SHRI NATARAJ CERAMIC AND CHEMICAL INDUSTRIES LIMITED · 2018-08-16 · Letter of Offer Dated 7th July, 2009 For the Equity Share holders of the Company only (Originally incorporated

Letter of Offer

Dated 7th July, 2009

For the Equity Share holders of the Company only

(Originally incorporated as Dalmia Ceramic Industries Limited on June 21, 1973, under the Companies Act, 1956, with the Registrar of Companies,

Tamil Nadu. The name of the Company was changed to Shri Nataraj Ceramic and Chemical Industries Limited, and a fresh Certificate of Incorporation

issued on November 01, 1983 by the Registrar of Companies, Tamil Nadu at Chennai (then Madras). For details of changes in the Registered Office of

the Company, please refer to page no. 9 of this Letter of Offer. For further details see “History of the Company and Other Corporate Matters” on page

no. 46 of this Letter of Offer.)

Registered Office: Dalmiapuram, P.O. Kallakudi-621651, Dist. Tiruchirapalli, Tamil Nadu

Tel: +91 4329 235133, 235155; Fax: +91 4329 235122

Corporate Office: 4, Scindia House, Connaught Place, New Delhi-110001

Tel: +91 11 23457102, 23324135; Fax: +91 11 23324136

Contact Person: Mr. C.N. Maheshwari, Company Secretary and Compliance Officer

Email: [email protected]

Registered with Registrar of Companies, Tamil Nadu, Block No.6, B Wing, 2nd Floor, Shastri Bhawan 26, Haddows Road, Chennai - 600034

SHRI NATARAJ CERAMIC AND CHEMICAL INDUSTRIES LIMITED

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF THE COMPANY ONLY

LETTER OF OFFER

ISSUE OF 2400000 6% NON-CONVERTIBLE DEBENTURES (NCDs) OF RS.10 EACH WITH DETACHABLE WARRANTS

AGGREGATING TO RS. 240 LACS TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF

3 NCDs WITH DETACHABLE WARRANTS FOR EVERY 1 EXISTING EQUITY SHARE HELD BY THE EXISTING

SHAREHOLDERS ON THE RECORD DATE, THAT IS ON JULY 06, 2009

THE PRICE AT WHICH WARRANT IS EXERCISABLE IS [�] TIMES THE CURRENT FACE VALUE OF RS.10 PER SHARE

GENERAL RISKS

Investment in Equity and Equity related securities involve a degree of risk and investors should not invest any funds in this offer unless they can

afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this

offering. For taking an investment decision, investors must rely on their own examination of the Issuer and the offer including the risk involved. The

Securities offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does the SEBI

guarantee the accuracy or adequacy of this document. Specific attention of the investors is invited to the statement of Risk Factors on Page No

viii of the Letter of Offer.

ISSUER’S ABSOLUTE RESPONSIBILITY

Shri Nataraj Ceramic and Chemical Industries Limited, having made all reasonable enquiries, accepts responsibility for, and confirms that this Offer

Document contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue; that the information contained

in the Offer Document is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions

expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information

or the expression of any such opinions or intentions misleading in any material respect.

LISTING ARRANGEMENTS

The existing Equity Shares of our Company are listed on The Madras Stock Exchange Ltd (“MSE”), The Calcutta Stock Exchange Association Ltd

(CSE) and The Delhi Stock Exchange Limited (DSE). The In-principle approvals have been received from MSE, CSE and DSE for listing of the

Equity Shares vide MSE’s letter dated September 25, 2008, CSE’s letter dated November 17, 2008 and DSE’s letter dated October 03, 2008, respectively.

For the purpose of this issue the Designated Stock Exchange is MSE.

LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE

Chartered Capital and Investment Limited

SEBI Regn No.- INM000004018

711, Mahakant, Opp V.S. Hospital,

Ellisbridge, Ahmedabad - 380 006

Tel: +91-79-2657 5337, 2657 7571

Fax: +91-79-2657 5731

E-mail: [email protected]

Website:www.charteredcapital.net

Contact Person: Mr. Sagar Bhatt

KARVYKARVYKARVYKARVYKARVY

D and A Financial Services Private Limited

SEBI Regn No.- INM000011484

13, Community Centre,

East of Kailash,

New Delhi - 110 065

Tel: 011 26218274, 26419079

Fax: 011 26219491


Contact Person: Mr. Heemadri Mukerjea

KARVY COMPUTERSHARE

PRIVATE LIMITED

SEBI Regn. No.-INR000000221

Plot No. 17-24, Vittal Rao Nagar,

Madhapur, Hyderabad-500081

Tel: 91-40-23420815/16/17/18

Fax: 91-40-23431551

Website: www.karvy.com

Email : [email protected]

Contact Person: M Murali Krishna

ISSUE CLOSES ON : 3rd August,

2009

ISSUE PROGRAMME

ISSUE OPENS ON : 20th

July, 2009

LAST DATE FOR REQUEST FOR SPLIT

APPLICATION FORMS : 27th July, 2009

xv

Shri Nataraj Ceramic And Chemical Industries Limited

TABLE OF CONTENTS

SECTION I - GENERAL ................................................................................................................................................................... i

DEFINITIONS / ABBREVIATIONS ........................................................................................................................................... i

CONVENTIONAL / GENERAL TERMS .................................................................................................................................... i

ISSUE RELATED TERMS ........................................................................................................................................................... i

COMPANY/INDUSTRY RELATED TERMS .......................................................................................................................... iii

ABBREVIATIONS .................................................................................................................................................................... iii

SECTION II - RISK FACTORS ...................................................................................................................................................... vi

FORWARD LOOKING STATEMENTS .................................................................................................................................... vi

PRESENTATION OF FINANCIAL AND MARKET DATA ................................................................................................... vii

RISK FACTORS ...................................................................................................................................................................... viii

SECTION III - INTRODUCTION................................................................................................................................................... 1

SUMMARY OF INDUSTRY OVERVIEW ................................................................................................................................. 1

SUMMARY OF BUSINESS OVERVIEW .................................................................................................................................. 3

ISSUE DETAILS IN BRIEF ........................................................................................................................................................ 4

SUMMARY FINANCIAL AND OPERATING INFORMATION .............................................................................................. 5

GENERAL INFORMATION ....................................................................................................................................................... 9

CAPITAL STRUCTURE OF THE COMPANY ........................................................................................................................ 15

OBJECTS OF THE ISSUE ........................................................................................................................................................ 21

BASIS OF ISSUE PRICE .......................................................................................................................................................... 25

STATEMENT OF TAX BENEFITS .......................................................................................................................................... 27

SECTION IV - ABOUT THE COMPANY .................................................................................................................................... 33

INDUSTRY OVERVIEW .......................................................................................................................................................... 33

BUSINESS OVERVIEW ........................................................................................................................................................... 38

KEY INDUSTRY REGULATIONS .......................................................................................................................................... 44

HISTORY AND CERTAIN CORPORATE MATTERS ............................................................................................................ 46

OUR MANAGEMENT .............................................................................................................................................................. 48

PROMOTERS ............................................................................................................................................................................ 56

CURRENCY OF PRESENTATION .......................................................................................................................................... 59

DIVIDEND POLICY ................................................................................................................................................................. 60

SECTION V - FINANCIAL INFORMATION.............................................................................................................................. 61

FINANCIAL INFORMATION OF OUR COMPANY .............................................................................................................. 61

FINANCIAL STATEMENTS OF GROUP COMPANIES ........................................................................................................ 95

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIALS ................................................................................ 131

SECTION VI - LEGAL AND OTHER INFORMATION .......................................................................................................... 141

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS ............................................................................. 141

GOVERNMENT AND OTHER APPROVALS ....................................................................................................................... 164

SECTION VII - OTHER REGULATORY AND STATUTORY DISCLOSURES .................................................................. 167

SECTION VIII- ISSUE RELATED INFORMATION ............................................................................................................... 176

TERMS OF THE ISSUE & ISSUE PROCEDURE ................................................................................................................. 176

SECTION IX - MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ........................................................................... 198

SECTION X - OTHER INFORMATION ................................................................................................................................... 221

MATERIAL CONTRACTS & DOCUMENTS FOR INSPECTION ...................................................................................... 221

DECLARATION ...................................................................................................................................................................... 223

i


SECTION I- GENERAL

DEFINITIONS / ABBREVIATIONS

ABBREVIATIONS & TECHNICAL TERMS

In this Letter of Offer, the terms “we”, “us”, “our”, “the Company”, “our Company” or “SNCCIL”, unless the context

otherwise implies, refer to Shri Nataraj Ceramic and Chemical Industries Limited. All references to “Rs.” or “Re.” or

“INR” refer to Rupees, the lawful currency of India, “USD” or “US$” refer to the United States Dollar, the lawful currency

of the United States of America, references to the singular also refers to the plural and one gender also refers to any other

gender, wherever applicable, and the words “Lakh” or “Lac” means”100 thousand” and the word “million” or “mn” means

“10 lacs” and the word “crore” means “10 million” or “100 lacs” and the word “billion” means “1,000 million” or “100

crores”. Any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off.

CONVENTIONAL / GENERAL TERMS

Term Description

“SNCCIL” or “the Company” Unless the context otherwise requires, refers to, Shri Nataraj Ceramic and

or “the Issuer” Chemical Industries Limited, a public limited company incorporated under

the Companies Act, 1956, and having its registered office at Dalmiapuram,

P.O. Kallakudi-621651, Dist. Tiruchirapalli, Tamil Nadu

Promoter(s) Shall mean jointly Mr. Jai Hari Dalmia and Mr. Yadu Hari Dalmia

Promoters’ Group As defined in Explanation II of Clause 6.8.3.2 of SEBI (Disclosure and

Investor Protection) Guidelines, 2000 and amendments thereof Promoters’

Group includes: Shri Jai Hari Dalmia, Shri Yadu Hari Dalmia, Smt. Kavita

Dalmia, Shri Gautam Dalmia, Smt. Anupama Dalmia, Kum. Sukeshi

Dalmia, Kum. Vaidehi Dalmia, Kum. Sumana Dalmia, Sukeshi Trust,

Vaidehi Trust, Sumana Trust, Shri J.H.Dalmia C/o J.H.Dalmia (HUF), Smt.Bela Dalmia, Shri Puneet Dalmia, Smt. Avantika Dalmia, Ku. ShrutipriyaDalmia, Ku. Avanee Dalmia, Mst. Priyang Dalmia, Shrutipriya Dalmia Trust,Shri Y.H.Dalmia C/o Y.H.Dalmia (HUF), Priyang Trust, Avanee Trust,Ankita Pratisthan Limited, Sita Investment Company Limited, RamaInvestment Company Pvt. Ltd., Kavita Trading & Investment Co. Pvt. Ltd.,Puneet Trading & Investment Co. Pvt. Ltd., Shree Nirman Limited, HimgiriCommercial Limited, ,Valley Agro Indusries Limited, Alirox AbrasivesLimited, Mayuka Investment Limited, Shri Chamundeswari MineralsLimited, Dalmia Cement (Bharat) Limited, D.I.Properties Limited, AvnijaProperties Limited, Hemshila Properties Limited, Himshikhar InvestmentLimited, Kanika Investments Limited, Ishita Properties Limited, ZipAhead.Com Limited, Geetee Estates Limited, Shri Rangam Brokers and HoldingsLtd., Shri Rangam Properties Limited, Arjuna Brokers & Minerals Limited,Dalmia Minerals & Properties Limited, Seeta Estates and Brokers Limited,

Shri Radha Krishna Brokers and Holdings Limited, Sri Kesva Mines and

Minerals Limited, Sri Madhava Minerals and Properties Limited, Sri

Shanmugha Mines and Minerals Limited, Sri Swaminatha Mines and

Minerals Limited, Sri Subramanya Mines and Minerals Limited, Avanee

And Ashni Securities Pvt. Ltd., Keshav Power Pvt.Limited (Formerly

Keshav Power Ltd.), Sri Dhandanthapani Miners & Minerals Ltd., Sri

Madhusudana Miners & Properties Ltd., Sri Trivikrama Miners & Properties

Ltd., Landmark Property Development Co. Ltd. Dalmia Cement Ventures

Limited, Dalmia Sugar Ventures Limited, OCL India Limited.

ISSUE RELATED TERMS

Term Description

Allotment/Allotted /Allocated Issue or transfer, as the context requires, of 6% NCDs with Detachable

Warrants pursuant to the Offer to the successful applicants as the context

requires

ii


Allottee The successful applicant to whom the 6% NCDs with Detachable Warrants

are being/have been issued or transferred

Applicant Any prospective investor who makes an application for 6% NCDs with

Detachable Warrants in terms of this Letter of Offer

Articles / Articles of Association/AoA The Articles of Association of SNCCIL.

Auditors The statutory auditors of the Company, being M/s S. S. Kothari Mehta &

Co, Chartered Accountants.

Banker(s) to the Issue Axis Bank Limited

Board/Board of Directors The Board of Directors of Shri Nataraj Ceramic and Chemical Industries

Limited or a committee thereof.

“Chartered Capital” or “Chartered” Chartered Capital And Investment Limited

or “Chartered Capital and Investment

Limited”

CAF Composite Application Form

“Companies Act”/ “The Act” The Companies Act, 1956, as amended from time to time

CSE The Calcutta Stock Exchange Association Ltd

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

Depository A depository registered with SEBI under the SEBI (Depositories and

Participant) Regulations, 1996, as amended from time to time.

Designated Stock Exchange The Madras Stock Exchange Ltd.

Director(s) Director(s) of Shri Nataraj Ceramic and Chemical Industries Limited, unless

otherwise specified.

DSE The Delhi Stock Exchange Ltd

Equity Shares Equity Shares of the Company of face value of Rs. 10/- each, unless

otherwise specified in the context thereof.

FII(s)/Foreign Institutional Investor Foreign Institutional Investor (as defined under the SEBI (Foreign

Institutional Investors) Regulations, 1995) registered with SEBI under

applicable laws in India.

Issue/Rights Issue/Present Issue Issue of 2400000 6% Non-Convertible Debentures (NCDs) of Rs. 10 each

with detachable warrants at a price of Rs. 10 per NCD for an amount

aggregating to Rs. 240 lacs to the existing equity shareholders on rights

basis in the ratio of 3 NCDs with detachable warrant for every 1 existing

equity share held by the existing shareholders on the record date, that is on

July 06, 2009

Income-tax Act The Income Tax Act, 1961, as amended from time to time.

“Issuer”/”Shri Nataraj Ceramic and Unless the context otherwise requires, refers to Shri Nataraj Ceramic and

Chemical Industries Limited”/”Company” Chemical Industries Limited, a Company incorporated under the Indian

/”we”/”us”/’our” Companies Act, 1956 having its registered office at Dalmiapuram, P.O.

Kallakudi-621651, Dist. Tiruchirapalli, Tamil Nadu

Issue Closing Date 3rd August, 2009

Issue Opening Date 20th July, 2009

Memorandum of Association/ The Memorandum of Association of Shri Nataraj Ceramic and Chemical

Memorandum/ MOA Industries Limited.

MSE The Madras Stock Exchange Ltd

iii


Mutual Funds Mutual funds registered with SEBI under the SEBI (Mutual Funds)

Regulations, 1996.

Registrar/Registrar to the Issue Being the Registrar appointed for the Issue, in this case Karvy

Computershare Private Limited, having its office at Plot No. 17-24, Vittal

Rao Nagar, Madhapur, Hyderabad-500081

ROC/Registrar of Companies Registrar of Companies, Tamil Nadu, Chennai.

Stock Exchanges MSE, CSE and DSE.

Renouncees Shall mean the persons who have acquired Rights Entitlements from Equity

Shareholders

Rights Entitlement The number of 6% NCDs with detachable warrants that a shareholder is

entitled to in proportion to his/her shareholding in the Company as on the

Record Date.

Rights Issue The Issue of 6% NCDs with detachable warrants in terms of this Letter of

Offer.

COMPANY/INDUSTRY RELATED TERMS

Term Description

Refractory A substance that is able to resist high temperature.

High Alumina Having alumina content more than 45%.

Bauxite A raw material, which is used in manufacturing of high alumina refractory.

ABBREVIATIONS

Abbreviation Full Form

AGM Annual General Meeting

AS Accounting Standards as issued by the Institute of Chartered Accountants

of India.

Asst. Assistant

AY Assessment Year

Bn Billion

BSE Bombay Stock Exchange Limited

CAGR Compound Annual Growth Rate

CCPS Convertible Cumulative Preference Shares

CDSL Central Depository Services (India) Limited

CRM Centre De Recherché Metallurgiques, Belgium

Delhi High Court High Court of Judicature at Delhi

SEBI (Disclosure and Investor Protection) SEBI (Disclosure & Investor Protection) Guidelines, 2000, as amended

Guidelines, 2000

DPM Company’s Manufactuting unit situated at Dalmiapuram

Dy. Deputy

EBIT Earnings before Interest and Tax.

EBITDA Earnings before Interest, Tax, depreciation and amortization.

ECS Electronic Clearing Service

iv


EGM Extraordinary General Meeting

EPS Earnings Per Share

ESI Employee State Insurance

FCNR Account Foreign Currency Non Resident Account

FDI Foreign Direct Investment

FEMA The Foreign Exchange Management Act, 1999, as amended from time to

time, and the regulations framed thereunder.

FIPB Foreign Investment Promotion Board

FY Financial year/ Fiscal year

GIR General Index Registry Number

GoI Government of India

HUF Hindu Undivided Family

ICAI The Institute of Chartered Accountants of India

IEC Importer Exporter Code

KMB Company’s Manufactuting unit situated at Jam-Khambalia

LC Letters of credit

LIBOR London Interbank Offered Rate

MOU Memorandum of Understanding

Mn Million

N.A. Not Applicable

NAV Net Asset Value

NCD Non Convertible Debenture

NEFT National Electronic Funds Transfer

NOC No Objection Certificate

NRE Account Non Resident External Account

NRI Non-Resident Indian, as defined under Foreign Exchange Management

(Transfer or Issue of Security by a Person Resident Outside India)

Regulations, 2000, as amended.

NRO Account Non Resident Ordinary Account

NSE National Stock Exchange of India Limited

NSDL National Securities Depository Limited

P.A./p.a./pa Per annum

P/E Ratio Price/Earnings Ratio

PAN Permanent Account Number

PAT Profit after Tax

PF Provident Fund

PLR Prime Lending Rate

RBI The Reserve Bank of India

v


ROC Registrar of Companies, Tamil Nadu, Block No.6, B Wing, 2nd Floor, Shastri

Bhawan 26, Haddows Road, Chennai - 600034

RoNW Return on Net Worth

Rs./ Rupees/INR Indian Rupees

RTGS Real Time Gross Settlement

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

time.

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

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

to time.

SEBI Guidelines SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI,

as amended, including instructions and clarifications issued by SEBI from

time to time.

SEBI Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares

and Takeover) Regulations, 1997, as amended.

TAN Tax Deduction and Collection Account Number

UIN Unique Identification Number

UPPCB U.P. Pollution Control Board

USD/US$/$ United States Dollar

WTD Whole time Director

vi


SECTION II- RISK FACTORS

FORWARD LOOKING STATEMENTS

We have included statements in this Letter of Offer which contain words or phrases such as “will”, “aim”, “will likely

result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”,

“objective”, “goal”, “may”, “shall” “project”, “should”, “will pursue” and similar expressions or variations of such

expressions, that are “forward- looking statements”.

Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties

associated with the Company’s expectations with respect to, but not limited to, regulatory changes pertaining to the industries

in India in which the Company has its businesses or proposes to have its business, and the Company’s ability to respond to

them, its ability to successfully implement its strategy, its growth and expansion, its exposure to market risks, competitive

landscape, general economic and political conditions in India which have an impact on its business activities or investments,

the monetary and fiscal policies of India, inflation, deflation, unanticipated fluctuations in interest rates, foreign exchange

rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in

domestic and foreign laws, regulations and taxes and changes in competition in the Company’s industries.

Important factors that could cause actual results to differ materially from the Company’s expectations include, among

others:

� General economic and business conditions;

� Company’s ability to successfully implement its strategy, its growth and expansion plans, and technology initiatives;

� Factors affecting the Cement and/or Steel industry;

� Factors affecting the refractory industry;

� Increasing competition in the refractory industry;

� Increase in labour cost, raw materials price, cost of plant & machinery and insurance premia;

� Inadequate availability of Raw Materials;

� Manufacturers’ defects or mechanical problems with Company’s plant & machineries or incidents caused by human

error;

� Ability to retain management team and skilled personnel;

� Changes in the value of the Indian Rupee and other currencies;

� Cyclical or seasonal fluctuations in the operating results;

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

� Potential mergers, acquisitions or restructurings;

� Changes in laws and regulations that apply to the refractory industry;

� Changes in fiscal, economic or political conditions in India;

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

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

For further discussion of factors that could cause the Company’s actual results to differ, please refer to the section titled

“Risk Factors”, “Business Overview” and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations” beginning on page nos. viii, 38 and 131 respectively, of this Letter of Offer. By their nature, certain market

risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result,

actual future gains or losses could materially differ from those that have been estimated. Neither our Company, its Directors

and Officers, any Member of Issue Management Team nor any of their respective affiliates have any obligation to update

or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of

underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, the

Company and the Lead Manager will ensure that investors in India are informed of material developments until such time

as the grant of listing and trading permission by the Stock Exchanges.

vii


PRESENTATION OF FINANCIAL AND MARKET DATA

Financial Data

Unless stated otherwise, the financial data in this Letter of Offer is derived from the restated financial statements as of and

for the years ended March 31, 2005, 2006, 2007, 2008 and 2009 prepared in accordance with Indian GAAP, the Companies

Act, 1956 and restated in accordance with SEBI Guidelines, as stated in the report of the Statutory Auditors of the Company,

M/s S. S. Kothari Mehta & Co., Chartered Accountants beginning from page no. 61 of this Letter of Offer. The fiscal year

commences on April 1 and ends on March 31.

In this Letter of Offer, unless the context otherwise requires, all references to one gender also refers to another gender and

the word “Lakh” or “Lac” means “one hundred thousand” and the word “million” means “ten lacs” and the word “Crore”

means “ten million”. In this Letter of Offer, any discrepancies in any table between total and the sum of the amounts listed

are due to rounding-off.

Throughout this Letter of Offer, all figures have been expressed in Lacs, unless otherwise stated. All references to “India”

contained in this Letter of Offer are to the Republic of India. All references to “Rupees” or “Rs.” are to Indian Rupees, the

official currency of the Republic of India. All references to US$, USD, or US Dollars are to the United States Dollars, the

legal currency of the United States of America.

For additional definitions used in this Letter of Offer, see the section “Definitions and Abbreviations” beginning from on

page no. i of this Letter of Offer. In the section entitled “Main Provisions of the Articles of Association of the Company”

on page no. 198 of this Letter of Offer, defined terms have the meaning given to such terms in the Articles of Association

of the Company. Market and Industry data used throughout this Letter of Offer has been obtained from industry publications

and other authenticated published data.

Industry publications generally state that the information contained in those publications has

been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their

reliability cannot be assured. Although the Company believes the industry data used in this Letter of Offer to be reliable,

it has not been independently verified. Similarly, internal Company reports, while believed by the Company to be reliable,

have not been verified by any independent sources.

Market Data

Unless stated otherwise, industry data used throughout this Letter of Offer has been obtained from industry publications.

Industry publications generally state that the information contained in those publications has been obtained from sources

believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured.

The data used from these sources may have been reclassified for the purpose of presentation. Although it is believed that

the industry data used in this Letter of Offer is reliable, it has not been verified by any independent source.

viii


RISK FACTORS

RISK FACTORS ENVISAGED BY MANAGEMENT

An investment in securities involves a high degree of risk. You should carefully consider all of the information in this

Letter of Offer, including the risks and uncertainties described below, before making an investment in the 6% NCDs with

Detachable Warrants of the Company. If any of the following risks actually occur, the business, financial condition and

results of operations could suffer, the trading price of the securities could decline, and all or part of the investment may be

lost.

Materiality

The Risk factors have been determined on the basis of their materiality. The following factors have been considered for

determining the materiality.

1. Some events may not be material individually but may be found material collectively.

2. Some events may have material impact qualitatively instead of quantitatively.

3. Some events may not be material at present but may be having material impacts in future.

Internal Risk Factors and Risk Relating to Our Business

1. There is a possibility of adverse impact on us in the event of the following litigations being decided against us

There are certain litigations and disputes outstanding against us that may have an adverse impact if decided against

us. Although no liability has been frozen in regard to the cases but in the event some liability does arise there is a

possibility of an adverse financial impact on us.

A summary of these cases filed against us is as follows:

S.no Type of case No. of cases Financial Implication

1 Litigation involving civil laws 3 Total claim in these cases is Rs. 277555.

2 Litigation involving labour laws 11 The total financial implication on the company on

account of these cases is about Rs. 5307230.

For futher details of these litigations kindly refer to page no. 141 of this letter of offer.

2. Rise in Input Costs may affect profitability

The input costs of the products of the Company may increase due to various reasons. In case the Company is not able

to pass on such increase to its customers because of competition or otherwise, it may affect the profitability of the

Company. The main raw materials used in the manufacture of our Refractory products are bauxite, etc. The raw

materials cost accounts for more than 40% percent of the net sales of our Company. Prices of raw materials may tend

to remain very volatile. The prices of raw materials we purchase from our suppliers may fluctuate due to changes in

demand and supply conditions for these raw materials in the markets. In the event of any significant increase in the

prices of these raw materials and if we are unable to pass on fully such increase in the prices to our customers, our

profitability will be adversely affected. If we are unable to ensure adequate and timely supply of raw materials our

production plans would be adversely affected impacting our profitability adversely.

3. Loss making Promoter group companies

There are certain promoter group companies which are incurring losses for last few years. The details of the same are

as follows:

(Rs. In Lacs)

S.No. Name of Subsidiary Company 2008-09 2007-08 2006-07 2005-06 2004-05

1 Arjuna Brokers & Minerals Limited (0.11) (0.04) (0.06) (0.38) -

2 D.I. Properties Limited (0.07) - (0.02) 0.43 0.30

3 Dalmia Cement Ventures Limited - (0.04) -

4 Dalmia Minerals & Properties Limited (0.26) (0.04) (0.06) (0.38) -

ix


5 Dalmia Sugar Ventures Limited (0.12) (1.97) - - -

6 Geetee Eststes Limited (0.25) - (0.00) 0.45 0.36

7 Kanika Investments Limited 8.31 24.37 (0.63) (0.26) 24.30

8 Seeta Estates & Brokers Limited 0.06 (0.10) (0.44) (0.38) -

9 Shri Radha KrishnaBrokers & Holdings Limited (0.11) (0.04) (0.06) (0.38) -

10 Shri Rangam Brokers & Holdings Limited (0.11) (0.04) (0.06) (0.38) -

11 Shri Rangam Properties Limited (0.23) 0.08 (0.07) (0.08) 0.05

12 Shri Dhandauthapani Mines & Minerals Limited 0.14 0.01 (0.41) - -

13 Sri Kesava Mines & Minerals Limited 0.23 0.05 (0.08) (0.37) -

14 Sri Madhva Minerals & Properties Limited (0.11) (0.04) (0.08) (0.37) -

15 Sri Madhusudana Mines & Minerals Limited (0.12) (0.06) (0.41) - -

16 Sri Shanmugha Mines & Minerals Limited (0.11) (0.04) (0.08) (0.37) -

17 Sri Subrmanya Mines & Minerals Limited (0.11) (0.04) (0.08) (0.37) -

18 Sri Swaminnatha Mines & Minerals Limited (0.11) (0.04) (0.08) (0.37) -

19 Sri Trivikrama Mines & Minerals Limited 0.15 (0.04) (0.41) - -

20 Shri Chamundeshwari Minerals Limited (0.39) (0.36) (1.23) (0.77) (1.09)

21 Alirox Abrasives Limited 3.19 93.40 3.14 (0.11) (0.76)

22 Shree Nirman Limited - 311.87 (740.88) 3627.59 (95.74)

23 Valley Agro Industries limited - 181.58 121.36 (4.49) (10.2)

24 Avanee & Ashni Securities Private Limited (0.36) (1.66) (1.65) (0.37) -

The reasons for the losses are as under:

Alirox Abrasives Limited, Valley Agro Industries Limited & Shri Chamundeshwari Minerals Limited- The Company’s

administrative overheads were more than the income received by the Company.

Shree Nirman Limited:-Loss was incurred due to Sale of Investments.

Others:-As the Companies have not started their operations, the administrative overheads incurred during the year have

translated themselves into losses.

4. The Company is highly dependant on High Alumina products which may affect the profitability of the Company

in the future

With the user industry, mainly, cement and steel, looking for better performing products the demand for the High

Alumina products may go down, affecting the profitability of the Company adversely in the future.

5. We are exposed to interruptions in the supply of electricity.

Currently our production processes at all our units require a continuous and adequate supply of electricity to ensure

that the production processes are uninterrupted and smooth running. We rely on the Electric supply companies for

supply of electricity. Any shortage or interruption in the future to the supply of electricity by external parties to our

plants for extended periods of time will disrupt our operations or increase our production costs. It will also affect our

ability to continue production operations smoothly and may damage our reputation, thereby eroding customer

confidence in us which may cause us to lose our existing customers or adversely affect our ability to attract new

customers. Our operating results and financial conditions will be adversely affected as a result.

6. Some of the Promoter Group Companies are engaged in the same line of business.

OCL India Limited, a company belonging to the Promoter group is, among other activities, also enagaged in the

same line of business as that of the Company. This might create conflict of interest in the business of the Company in

the Long Run.

x


7. The business of the Company is dependent on its manufacturing facilities to a large extent. The loss of or

shutdown of operations, as has already happened in the past may have a material adverse effect on the business,

financial condition and results of operations of the Company.

The existing manufacturing facilities of the Company are subject to operating risks, such as the breakdown or failure

of equipment, power supply or processes, performance below expected levels of output or efficiency, obsolescence,

labour disputes, natural calamities, industrial accidents and the need to comply with the directives of relevant

government authorities.

The occurrence of any of these risks could significantly affect the operating results of the Company.

8. The Company’s success depends in large part upon its management team and skilled personnel and its ability

to attract and retain such persons.

Company’s future performance may be affected by the discontinuation of service of its management team and skilled

personnel. The Company may face a challenge to recruit and retain a sufficient number of suitably skilled personnel.

Retention of personnel leaves companies with rising wage bills. There is also significant competition for managerial

and other skilled personnel in this industry, and it may be difficult to attract and retain the personnel that the Company

needs in the future. The loss of key personnel may have an adverse effect on the business of the Company, results of

operations, financial condition and its ability to grow.

9. If we are not able to implement our business strategy effectively, it may have an adverse impact on our business,

financial condition and results of operations.

The success of our business will depend greatly on our ability to effectively implement the business and growth

strategy on time, failing which our business, financial condition and results of operations might be adversely affected.

10. Contingent Liabilities as on 31st March, 2009:

As per the Audited Financial Statements, the Company has certain contingent liabilities, which, if determined against

it in future, may impact its financial position, adversely. Details of the contingent liabilities as on March 31, 2009 are

given in the following table:

(Rs. in Lacs)

PARTICULARS As at 31st March 2009

a) Contingent Liability exists in respect of

i) Income Tax for which the Company has preferred appeals 10.53

ii) Income Tax for which the Income Tax Department has preferred appeals 0.52

against the decisions in favour of the Company

iii) Other monies for which the Company is contingently liable including 26.20

Bank Gurantees

b) Claims against the Company not acknowledged as debt and being 94.86

contested before appropriate authorities.

Besides the above there are no contingent liabilities that are not provided for by the Company.

11. The Company is involved into labour intensive activitiy, non-availability of which, may adversly affect the

business of the Company in long run.

The Company had a labour turnover of 8.86% during the Financial year 2008-09. There can be no assurance that the

rate of labour turnover may not increase which might hamper the business of the Company adversely.

12. The Company is subject to operating risks common in the refractory industry

The Company’s financial results may get affected by its ability to control the cost of Raw Material. Further, its

operating margins would be adversely affected by increase in cost of labour, electricity, insurance and envirionmenatal

compliance expenses. The Company may have to upgrade its products periodically to keep up with changing trends

and consumer demands and such uogradatiuon may involve significant expenditure which may impact the profitability

of the Company.

xi


13. Change in Technology and trends in the industry may affect Company’s ability to compete. Any failure to

keep abreast of the latest trends in the Refractory Industry may adversely affect the competitiveness and

ability of the Company to compete with newer generation products.

14. Some of the mining leases of the Company have expired and have not been renewed till date. Though application

for renewal of the same have been made but the renewal has not been granted till date. In case the same in not

renewed it may hamper the business of the Company very seriously.

15. The Warrant Exercise Price, as may be fixed by the Board, may not be indicative of the future market price of

Equity Shares of the Company.

16. The shares of our company are listed only on Delhi, Calcutta and Madras Stock Exchanges. There has been no

trading in the shares of our company during the last 3 years. There can be no assurance that an active trading

market for our shares will revive or be sustained and as such the exit options available to the shareholders

may be limited.

17. We have not entered into any definitive agreements to utilize a portion of the Rights Issue. Any failure to enter

into arrangements on favourable terms and conditions, in a timely manner or at all, may have an adverse

effect on our business and financial results.

We intend to use the amount that will be raised upon conversion of the detachable warrants towards General Corporate

Purposes. We have not finalized any target acquisitions etc. as of date. However, we are in the process of evaluating

targets and investment options in this regard. Pending the use of funds for the General Corporate Purposes, we intend

to invest them in high quality interest/dividend bearing liquid instruments including money market mutual funds and

deposit with banks for necessary duration or reducing the working capital / term borrowings from banks and financial

institutions. For further details please refer to the chapter ‘Objects of the issue’ on page 21 of this Letter of Offer.

18. The Company has experienced negative cash flows in some of the previous years.

The Company has experienced negative cash flows in some of the previous years.

The details of the last 5 years are as under:

PARTICULARS 2009 2008 2007 2006 2005

Net increase in Cash and Cash equivalents 81.96 (44.07) 60.53 20.18 (101.63)

19. The Promoters of the Company do not hold any shares in the Company.

Our promoters do not hold any shares directly in our Company. They are in control of the Company through their

holdings in the Companies constituting the Promoter group and through their relatives who hold shares in the Company.

EXTERNAL RISK FACTORS

1. Risk in relation to refractory industry

The refractory industry is to some extent a cyclical industry, as the operating results has historically been fluctuating

in the past. The results may fluctuate in the future too depending on a number of variables such as international prices

of rawmaterial, fluctuation in rupee value, import tariff, domestic duties and taxes, changes in relationship between

revenue and cost and consolidation in the refractory industry, effect of seasonality, availability of raw material,

change of Government policies, addition of new machinery and other general economical and business factors. It is

possible that in future, at any point in time, the company’s operating results may vary from the expectations of

shareholders, market analysis and public on account of any or all these factors.

2. Refractory industry is Labour intensive

Being in a labour intensive industry, the Company may possibly face labour strikes, lockouts etc which may adversely

impact production, and profitability.

3. Increased competition in the Refractory industry may adversely affect the business of the Company.

4. Increase in taxes and other levies imposed by the Central or State Governments on the acquisition of Capital

goods/components, purchase of raw materials or finished goods may have an adverse effect on the profitability

of the Company.

Custom duty on raw material, consumables and machinery along with excise duty on finished goods with central

sales tax, VAT and state entry tax and other levies affect the company. These taxes and levies affect the cost of

production and sales price of its products and hence the demand for its products. Any increase in any of these taxes

or levies or the imposition of new taxes or levies in the future may have an adverse impact on the Company’s

business and financial condition.

xii


5. A slowdown in economic growth in India could cause our business to suffer. Any slowdown in the Indian

economy and the consequent impact on cement and steel industry could adversely affect the demand for the

Company’s products and consequently affect the results of operations.

6. Any unfavorable Government policies in relation to Refractory industry may have adverse impact on the

Company.

Refractory industry’s healthy growth is dependent on the government policies. As the refractory industry is heavily

dependant on the raw materials which are mined, any change in the policy with regard to mining activities could

affect the Industry’s existence and growth.

7. The Refractory industry is subject to numerous regulations.

The Company is subject to numerous laws and regulations in the jurisdiction in which it operates, including those

relating to the mining, environmental clareances, health and safety laws. The success of the Company’s strategy is

contingent upon, among other things, receipt of all required licenses, permits and authorizations, including mining

permits, environmental, health and safety permits, etc. Failure to obtain the licenses or permissions could lead to

increased costs and delay in the smooth operation of the Company.

8. Disruptions or lack of basic infrastructure could adversely affect our operations.

Being a manufacturing industry, the operations require continuous supply of power and any disruption in the supply

of the same may affect the operations of the Company and hence could have an adverse effect on the business, results

of operations and financial condition of the Company.

9. The Company’s operations could be affected by natural calamities at or in the vicinity of its manufacturing

units.

The operations of the Company are dependent on the Company’s ability to protect its manufacturing units from any

natural calamity such as fire, earthquakes, floods, natural and similar events. The occurrence of a natural disaster or

other unanticipated problems at its manufacturing units can cause interruptions in its operations. Any damage or

failure that causes interruptions in its operations could have a negative impact on its profitability and financial

condition.

10. Drastic changes in political situation in India may affect Company’s business

The Company’s performance is linked to the stability of Government policies and the political situation in India. The

Government of India, for more than a decade and a half, has relentlessly pursued pro-reform policies, thus encouraging

privatization and public-private partnerships. Protests and anti-reform agitations could slow the pace of liberalisation

and deregulation. This could have a resultant impact on policies related to refractory industry, foreign investment etc.

Notes:

i. Net worth of the Company as on March 31 2009, is Rs. 3160.13 Lacs.

ii. Issue of 2400000 6% Non-Convertible Debentures (NCDs) of Rs. 10 each with detachable warrants aggregating to

Rs. 240 lacs to the existing Equity Shareholders on rights basis in the ratio of 3 NCDs with detachable warrant for

every 1 existing Equity Share held by the existing shareholders on the record date, that is on July 06, 2009.

iii. Book Value of the Equity Shares of the Company as on March 31 2009 is Rs. 395.02 per Equity Share.

iv. There are no interests of promoters/directors/key management personnel other than reimbursement of expenses

incurred or normal remuneration or benefits.

v. Investors are advised to refer to the paragraph on Basis for Issue Price on page no. 25 before making an investment

in the issue.

vi. Investors may note that in case of over subscription, the allotment shall be as per the procedure stated under the Para

Basis of Allotment given on page no. 190.

vii. The investors are advised to refer the Paragraph on promoter’s background and past financial performance of the

Company before making an investment in the proposed issue.

xiii


viii. There are no relationships with statutory auditors to the Company other than auditing and certification of financial

statements except as mentioned in the section Risk Factors on page viii of the Letter of Offer.

ix. For the Contingent Liabilities not provided for as on March 31, 2009, please refer to page no. x of this Letter of

Offer.

x. Investors may contact the Lead Manager or the Compliance Officer for any complaint/ clarification/information

pertaining to the Issue.

xi. In accordance with Accounting Standard 18 “Related Party Disclosure” issued by the Institute of Chartered Accountants

of India, the Company has compiled the required information as per details provided on page no. 83 of this Letter of

Offer. The total value of the related party transaction during the year 2008-09 was Rs. 4256.75 Lacs.

xii. All information shall be made available by the Lead Manager and the Company to the public and investors at large

and no selective or additional information would be available for a section of the investors in any manner whatsoever.

xiii. There are no other ventures of the promoters, which have business interest/other interest in the issuer company

besides OCL India Limited, which has already been mentioned as a risk factor. To avoid such possible conflict in

future, areas of business synergies are being identified.

xiv. There are no loans and advances made to any person(s) / companies in which directors are interested.

1


SECTION III- INTRODUCTION

SUMMARY OF INDUSTRY OVERVIEW

The information presented in this section has been sourced from publicly available documents and information from

various sources, including material from the Government of India, Ministries of the Government of India, Websites of the

ministries, Industry related websites and Company estimates. It is understood that the above sources are believed to be

reliable, but their accuracy and reliability cannot be guaranteed. None of the information has been independently verified,

although the industry, market and government data are considered reliable.

What are refractories?

“Refractory” items according to any standard English dictionary are materials which are hard to work with, and are

especially resistant to heat and pressure. In practical terms, refractories are products used for high temperature insulation

and erosion/corrosion and are made mainly from non-metallic minerals. They are so processed that they become resistant

to the corrosive and erosive action of hot gases, liquids and solids at high temperatures, in various types of kilns and

furnaces.

Basalt is a naturally occurring siliceous refractory product. It was formed many, many years ago - and is still being formed

in lava flows from volcanic eruptions - under the natural geological forces of heat and pressure. Modern refractory production

is largely a replication of this process of forming naturally-occurring (or synthetic) non-metallic mineral oxides (and some

non-oxides like carbides or nitrides) under the bonding conditions of high heat and pressure. Of course with technological

progress, alternative bonding techniques, such as with chemicals, cements, resins, etc. have also developed.

Because refractory products are so resistant to heat, erosion and corrosion, they are typically used in any process involving

heat and corrosion such as in kilns and furnaces. According to the main chemical component, i.e. fire clay, or magnesia, or

zirconia, etc. they are commonly known as alumino-silicate or acid refractories, basic refractories, and neutral refractory

products.

In physical characteristics, refractories typically have relatively high bulk density, high softening point (or Pyrometric

Cone Equivalent), high crushing strength. They are produced as standard bricks, or as shapes (including hollow-wares) or

as granular or unshaped or monolithic products.

The principal applications of refractories are in iron and steel industries, cement, glass, non-ferrous metals, petro-chemicals

and fertiliser industry, chemicals, ceramics and even thermal power stations and incinerators.

The development and application of refractories for various industries, testing procedures of properties and so on are

covered in the English language, by a number of well-known technical journals, such as The Bulletin of the American

Ceramic Society, Taikubutsu Overseas, Interceram, Ceramic News, Refractories Applications, IRMA Journal, Transaction

of the Indian Ceramic Society, Metal News, etc.

Milestones in refractories development in India

1874 Fire clay Bricks

1941 Magnesite Bricks

1949 Coke Oven Silica Bricks

1955 Sillimanite Blocks for Glass Industries

1960 Bauxite based High Alumina Bricks for Steel & Cement Industries

1960 Mullite Bricks for Glass Industries

1969 High Grog Fire clay Bricks for Steel Ladles

1977 AZS Electrocast Blocks

1983 Magnesia Carbon Refractories

1983 Magnesia Slide Gate Plates

1984 High Alumina Slide Gate Plates

1985 Low Cement Castables/Monolithics

2


1985 Ceramic Fibres

1985 High Alumina Bauxite based Ladle Refractories

1986 BRN 62 Blast Furnace Hearth Blocks

1986 Bubble Alumina based Insulating Blocks

1988 Dense Silica Shapes for Tall Coke Ovens

1990 Direct Bonded Mag-Chrome Bricks

1990 Unidirectional Gas Purging Elements

1990 Alumina Carbon Torpedo Ladle Bricks

1990 Slide Gate Refractories

1991 Dense Silica Shapes for Blast Furnace Stoves

1993 Alumina Carbon Continuous Casting Refractories

1993 Mullite Bricks for Blast Furnace and Stoves

1993 Dry Basic Ramming Mass for Furnaces

1993 Gunning materials for Converters

1993 Spraying Mass for Tundish

1994 Ultra Low Cement Castables/Monolithics

1994 Pitch-Bonded Tempered Dolomite Bricks

1994 Cordierite and Silicon Carbide based Kiln Furniture

1995 Spinel based Ladle Monolithic Lining

1995 Alumina Carbon Silicon Carbide Blast Furnace Trough Mass

1998 Magnesia Alumina Zirconia Bricks for Cement Rotary Kilns

1998 Alumina Zirconia Slide Gate and CC Refractories

1998 Pumpable Refractories for Petrochemical Industries

(Source: http://www.irmaindia.org/reframore.html)

For further details, please see the section on “Industry Overview” beginning from page no. 33 of this Letter of Offer.

3


SUMMARY OF BUSINESS OVERVIEW

We are one of the refractory manufacturing concerns producing High Alumina Refractory Bricks & Castable and supplying

to core industries namely cement, steel and other engineering industries. We are having three units, second at Dalmiapuram,

Tamil Nadu and another at Jam-khambalia, Dist. Jamnagar, Gujarat and third one which is on lease at Wankaner, Gujarat.

Our production range is High Alumina Refractory Bricks and Castable. We are now having capacity of 88,000 MT p.a. and

are further expanding to 95,000 MT p.a. to meet the growing demand of expansion of core industries like cement & steel.

We are having a Rotary Kiln in Gujarat Unit with the capacity of 24,000 MT per year for calcinations of Raw Bauxite

which is our main raw material.

Our product profile mainly includes High Alumina Bricks in the cement industry.

With capacity expansion being undertaken by Cement plants considering favourable demand supply scenario, demand for

refractories are estimated to go up.

Our Products and Use:

1. Dalmia Range of Medium-Duty Fireclay Bricks: Dry-press and Semi-plastic - “Dalmia MHD” quality of medium-

duty fire clay bricks are manufactured from high-grade clays. They are fired in continuous kilns and have accurate

sizing with sharp edges and corners. Dalmia MHD bricks maintain a stable volume at their maximum working

temperature and are resistant to hot metal, slag and moderate temperature fluctuations. Dalmia MHD bricks are

economical bricks for general furnace use where temperature is not high and operating conditions are moderate.

2. Dalmia High Heat Duty Bricks: “Dalmia HH” - High Heat Duty Bricks are most suitable for general furnace

construction because of its characteristic qualities: resistance to slag attacks; ability to withstand temperature shock;

load bearing ability; low coefficient of expansion and high fusion point. Dalmia HH bricks are manufactured by both

Dry-Press and Semi-Plastic method from high-grade fire clays high in refractoriness and with less impurities.

3. Dalmia HG Range of Super Duty Bricks: Dalmia HG range of Super Duty bricks are manufactured from a blend

of premium quality Kerala, Karnataka kaolinite clays and best bond clays to obtain outstanding properties. Dalmia

HG grade of Super Duty bricks are burnt to a very high temperature to provide improved properties and in particular

resistance to carbon monoxide attack. Dalmia HG bricks have excellent refractoriness, high density, high strength

volume stability at their maximum service temperatures, high load bearing capacity and particularly good resistance

to chemical attack, abrasion and spalling. With these combined properties, Dalmia HG bricks are used in various

furnaces where working conditions are relatively severe.

4. High Alumina HA Refractory Bricks: We offers a complete line of high alumina bricks Dalmia HA range that

allows selection of grades having requisite chemical and physical properties to meet the severity of service. Dalmia

HA bricks are made from carefully selected Saurashtra Bauxite, Kaolin Malachite,, and high grade Chamotte, bond

clay and Calcined or fused alumina. Bricks having alumina contents 40 to 90% are made from dense aggregates

fortified by alumina additives, in amount to obtain the required alumina content. For bricks above 85% alumina

Calcined and fused alumina are used to develop the required alumina content. In addition to ceramic bonded burnt

high alumina bricks, we supplies a series of Phosphate bonded both chemical and burnt bricks having exceptional

mechanical strength, high abrasion and impact resistance, good load bearing and spalling resistance.

5. Lofal Range of High Purity High Alumina Bricks: We offers a complete line of high purity alumina bricks the

Lofal High Alumina range with alumina content ranging from 30 to 90% for use in applications where the working

conditions are severe. As a family of multi product brands all Lofal High Alumina brick exhibit a slight expansion,

similar to Dalmia HA brand high alumina bricks during use that tend to tighten the structure - a desirable requirement

in majority of installations. In addition to high refractoriness LOFAL High Alumina bricks possess excellent spalling

resistance, high load bearing capacity, dense structure giving extremely high mechanical strength and low porosity to

combat the slag and metal attack and high temperature properties to withstand high service temperature.

6. Dalmia Sillimanite Refractories: Dalmia SL the sillimanite range of bricks are produced from calcined kyanite

and beach sand sillimanite. All the sillimanite grades are fired to high temperatures to maximize mullite conversion.

Dalmia SL bricks are manufactured by dry press and pneumatic ramming with alumina contents ranging from 50%

to 62% which resist the attack of molten glass admirably and give extended life when used in glass tank melters,

bottom and side wall blocks, checker packing, bridge walls, refiners, fore-hearths, etc. Large size blocks are also

available for glass tanks use.

For further details, please see the section on “Business Overview” beginning from page no. 38 of this Letter of

Offer.

4


ISSUE DETAILS IN BRIEF

Pursuant to the resolutions passed by the Board of Directors of the Company at its meeting held on September 09, 2008 it

has been decided to make the following offer to the Equity Shareholders of the Company.

6% NCDs with Detachable warrants proposed to be 2400000 6% NCDs of Rs. 10 each with Detachable

issued by the Company warrants

Rights Entitlement Three 6% NCDs with Detachable warrants for one fully

paid up Equity Share held on record date i.e. July 06,

2009.

Record Date July 06, 2009

Issue Price per 6% NCD with Detachable warrants 10

Face value per 6% NCD with Detachable warrants 10

Interest 6% p.a. payable annually upto redemption of the NCDs

Warrant Exercise price Please refer to page 180

Warrant Exercise period Please refer to page 180

Equity Shares outstanding prior to the Issue 800000

Equity Shares outstanding after the Issue before 800000

exercise of Warrants

Equity Shares outstanding after the Issue after exercise 3200000

of Warrants*

Terms of the Issue For more information, see “Terms of Issue” on page

176 of this Letter of Offer.

*On exercise of all warrants issued under this issue.

5


SUMMARY FINANCIAL AND OPERATING INFORMATION

The following summary financial and operating information is derived from our restated financial statements as of for the

fiscal years ended March 31 2009, 2008, 2007, 2006 and 2005 as described in the Auditor’s Report in the section titled “

Financial Statements” beginning on page 61 of this Letter of Offer. These Financial statements have been prepared in

accordance with the Indian GAAP, the Companies Act, 1956 and have been restated as required under SEBI Guidelines.

The summary financial and operating information presented below should be read in conjunction with the financial

statements, the notes thereto included in the sections titled “Financial Statements” and the section titled “Management’s

Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages 61 & 131, respectively, of

this Letter of Offer.

In accordance with the requirements of Clause B.1 of Part II of Schedule II to the Companies Act, 1956, we report that the

profits of the Company for the above years are as set out below. These profits, expressed in lacs of rupees, have been

arrived at after charging all expenses of manufacture, working and management including depreciation and after making

such adjustments and regroupings as in our opinion are appropriate and are subject to the Accounting Policies being

followed by the Company and notes given below:

Statement of Profit & Losses (Adjusted)

(Rs in Lacs)

As At 31st March

2009 2008 2007 2006 2005

INCOME

Sales and Processing charges (Gross) 8628.12 6,098.16 3,992.77 3,808.24 3,724.11

Less:- Inter Segments Transfer 790.70 729.29 458.45 499.21 496.28

7837.42 5,368.87 3,534.32 3,309.03 3,227.83

Less :- Excise Duty 641.37 530.48 371.98 353.68 342.64

7196.05 4,838.39 3,162.34 2,955.35 2,885.19

Other Income 251.04 238.91 305.96 92.41 83.10

Increase/(Decrease) in Inventories 5.62 173.88 (156.63) 106.93 156.56

Add/(Less):- Excise duty variation

in opening/closing stock (0.49) (19.63) 14.97 (6.63) (13.16)

5.13 154.25 (141.66) 100.30 143.40

7452.22 5,231.55 3,326.64 3,148.06 3,111.69

EXPENDITURE

Purchases 573.37 394.93 0.00 0.00 0.00

Raw materials consumed 2284.11 1500.59 776.09 726.95 778.05

Staff Cost 1064.94 846.43 644.32 570.71 553.09

Manufacturing Expenses 1904.95 1302.61 942.70 1001.65 1100.62

Administrative Expenses 292.69 188.06 135.86 137.93 134.30

Selling Expenses 126.01 80.62 53.67 50.11 57.57

Interest & Finance Expenses 110.22 65.05 22.37 17.18 9.59

Depreciation/Amortization 136.17 94.01 79.38 84.01 69.98

Misc. Expenses w/off 0.01 1.30 0.56 0.23 0.12

Total Expenses 6492.47 4473.60 2,654.95 2,588.77 2,703.32

6


Profit before tax without adjustments 959.75 757.95 671.69 559.29 408.37

Prior Period expenditure

(Net of Income) 0.00 0.00 0.00 0.00 0.00

Profit before tax after adjustments 959.75 757.95 671.69 559.29 408.37

Provision for Taxes

- Current Tax 260.00 230.00 225.00 190.00 130.00

- Deferred Tax 66.80 30.00 (15.00) 1.00 10.00

- Fringe Benefits Tax 9.50 8.50 5.46 7.67 0.00

Profit After Tax 623.45 489.45 456.23 360.62 268.37

Add : Surplus brought forward

from the previous year 2,109.66 1,693.61 1,237.38 876.76 608.39

Profit available for appropriation 2,733.11 2,183.06 1,693.61 1,237.38 876.76

Appropriations :

Transfer to General Reserve 65.00 50.00 0.00 0.00 0.00

Interim Dividend 20.00

Proposed Dividend 40.00 0.00 0.00 0.00

Corporate Dividend Tax 6.80 3.40 0.00 0.00 0.00

Balance Carried to Balance Sheet 2,621.31 2,109.66 1,693.61 1,237.38 876.76

2,733.11 2,183.06 1,693.61 1,237.38 876.76

Notes:

Sales: -

� The Net Sales accounted for Rs.7196.05 lacs during the year 2008-09 as compared to Rs.4838.39 lacs during the year

2007-08 and increased by 48.73%. It accounted for 96.56% of the total income in the FY 2008-09 as against 92.48%

of 2007-08. The increase in turnover in F.Y. 2008-09 was on account of the increased in demand of Refractory items

by infrastructure industries mainly by Cement Industries resulting in increase in sales quantity which has gone up to

38894 MT in 2008-09 as compared to 2007-08.

� The Net Sales accounted for Rs.4838.39 lacs during the year 2007-08 as compared to Rs.3162.34 lacs during the year

2006-07 and increased by 53%. It accounted for 92.48% of the total income in the FY 2008. The increase in turnover

in F.Y. 2007-08 was on account of the increased demand of Refractory items by infrastructure industries mainly by

Cement Industries.

Raw Material Consumed:-

� Raw material consumption as a %age of total Income has increased from 30.65% in FY 2007-08 to 28.68% in FY

2008-09. The raw material consumption in FY 09 increased to Rs.2284.11 lacs from Rs.1500.59 lacs in FY08. This

increase in raw material consumption is mainly on account of increase in production and increase in price of raw

materials and usage of imported Raw Material which increased to 22.92% in 2009 from 19.92% in 2008.

� Raw material consumption as a %age of total Income has increased from 23.33% in FY07 to 28.68% in FY08. The

raw material consumption in FY08 increased to Rs.1500.59 lacs from Rs.776.09 lacs in FY07. This increase in raw

material consumption is mainly on account of increase in production and increase in price of raw materials and usage

of imported raw material which has gone up to 19.92 % in 2008 from 16.82% in 2007.

7


STATEMENT OF ASSETS AND LIABILITIES

The Assets and Liabilities of Shri Nataraj Ceramic and Chemical Industries Limited for each of the five financial years

ended March 31, 2009 (audited) are set out as here under:

(Rs in Lacs)

Particulars As At 31st March

2009 2008 2007 2006 2005

SOURCES OF FUNDS

1. Shareholders’ Funds

(a) Share Capital 80.00 80.00 80.00 80.00 79.97

(b) Reserves and Surplus 3080.13 2503.48 2037.43 1581.20 1220.58

Total shareholder’s Funds (Net Worth) 3160.13 2583.48 2117.43 1661.20 1300.55

2. Loan Funds

(a) Secured Loans 1594.63 611.15 173.71 216.66 283.98

(b) Unsecured Loans 125.00 125.00 125.00 125.00 148.01

3. Deferred Tax 204.50 137.70 107.70 122.70 121.70

TOTAL 5084.26 3457.33 2523.84 2125.56 1854.24

APPLICATION OF FUNDS

1. Fixed Assets

(a) Gross Block 3617.02 2671.42 2280.82 2227.24 2198.10

(b) Less: Depreciation 1794.28 1659.16 1582.11 1516.62 1443.48

(c) Net Block 1822.74 1012.26 698.71 710.62 754.62

(d) Capital Work in progress 162.41 8.47 77.73 0.15 0.85

2. Investments 360.03 771.50 1189.08 360.03 250.03

3. Current Assets, Loans and Advances

(a) Inventories 1933.40 1254.48 744.26 845.31 695.89

(b) Sundry Debtors 1541.89 670.94 319.95 350.89 444.74

(c) Cash and Bank Balances 142.88 60.92 104.99 44.46 24.28

(d) Other Current Assets 3.12 11.07 12.31 11.31 14.05

(e) Loans and Advances 1391.03 1377.57 790.86 491.79 291.99

Sub Total 5012.32 3374.98 1972.37 1743.76 1470.95

Less:Current Liabilities and Provisions

(a) Current Liabilities 1497.42 1052.83 867.65 367.60 464.21

(b) Provisions 775.82 657.05 546.40 321.40 158.00

Sub Total 2273.24 1709.88 1414.05 689.00 622.21

Net Current Assets 2739.08 1665.10 558.32 1054.76 848.74

TOTAL 5084.26 3457.33 2523.84 2125.56 1854.24

8


Note:

Secured Loan: -

� Secured loan increased to Rs. 1594.63 Lacs (Term Loan Rs. 1165.00 Lacs and Cash Credit Limit Rs. 429.63 Lacs) in

FY 2009 as compared to Rs. 611.15 lacs (Term Loan Rs. 412.50.00 Lacs and Cash Credit Limit Rs. 198.65 Lacs) in

FY 2008 due to additional term loan taken for capacity expansion which has increased to 88000 MT in 2009 from

69000 MT in 2008. and due to increase in volume of operation and increase in level of inventory and debtors.

� Secured loan increased to Rs. 611.15 Lacs (Term Loan Rs. 412.50 Lacs and Cash Credit Limit Rs. 198.65 Lacs) in

FY 2008 as compared to Rs. 173.71 lacs (Term Loan Rs.137.50 Lacs and Cash Credit Limit Rs. 36.21 Lacs) in FY

2007 due to additional term loan taken for capacity expansion which has increased to 69000 MT in 2008 from 61000

MT in 2007 and due to increase in volume of operation and increase in level of inventory and debtors.

Inventory: -

� The inventory level was Rs. 1933.40 Lacs in F.Y. 2008-09 as compared to Rs. 1254.48 Lacs which was mainly due

to raw material which rose to Rs.1178.47 lacs from Rs.629.36 lacs in F.Y. 2007-08 reason being level of holding of

imported Raw Material which is purchased in bulk quantity, resulting for economic reasons and future availability &

value of stores and spares which was Rs. 313.34 Lacs in F.Y. 2008-09 as compared to Rs. 190.56 Lacs in F.Y. 2007-

08.

� The inventory level was Rs. 1254.48 Lacs in F.Y. 2007-08 as compared to Rs. 744.26 Lacs which was mainly due to

raw material which rose to Rs.629.36 lacs from Rs.281.57 lacs reason is being level of holding of imported Raw

Material which is purchased in bulk quantity, resulting for economic reasons and future availability & value of

Finished Stock which was Rs. 388.36 Lacs in F.Y. 2007-08 as compared to Rs. 226.78 Lacs.

Loans and Advances: - The Loans and Advances were Rs. 1391.03 lacs in F.Y. 2008-09 as compared to Rs.1377.57 lacs

in F.Y. 2007-08. It has been mainly due to increase in the level of operation.

Debtors:-

The debtors which stood at Rs. 1541.89 on 31.03.2009 include Rs. 302.10 due from the following related parties.

Particulars Amount (Rs. In Lacs)

Dalmia Cement (Bharat) Ltd. & Dalmia Refractories 298.18

Orissa Cement Limited 3.92

Total 302.10

The debtors which stood at Rs. 670.94 on 31.03.2008 include Rs. 59.09 due from the following related parties.

Particulars Amount (Rs. In Lacs)

Dalmia Cement (Bharat) Ltd. & Dalmia Refractories 37.11

Orissa Cement Limited 21.98

Total 59.09

Fixed Assets: -

� During the F.Y. 2008-09 the Fixed Assets (Net Block) has increased by Rs. 810.48 Lacs because of the addition made

mainly in Plant & Machinery of Rs. 643.29 Lacs and in building Rs. 300.78 Lacs out of the total addition of Rs.

947.07 Lacs made during the F.Y. 2008-09. These additions are for enhancing the production capacity which rose to

88000 MT in 2009 from 69000 MT in 2008.

� During the F.Y. 2007-08 the Fixed Assets (Net Block) has increased from Rs. 698.71 Lacs because of the addition

made mainly in Plant & Machinery of Rs. 389.76 out of the total addition of Rs. 409.02 Lacs made during the F.Y.

2007-08. These additions are for enhancing the production capacity which rose to 69000 MT in 2008 from 61000

MT in 2007.

9


GENERAL INFORMATION


Incorporation

The Company was originally incorporated as Dalmia Ceramic Industries Limited on June 21, 1973, under the Companies

Act, 1956, with the Registrar of Companies, Tamil Nadu. The name of the Company was changed to Shri Nataraj Ceramic

and Chemical Industries Limited, and a fresh Certificate of Incorporation issued on November 01, 1983 by the Registrar of

Companies, Tamil Nadu at Chennai (then Madras).

Registered Office

Shri Nataraj Ceramic and Chemical Industries Limited

Dalmiapuram, P.O. Kallakudi - 621 651

Dist. Tiruchirapalli, Tamil Nadu

Tel: +91 4329 235133, 235155; Fax: +91 4329 235122


Changes in the Registered Office since incorporation

Since its incorporation the Company’s Registered Office is situated at Dalmiapuram, P.O.Kallakudi-621 651 Dist.

Tiruchirapalli, Tamil Nadu. There have been no changes in registered office of the Company.

Corporate Office


4, Scindia House, Connaught Place

New Delhi-110001

Tel: +91 11 23457102, 23324135

Fax: +91 11 23324136


Company Registration No.: 18-06372

CIN : L24297TN1973PLC006372

Address of the Registrar of Companies:

Registrar of Companies, Tamil Nadu

Block No.6, B Wing, 2nd Floor

Shastri Bhawan 26, Haddows Road

Chennai - 600034

Production Facilities:

1) Dalmiapuram, P.O. Kallakudi

Dist. Tiruchirapalli, Tamil Nadu-621651

2) Jam Nagar, Dwarka Road, Jam-Khambalia

Gujarat- 361305.

3) 23 to 27, 29A, G.I.D.C., Wankaner,

Gujarat-363622

Dear Shareholder(s),

Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on September 09, 2008, it

has been decided to make the following offer to the Equity Shareholders of the Company, with a right to renounce:

ISSUE OF 2400000 FULLY PAID UP 6% NCDs WITH DETACHABLE WARRANTS WITH A FACE VALUE OF

Rs. 10/- EACH FOR AN AMOUNT AGGREGATING TO Rs. 240 LACS ON RIGHTS BASIS TO THE EXISTING

EQUITY SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF THREE FULLY PAID UP 6% NCDS WITH

DETACHABLE WARRANTS FOR EVERY ONE EQUITY SHARE HELD BY THE EXISTING SHAREHOLDERS

ON THE RECORD DATE, THAT IS ON JULY 06, 2009.

10


Investors please note:

In the reasonable opinion of the Board, there are no circumstances that have arisen since the date of the last financial

statement disclosed in this Letter of Offer, that materially or adversely affect or are likely to affect the performance or

profitability of the Company or value of its assets or its ability to pay its liabilities within the next twelve months.

Important

1. This Issue is applicable only to those shareholders whose names appear as beneficial owners as per the list to be

furnished by Depositories in respect of the Equity Shares held in the electronic form and on the register of members

of the Company in respect of the Equity Shares held in physical form at close of business hours on July 06, 2009, i.e.

the Record Date.

2. Shareholders’ attention is drawn to Risk Factors appearing on page no viii to xiii of this Letter of Offer.

3. Please ensure that the CAF is received with the abridged version of this Letter of Offer.

4. Please read this Letter of Offer and the instructions contained therein and in the CAF carefully, before filling in the

CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefully

followed. The application is liable to be rejected if it is not in conformity with the terms of this Letter of Offer and/

or the CAF.

5. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrar to the Issue viz.

Karvy Computershare Private Limited, quoting the registered folio number/DP ID/client ID number and the serial

number of the CAF and his/her full name and address.

6. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrars/Company will issue a

duplicate CAF on the request of the shareholder who should furnish the registered folio number/DP ID/client ID

number and his/her full name and address to the Registrars/Company. Please note that those applicants who are

making the application in the duplicate CAF should not utilize the original CAF for any purpose including renunciation,

even if it is received/found subsequently. In case the original and the duplicate CAFs are lodged for subscription,

both the applications will be rejected.

7. The Issue will be kept open for a minimum period of 15 days. If extended, it will be kept open for a maximum period

of 30 days.

8. The Lead Managers and the Company shall make all information available to the Equity Shareholders and no selective

or additional information would be available for a section of the Equity shareholders in any manner whatsoever

including at presentations, in research or sales reports etc. after filing of the Letter of Offer with SEBI/Stock Exchange.

9. The Lead Manager and the Company shall update the Letter of Offer and keep the public informed of any material

changes till the listing and trading commences.

10. All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock Exchange have

been complied with.

Board of Directors

The Company is presently managed by its Board of Directors comprising of four Directors.

The Board comprises of:

S. No. Name Designation Status Address Director’s

Identification

Number

1 Shri Deepak Ambadas Managing Director & Executive C-62, Sector 14, 02421599

Thombre CEO Director Noida ,

S/o Shri Ambadas Raghunath Uttar Pradesh

Thombre

2 Shri C.Nagaratnam Whole-Time Director Executive B-7, Dalmia Colony, 00266838

S/o Shri N. Chandrasekaran Director Dalmiapuram PO,

Lalgudi TK, Trichy,

Tamil Nadu - 621651

11


3 Shri N. Gopalaswamy Director Non- C-1, Durga Paradise, 00017659

S/o-Shri S. Nagarajan Executive & 5A, Ramcharapuram

Independent Thennur- 620 017

Director Dist. Tirchy, Tamilnadu

4 Shri Pradeep Dayal Director Non-

Mathur Executive & B-407, Nirman Vihar 00266758

S/o-Shri G. D. Mathur Independent New Delhi- 110092

Director

For more details on the Board of Directors, please refer to the section titled “Our Management” beginning from page no.

48 of this Letter of Offer.

Company Secretary

Mr. C.N. Maheshwari



New Delhi-110001

Tel: +91 11 23457102, 23324135

Fax: +91 11 23324136


Legal Advisor to the Issue

M/s Zenith India Lawyers, Advocates & Solicitors

M-7/17, 2nd Floor, DLF Phase II

Gurgaon, 122002

Tel: 0124 - 4296671

Fax: 0124 - 4296671


Contact Person: Mrs. Raj Rani Bhalla, Sr. Partner

Bankers To The Company

Axis Bank Limited

Statesman House, 13th Floor

148, Barakhamba Road

New Delhi-110001

Tel: 011-41521951

Fax: 011-41521953

Contact Person: Vishal Mehra


Website: www.axisbank.com

Compliance Officer

Mr. C.N. Maheshwari



New Delhi-110001

Tel: +91 11 23457102, 23324135

Fax: +91 11 23324136


The Investors are requested to contact the Compliance Officer for any pre-issue/post-issue questions or information,

including letter of allotment, refund orders, demat credits of allotted shares etc.

12


Issue Management Team Lead Managers To The Issue

Chartered Capital and Investment Limited D and A Financial Services Private Limited

SEBI Regn No.- INM000004018 SEBI Regn No.- INM000011484

711, Mahakant, Opp V.S. Hospital, Ellisbridge, 13, Community Centre

Ahmedabad - 380 006 East of Kailash

Tel: +91-79-2657 5337, 2657 7571 New Delhi - 110065

Fax: +91-79-2657 5731 Tel: 011 26218274, 26419079

E-mail: [email protected] Fax: 011 26219491

Website:www.charteredcapital.net Email: [email protected]

Contact Person: Mr. Sagar Bhatt Contact Person: Mr. Heemadri Mukerjea

The statement of inter se allocation of responsibilities for this Issue is as follows:

No. Activities Responsibility Coordinator

a) Capital structuring with the relative components and formalities such CCIL CCIL

as composition of debt and equity type of instruments.

b) Drafting of offer document.

The designated Lead Managers shall ensure compliance with SEBI CCIL CCIL

Guidelines and other stipulated requirements and completion of

prescribed formalities with the Stock Exchanges and SEBI.

c) Drafting of advertisement/publicity material including newspaper CCIL CCIL

advertisements and brochure/memorandum containing salient features

of the offer document.

The designated Lead Managers shall ensure compliance with SEBI

Guidelines and other stipulated requirements and completion of pres-

cribed formalities with the Stock Exchanges and SEBI.

d) Retail/Non-Institutional marketing strategy which will cover inter-alia, Both CCIL

preparation of publicity budget, arrangement for selection of (i) ad-

media, (ii) centres of holding conferences of brokers, investors etc.,

(iii) bankers to the issue, (iv) collection centres, (v) distribution of

publicity and Issue materials including application form and Letter

of Offer.

e) Institutional marketing strategy Both DAFSPL

f) Selection of various agencies connected with the Issue, namely Both DAFSPL

Registrars to the Issue, printers, monitoring agency and advertisement

agencies.

g) Follow up with Bankers to the Issue to get quick estimates of CCIL CCIL

collection and advising the Issuer about closure of the Issue based

on the correct figures.

h) The post issue activities will involve essential follow up steps which CCIL CCIL

must include finalization of basis of allotment/weeding out of mult-

iple applications, listing of instruments and dispatch of certificates and

refunds, with the various agencies connected with the activities such

as Registrars to the Issue, Bankers to the Issue. Whilst, many of the

post issue activities will be handled by other intermediaries, the

designated Lead Manager shall be responsible for ensuring that these

agencies fulfill their functions and enable them to discharge this

responsibility through suitable agreements with the Issuer Company.

Note: For the purposes of allocation of responsibilities in this Issue, “Both” means Chartered Capital and Investment

Limited and D and A Financial Services (P) Limited, “CCIL” means Chartered Capital and Investment Limited and

“DAFSPL” means D and A Financial Services (P) Limited.

13


Registrar to The Issue

Karvy Computershare Private Limited

SEBI Regn. No.-INR 000000221

Plot No. 17-24, Vittal Rao Nagar,

Madhapur, Hyderabad-500081

Tel: 91-40-23420815/16/17/18

Fax: 91-40-23431551

Website: www.karvy.com

Email : [email protected]

Contact Person: M Murali Krishna

Bankers To The Issue

Axis Bank Limited

East of Kailash Branch

D-70A, East of Kailash,

New Delhi-110065.

Tel: 011- 46500495/ 496 / 497

Fax: 011-46500498

Contact Person: Sheetal Handa


Website: www.axisbank.com

Auditors

S S Kothari Mehta & Co, Chartered Accountants

146-149, Tribhuwan Complex,

Ishwar Nagar, Mathura Road,

New Delhi - 110065

Tel.: +91 11 66628888

Fax: +91 11 66628889


Contact Person: CA Arun Kumar Tulsian

Inter-se Allocation of Responsibilities

Not applicable

Credit Rating

The Company has appointed ICRA limited for the purpose of rating of its Proposed issue of 6% Non Convertible Debentures.

The Company has received a communication from ICRA Limited that LBBB+ rating has been assigned to the proposed

issue of 6% Non convertible Debentures but the Company has not accepted the same.

LBBB is the moderate -credit quality rating assigned by ICRA. The rated instrument carries higher than average credit

risk.

The rating action takes into account the favourable demand outlook for high alumina refractories, driven by expectations

of significant growth in the main consuming industries namely cement, steel and coke ovens. This coupled with the

company’s established market position is likely to result in significant revenue and profit growth. ICRA also derives

comfort from captive bauzite mines (which meet a significant chunk of bauxite requirement) and rotary kiln for calcinations

of bauxite and clay, which gives it a competitive advantage. The rating is also supported by the company’s strong financial

indicators and strength arising out of its being a part of the Dalmia group of companies. The rating is however constrained

by the strong competitive pressures, including those from small players, Which coupled with increasing cost of power and

fuel and outsourced raw materials (such as some grade of bauxite) are likely to result in some pressures on SNCCIL’s

profit margins in the medium term. The rating is also constrained by vulnerability of the industry to downcycles in the

consuming industries (which are all prone to cyclical trends) and small size of operations.

Ipo Grading

This being a rights issue of NCDs, no IPO Grading is required.

14


Trustees

The Company has appointed IL&FS Trust Company as the trustees for the holders of the NCDs offered through this Letter

of Offer.

Monitoring Agency

No agency has been appointed to monitor utilization of Funds. However, in case such an agency is appointed such agency

shall file the monitoring report with the issuer company and not with SEBI, so as to enable the Company to place the report

before its Audit committee.

Appraising Entity

The project is only for the raising funds for working capital requirement and General Corporate Purposes of the Company

based upon Management estimates and is not appraised.

Standby Underwriting Agreement

The present Rights Issue is not underwritten. However, the Promoters group has confirmed vide its Letter of intent that

they intent to subscribe to the full extent of their entitlement in the Issue or renounce the same to another person or entity

forming part of the Promoter Group. Further, the Promoters group has also stated that, in the event of undersubscription of

the total issue size, they may apply for additional 6% NCDs with Detachable Warrants in the Issue such that at least 90%

of the Issue size is subscribed. As a result of this subscription and consequent allotment and conversion of detachable

warrants, the Promoters Group may acquire Equity Shares over and above their entitlement in the Issue, which may result

in their shareholding in the Company being above their current shareholding.

Allotment Letters / Refund Orders

The Company will issue and dispatch letters of allotment/ debenture/warrants/share certificates/ demat credit or letters of

regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period

of 15 (Fifteen) days from the date of closure of the Issue. If such money is not repaid within 8 (eight) days from the day the

Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73(2)/ (2A)

of the Companies Act.

Applicants residing at 68 centers where clearing houses are managed by the Reserve Bank of India (RBI), will get refunds

through ECS only (Electronic Clearing Service) except where applicants are otherwise disclosed as applicable/eligible to

get refunds through direct credit and RTGS. In case of those Applicants who have opted to receive their Rights Entitlement

in dematerialized form using electronic credit under the depository system, advice regarding their credit of the NCDs shall

be given separately. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter through

ordinary post intimating them about the mode of credit of refund within 15 days of closure of Issue.

In case of those Applicants who have opted to receive their Rights Entitlement in physical form and the Company issues

letter of allotment, the corresponding securities certificates will be kept ready within one month from the date of allotment

thereof or such extended time as may be approved by the Company Law Board under Section 113 of the Companies Act or

other applicable provisions, if any. Allottees are requested to preserve such letters of allotment, which would be exchanged

later for the securities certificates.

For more information please refer to the section titled “Terms of the Issue” on page 176 of this Letter of Offer.

The letter of allotment / refund order exceeding Rs.1,500 would be sent by registered post/speed post to the sole/first

Applicant’s registered address. Refund orders up to the value of Rs.1,500 would be sent under certificate of posting. Such

refund orders would be payable at par at all places where the applications were originally accepted. The same would be

marked ‘Account Payee only’ and would be drawn in favour of the sole/first Applicant. Adequate funds would be made

available to the Registrar to the Issue for this purpose.

Note:

1. Investors are advised to contact the Registrar to the Issue/ Compliance Officer in case of any pre-issue/postissue

related problems such as non-receipt of Letter of Offer/ Abridged Letter of Offer/ CAF/ Letter of Allotment/Securities

Certificate(s) / Refund Orders.

2. The funds received against this Issue will be transferred to a separate bank account other than the bank account

referred to in sub-section (3) of Section 73 of the Act.

3. The Company has been filing periodic statements in regard to financial results and shareholding pattern with the

Stock Exchanges (and all documents that are to be filed with the Registrar of Companies) and such statements should

be available on websites of the Designated Stock Exchange. It has also been regularly paying the annual listing fees

to the Stock Exchanges.

15


CAPITAL STRUCTURE OF THE COMPANY

Share Capital as on the date of filing of Letter of Offer with SEBI

(Amount in Lacs)

PARTICULARS NOMINAL AGGREGATE

VALUE VALUE

A. Authorized Share Capital

5000000 Equity shares of Rs. 10/- each 500

B. Issued, Subscribed and paid-up capital

800000 Equity shares of Rs. 10/- each 80

C. Present issue being offered to the Equity Shareholders

through the Letter of Offer

2400000 Debentures of Rs. 10/- each being offered at at par.

D. Paid-up Capital after the Issue

800000 Equity Shares of Rs. 10/- each 80

E. Capital arising out of exercise of 2400000 warrants into equity 240 [*]*

shares of Rs. 10 each at a premium of Rs. [�] assuming full exercise

Paid up Capital after exercise of Warrants:

3200000 Equity Shares of Rs. 10/- each 320 [*]*

F. Share Premium Account

Before the Issue Nil

After the Issue Nil

After excersise of warrants assuming full conversion [*]*

* Can be ascertained only after the warrant exercise price is fixed up by the Board of Directors. For details please refer to

page 180 of the Letter of Offer.

Notes to Capital Structure

Details of Increase in Authorized Capital

Date Number of Cumulative Face Authorized Particulars

Shares Number of Value (Rs) Capital (Rs)

Shares

On incorporation 500000 500000 1 5000000 Incorporation

01.03.1983 1000000 1500000 10 15000000 Increase

29.09.1993 1500000 3000000 10 30000000 Increase

28.08.2008* 2000000 5000000 10 50000000 Increase

* Increased through postal ballot.

16


Capital Buildup: The existing Share Capital of the Company has been subscribed and allotted as under:

Date of No. of Face Issue Conside Nature No of Paid Up Cumulative

Allotment/ Equity Value Price ration of Equity Capital Share

Fully shares (Rs) (Rs) Allotment Shares (Rs.) Premium

Paid up Cumulative (Rs.)

Subscriber to

Memo. 10 1 1 Cash Subscription on signing 10 10 0

of Memorandum of

Association

04.09.1973 249980 1 1 Cash Further Allotment 249990 249980 0









13.05.1978 125000 10 10 Capitalisation Bonus issue* 250000$ 1250000 0

of Reserves

04.05.1983 250000 10 10 Capitalisation Bonus issue** 500000 2500000 0

of Reserves

16.10.1984 300000 10 10 Cash Public Issue 800000 3000000 0

$: This number has been adjusted keeping in view the alteration of the equity share capital by consolidation of 250000equity shares of Rs. 1 each into 25000 equity shares of Rs. 10 each. This was done in the AGM of the Company on30.12.1975.

* The Company had approved Bonus Issue in the AGM of the Company held on 20.12.1977 in the proportion of oneShares for every one equity Shares held by the shareholders and allotment was made on 13.05.1978 by capitalizationof general reserve of the Company.

** The Company had approved Bonus Issue in the EGM of the Company held on 01.03.1983 in the proportion of oneShares for every one Shares held by the shareholders and allotment was made on 04.05.1983 by capitalization ofgeneral reserve of the Company.

2. Redeemable Preference Shares

There are no issued redeemable preference shares as on date of this Letter of Offer.

3. Pre issue shareholding pattern of the Company as on May 31, 2009 is as follows:

17


Cate- Category of No. of Total No. of Total shareholding Shares pledged

gory shareholder share No. of shares as a percentage or otherwise

Code holders shares held in of total encumbered

demater- number

ialized of shares

form As a As a As a As a

perce perce perce perce

ntage ntage ntage ntage

of (A+B) of (A+B+C)

(A) * Shareholding of Promoter

and Promoter Group

(1) Indian - -

(a) Individuals/Hindu Undivided Nil Nil Nil Nil Nil - -

Family

(b) Central Government/State Nil Nil Nil Nil Nil - -

Government(s)

(c) Bodies Corporate 9 329281 4450 41.16 41.16 - -

(d) Financial Institutions/Banks Nil Nil Nil Nil Nil - -

(e) Any Other (specify) Nil Nil Nil Nil Nil - -

Sub-Total (A)(1) 9 329281 4450 41.16 41.16 - -

(2) Foreign Nil Nil Nil Nil Nil - -

(a) Individuals (Non-Resident

Individuals/Foreign Individuals Nil Nil Nil - -

(b) Bodies Corporate Nil Nil Nil - -

(c) Institutions Nil Nil Nil - -

(d) Any Other (specify) Nil Nil Nil - -

Sub-Total (A)(2) Nil Nil Nil - -

Total Shareholding of Prom-

oter and Promoter Group

(A)=(A)(1)+(A)(2) 9 329281 4450 41.16 41.16 - -

(B) Public shareholding

(1) Institutions Nil Nil Nil - -

(a) Mutual Funds/UTI Nil Nil Nil - -

(b) Financial Institutions/Banks 10 1262 0 0.16 0.16 - -

(c) Central Government/State Nil Nil Nil - -

Government(s)

(d) Venture Capital Funds Nil Nil Nil - -

(e) Insurance Companies Nil Nil Nil - -

(f) Foreign Institutional Investors Nil Nil Nil - -

(g) Foreign Venture Capital Investors Nil Nil Nil - -

(h) Any Other (specify)

Sub-Total (B) (1) 10 1262 0 0.16 0.16 - -

(2) Non-institutions

(a) Bodies Corporate 44 16629 7902 2.08 2.08

(b) Individuals -

i) Individual shareholders holding 5351 393833 23244 49.23 49.23 - -

nominal share capital upto Rs.1 lac.

ii) Individual shareholders holding 2 57339 57339 7.17 7.17 - -

18


nominal share capital in excess of

Rs.1 lac.

