SIMPLEX INFRASTRUCTURES LIMITED - CSE-India Infrastructures Limite… · name Simplex Concrete Piles (India) Limited. The name of the Company was changed to Simplex Concrete Piles

SIMPLEX INFRASTRUCTURES LIMITED(Originally incorporated on December 19, 1924 as a public company with limited liability under the Indian Companies Act, 1913, under thename Simplex Concrete Piles (India) Limited. The name of the Company was changed to Simplex Concrete Piles (India) Private Limited onAugust 2, 1957. On March 12, 1991 and with effect from June 15, 1988, the word “Private” was deleted from the name of the Company undersection 43A (1A) of the Companies Act, 1956 (the “Companies Act”). The name of the Company was changed to Simplex InfrastructuresLimited on November 8, 2005. The current registered office of the Company is at Simplex House, 27, Shakespeare Sarani, Kolkata 700 017,with effect from November 8, 2005. CIN number L99999WB1924PLC004969)

Simplex Infrastructures Limited (the “Company” or “Simplex Infrastructure”) is issuing [ ] equity shares of Rs.2 each (“Equity Shares”) ata price of Rs. [ ] per Equity Share, including a premium of Rs. [ ] per Equity Share, aggregating Rs. [ ] (the “Issue”).

ISSUE IN RELIANCE ON CHAPTER XIII-A OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (“SEBI”) GUIDELINES

THIS ISSUE AND THE DISTRIBUTION OF THIS PRELIMINARY PLACEMENT DOCUMENT IS BEING DONE IN RELIANCE ON CHAPTER XIII-A OF THESEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000, AS AMENDED (THE “SEBI GUIDELINES”). THIS PRELIMINARY PLACEMENTDOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR AND DOES NOT CONSTITUTE AN OFFER OR INVITATION OR SOLICITATION OF ANOFFER TO THE PUBLIC OR TO ANY OTHER PERSON OR CLASS OF INVESTORS.

Invitations, offers and sales of Equity Shares shall only be made pursuant to this Preliminary Placement Document, Confirmation of AllocationNote and the Application Form. See “Issue Procedure.” The distribution of this Preliminary Placement Document or the disclosure of itscontents without our prior consent, to any person, other than Qualified Institutional Buyers (as defined in the SEBI Guidelines) and personsretained by Qualified Institutional Buyers to advise them with respect to their purchase of Equity Shares, is unauthorised and prohibited. Eachprospective investor, by accepting delivery of this Preliminary Placement Document agrees to observe the foregoing restrictions, and to makeno copies of this Preliminary Placement Document or any documents referred to in this Preliminary Placement Document. This PreliminaryPlacement Document has not been and will not be registered as a prospectus with the Registrar of Companies in India, and will not becirculated or distributed to the public in India.

Investments in Equity Shares involve a degree of risk and prospective investors should not invest any funds in this Issue unlessthey are prepared to take the risk of losing all or part of their investment. Investors are advised to read the risk factors carefullybefore taking an investment decision in this Issue. Each prospective investor is advised to consult its advisers about the particularconsequences to it of an investment in the Equity Shares being issued pursuant to this Preliminary Placement Document.

The information on our website or any website directly or indirectly linked to such websites does not form part of this Preliminary PlacementDocument and prospective investors should not rely on such information.

The Equity Shares of the Company are listed on the Bombay Stock Exchange Limited (“BSE”), the National Stock Exchange of India Limited(“NSE”) and the Calcutta Stock Exchange Association Limited (“CSE”) (together, the “Stock Exchanges”). On November 30, 2007, theclosing price, as reported on BSE and NSE was Rs. 618.75 and Rs. 619.65 respectively. As per intimation dated November 28, 2007, fromCSE, the last closing price of Equity Shares on CSE was Rs. 608.45 on November 26, 2007. Applications shall be made for the listing of theEquity Shares in this Issue on the Stock Exchanges. The Stock Exchanges assume no responsibility for the correctness of any statementsmade, opinions expressed or reports contained herein. Admission of the Equity Shares to trading on the Stock Exchanges should not be takenas an indication of the merits of the Company or the Equity Shares.

YOU MAY NOT AND ARE NOT AUTHORISED TO (1) DELIVER THE PRELIMINARY PLACEMENT DOCUMENT TO ANY OTHER PERSON OR (2) REPRODUCETHIS PRELIMINARY PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER. ANY DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT INWHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SEBI GUIDELINES OROTHER APPLICABLE LAWS OF INDIA AND OTHER JURISDICTIONS.

A copy of this Placement Document has been delivered to the Stock Exchanges. This Preliminary Placement Document has been preparedby us solely for providing information in connection with the proposed issue of the Equity Shares described in this Preliminary PlacementDocument. The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (“Securities Act”),and they may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation Sunder the Securities Act) except outside the United States in offshore transactions to persons who are not U.S. persons, in reliance onRegulation S under the Securities Act. For further information, see “Transfer Restrictions”.

The information in this Preliminary Placement Document is not complete and may be changed. This Preliminary Placement Documentis not an offer to sell the Equity Shares and is not soliciting an offer to subscribe to the Equity Shares. It is being issued for the solepurpose of information or discussion on the Equity Shares that may be issued through the Placement Document.

J M Financial Consultants Private Limited141, Maker Chambers III,Nariman Point,Mumbai 400 021

SSKI Corporate Finance Private Limited803/4, Tulsiani Chambers, 7th Floor,Nariman Point,Mumbai 400 021

JOINT GLOBAL COORDINATORS

Preliminary Placement DocumentNot for CirculationSerial Number [ ]

Dated December 3, 2007

TABLE OF CONTENTS

NOTICE TO INVESTORS ................................................................................................................................... i

PRESENTATION OF FINANCIAL AND OTHER INFORMATION ..................................................................... vii

INDUSTRY AND MARKET DATA ...................................................................................................................... ix

FORWARD-LOOKING STATEMENTS ............................................................................................................... x

ENFORCEMENT OF CIVIL LIABILITIES ........................................................................................................... xii

CERTAIN DEFINITIONS AND ABBREVIATIONS ............................................................................................. 1

SUMMARY OF THE ISSUE ................................................................................................................................ 3

SUMMARY .......................................................................................................................................................... 5

RISK FACTORS .................................................................................................................................................. 12

MARKET PRICE INFORMATION ....................................................................................................................... 29

USE OF PROCEEDS .......................................................................................................................................... 32

CAPITALISATION AND INDEBTEDNESS ......................................................................................................... 33

DIVIDENDS AND DIVIDEND POLICY ............................................................................................................... 34

SELECTED FINANCIAL DATA ........................................................................................................................... 35

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS .................................................................................................................... 40

RECENT DEVELOPMENT ................................................................................................................................. 55

INDUSTRY OVERVIEW ..................................................................................................................................... 58

OUR BUSINESS ................................................................................................................................................. 68

REGULATIONS AND POLICIES ........................................................................................................................ 85

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL .................................................................. 87

ORGANISATIONAL STRUCTURE AND MAJOR SHAREHOLDERS ............................................................... 96

ISSUE PROCEDURE.......................................................................................................................................... 100

SELLING RESTRICTIONS ................................................................................................................................. 107

TRANSFER RESTRICTIONS ............................................................................................................................. 111

THE SECURITIES MARKET OF INDIA ............................................................................................................. 112

DESCRIPTION OF THE EQUITY SHARES ....................................................................................................... 120

TAXATION........................................................................................................................................................... 126

LEGAL PROCEEDINGS ..................................................................................................................................... 133

INDEPENDENT ACCOUNTANTS ...................................................................................................................... 134

GENERAL INFORMATION ................................................................................................................................. 135

SIMPLEX INFRASTRUCTURES LIMITED FINANCIAL STATEMENTS ........................................................... 136

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NOTICE TO INVESTORS We accept responsibility for the information contained in this Preliminary Placement Document and to our best knowledge and belief, having made all reasonable enquiries, confirm that this Preliminary Placement Document contains all information with respect to the Company and the Equity Shares which is material in the context of this Issue. The statements contained in this Preliminary Placement Document relating to us and the Equity Shares are, in every material respect, true and accurate and not misleading, the opinions and intentions expressed in this Preliminary Placement Document with regard to us and the Equity Shares are honestly held, have been reached after considering all relevant circumstances, are based on information presently available to the Company and are based on reasonable assumptions. There are no other facts in relation to us and the Equity Shares, the omission of which would, in the context of the Issue, make any statement in this Preliminary Placement Document misleading in any material respect. Further, all reasonable enquiries have been made by us to ascertain such facts and to verify the accuracy of all such information and statements. The Joint Global Coordinators have not separately verified all of the information (financial, legal or otherwise) contained in this Preliminary Placement Document. Accordingly, neither of the Joint Global Coordinators nor any member, employee, counsel, officer, director, representative, agent or affiliate of the Joint Global Coordinators makes any express or implied representation, warranty or undertaking, and no responsibility or liability is accepted by the Joint Global Coordinators as to the accuracy or completeness of the information contained in this Preliminary Placement Document or any other information supplied in connection with the Equity Shares. Each person receiving this Preliminary Placement Document acknowledges that such person has not relied on the Joint Global Coordinators nor on any person affiliated with either of the Joint Global Coordinators in connection with its investigation of the accuracy of such information or its investment decision, and each such person must rely on its own examination of the Company and the merits and risks involved in investing in the Equity Shares. Prospective investors should not construe anything in this Preliminary Placement Document as legal, business, tax, accounting or investment advice. No person is authorised to give any information or to make any representation not contained in this Preliminary Placement Document and any information or representation not so contained must not be relied upon as having been authorised by or on behalf of us or either of the Joint Global Coordinators. The delivery of this Preliminary Placement Document at any time does not imply that the information contained in it is correct as at any time subsequent to its date. The Equity Shares have not been approved, disapproved or recommended by the U.S. Securities and Exchange Commission, any state securities commission in the United States or the securities commission of any non-U.S. jurisdiction or any other U.S. or non-U.S. regulatory authority. None of these authorities has passed on or endorsed the merits of this Issue or the accuracy or adequacy of this Preliminary Placement Document. Any representation to the contrary is a criminal offence in the United States and may be a criminal offence in other jurisdictions. The distribution of this Preliminary Placement Document and the issue of the Equity Shares in certain jurisdictions may be restricted by law. As such, this Preliminary Placement Document does not constitute, and may not be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. In particular, no action has been taken by us and the Joint Global Coordinators which would permit an Issue of the Equity Shares or distribution of this Preliminary Placement Document in any jurisdiction, other than India, where action for that purpose is required. Accordingly, the Equity Shares may not be offered or sold,

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directly or indirectly, and neither this Preliminary Placement Document nor any Issue materials in connection with the Equity Shares may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction. In making an investment decision, investors must rely on their own examination of the Company and the terms of this Issue, including the merits and risks involved. Investors should not construe the contents of this Preliminary Placement Document as legal, tax, accounting or investment advice. Investors should consult their own counsel and advisors as to business, legal, tax, accounting and related matters concerning this Issue. In addition, neither we nor the Joint Global Coordinators are making any representation to any offeree or purchaser of the Equity Shares regarding the legality of an investment in the Equity Shares by such offeree or purchaser under applicable legal, investment or similar laws or regulations. Each purchaser of the Equity Shares in this Issue is deemed to have acknowledged, represented and agreed that it is eligible to invest in India and in the Company under Chapter XIII-A of the SEBI Guidelines and is not prohibited by SEBI or any other regulatory authority from buying, selling or dealing in securities. Each purchaser of Equity Shares in this Issue also acknowledges that it has been afforded an opportunity to request from us and review information relating to us and the Equity Shares. This Preliminary Placement Document contains summaries of certain terms of certain documents, which summaries are qualified in their entirety by the terms and conditions of such documents.

REPRESENTATIONS BY INVESTORS By purchasing any Equity Shares under this Issue, you are deemed to have acknowledged and agreed as follows: • you are a QIB and undertake to acquire, hold, manage or dispose of any Equity Shares

that are allotted to you for the purposes of your business in accordance with the SEBI Guidelines;

• the Preliminary Placement Document has not been verified or affirmed by SEBI or the Stock Exchanges and will not be filed with the Registrar of Companies. The Placement Document will be filed with the Stock Exchanges and has been displayed on the websites of the Company and the Stock Exchanges;

• you are entitled to subscribe for and/or purchase the Equity Shares under the laws of all relevant jurisdictions which apply to you and that you have fully observed such laws and obtained all such governmental and other guarantees and other consents in either case which may be required thereunder and complied with all necessary formalities;

• you are entitled to acquire the Equity Shares under the laws of all relevant jurisdictions and that you have all necessary capacity and have obtained all necessary consents and authorities to enable you to commit to this participation in this Issue and to perform your obligations in relation thereto (including, without limitation, in the case of any person on whose behalf you are acting, all necessary consents and authorities to agree to the terms set out or referred to in the Preliminary Placement Document) and will honor such obligations;

• the Joint Global Coordinators are not making any recommendations to you or advising you regarding the suitability of any transactions it may enter into in connection with this Issue, and that participation in this Issue is on the basis that you are not and will not be a client of such Joint Global Coordinators and that the Joint Global Coordinators have no

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duties or responsibilities to you for providing the protections afforded to their clients or customers or for providing advice in relation to this Issue;

• you are aware and understand that the Equity Shares are being offered only to QIBs and are not being offered to the general public and the allotment of the same shall be on a discretionary basis;

• you shall be provided a serially numbered copy of the Preliminary Placement Document and have read the Preliminary Placement Document in its entirety;

• that in making your investment decision, (i) you have relied on your own examination of the Company and the terms of this Issue, including the merits and risks involved, (ii) you have made your own assessment of the Company, the Equity Shares and the terms of this Issue based on such information as is publicly available, (iii) you have consulted your own independent counsel and advisors or otherwise have satisfied yourself concerning, without limitation, the effects of local laws, and (iv) you have received all information that you believe is necessary or appropriate in order to make an investment decision in respect of the Company and the Equity Shares;

• you have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the investment in the Equity Shares and you and any accounts for which you are subscribing to the Equity Shares (i) are each able to bear the economic risk of the investment in the Equity Shares, (ii) will not look to any of the Joint Global Coordinators, the Company and/or the officers of the Company for all or part of any such loss or losses that may be suffered, (iii) are able to sustain a complete loss on the investment in the Equity Shares, (iv) have no need for liquidity with respect to the investment in the Equity Shares and (v) have no reason to anticipate any change in your or their circumstances, financial or otherwise, which may cause or require any sale or distribution by you or them of all or any part of the Equity Shares;

• that where you are acquiring the Equity Shares for one or more managed accounts, you represent and warrant that you are authorized in writing by each such managed account to acquire the Equity Shares for each such managed account;

• you are not a Promoter or a person related to the Promoters of the Company, either directly or indirectly and your bid does not, directly or indirectly, represent any Promoter or Promoter Group of the Company;

• you have no rights under a shareholders agreement or voting agreement with the Promoters or persons related to the Promoters, no veto rights or right to appoint any nominee director on the Board of the Company other than that acquired in the capacity of a lender which shall not be deemed to be a person related to the Promoters;

• you will have no right to withdraw your bid after the bid closing date;

• the Equity Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing equity shares of the Issuer including the right to receive all dividends and other distributions declared, made or paid in respect of such equity shares after the date of issue of the Equity Shares;

• if allotted Equity Shares pursuant to this Issue, you shall, for a period of one year from allotment, sell the Equity Shares so acquired only on the floor of the Stock Exchanges;

• you are eligible to bid and hold Equity Shares so allotted and together with any equity shares held by you prior to this Issue. You further confirm that your holding upon the issue of any of the Equity Shares shall not exceed the level permissible as per any applicable regulations;

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• the bids made by you would not eventually result in triggering a tender offer under the

SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended ("Takeover Code");

• to the best of your knowledge and belief together with other QIBs in this Issue that belong to the same group or are under common control as you, the allotment under the present Issue shall not exceed 50% of the size of this Issue. For the purposes of this statement:

a. the expression 'belongs to the same group' shall derive meaning from the concept of 'companies under the same group' as provided in sub-section (11) of Section 372 of the Companies Act, 1956;

b. "Control" shall have the same meaning as is assigned to it by clause (c) of Regulation 2 of the Takeover Code;

• you shall not undertake any trade in the Equity Shares credited to your depository

participant account until such time that the final listing and trading approval for the Equity Shares is issued by the Stock Exchanges;

• you are aware that application shall be made to the Stock Exchanges for in-principle approval for listing and admission of the Equity Shares to trading on the Stock Exchanges' market for listed securities;

• you are aware and understand that the Joint Global Coordinators will enter into an agreement with the Company whereby the Joint Global Coordinators have, subject to the satisfaction of certain conditions set out therein, undertaken to use their best efforts as agents of the Company to seek to procure purchasers for the Equity Shares;

• that the content of the Preliminary Placement Document is exclusively the responsibility of the Company and that neither the Joint Global Coordinators nor any person acting on their behalf has or shall have any liability for any information, representation or statement contained in the Preliminary Placement Document or any information previously published by or on behalf of the Company and will not be liable for your decision to participate in this Issue based on any information, representation or statement contained in the Preliminary Placement Document or otherwise. By accepting participation in this Issue, you agree to the same and confirm that you have neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Joint Global Coordinators or the Company or any other person and that neither of the Joint Global Coordinators nor the Company nor any other person will be liable for your decision to participate in this Issue based on any other information, representation, warranty or statement which you may have obtained or received;

• that the only information you are entitled to rely on and on which you have relied in committing yourself to acquire the Equity Shares is contained in the Preliminary Placement Document, such information being all that you deem necessary to make an investment decision in respect of the Equity Shares and that you have neither received nor relied on any other information given or representations, warranties or statements made by either of the Joint Global Coordinators or the Company and neither of the Joint Global Coordinators nor the Company will be liable for your decision to accept an invitation to participate in this Issue based on any other information, representation, warranty or statement;

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• all statements other than statements of historical fact included in the Preliminary Placement Document, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products), are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause actual results to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. You should not place undue reliance on forward-looking statements, which speak only as at the date of the Preliminary Placement Document. The Company assumes no responsibility to update any of the forward-looking statements contained in the Preliminary Placement Document;

• that you are eligible to invest in India under applicable law, including the Foreign Exchange Management (Transfer or Issue of Security by Person Resident Outside India) Regulations, 2000, as amended from time to time, and have not been prohibited by SEBI from buying, selling or dealing in securities;

• you agree to indemnify and hold the Company and Joint Global Coordinators harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of your representations and warranties as contained herein. You agree that the indemnity set forth in this paragraph shall survive the resale of the Equity Shares including by or on behalf of the managed accounts; and

• that the Company, Joint Global Coordinators and others will rely upon the truth and accuracy of your foregoing representations, warranties, acknowledgements and undertakings, each of which is given to the Joint Global Coordinators on your own behalf and on behalf of the Company, and each of which is irrevocable.