(c) Any Other (specify)

Directors 2 58 0 0.01 0.01 - -

Non Resident Indian 11 1598 0 0.20 0.20 - -

Sub-Total (B)(2) 5410 469457 88485 58.68 58.68 - -

Total Public Shareholding 5420 470719 88485 58.84 58.84 - -

(B)=(B)(1)+(B)(2)

TOTAL (A)+(B) 5429 800000 92935 100.00 100.00 - -

(C) Shares held by Custodians and

against which Depository Receipts

have been issued Nil Nil Nil

GRAND TOTAL (A)+(B)+( C) 5429 800000 92935 100.00 100.00 - -

* Shares held by promoters in different folios have been clubbed together

4. The Pre Issue and Post Issue Shareholding Pattern of Promoter and Promoter group is as under (as on May

31, 2009):

Name of Entities PRE ISSUE POST ISSUE

NO % NO %

SHARES SHARES

A Promoters 0.00 0.00 [*] [*]

Total (A) 0.00 0.00 [*] [*]

B Promoters Group

Relatives of Promoters 0.00 0.00 [*] [*]

Sub Total (a) 0.00 0.00 [*] [*]

Trusts / HUFs 0.00 0.00 [*] [*]

Sub Total (b) 0.00 0.00 [*] [*]

Bodies Corporate

Ankita Pratisthan Limited 61890 7.74 [*] [*]

Sita Investment Company Limited 50322 6.29 [*] [*]

Rama Investment Company Pvt. Ltd. 28477 3.56 [*] [*]

Puneet Trading & Investment Co. Pvt. Ltd. 50 0.01 [*] [*]

Shree Nirman Limited 18450 2.31 [*] [*]

Himgiri Commercial Limited 6000 0.75 [*] [*]

Valley Agro Indusries Limited 22362 2.79 [*] [*]

Alirox Abrasives Limited 64000 8.00 [*] [*]

Mayuka Investment Limited 77730 9.72 [*] [*]

Sub Total (c) 329281 41.16 [*] [*]

Total (B) (a)+ (b)+(c) 329281 41.16 [*] [*]

Sub-total (A)+(B) 329281 41.16 [*] [*]

Total Promoters and Promoter Group holding 329281 41.16 [*] [*]

19


5. Details of the transactions in Equity Shares by the Promoters and the Promoter Group during the last six

months

The Promoters and the Promoter Group of the Company have not purchased/ sold any equity shares of the Company

during the last six months.

6. Equity Shares held by top ten shareholders

1. The ten largest shareholders as on the date of filing of the Letter of Offer with Stock Exchanges are as follows:

Name No. of shares % holding

MAYUKA INVESTMENT LTD 77730 9.72

ALIROX ABRASIVES LTD 64000 8.00

ANKITA PRATISTHAN LIMITED 61890 7.74

SITA INVESTMENT COMPANY LTD 50322 6.29

VALLABH BHANSHALI & SURAJ BHANSHALI 30000 3.75

RAMA INVESTMENT CO PVT LTD 28477 3.56

MAHENDRA GIRDHARILAL WADHAWANI 27339 3.42

VALLEY AGRO INDUSTRIES LIMITED 22362 2.79

SHREE NIRMAN LIMITED 18450 2.31

CHANDRAVADAN DESAI 8900 1.11

2. The ten largest shareholders, 10 days prior to the date of filing of the Letter of Offer with Stock Exchange are

as follows:












3. The ten largest shareholders, two years prior to the date of filing of the Letter of Offer with Stock Exchange are

as follows:












20


Note: Shares held in different folios have been clubbed together.

7) The total number of members of the Company as on May 31, 2009 was 5429.

8) The present Issue being a Rights Issue, as per SEBI guidelines, the requirement of promoters contribution and lock-in are not applicable.

9) The Company has not instituted any employee stock option scheme as on the date of this Letter of Offer.

10) The Company has not availed of “bridge loans” to be repaid from the proceeds of the Issue for incurring expenditureon the Objects of the Issue.

11) As on the date of this Letter of Offer, there are no outstanding warrants, options or rights to convert debentures, loansor other instruments into Equity Shares.

12) There will be no partly paid up shares arising out of this issue.

13) As on date there are no partly paid up shares.

14) The Promoters and Directors of the Company and Lead Manager of the Issue have not entered into any buy-back,standby or similar arrangements for any of the securities being issued through this Letter of Offer.

15) The terms of issue to Non-Resident Equity Shareholders/Applicants have been presented under the section “Termsof the Issue” on page 176 of this Letter of Offer.

16) At any given time, there shall be only one denomination of the Equity Shares of the Company and the Company shallcomply with such disclosure and accounting norms specified by SEBI from time to time. The Equity Shareholders ofthe Company do not hold any warrant, option or convertible loan or debenture, which would entitle them to acquirefurther shares in the Company.

17) No further issue of capital by way of issue of bonus shares, preferential allotment, rights issue or public issue or inany other manner which will affect the equity capital of the Company, shall be made during the period commencingfrom the filing of the Letter of Offer with the SEBI and the date on which the 6% NCDs with Detachable Warrantsissued under the Letter of Offer are listed or application moneys are refunded on account of the failure of the Issue.Further, presently the Company does not have any intention to alter the equity capital structure by way of split/consolidation of the denomination of the shares on a preferential basis or issue of bonus or rights or public issue ofshares or any other securities within a period of six months from the date of opening of the Issue.

18) The Issue will remain open for 15 days. However, the Board will have the right to extend the Issue period as it maydetermine from time to time but not exceeding 30 days from the Issue Opening Date.

19) In case any warrants remain to be exercised/converted into equity shares, within the Warrant Exercise Period, THEWARRANTS SHALL LAPSE i.e. the warrant holders shall not be entitled to exercise or claim issue of equity sharesafter expiry of the warrant exercise period. (explanation - the warrants to be lapsed in case it is not exercised by theeligible equity shareholders for conversion during the exercise period)

20) The Promoters Group has clarified that it intends to exercise the warrants to be issued to it under this Rights Issue, infull. The Promoters Group reserves the right to subscribe to their entitlement in the Issue by subscribing for renunciationif any made within the Promoters group to another person or entity forming part of the Promoters Group. ThePromoters group may also apply for 6% NCDs with detachable warrants in the Issue, such that at least 90% of theIssue is subscribed. As a result of this subscription and consequent allotment, the Promoters Group may acquire 6%NCDs with detachable warrants over and above their entitlement in the Issue, which may result in an increase of theshareholding being above the current shareholding upon conversion of the warrants being issued alonwith the 6%NCDs being issued under the present Issue. This subscription and acquisition of additional Equity Shares by thePromoters Group, if any, will not result in change of control of the management of the Company and shall be exemptin terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirementsindicated in the section on Objects of the Issue on page 21 of this Letter of Offer, there is no other intention/purposefor this Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoters Group,after conversion of the detachable warrants being offered in this Issue, the Promoters Group’s shareholding in theCompany exceeds their current shareholding. The Promoters Group intends to subscribe to such unsubscribed portionas per the relevant provisions of the law. Allotment to the Promoters Group of any unsubscribed portion, over andabove their entitlement shall be done in compliance with Clause 40A the Listing Agreement and other applicablelaws prevailing at that time relating to continuous listing requirements.

21) The post issue shareholding pattern as stated in this chapter must be read subject to the aforementioned point.

21


OBJECTS OF THE ISSUE

The objects of the present issue of 6% NCDs with Detachable Warrants on rights basis are:

a. To raise money for working capital;

b. To meet the expenses of this Issue;

c. To raise resources for general corporate purposes.

For the sake of clarity it is hereby stated that the objects are stated in the order of priority. Objects at serial no. ‘a’ and ‘b’

will be given priority over ‘c’.

The net proceeds of the Issue, after deduction of any issue expenses, are estimated to be approximately Rs. 200 Lacs

(excluding the amount that will be raised upon consversion of the detachable warrants at a time as mentioned in this letter

of offer under the chapter ‘Terms of the Issue’ on page no 176 of this Letter of Offer).

FUND REQUIREMENT

The fund requirement and deployment are based upon Management estimates

Particulars Amount (In Rs. Lacs)

Working capital requirement 200

Meeting issue expenses 30

General Corporate purposes [*]*

Total [*]*



The amount that will be raised upon conversion of the detachable warrants shall be used towards General Corporate

Purposes as mentioned later in this section.

The Objects Clause of the Memorandum and Articles of Association of the Company enables it to

undertake the activities for which the funds are to be raised in the present Rights Issue. Further, it is confirmed that the

activities, which the company has been carrying out until now is in accordance with the object clause of Memorandum and

Articles of Association of the Company.

FUNDING PLANS (MEANS OF FINANCE)

Particulars Amount (In Rs. Lacs)

Gross proceeds from the issue 240

Rights Issue of 2400000 6% NCDs of Rs. 10 each (issued with

2400000 Warrants attached thereto)* 240

Total 240

*This does not consider the amount mobilized at the time of conversion of warrants in accordance with the terms of the

Issue mentioned in this Letter of Offer.

In the present issue the Company does not require to comply with clause 2.8 of SEBI (Disclosure and Investor Protection)

Guidelines, 2000 as the only source of funding for the proposed use (raising funds for working capital) is being funded by

means of this issue.

Reasons for raising working capital

Working capital is being raised to partly fund the long term working requirement of the Company.

APPRAISAL

No appraisal of the working capital requirement has been done. It is based upon Management estimates.

22


DETAILED FUND REQUIREMENT FOR WORKING CAPITAL

Particulars Amount Amount

(In Rs. Lacs) (In Rs. Lacs)

Cash & Bank 100.00

Receivables 1085.00

Inventory:

Raw Material 1,025.00

W.I.P. 40.00

Finished Stock 430.00

Stores and Spares 250.00

Coal & Fuel 60.00 1805.00

Other Current Assets 350.00

3340.00

Less : Current Liabilities

Bank borrowing 1150.00

Sundry Creditors 450.00

Advance from Customer 200.00

Other Liabilities 75.00 1875.00

Deficit 1465.00

To be financed by :

Proposed Issue 200.00

Internal Accruals 1265.00 1465.00

As per the current Balance sheet the Company has a Reserves and Surplus position of 3080.13 Lacs. The current

internal accruals position is adequate to finance the part of the working capital requirement as described above.

Calculation of Working Capital as on 31st March, 2009

Current Assets, Loans and Advances

Inventories :

Stores & Spares 313.34

Raw Materials 1,178.47

Loose Tools 4.34

Finished Goods 378.58

Semi-finished Goods 58.67 1,933.40

Sundry Debtors 1,541.89

Cash and Bank Balances 142.88

Other Current Assets 3.12

Loans and Advances 1,391.03 5,012.32

Current Liabilities and Provisions

Sundry Creditors 1,241.24

23


Advances 148.01

Unclaimed Dividend 2.47

Matured Fixed Deposit and Interest thereon 0.28

Other Liabilities 105.42

Provision for tax 729.02

Provision for Dividend (including Corporate Dividend Tax) 46.80 2,273.24

Working Capital (Current Assets - Current Liabilities) 2,739.08

BREAK-UP OF ISSUE EXPENSES

The expenses for this Issue include management fees, selling commissions, printing and distribution expenses, legal fees,

fees to various advisors, statutory advertisement expenses and listing fees payable to the Stock Exchanges, among others.

The estimated Issue expenses are as under:

Activity Amount (in Rs. Lacs)

Lead Management Fees 8

Advertisement and Marketing expenses 2

Printing and Stationery 5

Registrar to the Issue 1.5

Others (legal fee, listing fee, etc) 13.5

Total Estimated Issue expenses 30

General Corporate Purposes:

The Company is continuously looking for opportunities to grow and towards this a portion of the proceeds of the Issue will

be used to meet its general corporate purposes which include but are not restricted to marketing and brand-building,

training key employees, working capital requirements, acquisition of businesses and such other activities.

No part of the issue proceeds will be paid as consideration to promoters, directors, key managerial personnel,

associates or group companies except in the normal course of business and as disclosed in the sections titled ‘Interest

of Promoters’ & ‘Interest of Directors’ as mentioned on page nos. 56 and 53 of this Letter of Offer.

In case of variations in the actual utilization of funds earmarked for the purposes set forth above, increased fund requirements

for a particular purpose may be financed through internal accruals and debt.

FUNDS DEPLOYED:

The Company has received the Sources and Deployment Funds Certificate dated June 25, 2009 from N. K. Bansal & Co.,

Chartered Accountants. The certificate states that the Company has deployed amounts aggregating Rs. 9.79 Lacs. Details

of the sources and deployment of funds as on June 15, 2009 as per the certificate is as follows:

Particulars Amount (Rs. Lacs)

Right Issue Expenses 9.79

Total 9.79

SOURCES OF FINANCING OF FUNDS ALREADY DEPLOYED

Particulars Amount (Rs. Lacs)

Internal Accruals 9.79

Total 9.79

24


DETAILS OF BALANCE FUND DEPLOYMENT:

(in Rs. Lacs)

Deployment of Funds Financial To be Total

Year 2009-10 incurred

Already upto

incurred March 2010

15.06.2009

Working capital 0.00 200 200

Issue Expenses 9.79 20.21 30

General Corporate purposes* [*]** [*]** [*]**

* The amount that will be raised upon conversion of the detachable warrants shall be used towards General Corporate

Purposes.

** Can be ascertained only after the warrant exercise price is fixed up by the Board of Directors. For details please refer to


DEPLOYMENT OF FUNDS PENDING UTILIZATION

The management, in accordance with the policies set up by the Board, will have flexibility in deploying the net proceeds

received by the company from the Issue. Pending utilization for the purposes described above, we intend to invest the

funds in high quality interest/dividend bearing liquid instruments including money market mutual funds and deposit with

banks for necessary duration or reducing the working capital / term borrowings from banks and financial institutions.

MONITORING OF UTILIZATION OF FUNDS

There is no requirement for a monitoring agency in terms of Clause 8.17 of the SEBI DIP Guidelines.

The company will disclose the utilization of the Net Issue Proceeds under a separate head in its balance sheet for such

fiscal periods as and when the Company’s subsidiaries prepay any loans, it shall make disclosures as required under the

SEBI DIP Guidelines, the listing agreements with the Stock Exchanges and any other applicable law or regulations, clearly

specifying the purposes for which the Net Issue Proceeds have been utilized. The Company will also, in its balance sheet

for the applicable fiscal periods, provide details, if any, in relation to all such Net Issue Proceeds that have not been

utilized, thereby also indicating investments, if any, of such currently unutilized Net Issue Proceeds.

No part of the Issue proceeds will be paid by the Company as consideration to SNCCIL’s Promoters, Directors, Key

Management Personnel except in the course of normal business.

Bridge Financing Facilities

We have not raised any bridge loan from any bank of financial institution for any amount as of the date of this letter of

offer.

25


BASIS OF ISSUE PRICE

The face value of the 6% NCDs with Detachable Warrants is Rs. 10 and the Issue Price of Rs. 10 is 1 times of the face

value.

Investors should read the following summary along with the sections titled “Risk Factors” and “Financial Information”

beginning on page nos. viii and 61 respectively of this LOO, and other details about the Company included in the section

entitled “History of the Company and Other Corporate Matters” beginning on page no. 46 of this Letter of Offer.

The trading price of the Equity Shares could decline due to these risks and you may lose all or part of your investments.

QUALITATIVE FACTORS

1. Shri Nataraj Ceramic and Chemical Industries Limited is a 36-year-old Company engaged in refractory manufacturing

concerns producing High Alumina Refractory Bricks & Castable and supplying to core industries namely cement,

steel and other engineering industries

2. The Company has ISO 9001:2000 certification for quality systems for its Dalmiapuram unit.

QUANTITATIVE FACTORS

Information presented in this section is derived from our Restated Financial Statements prepared in accordance with

Indian GAAP and SEBI (DIP) Guidelines.

1. Earning Per Share (EPS) of Equity Share having face value of Rs.10 each (as adjusted for changes in capital)

Year EPS (Rs.) Weight

2006-07 57.02 1

2007-08 61.18 2

2008-09 77.93 3

Weighted Average 68.86

Notes:

a. On year ended March 31, 2009 EPS calculations have been done in accordance with Accounting Standard 20-

“Earnings per share” issued by the Institute of Chartered Accountants of India.

b. The weighted average of adjusted EPS for these fiscal years have been computed by giving weights of 1, 2 and 3 for

the fiscal years ending March 31 2007, 2008 and 2009 respectively.

c. The earning per share has been computed on the basis of Restated Profits & Losses after Tax and exceptional items

for the respective years.

2. Price/Earning (P/E) ratio in relation to Issue Price of Rs. 10 per 6% NCD with Detachable Warrants

a. Based on results for Financial Year ended March 31, 2009, EPS is Rs. 77.93: 0.13

b. Based on weighted average, the EPS is Rs. 68.86: 0.15

Refractory Industry P/E (*)

Highest (Raasi Refractories) 122.5

Lowest (IFGL Refract.) 8.5

Industry Composite -

Source: Capital Market - June 15-28, 2009, Vol XXIV/08; refractories/intermediates

3. Average Return on Net Worth (“RONW”)

Return on Net Worth (RONW)

Year RONW (%) Weight

2006-07 21.54 1

2007-08 19.06 2

2008-09 19.62 3

Weighted Average 19.75

Note:

The average return on net worth has been computed on the basis of the adjusted profits and losses of the respective years

drawn after considering the impact of accounting policy changes and material adjustments/ regroupings pertaining to

earlier years.

26


4. Minimum Return on Increased Net Worth to maintain pre-issue EPS is 73.34 %

Note: The aforementioned calculation does not consider the effect on net worth due to conversion price of the warrants as

the same cannot be ascertained at this point of time. The figure of 73.34% includes only the face value of the shares to be

issued after conversion of warrants.

5. Net Asset Value per share (“NAV”)

(Rs.)

Net Asset Value (pre-issue) (as on 31/3/2009) 395.02

Net Asset Value (post issue) (prior to conversion of warrants) 395.02

Net Asset Value (post issue) (after conversion of warrants) [*]*

Issue Price [*]*



Notes:

a. The Earnings per Share and the average return on net worth has been computed on the basis of the adjusted profits

and losses of the respective years drawn after considering the impact of accounting policy changes and material

adjustments/prior period items pertaining to the earlier years.

b. The denominator considered for the purpose of calculating Earnings per Share is the average number of Equity

Shares outstanding during the year.

c. Net Asset Value Per Share represents Shareholder’s Equity as per restated financial statements less miscellaneous

expenditure as divided by number of shares outstanding at the end of the period

6. Comparative Figures (for the year ended 31st March, 2009)

Comparison with Financial ratios of the Peer Group

Peer Companies- Face Equity Book RONW Sales EPS P/E

refractories/ Value Capital Value in % (Rs. Cr) (Rs)

intermediates (Rs.) (Rs. Cr) (Rs.)

IFGL Refract. 10 34.61 24.90 - 166.79 3.70 8.60

Vesuvius India 10 20.30 91.00 - 341.48 14.50 10.70

SNCCIL 10 0.80 395.02 19.73 74.52 77.93 0.13

Source: Capital Market - June 15-28, 2009, Vol XXIV/08; refractories/intermediates

7. The face value of 6% NCDs with Detachable Warrants of SNCCIL is Rs 10/- per 6% NCD and the issue price is 1

times of the face value.

The Issue Price of Rs. 10 has been determined by the Company in consultation with the Lead Manager, on the basis

of assessment of market demand for the securities of the Company and the same is justified on the basis of the above

factors. The Lead Manager believes that the Issue Price of Rs. 10 is justified in view of the above qualitative and

quantitative parameters.

For details of the warrant exercise price, investors are requested to refer to page no 180 of this Letter of Offer.

The investors may want to peruse the risk factors and the financials of the Company including important profitability

and return ratios, as set out in the Auditors’ Report on page no. 61 of this Letter of Offer to have a more informed

view of the investment proposition.

27


STATEMENT OF TAX BENEFITS

TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS

The Board of Directors

Shri Nataraj Ceramic and

Chemical Industries Ltd.

Dalmiapuram - 621 651

Dist. Tiruchirapalli

TAMIL NADU

Dear Sirs,

We, the auditors of Shri Nataraj Ceramic and Chemical Industries Ltd. hereby confirm that the attached Annexure

states the possible tax benefits available to the Company and its shareholders under the Income Tax Act, 1961,

subject to the fact that several of these benefits are dependent on the Company or its shareholders fulfilling the

conditions prescribed under the relevant tax laws. Hence the ability of the Company or its shareholders to derive the

tax benefits is dependent upon fulfilling such conditions, which based on the business imperatives, the Company may

or may not choose to fulfill. The benefits discussed in the Annexure are not exhaustive.

This statement is only intended to provide general information to the investors and is neither designed nor

intended to be a substitute for the professional tax advice. In view of the individual nature of the tax consequences and

the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific

tax implications arising out of their participation in the issue.

We do not express any opinion or provide any assurance as to whether:

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

The conditions prescribed for availing of these benefits have been / would be met with.

The contents of this Annexure are based on the information, explanations and representations obtained from the Company

and on the basis of our understanding of the business activities and operations of the Company and interpretations of the

current tax laws.

For and on behalf of

S.S. Kothari Mehta & Co.

Chartered Accountants

Place: New Delhi (Arun K. Tulsian)

Date: June 27, 2009 Partner

Membership No. 89907

28


SPECIAL TAX BENEFITS ARISING OUT OF THE PRESENT ISSUE

NIL

OTHER GENERAL TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS

To the Company

Under the Income Tax Act, 1961

The Company will be entitled to deduction under the sections mentioned hereunder from its total income chargeable to

Income Tax.

1. By virtue of Section 10(34) and 10(35) of the IT Act, dividend income from domestic company and units of specified

mutual fund are exempt from tax in the hands of the Company.

2. Subject to fulfillment of conditions, the Company will be eligible, inter alia, for the following specified deductions in

computing its business income:-

a) Section 35(1)(i) and (iv) of the IT Act, in respect of revenue or capital expenditure incurred, other than

expenditure on the acquisition of any land, on scientific research related to the business of the Company.

b) Subject to compliance with certain conditions laid down in Section 32 to the IT Act, the company will be

entitled to get following additional deduction of depreciation in addition to the normal depreciation:

(i) In respect of intangible assets in the nature of know-how, patents, copyrights, trademarks, licenses,

franchises or any other business or commercial rights of similar nature acquired on or after 1st day of

April, 1998 at the rates prescribed under the Income Tax Rules;

(ii) In respect of new machinery or plant which has been acquired and installed after 31st March 2005 for

manufacturing facilities, a further sum of 20% of the actual cost of such machinery or plant as additional

depreciation in the year in which the new plant and machinery is first put to use.

3. As per the provisions of Section 35DDA of the IT Act, any expenditure incurred in any previous year by way of

payment of any sum to an employee in connection with his voluntary retirement, in accordance with any scheme or

schemes of voluntary retirement, 1/5th of the amount so paid shall be deducted in computing the profits and gains of

the business for that previous year, and the balance shall be deducted in equal instalments for each of the four

immediately succeeding previous year.

4. As per section 80IA and 80IB, the Company is eligible for deduction of an amount equal to specified per cent of the

profits and gains derived by specified industrial undertakings for such number of assessment years as may be specified

subject to the conditions specified in that section.

5. Business losses if any, for any Assessment Year (AY) can be carried forward and set off against business profits for

eight subsequent AYs.

6. As per section 115JAA(1A), the company is eligible to claim credit for Minimum Alternate Tax (“MAT”) paid for

any AY commencing on or after April 1, 2006 against normal income tax payable in subsequent AYs. MAT credit

shall be allowed for any A.Y. to the extent of difference between the tax computed as per the normal provisions of the

Act for that A.Y. and the MAT which would be payable for that A.Y. Such MAT credit will be available for set-off up

to seven years succeeding the A.Y. in which the MAT credit initially arose.

To the Members of the Company

Under the Income Tax Act, 1961

A. Resident Shareholders

1. Under Section 10(32) of the IT Act, any income of minor children clubbed in the total income of the parent

under section 64(1A) of the IT Act, will be exempt from tax to the extent of Rs. 1500 per minor child whose

income is so included.

2. Under Section 10(34) of the IT Act, income by way of dividend referred to in Section 115-O received on the

shares of the Company is exempt from income-tax in the hands of shareholders. However it is pertinent to note

that section 14A of the IT Act restricts claim for deduction of expenses incurred in relation to exempt income.

29


3. The characterization of the gains/ losses, arising from the sale of the shares, as capital gains or business income

would depend on the nature of holding in the hands of the member and various other factors.

4. a) The long-term capital gains accruing to the members of the Company on sale of the Company’s share in

a transaction entered into in a recognized stock exchange in India, and where such transaction is chargeable

to Securities Transaction Tax, shall be exempt from tax as per provisions of Section 10(38).

b) The short term Capital Gains accruing to the members of the Company on sale of the Company’s share in

a transaction entered into in a recognized stock exchange in India, and where such transaction is chargeable

to Securities Transaction Tax, tax will be chargeable @15% [plus applicable surcharge and education

cess] as per provisions of section 111A. In other case, i.e. where the transaction is not subjected to STT,

the short term capital gains would be chargeable as a part of the total income and the tax rates would

depend on the income slab. Further, no deduction under Chapter VI-A would be allowed in computing

such short term capital gains subjected to tax under section 111A.

c) As per the provisions of Section 112 of the Act, long term gains accruing to the members of the Company

on securities being listed in recognized stock exchanges, otherwise than as mentioned in point 4(a) above,

shall be charged to tax @ 10% [plus applicable surcharge and education cess] after deducting from the

sale proceeds the cost of acquisition without indexation. However, the members claiming the benefit of

indexation would be subjected to tax @20% plus applicable surcharge and education cess on the long

term gains. Further, no deduction under Chapter VI-A would be allowed in computing such long term

capital gains subjected to tax under section 112.

d) The members are entitled to claim exemption in respect of tax on long term capital gains [other than those

exempt under section 10(38) of the Income Tax Act] under section 54EC of the IT Act, if the amount of

capital gains is invested in certain specified bonds/ securities subject to the fulfillment of the conditions

specified therein. The maximum investment permissible for the purpose of claiming the exemption in the

above bonds by any person in a financial year is Rs. 5 million.

However, if the Member transfers or converts the notified bonds into money within a period of three

years from the date of their acquisition, the amount of capital gains exempted earlier would become

chargeable to tax as long term capital gains in the year in which such bonds are transferred or otherwise

converted into money.

e) Individuals or HUF members can avail exemption under section 54F by utilization of the sales consideration

arising from the sale of the Company’s share held for a period more than 12 months [which is not exempt

under section 10(38)], for purchase/construction of a residential house within the specified time period

and subject to the fulfillment of the conditions specified therein.

5. As per the provisions of section 10(23D) of the Act, all mutual funds set up by the public sector banks, private

financial institutions or mutual funds registered under the Securities Exchange Board of India (SEBI) or

authorized by the Reserve Bank of India are eligible for exemption from income-tax, subject to the conditions

specified therein, on their entire income including income from investment in shares of the Company.

B. Non-resident shareholders -other than Foreign Institutional Investors

1. Under Section 10(32) of the IT Act, any income of minor children clubbed in the total income of the parent

under Section 64(1A) of the IT Act, will be exempt from tax to the extent of Rs. 1500 per minor child whose

income is so included.

2. Under Section 10(34) of the IT Act, income by way of dividend referred to in Section 115-O received on the

shares of the Company is exempt from income-tax in the hands of shareholders. However it is pertinent to note

that Section 14A of the IT Act restricts claim for deduction of expenses incurred in relation to exempt income.

3. The characterization of the gains/ losses, arising from the sale of the shares, as capital gains or business income

would depend on the nature of holding in the hands of the member and various other factors.

4. The long-term Capital gains accruing to the members of the Company on sale of the Company’s share in a

transaction entered into in a recognized stock exchange in India, and where such transaction is chargeable to

Securities Transaction Tax, shall be exempt from tax as per provisions of Section 10(38).

30


5. The short term Capital Gains accruing to the members of the Company on sale of the Company’s share in a

transaction entered into in a recognized stock exchange in India, and where such transaction is chargeable to

Securities transaction Tax, tax will be chargeable @15% [plus applicable surcharge and education cess] as per

provisions of Section 111A. In other case, i.e. where the transaction is not subjected to STT, the short term

capital gains would be chargeable as a part of the total income and the tax rates would depend on the income

slab. Further, no deduction under Chapter VI-A would be allowed in computing such short term capital gains

subjected to tax under Section 111A.

6. As per the provisions of Section 112 of the Act, long term gains accruing to the members of the Company on

securities being listed in recognized stock exchanges, otherwise than as mentioned in point 4 above, shall be

charged to tax @ 10% [plus applicable surcharge and education cess] after deducting from the sale proceeds

the cost of acquisition without indexation. However, the members claiming the benefit of indexation would be

subjected to tax @20% plus applicable surcharge and education cess on the long term gains. Further, no deduction

under Chapter VI-A would be allowed in computing such long term capital gains subjected to tax under section

112.

7. The members are entitled to claim exemption in respect of tax on long term capital gains [other than those

exempt under section 10(38) of the Income Tax Act] under section 54EC of the IT Act, if the amount of capital

gains is invested in certain specified bonds/ securities subject to the fulfillment of the conditions specified

therein. The maximum investment permissible for the purpose of claiming the exemption in the above bonds

by any person in a financial year is Rs. 5 million.

However, if the Member transfers or converts the notified bonds into money within a period of three years from

the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as

long term capital gains in the year in which such bonds are transferred or otherwise converted into money.

8. Individuals or HUF members can avail exemption under section 54F by utilization of the sales consideration

arising from the sale of the company’s share held for a period more than 12 months [which is not exempt under

section 10(38)], for purchase/construction of a residential house within the specified time period and subject to

the fulfillment of the conditions specified therein.

9. Under the provisions of Section 90(2) of the IT Act, if the provisions of the Double Taxation Avoidance

Agreement (DTAA) between India and the country of residence of the non-resident are more beneficial, then

provisions of the DTAA shall be applicable.

10. Non-Resident Indians (as defined in Section 115C (e) of the IT Act) being shareholders of an Indian Company,

have the option of being governed by the provisions of Chapter XII-A of the IT Act, which inter alia entitles

them to the following benefits in respect of income from shares of an Indian Company acquired, purchased or

subscribed to in convertible foreign exchange fluctuation under the first proviso to section 48 of the Act.

� As per the provisions of Section 115E of the IT Act, and subject to the conditions specified therein, long

term capital gains arising on the transfer of the Company’s shares will be charged to income tax @ 10%

(plus applicable surcharge and education cess) [in case it is not covered under section 10(38)]. In computing

the above gains the benefit of indexation is not allowed, however the non-residents have been provided

with a protection against foreign exchange fluctuation under the first proviso to section 48 of the Act.

� As per provisions of Section 115F of the IT Act and subject to the fulfillment of the conditions specified

therein, long term capital gains [not covered under section 10(38)] arising on the transfer of the Company’s

shares shall be exempted from income tax entirely/ proportionately if all or a portion of the net consideration

is invested within 6 months of the date of transfer in specified asset as defined in section 115C(f) or any

savings certificates referred to in section 10(4B) of the IT Act. The amount so exempted shall, however,

be chargeable to tax as long term capital gains under the provisions of section 115F(2) if the specified

assets are transferred or converted in to money within 3 years from the date of acquisition as specified in

the said section.

� As per section 115-I of the Act, a Non-Resident Indian may elect not to be governed by the provisions of

Chapter XII-A for any assessment year under Section 139 of the Act, declaring therein that the provisions

of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that

assessment year will be computed in accordance with the other provisions of the Act.

31


C. Foreign Institutional Investors (FIIs)

In terms of Section 10(34) of the Income Tax Act, any income by way of dividends referred to in Section 115-O

received on the Shares of the Company is exempt from tax.

i) In terms of Section 10(38) of the Income Tax Act, any long term Capital Gains arising to an investor from

transfer of long term capital asset being Equity Shares in the Company would not be liable to tax in the hands

of the investor if the following conditions are satisfied:

(a) The transaction of sale of such Equity Shares is entered into on or after October 1, 2004.

(b) The transaction is chargeable to securities transaction tax under Chapter VII of the Finance (No.2) Act,

2004.

ii) In terms of Section 111A of the Act and other relevant provisions of the Income Tax Act, any short term Capital

Gains arising to a Shareholder from transfer of short term capital asset being Equity Shares in the Company

would be liable to tax in the rate of 15% (plus applicable surcharge and education cess) if the following conditions

are satisfied:

(a) The transaction of sale of such Equity Shares is entered into on or after October 1, 2004.

(b) The transaction is chargeable to securities transaction tax under Chapter VII of the Finance (No.2) Act,

2004.

iii) The income by way of short-term Capital Gains or long-term Capital Gains [in cases not covered under Section

10(38) of the Income Tax Act], realized by the FIIs is taxable @ 30% and 10% respectively (plus applicable

surcharge and education cess) as per section 115AD of the Income Tax Act. However in case of such long term

Capital Gains, the tax is levied on the Capital Gains computed without considering the cost indexation and

computation of gains in foreign exchange. Further, in terms of the fifth proviso to Section 48 of the Income Tax

Act, no deduction of amount paid on account of securities transaction tax will be allowed in computing the

income chargeable to tax as Capital Gains.

iv) Under Section 54EC of the Income Tax Act and subject to the conditions and to the extent specified therein,

long term Capital Gains [in case not covered under Section 10(38) of the Income Tax Act] arising on the

transfer of Shares of the Company shall not be chargeable to Capital Gains tax if the Capital Gains are invested

within a period of six months after the date of such transfer in long term specified assets and held for a period

of at least three years.

D. Venture Capital Companies / Funds

In terms of Section 10(23FB) of the Income Tax Act, all Venture Capital Companies /Funds registered with Securities

and Exchange Board of India, subject to the conditions specified, are eligible for exemption from income tax on their

entire income, including income from investment in the Shares of the Company.

Under the Wealth Tax Act, 1957

i) The Shares of the Company held by the shareholders will not be treated as an asset within the meaning of section

2(ea) of the Wealth Tax Act, 1957. Hence no Wealth Tax will be payable on the market value of shares of the

Company held by the shareholders of the Company.

Note:

� This statement sets out the possible tax benefits available to the Company and to the shareholders under the current

tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders

fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders

to derive the tax benefits is dependent upon fulfilling such conditions, which based on the business imperatives, the

Company may or may not choose to fulfill.

� This Statement sets out below the provisions of law in a summary manner only and is not a complete analysis or

listing of all potential tax consequences of the purchase, ownership and disposal of equity shares. This statement is

only intended to provide general information to the investors and is neither designed nor intended to be a substitute

for a professional tax advice. In view of the individual nature of tax consequences and changing tax laws, each

investor is advised to consult his or her or their own tax consultant with respect to specific tax implications arising

out of their participation in the issue;

32


� In respect of non-residents, the tax rates and the consequent taxation, mentioned above shall be further subject to any

benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which

the non-resident has fiscal domicile; and

� The stated benefits will be available only to the sole/ first named holder in case the shares are held by joint shareholders.

33


SECTION IV-ABOUT THE COMPANY

INDUSTRY OVERVIEW

The information presented in this section has been sourced from publicly available documents and information from

various sources, including material from the Government of India, Ministries of the Government of India, Websites of the

ministries, Industry related websites and Company estimates. It is understood that the above sources are believed to be

reliable, but their accuracy and reliability cannot be guaranteed. None of the information has been independently verified,

although the industry, market and government data are considered reliable.

What are refractories?

“Refractory” items according to any standard English dictionary are materials which are hard to work with, and are

especially resistant to heat and pressure. In practical terms, refractories are products used for high temperature insulation

and erosion/corrosion and are made mainly from non-metallic minerals. They are so processed that they become resistant

to the corrosive and erosive action of hot gases, liquids and solids at high temperatures, in various types of kilns and

furnaces.

Basalt is a naturally occurring siliceous refractory product. It was formed many, many years ago - and is still being formed

in lava flows from volcanic eruptions - under the natural geological forces of heat and pressure. Modern refractory production

is largely a replication of this process of forming naturally-occurring (or synthetic) non-metallic mineral oxides (and some

non-oxides like carbides or nitrides) under the bonding conditions of high heat and pressure. Of course with technological

progress, alternative bonding techniques, such as with chemicals, cements, resins, etc. have also developed.

Because refractory products are so resistant to heat, erosion and corrosion, they are typically used in any process involving

heat and corrosion such as in kilns and furnaces. According to the main chemical component, i.e. fire clay, or magnesia, or

zirconia, etc. they are commonly known as alumino-silicate or acid refractories, basic refractories, and neutral refractory

products.

In physical characteristics, refractories typically have relatively high bulk density, high softening point (or Pyrometric

Cone Equivalent), high crushing strength. They are produced as standard bricks, or as shapes (including hollow-wares) or

as granular or unshaped or monolithic products.

The principal applications of refractories are in iron and steel industries, cement, glass, non-ferrous metals, petro-chemicals

and fertiliser industry, chemicals, ceramics and even thermal power stations and incinerators.

The development and application of refractories for various industries, testing procedures of properties and so on are

covered in the English language, by a number of well-known technical journals, such as The Bulletin of the American

Ceramic Society, Taikubutsu Overseas, Interceram, Ceramic News, Refractories Applications, IRMA Journal, Transaction

of the Indian Ceramic Society, Metal News, etc.

Milestones in refractories development in India

1874 Fire clay Bricks

1941 Magnesite Bricks

1949 Coke Oven Silica Bricks

1955 Sillimanite Blocks for Glass Industries

1960 Bauxite based High Alumina Bricks for Steel & Cement Industries

1960 Mullite Bricks for Glass Industries

1969 High Grog Fire clay Bricks for Steel Ladles

1977 AZS Electrocast Blocks

1983 Magnesia Carbon Refractories

1983 Magnesia Slide Gate Plates

1984 High Alumina Slide Gate Plates

1985 Low Cement Castables/Monolithics

1985 Ceramic Fibres

1985 High Alumina Bauxite based Ladle Refractories

34


1986 BRN 62 Blast Furnace Hearth Blocks

1986 Bubble Alumina based Insulating Blocks

1988 Dense Silica Shapes for Tall Coke Ovens

1990 Direct Bonded Mag-Chrome Bricks

1990 Unidirectional Gas Purging Elements

1990 Alumina Carbon Torpedo Ladle Bricks

1990 Slide Gate Refractories

1991 Dense Silica Shapes for Blast Furnace Stoves

1993 Alumina Carbon Continuous Casting Refractories

1993 Mullite Bricks for Blast Furnace and Stoves

1993 Dry Basic Ramming Mass for Furnaces

1993 Gunning materials for Converters

1993 Spraying Mass for Tundish

1994 Ultra Low Cement Castables/Monolithics

1994 Pitch-Bonded Tempered Dolomite Bricks

1994 Cordierite and Silicon Carbide based Kiln Furniture

1995 Spinel based Ladle Monolithic Lining

1995 Alumina Carbon Silicon Carbide Blast Furnace Trough Mass

1998 Magnesia Alumina Zirconia Bricks for Cement Rotary Kilns

1998 Alumina Zirconia Slide Gate and CC Refractories

1998 Pumpable Refractories for Petrochemical Industries

(Source: http://www.irmaindia.org/reframore.html)

Refractory is a term given to a class of materials which are produced from non-metallic minerals and possess capability to

withstand heat and pressure. These are products that confer properties like high temperature insulation, resistance to

corrosive and erosive action of hot gases, liquids and solids at high temperatures in various kilns and furnaces.

The production of refractories started in India in the form of fire clay bricks in 1874. Today, a wide variety of refractory

products are manufactured tailor made to suit the requirements of the application in various sectors which include iron and

steel, cement, glass, non-ferrous metal, petrochemical, fertilizer, thermal power plants etc. The refractories are The fortunes

of the refractory industry are linked to the growth of iron and steel sector which consumes a mammoth 75% of the

refractories produced. Sector wise consumption of the refractories in India is shown in Fig.1.

Iron & Steel

Cement

Glass

Aluminium

Others

11%

5%5%

4%

75%

35


The specific refractory consumption is about 27 Kg/T in steel industry, 1.7 Kg/T in Cement and 55 Kg/T in glass industry.

These sectors are giving high thrust on productivity, quality, cost, energy conservation and cleaner environment which

necessitates new generation of refractories with specific requirements.

Production Scenario:

The installed capacity for refractory production in India is 16.5 lac tons and today runs at 62.37% of the total capacity. The

production was a mere 47.25% of the installed capacity in 2002-03. Refractory production in the country has been showing

a growth of 16% per annum from 2002-03 till now as is evident from Fig.2.

(Source:IRMA; All production figures are in Metric Tonne)

Among the refractories, high alumina bricks/shapes constitute 34.10%, fire clay bricks/shapes about 21.15%, basic bricks/

shapes 20.68%, others comprising of monolithics about 15.79%, special products 3.39% and silica bricks/shapes about

4.89% of the total refractory production during 2007-08 in India. A look at the individual refractory wise capacity utilization

indicate that the production of high alumina is running at 67.27%, special products at 80.43%, monolithics about 48.98%,

basic at about 52.42%, fire clay at 43.93% and silica at 50.00% of the installed capacities.

(Source:IRMA)

Category of Refractories & Application

Fire Clay Bricks/Shapes:

These are basically aluminosilicate refractories possessing alumina not exceeding 42%. Fire clay refractories earlier used

to find use in lining of blast furnaces for hearth and bosh portion due to the dense structure, reheat shrinkage, resistance to

slag and load characteristics of these bricks. How ever, today, the dense low heat duty fire clay refractories find use in top

part of the blast furnace where abrasion resistance is required and upper in wall portion where slight slagging action &

abrasion resistance are necessary, intermediate duty fire clay bricks are applied. Though these are the most economical

variety of refractories but suffer from poor slag resistance & low refractoriness characteristics. In many steel plants, these

find extensive use in lining of soaking pits & reheating furnaces, bottom pouring refractories for steel casting, safety lining

of the steel ladles and kilns in cement industry due to their good insulating, spalling resistance, dense structure preventing

erosion characteristics.

High Alumina Bricks/Shapes :

The change in the quality of the raw materials, increased productivity and higher temperature and increased campaign life

in iron/steel making arena resulted in drastic reduction in consumption of fire clay products and evolution of high alumina

refractories. 60%-72% alumina mullite bricks are used in hearth and bottom of the blast furnaces. The stoves and hot blast

Production

1200000

1400000

1000000

800000

600000

400000

0

200000

MT

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Year

36


system where the hot blast temperature gradually increased from 800ºC to 1250ºC, 72% alumina bricks with improved

insulation are used. In steel plants involving in production of carbon steels, 72% alumina bricks are still used for working

lining of ladles due to high refractoriness and moderate slag resistance properties. Well blocks and sleeves used in steel

ladles for fixing at gas purging cones which are subjected to localized turbulence created by flow of gases through porous

plugs requires refractory material that sustains good number of thermal cycles and increased campaign life. Here, 96%

alumina bearing material are used for

high temperature abrasion resistance, low porosity, high mechanical strength and result in uneven erosion on top surface of

the block. Even, slide gate refractories of 96% alumina are in use in steel ladles. The increasing trend for production of

cleaner steels led to use of 70% alumina refractories for bottom pouring.

Silica Bricks / Shapes :

Silica refractories possess the ability to withstand substantial load [50 lb/sq.in] to within a few degrees of its cone fusion

point of 1710ºC to 1730ºC, high resistance to attack by steel furnace fluxes comprising iron oxide,lime etc., freedom form

shrinkage at temperatures up to melting point and high thermal shock resistance in temperatures ranging from 600ºC to

1700ºC. How ever, silica refractories are highly sensitive to thermal shock below 600ºC or below 300ºC. These refractory

products find extensive use in arch roofs of the furnaces, door jambs of furnaces and in coke ovens due to their excellent

resistance to spalling.

Basic Bricks/Shapes :

The need to produce steels of high quality resulted in greater stresses on refractory as a result of aggressive slag, prolonged

turbulence by rinsing/lancing, high temperatures etc. led to adoption of basic refractories to resist slag attack while being

chemically stable. Broadly, these

refractories are classified as the dolomite variety and magnesite variety.

Dolomite is the most common basic refractory for both metallurgical and economic reasons. These are further classified as

the sintered and unburnt materials. The high silicon in hot metal led to use of dolo bricks for working lining of BOF. In

steel ladles, dolomite bricks are used but the holding time of steel in the ladle should be less and should be hot in circulation.

In contact with air, the free lime of the dolomite refractory reacts leading to crumbling of the refractory which is its major

disadvantage. Ceramic bonded sintered dolomite possess high mechanical strength and possess good resistance to hydration.

Here, addition of zirconia permits improvement in resistance to thermal shock while enrichment with magnesia lessens

sensitivity to slag attack. The high carbon dolomite products and chemically bonded products emerged in the market as an

alternative to resin bonded ones and are expected to be lower in cost with absence of fumes during heating.

Among the magnesite refractories, Magnesia-Carbon and Magnesia- Chrome bricks are highly popular. Magnesia-C bricks

find us in the hot spot area of EAF and BOF vessel lining as the refractoriness is high, highly resistance to slag and thermal

shock. In LF/VAD steel ladles, magnesia-carbon variety refractories with high oxidation resistance and high hot modulus

of rupture are applied in strike pad & slag zone areas. These refractories help in improved lining life under severe operating

conditions like high tapping temperature, longer holding times and highly basic slags. For VOD/AOD, dense magnesiachrome

co-clinker grains with low apparent porosity and high hot strength applied for full wear lining in side wall and bottom for

slags of lower basicity [as is the case for stainless steel] and provide properties such as excellent penetration of low basicity

slags, high hot modulus of rupture, excellent thermal spalling resistance and good abrasion resistance. Magnesia-chrome

steel cladded bricks are used in working lining of EAF and in certain zones magnesite bricks are applied.

Monolithics :

These refractories are well known to produce joint less structure which are stable from dimensional aspect at high

temperatures and are resistant to thermal shock and abrasion. It comprises of castables, plastic mass, ramming mix, mortars,

slingor mix and coating material.

Magnesia based gunnitting mix is used for patching of eroded areas in EAF. Mortars of magnesite and high alumina are

applied for patching of steel ladles. High alumina mortars are used for fixing ladle nozzle with well block, joint portion of

plate and nozzle, fixing well blocks to steel ladle etc. Alumino-silicate [60% Al2O3] trough and tap hole mixes are used in

blast furnaces. Even in coke ovens, there is extensive use of silica based mortars for hot patching and gunnitting. Magnetie

ramming mass is applied above the safety lining in EAF and for lining in basic induction furnaces involving in production

of special /alloy steels. In acidic induction furnaces used for melting cast iron/carbon steels, silica ramming mass is applied

as the lining material. Another important application is in the form of ceramic coating of oxygen/rinsing lances for prolonged

lancing/rinsing to meet the metallurgical requirements.

37


Among the monolithics, castables especially of low cement variety have dominated presence in various applications. This

variety of castables possess about 5%-7.5% calcium aluminate cement requiring only around 5% casting water and are less

prone to explosion, no loss of cold crushing strength at any temperature, low moisture content enabling faster drying/pre-

heating, high degree of volume stability at high temperature providing and excellent abrasion

resistance. 90% alumina castables find use for hoods of VAD/AOD/VOD units, delta region of EAF, permanent lining of

tundish, walking beam furnace hearth, precast burner block of walking beam furnaces etc. 60%-70% alumina castables are

applied for covers of soaking pits, stand pipes, charging hole blocks and covers of coke ovens.

Special Products :

In continuous casting, Garnex boards of silica/magnesite for cold tundishes are used to facilitate sequencing of heats.

Various flow control devices such as baffles / dams / weirs made of magnesite are used in tundishes for improved quality

of the steel. For crack and corrosion resistance, submerged entry nozzles used between tundish outlet and mould are made

of alumina-carbon/ magnesia-zirconia refractory. Shrouds and monoblock stoppers made of alumina-carbon/alumina-

zirconia are used in tundishes of various bloom/slab/billet casting machines. 95%zirconia metering nozzles are used for

flow of steel into mould of billet continuous casting machines for excellent erosion resistance. Also, for eliminating non-

metallic inclusions thus improving the steel quality, ceramic filters in tundishes have evolved recently.

Prefabricated single block launders of high alumina with SiC, Cr2O3 are used in EAFS to minimize lip jam formation,

improved hot load characteristics with resistance to slag and thermal shock. Ceramic fibres due to their insulating nature

are used in reheating furnaces, blast system/stoves of blast furnace etc. High magnesia porous plugs is another area which

involves inert gas purging for homogenisation of steel with regard to temperature and composition.

Future Outlook :

Refractories cost about 8%-10% of the total cost of steel production. There is greater possibility in reducing the specific

consumption of refractories by 9 kg/T in steel industry, 0.4 kg/T in cement industry in the coming 3 to 4 years. How ever,

the refractory production is expected to increase by 16% per annum in the coming few years due to the major expansion

and green field projects coming up in the steel segment. Refractories still have many areas in various sectors to enter in and

it would be the monolithics & special products that would dominate the production in future.

(Source: http://www.steelworld.com/focus0606.pdf)

38


BUSINESS OVERVIEW

We are a refractory manufacturing company producing High Alumina Refractory Bricks & Castables and supplying to

core industries namely cement, steel and other engineering industries. We are having three units, one at Dalmiapuram,

Tamil Nadu, another at Jam-khambalia, Dist. Jamnagar, Gujarat and one which is on lease at Wankaner Dist. Rajkot,

Gujarat.

Our production range is High Alumina Refractory Bricks and Castables. We are now having capacity of 88,000 MT p.a.

and are further expanding to 95,000 MT p.a. to meet the growing demand of expansion of core industries like cement &

steel.

We are having a Rotary Kiln in Gujarat Unit with the capacity of 24,000 MT per year for calcinations of Raw Bauxite

which is our main raw material.

Our product profile mainly includes High Alumina Bricks in the cement industry.

With capacity expansion being undertaken by Cement plants considering favourable demand supply scenario, demand for

refractories are estimated to go up.

Capacity enhancement at Dalmiapuram / Jam-Khambalia

Foreseeing this demand facilities for additional 16000 Tonne/year capacity are proposed to be created at Dalmipuram and

Jam-Khambalia respectively, by adding balancing equipments.

Installed Capacity in MT. (Bricks)

Unit Existing Addition Total

Dalmiapuram 45000 - 45000

Jam-Khambalia 36000 5000 41000

Wankaner 7000 2000 9000

Total 88000 7000 95000

Other plans for improving the operations are given below:

Operations:

* Contain raw material costs by continuously innovating better cost performance formulation.

* Develop alternate sources of bauxite to reduce dependence on Chinese Bauxite.

* Long term tie-up for transportation of bulk raw material.

* Improve productivity / production of refractory grade bauxite at own mines at Jam-Khambalia.

* Improve capacity utilization of Rotary Kiln at Jam-Khambalia.

Sales & Marketing:

* Maintain brand leadership on market share and market price in our targeted customer base in Cement sector.

* Improve service capability to provide complete Refractory Engineering solution to the customer.

* Maintain delivery schedules and cater to increased demand due to new projects in Cement Sector.

* Systematic efforts to increase exports, particularly the Cement Plants, the strength area.

* Develop networking for sales of castables.

Commercial:

* Strive for staggered delivery schedule with firm prices for bauxite, wherever feasible.

* Manufacture based on confirmed orders and keeping watch on the project schedule for delivery schedule.

* Contain customer credit to < 45 days, in each case.

* Help customers in reducing landed costs, at their works, by supplying from the advantageous location and negotiate

(DPM or KMB) better rates with the transporters, on customers’ behalf.

39


Long Term:

* Augment refractory grade bauxite reserves, to become self sufficient in bauxite supplies by acquiring more mines

and / or tie-up with units having such mining rights.

* Develop market for value added products giving complete refractory solutions.

Our Products and Use:

We are operating in two segments one is Refractory and another one is Rotary Kiln. Under Refractory segment wemanufacture Refractories /Castables /Mortrars. These are used for inside lining of the kiln where very high temperature isrequired to be maintained. Under Rotary Kiln we Calcine the raw bauxite which is used as input material for RefractoryProducts. Some of our products of Refractory segment are as under:-

1. Dalmia Range of Medium-Duty Fireclay Bricks: Dry-press and Semi-plastic - “Dalmia MHD” quality of medium-duty fire clay bricks are manufactured from high-grade clays. They are fired in continuous kilns and have accuratesizing with sharp edges and corners. Dalmia MHD bricks maintain a stable volume at their maximum workingtemperature and are resistant to hot metal, slag and moderate temperature fluctuations. Dalmia MHD bricks areeconomical bricks for general furnace use where temperature is not high and operating conditions are moderate.

2. Dalmia High Heat Duty Bricks: “Dalmia HH” - High Heat Duty Bricks are most suitable for general furnaceconstruction because of its characteristic qualities: resistance to slag attacks; ability to withstand temperature shock;load bearing ability; low coefficient of expansion and high fusion point. Dalmia HH bricks are manufactured by bothDry-Press and Semi-Plastic method from high-grade fire clays high in refractoriness and with less impurities.

3. Dalmia HG Range of Super Duty Bricks: Dalmia HG range of Super Duty bricks are manufactured from a blendof premium quality Kerala, Karnataka kaolinite clays and best bond clays to obtain outstanding properties. DalmiaHG grade of Super Duty bricks are burnt to a very high temperature to provide improved properties and in particularresistance to carbon monoxide attack. Dalmia HG bricks have excellent refractoriness, high density, high strengthvolume stability at their maximum service temperatures, high load bearing capacity and particularly good resistanceto chemical attack, abrasion and spalling. With these combined properties, Dalmia HG bricks are used in variousfurnaces where working conditions are relatively severe.

4. High Alumina HA Refractory Bricks: We offers a complete line of high alumina bricks Dalmia HA range thatallows selection of grades having requisite chemical and physical properties to meet the severity of service. DalmiaHA bricks are made from carefully selected Saurashtra Bauxite, Kaolin Malachite,, and high grade Chamotte, bondclay and Calcined or fused alumina. Bricks having alumina contents 40 to 90% are made from dense aggregatesfortified by alumina additives, in amount to obtain the required alumina content. For bricks above 85% aluminaCalcined and fused alumina are used to develop the required alumina content. In addition to ceramic bonded burnthigh alumina bricks, we supplies a series of Phosphate bonded both chemical and burnt bricks having exceptionalmechanical strength, high abrasion and impact resistance, good load bearing and spalling resistance.

5. Lofal Range of High Purity High Alumina Bricks: We offers a complete line of high purity alumina bricks theLofal High Alumina range with alumina content ranging from 30 to 90% for use in applications where the workingconditions are severe. As a family of multi product brands all Lofal High Alumina brick exhibit a slight expansion,similar to Dalmia HA brand high alumina bricks during use that tend to tighten the structure - a desirable requirementin majority of installations. In addition to high refractoriness LOFAL High Alumina bricks possess excellent spallingresistance, high load bearing capacity, dense structure giving extremely high mechanical strength and low porosity tocombat the slag and metal attack and high temperature properties to withstand high service temperature.

6. Dalmia Sillimanite Refractories: Dalmia SL the sillimanite range of bricks are produced from calcined kyaniteand beach sand sillimanite. All the sillimanite grades are fired to high temperatures to maximize mullite conversion.Dalmia SL bricks are manufactured by dry press and pneumatic ramming with alumina contents ranging from 50%to 62% which resist the attack of molten glass admirably and give extended life when used in glass tank melters,bottom and side wall blocks, checker packing, bridge walls, refiners, fore-hearths, etc. Large size blocks are also

available for glass tanks use.

The information regarding the percentage contribution of each activity in total profitability is as follows:-

Segment Percentage contribution

Refractory 83%

Rotary Kiln 17%

40


INFRASTRUCTURE FACILITIES

Raw materials

The Company is meeting its requirement of raw materials from imports, its own mines and from local suppliers.

Electricity

The Company is meeting its electricity requirement at all the plants from the respective State Electricity Boards and is also

keeping diesel generator sets of adequate capacity as bank up in case of disruption / load shedding of power.

Water

The Company is meeting its requirement of water from its own sources i.e. pumping set and bore well etc.

JOB WORKING AGREEMENT WITH DALMIA CEMENT (BHARAT) LTD.

Our Company has entered into a job work agreement with Dalmia Cement (Bharat) Ltd. having its registered office at

Dalmiapuaram Dist. Tiruchirapalli, Tamilnadu on 27th day of November 1997. The same has been extended from time to

time and is scheduled to expire on 31st day of March 2010. Company. The agreement has been successfully going on for

the last ten years as per the terms and conditions agreed to.

Subject of agreement

Shri Nataraj Ceramic and Chemical Industries Limited has a manufacturing plant at Dalmiapuram for manufacturing

Refractory products with an annual installed capacity of 33,000 MT’s and at Jam-Khambalia Dist. Jamnagar, Gujarat with

an annual installed capacity of 28,000 MT’s.

Dalmia Cement (Bharat) Ltd. is engaged in the business of manufacture and sale of Refractory products. Both the Companies

have decided to continue the present arrangement of getting Refractory products manufactured at Dalmiapuram.

Dalmia Cement (Bharat) Ltd. shall supply the basic raw material and other fuel material which may be required by Shri

Nataraj Ceramic and Chemical Industries Limited for the manufacture of refractory products.

Dalmia Cement (Bharat) Ltd. shall pay to Shri Nataraj Ceramic and Chemical Industries Limited an amount for job charge

as agreed between them. Such bill shall be raised by Shri Nataraj Ceramic and Chemical Industries Limited on monthly

basis and shall be paid by Dalmia Cement (Bharat) Ltd. within a period of seven days from the receipt of the bill.

There is an assurance from Dalmia Cement (Bharat) Ltd. regarding job work for every month. In the event that Dalmia

Cement (Bharat) Ltd. fails to do so, it shall pay to Shri Nataraj Ceramic and Chemical Industries Limited a minimum job

work charge of Rs. 45.75 lacs per month unless agreed otherwise.

INSURANCE

The Company has insurance policies that cover its assets and operations, including third party liabilities. The assets covered

by these policies are insured against losses from general liability such as burglary, standard fire and special perils policy,

machinery break down insurance, money, electronic equipment, earthquakes, terrorism and other risks to our premises and

equipment.

The Company believes that its insurance coverage is adequate as per present requirement of the Company.

Details of the said policies are as provided hereunder:

(a) The Company has taken a Standard Fire and Special Perils Policy No. 311201/11/09/11/00000136 from “The New

India Assurance Company Limited” with respect to Company’s Buildings and Plant & Machinery for its factory

situated at Jam-Khambalia, Gujarat. The said policy is valid from 18.06.2009 to 17.06.2010 and the Company has

paid a premium of Rs. 1,05,270/- including the service tax, for an insured sum of Rs. 11,93,50,000/-.

(b) The Company has taken a Standard Fire and Special Perils Policy No. 311201/11/08/11/00000371 from “The New

India Assurance Company Limited” with respect to Company’s Building Units and Plant & Machinery at its Jam-

Khambalia Refractory Unit. The said policy is valid from 01.11.2008 to 31.10.2009 and the Company has paid a

premium of Rs. 1,91,619/- including the service tax, for an insured sum of Rs. 17,95,16,000/-.

(c) The Company has taken a Standard Fire and Special Perils Policy No. 311201/11/08/11/00000372 from “The New

India Assurance Company Limited” with respect to Company’s stock, consumable raw materials and finished goods

at its Jam-Khambalia Refractory Unit. The said policy is valid from 01.11.2008 to 31.10.2009 and the Company has

paid a premium of Rs. 1,54,349/- including the service tax, for an insured sum of Rs. 14,46,00,000/-.

41


(d) The Company has taken a Standard Fire and Special Perils Policy No. 311201/11/08/11/00000373 from “The New

India Assurance Company Limited” with respect to Company’s Building used as staff quarters at Jam-Khambalia

Refractory Unit. The said policy is valid from 01.11.2008 to 31.10.2009 and the Company has paid a premium of Rs.

811/- including the service tax, for an insured sum of Rs. 19,00,000/-.

(e) The Company has taken a Money Insurance Policy No. 311201/48/08/07/00000179 from “The New India Assurance

Company Limited” with respect to Loss of Govt. Currency whilst in transit occasioned by Robbery/Theft or any

other cause whatsoever, from Company’s Bauxite Mine situated at 55 Km. to its work site at Jam-Khambalia, Dist

Jamnagar. The said policy is valid from 25.01.2009 to 24.01.2010 and the Company has paid a premium of Rs.

1,573/- including of service tax, for an insured sum of Rs. 50,00,000/-

(f) The Company has taken a Money Insurance Policy No. 4006/0005691 from “ICICI Lombard General Insurance”

with respect to Money-in-transit whilst in direct transit from Axis Bank Limited, Statesman House, 148, Barakhamba

Road, New Delhi & United Bank of India, P-90/8, J.C. Das Building, Connaught Circus, New Delhi-110001 within

a radius of 10 km. The said policy is valid from 01.04.2009 to 31.03.2010 and the Company has paid a premium of

Rs. 505/- including of service tax for an insured sum of Rs. 15,75,000/-.

(g) The Company has taken a Fidelity policy vide Cover Note No.AA1811108/08 from “ICICI Lombard General

Insurance” with respect to its three employees viz. Shri Vinay Agarwal, Shri R.S. Singh and Shri Umesh Pandey. The

said policy is valid from 01.04.2009 to 31.03.2010 and the Company has paid a premium of Rs. 662/- including of

service tax for an aggregate limit of guarantee of Rs. 1,50,000/-

(h) The Company has taken a Standard Fire and Special Perils Policy No. 1001/56644245/00/000 from “ICICI Lombard

General Insurance” with respect to Company’s stock at its Dalmiapuram Unit. The said policy is valid from 01.04.2009

to 31.03.2010 and the Company has paid a premium of Rs. 5515/- including the service tax, for an insured sum of Rs.

50,00,000/-.

(i) The Company has taken a Standard Fire and Special Perils Policy No. 1001/56644245/00/000 from “ICICI Lombard

General Insurance” with respect to Company’s Building used as staff quarters at its Dalmiapuram Unit. The said

policy is valid from 01.04.2009 to 31.03.2010 and the Company has paid a premium of Rs. 728/- including the

service tax, for an insured sum of Rs. 22,00,000/-.

(j) The Company has taken a Standard Fire and Special Perils Policy No. 1001/56644245/00/000 from “ICICI Lombard

General Insurance” with respect to Company’s Building and Plant & Machinery with accessories at its Dalmiapuram

Unit. The said policy is valid from 01.04.2009 to 31.03.2010 and the Company has paid a premium of Rs. 1,58,358/

- including the service tax, for an insured sum of Rs. 20,51,00,000/-.

(k) The Company has taken a Standard Fire and Special Perils Policy No. 1001/56644245/00/000 from “ICICI Lombard

General Insurance” with respect to Company’s Building at its Dalmiapuram Unit. The said policy is valid from

01.04.2009 to 31.03.2010 and the Company has paid a premium of Rs. 2,548/- including the service tax, for an

insured sum of Rs. 33,00,000/-.

(l) The Company has taken a Group Personal Accident Policy vide Cover Note No.AA1811108/08 from “ICICI Lombard

General Insurance” with respect to Company’s employees at New Delhi office and also at its two units at Jam-

Khambalia and Dalmiapuram respectively. The said policy is valid from 01.04.2009 to 31.03.2010 and the Company

has paid a premium of Rs. 55,270/- including the service tax, for an insured sum of Rs. 4,87,33,000/-.

(m) The Company has taken a Money Insurance Policy No. 311201/48/09/07/00000003 from “The New India Assurance

Company Limited” with respect to

(i) money for the payment of wages, salaries and other earning or for petty cash in direct transit from bank by the

insured or the authorized employee/s of the Company until delivered at the premises or other place of

disbursement.

(ii) money other than above in the personal custody of the Company or its authorized employee/s whilst in the

direct transit between the premises and bank or post office and vice versa.

(iii) money other than above collected by and in the personal custody of the Company or its authorized employee/

s whilst in transit to the premises of the bank within a period not exceeding 48 hours from the time of collection

and vice versa.

42


(iv) cash other than described above whilst on the premises during business hours or whilst secured in locked safe

or locked strong room on the Company’s premises out of business hours against the risk of burglary, house

breaking and hold-up.

The said policy is valid from 02.04.2009 to 01.04.2010 and the Company has paid a premium of Rs. 11,582/-

including of service tax for an insured sum of Rs. 3,15,00,000/-

(n) The company has taken a fidelity guarantee Insurance Policy No.311201/46/09/12/0000000/2 dated 04.04.09 from

“The New India assurance company Limited’ with respect to its three Khambalia employees viz., Shri Pravin Chandra,

Shri G. Raithatha, Shri T. Karthikeyan and Shri Amit Shanti Lal Manasata. The said policy is valid from 04.04.2009

to 03.04.2010 and the Company has paid a premium of Rs.7,942/- including of service tax for an aggregate limit of

guarantee of Rs.18,00,000/-.

(o) The Company has taken a Standard fire and Special Perils Policy No.311201/11/08/11/00000404 from “The New

India Insurance Company Limited” with respect to company’s Building, Furniture, Temporary Structure and Computers

at its New Delhi Office. The said policy is valid from 30.01.2009 to 29.01.2010 and the company has paid premium

of Rs.5,955/- including service tax for an insured sum of Rs.1,00,00,000/-.

(p) The Company has taken open inland transit policy from ICICI Lombard with respect to loss in transit from any place

in India to anywhere in India, of its machineries and spares parts and all kind of stores required for the production of

Refractory. Material cover calcined bauxite, Micro Silica, Silicon Carbide and other refractory material including

machinery part and stores parts. The said policy is valid from 01.05.2009 to 30.04.2010 and the company has paid a

premium of Rs.9,928/- including of service tax for an insured sum of Rs.1,00,00,000/-

(q) The Company has taken open import policy vide cove note no. AA1811453/08 dated 8th April 2009 from ICICI

Lombard with respect to loss in transit from any where in world to anywhere in India, Material cover calcined

bauxite, Micro Silica, Silicon Carbide and other refractory material. The said policy is valid from 10.04.2009 to

09.04.2010 and the company has paid a premium of Rs.60,179/- including of service tax for an insured sum of

Rs.3,80,00,000/-

PROPERTY

Immovable Properties Owned by the Company

S.

No.Particulars of Property Vendor Vendee Consideration

1 1940 Sq. Ft. of built up area in

Scindia House, Connaught Place

New Delhi with all existing

facilities on the first floor.

M/s Atmaram Properties Pvt.

Ltd. having its registered

office at Atma Ram House,

C-37 Connaught Place New

Delhi.

M/s Shri Nataraj Ceramic and

Chemical Industries Ltd. having

its registered office at

Dalmiapuram, P.O. Kallakudi ,

Dist.- Tiruchirapalli (Tamilnadu)

and Head Office at 4, Scindia

House, New Delhi

Sale Deed was executed on 12/

06/1986 for Rs. 3,19,765 (Three

lacs Ninteen Thousand Seven

Hundred and Sixty Five Only)

2 (a) 3.12 Acres of land situated

at Village Kallakudi, Dist.

Tiruchirapalli in Tamilnadu

together with all buildings,

structures, factories and sheds.

(b) 3.42 acres of land situated

and lying at village

Palanaganutham Taluk-Arialur

with all buildings and structures

, factories and sheds.

(c) 8.91 acres of land situated at

village Kallakudi and

Pallangnatham, Taluk -Lalgudi

and ariyalur in Tiruchirapalli

Dist. (Tamilnadu)

Dalmia Cement (Bharat)

Limited a Company

registered under the Indian

Companies Act 1913 and

having its registered office at

Dalmiapuram Tiruchirapalli

Dist. In Tamilnadu.

Dalmia Ceramic Industries Ltd.

(presently known as Shri Nataraj

Ceramic and Chemical Industries

Ltd.) a Company registered under

the Indian Companies Act 1956





House, New Delhi

Sale Deed was executed on 6th

June 1974 for consideration of

Rs. 20,34,049 (Rupees Twenty

Lacs Thirty Four Thousand and

Forty Nine Only)

43


Immovable Properties Taken On Lease

1 Lease Deed: Executed between Govt. of Tamilnadu as a lessor and Dalmia Ceramic Industries Ltd.

(presently known as Shri Nataraj Ceramic and Chemical Industries Ltd.) a Company registered

under the Indian Companies Act 1956 having its registered office at Dalmiapuram, P.O.

Kallakudi , Dist.- Tiruchirapalli (Tamilnadu) and Head Office at 4, Scindia House, New

Delhi as Lessee in respect of all tract of 0.679 Hectares of land situated at Panikkuppar

village in Cuddalore Taluk in the registration district of South Aracote.

Period: From 13th February 1977, for a period of Twenty years and applied for renewal on 07/07/

1993.

Stamp Stamped for Rs. One Hundred and Eighty Eight only. COMMENT ON THE STAMP DUTY-

IT BEING EXECUTED BY GOVT.

Yearly Rent: Lease Rent or Royalty paid by the lessee whichever is greater.Lease Rent with respect to

fireclay is Rs. 13.75 per hectare per annum. Amount of Royalty is prescribed by the State

Govt. from time to time in respect of any mineral removed from the leased area in the

Second Schedule to the Mines and Minerals (Regulation and Development) Act, 1957

Premium NIL

Registration: Registered

II Lease Deed: Executed between M/s AVON Refractories Pvt. Ltd. as a lessor and Shri Nataraj Ceramic

and Chemical Industries Ltd.) a company registered under the Indian Companies Act 1956

having its registered office at Dalmiapuram, P.O. Kallakudi , Dist.- Tiruchirapalli (Tamilnadu)

and Head Office at 4, Scindia House, New Delhi as in respect of manufacturing unit at 23 to

27 & 29 A, G.I.D.C., Wankaner, Gujrat

Period: From 4th August 2008, for a period of Three years ending on 31st July 2011.

Stamp Stamped for Rs. One Lac and Eighty Two Thousand only.

Yearly Rent: Rs. 50.00 Lacs

Premium NIL

Registration: Registered

PURCHASE OF PROPERTY

No property is proposed to be purchased out of the proceeds of this Issue.

S.

No.Particulars of Property Vendor Vendee Consideration

3 14 Acres and 25 Gunthas of non-

agricultural land situated at Jam-

Khambalia Vill-Ambavadi, Dist-

Jamnagar (Gujarat)

Damjibhai Hirabhai aged 35

years, Business and

Agriculturist, residing at

Navivadi (Jam-Khambalia)

Dalmia Ceramic Industries Ltd.

(presently known as Shri Nataraj

Ceramic and Chemical Industries

Ltd.) a Company registered under

the Indian Companies Act 1956





House, New Delhi

Sale Deed was executed on 15/

12/1981 for consideration of Rs.

1,55,380 (Rupees One Lac Fifty

Five Thousand Three Hundred

and Eighty only)

44


KEY INDUSTRY REGULATIONS

THE FACTORIES ACT, 1948

The Factories Act has been enacted to consolidate and amend the law regulating labour in Factories. The Act aims at

protecting human beings from being subjected to unduly hours of bodily strain or manual labour. The act provides that

employees should work in healthy and sanitary condition so far as the manufacturing process will allow and that precautions

should be taken for their safety and the preventions of accidents.

THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970

The act applies to every establishment in which 20 or more workmen are employed or were employed on any day of the

preceding 12 months as contract labour. The act is, however, not applicable to establishments which carry on work of a

casual nature occasionally.

THE ENVIRONMENT (PROTECTION) ACT, 1986

The Act provides for protection and improvement of environment and for matters connected therewith. The Act came into

being subsequent to the United Nations Conference on the Human Environment held at Stockholm in June 1972, in which

India participated. The Act aims at prevention of hazards to human beings, other living creatures, plants and property. As

per the act environment includes water, air and land and the inter-relationship which exists among and between water, air

and land, and human beings, other living creatures, plants, micro-organism and property whereas environmental pollutant

means any solid, liquid or gaseous substance present in such concentration as may be or tend to be injurious to environment.

Under the Act the Central Government shall have the power to take all measures as it deems necessary or expedient for the

purpose of protecting and improving the quality of the environment and preventing, controlling and abating environmental

pollution.

THE CENTRAL EXCISE ACT, 1944

The Central Excise Act consolidates and amends the law relating to Central Duties of Excise on goods manufactured or

produced in India. Excisable goods under the Act means goods specified in the Schedule to the Central Excise Tariff Act,

1985 as being subject to duty of excise. Factory means any premises, including the precincts thereof, wherein or in any part

of which excisable goods are manufactured, or wherein or in any part of which any manufacturing process connected with

the production of these goods being carried on or is ordinarily carried out. Under the Act a duty of excise is levied on all

excisable goods, which are produced or manufactured in India as, and at the rates, set forth in the First Schedule to the

Central Excise Tariff Act, 1985.

THE EMPLOYEES PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT, 1952

The Act provides for the institution of Provident Funds, Pension Fund and Deposit-Linked insurance fund for employees

in Factories and other Establishments. The act applies to (a) every establishment which is a factory engaged in any industry

specified in Schedule of the Act and in which 20 or more persons are employed and (b) any other establishment which the

Central Government by Notification specify giving not less than two months’ notice of its intention to do so in the Official

Gazette.

THE EMPLOYEES STATE INSURANCE ACT, 1948

The object of the Employees State Insurance Act 1948 is to provide for certain benefits to employees in case of sickness,

maternity and employment injury and to make provisions for certain other matters in relation thereto. Whenever any

insured person falls ill, he/she not only get free medical aid but also receive sickness benefits. The woman employees also

need no longer fear that they would be dismissed or removed from service in case they expect babies. Such female

employees not only retain their jobs but they get maternity benefits for a period of twelve week before and after confinement.

In case any insured person is injured in the course of his work and permanently or temporarily disabled, he will get what

is called disablement benefit in the form of cash in installments. Even the dependents of an insured person are entitled to

benefits in case of death of insured person. To qualify for all these benefits, the insurable employee has to pay very small

amount @ 1.75% of the wages as his share of his contribution. Every factory or establishment to which this act applies is

required to be registered alongwith the employees. For carrying into effect the provisions of the Act, the Central Government

has also made the Employees State Insurance (General) Regulations, 1950 and they extend to the whole of the Union

Territory of India. The employee’s contribution will be 4.75% of the wages. The act and the Regulations made thereunder

cast certain obligations on every employer to which they apply. Failure to fulfill those obligations exposes an employer to

prosecution.

45


THE PAYMENT OF GRATUITY ACT, 1972

The Payment of gratuity Act, 1972 was enacted to introduce a scheme for payment of gratuity for certain employees

employed in Industrial and commercial establishment as a measure of social security. By the amendment of 1984 by act 26

of 1984 sub section (3A) was inserted in section 1 to the Payment of Gratuity Act 1972 to ensure that once the act has

became applicable to such shop or establishment it shall continue to be so notwithstanding the fact that the number of

persons employed therein at any time after it has become so applicable falls below ten. To ensure that an unscrupulous

employer may not fabricate the records to avoid application of the Act or reduce the number of employees just to avoid

payment of gratuity, various provisions, as to notice of opening, notice of change or closure of the shop or establishment,

and appointment of inspectors have been made under the Act. Any violation thereof have been made offences punishable

with imprisonment or fine or with both.

THE MATERNITY BENEFITS ACT

The Act regulates the employment of women in certain establishments for certain period before and after childbirth and to

provide for medical benefit and certain other benefits. The Maternity Benefits Act applies, in the first instance - (a) to every

establishment being a factory, mine or plantation including any such establishment belonging to government and to every

establishment wherein persons are employed for the exhibition of equestrian acrobatic and other performances (b) to every

shop or establishment within the meaning of any law for the time being in force in relation to shops and establishment in

a State, in which ten or more persons are employed, or were employed on any day of the preceding twelve months.

46


HISTORY AND CERTAIN CORPORATE MATTERS

Incorporation and Initial Progress

Shri Nataraj Ceramic and Chemical Industries Limited was originally incorporated as Dalmia Ceramic Industries Limited

on June 21, 1973, under the Companies Act, 1956, with the Registrar of Companies, Tamil Nadu, vide Certificate of

Incorporation No. 18-06372. Mr. M. Satyanarayana, Mr. N. Ramaswamy Ayyar, Mr. Y.H. Dalmia, Mr. P.V. Krishnan, Mr.

B.V. Raju, Mr. K.R. Nagarajan and Mr. K.Sitaraman were the subscribers to the Memorandum and Articles of Association.

The name of the Company was changed to Shri Nataraj Ceramic and Chemical Industries Limited, and a fresh Certificate

of Incorporation issued on November 01, 1983 by the Registrar of Companies, Tamil Nadu at Chennai (then Madras). The

Company has its registered office at Dalmiapuram, P.O. Kallakudi-621651, Dist. Tiruchirapalli, Tamil Nadu.

The Company’s manufacturing facility for refractory bricks is located at Dalmiapuram, P.O. Kallakudi-621651, Dist.

Tiruchirapalli, Tamil Nadu and at Jam Nagar, Dwarka Road, Jam-Khambalia, Gujarat, 361305.

Major Events in the history of the Company are as follows:

Year

Major Events and Mile Stones

1973-74 Incorporation of the Company in the name of Dalmia Ceramic Industries Limited, with the Registrar

of Companies, Tamilnadu, taking over the business of manufacture of Refractory, Stoneware Pipe,

and Re- inforced Cement Concrete Pipes from Dalmia Cement (Bharat) Limited with effect from 1st

October 1973.

1974-75 During the year, the Company has promoted an investment company under the name of Shri Nataraj

Investment Company Limited, having its registered office at Dalmiapuram, Tiruchirapalli District-

Tamil Nadu on 15.05.1975.

The project for mining of Red Oxide at a factory as a small-scale industry was taken up during the

year.

1975-76 The production of Red oxide started in the first week of September 1975 at Hospet Works.

1977-78 The paid up capital was doubled to Rs. 25, 00,000 by allotment of 1,25,000 equity shares of Rs. 10

each on 13.05.1978, as fully paid up Bonus Shares in the ratio of 1:1 by capitalization of General

Reserves.

1978-79 Major repairs have been carried out at Hospet Works by closing down the unit for 5 months.

1979-80 During the year Shri Chamundeswari Minerals Limited has been incorporated. The capacity of

refractory production was increased to 29000 MT

1982-83 The Company diversified into chemical and started manufacturing Potassium Chlorate through its

plant near Thanjavur.

Increase in the Authorised capital of the Company form Rs. 50 lacs to Rs. 1.5 crores.

1983-84 Change of name of the Company to Shri Nataraj Ceramic and Chemical Industries Limited.

Commissioning of plant at Jam-Khambalia in Gujarat in Oct 1983. Total capacity production of

refractory increased to 39000 MT.

The paid up capital was doubled to Rs. 50,00,000 by allotment of 2,50,000 equity shares of Rs. 10

each on 04.05.1983, as fully paid up Bonus Shares in the ratio of 1:1 by capitalization of General

Reserves.

1984-85 Public issue of 300000 equity shares of the Company. The low demand of Red oxide made it

unprofitable and red oxide at Hospet was closed.

1993-94 Increase in the Authorised capital of the Company form Rs. 1.5 crores to Rs. 3.00 crores. Refractory

capacity increased to 48000 MT.

1994-95 Capacity of refractory production increased to 61000 MT and Chemical plant at Punakulam disposed

off as it had become unprofitable due to stiff competition from unorganized sector.

1997-98 Shri Nataraj Investment Company Limited subsidiary of Shri Nataraj Ceramic & Chemical Industries

Limited promoted Himshikhar Investments Limited.

47


1998-99 Entering in to Job working agreement with Dalmia Refractory a unit of Dalmia Cement (Bharat)

Limited for its Dalmiapuram Plant to ensure the 100% back up of one product.

2000-01 Shri Nataraj Investment Company Limited a wholly owned subsidiary of Shri Nataraj Ceramic &

Chemical Industries Limited was amalgamated with Mayuka Investment Limited.

2007-08 The capacity of refractory production is increased to 69000 MT.

2008-09 Increase in the Authorised capital of the Company form Rs. 3 crores to Rs. 5 crores. Stoneware

department was closed and the facilities are being used for Refractories production.

Main Objects of the Company

The main objects of the Company as set forth in the Memorandum of Association of the Company is as follows:

1. To carry on the business of producers, miners, manufacturers and to treat, purchase, sell, or otherwise deal with:

(a) Bricks, Tiles, Stoneware, Pipes, Pottery, Earthenware, Sanitary-ware, china and terra-cotta, Dolomite, Sulphur,

Pyrites, Graphite, cement, Reinforced cement, concrete pipes and cement products of all kinds, Refractories

and ceramic ware of all kinds.

(b) Fire clay, China clay, Magnetite, Quartizite and products thereof and all other refractory materials and products.

2. To purchase or otherwise acquire or take on lease for exploration or deal in any land, mining undertaking, coal mines,

artificial stones, gypsum material ,sand or other material useful for building purposes.

3. To establish, run and burn brick-kilns, limestone kilns and manufacture all kinds of building material inclusive of

pre-fabricating, paving, lining and roofing material.

4. To buy, sell or otherwise deal in coal, coke and fuel in connection with or allied to the business of the Company.

5. To manufacture, deal and carry on business in all kinds of earthen-ware, pottery or articles of clay, kaolin, lime,

cement, gypsum, sand or a combination of two or more of them and products allied thereto.

The Object Clauses of the Memorandum of Association enables the Company to undertake activities for which the

funds are being raised in this issue and also the activities, which the Company has been carrying on till date.

Changes in Memorandum of Association of Shri Nataraj Ceramic and Chemical Industries Limited

Since Incorporation, the following changes have taken place in the Company’s Memorandum of Association:

Date of Amendment Amendment

01.03.1983 Change in Authorized Capital i.e. increase in Authorised Share Capital from Rs. 50 lacs to

Rs. 1.5 Crore.

01.11.1983 Change in the name of the Company to Shri Nataraj Ceramic and Chemical Industries Limited.

29.09.1993 Change in Auhthorised Capital i.e. increase in Authorised Share Capital from Rs. 1.5 Crore

to Rs. 3.00 Crore.

28.08.2008 Change in auhthorised capital i.e. increase in Authorised Share Capital from Rs. 3.00 Corre

to Rs. 5.00 Crore.

The details of the Capital raised are given in the section titled “Capital Structure” on page no. 15 of the Letter of Offer.

Subsidiaries of the Issuer Company

The Company has one subsidiary-Shri Chamundeswari Minerals Limited.

Shareholders’ Agreements

At present, there are no shareholders agreements between the Company and any other person.

Other Agreements

The Company has not entered into any agreement other than the following agreements/contracts:

Our Company has entered into a job work agreement with Dalmia Cement (Bharat) Ltd. having its registered office atDalmiapuaram Dist. Tiruchirapalli, Tamilnadu on 27th day of November 1997. The same has been extended from time totime and is scheduled to expire on 31st day of March 2010. The agreement has been successfully going on for the last tenyears as per the terms and conditions agreed to.

Strategic Partners

The Company, as on date, has no strategic partners.

Financial Partners

The Company, as on date, has no financial partners.

48


OUR MANAGEMENT

As per the Article 99 of the Articles of Association, the Company must have a minimum of three (3) and a maximum of

twelve (12) Directors. The Company has 4 (Four) Directors as on date two of whom are independent Directors.

Board of Directors

The Board comprises of:

Name, Designation Status Director’s Address Occupation Qualifications Date of Other

Father’s Identification Appointment Directorships

Name and Number

nationality

Shri Deepak Managing Executive 02421599 C-62, Sector 14, Service Engineering November, 1,

Ambadas Thombre Director & Director Noida , Graduate 2008

S/o Shri Ambadas CEO Uttar Pradesh

Raghunath Thombre

Indian

Shri C.Nagaratnam Whole-Time Executive 00266838 B-7, Dalmia Service B.E(Mechanical) January 27 ,

S/o Shri Director Director Colony, 2009

N. Chandrasekaran Dalmiapuram PO,

Indian Lalgudi TK,

Trichy,

Tamil Nadu-621651

Shri N. Gopalaswamy Director Non- 00017659 C-1, Durga Paradise, Retired B.E (Chemical) April 30, 1999

S/o-Shri S. Nagarajan Executive & 5A, Ramcharapuram

Indian Independent Thennur- 620 017

Director Dist. Tirchy,

Tamilnadu

Shri Pradeep Dayal Director Non- 00266758 B-407, Nirman Vihar Chartered FCA January 25,

Mathur Executive New Delhi- 110092 Accountant 1999

S/o-Shri &

G. D. Mathur Independent

Indian Director

Annexure 1- Details of Other Directorships

Sl. No. Name Other Directorships/Partnerships

1. Shri Deepak Ambadas Thombre NilS/o Shri Ambadas Raghunath Thombre

2. Shri C.Nagaratnam Companies:

S/o-Shri S. Nagarajan Himshikhar Investment Limited, Director

3. Shri N. Gopalaswamy Companies:S/o-Shri S. Nagarajan 1. Poddar Pigments Limited, Director

2. Sri Kesava Mines & Minerals Limited, Director3. Sri Madhava Minerals & Properties Limited, Director4. Sri Shanmugha Mines & Minerals Limited, Director5. Sri Swaminatha Mines & Minerals Limited, Director6. Sri Subramanya Mines & Minerals Limited, Director7. Dalmia Cement (Bharat) Limited, Director8. Integrated Enterprises Limited, Director

4. Shri Pradeep Dayal Mathur Companies:S/o-Shri G. D. Mathur Prabha Ceramics Pvt. Ltd., Director

Firms:

Mathur Gupta & Associates, Partner

As

per a

nnex

ure

1

49


The brief profile of the Directors of the Company is given below:

Shri Deepak Ambadas Thombre:

Shri Deepak Thombre, aged 55 years, was appointed as Managing Director for a period of 3 years w.e.f 1st Novem-

ber,2008. Shri Thombre is an Engineering Graduate with Master in Management Studies and has over 30 years of experi-

ence in various managerial capacities in several organizations of repute.

Shri C.Nagaratnam:

Shri C Nagaratnam aged 57 years joined the Company as Sr. General Manager in February 1999. The Board Co-opted him

as Additional Director and was appointed as Whole-time Director upto March 2010 w.e.f 27th January, 2009, subject to the

approval of shareholders. Shri C. Nagaratnam holds BE Mechanical degree and have above 30 years experience

Shri N. Gopalaswamy:

Shri. N. Gopalaswamy, aged 77 years, had been appointed as Director on 30.04.1999. He is an Independent Director

holding 18 equity shares. He has a degree of B.E.(Chemical) from Annamalai University. He has above 41 years experi-

ence in various fields. He is primarily involved in strategic decision-making.

Shri Pradeep Dayal Mathur :

Shri Pradeep Dayal Mathur, aged 52 years, a Fellow member of Institute of Chartered Accountants of India. He has been

appointed as director on 25.01.1999.He is an independent professional, holding NIL shares. He has above 21 years expe-

rience in various fields including accounts and taxation. He is primarily involved in strategic decision-making.

Details of Borrowing Powers

Vide a resolution passed through a postal ballot of the shareholders of the Company on August 28, 2008, consent of the

members of the Company was accorded to the Board of Directors of the Company pursuant to the provisions of section

293 (1)(d) of the Companies Act, 1956 and other applicable provisions, if any, to borrow, from time to time, any sum or

sums of money which together with the monies already borrowed by the Company (apart from the temporary loans

obtained from the Company’s Bankers in the ordinary course of business) may exceed the aggregate of the paid-up share

capital and free reserves (the reserves not set apart for any specific purpose) of the Company provided that the total amount

up to which the money may be borrowed by the Board of Directors and outstanding at anytime shall not exceed the sum of

Rs. 50.00 Crores (Rupees Fifty crores).

TERMS OF APPOINTMENT & COMPENSATION OF MANAGING AND WHOLE TIME DIRECTORS

The commission of profits being paid to the non-executive directors of the Company has been approved by the sharehold-

ers of the Company through a special resolution in the annual general meeting of the Company held on 29th of Septem-

ber,1993.

Date of expiration of current term of office:

a) Shri Deepak Ambadas Thombre: October 30, 2011

b) Shri C.Nagaratnam: March 31, 2010

Other terms of Appointment

a) Shri Deepak Ambadas Thombre: The services of Shri Deepak Thombre have been taken on part time basis from

Dalmia Cement (Bharat) Limited and an amount of Rs. 18 lacs per annum has been agreed to be paid to Dalmia

Cement(Bharat) Limited for availing Mr. Deepak Thombre’s services. No retirement or other benefits are to be paid

by SNCCIL to Mr. Deepak Thombre.

b) Shri C.Nagaratnam:

Subject to the ceiling limits laid down in Sections 198 and 309 and other applicable provisions of the Companies Act,

1956 read with Schedule XIII to the Act as may be for the time being in force, remuneration by way of salary, and

perquisites and performance bonus permissible to the Whole-Time Director shall be as under:

i. Salary:

Rs.1,03,200/- per month plus such annual increments as may be sanctioned by the Board each year.

50


ii. Variable Pay/Performance Bonus

Performance Bonus of such amount for each corporate Financial Year or part thereof as may be decided by the

Board of Directors (which includes any committees thereof), subject, however that the total remuneration (i.e.

salary, perquisites and performance bonus) in any one financial year shall not exceed the limits prescribed

under sections 198, 309 and other applicable provisions of the Companies Act, 1956 read with Schedule XIII to

the Act as may be for the time being in force.

iii. Perquisites:

In addition to the salary, perquisites specified hereunder shall be allowed plus such annual increments as may

be sanctioned by the Board each year.

a. Electricity, Water and Furnishing:

Expenses on electricity, water and furnishing to be reimbursed as per the entitlement under the Compa-

ny’s relevant scheme or the relevant Acts/ Rules framed there under as the case may be.

b. Medical reimbursement:

Reimbursement of medical expenses incurred in India for self and family to be valued as per the Compa-

ny’s relevant scheme.

c. Leave Travel Concession:

Leave Travel expenses for self and family, once in a year subject to a monetary limit equivalent to one

month’s salary as

d. Professional membership:

Professional membership fees to the extent of entitlement.

e. House Rent Allowance:

Rent free accommodation or house rent allowance as per the entitlement under the Company’s relevant

scheme or the relevant Acts/Rules framed there under as the case may be.

f. Magazine/secretarial/credit card allowance:

Magazine/ Secretarial/Credit card allowance as per the entitlement under the Company’s relevant scheme.

g. Insurance (Hospitalisation plus Mediclaim):

Premium to be valued as per the company’s rules and the relevant Acts/ Rules framed there under as the

case may be.

h. Provident Fund and Superannuation Fund:

Company’s contribution towards Provident Fund and Superannuation Fund as per the rules framed under

the company’s relevant Scheme or the relevant Acts/rules framed there under as the case may be.

i. Gratuity:

Gratuity according to the rules of the Company.

j. Minimum Remuneration:

In the event of absence or inadequacy of profits in any financial year, during the currency of tenure of the

agreement, the whole-time Director shall be paid salary and perquisites as specified above, so however,

that the salary and perquisites shall not exceed the ceiling, if any, prescribed under Schedule XIII of the

Companies Act, 1956.

k. Other Terms and conditions :

i. The whole-time Director shall be entitled to 30 days (thirty days) privilege/24 days (Twenty four

days) general leave on full pay and allowances. Accumulated privilege leave not availed of since

the date of his appointment as a Whole-time director will be permitted to be encashed as per the

rules of the Company.

51


ii. The headquarters of the Whole-time Director shall be at Dalmiapuram or at such other place as may

be required, from time to time, and the Whole-time Director shall be allowed reimbursement of

traveling expenses on company’s business outside the headquarters as per the Rules of the Com-

pany as applicable.

iii. The Whole-time Director shall not, so long as he functions as such become interested or otherwise

concerned directly or through his wife, sons or unmarried daughters, in any selling agency of the

Company in future, without the prior approval of the Central Government.

iv. This agreement, may, notwithstanding the period mentioned in Clause 1 hereof, be terminated by

either party by giving to the other three month’s notice in writing.

The Non-executive Directors do not draw any remuneration from the Company other than the sitting fee and

commission @1% on profits u/s 349 of the Companies Act, 1956.

CORPORATE GOVERNANCE

The Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agree-

ment which has become applicable from FY 08-09. The Directors of the Company are independent in letter and Spirit

within the meaning of clause 49 of the Listing Agreement.

The Company stands committed to good Corporate Governance practices. The corporate governance philosophy is dedi-

cated to the attainment of the highest levels of accountability and transparency in dealings with its stakeholders. The

corporate governance policies lay emphasis on communication (both internal and external) and reporting. These vital

initiatives extend beyond mandatory corporate governance requirements and are in accordance with the Company’s aim of

establishing voluntary best practices for good corporate governance practices.

Accordingly, the Company has undertaken steps to comply with the SEBI Guidelines on Corporate Governance. Commit-

tees of the Board had been constituted in order to look into the matters in respect of audit, compensation of executive

directors, shareholding/Investors Grievance Redressal.

To comply with the guidelines in relation to Corporate Governance, the Issuer Company has appointed 3 independent

directors on its Board.

The Board of Directors, as on date, comprises a total of 4 (four) Directors.

1. AUDIT COMMITTEE

The scope and function of the Audit Committee are as per section 292A of the Companies Act, 1956 and Clause 49

of the Listing Agreement. Its main function is to provide the Board of Directors of the Company with additional

assurance as to the reliability of financial information and statutory financial statements and as to the adequacy of

internal accounting and controls systems. It acts as a link between the Management and the statutory auditors.

Composition

The Audit Committee comprises 3 Directors with the Chairman, being an independent director, with expertise in

financial and accounting areas.

S. No. Name Designation in the Committee Designation in the Company

1 N. Gopalaswamy Chairman Independent Director

2 Deepak Thombre Member Executive Director

3 P.D. Mathur Member Independent Director

The Statutory Auditors, Internal Auditor, the Finance/Accounts Head and Company Secretary of the Company are

permanent invitees.

The terms of reference of the Audit Committee, as defined by the Board of Directors in their meeting held on

30.06.2008 is to comply with the requirements of Clause 49 of the listing agreement entered into with the Stock

Exchange(s). The Audit Committee has the authority to investigate into any matter that may be prescribed and the

matters listed below and for this purpose the Audit Committee shall have full access to information contained in the

records of the Company and external professional advice, if necessary:

1. Overseeing the Company’s financial reporting process and the disclosure of its financial information to ensure

that the financial statements are correct, sufficient and credible.

52


2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of

the statutory auditor and the fixation of audit fees.

3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

4. Appointment, removal and terms of remuneration of internal auditors

5. Reviewing, with the management, the annual financial statements before submission to the Board for approval,

with particular reference to:

(i) Matters required to be included in the Director’s Responsibility Statement which is a part of the Board’s

report in terms of clause (2AA) of Section 217 of the Companies Act 1956;

(ii) Changes, if any, in accounting policies and practices and reasons for the same;

(iii) Major accounting entries involving estimates based on the exercise of judgment by management;

(iv) Significant adjustments made in the financial statements arising out of audit findings;

(v) Compliance with listing and other legal requirements relating to the financial statements;

(vi) Disclosure of any related party transactions;

(vii) Qualifications in the audit report.

6. Reviewing, with the Management, the quarterly financial statements before submission to the Board for ap-

proval.

7. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal

control systems.

8. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit depart-

ment, staffing and seniority of the official heading the department, reporting structure, coverage and frequency

of internal audit.

9. Discussions with internal auditors on any significant findings and follow up thereon.

10. Reviewing internal audit reports and adequacy of the internal control systems.

11. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit depart-

ment, staffing and seniority of the official heading the department, reporting structure coverage and frequency

of internal audit.

12. Reviewing management letters / letters of internal control weaknesses issued by the statutory auditors.

13. Discussion with internal auditors any significant findings and follow up there on.

14. Reviewing the findings of any internal investigations by the internal auditors into matters where there is sus-

pected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter

to the Board.

15. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as

post-audit discussion to ascertain any area of concern.

16. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, sharehold-

ers (in case of non-payment of declared dividends) and creditors.

17. To review the functioning of the whistle blower mechanism, when the same is adopted by the Company and is

existing.

18. Carrying out any other function as may be statutorily required to be carried out by the Audit Committee.

2. REMUNERATION COMMITTEE:

The Remuneration Committee has not been constituted as it is not mandatory to constitute such a committee.

3. SHAREHOLDERS GRIEVANCE COMMITTEE

This Committee is responsible for the redressal of shareholders’ grievances and for giving effect to share transfer

requests.

53


This Committee consists of the following:

S. No. Name Designation in the Committee Designation in the Company

1 Deepak Thombre Member Executive Director

2 P. D. Mathur Member Independent Director

Terms of Reference:

1. Investor relations and redressal of shareholders’ grievances in general and relating to non -receipt of dividends,

interest, non-receipt of balance sheet etc in particular;

2. Review of the periodicity and effectiveness of the share transfer process, statutory certifications, depository related

issues and activities of the Registrar and Share Transfer Agent; and

3. Such other matters, as may, from time to time, be required by any statutory, contractual or other regulatory Authorities,

to be attended to by such Committee.

This Committee is also responsible for approval of transfer of Equity and preference shares including power to

delegate the same to Registrar and Share Transfer Agent;

There were no unresolved complaints/transfer pending.

Shareholding of the Directors

The shareholding of the Directors on the date of the filing of this Letter of Offer with the Stock Excahnges is as follows:

Sl. No. Name of the Director No. of Shares %age of the Paid-up Share Capital

1. Shri N. Gopalaswamy 18 -

2. Shri C. Nagaratnam 40 -

None of our Directors have transacted in the shares of the Company in the last six months.

For details regarding Equity Shares held by the Promoters and their families and entities controlled by them, please refer

to “Capital Structure of the Company” beginning from page no. 15 of this Letter of Offer.

Interest of the Directors

All the non-Executive Directors of SNCCIL may be deemed to be interested to the extent of fees payable to them for

attending meetings of the Board or Committee thereof as well as to the extent of other remuneration and/or reimbursement

of expenses payable to them as per the applicable laws, and the Articles of Association.

The Directors may also be regarded as interested in the Equity Shares and dividend payable thereon, if any, held by or that

may be subscribed by and allotted/transferred to them or the companies, firms and trust, in which they are interested as

Directors, Members, partners and or trustees. All Directors may be deemed to be interested in the contracts, agreements/

arrangements entered into or to be entered into by SNCCIL with any Company in which they hold Directorships or any

partnership firm in which they are partners as may be declared in their respective declarations.

(For more details, please refer “Related Party Disclosures” as mentioned in page no. 83 of the Auditors’ Report given in

this Letter of Offer. Further, the Directors are also interested to the extent of Equity Shares, if any, already held by them or

their relatives in the Company, or that may be subscribed for and allotted to them, out of the present Issue in terms of this

Letter of Offer and also to the extent of any dividend payable to them and other distributions in respect of the said Equity

Shares.

Except as stated otherwise in this Letter of Offer, the Company has not entered into any Contract, Agreements or Arrange-

ments during the preceding two years from the date of this Letter of Offer in which the directors are interested directly or

indirectly and no payments have been made to them in respect of the contracts, agreements or arrangements which are

proposed to be entered with them.

Changes in Directors in the last three years:

Name Date of Appointment Date of Cessation Reason for change/Remarks

R. L. Bhatia 25.09.1986 10.06.2007 Deceased

Deepak Ambadas Thombre 01.11.2008 - Appointed as Additional Director

Barunjee 25.01.1999 28.11.2008 Resigned

C.Nagaratnam 27.01.2009 - Appointed as Additional Director

54


ORGANISATION CHART FOR THE CORPORATE OFFICE OF


The operating units are headed by Whole Time Director supported by the functional heads. The Whole Time Director

reports to the Managing Director.

KEY MANAGERIAL PERSONNEL

The Company is managed by its Board of Directors, assisted by qualified professionals, with vast experience in the field of

production, finance, accounts, marketing and corporate laws. The following key personnel assist the Management:

Details of the key managerial personnel are as follows:

Sl. No Name of Employee Designation Age Qualification Date Experience Previous

Years of Joining Employment

1. Sh. C. N. Maheshwari Company 53 FCA, FCS, 5th May 2006 26 years Mercury Travels

Secretary and AICWA Limited

CFO

2. Sh. D. Muthukrishnan AED Marketing 54 BE 15th 30 years Nil

December

1977

3. Sh. S. Asokan Sr. GM 54 M. Tech 2nd January, 27 years Nil

Jam-Khambalia 1981

Works

Sh. C. N. Maheshwari (Company Secretary & CFO):-

Sh. C. N. Maheshwari, aged 53 years is Company Secretary. He is a fellow member of Institute of Chartered Accountants

of India, a fellow member of Institute of Company Secretaries of India, and an associate member of Institute of Cost and

Work Accountants of India, having more than 26 years experience into various fields including finance and accounts. He

ManagingDirector

AED(Marketing)

WholeTime

Director(CEO)

GeneralManager(Works)

DPM

Sr. GeneralManager(Works)KMBL

Asstt.Executive

Director (CFO)

Finance,Accounts &

Taxation

Personal andAdministration Secretarial

55


has rejoined the Company on 5th May 2006. He presently is looking after the finance and secretarial related work of the

Company.

Sh. D. Muthukrishnan (Asst. Executive Director, Marketing):

Sh. D. Muthukrishnan, aged 54 years is Asst. Executive Director (Marketing). He holds BE Mechanical degree and having

above 309 years of experience in to various fields. He has joined the Company on 15th December 1977 and till date he is

associated with the Company. He presently looks after the marketing functions at Dalmiapuram Unit.

Sh. S. Asokan (Sr. GM Jam-Khambalia Works)

Sh. S. Asokan, aged 54 years is Sr. General Manager Jam-Khambalia Works. He holds M. Tech degree and having above

27 years of experience in to various fields. He has joined the Company on 2nd January 1981. Till date he is associated with

the Company. He presently looks after the Jam-Khambalia Unit.

All the abovementioned Key Managerial Persons are permanent employees of the Company.

It is confirmed that except as otherwise stated in this Letter of Offer, all the above-mentioned key managerial personnel

have no other material / pecuniary interest in the Company. Further, none of the key managerial personnel has been

selected as director / member of senior management by virtue of any arrangement or understanding with major sharehold-

ers, customers, suppliers or others.

Shareholding of Key Managerial Personnel

The shareholding of the Key Managerial Personnel on the date of the filing of this Letter of Offer with the Stock Ex-

changes is NIL

Bonus or Profit Sharing Plan for the Key Managerial Personnel

There is no Profit Sharing Plan for the Key Managerial Personnel. The Company makes bonus payments to the employees

based on their performances, which is as per their terms of appointment.

Changes in Key Managerial Personnel during the last 1 year:

Sr. No. Name Designation Date of Joining Date of Leaving Remarks

1. Shri C. Nagaratnam Executive Director 19.02.1999 27.01.2009 He has ceased to be

an Executive

Director and has

been promoted to

the level of Whole

Time Director

Family relation with Key Managerial Personnel (KMP)

There exists no family relation between the promoters/directors and the key managerial personnel.

Disclosures Regarding Employees Stock Option Scheme / Employees Stock Purchase Scheme

The Company has not issued any Employees Stock Option Scheme / Employees Stock Purchase Scheme, as required by

the Guidelines or Regulations of SEBI relating to Employee Stock Option Scheme and Employee Stock Purchase Scheme.

Payment or Benefit to Officers of the Company

In the last two years the Company has not paid or given any amount or benfit to any of its officers besides the normal

remuneration for services rendered as Directors, Officers or employees.

56


PROMOTERS

Mr. Jai Hari Dalmia and Mr. Yadu Hari Dalmia are the promoters of the Company.

PROMOTERS AND THEIR BACKGROUND

Mr. Jai Hari Dalmia

Mr. J. H. Dalmia, 64, holds a B.E. degree in electrical engineering from Jadavpur University and a Master’s degree in

electrical engineering from the University of Illinois, Urbana Champagne. He has more than 36 years of experience cutting

across various industries which includes wide knowledge and experience of refractory, sugar and cement businesses.

Mr. J.H. Dalmia has vast experience in research and development having personally received several patents for the

cement businesses.

Mr. Yadu Hari Dalmia

Mr. Y. H. Dalmia, 61, holds a B.Com (Hon) degree from Delhi University and is a Fellow Member of the Institute of

Chartered Accountants of India. He has more than 35 years of experience in the cement industry. Mr. Y.H. Dalmia has

served as President of the Cement Manufacturers Association and is a known figure in the cement industry.

Name of the Promoter Jai Hari Dalmia Yadu Hari Dalmia

Driving Licence No. WB01 19630065363 P02072004133700

Passport Number G 8600264 F 7942660

PAN AADPD6753A AADPD6740M

Voter Id No DL\01\002\231008 DL\01\002\231091

Name of Bank and Branch Punjab National Bank Punjab National Bank

Janpath, New Delhi Janpath, New Delhi

Bank Account No. 0131000100196989 0131000100196590

Declaration by the Promoters

The Company confirms that the Permanent Account Number, Bank Account Number, and Passport Number of the promot-

ers, as applicable, have been submitted to the MSE, CSE and DSE at the time of filing the Letter of Offer with them.

Common Pursuits

As on date, there are no common pursuits that may lead to conflict of interest in the business of the Company and other

firms/companies promoted by the Promoters.

Interest of the Promoters

The Promoters may be deemed to be interested to the extent of shares held by them, their friends or relatives, and benefits

arriving from their holding directorship in the company. The Promoters are not interested in any property, if acquired by

SNCCIL within two years prior the date of the Letter of Offer. The Promoters are neither interested in any loan or advance

given by the Company, nor are they beneficiary of any such loans or advances.

There are companies/firms that have been promoted by one or more of the promoters, and to that extent they may be

considered in such company/firm. There are however no common pursuits with the Issue Company nor are there any

conflict of interest.

57


The promoters do not generally participate in the management/day to day affairs of the Company but they are involved in

the strategic decision making in consultation with the Board of Directors of the Company. The day to day affairs of the

Company as also policy decisions are managed by the Board of Directors. The Chairman of the Board Meeting is unani-

mously elected in the meeting itself, from and by the Directors present in the meeting and the Chairman so elected presides

over the meeting.

Similarly the Chairman of the General Meeting is elected from amongst the Directors present in the meeting to preside

over the meeting.

Payment or benefit to Promoters of the Company

There are no payments or benefits to the Promoters of the Company.

Related Party Transaction

For details of related party transactions please refer to page no. 83 of the Letter of Offer.

PROMOTER GROUP

In addition to our Promoters as specified above, the following individuals (being the immediate relatives of the Promoters/

Managing Director and some of whom hold equity shares) and companies are part of the Promoter Group.

S.NO NAME OF ENTITIES NO OF SHARES HELD

Relatives of Promoters

Smt. Kavita Dalmia 0

Shri Gautam Dalmia 0

Smt. Anupama Dalmia 0

Kum. Sukeshi Dalmia 0

Kum. Vaidehi Dalmia 0

Kum. Sumana Dalmia 0

Smt. Bela Dalmia 0

Shri Puneet Dalmia 0

Smt. Avantika Dalmia 0

Ku. Shrutipriya Dalmia 0

Ku. Avanee Dalmia 0

Mst. Priyang Dalmia 0

Sub-Total 0

Trusts/HUFs 0

Sukeshi Trust 0

Vaidehi Trust 0

Sumana Trust 0

Shrutipriya Dalmia Trust 0

Priyang Trust 0

Avanee Trust 0

J.H.Dalmia (HUF) 0

Y.H.Dalmia (HUF) 0

Sub-Total 0

58


S.NO NAME OF ENTITIES NO OF SHARES HELD

Bodies Corporate

Ankita Pratisthan Limited 61890

Sita Investment Company Limited 50322

Rama Investment Company Pvt. Ltd. 28477

Kavita Trading & Investment Co. Pvt. Ltd. 0

Puneet Trading & Investment Co. Pvt. Ltd. 50

Shree Nirman Limited 18450

Himgiri Commercial Limited 6000

Valley Agro Indusries Limited 22362

Alirox Abrasives Limited 64000

Mayuka Investment Limited 77730

Shri Chamundeswari Minerals Limited 0

Dalmia Cement (Bharat) Limited 0

D.I.Properties Limited 0

Avnija Properties Limited 0

Hemshila Properties Limited 0

Himshikhar Investment Limited 0

Kanika Investments Limited 0

Ishita Properties Limited 0

ZipAhead. Com Limited 0

Geetee Estates Limited 0

Shri Rangam Brokers and Holdings Ltd. 0

Shri Rangam Properties Limited 0

Arjuna Brokers & Minerals Limited 0

Dalmia Minerals & Properties Limited 0

Seeta Estates and Brokers Limited 0

Shri Radha Krishna Brokers and Holdings Limited 0

Sri Kesva Mines and Minerals Limited 0

Sri Madhava Minerals and Properties Limited 0

Sri Shanmugha Mines and Minerals Limited 0

Sri Swaminatha Mines and Minerals Limited 0

Sri Subramanya Mines and Minerals Limited 0

Avanee And Ashni Securities Pvt. Ltd. 0

Keshav Power Pvt.Limited (Formerly Keshav Power Ltd.) 0

Sri Dhandanthapani Miners & Minerals Ltd. 0

Sri Madhusudana Miners & Properties Ltd. 0

Sri Trivikrama Miners & Properties Ltd. 0

Landmark Property Development Co. Ltd. 0

Dalmia Cement Ventures Limited 0

Dalmia Sugar Ventures Limited 0

OCL India Limited 0

Sub Total 329281

Total 329281

59


CURRENCY OF PRESENTATION

In this Letter of Offer, all references to “Rupees” or “Rs.” are to the legal currency of India. All references to US$, USD,

or US Dollars are to the United States Dollars, the legal currency of the United States of America.

60


DIVIDEND POLICY

Dividends, other than interim dividends, if any, will be declared at the Annual General Meetings of the shareholders of the

Company based on the recommendation of the Board of Directors. The Board may, at its discretion, recommend dividend

to be paid to the shareholders. Generally, the factors that may be considered by the Board of Directors before making any

recommendations for dividend include, but not limited to, the future expansion plans and capital requirements, profits

earned during the fiscal year, cost of raising funds from alternate sources, liquidity position, applicable taxes including tax

on dividend as well as exemptions under tax laws available to various categories of investors from time to time and general

market conditions. The Board of Directors may also, from time to time, pay interim dividends to the shareholders of the

Company.

However, the Board of Directors have recommended dividend @ 50% for the financial year 08-09 subject to the approval

of the shareholders. The Company has declared interim dividend @25% for the Financial Year 2007-08, which was con-

firmed as final in the Annual General Meeting of the company held on 29.08.2008. The Company last declared dividend in

the FY-1995-96 and declaration of dividend in the past is not necessarily indicative of the dividend amounts, if any, or the

dividend policy, for the future.

61


SECTION V- FINANCIAL INFORMATION

FINANCIAL INFORMATION OF OUR COMPANY

AUDITORS REPORT

The Directors,


Dalmiapuram - 621651

District Tiruchirapalli

Tamil Nadu

Dear Sirs,

(1) We have examined the books and accounts of Shri Nataraj Ceramic and Chemical Industries Limited Dalmiapuram

- 621651 for the five financial years ended on March 31, 2009, being the last date up to which the accounts of the

Company have been made up and audited by us for adoption by the members.

(2) In accordance with the requirements of:

(i) Paragraph B (1) of Part-II of Schedule-II to the Companies Act, 1956,

(ii) Securities and Exchange Board of India (Disclosure and Investors’ Protection) Guidelines, 2000 (SEBI Guide-

lines),

(iii) Engagement letter received from the Company, requesting us to carry out work relating to the offer document/

information memorandum being issued by the Company in connection with the Issue of 2400000 6% non-

convertible debentures (NCDs) of Rs.10/- each with detachable warrants aggregating to Rs.240 lacs to the

existing Equity shareholders on rights basis in the ratio of 3 NCDs with detachable warrants for every 1 exist-

ing Equity share held by the existing shareholders on the record date, that is on July 06, 2009.

We report that:

a. The Profit & Loss account of Shri Nataraj Ceramic and Chemical Industries Limited for the five financial

years ended on March 31, 2009 (audited) which were drawn up in accordance with the provisions of the

Companies Act, 1956 are as set out in Annexure I enclosed.

b. The Assets and Liabilities of Shri Nataraj Ceramic and Chemical Industries Limited for each of the five

financial years ended March 31, 2009 (audited) are as set out in Annexure II enclosed.

c. The aforesaid statement of Profit & Loss and Assets & Liabilities:

(i) read together with Significant Accounting Policies and Significant Changes in Accounting Policies

as set out in Annexure III, Notes to Accounts as set out in Annexure IV and Notes on Adjustments

arising out of qualification in Auditors Report, if any,(being nil) have been drawn, after giving

effect to adjustments and regrouping as and where, in our opinion, considered appropriate and,

(ii) have been prepared by the Company in accordance with the provisions of the Companies Act,1956

and guidelines issued by the Securities and Exchange Board of India (Disclosure and Investors’

Protection) Guidelines,2000 (SEBI Guidelines) and amendments made thereto.

(3) The statement of Profit & Loss and Assets & Liabilities of the subsidiary company for each of the five financial years

ended on March 31, 2009 (audited) together with Significant Accounting Policies as are set out in Annexure XXIV.

We have accepted the relevant accounts and statements in respect of Shri Chamundeswari Minerals Limited, audited

and reported upon by M/s Indra D. Narayan & Co., erstwhile auditor of the said subsidiary for last 4 financial years

ended on 31st March of 2005, 2006, 2007 and 2008.

(4) We report that there were no qualifications in the Audit Report for the year ending on 31st March, 2009, 2008, 2007,

2006, and 2005. (Annexure-XXI)

(5) We have examined the following financial information relating to the Company for the year ended on March 31,

62


2009, 2008, 2007, 2006, and 2005 proposed to be included in the Offer Letter of offer as approved by the Board of

Directors and annexed to this report :

1. Cash Flow Statement Annexure-V

2. Statement of Dividend paid/Proposed Annexure-VI

3. Performance Ratios Annexure-VII

4. Capitalization Statement Annexure-VIII

5. Statement of Tax Shelter Annexure-IX

6. Details of Other Income Annexure-X

7. Sundry Debtors Annexure-XI

8. Reserves & Surplus Annexure-XII

9. Loans & Advances Annexure-XIII

10. Unsecured Loans Annexure-XIV

10.A Statement of Deferred Tax Annexure-XIVA

11. Current Liabilities & Provisions Annexure-XV

12. Secured Loans Annexure-XVI

13. Investments Annexure-XVII

14. Contingent Liabilities Annexure-XVIII

15. Details of Opening Stock, Production, Sales & Closing Stock Annexure-XIX

16. Related Party Transactions Annexure-XX

17. Auditors’ Qualifications Annexure-XXI

18. Statement of Profit and Loss of Shri Chamundeswari Minerals Limited Annexure-XXII

19. Statement of Assets and Liabilities of Shri Chamundeswari Minerals Limited Annexure-XXIII

20. Notes of Shri Chamundeswari Minerals Limited Annexure-XXIV

21. Statement of Consolidated Profit and Loss. Annexure-XXV

22. Statement of Consolidated Assets and Liabilities Annexure-XXVI

23. Significant Accounting Policies & Notes to the Consolidated Financial Statements Annexure-XXVII

24. Consolidated Cash Flow Statement Annexure-XXVIII

In our opinion, the financial statements of the Company as mentioned above, read with the Significant Accounting

Policies and Notes to accounts, have been prepared in accordance with Part II of Schedule II to the Companies Act,

1956 and the SEBI Guidelines.

This report is intended solely for your information and for inclusion in the Letter of offer in connection with the Issue

of 6% non-convertible debentures (NCDs) of Rs.10/- each with detachable warrants aggregating to Rs. 240 lacs to

the existing Equity shareholders on rights basis in the ratio of 3 NCDs with detachable warrants for every 1 existing

Equity share held by the existing shareholders on the record date, that is on July 06, 2009 and is not to be used,

referred to or distributed for any other purpose without our prior written consent.

For and on behalf of

S.S. Kothari Mehta & Co.

Chartered Accountants

Place : New Delhi (ARUN K. TULSIAN)

Date : June 27, 2009 Partner

Membership No. 89907

63


PART-1

STATEMENT OF PROFIT AND LOSS

In accordance with the requirements of Clause B.1 of Part II of Schedule II to the Companies Act, 1956, we report that the

profits of the Company for the above years are as set out below. These profits, expressed in lacs of rupees, have been

arrived at after charging all expenses of manufacture, working and management including depreciation and after making

such adjustments and regroupings as in our opinion are appropriate and are subject to the Accounting Policies being

followed by the Company and notes given below:

ANNEXURE-I

Statement of Profit & Losses (Adjusted)

(Rs in Lacs)

As At 31st March

2009 2008 2007 2006 2005

INCOME

Sales and Processing charges (Gross) 8628.12 6,098.16 3,992.77 3,808.24 3,724.11


7837.42 5,368.87 3,534.32 3,309.03 3,227.83

Less :- Excise Duty 641.37 530.48 371.98 353.68 342.64

7196.05 4,838.39 3,162.34 2,955.35 2,885.19

Other Income 251.04 238.91 305.96 92.41 83.10


Add/(Less):- Excise duty variation in opening/closing stock (0.49) (19.63) 14.97 (6.63) (13.16)

5.13 154.25 (141.66) 100.30 143.40

7452.22 5,231.55 3,326.64 3,148.06 3,111.69

EXPENDITURE

Purchases 573.37 394.93 0.00 0.00 0.00

Raw materials consumed 2284.11 1500.59 776.09 726.95 778.05

Staff Cost 1064.94 846.43 644.32 570.71 553.09







Total Expenses 6492.47 4473.60 2,654.95 2,588.77 2,703.32


Prior Period expenditure (Net of Income) 0.00 0.00 0.00 0.00 0.00


Provision for Taxes

- Current Tax 260.00 230.00 225.00 190.00 130.00

- Deferred Tax 66.80 30.00 (15.00) 1.00 10.00

-Fringe Benefits Tax 9.50 8.50 5.46 7.67 0.00

Profit After Tax 623.45 489.45 456.23 360.62 268.37

Add : Surplus brought forward from the previous year 2,109.66 1,693.61 1,237.38 876.76 608.39

Profit available for appropriation 2,733.11 2,183.06 1,693.61 1,237.38 876.76

Appropriations :






2,733.11 2,183.06 1,693.61 1,237.38 876.76

64


PART-II STATEMENT OF ASSETS AND LIABILITIES

The Assets and Liabilities of Shri Nataraj Ceramic and Chemical Industries Limited for each of the five financial years

ended March 31, 2009 (audited) are set out as here under:

ANNEXURE-II

(Rs in Lacs)

Particulars As At 31st March

2009 2008 2007 2006 2005

SOURCES OF FUNDS


(a) Share Capital 80.00 80.00 80.00 80.00 79.97



2. Loan Funds

(a) Secured Loans 1594.63 611.15 173.71 216.66 283.98


3. Deferred Tax 204.50 137.70 107.70 122.70 121.70

TOTAL 5084.26 3457.33 2523.84 2125.56 1854.24


1. Fixed Assets

(a) Gross Block 3617.02 2671.42 2280.82 2227.24 2198.10


(c) Net Block 1822.74 1012.26 698.71 710.62 754.62


2. Investments 360.03 771.50 1189.08 360.03 250.03

3. Current Assets, Loans and Advances

(a) Inventories 1933.40 1254.48 744.26 845.31 695.89

(b) Sundry Debtors 1541.89 670.94 319.95 350.89 444.74




Sub Total 5012.32 3374.98 1972.37 1743.76 1470.95

Less: Current Liabilities and Provisions


(b) Provisions 775.82 657.05 546.40 321.40 158.00

Sub Total 2273.24 1709.88 1414.05 689.00 622.21


TOTAL 5084.26 3457.33 2523.84 2125.56 1854.24

65


ANNEXURE-III

SIGNIFICANT ACCOUNTING POLICIES (as on 31st March 2009)

1. Accounting Convention

The Financial Statements are prepared under historical cost convention on a going concern basis and comply with

the presentational requirements of the Companies Act, 1956 and mandatory accounting standards issued by the

Institute of Chartered Accountants of India. Revenues are recognised and expenses are accounted on their accrual

with necessary provisions for all known liabilities.

2. Fixed Assets and Depreciation

i) Fixed Assets are stated at cost of acquisition or construction and include interest on specific borrowings for

new projects upto commissioning.

ii) Leasehold Land is being amortised over the lease period.

iii) Depreciation is provided on straight line method for the fixed assets at Dalmiapuram, Khambalia and Wankaner

Works and on written down value method for the fixed assets at New Delhi Office at the rates specified in

Schedule XIV to the Companies Act, 1956.

3. Investments

Long-term Investments are carried at cost. However, provision for diminution in value is made to recognise a decline

other than temporary in the value of investments. Current Investments are stated at cost or fair value, whichever is

lower.

4. Inventories

i) Finished goods, Semi-finished goods, Stores, Spares and Raw Materials including materials in transit are val-

ued at cost or net realisable value, whichever is lower.

ii) Loose tools are valued at cost.

iii) Cost is determined using weighted average cost method.

5. Employee Benefits

i) Defined Contribution Plan:

Employee benefits in the form of the Company’s contribution to provident fund, pension scheme, superannua-

tion fund and ESI are considered as defined contribution plan and charged to the profit and loss account of the

year when the contribution to the respective funds are due.

ii) Defined Benefit Plan:

Retirement benefits in the form of gratuity and leave encashment are considered as defined benefit obligations

and are provided for on the basis of an actuarial valuation as at the date of the balance sheet using the projected

unit credit method which considers each period of service as giving rise to an additional unit of benefit entitle-

ment and measures each unit separately to build up the final obligation. Past services are recognized on a

straight line basis over the average period until the amended benefits become vested. Obligation is measured

at the present value of estimated future cash flows using a discounted rate that is determined by reference to

market yields at the balance sheet date on Government bonds where the currency and terms of the Government

bonds are consistent with the currency and estimated terms of the defined benefit obligation.

iii) The expenditure on voluntary retirement schemes is charged to the profit and loss account in the year in which

it is incurred.

6. Excise Duty

Excise Duties recovered are included in the gross sale value of products.

66


7. Foreign Currency Conversion/Transaction

Foreign currency transactions are recorded on initial recognition at the rate prevailing on the date of transaction.

Where export bills are negotiated with the bank, the export sales are recorded at the rate on the date of negotiation as

the said rate approximates the actual rate on the date of the transaction.

Foreign currency monetary items are reported using the closing rate. Exchange differences arising on settlement of

monetary items or on reporting the same at the closing rate as at the balance sheet date are recognized as income or

expense in the period in which they arise.

The premium or discount arising at the inception of forward exchange contract is amortised as an expense or income

over the life of the contract.

8. Impairment of Assets

Impairment losses, if any, are recognised in accordance with the accounting standard issued in this regard by The

Institute of Chartered Accountants of India.

9. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the

Balance Sheet date is considered probable. Contingent liabilities are shown by way of Notes to Accounts in respect

of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not

probable. Contingent assets are not recognised in the Accounts.

ANNEXURE-IV

NOTES TO ACCOUNTS (Rs. in Lacs)

31.03.2009 31.03.2008

1. Estimated amount of contracts remaining to be executed on capital account 0.86 0.00

and not provided for (Net of advances)

2. a) Contingent Liability exists in respect of

i) Income Tax for which the Company has preferred appeals 10.53 10.53

ii) Income Tax for which the Income Tax Department has preferred appeals

against the decisions in favour of the Company. 0.52 0.52

iii) Other monies for which the Company is contingently liable including

Bank Guarantees. 26.20 182.95

b) Claims against the Company not acknowledged as debt and being contested

before appropriate authorities. 94.86 93.92

3. Installments of Term Loans due during the next 12 months 327.50 150.00

4. Computation of Profits under Section 349 of the Companies Act, 1956 for

calculating commission payable to Directors :

Profit as per Profit and Loss Account 956.23

Add :

i) Non-Executive Directors’ Commission 3.00

ii) Directors’ Sitting Fees 0.29

iii) Loss on Sale of Fixed Assets 0.17

iv) Loss on Sale of Investments 0.20

iv) Whole-time/Managing Director remuneration 12.64 16.30

67


31.03.2009 31.03.2008

Less :

i) Profit on Sale of Fixed Assets 0.01

ii) Profit on Sale of Investments 31.01 31.02 (14.72)

Net Profit for calculating Directors’ Commission 941.51

Directors’ Commission @ 1% (previous year @ 1.5%) on Rs.941.51 lacs 9.41

Maximum Commission payable 3.00 3.00

5. Details of remuneration to Whole-time Director/Managing Director

Salaries 10.57*

Perquisites 1.38

Contribution to Provident Fund 0.26

Superannuation Fund and other Funds 0.43 12.64 0.00

*Includes Rs.8.39 lacs paid to Dalmia

Cement (B) Ltd. on account of Managing

Director’s services.

6. Prior period expenses 3.52 0.00

7. The Company has taken on lease land, building, plant & machinery and other

assets relating to refractory unit at Wankaner effective from 04.08.2008 for a

period of 3 years, at a lease rent of Rs.12.50 lacs per quarter aggregating to

Rs.150 lacs with the right of purchasing the unit in 1st 18 months at Rs.300 lacs.

The total lease rent charged to the Profit & Loss Account for the year is

Rs.31.25 lacs. The breakup of total minimum lease payments under

non-cancellable lease due as at 31.03.2009 are as follows:

Not later than one year 50.00 0.00

Later than one year and not later than five years 68.75 0.00

Later than five years N.A. 0.00

8. Excise duty is net of reimbursement on job work production Rs.662.95 lacs

(previous year Rs.556.85 lacs)

9. The following expenses have been charged to other Accounts:

(a) Salaries, Wages and Benefits to Employees 193.52 130.58

(b) Repairs to Machinery 0.00 0.03

10. Disclosure of sundry creditors under current liabilities is based on the information

available with the Company regarding the status of the suppliers as defined under

the Micro, Small and Medium Enterprises Development Act, 2006. There are no

delays in payments to Micro and Small Enterprises as required to be disclosed

under the Act.

11. In the opinion of the Board and to the best of their knowledge and belief, the value

on realisation of Current assets, Loans and Advances, will, in the ordinary course

of business, not be less than the amount at which they are stated in the Balance Sheet.

12. (a) Value of imports calculated on C.I.F. basis.

Raw Materials 923.85 443.72

Capital Goods & Stores 0.00 0.00

(b) Details regarding imported and indigenous materials consumed:

Spare Parts :

i) Indigenous 217.43 159.26

(100%) (100%)

The Company has taken on lease land, building, plant & machinery and other assets

relating to refractory unit at Wankaner effective from 04.08.2008 for a period of 3

years, at a lease rent of Rs.12.50 lacs per quarter aggregating to Rs.150 lacs with the

right of purchasing the unit in 1st 18 months at Rs.300 lacs. The total lease rent

charged to the Profit & Loss Account for the year is Rs.31.25 lacs. The breakup of

total minimum lease payments under non-cancellable lease due as at 31.03.2009 are

as follows:

68


31.03.2009 31.03.2008

ii) Imported 0.00 0.00

(0.00) (0.00)

Raw Materials :

i) Indigenous 2370.13 1785.77

(77.08%) (80.08%)

ii) Imported 704.68 444.11

(22.92%) (19.92%)

(c) Expenditure in foreign currency Foreign Travelling 2.01 0.00

Current Year Previous Year

M.T. Rs. Lacs MT Rs. Lacs

13. Raw Materials Consumed

Clays 18835 432.48 13804 235.27

Bauxite 40295 1846.79 44428 1414.19

Other Materials 795.54 580.42

Total 3074.81 2229.88

Less: Inter-unit transfer 790.70 729.29

2284.11 1500.59

14. Detailed information about goods manufactured and traded in :

Refractory Calcined

Bauxite

Licensed Capacity N.A. N.A.

Installed Capacity (MT) 88,000* 24,000

(As certified by the management) (69,000) (24,000)

Production (MT) 81,842** 19,029***

(69,522) (23,136)

Sales (MT) 38,894 4,218

(30,669) (3,048)

Sales (Rs. Lacs) 5,422.82 331.17

(3,631.65) (165.81)

Self Consumption (MT) 595 16,632

(692) (17,825)

Self Consumption (Rs. Lacs) 38.12**** 784.32

(36.91) (729.29)

Opening Stock (MT) 1,917 5750

(1,559) (3,487)

69


Opening Stock (Rs. Lacs) 147 241.36

(117.03) (109.75)

Closing Stock (MT) 2,253 3,929

(1,917) (5,750)

Closing Stock (Rs. Lacs) 202.50 176.53

(147.00) (241.36)

Goods Traded@ 573.37 0.00

Purchase ( Rs. In lacs ) (394.93) (0.00)

Sales ( Rs. In lacs) 634.17 0.00

(406.72) (0.00)

Note The Company has stopped the manufacturing of Stoneware Pipes since 2007-08.

@ Goods traded are of different specifications, sizes, weight and are in large numbers. Due to voluminous data, it

is not possible to give quantitative details of goods traded.

(*) Includes 7000 MT capacity of Wankaner Unit taken on lease w.e.f. August, 2008.

(**) Includes production of 42,017 MT (previous year 37,803 MT) on job work basis.

(***) Includes 7,225 MT (previous year 6,858 MT) towards calcinations of clay etc.

(****) Corresponding figures have been included under the relevant expenditure head and this treatment has no im-

pact on Profit/Loss for the year.

(Figures in brackets pertain to previous year i.e 2007-08)

15. During the year, the Company has carried out production of refractories at its Dalmiapuram Unit mainly on job work

basis.

16. Previous year figures have been regrouped and/or rearranged wherever necessary to correspond with current year’s

figures.

17. All amounts including those in contingent liabilities and Notes have been expressed in Rs. Lacs rounded off to the

nearest thousands. Figures less than Rupees five hundred which are required to be shown separately have been

shown at actuals in double bracket. Figures in Metric Tonnes have been rounded off to the nearest Metric Tonne.

18. As per Accounting standard (AS) 15 “ Employee Benefits”, the disclosure of employee benefits as defined in the

Accounting Standard is given bellow :

(a) Defined Contribution Plans:-

The Company has recognised an expense of Rs. 110.53 lacs towards the defined contribution plan.

70


(b) Defined Benefit Plans:- as per actuarial valuation on 31st March, 2009:-

Particulars Gratuity Leave Encashment

Funded Non - Funded

Rs. Lacs Rs. Lacs

Current Previous Current Previous

Year Year Year Year

I Expenses recognised in the Profit and Loss Account for the year

ended 31st March, 2009

1. Current Service Cost 15.43 11.60 7.02 3.96

2. Interest Cost 16.44 13.30 1.54 2.46

3. Expected return on plan assets (17.27) (15.00) 0.00 0.00

4. Net Actuarial (Gain)/Loss 22.14 30.53 20.73 (4.60)

5. Total Expenses 36.74 40.43 29.29 1.82

II Net Asset/(Liability) recognized in the Balance Sheet as at 31st

March, 2009

1. Present Value of obligation as at year - end 250.17 205.51 63.78 41.91

2. Fair Value of plan assets as at year end 211.04 165.39 0.00 0.00

3. Funded Status {Surplus/(Deficit)} (39.13) (40.12) (63.78) (41.91)

4. Net Assets/(Liability) as at 31st March, 2009 0.00 0.00 (63.78) (41.91)

III Change in obligation during the year ended 31st March, 2009

1. Present value of Obligation at the beginning of the year 205.51 166.35 41.91 31.89

2. Current Service Cost 15.43 11.60 7.02 3.96

3. Interest Cost 16.44 13.31 1.54 2.46

4. Actuarial (Gain)/Loss 22.14 30.53 20.73 4.60

5. Benefits Paid (9.35) (16.27) (7.42) 0.00

6. Present Value of Obligation at the year- end 250.17 205.51 63.78 41.91

IV. Change in the Assets during the year ended 31st March, 2009.

1. Plan assets at the beginning of the year 203.12 166.67 0.00 0.00

2. Expected return on plan assets 17.27 14.99 0.00 0.00

3. Employer’s contribution 39.13 40.12 0.00 0.00

4. Benefits Paid (9.35) (16.27) 0.00 0.00

5. Plan assets at the end of the year 250.17 205.51 0.00 0.00

V The major categories of plan assets as percentage of total plan

Qualifying Insurance Policy 100% 100% 0.00 0.00

VI Actuarial Assumptions :

1. Discount Rate 8% 8% 8% 8%

2. Expected rate of return on plan assets 8.5% 9% - -

3. Mortality Table LIC LIC LIC LIC

(94-96) (94-96) (94-96) (94-96)

duly duly duly duly

Modified modified Modified modified

4. Salary Escalation 8% 8% 8% 8%

71


19. Segment reporting, as required by Accounting Standard - 17, is as below :-

Refractory Calcination Others Total

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

REVENUE

1. External sales 7,354.08 325.59 0.00 7,679.67

(5,085.53) (165.81) (0.00) (5,251.34)

2. Inter-segment sales 38.12 784.32 0.00 822.44

(36.91) (729.29) (0.00) (766.20)

3. Other Revenue 185.25 1.79 0.00 187.04

(192.65) (0.02) (0.00) (192.67)

4. Unallocated Corporate Revenue 0.00 0.00 0.00 64.00

(0.00) (0.00) (0.00) (46.24)

Total Segment Revenue 7,577.45 1,111.70 0.00 8,753.15

(5,315.09) (895.12) (0.00) (6,256.45)

RESULT (Profit before interest and corporate expenses)

Segment Profit/(Loss) 971.67 170.52 0.00 1,142.19

(833.58) (52.19) (0.00) (885.77)

Unallocated Corporate Expenses net of unallocated

Corporate Revenue 0.00 0.00 0.00 72.22

(0.00) (0.00) (0.00) (62.77)

Operating Profit 0.00 0.00 0.00 1,069.97

(0.00) (0.00) (0.00) (823.00)

Interest Expenses 1.78 0.00 0.00 110.22

(5.67) (0.00) (0.00) (65.05)

Income Taxes

Current Tax 0.00 0.00 0.00 260.00

(0.00) (0.00) (0.00) (230.00)

Deferred Tax 0.00 0.00 0.00 66.80

(0.00) (0.00) (0.00) (30.00)

Fringe Benefits Tax 0.00 0.00 0.00 9.50

(0.00) (0.00) (0.00) (8.50)

Net Profit 0.00 0.00 0.00 623.45

(0.00) (0.00) (0.00) (489.45)

OTHER INFORMATION

Assets 5,457.90 505.57 0.00 5,963.47

(2,709.20) (662.05) (0.00) (3,371.25)

Unallocated Corporate Assets 0.00 0.00 0.00 69.98

(0.00) (0.00) (0.00) (67.42)

Total Assets 0.00 0.00 0.00 6,033.43

(0.00) (0.00) (0.00) (3,438.67)

Liabilities 1,535.53 51.68 0.00 1,587.21

(1,054.48) (118.21) (0.00) (1,172.67)

Unallocated Corporate Liabilities 0.00 0.00 0.00 1,629.84

72


(0.00) (0.00) (0.00) (616.31)

Total Liabilities 0.00 0.00 0.00 3,217.05

(0.00) (0.00) (0.00) (1,788.98)

Depreciation 104.77 29.36 0.00 134.13

(63.36) (28.76) (0.00) (92.12)

Unallocated Corporate Depreciation 0.00 0.00 0.00 2.04

(0.00) (0.00) (0.00) (1.89)

Total Depreciation 0.00 0.00 0.00 136.17

(0.00) (0.00) (0.00) (94.01)

Capital Expenditure 1,097.62 0.00 0.00 1,097.62

(324.23) (13.09) (0.00) (337.32)

Unallocated Corporate Capital Expenditure 0.00 0.00 0.00 3.39

(0.00) (0.00) (0.00) (2.44)

Total Expenditure 0.00 0.00 0.00 1,101.01

(0.00) (0.00) (0.00) (339.76)

20. Related Party Disclosures, as required by Accounting Standard - 18 is as below:

A. Relationships:

(i) Subsidiary of the Company :- Shri Chamundeswari Minerals Limited

(ii) Directors of the Company :-

Shri N. Gopalaswamy, Shri Deepak Thombre (w.e.f. 01.11.2008), Shri.C.Nagaratnam (w.e.f. 27.01.2009),

Shri P.D.Mathur and Shri Barunjee (upto 28.11.2008).

(iii) Promoters of the Company/Relatives of the Promoter :-

Shri J.H. Dalmia, Shri Y.H. Dalmia, Shri Gautam Dalmia, Shri Puneet Dalmia and their relatives, Shri

V.H. Dalmia, Smt. Kavita Dalmia, Smt. Bela Dalmia, Smt. Anupama Dalmia, Smt. Avantika

Dalmia, Kumari Shrutipriya Dalmia, Kumari Sukeshi Dalmia, Kumari Vaidehi Dalmia, Kumari Sumana

Dalmia , Kumari Avanee Dalmia and Mst. Priyang Dalmia

(iv) Enterprises controlled by Directors of the Company :- NIL

(v) Enterprises controlled by the Promoters of the Company :-

Rama Investment Company Private Limited, Puneet Trading & Investment Company Private, Limited,

Kavita Trading & Investment Company Private Limited, Sita Investment Company Limited, Mayuka

Investment Limited, Ankita Pratisthan Ltd.,Himgiri Commercial Limited, Valley Agro Industries Lim-

ited, Alirox Abrasives Limited, Shree Nirman Limited, Zip Ahead.Com Limited, Keshav Power Private

Limited, Dalmia Cement (Bharat) Limited, Kanika Investment Limited, Ishita Properties Limited, D.I.

Properties Limited, Avnija Properties Limited, Shri Rangam Properties Limited, Geetee Estates Limited,

Hemshila Properties Limited, Himshikhar Investment Limited, Dalmia Minerals & Properties Limited,

Shree Radha Krishna Broker & Holdings Limited, Seeta Estates & Brokers Limited, Shri Rangam Bro-

kers & Holdings Limited, Arjuna Brokers & Minerals Limited, Sri Kesava Mines & Minerals Limited,

Sri Madhava Minerals & Properties Limited, Sri Shanmugha Mines & Minerals Limited, Sri Swaminatha

Mines & Minerals Limited Sri Subramanya Mines & Minerals Limited, OCL India Limited, Avanee and

Ashni Securities Private Limited, Sri Trivikrama Mines & Properties Limited, Sri Dhandauthapani Mines

& Minerals Limited, Sri Madhusudana Mines & Properties Limited, Landmark Property Development

Co. Ltd., Dalmia Cement Ventures Limited and Dalmia Sugar Ventures Limited

73


B. The following transactions were carried out with the related parties in the ordinary course of business:

(Rs. In lacs)

Nature of Subsidiary Salary Directors Promoters Director Promoter Total

Transaction Company and perquisites and their and their controlled controlled

of key relatives relatives enterprises enterprises

Management

personnel &

Directors

Sales of Goods/ 0.00 0.00 0.00 0.00 0.00 2,753.32 2,753.32

services (0.00) (0.00) (0.00) (0.00) (0.00) (1,938.64) (1,938.64)

Purchase of 0.00 0.00 0.00 0.00 0.00 523.14 523.14

goods and (0.00) (0.00) (0.00) (0.00) (0.00) (218.76) (218.76)

services

Rent Payment 0.00 0.00 0.00 0.00 0.00 0.46 0.46

(0.00) (0.00) (0.00) (0.00) (0.00) (0.46) (0.46)

Sitting Fees and 0.00 0.00 3.29 0.00 0.00 0.00 3.29

commission to (0.00) (0.00) (3.19) (0.00) (0.00) (0.00) (3.19)

Directors

Loan Given 0.00 0.00 0.00 0.00 0.00 435.00 435.00

(0.00) (0.00) (0.00) (0.00) (0.00) (380.00) (380.00)

Repayment of

Loan 0.00 0.00 0.00 0.00 0.00 500.00 500.00

(0.00) (0.00) (0.00) (0.00) (0.00) (80.00) (80.00)

Interest on Loan 0.00 0.00 0.00 0.00 0.00 28.90 28.90

recd. (0.00) (0.00) (0.00) (0.00) (0.00) (12.13) (12.13)

Salary and 0.00 12.64 0.00 0.00 0.00 0.00 12.64

Perquisites (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)

Outstanding 0.00 0.00 0.00 0.00 0.00 235.00 235.00

Balance as at (0.00) (0.00) (0.00) (0.00) (0.00) (300.00) (300.00)

year end

Loans

(receivable)

Amount 0.00 0.00 0.00 0.00 0.00 135.14 135.14

Receivable (0.00) (0.00) (0.00) (0.00) (0.00) (69.14) (69.14)

74


CASH FLOW STATEMENT ANNEXURE-V

(Rs. in lacs)

PARTICULARS 2009 2008 2007 2006 2005

A. Cash Flow from Operating Activities

Net Profit/(Loss) before Tax 959.75 757.95 671.69 559.29 408.37

Adjustments for :

Depreciation 136.17 94.01 79.38 84.01 69.98

Write-off of Fixed Assets & Lease Money 0.00 1.30 0.56 0.23 0.12

Loss on Sale of Fixed Assets 0.17 0.12 0.14 1.88 0.08

Loss on Sale of Investment 0.20 0.00 0.00 0.00 0.00

Profit on Sale of Fixed Assets (0.01) (10.85) (15.02) (1.81) (0.23)

Profit on sale of Investments (31.01) (0.22) (0.19) (11.73) 0.00

Interest paid 110.22 65.05 22.37 17.18 9.59

Interest received (32.30) (14.74) (6.97) (7.27) (2.80)

Dividend received (0.35) (32.64) (13.86) 0.00 0.00

Operating Profit before Working Capital changes 1142.84 859.98 738.10 641.78 485.11

Adjustments for :

Trade and Other receivables (795.50) (805.26) (53.49) 62.06 (162.90)

Inventories (678.92) (510.22) 101.05 (149.42) (143.05)

Trade Payables 444.59 181.74 500.05 (96.61) (9.46)

Cash Flow from Operating Activities 113.01 (273.76) 1,285.71 457.81 169.70

Direct Taxes paid/Refunds received (Net) (268.99) (250.55) (215.64) (191.39) (128.70)

Fringe Benefits Tax (9.50) (8.50) (5.46) (7.67) 0.00

Net Cash Flow from Operating Activities (165.48) (532.81) 1,064.61 258.75 41.00

B. Cash Flow from Investment Activities

Purchase of Fixed Assets (1101.01) ( 339.76) (148.78) (43.94) (225.88)

Sale of Fixed Assets 0.26 10.89 18.05 3.85 0.33

Sale of Investments 442.28 467.80 40.00 256.73 0.00

Purchase of Investments 0.00 (50.00) (868.86) (355.00) (155.00)

Interest Received 32.30 14.74 6.97 7.27 2.80

Dividend Received 0.35 32.64 13.86 0.00 0.00

Net Cash from Investment Activities (625.82) 136.31 (938.76) (131.09) (377.75)

C. Cash Flow from Financing Activities

Secured Loans 983.48 437.44 (42.95) (67.32) 267.73

Unsecured Loans 0.00 0.00 0.00 (23.01) (23.02)

Interest Paid (110.22) (65.05) (22.37) (17.18) (9.59)

Dividend Paid including Tax 0.00 (19.96) 0.00 0.00 0.00

Increase in Share Capital 0.00 0.00 0.00 0.03 0.00

Net Cash from Financing Activities 873.26 352.43 (65.32) (107.48) 235.12

D. Net increase in Cash and Cash equivalents 81.96 (44.07) 60.53 20.18 (101.63)

Cash and Cash Equivalents

Opening Balance 60.92 104.99 44.46 24.28 125.91

Closing Balance 142.88 60.92 104.99 44.46 24.28

75


ANNEXURE VI

Statement of Dividend Paid

(Rs. in lacs)

Year Ended 31.3.2009 31.3.2008 31.3.2007 31.3.2006 31.3.2005

On Equity Share Capital :

Paid up Share capital 80.00 80.00 80.00 80.00 79.97

Face Value (Rs.) 10.00 10.00 10.00 10.00 10.00

Rate of Dividend 50% 25% 0.00 0.00 0.00

Interim Dividend 0.00 20.00 0.00 0.00 0.00

Proposed Dividend 40.00 0.00 0.00 0.00 0.00


PERFORMANCE RATIOS ANNEXURE VII

(Rs. in lacs)

PARTICULARS As at 31st March

2009 2008 2007 2006 2005

KEY RATIOS

Adjusted Profit/(Loss) 623.45 489.45 456.23 360.62 268.37

Average Number of Equity Shares

Outstanding at the end of the year 8,00,000 8,00,000 8,00,000 8,00,000 7,99,350

Net worth 3,160.13 2,583.48 2117.43 1661.20 1300.55

Cash Earning per share (CEPS) 94.95 72.93 66.95 55.57 42.32

Earning per Share (EPS) 77.93 61.18 57.02 45.08 33.57

Net Asset Value Per Share 395.02 322.94 264.68 207.65 162.70

Return on Net worth (%) 19.73% 18.95% 21.54% 21.71% 20.63%

Definitions of Key Ratios :

Earning Per Share ( EPS) ( Rs.) Profit After Tax/Weighted Number of Equity Shares

Cash Earning Per Share ( CEPS) ( Rs.) Profit After Tax Plus Depreciation/Weighted Number of Equity

Shares

Net Asset Value Per Share ( Rs.) Net worth at year-end/ Number of Equity Shares

Return on Net worth ( %) Net Profit/Net Worth

76


CAPITALISATION STATEMENT ANNEXURE VIII

(Rs. in Lacs)

PARTICULARS 31st March, POST

2009 ISSUE

Short term Debt (C/C) 429.63 429.63

Long Term Debt -Term Loan 1165.00 1405.00

Total Debt 1594.63 1834.63

Shareholders’ Fund

Share Capital 80.00 80.00

Reserves and Surplus (Net of Debit balance in P/L A/c) 3080.13 3080.13

Total Shareholders’ Fund 3160.13 3160.13

Long Term Debt/ Shareholders’ Fund 0.37:1 0.44:1

STATEMENT OF TAX SHELTER ANNEXURE-IX

(Rs. in Lacs)


2009 2008 2007 2006 2005

Profit as per P/L A/c (Before Tax) 959.75 757.95 671.69 559.29 408.37

Tax Rate 33.99 33.99 33.66 33.66 36.59

Tax at Notional Rate 326.22 257.63 226.09 188.26 149.43

Adjustments :

Difference between Tax Depreciation and Book Depreciation 181.51 73.57 (21.34) (28.83) (6.35)

Other Adjustments: 20.00 16.45 (1.13) 29.49 88.58

Net Adjustments 201.51 90.06 (22.47) 0.66 82.23

Tax savings thereon : 68.49 30.61 (7.56) 0.22 30.09

Net Tax payable as per Income Tax Return 257.73* 227.02 233.65 188.03 119.34

* Provisional figure; Income Tax Return yet to be filed.

77


ANNEXURE X

Details of Other Income:

(Recurring and mainly pertaining to business activities)

(Rs in Lacs)

Particulars Year ended 31st March(Audited)

2009 2008 2007 2006 2005

Interest from Banks and Others 32.30 14.74 6.97 7.27 2.8

Dividend Receipts 0.35 32.64 13.86 0.06 0.00

Miscellaneous Receipts 187.37 180.46 269.22 71.50 76.59

Profit on Sale of Fixed Assets 0.01 10.85 15.02 1.81 0.23

Profit/(Loss) on Sale of Investments 31.01 0.22 0.19 11.73 0.002

Provisions, no longer required, written back 0.00 0.00 0.70 0.04 3.48

TOTAL 251.04 238.91 305.96 92.41 83.10

Note: There are no items non-recurring in nature

ANNEXURE XI

SUNDRY DEBTORS

(UNSECURED)

(Rs. in lacs)

31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

A. Debts outstanding for a period exceeding six months

Considered good 21.10 0.55 17.04 23.39 24.27

Considered doubtful 0.00 0.00 0.00 2.28 10.80

21.10 0.55 17.04 25.67 35.07

Less : Provision for doubtful debts 0.00 0.00 0.00 2.28 10.80

(A) 21.10 0.55 17.04 23.39 24.27

B) Other Debts

Considered Good 1520.79 670.39 302.91 327.50 420.47

(B) 1520.79 670.39 302.91 327.50 420.47

TOTAL (A+B) 1541.89 670.94 319.95 350.89 444.74

78


ANNEXURE XII

RESERVES AND SURPLUS

(Rs. in lacs)

(AS ON)

31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

Capital Reserve (A) 82.33 82.33 82.33 82.33 82.33

General Reserve :

Opening Balance 311.49 261.49 261.49 261.49 261.49

Addition 65.00 50.00 0.00 0.00 0.00

Closing Balance (B) 376.49 311.49 261.49 261.49 261.49

Surplus in Profit and Loss Account

Opening Balance 2109.66 1,693.61 1,237.38 876.76 608.39

Addition 511.65 416.05 456.23 360.62 268.37

Closing Balance (C) 2,621.31 2,109.66 1,693.61 1,237.38 876.76

Total (A+B+C) 3,080.13 2,503.48 2,037.43 1,581.20 1,220.58

ANNEXURE XIII

LOANS AND ADVANCES

(Unsecured - Considered Good)

(Rs. in lacs)

31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

Due from Employees 18.48 17.84 19.14 16.11 13.56

Subsidiary Company 0.97 0.97 0.97 0.00 0.07

Advances recoverable in cash or in kind or for

value to be received

Considered Good 1,134.07 1,181.70 627.40 417.93 228.67

Considered doubtful 0.00 0.00 0.00 1.92

1,134.07 1,181.70 627.40 417.93 230.59

Deposits with Govt. authorities and others 237.51 177.06 143.35 57.75 49.69

1,391.03 1,377.57 790.86 491.79 293.91

Less : Provision for doubtful loans and advances 0.00 0.00 0.00 0.00 1.92

1,391.03 1,377.57 790.86 491.79 291.99

79


ANNEXURE XIV

STATEMENT OF UNSECURED LOANS AS ON MARCH 31, 2009

(Rs. In lacs)

Sr. Name Amount Repayment Schedule

No. of the Out- FY FY FY FY FY FY FY FY FY

Institution/ standing 2009 2010 2011 2012 2013 2014 2015 2016 2017

Bank

1. Dalmia Cement

(Bharat) Limited 125.00* 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total 125.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

* No Stipulation of repayment

ANNEXURE-XIV A

STATEMENT OF DEFERRED TAX

(Rs. in lacs)

PARTICULARS 2009 2008 2007 2006 2005

Liabilities

Depreciation 210.68 147.00 120.80 127.49 137.25

Others 0.00 0.00 0.00 0.00 0.00

Assets :

Voluntary Retirement Expenses 6.18 9.30 13.10 4.02 10.91

Expenses allowable in computing taxable income on

payment basis 0.00 0.00 0.00 0.77 4.64

MAT Credit entitlement 0.00 0.00 0.00 0.00 0.00

Net Liability 204.50 137.70 107.70 122.70 121.70

ANNEXURE XV

CURRENT LIABILITIES AND PROVISIONS

(Rs. in lacs)

31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

Sundry Creditors

Micro, Small & Medium Enterprises 0.00 0.00 0.00 0.00 0.00

Others 1241.03 679.82 467.06 249.28 339.79

Advances from Customers 148.01 294.75 350.25 57.54 57.22

Unpaid Dividend 2.47 3.44 0.00 0.00 0.00

Matured Fixed Deposit and Interest thereon* 0.28 0.28 0.28 0.28 0.28

Other Liabilities 98.88 68.54 47.06 57.50 66.92

Directors Commission payable 6.75 6.00 3.00 3.00 0.00

Proposed Dividend 40.00 0.00 0.00 0.00 0.00


Provision for Taxation 729.02 657.05 546.40 321.40 158.00

2,273.24 1,709.88 1,414.05 689.00 622.21

* There are no amounts due and outstanding to be credited to Investor Education and Protection Fund.

80


ANNEXURE-XVI

STATEMENT OF SECURED LOANS AS ON MARCH 31, 2009 (Rs. In lacs)

Sr. Name Sanctioned Amount Repayment Schedule

No. of the Amount Out- FY FY FY FY FY FY Assets

Institution/ standing 2010 2011 2012 2013 2014 2015 charged as

Bank security

1. AXIS Bank 200.00 37.50 37.50 0.00 0.00 0.00 0.00 0.00 Secured by first

charge over

moveable fixed

assets and

hypothecation of

stocks and other

current assets as

c o l l a t e r a l

extensions.

2 AXIS Bank 400.00 225.00 100.00 100.00 25.00 0.00 0.00 0.00 Secured by

hypothecation of

all stock of raw

materials, semi-

finished goods,

stores, spares,

book debts and

moveable fixed

assets at the

Dalmiapuram

and Khambalia

Units.


hypothecation of

all stock of raw

materials, semi-

finished goods,

stores, spares,

book debts and

moveable fixed

assets at the

Dalmiapuram

and Khambalia

Units.


(cash credit) hypothecation of

all stock of raw

materials, semi-

finished goods,

stores, spares,

book debts and

moveable fixed

assets at the

D a l m i a p u r a m

and Khambalia

Units.

Total 1594.63 0.00 0.00 0.00 0.00 0.00 0.00

81


ANNEXURE XVII

INVESTMENTS (Rs. in lacs)

(AS ON)

31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

I. Government Securities (Unquoted)

National Savings Certificates* 0.03 0.03 0.03 0.03 0.03

II. Fully paid up Equity shares of Joint Stock

Companies (Unquoted)

In Subsidiary Shri Chamundeswari Minerals Limited 4.00 4.00 4.00 4.00 4.00

III. Fully paid up Redeemable Preference

Shares of Joint Stock Companies (Unquoted)

In Subsidiary Shri Chamundeswari Minerals Limited 356.00 356.00 356.00 356.00 1.00

IV. Mutual Funds (Quoted) 0.00 411.47 829.95 0.00 245.00

360.03 771.50 1,189.98 360.03 250.03

Investments other than Mutual Funds are Long Term

(*) Pledged with Government Department

MARKET VALUE OF INVESTMENTS (Rs in Lacs)

PARTICULARS As At 31st March

2009 2008 2007 2006 2005

Book value of Unquoted Investments 360.03 360.03 360.03 360.03 5.03

Book value of Quoted Investments 0.00 411.47 829.05 0.00 245

Market value of Quoted Investments 0.00 441.99 838.84 0.00 255.52

ANNEXURE XVIII

CONTINGENT LIABILITY (Rs. in Lacs)


2009 2008 2007 2006 2005

a) Contingent Liability exists in respect of

i) Income Tax for which the Company has preferred 10.53 10.53 10.53 10.53 10.53

appeals

ii) Income Tax for which the Income Tax Department 0.52 0.52 0.52 0.52 0.52

has preferred appeals against the decisions in

favour of the Company

iii) Other monies for which the Company is 26.20 182.95 315.94 0.00 0.00

contingently liable including Bank Guarantees

b) Claims against the Company not acknowledged as 94.86 93.92 92.18 54.06 51.55

debt and being contested before appropriate authorities.

82


ANNEXURE XIX

DETAILS OF OPENING STOCK, PRODUCTION, SALES AND CLOSING STOCK

(in MT)

31.03.2009 31.03.2008 31.03.2007

Refractory Calcined Stone- Refractory Calcined Stone- Refractory Calcined Stone-

Bauxite ware Bauxite ware Bauxite ware

Opening Stock 1917.00 5750.00 0.00 1559.00 3487.00 0.00 2783.00 5204.00 401.00

Production* 81842.00 19029.00 0.00 69522.00 23136.00 0.00 50297.00 19396.00 2.00

Sales/Turnover 39489.00 20850.00 0.00 31361.00 20873.00 0.00 21958.00 21113.00 359.00

Closing Stock** 2253.00 3929.00 0.00 1917.00 5750.00 0.00 1559.00 3487.00 0.00

(*) Includes 42017.00 37803.00 29563.00

production of

Refractories on Job

Work basis

(**) Excludes Yard

rejection/ damaged

stock. 44.00

(In MT)

31.03.2006 31.03.2005

Refractory Calcined Stone- Refractory Calcined Stone-

Bauxite ware Bauxite ware

Opening Stock 2788.00 2114.00 269.00 1862.00 238.00 31.00

Production* 52443.00 22622.00 590.00 55974.00 25009.00 4056.00

Sales/Turnover 23243.00 19532.00 458.00 25158.00 23133.00 3784.00

Closing Stock** 2783.00 5204.00 401.00 2788.00 2114.00 269.00

(*) Includes production of Refractories on

Job Work basis 29205.00 29890.00

(**) Excludes Yard rejection/ damaged stock. 34.00

Details of Raw Material consumed

(In MT)

31.03.2009 31.03.2008 31.03.2007 31.03.2006 31.03.2005

Raw Material 75977.00 63539.00 46736.00 55272.00 67479.00

83


ANNEXURE XX

RELATED PARTY TRANSACTIONS (Financial Year 2008-09)

Related Party Disclosures, as required by Accounting Standard - 18 is as below:

A. Relationships:



Shri N. Gopalaswamy, Shri Deepak Thombre (w.e.f. 01.11.2008), Shri C. Nagaratnam (w.e.f. 27.01.2009), Shri

P.D.Mathur and Shri Barunjee (upto 28.11.2008).

(iii) Promoters of the Company/Relatives of the Promoters :-

Shri J.H. Dalmia, Shri Y.H. Dalmia, Shri Gautam Dalmia, Shri Puneet Dalmia and their relatives, Shri V.H.

Dalmia, Smt. Kavita Dalmia, Smt. Bela Dalmia, Smt. Anupama Dalmia, Smt. Avantika Dalmia, Kumari

Shrutipriya Dalmia, Kumari Sukeshi Dalmia, Kumari Vaidehi Dalmia, Kumari Sumana Dalmia, Kumari Avanee

Dalmia and Mst. Priyang Dalmia

(iv) Enterprises controlled by Directors of the Company :- NIL


Rama Investment Company Private Limited, Puneet Trading & Investment Company Private Limited, Kavita

Trading & Investment Company Private Limited, Sita Investment Company Limited, Mayuka Investment Lim-

ited, Ankita Pratisthan Ltd., Himgiri Commercial Limited, Valley Agro Industries Limited, Alirox Abrasives

Limited, Shree Nirman Limited, Zip Ahead.Com Limited, Keshav Power Private Limited, Dalmia Cement

(Bharat) Limited, Kanika Investment Limited, Ishita Properties Limited, D.I. Properties Limited, Avnija Prop-

erties Limited, Shri Rangam Properties Limited, Geetee Estates Limited, Hemshila Properties Limited,

Himshikhar Investment Limited, Dalmia Minerals & Properties Limited, Shree Radha Krishna Broker &

Holdings Limited, Seeta Estates & Brokers Limited, Shri Rangam Brokers & Holdings Limited, Arjuna Bro-

kers & Minerals Limited, Sri Kesava Mines & Minerals Limited, Sri Madhava Minerals & Properties Limited,

Sri Shanmugha Mines & Minerals Limited, Sri Swaminatha Mines & Minerals Limited Sri Subramanya

Mines & Minerals Limited, OCL India Limited, Avanee and Ashni Securities Private Limited, Sri Trivikrama

Mines & Properties Limited, Sri Dhandauthapani Mines & Minerals Limited, Sri Madhusudana Mines & Prop-

erties Limited, Landmark Property Development Co. Ltd., Dalmia Cement Ventures Limited and Dalmia

Sugar Ventures Limited

The following transactions were carried out with the related parties in the ordinary course of business:

(Rs. in lacs)

Nature Subsidiary Salary Directors Promoters Director Promoter Total

of Transaction Company and and their and their controlled controlled

perquisites relatives relatives enterprises enterprises

of key

Management

personnel &

Directors

Sales of Goods/ 0.00 0.00 0.00 0.00 0.00 2,753.32 2,753.32

services (0.00) (0.00) (0.00) (0.00) (0.00) (1,938.64) (1,938.64)

Purchase of goods 0.00 0.00 0.00 0.00 0.00 523.14 523.14

and services (0.00) (0.00) (0.00) (0.00) (0.00) (218.76) (218.76)

Rent Payment 0.00 0.00 0.00 0.00 0.00 0.46 0.46

(0.00) (0.00) (0.00) (0.00) (0.00) (0.46) (0.46)

84


Nature Subsidiary Salary Directors Promoters Director Promoter Total

of Transaction Company and and their and their controlled controlled

perquisites relatives relatives enterprises enterprises

of key

Management

personnel &

Directors

Sitting fees and 0.00 0.00 3.29 0.00 0.00 0.00 3.29

Commission to (0.00) (0.00) (3.19) (0.00) (0.00) (0.00) (3.19)

Directors

Loan Given 0.00 0.00 0.00 0.00 0.00 435.00 435.00

(0.00) (0.00) (0.00) (0.00) (0.00) (380.00) (380.00)

Repayment of Loan 0.00 0.00 0.00 0.00 0.00 500.00 500.00

(0.00) (0.00) (0.00) (0.00) (0.00) (80.00) (80.00)

Interest on Loan recd. 0.00 0.00 0.00 0.00 0.00 28.90 28.90

(0.00) (0.00) (0.00) (0.00) (0.00) (12.13) (12.13)

Salary and 0.00 12.64 0.00 0.00 0.00 0.00 12.64

Perquisites (0.00) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)

Outstanding 0.00 0.00 0.00 0.00 0.00 235.00 235.00

Balance as at (0.00) (0.00) (0.00) (0.00) (0.00) (300.00) (300.00)

year end

Loans (receivable)

Amount 0.00 0.00 0.00 0.00 0.00 135.14 135.14

Receivable (0.00) (0.00) (0.00) (0.00) (0.00) (69.14) (69.14)



A. Relationships:



Shri N. Gopalaswamy, Shri Barunjee and Shri P.D.Mathur.