P-NOTES

Under Regulation 15A(1) of the Securities Exchange Board of India (Foreign Institutional Investors) Regulation, 1995, as amended, and subject to all other applicable laws in India, foreign institutional investors as defined under SEBI Guidelines, or their sub-accounts (together referred to as "Flls"), including FII affiliates of either of the Joint Global Coordinators may issue, deal in or hold, off-shore derivative instruments such as participatory notes, equity linked notes or any other similar instruments against Equity Shares allocated in this Issue (all such off-shore derivative instruments referred to herein as "P-Notes") only in favour of these entities which are regulated by any relevant regulatory authorities in the countries of their incorporation or establishment subject to compliance with applicable ‘know your client’ requirements, for which they may receive compensation from purchasers of such instruments. With effect from October 25, 2007, P-Notes can be issued to only “regulated entities” as opposed to “registered entities”. However, legislation setting forth the guidelines in this respect has not been announced as of the date of this Preliminary Placement Document. P-Notes have not been and are not being offered or sold pursuant to this Preliminary Placement Document. The Preliminary Placement Document does not contain any information concerning P-Notes or the issuer(s) of any P-Notes, including, without limitation, any information regarding

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any risk factors relating thereto. An FII shall also ensure that no further downstream issue or transfer of any P-Notes is made to any person other than a regulated entity. P-Notes that may be issued are not securities of the Company and do not constitute any obligations of, claim on, or interests in the Company. The Company has not participated in any offer of any P-Notes or in the establishment of the terms of any P-Notes, or in the preparation of any disclosure related to any P-Notes. Any P-Notes that may be offered are issued by, and are solely the obligations of, third parties that are unrelated to the Company. The Company and its affiliates do not make any recommendation as to any investment in P-Notes and do not accept any responsibility whatsoever in connection with any P-Notes. Any P-Notes that may be issued are not securities of either of the Joint Global Coordinators and do not constitute any obligations of, or claims on, either of the Joint Global Coordinators. FII affiliates of the Joint Global Coordinators may purchase Equity Shares in the Issue and may issue P-Notes in respect thereof. Prospective investors interested in purchasing any P-Notes have the responsibility to obtain adequate disclosure as to the issuer(s) of any P-Notes and the terms and conditions of any such P-Notes from the issuer(s) of such P-Notes. Neither SEBI nor any other regulatory authority has reviewed or approved any P-Notes or any disclosure related thereto. Prospective investors are urged to consult with their own financial, legal, accounting and tax advisors regarding any contemplated investment in P-Notes, including whether P-Notes are issued in compliance with applicable laws and regulations.

DISCLAIMER CLAUSE OF THE STOCK EXCHANGES As required, a copy of this Preliminary Placement Document has been submitted to the Stock Exchanges. The Stock Exchanges do not in any manner: 1. warrant, certify or endorse the correctness or completeness of any of the contents of the

Preliminary Placement Document; 2. warrant that the Company's Equity Shares will be listed or will continue to be listed on

the Stock Exchange; or 3. take any responsibility for the financial or other soundness of the Company, its

Promoters, its management or any scheme or project of the Company; and it should not for any reason be deemed or construed to mean that the Preliminary Placement Document has been cleared or approved by the Stock Exchanges. Every person who desires to apply for or otherwise acquire any securities of the Company may do so pursuant to an independent inquiry, investigation and analysis and shall not have any claim against the Stock Exchanges whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION In this Preliminary Placement Document, unless the context otherwise indicates or implies, references to “you,” “offeree,” “purchaser,” “subscriber,” “recipient,” “investors” and “potential investor” is to the prospective investors in this Issue, references to “Simplex Infrastructures,” “SIL”, the “Company” or the “Issuer” are to Simplex Infrastructures Limited. In this Preliminary Placement Document, references to “US$” and “U.S. dollars” are to the legal currency of the United States and references to “Rs.” and “Rupees” are to the legal currency of India. All references herein to the “U.S.” or the “United States” are to the United States of America and its territories and possessions and all references to “India” are to the Republic of India and its territories and possessions. Unless otherwise stated, references in this Preliminary Placement Document to a particular year are to the calendar year ended on December 31 and to a particular “fiscal” or “fiscal year” are to the fiscal year ended on March 31. The Company publishes its financial statements in Rupees. Our profit and loss data for the years ended March 31, 2005, March 31, 2006 and March 31, 2007, our balance sheet data as of March 31, 2005, March 31, 2006 and March 31, 2007 and our cash flow statements for the years ended March 31, 2005, March 31, 2006 and March 31, 2007, have been prepared in accordance with Indian GAAP, collectively referred to as the “Financial Statements”. The financial statements as of and for the year ended March 31, 2005, March 31, 2006 and March 31, 2007 have been audited by M/s. Price Waterhouse, statutory auditors and independent Chartered Accountants in India. See “Financial Statements”. The unaudited financial statements of the Company as of and for the three-month period ended June 30, 2007 and June 30, 2006 have been prepared in accordance with accounting principles generally accepted in and pursuant to the relevant laws of India consistently applied. The financial information set out in the unaudited financial statement are consistent with the financial information for the fiscal years ended March 31, 2007 and March 31, 2006. With respect to the unaudited interim financial statements of the Company for the three-month period ended June 30, 2007 (together with the corresponding previous three-month period ended June 30, 2006) included in this Preliminary Placement Document, Price Waterhouse, Chartered Accountants reported that they have applied limited review procedures in accordance with professional standards for a review of such information. However, their separate report dated October 29, 2007 appearing herein, states that they did not audit and they do not express an opinion on this unaudited interim financial statements. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. See “Financial Statements”. The Company is an Indian listed company and prepares its financial statements in accordance with Indian GAAP and in compliance with the Companies Act, 1956, as amended (the “Companies Act”). There are changes in the presentation of financial information included in the Preliminary Placement Document if compared to the presentation and disclosures we have reported as a listed company in India. This generally involves changes in the description and classification of certain amounts from those shown in our Indian GAAP financial statements prepared and presented to our shareholders and reported by us as a listed company. Neither the information set forth in our financial statements nor the format in which it is presented should be viewed as comparable to information prepared in accordance with IAS/IFRS or any accounting principles other than principles specified in the Indian Accounting Standards. We prepare our financial statements in accordance with Indian GAAP and Indian Accounting Standards. Indian

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GAAP differs significantly in certain respects from IFRS and U.S. GAAP. See “Risk Factors – Risks Related to Investments in an Indian Company – Significant differences exist between Indian GAAP and IFRS, which may be material to the financial information prepared and presented in accordance with Indian GAAP contained in this Preliminary Placement Document.” All references to units of length e.g. “kilometers” or “miles” in this Preliminary Placement Document are approximations. Any discrepancies in the tables included herein between the amounts listed and the totals thereof are due to rounding off.

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INDUSTRY AND MARKET DATA Information regarding market position, growth rates and other industry data pertaining to our businesses contained in this Preliminary Placement Document consists of estimates based on data reports compiled by professional organisations and analysts, data from other external sources and our knowledge of the markets in which we compete. The statistical information included in this Preliminary Placement Document relating to various industries in which we operate has been reproduced from various trade, industry and government publications and websites. This data is subject to change and cannot be verified with complete certainty due to limits on the availability and reliability of the raw data and other limitations and uncertainties inherent in any statistical survey. In many cases, there is no readily available external information (whether from trade or industry associations, government bodies or other organisations) to validate market-related analyses and estimates, so we rely on internally developed estimates. While we have compiled, extracted and reproduced this data from external sources, including third parties, trade, industry or general publications, we accept responsibility for accurately reproducing such data. However, neither we nor either of the Joint Global Coordinators have independently verified this data and neither we nor either of the Joint Global Coordinators make any representation regarding the accuracy of such data. Similarly, while we believe our internal estimates to be reasonable, such estimates have not been verified by any independent sources and neither we nor either of the Joint Global Coordinators can assure potential investors as to their accuracy.

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FORWARD-LOOKING STATEMENTS Certain statements contained in this Preliminary Placement Document that are not statements of historical fact constitute "forward-looking statements." Investors can generally identify forward-looking statements by terminology such as "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "intend", "may", "objective", "plan", "potential", "project", "pursue", "shall", "should", "will", "would", or other words or phrases of similar import. All statements regarding our expected financial condition and results of operations and business plans and prospects are forward-looking statements. These forward-looking statements include statements as to our business strategy, our revenue and profitability, planned projects and other matters discussed in this Preliminary Placement Document that are not historical facts. These forward-looking statements and any other projections contained in this Preliminary Placement Document (whether made by us or any third party) are predictions and involve known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements. Important factors that could cause actual results to differ materially from our expectations include, among others: • General political economic and business conditions in India and other countries; • The Company's ability to successfully implement its strategy, its growth and expansion

plans and technological changes; • Status of projects in order book; • Costs and availability of equipment, materials, labour and fuel; • Cost overruns, delays and disruptions in completion and commissioning of projects; • Performance of industrial sectors in India: • Potential mergers, acquisitions or restructurings; • Performance of the Indian debt and equity markets; • Occurrence of natural calamities or natural disasters affecting the areas in which the

Company has operations: • Changes in laws and regulations that apply to companies in India; • Changes in the foreign exchange control regulations in India. • Other factors discussed in this Preliminary Placement Document, including under "Risk

Factors". All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results and property valuations to differ materially from those contemplated by the relevant statement. Additional factors that could cause actual results, performance or

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achievements to differ materially include, but are not limited to, those discussed under "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Industry" and "Our Business". The forward-looking statements contained in this Preliminary Placement Document are based on the beliefs of management, as well as the assumptions made by and information currently available to management. Although we believe that the expectations reflected in such forward-looking statements are reasonable at this time, we cannot assure investors that such expectations will prove to be correct. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements. If any of these risks and uncertainties materialize, or if any of our underlying assumptions prove to be incorrect, our actual results of operations or financial condition could differ materially from that described herein as anticipated, believed, estimated or expected. All subsequent forward-looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary statements.

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ENFORCEMENT OF CIVIL LIABILITIES The Company is a limited liability company incorporated under the laws of India. Substantially all of the Company’s Directors and key managerial personnel named herein are residents of India and a substantial portion of assets of such persons are located in India. As a result, it may be difficult for investors to effect service of process upon the Company or such persons outside India or to enforce judgments obtained against such parties outside India. Recognition and enforcement of foreign judgments is provided for under Section 13 of the Code of Civil Procedure, 1908 (the “Code”) on a statutory basis. Sections 13 and 44A of the Code provide that a foreign judgment shall be conclusive regarding any matter directly adjudicated upon except: (i) where the judgment has not been pronounced by a court of competent jurisdiction, (ii) where the judgment has not been given on the merits of the case, (iii) where it appears on the face of the proceedings that the judgment is founded on an incorrect view of international law or a refusal to recognize the law of India in cases in which such law is applicable, (iv) where the proceedings in which the judgment was obtained were opposed to natural justice, (v) where the judgment has been obtained by fraud, and (vi) where the judgment sustains a claim founded on a breach of any law in force in India. India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments. However, Section 44A of the Code provides that where a foreign judgment has been rendered by a superior court within the meaning of that section in any country or territory outside India which the Government has by notification declared to be in a reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in India. However, Section 44A of the Code is applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty. The United Kingdom has been declared by the Government to be a reciprocating territory but the United States has not been so declared. A judgment of a court in a jurisdiction which is not a reciprocating territory may be enforced only by a fresh suit upon the judgment and not by proceedings in execution. The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it viewed the amount of damages awarded as excessive or inconsistent with public policy. Further, any judgment or award in a foreign currency would be converted into Rupees on the date of such judgment or award and not on the date of payment. A party seeking to enforce a foreign judgment in India is required to obtain approval from the RBI to repatriate outside India any amount recovered and any such amount may be subject to income tax in accordance with applicable laws.

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CERTAIN DEFINITIONS AND ABBREVIATIONS We have prepared this Preliminary Placement Document using certain definitions and abbreviations which you should consider when reading the information contained herein. References to Industry or our Business “BOT” means Build, Operate and Transfer “DIL” means Direct Industrial Licences, which are being issued since November 2003 “EPC” means Engineering, Procurement and Construction “GQ” means the Golden Quadrilateral project of the NHAI “IEM” means Industrial Entrepreneurs Memoranda “LOI” means Letters of Intent “Order Book” refers to a compilation of our expected revenues from uncompleted portions of construction contracts received “MRTS” means Mass Rail Transit System “NHDP” means the National Highway Development Project of the NHAI “RCC” means Reinforced Concrete and Cement References to Other Business Entities, Governmental and Other Entities “CIA” means Central Investigation Agency (of the USA) “CSE” means Calcutta Stock Exchange Association Limited “CSO” means Central Statistical Organisation “BSE” means Bombay Stock Exchange Limited “CFI” means Construction Federation of India “CIDC” means Construction Industry Development Council “CSE” means Calcutta Stock Exchange Association Limited “DMRC” means Delhi Metro Rail Corporation Limited “Government” or “GoI” means the Government of the Republic of India “NHAI” means National Highways Authority of India “NSE” means National Stock Exchange of India Limited “RBI” means Reserve Bank of India “SEBI” means Securities and Exchange Board of India Other Abbreviations “BPO” means Business Process Outsourcing “E&D” means (oil and gas) Exploration and Development “EPS” means Earnings Per Share “Equity Shares” means an Equity Share of the par value Rs. 2 of the Company “FEMA” means the Foreign Exchange Management Act, 1999, as amended, and the regulations framed thereunder “FII” means Foreign Institutional Investor (as defined under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as amended) registered with SEBI under applicable laws in India “FY” means Financial Year or Fiscal Year “GDP” means Gross Domestic Product “GFCF” means Gross Fixed Capital Formation “HRD” means Human Resource Development “IFRS” means International Financial Reporting Standards

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“ICAI” means Institute of Chartered Accountants of India “ISO” means International Standardisation Organisation “IT/ ITES” means Information Technology/ Information Technology Enabled Services “Indian GAAP” means Generally Accepted Accounting Principles of India “MBA” means Masters in Business Administration “MIS” means Management Information Systems “NELP” means New Exploration and Licensing Policy, issued by the GoI, Ministry of Petroleum and Natural Gas “PAT” means Profit After Tax “PBT” means Profit Before Tax “PPP” means Public Private Participation “QIB” means Qualified Institutional Buyer as defined in the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 “SEZ” means Special Economic Zones “SICA” means Sick Industrial Companies (Special Provisions) Act, 1985 “UAE” means United Arab Emirates “U.S. GAAP” means Generally Accepted Accounting Principles of the U.S. “WSS” means Water Supply and Sanitation

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SUMMARY OF THE ISSUE The following is a general summary of the terms of the Issue: Issuer Simplex Infrastructures Limited Issue [●] Equity Shares of the Issuer of par value Rs. 2 each. Issue Price Rs. [●] per Equity Share. Eligible Investors

QIBs as defined in clause 2.2.2B(v) of the SEBI Guidelines. See “Issue Procedure — Qualified Institutional Buyers.”

Equity Shares issued and outstanding immediately prior to the Issue

42,872,330 Equity Shares, aggregating Rs. 85.74 million*∗

Equity Shares issued and outstanding immediately after the Issue

[•]

Listing The Issuer shall make applications to each of Stock Exchanges to obtain in-principle approvals for the listing of the Equity Shares on Stock Exchanges.

Lock-up The Issuer has agreed that, subject to certain exceptions (including conversion of any warrants by any Promoter or member of the Promoter Group, in respect of warrants issued to them pursuant to the resolution of the shareholders dated September 19, 2007), it will not without the prior written consent of the Joint Global Coordinators, until 180 days after the date of the Preliminary Placement Document, (i) directly or indirectly, offer, issue, contract to issue, grant any option or right for the issuance and allotment, or otherwise dispose of or transfer, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position with respect to, any Equity Shares or securities convertible into or exchangeable or exercisable for such Equity Shares (including any warrants or other rights to subscribe for any Equity Shares), (ii) enter into a transaction which would have the same effect, or enter into any swap, hedge or other agreement or that transfers, in whole or in part, the economic consequences of ownership of the Equity Shares, whether any such transaction described in clause (i) or (ii) above is to be settled by allotment of Equity Shares or such other securities, in cash or otherwise, or (iii) publicly disclose its intention to enter into the transactions referred to in (i) or (ii) above. In addition, our Promoters and members of the Promoter group, have collectively agreed not, without the prior written consent of each of the Joint Global Coordinators, to offer, sell or contract to sell, or otherwise dispose of, for a period of 180 days from the date of issuance and allotment of the Equity Shares, any of their respective Equity Shares or any securities convertible, exchangeable or exercisable for Equity Shares (including any warrants) and

∗ *126,000 Equity Shares of par value Rs.10 each (equivalent to 630,000 Equity Shares of par value Rs. 2 each) were forfeited on October 18, 2001.

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any Equity Shares obtained upon conversion, exchange or exercise of such securities or publicly announce an intention to effect any such transaction. Provided, however, that any or all of them shall have the right to pledge any or all of the Equity Shares whether now owned or hereinafter acquired. Provided that the above lock-up provisions shall not apply to the preferential issue of 5.50 million warrants to the Promoter and Promoter group, entitling the warrant holders with an option to apply for and be allotted one fully paid up Equity Share of par value Rs. 2 each against one warrant (“Warrants”), in accordance with Chapter XIII of the SEBI Guidelines, pursuant to the recommendation of the Board of Directors, dated July 31, 2007 and the approval of the members of the Company, dated September, 19, 2007.

Transferability Restrictions

The Equity Shares being allotted pursuant to this Issue shall not be sold for a period of one year from the date of allotment except on the Stock Exchanges.

Use of Proceeds The net proceeds of the Issue (after deduction of fees, commissions and expenses) are expected to total approximately Rs. [●] million. We plan to use the net proceeds of this Issue to meet our capital expenditure, additional working capital requirements to execute our existing and future order book and for general corporate purposes, as may be permitted by applicable laws. See “Use of Proceeds”.

Risk Factors See “Risk Factors” for a discussion of factors you should consider before deciding whether to buy our Equity Shares.

Closing The allotment of the Equity Shares offered pursuant to this Issue is expected to be made on or about [●] (“Closing Date”).

Ranking The Equity Shares being issued shall be subject to the provisions of the Issuer’s Memorandum and Articles of Association and shall rank pari-passu in all respects with the existing Equity Shares including rights in respect of dividends. The shareholders will be entitled to participate in dividends and other corporate benefits, if any, declared by the Issuer after the Closing Date, in compliance with the Companies Act. Shareholders may attend and vote in shareholders’ meetings on the basis of one vote for every Equity Share held. See “Description of the Equity Shares”.