(iii) Promoters of the Company/Relatives of the Promoter :-


Dalmia, Smt. Kavita Dalmia, Smt. Bela Dalmia, Smt. Anupama Dalmia, Smt. Avantika Dalmia, Kumari

Shrutipriya Dalmia, Kumari Sukeshi Dalmia, Kumari Vaidehi Dalmia, Kumari Sumana Dalmia , Kumari Avanee

Dalmia and Mst. Priyang Dalmia

(iv) Enterprises controlled by Directors of the Company:- NIL

(v) Enterprises controlled by the Promoters of the Company:-



ited, Ankita Pratisthan Ltd., Himgiri Commercial Limited, Valley Agro Industries Limited, Alirox Abrasives

Limited, Shree Nirman Limited, Zip Ahead.Com Limited, Keshav Power Private Limited, Dalmia Cement

(Bharat) Limited, Kanika Investment Limited, Ishita Properties Limited, D.I. Properties Limited, Avnija Prop-

erties Limited, Shri Rangam Properties Limited, Geetee Estates Limited, Hemshila Properties Limited,

85


Himshikhar Investment Limited, Dalmia Minerals & Properties Limited, Shree Radha Krishna Broker &

Holdings Limited, Seeta Estates & Brokers Limited, Shri Rangam Brokers & Holdings Limited, Arjuna Bro-

kers & Minerals Limited, Sri Kesava Mines & Minerals Limited, Sri Madhava Minerals & Properties Limited,

Sri Shanmugha Mines & Minerals Limited, Sri Swaminatha Mines & Minerals Limited Sri Subramanya

Mines & Minerals Limited, OCL India Limited, Avanee and Ashni Securities Private Limited, Sri Trivikrama

Mines & Properties Limited, Sri Dhandauthapani Mines & Minerals Limited, Sri Madhusudana Mines & Prop-

erties Limited, Eswar Cements Private Limited, Dalmia Cement (Meghalaya) Limited(upto 30.06.2007) , OCL

Iron and Steel Limited, Landmark Property Development Co. Ltd., Dalmia Cement Ventures Limited (w.e.f.

10.12.2007) and Dalmia Sugar Ventures Limited (w.e.f.13.08.2007 )

B. The following transactions were carried out with the related parties in the ordinary course of business:

(Rs. in lacs)

Nature Subsidiary Directors Promoters Director Promoter Total

of Transaction Company and their and their controlled controlled

relatives relatives enterprises enterprises

Sales of Goods/ services 0.00 0.00 0.00 0.00 1938.64 1938.64

(0.00) (0.00) (0.00) (0.00) (1,499.53) (1,499.53)

Purchase of goods and services 0.00 0.00 0.00 0.00 218.76 218.76

(0.00) (0.00) (0.00) (0.00) (60.19) (60.19)

Rent Payment 0.00 0.00 0.00 0.00 0.46 0.46

(0.00) (0.00) (0.00) (0.00) (0.46) (0.46)

Remuneration and Sitting fees to 0.00 3.19 0.00 0.00 0.00 3.19

Directors (0.00) (3.23) (0.00) (0.00) (0.00) (3.23)

Loan Given 0.00 0.00 0.00 0.00 380.00 380.00

(0.00) (0.00) (0.00) (0.00) (0.00) (0.00)

Repayment of Loan 0.00 0.00 0.00 0.00 80.00 80.00

(0.00) (0.00) (0.00) (0.00) (0.00) (0.00)

Interest on Loan recd. 0.00 0.00 0.00 0.00 12.13 12.13

(0.00) (0.00) (0.00) (0.00) (0.00) (0.00)

Outstanding Balance As at year end 0.00 0.00 0.00 0.00 300.00 300.00

Loans (receivable) (0.00) (0.00) (0.00) (0.00) (0.00) (0.00)

Amount Receivable 0.00 0.00 0.00 0.00 69.14 69.14

(0.00) (0.00) (0.00) (0.00) (7.17) (7.17)



A. Relationships:

(i) Subsidiary of the Company:- Shri Chamundeswari Minerals Limited


Shri N. Gopalaswamy, Shri R.L. Bhatia, Shri Barunjee and Shri P.D.Mathur.

(iii) Promoters of the Company/Relatives of the Promoter Directors :-


Dalmia, Smt. Kavita Dalmia, Smt. Bela Dalmia, Smt. Anupama Dalmia, Smt. Avantika Dalmia,Kumari Shrutipriya

Dalmia, Kumari Sukeshi Dalmia, Kumari Vaidehi Dalmia, Kumari Sumana Dalmia and Kumari Avanee Dalmia.

86


(iv) Enterprises controlled by Directors of the Company: - NIL




ited, Kanodia Commercial Limited, Ankita Pratisthan Ltd., Kajal (India) Limited, Himgiri Commercial Lim-

ited, Valley Agro Industries Limited, Alirox Abrasives Limited, Shree Nirman Limited, Dalmia Electrodyne

Technologies Ltd., Zip Ahead.Com Limited, Keshav Power Private Limited, Dalmia Cement (Bharat) Limited,

Kanika Investment Limited, Ishita Properties Limited, D.I. Properties Limited, Avnija Properties Limited, Shri

Rangam Properties Limited, Geetee Estates Limited, Hemshila Properties Limited, Himshikhar Investment

Limited, Dalmia Minerals & Properties Limited, Shree Radha Krishna Broker & Holdings Limited, Seeta

Estates & Brokers Limited, Shri Rangam Brokers & Holdings Limited, Arjuna Brokers & Minerals Limited,

Sri Kesava Mines & Minerals Limited, Sri Madhava Minerals & Properties Limited, Sri Shanmugha Mines &

Minerals Limited, Sri Swaminatha Mines & Minerals Limited Sri Subramanya Mines & Minerals Limited,

OCL India Limited, Avanee and Ashni Securities Private Limited, Sri Trivikrama Mines & Properties

Limited(w.e.f 26.09.06), Sri Dhandauthapani Mines & Minerals Limited(w.e.f.04.10.06), Sri Madhusudana

Mines & Properties Limited(w.e.f.04.10.06), Eswar Cements Private Limited(w.e.f.01.11.06), Dalmia Cement

(Meghalaya) Limited(w.e.f.27.03.07) and Anupama Investment Limited.

B. The following transactions were carried out with the related parties in the ordinary course of business :

(Rs. in lacs)

Nature Subsidiary Directors Promoters Director Promoter Total

of Transaction Company and their and their controlled controlled

relatives relatives enterprises enterprises

Shares purchased 0.00 0.00 0.00 0.00 0.00 0.00

(355.00) (0.00) (0.00) (0.00) (0.00) (355.00)

Sales of goods and services 0.00 0.00 0.00 0.00 1499.53 1499.53

(0.00) (0.00) (0.00) (0.00) (1296.59) (1296.59)

Purchase of goods and services 0.00 0.00 0.00 0.00 60.19 60.19

(0.00) (0.00) (0.00) (0.00) (60.35) (60.35)

Rent Payment 0.00 0.00 0.00 0.00 0.46 0.46

(0.00) (0.00) (0.00) (0.00) (0.46) (0.46)

Remuneration and Sitting 0.00 3.23 0.00 0.00 0.00 3.23

fees to Directors (0.00) (3.27) (0.00) (0.00) (0.00) (3.27)

Loans taken 0.00 0.00 0.00 0.00 0.00 0.00

(0.00) (0.00) (0.00) (0.00) (200.00) (200.00)

Repayment of loan 0.00 0.00 0.00 0.00 0.00 0.00

(0.00) (0.00) (0.00) (0.00) (200.00) (200.00)

Interest on loan received 0.00 0.00 0.00 0.00 0.00 0.00

(0.00) (0.00) (0.00) (0.00) (4.79) (4.79)

87


ANNEXURE XXI

AUDITOR’S QUALIFICATIONS

There were no qualifications in the Audit Report for the years ending 31st March, 2005, 2006, 2007, 2008 and 2009.

ANNEXURE XXII

Details of Subsidiary of the Company

Shri Chamundeswari Minerals Limited

Shri Chamundeswari Minerals Limited was incorporated on 24-1-1980. SNCCIL holds 100% of its paid-up share capital.

It is engaged in the business of Mining.

The profits and losses and the assets and liabilities of each of the Company’s subsidiaries are as set out hereunder:

STATEMENT OF PROFIT AND LOSS OF SHRI CHAMUNDESWARI MINERALS LIMITED

(Rs. In Lacs)

As at 31st March (audited)

Particulars 2008-09 2007-08 2006-07 2005-06 2004-05

Income 0.24 0.26 0.71 0.15 0.13

Total Expenses 0.63 0.62 1.94 0.92 1.22

Profit/(Loss) before Tax (0.39) (0.36) (1.23) (0.77) (1.09)

Taxation 0.00 0.00 0.00 0.00 0.00

Profit/(Loss) after Tax (0.39) (0.36) (1.23) (0.77) (1.09)

Surplus/(Deficit) brought forward from last year (3.29) (2.93) (1.70) (0.93) 0.16

Balance carried forward to Balance Sheet (3.68) (3.29) (2.93) (1.70) (0.93)

ANNEXURE XXIII

STATEMENT OF ASSETS AND LIABILITIES OF SHRI CHAMUNDESWARI MINERALS LIMITED

(Rs. In lacs)

LIABILITIES 2008-09 2007-08 2006-07 2005-06 2004-05

Equity Capital 4.00 4.00 4.00 4.00 4.00

Preference Capital 356.00 356.00 356.00 356.00 1.00

Reserves and Surplus 0.00 0.00 0.00 0.00 0.00

360.00 360.00 360.00 360.00 5.00

ASSETS

Net Fixed Assets 1.43 1.43 1.43 1.43 1.43

Investments 355.00 355.00 355.00 355.00 0.00

Current Assets, Loans and Advances 0.96 0.75 0.58 0.30 0.60

Less: Current Liabilities and Provisions 1.07 1.00 1.00 0.02 0.09

Net Current Assets (0.11) (0.25) (0.42) 0.28 0.51

Miscellaneous Expenditure 0.00 0.53 1.06 1.59 2.13

Profit & Loss A/c 3.68 3.29 2.93 1.70 0.93

360.00 360.00 360.00 360.00 5.00

EPS (Rs.) (0.98) (0.90) (3.07) (1.92) (2.72)

88


ANNEXURE XXIV

NOTES FORMING PART OF ACCOUNTS

1. SIGNIFICANT ACCOUNTING POLICIES:

Fixed Assets:

Fixed assets are stated at cost.

Miscellaneous Expenditure:

Preliminary expenses are written off over a period of 5 years.

Recognition of Income & Expenditure:

The Company is following the mercantile system of accounting and the income and expenses are recognised on

accrual basis.

Contingent Liabilities:

Contingent liabilities are not provided for in the accounts and are separately shown in the Annual Statement of

Accounts.

2. Deferred tax assets as per Accounting Standard-22 on account of carry forward losses has not been made as there is

no convincing evidence that sufficient future taxable income shall be available against which such deferred tax

assets can be realised.

3. Related Party Disclosures, as required by Accounting Standard - 18, and SEBI (Substantial Acquisition of Shares &

Takeovers) Regulations, 1997 is as below :

A. Relationships :

(i) Directors of the Company :-

Shri M.L. Dujari, Shri R.K. Agarwal and Shri C.N. Maheshwari.

(ii) Promoters of the Company :-

Shri J.H. Dalmia and Shri Y.H. Dalmia.

(iii) Relatives of Promoters :-

Shri Gautam Dalmia, Shri Puneet Dalmia and their relatives, Shri V.H. Dalmia, Smt. Kavita Dalmia,

Smt. Bela Dalmia, Smt. Anupama Dalmia, Smt. Avantika Dalmia, Kumari Shrutipriya Dalmia, Kumari

Sukeshi Dalmia, Kumari Vaidehi Dalmia, Kumari Sumana Dalmia ,Kumari Avanee Dalmia and Mst.

Priyang Dalmia

(iv) Enterprises controlled by the Promoters of the Company :-

Shri Nataraj Ceramic and Chemical Industries Limited (Holding Co.), Kanika Investment Ltd, Ishita

Properties Ltd., D.I. Properties Limited, Dalmia Cement (Bharat) Ltd, Geetee Estates Limited, Avnija

Properties Limited, Shri Rangam Properties Limited, Hemshila Properties Limited, Himshikhar

Investment Limited, Dalmia Minerals & Properties Limited, Shree Radha Krishna Broker & Holdings

Limited, Seeta Estates & Brokers Limited, Shri Rangam Brokers & Holdings Limited, Arjuna Brokers

& Minerals Limited, Sri Kesava Mines & Minerals Limited, Sri Madhava Minerals & Properties Limited,

Sri Shanmugha Mines & Minerals Limited, Sri Swaminatha Mines & Minerals Limited, Sri Subramanya

Mines & Minerals Limited, Sri Trivikrama Mines & Properties Limited. Sri Dhandauthapani Mines &

Minerals Limited, Sri Madhusudana Mines & Properties Ltd. and Landmark Property Development

Limited, Rama Investment Company Private Limited, Puneet Trading & Investment Company Private

Limited, Kavita Trading & Investment Company Private Limited, Mayuka Investments Limited, Ankita

Pratisthan Limited, Sita Investment Co. Limited, Himgiri Commercial Limited, Valley Agro Industries

Limited, Alirox Abrasives Limited, Shree Nirman Limited, Keshav Power Private Limited, Avanee and

Ashni Securities Private Limited,OCL India Limited, ZipAhead.Com Limited, Dalmia Cement Ventures

Limited and Dalmia Sugar Ventures Limited.

4. Previous year’s figures have been regrouped and/or re-arranged wherever considered necessary.

5. Other information required under para 4A, 4B, 4C & 4D to Part-II to Schedule-VI to the Companies Act, 1956 are

NIL.

89


ANNEXURE XXV

STATEMENT OF PROFIT & LOSS (ADJUSTED) - CONSOLIDATED

(Rs in Lacs)

As At 31st March

2009 2008 2007 2006 2005

INCOME

Sales:

Sales and Processing charges (Gross) 8,628.12 6,098.16 3,992.77 3,808.24 3,724.11


7,837.42 5,368.87 3,534.32 3,309.03 3,227.83

Less :- Excise Duty 641.37 530.48 371.98 353.68 342.64

7,196.05 4,838.39 3,162.34 2,955.35 2,885.19

Other Income 251.28 239.17 306.68 92.56 83.23


Add/(Less):-Excise duty variation in

opening/closing stock (0.49) (19.63) 14.97 (6.63) (13.16)

5.13 154.25 (141.66) 100.30 143.40

Total Income 7,452.46 5,231.81 3,327.36 3,148.21 3,111.82

EXPENDITURE

Raw materials consumed 2,857.48 1895.52 776.09 726.95 778.05

Staff Cost 1,064.94 846.43 645.62 570.71 553.15







Total Expenses 6,493.10 4,474.23 2,656.89 2,589.69 2,704.54


Prior Period Expenditure

(Net of Income)


Provision for Taxes

- Current Tax 260.00 230.00 225.00 190.00 130.00

- Deferred Tax 66.80 30.00 (15.00) 1.00 10.00

- Fringe Benefits Tax 9.50 8.50 5.46 7.67 0.00

Profit After Tax 623.06 489.08 455.01 359.85 267.28

Add : Surplus brought forward

from the previous year 2,106.37 1,690.69 1,235.68 875.83 608.55

2,729.43 2,179.77 1,690.69 1,235.68 875.83

90


Appropriations :






2,729.43 2,179.77 1,690.69 1,235.68 875.83

ANNEXURE XXVI

STATEMENT OF CONSOLIDATED ASSETS AND LIABILITIES

(Rs in Lacs)

As at 31st March

2009 2008 2007 2006 2005

SOURCES OF FUNDS


(a) Share Capital 80.00 80.00 80.00 80.00 79.97



2. Loan Funds

(a) Secured Loans 1594.63 611.15 173.71 216.66 283.98


3. Deferred Tax 204.50 137.70 107.70 122.70 121.70

TOTAL 5080.58 3454.04 2520.92 2123.86 1853.31


1. Fixed Assets

(a) Gross Block 3618.45 2672.85 2282.25 2228.67 2199.53


(c) Net Block 1824.17 1013.69 700.14 712.05 756.05


2. Investments 355.03 766.50 1184.08 355.03 245.03

3. Current Assets,

Loans and Advances

(a) Inventories 1933.40 1254.48 744.26 845.31 695.89

(b) Sundry Debtors 1541.89 670.94 319.95 350.89 444.74




Sub Total 5012.31 3374.76 1971.98 1744.05 1471.48

91


Less: Current Liabilities and Provisions


(b) Provisions 775.82 657.05 546.40 321.40 158.00

Sub Total 2273.34 1709.91 1414.08 689.02 622.23


Miscellaneous Expenses 0.00 0.53 1.07 1.60 2.13

TOTAL 5080.58 3454.04 2520.92 2123.86 1853.31

ANNEXURE XXVII

SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Convention

The financial statements are prepared under historical cost convention on a going concern basis and comply with the

presentational requirements of the Companies Act, 1956 and mandatory accounting standards issued by the Institute

of Chartered Accountants of India. Revenues are recognized and expenses are accounted on their accrual with

necessary provisions for all known liabilities.

2. Principles of Consolidation

i) The consolidated financial statements relate to Shri Nataraj Ceramic and Chemical Industries Limited (“the

Company”) and its wholly owned subsidiary company. The consolidated financial statements have been

prepared on the following basis.

a. The financial statements of the Company and its subsidiary company have been combined on a line by

line basis by adding together the book values of like items of assets, liabilities, income and expenses,

after eliminating intra-group balances and intra-group transactions resulting in unrealised profits or

losses.

b. The consolidated financial statements have been prepared using uniform accounting policies for like

transactions and other events in similar circumstances and are presented to the extent possible, in the

same manner as the Company’s separate financial statements.

ii) The subsidiary company considered in the consolidated financial statement is :

Name of the Company Country of incorporation % voting power held as at

31st March, 2009

Shri Chamundeswari Minerals Limited India 100%

3. Other Significant Accounting Policies

These are set out in the notes to accounts under “Significant Accounting Policies” of the financial statements of the

Company and Shri Chamundeswari Minerals Limited.

SIGNIFICANT NOTES ON ACCOUNTS TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. These are set out in the notes to accounts of the financial statements of the Company and Shri Chamundeswari

Minerals Limited.

2. The consolidated financial statements have been prepared in accordance with Accounting Standard (AS-21)

“Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India.

92


ANNEXURE XXVIII

CASH FLOW STATEMENT - (CONSOLIDATED)

(Rs. in lacs)

PARTICULARS 2009 2008 2007 2006 2005

A. Cash Flow from Operating Activities

Net Profit/(Loss) before Tax 959.36 757.58 670.47 558.52 407.28

Adjustments for :

Depreciation 136.17 94.01 79.38 84.01 69.98

Write-off of Fixed Assets & Lease Money 0.00 1.30 0.56 0.23 0.12

Preliminary Expenses write off 0.53 0.54 0.53 0.53 0.53

Loss on Sale of Fixed Assets 0.17 0.12 0.14 1.88 0.08

Loss on Sale of Investment 0.20

Profit on sale of :

- Fixed Assets (0.01) (10.85) (15.02) (1.81) (0.23)

- Investments (31.01) (0.22) (0.19) (11.73) 0.00

Interest paid 110.22 65.05 22.37 17.18 9.59

Interest received (32.30) (14.74) (6.97) (7.27) (2.93)

Dividend received (0.59) (32.64) (14.17) 0.00 0.00

Preliminary Expenses (2.66)

Operating Profit before Working

Capital changes 1142.74 860.15 737.10 641.54 481.76

Adjustments for :

Trade and Other Receivables (795.50) (805.26) (52.53) 62.00 (162.88)

Inventories (678.92) (510.22) 101.05 (149.42) (143.05)

Trade Payables 444.66 181.74 500.06 (96.61) (9.46)

Cash Flow from Operating Activities 112.98 (273.59) 1,285.68 457.51 166.37

Direct Taxes paid/Refunds received (Net) (268.99) (250.55) (215.66) (191.39) (128.70)

Fringe Benefits Tax (9.50) (8.50) (5.46) (7.67) 0.00

Net Cash Flow from Operating Activities (165.51) (532.64) 1,064.56 258.45 37.67

B. Cash Flow from Investment Activities

Purchase of Fixed Assets (1101.01) (339.76) (148.78) (43.94) (225.88)

Sale of Fixed Assets 0.26 10.89 18.05 3.85 0.33

Sale of Investments 443.08 467.80 40.00 256.73 0.00

Purchase of Investments (0.80) (50.00) (868.86) (355.00) (155.00)

Interest Received 32.30 14.74 6.97 7.27 2.93

Dividend Received 0.59 32.64 14.17 0.00 0.00

Net Cash from Investment Activities (625.58) 136.31 (938.45) (131.09) (377.62)

93


C. Cash Flow from Financing Activities

Secured Loans 983.48 437.44 (42.95) (67.32) 267.73

Unsecured Loans 0.00 0.00 0.00 (23.01) (23.02)

Interest Paid (110.22) (65.05) (22.37) (17.18) (9.59)

Dividend Paid including Tax 0.00 (19.96) 0.00 0.00 0.00

Increase in Share Capital 0.00 0.00 0.03 0.00

Net Cash from Financing Activities 873.26 352.43 (65.32) (107.48) 235.12

D. Net increase in Cash and Cash equivalents 82.17 (43.90) 60.79 19.88 (104.83)

Cash and Cash Equivalents

Opening Balance 61.63 105.53 44.74 24.86 129.69

Closing Balance 143.80 61.63 105.53 44.74 24.86

Existing borrowing facilities as on 31.03.2009

The Company has the following existing loans outstanding in its books of accounts:

I. SECURED LOANS

a. EXISTING TERM LOAN FACILITIES:

(Rs. In lacs)

Sl. Name of the Bank Amount Amount Repaid till Principal Amount

No. Sanctioned Disbursed date Outstanding as

on 31.3.2009

1. AXIS BANK LTD. 950.00 950.00 47.50 902.50

2. AXIS BANK LTD. 400.00 400.00 175.00 225.00

3. AXIS BANK LTD. 200.00 200.00 162.50 37.50

Total 1550.00 1550.00 385.00 1165.00

b. EXISTING WORKING CAPITAL FACILITIES:

(Rs. in lacs)

Sl. No. Name of the Bank Amount Sanctioned

1. AXIS BANK LTD. 1150

Total 1150

Details of the above Term Loans are as under:

Term loan Repayment Interest Moratorium Prime/Collateral Guarantees

Rs. in lacs Period/Schedule (In %) for Principal security

Repayment

400 Rs. 25 Lacs per 11.00 6 months Secured by first charge over NIL

quarter (for a total of moveable fixed assets and

16 quarters) hypothecation of stocks and other

current assets as collateral

extensions.

200 Rs. 12.5 Lacs per 11.25 6 months Secured by hypothecation of all NIL

quarter (for a total of current assets of the company,

16 quarters) factory, land and building at

Dalmiapuram and Khambalia Units.

94


950 Rs. 47.5 Lacs per 11.25 6 months Secured by hypothecation of all NIL

quarter (for a total of current assets of the company,

20 quarters) factory, land and building at


Details of the above Working Capital Facilities are as under:

Working Repayment Interest Moratorium Prime/Collateral sec Guarantees

Capital Period/Schedule (%)

1150 Renewed every year 11.00 N.A Secured by hypothecation of all NIL

stock of raw materials, semi-finished

goods, stores, spares, book debts and

moveable fixed assets at the


Details of the Non Fund Based Limits are as under:

Sanctioned By Amount Period Security

(Rs. in Lacs)

Axis Bank Ltd. 1200 Yearly Secured by hypothecation of all stock of raw materials,

semi-finished goods, stores, spares, book debts and

moveable fixed assets at the Dalmiapuram and

Khambalia Units.

II. UN-SECURED LOANS

(Rs. In lacs)

S.no Name of lender Amount

1 Dalmia Cement (Bharat) Limited 125

95


FINANCIAL STATEMENTS OF GROUP COMPANIES

The information for the last 3 years based on the audited statements in respect of five listed group companies, irrespective

of whether these are covered under section 370(1)(B) of the Companies Act, 1956 or not are given hereunder:

1. Sita Investment Company Limited (SICL):

SICL was incorporated on March 13, 1974 under the Companies Act, 1956. SICL received certificate of commencement

of business on April 25, 1974. The Registered Office of the company is situated at 4, Scindia House, Connaught Place,

New Delhi-110001. The Company is a registered NBFC. Its RBI registration no. is 14.00330.

The shares of SICL are presently listed on Calcutta Stock Exchange Association Limited. The company has, however,

initiated the process of getting itself delisted from the said stock exchange vide resolution passed in Board meeting dated

November 28, 2008 and EGM dated December 26, 2008. It has also received the NOC from the Stock Exchange for

using electric linked transparent facility to make reverse Book Building Process vide its lette dated June 02, 2009.

It is engaged in Investment Business.

The main objects of the Company are as under:

(a) Main objects:

1. To carry on the business of an investment Company in all its aspects and branches, and for that purpose (a) to

subscribe, take, purchase, or acquire by gift exchange or otherwise and to hold, issue, reissue, sell, deal or

otherwise dispose of shares (whether fully paid or partly paid), stock, debentures, debenture stock, bonds,

notes, obligations and securities issued or guaranteed, by any company, debentures, debenture stock, bonds,

notes, obligations and securities issued or guaranteed by any government sovereign ruler, commissioners,

public body or authorities, supreme, dependant municipal, local or otherwise in any part of the world, (b) to

lend money with or without security (c) underwrite shares, debentures, debenture stock, bonds and notes.

2. To acquire any such shares, stock, debentures, debenture stock, bonds, notes, obligations or securities by

original subscription, contract tender, purchase, exchange, underwrite, participate in syndicates or by gift or

otherwise and whether or not fully paid up, and to subscribe for the same, subject to such terms and conditions

(if any) as may be thought fit.

3. To exercise and enforce all rights and powers conferred by or incident to the ownership of any such shares,

stock, obligations or other securities including without prejudice to the generality of the foregoing, all such

powers of veto or control as may be conferred by virtue of holding by the Company of some special proportion

of the issued or nominal amount thereof.

4. To carry on the business of Issue House for issue of shares, debentures, debenture stock, bonds and for that

purpose, arrange for underwriters, brokers, bankers, advisers, act as Registrars for companies, as a service

organisation in all its respects, arrange and assist in the arrangement of finance and knowhow for project, or

collaborators for projects, whether in India or elsewhere.

The Directors on the Board of SICL are:

S.no Name Status Designation DIN

1. Shri J. H. Dalmia Promoter, Non- Executive Director 00009717

2. Shri Gautam Dalmia Promoter, Non- Executive Director 00009758

3. Shri L. N. Goyal Independent, Non- Executive Director 00019772

Authorized Capital: The authorized share capital of the Company is Rs.49655000 divided in to 4765500 Equity shares of

Rs. 10 each and 20000 6% Non- Cumulative Redeemable Preference shares of Rs. 100/- each.

Brief Audited Financials of SICL are as follows:

Amount in Rs. Lacs

Particulars March 31, 2007 March 31, 2008 March 31, 2009

Total Paid up Capital 10.00 26.83 26.83

Paid up Equity Capital 10.00 10.33 10.33

Reserves & Surplus 451.56 2047.74 2119.48

96


Sales/Total Income 93.21 273.69 195.91

Profit/(Loss) after Tax (PAT) 91.69 248.24 71.74

Earning per Share (Rs.) 91.69 240.20 69.42

NAV (Rs.) 461.56 1959.42 2028.84

STATEMENT SHOWING SHAREHOLDING PATTERN

I (a) Statement showing Shareholding Pattern Quarter ended 31st March 2009

Scrip Code:

Category Category of * No. of Total No. No. of shares Total shareholding as a Shares Pledged

Code shareholder shareholders of shares held in percentage of total or otherwise

dematerialized number of shares encumbered

form

As a As a Number of As a

percentage percentage Shares percentage

of (A+B) of (A+B+C)

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX) = (VIII)

/(IV)*100

(A) Promoter and

Promoter Group

(1) Indian

(a) Individuals/Hindu 3 26393 - 25.54 - - -

Undivided Family

(b) Central Government / - - - - - - -

State Government(s)

(c) Bodies Corporate 2 50870 - 49.22 - - -

(d) Financial Institutions / - - - - - - -

Banks

(e) Any Other (specify) - - - - - - -

Sub-Total (A)(1) 5 77263 - 74.76 - - -

(2) Foreign

(a) Individuals (Non- - - - - - - -

Resident Individuals/

Foreign Individuals

(b) Bodies Corporate - - - - - - -

(c) Institutions - - - - - - -

(d) Any Other (specify) - - - - - - -

Sub-Total (A)(2) - - - - - - -

Total Shareholding of

Promoter and

Promoter Group

(A)=(A)(1)+(A)(2) 5 77263 - 74.76 - - -

97



(1) Institutions

(a) Mutual Funds/UTI - - - - - - -

(b) Financial Institutions / - - - - - - -

Banks

(c) Central Government - - - - - - -

/ State Government(s)

(d) Venture Capital Funds - - - - - - -

(e) Insurance Companies - - - - - - -

(f) Foreign Institutional - - - - - - -

Investors

(g) Foreign Venture Capital - - - - - - -

Investors

(h) Any Other (specify) - - - - - - -

Sub-Total (B)(1) - - - - - -

* Shares held by same

persons in different

folioshave been

clubbed together


(a) Bodies Corporate 5 21277 - 20.59 - - -

(b) Individuals -

(i) Individual shareholders 7 4804 - 4.65 - - -

holding nominal share

capital upto Rs.1 lac.

(ii) Individual shareholders 0 0 - - - - -


capital in excess of

Rs.1 lac.

(c) Any Other (specify)

Director 1 1 0.00 -

Sub-Total (B)(2) 13 26082 - 25.24 - - -

Total Public 13 26082 - 25.24 - - -

Shareholding

(B) = (B)(1) + (B)(2)

Total ( A)+(B) 18 103345 - 100.00 - - -

(C) Shares held by - - - - - - -

Custodians and against

which Depository

Receipts have been

issued

GRAND TOTAL

(A)+(B)+( C) 18 103345 - 100.00 - - -

98


I (b) Statement showing Shareholding of persons belonging to the category “Promoter and Promoter Group”

Quarter ended: 31st March 2009

Sr. No Name of the shareholder Total shares held Shares Pledged or otherwise encumbered

Number As a percentage Number As a percentage As a percentageof grand total (VI)=(V)/(III)*100 of grand total of

(A) + (B)+ (C) (A) + (B)+ (C) ofsub clause I(a)

(I) (II) (III) (IV) (V) (VI) (VII)

1 Kavita Trading and 47525 45.99 - - -Investment Co. Pvt. Ltd.

2 Shri Jai Hari Dalmia 22193 21.47 - - -

3 Ishita Properties Limited 3345 3.24 - - -

4 Shri Gautam Dalmia 3200 3.10 - - -

5 Smt Kavita Dalmia 1000 0.97 - - -

Total 77263 74.76 - - -

(1) (c) Statement showing Shareholding of persons belonging to the category “Public and holding more than

1% of the total number of shares

Sr. Name of the Number of Shares as a percentage of total

No. shareholder shares number of shares {I.e.,GrandTotal

(A)+(B)+(C) indicated in Statement

at para (1)(a) above.}

1 Chicky Traders Private Limited 5000 4.84

2 Radar Commercial Private Limited 5000 4.84

3 Vista T V Company Limited 5000 4.84

4 Vikas Consultants Private Limited 4677 4.53

5 Aditya Tulsyan 1900 1.84

6 Rasendu Poddar 1900 1.84

7 Pluto Trade Links Limited 1600 1.55

Total 25077 24.27

Top 10 Shareholders as on 31.03.2009:

Sr. No. Name of Shareholder No. of Shares % of Shareholding

1 Kavita Trading & Investment Co. Pvt. Ltd. 47525 45.98

2 Shri Jai Hari Dalmia 22193 21.47

3 Chicky Traders Pvt. Ltd 5000 4.84

4 Radar Commercial Pvt. Ltd 5000 4.84

5 Vista TV Company Ltd. 5000 4.84

6 Vikas Consultants Private Limited 4677 4.53

7 Ishita Properties Limited 3345 3.24

8 Shri Gautam Dalmia 3200 3.10

9 Aditya Tulsyan 1900 1.84

10 Rasendu Poddar 1900 1.84

Total 99740 96.52

99


Details of Prices of Shares:

The highest and lowest market price of shares during the preceding six Months:

The shares of SICL are listed on Calcutta Stock Exchange Association Limited. The Higest and Lowest prices of the

shares of the Company is not available since the shares of the Company are not frequently traded.

Status of Investor Complaints for the period 01/04/2009 TO 31/05/2009

Sl. No. Description Received Resolved Pending

1 Share Transfers Nil Nil Nil

2 Transmission/deletion of name Nil Nil Nil

3 Issue of Duplicate share certificates Nil Nil Nil

4 Issue of duplicate/re-validated dividend/interest warrants Nil Nil Nil

5 Non-receipt of Annual report Nil Nil Nil

6 Change of Address Nil Nil Nil

7 Sub Division/ Consolidation/ Split up Nil Nil Nil

Total Nil Nil Nil

Details of public or rights issue in the preceding three years: The company has not made any public or rights issue of

securities in the preceding three years. However, the Company has made a preferential issue of 16500 6% Non cumulative

redeeemable preference shares of Rs 100 each in the year 2008. It has also issued 3345 equity shares of Rs. 10 each in lieu

of 334500 shares of Anupama Investment Limited pursuant to its merger into SICL.

Information regarding adverse factors related to the company:

* The company has not become a sick company within the meaning of the Sick Industrial Companies (Special

Provisions) Act, 1995.

* The Company is not under winding up.

The company has not made a loss in the immediately preceding year.

2. OCL India Limited (OCL):

OCL was originally incorporated on 11th October, 1949 as Orissa Cement Limited under the Companies Act, 1913.

Name of the Company was changed to OCL India Limited w.e.f. 15th January, 1996.The Registered Office of the

company is situated at Rajgangpur, District- Sundergarh, Orrisa 770 017. It is engaged in the business of cement

manufacturing and refractory production. The shares of OCL are listed on NSE and BSE.


(1) To produce, manufacture, refine, prepare, import, export, purchase, sell and generally to deal in all kinds of

cement (ordinary, white, coloured, portland, alumina, blast furnace, silica, etc, etc.), cement products of any

description (pipes, poles, asbestos sheets, blocks, tiles, garden-wares, etc. etc.), lime, limestone and/or by-

products thereof, and in connection therewith to take on lease or acquire, erect, construct, establish operate

and maintain cement factories, quarries and collieries workshops and other works.

(2) To produce, manufacture, treat, purchase, sell or otherwise deal with;

(a) Bricks, Tiles, Pipes: Pottery, Earthen-ware, sanitary-ware, China and Terracotta, Refractories and Ceramic-

ware of all kinds.

(b) Colours, Paints, Varnishes, etc.

(c) Caustic Soda, Chlorine and other allied products.

(d) Sulphuric Acid, Sulphates, Alums and other allied products.

(e) Grinding of Oil-seeds, Refining of Oil, Manufacture of Soap, etc.

100


(f) Midget electrodes, carbon rods of all kinds, electrodes of all kinds, batteries, battery cells, bulbs, wires,

cables, dynamos, motors, fans, stoves and all other electrical goods, radios, transistors, all kinds of

electronic goods, materials, products and equipment including all kinds of Televisions, computers, computer

hardware, computer software, computer peripherals, integrated and hybrid circuits, printed circuits, all

kinds of films tapes, disks etc. pertaining to designing and simulation including Computer Aided Designing,

Computer, aided Engineering, Computer Aided Manufacturing, architectural and product designs, garment

and carpet styling, factory simulation,medical imaging, image processing and mapping, motion films,

digital magnetic video films, short and documentary films, advertisement and publicity films, special

effects films, TV films computer animation films, cell animation films, manual animation films, laser

produced films, video games, TV serials, transparencies, bromides, video software, audio tapes and disks,

video tapes and disks compact disks, laser disks, tape recorders and players, disk recorders and players

prerecorded tapes and disks of all kinds audio and visual communications equipment, audio equipment,

video equipment, projectors, microprocessors, all or any parts required for any of the above.

[2(f) As per Special Resolution passed at the Annual General Meeting held on the 21st day of September,

1989.]

(g) All Kinds of calcium carbonate, all chemicals, basic, intermediary or otherwise all varieties of Alkalis

acids, drugs, fungicides and pesticides, fertilizers and petrochemicals of all kinds, pharmaceutical,

Medicinal and chemical preparations;

(h) All kinds and classes of paper. Board and pulp, cutlery, knives, scissors, razors and lades;

(i) Sugar, sugar products, confectionary, dry and preserved fruits, juices, vegetables, bread, flour, biscuits,

baking materials, processed foods, vegetable oils, containers of all kinds and description;

(j) All kinds of cotton, silk, artificial silk, woolen, linen, jute, hemp, synthetic fibres and yarn, textiles or

other articles made of anyone or more of these;

(k) Rubber, natural and synthetic, leather, imitation leather, leather cloth, plastic, oil cloth, linoleum, hospital

sheetings and all other articles of any description made from or prepared with rubber, leather or plastic;

(l) Abrassives in all forms, alumina, aluminium and all derivatives therefrom;

(m) Ships, boats, barges, tugs and all other vehicles of water transport of all kinds and description.

(As per Special Resolution passed at Ordinary General Meeting held on 30th day of October, 1973)

(2A) To process, convert, treat, manipulate or manufacture all kinds of food stuffs, oil seeds, vegetables, vegetable

products, fruits, grass, timber, bamboo, straw, cotton, jute, rubber, sugarcane, tea, coffee, coconuts, cashew

nuts, tobacco and other articles that are the produce of land or soil and to sell, purchase and deal in the same

as Principals or Agents.

(As per Special Resolution passed at the Annual General Meeting held on 29th day of September, 1997)

(2B) To carry on business as dealers in, and producers of dairy, farms, and garden produce of all kinds, and in

particular milk, cream, butter, ghee, cheese, poultry and eggs, fruits and vegetables.

(2C) To carry on the business of iron founders, steel founders, non-ferrous metal founders, mechanical engineers,

structural engineers. electrical engineers, manufacturers of cast iron and steel pipes, manufacturers of grinding

medias, manufacturers of agricultural implements, other machineries, airconditioners, refrigerators, consumer

and domestic appliances, tool makers, metal workers boiler makers, mill wright machinists, iron and steel

converters.

(2D) To carryon the business of builders, contractors, promoters of all types of construction including Roads,

bridges, towers, factory buildings, residential flats, dwelling houses, hotels, restaurants, shops, officers, and

for that purpose, organise, incorporate and manage co-operative societies.

(2E) To deal in purchase, sale, exchange and/or transfer of securities, shares, debentures and all other forms of

investments either for ready or on forward transactions and to carry on all kinds of investment business.

(2F) To carryon the business of the letting on hire, hire purchase or easy payment system of appliances, fittings,

machines, equipments, vehicles, furniture wireless and television receivers and other apparatus and all other

things of Whatsoever nature of description capable of inclusion in this class of business.

101



(2G) To Carry on the business of producers, creators, directors, buyers, sellers, suppliers,· exporters, importers,

hirers, contractors, stockists, distributors, repairers, consultants and dealers of and in all kinds of descriptions

of:

i) electronic components, devices, systems, appliances and testing equipments;

ii) photocopiers, fax machines, data processing machines, accounting and business machines, transformers;

iii) sound production and recording including recording of analogue and digital sound dialogues and music,

iv) all kind of publishing and printing including desk top publishing, offsets printing, laser printing of

brochures, pamphlets, magazines, periodicals, books maps, newspapers, annual reports, tourist and

other literature.

v) equipments for all kinds of advertisement, publicity and campaigning;

vi) conductors, semiconductors, resistors capacitors, inductors, coils, connectors, display devices;

vii) transistors, diodes, photo transistors, photo diodes, silicon transistors and related items, and equipment

utilizing such devices;

viii) telephone of telegraph equipment, studio equipment, sound equipment and amplifying equipment etc.

(As per Special Resolution passed at the Annual General Meeting held on 21st day of September, 1989)

(2H) To carry on the business of supply of skilled manpower to overseas countries.

(2I) To carry on the business of Power Generation including Wind Power Generation and distribution and transmission

of the power.”

(As per special resolution passed by the shareholders through postal ballots and declared on n 17h September

2007)

3. To carry on any business relating to the mining and working of minerals, the production and working of

metals, and the production, manufacture, and preparation of any other materials Which may be usefully or

conveniently combined with the engineering or manufacturing business of the Company, or any contracts

undertaken by the Company, and either for the purpose only of such contracts or as an independent business.

(3A) To carry on the business of manufacture, purchase, sale, or, otherwise deal in all varieties of Sponge iron, pig

iron, cast iron, re-rolling products, alloy steels, special steels and any other kinds and grades of iron or steel

or any by-products thereof including fabrication and machining thereof.

(As per special resolution passed by the shareholders through postal ballots and declared on 17th September

2007)

(4) To construct, Improve, maintain, develop, work, manage, carry out or control any roads, ways tramways,

railways branches or sidings, bridges reservoirs, water courses, wharves, manufactories, ware houses, electric

works, shops, stores, and other, works and conveniences which may seem calculated directly or indirectly to

advance to Company’s interests, and to contribute to, subsidize or otherwise assist or take part in the construction,

improvement, maintenance, working, management, Carrying out or control thereof.

(5) To buy, sell, import, export, manipulate, prepare for market, and deal in merchandise of all kinds, and generally

to carry on business as merchants, importers and exporters and to buy, sell and deal in property of all kinds.

(6) To carry on the business of contractors, clearing and forwarding agents, general carriers of passengers and

goods bonded car-man, and common car-man.

(7) To carry on the business of insurance agents of all types of insurance work for any Insurance company.

(8) (a) To undertake, transact and execute all kinds of agency business and render all kinds of services technical,

managerial or otherwise including all kinds of computer software services and services of designing and

simulation, computer aided designing, computer aided engineering computer aided manufacturing,

architectural and product designing, garment and carpet styling, factory simulation, medical imaging,

102


image, processing, mapping of all kinds, sound production and recording of all kinds including recording

of analogue and digital sound dialogues and music, rendering services of all kinds computer aided or

otherwise of publishing and printing including Desk Tap Publishing, Offset printing, laser printing, making

far others all kinds of films including motion films, digital and magnetic and video films, short and

documentary films, advertisement and publicity films, special effects films, TV films, computer animation

films, cell animation films, manual animation films, laser produced films, making far others transparencies

bromides and video software etc. making far others all kinds of advertisement, Publicity and campaigns

with electronic equipment computer software or otherwise.

(As per Special resolution passed at the Annual General Meeting held an 21st day of September 1989)

(8) (b) To act as Advisers, Consultants or Manager and to. render advice assistance, guidance, in any capacity

whatsoever to. any person, Firm or Company, an all aspects of business, organization and industry and

to. advise upon the means and methods far extending, developing all types of business and Industry and

all systems or processes relating to. production, storage, distribution, marketing and sale of goods and/

or relating to. rendering or services.

(As per Special October, 1973) Resolution passed at Ordinary General Meeting held an 30th day of

(9) To receive money, securities and valuables of all kinds an deposit or safe custody an any terms.

(10) To borrow, raise or secure the payment of money in such manner as the Company shall think fit, and in particular

by the issue of debentures, or debenture stack, perpetual or otherwise, charged upon all or any of the Company’s

property, bath present and future, including its un-called capital, and to. purchase, redeem, or pay off any such

securities.

(11) To lend money, securities or other property, either with or without security, to. such, persons or companies and

an such terms as may seem expedient, and in particular to.customers and others having dealings with the

Company, and to. guarantee the performance of contracts by any such persons or companies.

(12) To draw, make, accept, endorse, discount, execute, and issue promissory notes, bills of exchange, bills of

lading, warrants, debentures and other negotiable or transferable instruments,

(13) To Invest and deal with the moneys of the Company in such manner as may, from time to time, be determined

by the directors.

(14) To purchase or otherwise acquire, issue, re-issue, sell, place, and deal in shares, stocks, bands, debentures and

securities of all kinds.

(15) To take or otherwise acquire, and hold shares in any other company having objects altogether or in part

similar to. those of this Company or otherwise, or carrying on any business capable of being conducted so as

directly or indirectly to benefit this company.

(16) To apply ‘far, purchase, or otherwise acquire any patents, brevets invention, licences. concessions and the like

conferring any exclusive or non-exclusive or limited right to use, or any secret or other information as to any

invention ‘which may seem capable of being used far any of the purposes of the Company, or the acquisition

of which may seem calculated directly or indirectly to benefit the Company, and to. use, exercise, develop or

grant licences in respect Of, or otherwise turn to account the property rights or information so acquired.

(17) To acquire and undertake the whole or any part of the business, property and liabilities of any person or company

carrying on any business which the Company is authorized to carry on, or possessed of property suitable for the

purposes of this Company.

(18) To construct, maintain, and alter any buildings or works, necessary or convenient for the purposes of the

Company.

(19) Generally to purchase, take on lease or in exchange, hire or otherwise acquire any real and personal property,

and rights or privileges which the company may think necessary or convenient for the purposes of its business

and in particular any land, buildings, easements, machinery, plant, and stock-in-trade.

(20) To sell, improve, manage, develop, exchange, lease, mortgage, enfranchise, dispose of, turn to account, or

otherwise deal with, all or any part of the property and rights of the company.

(21) To enter into contracts of indemnity and to indemnify any party or become sureties against any debts, obligations

103


or liabilities.

(22) To enter into any contract or agreement of guarantee.

(23) To guarantee or become sureties for the performance of any agreement or contract of any party or parties or for

the discharge of any duty or obligation of any party or parties or the payment of money by any party or parties.

(24) To enter into partnership or into any arrangement for sharing profits, union of interests, co-operation, joint

adventure, reciprocal concession, or otherwise, with any person or company carrying on or engaged in or

about to carry on or engage in any business or transaction which this Company is authorized to carry on or

engage in, or any business or transaction capable of being conducted so as directly OF indirectly to benefit this

Company. And to lend money to guarantee the contracts, or otherwise assist, any such person or company, and

to take or otherwise acquire shares and securities of any such company, and to sell, hold, re-issue, with or

without guarantee, or otherwise deal with the same.

(25) To enter into any arrangements with any Governments or authorities, supreme, municipal, local, or otherwise,

that may seem conducive to the Company’s objects, or any of them, and to obtain from any such Government

or authority, any rights, privileges and concessions which the Company may think desirable to obtain, and to

carry out, exercise and comply with any such arrangements, rights, privileges and concessions.

(26) To remunerate any person or company for services rendered, or to be rendered, in placing or assisting to place

or guaranteeing the place of any or the shares in the Company’s capital, or any debenture stock or other

securities of the Company or in or about the formation or promotion of the Company or the conduct of its

business.

(27) To establish and support or aid in the establishment and support of associations, institutions, funds, trusts, and

conveniences calculated to benefit employees or ex-employees of the Company or its predecessors in business

or the dependants or connections of such persons, and to grant pensions and allowances, and to make payment

towards insurance and to subscribe or guarantee money for charitable or benevolent objects or for any exhibition,

or for any public, general or useful object.

(28) To make donations to such persons and in such cases, and either of cash or other assets, as the Directors may

think directly or indirectly conducive to any of the company’s objects otherwise considered expedient.

(29) To undertake and execute any Trust, the undertaking of which may seem desirable to the Directors, to make or

receive gifts of any kind, cash or otherwise, for any purpose atsoever.


(30) To promote any company or companies for the purpose of acquiring all or any of the property, rights and

liabilities of this Company, or for any other purpose which may seem directly or indirectly calculated to

benefit this Company.

(31) To from, constitute, and promote companies, syndicates, associations, and undertaking of all kinds.

(32) To carry on and undertake any business transaction or operation commonly carried on or undertaken by

promoters of companies, financiers, concessionaries, contractors for public and other works, capitalists,

merchants, traders, and to carry on any other business which may seem to the company capable of being

conveniently carried on in connection with the above objects, or calculated, directly or indirectly, to enhance

the value of, or render profitable, any of the Company’s property or rights.

(33) To carry on any other business, whether manufacturing or otherwise, which may seem to the Company

capable of being conveniently carried on in connection with the above or calculated directly or indirectly to

enhance the value of or render profitable any of the Company’s property or rights.

(34) To promote the establishment, carrying on, and development of trades and businesses or all kinds within any

territories in which the Company is interested, and to subsidise, grant special rights to, or otherwise assist,

support, protect, or encourage all persons and companies engaged or proposing to engage therein.

(35) To adopt such means of making known the products of the Company as may seem expedient, and in particular

by advertising in the press, by purchase and exhibition of works of art or interest, by publication of books and

periodicals, and by granting prizes, rewards and donations.

104


(36) To sell or dispose of the undertaking of the Company or any part thereof and all or any of the property of the

Company for cash or for stock, for shares or securities of any other company or for such other consideration as

the Directors may think fit.

(37) To obtain any provisional order or Act of legislature for enabling the Company to carry any of its objects into

effect, or for effecting any modification of the Company’s constitution, or for any other purpose which may

seem expedient, and to oppose any proceedings or applications which may seem calculated, directly or indirectly,

to prejudice the Company’s interest.

(38) To procure the Company to be registered or recognised in any foreign country or place.

(39) To do all or any of the above things in any part of the world and as principals, agents, contractors, trustees or

otherwise, and by or through trustees, agents, or otherwise, and either alone or in conjunction with others.

(40) To do all such other things as are incidental or conducive to the attainment of the above objects.

And it is hereby declared that the world “Company” in this clause shall be deemed to include any partnership

or other body of persons, whether incorporated, or not incorporated, and whether domiciled in India or

elsewhere, and the intention is that the objects specified in each paragraph or this clause shall, except where

otherwise expressed in such paragraph, be independent main objects, and shall be in no way limited or

restricted by reference to or inference from the terms of any other ‘paragraph or the’ name or the company.

The Directors on the Board of OCL are:

Sl. No. Name Status Designation DIN

1. Shri Pradeep Kumar Khaitan Non-executive and Non-independent Chairman 00004821

2. Shri D.N.Davar Non-executive and Independent Director 00002008

3. Dr. S.R.Jain Non-executive and Independent Director 00364293

4. Dr. Ramesh C Vaish Non-executive and Independent Director 01068196

5. Shri V.P.Sood Executive and Non-independent WholeTime Director 00092593

6. Shri Puneet Dalmia Non-executive and Non-independent Director 00022633

Authorized Capital: The authorized share capital of the Company is Rs.15,00,00,000 divided in to 1,00,000 shares of

Rs. 100/- each and 7,00,00,000 shares of Rs. 2/- each.

Brief Audited Financials of OCL are as follows:

(Rs. In Lacs)

Particulars March 31, 2007 March 31, 2008 March 31, 2009

Equity Capital 891.45 1138.50 1138.50

Paid up Capital 891.45 1138.50 1138.50


Total Income 84194.35 80312.61 114425.47


Earning per Share(Rs.) 18.46 21.58 20.34

NAV(Rs.) 81.74 97.21 115.85

Shareholders Details:

Name of the Company : OCL INDIA LIMITED

105


Quarter ended : 31st March, 2009

Category Category of No. of Total No. No. of Shares Total shareholding Shares pledged

Code Shareholder Share of Shares held in as a percentage or otherwise

holders Dematerialize of total no. encumbered

Form of shares

As a As a No. of As a

percentage of percentage Shares percentage

(A+B) of (A+B+C) (VIII) (IX)=(VII) /

(IV)*100

(A) Shareholding of 0.00

Promoter and

Promoter Group 0.00

(1) Indian 0.00

(a) Individuals/ Hindu 7 17447936 17447936 30.66 30.66 0 0.00

Undivided Family

(b) Central Government 0.00 0.00 0 0.00

/ State Governments

(C) Bodies Corporates 2 12911086 12911086 22.69 22.69 0 0.00

(d) Financial Institutions 0.00 0.00 0.00

/Banks

(e) Any Others(specify) 0.00 0.00

(f) Trust-1 7 9318409 6252894 16.38 16.38 50000 0.54

Trust-2 1 20708 20708 0.04 0.04 0 0.00

Sub -Total (A)(1) 17 39698139 36632624 69.77 69.77 50000 0.13

(2) Foreign 0.00

(a) Individuals (Non- 0.00 0.00 0 0.00


ForeignIndividuals)

(b) Bodies Corporates 0.00 0.00 0 0.00

(c) Institutions 0.00 0.00 0 0.00

(d) Any Other (Specify) 0.00 0.00 0 0.00

Sub-Total (A)(2) 0 0 0 0.00 0.00 0 0.00

Total Shareholding of 17 39698139 36632624 69.77 69.77 50000 0.13

Promoter and

Promoter Group

(A)=(A)(1)+(A)(2)

(B) Public shareholding N.A 0.00

(1) Institutions 0.00

(a) Mutual Funds/UTI 2 24500 0.04 0.04 0.00

(b) Financial Institutions 22 60100 27855 0.11 0.11 0.00

/Banks

106


(c) Central Government 0.00

/State Governments

(d) Venture Capital Funds 0.00 0.00 0.00

(e) Insurance Companies 1 35275 35275 0.06 0.06 0.00

(f) Foreign Institutional 10 189811 189511 0.33 0.33 0.00

Investors

(g) Foreign Venture 0.00 0.00 0.00

Capital Investors

(h) Any Other (Specify) 0.00 0.00 0.00

Sub-Total (B)(1) 35 309686 252641 0.54 0.54 0.00

(2) Non-Institutions 0.00

(a) Bodies Corporates 443 8237070 6853931 14.48 14.48 0.00

(b) Individuals 0.00

(i) Individual

shareholders

holding nominal

share capital upto

Rs. 1 lac 13293 6693635 4953180 11.76 11.76 0.00

(ii) Individual

shareholders

holding nominal

share capital in

excess of Rs. 1 lac 9 1692031 1561721 2.97 2.97 0.00

(c) Any Other (Specify) 0.00

- Non Resident Indians 158 163313 127558 0.03 0.03 0.00

- Froeign Nationals 31 18080 - 0.03 0.03 0.00

- Clearing Members 67 88266 88266 0.06 0.16 0.00

Sub-Total (B)(2) 14001 16892395 13584656 29.69 29.69 0.00

Total Public

Shareholding

(B) = (B) (1)+(B)(2) 14036 17202081 13837297 30.23 30.23 0.00

Total (A)+(B) 14053 56900220 50469921 100.00 100.00 0.00

(C) Shares held by 0.00


which Depository

Receipts have been

issued

GRAND TOTAL 141053 56900220 50469921 100.00 100.00 0.00

(A)+(B)+(C )

Statement showing Shareholding of persons belonging to the category “Promoter and Promoter Group”

(I) (b) Statement showing Shareholding of persons belonging to the category

107


“Promoter and Promoter Group”

Sr. Name of the shareholder Total shares held Shares pledged or otherwise

No. encumbered

Number As a % of Number As a As a % of

grand total percentage grand total

(A)+(B)+(C) (A)+(B)+(C)

of sub-

clause (I) (a)

(I) (II) (III) (IV) (V) (VI)=(V) (VII)

/(III)*100

1 Sri Mridu Hari Dalmia 9318409 16.38 50000 0.54 0.09(C/o. M. H. Dalmia Parivar Trust) (*)

2 Sri Yadu Hari Dalmia 11352293 19.95 0 0.00 0.00

3 Puneet Dalmia 1551525 2.73 0 0.00 0.00

4 Smt Abha Dalmia 1962601 3.45 0 0.00 0.00

5 Sri Gautam Dalmia (C/o Sumana Trust) 20708 0.04 0 0.00 0.00

6 Sri Gautam Dalmia (HUF) 110541 0.19 0 0.00 0.00

7 Smt Usha Jhunjhunwala 58333 0.10 0 0.00 0.00

8 Sri Gaurav Dalmia 58333 0.10 0 0.00 0.00

9 Sri Mridu Hari Dalmia 2354310 4.14 0 0.00 0.00

10 Shree Nirman Limited 558586 0.98 0 0.00 0.00

11 Dalmia Cement (Bharat) Ltd. 12352500 21.71 0 0.00 0.00

39698139 69.77 50000 0.13 0.09

Note :- (*) More than one folio clubbed

Sr. Name of the shareholder Total shares held Shares pledged or otherwise

No. encumbered

Number As a % of Number As a As a % of

grand total percentage grand total

(A)+(B)+( C ) (A)+(B)+(C)

of sub-

clause (I) (a)

(I) (II) (III) (IV) (V) (VI)=(V) (VII)

/(III)*100

1 Sri Mridu Hari Dalmia(C/o. M. H. Dalmia Parivar Trust) (*) 9318409 16.38 50000 0.54 0.09

2 Sri Yadu Hari Dalmia 11352293 19.95 0 0.00 0.00

3 Puneet Dalmia 1551525 2.73 0 0.00 0.00

4 Smt Abha Dalmia 1962601 3.45 0 0.00 0.00

5 Sri Gautam Dalmia (C/o Sumana Trust) 20708 0.04 0 0.00 0.00

6 Sri Gautam Dalmia (HUF) 110541 0.19 0 0.00 0.00

7 Smt Usha Jhunjhunwala 58333 0.10 0 0.00 0.00

8 Sri Gaurav Dalmia 58333 0.10 0 0.00 0.00

9 Sri Mridu Hari Dalmia 2354310 4.14 0 0.00 0.00

10 Shree Nirman Limited 558586 0.98 0 0.00 0.00

11 Dalmia Cement (Bharat) Ltd. 12352500 21.71 0 0.00 0.00

39698139 69.77 50000 0.13 0.09

Note :- (*) More than one folio clubbed

(I)(c) Statement showing Shareholding of persons belonging to the category

“Public” and holding more than 1% of the total number of Shares

108


Sr. No. Name of the shareholder Number Shares as a

of shares percentage of

total number of

shares {i.e., Grand

Total (A)+(B)+(C)

indicated in

Statement at

para (I)(a) above}

1 Dharti Investments and Holdings Limited 3507633 6.16

2 Shreevallabh Orthopaedic Instruments Pvt. Ltd. 682500 1.20

3 Yugalshree Tonics and Foods Pvt. Ltd. 682500 1.20

4 SKIL SEZ Infrastructure Holdings Pvt. Ltd. 755788 1.33

5 Jai Kumar Jain 734207 1.29

TOTAL 6362628 11.18


Sr. Name of Shareholder No. of % of

No. Shares Shareholding

1 Dalmia Cement (Bharat) Ltd. 12352500 21.71

2 Shri Yadu Hari Dalmia 11352293 19.95

3 Shri M. H. Dalmia (C/o M.H.Dalmia Parivar Trust) 9318409 16.38

4. Dharti Investments and Holdings Limited 3507633 6.16

5 Shri M.H.Dalmia 2354310 4.14

6 Smt Abha Dalmia 1962601 3.45

7 Puneet Dalmia 1551525 2.73

8 SKIL SEZ Infrastructure Holdings Pvt. Ltd. 755788 1.33

9 Jai Kumar Jain 734207 1.29

10 Shreevallabh Orthopaedic Instruments Pvt. Ltd 682500 1.20

Total 38792440 78.34

Analysis of Shareholders’/Investors’ Complaints/ letters received and redressed from 1st April, 2009 to 31st May,2009

S. Nature of complaint/ Opening Received Date of Actual days Closing If still Action

No. letter balance from complaint within which balance pending, taken

complaint/ reasons

letter resolved thereof

Investors/SEBI/ 1-15 Days/

RoC/Stock Exch- 16-30 Days/

anges/RBI/DCA/ More than

Others 30 Days

1 Share Transfers Nil Nil N.A

2 Transmission/deletion of name Nil Nil N.A

3 Issue of duplicate share certificates Nil Nil N.A

4 Issue of duplicate/re-validated Nil Nil N.A

dividend/interest warrants

109


5 Non-receipt of dividend/refund

warrants Nil Nil N.A

6 Non-receipt of Annual report Nil Nil N.A

7 Nominations Nil Nil N.A

8 ECS/Bank Mandates/PoA Nil Nil N.A

9 Change of Address Nil Nil N.A

10 Demat/ Remat Request Nil Nil N.A

11 Sub Division/ Consolidation/

Split up of Share Certificate Nil Nil N.A

Details about Prices of Shares:

The highest and lowest market price of shares during the preceding six Months


The shares of OCL are listed on Bombay Stock Exchange Limited, National Stock Exchange of India Limited.

The stock market data as available on the website of the National Stock Exchange of India Limited is mentioned hereunder:

High Low

Period Date Rate No. of Net Date Rate No. of Net

in Rs. Shares Turnover in Rs. Shares Turnover

Traded (Rs. in Traded (Rs. in

Lacs) Lacs)

Dec 2008 19/12/2008 52.90 5932 2.98 02/12/2008 37 3778 1.46

Jan 2009 07/01/2009 54.10 18379 9.31 28/01/2009 41.60 4509 2.06

Feb 2009 13/02/2009 52.05 2667 1.37 27/02/2009 43.60 6482 2.90

March 2009 31/03/2009 49 31770 14.68 06/03/2009 39 40844 17.15

April 2009 16/04/2009 78 33884 24.82 01/04/2009 46.05 24128 11.89

May 2009 29/05/2009 97.30 227162 205.05 07/05/2009 68.50 5964 4.30

The stock market data as available on the website of the Bombay Stock Exchange Limited is mentioned hereunder:

High Low



Traded (Rs. in Traded (Rs. in

Lacs) Lacs)

Dec 2008 19/12/2008 52 7512 3.77 02/12/2008 37.15 1256 0.48

Jan 2009 07/01/2009 54.75 14663 0.75 27/01/2009 42 743 0.31

Feb 2009 13/02/2009 52.40 7127 3.68 27/02/2009 43.70 15681 7.02

March 2009 12/03/2009 52.85 1842 0.81 06/03/2009 39.80 26764 11.23

April 2009 16/04/2009 79.50 27855 19.89 01/04/2009 45.95 19348 0.94

May 2009 29/05/2009 96.80 20547 186.87 07/05/2009 64.50 5506 0.39

Details of public or rights issue in the preceding three years: The company has not made any public issue of securities

in the preceding three years. However the company has made right issue of securities in 2006.

110



* The company has not become a sick company within the meaning of the Sick Industrial Companies (Special Provisions)

Act, 1995.


* The company has not made a loss in the immediately preceding year.

3. Alirox Abrasives Limited (AAL):

AAL was incorporated as The Shevaroy Bauxite Products Company Private Limited on May 13, 1944 under the

Indian Companies Act, 1913 and further the name of the company was changed to Shevaroy Private Limited on

October 05, 1968 and finally changed its name to Alirox Abrasives Limited on August 19, 1975. The Registered

Office of the company is situated at 4, Scindia House, Connaught Place, New Delhi-110001. It is engaged in the

business of Bauxite Mining. The shares of AAL are listed on Delhi Stock Exchange Limited.


1. To acquire Bauxite Mines and mining rights in India and elsewhere and any interest therein.

2. To search for, win, get, quarry, reduce, amalgamate, dress refine and prepare for market, Bauxite and other

mineral substances and generally to carryon any metallurgical operations which may seem conducive to any of

the Company’s objects.

3. To carryon the trade or business of manufacturers of abrasive in all forms

4. (A) “To carryon all or any of the business of manufacturers of and dealers and workers in cement, lime,

plasters, whiting, clay, gravel, sand, minerals, earth, coke, fuel, artificial· stones and builders requisites

and conveniences of all kinds including asbestos cement sheets, pipes, fittings and/or other things of

cement and also to win, get, recover, quarry, smelt, c1acine, refine, dress, amalgamate, manipulate and

prepare for market, ore metal and mineral substances of all kinds and tin in particular and also to carryon

any other metallurgical operation.”

4. To carryon the trades or business of miners, smelters, engineers, manufacturers and producers of alumina, aluminium

and all derivatives’ therefrom.

5. To prospect, examine and explore any territories and places in’ India and elsewhere, and to employ and equip

expeditions, commissions, experts and other agents.

6. To carryon the business of general manufacturers and to manufacture, buy, sell and deal in apparatus, machinery,materials and articles of all kinds.

7. To acquire, by purchase or on lease or otherwise, ,lands in India or elsewhere and to establish and equip factories onsuch lands or on any other or any part of or parts thereof together with such gardens and plantations as shall beconsidered expedient or convenient for the purposes of the Company.

8. To carryon all or any of the business of or usually carried on by zemindars or land companies.

9. To irrigate, cultivate, improve and develop any lands and properties, whether belonging to the Company or not, andto develop the resources thereof by clearing, draining, fencing, cultivating, planting, manuring, farming letting orotherwise, with power to advance money to other persons for any of the purposes aforesaid.

10. To acquire by purchase, lease, exchange or otherwise, lands, buildings, and hereditaments of any tenure or description,and any estate or interest therein the and any rights ever or connected with land, and either to retain the same for thepurpose of the Company’s business or to turn the same to account as may seem expedient.

11. To sink wells and shafts, lay down pipes, construct maintain and improve any tramways, railways, roadways,telegraphlines, canals, reservoirs, water-courses, wharehours, sheds, and other buildings and works calculated, directlyor indirectly, to advance the interests of the Company, and to pay or contribute to the expenses of constructing,maintaining, and improving any such works.

12. To construct, carry out, maintain, improve, manage, work control and superintend any hats, markets, tanks, bridges

and works in connection therewith, hydraulic works, electrical works and factories, houses, and coolies lines and

bustees, villages and other works and conveniences, which may seem directly or indirectly, conducive to any of the

objects of the Company, and to contribute to, subsidise or otherwise aid or take part in any such operations.

111


13. To carryon any other business which may seem to the Company capable of being conveniently carried on in connection

with any of the above or calculated, directly or indirectly, to enhance the value of or render profitable any of the

Company’s property or rights.

14. To enter into any arrangement with any Government or authority, supreme, municipal, local or otherwise, that may

seem conducive to the Company’s objects or any of them and to obtain from any such Government or authority all

rights, concessions and privileges which the Company may think it desirable to obtain and to carry out, exercise and

comply with any such arrangements, rights, privileges and concessions.

15. To acquire and undertake -all or any part of the business, property and liabilities of any person or company carrying

on any business which this Company is authorised to carryon or possessed of property suitable for the purposes of

the Company.

16. To apply for, purchase or otherwise acquire any patents, brevets d’invention, licences, concessions and the like

conferring any exclusive or non-exclusive or limited right to use, or any secret or other information as to any invention

which may seem capable of being used for any of the purposes of the Company or the acquisition of which may seem

calculated, directly or indirectly, to benefit the Company and to use, exercise, develop or grant licences in respect of

or otherwise turn to account the property, rights or information so acquired.

17. To enter into partnership or into any arrangement for sharing profits into any union of interests, joint venture, reciprocal

concession or cooperation with any person or persons or company or companies carrying on or, engaged in, or about

to carryon or engage in or being authorised to carryon or engage in, any business or transaction which this Company

is authorised to carryon or engage in or any business or transaction capable of being conducted so as directly or

indirectly be benefit this Company.

18. To carryon the business of banking in all its branches and departments, including the borrowing, raising or taking up

money, the lending or advancing money on securities and property, the discounting, buying, selling and dealing in

bills of exchange, promissory notes, coupons, drafts, and other instruments and securities whether transferable or

negotiable or not, the granting and issuing of letters of credit and circular notes, the buying, selling and dealing with

stocks, funds, shares, debentures, debenture-stock, bonds, obligations and other securities.

19. To lend money, either with or without security, and generally to such persons and upon such terms and conditions as

the Company may think fit.

20. To take or otherwise acquire and hold shares in any other company or carrying on any business capable of being

conducted so as directly or indirectly to benefit the Company.

21. To promote any company or companies for the purpose of acquiring all or any of the property, rights and liabilities of

this Company or for any other purpose which may seem, directly or indirectly, calculated to benefit this Company.

22. To invest and deal with the moneys of the Company not immediately required upon such securities and in such

securities and in such manner as may from time to time be determined.

23. To guarantee the payment of moneys unsecured or secured by or payable under or in respect of promissory notes,

bonds, debentures, debenture- stock, contracts, mortgages, charges, obligations, instruments, and securities of any

company or of any authority, supreme, municipal, local or otherwise or of any persons whomsoever, whether

incorporated or not incorporated, and generally to guarantee or become sureties for the performance of any contracts

or obligations.

24. To adopt such means of making known the products of the Company as may seem expedient and in particular by

advertising in the press, by circulars, by purchase and exhibition of works of art or interest, by publication of books

and periodicals and by granting prizes, rewards and donations.

25. To aid, pecuniarily or otherwise, any association, body or movement having for an object the solution, settlement, or

surmounting of industrial or labour problems or troubles or the promotion of industry or trade.

26. To establish and support, or aid in the establishment and support of associations, institutions, funds, trusts and

convenience calculated to benefit employees of the Company or its predecessors in business or the dependent or

connections of such persons and to grant pensions and allowances and to make payments towards insurance and to

subscribe or guarantee money for charitable or benevolent objects or for any exhibition for any public, general or

useful objects.

112


27. To borrow or raise or secure the payment of money in such manner as the Company shall think fit and in particular

by the issue of debentures or debenture stock, perpetual changed upon all or any, of the Company’s property (both

present and future), including its uncalled capital and to purchase, redeem and payoff any such securities.

28. To remunerate any persons or company for services rendered, or to be rendered, in placing or assisting to place, or

guaranteeing the placing of, any shares in the Company’s capital or any debentures, debenture stock or other securities

of the Company or in or about the formation or promotion of the company or the acquisition of property by the

Company or the conduct of its business.

29. To draw, make, accept, discount, execute and issue bills of exchange, Government of India and other promissory

notes, bills of lading, warrants, debentures and other negotiable or transferable instruments or securities.

30. To undertake and execute any trust, the undertaking of which may seem to the company desirable, and either

gratutiously, or otherwise.

31. To sell or dispose of the undertaking of the Company or any part thereof for such consideration as the Company may

think fit and in particular for shares, debentures or securities of any other company.

32. To sell, improve, manage, develop, exchange, lease, mortgage, dispose of, turn to account or otherwise deal with all

or any part of the property and rights of the Company.

33. To distribute all or any of the property of the Company among the members in specie or kind.

34. To do all or any of the above things, either as principals, agents, trustees, contractors, or otherwise, and either alone

or in conjunction with others, and either by or through agents, sub-contractors, trustees, or otherwise, and either

alone or in conjunction with others and to do all such things as are incidental or conducive to the attainment of the

above objects.

The Directors on the Board of AAL are:


1. Shri J. H. Dalmia Promoter, Non-Executive Director 00009717

2. Shri K. V. Mohan Independent, Non- Executive Director 00006842

3. Shri C. N. Maheshwari Independent, Non- Executive Director 00125680

Authorized Capital: The authorized share capital of the Company is Rs.10000000 divided in to 1000000 Equity shares

of Rs. 10 each.

Brief Audited Financials of AAL are as follows:

(Amount in Rs. Lacs)

Particulars March 31, March 31, March 31,

2007 2008 2009






Earning per Share (In Rs.) 1.31 38.92 1.33

NAV (In Rs.) 15.74 54.66 55.99

113


Shareholders Details: ALIROX ABRASIVES LIMITED

Statement showing Shareholding Pattern


Category Category No. of Total No. of Total shareholding Shares Pledged or

Code of share- share- No. of shares as a percentage otherwise encumbered

holder holders shares held in of total number

demater- of shares

ialized

form

As a As a Number As a

percentage percentage of Shares percentage

of (A+B) of (A+B+C)

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)= (VIII)/

(IV)*100

(A) Promoter and

Promoter Group

(1) Indian

(a) Individuals/Hindu 8 73900 - 30.79 30.79 - -

Undivided Family

(b) Central Government/ - - - - - - -

State Government(s)

( c) Bodies Corporate 7 79370 - 33.07 33.07 - -

(d) Financial Institutions/ - - - - - - -

Banks


Sub-Total (A)(1) 15 153270 - 63.86 63.86 - -

(2) Foreign



Foreign Individuals




Sub-Total (A)(2) - - - - - - -

Total Shareholding

of Promoter and

Promoter Group - - -

(A)=(A)(1)+(A)(2) 15 153270 - 63.86 63.86 - -


(1) Institutions


114


(b) Financial Institutions/ - - - - - - -

Banks

(c) Central Government/ - - - - - - -

State Government(s)




Investors

(g) Foreign Venture - - - - - - -

Capital Investors


Sub-Total (B)(1) - - - - - - -


(a) Bodies Corporate 4 25340 Nil 10.56 10.56 - -

(b) Individuals -

(i) Individual shareholders


capital upto Rs.1 lac. 133 50890 Nil 21.20 21.20 - -

(ii) Individual shareholders


capital in excess of 1 10500 Nil 4.38 4.38 - -

Rs.1 lac.

(c) Any Other (specify) - - - - - - -

Sub-Total (B)(2) 138 86730 Nil 36.14 36.14 - -

Total Public 138 86730 Nil 36.14 36.14 - -

Shareholding

(B)=(B)(1)+(B)(2) - -

Total ( A)+(B) 153 240000 Nil 100.00 100.00 - -


Custodians and

against which

Depository Receipts

have been issued

GRAND TOTAL

(A)+(B)+( C) 153 240000 Nil 100.00 100.00 - -

115


Statement showing Shareholding of persons belonging to the category “Promoter and Promoter Group


Sr. Name of the Total shares held Shares Pledged or otherwise encumbered

No. Number

Number As a Number As a As a

percentage percentage percentage

of grand (VI)=(V)/ of grand

total (III)*100 total of

(A) + (B)+ (C) (A) + (B)+ (C)

of sub clause

I(a)


1 Mayuka Investment Ltd. 21550 8.98 - - -

2 Kavita Trading & Investment 18700 7.79 - - -

Co. Pvt. Ltd.

3 Sh. Jai Hari Dalmia 14500 6.04 - - -

4 Sh. Yadu Hari Dalmia 14400 6.00 - - -

5 Shree Nirman Limited 11950 4.98 - - -

6 Smt. Kavita Dalmia 11000 4.58 - - -

7 Smt. Bela Dalmia 11000 4.58 - - -

8 Puneet Trading & Investment 10920 4.55 - - -

Co. Pvt. Ltd.

9 Rama Investment Co. Pvt. Ltd. 10000 4.17 - - -

10 Shri Puneet Dalmia 7200 3.00 - - -

11 Shri Gautam Dalmia 7200 3.00 - - -

12 Smt. Anupama Dalmia 4300 1.79 - - -

13 Smt Avantika Dalmia 4300 1.79 - - -

14 Sita Investment Co. Ltd. 4100 1.71 - - -

15 Ankita Pratisthan Ltd. 2150 0.90 - - -

Total 153270 63.86 - - -

Statement showing Shareholding of persons belonging to the category “Public and holding more than 1% of the

total number of shares

Sr. Name of the shareholder Number Shares as a percentage

No. of shares of total number of shares

{I.e.,GrandTotal

(A)+(B)+( C)

indicated in Statement at

para (1)(a) above.}

1 Sh. Shrey Mittra 10500 4.38

2 Radar Commercials Private Limited 10000 4.17

3 Chicky Traders Private Limited 9650 4.02

4 Shri Bhole Prasad 7800 3.25

5 Amrapalli Housing Properties Pvt. Ltd. 5550 2.31

6 Smt. Savita Joshi 4000 1.67

7 Smt. Sushila Devi Agarwal 3500 1.46

Total 51000 21.26

116




1 Mayuka Investment Ltd 21550 8.98

2 Kavita Trading & Investment Co. Pvt. Ltd 18700 7.79

3 Sh. Jai Hari Dalmia 14500 6.04

4 Sh. Yadu Hari Dalmia 14400 6.00

5 Shree Nirman Ltd 11950 4.98

6 Smt. Kavita Dalmia 11000 4.58

7 Smt. Bela Dalmia 11000 4.58

8 Puneet Trading & Investment Co. Pvt. Ltd. 10920 4.55

9 Sh. Shrey Mittra 10500 4.38

10 Radar Commercials Private Limited 10000 4.17

Total 134520 56.05

Details about Prices of Shares: The shares of AAL are listed on Delhi Stock Exchange Limited.The Higest and Lowest

prices of the shares of the Company is not available since the shares of the Company are not frequently traded.






4 Issue of duplicate/re-validated dividend/ Nil Nil Nil

interest warrants




Total Nil Nil Nil


securities in the preceding three years.



Act, 1995.



4. Ankita Pratisthan Limited (APL):

APL was incorporated on January 31, 1983 under the Companies Act, 1956. APL received certificate of commencement

of business on February 08, 1983. The Registered Office of the company is situated at 2, Waterloo Street, Kolkata-

700069. The Company is a registered NBFC. Its RBI registration no. is 05.02482 It is engaged in Investment Business.

The shares of APL are listed on Uttar Pradesh Stock Exchange Association Limited. The company has, however,

initiated the process of getting itself delisted from the said stock exchange vide resolution passed in Board meeting

dated October 16, 2008 and EGM dated November 12, 2008.

117



1. To carry on the business of an investment company and to invest the capital and other moneys of the Company in thepurchase or upon the security of shares, stocks units, debentures, debenture stock, bonds, mortgages, obligations andsecurities of any kind issued or guaranteed by any company, corporation or undertaking of whatever nature, whetherincorporated or otherwise and where-soever constituted or carrying on business, and to buy, sell or otherwise deal inshares, stocks, debentures, debentures stock, bonds, notes, mortgages, obligations and other securities issued orguaranteed by any government, governing ruler, commissioners, trust, municipal, local or other authority or body ofwhatever nature in India or abroad.

2. To acquire, hold, sell, buy, or otherwise deal in any shares, stocks, debentures, debenture stock, bonds, mortgages,obligations and other securities by original subscription, syndicate participation, tender, purchase, exchange, gift orotherwise and to subscribe for the same, either conditionally or otherwise and to underwrite or sub-underwrite orguarantee the subscription thereof and to purchase and sell units.

3. To carry on all or any of the business of financiers of industrial, commercial and other enterprises and generalfinanciers, film financiers, producers and distributors and exhibitors, money-lenders, sahukars, trustees real estateowners, land lords real estate agents builders, underwriters, guarantors, hire-purchase dealers, investors, promoters,securities, bonds, obligations, claims, licences and charges, land, buildings, houses, easements negotiable instruments,decrees, book-debts, patents, factories, mines, industrial undertaking, business concerns, warehouses property andrights of all kinds, agricultural units, shops and godowns, business of insurance agents, trust company, safe depositecompany and such other business and acts required in connection therewith, to receive or deposite or borrow andraise money and to lend or deal with the money either with or without interest or security provided the company shallnot carry on the business of Banking as defined under the Banking Regulation Act, 1949.