Security Codes for the Equity Shares

ISIN: INE059B01024 CSE Code: 29053 BSE Code: 523838 NSE Code: SIMPLEXINF

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SUMMARY The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this Preliminary Placement Document. In addition to this summary, we urge you to read the entire Preliminary Placement Document carefully, especially the risks of investing in the Equity Shares discussed under “Risk Factors,” before deciding whether to buy our Equity Shares. Overview: We are a large and well-established construction company in India with experience in civil and structural construction services since 1924. Our service offerings include design, engineering and construction using reinforced concrete and cement (“RCC”) and steel, fittings and finishing work on structures, electro-mechanical fit outs, piling foundations, ground engineering and earth works. We provide both design-and-build and build-to-design services. We are present across various construction sectors, which include piling, industrial, power, urban infrastructures, buildings and housing, marine and roads, railways, and bridges. In addition to this varied sector portfolio, our operations cover many geographical areas throughout India, as well as overseas in Qatar and the United Arab Emirates (“UAE”). The demand for construction services flows from three streams - infrastructure, industrial and real estate construction. Our presence in multiple sectors caters to all three demand streams in India and overseas. While our power, marine, urban infrastructure and roads, railways and bridges business sectors cater to the infrastructure construction demand, the building and housing sector the real estate construction demand, the industrial sector the industrial construction demand, and the piling sector caters to the demand from all three demand streams. We have over 80 years of construction experience in India and abroad. We were originally incorporated as Simplex Concrete Piles (India) Limited on December 19, 1924, under the Companies Act, 1913 by Mr. R.A. Lancaster, an Englishman, who invented the piling system, and came under Indian management in 1947, when the Mundhra family took over the business. We went public with an initial public offering of shares in 1993. The Company changed its name to Simplex Infrastructures Limited in 2005. Our early operations focused on the construction of cast-in-situ driven pile foundations, which became referred to in the industry as the “Simplex system of piling” throughout India and South-East Asia. Initially, piling services of all types was our primary business. Over several decades, we expanded and developed our expertise across various sectors in the construction industry. We have completed and continue to undertake projects across sectors throughout India and in Dubai, UAE and Doha, Qatar. As of June 30, 2007, 139 project sites were in process, of which 11 are located in Qatar and 3 are located in the UAE. Our client mix is diverse and comprises private and public institutions, including the National Highway Authority of India, domestic and international conglomerates and state governments. Our private sector clients include well known industrial groups in India across diverse manufacturing sectors, corporates and international EPC contractors. Our registered and head office is located in Kolkata. We organise and manage our business through our project offices, branch offices in Kolkata, Delhi, Mumbai and Chennai in India and overseas branch offices in Doha, Qatar and Dubai, UAE, employing as of September 30, 2007, 6,084 employees and hiring construction workers as needed at project sites.

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We enjoy several accreditations and awards. In 2003, we received ISO 9001:2000 quality management systems certification. In 2005, we were rated as the “Overall Best Managed Company (Small-Cap)” by Asia Money magazine. In 2006, we were nominated for “The Most Admired Infrastructure Company for Year 2005-2006” by the English news channel NDTV Profit. In 2007, the Company was rated by the magazine Business World among the top five largest shareholder-value creators in the last five years in the mid-cap category. The table below depicts our contract revenue in each sector over financial years ended March 31, 2005, 2006 and 2007, and the three months ended June 30, 2006 and 2007:

(Rs. in million) Contract Turnover

3 months ended June 30, 2007

3 months ended June 30, 2006

FY 07 FY 06 FY 05

By Sectors:

Contract turnover

% of total contract turnover

Contract turnover


Contract turnover


Contract turnover


Contractturnover


Piling 743.00 12.79% 556.57 15.85% 2,234.81 13.08% 1,374.03 10.23% 871.32 8.72%Industrial projects 1,823.41 31.39% 512.63 14.60% 4,110.99 24.07% 2,195.10 16.35% 1,859.94 18.62%Power 1,017.41 17.52% 1,183.24 33.69% 4,488.49 26.28% 4,413.57 32.87% 1,189.35 11.91%Roads, railways and bridges

Roads 276.71 4.76% 37.71 1.07% 444.67 2.60% 388.70 2.90% 1,310.90 13.12%Railways 99.35 1.71% 0.00 0.00% 111.92 0.66% - 0.00% - 0.00%Bridges 413.95 7.13% 242.61 6.90% 1,424.52 8.34% 827.70 6.16% 760.37 7.61%

Building and housing

678.72 11.69% 488.53 13.91% 1,792.68 10.49% 1,450.93 10.81% 908.64 9.10%Marine 151.31 2.61% 305.74 8.71% 992.62 5.81% 1,195.05 8.90% 599.40 5.99%Urban infrastructures

603.75 10.40% 185.02 5.27% 1,481.44 8.67% 1,582.31 11.78% 2,490.19 24.93% Total Contract Turnover 5,807.61 100.00% 3,512.05 100.00% 17,082.14 100.00% 13,427.39 100.00% 9,990.11 100.00% By Geographical Segments:

Domestic 5,053.69 87.02% 2,904.12 82.69% 14,574.63 85.32% 12,275.56 91.42% 9,556.72 95.66%Foreign 753.92 12.98% 607.93 17.31% 2,507.51 14.68% 1,151.83 8.58% 433.39 4.34%Total Contract Turnover

5,807.61 100.00% 3,512.05 100.00% 17,082.14 100.00% 13,427.39 100.00% 9,990.11 100.00%

As of June 30, 2007, our order book was Rs. 69,391.82 million comprising 184 contracts spread over 139 project sites including 11 in Doha, Qatar and 3 in Dubai, UAE. The share of the overseas projects in the order book was Rs. 20,986.09 million, being 30.24% of the total order book.

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Our Strengths Experience across diversified business sectors: We are a well-diversified construction company with a presence in almost all sectors of the construction business, including piling, industrials, buildings and housing, power, marine, urban infrastructure and roads, railways and bridges. Our experience includes the following:

• Industrial structures: construction of plants for cement, steel, aluminium, copper, engineering, automobiles, petrochemicals, fertilisers, paper, textiles, pharmaceutical, chemicals and shipyards.

• Power: construction of thermal (coal, oil and gas-based), hydroelectric and nuclear power

plants.

• Piling: foundation work including pre-cast piling, pre-cast jointed piling, driven piling, bored piling and cast-in-situ piling and ground engineering work including soil compaction, soil strengthening and diaphragm walls.

• Urban infrastructures: construction of metro transport projects (underground and above

ground stations), water and sewage treatment plants and pipelines, airports, sports stadiums, and public buildings.

• Building and housing: construction of multi-storied residential and commercial towers,

mass housing, institutional buildings.

• Marine structures: construction of ports, jetties, wharves, terminals, lighthouses, breakwaters and quays.

• Roads, railways and bridges: construction of flyovers, elevated corridors, roads, laying

down of railway tracks, and related activities. Good quality and healthy order book: By diversifying our skill set and order book across sectors, we are able to pursue a broader range of project tenders and therefore maximise our business volume and contract profit margins.

Outstanding order value

Contract ValueJune 30, 2007

June 30, 2007 % of Outstanding order value

Sectors (Rs. in million) (Rs. in million) Piling 3,815.25 1,517.54 2.19% Industrial 21,853.22 16,525.24 23.80% Power 15,700.54 4,801.72 6.92% Roads, railway and bridges Roads 3,898.40 3,194.50 4.60% Railways 2,382.55 2,171.29 3.13% Bridges 9,537.02 6,724.35 9.68%

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Contract ValueJune 30, 2007


Sectors (Rs. in million) (Rs. in million) Marine 4,814.66 2,381.39 3.43% Building and housing 26,487.76 23,935.92 34.47% Urban infrastructures 11,254.66 8,182.11 11.78% Total 99,744.06 69,391.82 100.00% Geographical Segments: Domestic 76,657.80 48,452.96 69.78% Foreign 23,086.26 20,986.09 30.24% Total 99,744.06 69,391.82 100.00%

With India’s economy growing at a rapid pace, our diverse expertise across sectors and geographies allows us to capture more opportunities than if we were focused on only one sector or geography. We also believe that our diversification protects us from downturns in any one particular sector or geography. Our clients are both private and public entities, and although many of our clients refer repeat business to us, no single client accounts for more than 10% of our current order book. Strong project management and execution expertise and capabilities: We were managing 139 project sites and 184 contracts as of June 30, 2007, in India and abroad. Managing such a large number of project sites and contracts requires significant project management and execution expertise and capabilities, which we have been able to build gradually since our inception in 1924. We have established a good track record and reputation for efficient and systematic project management and execution skills due to the following competencies:

• Experienced project managers supported by core project teams at each project site to help expedite decision-making, project planning and execution and contract management.

• A dedicated team to facilitate efficient procurement, deployment, operation and

maintenance of construction equipment for various project sites.

• Experienced design and engineering teams.

• Strong human resource development teams to perform recruitment and training.

• All project sites are overseen by seven zonal/branch offices.

• Strategic purchasing capabilities include maintaining good relationships with multiple suppliers to reduce dependence, placing centralised large orders to receive bulk discounts and sourcing from imports if there is a price advantage.

• Maintaining strong relationships with sub-contractors enable us to secure competent

construction workers in a timely manner.

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• Information technology and internet connectivity with project sites to allow for easy accessibility and communication among on-site project managers and each zonal/branch office.

• Effective management information systems (“MIS”) to help plan and monitor progress of

project execution in terms of time, cost, quality parameters, efficiency, utilisation and deployment of plant, equipment and manpower resources across locations.

Wide presence in India and locations in Qatar and the UAE: We are present across the length and breadth of India, with 125 project sites in operation as of June 30, 2007. In order to capitalise on business opportunities in Qatar and the UAE, we opened branch offices in Doha, Qatar in 2003, and Dubai, UAE in 2004. This allows us to better support 14 current projects in those cities and carry out business development in the region. During the past few years, the contribution of foreign sales to our total contract turnover grew from 4.34% in 2004-2005 to 14.68% in 2006-2007. As of June 30, 2007, our order book comprised 30.24% overseas contracts. Experienced, qualified and motivated management team and employee base: We have significant experience with over eight decades of construction technology and project management know-how. Our management team is well qualified and experienced in the construction industry. This team is responsible for the growth in our business operations. In addition, our Board, with a strong combination of managerial acumen as well as entrepreneurial spirit, is equipped to handle both domestic and international business situations. The length and breadth of their experience and expertise, rich business domain knowledge, coupled with their strong client relationships and positive industry reputation, gives us a competitive edge in the construction industry. Our employees are also key to our success, which is why we strive to be an employer of choice. As of September 30, 2007, we employed 6,084 employees (including temporary job appointees and trainees, but excluding contract labourers), of which 81.5% are technically qualified and trained. This includes 3,976 engineers, 526 trained technicians and 455 science graduates and post-graduates. To manage the pan-India and overseas business, we have 114 qualified finance professionals including chartered accountants and Masters of Business Administration (“MBAs”). The senior management team of 51 people is highly experienced and is drawn from technical and commercial backgrounds. In our industry, clients expect quality work from contractors and, therefore, we strive to hire talented and qualified people. The Company’s management recognises the competitive environment for talent in India, especially for junior technical staff. In response, the Company proactively increased its recruitment class of new graduates this year to ensure that our human resources are sufficient to meet the demands of our growing business. We hold training programmes for our employees on an annual basis to help them expand and develop their knowledge and skills. Training is provided in-house and covers many areas including construction technology and management. We also strive to provide a positive work atmosphere for our employees.

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Own large fleet of modern construction equipment: We have consistently invested in a large fleet of modern equipment. The Company owns modern construction plants and equipment, which meets most of the Company’s requirements for our present projects. With so many projects in progress at any given time, ready access to such equipment is important to our ability to execute projects and bid on additional tenders. Our major construction equipment numbering over 1,060 pieces as on June 30, 2007, includes 117 piling rigs including hydraulic rigs, 130 cranes including tower cranes, 89 batching plants, 167 transit mixers and 11 crusher plants. Business Strategy Capture high growth opportunities throughout India: We intend to target specific projects, sectors and geographies where we believe there is high potential for growth and where we enjoy competitive advantages. We intend to capitalise on our experience in executing current high growth opportunities in infrastructure, housing and industrial projects. We continue to evaluate and identify the future high growth areas in Indian construction such as marine, power and railways. We intend to expand and enhance our pan-India presence where we have previously developed a strong base of operations by capitalising on our local experience, established contacts with local clients and suppliers, and familiarity with local working conditions. In pursuing our strategies, we seek to identify markets where we believe we can utilise our technical capabilities to provide high quality construction services with significant cost advantages to our clients and distinguish ourselves from our competitors. In order to expand our operations, we also seek to identify joint venture partners whose resources, capabilities and strategies are complementary to, and are likely to enhance, our business operations in such regions. Our services in some of the sectors are dependent on construction projects of large Indian and international conglomerates and infrastructure projects undertaken by governmental authorities funded by governments or international and multilateral development finance institutions. We intend to develop or maintain relationships with this client base. A part of our business also flows from developing and maintaining strategic alliances with EPC contractors with whom we may want to enter into strategic alliances in the form of joint ventures, consortia or sub-contract relationships for specific projects. Capitalise on opportunities in Qatar, the UAE and other locations: We also intend to strengthen our presence in strategically important locations where we have established ourselves, such as Qatar and the UAE, which we believe have potential for construction projects in the building and housing, industrial construction and commercial construction. We have established branch offices in Doha and Dubai. In pursuing our strategies, we seek to identify markets where we believe we can leverage our technical capabilities to provide high quality construction services with significant cost advantages to our clients and distinguish ourselves from other competitors. In order to expand our operations, we also seek to identify joint venture partners whose resources, capabilities and strategies are complementary to and are likely to enhance our business operations in such regions.

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Selectively enter into new areas of business: We intend to explore new opportunities in areas where we can capitalise our existing strengths to increase our margins. We intend to pursue public private participation (“PPP”) arrangements in infrastructure projects and obtain turnkey and EPC contracts. Such contracts, which generally yield higher fees, will enable us to move up the value chain to become the main contractor on our projects. These will provide opportunities to bid on a higher number of international projects, deploy our resources more efficiently and improve operating margins. For certain large value projects we may also explore forming strategic alliances with other experienced and qualified contractors, which may include some of our existing or past clients. We also intend to explore other opportunities that will allow us to gain new skills while utilising our existing resources. Due to our long experience of handling the entire range of piling and drilling rigs in different kinds of locations, we recently took the first step in providing on-shore oil drilling services. In consortium with a company engaged in on-shore oil drilling, we have signed a two-year contract, further renewable on the same terms, to provide on-shore oil drilling services to an Indian oil company. In order to provide the contract on-shore oil drilling services, we have procured an on-shore oil-drilling rig. The cost incurred through November 30, 2007 for this oil drilling rig and accessories is approximately Rs. 386.04 million. Continue to focus on performance and building project execution capabilities: We believe that we have developed a good reputation for undertaking complex and challenging construction projects and completing projects within quality, cost and time parameters. We intend to continue to focus on performance and project execution in order to maximise client satisfaction and profit margins. Our pan-India, international and multi-sector experience enable our engineering teams to incorporate best practices from different sectors and geographic regions. We utilise advanced technologies, designs, engineering and project management tools to increase productivity and maximise asset utilisation in capital and labour-intensive construction activities. We intend to continue to invest in and strengthen our information and communication technology infrastructure for our operations in order to maintain high quality engineering solutions to our clients. We also continue to invest in construction equipment, manpower resources and training. Attract and retain talent: The chief constraint on building or maintaining the capabilities for future growth is the availability of trained employees. We proactively recruit employees ahead of our requirements for creating the capabilities for future growth in business. Newly recruited employees are required to undergo on-the-job training and initially work as assistants to experienced staff covering various functions at sites and offices before they are given specific and direct responsibilities for any activity. The employee base has been continually growing to meet current and future growth needs. Our employee strength as of September 30, 2007, was 6,084, which included 1,451 temporary appointees and trainees. Our employee base increased from 3,097 to 5,024 from the end of FY 2005 to the end of FY 2007, respectively.

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RISK FACTORS This Preliminary Placement Document contains forward-looking statements that involve risks and uncertainties. Prospective investors should carefully consider the following risk factors as well as other information included in this Preliminary Placement Document prior to making any decision as to whether or not to invest in our Equity Shares. The risks described below and any additional risks and uncertainties not presently known to us or that currently are deemed immaterial could adversely affect our business, financial condition, liquidity or results of operations. As a result, the trading price of our Equity Shares could decline and investors may lose part or all of their investment. Prospective investors should pay particular attention to the fact that we are an Indian company and are subject to a legal and regulatory environment, which may differ in certain respects from that of other countries. Risks Relating to Our Business and Industry Projects included in our order book may be delayed or cancelled for reasons beyond our control. On account of such delays, cancellations or circumstances where we are unable to resolve related matters or issues, our cash flow position, revenues and earnings could be materially adversely affected. Order Book refers to a compilation of our expected revenues from uncompleted portions of construction contracts received. Projects in the order book represent business that is considered firm. Our order book does not necessarily indicate future earnings related to the performance of that work, as contracts may be amended, delayed or cancelled before work commences or during the course of construction. As of June 30, 2007, our order book (which included the value of unexecuted orders as of June 30, 2007 and the value of new orders received until June 30, 2007) was Rs. 69.39 billion. Due to unexpected changes in project scope and schedule, we cannot predict with certainty when or if expected revenues as reflected in the order book will be achieved. In addition, even where a project proceeds as scheduled, it is possible that contracting parties may default and fail to pay amounts owed or receivables. Any delay, cancellation or payment default could materially harm our cash flow position, revenues and/or earnings. We have high working capital requirements. If we experience insufficient cash flows to meet required payments on our debt and working capital requirements, there may be an adverse effect on our results of operations. Our business requires a significant amount of working capital and financing. In many cases, significant amounts of our working capital are required to finance the performance of construction and other work on projects before payment is received from clients. In certain cases, we are contractually obligated to our clients to fund the specific plant and equipment required for the execution of the projects. Moreover, we may need to incur additional indebtedness in the future to satisfy our working capital needs. It is customary in the industry in which we operate to provide bank guarantees or performance bonds in favor of clients to secure obligations under contracts. If we are unable to obtain bank guarantees or performance bonds, our ability to enter into new contracts could be limited. We may not be able to continue obtaining new bank guarantees and performance bonds in sufficient quantities to match our business requirements. We may also need to offer performance bonds for projects executed partly or largely by our joint venture partners, exposing us to associated risks. If we are unable to obtain guarantees or performance bonds in connection with our contracts, our financial position may be materially adversely affected.

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Our indebtedness and the conditions and restrictions imposed by our financing agreements could adversely affect our ability to conduct our business and operations. As of June 30, 2007, we had total secured and unsecured loans of approximately Rs.7,917.03 million. In addition, we may incur additional indebtedness in the future. Our indebtedness could have several important consequences, including but not limited to the following: • A portion of our cash flow may be used towards repayment of our existing debt, which will

reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate requirements.

• Our ability to obtain additional financing in the future on reasonable terms may be

restricted. • Any adverse fluctuations in market interest rates may affect the cost of our borrowings, as

some of our indebtedness is at variable interest rates. • There could be a material adverse effect on our business, financial condition and results of

operations if we are unable to service our indebtedness or otherwise comply with financial and other covenants specified in the financing agreements.

Our ability to borrow funds at acceptable rates and in required amounts has been aided by the willingness of our Promoters to provide personal guarantees of our indebtedness. We can not give any assurance that our Promoters will be willing, or able, to provide such guarantees in the future. Some of our financing agreements include conditions and covenants that require us to obtain lender consents, prior to carrying out certain activities and entering into certain transactions. Failure to meet these conditions or obtain these consents could have significant consequences on our business. Typically, we require, and may be unable to obtain, lender consents to incur additional secured debt, issue equity, change our capital structure, undertake any major expansion, change our management structure or merge with or acquire other companies, whether or not there is any failure by us to comply with the other terms of such agreements. We believe that our relationships with our lenders are satisfactory, and we have in the past obtained consents from them to undertake various actions. Any failure to comply with the requirement to obtain a consent, or other condition or covenant under our financing agreements that is not waived by our lenders or is not otherwise cured by us, may lead to a termination of our credit facilities, acceleration of all amounts due under such facilities and trigger cross default provisions under certain of our other financing agreements, and may adversely affect our ability to conduct our business and operations or implement our business plans. An inability to manage our growth could disrupt our business and reduce our profitability. We have experienced high growth in the past few years and expect our business to grow significantly as a result of our domestic and international operations. We expect this growth to place significant demands on us and require us to continuously evolve and improve our operational, financial and internal controls across the organization. In particular, continued expansion increases the challenges involved in:

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• Maintaining high levels of client satisfaction. • Developing and improving our internal administrative infrastructure, particularly our

financial, operational, communications and other internal systems. • Recruiting, training and retaining sufficient skilled management, technical and marketing

personnel. • Adhering to health, safety and environment and quality and process execution standards that

meet client expectations. • Preserving a uniform culture, values and work environment in operations within and outside

India. Any inability to manage our growth may have an adverse effect on our business and results of operations. We are exposed to significant liability under our construction contracts. We provide construction services under contracts entered into by us with our clients. A majority of these contracts specify a period (generally for a period of 12 to 24 months from the date of completion) as the defects liability period during which we would have to rectify any defects arising from construction services provided by us within the warranty periods stipulated in our contracts at our cost. Our operations are subject to hazards inherent in providing construction services, such as risk of equipment failure, work accidents, including hazards that may cause injury and loss of life, and severe damage to and destruction of property and equipment. Our contracts also usually include liquidated damages clauses that are typically capped at 5% to 10% of the contract price, which may be enforced against us if we do not meet specified targets during the course of a contract. Our risk of incurring such liabilities is greater for long term contracts, generally over two years long, than short or medium term contracts. Actual or claimed defects in construction quality could give rise to claims, liabilities, costs and expenses, relating to loss of life, personal injury, damage to property, damage to equipment and facilities, pollution, inefficient operating processes, or suspension of operations. Our practice of covering these risks through contractual limitations of liability, indemnities and insurance may not always provide full cover. These liabilities and costs, if not covered, could have a material adverse effect on our business, results of operations and financial condition. Given the long-term nature of the projects that we undertake, we face various kinds of implementation risks. Construction projects involve agreements that are long term in nature. All long term projects, which include item rate, lump sum and EPC contracts with or without price escalation, have inherent risks associated with them that may not necessarily be within our control and accordingly our exposure to a variety of implementation and other risks, including construction delays, material shortages, unanticipated cost increases, cost overruns, inability to negotiate satisfactory arrangements with joint venture partners, and disagreements with our joint venture partners is enhanced. The long term nature of our contracts exposes us to increased risk of unforeseen business and industry changes and could have a material adverse effect on our business, financial condition and results of operations.

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On fixed price contracts, lump sum or EPC contracts, we are exposed to significant construction risks that could cause us to incur losses. Some of our contracts, whether item rate, lump sum or EPC, are on a fixed price basis. Under the terms and conditions of fixed price contracts, we generally agree to a fixed price for providing construction services for the part of the project contracted to us. These contracts may not include escalation clauses covering increased costs. The actual expense to us for executing a fixed price contract may vary substantially from the assumptions underlying our bid for several reasons, due to more than anticipated increases in the cost of materials, labour and others. Additionally, the item rate, lump sum or EPC contracts with price escalation clauses entail risks of unforeseen construction conditions, including the inability of the client to obtain requisite statutory clearances and approvals, resulting in delays and increased costs, and delays caused by unusual weather conditions or force majeure events. These variations and the risks generally inherent to the construction industry may result in our profits being different from those originally estimated and may result in our experiencing reduced profitability or losses on projects. Depending on the size of a project, these variations from estimated contract performance could have a significant adverse effect on our results of operations. We face significant competition for the projects that we bid for from domestic and foreign construction companies. As a result, we may be required to charge low prices for our services in response to such competition, which may materially and adversely impact our operating revenue and profitability. We operate in a competitive environment. Our contracts are awarded following competitive bidding processes and satisfaction of other prescribed pre-qualification criteria. Our competition varies depending on the size, nature and complexity of the project and on the geographical region in which the project is to be executed. We compete against major domestic and foreign construction companies as well as smaller local construction companies. While service quality, technological capacity and performance, health and safety records and personnel, as well as reputation and experience, are important considerations in client decisions, price is a major factor in most tender awards. The competitive nature of this process may necessitate us and other prospective bidders to submit low bids to win the award of the contract so as to maintain our respective market share. Our industry has been frequently subject to intense price competition. As a result of this competition, we may face margin pressure. Consequently, this could have a material adverse effect on our results of operations, financial condition and prospects. For more information on our competitors in specific industry and project segments, see “Our Business - Competition.” If we do not succeed in being awarded the contracts for projects, we could fail to increase, or maintain, our volume of order intake and operating revenues. There can be no assurance that we can continue to effectively compete with our competitors in the future, and failure to compete effectively may have an adverse effect on our business, financial condition and results of operations. We face margin pressure as a large number of the projects that we work on are awarded by the GoI and state governments following competitive bidding process. We derive a substantial part of our revenue from projects awarded by the GoI, state governments or their respective authorized agencies. Prospective bidders must meet technical requirements of the tender specified by the relevant government, and the contract is usually awarded to the most

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competitive financial bidder. We face competition from companies that operate on a larger scale than us and are able to achieve better economies of scale when bidding on government contracts. The nature of the bidding process on government contracts may cause us to accept lower margins in order to be awarded the contract, which may have an adverse effect on our business, financial condition and results of operations. The failure of a joint venture partner to perform its obligations could impose additional financial and performance obligations resulting in reduced profits or, in some cases, significant losses from the joint venture. We enter into various joint ventures with domestic as well as international construction companies in order to pre-qualify and meet eligibility criteria for contracts, in order to further our expansion plans. The success of these joint ventures partly depends on the satisfactory performance by our joint venture partners and fulfillment of their obligations. If our joint venture partners fail to perform these obligations satisfactorily, the joint venture may be unable to perform adequately or deliver its contracted services. In that instance, we may be required to make additional investments and/or provide additional services to ensure the adequate performance and delivery of the contracted services. We may also be subject to joint and several liabilities as a member of the joint venture in a number of projects. These additional obligations could result in reduced profits or, in some cases, losses for us. The inability of a joint venture partner to continue with a project due to financial or legal difficulties could mean that we would bear increased and possibly sole responsibility for the completion of the project and bear a concomitant increase in the financial risk of the project. We may also lose a project altogether, either because we are no longer eligible on a standalone basis, or because the joint venture was based on a firm delineation of roles and we lack the ability or capacity to execute the partner’s allocated work. In case we fail to successfully manage our geographically diverse operations, our business and results of operations could be adversely affected. As of June 30, 2007, we had over 139 project sites in operation throughout India, Qatar and the UAE. In India, each project site is managed locally by a project manager who reports to one of three zonal offices in Kolkata, New Delhi and Chennai, and a branch office in Mumbai. We have branch offices in Doha and Dubai to support projects in and near those locations. Our zonal and branch offices are able to manage these geographically diverse operations. However, there is a risk that factors such as a rapid increase in order volume, disruption in communications, and inability to retain and recruit trained staff could affect the capacity and capabilities of a zonal or branch office to support one or more project sites. If we are unable to successfully manage our projects and execute contracts effectively, either through a zonal or branch office, or otherwise, our business and results of operations may be adversely affected. Our business may be subject to adverse conditions in foreign jurisdictions where we operate and plan to expand. As of June 30, 2007, 30.24% of our order book was attributable to foreign sales, mainly in Qatar and the UAE. These operations are subject to risks that could adversely affect our business and results of operations, including possible inconsistencies in standards, controls and business cultures, diversion of management attention from day-to-day management of certain sites, risks associated with uncertain political and economic environments, government instability and legal systems, laws and regulations that are different from the legal systems, laws and regulations that we are familiar with in India, and which may be less established or predictable than those in more

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developed countries. In addition, we could be subject to expropriation or deprivation of assets or contract rights, foreign currency restrictions, exchange rate fluctuations and unanticipated taxes or encounter potential incompatibility with foreign joint venture partners, and non-availability of suitable personnel and equipment. The portions of projects sub-contracted by us could be affected on account of the sub-contractors’ performance, resulting in delayed payments. In the projects awarded to us we sometimes sub-contract some portions of the work to sub-contractors. For such projects we are dependent on the skills and labour provided by the sub-contractor. Timely and satisfactory performance of the sub-contractors plays an important role in the payments we receive. Any delay or failure on the part of the sub-contractor could result in delayed payments to us which may affect our profitability. An inability to attract and retain skilled personnel, including senior managers, could adversely affect our business and results of operations. An ability to meet future business challenges depends on our ability to attract and recruit talented and skilled personnel. A significant number of our employees are skilled engineers and technicians and we face strong competition, from both inside and outside the construction industry, to recruit and retain skilled and professionally qualified staff. We may not be able to recruit enough engineers and technicians due to the increased, and increasing, demand for these employees in other sectors India. An inability to attract and retain talent may materially and adversely impact our business and results of operations. Our senior management and key personnel, some of whom have decades of experience with us and in the construction industry, would be difficult to replace. We cannot guarantee that we will be able to find qualified replacements for individuals who make up our senior management team if their services were no longer available. The loss of one or more members of the senior management team could have a material adverse effect on the Company’s business, financial condition and results of operations. We maintain a workforce based upon current and anticipated workloads. If we do not receive future contract awards or if these awards are delayed, under-utilisation of workforce could result in higher operating costs. In planning for our growth, we continue to add to our workforce as we anticipate inflow of additional orders. Should the same be delayed or reduced, it could cause under-utilisation of human resources resulting in additional costs of operation affecting our financial results. We could be adversely affected if we fail to keep pace with technical and technological developments in the construction industry. Our recent experience indicates that clients are increasingly developing larger, more technically complex projects across various sectors. To meet our clients’ needs, we must continuously update existing, and develop new technology for our construction services. In addition, rapid and frequent technology and market demand changes can often render existing technologies and equipment obsolete, requiring substantial new capital expenditures and/or write downs of assets. Our failure to anticipate or to respond adequately to changing technical, market demands and/or client requirements could adversely affect our business and financial results.

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Our results of operations could be adversely affected by any disputes with our employees. As of September 30, 2007, we employed a multinational work force of 6,084 employees (including temporary job appointees and trainees) plus a significant number of contract labourers. The number of contract labourers we employ varies from time to time based on the nature and extent of work contracted to independent contractors. While we believe that we maintain satisfactory relationships with our employees and contract labour, there can be no assurance that we will not experience future disruptions to our operations due to disputes or other problems with our work force, which may adversely affect our business and results of operations. All contract labourers engaged at our facilities are assured minimum wages that are fixed by local government authorities. Any upward revision of wages or other benefits required to be paid to workers, or the unavailability of the required number of contract labourers, may adversely affect our business and results of our operations. Although we endeavour to provide adequate insurance coverage and a safe working environment to our employees and workers, we cannot rule out the possibility of future industrial accidents. A successful claim brought against us in excess of available insurance coverage may have a material adverse effect on our financial position. Members of our Promoter group have majority control in the Company, which will enable them to influence the outcome of matters submitted to shareholders for approval. As of November 16, 2007, members of the Promoter group, comprising 17 Promoters and directors, beneficially own approximately 51.55% of our Share capital. See “Capitalisation and Indebtedness” and “Organisational Structure and Major Shareholders”. As a result, the Promoter group has the ability to control our business including matters relating to the timing and distribution of dividends and the election or termination of appointment of our officers and directors. This control could delay, defer or prevent a change in control of the Company, impede a merger, consolidation, takeover or other business combination involving the Company, or discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company even if it is in the Company’s best interest. In addition, for so long as the Promoter group continues to exercise significant control over the Company, it may influence the material policies of the Company in a manner that could conflict with the interests of our other shareholders. The Promoter group may have interests that are adverse to the interests of our other shareholders and may take positions with which we or our shareholders do not agree. Failure by us to recover adequately on claims raised against clients could have a material adverse effect on our expected profitability. Project claims include claims brought by us or our clients, typically in relation to disputes regarding amounts claimed by us, arising from time overruns or changes in the initial scope of work or project specifications. As per the applicable accounting standard, and as noted in our significant accounting policies, claims and counterclaims in our contracts relating to customers, including those under arbitration, are not accounted for until their final disposition. Other contract claims (not subject to arbitration or other proceedings) are recognized when there is reasonable certainty as to their recoverability. Accordingly, our financial statements do not recognise pending project claims. However, as a risk generally inherent to the construction industry, we may use significant additional working capital in projects with time and cost overruns, pending the resolution of the relevant project claims. These claims are often subject to lengthy arbitration or litigation proceedings, which may involve associated costs. Such project claims may continue to arise in the future. Failure to resolve these claims amicably, favourably, or within a reasonable

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time or at all, may result in our profits being different from those originally estimated and may result in our experiencing reduced profitability or losses on projects. See “Legal Proceedings - Project-related claims” and “Financial Statements”. There are certain legal proceedings against our Directors, Promoters, Officers and the Company. Our Directors, Promoters, Officers and the Company are parties to certain legal proceedings initiated by or against such parties. These proceedings are pending at different levels of adjudication before various courts or authorities. For further details on these proceedings, see “Legal Proceedings.” We have entered into certain transactions with related parties. We have entered into certain transactions with related parties. These transactions or any future transactions with our related parties could potentially involve conflicts of interest. See “Financial Statements- Schedule 19- Notes on Accounts- Related party disclosure pursuant to Accounting Standard 18 issued by The Institute of Chartered Accountants of India.” We have not entered into any definitive agreements to utilise a substantial portion of the net proceeds of this Issue. We intend to use the net proceeds of this Issue for capital expenditure, additional working capital requirements, to execute our order book and to finance our new business initiatives and strategic alliances. See “Use of Proceeds.” We have not entered into any definitive agreements to utilise the net proceeds for investment in capital equipment, and our capital expenditure plans are based on management estimates and have not been appraised by any bank or financial institution or any other independent organisation. In addition, our capital expenditure plans are subject to a number of variables, including possible cost overruns and changes in management’s views of the desirability of current plans, among others. Pending utilisation of the proceeds of this Issue for the purposes described in this Preliminary Placement Document, we may temporarily invest the funds in creditworthy liquid instruments, including money market mutual funds and deposits with banks and corporates. Such investments would be in accordance with the investment policies or investment limits approved by our Board from time to time. We intend to enter into new businesses in which we have little or no experience. As part of our growth strategy, we may in the future offer services in which we have little or no experience in order to develop new expertise and win business. For example, currently we are considering providing onshore oil drilling services, engaging in real estate development and providing certain coal mining drilling services. We are also considering bidding on more EPC contracts. Operating in new business areas may expose us to unanticipated risks, including financial, management and operational strain, due to our limited experience in the area. There is no assurance that we will be able to effectively manage our operations in any future projects of this nature, in a manner which will allow us to recover our costs and to obtain a profit.

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The “Simplex” name is generic and cannot be registered as a trademark. “Simplex” is a generic name that cannot be protected by trademark registration in India and is used by other companies inside and outside the construction industry. Another unrelated entity may use the “Simplex” name and dilute or diminish any goodwill we have built in the name. This could harm our reputation and negatively affect our business. Increased cost or unavailability of equipment or fuel costs may adversely affect our results of operations. Material costs constitute a significant part of our operating expenses. Our construction operations require various bulk construction materials including steel, cement, sand and aggregate. At times there is an artificial scarcity of raw materials. Transport of these raw materials is subject to various conditions beyond our control, including poor roads or strikes. Our ability to pass on increased costs may be limited under fixed price contracts with limited price escalation provisions. Further, our customers may dispute the increased costs. Fuel costs for operating our construction and other equipment also constitute a significant part of our operating expenses, especially in the case of our infrastructure project contracts. Unanticipated increases in equipment or fuel costs not taken into account in our bids may adversely affect our results of operations. An increase or decrease or withdrawal of tax benefits and other incentives by the GoI will have an impact on our net income. Any increase in our effective tax rate as a result of the expiration of tax benefits. Changes in applicable tax laws or the actions of applicable income tax or other regulatory authorities could materially reduce our profitability. Furthermore, any significant increase in our future effective tax rates could adversely impact net income for future periods. Any disallowance by the tax authorities of tax benefits under section 80 IA of Income Tax Act, 1961 could have an adverse effect on our financial position. The Company is eligible for benefits under section 80 IA of the Income Tax Act, 1961, except in cases where the Company enters into a works contract (such as it becomes a sub-contractor) with an eligible undertaking or an enterprise under section 80 IA (4) of the Income Tax Act, 1961. The tax impact of the benefit availed up to June 30, 2007 amounts to Rs.181.71 million. Any disallowance by the tax authorities of such benefits could have an adverse effect on our financial position. We do not operate our business through subsidiaries to isolate risks and liabilities. We do not operate our business through subsidiaries. Although our operations are geographically dispersed across diverse sectors, we do not segregate potential liabilities by operating through subsidiaries in each location or by sector. Thus, all of our assets, regardless of location or type, are vulnerable to claims by our creditors. Therefore, if a creditor enforces a judgment against us, this could have an adverse effect on our overall results of operations and financial position. Our inability to maintain our credit rating could have a materially adverse effect on our financial position. We received a PR1+ credit rating for our issue of commercial paper and for a short term debt programme from Credit Analysis & Research Ltd. (“CARE”). In making its rating, CARE noted,

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among other things, our long and satisfactory track record for over eight decades, engineering capabilities and experience in executing high value projects. The rating is constrained, however, by our relatively longer than average collection period and intense competition in the industry. Maintaining a satisfactory order book position and margin, in the wake of increasing competition, and regular receipt of contract proceeds are CARE’s key rating sensitivities. If we are unable to maintain our PR1+ credit rating, our interest rates may increase, which may have a materially adverse effect on our access to indebtedness and results of operations. Our revenues and profits are difficult to predict and can vary significantly from period to period, which could cause the price of our Equity Shares to fluctuate. Revenues from construction work vary and are dependent on various factors such as the current stage and size of the project, the expected completion dates, increases in the price of raw materials, shortages of raw materials, delays in execution of the contracts, and others. The anticipated completion dates for our projects, including those set forth in this Preliminary Placement Document, are estimates based on current expectations and market conditions, and could change significantly, thereby affecting our income. The combination of these factors may result in significant variations in our revenues and profits. External Risk Factors Demand for construction services in India depends on domestic, regional and global economic growth. The construction business is dependent on the level of domestic, regional and global economic growth and development and is directly linked to consumer spending on fixed assets. The rate of growth of India’s economy and consequently the demand for construction services in India may fluctuate over the years. During periods of strong growth, demand for such services may grow at a rate as great as, or even greater than, that of the GDP. Conversely, during periods of slow GDP growth, such demand may exhibit slow or even negative growth. There can be no assurance that future fluctuations in economic or business cycles, or other events that could influence GDP growth, will not have a material adverse effect on our business and results of operations. We are subject to risks arising from interest rate fluctuations, which could adversely affect our business, financial condition and results of operations. Changes in interest rates could significantly affect our financial condition and results of operations. If the interest rates for our existing or future borrowings increase significantly, our cost of servicing such debt will increase. We borrow funds on both fixed and floating interest rates. The majority of our borrowed funds are subject to floating interest rates. This may adversely affect our results of operations, planned capital expenditures and cash flows. Because we make sales and incur expenses in multiple currencies, exchange rate movements may cause us to incur losses when hedging on our exchange rate exposure is not sufficient. Changes in currency exchange rates influence our results of operations. We report results in our financial statements in Rupees, while portions of our revenues and expenses are denominated in currencies other than Rupees, most significantly Qatari Rial and UAE Dirham. To the extent that our income and expenditure are not denominated in the same currency, adverse exchange rate fluctuations could cause some of our costs to increase more than the proportionate revenues on a given contract.