4. To carry on the business as dealers, owners and investors in land, building, factories for which purpose to acquire andpurchase, take on lease tenancy or in exchange, hire or by other means obtained ownership and/or options over anyfreehold or other property for the said estate or interest thereof any rights, privileges or easements over or in respectof any property, land or any building and to turn into account, develop the same and dispose of or maintain the sameand to build township, markets, or other buildings or conveniences thereon and to equip the same or any part thereofwith all or any amenities or conveniences, drainage facility, electric, air-conditioning, telegraphic, telephonic, televisioninstallations and to deal with the same in any manner whatsoever and to build, take on lease and/or on rent, purchase

or acquire in any manner whatsoever any departments houses, flats, rooms, floors, huts or other accommodation and

to let or dispose of the same on instalments basis, hire purchase basis or by out right sale whether by private treaty or

by auction or in any other mode of disposition all or any integral part thereof.

The Directors on the Board of APL are:


1. Shri Puneet Dalmia Promoter, Non - Executive Director 00022633

2. Shri O.P. Jhunjhunwala Independent, Non- Executive Director 00328769

3. Shri C.N Maheshwari Independent, Non- Executive Additional Director 00125680

Authorized Capital: The authorized share capital of the Company is Rs.17610000 divided in to 1011000 Equity shares of

Rs. 10 each and 75000 Preference Shares of Rs. 100/- each.

Brief Audited Financials of APL are as follows:

(Amount in Rs. Lacs)


2007 2008 2009







NAV (In Rs.) 53.64 180.36 166.49

118



ANKITA PRATISTHAN LIMITED

Statement showing Shareholding Pattern


Category Category No. of Total No. of Total shareholding Shares Pledged or

Code of share- share- No. of shares as a percentage of otherwise encumbered

holder holders shares held in total number

demater- of shares

ialized

form



of (A+B) of (A+B+C)

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)= (VIII)/

(IV)*100

(A) Promoter and

Promoter Group

(1) Indian

(a) Individuals/Hindu

Undivided Family 4 71910 - 10.09 10.09 - -

(b) Central Government/

State Government(s) - - - - - - -

(c) Bodies Corporate 7 480035 62554 67.34 67.34 - -

(d) Financial Institutions/ - - - - - - -

Banks


Sub-Total (A)(1) 11 551945 62554 77.43 77.43 - -

(2) Foreign



Foreign Individuals




Sub-Total (A)(2) - - - - - - -

Total Shareholding - - -

of Promoter and

Promoter Group

(A)=(A)(1)+(A)(2) 11 551945 62554 77.43 77.43 - -


(1) Institutions


(b) Financial Institutions - - - - - - -

/Banks

119


(c) Central Government/ - - - - - - -

State Government(s)




Investors

(g) Foreign Venture - - - - - - -

Capital Investors


Sub-Total (B)(1) - - - - - - -

(2) Non-institutions -

(a) Bodies Corporate - - - - - - -

(b) Individuals -

(i) Individual shareholders


capital upto Rs.1 lac. 345 160855 470 22.57 22.57 - -

(ii) Individual shareholders - - - - - - -


capital in excess of

Rs.1 lac.

(c) Any Other (specify) - - - - - - -

Sub-Total (B)(2) 345 160855 470 22.57 22.57 - -

Total Public

Shareholding

(B)=(B)(1)+(B)(2) 345 160855 470 22.57 22.57 - -

Total ( A)+(B) 356 712800 63024 100.00 100.00 - -



which Depository

Receipts have been

issued

GRAND TOTAL

(A)+(B)+(C) 356 712800 63024 100.00 100.00 - -

Note: shares held in different folios have been clubbed together.

Sr. Name of the shareholder Total shares held Shares Pledged or otherwise encumbered

No

Number As a Number As a As a

percentage percentage percentage

of grand (VI)=(V)/ of grand

total (III)*100 total

(A) + (B)+ (C) (A) + (B)+ (C)

of sub clause I(a)


1 Rama Investment Co. Pvt. Ltd. 191089 26.81 - - -

120


2 Shree Nirman Limited 77079 10.81 - - -

3 Kavita Trading & Investment Co. Pvt. Ltd. 63564 8.92 - - -

4 Sita Investment Company Limited 28210 3.96 - - -

5 Puneet Trading & Investment Co.Pvt. Ltd. 23280 3.27 - - -

6 Mayuka Investments Ltd. 80813 11.34 - - -

7 Himgiri Commercial Ltd. 16000 2.24 - - -

8 Shri Jai Hari Dalmia 18740 2.63 - - -

9 Shri Yadu Hari Dalmia 18290 2.57 - - -

10 Smt Anupama Dalmia 17440 2.45 - - -

11 Smt Avantika Dalmia 17440 2.45 - - -

Total 551945 77.43 - - -

Statement showing Shareholding of persons belonging to the category “Public and holding more than 1% of the


Sr.No. Name of the shareholder Number of shares Shares as a percentage of


{i.e., GrandTotal (A)+(B)+( C)

indicated in Statement at para (1)

(a) above.}

1 B Goutam Chand 7600 1.07

Total 7600 1.07



1 Rama Investment Co. Pvt. Ltd. 191089 26.81

2 Mayuka Investments Ltd. 80813 11.34

3 Shree Nirman Ltd 77079 10.81

4 Kavita Trading & Investment Co. Pvt. Ltd 63564 8.92

5 Sita Investment Co. Ltd 28210 3.96

6 Puneet Trading and Investment Co. Pvt. Ltd. 23280 3.27

7 Sh. J. H. Dalmia 18740 2.63

8 Sh. Y. H. Dalmia 18290 2.57

9 Smt . Anupama Dalmia 17440 2.45

10 Smt. Avantika Dalmia 17440 2.45

Total 535945 75.21

Details about Prices of Shares: The shares of APL are listed on Uttar Pradesh Stock Exchange Association Limited.The

Higest and Lowest prices of the shares of the Company is not available since the shares of the Company are not frequently

traded.





121



4 Issue of duplicate/re-validated dividend/interest warrants Nil Nil Nil




Total Nil Nil Nil


securities in the preceding three years. However, the Company has made a preferential issue of 14000 6% Non cumulative

redeeemable preference shares of Rs 100 each in the year 2008. It has also issued 199200 equity shares of Rs. 10 each in

lieu of 249000 shares of Kajal (India) Limited and 273600 equity shares of Rs. 10 each in lieu of 240000 shares of Kanodia

Commercial Limited pursuant to their merger into APL.



Act, 1995.



5. Dalmia Cement (Bharat) Limited (DCBL):

DCBL was incorporated on November 1, 1951 under the Companies Act, 1913. DCBL received certificate of

commencement of business on December 26, 1951. The Registered Office of the company is situated at Dalmiapuram-

621651, Dist. Tiruchirapalli (Tamil Nadu). The shares of DCBL are listed on Bombay Stock Exchange Limited,

National Stock Exchange of India Limited and Madras Stock Exchange Limited. It is engaged in Cement and Sugar

Business.

The Main objects of the Company are as under:

The objects for which the Company is established are all or any of the following including acquiring and taking over as a

going concern the business now carried on in India, under the style of Dalmia Cement Limited and all or any of the

assets and liabilities of that business in connection therewith and with a view thereto to enter into an arrangement and

agreement on such terms and conditions as may be agreed upon and to carry the same into effect with or without

modification.

1. To produce, manufacture, purchase, refine, prepare, import, export, sell and generally to deal in cement, portland

cement, alumina cement, lime and limestone, kankar and/or by products thereof and building materials generally and

in connection therewith to acquire, erect, construct, establish, operate and maintain cement factories, limestone

quarries, workshops and other works.

(1-A) To organise and effect export from and import into India of all classes, types, varieties and categories of

goods and commodities and to undertake the purchase, sale and transport of and general trade in such goods

and commodities in India or anywhere else in the world.

(1-B) To barter, exchange, pledge, manipulate, treat, manufacture and deal in merchandise, commodities and

articles of all kinds and to carry on any kind of commercial and/or financial business.

(Clauses 1-A and 1-B added as per Special Resolution passed on 28-6-1963 which was confirmed by Order of

Madras High Court dated 28-2-1964 in Company Petition No.66 of 1963)

2. To produce, manufacture, treat, purchase, sell or otherwise deal with either as Principal or Agents either solely or in

partnership with others:-

(a) Cement, alumina cement, lime, plaster of Paris and other building materials of all kinds;

(b) Chemicals of all kinds including acids, alkalis and salts, manures, fertilizers, dyes, caustic soda, soda ash,

sulphur, dry ice, catechu;

(c) Cotton, silk, artificial silk, woollen, linen, jute, hemp goods;

122


(d) Food stuffs, such as sugar, tinned fruits, biscuits, cheese, butter, condensed milk, chocolates, aerated waters;

(e) Printing presses, types, papers, inks, stationery, pens, fountain pens, books, cardboards and all kinds of printing

materials;

(f) Celotex, asbestos, building boards to be used in ceiling, floor or walls, made from any fibrous materials such as

bagasse, bamboo, wood, paper, jute, hemp, etc.

(2-A)To produce, mine, manufacture, treat, purchase, sell or otherwise deal with:-

(a) Bricks, Tiles, Pipes, Pottery, Earthenware, Sanitary Ware, China and Terracotta, Dolomite, Sulphur Pyrites,

Graphite, Refractories and Ceramic Ware of all kinds;

(b) Fire clay, China clay, Magnesite, Quertizite and all other refractory materials.

(2-B)To carry on the business of iron founders, steel founders, non-ferrous metal founders, mechanical engineers, structural

engineers, electrical engineers, manufacturers of cast iron and steel pipes, manufacturers of grinding medias,

manufacturers of agricultural implements and other machineries, tool makers, metal workers, boiler makers, mill

wright, machinist, iron and steel converters, smith, wood workers, builders, painters, metallurgists, water supply

engineers, gas makers, farmers, printers, carriers and merchants, and to buy, sell, manufacture, repair, convert, alter,

let on hire and deal in machineries, implements, rolling stocks and hard-ware of all kinds, and to carry on any other

business (manufacturing or otherwise) which may seem to the Company capable of being conveniently carried on in

connection with the above, or otherwise calculated directly or indirectly, to enhance the value of any of the Company’s

property and rights for the time being.

(2-C)To acquire Bauxite Mines and to carry on the trade or business of manufacturers of abrasives in all forms and of

alumina, aluminium and all derivatives therefrom.

(Clauses 2A, 2B & 2C added as per Special Resolutions passed on 15-9-1955 which were confirmed by Order of

Madras High Court dated 13-2-1956 in O.P. NO.348 of 1955.)

3. To plant, cultivate and purchase all kinds of foodstuffs, oil seeds, vegetables, fruits, grass, timber, wood, bamboo,

straw, cotton, jute, flex, hemp, sugarcane and other articles that are the produce of land and to sell, purchase and deal

in the same as Principals or Agents.

4. To search for, get, work, make merchantable, sell and deal in iron, coal, ironstone, limestone, manganese, zinc,

aluminium, tin, copper, silver, gold, cobalt, mica, nickel, clay, fireclay and other metals, minerals and substances and

to buy, sell, manufacture and deal in minerals and mineral products, plant and machinery capable of being used in

connection with mining or metallurgical operations or required by workmen and others employed by the Company.

5. To carry on the business of Water Works Company in all its branches and to sink wells and shafts and to make and

maintain reservoirs, water works, cisterns and do all other works necessary for distributing and dealing in water.

6. To carry on the business as distillers, dye makers, gas makers, metallurgists, mechanical engineers, ship-owners,

charterers, carriers by land and by sea, wharfingers, warehousemen, barge-owners planters and weavers.

7. To acquire by concession, grant, purchase, barter, lease, license or otherwise any houses, lands, zamindaris, farms,

and to construct, carry out, improve, manage any hats markets, bustees, railways, and other works which may seem

directly or indirectly conducive to any of the objects of the company and to contribute, to subsidise or otherwise take

part in any such operations.

8. To acquire by lease, grant assignment, purchase, exchange, concession, barter, license or otherwise, either absolutely

or conditionally and either solely or jointly with others any houses, estates, lands, villages, hills, quarries, easements,

water rights, way-leaves, privileges, rights, hereditaments, trade marks, patents, inventions, limestone rocks, lime

and kanker deposits, mines, veins, hoards of other minerals, substances and things having cohesive properties,

machinery, plant utensils, railways, tramways, locomotives, factories and any other movable or immovable properties

situated either in a Native State or in India, or abroad or elsewhere, from Governments, private persons, landed

proprietors, ruling princes, Rajas, Nawabs, Taluqdars, and individual firms, companies or corporations.

8-A. To carry on the business of purchasing or otherwise acquiring, maintaining, letting on lease or hire or hire purchase

basis, or selling in any part of India or abroad, all kinds of machinery, plants, tools, jigs and fixtures, agricultural

machinery, ships, trawlers, vessels, barges, automobiles and vehicles of every kind and description, computers,

office equipments, hotel equipments, medical equipments, household equipments of every kind, construction machinery

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of all types and description, air-conditioning plants and equipments, cold storage and ice plants, air crafts, electric

installations and electronic equipment of all kinds and description, land, building and real estate and to render leasing

consultancy and advisory services.

(Clause 8-A added as per Special Resolution passed on 25-9-1991,and confirmed by Order of Company Law Board

bench, Southern Region dated 27-5-1992)

9. To carry on the business of an Electricity producing and distributing company, to manufacture bulbs, wires, cables,

dynamos, motors, fans, stoves, batteries, refrigerators, cells and all other electrical goods; to carry on all sorts of

electric installation work, including installation of telephones, radios, etc.

9-A. To carry on the business in India or elsewhere in the world, of manufacturers, assemblers, processors, fabricators,

testers, designers, consultants, programmers, importers, exporters, buyers, sellers, hirers, renters, distributors, agents

and dealers of all kinds of descriptions of electronic, electrical electro - mechanical, telecommunication, computers,

Computer peripherals and storage media products, apparatus materials, components, systems, sub-systems, parts

and things (whether for Industrial, business, house-hold, entertainment or otherwise) including control applications,

electronic circuits, printed circuit boards, integrated circuits, transformers, conductors, semiconductors, resistors,

capacitors, inductors, coils, connectors, display devices, speakers, magnetic materials including ferrites, micro wave

components, projects, video games, tapes, discs, fittings, switches, entertainment electronic equipments, televisions,

transistors, receivers, accounting and business machines, space research equipments, computer-hardwares, softwares

and peripherals thereto.

(Clause 9-A added as per Special Resolution passed on 23-12-1989 and confirmed by Order of Company Law Board

Bench, Southern Region, dated 19-9-1989 in C.P.No.103/17/SRB/89.)

9-B. To carry on the business, in India or elsewhere in the world, of designing, developing, importing, procuring, selling,

providing, dealing in, exporting providing consultancy, licensing (whether ready of future delivery) and marketing

(whether directly or through third parties) information technology services, desktop system management, application

software services, network related services, site services, information kiosk services, value added network services,

managed operations, international procurement operations and to establish, maintain conduct customer, software

training centre, and programming based education centres and programmes in the field of information technology

and related areas.

(Clause 9-B added by the Shareholders in their Annual General Meeting held on 26-08-1999 by way of a Special

Resolution)

10. To acquire and deal with the business, property and liabilities of any company, firm or person carrying on any

business within the objects of this company.

11. To acquire and deal in shares or stock or securities in or of any company or undertaking, the acquisition of which may

promote or advance the interests of the Company.

12. To acquire and deal with patents, patent rights or inventions, processes, devices, trade marks, formulate and other

rights.

13. To do or perform all or any of the following operations, acts or things:

(a) To pay all the costs, charges and expenses incidental to the promotion, formation, registration and establishment

of the Company and the issue of its capital, including underwriting or other commission, broker’s fees and

charges in connection therewith, and to remunerate or make donations to (by cash or other assets or by the

allotment of fully or partly paid shares or by a call or option on shares debentures, debenture-stock or securities

of this or any other company, or in any other manner whether out of the Company’s capital or profits or

otherwise) any person or persons for services rendered or be rendered in introducing any property or business

to the Company or in placing or assisting to place or guaranteeing the subscription of shares, debentures,

debenture-stock, or other securities of the Company, or for any other reason which the company may think

proper.

(b) To make experiments in connection with any business of the Company and to protect any inventions of the

Company by letters-patent or otherwise.

(c) To sell, let, dispose of or grant rights over all or any property of the Company.

124


(d) To manufacture plant, machinery, tools, goods and things for any of the purposes of the business of the Company.

(e) To underwrite shares, stock or securities of any other company and to pay underwriting commission and brokerage

on any shares, stock or security issued by the Company.

(f) To draw, accept and negotiate bills of exchange, promissory notes and other negotiable instruments.

(g) To lend money, with or without security, and to invest money of the Company in such manner as the Directorsthink fit.

(h) To borrow money or to receive money on deposit for the purpose of financing its business either withoutsecurity or secured by debentures, debenture-stock (perpetual or terminable) mortgage or other security chargedon the undertaking of all or any of the assets of the Company including uncalled capital.

(i) To promote companies.

(i-1) To carry on the business of Consultants and/or Advisors to and for the benefit of any person, firm, company,corporation, body-corporate, trust, institution, association, society or any other organisation whatsoever relatingto Cement Industries and to render consultancy, advisory and other services.

(i-2) To acquire by amalgamation or merger any company or body corporate, and to amalgamate with any othercompany or body corporate.

(Clause (i-1) and (i-2) added as per Special Resolution passed on 27-10-1979, which was confirmed by order ofCompany Law Board bench, Southern Region, Dated 11-8-1981 after adding the words in italics.)

(j) To enter partnership or into any arrangement for sharing profits, co-operation, joint adventure, reciprocal concessionsor otherwise with the Government of India or any native state in India or elsewhere or foreign state or any localGovernment or any municipal or local authority, partnership, person, firm or company carrying on or engaged in orabout to carry on or engaged in any business or transaction which the Company is authorised to carry on or engagedin or any business or transaction capable of being conducted so as directly or indirectly to benefit this Company.

(k) To sell the undertaking and all or any of the property of the company for cash, or for stock shares or securities of anyother company or for other consideration.

(l) To procure Company’s registered or established or authorised to do business as a joint Stock Company with limitedliability in any foreign country or place.

(m) To establish and maintain any agencies in any part of the world for the conduct of the business of the Company, or forthe sale of any materials or things for the time being at the disposal of the Company for sale and to advertise and toadopt means of making known, all or any of the manufactures, products or goods of the Company or any articles orgoods traded or dealt in by the Company, in any way that may be though advisable including the posting of bills inrelation thereto and the issue of circulars, books, pamphlets and price lists, and the conducting of competitions andthe giving of prizes, rewards and donations.

(m-1) To act as agents indentors and/or trustees for any person or company or Government and to undertake andperform subcontracts and to do all or any of the above thing in any part of the world, alone or jointly withothers and either by or through agents, subcontractors, trustees or otherwise.

(Clause 13 (m-1) added as per special resolution passed on June 28, 1963 which was confirmed by order of MadrasHigh Court dated February 28, 1964 in Company petition No. 66 of 1963)

(n) To create any Depreciation Fund, Reserve Fund, Sinking Fund, or any other special fund, whether for depreciation orfor repairing, improving, extending or maintaining any of the property of the Company or for any other purposeconducive to the interest of the Company.

(o) To place, to reserve or to distribute as divided or bonus among the members or otherwise to apply as the Companymay from time to time think fit, any money received by way of premium on shares or debentures issued at a premiumby the Company, and any money received in respect of dividends accrued on forfeited shares and moneys arisingfrom the sale by the Company of forfeited shares or from unclaimed dividends.

(p) To distribute in specie assets of the Company among its members.

(q) To provide for the welfare of persons employed or formerly employed by the Company or any predecessor in business

of the Company and the wives, widows and families of such persons by grants of money or other aid or otherwise as

the Company shall think fit.

(r) To subscribe or otherwise aid benevolent, charitable, national or other institutions or objects of a public character,

and to make donations to such persons and in such cases as may seem expedient.

125


(s) Generally to carry on in any place or places in the world any other trade or business, whether manufacturing or

otherwise, subsidiary or auxiliary to, or which can be conveniently carried on in connection with any of the company’s

objects.

14. To enter into any contract or agreement of guarantee.

15. To guarantee or become sureties for the performance of any agreement or contract of any party or parties or for the

discharge of any duty or obligation of any party or parties or the payment of money by any party or parties.

16. To enter into contracts of indemnity and to indemnify any party or become sureties against any debts, obligations or

liabilities.

The Directors on the Board of DCBL are:


1. Shri P. K. Khaitan Non- Executive Chairman 00004821

2. Shri Ghyanendra Nath Bajpai Independent Director 00946138

3. Shri N. Gopalaswamy Non- Executive Director 00017659

4. Shri T. Venkatesan Executive Whole Time Director 00124050

5. Shri J. H. Dalmia Executive Vice- Chairman 00009717

6. Shri Y. H. Dalmia. Executive Vice Chairman 00009800

7. Shri Puneet Dalmia Executive Managing Director 00022633

8. Shri Gautam Dalmia Executive Joint Managing Director 00009758

9. Shri M. H. Dalmia Non- Executive Director 00009529

10. Shri J. S. Baijal Independent Director 00049565

11. Shri M. Raghupathy Independent Director 00012997

12. Shri Donald M. Peck Independent Director 00140734

Authorized Capital: The authorized share capital of the Company is Rs.400000000 divided in to 114726820 ordinary

shares of Rs. 2/- each and 85273180 Unclassified Shares of Rs. 2/- each.

Brief Audited Financials of DCBL are as follows:

(Rs. In lacs)


2007 2008 2009







NAV (In Rs.) 157.96 132.95 148.95

126



Name of the Company : DALMIA CEMENT (BHARAT) LIMITED

Quarter ended : 31.03.2009

(1)(a) Statement showing Shareholding Pattern

Category Category of Shareholder No. of Total No. of Total Shares Plegded

Code Share No. of Shares shareholding as a or otherwise

holders Shares held in percentage of encumbered

Demate total no. of shares

rialize

Form



of (A+B) of (A+B+C)

(A) Shareholding of Promoter and

Promoter Group

-1 Indian

(a) Individuals/ Hindu Undivided Family 16 5911524 355284 7.3 7.3 NIL NIL

(b) Central Government/State Governments - - - - - NIL NIL

NIL NIL

NIL NIL

(c) Bodies Corporates 11 39571237 7912242 48.89 48.89 NIL NIL

(d) Financial Institutions/Banks - - - - - NIL NIL

(e) Any Other (Specify) - - - - -

Sub -Total (A)(1) 27 45482761 8267526 56.19 56.19 NIL NIL

-2 Foreign NIL NIL

(a) Individuals (Non-Resident Individuals/

ForeignIndividuals) - - - - - NIL NIL

(b) Bodies Corporates - - - - - NIL NIL

(c) Institutions - - - - - NIL NIL

(d) Any Other (Specify) - - - - - NIL NIL

Sub-Total (A)(2) - - - - - N.A N.A

Total Shareholding of Promoter and

Promoter Group 27 45482761 8267526 56.19 56.19 N.A N.A


-1 Institutionsx

(a) Mutual Funds/UTI 1 2500 - - -

(b) Financial Institutions/Banks 26 1795250 1769994 2.22 2.22

(c) Central Government/State Governments 4 128155 59200 0.16 0.16

(d) Venture Capital Funds - - - - -

(e) Insurance Companies 3 1263921 1263921 1.56 1.56

(f) Foreign Institutional Investors 16 1052031 1052031 1.3 1.3

127


(g) Foreign Venture Capital Investors - - - - -

(h) Any Other (Specify) - - - - - N.A N.A

Sub-Total (B)(1) 50 4241857 4145146 5.24 5.24

-2 Non-Institutions - -

(a) Bodies Corporates 369 10869673 10834894 13.43 13.43

(b) Individuals - -

(I) Individual shareholders holding nominal

share capital upto Rs. 1 lac 10872 8509630 5142890 10.51 10.51

(ii) Individual shareholders holding nominal

share capital in excess of Rs. 1 lac 15 1469915 1469915 1.82 1.82

(c) Any Other (Specify) - -

- Overseas Corporate Bodies 5 5245824 5245824 6.48 6.48

- Foreign Corporate Bodies 2 4470588 4470588 5.52 5.52

- Non Resident Indians 82 128745 63249 0.16 0.16

- Foreign Nationals 15 19655 - 0.02 0.02

- Custodian of Enemy Property 140 188303 - 0.23 0.23

- Trusts 6 62450 62450 0.08 0.08

- Clearing Members 24 229379 229379 0.28 0.28 - -

- Directors and their relatives # 3 20523 20523 0.03 0.03 N.A N.A

Sub-Total (B)(2) 11533 31214685 27539712 38.57 38.57 - -

Total Public Shareholding 11583 35456542 31684858 43.81 43.81 N.A N.A

(B) = (B)(1)+(B)(2)

Total (A)+(B) 11610 80939303 39952384 100.00 100.00 - -

(C) Shares held by Custodians and against - - -

which Depository Receipts have been

issued

GRAND TOTAL(A)+(B)+(C ) 11610 80939303 39952384 100.00 100.00

# Since the Directors of the Company do not exercise control over the Company, the shareholding of Directors and

their relatives has been shown under the category Public Shareholding.

Statement showing Shareholding of persons belonging to the category “Promoter and Promoter Group”

Sr. Name of the Shareholder No. of Shares Shares as a percentage of

No. total no. of shares {I.e. Grand

Total (A)+(B)+(C) indicated in

Statement at para (1)(a) above

(a) Individuals/Hindu Undivided Family

1 Shri V. H. Dalmia 9044 0.01

2 Smt. Abha Dalmia 1000 0.00

3 Shri Jai Hari Dalmia 1635010 2.02

4 Smt. Kavita Dalmia 301870 0.37

5 Shri Gautam Dalmia 677290 0.84

128


6 Smt. Anupama Dalmia 11250 0.01

7 Ku. Vadehi Dalmia 37180 0.05

8 Ku. Sukeshi Dalmia 37180 0.05

9 Shri Jai Hari Dalmia C/o J. H. Dalmia (HUF) 315175 0.39

10 Shri Yadu Hari Dalmia 602380 0.74

11 Smt. Bela Dalmia 553495 0.68

12 Shri Puneet Dalmia 742055 0.92

13 Smt. Avantika Dalmia 660265 0.82

14 Ku. Shrutipriya Dalmia C/o Shrutipriya Dalmia Trust 86665 0.10

15 Shri Yadu Hari Dalmia C/o Y. H. Dalmia (HUF) 241005 0.30

16 Shri R. H. Dalmia C/o R. H. Dalmia Parivar Trust 660 0.00

5911524 7.30

(b) Bodies Corporate :

1 Mayuka Investment Limited 16407477 20.27

2 Shree Nirman Limited 6540130 8.08

3 Sita Investment Company Limited 5876800 7.26

4 Keshav Power Private Limited 1001000 1.24

5 Ankita Pratisthan Limited 5829070 7.20

6 Rama Investment Company Private Limited 2644985 3.27

7 Himgiri Commercial Limited 738265 0.91

8 Kavita Trading & Investment Co. Pvt. Ltd. 300570 0.37

9 Puneet Trading and Investment Co. Pvt. Ltd. 109080 0.14

10 Alirox Abrasives Limited 120360 0.15

11 Valley Agro Limited 3500 0.00

39571237 48.89

Note :- The shares held by a shareholder under different folios have been clubbed together.

(1)(c) Statement showing Shareholding of persons belonging to the category “Public” and holding more than 1% of the

total no. of shares

Sr. No. Name of the Shareholder No. of Shares Shares as a percentage of

total no. of shares {I.e. Grand

Total (A)+(B)+(C ) indicated

in Statement at para (1)

(a) above

1 Boron India Limited 3576470 4.42

2 Horsell Investments Limited 1844785 2.28

3 Dharti Investments and Holdings Limited 1739844 2.15

4 Camberley Investments Limited 1409020 1.74

5 Life Insurance Corporation of India 1259685 1.56

6 Jubiliant Enterprises Private Limited 987326 1.22

7 Boron South Asia Limited 894118 1.10

8 The Oriental Insurance Company Limited 884361 1.09

12595609 15.56

129



Name of Shareholder No. of Shares % of Total shareholding

Mayuka Investment Limited 16407477 20.27

Shree Nirman Limited 6540130 8.08

Sita Investment Company Limited 5876800 7.26

Ankita Pratisthan Limited 5829070 7.20

Boron India Limited 3576470 4.42

Rama Investment Company Private Limited 2644985 3.27

Horsell Investments Limited 1844785 2.28

Dharti Investments and Holdings Limited 1739844 2.15

Shri Jai Hari Dalmia 1635010 2.02

Camberley Investments Limited 1409020 1.74

Details of Prices of Shares:


The shares of DCBL are listed on Bombay Stock Exchange Limited, National Stock Exchange of India Limited and

Madras Stock Exchange Limited.

The stock market data as available on the website of the National Stock Exchange of India Limited is mentioned hereunder:

High Low



Traded (Rs. in Lacs) Traded (Rs. in Lacs)

Dec 2008 17/12/2008 89 15167 13.09 11/12/2008 68.25 15965 11.33

Jan 2009 06/01/2009 89 68589 57.23 09/01/2009 73.10 6798 5.31

Feb 2009 17/02/2009 86.70 53763 44.52 03/02/2009 74.00 13169 10.35

Mar 2009 26/03/2009 79.80 89045 70.69 06/03/2009 71.30 43447 31.47

April 2009 16/04/2009 106.85 19946 19.81 01/04/2009 77.50 7434 5.98

May 2009 29/05/2009 142 383996 514.51 12/05/2009 88.10 3443 3.29

The stock market data as available on the website of the Bombay Stock Exchange Limited is mentioned hereunder:

High Low



Traded (Rs. in Lacs) Traded (Rs. in Lacs)

Dec 2008 26/12/2008 90.00 1156 0.90 02/12/2008 67.20 9728 7.14

Jan 2009 07/01/2009 91.90 13414 10.97 13/01/2009 73.55 942 0.73

Feb 2009 17/02/2009 86.90 13666 11.26 24/02/2009 75.50 2568 2.00

March 2009 30/03/2009 82.45 203766 164.88 06/03/2009 71.65 9131 6.64

April 2009 16/04/2009 104.40 21205 21.01 01/04/2009 78.50 2804 2.24

May 2009 29/05/2009 142.70 222954 299.90 05/05/2009 89.50 12551 11.92

130


COMPLAINTS REPORT FOR THE PERIOD 01/04/2009 TO 31/05/2009

SUB_CODE DESCRIPTION RECEIVED RESOLVED PENDING

DW09 NON RECEIPT OF DIVIDEND WARRANTS 10 10 0

SH15 NON RECEIPT OF DUP/TRANSMISSION/

DELITION OF SCS 1 1 0

SH16 NON RECEIPT OF SECURITIES 7 7 0

SH21 NON RECEIPT OF FRESH/NEW SECURITIES 3 3 0

TOTAL 21 21 0


securities in the preceding three years.



Act, 1995.



Related Business Transactions:

The company is having a job work arrangement with Shri Nataraj Ceramic and Chemical Industries Limited under which

job work charges of Rs. 1417.52 lacs have been paid during the year 2008-09.

131


MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIALS

The following is the discussion of the financial condition and results of operations together with the Company’s audited

restated financial statements for the fiscal years ended March 31, 2005, 2006, 2007 ,2008 and 2009 including the

significant accounting policies and notes thereto and reports thereon which appear elsewhere in this Letter of Offer.

These financial statements have been prepared in accordance with Indian GAAP, the Companies Act and as required

under the SEBI Guidelines.

Unless indicated otherwise, the financial data in this section is derived from the Company’s restated unconsolidated

financial statements prepared in accordance with Indian GAAP and included in this Letter of Offer. The Company’s

fiscal year ends on March 31 of each year, so all references to a particular fiscal year are to the 12 month period ended

March 31 of that year. This discussion contains forward-looking statements that involve risks and uncertainties. The

actual results may differ from those projected in the forward-looking statements. Factors that might cause future results

to differ significantly from those projected in the forward-looking statements include, but are not limited to, those discussed

below and elsewhere in this Letter of Offer, particularly under “Risk Factors” beginning on page no. viii of this Letter of

Offer.

i. OVERVIEW OF THE BUSINESS OF THE COMPANY

Shri Nataraj Ceramic and Chemical Industries Limited was originally incorporated Dalmia Ceramic Industries

Limited on June 21, 1973, under the Companies Act, 1956, with the Registrar of Companies, Tamil Nadu, vide

Certificate of Incorporation No. 18-06372. Mr. M. Satyanarayana, Mr. N. Ramaswamy Ayyar, Mr. Y.H. Dalmia,

Mr. P.V. Krishnan, Mr. B.V. Raju, Mr. K.R. Nagarajan and K.Sitaraman were the subscribers to the Memorandum

and Articles of Association.

The name of the Company was changed to Shri Nataraj Ceramic and Chemical Industries Limited, and a fresh

Certificate of Incorporation issued on November 01, 1983 by the Registrar of Companies, Tamil Nadu at Chennai

(then Madras). The Company has its registered office at Dalmiapuram, P.O. Kallakudi-621651, Dist. Tiruchirapalli,

Tamil Nadu.

The Company’s manufacturing facilities for refractory bricks are located at Dalmiapuram, P.O. Kallakudi-621651,

Dist. Tiruchirapalli, Tamil Nadu, at Jam Nagar, Dwarka Road, Jam-Khambalia, Gujarat, 361305 and 23-27 and

29A, G.I.D.C, Wankaner, Distt. Rajkot, Gujarat.

Manufacturing unit of the company has been running successfully and generating cash profits since inception. The

Company has registered a net sales turnover of Rs. 7452.22 lacs and PAT of Rs. 623.45 lacs for FY 2008-09.

ii. SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR

Save as mentioned herein-below in this Letter of Offer, in the opinion of the Board of Directors of the Company,

there have not arisen any circumstances since March 31, 2009 which materially and adversely affect, or are likely

to materially and adversely affect, the Company’s manufacturing or sales or the profitability of the Company, or the

value of the assets, or the Company’s ability to pay its liabilities within the next 12 months.

iii. FACTORS AFFECTING THE COMPANY’S RESULTS OF OPERATIONS

The financial condition of the Company and its results of operations are affected by numerous factors including the

following:

General economic and business conditions:

The demand for the Company’s products and business is dependent on general economic conditions in India and, may be

affected if there are changes in business conditions in the country. In the era of globalization and cutthroat competition,

the Indian Industry is facing hurdles, which depend upon the following factors:

a. Demand:

The demand for refractories is linked to the GDP Growth. The demand for refractories is influenced by various other

factors like national economic growth, industrial production, promotional expenditure, population growth,

Government’s allocation for the infrastructure sector and government support to the refractories industry for meeting

the growing domestic demand for ceramics and chemicals, enhancing the per capita consumption, achieving economies

of scale and attaining global competitiveness.

132


b. Competition:

Selling prices of the Company’s products may be affected if competition intensifies. After globalization, India was

facing many difficulties, due to competition from various nations and incompetence in the internal governance. Main

threats are from foreign nations. Hence it is necessary to analyze India’s position in global arena.

c. Capacity:

The existing manufacturing activities cover three refractory units with installed capacity of 88000 MT per annum.

d. Raw Material:

Raw material for Company’s refractories unit is mainly Bauxite. Fluctuations in its cost may alter the cost structure

and affect profitability.

e. Other Factors:

The Company’s results of operations are dependent upon its success in managing its inventories. The Company has

to schedule out production process and procurements according to delivery schedule of customers. Any change in

schedule may affect its operation in the short run.

f. Labour:

The refractories Industry is labour intensive. The competitive strength of the Company depends upon the availability

and efficiency of its labour force. The management-labour relations are cordial and the Company has not experienced

any labour trouble in the past.

g. Cost of funds:

Another important problem that is hampering the India’s competitiveness is the cost of funds available for promoting

new projects. The higher cost of funds increases the required rate of return of projects, which consequently impedes

further investment in any projects. Lending rates in India continues to be still higher in comparison to the international

markets. Interest rate is mainly a function of two factors namely underlying liquidity and policies of the RBI, which

in turn is influenced by trends in international rates, external sector scenario and inflation rate.

Key factors influencing results of operations

Several factors influence the Company’s results of operations, financial condition and cash flow significantly. The key

factors affecting its operations include:

1. Fluctuation and increase in raw material prices.

2. New competitive businesses.

3. Government Regulations and Policies.

4. Any slow down in the economic growth.

For more information on these and other factors/developments, which have or may affect the Company, please refer to the

section titled “Risk Factors” beginning on page no. viii, and the section titled “Business Overview” on page no. 38 of this

Letter of Offer.

Critical Accounting Policies

The Company’s financial statements are prepared in accordance with generally accepted accounting principles, the applicable

accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies

Act, 1956. Certain of the accounting policies are particularly important to the portrayal of the financial position and results

of operations and require the application of assumptions and estimates of the management. For further details please refer

to the section titled “Financial Information-Significant Accounting Policies and Notes to accounts” at page nos. 65 and 66

of this Letter of Offer. Some of the important accounting policies are as under.

1. Basis of Preparation of Financial Statement

i. The financial statements have been prepared under the historical cost convention and on the accounting principles

of going concern. Accounting polices not specifically referred to otherwise are in accordance with the generally

accepted accounting principles and materially comply with the mandatory accounting standards issued by the


133


ii. The Company follows mercantile system of accounting and recognise significant items of income and expenditure

on accrual basis.

iii. In order to comply with the requirements of section 211(3C) of the Companies Act, 1956, the Company is

complying with the provisions of the Accounting-Standards issued by the ICAI.

2. Revenue Recognition

Sales are inclusive of Excise Duty and are booked on the basis of dispatches from factory gates.

Fixed Assets and Depreciation

• Fixed Assets are stated at cost of acquisition or construction and include interest on specific borrowings for new

projects upto commissioning.

• Leasehold Land is being amortised over the lease period.

• Depreciation is provided on straight line method for the fixed assets at Dalmiapuram and Khambalia Works and on

written down value method for the fixed assets at New Delhi Office at the rates specified in Schedule XIV to the

Companies Act, 1956.

3. Investments

Long-term Investments are stated at cost. However, provision for diminution in value is made to recognise a decline

other than temporary in the value of investments. Current Investments are stated at cost or fair value, whichever is

lower.

4. Inventories

• Finished goods, Semi-finished goods, Stores, Spares and Raw Materials including materials in transit are

valued at cost or net realisable value, whichever is lower.

• Loose tools are valued at cost.

• Cost is determined using weighted average cost method.

5. Employee Benefits

• Defined Contribution Plan:

Employee benefits in the form of the Company’s contribution to provident fund, pension scheme, superannuation

fund and ESI are considered as defined contribution plan and charged to the profit and loss account of the year

when the contribution to the respective funds are due.

• Defined Benefit Plan:

Retirement benefits in the form of gratuity and leave encashment are considered as defined benefit obligations

and are provided for on the basis of an actuarial valuation as at the date of the balance sheet using the

projected unit credit method which considers each period of service as giving rise to an additional unit of

benefit entitlement and measures each unit separately to build up the final obligation. Past services are

recognized on a straight line basis over the average period until the amended benefits become vested. Obligation

is measured at the present value of estimated future cash flows using a discounted rate that is determined by

reference to market yields at the balance sheet date on Government bonds where the currency and terms of the

Government bonds are consistent with the currency and estimated terms of the defined benefit obligation.

• The expenditure on voluntary retirement schemes is charged to the profit and loss account in the year in

which it is incurred.

6. Excise Duty

Excise Duties recovered are included in the gross sale value of products.

7. Foreign Currency Conversion/Transaction

Foreign currency transactions are recorded on initial recognition at the rate prevailing on the date of transaction.

Where export bills are negotiated with the bank, the export sales are recorded at the rate on the date of negotiation

as the said rate approximates the actual rate on the date of the transaction.

134


Foreign currency monetary items are reported using the closing rate. Exchange differences arising on settlement of

monetary items or on reporting the same at the closing rate as at the balance sheet date are recognized as income or

expense in the period in which they arise.

The premium or discount arising at the inception of forward exchange contract is amortised as an expense or income

over the life of the contract.

8. Impairment of Assets

Impairment losses, if any, are recognised in accordance with the accounting standard issued in this regard by The


9. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the

Balance Sheet date is considered probable. Contingent liabilities are shown by way of Notes to Accounts in respect

of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not

probable. Contingent assets are not recognised in the Accounts.

10. Taxation on Income

Current Tax is the tax payable for the period determined as per the provisions of the Income Tax Act, 1961. The

Provision for deferred tax has been made in accordance with the requirement of Accounting Standard 22 issued by

the Institute of Chartered Accounts of India (ICAI).

COMPARISON OF SIGNIFICANT ITEMS OF INCOME AND EXPENDITURE OF THE COMPANY FOR THE

PAST THREE YEARS IS AS FOLLOWS:

(Rs. In Lacs)

Expenditure Year Ended 31.3.2009 Year ended 31.3.2008 Year ended 31.3.2007

Amt. % Amt. % Amt. %

Sales

Of Products manufactured by

the company 8628.12 6098.16 3992.77

Less: Inter Segment Transfer 790.70 729.29 458.45

7837.42 5368.87 3534.32

Less: Excise Duty 641.37 530.48 371.98

Net Sales 7196.05 96.56 4838.39 92.48 3162.34 95.06

Other Income 251.04 3.37 238.91 4.57 305.96 9.20

Increase/Decrease in Stock 5.13 0.07 154.25 2.95 (141.66) -4.26

Total Income 7452.22 5231.55 3326.64

Purchase 573.37 7.69 394.93 7.55 -

Raw Material Consumed 2284.11 30.65 1500.59 28.68 776.09 23.33

Manufacturing Expenses 1904.95 25.56 1302.61 24.90 942.70 28.34

Payment & Provision for Employees

(Personnel expenses) 1064.94 14. 29 846.43 16.18 644.32 19.37

Administrative Expenses 292.69 3.93 188.06 3.59 135.86 4.08

Selling & Distribution Expenses 126.01 1.69 80.62 1.54 53.67 1.61

Miscellaneous Expenses w/o 0.01 0 1.30 0.02 0.56 0.02

Total 6246.08 83.82 4314.54 82.47 2553.20 76.75

135


Depreciation 136.17 1.82 94.01 1.80 79.38 2.39

Interest & Finance Charges 110.22 1.48 65.05 1.24 22.37 0.67

Net Profit before Tax 959.75 12.88 757.95 14.49 671.69 20.19

Provision for Income Tax 260.00 230.00 225.00

Adjustments For Income Tax

Provision for FBT 9.50 8.50 5.46

Provision for Deferred tax liabilities 66.80 30.00 (15.00)

Net Profit before Adjustments 623.45 8.37 489.45 9.36 456.23 13.71

Adjustments

Current Tax impact of Adjustments

Net Profit as Restated 623.45 8.37 489.45 9.36 456.23 13.71

(% is in relation to total income)

COMPARISON OF FY 2009 WITH FY 2008 - REASONS FOR VARIANCE

Sales (Net of Excise Duty)

The Net Sales accounted for Rs.7196.05 lacs during the year 2008-09 as compared to Rs.4838.39 lacs during the year

2007-08 and increased by 48.73%. It accounted for 96.56% of the total income in the FY 2008-09 as against 92.48% of

2007-08. The increase in turnover in F.Y. 2008-09 was on account of the increased in demand of Refractory items by

infrastructure industries mainly by Cement Industries resulting in increase in sales quantity which has gone up to 38894

MT in 2008-09 as compared to 2007-08.

Other Income

The income from other sources showed a increase from Rs.238.91 lacs in F.Y. 2007-08 to Rs.251.04 lacs in F.Y. 2008-09.

Total Income

The total Income of the Company was Rs.7452.22 lacs in F.Y. 2008-09 as compared to Rs.5231.55 lacs in F.Y. 2007-08.

This increase of 42.45% in total income was on account of increased sales volume and better realization by the company

during F.Y. 2008-09.

Purchase

Purchases of bought out items have increased to Rs. 573.37 Lacs in 2008-09 as compared to Rs. 394.93 Lacs in 2007-08

and increased by 45.18%

Raw Material Consumed

Raw material consumption as a %age of total Income has increased from 30.65% in FY 2007-08 to 28.68% in FY 2008-09.

The raw material consumption in FY 09 increased to Rs.2284.11 lacs from Rs.1500.59 lacs in FY08. This increase in rawmaterial consumption is mainly on account of increase in production and increase in price of raw materials and usage of

imported Raw Material which increased to 22.92% in 2009 from 19.92% in 2008.

Manufacturing Expenses

Major heads under manufacturing expenses constitute Power & Fuel, Stores & Spares and Repair & Maintenance. Power& Fuel costs cover a major portion of total manufacturing expenses. The manufacturing expense as a %age of total income

has increased from 24.90% (2007-08) to 25.56% (2008-09) and was Rs.1904.95 lacs in F.Y. 2008-09 as compared to Rs.1302.61 lacs in F.Y. 2007-08 due to overall increase in the prices.

Personnel Expenses

The Personnel expenses basically consist of Salaries, Wages, Overtime, Bonus, Gratuity, and Contribution to employee

benefit schemes and other related benefit. The personnel expenses in FY 2008-09 were Rs. 1064.94 lacs as compared toRs. 846.43 lacs in FY 2007-08. The %age decrease in the Personnel expenses to Total Income was from 16.18% (2008) to

14.29% (2009). This decrease in 1.89% of personnel expenses to total expenses is basically due to significant increase in

production which was 81842 MT in 2008-09 as against 69522 MT in 2007-08.

136


Administrative Expenses

The administrative expenses as a percentage of total income have increased from 3.59% (2007-08) to 3.93% (2009). The

expenses in FY 208-09 were Rs. 292.69 lacs as compared to Rs.188.06 lacs in FY 2007-08. This slight increase in expenses

is mainly on account of increased cost of overhead.

Selling Expenses

The selling expenses as a percentage of total income have increased from 1.54% (2007-08) to 1.69% (2008-09). The

expenses in FY 2008-09 were Rs. 126.01 lacs as compared to Rs. 80.62 lacs in FY 2007-08. This marginal increase in

expenses is mainly on account of increased cost of selling overheads.

Depreciation

Depreciation for FY 2008-09 was Rs. 136.17 lacs as compared to Rs. 94.01 lacs in FY 2007-08. Deprecation as a %age

of total income during the year 2008-09 was 1.83% as compared to 1.80% during 2007-08. This increase in value is on

account of addition in Plant and Machinery for capacity expansion.

Interest & Finance Charges

Interest and finance charges increased from Rs. 65.05 lacs in FY 2007-08 to Rs. 110.22 lacs in FY 2008-09. The finance

charges as a %age of total income increased from 1.24% (2007-08) to 1.48% during 2008-09. This increase in finance

cost was due to higher utilization of credit limits and because of increase in volume of operations and interest on Term

Loan utilized for capacity expansion.

Profit before Tax

Profit Before Tax was Rs. 959.75 lacs in fiscal year 2009 as compare to 757.95 lacs in fiscal year 2008, the profit as

percentage of total income has decreased from 14.49% (2008) to 12.88% (2009) due to increase in raw material

manufacturing expenses and overhead cost.

Profit after tax

The profit after tax was Rs. 623.45 lacs in fiscal year 2009 as compared to profit after tax of Rs. 489.45 lacs in fiscal year

2008. The profit after tax as a percentage of total income marginally decreased from 9.36% in fiscal year 2008 to 8.37%

during 2009 because of increased cost of Raw Material. Manufacturing expenses and selling overheads.

REVIEW OF FINANCIAL POSITION

Fixed Assets

Fixed assets comprised mainly of land, building, plant and machinery, electrical installation, generator, vehicle, office

equipment, furniture & fixture and computers.

Current Assets

Current assets consist of inventories, debtors, cash and bank balances, and loans and advances. Current assets have

generally increased in line with the Operation of the Company’s business activities. Total Current assets as at the year

ended on 31.3.2009 was Rs. 5012.32 lacs as compared to Rs. 3374.98 lacs as at 31.3.2008.


Current liabilities comprise sundry creditors against goods, expenses payable, other payables, provisions for gratuity and

leave encashment. Current liabilities and provisions as at fiscal year ended 2009 was Rs. 2273.24 lacs as compared to Rs.

1709.88 lacs as at the fiscal year ended 2008.

Non-Current Liabilities

Non-current liabilities as at 31.3.2009 were Rs. 1924.13 lacs as compared to 873.85 lacs at Fiscal year ended on 31.3.2008.

The increase is mainly due to increase in long-term secured loans from banks and of deferred tax liability.

Net Worth

Net worth as at 31-03-2009 was Rs. 3160.13 as compared to Rs. 2583.48 lacs at the end of the previous fiscal year 2008.

137




The Net Sales accounted for Rs.4838.39 lacs during the year 2007-08 as compared to Rs.3162.34 lacs during the year

2006-07 and increased by 53%. It accounted for 92.48% of the total income in the FY 2008. The increase in turnover in

F.Y. 2007-08 was on account of the increased demand of Refractory items by infrastructure industries mainly by Cement

Industries.

Other Income

The income from other sources showed a decrease from Rs.305.96 lacs in F.Y. 2006-07 to Rs.238.91 lacs in F.Y. 2007-08.

Total Income

The total Income of the Company was Rs.5231.55 lacs in F.Y. 2007-08 as compared to Rs.3326.64 lacs in F.Y. 2006-07.

This increase of 57.26% in total income was on account of increased sales volume, better realization & reduction of

manufacturing expenses by the company during F.Y. 2007-08.

Purchase

Purchases of bought out items have been made during the year Rs. 394.93 Lacs. Nothing like bought out items has been

purchased during F.Y. 2006-07


Raw material consumption as a %age of total Income has increased from 23.33% in FY07 to 28.68% in FY08. The raw

material consumption in FY08 increased to Rs.1500.59 lacs from Rs.776.09 lacs in FY07. This increase in raw material

consumption is mainly on account of increase in production and increase in price of raw materials and usage of imported

raw material which has gone up to 19.92 %.


Major heads under manufacturing expenses constitute Power & Fuel, Chemicals, Stores & Spares and Machine Repair &

Maintenance. Power & Fuel costs cover a major portion of total manufacturing expenses. The manufacturing expenses as

a %age of total income has reduced from to 28.34% (2007) to 24.90% (2008) and was Rs.1302.61 lacs in F.Y. 2008 as

compared to Rs. 942.70 lacs in F.Y. 2007 due to overall effective cost measures.

Personnel Expenses


benefit schemes and other related benefit. The personnel expenses in FY08 was Rs. 846.43 lacs as compared to Rs. 644.32

lacs in FY07. The %age decrease in the Personnel expenses to Total Income was from 19.37% (2007) to 16.18% (2008).

This decrease in personnel expenses to total expenses is basically due to increase in production.


The administrative expenses as a percentage of total income has decreased from 4.08% (2007) to 3.59% (2008). The

expenses in FY08 were Rs. 188.06 lacs as compared to Rs. 135.86 lacs in FY07. This decrease in expenses is mainly on

account of increased sales.

Selling Expenses

The selling expenses as a percentage of total income has decreased from 1.61% (2007) to 1.54% (2008). The expenses in

FY08 were Rs. 80.62 lacs as compared to Rs. 53.67 lacs in FY07. This marginal decrease in expenses is mainly on account

of increased sales

Depreciation

Depreciation for FY08 was Rs. 94.01 lacs as compared to Rs. 79.38 lacs in FY07. Deprecation as a %age of total income

during the year 2007-08 was 1.80% as compared to 2.39% during 2006-07. This increase in value is on account of addition

in Plant and Machinery.


Interest and finance charges increased from Rs. 22.37 lacs in FY07 to Rs. 65.05 lacs in FY08. The finance charges as a

%age of total income increased from 0.67% (2007) to 1.24% during 2008. This increase in finance cost was due to higher

utilization of credit limits and increase in rate of interest by the bank.

138


Profit before Tax

Profit Before Tax was Rs. 757.95 lacs in fiscal year 2008 as compare to 671.69 lacs in fiscal year 2007, the profit as

percentage of total income has decreased from 20.19% (2007) to 14.49% (2008) due to increase in raw material cost.

Profit after tax


2007. The profit after tax as a percentage of total income marginally decreased from 13.71% in fiscal year 2007 to 9.36%

during 2008.


Fixed Assets



Current Assets



ended on 31.3.2008 was Rs. 3374.98 lacs as compared to Rs. 1972.37 lacs as at 31.3.2007.



leave encashment. Current liabilities and provisions as at fiscal year ended 2008 was Rs. 1709.88 lacs as compared to Rs.

1414.05 lacs as at the fiscal year ended 2007.


Non-current liabilities as at 31.3.2008 were Rs. 873.85 lacs as compared to 406.41 lacs at Fiscal year ended on 31.3.2007.

The increase is mainly due to increase in long-term secured loans.

Net Worth

Net worth as at 31-03-2008 was Rs. 2583.48 as compared to Rs. 2117.43 lacs at the end of the previous fiscal year 2007.



The Net Sales accounted for Rs. 3162.34 lacs during the year 2006-07 as compared to Rs. 2955.35 lacs during the year

2005-06. It accounted for 95.06% of the total income in the FY 2007, and showed marginal increase of 7% in the FY

2007. The increased turnover in F.Y. 2006-07 was on account of better price.

Other Income

The income from other sources showed a marginal increase from Rs. 92.41 lacs in fiscal year 2006 to Rs. 305.96 lacs in

fiscal year 2007. The Other Income in fiscal year 2007 was higher due to Income from Sale of low grade bauxite.

Total Income

The Company registered an increase of about 5.67% in its total income for the FY 2007 compared to the previous year on

account of increased sales in the F.Y. 2006-07. The total Income of the Company was Rs. 3326.64 lacs in fiscal year 2007

as compared to Rs. 3148.06 lacs in fiscal year 2006.


Raw material consumption as a %age of total Income has slightly increased from 23.09% in FY06 to 23.33% in FY07.

The raw material consumption in FY07 increased to Rs. 776.09 lacs from Rs. 726.95 lacs in FY06. This increase in raw

material consumption is mainly on account of increased price.


Major heads under manufacturing expenses constitute Power & Fuel, Chemicals, Stores & Spare and Machine Repair &

Maintenance. Power & Fuel costs cover a major portion of total manufacturing expenses. The manufacturing expenses as

a %age of total income has reduced from to 31.82% (2006) to 28.34% (2007) due to effective cost control measures,

resulting in decrease from Rs. 1001.65 lacs in FY06 to Rs. 942.70 lacs in FY07.

139


Personnel Expenses


benefit schemes and other related benefit. The personnel expense in FY07 was Rs. 644.32 lacs as compared to Rs. 570.71

lacs in FY06. The %age increase in the Personnel expenses to Total Income was from 18.13% (2006) to 19.37% (2007).

This increase in personnel expenses to total expenses is basically due to annual increase in wages.


The administrative expenses as a percentage of total income has decreased from 4.38% (2006) to 4.08% (2007). The

expense in FY07 was Rs. 135.86 lacs as compared to Rs. 137.93 lacs in FY06.

Selling Expenses

The selling expenses as a percentage of total income has increased from 1.59% (2006) to 1.61% (2007). The expenses in

FY07 were Rs. 53.67 lacs as compared to Rs. 50.11 lacs in FY06.

Depreciation

Depreciation for FY07 was Rs. 79.38 lacs as compared to Rs. 84.01 lacs in FY06. Deprecation as a %age of total income

during the year 2006-07 was 2.39% as compared to 2.67% during 2005-06.


Interest and finance charges increased from Rs.17.18 lacs in FY06 to Rs. 22.37 lacs in FY07. The finance charges as a

%age of total income increased from 0.54% (2006) to 0.67% during 2007 due to change in rate of interest.

Profit before Tax

Profit before Tax increased from Rs. 559.29 lacs in fiscal year 2006 to 671.69 lacs in fiscal year 2007 and as % of total

income increased from 17.77% (2006) to 20.19% (2007), mainly due to increased selling price, reduction in manufacturing

expenses by optimum utilization of resources like power, fuel, water and manpower.

Profit after tax


2006. The profit after tax as a percentage of total income increased from 11.46% in fiscal year 2006 to 13.71% during

2007. This was largely due to the reversal of deferred tax provision.


Fixed Assets



Current Assets



ended on 31.3.2007 was Rs. 1972.37 lacs as compared to Rs. 1743.76 Lacs as at 31.3.2006.



leave encashment. Current liabilities and provisions as at Fiscal Year ended 2007 was Rs. 1414.05 lacs as compared to

Rs. 689.00 lacs as at the Fiscal Year ended 2006.


Non-current liability as at 31.3.2007 was Rs. 406.41 lacs as compared to 464.36 lacs at Fiscal year ended on 31.3.2006.

The decrease is mainly due to lesser utilization of credit facilities, secured loans & unsecured loans.

Net Worth

Net worth increased by Rs. 456.23 lacs during the fiscal year ended on 31.3.2007 to reach a level of Rs. 2117.43 lacs, as

compared to Rs. 1661.20 lacs at the end of the previous fiscal year 2006.

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LIQUIDITY AND CAPITAL RESOURCES

The Company depends on both internal and external sources of liquidity to fund working capital and capital expenditure.

The Company has traditionally funded the working capital requirements and capital expenditures from internally generated

funds, unsecured loans and debt financing. In respect of the debt funding of working capital, project or capital expenditure

the Company uses cash credit limits from AXIS bank. The Company has also entered into long term borrowings in the

form of term loans from AXIS Bank which has been in Rupees and has proposed dividend @ 50% for the Year 2008-09.

Dividend

The Company has declared and paid dividend @ 25% during the year 2008 provided in the statement of dividend paid on

page no 75 of this Letter of Offer.

Declaration by the Issuer

There are no changes in the activities of the issuer Company which may have a material impact on the statement of profits/

losses for the five years including discontinuance of lines of business, loss of agencies or markets and similar factors.

Information required as per clause 6.10.5.5(a) of the SEBI Guidelines:

i) Unusual or infrequent events or transactions

Nil

ii) Significant economic changes that materially affected or are likely to affect income from continuing operations

Nil

iii) Known Trends or Uncertainties that have had or are expected to have a material adverse impact on sales, revenue or

income from continuing operations

Apart from the risks as disclosed in this Letter of Offer, there are no other known trends or uncertainties that have had

or are expected to have a material adverse impact on sales, revenue or income from continuing operation.

iv) Future changes in relationship between costs and Income, in case of events such as future increase in labour or

material costs or prices that will cause a material change are known

Increase in the price of raw materials such as bauxite could materially affect cost as a percentage of revenue. The

risk on account of price fluctuation is reduced to a significant extent considering the fact that a rise in the price of

the basic raw material is passed on in the form of increased prices of the finished products.

v) The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new

products or increased sale prices

The increase in revenue has been mainly due to the Company being able to demand higher price from the market and

reduction in cost of inputs.

vi) Total turnover of each major industry segment in which the issuer company operated

The Company currently operates only in one industry segment i.e., manufacturing of refractories and the total revenue

of the Company represents revenue derived from that segment only.

vii) Status of any publicly announced new products or business segment -

Nil

viii) The extent to which the business is seasonal

The Company’s products are not seasonal in nature.

ix) Any significant dependence on a single or few suppliers or customers

The Company is not dependent on a single or few customers. The Company sources its raw material from a number

of suppliers and is not under threat from seasonal dependence on any single supplier.

x) Competitive Conditions

The Company faces competition from both bigger and smaller players.

141


SECTION VI- LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

Except as described below:

• There are no outstanding litigation suits, criminal or civil, involving economic offences or proceeds or tax liability

against our company and our Directors that would have material adverse effect on our Business.

• There are no overdue, defaults to the Financial Institutions/Banks, Re-Scheduling of loans to Banks/Financial

Institutions by the Company. There are no pending offences of non-payment of statutory dues by the promoters of

the Company.

• There are no cases of litigation pending against the Company or against any other Company whose outcome could

have a materially adverse effect on the position of the Company. There are no pending litigations against the

promoters/directors in their personal capacities and also involving violation of statutory regulations or criminal

offences. There are no pending proceedings initiated for economic offences against the Directors, Promoters,

Companies and firms promoted by the promoters.

• There are no outstanding litigation, defaults etc., pertaining to matters likely to affect the operations and

• finances of the Company including disputed tax liability, prosecution under any enactment in respect of Schedule

XIII of the Companies Act, 1956.

• There is no litigation outstanding against the promoters/Directors in their personal capacity. The Company, its promoters

and other companies with which promoters are associated have neither been suspended by SEBI nor any disciplinary

action has been taken by SEBI other than those mentioned above.

• There are no past cases in which penalties were imposed by the concerned authorities on the Company or its directors.

I . OUTSTANDING LITIGATIONS INVOLVING THE COMPANY

A. FILED AGAINST THE COMPANY

1. LITIGATION INVOLVING CRIMINAL LAWS

There is no litigation pending against the Company involving Criminal Law.

2. LITIGATION INVOLVING SECURITIES AND ECONOMIC LAWS

There is no litigation pending against the Company involving Securities and Economic laws.

3. LITIGATION INVOLVING STATUTORY LAWS

There is no litigation pending against the Company involving statutory laws.

4. LITIGATION INVOLVING CIVIL LAWS

There is no litigation pending against the Company involving civil laws except as mentioned below.

• Mr. M. Charles was a Contract Labour engaged by the Company with effect from 31.12.1984. Section 6 of Employees

Provident Fund and Miscellaneous Provisions Act, 1952 provides for employee’s contribution to be deducted by the

employer and deposited in the provident fund account. During the period of his engagement with the company, for

fulfilling its obligations under this provision, the company has deducted money equal to employee’s contribution

from his monthly bill and deposited the same in the Provident Fund account. His contract with the Company was

terminated on 30.09.1988 by the Company. After termination of the contract, he filed a civil suit against the

company for refund of the deducted money. Total claim in this case is Rs. 177554.50. Case no. SCA/10/92 has been

allotted to this case. The matter is still pending before High Court and there is no development since 2002.

• Mr. Jusab Dost Mohamad was employee of M/s Mines Pvt. Contractor. M/s Mines Pvt. Contractor had terminated

his services. Jusab Dost Mohamad was under the impression that he was Employee of the Company. Under this

impression he filed a case in Labour Court, at Rajkot. The matter was thereafter transferred from Rajkot to Jamnagar

Labour Court, Jamnagar Labour Court issued a notice to the Company desiring that the matter should be disposed

off by the settlement. As per settlement made before labour court Company had offered him employment in the

company as a regular employee . this offer was not acceptable to him, thereafter company had retraced its offer.

142


Thereafter he had filed a Civil Suit in Dist. Court of Khambhalia Court which was dismissed by the Court. Against

this dismissal order he filed present Civil Appeal (41/06). This appeal is pending inDist. Court of Khambhalia and

next hearing in this matter is fixed on 11.09.2008.

• An accident has taken place on 12.01.2006 Mr. Ranjit Singh. B. Sodha, Driver of vehicle, filed a claim petition

against the Company for compensation of Rs.1,00,000 at the District Court Khmabalia. Matter is still pending

without any development.

5. LITIGATION INVOLVING LABOUR LAWS

There is no litigation pending against the Company involving labour offences except as mentioned below.

• Mr. Vasant H. Vaghela was working as a Contract Worker with M/s Chirwa Agencies. M/s Chirwa Agencies was

engaged by the Company for receiving services of Contract Workers. Mr. Vasant H. Vaghela was terminated by M/

s Chirwa Agencies.

After that he had filed a case against the Company for permanent reinstatement in Company with full back wages.

Case No. LCJ/138/95 is allotted to this case. The case is still pending for applicant’s evidence and the next date of

hearing is 7th of July 2009.

• There is a case against the company for not fulfilling the vacancies under the Apprentice Act, 1961.Case no. 532/

2003 is allotted to this case. Latest date of hearing in this case was 15/06/2009. The case is still pending adjudication.

• Mr. Dilip Singh H. Chudsama was a permanent worker of the Company. He misbehaved and threatened an officer of

the Company. Thereafter based on an internal enquiry his service was terminated after giving one-month notice to

him.

Thereafter he had filed a case against the Company for reinstatement of job with full previous monetary entitlements.

Case No. LCJ/139/95 is allotted to this case. District Labour Court ordered the Company to reinstate the worker

but the Company has filed an appeal against the said order in Gujarat High Court.

• Mr. Manilal G. Bhatt was working as a ‘peon-cum-chokidar’ at Jamnagar unit of the company from 1985. Due to

administrative reason he had been transferred to Jam Khambalia unit. However, he did not join duty at Jam Khambalia

Unit; lastly, his service was terminated on 7 May, 1986.

Thereafter he had filed a case against the Company alleging that his service was terminated without giving notice

to him and without conducting an enquiry. He had lost his case in Labour Court thereafter he had filed a writ

petition in High Court against the order of the Labour Court. In Labour Court, case no. LCJ/2105/86 was allotted

to this case. The case is still pending adjudication.

• Mr.Jam Nagajan was transferred to Dalmiapuram works for training but he disobeyed the order. Therefore his service

was terminated after conducting full domestic enquiry. Now he is claiming reinstatement with full previous wages.

Case No. LCJ/301/01 was allotted to this case. The case is still pending adjudication. District Labour Court ordered

the Company to reinstate the worker but the Company has filed an appeal against the said order in Gujarat High

Court.

• Mr. Hitesh K. Sanchania employee of the Company was caught sleeping while on duty. He was also guilty of gross

negligence; his service was terminated after conducting a departmental enquiry by an authorised official of the

Company. Against the termination of his services he filed a case against the Company bearing No. LCJ/140/02.

Latest hearing in this case was on 6th of May 2008. However the matter is still pending.

• Fifteen Workers of the Company alongwith other workers went on an illegal strike and struck work. Company

thereafter terminated the services of the fifteen employees responsible for the strike. They filed separate cases

against the Company bearing no. LCJ/352/01 to LCJ/366/01 for reinstatement with full previous wages. Next date

of hearing in this case is 7th of July 2009. The case is still pending adjudication.

• Mr. Shankarlal Hariji was permanent worker of the company. He was employed in the production department of the

Company. He opted for VRS and got relieved on 6/12/2006. He never came to the Company for receiving his full

and final settlement dues. There after Company had sent all his dues through Registered A.D which he refused to

accept and filed a case against Company to the Labour commissioner alleging that the Company had received his

resignation by force. Case no. LCJ/24/07 is allotted to this case. The case is still pending adjudication. The next

date fixed for hearing is 06th August 2009.

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• Mr. Puna Ram was working as a Contract Worker with M/s Bharati Enterprise. M/s Bharati Enterprise was engaged

by the Company for receiving services of Contract Workers. Mr. Puna Ram was terminated by M/s Bharati Enterprise.

After that, he had filed a case against the Company and claimed Rs. 1, 26,000 as compensation. Case No. W.C. (NF)

49/03 is allotted to this case. The case is still pending for applicant’s evidence and next date of hearing is 16th July

2009. The case is still pending adjudication.

• Mr. Allarakha Hasam was working as a Contract Worker with M/s Chirwa Agencies. M/s Chirwa Agencies was

engaged by the Company for receiving services of Contract Workers. Mr. Allarakha Hasam was terminated by M/

s Chirwa Agencies. After that he had filed a case against the Company for his gratuity, in Labour Court Company

has lost its case and has filed an Appeal against this order. However, the case is still pending for adjudication.

• Mr. Abbas Mammad was working as a Contract Worker with M/s Chirwa Agencies. M/s Chirwa Agencies was

engaged by the Company for receiving services of Contract Workers. Mr. Abbas Mammad was terminated by M/s

Chirwa Agencies. After that, he had filed a case against the Company for his gratuity, in Labour Court Company

has lost its case and has filed an Appeal against this order. The case is still pending for adjudication.

The total financial implication on the company on account of these labour cases is Rs. 5307230. It has already been

provisioned for the balance sheet as a contingent liability.

A. FILED BY THE COMPANY

• LITIGATION INVOLVING CRIMINAL LAWS

There is no litigation filed by the Company involving criminal offences

• LITIGATION INVOLVING SECURITIES AND ECONOMIC LAWS

There is no litigation filed by the Company involving securities or economic offences.

• LITIGATION INVOLVING STATUTORY LAWS

There is no litigation filed by the Company involving statutory law.

• LITIGATION INVOLVING CIVIL LAWS

There is no litigation filed by the Company involving civil laws except as mentioned below.

• Company purchased a Land in 1990 measuring 30 Acres and 30 Guntha from Mr. Bharatsingh who was an employee

of the Company. An initial amount of Rs. 1,84,000 was given to him as a loan. Subsequently, this loan amount had

been converted as a sale consideration. But thereafter he left the company and sold the land to others. Company had

filed a suit against him in the Jam Khambalia District Court. Suit no. 6/96 has been allotted to case. The case is still

pending adjudication.

If company loses this case it will also loose ownership of above said land.

II. OUTSTANDING LITIGATIONS INVOLVING ANY OF THE PROMOTER/ DIRECTOR OF THE

COMPANY

Other than above mentioned litigation involving the Statutory Laws, there is no other litigation pending against

any of the Director/ Promoter of the Company under any of the following heads:

1. LITIGATION INVOLVING CRIMINAL LAWS: NIL

2. LITIGATION INVOLVING SECURITIES AND ECONOMIC LAWS: NIL

3. LITIGATION INVOLVING CIVIL LAWS: NIL

4. LITIGATION INVOLVING LABOUR LAWS: NIL

There is no litigation filed by any of the other Directors/Promoters of the company under any of the following heads:

1. LITIGATION INVOLVING CRIMINAL LAWS: NIL

2. LITIGATION INVOLVING SECURITIES AND ECONOMIC LAWS: NIL

3. LITIGATION INVOLVING STATUTORY LAWS: NIL

4. LITIGATION INVOLVING CIVIL LAWS: NIL

5. LITIGATION INVOLVING LABOUR LAWS: NIL

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III. OUTSTANDING LITIGATIONS INVOLVING PROMOTER GROUP COMPANIES

A. FILED AGAINST THE PROMOTER GROUP COMPANIES

1. LITIGATION INVOLVING CRIMINAL LAWS

There is no litigation pending against the Promoter Group Company involving Criminal Laws.

2. LITIGATION INVOLVING SECURITIES AND ECONOMIC LAWS

There is no litigation pending against the Promoter Group Company involving Securities and Economic laws.

3. LITIGATION INVOLVING STATUTORY LAWS

There is no litigation pending against the Promoter Group Company involving statutory laws.

4. There is no default with regard to the following:

i) Financial Institutions/ Banks,

ii) Non payments of Statutory dues,

iii) Dues towards instrument holders like, debenture holders, fixed deposits, arrears of cumulative preference shares.

5. LITIGATION INVOLVING CIVIL LAWS

There is no litigation pending against the Company involving civil laws except as mentioned as under

CIVIL LITIGATION AGAINST DALMIA CEMENT (BHARAT) LTD.

a) Labour disputes pending before the High Court of Madras, involving an amount of Rs. 41.63 Lacs with respect to

claim for permanent employment by 4 contract workmen and also a dispute regarding retirement age of an employee.

As on date the disputed amount stands at Rs.56.76 Lacs after considering yearly increments in the contract labour

wages. The case is still pending adjudication.

b) The State of Tamil Nadu while renewing Mining Leases of the Company directed payment of compensation for the

surface rights on the Government Lands on which the Mining Leases were to be renewed or granted in favour of the

Company. Although the Company has succeeded in its Revision Petition before the Central Government, the State

Government of Tamil Nadu has filed Writ Petitions before the Madras High Court challenging the said orders of the

Central Government.

c) Haryana Government vide order dated December 14, 1989 proposed to acquire vacant factory land admeasuring

15.32 acres of Dalmia Electronics Corporation unit of the Company at Ballabhgarh. The Company has obtained a

Stay order from the Punjab and Haryana High Court restraining the State Government from dispossessing the land.

In the meanwhile, the Company has filed appropriate proceedings before the District Judge, Faridabad, for

enhancement of the quantum of the award, which is still pending.

d) DCB had entered into a contract with M/s Bulk Trading for sale of 36,000 metric tons of South African steam coal

delivery at Chennai port. The contract provided that M/s Bulk trading was to secure the vessel to effect delivery. M/

s Bulk trading was also to furnish complete particulars of the vessel nominated by it which would be within the

restrictions prevailing at the discharge port i.e. Chennai. Demurrage was to be borne on DCB account. The vessel

reached the port but could not berth as no berth was designed to handle the vessel, which was of 699ft. The delay

resulted in demurrage of 7 days and M/s Bulk Trading initiated Arbitrations proceedings under ICC Rules at

London. The sole Arbitrator conducted the proceedings and passed an award for USD 36, 584.74 plus simple

interest on the sum from 1.11.1999. DCB was also asked to pay costs amounting to GBP 14,484.70 plus USD

220,000 along with simple interest of 4 % from the date of Award till payment (Approx 45 Lacs plus 4% interest).

DCB challenged the Award under section 34 of Arbitration and Conciliation Act, 1996 before the District Court,

Trichy. The case is still pending adjudication.

e) The Company has contested a demand made by the ESI Department claiming contribution and interest thereon

aggregating to Rs. 2.13 Lacs. The Court has stayed 50% of the demand and the matter is presently pending.

f) Certain contract workers have filed a suit against the contractor and the Company claiming an amount of Rs. 50

Lacs towards the injuries caused during the period they were engaged in the construction site. The claim is presently

pending before the District Court at Tiruchirapalli. The Company has filed counter claim.

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EFFECT ON ISSUER COMPANY: - Chances of any adverse impact on the issuer company due to these litigations is

very remote, because business and activities of both the companies are not related to each other in any way except a Job

Work Agreement of issuer Company with DCB Ltd. here it is also mentionable that both the Company does not hold a

single share in each other except of the fact that both the companies are promoted by the same promoters.

CIVIL LITIGATION AGAINST OCL INDIA LIMITED

• SLP (CIVIL) NO.5264/2006 (CIVIL APPEAL NO. 1883/2006)

Filed by the State Orissa Challenging the final order passed by the Hon’ble High Court of Orissa striking down the

validity of “Orissa Rural infrastructure and Socio Economic development Act,2004 and Rules made there under and

notification dated 25.05.2005 issued under the provisions of Section 3 (2) .

• MOTOR ACCIDENT CLAIMS CASE NO. 27/2004 & 28/2004

The Company’s tanker OR-16A-9825 met with an accident on 03.12.2003 in which Shri Purna Chandra Choudhury,

resident of Sundargarh, died. His legal heirs lodged a claim for payment of Rs.5,00,000/- and Rs.50,000/- under

Section 166 and 140 of the Motor Vehicles Act in the Court of Motor Accident Claims Tribunal-1, Sundargarh. The

vehicle is insured with The Oriental Insurance Company and as such the payment liability will be on the insurance

company. The case is still pending adjudication.

• MOTOR ACCIDENT CLAIM CASE NO. 353/2006 &354/2006

The Company’s vehicle bearing No.OR-16-7168 met with an accident in which one person sustained injuries and

died. His legal heirs lodged a claim for payment of Rs.2,00,000 as compensation under Section 166 and 140 of the

Motor vehicles Act, in the court of Motor Accident Tribunal, Rourkela. The vehicle is insured with The Oriental

Insurance Company and as such the payment liability will be on the insurance company. The case is still pending

adjudication.

• OJC NO. 7741/1997

Jute Packaging Materials (Compulsory use in packing commodities) Act,1987 requires the Cement manufacturers to

use jute packaging materials for supply and distribution up to 50% of their production. Sundargarh Industrial Mazdoor

Union (SIMU) challenged the notification dated 15.03.1995 regarding compulsory use of 50% of jute bags as use of

jute bags is hazardous to the health of workmen. The Company has been made one of the Opposite Parties. Stay has

been granted by the Hon’ble court of Orissa. The case is pending.

• F A O NO.84/2005

North Frontier Railway filed the appeal against the order dated 28.05.2004 of Railway Claims Tribunal, Bhubaneshwar

in OA No.66/1994 and 67/1994 directing refund of Rs. 66,230/- along with 6% interest from the date of filing of the

claim to the Company. The claims were filed by the Company for claiming refund of excess freight charges collected

at the destination station on the basis of circular dated 14.06.1991, which was not in existence at the time of booking

of the consignment.

• WP (C) NO.80/2006

This case was filed by M/s Shiva Cement Limited challenging the action of the DRDA, Balasore in terminating the

agreement for supply of cement @Rs.141/- per bag and awarding the same contract to the Company @ Rs.158.50

per bag.

CASES FILED BY OCL

MISC. APPEAL CASE NO. 20/2008

(OCL India Limited Vs. Tahasildar, Rajgangpur)

Filed by the Company challenging the Notice cum stay order No. 3252 dated 07.11.2008 issued by the Tahasildar,

Rajgangpur registered as Lease Case No. 54/2008 directing the Company to show cause as to why land covered by Plot

Nos. 73 & 75 of Khata No.50 of Mouza: Rajgangpur (KA) shall not be resumed U/s 3(B) of the OGLS Act, 1962 and to

stop any type of construction / operational activities in the Company’s Line-II project.

The Sub-Collector, Sadar, Sundargarh vide his order dated 10.11.2008 stayed the operation of the notice cum stay order

dated 07.11.2008 of the Learned Tahasildar, Rajgangpur. The case is still pending adjudication.

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ENCROACHMENT CASE NO.534/2008 and 535/2008

(State Vs. Shri V P Sood, Whole Time Director, OCL India Limited)

The Tahasildar, Rajgangpur suo motu started the captioned encroachment case against the Company alleging encroachment

of Govt. land by the Company while constructing it’s conveyer belt system for transportation of clinker from it’s existing

Cement plant to the project site. The Company filed its written statement and the case was heard at length and the

Learned Tahasildar after satisfied passed a reasoned order in favour of the Company and dropped the aforesaid two cases.

On 11.10.2008 while the work of another conveyer belt was going on, the newly elected Chairperson of the Rajgangpur

Municipality requested to stop the work and requisitioned the Tahasildar to direct the Company to stop the work. On the

basis of the requisition of the Chairperson, the Learned Tahasildar has again issued two show cause notices to start fresh

encroachment cases. The next date was fixed on 07.11.2008 for hearing of the case before the Learned Tahasildar,

Rajgangur but the proceedings were stayed by the Hon’ble High court of Orissa vide its order dated 24.10.2008 in Misc.

Case No. 13217/2008 arising out of WP(C) No.15187/2008.

CASE NO. 20/2009 - BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY- NEW DELHI

(OCL Vs. OERC, State Load Despatch Centre and WESCO)

The company set up Captive power plant (CPP) in its sponge iron unit in the year,2006 and power generated by it was

consumed by its all units namely cement, refractory and sponge iron unit. As per the Scheme of arrangement approved by

the Hon’ble high court of Orissa, sponge iron unit was demerged and its assets and liabilities were transferred to OCL

Iron and Steel Limited (OISL). Thus CPP became the property of OISL.

To share the surplus power generated by CPP of OISL which became a separate entity, the company approached the

Orissa Electricity Regulatory Commission (OERC) to allow short term open access for drawing power from CPP of OISL

and to waive surcharge payable to WESCO. The commission passed an order on 01.12.2008 treating the company as open

access customer and held that the company is liable to pay cross subsidy charges

Aggrieved by said order the company filed an appeal U/s 111 of the Electricity Act, 2003 before the Appellate Tribunal for

Electricity on the grounds that (1) power is transmitted through its own dedicated lines and no part of the WESCO’s

distribution system is used (2) majority of the shareholding of OISL is held by a group of promoters who are common

to both OCL and OISL and (3) there is no loss of revenue to WESCO as it was not in a position to supply additional power

required by the company. The case is still pending.

EFFECT ON ISSUER COMPANY: OCL is a promoter group company because one of the promoters of Issuer Company

holds more than 10% shareholding in it. But the said Promoter does not have shareholding in Issuer Company as well as

there is no intrinsic relationship between the businesses of OCL India Limited and the Issuer Company. Hence there are

remote chances of any adverse effect on Issuer Company due to this litigation.

5. LITIGATION INVOLVING LABOUR LAWS

There is no litigation pending against the Company involving labour offences except as mentioned below.

LITIGATION INVOLVING LABOUR LAW AGAINST OCL INDIA LTD.

• OJC NO. 7381/1994

Shri Pravash Chandra Chakra (ex- Mechanist, Refractory Works) was superannuated with effect from 10.11.1994 on

attaining the age of 55 years in terms of the standing orders of the Company. As per tripartite settlement dated

21.11.1990 the retirement age of employees was increased to 58 years. However this benefit was not given to him,

as the standing order was not amended. He challenged the order of the superannuation by filing this case. The case

is still pending adjudication. The maximum liability that may arise in this case may be Rs.1,56,254/-.

• OJC NO.2215/1996

Filed by Sundargarh Industrial Mazdoor Union (SIMU) against Union of India and Others for quashing “The Employees

Provident Funds and Miscellaneous Provisions (Amendment Ordinance) 1995 making the Company as one of the

Opposite Parties. The Union (SIMU) contends that the Family Pension scheme framed through the ordinance is not

only arbitrary and unconstitutional but is highly detrimental to the employees. The case is still pending adjudication.