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Although we closely follow our exposure to foreign currencies on a contract-by-contract basis and occasionally enter into hedging transactions in an attempt to reduce the risks of currency fluctuations, we do not have a formal hedging policy and these activities are not always sufficient to protect us against incurring potentially large losses if currencies fluctuate significantly. Moreover, our ability to hedge during the period between our bid and the award of the contract is also limited. Certain of our contracts may contain covenants including compliance with environmental laws and regulations. Any failure on our part to comply with applicable environmental laws and regulations in our contracts could have an adverse effect on our financial condition. Certain of our contracts may contain covenants that require us to comply with environmental protection laws and regulations, which are complex and stringent. Significant fines and penalties may be imposed for non-compliance with environmental laws and regulations. In addition to potential liabilities that may be incurred in satisfying these requirements, we may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances. There can be no assurance that we will not become involved in future litigation or other proceedings or be held responsible in any such future litigation or proceedings relating to safety, health and environmental matters in the future, the costs of which could be material. Clean-up and remediation costs, as well as damages, other liabilities and related litigation, could adversely affect our business, financial condition and results of operations. Our operations are sensitive to weather conditions. We have business activities that could be materially and adversely affected by severe weather, particularly in Qatar and the UAE. Repercussions of severe weather conditions may require us to evacuate personnel or curtail services, damage a portion of our fleet of equipment resulting in the suspension of operations, damage our facilities, prevent us from delivering materials to our jobsites in accordance with contract schedules or generally reduce our productivity. Our operations are also adversely affected by difficult working conditions and extremely high temperatures during summer months and during the Indian monsoon season which restrict our ability to carry on construction activities and fully utilise our resources. Since we record revenues on the percentage of completion method and revenues are not recognised until there is reasonable progress on a contract, revenues recorded in the first half of our financial year between April and September are traditionally less compared to revenues recorded during the second half of our financial year. During periods of curtailed activity due to adverse weather conditions, we may continue to incur operating expenses, but our revenues from operations may be delayed or reduced. Natural calamities and force majeure events may have an adverse impact on our business. Constructions of infrastructure projects involve a number of hazards including earthquakes, flooding, tsunamis and landslides. Natural disasters may cause significant interruption to our operations, disruption to our project sites and damage to the environment that could have a material adverse impact on us. India has experienced natural calamities such as earthquakes, floods, drought and a tsunami in recent years. Prolonged spells of deficient or abnormal rainfall

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and other natural calamities could have an adverse impact on the Indian economy, which could adversely affect our business and the price of our Equity Shares. Our revenues are subject to a number of tax regimes and changes in the legislation governing the rules implementing them or the regulator enforcing them in any country could negatively and adversely affect our results of operations. We currently have operations and staff in four countries and, as a result, we are subject to the jurisdiction of a number of tax authorities and regimes. The revenues recorded and income earned in these various jurisdictions are taxed on differing bases. The final determination of our tax liabilities involves the interpretation of local tax laws, tax treaties and related authorities in each jurisdiction as well as the significant use of estimates and assumptions regarding the scope of future operations and results achieved and the timing and nature of income earned and expenditures incurred. Changes in the operating environment, including changes in tax law and currency/repatriation controls, could affect the determination of our tax liabilities for any given tax year. Taxes and other levies imposed by the Central or state governments in India that affect our industry include customs duties, excise duties, sales tax, service tax, income tax and other taxes, duties or surcharges introduced on a permanent or temporary basis from time to time. The Central and state tax scheme in India is extensive and subject to change from time to time. Any adverse changes in any of the taxes levied by the Central or state governments may adversely affect our competitive position and profitability. The non-availability of these tax incentives could adversely affect our financial condition and results of operations. We may undertake strategic acquisitions or investments, which may prove to be difficult to integrate and manage or may not be successful. In the future, we may consider making strategic acquisitions of other engineering and/or construction companies whose resources, capabilities and strategies are complementary to and are likely to enhance our business operations in the different geographic regions that we operate in. It is also possible that we may not identify suitable acquisition or investment candidates, or that if we do identify suitable candidates, we may not complete those transactions on terms commercially acceptable to us or at all. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may adversely affect our competitiveness or our growth prospects. If we acquire another company we could face difficulty in integrating the acquired operations. In addition, the key personnel of the acquired company may decide not to work for us. These difficulties could disrupt our ongoing business, distract our management and employees and increase our expenses. There can be no assurance that we will be able to achieve the strategic purpose of such acquisition or operational integration or our targeted return on investment. Any further issuance of Equity Shares by the Company or sales of our Equity Shares by any of our significant shareholders may adversely affect the trading price of the Equity Shares offered hereunder. Any future issuance of Equity Shares by the Company could dilute the shareholding of holders of the Equity Shares offered hereunder. Any such future sales of Equity Shares by any of our significant shareholders may also adversely affect the trading price of the Equity Shares, and could affect our ability to raise capital through an issue of our securities. In addition, any

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perception by investors that such issuances or sales might occur could also affect the trading price of the Equity Shares. For further information relating to Shares that are locked up, please see “Organization Structure and Major Shareholders.” Statistical and financial industry data in this Preliminary Placement Document may be incomplete or unreliable. We have not independently verified data from industry publications and other third party sources and therefore cannot assure you that they are complete or reliable. Such data may also be produced on different bases from those used in other countries. Therefore, discussions of matters relating to India, its economy in this Preliminary Placement Document are subject to the caveat that the statistical and other data upon which such discussions are based may be incomplete or unreliable. In addition, internal company reports have not been verified by independent sources and may be incomplete or unreliable. Risks Related to Investments in an Indian Company A slowdown in economic growth in India could cause our business to suffer. Our performance and growth are dependent on the health of the Indian economy. The economy could be adversely affected by various factors such as political or regulatory action, including adverse changes in liberalisation policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, commodity and energy prices and various other factors. Any slowdown in the Indian economy may adversely impact our business and financial performance and the price of our Equity Shares. Political instability or changes in the GoI could delay the liberalisation of the Indian economy and adversely affect economic conditions in India generally and our business in particular. Our operations are primarily located in India. Our business, and the market price and liquidity of the Equity Shares, are therefore directly affected by the Indian market for our products, which in turn may be affected by foreign exchange rates and controls, interest rates, changes in government policy, taxation, social and civil unrest and other political, economic or other developments in or affecting India. Since 1991, successive Indian governments have pursued policies of economic liberalisation, including significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian Central and state governments in the Indian economy as producers, consumers and regulators has remained significant. The present government, formed in May 2004, has announced policies and taken initiatives that support the continued economic liberalisation policies that have been pursued by previous governments. We cannot assure you that these liberalisation policies will continue in the future. The current government is a coalition of several parties, the withdrawal of one or more of which could cause instability. The rate of economic liberalisation could change, and specific laws and policies affecting construction companies, foreign investment, currency exchange and other matters affecting investment in our securities could change as well. Any change in India’s economic liberalisation and deregulation policies could adversely affect business and economic conditions in India generally and our business in particular.

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Terrorist attacks or war or conflicts involving India or other countries could adversely affect business sentiment and the financial markets and adversely affect our business. Incidents such as the terrorist attacks on New York, Washington D.C., Bali, Indonesia, Madrid, Spain, London, England, New Delhi and Hyderabad, India may adversely affect global equity markets and economic growth as well as the Indian economy and stock markets. Such acts negatively impact business and economic sentiment, which could adversely affect our business and profitability. Also, India has from time to time experienced, and continues to experience, social and civil unrest and hostilities with neighboring countries. Armed conflicts, particularly between India and any of its neighbouring countries, could disrupt communications and adversely affect the Indian economy. Such events could also create a perception that investments in Indian companies involve a higher degree of risk. This, in turn, could have a material adverse effect on the market for securities of Indian companies, including the Equity Shares. The consequences of any armed conflicts are unpredictable, and we may not be able to foresee events that could have an adverse effect on our business. Investors may have difficulty enforcing judgments against us or our management. The enforcement by investors of civil liabilities, including the ability to effect service of process and to enforce judgments obtained in courts outside of India may be affected adversely by the fact that we are incorporated under the laws of the Republic of India and all of our executive officers and directors reside in India. Nearly all of our assets and the assets of our executive officers and directors are also located in India. As a result, it may be difficult to effect service of process upon us and any of these persons outside of India or to enforce outside of India judgments obtained against us and these persons in courts outside of India. Section 44A of the Indian Code of Civil Procedure, 1908, as amended, provides that where a foreign judgment has been rendered by a court in any country or territory outside India, which the Government has by notification declared to be a reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in India. The United Kingdom has been declared by the Government to be a reciprocating territory for the purposes of Section 44A. However, the United States has not been declared by the Government to be a reciprocating territory for the purposes of Section 44A. A judgment of a court in the United States may be enforced in India only by a suit upon the judgment, subject to Section 13 of the Indian Code of Civil Procedure, 1908, and not by proceedings in execution. The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. Generally, there are considerable delays in the disposal of suits by Indian courts. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is brought in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it viewed the amount of damages awarded as excessive or inconsistent with Indian practice. A party seeking to enforce a foreign judgment in India is required to obtain prior approval from the RBI under FEMA to repatriate any amount recovered. See “Enforcement of Civil Liabilities.”

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A third party could be prevented from acquiring control of us because of the anti-takeover provisions under Indian law. There are provisions in Indian law that may discourage a third party from attempting to take control over our Company, even if a change in control would result in the purchase of your Equity Shares at a premium to the market price or would otherwise be beneficial to you. These provisions may discourage or prevent certain types of transactions involving an actual or threatened change in control of us. For more information, see “The Indian Securities Market - Takeover Code.” Significant differences exist between Indian GAAP and IFRS, which may be material to the financial information prepared and presented in accordance with Indian GAAP contained in this Preliminary Placement Document. As stated in the reports of our auditors included in this Preliminary Placement Document, the financial statements included in this Preliminary Placement Document are prepared and presented in conformity with Indian GAAP and no attempt has been made to reconcile any of the information given in this Preliminary Placement Document to any other principles or to base it on any other standards. Indian GAAP differs from accounting principles and auditing standards with which prospective investors may be familiar in other countries, such as IFRS or U.S. GAAP. Significant differences exist between Indian GAAP, IFRS and U.S. GAAP, which may be material to the financial information prepared and presented in accordance with Indian GAAP contained in this Preliminary Placement Document. We have made no attempt to quantify the effect of any of those differences. In making an investment decision, investors must rely upon their own examination of us, the terms of this Issue and the financial information contained in this Preliminary Placement Document. Any downgrading of India’s debt rating by an independent agency may harm our ability to raise debt financing. Any adverse revisions to India’s credit ratings for domestic and international debt by international rating agencies may adversely affect our ability to raise additional financing and the interest rates and other commercial terms at which such additional financing is available. This could have a material adverse effect on our capital expenditure plans, business and financial performance. Risks Relating to Investment in our Equity Shares An active market for our Equity Shares may not be sustained, which may cause the price of our Equity Shares to fall. While our Equity Shares are traded on the BSE, NSE and CSE, there can be no assurance regarding the continuity of the existing active or liquid market for our Equity Shares, the ability of investors to sell their Equity Shares or the prices at which investors may be able to sell their Equity Shares. In addition, the market for debt and equity securities in emerging markets has been subject to disruptions that have caused volatility in the prices of securities similar to our Equity Shares. There can be no assurance that the market for the Equity Shares offered hereunder will not be subject to similar disruption. Any disruption in these markets may have an adverse effect on the market price of our Equity Shares.

27

Conditions in the Indian securities markets may affect the price or liquidity of our Equity Shares. Securities markets in India are smaller and more volatile than securities markets in more developed economies. The Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. The BSE and the NSE halted trading on the exchanges in view of the sharp fall in securities prices. For example, on May 22, 2006 the stock exchanges halted trading for one hour after indices on these exchanges fell more than 10%. In addition, the governing bodies of the Indian stock exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. Future fluctuations in the Indian securities markets could have a material, and unpredictable, adverse effect on the price of our Equity Shares. Financial instability in other countries, particularly emerging market countries, could disrupt our business and affect the price of our Equity Shares. Although economic conditions are different in each country, investors’ reactions to developments in one country may have an adverse effect on the securities of companies in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets may cause increased volatility in Indian financial markets and the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy, including the movement of exchange rates and interest rates in India. Any financial disruption could have an adverse effect on our business, future financial performance, shareholders’ equity and the price of our Equity Shares. There may be less company information available regarding Indian securities markets compared to information available regarding securities markets in developed countries. The level of regulation and monitoring of the Indian securities markets and the activities of investors, brokers and other participants and markets is not as transparent in India as it is in some other developed economies, although SEBI and the Indian stock exchanges are responsible for improving disclosure and other regulatory standards for the Indian securities markets. SEBI has issued regulations and guidelines on disclosure requirements, insider trading and other matters. There may, however, be less publicly available information about Indian companies than is regularly made available by public companies in other more developed economies. Because our Equity Shares are quoted in Indian rupees in India, investors may be subject to potential losses arising out of exchange rate risk on the Indian rupee and risks associated with the conversion of Indian rupee proceeds into foreign currency. Investors are subject to currency fluctuation risk and convertibility risk since the Equity Shares are quoted in Indian rupees on the Indian stock exchanges on which they are listed. Dividends on the Equity Shares will also be paid in Indian rupees. Investors that seek to convert the Indian rupee proceeds of a sale of Equity Shares into foreign currency and export the foreign currency will need to obtain the approval of the RBI for each such transaction. In addition, investors that seek to sell Equity Shares will have to obtain approval from the RBI, unless the sale is made on a stock exchange or in connection with an offer made under regulations regarding takeovers. Holders of Indian rupees in India may also generally not purchase substantial amounts of foreign currency without general or special approval from the RBI.

28

The volatility of the Indian rupee against the U.S. dollar and other currencies subjects investors who convert funds into Indian rupees to purchase our Equity Shares to currency fluctuation risks. As measured by the RBI’s reference rate, the Indian rupee lost approximately 12.8% of its value against the U.S. dollar from September 1999 to May 2002, depreciating from Rs. 43.47 per U.S. dollar on September 1, 1999 to Rs. 49.03 on May 31, 2002 before appreciating to Rs. 45.39 on May 28, 2004. Most recently, the Indian rupee has appreciated significantly against the U.S. dollar. As of October 30, 2007, the Indian rupee was at Rs. 39.40 per U.S. dollar. There is no guarantee that the Equity Shares will be listed on the BSE, NSE and CSE in a timely manner or at all, and any trading closures at the Stock Exchanges may adversely affect the trading price of our Equity Shares. In accordance with Indian law and practice, permission for listing of the Equity Shares will not be granted until after those Equity Shares have been issued and allotted. Approval will require all other relevant documents authorizing the issuing of Equity Shares to be submitted. There could be a failure or delay in listing the Equity Shares on the Stock Exchanges. Any failure or delay in obtaining the approval would restrict your ability to dispose of your Equity Shares. The regulation and monitoring of Indian securities markets and the activities of investors, brokers and other participants differ, in some cases significantly, from those in Europe and the U.S. The Stock Exchanges have in the past experienced problems, including temporary exchange closures, broker defaults, settlement delays and strikes by brokerage firm employees, which, if continuing or recurring, could affect the market price and liquidity of the securities of Indian companies, including the Equity Shares, in both domestic and international markets. A closure of, or trading stoppage on, any of the Stock Exchanges could adversely affect the trading price of the Equity Shares. Historical trading prices, therefore, may not be indicative of the prices at which the Equity Shares will trade in the future. You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares. Capital gains arising from the sale of shares in an Indian company are generally taxable in India. Any gain realised on the sale of listed equity shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in India if the Securities Transaction Tax (“STT”) has been paid on the transaction. The STT will be levied on and collected by a domestic stock exchange on which equity shares are sold. Any gain realised on the sale of equity shares held for more than 12 months to an Indian resident, which are sold other than on a recognised stock exchange and as result of which no STT has been paid, will be subject to capital gains tax in India. Further, any gain realised on the sale of listed equity shares held for a period of 12 months or less will be subject to capital gains tax in India. For more information, see “Taxation”. Capital gains arising from the sale of our Equity Shares will be exempt from tax in India in cases where such exemption is provided under the tax treaty between India and the country of which the seller is a resident. Generally, Indian tax treaties do not limit India’s ability to impose tax on capital gains. As a result, residents of such countries may be liable for tax in India, as well as in their own jurisdictions on gain upon a sale of our Equity Shares.

29

MARKET PRICE INFORMATION Source: NSE and BSE Websites The shares of the Company have been listed on CSE, BSE and NSE (the Stock Exchanges) since April 5, 1993, April 21, 1993 and March 9, 2004, respectively. The tables below set forth, for the periods indicated, the high and low closing prices and the average daily trading volume on BSE and NSE for the Company’s shares. As per intimation dated November 28, 2007 from CSE, the last closing price of the Equity Shares on CSE was Rs. 608.45 on November 26, 2007. Since trading of the Equity Shares on CSE is sporadic and far between, market price information for the past six months and last three years with respect to CSE has not been stated. As of October 31, 2007, 42,872,330 Equity Shares of face value of Rs. 2 each were issued and subscribed and 630,000 Equity Shares of face value of Rs. 2 each remain as forfeited. The Company does not have any issued and outstanding convertible securities. However, on October 4, 2007, the Board allotted 5.50 million warrants to the Promoter and Promoter group, entitling the warrant holders with an option to apply for and be allotted one fully paid up equity share at par value of Rs. 2 each against one warrant. [●] Equity Shares will be issued and outstanding immediately after the Issue. The High, Low and Average market prices of shares of the Company during the preceding three fiscal years, are provided in the format below:

NSE

* Average of the daily closing prices ** Pursuant to the approval of the Shareholders at the Annual General Meeting held on August 18, 2006, the authorized share capital

of the Company stands increased and reclassified with denomination of shares being subdivided into Equity Shares of Rs.2 each. Accordingly, the Equity Shares of the Company of par value of Rs.10 each were subdivided into Equity Shares of Rs.2 each, on September, 20, 2006.

Year ending

March 31

High (Rs.)

Date of High

No. of Equity Shares traded on date of high

Total Volume

of Equity Shares traded on date of high (Rs. in

million)

Low (Rs.)

Date of Low

No. of Equity Shares traded

on date of

low

Total Volume

of Equity Shares traded on date of low (Rs. in

million)

Closing Price (Rs.)