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• OJC NO. 12034/1998

Demanding reinstatement in service after acquittal from the criminal case, Shri Purna Chandra Das raised an industrial

dispute, which was referred by the Government to the Presiding Officer, Industrial Tribunal, Rourkela for adjudication.

The said case was registered as Industrial Dispute Case No. 12/1997. As Shri Das was not satisfied with the reference

of the case, filed this case in Orissa High Court for changing the reference and obtained stay of the proceedings in

Tribunal. The case is still pending adjudication. As the reference cannot be changed the Company does not foresee

any liability in this case.

• OJC NO. 12170/1999

Filed by Utkal Shramik Sangh (USS) seeking direction from the Hon’ble High Court of Orissa to State Government

of Orissa to issue notification U/s 10(1) of “ The Contract Labour (R&A) Act,1970 pursuant to the recommendations

made by the State Advisory Board. The notification dated 28.04.2000 has already been published, hence the writ

becomes infructuous. The case is still pending adjudication.

• OJC NO. 10854/2000

Filed by Sundargarh Industrial Mazdoor Union (SIMU) challenging the notification dated 28.04.2000 issued by the

State Government of Orissa for not abolishing contract labour system in all the jobs recommended by the State

Labour Advisory Board. The case is still pending adjudication.

• OJC N0.4797/2000

The Company appointed Shri Jagdish Chandra Das as Apprentice Electrician on 12.05.1987 and he was given extension

from time to time as an Apprentice Trainee. On 02.04.1990, he was given appointment on temporary basis for a

period of one year only subject to the condition that he has to obtain B- Class Lineman’s License within six months.

He failed to obtain the License within the time period, therefore Company terminated his services. He raised an

Industrial Dispute before the Presiding Officer, Labour Court, Sambalpur vide No. 50/1993, challenging his termination.

On 30.12.1999 the Presiding Officer, Labour Court, Sambalpur passed the award, stating that the termination of Shri

Jagdish Chandra Das was legal and justified and he is not entitled to get any relief.

Aggrieved by the said order, Shri Jagdish Chandra Das filed an Application under Article 226 of the Constitution of

India vide No. OJC 4797/2000 in the High Court of Orissa, challenging the award of the Presiding Officer, Labour

Court, Sambalpur. The case is still pending adjudication. The company does not foresee any liability in this case.

• OJC NO. 4473/2002

Smt. Beronica Bilung and eight others of Lanjiberna Quarry, employees of Contractor M/s Bhagawati Miners, filed

the writ Application under Article 226 & 227 of the Constitution of India in the High Court of Orissa, praying the

Hon’ble High Court for a direction to the Company to settle their statutory dues and eligible amount as per VR

Scheme. The contractor paid them as per VR scheme but they are disputing the basis adopted for payment The writ

is not maintainable since the Company and the Contractor are not a State within the meaning of Article 12 of

Constitution of India. The case is pending for further proceedings. The Company does not foresee any liability in

this case.

• OJC NO. 4474/2002

Smt. Jamini Kujur and five others of Lanjiberna Quarry, employees of Contractor M/s Vaishnoo Minerals, filed the

writ Application under Article 226 & 227 of the Constitution of India vide OJC No. 4474 of 2002 in the High Court

of Orissa, praying the Hon’ble High Court for a direction to the Company to settle their statutory dues and eligible

amount as per VR Scheme. The contractor paid them as per VR scheme but they are disputing the basis adopted for

payment. The writ is not maintainable since the Company and the Contractor are not a State within the meaning of

Article 12 of Constitution of India. The case is pending for further proceedings. The Company does not foresee any

liability in this case.

• OJC N0.4475/2002

Smt. Norm Minz and three others of Lanjiberna Quarry employees of Contractor M/s Swastic Traders filed the writ

Application under Article 226 & 227 of the Constitution of India vide OJC No. 4475 of 2002, in the High Court of

Orissa, praying the Hon’ble High Court for a direction to the Company to settle their statutory dues and eligible


payment The writ is not maintainable since the Company and the Contractor are not a State within the meaning of



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• OJC N0.4476/2002

Smt. Agnesh Ekka and another of Lanjiberna Quarry employees of Contractor M/s Pashupati Enterprises filed the

writ Application under Article 226 & 227 of the Constitution of India vide OJC No. 4476 of 2002 in the High Court

of Orissa, praying the Hon’ble High Court for a direction to the Company to settle their statutory dues and eligible


payment The writ is not maintainable since the Company and the Contractor are not a State within the meaning of



• MISC. APPEAL NO.330/2000

Shri Mangal Ekka driver of Contractor M/s Sadique Ahamed met with an accident and sustained injuries. He filed a

claim for Rs.1,00,000/- under the Workman’s Compensation Act bearing No. WC Case - 6/1997 impleading the

Contractor, the Company and the United India Insurance Company Limited. The WC Commissioner by his order

dated 29.03.2000 decided that the compensation payable was Rs.57,696/- and not Rs.1,00,000/- as claimed by the

workman. He directed the Insurance Company to deposit compensation amount of Rs.57,696/-. Aggrieved with the

order United India Insurance Company file this appeal in Orissa High Court. The case is still pending adjudication.

The maximum liability in this case may be Rs.57,696/-.

• WP(C) NO. 1131/2004

Shri Gayadhar Sahoo, Mason was dismissed from services on the grounds of disobedience, misbehavior and absence

from duty. He raised an industrial dispute and was registered with the Labour Court, Sambalpur as Industrial

Dispute Case No. 1/2003. Vide order dated 01.01.2004 the said case has been transferred from the registry of

Labour Court, Sambalpur to the Registry of Industrial Tribunal, Rourkela for adjudication.Being aggrieved by the

said order, the Company filed the writ Application under Article 226 and 227 of the Constitution of India in the

Hon’ble High Court of Orissa. The Hon’ble Court vide order dated 09.02.2004 stayed the proceedings of the ID

case No.1/2003. The case is pending for further proceedings.

• OJC NO.15583/2001

Sri Jairam Sahoo raised an Industrial dispute, which was registered as I D Case No. 48/1996, challenging his dismissal

order and the Labour Court awarded lump sum amount of Rs.1,50,000/- to Shri Jairam Sahoo, ex-Pipe Fitter (Refractory

Works), towards final settlement instead of ordering re-instatement. The Company paid the said awarded sum to the

workman. However he filed a writ petition even after receiving the awarded sum from the Company for quashing the

award passed by the Presiding Officer, Labour Court, Sambalpur. The case is still pending adjudication.

• WP (C) No.488/2007

Utkal Sharmik Sangh, the recognised union filed writ for injuncting Sundargarh Mazdoor Sangh, another union, to

operate as a union in the establishment of OCL India Limited and for cancellation of its registration, if sufficient

number of workmen of the Company are not its members. The Hon’ble High court of Orissa by its order dated

18.01.2007 directed Opposite Party No.3 (OCL) to protect the interest of the Petitioners and directed for listing on

28.02.2007 for final disposal at the stage of admission. However, the matter is still pending and the next date of

hearing is awaited.

• WP (C) No. 13251/2007

Filed by Shri Girija Shankar Sunani and Smt. Menaka Sunani legal heirs of Late Mukund Sunani against State of

Orissa and five others for payment of adequate compensation to the them for 1.320 acres of land acquired by the

Collector, Sundargarh for SE Railway for constructing railway siding for OCL India Limited. The parties alleged

that they have not received the compensation. The case is still spending.

• WP(C) No. 17400/2007

Filed by the SIMU Union challenging the order dated 27.11.2007 of the Labour Commissioner, Orissa allowing

Sundargarh Mazdoor Sangha (SMS) to participate in the verification of membership of Trade Unions functioning

in the Company.

149


• WP(C) No. 12411/2008

(Bellary Steels and Alloys Limited Vs. OCL India Limited)

Filed by Bellary Steels and Alloys Limited challenging the order dated 22.07.2008 passed by the Civil Judge, Senior

Division, Sundargarh in Civil (Money) Suit No.35/1999 by rejecting an application under Section 151 of Civil

Procedure Code,1908 for stay of the proceedings in Money Suit No. 35/1999. The Hon’ble High Court of Orissa has

stayed the proceedings in the said suit.

• INDUSTRIAL DISPUTE CASE NO. 12/1997

Demanding reinstatement in service after acquittal from the criminal case Shri Purna Chandra Das raised an industrial

dispute, which was referred by the Government to the Presiding Officer, Industrial Tribunal, Rourkela for adjudication.

The said case was registered as Industrial Dispute Case No. 12/1997. Shri Das was not satisfied with the reference of

the case and filed a writ bearing OJC No.12034/1998 in Orissa High Court for changing the reference and further

proceedings in Tribunal are stayed. The Company does not foresee any liability in this case.


Challenged the order of dismissal. He was dismissed for disobeying the order of his superiors. Subsequently on the

petition of Shri Mohapatra Govt. transfer this case from Sambalpur to Bhubaneswar and the said transfer was

challenged by the Company and proceedings are stayed. Subsequently on the request of Shri Mohapatra, the matter

was settled out of court by entering into an agreement in Form-K. In view of the settlement, the writ filed by the

Company was withdrawn and Labour Court, Bhubaneswar was approached for passing a no dispute award. The

case is still pending.


Shri Rabi Narayan Behera, Sr. Clerk, Share and Law Department raised an industrial dispute challenging the termination

of his service on the ground of disobedience. He raised an industrial dispute and the same was registered as ID Case

No. 6/2001 in the Labour Court, Sambalpur. State Govt. on request of Shri Behera transferred the said case to Labour

Court, Bhubaneswar without giving an opportunity of hearing to the Company. The Company filed writ in Orissa

High Court challenging the order of Government of Orissa transferring the ID Case from Labour Court, Sambalpur

to Labour Court, Bhubaneswar. Stay is granted by Orissa High court. During the pendency of the said writ Shri

Behera entered into a settlement with the Company in Form -K and received Rs.1,50,000/- towards full and final

settlement of his claim. In view of this development the Company filed withdrawal petition in the High Court for

withdrawal of the writ. The ID case in the Labour Court will accordingly be disposed off in terms of the settlement.

The case is pending.


Shri Gayadhar Sahoo, Mason was dismissed from services on the grounds of disobedience, misbehavior and absence

from duty. He raised a dispute, which was registered with the Labour Court, Sambalpur as Industrial Dispute Case

No. 1/2003. Vide order dated 01.01.2004 the said case has been transferred from the registry of Labour Court,

Sambalpur to the Registry of Industrial Tribunal, Rourkela for adjudication.Being aggrieved by the said order dated

01.01.2004, the Company filed the writ Application under Article 226 and 227 of the Constitution of India in the

Hon’ble High Court of Orissa. The Hon’ble Court vide order dated 09.02.2004 stayed further proceedings in the

case pending before the Industrial Tribunal, Rourkela. The case is pending The maximum liability may be Rs.3,00,827/

- in this case.


An industrial dispute arose between the workmen Shri Bidyananda Rai and others and it’s contractor M/s Rattan

Enterprises with regard to entitlement of wages at higher rate. The State Government while referring the dispute

wrongly impleaded the Company as a party to the dispute and the said reference was registered as Industrial

Dispute case No. 16 of 2005 in Industrial Tribunal, Rourkela. By filing the writ petition, the Company challenged

the said illegal reference dated 26.11.2005 of Government of Orissa, Labour and Employment Department on the

ground that the dispute is between the workmen and the Contractor and is contrary to the Section 12(5) read with

Section 10(1)(d) of the Industrial Disputes Act, 1947. The case is pending in the Tribunal.

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EFFECT ON ISSUER COMPANY : OCL is a promoter group company because one of the promoters of Issuer Company



remote chances of any adverse effect on issuer company due to these litigations.

B. FILED BY THE PROMOTER GROUP COMPANIES

• LITIGATION INVOLVING CRIMINAL LAWS

There is no litigation filed by the Company involving criminal offences except the following:

CRIMINAL LITIGATION INITIATED BY DALMIA CEMENT (BHARAT) LTD.

a) There are 20 cases filed by the Company against debtors under section 138 of the Negotiable Instruments Act, 1881

(regarding dishonour of cheques) for an aggregate amount of about Rs. 340 Lacs.

b) There are 5 criminal cases filed under various provisions of the Indian Penal Code, 1860 against employees/ex-

employees.

There are 4 cases filed by the Company against others relating to encroachment of its premises at Salem, pending before

the Munsif Court at Salem.

• LITIGATION INVOLVING SECURITIES AND ECONOMIC LAWS

There is no litigation filed by the Company involving securities or economic offences except as mentioned below.

• Filed by the Company challenging the demand notice No.434 dated 23.03.2005 for Rs.4,17,172/- and demand notice

No. 435 dated 24.03.2005 for Rs.5,95,100/- both issued by the Regional Transport Officer(RTO), Sundargarh

demanding payment of road tax and penalty in respect of seven pay loaders and one pick and carry Hydraulic crane

operated in the factory premises of the Company. The Company in it’s reply to the RTO contended that the said pay

loaders and pick and carry Hydraulic crane are not motor vehicles within the meaning of under Section 2(28) of

The Motor Vehicles Act, 1988. Hon’ble Orissa High Court by its order dated 10.05.2005 restrained the RTO,

Sundargarh for giving any further effect to the demand notice till further orders. However the Company paid the

demand of Rs.3,74,188/- by cheque No. 950695 dated 28.03.2005. The Company may be contingently liable for

interest for the delayed payment. WP (C) No. 4778/2005.

• LITIGATION INVOLVING STATUTORY LAWS

There is no litigation filed by the Company involving statutory law.

• LITIGATION INVOLVING CIVIL LAWS

There is no litigation filed by the Company involving civil laws except the following.

CIVIL LITIGATIONS INITIATED BY DALMIA CEMENT (BHARAT) LTD.

a) Recovery suit filed against M/s. Indian Seamless Steels & Alloys Limited, Pune, involving an amount of Rs. 116.01

Lacs. This amount is due to the Company on account of value of goods supplied and interest @ 20% p.a, has been

decreed in favour of the Company. However, the Bombay High Court has stayed the execution proceedings and

directed the judgement debtor to deposit the amount of the decree in court amounting to Rs. 1.47 crores which was

withdrawn by us after furnishing a Bank Guarantee as per the liberty given by the Hon’ble High Court. Appeal is

still pending for adjudication.

b) Winding up petition dated March 12, 2000, filed against M/s. Bellary Steels & Alloys Limited, Bellary before the

High Court of Karnataka at Bangalore involving an amount of Rs. 34.97 Lacs on account of unpaid value of goods

plus interest thereon. This petition has been admitted and the High Court has ordered the advertisement of the

petition in newspapers before passing appropriate orders for winding up. The Company has also filed a Civil Suit

for recovery of the same which is pending before the City Civil Judge, Bangalore. Company is in BIFR therefore all

proceedings have been stayed.

c) The Company has filed a Civil Suit against M/s Maragos Steels Limited, in Goa for recovery of Rs. 9.12. Lacs

together with interest @ 20% per annum in respect of sales and supplies made to them between the period October,

1998 to June, 2000. The matter is pending as on date.

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d) The Company was using 9.41 acres of land as a road from its Salem factory leading to the National Highway. This

road was also used by the general public for transportation of men and materials. The State Government initially

proposed to give the said area on lease to the Company and demanded rental of about Rs.26 Lacs for the period from

1977 onwards. Being aggrieved by this demand the Company has filed a Writ Petition before the Madras High Court,

which is pending adjudication. Against interim orders of the High Court the Company has furnished a bank guarantee

to the State Government for like amount.

e) Suits have been filed before the Railway Tribunal, etc. for claiming variance in distance of Western Coal fields and

train wagon load in respect of Eastern Coals fields involving an amount of Rs.1.39 Lacs.

f) Suit No. 996 of 1986 filed on March 31, 1986 before the Delhi High Court against M/s. Max Crona Consolidated for

non-completion of repair work of the Ballabgarh factory roofs, for an amount of Rs. 6.16 Lacs. M/s. Max Crona

Consolidated has filed a counter claim in the said suit on April 10, 1987 with the Delhi High Court for an amount

of Rs. 2.42 Lacs. The case is now transferred to the District Court where it is presently pending for adjudication.

g) Suits have been filed before the High Court, Kolkatta for claiming variance in distance of Western Coal fields and

train wagon load in respect of Eastern Coals fields involving an amount of Rs. 0.55 Lacs.

h) There are 4 separate legal cases filed against Hansalaya Properties before the Delhi High Court (i) Suit for damages

of Rs.9,26,378/- and late delivery of 11th and 12th floor (ii) suit filed for claiming title of premises in respect of 11th

& 12th floors and the basement area of Hansalaya Building; (iii) demanding formation of Society and execution and

Deed of Apartment under Apartment Ownership Act, 1986 and (iv) suit filed for declaration and seeking right to

install its own cooling tower. All these cases have now been transferred to the District Court.

i) 28 writ petitions filed before the Madras High Court against the orders of land acquisition issued by the State of

Tamil Nadu in respect of lands in and around Vallajanagaram and other villages in the State of Tamil Nadu. These

lands are mineral bearing and are required for mining operations by the Company. These petitions were dismissed

and the Company has preferred a Writ Appeal before the Madras High Court. The amounts are not ascertainable

and the Company is yet to receive the awards for land acquisition proceedings. The High Court was pleased to

dismiss the Writ Appeals and a SLP was filed by the Company before the Supreme Court. Supreme Court has issued

notice and stayed dispossession of land. Matter is pending adjudication in Supreme Court.

j) Two writ petitions filed on April 30, 1992, before the High Court of Madras one against rejection of the Company’s

Mining Lease application for the Valajanagaram area (an area of 714.14 acres), and against the order of the State

Government dated August 25, 1986 and the other Writ Petition in respect of order for reservation of area in and

around Valajanagaram Village in Tamil Nadu. This matter is pending in Madras High Court and the Company is not

mining in this area.

Note:Mining leases under litigation relate to areas where mining lease applications of the Company have been

rejected on the ground that these areas have been reserved by the State Government for State exploitation under Rule

58 of the Mineral Concession Rules, 1960. Based on legal opinion obtained by the Company, the reservations made

are no more valid after the deletion of Rule 58 of the Mineral Concessions Rules, 1960, without any savings clause.

k) Mining lease for the Perianagalur area (an area of 172.99 acres) is under litigation and pending before Madras High

Court. The Company is, however, mining in this area under High Court Order of stay dated July 21, 1998. The State

Government has issued GO granting first renewal from 1985 to 2005 and Company has filed application for grant of

second renewal fro 2005 till 2025 which is pending before the State Government. The High Court vide order dated

13th June 2007 has directed the State Government to consider the application for second renewal of the Company

within six weeks.

Although the state Govt has issued Government Order granting second renewal from 2005 to 2025 the Writ Applications

are still pending.)

Note:Mining leases under litigation relate to areas where mining lease applications of the Company have been

rejected on the ground that these areas have been reserved by the State Government for State exploitation under Rule

58 of the Mineral Concession Rules, 1960. Based on legal opinion obtained by the Company, the reservations made

are no more valid after the deletion of Rule 58 of the Mineral Concessions Rules, 1960, without any savings clause.

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l) Arbitration proceeding for damages before the International Chamber of Commerce between the Company and the

claimants - South India Corporation, Chennai and Rich Group International and/or Arko Trading Limited, Hongkong

- the respondents, for non-supply of steam coal of Indonesian origin against the Company’s contract dated October

28, 1999 with them has been completed in favour of the Company. As the respondents have gone into liquidation, the

Company has filed necessary claims with the Official Liquidator. The liquidator’s summary of receipts and payments

indicate that there are no assets of the Respondents to realize our dues.

m) The Tamil Nadu Government has raised demands aggregating to Rs.18.51 crores towards short payment of royalty

on the basis of quantity of cement produced. Write Petition has been filed before the Madras High Court by DCB.

The case is still pending adjudication.

n) The Tamil Nadu Government has raised demand for enhanced charges for drawl of water from the Coleroon River.

The Company has filed a Writ Petition before the Madras High Court. The Court vide judgement dated 28/02/2006

has upheld levy of Rs. 500/- of Rs. 500/- per cubic meters retrospectively from the year 1991. On the issue of

whether it had to be levied on contracted demand or actual water drawn, the court has refused to pass any orders due

to pendency of Writ Appeal pending before Division Bench. Amount of Rs.35.8 Lacs has been paid under protest.

o) The Government of Tamil Nadu levied lease rental amounting to about Rs. 8 crores for lease of peramboke lands in

respect of renewal of mining lease of Ameenabad and Kairulabad mines used by the Company for mining limestone.

The Government raised the demand for the said amount be paid for execution of the mining lease deed. The

Company filed Writ Petition in the High Court at Chennai against the said demand which was stayed by the High

Court. The matter is pending adjudication.

LITIGATIONS INITIATED BY DALMIA CEMENT (BHARAT) LTD AGAINST GOVERNMENT:

a) Tamil Nadu Electricity Board has levied an electricity generation tax on self-generated electricity by using Furnace

Oil. The Company had filed Writ Petitions in the Madras High Court challenging the levy of such tax, on the basis

of notifications issued in respect of certain industries using other Petroleum products, which has been decided

against the Company. The Company has filed Writ Appeals against the said order of the learned Single Judge. The

demands had been made at 15% of the unit charges applicable from time to time. In the interim orders on the Writ

Appeal filed by the Company, the Madras High Court has directed the Company to pay the said tax at the admitted

rate of 5.5% of the unit charges together with 50% of the disputed amount of the demand of the unit charges. The

aggregate liability for such disputed demand is Rs. 289.90 Lacs, which has not been provided for in the accounts.

The Company has also challenged the levy and validity of the Tamil Nadu Electricity Act, 2003 before the Madras

High Court, which was dismissed. Against this order, the Company has preferred a Writ Appeal before the Madras

High Court. The High Court vide order and judgment dated 13th July 2006 upheld the validity of the Act 2003 and

dismissed the Writ Appeal against which the Company filed SLP before the Supreme Court. The Supreme Court

vide judgment and order dated 15/05/2007 has held that the benefit of the exemption notifications issued by the

State Government under the old act shall continue under the new Act also. In terms of the judgment, Company is

entitled to refund of tax paid as per the exemption notifications.

b) Claim for refund of excise duty on equalized freight for sale of cement pending before the Delhi High Court as a

Reference Petition amounting to Rs. 2.64 crores. Meanwhile the amount has been refunded to the Company. Reference

answered by the High Court in favour of the Company and Dept filed SLP before the Supreme Court which has been

admitted and pending before the Supreme Court.

c) Appeals pending before the STAT, Madurai, for use of Form XVII for purchase of lubricants and furnace oil and

explosives at concessional rates for FY 1996 amounting to Rs.14.46 Lacs, for FY 1997 amounting to Rs. 40.55 Lacs

and for FY 1998 amounting to Rs. 3.64 Lacs.

d) Case pending before the Deputy Commissioner Tax Officer, Lalgudi filed by the Sales Tax Department, Tamil Nadu,

regarding determination of sales tax on packaging charges in the sale of cement for FY 1978 amounting to Rs. 13

Lacs, for FY 1975-76 and 1976-77 amounting to Rs. 28.5 Lacs and for FY 1983-84 amounting to Rs. 18.24 Lacs.

e) Show Cause Notice issued by Jt Comm/ Asst Comm Excise pending, along with an appeal to CESTAT Delhi against

order of Comm Appeals demanding payment of excise duty on Bagasse amounting to Rs. 1.01 crores.

f) Appeals filed by the Sales Tax Department, Tamil Nadu is pending with the Sales Tax Appellate Tribunal/TNTST,

against the order of AAC/STAT granting exemption of Purchase Tax on purchases of Explosives and Fire Bricks

amounting to Rs. 4.22 Lacs.

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g) Certain matters relating to excise pending adjudication before the Excise Authorities, disallowing Cenvat credit and/

or demanding payment of duty amount to Rs. 2.28 Lacs.

h) Appeal has been filed before the Sales tax Tribunal in respect of demand for entry tax on raw sugar aggregating to Rs.

11.22 Lacs and the matter is presently pending.

i) Writ Petition has been filed in respect of demand for entry tax on goods amounting to Rs. 4.70 Lacs and the matter is

presently pending.

j) Under the Jute Packaging Materials (Compulsory use of Packaging Commodities) Act, 1987, 50% of the cement

produced should be supplied in jute bags. Failure to do so attracts a maximum fine equal to twice the cost of jute

bags not used as required by the Act. The Company has not been using the jute bags. The Supreme Court has upheld

the constitutional validity of the above Act. As per the order, the percentages of using jute bags for packing the

various commodities will be prescribed by the Government of India. The Madras High Court has stayed the use of

jute bags by the cement industry, in the writ petitions filed by the trade unions. Vide Notification dated December

15, 1998, the Governments’ order prescribing percentages for use of jute bags in packing various commodities,

cement has been excluded. The amount that may become payable by the Company as penalty in case it is ultimately

held that penalty is leviable for non-compliance of the Act is presently is not quantifiable.

k) Appeal pending with CESTAT, Chennai, regarding refund of service tax of Rs. 15.88 Lacs on services availed from

goods transport operators. The matter is pending with CESTAT for final disposal.

l) Special Leave Petition filed with the Supreme Court of India contesting payment of 100% royalty on new leases of

Patta Lands. The amount involved is Rs. 27.74 Lacs.

m) Disallowance of Cenvat credit on steel and cement amounting to Rs. 346.92 Lacs taken towards brownfield expansion

pending before the Commissioner Excise Trichy. The amount involved is 587 Lacs. Out of which Company has paid

Rs.100 Lacs based on the CESTAT Stay order. Final order is awaited.

n) Disallowance of Cenvat credit of Rs.705.04 Lacs on power plant leased to Keshav Power Plant. Appeal allowed by

CESTAT, Chennai. Application filed for re-credit of the allowed amount. Company has taken credit of the amount

based on the order of CESTAT. Now the Department had filed appeal before Madras High Court.

o) Company had filed a Special Leave Petition before the Supreme Court of India with regard to the Company’s claim

for Modvat credit on Furnace Oil. The amount involved was Rs. 11.21 Lacs. The case was dismissed by Hon’ble

Supreme Court.

p) The Company has filed a petition challenging the orders of the ESI Department demanding payment of contribution

besides interest and damages in respect of certain contract workers. The matter is still pending.

q) The Company has contested a claim from the Provident Fund Department relating to provident fund contribution on

the lump sum amounts paid under the Wage Board settlement. Amount involved is Rs. 96.21 Lacs. The High court

has decided the case against Company and directed the Company to deposit Rs.6,60,821/-. Company has deposited

the amount based on the demand received from PF Department.

CIVIL LITIGATION INITIATED BY LANDMARK PROPERTY DEVELOPMENT COMPANY LTD.

Civil Appeal No. 1883 of 2006 (State of Orissa V/s. National Aluminum Company Limited- Konark Minerals Limited

(Presently known as Landmark Property Development Company Ltd.)

The State of Orissa enacted the Orissa Rural Infrastructure and Socio-Economic Development Act, 2004 (ORISED) to

provide additional resources for development of infrastructure, promotion of education and employment and for the

socio-economic development in rural, backward and mining areas of the State which extends to the whole of the State of

Orissa. The Act was published in the Orissa Gazette Extraordinary on 01.02.2005.

The Company and others challenged the said Act by filing a writ petition before Hon’ble High Court of Orissa. The

Hon’ble High Court by a common judgment and order dated 05.12.2005 struck down the constitutional validity of the

ORISED Act and directed the State of Orissa to refund the tax collected under the impugned Act. State of Orissa filed a

Special Leave Petition (SLP) in Hon’ble Supreme Court challenging the judgment dated 05.12.2005 of the Hon’ble High

Court. The said SLP was registered as Civil Appeal No. 1883 of 2006. In the said petition State of Orissa prayed for

interim relief to stay the judgment of Orissa High Court as it will be facing a huge burden of refund of ORISED tax

collected by it.

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The said appeal was listed for hearing on 01.08.2007 and Hon’ble Supreme Court directed the respondents to file an

affidavit confined to the prayer for interim relief. On 14.08.2007 KML filed an affidavit opposing the prayer of the State of

Orissa for grant of interim relief. The case is now pending in the Supreme Court.

EFFECT ON ISSUER COMPANY :- There is no probable present or future adverse effect on the issuer company due to

this litigation because as per the fact of this case impugned tax already has been paid by the Landmark Property Development

Company Ltd.

If Company wins the case it can get refund of that much amount which has been paid by it.

CIVIL LITIGATION INITIATED BY OCL INDIA LIMITED

• A Civil Suit has been filed by the Company challenging the final order passed by Hon’ble High Court of Orissa

dismissing the writ petition bearing OJC No. 14424 / 1999 (8747/2000 - OCL Vs. State of Orissa and others) declaring

that the State legislature has power and authority to extend operation of the Orissa Entry Tax Act, 1999 throughout

the state including an industrial township. The case is pending (SLP (CIVIL) NO.5113/2003).

• A Civil Suit (OJC NO. 2480/1989) has been against State of Orissa & Ors. Challenging the order dated 18th/19th

October 1983 of the Tahasildar, Rajgangpur charging water rates under the provisions of Orissa Irrigation Act,

1959 by notice dated 12th February, 1988 for Rs.2,39,538/- for the years 1980-81 to 1987-88. The contention of the

Company is that the Tahasildar is not vested with the power under the Irrigation Act, to levy water rate as the water

drawn by the company was from a natural source and not from any irrigated source and the company sought for the

interim injunction to restrain the effect of the aforesaid order and notice. The Orissa High Court passed an interim

order to the effect that no coercive measures be taken for realization of water charges until further orders and the said

order was made absolute on 16.10.1989.The case is pending for further proceedings.

• CIVIL (MONEY) SUIT NO. 56/2008

The Company participated in tender bearing No. CS No. 134/1999 agreeing to supply cement to the parties nominatedby the Railway Board for manufacturing concrete railway sleepers and submitted a bank guarantee for Rs.10,00,000/-. After completion of the supply the Railway released the said bank guarantee. Thereafter on complaint of M/s DayaEngineering Works, one of the concrete sleeper manufacturer, Railway Authority encashed two other bank guaranteesof the Company of Rs.10,00,000/- and Rs.12,91,946.48 respectively submitted for Tender No. 153/2003 and 155/2004. The Company filed the money suit claiming refund of the aforesaid amount alongwith interest in the Court ofCivil Judge, Senior Division, Sundargarh.

WP (C) NO. 9888/2008

(OCL Vs. State of Orissa and 5 others)

The Company challenged the legality and validity of the notice dated 21.01.2008 of the Tahasildar, Rajgangpur forpayment of Rs.1,54,13,000/- towards land premium for use /diversion of forest land of 62.403 hectors for mining onthe basis of circular issued by the Government of Orissa, Department of Revenue and Disaster Management. TheCompany contended that the demand is illegal as State Government has no power to levy as it is a levy on mineralbearing land and the Company is a lessee and not owner of the lands.

The Hon’ble High Court by it’s order dated 15.07.2008 in Misc.Case No. 9058/2008 arising out of WP(C) NO. 9888/2008 stayed the demand notice dated 21.01.2008 of the Tahasildar till next listing of the case.

WP (C) NO. 15187/2008

(OCL Vs. State of Orissa and 3 others)

Filed by the Company challenging two illegal notices cum stay orders bearing Nos. 2935 and 2937 both dated14.10.2008 issued by the Tahasildar, Rajgangpur in Encroachment case No.534/2008 and 535/2008 respectively,directing the Petitioner to stop construction of overhead conveyer belt system across the Municipal road at Rajgangpurfalling under Plot No. 66/P Mouza: Rajgangpur (Ka), which construction was permitted by a resolution passed by theduly constituted Municipal Council of the Rajgangpur Municipality and to show cause as to why the PetitionerCompany shall not be evicted from alleged encroachment of the said Municipal road.

The Hon’ble High Court by it’s order dated 24.10.2008 in Misc. Case No. 13217/2008 arising out of WP(C) NO.

15187/2008 stayed notices cum stay orders bearing Nos. 2935 and 2937 both dated 14.10.2008 issued by the Tahasildar,

Rajgangpur and letter No. 2720 dated 16.10.2008 issued by the Executive Officer, Rajgangpur Municipality. The

Hon’ble High Court also allowed further construction of conveyer belt system. The case is still pending.

155


WP(C) NO. 2482/2009

(OCL Vs. Union of India, Coal India Limited and MCL)

The Company has been purchasing coal for it’s Refractory unit through E-auction scheme. The price paid is in excess of

base price notified by Mahanadi Coalfields Limited (MCL). The Supreme Court of India in the matter of Ashoka Smokeless

Coal India Pvt. Ltd. and other Vs. Union of India and others (2007-2-SCC-640) held the methodology of E-auction is

unconstitutional. The Company filed a writ petition praying for refund of a sum of Rs.4,07,30,509/- paid by the Company

to MCL over and above the base price.

• ARBITRATION PROCEEDINGS BETWEEN

(OCL and Neelachal Ispat Nigam Limited)

Company has entered into an agreement on 12.05.1998 with Neelachal Ispat Nigam Limited (formerly Konark Met

Coke Limited which merged into the present Respondent by virtue of the order of the Hon’ble High Court of Orissa

under section 394(2) of the Companies Act, 1956) for supply of 14081 MTs of different types of silica refractory

bricks and 1250 MTs of mortar for a total price of Rs.31.26 Crores. As per the agreement the Claimant was required

to manufacture the goods in accordance with the specification of the order and offer the same for inspection to the

Respondent. After satisfying, with the quality of goods Respondent Company issued a certificate and dispatch

clearance to the Claimant Company. Thereafter, The Claimant Company delivered the goods to the Respondent

Company. The Claimant Company manufactured the goods in accordance with the specification of the order of the

Respondent and the same was offered to the Respondent for inspection and test and issuance of dispatch clearance

but the Respondent did not issue the dispatch clearance within a reasonable period and thus prevented the Claimant

from dispatching the goods by adhering to the time schedule. Being aggrieved with the act of the Respondent

Company, The Claimant Company has filed the claim before the Arbitral Tribunal and claimed damages of

Rs.12,87,41,119/- on account of loss sustained by them for such delay in dispatch of goods manufactured and

consequent delay in payment of the price thereof. The Respondent Company has also raised three counter claims

totaling Rs.9,81,29,843/- against the Claimant Company. The hearing has already been concluded. Award is awaited.

• The Company challenged the notification dated 17.03.1993 prohibiting the employment of contract labour in limestone

and dolomite mines in the activities covering raising of and transportation of limestone including loading and unloading

from mine site to factory. The Hon’ble High Court of Orissa by its order dated 02.08.1993 granted stay until further

orders. The case is pending. The Company does not foresee any liability in this case. Case No. OJC No. 4696/1993.

• OJC NO. 8106/1995 filed by the Company against Union of India and Others challenging the validity of Bonus

(Amendment Act) 1995 which gave retrospective effect from 01.04.1993 to amendment relating to eligibility criteria

for earning bonus i.e raising of limit of monthly salary from Rs.2,500/- per month to Rs.3,500/- per month. Also

challenged the salary limit for computation of bonus, which was enhanced from Rs 1600/ per month to Rs 2500/-

per month. The Company has obtained stay. The maximum liability on this account may be Rs.21.92 Lacs. The

Case is pending.

• The Company’s consignments were sent from OC Siding, Rajgangpur to Dimapur, New Bongaigaon, Silchar, New

Guwahati via longer route without the instruction of the Company. In the process Railways collected excess freight.

The Company filed a writ petition OJC NO. 9371/1995 against Union of India and Others for refund of Rs.1,33,85,384/

- being the excess freight collected by Railways on the basis of longer route used for delivery of the consignment

instead of the shortest route to destination. The Company’s contention is that Railway Board is not authorized to

issue General Order No. 1 of 1990 for rationalization of longer route as such power is vested with Central Government

only. The case is pending.

• The Company challenged the notification dated 04.07.1996 prohibiting the employment of contract labour in limestone

and dolomite mines in the activities covering raising and transportation of limestone including loading and unloading

within mine site. The Hon’ble High Court of Orissa by its order dated 09.09.1996 granted stay until further orders.

The Company does not foresee any liability in this case. Case No. OJC NO. 8767/1996 allotted to this case.

• The Company executed a lease deed with State Government of Orissa for grant of mining lease for Limestone and

Dolomite. The Company paid under protest Rs.15.55 Lacs towards stamp duty and registration fee of Rs.7.41 Lacs.

The said stamp duty was collected on the basis of estimated royalty on limestone and dolomite expected to be raised

by the Company. The Company contends that the stamp duty should have been calculated on the basis of annual deed

rent in terms on Section 9(A)(2) of Indian Stamp Act read with IIIrd schedule to Mines and Minerals (Regulation &

Development) Act, 1957 and not on the basis of estimated royalty. As such the Company filed this case against State

156


of Orissa & Ors. Claiming refund of excess stamp duty of Rs.15.50 Lacs and registration charges of Rs. 7.38 Lacs

total amounting to Rs.22.88 Lacs paid on execution of mining lease for Lanjiberna Lime Stone area. The case no. is

OJC NO. 12894/1997 and it is still pending.

• Filed by the Company against State of Orissa and others seeking stay of demand raised by Regional Transport

Officer for payment of Rs 16,36,240 as road tax on 11 dumpers having capacity of 35 tonne. The Company relied

upon the Supreme Court judgment, which clearly states that the dumpers are not “Motor Vehicles” within the

meaning of Section 2 (28) of The Motor Vehicles Act, 1988 and Section 22 (b) of the Orissa Motor Vehicles Taxation

Act, 1975. The Hon’ble High Court of Orissa granted stay subject to payment of 50% of the tax demanded. The

Company paid Rs.23 Lacs till 31st March 2001 being 50% of the tax demanded. Subsequently on demand from the

Regional Transport Officer, Sundargarh, the balance 50% was also paid under protest. As the Company has been

paying for each quarter the full amount of tax under protest, the Company has no liability. On the contrary refund

may arise, if the case is decided in favour of the Company. The Case no. is OJC NO. 10599/1998 and it is still

pending.

• Filed by the Company against Union of India and Others challenging the notification No. S.O. 1255(E) dated 30.12.1988

issued by Govt. of India increasing the coal prices and a premium of 10% on coal supplies by some of the collieries

of Coal India Limited. Collieries are supplying different grades of coal. On the basis of quality, coal is graded and

prices are accordingly fixed. However SECL has been charging 10% premium on it’s different grades of coal in

comparison to same grades of coal supplied by other collieries. The Company contended that the premium of 10%

charged by selected coal fields like ECL on the basis of A, B, C and D grade coal is ultra vires the Constitution and

hit by Article 14 of the Constitution. The Company demanded refund of Rs.36 Lacs premium collected for the period

from 01.01.1989 to 31.03.1993. The case still pending.

As per the Jute Packaging Materials (Compulsory use in packaging commodities) Act, 1997 Cement manufacturers

are required to use jute packaging materials for supply or distribution up to 50% of their total production. Show

cause notice dated 20.08.2002 was issued by the Jute Commissioner, Calcutta alleging violation of two orders dated

March15, 1995 and June 30, 1997. By the said notice, the Company was required to show cause as to why penal

action should not be taken against it for violation of the said orders. The Company filed a writ Petition in Calcutta

High Court challenging the said show cause notice and stay was granted by the Court against the show cause notice.

The Union of India through Jute Commissioner filed petition for transfer of all writ petitions along with other

proceedings pending before various High Courts for hearing and disposal on merit by the Supreme Court. While

the Company may be liable for non-compliance up to an amount equal to double the cost of the jute packaging

material, which ought to have been used, liability, if any, in this regard is not ascertainable. The case is pending in

Calcutta High Court bearing No. (WP (W) NO.14732/2002).

• Shri Laxmi Dhar Roul, a former employee of the Company un-authorisedly constructed a house on the land acquired

by the Company for clay extraction. The Company filed a civil suit in the Court of Civil Judge, Senior Division,

Sundargarh for declaration of right, title, interest and for recovery of possession 0.02 acres of the Company land

encroached by Shri Roul. The learned Civil Judge, Sr. Division passed the order in favour of the Company. The said

order was challenged by Shri Roul by filing a Title Appeal No.10/1997 in the Court of District Judge, Sundargarh

which set aside the order of lower court by judgment dated 07.08.2003. The Company challenged the said judgment

by this Second Appeal. The case No. is RSA No. 530/2003 is pending.

• Shri Duryodhan Behera, a former employee of the Company un-authorisedly constructed a small hut on the land

acquired by the Company for clay extraction. The Company filed a civil suit in the Court of Civil Judge, Senior

Division, Sundargarh for declaration of right, title, interest and for recovery of possession of area admeasuring

17'.6" X 12'.6" of the Company’s land encroached by Shri Behera. The learned Civil Judge, Sr. Division passed the

order in favour of the Company. The said order was challenged by Shri Behera by filing a Title Appeal No.4/1994

in the Court of District Judge, Sundargarh which set aside the order of lower court by judgment dated 18.12.2003.

The Company challenged the said judgment. The case No. is RSA NO. 85/2004 and the matter is still pending.




remote chances of any adverse effect on Issuer Company due to these litigation.

157


LITIGATION INVOLVING LABOUR LAWS

There is no litigation filed by the Promoter Group Company involving Labour Law except as mentioned below.

LITIGATION INITIATED BY THE OCL INDIA LIMITED INVOLVING LABOUR LAWS.

• The Company disputed payment of contribution on overtime wages, cycle allowance, LTA etc. The Company received

demand notice dated 27.06.1995 to pay a sum of Rs.2,06,883/- on account of non-payment of contribution on account

of “overtime” allowance for the period 01.02.1993 to 31.01.1994. Company filed Misc. case under section 75 of the

Employees State insurance Act, 1948 in the Court of District Judge, Puri. Ld. District Judge was pleased to stay the

demand notice vide its order dated 27.01.2000. Subsequently the case was transferred to the Ld. District Judge,

Khurda, Bhubaneswar and renumbered as Misc. Case No. 267 of 2001. Pursuant to interim order of the Dist. Judge,

Khurda the Company deposited the ESI contribution on overtime time wages leaving contribution on cycle allowance

and LTA. On 24.12.2004 the Ld. District Judge, Khurda, Bhubaneswar was pleased to dispose the matter by directing

the Company to deposit the ESI contribution on Cycle allowance along with interest on the contribution from due

date. Aggrieved by this order the Company filed this Appeal and Hon’ble High Court by its order dated 11.02.2005

stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till

further order. The case is pending for further orders. The Company may be liable to pay interest @ 12% PA on

Rs.2,06,883/- from 28.02.1990 being the date of demand till date of payment of ESI contribution. Case No. FAO NO.

53/2005 is allotted to this case.

• A litigation is initiated by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -

Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 241/2001 directing payment of interest from the

date of demand of ESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the

order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further

orders. The Company may be liable to pay interest @ 12% PA on Rs.72,185/- from 28.02.1990 being the date of

demand till date of payment of ESI contribution. Case No. FAO No. 54/2005 is allotted to this case.




order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further orders.

The Company may be liable to pay interest @ 12% PA on Rs.60,728/- from 28.02.1990 being the date of demand

till date of payment of ESI contribution. Case No. 55/2005 is allotted to this case.


Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 243/2001, directing payment of interest from the

date of demand of ESI contribution on overtime wages. High Court by it’s order dated. 11.02.2005 has stayed the

order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further

orders. The Company may be liable to pay interest @ 12% PA on Rs.2,11,631/- from 25.09.1991 being the date of

demand till date of payment of ESI contribution. Case No. 56/2005 is allotted to this case.

• ATA NO. 390 (8)2002

• Filed by the Company challenging the order dated 31st July 2002 of Assistant Provident Fund Commissioner, Sub

Regional Office, Rourkela demanding PF contribution on Special Allowance and Additional Special Allowance

paid to all workmen amounting to Rs.89,03,046/- for the wage period from 01.01.2000 to 31.12.2001 and interest

of Rs.16,33,441/-.The contention of the Company is that Section 2(b) of the Provident Fund Act specifically excludes

certain allowances like house rent allowance, overtime allowance ..., any other similar allowance from the purview

of the basic wages. The element of special allowance falls within the exclusion clause. The Hon’ble Tribunal by it’s

order dated 27.07.2005 directed the Company to deposit 25% of the determined amount within two weeks for

admission of the case for hearing. Accordingly the Company deposited Rs.14,05,944/-. The case is pending.



date of demand of ESI contribution on overtime wages. High Court by its order dated 11.02.2005 has stayed the

order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further order.

The Company may be liable to pay interest @ 12% PA on Rs.1,60,734/- from 10.06.1991 being the date of demand


158



Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 252/2001directing payment of interest from the





• Alitigation is initiated by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -

Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No.261/2001 directing payment of interest from the








order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further order









• Alitigation is initiated by the Company challenging the judgment dated 24.12.2004 passed by the District Judge -

Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 262/2001directing payment of interest from thedate of demand of ESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed theorder of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further orders.The Company may be liable to pay interest @ 12% PA on Rs.3,77,261/- from 02.11.1993 being the date of demandtill date of payment of ESI contribution. Case No. 62/2005 is allotted to this case.

• An industrial dispute arose between the workmen and it’s contractor M/s Rattan Enterprises with regard to entitlementof wages at higher rate. The State Government while referring the dispute wrongly impleaded the Company as aparty to the dispute and the said reference was registered as Industrial Dispute case No. 16 of 2005 in IndustrialTribunal, Rourkela. The Company challenged the said illegal reference dated 26.11.2005 of Government of Orissa,Labour and Employment Department on the ground that the dispute is between the workmen and the Contractor andis contrary to the Section 12(5) read with Section 10(1)(d) of the Industrial Disputes Act, 1947. Case No. WP (C) No.8683/2006 is allotted to this case.

• A litigation is initiated by the Company challenging the award dated 04.04.2007 passed by the Presiding Officer,Labour Court, Sambalpur in I D Case No. 72/2002 reinstating Shri Gokul Das with back wages. Misc. Case No.7272/2007 also filed praying for a stay of the award and exempting from paying wages U/s 17-B of the ID Act,1947to Shri Das. In the meantime the workman approached for an out of Court settlement and accordingly settlement inForm -K has been filed in the Court with a prayer to dispose off the case in terms of settlement. Case No. WP (C) No.7701/2007 is allotted to this case.

• Shri Rabi Narayan Behera, Sr. Clerk, Share and Law Department raised an industrial dispute challenging the terminationof his service on the ground of disobedience. The said case was registered as ID Case No. 6/2001 in the LabourCourt, Sambalpur. State Govt. on request of Shri Behera transferred the said case to Labour Court, Bhubaneswarwithout giving an opportunity of hearing to the Company. The Company filed writ in Orissa High Court challengingthe order of Government of Orissa transferring the ID Case from Labour Court, Sambalpur to Labour Court,Bhubaneswar. Stay is granted by Orissa High court. During the pendency of the said writ Shri Behera entered into asettlement with the Company in Form -K and received Rs.1,50,000/- towards full and final settlement of his claim. Inview of this development the Company filed withdrawal petition in the High Court for withdrawal of the writ. The ID

case in the Labour Court will accordingly be disposed off in terms of the settlement. The case No. is 4273/2002 and

the matter is still pending.

159


• WP(C) NO 7529/2005

Filed by the Company challenging the letter dated 25.04.2005 issued by the Chief Sales Manager, MCL directing the

Company to lift coal for it’s Refractory unit by E-auction or to pay the average E-auction price of particular grade of

coal in violation of the terms and conditions of the agreement dated 07.01.2004 entered into between the Company

and Mahanadi Coalfields Limited. By interim order dated 21.06.2005 Hon’ble Orissa High Court directed MCL to

supply coal as per agreement but at enhanced price. The differential amount shall be kept in a separate interest

bearing account till disposal of the case The Supreme Court of India in the matter of Ashoka Smokeless Coal India

Pvt. Ltd. and other Vs. Union of India and others (2007-2-SCC-640) held the methodology of E-auction is

unconstitutional. Therefore the Company has filed a Misc. Case in the Orissa High Court for refund of Rs. 1,55,55,156/

- along with interest. The case is still pending.

• WP (C) NO. 3266/2006

The Chief Goods Supervisor, OC Siding, Rajgangpur, S E Railway, levied overloading punitive charges for Rs.7,25,070/

- alleging overloading of iron ore loaded from Barsuan and Nuamundi station and consigned to OC Siding, Rajgangpur

(S E Railway). The action of the Company was based on the Special rate circular bearing Sl. No. 79(G)2005 dated

11.05.2005 which revised the permissible capacity of BOXN wagos, with effect from 15.05.2005. This circular

permits carrying capacity of CC+8 tonnes in place of CC+4 tonnes in respect of specified materials like iron ore in

designated routes. The Railways action is based on the withdrawal of the said circular with retrospective effect i.e.

with effect from 15.05.2005. The Company challenged the levy on the ground that withdrawal of the previous

circular dated 11.05.2005 with retrospective effect is illegal. The Hon’ble Orissa High Court by it’s order dated

08.03.2006 stayed the said demand till the next date.

• WP (C) NO. 4214/2006

The Chief Goods Supervisor, OC Siding, Rajgangpur, S E Railway, levied overloading punitive charges for Rs.9,67,613/

- alleging overloading of coal despatched from Akaltara and consigned to OC Siding, Rajgangpur. The Company

filed writ petition challenging the levy on the ground that weigment of the wagons is incorrect due to faulty weighbridge

of the Railways. The Hon’ble Orissa High Court by it’s order dated 31.03.2006 stayed the said demand till the next

date.

• WP (C) NO.6628/2006

The Company was allotted a coal block for captive mining of coal jointly with M/s Rungta Mines (leader) and M/s

Ocean Ispat Ltd. The Ministry of coal and mines indicated three options. The leader of the joint allottees opted for

Option III. It is clarified by the Ministry of Coal that the draft agreement proposed under Option III is only model

form and the same can be altered/modified by mutual agreement. The Company intimated it’s preference to work

the coal mine through a joint venture company to ensure equal representation to the joint allot tees in activities of

the venture and sharing of the coal raised in proportion of their coal entitlement stands inter se. In the event the

Ministry directs to adopt Option III, a draft has been suggested with modification to Option III. However the

Government refused to accept the proposal and directed the parties that Radhikapur coal block shall be worked only

by the leader M/s Rungta Mines and joint allottees shall surrender their right to the leader. The Company filed a writ

challenging the said letter dated 25.04.2006 which ignored the proposal of the joint allottees. Orissa High Court byits’ order dated 18.05.2006 directed the Ministry of Coal not to take any decision prejudicial to the interest of the

Company in respect of the coal block in question unless all of them agree to sign the draft agreement as proposed bythe Government.

• WP NO.2632/2006

Filed by the Company challenging legality and validity of Chhatishgarh (Adhosanrachna Vikas avam Paryavaran)

Upkar Adhiniyam,2005 and Rules made thereunder. The aforesaid Act provides for levy of cess on land for raisingfunds to implement infrastructure development projects and environment projects. The Hon’ble Chhatisgarh High

Court by it’s order dated 07.06.2006 held that the cess that may be recovered under the impugned enactment shall besubject to the final result of the writ petition.

• WP NO.2633/2006

South Eastern Coal Fields Limited supplied 11093 MT of coal from the mines of SECL, Corba Raigarh during the

period 04.04.2006 to 05.05.2006.and demanded cess under Chhatishgarh (Adhosanrachna Vikas avam Paryavaran)Upkar Adhiniyam,2005 and Rules made thereunder. The Company filed writ petition for staying the said demand.

The Hon’ble Chhatisgarh High Court by it’s order dated 07.06.2006 held that the cess that may be recovered under

the impugned enactment shall be subject to the final result of the writ petition.

160


• ESI MISC. NO. 179/2004

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views of various

High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in the case of

The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages

do not form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge,

Puri. However the Company paid the contribution during the pendency of the case as the Supreme Court finally

held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State

Insurance Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State Insurance

Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-9-5258 issued on 09.11.2003 imposing

damages totaling to Rs.10,52,468/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI contribution

on over time wages for periods from 16.02.1994 to 15.05.1996.

The Company challenged the said order and the Hon’ble District Judge, Bhubaneswar granted stay vide order dated

15.04.2004.

• ESI MISC. NO. 260/2004








Corporation, Bhubaneswar started a certificate case bearing No. 44/Y/11/15/44-1281-RR dated 29.04.2004 for

realisation of interest totaling to Rs.8,33,901/- under Section 45 of the ESI Act, 1948 for delayed payment of ESI

contribution on over time wages for periods from 16.02.1994 to 15.05.1996.

The Company challenged the said certificate proceeding and the Hon’ble District Judge, Bhubaneswar granted stay

vide order dated 10.06.2004.

• ESI MISC. NO. 416/2004








Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-1-18674 issued on 09.08.2004

imposing damages totaling to Rs.1,95,579/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI

contribution on over time wages for periods from 16.12.1989 to 15.01.1991

The Company challenged the said demand notice and the Hon’ble District Judge, Bhubaneswar granted stay vide

order dated 06.10.2004.

• ESI MISC. NO. 417/2004


High Courts on the issue. The Company contended that the decision of Hon’ble Orissa High Court in the case of The

Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages do not

form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge, Puri.

However the Company paid the contribution during the pendency of the case as the Supreme Court finally held that

overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State Insurance

Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State Insurance Corporation,

Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-3-18668 issued on 09.08.2004 imposing damages

totaling to Rs.72,182/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI contribution on over

time wages for periods from 16.01.1989 to 15.12.1989.



161


• ESI MISC. NO. 418/2004








Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-2-18671 issued on 09.08.2004

imposing damages totaling to Rs.32,333/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI

contribution on over time wages for periods from 16.01.1991 to 15.12.1992.



• ESI MISC. NO. 342/2004








Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1167-46-19-11893 issued on 24/26.05.2005


contribution on overtime wages for periods from 01.01.1990 to 31.01.1991.



• ESI MISC. NO. 343/2004










contribution on over time wages for periods from 01.02.1991 to 31.01.1993.The Company challenged the said

demand notice and the Hon’ble District Judge, Bhubaneswar granted stay vide order dated 21.07.2005.

• ESI Misc. No. 344/2004









imposing damages totaling to Rs.60,728/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI

contribution on over time wages for periods from 01.02.1989 to 31.12.1989.The Company challenged the said demand

notice and the Hon’ble District Judge, Bhubaneswar granted stay vide order dated 21.07.2005.

162





remote chances of any adverse effect on issuer company due to this litigation.

LITIGATION FILED BY OCL INDIA LIMITED INVOLVING ENVIRONMENTAL LAWS

WP (C) NO. 9168/2004

The Assessing Authority of State Pollution Control Board, Orissa by it’s order dated 12.09.2000 assessed the water cess

for the period from September -1999 till July-2000 as Rs.1,81,349/- which includes Rs.1,78,764/- towards cess on water

merely pumped out from the bottom of the mines pit to the surface area. The Company has preferred an appeal before the

Cess Appellate Committee against the assessment order cum demand notice dated 12.09.2000, which was out rightly

rejected by the Appellate Authority on the ground that the appeal was time barred. Against this order Company filed the

writ petition in the High Court of Orissa challenging the assessment -cum- demand notice dated 12.09.2000 for Rs.1,81,349/

- passed by Orissa Pollution Control Board and order dated 15.04.2004 passed by the Cess Appellate Committee of State

Pollution Control Board, Orissa. The main’ contention of the company is that mine drainage water pumped out by the

Company from mines pit to mines surface does not amount to consumption / pollution and hence not liable for Cess. The

matter came up for hearing on 02.11.2006 and the Hon’ble court stayed the order of Cess Appellate committee till next

date. The case is pending for further proceedings.

W P (C) NO. 15805/2006

Filed by the company challenging the authority of Cess Appellate Committee and the State Pollution Control Board in

levying consolidated demand of Rs.11,81,840/- towards cess on mine drainage water. The consolidated demand was

raised on the basis of dismissal of our appeal before the Cess Appellate Committee. The initial demand of Rs.1,81,349

was stayed by the Hon’ble High court of Orissa in WP(C) No.9168/2004.The case is pending for further proceedings.




remote chances of any adverse effect on Issuer Company due to this litigation

IV. OUTSTANDING LITIGATIONS INVOLVING SUBSIDIARY COMPANIES

There are no outstanding litigations, defaults etc. with respect to Shri Chamundeshwari Minerals Limited (the wholly

owned subsidiary of our Company) pertaining to matters likely to affect our operations and finances including disputed

tax liabilities, prosecutions under any enactment in respect of schedule XIII of the Companies Act, 1956.

There are no creditors or small scale undertaking(s) to whom the Company owes a sum of Rs. One Lacs which is

outstanding for more than 30 days except as follows:

S.NO. PARTICULARS AMOUNT DUE

(In Rs.)

1. Dalmia Industries Limited 8,21,651

2. Precision Engineers Pvt Ltd 2,05,492

3. Bawa Steel Corporation 1,14,303

4 Koppind Private Limited 4,95,200

5 Dustven Private Limited 1,48,896

6. Balsara Fasteners Private Limited 16,92,124

7 Ganpathi Metals Bangalore 2,37,487

8 Girish Trading Company 1,42,968

9 Harish Clay 2,43,523

10 Harsiddhi Mineral Products 1,02,922

11 Hayderabad Industries 36,71,753

163


12 Kathiyavad Industries 2,51,473

13 Khodiar Traders 1,20,764

14 Koppind Private Limited 4,50,000

15 Llyod Insulation (Ind) Limited 2,53,460

16 Mayur Lime & Chemical Limited 96,67,342

17 Newkem Products Corporation 16,98,048

18 Orient Abrasives Limited 4,28,197

19 Orkly India Private Limited 3,27,172

20 Pracision Engineers Private Limited 1,53,015

21 Raj Trade Link, Ahemdabad 1,30,298

22 Rushabh Enterprises 1,25,401

23 Shree Gayatri Industries Limited 1,95,395

24 Shree Krishan Timber 2,08,507

25 Shree Ram Ref & Allied 1,50,93,590

26 Shree Vinayak Calcine Industries, 7,59,751

27 Shreenathji Enterprise 1,05,270

28 Tahlaram & Sons, Bikaner 3,15,686

29 T. Setha Madhvan Khambhalia 1,46,931

30 Shri ram Chem INt 3,02,360

Grand Total 3,86,08,979

164


GOVERNMENT AND OTHER APPROVALS

As per Notification No. FEMA 20 / 2000 - RB dated 3rd May 2000, as amended from time to time, under automatic route

of Reserve Bank, the Company is not required to make an application for Issue of Equity Shares to NRIs/FIIs with

repatriation benefits. However, the allotment / transfer of the Equity Shares to NRIs/FIIs shall be subject to prevailing

RBI Guidelines. Sale proceeds of such investments in Equity Shares will be allowed to be repatriated along with the

income thereon subject to the permission of the RBI and subject to the Indian tax laws and regulations and any other

applicable laws.

The Company has all the necessary licenses, permissions and approvals, as may be applicable, from the Central and State

Governments and other government agencies/certification bodies required for the business and no further approvals are

required by the company, except those mentioned separately hereunder, and those approvals that may be required to be

taken from any government or any other authority in the normal course of business from time to time to continue the

activities, and those mentioned under the heading Risks Envisaged.

The Company does not require any other approvals or renewals pertaining to land, except as mentioned specifically

hereunder.

It must, however be, distinctly understood that in granting the below-mentioned approvals, the Central Government,

State Government, RBI and other authorities do not take any responsibility for the financial soundness of the Company

or for the correctness of any of the statements or any commitments made or opinions expressed.

In view of the approvals listed below, the Company can undertake this Issue and its current and proposed business

activities and no further material approvals are required from any Government authority to continue such activities.

Sl.No.

1.

2.

3.

4.

5.

6.

7.

8.

9.

Name of Registration

Certificate of Incorporation for

incorporation of the Company as Dalmia

Ceramic Industries Limited

Fresh Certificate of Incorporation

consequent upon change of name Shri

Nataraj Ceramic and Chemical

Industries Limited

Permanent Account Number

TDS Account Number

Import Export Code

Employees Provident Fund Registration

Employees State Insurance Registration

ISO 9001:2000

VAT (TIN)

Name of Issuing Authority/Department



Income Tax Department, Government of

India

National Securities Depository Limited,

Mumbai.

National Securities Depository

Limited,Mumbai

National Securities Depository Limited,

Mumbai

Jt. Director General of Foreign Trade,

Ministry of Commerce, Government of

India

1. Office of Regional Provident Fund

Commissioner, Ahmedabad

2. Sub-Regional office of the Provident

Fund Department of Tamilnadu at

Trichirapalli

Office of Regional Director, ESIC

Bureau of Indian Standards

1. Commercial Tax Department of

Tamilnadu via its Deputy Commercial Tax

Officer (VAT) at Lalcudi

2. Commercial Tax Department of Gujarat

via its Sales Tax Officer (VAT) at Jamnagar.

Licence/Registration

No.

18-06372 dated June 21,

1973

18-06372 dated

November 01, 1983

AABCS5453M

DELS01604B

CHES12048B

RKTS01310B

0488016983

1. GJ/10904/ENF.IV/

8876 dated 21.02.84

with effect from July

1982

2. TN/TRY/135-A

63477431

MSC/L-6000191.4

1. 33683480223 (w.e.f

01/01/2007)

2. 24100800253(w.e.f

27/09/05)

165


Sl.No.

10.

11

12

13

Name of Registration

Central Sales Tax Act, 1956

Service Tax

Central Excise

Factories Act

Name of Issuing Authority/Department

Commercial Tax Department of Tamilnadu

via its Deputy Commercial Tax Officer at

Lalcudi

Commercial Tax Department of Tamilnadu

via its Deputy Commercial Tax Officer at

Jamnagar

Office of the Assistant Commissioner of

Central Excise, Division-Service Tax,

Rajkot



Rajkot



Trichirappalli

Office of the Assistant Commissioner

of Central Excise, Division-Service Tax,

New Delhi

1. Central Excise Authority, Dist. Jam

Nagar

2. Central Excise Authority, Dist. Trichy

3. Central Excise Authority, Dist. Rajkot

Directorate general of technical

development (Refractories Directorate) of

the Government of India

Directorate general of technical

development (Refractories Directorate) of

the Government of India

Licence/Registration

No.

209035/ TRI (Central)

w.e.f 1/10/1973

24600800253 dated 27/

09/2005

AABCS5453MST003

AABCS5453MST004

AABCS5453MST002

AABCS5453MST001

1. AABCS5453MXM002

on 10.09.2002.

2. AABCS5453MXM001

dated 16.07.2002

3. AABCS5453MXM003

DGTD/HQ/B/S-16/R-

4 4 5 / C - 3 0 ( V ) / S E / 7 9

dated 27.01.1979

DGTD/HQ/D/S-30/C-

7375/C-30(v) /SE/81

Dated 24/4/1981

Other consents

1. Consent Order No. AWH-31803 dated 04.03.2009 from Gujarat Pollution Control Board to use its unit at Jam-

Khambalia for discharging trade effluent.

2. Consent to Establish (NOC) No. GPCB/CCA-JMN-4(3)/2066 dated 22.01.2008 from Gujarat Pollution Control

Board for expansion in the existing unit at Jam-Khambalia.

3. The Company has been granted a License No. P/HQ/GJ/15/1367/ dated 19.11.2007 to Import and Store Petroleum

in Installation from Petroleum and Explosives Safety Organization (PESO), Ministry of Commerce & Industry.

The said license has further been renewed upto 31.12.2010. The total licensed capacity is 360 KL.

4. The Company has been granted a License no. G/HT/C: 391 to act as Electrical Contractors for carrying out Electric

Installation Works in the State of Gujarat.

5. The Company has got its Generating Sets registered with the Office of the Collector of Electricity Duty, Gandhi

Nagar, Gujarat, for the purpose of generation of electricity at its unit at Jam-Khambalia. For two generation sets of

the capacity of IX 180 KVA, two different registration numbers Jamnagar/51-C and Jamnagar/51-D have been

allotted. For the remaining two generation sets of the capacity of Ix 250 KVA, two separate registration no. Jamnagar/

51-E and Jamnagar/51-F have been allotted.

6. The Company has been registered with the Directorate General of Technical Development vide registration no.

DGTD/HQ/D/S/-30C-7375/C-30(v)/SE/81 dated 24.04.1981 for the manufacture of Refractories at its unit at Jam-

Khambalia.

166


7. Similarly, for its unit at Dalimiapuram, the Company has been granted a registration no. DGTD/HQ/B/S-16/R-445/

C-30(v)/SE/79 dated 27.01.1979 by Directorate General of Technical Development, for the manufacture of Refractories.

8. Further, the Company has also been registered with the General of Technical Development vide registration no.

DGTD/HQ/B/S-16/R-16839/C-30(i)/SE/87 dated 25.03.1987 for the manufacture of Castables with an annual capacity

of 4000 M.T. at its unit situated at Dalmiapuram. Similarly for its unit at Jam-Khambalia, it has been given a

registration no. DGTD/HQ/B/S-30/R-16838/C-30(i)/SE/87 dated 25.03.1987 for the manufacture of Castables with

an annual capacity of 2000 M.T.

9. The Company has been granted Industrial Licence (Carry on Business) No. IL-534 (83) dated 02.12.83 by the

Ministry of Industry, Department of Industrial Development, Secretariat for Industrial Approvals, for the manufacture

of Potassium Chlorate.

10. Further, the Company has been granted Industrial Licence (Carry on Business) No. IL-108 (86) dated 30.12.1983

by the Ministry of Industry, Department of Industrial Development, Secretariat for Industrial Approvals, for the

manufacture of Salt glazed stoneware pipes and specials.

11. The Company has been granted the Registration-Cum-Membership Certificate by the Chemical & Allied Products

Export Promotion Council, Calcutta on 24.01.1992 as a Manufacturer-Exporter.

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SECTION VII - OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on September 09, 2008 it

has been decided to make this offer to the Equity Shareholders of the Company with a right to renounce in accordance

with the provisions of sections 80, 81(1A) of the Companies Act, 1956.

Consent of Lenders

The agreements in respect of some of the debt taken by us contain certain covenants inter-alia for altering our share

capital and for our expansions and diversifications plans. We have obtained the consents of these lenders for the proposed

rights issue by our Company.

Prohibition by SEBI/RBI/Any other Authority

Neither we, nor our Directors or the Promoter Group Companies, or companies with which our Directors are associated

with as directors or promoters, have been prohibited from accessing or operating in the capital markets under any order

or direction passed by SEBI. Further, none of the directors or person(s) in control of the Promoters (as applicable) have

been prohibited from accessing the capital market under any order or direction passed by SEBI or any other authority.

Neither the Company nor its directors, associates, promoters, promoters Group companies or relatives of the Promoters

have been detained as wilful defaulter by the RBI or government authorities. There are no violations of securities laws

committed by any of them in the past or pending against them.

Eligibility for the Issue

The Company is an existing company registered under the Indian Companies Act, 1956 whose Equity Shares are listed

on the MSE, CSE and DSE. It is eligible to offer this Issue in terms of Clause 2.4.1(iv) of the SEBI DIP Guidelines. The

Company, its Promoter, its Directors or any of the Company’s associates or group companies are currently not prohibited

from accessing the capital market under any order or direction passed by SEBI. Further the Promoter, their relatives (as

per Act), the Company, group companies, associate companies are not detained as willful defaulters by RBI / Government

authorities.

Disclaimer Clause of SEBI

“IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF OFFER DOCUMENT TO SEBI SHOULD

NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED

BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF

ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE

CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT.

LEAD MERCHANT BANKER, CHARTERED CAPITAL AND INVESTMENT LTD. HAS CERTIFIED THAT

THE DISCLOSURES MADE IN THE OFFER DOCUMENT ARE GENERALLY ADEQUATE AND ARE IN

CONFORMITY WITH SEBI (DISCLOSURES AND INVESTOR PROTECTION) GUIDELINES IN FORCE

FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED

DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY

RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT

INFORMATION IN THE OFFER DOCUMENT, THE LEAD MERCHANT BANKER IS EXPECTED TO

EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY

ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MERCHANT BANKER

CHARTERED CAPITAL AND INVESTMENT LTD. HAS FURNISHED TO SEBI A DUE DILIGENCE

CERTIFICATE DATED SEPTEMBER 16 2008 WHICH READS AS FOLLOWS:

WE, THE UNDER NOTED LEAD MERCHANT BANKER (S) TO THE ABOVE MENTIONED FORTHCOMING

ISSUE STATE AS FOLLOWS:

1) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION

LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC.

AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE HERETO

IN CONNECTION WITH THE FINALISATION OF THE LETTER OF OFFER PERTAINING TO THE

SAID ISSUE;

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2) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS

DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE

STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE

JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE

AND OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:

(A) THE LETTER OF OFFER FORWARDED TO THE BOARD IS IN CONFORMITY WITH THE

DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

(B) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE

GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE BOARD, THE GOVERNMENT AND ANY

OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH;

AND

(C) THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO

ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT

IN THE PROPOSED ISSUE (AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE

REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SEBI (DISCLOSURE AND INVESTOR

PROTECTION) GUIDELINES, 2000 AND OTHER APPLICABLE LEGAL REQUIREMENTS).

3) WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE LETTER

OF OFFER ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS

VALID.

4) WE HAVE SATISFIED OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFIL

THEIR UNDERWRITING COMMITMENTS.

5) WE CERTIFY THAT WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN OBTAINED FOR

INCLUSION OF THEIR SECURITIES AS PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO

LOCK-IN AND THE SECURITIES PROPOSED TO FORM PART OF PROMOTERS’ CONTRIBUTION

SUBJECT TO LOCK-IN, WILL NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTERS

DURING THE PERIOD STARTING FROM THE DATE OF FILING THE LETTER OF OFFER

WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN

THE LETTER OF OFFER.

6) WE CERTIFY THAT CLAUSE 4.6 OF THE SEBI (DISCLOSURE AND INVESTOR PROTECTION)

GUIDELINES, 2000, WHICH RELATES TO SECURITIES INELIGIBLE FOR COMPUTATION OF

PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE

DISCLOSURES AS TO COMPLIANCE WITH THE CLAUSE HAVE BEEN MADE IN THE LETTER OF

OFFER.

7) WE UNDERTAKE THAT CLAUSES 4.9.1, 4.9.2, 4.9.3 AND 4.9.4 OF THE SEBI (DISCLOSURE AND

INVESTOR PROTECTION) GUIDELINES, 2000 SHALL BE COMPLIED WITH. WE CONFIRM THAT

ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION AND

SUBSCRIPTION FROM ALL FIRM ALLOTTEES WOULD BE RECEIVED AT LEAST ONE DAY

BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS’ CERTIFICATE TO

THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT

ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL

BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE

RELEASED TO THE COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE.

8) WHERE THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION IS NOT APPLICABLE TO THE

ISSUER, WE CERTIFY THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION UNDER CLAUSE

4.10 {SUB-CLAUSE (A), (B) OR (C), AS MAY BE APPLICABLE} ARE NOT APPLICABLE TO THE

ISSUER.

9) WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE

BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE

OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE

ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID

IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

10) WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE

MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS

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PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS

SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL

THE STOCK EXCHANGES MENTIONED IN THE LETTER OF OFFER. WE FURTHER CONFIRM

THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE

ISSUER SPECIFICALLY CONTAINS THIS CONDITION.

11) WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT, COMMISSION, ALLOWANCE

OR OTHERWISE SHALL BE MADE BY THE ISSUER OR THE PROMOTERS, DIRECTLY OR

INDIRECTLY, TO ANY PERSON WHO RECEIVES SECURITIES BY WAY OF FIRM ALLOTMENT IN

THE ISSUE.

12) WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE LETTER OF OFFER THAT THE

INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE.

13) WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE LETTER OF

OFFER:

(A) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE ONLY

ONE DENOMINATION FOR THE SHARES OF THE COMPANY AND

(B) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE

AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.

The filing of this Letter of Offer does not, however, absolve the Company from any liabilities under Section 63 or Section

68 of the Act or from the requirement of obtaining such statutory or other clearance as may be required for the purpose of

the proposed Issue. SEBI further reserves the right to take up, at any point of time, with the Lead Managers any irregularities

or lapses in this Letter of Offer.

Caution

The Company, its Directors and the Lead Manager accept no responsibility for statements made otherwise than in the

Letter of Offer or the advertisements or any other material issued by or at the instance of the above mentioned entities and

any one placing reliance on any other source of information would be doing so at his or her own risk.

The Lead Manager does not accept any responsibility, save to the limited extent as provided in terms of the Memorandum

of Understanding entered into between the Company and the Lead Manager.

All information shall be made available by the Lead Manager and the Company to the public and investors at large and

no selective or additional information would be available for a section of the investors in any manner whatsoever including

at road show presentations, in research or sales reports or elsewhere.

The Company and the Lead Managers are obliged to update the Letter of Offer and keep the public informed of any

material changes till the listing and trading commencement.

Disclaimer with respect to jurisdiction

This Issue is being made in India to persons resident in India (including Indian nationals resident in India), who are majors,

HUF, companies, corporate bodies and societies registered under the applicable laws in India and authorised to invest in

shares, Indian mutual funds registered with SEBI, Indian financial institutions, scheduled commercial banks, regional

rural banks, co-operative banks (subject to RBI permission), or Trusts under the applicable Trust Law and who are authorised

under their constitution to hold and invest in shares, permitted Insurance Companies and Pension Funds and to permitted

non residents including FIIs, NRIs and other eligible Foreign investors. This Letter of Offer does not, however, constitute

an offer to sell or, an invitation to subscribe to or purchase Equity Shares offered hereby in any other jurisdiction to any

person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this

Letter of Offer comes is required to inform himself or herself about it, and to observe, any such restrictions. Any dispute

arising out of this Issue shall be subject to the exclusive jurisdiction of appropriate court(s) in, Delhi, India only.

No action has been or will be taken to permit a public Issue in any jurisdiction where action would be required for that

purpose, except that the Letter of Offer has been filed with SEBI for observations and the SEBI has given its observations.

Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this Letter of

Offer may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such

jurisdiction. Neither the delivery of this Letter of Offer nor any sale hereunder shall, under any circumstances, create any

implication that there has been no change in affairs of the Company since the date hereof or that the information contained

herein is correct as of any time subsequent to this date.

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Designated Stock Exchange

The Designated Stock Exchange for the purpose of the Issue will be The Madras Stock Exchange Ltd.

Disclaimer Clause of the MSE

Madras Stock Exchange Limited does not in any manner:

Warrant, certify or endorse the correctness or completeness of any of the contents of this offer document, or

Warrant that this company’s securities will be listed or continue to be listed on Madras Stock Exchange, or

Take any responsibility for the financial or other soundness of this Company, its promoter, the management or any scheme

of project of the company.

It should not, for any reason be deemed or construed that this Offer Document has been cleared or approved by the

Exchange. Every person who desires to apply for or otherwise acquires any securities of the company may do so pursuant

to independent inquiry, investigation and analysis and shall not have any claim against the Madras Stock Exchange

whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such

subscription / acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

Disclaimer Clause of the CSE

The Calcutta Stock Exchange Association Ltd., (“the Exchange”), has given its permission to the company to use the

name of the Exchange in the Offer Document as a Non-Designated Stock Exchange on which the company’s further

securities are proposed to be listed. The Exchange has scrutinized this offer document for its limited internal purpose of

deciding on the matter of granting the aforesaid permission to the company.

This Exchange does not in any manner

(1) Warrant, certify or endorse the correctness or completeness of any of the contents of the Letter of Offer, or

(2) Warrant that the company’s securities will be listed or will continue to be listed on this Exchange, or

(3) Take any responsibility for the financial or other soundness of this Company, its promoter, its management or any

scheme of project of the company.

and it should not for any reason be deemed or construed that this Letter of Offer has been cleared by the Exchange. Every

person who desires to apply for or otherwise acquires any securities of the company may do so pursuant to independent

inquiry, Investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss

which may be suffered by such person consequent to or in connection with such subscription / acquisition whether by

reason of anything stated or omitted to be stated in the offer document or for any other reason whatsoever.

Disclaimer Clause of the DSE

The Delhi Stock Exchange Ltd., has given its no objection to the company vide its letter dated October 1, 2008 to use the

name of the Exchange in this Offer Document as one of the Stock Exchanges on which the company’s securities are

proposed to be listed. Delhi Stock Exchange has scrutinized this Draft Offer Documents for its limited internal purpose

of deciding on the matter of granting the aforesaid permission to the company. The Delhi Exchange does not in any

manner:

• Warrant, certify or endorse the correctness or completeness of any of the contents of this offer document.

• Warrant that this company’s securities will be listed or continue to be listed on DSE.

• Take any responsibility for the financial or other soundness of this Company, its promoter, the management or any

scheme of project of the company

and it should not be, for any reason be deemed or construed that this Offer Document has been cleared or approved by

DSE. Every person who desires to apply for or otherwise acquires any securities of this company may do so pursuant to

independent inquiry, investigations and analysis and shall not have any claim against DSE, whatsoever by reason of any

loss which may be suffered by such person consequent to or in connection with such subscription / acquisition whether by

reason of anything stated in the offer document or any other reason whatsoever.

Filing

This Letter of Offer will be filed with SEBI, Corporation Finance Department, Division of Issues and Listing, D’ Monte

Building, 3rd Floor, 32 D’ Monte Colony, TTK Road, Alwarpet, Chennai, 600018. Three copies of the Letter of Offer will

also be filed with Primary Market Department at the Head Office of the SEBI at SEBI Bhavan, Plot No. C-4A, G Block,

171


Bandra Kurla Complex, Bandra (East), Mumbai- 400 051. The Letter of Offer will also be filed with the Stock Exchanges

as per the requirements of the law. All the legal requirements applicable till the date of filing the Letter of Offer with the

Stock Exchanges have been complied with.

Dematerialised Dealing

The Company has agreement with Central Depository Services (India) Limited (CDSL) and its Equity Shares bear the

ISIN No. INE200F01017.

Listing

The existing Equity Shares are listed on the MSE, CSE and DSE. The Company has made an application to the MSE,

CSE and DSE for permission to deal in and for an official quotation in respect of the 6% NCDs with Detachable Warrants

being offered in terms of this Letter of Offer. If the permission to deal in and for an official quotation of the securities is

not granted by any of the Stock Exchanges mentioned above, within 7 days from the Issue Closing Date, the Company

shall forthwith repay, without interest, all monies received from applicants in pursuance of this Letter of Offer. If such

money is not paid within 8 days after the Company becomes liable to repay it, then the Company and every Director of the

Company who is an officer in default shall, on and from expiry of 8 days, be jointly and severally liable to repay the

money with interest as prescribed under the Section 73 of the Companies Act, 1956.

Impersonation

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection (1) of

Section 68A of the Act which is reproduced below:

“Any person who makes in a fictitious name an application to a company for acquiring, or subscribing for, any shares

therein, or otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in

a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”.

Consents

Consents in writing of the Auditors, Lead Managers, Legal Advisors, Registrar to the Issue and Banker to the Company

to act in their respective capacities have been obtained and filed with SEBI, along with a copy of the Letter of Offer and

such consents have not been withdrawn up to the time of delivery of this Letter of Offer for registration with the Stock

Exchanges.

The Auditors of the Company have given their written consent for the inclusion of their Report in the form and content

as appearing in this Letter of Offer and such consents and reports have not been withdrawn up to the time of delivery of

this Letter of Offer for registration for registration with the stock exchanges.

The Auditors have given their written consent for inclusion of income tax benefits in the form and content as appearing

in this Letter of Offer, accruing to the Company and its members.

To the best of our knowledge there are no other consents required for making this Issue. However, should the need arise,

necessary consents shall be obtained by us.

Expert Opinion, if any

Save and except as indicated elsewhere in this Letter of Offer, no other expert opinion has been obtained by the Company.

Fees Payable to the Lead Managers to the Issue

The fees payable to the Lead Managers to the Issue are set out in the Memorandum of Understanding entered into by the

Company with Chartered Capital and Investment Limited, copies of which are available for inspection at the Registered

Office of the Company.

Fees Payable to the Registrars to the Issue

The fee payable to the Registrars to the Issue is as set out in the relevant documents, copies of which are kept open for

inspection at the Registered Office of the Company.

Underwriting commission, brokerage and selling commission

No underwriting commission, brokerage and selling commission will be paid for this Issue.

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Other Expenses of the Issue

The other expenses of the Issue payable by the Company including printing and distribution expenses, publicity, listing

fees, stamp duty and other expenses are estimated at Rs. 30 Lacs (around 12.5% of the total Issue size) and will be met out

of the proceeds of the Issue. The following table provides a break-up of estimated issue expenses:

The expenses for this Rights Issue are estimated at Rs. 30 lacs, the break-up whereof is as follows:

Activity Amount (in Rs. Lacs)

Lead Management Fees 8

Advertisement and Marketing expenses 2

Printing and Stationery 5

Registrar to the Issue 1.5

Others (legal fee, listing fee, etc) 13.5

Total Estimated Issue expenses 30

Previous Issues by the other Group Companies during last three years

There have been no previous Issues by the other Group Companies during last three years except OCL India Limited the

details of which are mentioned on page no 173 of this letter of offer.

Promise v. Performance


SNCCIL made a public issue to their shareholders in 1984.

The issue comprised of 300000 equity shares of Rs. 10 each and offer for sale of 20000 equity shares of Rs. 10 each by

Govan Bros.(Rampur) Pvt. Limited, both for cash at par.

Objects of the issue

The issue was made with the object of obtaining an official quotation for Equity Shares of the Company, to have funds for

long term working capital requirement of the Company and meet the expenses of the issue.

Actual performance:

The objects of the issue were successfully achieved.

Funds were utilized for the following:

1) The shares of the Company were successfully listed on the Madras Stock Exchange Association Limited (then know

as Madras Stock Exchange Limited)

2) Rs. 2400000 was used for funding the long term working capital requirements of the Company.

3) Rs. 600000 were used for meeting the expenses of the issue.

Listed Ventures of the Promoters Group

1. Sita Investment Company Limited (SICL):

The shares of SICL are listed on Calcutta Stock Exchange Association Limited.

The company has, however, initiated the process of getting itself delisted from the said stock exchange vide resolution

passed in Board meeting dated Novembe 28, 2008 and EGM dated December 26, 2008. It has also received the NOC

from the Stock Exchange for using electric linked transparent facility to make reverse Book Building Process vide its

letter dated June 02, 2009.

2. Shree Nirman Limited (SNL):

The shares of SNL were listed on Calcutta Stock Exchange Association Limited. However the shares have been

delisted from this exchange w.e.f April 09, 2009.

3. Alirox Abrasives Limited (AAL):

The shares of AAL are listed on Delhi Stock Exchange Limited.

173


4. Ankita Pratisthan Limited (APL):

The shares of APL are listed on Uttar Pradesh Stock Exchange Association Limited. The company has, however,

initiated the process of getting itself delisted from the said stock exchange vide resolution passed in Board meeting

dated October 16, 2008 and EGM dated November 12, 2008.

The shares of the company have been delisted from Calcutta Stock Exchange Association Limited w.e.f April 09, 2009

vide CSE’s letter dated March 31, 2009. The shares of this Company were listed on Delhi Stock Exchange Limited vide

DSE’s letter dated September 29, 2009 and subsequently delisted from the said exchange w.e.f. March 31 2009.

5. Dalmia Cement (Bharat) Limited (DCBL):

The shares of DCBL are listed on Bombay Stock Exchange Limited, National Stock Exchange of India Limited and

Madras Stock Exchange Limited.

6. OCL India Limited

The existing Equity Shares of the OCL India Limited are listed on the National Stock Exchange of India Limited

and Bombay Stock Exchange Limited.

7. Landmark Property Development Co. Limited

The existing Equity Shares of the Landmark Property Development Co. Limited are listed on the National Stock

Exchange of India Limited and Bombay Stock Exchange Limited.

Promise vis-à-vis performance - Last one Issue of Group / Associate Companies

All the promises as mentioned in the offer documents of the last one issues of the group Companies have been successfully

accomplished.

Dalmia Cement (Bharat) Limited (DCBL) : It came out with a right issue of 6% NCDs with Detachable Warrants in

2001.

The object of the issue was to pre-pay its term loan from Punjab National Bank, Janpath Branch, New Delhi or to reduce

any of its other borrowings.

Actual performance:

The object of the issue was successfully achieved.

OCL India Limited : It came out with a right issue of Equity Shares in 2006.

The object of the issue were:

1. To increase cement manufacturing capacity of the Company, which will enable us to produce increased volumes of

blended cement. We intend to add a VRM to our already existing line of three VRMs in our cement plant at

Rajgangpur; and

2. To meet the expenses of the Issue.

Actual performance:

The objects of the issue were successfully achieved.

Outstanding Debentures or Bonds and Redeemable Preference Shares and Other Instruments issued by SNCCIL

Outstanding as on the Letter of Offer Date and their terms of Issue

There are no Outstanding Debentures or Bonds and Redeemable Preference Shares issued by Shri Nataraj Ceramic and

Chemical Industries Limited as on the date of this Letter of Offer.

Stock Market Data for Equity Shares of Shri Nataraj Ceramic and Chemical Industries Limited

The stock market data as for the Company is not available as the shares are infrequently traded.

The Average Price for the preceding three years on MSE, CSE and DSE were as under:

The Average price for preceding 3 years for the Company is not available as the shares are infrequently traded. The shares

of the company last traded at Madras Stock Exchange Limited at Rs. 30.50 per share on February 14, 2000.

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The market price immediately on September 09, 2008 i.e. after the date on which the Board of Directors approved the

Rights Issue is not available as the shares are infrequently traded.

The volume of securities traded in each month during the six months preceding the date on which the Letter of Offer is

filed with the Stock Exchange is not available as the shares are infrequently traded.

Information as per Clause 6.48.1 of SEBI DIP Guidelines 2000

Working results of the Company from 1st April, 2009 till 31st May, 2009:

(Rs. in Lacs)

Sl. No. Particulars Amount

1 Net Sales/Income from Operations 1615.00

2 Other Income 15.00

3 Gross Profit Before Depreciation & Taxation 279.00

4 Depreciation 26.00

5 Provision for Tax 85.00

6 Estimated Net Profit 168.00


Material changes and commitments, if any, affecting financial position of the Company: Nil


This Information is not available as the shares are infrequently traded.

Mechanism evolved for Redressal of Investor Grievances

The Memorandum of Understanding between the Company and the Registrar to the Issue provides for retention of records

with the Registrar to the Issue, Karvy Computershare Private Limited, for a period of at one year from the last date of

dispatch of letters of allotment, demat credit, and refund orders to enable the investors to approach the Registrar to the

Issue for redressal of their grievances.

All grievances relating to this Issue may be addressed to Company and the Registrar to the Issue, giving full details such as

name, address of the applicant, application number, number of Equity Shares applied for, amount paid on application,

Depository participant and the respective Syndicate member or collection center where the application was submitted.

All investor complaints that cannot be resolved by the Compliance Officer would be placed before the Investors Grievance

Committee for resolution. The Company will settle investor grievances expeditiously and satisfactorily.


Sl. No. Sub_Code Description Received Resolved Pending

1 DW09 Non Receipt of Dividend Warrants 2 2 0

2 GN10 Non Receipt of Annual Report 1 1 0

3 SH15 Non Receipt of Dup/ Transmission/

Deletion of SCS 1 1 0

Total 4 4 0

Disposal of Investor Grievances by the Company

The Company estimates that the average time required by it or the Registrar to the Issue for the redressal of routine

investor grievances shall be seven working days from the date of receipt of the complaint. In case of non-routine complaints

and where external agencies are involved, the Company or the Registrars will seek to redress these complaints as expeditiously

as possible.

The Company has appointed, Mr. C.N.Maheshwari, Company Secretary as the Compliance Officer and he may be contacted

in case of any pre-issue or post-issue related problems such as non-receipt of allotment advice, refund orders and demat

credit, etc. He can be contacted at:

Mr. C.N. Maheshwari



New Delhi-110001

Tel: +91 11 23457102, 23324135

Fax: +91 11 23324136

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Mechanism evolved for Redressal of Investor Grievances for listed Group Companies.

The Companies have duly appointed the Company Secretaries/Senior Officers of the as Compliance Officers and they may

be contacted in case of any investor related problems.

Change if any to the Auditor during last 3 years and reasons thereof

There has been no change in Auditors of our Company during the last 3 years.

Capitalization of Reserves or Profits (during last five years)

There has not been any capitalization of Reserves or Profits during the last five years.

Revaluation of Assets

None of the assets of the Company have been revalued during the last five years.

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SECTION VIII- ISSUE RELATED INFORMATION

TERMS OF THE ISSUE & ISSUE PROCEDURE

The 6% NCDs with detachable warrants, now being issued, are subject to the terms and conditions contained in this Letter

of Offer, the enclosed Composite Application Form (CAF), the Memorandum and Articles of Association of the Company,

the provisions of the Act, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for

listing of securities issued by Government of India and/or other statutory authorities and bodies from time to time, terms

and conditions as stipulated in the allotment advice or letter of allotment or security certificate and rules as may be

applicable and introduced from time to time.

Authority for the Issue

This Issue is being made pursuant to the resolutions passed by the Board of Directors of the Company at ts meeting held on

September 09 2008.

Basis for the Issue

The 6% NCDs with detachable warrants being offered for subscription for cash to those existing Equity Shareholders

whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held

in the electronic form and on the Register of Members of the Company in respect of shares held in the physical form at

the close of business hours on the Record Date i.e. July 06, 2009 fixed in consultation with MSE, DSE and CSE.

Rights Entitlement

As your name appears as beneficial owner in respect of the Equity Shares held in the Electronic Form or appears in the

Register of Members as an Equity Shareholder on the Record Date, you are entitled to the number of 6% NCDs with

detachable Warrants shown in Block I of Part A of the enclosed CAF.

The eligible Equity Shareholders are entitled to the following:

• Three (3) 6% NCDs for every One (1) Equity Share held on the Record Date;

• For every 6% NCD being allotted on a rights basis under this Issue, the Equity Shareholder shall be entitled to

receive one detachable Warrant

Face Value

Each 6% NCD shall have the face value of Rs. 10/-.

Issue Price

Each 6% NCDs with detachable Warrants is being offered at a price of Rs. 10/-.

Terms of Payment

Entire Issue price would be payable on application.

Rights Entitlement Ratio

It shall be as detailed above.

Fractional Entitlements

Since the threshold limit of entitlement is one equity share, the situation of fractional entitlement will not arise.

Joint-holders

Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as

joint tenants with benefits of survivorship subject to provisions contained in the Articles of Association of the Company.

Ranking of the Equity Shares

The Equity Shares shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari-

passu in all respects including dividends with the existing Equity Shares of the Company.

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Rights of the Equity Shareholder of the Company

Subject to applicable laws, the equity shareholders shall have the following rights:

1) Right to receive dividend, if declared;

2) Right to attend general meetings and exercise voting powers, unless prohibited by law;

3) Right to vote on a poll in person or by proxy;

4) Right to receive offers for rights shares and be allotted bonus shares, if announced;

5) Right to receive surplus on liquidation;

6) Right to free transferability of shares; and

7) Such other rights as may be available to a shareholder of a listed public company under the Companies Act and

Memorandum and Articles of Association.

For a detailed description of the main provisions of the Company’s Articles of Association dealing with voting rights,

dividends, forfeiture, lien, transfer and transmission, and/or consolidating/splitting, see the section titled “Main Provisions

of Articles of Association” on page 198 of this Letter of Offer.

Principal Terms of 6% Non-Convertible Debentures

Face Value

Each NCD shall have the face value of Rs. 10.

Entitlement Ratio

The NCDs are being offered on a rights basis to the existing Equity Shareholders of the Company in the ratio of three (3)

NCDs for every One (1) Equity Share held on the Record Date i.e. July 06, 2009.

SEBI vide its Circular No. IMD/FII/20/2006 dated April 5, 2006 and the RBI circular no. RBI/2006-2007/435 A.P. (DIR

Series) Circular No.74 dated June 8, 2007, has stated that Government of India and Reserve Bank of India have clarified

that FII investments are restricted to only listed debt securities of companies. Accordingly, FIIs are eligible to subscribe

to the NCDs with detachable warrants issued vide this Letter of Offer as the Debt securities will be listed.

Fractional Entitlement

Since the threshold limit of entitlement is one equity share, the situation of fractional entitlement will ot arise.

Non-Resident Equity Shareholder/ Applicants

Applications received from NRIs and non-residents for allotment of NCDs and detachable Warrants shall be inter alia,

subject to the conditions imposed from time to time by the RBI under the FEMA in the matter of refund of application

moneys, allotment of NCDs with detachable Warrants, issue of allotment advice /debenture certificates, payment of

interest, dividends, etc. General permission has been granted to any person resident outside India to purchase 6% NCDs

with Detachable Warrants offered on rights basis by an Indian company in terms of FEMA and regulation 6 of notification

No. FEMA 20/2000-RB dated May 3, 2000 The Board of Directors may at its absolute discretion, agree to such terms and

conditions as may be stipulated by RBI while approving the allotment of NCDs with detachable Warrants, payment of

interest etc. to the non-resident shareholders. The rights 6% NCDs with Detachable Warrants purchased by non-residents

shall be subject to the same conditions including restrictions in regard to the repatriability as are applicable to the

original shares against which rights shares are issued.

By virtue of Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs”) have been

derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management

(Withdrawal of General Permission to Overseas Corporate Bodies “OCBs”) Regulations, 2003. Accordingly, OCBs shall

not be eligible to subscribe to the /NCD/Warrants. The RBI has however clarified in its circular, A.P. (DIR Series)

Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not under the adverse notice of the

RBI are permitted to undertake fresh investments as incorporated non-resident entities. Thus, OCBs desiring to participate

in this Issue must obtain prior approval from the RBI. On providing such approval to the Company at its registered office,

the OCB shall receive the Letter of Offer and the CAF.

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Terms of Payment

On application: Rs. 10 per NCD

Subsequent to this the Company would have a corporate action for appropriation of amount payable on allotment and for

credit of fully paid NCDs to the demat accounts of NCD holders who have paid the amount due on allotment. In case the

shareholder applies for additional 6% NCDs with Detachable Warrants and is not fully allotted the same, the balance

shall be duly refunded to him.

Redemption

Each NCD shall be redeemed at the end of 7 years (or earlier as may be decided by the Board) from the Date of Allotment

at the face value of Rs. 10.

Interest

Interest would be paid at the rate of 6% per annum on the amount outstanding from time to time from the Date of

Allotment of each NCD. Interest payments would be made at the end of each year from the date of allotment and the last

payment would be made on final redemption. If such date falls on a Sunday or a public holiday in New Delhi notified in

terms of the Negotiable Instruments Act, 1881, then interest would be paid on the next working day. Payment of interest

would be subject to the deduction of Income-tax Act, 1961 or any statutory modification or re-enactment thereof for the

time being in force.

As per the current provisions of the Income-tax Act, 1961, tax will not be deducted at source from interest on NCD (in

case of resident individual NCD holders), if such interest does not exceed Rs.2,500, respectively in any financial year. If

interest exceeds the prescribed limit of Rs.2,500 on account of interest on NCD, then, to ensure non-deduction or lower

deduction of tax at source, as the case may be, the NCD holder should furnish either (a) a declaration (in duplicate) in the

prescribed form i.e. (i) Form 15H which can be given by individuals who are of the age of 65 years or more (ii) Form 15G

which can be given by all applicants (other than companies, firms and NR), or (b) a certificate, from the Assessing

Officer which can be obtained by all applicants (including companies and firms) by making an application in the prescribed

form i.e. Form 13. The aforesaid documents, as may be applicable, should be submitted to Company quoting the name of

the sole/ first NCD holder, NCD folio number and the distinctive number(s) of the NCD held, at least one month prior to

the interest payment date, to ensure non-deduction/lower deduction of tax at source from interest on NCD. The investors

need to submit Form 15H/ 15G/ certified true copy of Certificate from Assessing Officer for each financial year to ensure

non-deduction or lower deduction of tax at source from interest on NCD. NRIs/ OCBs applying on repatriation basis who

desire that the interest be paid without deduction of tax at source or at lower rate should submit a certified true copy of

Certificate issued by their Assessing Officer to the Company.

Agents and Trustees for the NCD holders

The Company has appointed IL&FS Trust Company as the trustees for the holders of the NCDs offered through this

Letter of Offer.

Security

The redemption of the principal amount of the Debentures, payment of all interest, remuneration of the Debenture

Trustees, all fees, costs, charges, expenses and all other monies payable in respect thereof, will be secured by a pari passu

charge in favour of the Trustees in such form and manner created in one or more tranches as may be decided in consultation

with the Trustees on all or part of the movable and fixed assets of the Company at its Dalmiapuram unit. The principal

amount of the NCDs, all interest and all other monies to be secured will as between the holders of the NCDs inter-se rank

pari passu without any preference or priority whatsoever on account of date of issue or allotment or otherwise.

The Company will undertake to furnish to the Trustees additional security as may be required by the Trustees by way of

hypothecation on current assets, pledge of securities, shares, investments or mortgage of immoveable properties after

making out a clear and marketable title thereto to the satisfaction of the Trustees and after obtaining all such consents as

necessary for creation of additional security for the NCDs.

Also, the bankers to the Company, M/s Axis Bank Limited, have given their NOC for ceding their pari passu charge in

favour of the Debenture trustee.

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Further Issues/Borrowings

The Company shall be entitled, from time to time to make further issue of debentures and/or raise term loans or raise

further funds from time to time by such other debt instruments or other securities (whether or not the same constitutes

securities for the purposes of the Act or the Securities (Contracts Regulations) Act, 1956 to the public, of any section of

the public in India or any part of the world, members of the Company, by way of a private placement or bilateral

arrangements and/ or avail of further financial and or guarantee facilities from financial institutions, banks and/or any

other person(s) on the security or otherwise of its property or against any security provided by any third party security

provider without the consent of the holders of the NCD. However, until the NCDs are fully redeemed, the Company shall

not create any mortgage or charge on any of its properties or assets without obtaining prior written approval of the

Trustee.

Rights of Holders of NCD

1) The NCDs shall rank pari-passu inter-se without any preference or priority of one over the other or others of them.

2) The NCD shall be transferable and transmittable in the same manner and to the same extent and be subject to the

same restrictions and limitations as in the case of the Equity Shares of the Company. The provisions relating to

transfer and transmission and other related matters in respect of Equity Shares of the Company contained in the

Articles and the Act shall apply, mutatis mutandis, to the NCD as well.

3) The NCD holders will not be entitled to any right and privileges of the Equity Shareholders of the company other

than those available to them under statutory requirements. The NCDs shall not confer upon the NCD holders the

right to receive notice, or to attend and vote at the general meetings of shareholders or the NCD holders or any other

class of securities of the Company.

4) The rights, privileges, terms and conditions attached to the NCDs may be varied, modified or abrogated with the

consent, in writing, of those holders of the NCDs (or through the Trustee) who hold at least three fourths of the

outstanding amount of the NCDs (of the current issue) or with the sanction accorded pursuant to a resolution passed

at the meeting of the NCD holders; provided that nothing in such consent or resolution shall be operative against

the Company where such consent or resolution modifies or varies the terms and conditions governing the NCDs

and the same are not acceptable to the Company.

5) The Company shall, as required by Section 152 of the Companies Act, keep a Register of the Debenture holders and

enter therein the particulars prescribed under the said Section.

6) The Trustee or the Company may, at any time, and the Trustee shall at the request in writing of the holder(s) of

NCDs representing not less than one-tenth in value of the nominal amount of the NCDs for the time being outstanding,

convene a meeting of the holders of the NCDs by giving not less than 21 days notice in writing. Provided that a

meeting may be called by giving shorter notice if the consent of the NCD holders representing not less than 95% of

the NCDs remaining outstanding is accorded.

7) The accidental omission to give notice to, or the non-receipt of notice by, any NCD holder or other person to whom

it should be given shall not invalidate the proceedings at the meeting.

8) The quorum for a meeting of the NCD holders shall be 5 (Five) NCD holders, personally present or holders of not

less than 10% of the outstanding amount of the NCDs. The nominee of the Trustee shall be the chairman of the

meeting of the NCD holders and in his absence, the NCD holders personally present at the meeting shall elect one

of themselves to be the Chairman thereof on a show of hands.

9) At every such meeting each NCD holder shall, on a show of hands, be entitled to one vote only, but on a poll he shall

be entitled to one vote in respect of every NCD of which he is a holder in respect of which he is entitled to vote.

10) The NCD will be subject to any other terms and conditions to be incorporated in the Agreement/Trust Deed(s) to be

entered into by the Company with the Trustees and the NCD Certificates/ Allotment Letters that will be issued.

Procedure for Redemption of NCDs

Payment on part or final redemption of the NCD will be made to those NCD holders whose names appear in the Register

of NCD holders (or to first holder in case of joint-holders) as on record date/book closure date to be fixed by the Company

for this purpose from time to time. On payment of the final redemption proceeds, the NCD Certificate shall automatically

stand cancelled.

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The record date for this purpose would be fixed in consultation with the Stock Exchanges at least 15 calendar days prior to

the relevant part/final redemption date. Such dates would be would be intimated to the Stock Exchanges where the NCDs

are proposed to be listed. No separate notice would be published by the Company in this regard. Buyers of the NCD are

advised to send the NCD Certificates to the Company Limited or to such persons as may be notified by the Company from

time to time, along with a duly executed Transfer Deed for registration of transfer of the NCD. If the request for transfer of

the NCD is not received by, or on, the record date fixed by the Company for the said part/final redemption, the part/final

redemption proceeds will be paid to the seller and not to the buyer. In such cases, any claims, shall be settled inter-se

between the parties and no claim or action shall lie against the Company. Payment on part or final redemption will be made

by cheque payable at par at all such places where the applications were originally accepted. At other places, the Company

reserves the right to adopt any other suitable mode of payment.

The Company’s liability to the NCD holder(s) towards their rights including for payment or otherwise shall stand extinguished

from the date of final redemption in all events and on the Company dispatching the final redemption amounts to the NCD

holder(s). Further, the Company will not be liable to pay any interest, income or compensation of any kind from the date

of redemption of the NCD(s).

Modification to the Terms of the NCDs

Any modification to the terms of issue pertaining to the NCDs would be carried out only with the prior approval of the

NCD holders and Trustees. This would be done by convening their special class meeting in accordance with the provisions

of the Companies Act, 1956 and taking their approval by a simple majority to the terms of modification sought, from the

NCD holders present and voting.

Repurchase and Right to Reissue NCD

The Company may, at its discretion, at any time purchase the NCD at discount, at par or at a premium in the open market

or otherwise. Such NCD may, at the option of the Company, be cancelled, held, reissued or resold at such price and on

such terms and conditions as the Company may deem fit and as permitted by law.

Where the Company has redeemed or repurchased any NCD, the Company shall have and shall be deemed always to

have had the right to keep such NCD alive without extinguishment for the purpose of resale or reissue and in exercising

such right, the Company shall have and be deemed always to have had, the power to resell or reissue such NCD either by

reselling or reissuing the same NCD or by issuing any other NCD in its place. This includes the right to reissue the

original NCD.

PRINCIPAL TERMS OF DETACHABLE WARRANTS

Entitlement

For allotment of every NCD being offered, one detachable Warrant would be issued. This Warrant can be freely and

separately traded. The Warrant holder will be entitled to exercise his right to apply for one Equity Share of Re. 10 each at

the Warrant Exercise Price for each Warrant held, at any time during the Warrant Exercise Period.

Warrant Exercise Period

Warrant Exercise Period shall not exceed 18 months from the date of allotment from the date of allotment. Warrant

holders can exercise their right to apply for the Equity Share at the Warrant Exercise Price any time during the Warrant

Exercise Period. Record date shall be fixed before the conversion. FURTHER THE WARRANTS NOT EXERCISED

DURING THE WARRANT EXERCISE PERIOD SHALL LAPSE i.e. the warrant holders shall not be entitled to

exercise or claim issue of equity shares after expiry of the warrant exercise period. (explanation - the warrants to be

lapsed in case it is not exercised by the eligible equity shareholders for conversion during the exercise period)

Call Option

Company will have a call option for Conversion to be exercised at the discretion of the Board, by giving a notice of at

least 60 days at any time after allotment. The Company will give a Notice in the newspapers declaring the Warrant

Exercise Price and shall call upon the Warrant holders to exercise the right to subscribe to Equity Shares. Warrants will

lapse in case investors do not exercise Conversion option on receipt of a notice for the Call Option.

Warrant Exercise Price

As the equity Shares of the Company are listed on MSE, CSE and DSE and shares are very infrequently traded at present,

the Warrant Exercise Price will be a price to be decided by the Board at its Meeting, such date being after the date of

allotment of warrants in this Rights Issue, provided however that the price will not exceed Rs.200/- and will not be below

Rs. 10/-. The Warrant Exercise Price will be communicated to the Warrant holders by way of a Public Notice in newspapers.

The Warrant Exercise Price will be payable in calls as decided by the Board of Directors of the Company.

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The face value of each Equity Share of the Company is Re.10 each. In the event of any sub-division or consolidation of the

face value, the share entitlement on each Warrant shall be proportionately increased/decreased such that the aggregate

nominal value of the entitlement remains the same as the nominal value of the Equity Shares immediately prior to such

subdivision or consolidation e.g. in case the Company decides to sub-divide the face value of Equity Shares to Rs. 5 each,

then upon exercise of each Warrant by making payment under the Warrant Exercise Price, the Warrant holder would be

required to pay half time the Warrant Exercise Price in order to subscribe to one Equity Share of face value Rs. 5 each.

Procedure for Conversion of Detachable Warrants being issued with NCDs under this Issue

In case of Conversion either, the Company will announce a Record Date for determining Warrant holders who are

eligible for Conversion of their Warrants into Equity Shares, as per the prevailing regulations. Application for issue of

Equity Shares should be made on the prescribed Warrant Exercise Application Form. This application form would be

sent to all the eligible Warrant holders separately informing them of the conversion date and process for conversion. The

same would also be available on request with our Secretarial department.

In case of Warrant held in Physical Mode: During the Warrant Exercise Period, the the Warrant holder should send his

application for issue of Equity Shares to our Registrar, Karvy Computershare Private Limited at Plot No. 17-24, Vittal

Rao Nagar, Madhapur, Hyderabad-500081, India by filling up the requisite particulars on the Warrant Exercise Application

Form and by discharging on the reverse of the Warrants certificate. It should be accompanied by a cheque/demand draft

favoring “Shri Nataraj Ceramic and Chemical Industries Limited” payable at New Delhi for the requisite amount.

In case of Warrants held in Demat Form: During the Warrant Exercise Period, the Warrant holder should send his

application for issue of Equity Shares to our Registrar, Karvy Computershare Private Limited at Plot No. 17-24, Vittal

Rao Nagar, Madhapur, Hyderabad-500081 by filling up the said application form. It should be accompanied by cheque/

demand draft favouring “Shri Nataraj Ceramic and Chemical Industries Limited” for the requisite amount. Warrant

holders should concurrently transfer their dematerialized holdings to the Escrow Account to be opened by the Company

by marking this as an off market transaction. Details of the Escrow Account would be mentioned in the Warrant Exercise

Application Form to be provided by the Company.

Modification to the Terms of the Warrants

Any modification to the terms of issue and exercise of the Warrants would be carried out only with the prior

approval of the Warrant holders. This would be done by convening a special class meeting for seeking their approval

to the terms of modification sought, from the Warrant holders present and voting in accordance with the provisions

of the Companies Act, 1956.

Rights of Warrant holders

1) The Warrants shall be transferable and transmittable in the same manner and to the same extent and be subject to

the same restrictions and limitations and other related matters as in the case of Equity Shares of the Company.

By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs”)

have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange

Management [Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)] Regulations, 2003.

Accordingly, the warrants shall not be transferable (by sale or gift) in favour of OCB(s).

2) The Warrants shall not confer upon the holders thereof any right to receive any notice of the meeting of the

Shareholders of the Company or Annual Report of the Company and or to attend/vote at any of the General Meetings

of the Shareholders of the Company held, if any.

3) Save and except the right of subscription to the Company’s Equity Shares as per the terms of the Issue of Warrants,

the holders of the Warrants in their capacity as Warrant holders shall have no other rights or privileges.

4) The Warrant holders inter-se, shall rank pari passu without any preference or priority of one over the other or

others.

5) All the above rights of the Warrant holders shall lapse automatically if the Warrants are not converted within the

Warrant Exercise Period and the unexercised Warrant shall automatically be treated as cancelled.

6) A separate register of Warrant holders would be maintained by the Company.

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Ranking of the Equity Shares

The Equity Shares allotted on conversion of the Warrants shall be subject to the Memorandum and Articles of Association

of the Company and shall rank pari passu in all respects including dividends with the existing Equity Shares of the Company

Caution:

1) Each warrant application form shall be accompanied by a single instrument of payment. Clubbing of folios/securities

for the purpose of making a consolidated payment is not permitted.

2) Cheques/DD should be payable at New Delhi for the full amount and upcountry instructions/payments for less

amount will be rejected.

3) Investors are advised not to close or transfer their DEMAT account between the period of application for exercise of

warrant(s) till the time of allotment/receipt of credit in their account so as to avoid rejection of credit from the

Depositories and resultant delay in receiving the intimation of allotment

4) Warrants may not be exercised from within United States by/or on behalf of US citizens. Each person exercising the

warrant must provide a written certification that he/she is not a US person or that the warrant is not being exercised

on behalf of US citizen. No exercise will be accepted from any person whose address is within United States.

GENERAL TERMS OF THE ISSUE

Printing of Bank Particulars on Refund Orders

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the

particulars of the applicant’s bank account are mandatory for printing on the refund orders. Bank account particulars will

be printed on the refund orders/refund warrants which can then be deposited only in the account specified. The Company

will in no way be responsible if any loss occurs through these instruments falling into improper hands either through

forgery or fraud.

Notices

All notices to the Equity Shareholder(s)/Debentureholder(s) required to be given by the Company shall be published in

one English national daily with wide circulation, one Hindi national daily with wide circulation, and one regional

language daily newspaper with wide circulation and/or, will be sent by post to the registered holders of the Equity Shares

from time to time.

Market Lot

The NCDs and detachable Warrants of the Company are tradable only in dematerialized form. The market lot for NCDs

and detachable Warrants in dematerialised mode is one. In case of holding of NCDs and detachable Warrants in physical

form, the Company would issue to the allottees 1 certificate for the NCDs and/or detachable Warrants, applicable allotted

to each folio (“Consolidated Certificate”).

Nomination Facility

In terms of Section 109A of the Act, nomination facility is available in case of NCDs and Detachable warrants. The

applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose. A sole

Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s) may

nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall

become entitled to the NCDs and Detachable warrants. A Person, being a nominee, becoming entitled to the NCDs and

Detachable warrants by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages

to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the

Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled

to the 6% NCDs with Detachable Warrants, in the event of death of the said holder, during the minority of the nominee.

A nomination shall stand rescinded upon the sale of the 6% NCDs with Detachable Warrants by the person nominating.

A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two

or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh

nominations can be made only in the prescribed form available on request at the registered office of the Company or such

other person at such addresses as may be notified by the Company. The applicant can make the nomination by filling in

the relevant portion of the CAF.

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Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already registered the

nomination with the Company, no further nomination needs to be made for NCDs and Detachable warrants to be allotted

in this Issue under the same folio.

In case the allotment of NCDs and Detachable warrants is in dematerialized form, there is no need to make a

separate nomination for the NCDs and Detachable warrants to be allotted in this Issue. Nominations registered

with respective DP of the applicant would prevail. If the applicants want to change their nomination, they are

requested to inform their respective DP.

Minimum Subscription

Save as provided hereinunder, if the Company does not receive the minimum subscription of 90% of the issue, the entire

subscription shall be refunded to the applicants within fifteen days from the date of closure of the issue.

If there is delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription

amount (i.e. fifteen days after closure of the issue), the company will pay interest for the delayed period, at rates prescribed

under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

If after considering the number of NCDs with Detachable warrants applied for in the issue the subscription level received

remains below the prescribed minimum of 90% of the issue size then the issue will be understood to be undersubscribed.

The undersubscribed portion can be applied for only after the closure of the Issue. The Promoters Group has clarified that

it intends to exercise the warrants to be issued to it under this Rights Issue, in full. The Promoters Group reserves the

right to subscribe to their entitlement in the Issue by subscribing for renunciation if any made within the Promoters group

to another person or entity forming part of the Promoters Group. The Promoters group may also apply for 6% NCDs with

detachable warrants in the Issue, such that at least 90% of the Issue is subscribed. As a result of this subscription and

consequent allotment, the Promoters Group may acquire 6% NCDs with detachable warrants over and above their

entitlement in the Issue, which may result in an increase of the shareholding being above the current shareholding upon

conversion of the warrants being issued alonwith the 6% NCDs being issued under the present Issue. This subscription

and acquisition of additional Equity Shares by the Promoters Group, if any, will not result in change of control of the

management of the Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As

such, other than meeting the requirements indicated in the section on Objects of the Issue on page 21 of this Letter of

Offer, there is no other intention/purpose for this Issue, including any intention to delist the Company, even if, as a result

of allotments to the Promoters Group, after conversion of the detachable warrants being offered in this Issue, the Promoters

Group’s shareholding in the Company exceeds their current shareholding. The Promoters Group intends to subscribe to

such unsubscribed portion as per the relevant provisions of the law. Allotment to the Promoters Group of any unsubscribed

portion, over and above their entitlement shall be done in compliance with Clause 40A the Listing Agreement and other

applicable laws prevailing at that time relating to continuous listing requirements.

Further this acquisition will not result in change of control of management of our Company.

The above is subject to the terms mentioned under the section entitled “Basis of Allotment” on page 190 of this Letter of

Offer.

Listing and trading of NCDs with detachable Warrants proposed to be Issued and the Equity Shares arising on

conversion of the detachable Warrants

The Company’s existing Equity Shares are currently listed on the MSE, CSE and DSE under the ISIN INE200F01017.

The NCDs with detachable Warrants proposed to be issued on a rights basis shall be listed and admitted for trading on the

MSE, CSE and DSE for which the Company has made an application to the MSE, CSE and DSE through letters dated 17

September, 2008. The NCDs with detachable Warrants allotted pursuant to this Issue will be listed as soon as practicable

but in no case later than 7 days from the date of allotment. The Company has made an application for “in-principle”

approval for listing of the NCDs with detachable Warrants in accordance with clause 24(a) of the Listing Agreement to

the MSE, CSE and DSE through letters dated 17 September, 2008 and has received such approval from the MSE through

letter no. MSE/SEC/738/407/08, dated September 25, 2008, from the CSE through letter no. CSEA/LD/528/2008, dated

November 17, 2008 and from the DSE through letter no. DSE/LIST/4857/NR/3725, dated October 03, 2008.

The equity shares which will arise on conversion of Warrants shall be listed for trading on the MSE, CSE and DSE under

the existing ISIN for fully paid Equity Shares of the Company. The Equity Shares allotted pursuant to the conversion will

be listed as soon as practicable but in no case later than 7 days of allotment.

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The distribution of this Letter of Offer and the issue of NCDs with detachable Warrants on a rights basis to persons in

certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions.

The Company is making this issue of NCDs with detachable Warrants on a rights basis to the shareholders of the Company

and will dispatch this Letter of Offer/Abridged Letter of Offer and CAF to shareholders who have provided an Indian

address.

Additional Subscription by the Promoter

The Promoters Group has clarified that it intends to exercise the warrants to be issued to it under this Rights Issue, in full.

The Promoters Group reserves the right to subscribe to their entitlement in the Issue by subscribing for renunciation if

any made within the Promoters group to another person or entity forming part of the Promoters Group. The Promoters

group may also apply for 6% NCDs with detachable warrants in the Issue, such that at least 90% of the Issue is subscribed.

As a result of this subscription and consequent allotment, the Promoters Group may acquire 6% NCDs with detachable

warrants over and above their entitlement in the Issue, which may result in an increase of the shareholding being above

the current shareholding upon conversion of the warrants being issued alonwith the 6% NCDs being issued under the

present Issue. This subscription and acquisition of additional Equity Shares by the Promoters Group, if any, will not

result in change of control of the management of the Company and shall be exempt in terms of proviso to Regulation

3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirements indicated in the section on Objects of the

Issue on page 21 of this Letter of Offer, there is no other intention/purpose for this Issue, including any intention to delist

the Company, even if, as a result of allotments to the Promoters Group, after conversion of the detachable warrants being

offered in this Issue, the Promoters Group’s shareholding in the Company exceeds their current shareholding. The

Promoters Group intends to subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to

the Promoters Group of any unsubscribed portion, over and above their entitlement shall be done in compliance with

Clause 40A the Listing Agreement and other applicable laws prevailing at that time relating to continuous listing

requirements.

Further this acquisition will not result in change of control of management of our Company. For further details please

refer to section titled “Basis of Allotment” beginning on page 190 of this Letter of Offer.

Procedure for Application

The CAF would be printed in black ink for all shareholders. In case the original CAF is not received by the applicant or is

misplaced by the applicant, the applicant may request the Registrar to the Issue, Karvy Computershare Private Limited, for

issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name

and address. Non-resident shareholders can obtain a copy of the CAF from the Registrar to the Issue, Karvy Computershare

Private Limited from their office located at at Plot No. 17-24, Vittal Rao Nagar, Madhapur, Hyderabad-500081, India by

furnishing the registered folio number, DP ID number, Client ID number and their full name and address.

Acceptance of the Issue

You may accept the Issue and apply for the 6% NCDs with detachable warrants offered, either in full or in part by filling

Part A of the enclosed CAF and submit the same along with the Application Money payable to the Bankers to the Issue or

any of the branches as mentioned on the reverse of the CAF before the close of the banking hours on or before the Issue

Closing Date or such extended time as may be specified by the Board thereof in this regard. Applicants at centers not

covered by the branches of collecting banks can send their CAF together with the cheque /demand draft, net of

bank and postal charges, payable at New Delhi to the Registrar to the Issue by registered post. Such applications

sent to anyone other than the Registrar to the Issue are liable to be rejected. The applications received through registered

post shall be dealt with by the Registrar to the Issue in the normal course.

Option available to the Equity Shareholders

The Composite Application Form clearly indicates the number of 6% NCDs with detachable warrants that the Equity

Shareholder is entitled to.

If the Equity Shareholder applies for an investment in 6% NCDs with detachable warrants, then he can:

• Apply for his entitlement in part;

• Apply for his entitlement in part and renounce the other part;

• Apply for his entitlement in full;

• Apply for his entitlement in full and apply for additional 6% NCDs with detachable warrants.

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Renouncees for 6% NCDs with Detachable Warrants can apply for the 6% NCDs with Detachable Warrants renounced to

them and also apply for additional Equity Shares after subscribing for the 6% NCDs with Detachable Warrants renounced

to them, in full.

Additional 6% NCDs with detachable warrants

You are eligible to apply for additional 6% NCDs with detachable warrants over and above the number of 6% NCDs with

detachable warrants you are entitled to, provided that you have applied for all the 6% NCDs with detachable warrants

offered without renouncing them in whole or in part in favour of any other person(s).

If you desire to apply for additional 6% NCDs with detachable warrants, please indicate your requirement in the place

provided for additional 6% NCDs with detachable warrants in Part A of the CAF. Applications for additional 6% NCDs

with detachable warrants shall be considered and allotment shall be in the manner prescribed under the section entitled

“Basis of Allotment” on page 190 of this Letter of Offer. The renouncees applying for all the 6% NCDs with detachable

warrants renounced in their favour may also apply for additional Equity Shares.

In case of change of status of holders i.e. from Resident to Non-Resident or vice-versa, a new demat account shall be

opened for the purpose.

Where the number of additional 6% NCDs with detachable warrants applied for exceeds the number available for allotment,

the allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.

Renunciation

This Issue includes a right exercisable by you to renounce the 6% NCDs and Detachable warrants offered to you either in

full or in part in favour of any other person or persons subject to the approval of the Board. Such renouncees can only be

Indian Nationals (including minor through their natural/legal guardian)/limited companies incorporated under and

governed by the Act, statutory corporations/institutions, trusts (registered under the Indian Trust Act), societies (registered

under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorized

under its constitution/bye laws to hold 6% NCDs and Detachable warrants in a company and cannot be a partnership

firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or to any person

situated or having jurisdiction where the offering in terms of this Letter of Offer could be illegal or require compliance

with securities laws of such jurisdiction or any other persons not approved by the Board.

Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian

Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is

subject to the renouncer(s)/renouncee(s) obtaining the approval of the FIPB and/ or necessary permission of the RBI

under the Foreign Exchange Management Act, 1999 (FEMA) and other applicable laws and such permissions should be

attached to the CAF.

Applications not accompanied by the aforesaid approval are liable to be rejected. By virtue of the Circular No. 14 dated

September 16, 2003 issued by the RBI, Overseas Corporate Bodies (OCBs) have been de-recognized as an eligible class

of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission

to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders of the Company

who do not wish to subscribe to the NCDs and Detachable warrants being offered but wish to renounce the same in favour

of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s).

Your attention is drawn to the fact that the Company shall not allot and/or register any 6% NCDs and Detachable

warrants in favour of:

1) More than three persons including joint holders

2) Partnership firm(s) or their nominee(s)

3) Minors

4) Hindu Undivided Family

5) Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any other applicable

Trust laws and is authorized under its Constitutions to hold NCDs and Detachable warrants of a Company)

The right of renunciation is subject to the express condition that the Board shall be entitled in its absolute discretion

to reject the request for allotment to renouncee(s) without assigning any reason thereof.

Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used,

this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its collecting

branches specified on the reverse of the CAF with the form of renunciation (Part B of the CAF) duly filled in shall be

conclusive evidence for the Company of the person(s) applying for 6% NCDs and Detachable warrants in Part C to

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receive allotment of such 6% NCDs and Detachable warrants. The renouncees applying for all the 6% NCDs and Detachable

warrants renounced in their favour may also apply for additional 6% NCDs and Detachable warrants. Part A must not be

used by the renouncee(s) as this will render the application invalid. Renouncee(s) will also have no further right to

renounce any 6% NCDs with Detachable Warrants in favour of any other person.

PROCEDURE FOR RENUNCIATION

To renounce the whole offer in favour of one renouncee

If you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In case of joint holding,

all joint holders must sign Part B of the CAF. The person in whose favour renunciation has been made should complete and

sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign this part of the CAF.

To renounce in part/or renounce the whole to more than one person(s)

If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more

renouncees, the CAF must be first split into requisite number of forms.

Please indicate your requirement of split forms in the space provided for this purpose in Part D of the CAF and return the

entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of

receiving requests for split forms. On receipt of the required number of split forms from the Registrar, the procedure as

mentioned in paragraph above shall have to be followed.

In case the signature of the Equity Shareholder(s), who has renounced the 6% NCDs with Detachable Warrants does not

agree with the specimen registered with the Company, the application is liable to be rejected.

Renouncee(s)

The person(s) in whose favour the 6% NCDs and Detachable warrants are renounced should fill in and sign Part C of the

Application Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date

along with the application money.

Change and/ or introduction of additional holders

If you wish to apply for 6% NCDs and Detachable warrants jointly with any other person(s), not more than three, who is/

are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation

shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and

the procedure, as stated above shall have to be followed.

However, this right of renunciation is subject to the express condition that the Board of Directors of the Company shall be

entitled in its absolute discretion to reject the request for allotment from the renouncee(s) without assigning any reason

thereof.

Instructions for Options

Please note that :

1) Part A of the CAF must not be used by any person(s) other than those in whose favour this Issue has been made. If

used, this will render the application invalid.

2) Request for split form should be made for a minimum of 1 NCDs with detachable Warrants or, in either case, in

multiples thereof and one Split Application Form for the balance NCDs with detachable Warrants, if any.

3) Request by the applicant for the Split Application Form should reach the Registrars on or before 27th July, 2009.

4) Only the person to whom this Letter of Offer has been addressed to and not the renouncee(s) shall be entitled to

renounce and to apply for Split Application Forms. Forms once split cannot be split again.

5) Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

Additional NCDs with detachable Warrants

You are eligible to apply for additional NCDs with detachable Warrants over and above the number of NCDs with detachable

Warrants you are entitled to, provided that you have applied for all the NCDs with detachable Warrants offered, as the case

may be, without renouncing them in whole or in part in favor of any other person(s). Applications for additional NCDs

with detachable Warrants shall be considered and allotment shall be in the manner prescribed under the section entitled

‘Basis of Allotment’ on page 190 of this Letter of Offer. Where the number of additional NCDs with detachable Warrants

applied for exceeds the number available for allotment, the allotment would be made on a fair and equitable basis in

consultation with the Stock Exchanges.

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How to Apply

Resident Equity Shareholders

Applications should be made on the enclosed CAF provided by the Company. The enclosed CAF should be completed in

all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the Lead Manager

or by the Registrar to the Issue or by the Company at any offices except in the case of postal applications as per instructions

given elsewhere in the Letter of Offer.

The CAF consists of four parts :

Part A : Form for accepting the NCDs with detachable Warrants offered and for applying for additional NCDs with

detachable Warrants

Part B : Form for renunciation

Part C : Form for application for renouncees

Part D : Form for request for split application forms

Non-resident Equity Shareholders

Applications received from the Non-Resident Equity Shareholders for the allotment of 6% NCDs with Detachable Warrants

shall, inter alia, be subject to the conditions as may be imposed from time to time by RBI, in the matter of refund of

application moneys, allotment of NCDs with detachable Warrants, issue of letters of allotment/ certificates/ payment of

dividends etc.

Letter of Offer and CAF shall only be dispatched to non-resident Equity Shareholders with registered address in India.

The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following

options with regard to the NCDs with detachable Warrants offered, using the enclosed CAF:

Option Available

Accept whole or part of your entitlement without

renouncing the balance.

Accept your entitlement in full and apply for

additional NCDs with detachable Warrants.

Accept only a part of your entitlement of the NCDs

with detachable Warrants offered to you (without

renouncing the balance).

Renounce your entitlement in full to one person

(Joint renouncees not exceeding three are

considered as one renouncee).

1. Accept a part of your entitlement and renounce

the balance to one or more renouncee(s). OR

2. Renounce your entitlement to all the NCDs with

detachable Warrants offered to you to more than

one renouncee.

Introduce a joint holder or change the sequence of

joint holders

Option

A

B

C

D

E

F

Action Required

Fill in and sign Part A (All joint holders must sign)

Fill in and sign Part A including Block III relating to

the acceptance of entitlement and Block IV relating to

additional NCDs with detachable Warrants (All joint

holders must sign).

Fill and sign Part A of the CAF.

Fill in and sign Part B (all joint holders must sign)

indicating the number of NCDs with detachable Warrants

renounced and hand over the entire CAF to the

renouncee. The renouncees must fill in and sign Part C

of the CAF (All joint renouncees must sign).

Fill in and sign Part D (all joint holders must sign)

requesting for Split Application Forms. Send the CAF

to the Registrar to the Issue so as to reach them on or

before the last date for receiving requests for Split Forms.

Splitting will be permitted only once.On receipt of the

Split Form take action as indicated below:i. For the NCDs

with detachable Warrants you wish to accept, if any, fill

in and sign Part A of one split CAF (only for option 1).

ii. For the NCDs with detachable Warrants you wish to

renounce, fill in and sign Part B indicating the number

of NCDs with detachable Warrants renounced and hand

over the split CAFs to the renouncees.iii. Each of the

renouncees should fill in and sign Part C for the NCDs

with detachable Warrants accepted by them.

This will be treated as a renunciation. Fill in and sign

Part B and the renouncees must fill in and sign Part C.

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Applications for NCDs with detachable Warrants should be made only on the CAF, which are provided by the Company.

The CAF should be completed in all respects as explained under the head ‘INSTRUCTIONS’ indicated on the reverse of

the CAF before submission to the Banker to the Issue at its collecting branches mentioned on the reverse of the CAF on

or before the closure of the subscription list. Non Resident Shareholders/Renouncee should forward their applications to

Banker to the Issue as mentioned in the CAF for Non-Resident Equity Shareholders. No part of the CAF should be

detached under any circumstances. Applicants must provide information in the CAF as to their Savings / Current / NRE

/ NRO / FCNR bank account and the name of the bank with whom such account is held to enable the Registrar to print

the said details in the refund orders after the name of the payees.

For Applicants Residing at places other than Designated Bank Collecting Branches

Applicants residing at places other than the cities where the Bank collection centres have been opened should send their

completed CAF by registered post/speed post to the Registrars to the Issue, Karvy Computershare Private Limited, along

with demand drafts, net of bank and postal charges, payable in favour of “SNCCIL- Rights Issue” in case of Resident

shareholders and Non Resident shareholders applying on Non-repatriable basis and in favour of “SNCCIL- Rights Issue-

NR” in case of non-resident shareholders applying on a repatriable basis and crossed, ‘A/c Payee only’, so that the same

are received on or before closure of the Issue i.e. 3rd August, 2009. In such case the demand draft in case of Resident

shareholders, should be payable at New Delhi and in case of Non-resident shareholders, should be payable at New Delhi.

The Company will not be liable for any postal delays and applications received through mail after the closure of the Issue

are liable to be rejected and returned to the applicants. Applications by mail should not be sent in any other manner

except as mentioned below :

All application forms duly completed together with cash/ cheque/demand draft for the application money must be

submitted before the close of the subscription list to the Bankers to the Issue named herein or to any of its branches

mentioned on the reverse of the CAF. The CAF along with application money must not be sent to the Company or

the Lead Manager to the Issue or the Registrar to the Issue except as mentioned above.

The applicants are requested to strictly adhere to these instructions. Failure to do so could result in the application

being liable to be rejected with the Company, the Lead Manager and the Registrar not having any liabilities to

such applicants.

Availability of Duplicate CAF

In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate

CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID No. and his/ her

full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate

form should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently.

Thus in case the original and duplicate CAFs are lodged for subscription, allotment will be made on the basis of the

duplicate CAF and the original CAF will be ignored.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may

make an application to subscribe to the Issue on plain paper, along with a demand draft net of bank and postal charges,

drawn in favour of “SNCCIL- Rights Issue” in case of resident shareholders and non-resident shareholders applying on

non-repatriable basis and in favour of “SNCCIL- Rights Issue- NR” payable at New Delhi, in case of non-resident

shareholders applying on repatriable basis and send the same by registered post directly to the Registrar to the Issue so as

to reach them on or before the closure of the Issue. In such case the demand draft should be payable at New Delhi. The

envelope should be superscribed “Shri Nataraj Ceramic and Chemical Industries Limited-Rights Issue” in case of resident

shareholders and non-resident shareholders applying on non-repatriable basis and in favour of “Shri Nataraj Ceramic

and Chemical Industries Limited- Rights Issue- NR” in case of non-resident shareholders applying on repatriable basis.

The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen

recorded with the Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should

contain the following particulars :

1. Name of Issuer, being Shri Nataraj Ceramic and Chemical Industries Limited

2. Name and address of the Equity Shareholder including joint holders

3. Registered Folio No./ DP ID No. and Client ID No.

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4. Number of shares held as on Record Date.

5. Certificate numbers and Distinctive Nos., if held in physical form.

6. Number of NCDs with detachable warrants entitled.

7. Number of Rights NCDs with detachable warrants applied for.

8. Number of additional NCDs with detachable warrants applied for, if any.

9. Total number of NCDs with detachable warrants applied for.

10. Total amount paid on application

11. Particulars of cheque/draft

12. Savings/Current Account Number and name and address of the bank where the Equity Shareholder will be depositing

the refund order.

13. PAN, Income Tax Circle/Ward/District for the applicant and for each applicant in case of joint names.

14. Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of the

Company.

Please note that those who are making the application otherwise than on original CAF shall not be entitled to renounce

their rights and should not utilize the original CAF for any purpose including renunciation even if it is received subsequently.

If the applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications. The

Company shall refund such application amount to the applicant without any interest thereon.

Last Date of Application

The last date for submission of the duly filled in CAF is 3rd August, 2009. The Board or any committee thereof will have

the right to extend the said date for such period as it may determine from time to time but not exceeding 30 (Thirty) days

from the Issue Opening Date.

If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on or before

the close of banking hours on the aforesaid last date or such date as may be extended by the Board/ Committee of Directors,

the offer contained in this Letter of Offer shall be deemed to have been declined and the Board/ Committee of Directors

shall be at liberty to dispose off the NCDs with detachable Warrants hereby offered, as provided under the section entitled

“Basis of Allotment”.

INVESTORS MAY PLEASE NOTE THAT THE NCDs WITH DETACHABLE WARRANTS OF THE COMPANY

CAN BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM.

Mode of Payment for Resident Equity Shareholders/ Applicants

All cheques / drafts accompanying the CAF should be drawn in favour of “SNCCIL- Rights Issue” and marked “A/c Payee

only”. Applicants residing at places other than places where the bank collection centres have been opened by the Company

for collecting applications, are requested to send their applications together with Demand Draft of amount net of bank and

postal charges, for the full application amount favouring “SNCCIL- Rights Issue” and marked “A/c Payee only” payable

at New Delhi directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing

Date. The Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit,

if any.

Mode of payment for Non-Resident Equity Shareholders/ Applicants

As regards the application by non-resident equity shareholders, the following further conditions shall apply:

Payment by non-residents must be made by demand draft / cheque payable at New Delhi or funds remitted from abroad in

any of the following ways:

Application with repatriation benefits

Payment by NRIs/ FIIs/ foreign investors must be made by demand draft/cheque payable at New Delhi or funds remitted

from abroad in any of the following ways:

1) By Indian Rupee drafts purchased from abroad and payable at New Delhi or funds remitted from abroad (submitted

along with Foreign Inward Remittance Certificate); or

190


2) By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in New Delhi; or

3) By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable in New

Delhi; or

4) FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.

5) All cheques/drafts submitted by non-residents applying on repatriable basis should be drawn in favour of “SNCCIL-

Rights Issue- NR” payable at New Delhi and crossed “A/c Payee only” for the amount payable.

A separate cheque or bank draft must accompany each application form. Applicants may note that where payment is

made by drafts purchased from NRE/FCNR accounts as the case may be, an Account Debit Certificate from the bank

issuing the draft confirming that the draft has been issued by debiting the NRE/FCNR account should be enclosed with

the CAF. In the absence of the above the application shall be considered incomplete and is liable to be rejected.

In the case of NR who remit their application money from funds held in FCNR/NRE Accounts, refunds and other

disbursements, if any shall be credited to such account details of which should be furnished in the appropriate columns in

the CAF. In the case of NRIs who remit their application money through Indian Rupee Drafts from abroad, refunds and

other disbursements, if any will be made in US Dollars at the rate of exchange prevailing at such time subject to the

permission of RBI. The Company will not be liable for any loss on account of exchange rate fluctuation for converting the

Rupee amount into US Dollars or for collection charges charged by the applicant’s Bankers.

Application without repatriation benefits

As far as non-residents holding shares on non-repatriation basis is concerned, in addition to the modes specified above,

payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in New Delhi or

Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at New Delhi. In such cases, the

allotment of Equity Shares will be on non-repatriation basis.

All cheques/drafts submitted by non-residents applying on non-repatriation basis should be drawn in favour of “SNCCIL

- Rights Issue” payable at New Delhi and must be crossed “A/c Payee only” for the amount payable. The CAF duly

completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the

reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft

must accompany each CAF.

If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank issuing

the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with the CAF. In the

absence of the above, the application shall be considered incomplete and is liable to be rejected. New demat account shall

be opened for holders who have had a change in status from resident Indian to NRI.

Note :

1) In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in 6%

NCDs with Detachable Warrants can be remitted outside India, subject to tax, as applicable according to Income

Tax Act, 1961.

2) In case 6% NCDs with Detachable Warrants are allotted on non-repatriation basis, the dividend and sale proceeds

of the Equity Shares cannot be remitted outside India.

3) The CAF duly completed together with the amount payable on application must be deposited with the Collecting

Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A

separate cheque or bank draft must accompany each CAF.

4) In case of an application received from non-residents, allotment, refunds and other distribution, if any, will be made

in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment,

remittance and subject to necessary approvals.

Payment by Stockinvest

In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the Stockinvest Scheme

has been withdrawn with immediate effect. Hence, payment through Stockinvest would not be accepted in this Issue.

Basis of Allotment

Subject to the provisions contained in this Letter of Offer, the Articles of Association of the Company and the approval

of the Designated Stock Exchange, the Board will proceed to allot the NCDs with Detachable Warrants in the following

order of priority:

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1. Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in part and

also to the renouncee(s) who has/ have applied for NCDs with Detachable Warrants renounced in their favour, in full

or in part.

2. Allotment to the Equity Shareholders who having applied for all the NCDs with Detachable Warrants offered to them

as part of the Issue and have also applied for additional NCDs with Detachable Warrants. The allotment of such

additional NCDs with Detachable Warrants will be made as far as possible on an equitable basis having due regard to

the number of Equity Shares held by them on the Record Date in consultation with the Designated Stock Exchange.

3. Allotment to the renouncees who having applied for the NCDs with Detachable Warrants renounced in their favour

have also applied for additional NCDs with Detachable Warrants provided there is an under-subscribed portion

after making full allotment in (1) and (2) above. The allotment of such additional NCDs with Detachable Warrants

will be made on a proportionate basis at the sole discretion of the Board/Committee of Directors but in consultation

with the Designated Stock Exchange.

4. Allotment to any other person as the Board/Committee of Directors may in its absolute discretion deem fit provided

there is surplus available after making full allotment under (1), (2) and (3) above.

After taking into account allotment to be made under (1) and (2) above, if there is any unsubscribed portion, the same

shall be deemed to be unsubscribed for the purpose of regulation 3(1)(b) of the Takeover Code which would be available

for allocation under (3) and (4) above. The Promoters Group may subscribe to unsubscribed portion if the Issue does not

have subscription to the extent of 90% of the Issue size, after considering the above allotment, to ensure that the Issue is

successful.

As a result of this subscription and consequent allotment and conversion, the Promoters Group may acquire shares over

and above their entitlement in the Issue, which may result in an increase of the shareholding being above the current

shareholding with the entitlement of share warrants under the Issue. This subscription and acquisition of additional

Equity Shares by the Promoter due to conversion of warrants into equity shares, if any, will not result in change of control

of the management of the Company and shall be exempt from the applicability of regulation 11 and 12, in terms of

proviso to Regulation 3(1)(b)(ii) of the Takeover Code. This disclosure is made in terms of the requirement of Regulation

3(1)(b) of the Takeover Code.

As such, other than meeting the requirements indicated in the section on “Objects of the Issue” on page 21 of this Letter

of Offer), there is no other intention/purpose for this Issue, including any intention to delist the Company, even if, as a

result of allotments to the Promoter, in this Issue, the Promoter’s shareholding in the Company exceeds their current

shareholding. In the event of oversubscription, allotment will be made within the overall size of the Issue.

Allotment to Promoters Group of any unsubscribed portion, over and above their entitlement shall be done in compliance

with Clause 40A of the Listing Agreement and the other applicable laws prevailing at that time.

After such allotments to the the Promoters Group, including the application for rights/renunciation and additional NCDs

with Detachable Warrants, any further additional NCDs with Detachable Warrants (which remain unsubscribed after

meeting the minimum subscription clause) shall be disposed off by the Board or Committee of the Board authorised in

this behalf by the Board of the Company, in such manner as they think most beneficial to the Company and the decision

of the Board or committee of the Board of the Company in this regard shall be final and binding. In the event of over-

subscription, allotment will be made within the overall size of the issue.

Underwriting

The present Issue is not underwritten save as mentioned in the aforementioned section where the promoters intend to

subscribe to the issue in the event of the issue remaining undersubscribed.

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Companies Act,

1956, which is reproduced below:

“Any person who:

a. Makes in a fictitious name, an application to a Company for acquiring or subscribing for, any shares therein, or

b. Otherwise induces a Company to allot, or register any transfer of shares therein to him, or any other person in a

fictitious name, shall be punishable with imprisonment for a term which may extend to five years.”

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Allotment / Refund

The Company will issue and dispatch letters of allotment/ Debenture and warrant entitlement certificates/ demat credit

and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if

any, within a period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day

the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73 of

the Act.

In case of those shareholders who have opted to receive their Right Entitlement 6% NCDs with Detachable Warrants in

dematerialized form by using electronic credit under the depository system, an advice regarding the credit of the securities

shall be given separately.

In case the Company issues letters of allotment, the corresponding Debenture and warrant entitlement certificates will be

kept ready within three months from the date of allotment thereof or such extended time as may be approved by the

Company Law Board under Section 113 of the Act or other applicable provisions, if any. Allottees are requested to

preserve such letters of allotment, which would be exchanged later for the Debenture and warrant entitlement certificates.

For more information, please refer to the section entitled ‘Letters of Allotment / Securities Certificates/Demat Credit’ on

page no. 193 of this Letter of Offer.

Payment of Refund

Payment of refund shall be undertaken through ECS for applicants having an account at any of the following 68 centers:

Ahmedabad, Bangalore, Bhubaneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai,

Nagpur, New Delhi, Patna, Thiruvananthapuram (managed by RBI); Baroda, Dehradun, Nashik, Panaji, Surat, Trichy,

Trichur, Jodhpur, Gwalior, Jabalpur, Raipur, Calicut, Siliguri (Non-MICR), Pondicherry, Hubli, Shimla (Non-MICR),

Tirupur, Burdwan (Non-MICR), Durgapur (Non-MICR), Sholapur, Ranchi, Tirupati (Non-MICR), Dhanbad (Non-MICR),

Nellore (Non-MICR) and Kakinada (Non-MICR) (managed by State Bank of India); Agra, Allahabad, Jalandhar, Lucknow,

Ludhiana, Varanasi, Kolhapur, Aurangabad, Mysore, Erode, Udaipur, Gorakpur and Jammu (managed by Punjab National

Bank); Indore (managed by State Bank of Indore); Pune, Salem and Jamshedpur (managed by Union Bank of India);

Visakhapatnam (managed by Andhra Bank); Mangalore (managed by Corporation Bank); Coimbatore and Rajkot (managed

by Bank of Baroda); Kochi/Ernakulum (managed by State Bank of Travancore); Bhopal (managed by Central Bank of

India); Madurai (managed by Canara Bank); Amritsar (managed by Oriental Bank of Commerce); Haldia (Non-MICR)

(managed by United Bank of India); Vijaywada (managed by State Bank of Hyderabad); and Bhilwara (managed by State

Bank of Bikaner and Jaipur). This mode of payment of refunds would be subject to availability of complete bank account

details including the MICR code as appearing on a cheque leaf, from the Depositories. Applicants having bank accounts

at any of the 68 centres where clearing houses are managed by the Reserve Bank of India (RBI) will get refunds through

Electronic Credit Service (ECS) only, except where applicant is otherwise disclosed as eligible to get refunds through

direct credit or Real Time Gross Settlement (RTGS).

In case of other applicants, the Company shall ensure dispatch of refund orders, if any, of value up to Rs. 1,500 by .Under

Certificate of Posting., and shall dispatch refund orders above Rs. 1,500, if any, by registered post or speed post. Such

cheques or pay orders will be payable at par at all the centers where the applications were originally accepted and will be

marked “A/c payee” and would be drawn in the name of the sole/first applicant. Adequate funds would be made available

to the Registrar to the Issue for the dispatch of such letters of allotment/securities certificates/ demat credit and refund

orders. Applicants to whom refunds are made through Electronic transfer of funds will be sent a letter (refund advice)

through ‘Under Certificate of Posting’ intimating them about the mode of credit of refund.

As regards allotment/ refund to non-residents, the following further conditions shall apply:

In case of non-residents, who remit their application monies from funds held in NRE/ FCNR accounts, refunds and/ or

payment of interest/ dividend and other disbursement, if any, shall be credited to such accounts, details of which should

be furnished in the CAF. Subject to the approval of the RBI, in case of non-residents, who remit their application monies

through Indian Rupee draft purchased from abroad, refund and/ or payment of dividend/ interest and any other disbursement,

shall be credited to such accounts (details of which should be furnished in the CAF) and will be made net of bank charges/

commission in US Dollars, at the rate of exchange prevailing at such time. The Company will not be responsible for any

loss on account of exchange fluctuations for converting the Indian Rupee amount into US Dollars. The securities certificate(s)

will be sent by registered post at the Indian address of the non-resident applicant.

Mode of Making Refunds

The payment of refund, if any, would be done through various modes in the following order of preference:

1. ECS. Payment of refund would be done through ECS for applicants having an account at any of the 68 centres

where clearing houses for ECS are managed by the Reserve Bank of India, namely Ahmedabad, Bangalore,

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Bhubaneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi,

Patna, Thiruvananthapuram (managed by RBI); Baroda, Dehradun, Nashik, Panaji, Surat, Trichy, Trichur, Jodhpur,

Gwalior, Jabalpur, Raipur, Calicut, Siliguri (Non-MICR), Pondicherry, Hubli, Shimla (Non-MICR), Tirupur, Burdwan

(Non-MICR), Durgapur (Non-MICR), Sholapur, Ranchi, Tirupati (Non-MICR), Dhanbad (Non-MICR), Nellore

(Non-MICR) and Kakinada (Non-MICR) (managed by State Bank of India); Agra, Allahabad, Jalandhar, Lucknow,

Ludhiana, Varanasi, Kolhapur, Aurangabad, Mysore, Erode, Udaipur, Gorakpur and Jammu (managed by Punjab

National Bank); Indore (managed by State Bank of Indore); Pune, Salem and Jamshedpur (managed by Union Bank

of India); Visakhapatnam (managed by Andhra Bank); Mangalore (managed by Corporation Bank); Coimbatore and

Rajkot (managed by Bank of Baroda); Kochi/Ernakulum (managed by State Bank of Travancore); Bhopal (managed

by Central Bank of India); Madurai (managed by Canara Bank); Amritsar (managed by Oriental Bank of Commerce);

Haldia (Non-MICR) (managed by United Bank of India); Vijaywada (managed by State Bank of Hyderabad); and

Bhilwara (managed by State Bank of Bikaner and Jaipur).

This mode of payment of refunds would be subject to availability of complete bank account details including the nine

digit Magnetic Ink Character Recognition (MICR) code as appearing on a cheque leaf, from the depository. The

payment of refund through ECS is mandatory for applicants having a bank account at any of the 68 centers named

herein above, except where applicant is otherwise disclosed as eligible to get refunds through direct credit or RTGS.

2. Direct Credit. Applicants having their bank account with the Refund Banker, i.e. Axis Bank Limited shall be eligible

to receive refunds, if any, through direct credit. The refund amount, if any, would be credited directly to the eligible

applicant”s bank account with the Refund Banker.

3. RTGS. Applicants having a bank account at any of the 68 centers detailed above, and whose application amount

exceeds Rs. 10 Lacs, shall be eligible to exercise the option to receive refunds, if any, through RTGS. All applicants

eligible to exercise this option shall mandatorily provide the IFSC code in the CAF, the refund shall be made

through the ECS or direct credit, if eligibility disclosed.

Please note that only applicants having a bank account at any of the 68 centers where clearing houses for ECS

are managed by the RBI are eligible to receive refunds through the modes detailed in 1, 2 & 3 hereinabove.

For all the other applicants, including applicants who have not updated their bank particulars alongwith the

nine digit MICR Code, the refund orders would be dispatched ‘Under Certificate of Posting’, for refund

orders of value upto Rs. 1,500 and through speed post / registered post for refund orders of above Rs. 1,500.

Letters of Allotment / Debenture and warrant entitlement Certificates / Demat Credit

Letter(s) of allotment/ Debenture and warrant entitlement certificates/ demat credit or letters of regret will be dispatched

to the registered address of the first named applicant or respective beneficiary accounts will be credited within 15 (Fifteen)

days from the date of closure of the issue. In case the Company issues letters of allotment, the relative securities certificates

will be dispatched within three months from the date of allotment. Allottees are requested to preserve such letters of

allotment (if any) to be exchanged later for share certificates. Export of letters of allotment (if any)/ share certificates/

demat credit to non-resident allottees will be subject to the approval of RBI.

Option to receive NCDs with Detachable Warrants in Dematerialized Form

Applicants to the NCDs with Detachable Warrants of the Company issued through this Issue shall be allotted the securities

in dematerialized (electronic) form at the option of the applicant. The Company has signed the following tripartite

agreement to enable the Investors to hold and trade in securities in a dematerialized form, instead of holding the securities

in the form of physical certificates:

i. An Agreement dated May 28, 2002, among CDSL, the Company and Karvy Computershare Private Limited (then

Karvy Consultants Ltd.)

In this Issue, the allottees who have opted for NCDs with Detachable Warrants in dematerialized form will receive their

NCDs with Detachable Warrants in the form of an electronic credit to their beneficiary account with a depository participant.

The CAF shall contain space for indicating number of 6% NCDs with Detachable Warrants applied for in demat and

physical form or both. Investor will have to give the relevant particulars for this purpose in the appropriate place in the

CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No

separate applications for securities in physical and/or dematerialized form should be made. If such applications are

made, the application for physical securities will be treated as multiple applications and is liable to be rejected. In case of

partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be

allotted in physical mode.

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Procedure for availing the facility for allotment of NCDs in this Issue in the electronic form is as under:

• Open a beneficiary account with any depository participant (care should be taken that the beneficiary account should

carry the name of the holder in the same manner as is exhibited in the records of the Company. In the case of joint

holding, the beneficiary account should be opened carrying the names of the holders in the same order as with the

Company). In case of Investors having various folios in the Company with different joint holders, the Investors will

have to open separate accounts for such holdings. Those Applicants who have already opened such Beneficiary

Account (s) need not adhere to this step.

• For Equity Shareholders already holding Equity Shares of the Company in dematerialized form as on the Record

Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who

change their accounts and wish to receive their NCDs pursuant to this Issue by way of credit to such account, the

necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that

the allotment of NCDs arising out of this Issue may be made in dematerialized form even if the original Equity

Shares of the Company are not dematerialized. Nonetheless, it should be ensured that the Depository Account is in

the name(s) of the Equity Shareholders and the names are in the same order as in the records of the Company.

Responsibility for correctness of information (including applicant.s age and other details) filled in the CAF vis-à-vis such

information with the applicant’s depository participant, would rest with the applicant. Applicants should ensure that the

names of the applicants and the order in which they appear in CAF should be the same as registered with the applicant.s

depository participant.

If incomplete / incorrect beneficiary account details are given in the CAF the applicant will get 6% NCDs with Detachable

Warrants in physical form.

The NCDs with Detachable Warrants issued pursuant to this Issue allotted to investors opting for dematerialized form,

would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order

(if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant.s depository participant will

provide to him the confirmation of the credit of such 6% NCDs with Detachable Warrants to the applicant.s depository

account.

Renouncees will also have to provide the necessary details about their beneficiary account for allotment of securities in

this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected.

Utilization of Proceeds

Subscription received against this Issue will be kept in a separate bank account(s) and the Company would not have access

to such funds unless it has received minimum subscription of 90%, of the Issue and the necessary approvals of the Designated

Stock Exchange, to use the amount of subscription.

General instructions for applicants

Please read the instructions printed on the enclosed CAF carefully.

1. Application should be made on the printed CAF, provided by the Company except as mentioned under the head

Application on Plain Paper and should be completed in all respects. The CAF found incomplete with regard to any of

the particulars required to be given therein, and/ or which are not completed in conformity with the terms of this

Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest

and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names

of all the applicants, details of occupation, address, and father’s / husband’s name must be filled in block letters.

2. The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting Bank or to the

Registrar to the Issue and not to the Company or Lead Manager to the Issue. Applicants residing at places other than

cities where the branches of the Bankers to the Issue have been authorized by the Company for collecting applications,

will have to make payment by Demand Draft payable at New Delhi of amount net of bank and postal charges, and

send their application forms to the Registrar to the Issue by REGISTERED POST. If any portion of the CAF is / are

detached or separated, such application is liable to be rejected.

3. PAN: The applicant or in the case of application in joint names, each of the applicants, should mention his/ her PAN

allotted under the Income-Tax Act, 1961. Application Forms without mentioning PAN will be considered

incomplete and are liable to be rejected.

4. Bank Account Details: It is mandatory for applicants to provide information as to their savings/current account

number and the name of the Bank with whom such account is held in the CAF to enable the Registrar to the Issue to

print the said details in the refund orders, if any, after the names of the payees. Application not containing such details

is liable to be rejected.

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5. Payment by cash: The payment against the application should not be effected in cash if the amount to be paid is Rs.

20,000 or more. In case payment is effected in contravention of this, the application may be deemed invalid and the

application money will be refunded and no interest will be paid thereon. Payment against the application if made in

cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.

6. Signatures should be either in English or Hindi or in any other language specified in the Eight Schedule to the.

Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary

Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as

per the specimen signature recorded with the Company or depositories.

7. In case of an application under power of attorney or by a body corporate or by a society, a certified true copy of the

relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under

this Issue and to sign the application and a copy of the Memorandum and Articles of Association and / or bye laws

of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial

number of the CAF. In case the above-referred documents are already registered with the Company, the same need

not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the Issue or are

sent after the Issue Closing Date, then the application is liable to be rejected. In no case should these papers be

attached to the application submitted to the Bankers to the Issue.

8. In case of joint holders, all joint-holders must sign the relevant part of the CAF in the same order and as per the

specimen signature(s) recorded with the Company. Further, in case of joint applicants who are renouncees, the

number of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the first

applicant’s name and all communication will be addressed to the first applicant.

9. Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroad for allotment of 6%

NCDs with Detachable Warrants shall, inter alia, be subject to conditions, as may be imposed from time to time by

the RBI under FEMA in the matter of refund of application money, allotment of 6% NCDs with Detachable Warrants,

subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a Non-Resident or

NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose

a copy of such approval with the CAF.

10. All communication in connection with application for the 6% NCDs with Detachable Warrants, including any

change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of

allotment in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF

number. Please note that any intimation for change of address of Debentureholders, after the date of allotment,

should be sent to the Secretarial Department, Karvy Computershare Private Limited, at Plot No. 17-24, Vittal Rao

Nagar, Madhapur, Hyderabad-500081, in the case of 6% NCDs with Detachable Warrants held in physical form

and to the respective depository participant, in case of NCDs held in dematerialized form.

11. Split forms cannot be re-split.

12. Only the person or persons to whom 6% NCDs with Detachable Warrants have been offered and not renouncee(s)

shall be entitled to obtain split forms.

13. Applicants must write their CAF number at the back of the cheque / demand draft.

14. Only one mode of payment per application should be used. The payment must be either in cash or by cheque/

demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a

sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the

application is to be submitted.

15. A separate cheque/draft must accompany each CAF. Outstation cheques / demand drafts or post-dated cheques and

postal/money orders will not be accepted and applications accompanied by such cheques / demand drafts/money

orders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash.

(For payment against application in cash please refer point (5) above)

16. No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar will

acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.

Grounds for Technical Rejections

Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following :

1. Bank account details (for refund) are not given;

2. Age of first applicant not given;

3. PAN not mentioned.

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4. In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant documents are

not submitted;

5. If the signature of the existing shareholder does not match with the one given on the Application Form and for

renouncees if the signature does not match with the records available with their depositories;

6. Application Forms are not submitted by the Applicants within the time prescribed as per the Application Form and

the Letter of Offer;

7. Applications not duly signed by the sole/joint Applicants;

8. Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to invest in the

Issue;

9. Applications accompanied by Stockinvest;

10. Applications by ineligible Non-residents (including on account of restriction or prohibition under applicable local

laws) and where last available address in India has not been provided.

Disposal of Application and Application Money

No acknowledgment will be issued for the application moneys received by the Company. However, the Bankers to the

Issue/Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment

slip at the bottom of each CAF.

The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in

either case without assigning any reason thereto.

In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an

application is rejected in part, the balance of application money, if any, after adjusting any money due on 6% NCDs with

Detachable Warrants allotted, will be refunded to the applicant within six weeks from the close of the Issue in accordance

with section 73 of the Act.

For further instruction, please read the Composite Application Form (CAF) carefully.

Utilization of Issue Proceeds

The Board of Directors declares that:

1. The funds received against this Issue will be transferred to a separate bank account as per sub-section (3) of Section

73 of the Act.

2. Details of all moneys utilized out of the Issue shall be disclosed under an appropriate separate head in the balance

sheet of the Company indicating the purpose for which such moneys has been utilized.

3. Details of all such unutilized moneys out of the Issue, if any, shall be disclosed under an appropriate head in the

balance sheet of the Company indicating the form in which such unutilized moneys have been invested.

The funds received against this Issue will be kept in a separate bank account and the Company will not have any access

to such funds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that the minimum

subscription of 90% of the Issue has been received by the Company.

Undertakings by the Company

1. The complaints received in respect of the Issue shall be attended to by the Company expeditiously and satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock Exchanges

where the securities are to be listed will be taken within seven working days of finalization of basis of allotment.

3. The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post shall be made

available to the Registrar to the Issue.

4. The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within the specified

time.

5. No further issue of securities affecting equity capital of the Company shall be made till the securities issued/ offered

through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription

etc.

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6. The Company accepts full responsibility for the accuracy of information given in this Letter of Offer and confirms

that to best of its knowledge and belief, there are no other facts the omission of which makes any statement made in

this Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.

7. All information shall be made available by the Lead Manager and the Issuer to the investors at large and no selective

or additional information would be available for a section of the investors in any manner whatsoever.

Important

Please read this Letter of Offer carefully before taking any action. The instructions contained in the accompanying Composite

Application Form (CAF) are an integral part of the conditions of this Letter of Offer and must be carefully followed;

otherwise the application is liable to be rejected.

All enquiries in connection with this Letter of Offer or accompanying CAF and requests for Split Application Forms must

be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first

Equity Shareholder as mentioned on the CAF and super scribed “Shri Nataraj Ceramic and Chemical Industries Limited -

Rights Issue” on the envelope) to the Registrar to the Issue at the following address : Karvy Computershare Private

Limited, at Plot No. 17-24, Vittal Rao Nagar, Madhapur, Hyderabad-500081.

It is to be specifically noted that this Issue of NCDs with Detachable Warrants is subject to the section entitled “Risk

Factors” beginning on page viii of this Letter of Offer.

The Issue will not be kept open for more than 15 days unless extended, in which case it will be kept open for a maximum

of 30 days.

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SECTION IX- MAIN PROVISIONS OF ARTICLES OF ASSOCIATION

ARTICLES OF ASSOCIATION OF SHRI NATARAJ CERAMIC AND CHEMICAL INDUSTRIES LIMITED

1. The provisions of the Companies Act, 1956, as amended from time to time shall apply to SHRI NATARAJ CERAMIC

AND CHEMICAL INDUSTRIES LIMITED except in so far as they permit regulation of the Company’s affairs by

the Articles provided herein. The regulations contained in Table A, in the first Scheme to the Companies Act, 1956,

except so far as they are herein embodied, shall not apply to this Company, but the regulations for the management

of the company in reference to the repeal or alteration of or additions to its regulations by Special resolution, as

prescribed by the said Companies Act, 1956, or any statutory modifications thereof, be such as are contained in

these Articles.

II. INTERPRETATION

2. (a) The marginal notes hereto are purely for guidance and shall not effect the interpretation of these Articles.

(b) In the interpretation of these Articles the following words and expressions shall have the following meaning,

unless repugnant to the subject or context thereof:-

“The Act” or “the said Act” means “The Companies Act, 1956” as amended upto date or any statutory

modifications or re-enactment thereof or any other Act or Acts for the time being in force in India governing

Companies.

“The Board” or the “Board of Directors” means a meeting of the Directors duly called and constituted or as

the case may be, the Directors assembled at a Board, or the requisite number of Directors entitled to pass a

circular resolution in accordance with the Articles, or the Directors of the Company collectively.

“The Company” or “This Company” means “SHRI NATARAJ CERAMIC AND CHEMICAL INDUSTRIES

LIMITED.”

“Directors” means the Directors for the time being of the Company or as the case may be, the Directors

assembled at a Board.

“Dividend” includes bonus.

Words importing the plural number also include, where the context requires or admits, the singular number

and vice versa.

Subject as aforesaid, any words or expressions defined in the Act, shall, except where the subject or context

otherwise requires, bear the same meaning in these Articles.

III. CAPITAL

3. The Share Capital of the Company is as stated in Clause V of the Memorandum of Assiciation. The company has

the power to increase, reduce or modify the said capital and to issue any part of its capital original, increased or

reduced, with or without any preference, priority or special privilege or subject to any postponement of rights or to

any conditions or restrictions so that unless the conditions of issue shall expressly declare, every issue of shares,

whether declared to be preference or otherwise, shall be subject to the power herein-before contained.

(As substituted by the Special Resolution passed by the shareholders on 28th August, 2008).

IV. SHARES

4. Subject to the provisions of the Act, the Directors are empowered to issue shares to the extent of the Authorised

Capital of the Company with such right and privileges annexed thereto and upon such terms and conditions as they

may deem fit.

5. Subject to the provision of the Act and these Articles, the Directors may allot and issue shares in the capital of the

Company in payment or part payment for any property or assets of any kind whatsoever, sold, supplied or transferred,

goods or machinery supplied or for service rendered to the company either in or about the formation or promotion

of the company or the conduct of the business and any shares which may be so allotted may be issued as fully paid

up or partly paid up otherwise than in cash, and, if so issued, shall be deemed to be fully paid up or partly paid up

shares, as the case may be.