Average price

for the year (Rs.)

2005 526.70 11/03/2005 7439 3.82 65.60 13/07/2004 400 0.03 494.90 180.06

2006 2050.00 21/03/2006 712 1.43 466.00 18/04/2005 1947 0.93 1897.65 1108.28

2007**

Before Subdivision

2780.00 03/05/2006 2175 5.82 1055.00 25/07/2006 3008 3.40 1826.20 1896.75

After Subdivision

414.90 29/11/2006 3369917 1364.72 276.00 07/03/2007 8620 2.46 362.00 385.48

30

BSE

* Average of daily closing prices ** Pursuant to the approval of the Shareholders at the Annual General Meeting held on August 18, 2006, the authorized

share capital of the Company stands increased and reclassified with denomination of shares being subdivided into Equity Shares of Rs.2 each. Accordingly, the Equity Shares of the Company of par value of Rs.10 each were subdivided into Equity Shares of Rs.2 each, on September, 20, 2006.

The high and low closing prices recorded on BSE and NSE and the number of Equity Shares traded on the days such high and low prices were recorded during the last six months are provided in the format below:

NSE

* Average of the daily closing prices

Year ending

March 31

High (Rs.)

Date of High


on date of high

Total Volume


million)

Low (Rs.)

Date of Low


on date of

low

Total Volume


million)

Closing Price (Rs.)

Average price for the year (Rs.)*

2005 531.95 09/03/2005 17673 8.93 65.00 26/07/2004 577 0.04 502.40 193.92

2006 2045.95 14/03/2006 6937 13.91 470.00 20/04/2005 1892 0.91 1892.95 1150.32

2007**

Before Subdivision

2725.00 02/05/2006 6956 18.29 1065.00 24/07/2006 1218 1.33 1834.50 1916.20

After Subdivision

415.00 29/11/2006 87271 35.33 270.95 09/03/2007 3507 1.06 362.40 392.44

Total volume of Equity Shares

traded in the month

Month High (Rs.)

Date of High


on date of high

Total Volume


million)

Low (Rs.)

Date of Low


on date of

low

Total Volume


million)

Average price for

the month (Rs.)*

(In number)

(Rs. in million)

June 2007 388.90 14/06/2007 107193 40.64 317.05 07/06/2007 7190 2.37 354.71 521962 191.55

July 2007 414.95 13/07/2007 67409 26.77 343.00 30/07/2007 8765 3.19 382.17 341975 132.56

August 2007

415.00 03/08/2007 23622 9.09 330.00 03/08/2007 23622 9.09 359.83 249835 90.50

September 2007

438.75 28/09/2007 18429 7.82 350.15 03/09/2007 3730 1.35 384.68 724400 289.21

October 2007

613.00 31/10/2007 102904 59.37 423.00 03/10/2007 35200 15.16 485.58 969982 484.38

November 2007

668.85 22/11/2007 17887 10.88 511.00 13/11/2007 7505 4.14 587.22 912869 540.05

31

BSE

* Average of the daily closing prices The closing prices of our Equity Shares on NSE and BSE on August 1, 2007, the trading day immediately following the day on which the resolution of the Board to approve this Issue was passed, were Rs. 375.55 and Rs. 384.60 per Equity Share of par value Rs. 2 each, respectively.

Total volume of Equity Shares

traded in the month

Month High (Rs.)

Date of High

No. of Equity Shares traded on date of high

Total Volume


million)

Low (Rs.)

Date of Low

No. of Equity Shares traded on date of low

Total Volume


million)

Average price

for the month (Rs.)*

(In number)

(Rs. in Million)

June 2007 388.90 14/06/2007 38010 14.41 322.00 05/06/2007 658 0.22 354.42 241047 88.40

July 2007 414.90 13/07/2007 19499 7.72 340.05 30/07/2007 10364 3.76 381.96 154182 59.14

August 2007

400.50 03/08/2007 9675 3.72 330.00 17/08/2007 5437 1.91 360.54 135006 48.92

September 2007

440.00 27/09/2007 20899 8.90 354.50 03/09/2007 2951 1.07 384.74 499763 199.01

October 2007

608.90 31/10/2007 106600 62.15 410.00 17/10/2007 209987 105.91 487.24 977757 491.04

November 2007

658.90 20/11/2007 12145 7.83 512.05 12/11/2007 23911 13.18 588.33 432003 258.98

32

USE OF PROCEEDS The total proceeds of the Issue will be Rs. [●]. After deducting the Issue expenses of approximately Rs. [●], the net proceeds of the Issue will be approximately Rs. [●]. Subject to compliance with applicable laws and regulations, we intend to use the net proceeds of the Issue primarily for capital expenditure, additional working capital requirements to execute our existing and future order book and for general corporate purposes. In accordance with the decision of our Board, our management will have flexibility in deploying the proceeds received by us from the Issue. Pending utilization for the purpose described above, we intend to temporarily invest funds in creditworthy instruments, including money market mutual funds and deposits with banks and corporates. Such investments would be in accordance with the investment policies approved by the Board from time to time.

33

CAPITALISATION AND INDEBTEDNESS The following table sets forth the Company’s capitalisation and total debt as of June 30, 2007 and as adjusted to give effect to the Issue pursuant to this Preliminary Placement Document. This table should be read in conjunction with the Company’s financial statements as of June 30, 2007 and the related notes and other financial information contained elsewhere in this Preliminary Placement Document.

(Rs. in million)

As at June 30, 2007

As adjusted for the issue

Loan Funds Secured Loans 3,190.93 3,190.93 Unsecured Loans 4,726.10 4,726.10Total Debts (A) 7,917.03 7,917.03 Shareholders' Fund Authorised Capital 374,900,000 Equity Shares of par value Rs. 2 each 749.80 749.8020,000 15% Cumulative Preference Shares of par value Rs.10 each 0.20 0.20Issued and Subscribed and Paid up Equity Share Capital Issued and Subscribed and Paid up Equity Share Capital, Par value Rs. 2 each 86.13 [●]Reserves and Surplus 2,671.21 [●]Total Shareholders' Fund (B) 2,757.34 [●]Total Capitalisation (A+B) 10,674.37 [●] The members, at the Annual General meeting held on September 19, 2007, approved the issue of 5.50 million warrants to the Promoter/ Promoter group on preferential basis entitling the warrant holders with an option to apply for and be allotted one fully paid up Equity Share of par value of Rs.2 each against one warrant (“Warrants”) as per Chapter XIII of the SEBI Guidelines, 2000. On October 4, 2007, the Board allotted 5.50 million Warrants to RBS Credit and Financial Developments Private Limited, a company belonging to the Promoter group at a price of Rs. 401 per Warrant. As per the SEBI Guidelines, RBS Credit and Financial Developments Private Limited paid 10% of the issue price i.e. Rs. 220.55 million and balance 90% i.e. Rs. 1,984.95 million is to be paid on conversion of the said Warrants to Equity Shares. Such option has to be exercised by the Warrant holders within 18 months from the date of allotment of Warrants. In the event the option to exercise the Warrant is not exercised, the amount paid shall stand forfeited.

34

DIVIDENDS AND DIVIDEND POLICY The Equity Shares to be issued in connection with this Issue shall qualify for any dividend that is declared in respect of the financial year in which they have been allotted. The Company does not have a formal dividend policy. Amounts paid as dividends in the past are not necessarily indicative of a dividend policy or dividend amounts, if any, in the future. The following table sets forth the aggregate number of outstanding shares entitled to dividends, as well as cash dividend per share paid on the Equity Shares during each of the fiscal years indicated:

(Rs. in million) Fiscal 2007 Fiscal 2006 Fiscal 2005 Issued, subscribed and paid-up Equity Share Capital

86.13 86.13

73.28

No. of shares*

42,872,330 8,574,466

7,289,466

Dividend (%)

80 50

45

Dividend

68.59 42.87

32.80

Dividend Tax

11.66 6.01 4.63

* Pursuant to the approval of the shareholders at the Annual General Meeting dated August 18, 2006, the authorised share capital of the Company was increased and reclassified with denomination of shares being divided into Equity Shares of Rs. 2 each. Accordingly, the Equity Shares of the Company of par value Rs. 10 each were sub-divided into Equity Shares of Rs. 2 each, on September 20, 2006. The figures shown in the above table, prior to this date are based on Equity Share par value Rs. 10 each.

35

SELECTED FINANCIAL DATA The following selected financial information is derived from our financial statements as of and for the years ended March 31, 2005, March 31, 2006 and March 31, 2007. The financial statements have been prepared in accordance with Indian GAAP and the Companies Act. The selected financial and operating information presented below should be read in conjunction with the financial statements, and the notes thereto included in “Financial Statements.”

36

SIMPLEX INFRASTRUCTURES LIMITED

BALANCE SHEET AS AT MARCH 31, 2007, MARCH 31, 2006 AND MARCH 31, 2005

(Rupees in million) As at March 31 2007 2006 2005

SOURCES OF FUNDS Shareholders' Fund Share Capital 86.13 86.13 73.28 Reserves and Surplus 2,530.71 2,104.14 848.78 Loan Funds Secured Loans 2,829.35 1,073.46 1,016.33 Unsecured Loans 4,047.43 3,378.08 2,526.60 Deferred Tax Liability (Net)

259.89 201.70 183.88

TOTAL 9,753.51 6,843.51 4,648.87APPLICATION OF FUNDS Fixed Assets Gross Block 4,304.55 2,904.96 1,893.65 Less: Depreciation 913.88 682.34 561.15 Net Block 3,390.67 2,222.62 1,332.50 Capital Work in Progress 228.29 47.50 111.07 3,618.96 2,270.12 1,443.57 Investments 52.62 3.07 0.17 Current Assets, Loans & Advances Inventories 2,851.89 1,800.53 1,561.38 Sundry Debtors 8,500.40 5,378.64 3,948.78 Cash and Bank Balances 424.84 444.86 231.62 Other Current Assets 408.14 445.51 291.75 Loans and Advances 1,706.82 783.06 585.77 13,892.09 8,852.60 6,619.30 Less: Current Liabilities & Provisions Liabilities 7,729.35 4,232.90 3,376.77 Provisions 80.81 49.38 37.40 7,810.16 4,282.28 3,414.17 Net Current Assets 6,081.93 4,570.32 3,205.13 TOTAL 9,753.51 6,843.51 4,648.87

37

SIMPLEX INFRASTRUCTURES LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007, MARCH 31, 2006 AND MARCH 31, 2005

(Rupees in million)

For the year ended March 31 2007 2006 2005

INCOME Contract Turnover 17,082.14 13,427.39 9,990.11Less: Contract Expenses (other than related depreciation / amortization ) (Net) 14,676.41

11,734.25 8,805.28

Profit on Contract Work done 2,405.73 1,693.14 1,184.83Company's Share in profit of Joint Venture 27.50 18.42 - Other Income 106.27 32.81 2.66 2,539.50 1,744.37 1,187.49EXPENSES Interest and Finance Charges (net) 632.25 403.56 330.60Amortisation of Tools 151.04 99.97 60.22Depreciation 240.04 129.33 88.96Other Administrative Expenses 814.55 530.48 363.66 1,837.88 1,163.34 843.44 PROFIT BEFORE TAX 701.62 581.03 344.05 PROVISION FOR TAXATION Current Tax 97.00 140.50 52.50Fringe Benefit Tax 9.31 6.27 -Provision for Taxation Written Back (credit) - - (4.00)PROFIT BEFORE DEFERRED TAX 595.31 434.26 295.55Deferred Tax 58.19 17.82 43.79PROFIT AFTER TAX 537.12 416.44 251.76Transfer from Debenture Redemption Reserve - 22.50 -Balance Brought Forward from Previous Year 753.49 413.43 224.30AMOUNT AVAILABLE FOR APPROPRIATIONS 1,290.61 852.37 476.06APPROPRIATIONS Transfer to General Reserve 60.00 50.00 25.20Proposed Dividend 68.59 42.87 32.80Tax thereon 11.66 6.01 4.63 140.25 98.88 62.63Year-end Surplus 1,150.36 753.49 413.43 1,290.61 852.37 476.06Basic and Diluted Earning Per Share (Rs.) 12.53 10.53 6.91

38

SIMPLEX INFRASTRUCTURES LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2007, MARCH 31, 2006 AND MARCH 31, 2005

(Rupees in million)

For the year ended March 31, 2007 2006 2005

A. CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before tax 701.62 581.03 344.05 Adjustments for: Depreciation 240.04 129.33 88.96 Interest and Finance charges (Net) 632.25 403.56 329.19 (Gain) /Loss on sale of Fixed Assets 2.04 7.04 (0.79) Bad Debts/Advances written off 58.55 10.49 12.13 Provision for Doubtful Debts, Advances and Deposits 9.46 14.86 12.47 Tools written off / amortised 151.04 99.97 60.22 Liability no longer required written back (11.33) (12.30) (1.10) Wealth Tax 0.28 0.20 0.19 Exchange (Gain)/ Loss (Net) 8.35 - - Effect of Change in Foreign Exchange Translation (18.87) 2.62 - 1,071.81 655.77 501.27 Operating Profit before Working Capital Changes 1,773.43 1,236.80 845.32 Adjustments for: Trade and other receivables (3,864.05) (1,669.18) (1,713.65) Inventories (1,202.39) (341.09) (702.69) Trade Payables 3,461.66 865.04 1,165.30 (1,604.78) (1,145.23) (1,251.04) Cash generated from / (used in) operations 168.65 91.57 (405.72) Direct Taxes( Paid) (216.21) (232.88) (23.81) Net Cash ( used in ) Operating Activities (47.56) (141.31) (429.53)

B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of Fixed Assets (1,834.40) (981.89) (373.22) Sale/Disposal of Fixed Assets 44.26 6.93 11.32 Purchase of investment (0.01) - - Interest Received 17.54 22.80 4.73 Investment in Joint Venture (20.81) (2.94) - Sale of investment - 0.05 0.50 Investment in Simplex Almoayyed WLL - (5.54) - - - Intercorporate Deposit 59.00 (29.20) (59.47) Net Cash ( used in ) Investing Activities (1,734.42) (989.79) (416.14) Carried Forward (1,781.98) (1,131.10) (845.67)

39

For the year ended March 31, 2007 2006 2005 Brought Forward (1,781.98) (1,131.10) (845.67)

C. CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issue of Share Capital - 901.44 - Partly Optionally Convertible Debenture Repayment - (30.00) (30.00) Proceeds from long term borrowings 1,103.65 474.11 196.58 Proceeds from short term borrowings 6,002.60 4,189.85 2,413.41 Repayment of long term borrowings (293.73) (243.22) (183.63) Repayment of short term borrowings (4,392.56) (3,483.50) (1,118.00) Interest Paid (607.39) (427.38) (336.53)

Dividend Paid [including Dividend Tax 6.01 (2006-4.63, 2005-1.40)] (48.82) (37.34) (12.71)

Net Cash flow from Financing Activities 1,763.75 1,343.96 929.12 Net Increase/(Decrease) in Cash and Cash Equivalents (18.23) 212.86 83.45

D. Exchange Differences on Translation of Foreign Currency

Cash and Cash Equivalents (1.79) 0.38 - (20.02) 213.24 83.45 Cash and cash equivalents Opening Balance 444.86 231.62 148.17 Cash and cash equivalents Closing Balance 424.84 444.86 231.62 (20.02) 213.24 83.45

40

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS You should read the following discussion of our financial condition and results of operations together with our financial statements as of and for the years ended 31 March 2005, 2006 and 2007, and the three months ended 30 June 2006 and 2007, including the notes thereto and reports thereon, which begin on page 137 of this Preliminary Placement Document. The financial statements included in this Preliminary Placement Document are prepared in accordance with Indian Generally Accepted Accounting Principles, which differs in certain material respects with U.S. GAAP and International Financial Reporting Standards. Overview We are a large and well-established construction company in India with experience in civil and structural construction services since 1924. Our service offerings include design, engineering and construction using reinforced concrete and cement (“RCC”) and steel, fittings and finishing work on structures, electro-mechanical fit outs, piling foundations, ground engineering and earth works. We provide both design-and-build and build-to-design services. We are present across various construction sectors, which include piling, industrial, power, urban infrastructure, buildings and housing, marine and roads, railways, and bridges. In addition to this varied sector portfolio, our operations cover many geographical areas throughout India, as well as overseas in Qatar and the United Arab Emirates (“UAE”). The demand for construction services flows from three streams - infrastructure, industrial and real estate construction. Our presence in multiple sectors caters to all three demand streams in India and overseas. While our power, marine, urban infrastructure and roads, railways and bridges business sectors cater to the infrastructure construction demand, the building and housing sector the real estate construction demand, the industrial sector the industrial construction demand, and the piling sector caters to the demand from all three demand streams. We have over 80 years of construction experience in India and abroad. We were originally incorporated as Simplex Concrete Piles (India) Limited on December 19, 1924 under the Companies Act, 1913 by Mr. R.A. Lancaster, an Englishman, who invented the piling system, and came under Indian management in 1947, when the Mundhra family took over the business. We went public with an initial public offering of shares in 1993. The Company changed its name to Simplex Infrastructures Limited in 2005. Our early operations focused on the construction of cast-in-situ driven pile foundations, which became referred to in the industry as the “Simplex system of piling” throughout India and South-East Asia. Initially, piling services of all types was our primary business. Over several decades, we expanded and developed our expertise across various sectors in the construction industry. We have completed and continue to undertake projects across sectors throughout India and in Dubai, the UAE and Doha, Qatar. As of June 30, 2007, 139 project sites were in process, of which 11 are located in Qatar and 3 are located in the UAE. Our client mix is diverse and comprises private and public institutions, including the National Highway Authority of India, domestic and international conglomerates and state governments. Our private sector clients include well known industrial groups in India across diverse manufacturing sectors, corporates and international engineering, procurement and construction (“EPC”) contractors.

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Our registered and head office is located in Kolkata. We organise and manage our business through our project offices, branch offices in Kolkata, Delhi, Mumbai and Chennai in India and overseas branch offices in Doha, Qatar and Dubai, UAE, employing as of September 30, 2007, 6,084 employees and hiring construction workers as needed at project sites. We enjoy several accreditations and awards. In 2003, we received ISO 9001:2000 quality management systems certification. In 2005, we were rated as the “Overall Best Managed Company (Small-Cap)” by Asia Money magazine. In 2006, we were nominated for “The Most Admired Infrastructure Company for Year 2005-2006” by in India by the English news channel NDTV Profit. In 2007, the Company was rated by the magazine Business World among the top five largest shareholder-value creators in the last five years in the mid-cap category in India. As of June 30, 2007, our order book was Rs.69,391.82 million comprising 184 contracts spread over 139 project sites including 11 in Doha, Qatar and 3 in Dubai, UAE. The share of the overseas projects in the order book was Rs. 20,986.09 million, being 30.24% of the total order book. Factors affecting our results of operations Our financial condition and results of operations are affected by numerous factors and the following are of particular importance: Demand for construction services in India, Qatar and the UAE. We provide construction services across diverse areas with projects involving industrial construction, power, building and housing, roads, railways and bridges, urban infrastructure, and marine, as well as significant expertise in piling and ground engineering. Rather than specialising in any one area, we are able to develop expertise in various types of projects and increase the number and types of contracts on which we bid. Demand for construction services in India is currently high, allowing us to expand operations across India. We will continue to focus primarily on the Indian market, and also to increase the amount of our services in Qatar and the UAE. Our business is therefore significantly dependent on the general economic conditions in these regions and government policies relating to such projects. For example, the GoI’s focus on and sustained increase in budgetary allocation for the infrastructure projects and the development of a structured and comprehensive infrastructure policy that encourages greater private sector participation as well as increased funding by international and multilateral development financial institutions for infrastructure projects in this region have resulted in and is expected to result in several additional infrastructure projects in this region. Our ability to benefit from the considerable investments proposed in the infrastructure sector in the medium and long term will be important factors affecting our results of operations. Ability to attract and retain skilled personnel. Over 80% of our employees are technically qualified and trained, either as engineers, technicians or otherwise, and we face competitive pressures in recruiting and retaining skilled and professionally qualified staff. The loss of key personnel or any inability to manage the attrition levels in different employee categories may materially and adversely affect our results of operations. Competition. We compete against major domestic and international construction companies. Our competition varies depending on the size, nature and complexity of the project and on the geographical region in which the project is executed. In selecting contractors for major projects, clients generally limit the tender to contractors they have pre-qualified based on several criteria

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including experience, technological capability, capacity, performance, reputation for quality, safety record, financial strength and bonding capacity, and size of previous executed contracts in similar projects, although price competitiveness of the bid is the most important selection criterion. Pre-qualification is key to our winning major projects. Our net worth and track record qualify us to bid for most of the projects in India in the construction sectors in which we are present. Further, we may seek alliances with large engineering and construction conglomerates for obtaining projects including in those areas where we do not qualify in our own right. Depending on various factors, including our prior project experience, geographical presence and familiarity with local working conditions, we are often able to provide more cost effective services than our competitors or offer a superior value proposition. Execution of contracts. As of June 30, 2007, we operated project sites at 125 locations throughout India and 14 in Qatar and the UAE. We believe that we have established a good track record and a reputation for efficient project management and execution. This is accomplished through efficient deployment of equipment and resources, quick decision-making capabilities by on-site project managers, strong relationships with suppliers and sub-contractors, and good communication, co-ordination between project sites, each zonal office and the head office. Our managers also utilise management information systems to plan and monitor progress of project execution in terms of time, cost, quality, efficiency, manpower resources and deployment of plant and equipment. Our ability to continue to execute contracts effectively, as our business grows, is important to our strategy and results of operations. Seasonality and weather conditions. Our business operations may be adversely affected by severe weather, which may require us to evacuate personnel or curtail services, may result in damage to a portion of our fleet of equipment or facilities resulting in the suspension of operations, and may prevent us from delivering materials to our project sites in accordance with contract schedules or generally reduce our productivity. Our operations are also adversely affected by difficult working conditions and extremely high temperatures during summer months and during the monsoon season, each of which may restrict our ability to carry on construction activities and fully utilize our resources. Accordingly, revenues recorded in the first half of our financial year between April and September are traditionally lower compared to revenues recorded during the second half between October and March of our financial year. During periods of curtailed activity due to adverse weather conditions, we may continue to incur overhead expenses, but our revenues from operations may be delayed or reduced. Description of Income and Expenditure Items

Income Our income includes (i) contract turnover, (ii) profit from our share in joint ventures, and (iii) other income. Other income is mainly comprised of income generated from accruals under duty free credit entitlement. It also includes income from sale of scrap, miscellaneous receipts, wind-mill generated electricity, bad debts recovered and write back of liabilities no longer required.

Expenditure Our expenditure comprises (i) contract expenses (other than related depreciation/amortisation)(net), (ii) interest and finance charges (net), (iii) amortisation of tools, (iv) depreciation and (v) other administrative expenses.

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Contract expenses (other than related depreciation/amortisation) (net). Our contract expenses (other than related depreciation/amortisation)(net) are comprised of stores consumed, salaries and wages (including amounts paid or payable to sub-contractors), sales tax on work contracts, purchase tax, repairs and renewals and other expenses. Interest and finance charges (net). We incur interest expenses net of interest received or receivables, as well as finance charges consisting of bank charges and guarantee charges. Depreciation of fixed assets and amortisation of tools. Depreciation of fixed assets is provided on a straight line method at the rates prescribed in Schedule XIV to the Companies Act, 1956, except as indicated below where higher rates are used to reflect the charge over the useful life:

• Leasehold land and building on leasehold land are amortised over the period of the lease. • Building on contractee’s land is depreciated at 5% on a straight line method. • Construction equipments included in plant and machinery are depreciated at 12.5% and

20%. • In case of branches outside India, depreciation is provided on plant and machinery at

10%. We amortise our tools based on the effective future life determined by a technical evaluation. Other administrative expenses. Our other administrative expenses include, among other things, travel and communication expenses, salaries and bonus, staff welfare expenses, contributions to provident and other funds, rent (net), rates and taxes, repairs and maintenance of buildings, insurance, losses on sales of fixed assets, provision for doubtful debts or advances and bad debts or advances that have been written off (net of provisions for debts and advances written back).

Significant Accounting Policies Fixed assets are stated at cost of acquisition and related expenditure. The cost of fixed assets acquired on finance lease is comprised of present value of minimum hire purchase/ lease payments at the inception of lease and residual value of the related assets. The discounting factor considered in calculating the present value of the minimum hire purchase/ lease payments is the rate of interest implicit in the lease. Depreciation of fixed assets is discussed above under “Description of Income and Expenditure Items – Expenditure”. Impairment loss is recognised wherever the carrying amount of the fixed assets exceeds the recoverable amount such as the higher of the asset's net selling price and value in use. Long term investments are valued at cost less provision for permanent diminution, if any, in value of such investments. Inventories other than tools/ stores comprising various construction implements and tackles, which are a type of equipment having a short life, are valued at lower of cost and net realisable value. The cost, in general, are determined under “first in first out” method. Tools/ stores are stated on the basis of their cost and year end values based on physical inventory and effective future life determined on technical evaluation. Revenue is recognised under the percentage of completion method. The stage of completion is determined on the basis of completion of physical proportion of the contract work. Extra work, to

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the extent that it is probable that it will result in revenue and can be reliably measured, is also covered. Site development including initial expenses thereon is charged off proportionately within the stipulated period of contract from the date of revenue recognition. Borrowing cost as and when attributable to the acquisition of qualifying assets are added to the cost up to the date when such assets are ready for their intended use. Other borrowing costs are recognised as expenses in the period in which these are incurred. Claims and counter claims (related to customers), including those under arbitration, are accounted for on their final disposal. Other contract related claims are recognised when there is reasonable certainty as to their recoverability. Employee Benefits The Company has adopted Accounting Standard 15 (revised) on employee benefits, with effect from April 1, 2007 which is accounted as follows: i) Provisions for gratuity are made on basis of latest year ended actuarial valuation. ii) Contributions to provident fund during the period are charged as expenses. Transaction in foreign currency outstanding at the balance sheet date (such as monetary items) are accounted for at the contracted rate when covered by forward contracts and at exchange rates prevailing on the balance sheet date in case of others. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate at the date of the transactions. Exchange differences are dealt with in the profit and loss account. Pursuant to the Companies (Accounting Standard) Rules 2006, which took effect for the Company on April 1, 2007, gain or loss from foreign exchange on foreign currency loans or credits taken for acquisition of imported fixed assets is accounted for in the profit and loss accounts. Financial statements of foreign branches are treated as non-integral operation. In translating the financial statements of foreign branches, the assets and liabilities, both monetary and non-monetary, has been translated at the closing rate and income and expenses items are translated at the average rate for the period. The resultant exchange differences are accumulated in the “Foreign Currency Translation Reserve Account”. Exchange differences arising on monetary items that is receivable from or payable to non-integral operation for which settlement is neither planned nor likely to occur in the foreseeable future forms part of net investment in non-integral foreign operations and are also accumulated in the “Foreign Currency Translation Reserve Account”. Current tax in respect of taxable income is provided for the year based on applicable tax rates and laws. Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are reviewed at each Balance Sheet date to re-assess realisability thereof. Fringe benefit tax is accounted for based on the estimated fringe benefit for the period as per related provisions of the Income-tax Act, 1961

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Results of Operations The following table sets forth select financial data from our profit and loss accounts, the components of which are also expressed as a percentage of total income for the periods indicated:

Three month

period ended June 30, 2007

Three month period ended June

30, 2006

Financial Year 2007

Financial Year 2006

Financial Year 2005

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

Particulars

(Rs. in millions)

% of Total

Income*(Rs. in

millions)

% of Total

Income*(Rs. in

millions)

% of Total

Income*(Rs. in

millions)

% of Total

Income* (Rs. in

millions)

% of Total

Income*Income: Contract turnover 5,807.61 99.07% 3,512.05 99.22% 17,082.14 99.22% 13,427.39 99.62% 9,990.11 99.97%Less: Contract Expenses (other than related depreciation/amortisation) (net)

4,999.86 85.29% 3,030.74 85.62% 14,676.41 85.25% 11,734.25 87.06% 8,805.28 88.12%

Profit on contract work done

807.75 13.78% 481.31 13.60% 2,405.73 13.97% 1,693.14 12.56% 1,184.83 11.86%

Company’s share in profit of joint ventures

9.96 0.17% 8.25 0.23% 27.50 0.16% 18.42 0.14% - -

Other income 44.30 0.76% 19.33 0.55% 106.27 0.62% 32.81 0.24% 2.66 0.03%Total 862.01 14.71% 508.89 14.38% 2,539.50 14.75% 1,744.37 12.94% 1,187.49 11.88%

Expenditure: Interest and finance charges (net)

247.21 4.22% 125.32 3.54% 632.25 3.67% 403.56 2.99% 330.60 3.31%

Amortisation of tools 49.45 0.84% 33.21 0.94% 151.04 0.88% 99.97 0.74% 60.22 0.60%Depreciation 77.87 1.33% 49.37 1.39% 240.04 1.39% 129.33 0.96% 88.96 0.89%Other administrative expenses

237.02 4.04% 174.23 4.92% 814.55 4.73% 530.48 3.94% 363.66 3.64%

Total Expenditure 611.55 10.43% 382.13 10.80% 1,837.88 10.68% 1,163.34 8.63% 843.44 8.44% Profit before tax 250.46 4.27% 126.76 3.58% 701.62 4.08% 581.03 4.31% 344.05 3.44%Provision for taxation Current Tax 38.70 0.66% 11.00 0.31% 97.00 0.56% 140.50 1.04% 52.50 0.53%Fringe Benefit Tax 2.47 0.04% 1.64 0.05% 9.31 0.05% 6.27 0.05% - -Provision for taxation written back (credit)

(4.00) (0.04%)

Profit before deferred tax 209.29 3.57% 114.12 3.22% 595.31 3.46% 434.26 3.22% 295.55 2.96%Deferred tax 15.00 0.26% 3.32 0.09% 58.19 0.34% 17.82 0.13% 43.79 0.44%Profit After Tax 194.29 3.31% 110.80 3.13% 537.12 3.12% 416.44 3.09% 251.76 2.52%Transfer from debenture redemption reserve

- 22.50 -

Balance brought forward from previous year

1,150.36 19.62% 753.49 21.29% 753.49 4.38% 413.43 3.07% 224.30 2.24%

Amount available for appropriations

1,344.65 22.94% 864.29 24.42% 1,290.61 7.50% 852.37 6.32% 476.06 4.76%

Appropriations Transfer to general reserve

60.00 0.35% 50.00 0.37% 25.20 0.25%

Proposed dividend 68.59 0.40% 42.87 0.32% 32.80 0.33%

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30, 2007


30, 2006

Financial Year 2007

Financial Year 2006

Financial Year 2005

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

Particulars

(Rs. in millions)

% of Total

Income*(Rs. in

millions)

% of Total

Income*(Rs. in

millions)

% of Total

Income*(Rs. in

millions)

% of Total

Income* (Rs. in

millions)

% of Total

Income*Tax thereon 11.66 0.07% 6.01 0.04% 4.63 0.05% 140.25 0.81% 98.88 0.73% 62.63 0.63%Year-end Surplus 1,344.65 22.94% 864.29 24.42% 1,150.36 6.68% 753.49 5.59% 413.43 4.14% 1,344.65 22.94% 864.29 24.42% 1,290.61 7.50% 852.37 6.32% 476.06 4.76%Basic and diluted earning per share (Rs.)

4.53 2.58 12.53 10.53 6.91

*Total income includes (i) contract turnover; (ii) profit from our share in joint ventures and (iii) other income. Three months ended June 30, 2007 compared to three months ended June 30, 2006 Income Contract turnover. Our contract turnover increased by 65.36% from Rs.3,512.05 million in the three months ended June 30, 2006 to Rs.5,807.61 million in the three months ended June 30, 2007, primarily as a result of executing more contracts in the industrial, urban infrastructure and roads, railways and bridges sectors. Profits from shares of joint ventures. Our profits from shares of joint ventures increased by 20.73% from Rs.8.25 million in the three months ended June 30, 2006 to Rs.9.96 million in the three months ended June 30, 2007. This increase was mainly attributable to an increased volume of work executed in the joint venture projects in the roads, railways and bridges sector and urban infrastructure sector. Other income. Our other income increased by 129.18% from Rs. 19.33 million in the three months ended June 30, 2006 to Rs. 44.30 million in the three months ended June 30, 2007, primarily as a result of an increase in the duty free credit entitlement available in respect of our contracts in foreign currency, which increased by Rs. 20.12 million. Our sale of scrap also increased by Rs.1.66 million and miscellaneous receipts increased by Rs.1.00 million. Expenditure Contract expenses (other than related depreciation/amortisation)(net). Our contract expenses (other than related depreciation/amortisation) (net) increased by 64.97% from Rs.3,030.74 million in the three months ended June 30, 2006 to Rs.4,999.86 million in the three months ended June 30, 2007, which followed largely from a corresponding increase in our contract turnover due to increased volume in our business. Interest and finance charges (net). Our interest and finance charges (net) increased by 97.26% from Rs.125.32 million in the three months ended June 30, 2006 to Rs.247.21 million in the three months ended June 30, 2007, primarily as a result of (i) an increase in our average interest rate from 8.10% to 10.50%, (ii) an increase of our term loan borrowing for equipment financing resulting in additional interest expense of Rs.19.89 million, (iii) increased bank borrowings due to our growing business and additional working capital requirements, which resulted in an increase

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in interest expense of Rs.77.69 million and (iv) and increase of finance charges consisting of bank charges and guarantee charges of an additional Rs.15.21 million due to more letters of credit and bank guarantees being required as a result of our increased volume of business. Depreciation on fixed assets/amortisation of tools. Our depreciation on fixed assets increased by 57.73% from Rs.49.37 million in the three months ended June 30, 2006 to Rs.77.87 million in the three months ended June 30, 2007. Our amortisation of tools increased by 48.90% from Rs.33.21 million in the three months ended June 30, 2006 to Rs.49.45 million in the three months ended June 30, 2007. These increases are due to the growth of our business, which required us to procure additional plant and machinery and tools over this period. Other administrative expenses. Our other administrative expenses increased by 36.04% from Rs.174.23 million in the three months ended June 30, 2006 to Rs.237.02 million in the three months ended June 30, 2007, primarily as a result of (i) an increase in salaries and bonus for our employees, (ii) the recruitment of approximately 1,800 new employees, (iii) increase in rent and (iv) an increase in our insurance expenses due to an increase in contractor all risk insurance policies and an increase in coverage of additional fixed assets. Profit before tax (“PBT”). Our PBT increased by 97.58% from Rs.126.76 million in the three months ended June 30, 2006 to Rs.250.46 million in the three months ended June 30, 2007. Our PBT margins on total income for the three months ended June 30, 2006 and 2007 were 3.58% and 4.27%, respectively. Provision for taxation. Our current tax increased by 251.82% from Rs.11.00 million in the three months ended June 30, 2006 to Rs.38.70 million in the three months ended June 30, 2007. Provision for taxation was lower in the three month period ended June 30, 2006 as compared to same period ended June 30, 2007 due to lower taxable income as a consequence of higher tax benefits. Our deferred tax increased by 351.81% from Rs.3.32 million in the three months ended June 30, 2006 to Rs.15.00 million in the three months ended June 30, 2007 due to the acquisition of additional fixed assets. Our fringe benefit tax increased by 50.61% from Rs.1.64 million in the three months ended June 30, 2006 to Rs.2.47 million in the three months ended June 30, 2007, due to the increased number of employees and the increase in the amount of fringe benefits provided to employees. Our effective tax rates (inclusive of deferred tax and fringe benefit tax) for the three months ended June 30, 2006 and 2007 were 12.59% and 22.43%, respectively. Profit after tax (“PAT”). Our PAT increased by 75.35% from Rs.110.80 million in the three months ended June 30, 2006 to Rs.194.29 million in the three months ended June 30, 2007. Our PAT margins on total income for the three months ended June 30, 2006 and 2007 were 3.13% and 3.31%, respectively.

Year ended March 31, 2007 compared to year ended March 31, 2006 Income: Contract turnover. Our contract turnover increased by 27.22% from Rs.13,427.39 million in the year ended March 31, 2006 to Rs.17,082.14 million in the year ended March 31, 2007, primarily as a result of increases in domestic contract turnover by Rs.2,299.07 million and foreign contract turnover by Rs.1,355.68 million, respectively, including increased contract turnover in the piling, industrial, roads, railways and bridges and urban infrastructure sectors.

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Profits from shares of joint ventures. Our profits from shares of joint ventures increased by 49.29% from Rs.18.42 million in the year ended March 31, 2006 to Rs.27.50 million in the year ended March 31, 2007, primarily as a result of the formation of two new joint ventures, which in turn led to an increase in profits therefrom and increased volume of work executed in existing joint ventures. Other income. Our other income increased by 223.90% from Rs.32.81 million in the year ended March 31, 2006 to Rs.106.27 million in the year ended March 31, 2007, primarily as a result of an increase in the duty free credit entitlement by Rs.68.36 million in respect of the contracts in foreign currency. Expenditure: Contract expenses (other than related depreciation and amortisation)(net). Our contract expenses (other than related depreciation and amortisation) (net) from our contracts increased by 25.07% from Rs.11,734.25 million in the year ended March 31, 2006 to Rs.14,676.41 million in the year ended March 31, 2007. This increase is directly related to the costs incurred in connection with our increased contract turnover. Interest and finance charges (net). Our interest and finance charges (net) increased by 56.67% from Rs.403.56 million in the year ended March 31, 2006 to Rs.632.25 million in the year ended March 31, 2007, primarily as a result of an increase in (i) our bank borrowings as a result of our growing business, leading to a Rs.161.32 million increase in interest expense, (ii) our equipment financing, (iii) interest rates and (iv) finance charges consisting of bank charges and guarantee charges by Rs.24.15 million due to more letters of credit and bank guarantees being required as a result of our increased volume of business. Depreciation on fixed assets/amortisation of tools. Our depreciation on fixed assets increased by 85.60% from Rs.129.33 million in the year ended March 31, 2006 to Rs.240.04 million in the year ended March 31, 2007. Our amortisation of tools increased by 51.09% from Rs.99.97 million in the year ended March 31, 2006 to Rs.151.04 million in the year ended March 31, 2007. Both increases were due to our procurement of additional plant and machinery and tools during financial year 2007 as compared to financial year 2006 in response to the increase number of contracts with the increase in volume of business. We purchased Rs.412.07 million of tools during this period. Other administrative expenses. Our other administrative expenses increased by 53.55% from Rs.530.48 million in the year ended March 31, 2006 to Rs.814.55 million in the year ended March 31, 2007, due to multiple factors including, among other things, (i) a 50.37% increase in the salary and bonus expenses reflecting general wage increases to ensure that our wage package is competitive in our industry, (ii) an increase in the number of employees by approximately 1,507, (iii) a 50.93% increase in contributions to provident and other funds, (iv) a 140.71% increase in our insurance expenses due to increase in contractor all risk policies and increase in coverage of additional fixed assets and (v) increased travel and communication costs incidental to managing our growing business. Profit before tax. Our PBT increased by 20.75% from Rs.581.03 million in the year ended March 31, 2006 to Rs.701.62 million in the year ended March 31, 2007. Our PBT margins on total income for the years ended March 31, 2006 and 2007 were 4.31% and 4.08%, respectively.