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6. An application signed by or on behalf of an applicant for shares in the Company followed by an allotment of any

shares therein shall be an acceptance of shares within the meaning of these Articles.

7. The money (if any) which the Directors, shall on the allotment of any shares being made by them, require or direct to

be paid by way of deposit, call or otherwise, in respect of any shares allotted by them shall immediately on the

inscription of the name of allottee in the Register of Members as the holder of such shares, become a debt due to and

recoverable by the Company from the allottee thereof, and shall be paid by him accordingly.

8. If by the conditions of allotment of any share, the whole or part of the amount or issue price thereof shall be payable

by installments, every such installment shall, when due, be paid to the Company by the person who, for the time

being and from time to time shall be the Registered holder of the shares, or by his legal representative, provided that

an option or right to call on shares shall not be given to any person or persons without the sanction of the Company

in General Meeting.

(As substituted by the special resolution at the Extra-Ordinary General Meeting of the shareholders held on 30th

November, 1983).

9. Except as required by law, no person shall be recognized by the Company as holding any share upon any trust and

the Company shall not be bound by or be compelled in any way, to recognize (even when having notice thereof) any

equitable, contingent, future or partial interest or share of any interest in any fractional part of a share, or (except

only as by these Articles or as ordered by the Court of competent jurisdiction or by law otherwise provided) any

other rights in respect of any share except an absolute right to the entirety thereof in the registered holder. The

Board, however, shall be at liberty at their sole discretion to register any share in the joint names or any two or more

persons, not exceeding four, or the survivor or survivors of them.

V. UNDERWRITING AND BROKERAGE

10. The Company may, subject to the provisions of section 76 and other applicable provisions (if any) of the Act, at any

time, pay a commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely

or conditionally, for any shares in or, debentures of the Company, or his procuring or agreeing to procure subscriptions,

whether absolute or conditional, for any shares in or, debentures of the Company, but so that the amount or rate of

Commission does not exceed in the case of shares, five percent of the price at which the shares are issued and, in the

case of debentures two and a half percent of the price at which the debentures are issued. The commission may be

satisfied by the payment of cash or allotment of fully or partly paid shares or debentures or partly in one way and

partly in the other way. The Company may also on any issue of shares or debentures pay such brokerage as may be

lawful, and usual or reasonable.

DEMATERIALISATION OF SHARES AND DEBENTURES

10A. 1. For the purpose of the Article :-

‘Beneficial Owner’ means a person or persons whose name is recorded as such with a depository ;

‘SEBI’ means the Securities and Exchange Board of India;

‘Depository’ means a company formed and registered under the Companies Act, 1956, and which has been

granted a certificate of registration to act as a depository under the Securities and Exchange Board of India

Act, 1992; and

‘Security’ means such security as may be specified by SEBI from time to time.

2. Notwithstanding anything contained in these Articles, the Company shall be entitled to dematerialize its

securities and to offer securities in a dematerialized form pursuant to the Depositories Act, 1996.

3. Every person subscribing to securities offered by the Company shall have the option to receive security certificates

or to hold the securities with a depository. Such a person who is the beneficial owner of the securities can at

any time opt out of a depository, if permitted by the law, in respect of any security in the manner provided by

the Depositories Act, and the Company shall, in the manner and within the time prescribed, issue to the

beneficial owner the required Certificates of Securities.

If a person opts to hold his security with a depository, the Company shall intimate such depository the details

of allotment of the security, and on receipt of the information, the depository shall enter in its record the name

of the allottee as the beneficial owner of the security.

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4. All securities held by a depository shall be dematerialised and be in fungible form. Nothing contained in

Sections 153, 153A, 153B, 187B, 187C and 372A of the Act shall apply to a depository in respect of the

securities held by it on behalf of the beneficial owners.

5. a) Notwithstanding anything to the contrary contained in the Act or these Articles, a depository shall be

deemed to be the registered owner for the purposes of effecting transfer of ownership of security on

behalf of the beneficial owner.

b) Save as otherwise provided in (a) above, the depository as the registered owner of the securities shall not

have any voting rights or any other rights in respect of the securities held by it.

c) Every person holding securities of the Company and whose name is entered as the beneficial owner in the

records of the depository shall be deemed to be a member of the Company. The beneficial owner of

securities shall be entitled to all the rights and benefits and be subject to all the liabilities in respect of his

securities which are held by a depository.

6. Notwithstanding anything in the Act or these Articles to the contrary, where securities are held in a depository,

the records of the beneficial ownership may be served by such depository on the company by means of electronic

mode or by delivery of floppies or discs.

7. Nothing contained in Section 108 of the Act or these Articles shall apply to a transfer of securities effected by

a transferor and transferee both of whom are entered as beneficial owners in the records of a depository.

8. Notwithstanding anything in the Act or these Articles, where securities are dealt with by a depository, the

company shall intimate the details thereof to the depository immediately on allotment of such securities.

9. Nothing contained in the Act or these Articles regarding the necessity of having distinctive numbers for securities

issued by the Company shall apply to securities held with a depository.

10. The Register and Index of beneficial owners maintained by a depository under the Depositories Act, 1996,

shall be deemed to be the Register and Index of Members and Security holders for the purposes of these

Articles.

(As inserted by special resolution at the Annual General Meeting of the Shareholders held on 27th September

2002).

VI. SHARE CERTIFICATES

11. (a) Every member shall be entitled without payment to one certificate for all the shares of each class or denomination

registered in his name, or, if the Directors so approve on payment of such fees at the discretion of the Directors

or without payment of fees as the Directors may from time to time determine, to several certificates each for

one or more shares of each class. Every certificate of shares shall specify the name (or names) of the person(s)

in whose favor the certificate is issued, the share to which it relates and the amount paid up thereon, the number

and the distinctive number of the shares in respect of which it is issued and shall be in such form as the

Directors shall prescribe or approve. Any two or more joint allottees of shares shall, for the purpose of this

Article, be treated as a single member.

(b) The Certificates of title to shares shall be issued under the seal of the Company in any of the manners provided

for by the Companies (Issue of share Certificate) Rules for the time being in force. A director may sign a share

certificate by affixing his signature by means of any machine equipment or other mechanical means such as

engraving in metal or lithography.

(c) Share Certificates shall be issued in marketable lots. Where share certificates are issued for either more or less

than marketable lots, sub-division/Consolidation into marketable lots shall be done free of charge.

(As substituted by the special resolution at the Extra-Ordinary General Meeting of the Shareholders held on

30th November, 1983).

12. If any certificate be worn out, defaced, torn or be otherwise mutilated or rendered useless from any cause whatsoever,

or if there is no space on the back thereof for endorsement of transfers, then, upon surrender to the Company the same

may be cancelled and the Company may issue a new certificate in lieu thereof, without charging any fee in respect

thereof, and if any certificate be lost or destroyed, then, upon proof thereof to the satisfaction of the Directors and on

such indemnity as the Directors deem adequate being given and on the payment of out of pocket expenses incurred

by the Company in investigating evidence, a new certificate on payment of any such sum not exceeding one rupee for

every new Certificate as the Directors may in their discretion determine.

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13. The Board of Directors may from time to time by a resolution passed at a meeting of the Board but subject to the

conditions hereinafter mentioned, make such calls as they think fit upon the members in respect of all monies unpaid

on the shares held by them respectively (whether on account of the nominal value of the shares or by way of premium)

and not by conditions of allotment thereof made payable at fixed times, and such member shall pay the amount of

every call so made on him to the Company or where payable to a person other than the Company, to the person and

at the time or times appointed by the Directors. A call may be made payable by instalments. Joint holders of a share

shall be jointly and severally liable to pay all calls in respect thereof.

14. Where any calls for share capital are made on shares, such calls may be made on a uniform basis on all shares falling

under the same class. For the purpose of this Article, shares of some nominal value on which different amounts have

been paid up shall not be deemed to fall under the same Class.

15. Fifteen days’ notice atleast of every call, otherwise than on allotment, shall be given specifying the time and place of

payment, and the name of the person to whom the calls shall be paid, provided that before the time for payment of

such calls the Directors may by notice in writing to the members revoke the same.

16. A call shall be deemed to have been made at the time when the resolution of the Board authorising such call was

passed and may be made payable by the member whose name appear on the Register of Members on such date or at

the discretion of the Board on such subsequent date as shall be fixed by the Board.

17. The Board may from time to time at their discretion extend the time fixed for the payment of any call, and may

extend such time as to all or any of the members who, due to residence at the distance or other cause, the Board may

deem entitled to such extension but so member shall be entitled to such extension as a right.

18. If by the terms of issue of any share or otherwise any amount is made payable at any fixed time or by instalments at

fixed times (whether on account of the nominal amount of the share or by way of premium) every such amount or

instalment shall be payable as if it were a call duly made by the Board and of which due notice has been given and

all the provisions herein contained in respect of calls shall relate to such amount of instalment accordingly.

19. If the sum payable in respect of any call or instalment be not paid on or before the day appointed for payment thereof

or any extension thereof as aforesaid, the holder for the time being or allottee of the share in respect of which a call

shall have been made or the instalment shall be due, shall pay interest on the same at such rate not exceeding nine

per cent per annum as the Board shall fix from the date appointed for the payment thereof to the time of actual

payment but the Board may in their absolute discretion waive payment of such interest wholly or in part.

20. Subject to the provisions of the Act and these Articles, on the trial or hearing of any action or suit brought by the

Company against any member or his legal representative for the recovery of any call or other money claimed to be

due to the Company in respect of any shares, it shall be sufficient to prove that the name of the member in respect

of whose shares the money is sought to be recovered, appears entered on the Register of Members as the holder of

the shares in respect of which such money is sought to be recovered, that the resolution making the call is duly

recorded in the Minute Book and that notice of such call was duly given in pursuance of these present; and it shall

not be necessary to prove the appointment of the Director who made such call nor any other matter whatsoever, but

the proof of the matters aforesaid shall be conclusive evidence of the debt.

21. Neither a Judgment nor a decree in favour of the Company for calls or other money due in respect of any shares nor

any part payment or satisfaction thereunder nor the receipt by the company of a portion of any money which shall

from time to time be due from any member in respect of any shares, either by way of principal or interest, nor any

indulgence granted by the Company in respect of the payment of any money shall preclude the forfeiture of such

shares as herein provided.

22. The Directors may if they think fit, receive from any member willing to advance the same, all or any part of the

money due upon the shares held by him beyond the sums actually called for; and upon the moneys so paid in

advance or so much thereof as from time to time exceeds the amount of the calls then made upon the shares in

respect of which such advance has been made, the Company may pay interest at such rate to the member paying

such sum in advance as the Directors agree upon. The Company may at any time repay the amount so advanced

upon giving to such member three months’ notice in writing.

23. Money paid in advance of calls shall not rank for dividend of participate in profits. A call may be revoked or

postponed at the discretion of the Board.

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VII SHARE WARRANTS

23A (1) The Company may issue share warrants subject to and in accordance with the provisions of Section 114 and

115, and accordingly the Board in its discretion with respect to any share which is fully paid, upon application

in writing signed by the persons registered as holder of the share, and authenticated by evidence (if any) as the

Board may, from time to time, require as to the identity of the person signing the application and on receiving

the certificate (if any) of the share, and the amount of the stamp duty on the warrant and such fee as the Board

may from time to time require issue a share warrant.

(2) The bearer of a share warrant may at any time deposit the warrant at the office of the company, and so long as

the warrant remains so deposited, the depositor shall have the same right of signing a requisition for calling

a meeting of the company and of attending and voting and exercising the other privileges of the member at

any meeting held after the expiry of two clear days from the time of deposit as if his name were inserted in the

Register of Members as the holder of share included in the deposited warrant.

Not more than one person shall be recognized as depositor of the share warrant.

The Company shall, on two days written notice return the deposited share warrant to the depositor.

(3) Subject as herein otherwise expressly provided, no person shall, as bearer of a share warrant, sign a requisition

for calling a meeting of the company, or attend or vote or exercise any other privileges of a member at a

meeting of the company, or be entitled to receive any notice from the company.

The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages as if

he was named in the Register of Members as the holder of the share included in the warrant, and he shall be

a member of the company.

The Board may, from time to time, make bye-laws as to the terms on which (if it shall think fit) a new share

warrant or coupon may be issued by way of renewal in case of defacement, loss or destruction.

(As inserted by the Special Resolution passed by the shareholders on 28th August, 2008).

CONVERSION OF SHARESINTO STOCK AND RECONVERSION

23B The Company may, by ordinary Resolution:-

(1) Convert any paid shares into stock; and Reconvert any stock into paid-up shares of any denomination.

(2) Several holders of such stock may transfer their respective interest therein or any part thereof in the same

manner and subject to the same regulations under which the shares from which the stock arose might before

the conversion have been transferred, or as near thereto as circumstances admit.

PROVIDED that the Board may, from time to time, fix minimum amount of stock transferable, so however,

that such minimum shall not exceed the nominal amount of the shares from which the stock arose.

(3) The holders of stock shall, according to the amount of stock held by them, have the same right, privileges and

advantages as regards dividends, voting at the company, and other matters, as if they held the shares from

which the stock arose, but no such privilege or advantage (except participation in the dividends and profits of

the Company and in the assets on winding up) shall be conferred by an amount of stock which would not, if

existing in shares, have conferred those privileges or advantages.

(4) Such of the regulations of the company as are applicable to paid up shares shall apply to stock and the words

‘Shareholder’ in these regulations shall include ‘stock’ and ‘stock-holder’ respectively.

(As inserted by the Special Resolution passed by the shareholders on 28th August, 2008).

VIII FORFEITURE, SURRENDER AND LIEN

24. If any member fails to pay the whole or any part of any call or instalment or any money due in respect of any shares

either by way of principal or interest on or before the day appointed for the payment of the same or any extension

thereof as aforesaid, the Directors may at any time there after during such time as the call or instalment or any part

thereof or other moneys remain unpaid or a judgment or decree in respect thereof remains unsatisfied, in whole or

in part, serve a notice on such member, or on the person (if any) entitled to the share by transmission, requiring him

to pay such call or instalment or such part thereof or other moneys as remain unpaid together with any interest that

may have accrued and all expenses (legal or otherwise) that may have been incurred by the Company by reason of

such non-payment.

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25. The Notice aforesaid shall name a day (not being less than fourteen days from the date of the notice) and place or

places on and at which the money is to be paid and the notice shall also state that in the event of the non-payment of

such money at the time and place appointed the shares in respect of which the same is owning will be liable to be

forfeited.

26 If the requirement of any such notice shall not be complied with every or any share in respect of which the notice is

given may at any time thereafter, before payment of all calls or instalments, interest and expenses due in respect

thereof, be forfeited by a resolution of the directors to that effect. Such forfeiture shall include dividends declared

in respect of the forfeited shares and not actually paid before the forfeiture.

27. When any share is so declared to be forfeited, notice of forfeiture shall be given to the member in whose name it

stood immediately prior to forfeiture, and an entry of the forfeiture with the date thereof shall forthwith be made in

the Register of Members, but no forfeiture shall be in any manner invalidated by any omission or neglect to given

such notice or to make any such entry as aforesaid.

28. Every share so forfeited as aforesaid shall thereupon be the property of the Company and may be sold, re-allotted or

otherwise disposed of either to the original holder thereof or to any other person upon such terms and in such

manner as the Board shall think fit.

29. The Directors may at any time before any share so forfeited shall have been sold, re-allotted or otherwise disposed

of annul the forfeiture thereof upon such conditions as they may think fit.

30. Any member whose shares may be forfeited shall, not withstanding the forfeiture, be liable to pay and shall forthwith

pay to the Company all calls and other moneys owing upon the shares at the time of forfeiture together with interest

thereon from the time of the forfeiture until payment at nine percent per annum, and the Directors may enforce the

payment thereof if they think fit, but shall not be under any obligation to do so.

31. The forfeiture of a share shall involve the extinction of all interest in, and also of all claims and demands against

the Company in respect of the share, and all other rights incidental to the share, except only such of those rights as

by these Articles are expressly saved.

32. A certificate in writing under the hand of a Director or the Secretary that the call or other moneys in respect of a

share was or were due and payable and notice thereof given and that default in payment of the call or other moneys

was made, and that the forfeiture of the shares was made by a resolution of the Directors to the effect, shall be

evidence of the facts stated therein as against all persons entitled to such share.

33. The Company may receive the consideration, if any, given for the share on any sale, re-allotment or other disposition

thereof and the person to whom such share is sold, re-allotted or disposed of may be registered as the holder of the

share and he shall not be bound to see to the application of the consideration, if any, nor shall his title to the share

be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale, re-allotment or

disposal of the share.

34. The Directors may, at any time, subject to the provisions of the Act, accept the surrender of any share from or by any

member desirous of surrendering on such terms as the Directors may think fit.

35. The Company shall have a first and paramount lien upon all shares (other than fully paid up shares) registered in

the name of each member (whether solely or jointly with others) and upon the proceeds of sale thereof for all

moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares and no

equitable interest in any share shall be created except upon the footing and condition that Article 30 thereof is to

have full effect. Any such lien shall extend to all dividends and bonuses from time to time declared in respect of

such shares. Unless otherwise agreed, the registration of a transfer of shares shall operate as a waiver of the

Company’s lien, if any, on such shares. The Directors may at any time declare any share to be wholly or in part

exempt from the provisions of this clause.

36. For the purpose of enforcing such lien, the Board of Directors may sell the shares subject thereto in such manner as

they think fit but no sale shall be made unless the sum in respect of which the lien exists is presently payable and

until notice in writing of the intention to sell shall have been served on such member, his executors or administrators

or his committee, curator bonis or other legal representatives as the case may be, and default shall have been made

by him or them in the payment of the sum payable as aforesaid for fourteen days after the date of such notice. To

give effect to any such sale, the board may authorize some person to transfer the shares sold to the purchaser thereof

and the purchaser shall be registered as the holder of the shares comprised in any such transfer. Upon any such sale

as aforesaid, the existing certificates in respect of the shares sold shall stand cancelled and become null and void

and of no effect, and the Directors shall be entitled to issue a new certificate or certificates in lieu thereof to the

purchaser or purchaser concerned.

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37. The net proceeds of the sale shall be received by the Company and, on the payment of the costs of such sale, applied

in payment of such part of the amount in respect of which the lien exists as is presently payable and the residue, if

any, shall subject to like lien for sums not presently payable as existed upon the shares before the sale be paid to the

person entitled to the shares at the date of the sale.

38. The instrument of transfer of any “share shall be in writing and all the provisions of Section 108 of the Companies

Act, 1956, and of any statutory modification thereof for the time being shall be duly complied with in respect of all

transfers of shares and the registration thereof. The form of transfer shall be in form 7B as prescribed under the Act

and the provisions of Sec. 108 of the Act shall be complied with regard to transfer of shares.”

(As substituted by the special resolution at the Extra-ordinary General Meeting of the shareholders held on 30th

November, 1983.)

39. The Company shall have power to keep Foreign Register of members or Foreign Register of debenture holders in

any country or State outside India as may be decided by the Board from time to time. If any shares are to be

registered in any such register, the instrument of transfer shall be in a form recognised under the law of such

country or state or in such form as may be approved by the Board.

40. Subject to the provisions of Section 111 of the Act or any statutory modification of the said provisions for the time

being in force, the Directors may, at their own absolute and uncontrolled discretion and with-out assigning any

reason, decline to register or acknowledge any transfer of shares and in particular may so decline in any case in

which the Company has a lien upon the shares of any of them or whilst any monies in respect of the shares desired

to be transferred or any of them remain unpaid or unless the transferee is approved by the directors and such refusal

shall not be affected by the fact that the proposed transferee is already a member. The registration of a transfer shall

be conclusive evidence of the approval by the Directors of the transferee, provided that registration of a transfer

shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons,

indebted to the Company on any account what-soever except a lien.

41. If the Company refuses to register any share or transmission of any right therein, the Company shall, within two

months from the date on which the instruments of transfer or intimation of transmission was lodged with the

Company, send notice of refusal to the transferee and transferor or to the person giving intimation of the transmission,

as the case may be, and thereupon the provision for the time being in force shall apply.

42. The instrument of transfer shall after registration be retained by the Company. All instruments of transfer which

the Directors may decline to register shall, on demand, be returned, to the persons depositing the same. The

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

43. The Directors shall have power, on giving not less than seven days’ previous notice by advertisement as required by

section 154 of the Act, to close the transfer books, the Register of Members or the Register of debenture holders of

the Company for such period or periods of time not exceeding on the whole 45 days in each year and not exceeding

30 days at a time, as to them may seem fit.

44. The executor or administrator of a deceased member, (whether European, Hindu, Mohamedan or Parsi) or holder of

succession certificate shall be the only person recognised by the Company as having any title to his shares, and the

Company shall not be bound to recognise such executor or administrator or holder of a succession certificate unless

such executor or administrator shall have first obtained Probate, Letters of Administration, or other legal representation,as the case may be, from a duly constituted Court in India, or from any authority empowered by any law to grant suchother legal representation, provided that in any case, where the Board in their absolute discretion thinks fit the Boardmay dispense with the production of probate or letters of Administration or other legal representation and, under thenext Article, register the name of any person who claims to be absolutely entitled to the shares standing in the nameof a deceased member as a member, upon such terms as to indemnity or otherwise as the Directors may deem fit.

45. Subject to the provisions of the Act and these Articles, any person becoming entitled to a share in consequence of thedeath, bankruptcy or insolvency of any member or by any lawful means other than by a transfer in accordance withthese presents, may be with the consent of the Directors (which they shall not be under any obligation to give), uponadducing such evidence that he sustains the character in respect of which he proposes to act under this clause, or ofhis title, as the Board may think sufficient and upon giving such indemnity as the Directors may require, either beregistered him-self as the holder of the share or elect to have some person nominated by him and approved by theBoard, registered as such holder, provided nevertheless that if such person shall elect to have his nominee registered

he shall testify the election by executing to his nominee instrument of transfer of the share in accordance with the

provisions herein contained and until he does so he shall not be freed from any liability in respect of the share. This

clause is herein referred to as “the Transmission clause”.

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46. Subject to the provisions of the Act and these Articles, the Directors shall have the same right to refuse to register a

person entitled by transmission to any shares or his nominee as if he were the transferee named in an ordinary

transfer presented for registration.

47. Every transmission of a share shall be verified in such manner as the Directors may require, and the Company may

refuse to register any such transmission until the same be so verified or until or unless an indemnity be given to the

Company with regard to such registration which the Board at their discretion shall consider sufficient; provided

nevertheless that there shall not be any obligation on the Company or the Board to accept any indemnity.

48. No fee shall be charged for Registration of Transfer or for effecting transmission or for registering any letter or

probate, letters of administration and similar other documents.

(As substituted by the special resolution at the Extra-Ordinary General Meeting of the shareholders held on 30th

November, 1983.)

49. The Company shall incur no liability or responsibility whatever in consequence of their registering or giving effect

to any transfer of shares made or purporting to be made, by any apparent legal owner thereof (as shown or appearing

in the Register of Members) to the prejudice of persons having or claiming any equitable rights, title or interest to

or in the same shares, notwithstanding that the Company may have had notice of such equitable right, title or

interest or notice prohibiting registration or such transfer, and may have entered such notice or referred thereto in

any book of the Company, and the Company shall not be bound or required to regard or attend or give effect to any

notice which may be given to them of any equitable right title or interest or be under any liability whatsoever for

refusing or neglecting so to do, though it may have been entered or referred to in some books of the Company, but

the Company shall, nevertheless, be at liberty to regard and attend to any such notice and given effect thereto, if the

Directors shall so think fit.

IX INCREASE, REDUCTION AND ALTERATION IN AUTHORISED, ISSUED AND SUBSCRIBED CAPITAL

50. The Company may from time to time in general meeting by ordinary resolution alter the condition of its memorandum

by increase of its authorised share capital by creation of new shares of such amount as it thinks expedient.

51. Subject to the provisions of the Companies Act, 1956 the Board of Directors may from time to time increase its

subscribed share capital by issue of new shares upon such terms and conditions and with such rights and privileges

annexed thereto as the Directors shall determine; and in particular, such shares may be issued with a preferential,

or qualified right to dividends and in the distribution of assets of the Company, provided always that any preference

shares may be issued on the terms that they are or at the option of the Company are to be liable to be redeemed andon such terms and conditions of redemption as may be prescribed.

52. Except so far as otherwise provided by the conditions of issue or by these presents any capital raised by the creationof new shares shall be considered part of the original capital and shall be subject to the provisions, herein containedwith reference to the payment of calls and instalments, transfer and transmission, forfeiture, lien, surrender, votingand otherwise.

53. Notwithstanding anything contained in these Articles, in the case of the issue of redeemable Preference shares underthe provisions of Article 51 hereof the provisions of Section 80 of the Act shall apply.

54. The Company may (subject to provisions of Section 100 to 105 of the Act) from time to time by Special Resolutionsreduce its share capital or any Capital Redemption Reserve Account, or Share Premium Account in any way authorisedby law and in particular may pay off any paid up share capital upon the footing that it may be called up again, orotherwise, and may, if as far as is necessary, alter its Memorandum by reducing the amount of share capital and of itsshares accordingly.

55. The Company in General Meeting by Special Resolution, may alter the conditions of its Memorandum as follows :

(a) Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares.

(b) Sub-divide its shares or any of them into shares of smaller amounts than originally fixed by the Memorandum,subject nevertheless to the provisions of the Act and of these Articles.

(c) Cancel shares which, at the date of passing of the Resolution in that behalf have not been taken or agreed to betaken by any person and diminish the amount of its share capital by the amount of shares so cancelled.

56. The rights conferred upon the holders of the shares of any class issued with preferred of other rights shall not, unless

otherwise expressly provided by the terms of the issues of the shares of that class, be deemed to be varied by the

creation or issue of further shares ranking pari passu there with, but in no respect in priority thereto.

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X MODIFICATION OF CLASS RIGHTS

57. All or any of the rights and privileges attached to any class of shares may, subject to provisions of sections 106 and

107 of the Act, be modified, abrogated or dealt with subject to :

(a) The consent of holders of not less than three-fourths of the issued shares of that class, or

(b) The sanction by Special Resolution passed at a separate meeting of the holders of the issued shares of that

class.

(c) To every such separate meeting, the provisions herein contained as to general meeting shall Mutatis Mutandis

apply.

XI JOINT HOLDERS

58. Where two or more persons are registered as the holders of any share, they shall be deemed to hold the same as joint

tenants with benefits of survivorship subject to the following and other provisions contained in these Articles.

(a) The company shall be entitled to decline to register more than four persons as the joint holders of any share.

(b) The joint holders of any share shall be liable severally as well as jointly for and in respect of all calls and other

payments which ought to be made in respect of such share.

(c) On the death of any such joint holders, the survivors shall be the only person or persons recognised by the

Company as having any title or interest in the share but the Directors may require such evidence of death as

they may deem fit and nothing herein contained shall be taken to release the estate of a deceased joint holder

from any liability of shares held by him jointly with any other person.

(d) Anyone of the joint holders may give effectual receipt of any dividends or other monies payable in respect of

such shares.

(e) Only the person whose name stands first in the Register of Members as one of the joint holders of any share,

shall be entitled to delivery of the Certificate relating to such shares or to receive documents (which expression

shall be deemed to include all documents referred to in Article 158) from the Company and any documents

served on or sent to such person shall be deemed as good service on all the joint holders.

(f) Any one of two or more joint holders may vote at any meeting either personally or by attorney or by proxy in

respect of such shares as if he were solely entitled thereto and if more than one of such joint holders be present

at any meeting personally or by proxy or by attorney, then, that one of such persons so present whose name

stands first or higher (as the case may be) on the Register of Members, in respect of such shares shall alone be

entitled to vote in respect thereof but the other or others of the joint holders shall be entitled to be present at the

meeting, provided always that a joint holder present at any meeting personally shall be entitled to vote in

preference such joint holder present by an attorney or by proxy although the name of such joint holder present

by an attorney or proxy stands first or higher (as the case may be) in the Register of Member in respect of such

shares. Several executors or administrators of a deceased member in whose (deceased members’s) sole name

any share stands shall for the purpose of this sub clause be deemed to be joint holders.

XII BORROWING POWERS

59. Subject to the provisions of the Act and these Articles, and without prejudice to the powers conferred by these

Articles, the Directors shall have power, from time to time, at their discretion to accept deposits from members of the

company either in advance of calls or otherwise and generally to raise or borrow or secure the payment of any sum

or sums of money for the purposes of the Company, provided that the aggregate of the amount borrowed at any time

together with the moneys already borrowed by the Company (apart from temporary loans as defined in Section 293

of the Act, obtained from the Company’s bankers in the ordinary course of business) and remaining outstanding and

undischarged at the time, shall not, without the consent of the Company in general meeting exceed the aggregate of

the paid-up capital of the company and its free reserves, that is to say, reserves not set apart for any specific purpose.

60. Subject to the provisions of the Act and these Articles, the Directors may be a resolution at a meeting of the Board

raise and secure the payment of such sum or sums in such manner and upon such terms and conditions in all respect

as they think fit and in particular by the issue of the bonds, perpetual or redeemable debentures, debenture stock, or

any mortgage, charge or other security, on the undertaking or on the whole or any part of the property of the Company

(both present and future) including its uncalled capital for the time being.

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61. Any bonds, debentures, stocks or other securities issued or to be issued by the Company, shall be under the control of

the Directors who may issue them upon such terms and conditions and in such manner and for such consideration as

they shall consider to be for the benefit of the company.

62. Debentures, debenture stock, bonds or other securities may be made assignable free from equities between the

Company and the person to whom the same may be issued.

63. Subject to the provisions of the Act and these Articles, any bonds, debentures, debenture stock or other securities

may be issued at a discount, premium or otherwise and with any special privileges and conditions as to redemption,

surrender, drawings, allotment of shares and otherwise, and except in the case of debentures and debenture stock,

as to attending at General Meeting of the Company also. Provided that debentures, debenture stock, loan/loan

stock with the right to allotment of or conversion into shares shall not be issued except with the sanction of the

company in general meeting by a Special Resolution.

(As substituted by the special resolution at the Extra-Ordinary General Meeting of the Shareholders held on 30th

November, 1983.)

64. Subject to the provisions of the Act and these Articles, if the Directors or any of them or any other person shall incur

or be abut in incur any liability whether as principal or surety for the payment of any sum primarily due from the

company, the Board may execute or cause to be executed any mortgage, charge or security over or affecting the

whole or any part of the assets of the Company by way of indemnity to secure the Directors or person so becoming

liable as aforesaid from any loss in respect of such liability.

65. If any uncalled capital of the Company is included or charge by any mortgage or other security, the Directors, shall,

subject to the provisions of the Act and these Articles, make calls on the members in respect of such uncalled capital

in trust for the person in whose favour such mortgage or securities is executed.

65A. Every holder of Shares in, or holder of Debentures of, the Company may, at any time, nominate a person to whom his

Shares in or Debentures of, the Company shall vest in the event of his death and the Company shall, subject to the

provisions of Section 109A and other application provisions, if any, of the Companies Act, 1956, and the Rules made

thereunder, register such nomination.

(As inserted by the special resolution at the Annual General Meeting of the Shareholders held on 27th September

2002.)

XIII. STATUTORY MEETING

66. The statutory meeting of the Company shall be held at such place and time within a period of not less than one month

nor more than six months from the date at which the Company is entitled to commence business as the Directors may

determine and in connection therewith, the Directors shall comply with the provisions of section 165 of the Act.

XIV. GENERAL MEETING

67. Subject to the provisions of the Act, the Company shall hold, from time to time as provided by the Act, in addition to

any other meetings, a general meeting as its Annual General Meeting. The provisions of section 166 of the Act shall

apply to such Annual General Meeting.

68. every annual General Meeting shall be called for a time during business hours, and on such day (not being a public

holiday) as the Directors may from time to time determine and it shall be held either at the registered office of the

company or at some other place within the city, town or village in which the registered office to the company is

situated.

69. (1) All general meeting other than Annual General Meetings shall be called Extra-ordinary General Meetings.

(2) The Board of Directors may, whenever it thinks fit, call an Extra-ordinary General Meeting.

70. The Board of Directors shall, on due requisition of members in accordance with section 169(4) of the Act, forthwith

proceed to call an Extra-ordinary General Meeting and the provisions of section 169 of the Act shall apply in respect

of such meetings.

71. Save as permitted under section 171(2) of the Act, a general meeting of the company may be called by giving not less

than twenty one days notice in writing.

72. Notice of every meeting shall be given to the members and to such other person or persons as required and in

accordance with sections 172 and 173 of the Act and it shall be served in the manner authorised by section 53 of the

Act.

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XV. PROCEEDINGS AT GENERAL MEETING

73. At least five members entitled to vote and present in person shall be quorum for a general meeting. No business shall

be transacted at any general meeting unless the quorum requisite be present at the commencement of the business.

74. If within half an hour from the time appointed for holding a meeting of the company, quorum is not present, the

meeting, if called upon the requisition of members, shall stand dissolve. In any other case, the meeting shall stand

adjourned to such time on the following day or such other day and at such place as the members present at the

expiration of the half an hour determine, and if no such time and place be determined, to the same day in the next

week at the same time and place, and if at such adjourned meeting, quorum of members is not present, those

members present shall be quorum and they may transact the business for which the meeting was called.

75. If at any adjourned meeting also quorum is not present within half an hour of the time appointed for holding the

meeting, the members present, whatever their number (not being less than two) shall be a quorum and shall have

power to decide upon the matters which could properly have been disposed of at the meeting from which the

adjournment took place.

76. The Chairman (if any) of the Board of Directors shall, if present, preside as Chairman at every general meeting

whether Annual or Extra-Ordinary, but if there be no such Chairman or in case of his absence of refusal anyone of

the Directors present, shall be chosen to be Chairman of the meeting.

77. If at any meeting a quorum of members shall be present, and the Chair is not taken by the Chairman of the Board

or by the Vice-Chairman or by a Director, at the expiration of half an hour from the time appointed for holding the

meeting, or if before the expiration of that time all the Directors shall decline to take the Chair, the member present

shall on a show of hand choose one of their own member to be Chairman of the meeting.

78. (1) No business shall be discussed at any general meeting except the election of the chairman whilst the Chair is

vacant.

(2) If a poll is demanded on the election of the chairman it shall be taken forthwith in accordance with the

provisions of the Act and these Articles.

79. The Chairman may with the consent of any meeting at which quorum is present, and shall, if so directed by the

meeting, adjourn any meeting from time to time and from place to place but no business shall be transacted at any

adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

80. When a meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case

of original meeting. Save as aforesaid it shall not be necessary to give any notice of adjournment or of the business

to be transacted at the adjourned meeting.

81. At any general meeting provisions of Sections 177 to 185 of the Act shall apply provided that in case of equality of

votes, whether on a show of hands or on a poll, the Chairman of the meeting at which the show of hands takes place

or at which the poll is demanded, shall be entitled to a casting vote in addition to his own votes to which he may be

entitled as a member.

82. Any act or resolution which under the provisions of these Articles or of the Act, is permitted or required to be done

or passed by the Company in a general meeting, shall be sufficiently so done or passed if effected by an ordinary

resolution as defined in section 189(1) of the Act unless either the Act or these Articles specifically require such act

or resolution to be done or passed by a special resolution as defined in section 189(2) of the Act.

83. At every Annual General Meeting of the Company there shall be laid on the table the Director’s Report and audited

statement of Accounts, Auditor’s Report (if not already incorporated in the audited statement of Accounts), the

Proxy Register with the proxies and the Register of Directors holding maintained under section 307 of the Act. The

Auditors’ Report shall be read before the company in general meeting and shall be open to inspection by any

member of the Company.

84. The Company shall cause minutes of all proceedings of every general meeting and every meeting of the Board of

Directors and every Committee of the Board, to be kept in accordance with section 193 of the Act.

85. The books containing the Minutes of the proceedings of the general meetings of the Company shall be kept at the

registered office of the Company and be open to the inspection of any member as prescribed by section 196 of the

Act.

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XVI. VOTES OF MEMBERS

86. Subject to the provisions of the Act and these Articles, votes may be given either personally or by an attorney or by

proxy or in the case of the body corporate also by representative duly authorised under section 187 of the Act and

Article 87 hereof.

87. Subject to the provisions of the Act (and particularly of sections 87, 89 and 92(2) thereof) and of these Articles:

1) Upon a show of hands every member holding equity shares and entitled to vote and be present in person

(including an attorney or a representative of a body corporate as mentioned in Article 88) shall have one vote;

2) Upon a poll the voting right of every member holding equity shares and entitled to vote and present in person

(including a body corporate present as aforesaid) or by attorney or by proxy shall be one vote for each rupee

paid up in the capital of the Company;

3) The voting right of every member holding preference shares, if any, shall upon a show of hands or upon a poll

be subject to the provisions, limitations, and restrictions laid down in section 87 of the Act.

88. No member not personally present shall be entitled to vote on a show of hands unless such member is a body

corporate present by attorney or by representative duly authorised under section 187 of the Act in which case such

attorney or representative may vote on a show of hands as if he was an individual member of the Company.

89. Subject to the provisions of the Act, no member shall be entitled to his voting rights in respect of any shares registered

in his name on which any calls or other sums presently payable by him, have not been paid or in regard to which the

Company has exercised any right of lien.

90. Any person entitled under the transmission Clause (Article 54 thereof) to transfer any shares, may vote at any general

meeting in respect thereof as if he was the registered holder of such shares, provided that at least forty eight hours

before the time of holding of the meeting or adjourned meeting, as the case may be, at which he proposes to vote he

shall satisfy the Board of this right to transfer such shares unless the Board shall have previously admitted his right

to vote at such meeting in respect thereof.

91. On a poll taken at a meeting of the Company, a member entitled to more than one vote, or his proxy, or other person

entitled to vote for him, as the case may be, need not, if he votes, use all his votes or cast in the same way all the votes

he uses.

92. A member of unsound mind or in respect of whom an order has been made by any Court having Jurisdiction in

lunacy, may vote, whether on a show of hands or on a poll by his committees or other legal guardian, and any such

committee or guardian may, on a poll, vote by proxy.

93. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a

notary certified copy thereof shall be deposited at the registered office of the Company or at such place or places (if

any) as may be specified for that purpose in the notice convening the meeting not less than forty eight hours before

the time for holding the meeting at which the person named in the instrument proposed to vote, and in default, the

instrument of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiration

of twelve months from the date of its execution except in case of the adjournment of any meeting first held previously

to the expiration of such time. An attorney shall not be entitled to vote unless the power of attorney or other instruments

appointing him or a notarially certified copy thereof has either been registered in records of the Company at any time

not less than forty eight hours before the time for holding the meeting at which the attorney proposes to vote or is

deposited at the registered office of the Company not less than forty eight hours before the time fixed for such

meeting as aforesaid. Notwithstanding that a power of attorney or other authority has been registered in the records

of the Company, the Company may, be notice in writing addressed to the members or the attorney given atleast

fourteen days before the meeting, require him to produce the original power of attorney or authority and unless the

same is thereupon deposited with the Company not less than forty eight hours before the time fixed for the meeting,

the attorney shall not be entitled to vote at such meeting unless the Directors in their absolute discretion excuse such

non-production and deposit.

94. An instrument appointing a proxy shall be in either of the forms in Schedule IX to the Act or a form as near thereto

as circumstances admit.

95. If any such instrument of appointment be confined to the object of appointing an attorney or proxy, it shall remain

per5manently or for such time as the Directors may determine, in the Custody of the Company, if embracing other

objects, a copy thereof, examined with the original shall be delivered to the Company to remain in their custody.

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96. A vote given in accordance with the terms of an instrument or proxy or by an attorney shall be valid notwithstanding

the previous insanity or lunacy or death of the principal or revocation of the proxy or power of attorney, as the case

may be, or of any power of attorney under which such proxy was signed, or the transfer of the share in respect of

which the vote is given, provided that no intimation in writing of the insanity, lunacy, death, revocation or transfer

shall have been received at the registered office before the meeting.

97. Subject to the provisions of the Act and these Articles, no objection shall be made to the validity of any vote except

at the meeting or poll at which such vote shall be tendered and every vote, whether given personally or by proxy or

by any means hereby authorised and not disallowed at such meeting or poll, shall be deemed valid for all purposes

of such meeting or poll whatsoever.

98. Subject to the provisions of the Act and these Articles, the Chairman of any meeting shall be the sole judge of the

validity of every vote tendered at such meeting. Subject as aforesaid the Chairman present at the taking of the poll

shall be the sole judge of the validity of every vote tendered at such poll.

XVII DIRECTORS

99. Until otherwise determined by a general meeting the number of Directors shall not be less than three and not more

than twelve.

100. Article 100(1) and (2) deleted vide Special Resolution passed at the Extra-Ordinary General Meeting held on 21-6-

1974.

101. Whenever the Directors enter into a contract with any person or persons for borrowing any money or for providing

any guarantee or security or for technical collaboration or assistance or enter into any other arrangement, the

Directors shall have, subject to the provisions of section 255 of the Act, the power to agree that such person or

persons shall have the right to appoint or nominate by a notice in writing addressed to the Company one or more

Directors on the Board for such periods and upon such conditions as may be mentioned in the Agreement and that

such Director or Directors may not be liable to retire by rotation nor be required to hold any qualification shares.

The Directors may also agree that any such Director or Directors may be removed from time to time by the person

or persons aforesaid who appoint another or others in his or their place and also fill in any vacancy, which may

occur as a result of any such Director or Directors ceasing to hold the office for any reason whatsoever. The

Directors appointed or nominated under this Article shall be entitled to exercise and enjoy all or any right and

privileges exercised and enjoyed by the Directors of the Company including the payment of remuneration and

traveling expenses to such Directors or Director as may be agreed by the Company with such person of persons

aforesaid.

102. Subject to Article 130 hereof and the provisions of Sections 260 and 264 of the Act, the Board shall have power at

any time and from time to time to appoint any person to be an additional Director but so that the total number of

Directors shall not at any time exceed the maximum fixed under Article 99. Any such additional Director shall

hold office only upto the date of the next Annual General Meeting.

103. The Board may appoint an alternate Director who is recommended for such appointment by a Director, (hereinafter

called the ‘Original Director’) to act for him during his absence for period of not less than three months from the

State in which the meetings of the Board are ordinarily held. An Alternate Director appointed under this Article

shall not hold office as such for a longer period than that permissible to the Original Director in whose place he has

been appointed and shall vacate office if and when the Original director returns to such State. If the term of office

of the Original Director is determined before he so returns to such State, any provision in the Act or these Articles

for the automatic reappointment of retiring Directors in default of another appointment shall apply to the Original

Director and not to the alternate Director.

104. Subject to the provisions of Section 284(6) or the applicable provisions (if any) of Act, if the office of a Director

appointed by the Company in general meeting is vacated before his term of office will expire in the normal course,

the resulting casual vacancy may, in default of and subject to any regulation contained in these Articles, be filled by

the Board of Directors at meeting of the Board. Any person so appointed shall hold office only upto the date upto

which the Director in whose place he is appointed would have held office if it had not been vacated as aforesaid.

105. A Director shall not be required to hold any qualification shares and a person may be appointed as a Director

notwithstanding that he holds no shares in the Company.

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106. Subject to the provisions of the Sections 198, 309, 310, 311 of the Act, the remuneration payable to the Directors of

the Company may be as hereunder provided:-

1. The remuneration of the Directors shall be as fixed by the general meeting and may be by way of fees for

meeting attended or monthly payments or otherwise as may be fixed by the general meeting. The remuneration of

the Directors shall, in so far as it consists of a monthly payment as may be fixed by the general meeting, be deemed

to accrue day by day.

2. Until otherwise resolved by general meeting :

i) Every Director shall be entitled to such sitting fee for every meeting of the Board which he attends as

may be determined by the Board subject to maximum ceiling, if any under the Companies Act, 1956.

ii) Every Director shall be entitled to such sitting fee for every meeting of any committee or sub-committee

of Directors which he attends as may be determined by the Board provided that it shall not exceed 50% of

the sitting fee as may be determined for the purpose of Clause 2(i).

(As inserted by the special resolution at the Annual General Meeting of the shareholders held on 28th day

of September, 1995.)

iii) In addition to the remuneration payable to them as hereinabove stated the Directors may be paid traveling,

hotel and other expenses at the rate as determined by the Board from time to time.

(a) for attending and returning from meetings of the Board of Directors or any committee or sub-committee

thereof, or

(b) in connection with the business of the Company.

i) Subject to the provisions of the Act, such reasonable additional remuneration as may be fixed by the

Board may be paid to any one or more of its number for services rendered by him or them for attending to

any other business of the Company when specially called for to do so.

ii) The Directors shall be paid further remuneration by way of commission at the rate of 1.5% of each year’s

net profits of the company calculated in accordance with the provisions of the Companies Act subject to

maximum as Rs.3 lacs in aggregate (As substituted by the special resolution at the annual general meeting

as the shareholders hold on 29th September 1993) and such remuneration shall be divided amongst the

Directors in such proportion and manner as the board may from time to time determine and in default of

such determination shall be divided amongst the Directors equally.

107. The continuing Directors may act notwithstanding any vacancy in their body, but so that, subject to the provisions of

the Act, if the number falls below the minimum above fixed and notwithstanding the absence of the quorum, the

Directors may act for the purpose of filling up vacancies, or for summoning a general meeting of the Company.

108. Subject to section 283(2) of the Act, the office of a Director shall become vacant if :-

a) he is found to be of unsound mind by a Court of competent jurisdiction; or

b) he applies to be adjudicated an insolvent; or

c) he adjudged an insolvent; or

d) he fails to pay any call made on him in respect of shares of the Company held by him, whether alone or jointly

with other, within six months from the last date fixed for the payments of call unless the Central Government

has by notification in the official Gazette removed the disqualification incurred by such failure; or

e) he (whether by himself or by any person for his benefit or on his account) or any firm in which he is a partner

or any private company of which he is a Director, accept a loan or any guarantee or security for a loan or any

guarantee or security for a loan from the Company in contravention of section 295 of the Act; or

f) he absents himself from three consecutive meetings of the board of Directors or from all meetings of the Board

for a continuous period of three months, whichever is longer, without obtaining leave of absence from the

Board; or

g) he becomes disqualified by any order of Court (as defined in the Act) under section 203 of the Act; or

h) he is removed in pursuance of section 284 of the Act; or

i) he is convicted by a court of any offence involving moral turpitude and sentenced in respect thereof to

imprisonment for not less than six months; or

j) he having been appointed as a Director by virtue of his holding office or other employment in the Company,

ceases to hold such office/employment in the Company.

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109. Subject to the provisions of the Act, a Director may resign his office at any time by notice in writing addressed to the

Company or to the Board of Directors.

110. A Director may become a Director of any company promoted by the Company or in which it may be interested as a

vendor, shareholder or otherwise, and subject to the provisions of the Act and these Articles, no such Director shall

be accountable for any benefits received as Director or shareholder of such company.

111. The retirement of Directors by rotation and filling up of vacancies caused by such retirement shall be governed by

the provisions of the Act, in particular of the Sections 255 and 256 thereof.

XVIII. PROCEEDING OF DIRECTORS

112. The Directors may meet together as a Board for the dispatch of business from time to time and shall so meet for the

minimum occasions prescribed by the Act for the time being in force. The Directors may adjourn and otherwise

regulate their meetings and proceedings as they think fit. The Managing Director, or the Secretary may at any time,

and at the request of the Director shall, convene as meeting of the Board.

113. Notice of every meeting of the Board of Directors of the Company shall be given in writing to every Director for the

time being in India, and at his usual address in India to every other Director.

114. Subject to the provisions of section 287 of the Act, the quorum for the meeting of the Board of Directors shall be one

third of the total strength (excluding Director, if any, whose places may be vacant at the time and any fraction

contained in that one third being rounded off as one) or two Directors, whatever is higher, provided that where at

any time the number of interested Directors exceeds or is equal to two thirds of the total strength, the number of the

remaining Directors, that is to say, the number of Director who are not interested and are present at the meeting, not

being less than two, shall be the quorum during such time.

A meeting of the Directors for the time being at which a quorum is present shall be competent to exercise all or any

of the authorities, powers of discretions by or under the Act or the Articles of the Company for the time being vested

in or exercisable by the Board of Directors generally.

115. If the meeting of the board can not be held for want of quorum, then, the meeting shall stand adjourned to such day,

time and place as the Director or Directors, present at that time may fix. Notice of the adjournment of the meeting

shall be given to the Directors in the manner prescribed under Article 113.

116. The directors may from time to time elect one of their number to be the Chairman of the Board of Directors and

determine the period for which he is to hold office. The Directors may likewise appoint a Vice-Chairman of the

Board of Directors.

117. All meetings of the Directors shall be presided over by the Chairman, if present, but if at any meeting of the

Directors, the Chairman be not present at the time appointed for holding the same, the Vice-Chairman, if present,

shall preside and if he be not present at such time, then and in that case the Directors shall choose one of the

Directors then present to preside at the meeting.

118. Questions arising at any Board meeting shall be decided by a majority of votes and, in case of any equality of votes

the Chairman of the meeting (whether the Chairman or Vice-Chairman appointed by virtue of these Articles or the

Director presiding at such meeting) shall have a second or casting vote.

119. Subject to the provisions of Sections 292 and 293 of the Act, the Directors may delegate any of their powers to

committee of any such member or members of their body as they think fit and they may from time to time revoke

and discharge any such committee either wholly or in part, and either as to person or purposes, but every committee

so formed shall, in the exercise of power so delegated, conform to any regulations that may, from time to time, be

imposed on it by the Directors. All acts done by any such committee in conformity with such regulations and in

fulfillment of the purposes of their appointment, but not otherwise, shall have the like force and effect as if done by

the Board. Subject to the provisions of the Act, the Board may from time to time fix the remuneration to be paid to

any member or members of their body constituting a committee appointed by the Board in terms of these Articles

and may pay the same.

120. The meeting and proceedings of any such committee shall be governed by the provisions herein and/or in the Act

contained for regulating the meetings and proceedings of Directors so far as the same are applicable thereto, and

are not superseded by any regulations made by the Directors under the last preceding Article.

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121. (1) Subject to the provisions of section 289 of the Act, resolutions passed by circulation, without a meeting of the

Board or of a Committee of the Board appointed under Article 119 shall, subject to the provisions of sub-clause

(2) hereof and the Act, be as valid and effectual as resolution duly passed at a meeting of the Directors or of a

committee duly called and held.

(2) A Resolution shall be deemed to have been duly passed by the Board or by a committee thereof by circulation,

if the resolution has been circulated in draft together with the necessary papers, if any, to all the Directors or

to all the members of the committee at their respective addresses registered with the company and has been

approved by a majority of the Directors or members of the committee as are entitled to vote on the resolution.

122. Subject to the provisions of the Act and these Articles, all acts done by any meeting of the Directors or a committee

of Directors shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment

of such Directors or persons acting as aforesaid or that they or any of these were or was disqualified, be as valid as

if every such person had been duly appointed, and was qualified to be a Director.

XIX. POWERS OF DIRECTORS

123. (1) Subject to the provisions of the Act and these Articles, the Board of Directors of the Company shall be entitled

to exercise all such powers, and to do all such acts and things, as the Company is authorised to exercise and to;

provided that the Board shall not exercise any power or do any act or things which is directed or required,

whether by the Act or any other act or by the Memorandum or these Articles or otherwise, to be exercised or

done by the Company in general meeting, provided further that in exercising any such power of doing any such

act or thing the Board shall be subject to the provisions contained in that behalf in the Act or in the Memorandum

or in these Articles or in any regulations not inconsistent therewith and duly made thereunder including regulations

made by the Company in general meeting.

(2) No regulation made by the Company in general meeting shall invalidate any prior act of the Board which

would have been valid if that regulation had not been made. Provided that the Board shall not, except with the

consent of the Company in general meeting by Special Resolution sell, lease or otherwise dispose of the whole

or substantially the whole of the undertaking of the Company owns more than one undertakings of the whole or

substantially the whole of any such undertakings.

124. (i) Without prejudice to the general powers conferred by the preceding Article, the Directors may from time to

time and at any time, subject to the restrictions contained in the Act, delegate to Managers, Secretaries, Officers,

Assistants and other employees or other persons (including any firm or body corporate) any of the powers,

authorities and discretions for the time being vested in the Directors.

(ii) All deeds, agreements and documents and all cheques, promissory notes, drafts, hundies, bills of exchange and

other negotiable instruments, and all receipts for moneys paid to the Company, shall be signed, drawn, accepted

or endorsed or otherwise executed, as the case may be, by such person (including any firm or body corporate)

whether in the employment of the Company or not, and in such manner as the Directors shall from time to time

by Resolution determine.

125. The Directors may take such arrangements as may be thought fit for the management of the Company’s affairs

abroad and, may for this purpose (without prejudice to the generality of their powers), appoint local bodies, and

agents and fix their remuneration and delegate to them such powers as may be deemed requisite or expedient. The

foreign seal shall be affixed by the authority and in the presence of, and instrument sealed therein shall be signed by,

such persons as the Directors shall from time to time by writing under the Common Seal appoint. The Company may

also exercise the powers of keeping Foreign Registers.

XX. MANAGING OR WHOLE-TIME DIRECTORS

126. Subject to the provisions of Sections 197A, 198, 267, 268, 269, 309, 310, 311, 316 and 317 and other applicable

provisions of the Act and these Articles, the Directors may from time to time appoint one or more of their body to be

a Managing Director or Managing Directors or whole-time Director or whole-time Directors of the Company for

such term not exceeding five years at a time and on such terms and conditions as they may think fit.

127. Subject to the provisions of the Act and these articles, the Managing Director of whole-time Director shall not, while

he continues to hold office, be subject to retirement by rotation under Article 111, but he shall, subject to the provisions

of any contract between him and the Company, be subject to the same provisions as to resignation and removal as the

other Directors of the company and he shall ipso facto and immediately cease to be a Managing Director or whole-

time Director if he ceases to hold the office of Director from any cause.

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XXI. SECRETARY

128. The Directors may appoint a Secretary of the Company for such term, at such remuneration and upon such conditions

as they may think fit; and any Secretary so appointed may be removed by the. The Directors may appoint any

temporary substitute for the Secretary, who shall, for the purposes of these presents, be deemed to be the Secretary.

The main function of the Secretary shall be to be responsible for maintaining registers required to be kept under the

Act, and for making the necessary returns to the Registrar of Companies under the Act, and for getting the necessary

documents registered with the registrar and for carrying out all other administrative and ministerial acts, duties and

functions which a Secretary of a company is normally supposed to carry out, such as giving necessary notices to the

members, preparing minutes of meetings of members and/or Directors and of any Committee of Directors and

maintaining minute books and other statutory documents, and he shall carry out and discharge such other functions

and duties as the Directors may from time to time require him to do.

XXII. THE SEAL

129. The Board shall provide a Common Seal for the purpose of the Company and shall have power from time to time to

destroy the same, substitute new Seal in lieu thereof, and the Board shall provide for the safe custody of the Seal for

the time being, and the seal shall never be used except by or under the authority of the Board or a Committee of

Directors.

130. Every deed or other instrument to which the Seal of the Company is required to be affixed shall, unless the same is

execute by a duly constituted attorney of the Company, be signed by the Director or the person authorised by the

Board for the purpose, provided nevertheless that certificates of debentures may be signed by one director or by the

Secretary of the Company or by an Attorney of the Company duly authorised in this behalf and certificates of shares

shall be signed as provided in Article 11.

131. The Company may exercise the powers conferred by Section 50 of the Act and such powers shall accordingly be

vested in the Board.

XXIII. INTEREST OUT OF CAPITAL

132. Where any shares are issued for the purpose of raising money to defray the expenses of the construction of any

works or buildings, or the provisions of any plant, which cannot be made profitable for a lengthy period. The

Company may pay interest on so much of that share capital, as is for the time being paid up, for the period, at the

rate, and subject to the conditions and restrictions provided by section 208 of the Act and may charge the same to

capital as part of the cost of construction of the work or building or the provisions of any plant.

XXIV. DIVIDENDS

133. The profits of the Company, Subject to special rights, if any, relating thereto created or authorised to be created by

the Memorandum or these Articles, and subject to the provisions of these Articles, shall be divisible among the

members in proportion to the amount of capital paid up on the shares held by them respectively. Provided always

that subject as aforesaid, any capital paid up on a share, during the period in respect of which a dividend is declared

shall, unless the Board otherwise determine, only entitle the holder of such share to an apportioned amount of such

dividend as from the date of payment.

134. Where capital is paid up in advance of calls upon the footing that the same shall carry interest, such capital shall not

whilst carrying interest confer a right to participate in profits.

135. The Company may pay dividends in proportion to the amount paid up or credited as paid up on each share, where

a larger amount is paid up or credited as paid up on some shares than on others.

136. (1) The Company in general meeting may declare a dividend to be paid to the members according to their respective

rights and interests in the profits and, subject to the provisions of the Act, may fix the time for payment. When

a dividend has been so declared, the warrant in respect thereof shall be posted within forty-two days from the

date of the declaration to the shareholder entitled to-the payment of the same.

(2) No larger dividend shall be declared than is recommended by the Directors, but the Company in general meeting

may declare a smaller dividend. Subject to the provisions of the Act and in particular section 205 thereof, no

dividend shall be payable except out of the profits of the year or any other undistributed profits of the Company,

and the declaration of the Directors as to the amount of the net profits of the Company shall be conclusive.

(3) No dividend shall carry interest as against the Company.

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137. Subject to the provisions of the Act, the Directors may from time to time pay to the members on account of the next

forthcoming dividend such interim dividends as in their judgment the position of the Company justifies.

138. Subject to the Provision of the Act, the Directors may retain the dividends payable upon share in respect of which

any person is, under Article 45 hereof, entitled to become a member, or which any person under that Article is

entitled to transfer, until such person shall become a member in respect of such shares or shall duly transfer the

same.

139. No member shall be entitled to receive payment of any interest or dividend in respect of his share or shares whilst

any moneys may be due or owing from him to the Company in respect of such share or shares or otherwise

howsoever, either alone or jointly with any other person or persons; and the Directors may deduct from the interest

of dividend payable to any member all sums of money so due from him to the Company.

140. No unclaimed dividend shall be forfeited by the Board and the Company shall comply with the provisions of

Sec.205A of the Act.

141. A transfer of shares shall not pass the right to any dividend declared thereon before the registration of the transfer.

142. Unless otherwise directed by any member, any dividend may be paid by cheque or warrant sent through the post to

the registered address of the member or person entitled or, in case of joint holders, to that one of them first named

in Register of Members in respect of the joint holding or to such person and to such address as the member or joint

holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to

whom it is sent. The Company shall not be liable or responsible for any cheque or warrant lost in transmission or

for any dividend lost to the member or person entitled thereto, by the forged endorsement of any cheque or warrant

or the fraudulent use thereof by any other means.

143. Any general meeting declaring a dividend may make a call on the members for such amount as the meeting fixes,

but so that the call on each members shall not exceed the dividend payable to him and so that the call be made

payable at the same time as the dividend, and that the dividend may, if so arranged between the Company and the

members be set off against the calls.

144. No dividend shall be payable except in cash. Provided that nothing in this Article shall be deemed to prohibit the

capitalization of profits or reserves of the Company for the purpose of issuing fully paid-up Bonus shares or paying

up any amount for the time being unpaid on any shares held by the members of the Company.

XXV. CAPITALISATION

145. (1) Any general meeting may resolve that any amount to the credit of the Share Premium Account or the Capital

redemption Reserve Account or any moneys’ investments or other assets forming part of the undividend

profits (including profits or surplus moneys arising from the realization and where permitted by law, from the

appreciation in value of any capital assets of the Company) standing to the credit of the general reserve,

reserve fund or any other fund of the Company or in the hands of the Company and available for dividend may

be capitalized. Any such amount (excepting the amount standing to the credit of the Share Premium Account

and/or the Capital Redemption Reserve Account) may be capitalized.

(a) by the issue and distribution as fully paid shares, debentures, debenture stock, bonds or other obligations

of the Company ; or

(b) by crediting the shares of the Company, which may have been issued and are not fully paid up, with the

whole or any part of the sum remaining unpaid thereon.

Provided that any amounts standing to the credit of the share Premium Account and Capital Redemption

Reserve Account may be applied :

(i) in paying up unissued shares of the Company to be issued to members of the Company as fully paid

bonus shares ;

(ii) in writing off the preliminary expenses of the Company ;

(iii) in writing of the expenses of, or the commission paid or discount allowed on any issue of shares or

debentures of the Company, or

(iv) in providing for the premium payable on the redemption of any redeemable preference shares or of

any debentures of the Company.

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(2) Such issue and distribution under sub-clause (1) (a) above and such payment to the credit of unpaid shares

capital under sub-clause (1)(b) above shall be made to among and in favour of the members or any class of

them or any of them entitled thereto and in accordance with their respective rights and interests and in

proportion to the amount of capital paid up on the shares held by them respectively in respect of which such

distribution under sub-clause (1)(a) or payment under sub-clause (1)(b) above shall be made on the footing

that such members become entitled thereto as capital.

(3) The Directors shall give effect to any such resolution and apply such portion of the profits, general reserve fund

or any other fund or amount as aforesaid as may be required for the purpose of making payment in full for the

shares, debentures, stock, bonds or other obligations of the Company so distributed under sub-clause (1)(a)

above or (as the case may be) for the purpose of paying, in whole or in part, the amount unpaid up under sub-

clause (1)(b) above, provided that no such distribution or payment shall be made unless recommended by the

Directors and if so recommended such distribution and payment shall be accepted by such members as aforesaid

in full satisfaction of their interest in the said capitalized sum.

(4) For the purpose of giving effect to any such resolution, the Directors may settle any difficulty which may arise

in regard to the distribution or payment as aforesaid as they think expedient and in particular they may issue

fractional certificates and fix the value for distribution of any specific assets and may determine that cash

payments be made to any members on the footing of the value so fixed and may vest any such cash, shares,

debentures, debenture-stock, bonds or other obligations in trustees upon such trusts for the persons entitled

thereto as may seem expedient to the Directors and generally may make such arrangement for the acceptance,

allotment and sale of such shares, debentures, debentures-stock, bonds or other obligations and fractional

certificates or otherwise, as the may think fit.

(5) Subject to the provisions of the Act and these Articles, in cases where some of the shares of the Company are

fully paid and other are partly paid-only, such capitalization may be effected by the distribution of further

shares in respect of the fully paid shares, and/or by crediting the partly paid shares with the whole or part of

the unpaid liability thereon but so that as between the holders of the fully paid shares, and the partly paid

shares the sum so applied in the payment of such further shares and in the extinguishment or diminution of

the liability on the partly paid shares shall be applied pro rata in proportion to the amount then already paid

or credited as paid on the existing fully paid and partly shares respectively.

(6) When deemed requisite a proper contract shall be filed with the Registrar of Companies in accordance with

the provisions of the Act and the Board may appoint any person to sign such contract on behalf of the

members entitled as aforesaid and such appointment shall be effective.

XXVI. ACCOUNTS

146. The Company shall keep proper books of accounts as required by the Act and in particular under section 209

thereof.

147. The Directors shall from time to time determine whether and to what extent and at what times and places and under

what conditions or regulations the accounts, books and documents of the Company or any of them, shall be open to

the inspection of the members, and no member (not being a Director) shall have any right of inspecting any account

or books or documents of the Company except as conferred by the statute or authorized by the Directors or by a

resolution of the Company in general meeting.

148. The Board of Directors shall lay before each Annual General Meeting a duly authenticated Balance Sheet and Profit

and Loss Account along with its report made up in Accordance with the provisions of Article 151.

149. (1) (a) Save as provided by item (b) of this sub-clause, every Balance Sheet and every Profit and Loss Account

of the Company shall be signed on behalf of the Board of Directors by its Secretary, if any, and by not

less than two Directors of the Company one of whom shall be the Managing Director, if there is or are

any.

(b) When only one of the Directors of the Company is for the time being in India, the Balance Sheet and the

Profit and Loss Account shall be signed by such Director, but in such case there shall be attached to the

Balance Sheet and the Profit and Loss Account a statement signed by him explaining the reason for non-

compliance with the provisions of the above item (a).

(2) The Balance Sheet and the Profit and Loss Account shall be approved by the Board of Directors before they are

signed on behalf of the Board in accordance with the provisions of this Articles and before they are submitted

to the Auditors for their report thereon.

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150. The Profit and Loss Account shall be annexed to the Balance Sheet and the Auditor’s Report (including the Auditors’

separate, special or supplementary report, if any) shall be attached thereto.

151. (1) Every Balance Sheet laid before the Company in Annual General Meeting, shall have attached to it a Report by

the Board of Directors with respect to the state of the company’s affairs; the amounts, if any, which it proposes

to carry to any reserve in such material changes and commitments, if any, effecting the financial position of

the Company which have occurred between the end of the financial year of the Company to which the Balance

Sheet relates and the date of the Report.

(2) The Report shall, so far, as it is material for the appreciation of the state of the Company’s affairs by its

members and will not in the Board’s opinion be harmful to the business of the Company or of any of its

subsidiaries, deal with any changes which have occurred during the financial year in the nature of the Company’s

business; in the Company’s subsidiaries or in the nature of the business carried on by them, and generally in

the classes of business in which the Company has any interest.

(3) The Board shall also give the fullest information and explanation in its Report or in cases falling under the

proviso the Section 222 of the Act in an addendum to that Report, on every reservation, qualification or

adverse remark contained in the Auditors’ Report.

(4) The Board’s Report and Addendum (if any) there to shall be signed by its Chairman if he is authorized in that

behalf by the Board; and where he is not so authorized shall be signed by such member of Directors as are

required to sign the Balance Sheet and the Profit and Loss Account of the Company by virtue of sub-clause (1)

Article 149.

(5) The Board shall have the right to charge any person not being a Director with the duty of seeing that the

provisions of sub-clauses (1) to (3) of this Article are complied with.

152. Every Balance Sheet and Every Balance Sheet and Profit and Loss Accounts of the Company when audited and

adopted by a general meeting shall be conclusive expect as regards any error discovered their in after the adoption

thereof. Whenever any such error is discovered the account shall forth with be corrected and thenceforth shall be

conclusive.

XXVII. AUDIT

153. Every Balance Sheet and profit and Loss Account shall be audited by one or more Auditors to be appointed as

hereinafter mentioned.

154. (1) The Company at the Annual General Meeting in each year shall appoint an Auditor or Auditors to hold office

from the conclusion of that meeting until the conclusion of the next Annual General Meeting and shall, within

seven days of the appointment, give intimation thereof to every auditor so appointed unless he is a retiring

Auditor.

(2) At any Annual General Meeting, a retiring Auditor, by whatever authority appointed shall be re-appointed

unless :

(a) he is not qualified for re-appointment;

(b) he has given the Company notice in writing of his unwillingness to be re-appointed;

(c) a resolution has been passed at that meeting appointing somebody instead of him or providing expressly

that he shall not be re-appointed; or

(d) where notice has been given of an intended resolution to appoint some person or persons in the place of

the retiring Auditor, and by reason of the death, incapacity or disqualification of that person or of all those

persons, as the case maybe, the resolution cannot be proceeded with.

(3) Where at an Annual General Meeting no Auditors are appointed or re-appointed, the Central Government may

appoint a person to fill the vacancy.

(4) The Company shall, within seven days of the Central Government’s power under sub-clause (3) becoming

exercisable, give notice of that fact to the Government.

(5) The Directors may fill any casual vacancy in the office of Auditor, but while any such vacancy continues, the

surviving or continuing Auditor or Auditors (if any) may act, but where such vacancy is caused by the resignation

of an Auditor, the vacancy shall only be filled by the company in general meeting.

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(6) A person, other than retiring Auditor, shall not be capable of being appointed at an Annual General Meeting

unless special notice of the resolution for appointment of the person to the office of Auditor has been given by

a member to the Company not less then fourteen days before the meeting in accordance with section 190 of

the Act. The Company shall send a copy of any such notice to the retiring Auditor and shall give notice

thereof to the members in accordance with the section 190 of the Act, and the other provisions of section 225

of the Act shall apply in the matter. The provisions of this sub-clause shall also apply to a resolution that a

retiring Auditor shall not be re-appointed.

(7) The person, qualified for appointment as Auditors shall be only those referred to in section 226 of the Act.

(8) None of the persons mentioned in section 226 of the Act as are not qualified for appointment as Auditors shall

be appointed Auditors of the Company.

155. The Company shall comply wioth the provisions of section 228 of the Act in relation to the Audit of Branch offices

of the Company, except to the extent to which by exemption may be granted by the Central Government in that

behalf.

156. The remuneration of the Auditors shall be fixed by the Company in general meeting except that the remuneration

of any Auditors appointed to fill any casual vacancy may be fixed by the Directors.

157. (1) The Auditors of the Company shall have a right of access at all times to the books and vouchers of the

Company and shall be entitled to require from the Directors and officers of the Company such information

and explanation as may be necessary for the performance of the duties of the Auditors.

(2) All notices of and other communications relating to any general meeting of the Company which any member

of the Company is entitled to have sent to him, shall also be forwarded to the Auditor of the Company and the

Auditor shall be entitled to attend any general meeting and to be heard at any general meeting which he

attends on any part of the business which concerns him as auditors.

(3) The Auditor shall make a report to the members of the Company on the accounts examined by him and on

every Balance Sheet and Profit and Loss Account and on every other document, declared by this Act to be part

of or annexed to the Balance Sheet or Profit and Loss Account, which are laid before the Company in General

Meeting during his tenure of office, and the report shall state whether, in his opinion and to the best of his

information and according to the explanations given to him, the said accounts give the information required

by the Act in the manner so required and give a true and fair view -

(i) in the case of the balance sheet, of the state of Company’s affairs as at the end of its financial years, and

(ii) in the case of the Profit and Loss Account, of the Profit and Loss for its financial year.

(4) The Auditor’s Report shall also state :

(a) Whether he has obtained all the information and explanations which to the best of his knowledge and

belief were necessary for the purpose of his audit;

(b) Whether, in his opinion, proper books of account as required by law have been kept by the Company so

far as appears from his examination of these books and proper return adequate for the purposes of his

audit have been received from branches not visited by him.

(c) Whether the report on the Account of any branch office audited under section 228 by a person other than

the Company’s Auditor has been forwarded to him as required by clause (c) and sub-section (3) of that

section and how he has dealt with the same in preparing the Auditor’s Report.

(d) Whether the Company’s Balance Sheet and Profit and Loss Account dealt with by the report are in

agreement with books of account and return.

(5) Where any of the matter referred to in lcause (3) (i) and (ii) and (4) of this article is answered in the negative or

with a qualification, the Auditor’s Report shall state the reasons for the answer.

XXVIII. DOCUMENTS AND SERVICE OF DOCUMENTS

158. A document (which expression for this purpose shall be deemed to include and include any summons, notice,

requisition, process, order, judgement or any other document in relation to or in the winding up of the Company)

may be served or sent by the Company on or to any member in the manner prescribed by section 53 of the Act.

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159. Subject to the provision of the Act, any document required to be served or sent by the company on or to the members,

or any of them and not expressly provided for the these presents, shall be deemed to be duly served or sent if

advertised once in one daily English and one daily vernacular newspaper circulating in the neighbourhood of the

registered office of the Company.

160. Every person, who by operation of law, transfer or other means whatsoever, shall become entitled to any share, shall

be bound by every document in respect of such share which, previously to his name and address being entered on

the Registered of Members, shall have been duly served on or sent to the person from whom he derives his title to

such share.

161. All notice to be given on the part of members shall be left at or sent by registered post to the registered office of the

Company

162. Any notice to be given by the Company shall be signed by such Director or Secretary of Officer as the Board mayappoint. The signature on any notice to be given by the Company may be written or printed or lithographed or beaffixed by any other mechanical means.

XXIX. AUTHENTICATION OF DOCUMENTS

163. Save as otherwise expressly provided in the Act or these Articles, a document or proceeding requiring authenticationby the Company may be signed by a Director or Secretary or an authorised Officer of the Company and need not beunder its seal.

XXX. WINDING UP

164. If the Company shall be wound up, and the assets available for distribution among the members as such shall beinsufficient to repay the whole of the paid up capital, such assets shall be distributed so that, as nearly as may be, thelosses shall be borne by the members in proportion to the capital paid up, or which ought to have been paid up (otherthan the amount of calls paid in advance) at the commencement of the winding up, on the shares held by themrespectively, and if in a winding up, the assets available for distribution among the members shall be more thansufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall bedistributed amongst the members in proportion to the capital at the commencement of the winding up or which oughthave been paid on the shares held by them respectively. But this clause is to be without prejudice to the rights of theholders of shares issued upon special terms and conditions.

165. (1) If the Company shall be wound up, the Liquidator may with the sanction of Special Resolution of the Companyand any other sanction required by the Act, divide amongst the members, in specie or kind, the whole or anypart of the assets of the Company, whether they shall consist of property of the same kind or not.

(2) For the purpose aforesaid, the Liquidator may set such value as he deems fair upon any property to be dividedas aforesaid and may determine how such divisions shall be carried out as between the members or differentclauses of members.

(3) The Liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trustfor the benefit of the contributories as the Liquidator, with the like sanction, shall think fit, but so that nomembers shall be compelled to accept any shares or other securities whereon there is any liability.

XXXI. SECRECY CLAUSE

166. No member shall be entitled to visit or inspect the Company’s work without the permission of the Board or Manageror Secretary to acquire discovery of or any information respecting any detail of the Company’s trading or any matterwhich is or may be in the nature of a trade secret, mystery of trade secret or process which may relate to the conductof the business of the Company and which in the opinion of the Board, it will be inexpedient in the interest of themembers of the Company to communicate to the public.

XXXII. INDEMNITY AND RESPONSIBILITY

167. (a) Subject to the provision of Section 201 of the Act, every Director, Manager, Secretary and other Officer oremployee of the Company shall be indemnified by the Company against all liability incurred by him as suchDirector, Manager, Secretary or Officer or employee and it shall be duty of Directors to pay out of funds of the

Company all costs, losses and expenses (including traveling expenses) which any such Director, Manager,

Secretary or Officer or employee may incur or become liable to by reason of any contract entered into or act or

deed done by him as such Director, Manager, Secretary or Officer or Employee or in any way in the discharge

of his duties.

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(b) Subject as aforesaid, every Director, Manager, Secretary or other officer or employee of the Company shall be

indemnified against any liability incurred by them or him indefending any proceedings whether civil or

criminal in which judgment is given in their or his favour or in which he is acquitted or discharged or in

connection with any application under Section 633 of the Act in which relief is given to him by the Court.

168. Subject to the provisions of Section 201 of the Act, no Director or other officer of the Company shall be liable for the

acts, receipts, neglects or defaults of any other director for joining in any receipt or other act of conformity or for

any loss or expense happening to the Company through insufficiency or deficiency of title to any property acquired

by order of the Directors for or on behalf of the Company, or for the insufficiency or deficiency of any security in or

upon which any of the moneys of the Company shall be invested, or for any loss or damage arising from the

bankruptcy, insolvency or tortuous act of any person, company, body corporate or corporate or corporation with

whom any money, securities or effects shall be entrusted or deposited or for any loss occasioned by any error of

judgment, oversight on his part, or for any other loss or damage or misfortune whatsoever which shall happen in

the execution of the duties of his office or in relation thereto, unless the same happens through willful misconduct

or neglect or dishonesty.

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SECTION X- OTHER INFORMATION

MATERIAL CONTRACTS & DOCUMENTS FOR INSPECTION

The Contracts referred to in para (A) below which are or may be deemed material, have been entered into by the Company.

The contracts together with the documents referred to in paragraph (B) below, copies of all of which have been attached to

the copy of this Letter of Offer may be inspected at the Registered Office of the Company between 11.00 a.m. and 1.00

p.m. on any working day from the date of this Letter of Offer until the closing of the subscription list.

A. MATERIAL CONTRACTS

1. Copy of Memorandum of Understanding dated September 15, 2008 between SNCCIL and Chartered Capital and

Investment Limited (Lead Manager), Lead Manager to the Issue.

2. Copy of Memorandum of Understanding dated June 16, 2009 between SNCCIL and D & A Financial Services (P)

Limited (Co-Lead Manager), Co-Lead Manager to the Issue.

3. Copy of Memorandum of Understanding dated September 15, 2008 between SNCCIL and Chartered Capital and

Investment Limited (Lead Manager), Lead Manager to the Issue.

4. Copy of Memorandum of Understanding dated September 10, 2008 between SNCCIL and Karvy Computershare

Private Limited, Registrar to the Issue.

5. Letter of Appointment dated May 27, 2008 from the Issuer Company appointing Chartered Capital and Investment

Limited as Lead Manager to the Issue.

6. Letter of Appointment dated June 16, 2009 from the Issuer Company appointing D & A Financial Services (P)

Limited as Co-Lead Manager to the Issue.

7. Engagement Letter dated June 23, 2008 to M/s Zenith India Lawyers, Advocates & Solicitors appointing them as

Legal Advisor to the Issue.

8. Copy of Tripartite Agreement dated May 28, 2002, among CDSL, the Company and Karvy Computershare Private

Limited (then Karvy Consultants Ltd.).

9. Copy of the Contracts for appointment and fixing the remuneration of Mr. Deepak Thombre and Mr. C. Nagaratnam

dated October 27 2008 and February 23, 2009.

B. DOCUMENTS FOR INSPECTION

1. Memorandum of Articles and Articles of Association of SNCCIL.

2. Certificate of Incorporation dated June 21, 1973.

3. Certificate of commencement of business dated Septemeber 27, 1973

4. Fresh Certificate of Incorporation dated November 01, 1983 consequent upon change of name of the company from

Dalmia Ceramic Industries Limited to Shri Nataraj Ceramic and Chemical Industries Limited.

5. Resolution Passed by the Board of Directors at their meeting held on September 09 2008 for the proposed Issue.

6. Consents of the Directors, Auditors, Lead Manager to the Issue, Legal Advisor to the Issue, Bankers to the Issue,

Bankers to the Company and Registrars to the Issue, to include their names in the Letter of Offer to act in their

respective capacities.

7. Appointment of Company Secretary as Compliance Officer.

8. Certificate of Sources and Deployment Funds Certificate dated June 25, 2009 from N. K. Bansal & Co. Chartered

Accountants.

9. The Report of the Auditors, M/s. S. S. Kothari Mehta & Co, Chartered Accountants, as set out herein dated June 27,

2009 in relation to the restated financials of the Company for the last five financial years.

10. Letter dated June 27, 2009 from the Auditors of the Company confirming Tax Benefits as mentioned in this Letter

of Offer.

11. Copies of Annual report of the Company for the year ended March 31, 2005, March 31, 2006, March 31, 2007,

March 31, 2008 and March 31, 2009.

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12. Copy of listing application made to MSE, CSE and DSE for permission to list the Equity Shares offered through this

Letter of Offer and for an official quotation of the Equity Shares of the Company.

13. Copy of in-principle listing permission received from MSE, CSE and DSE vide MSE’s letter no. MSE/SEC/738/407/

08, dated September 25, 2008, CSE’s letter no. CSEA/LD/528/2008, dated November 17, 2008 and DSE’s letter no.

DSE/LIST/4857/NR/3725, dated October 03, 2008.

14. Final observation letter No. SRO/PMD/IMID/EIF/2009 dated February 18, 2009 issued by SEBI for the Issue.

15. Due Diligence Certificate dated September 16, 2008 issued by Chartered Capital and Investment Limited.

16. Copy of Agreements in respect of the registered office of the Company.

17. Copy of Agreements in respect of the other properties/offices of the Company.

18. Complaints received from investors in respect of the Letter of Offer filed with SEBI and Company’s & the Lead

Managers responses to them.

19. Copy of the offer documents of the previous Public Issue made in 1984.

Any of the contracts or documents mentioned in this Letter of Offer may be amended or modified at any time if so

required in the interest of the Company or if required by the other parties, without reference to the shareholders subject

to compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION

All the relevant provisions of the Companies Act, 1956, and the guidelines issued by the Government of India or the

guidelines issued by the Securities and Exchange Board of India, established under Section 3 of the Securities and

Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in this Letter

of Offer is contrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992

or rules made there under or guidelines issued, as the case may be. We further certify that all the disclosures made in this

Letter of Offer are true and correct.

SIGNED BY THE DIRECTORS OF THE COMPANY

Sd/-

Shri.Deepak Ambadas Thombre

Managing Director & CEO

Sd/-

Shri.C. Nagaratnam

Director

Sd/-

Shri. N. Gopalaswamy*

Director

Sd/-

Shri. Pradeep Dayal Mathur

Director

Sd/-

Shri. C.N. Maheshwari

Company Secretary, Compliance Officer and CFO

Place: New Delhi

Date: 7th July, 2009

*through his duly constituted attorney