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Provision for taxation. Our current tax decreased by 30.96% from Rs.140.50 million in the year ended March 31, 2006 to Rs.97.00 million in the year ended March 31, 2007, and our deferred tax increased by 226.54% from Rs.17.82 million in the year ended March 31, 2006 to Rs.58.19 million in the year ended March 31, 2007, primarily as a result of an increase in the number of projects eligible for tax benefits under the Income Tax Act, 1961, as well as higher depreciation rate benefits on an increased amount of fixed assets. Our fringe benefit tax increased by 48.48% from Rs.6.27 million in the year ended March 31, 2006 to Rs.9.31 million in the year ended March 31, 2007, due to the increase in number of employees and also increase in amount of fringe benefits given to the employees compared to the previous year. Our effective tax rates (inclusive of deferred tax and fringe benefit tax) for the years ended March 31, 2006 and 2007 were 28.33% and 23.44%, respectively. Profit after tax. Our PAT increased by 28.98% from Rs.416.44 million in the year ended March 31, 2006 to Rs.537.12 million in the year ended March 31, 2007. Our PAT margins on total income for the years ended March 31, 2006 and 2007 were 3.09% and 3.12%, respectively.

Year ended March 31, 2006 compared to year ended March 31, 2005 Income: Contract turnover. Our contract turnover increased by 34.41% from Rs.9,990.11 million in the year ended March 31, 2005 to Rs.13,427.39 million in the year ended March 31, 2006, primarily as a result of increases of domestic contract turnover and foreign contract turnover by the amount of Rs.2,718.84 million and Rs.718.44 million, respectively. We also experienced increased construction demand in the industrial, marine and power sectors during this period. Profits from shares of joint ventures. Our profits from shares of joint ventures increased from nil in the year ended March 31, 2005 to Rs.18.42 million in the year ended March 31, 2006, primarily as a result of the formation and operation of contract-based joint ventures. Other income. Our other income increased from Rs.2.66 million in the year ended March 31, 2005 to Rs.32.81 million in the year ended March 31, 2006, primarily as a result of an increase of Rs.18.67 million in the availability of duty free credit entitlement for our contracts in foreign currency and write back of liabilities no longer required by Rs.11.20 million. Expenditure: Contract expenses (other than related depreciation and amortisation)(net). Our contract expenses (other than related depreciation and amortisation) (net) increased by 33.26% from Rs.8,805.28 million in the year ended March 31, 2005 to Rs.11,734.25 million in the year ended March 31, 2006, as a direct result of our increase in contract turnover from domestic and foreign contracts. In addition, our material costs have been controlled by procuring the same in bulk quantities at a lower price and better management of resources during this period. Interest and finance charges (net). Our interest and finance charges (net) increased by 22.07% from Rs.330.60 million in the year ended March 31, 2005 to Rs.403.56 million in the year ended March 31, 2006, primarily as a result of (i) an increase in bank borrowings, which increased our interest expenses by Rs.75.01 million and (ii) an increase in finance charges consisting of bank charges and guarantee charges by Rs.15.87 million due to more letters of credit and bank guarantees being required as a result of our increased volume of business.

50

Depreciation on fixed assets/amortisation of tools. Our depreciation on fixed assets increased by 45.38% from Rs.88.96 million in the year ended March 31, 2005 to Rs.129.33 million in the year ended March 31, 2006. Our amortisation of tools increased by 66.01% from Rs.60.22 million in the year ended March 31, 2005 to Rs.99.97 million in the year ended March 31, 2006. These increases resulted from our procurement of additional plant and machinery and tools during this period to satisfy our business growth requirements. During this period, we purchased tools in the total aggregate amount of Rs.287.21 million. Other administrative expenses. Our other administrative expenses increased by 45.87% from Rs.363.66 million in the year ended March 31, 2005 to Rs.530.48 million in the year ended March 31, 2006, primarily as a result of employee related expenses including (i) a 56.22% increase in salaries and bonus, (ii) the addition in number of approximately 640 new employees and (iii) an increase in staff welfare expenses by Rs.10.02 million. There was also an increase in rent expense by Rs. 12.52 million. Moreover, our traveling and communication expenses have increased with the growth of our business. Profit before tax. Our PBT increased by 68.88% from Rs.344.05 million in the year ended March 31, 2005 to Rs.581.03 million in the year ended March 31, 2006. Our PBT margins on total income for the years ended March 31, 2005 and 2006 were 3.44% and 4.31%, respectively. Provision for taxation. Our current tax increased by 167.62% from Rs.52.50 million in the year ended March 31, 2005 to Rs.140.50 million in the year ended March 31, 2006, due to an increase in contract turnover and PBT. Our deferred tax decreased by 59.31% from Rs.43.79 million in the year ended March 31, 2005 to Rs.17.82 million in the year ended March 31, 2006, primarily as a result of a decrease in the rate of depreciation of plant and machinery from 25% to 15% under the Income Tax Act, 1961. Our fringe benefit tax increased from Rs. nil in the year ended March 31, 2005 to Rs.6.27 million in the year ended March 31, 2006, as a result of the introduction of the fringe benefit tax during the financial year of 2005-2006. Our effective tax rates (inclusive of deferred tax and fringe benefit tax, and net of any provision written back) for the years ended March 31, 2005 and 2006 were 26.82% and 28.33%, respectively. Profit after tax. Our PAT increased by 65.41% from Rs.251.76 million in the year ended March 31, 2005 to Rs.416.44 million in the year ended March 31, 2006. Our PAT margins on total income for the years ended March 31, 2005 and 2006 were 2.52% and 3.09%, respectively. Liquidity and Capital Resources Liquidity Historically, our primary liquidity requirements have been to finance our working capital needs and our capital expenditures. Our business requires a significant amount of working capital. In many cases, significant amounts of working capital are required to finance the purchase of materials and the performance of civil, construction and other work on projects before payment is received from clients.To fund these costs we have relied on equity contributions, short-term and long-term borrowings including working capital financing and cash flows from operating activities. Cash Flows The table below summarizes our cash flows in the three months ended June 30, 2007 and the years ended March 31, 2007, 2006 and 2005:

51

(Rs. in million)

Year ended March 31, Three months

ended June 30, 2007 (Unaudited)

2007 (Audited) 2006 (Audited)

2005 (Audited)

Net cash from (used in) operating activities

(62.32) (47.56) (141.31) (429.53)

Net cash from (used in) investing activities

(651.61) (1,734.42) (989.79) (416.14)

Net cash from (used in) financing activities

824.98 1,763.75 1,343.96 929.12

Net increase (decrease) in cash and cash equivalents

111.05 (18.23) 212.86 83.45

Operating Activities Net cash used in operating activities for the three months ended June 30, 2007 was Rs.62.32 million, consisting of our profit before tax of Rs.250.46 million and among other things depreciation and amortization of tools of Rs.127.32 million reduced by, among other things, an increase in a working capital increase of Rs.565.44 million, arising out of our increased volume of business. Net cash used in operating activities for the year ended March 31, 2007 was Rs.47.56 million, consisting of our profit before tax of Rs.701.62 million and among other things depreciation and amortization of tools of Rs.391.08 million reduced by, among other things, an increase in working capital of Rs.1,604.78 million, arising out of our increased volume of business. Net cash used in operating activities for the year ended March 31, 2006 was Rs.141.31 million, consisting of our profit before tax of Rs.581.03 million and among other things depreciation and amortization of tools of Rs.229.30 million reduced by, among other things, an increase in a working capital increase of Rs.1,145.23 million, arising out of our increased volume of business. Net cash used in operating activities for the year ended March 31, 2005 was Rs.429.53 million, consisting of our profit before tax of Rs.344.05 million and among other things depreciation and amortization of tools of Rs.149.18 million reduced by, among other things, an increase in working capital of Rs.1,251.04 million, arising out of our increased volume of business. Investing Activities Net cash used in investing activities for the three months ended June 30, 2007 was Rs.651.61 million. Net cash used in investing activities for the years ended March 31, 2007, 2006 and 2005 was Rs.1,734.42 million, Rs.989.79 million and Rs.416.14 million, respectively. Our expenditures for investing activities have primarily related to purchases of fixed assets, mainly plant and equipment, along with investment in joint ventures, partially offset by minor disposals of fixed assets and interest received on deposits made.

52

Financing Activities Net cash flow from financing activities in the three months ended June 30, 2007 was Rs.824.98 million, comprising Rs.408.38 million in proceeds from long term borrowings and Rs.1,838.96 million in additional short term working capital loans. These were partially offset by Rs.279.83 million repayment of long term borrowings, a Rs.931.40 million repayment of short term borrowings and interest payments of Rs.211.13 million. Net cash flow from financing activities in the year ended March 31, 2007 was Rs.1,763.75 million, comprising Rs.1,103.65 million in proceeds from long term borrowings and Rs.6,002.60 million in additional short term borrowings. These were partially offset by a Rs.293.73 million repayment of long term borrowings, a Rs.4,392.56 million repayment of short term borrowings, interest payments of Rs.607.39 million and a dividend including divided tax of Rs.48.82 million. Net cash flow from financing activities in the year ended March 31, 2006 was Rs.1,343.96 million, comprising Rs.474.11 million in proceeds from long term borrowings, Rs.4,189.85 million in additional short term borrowings and Rs.901.44 million in proceeds from an equity issue. These were partially offset by a Rs.243.22 million repayment of long term borrowings, a Rs.3,483.50 million repayment of short term borrowings, interest payments of Rs.427.38 million, a dividend including dividend tax of Rs.37.34 million and a debenture repayment of Rs.30.00 million. Net cash flow from financing activities in the year ended March 31, 2005 was Rs.929.12 million, comprising Rs.196.58 million in proceeds from long term borrowings and Rs.2,413.41 million in additional short term borrowings. These were partially offset by a Rs.183.63 million repayment of long term borrowings, a Rs.1,118.00 million repayment of short term borrowings, interest payments of Rs.336.53 million, a dividend including dividend tax of Rs.12.71 million and a debenture repayment of Rs.30.00 million. Historical Capital Expenditures We need to make investments in capital equipment on a recurring basis. In the year ended March 31, 2007, we purchased Rs.1,454.41 million of fixed assets including Rs.1,351.93 million for plant and machinery. In the years ended March 31, 2006 and 2005, we purchased fixed assets of Rs.1,056.14 million and Rs.287.20 million, respectively. Indebtedness The following table summarizes our secured and unsecured obligation balances.

(Rs. in million) Three month period ended

June 30, 2007 (Unaudited)

As at March 31, 2007 (Audited)



Secured 3,190.93 2,829.35 1,073.46 1,016.33 Unsecured 4,726.10 4,047.43 3,378.08 2,526.60

53

The following table summarizes our repayment obligations with respect to secured and unsecured long-term indebtedness as at June 30, 2007.

(Rs. in million) Payment due during the year ended March 31,

Indebtedness Outstanding amount as at June 30, 2007

2007-08 (July – March)

2008-09 2009-10

2010-11

2011-12 After 2012

Secured 3190.93 372.76 608.58 437.61 207.11 97.19 4.81

Unsecured 4726.10 3,831.05 875.35 0.00 0.00 0.00 0.50

Some of our financing arrangements are secured by our movable and immovable assets. Some of our financing agreements include conditions and covenants that require us to obtain lender consents, prior to carrying out certain activities and entering into certain transactions. Failure to meet these conditions or obtain these consents could have significant consequences on our business. Typically, we require, and may be unable to obtain, lender consents to incur additional secured debt, issue equity, change our capital structure, undertake any major expansion, change our management structure or merge with or acquire other companies, whether or not there is any failure by us to comply with the other terms of such agreements. We believe that our relationships with our lenders are satisfactory, and we have in the past obtained consents from them to undertake various actions and have informed them of our activities from time to time. Compliance with the various terms is, however, subject to interpretation and we cannot assure you that we have requested or received all consents from our lenders that are required by our financing documents. As a result, it is possible that a lender could assert that we have not complied with all terms under our existing financing documents. Any failure to comply with the requirement to obtain a consent, or other condition or covenant under our financing agreements that is not waived by our lenders or is not otherwise cured by us, may lead to a termination of our credit facilities, acceleration of all amounts due under such facilities and trigger cross default provisions under certain of our other financing agreements, and may adversely affect our ability to conduct our business and operations or implement our business plans. We borrow funds on both fixed and floating interest rates. The majority of our borrowed funds are subject to floating interest rates. Our average rate of interest on our indebtedness was 10.50% in the three months ended June 30, 2007, and 8.61%, 7.68% and 8.53% in the financial years ended March 31, 2007, 2006 and 2005, respectively. Contingent Liabilities and Contractual Obligations Contingent liabilities We had contingent liabilities for the year ended June 30, 2007 in the amount of Rs.45.10 million, predominantly composed of disputed sales tax in the amount of Rs.43.97 million. We have received a show cause cum demand notice for Rs. 264.33 million from the Commissioner of Service Tax on August 2, 2007 on the ground that a free issue of material supplied by a client to the Company has not been considered for the purpose of payment to service tax authorities. We have challenged the contention of the service tax authorities and filed a writ petition before the Calcutta High Court, which is pending. Contractual obligations We have capital commitments related to the purchase of fixed assets, net of advances paid, which aggregate to Rs.742.80 million as of June 30, 2007. We also have finance lease arrangements in place related to vehicles, plant, machinery and loose tools, which are on cancellable lease. As of

54

June 30, 2007, the minimum lease payments under our finance lease arrangements outstanding (i) with a term of one year or less, were Rs.0.60 million, and (ii) with a term longer than one year but not later than five years, were Rs.0.45 million. As on June 30 2007, we had non-cancellable lease obligations of Rs.61.55 million for obligations payable within one year and Rs.19.09 million for obligations payable more than one year but not later than five years.

Market Risks

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk, commodity risk, credit risk, inflation risk and foreign currency exchange risk. Interest rate risk

Changes in interest rates could significantly affect our financial condition and results of operations. Our loans are subject to both fixed and floating interest rates. If the interest rates for our existing or future borrowings increase significantly, our cost of servicing such debt will increase. This may adversely impact our results of operations, planned capital expenditures and cash flows. We do not have a policy to enter into hedging arrangements against interest rate. Commodity risk

Many of our construction contracts contain price escalation clauses to protect us against fluctuations in prices of raw materials. However, for fixed priced contracts that do not contain price escalation clauses, any increase in the cost of raw materials or availability of such materials could affect our margins. See “Risk Factors.” Credit risk

We have significant credit risk on payments due from our customers owing to the way in which our payments are structured. In the years ended March 31, 2007 and 2006, we made provisions for doubtful debts/advances in the amount of Rs.9.46 million and Rs.14.86 million, respectively. Foreign currency exchange risk

Changes in currency exchange rates influence our results of operations. As our international operations increase, growing portions of our revenues and expenses will be denominated in currencies other than Indian Rupees, most significantly the Qatari Riyal, the US Dollar, and the UAE Dirham. To the extent that our income and expenditure are not denominated in the same currency, exchange rate fluctuations could cause some of our costs to increase more than the proportionate revenues on a given contract. As of June 30, 2007, we had foreign currency loans aggregating Rs.96.04 million Further, our future capital expenditures, including any imported equipment and machinery, may be denominated in currencies other than Indian Rupees. Any declines in the value of the Rupee against such other currencies could increase the Rupee cost of servicing our debt or purchasing such equipment and could also result in exchange gain on exports. Inflation risk

In recent years, although India has experienced fluctuation in inflation rates, inflation has not had a material impact on our business and results of operations. According to the CSO, inflation (“CPI”) in India was approximately 3.9%, 3.8%, and 4.4% in the financial years ended 2004, 2005 and 2006, respectively.

55

RECENT DEVELOPMENTS

Below are certain recent developments since June 30, 2007: Order Book As of September 30, 2007, our order book was Rs. 69,890.91 million comprising 186 contracts spread over 142 project sites including 15 in Doha, Qatar and three in Dubai, UAE. The share of the overseas projects in the order book was Rs. 20,421.96 million, being 29.22% of the total order book. Major Orders Further, we have announced the following major orders through press releases to the Stock Exchanges during October and November 2007:

Order description

Entered into contracts aggregating Rs. 680 crores* for design and construction of Eastern Freeway from Prince Wales Museum to Anik Panjarapole Link Road and for design and construction of Fly Over on Dr. Babasaheb Ambedkar Road under Package II Entered into a contract for Rs. 580 crores* for civil work for international container transhipment terminal (ICTT), Kochi Port, Phase 1A

(* Rs. 1 crore = Rs. 10 million) Financial Results Under the terms of our listing agreements with the BSE, NSE and CSE, we are required to publish unaudited financial results of the company on a quarterly basis. Our committee of director on October 29, 2007, and also in the meeting of Board of directors on November 30, 2007, approved the quarterly results for the three month and six month periods ended September 30, 2007. Also, under our listing agreement with the Stock Exchanges, we are required to send to Stock Exchanges a limited review report of the statutory auditors on the quarterly un-audited financial results. Below is the un-audited financial results for the three months and six months ended September 30, 2007 together with the limited review report of the Statutory auditors thereon.

In the above result, figures have been given in Rs. in lacs. (Rs. 1 lac = Rs. 100,000 )

56

The Board of Directors Simplex Infrastructures Limited Simplex House, 27, Shakespeare Sarani Kolkata – 700 017

Report on Limited Review of the Un-audited Financial Results of Simplex Infrastructures Limited for three months and six months ended 30th September, 2007. 1. We have reviewed the accompanying statement of Un-audited Financial Results of Simplex

Infrastructures Limited for three months and six months ended 30th September, 2007 initialled by us for the purpose of identification. This Statement is the responsibility of the Company’s Management and has been approved by the Board of Directors.

2. A review of interim financial information consists principally of applying analytical procedures for financial data and making inquiries of persons of the Company responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

3. Period wise break up of the following items of expenses in the accompanying statement have been included in depreciation/ interest :

(Rs in lacs)

3 months ended

30.09.2007

3 months ended

30.09.2006

6 months ended

30.09.2007

6 months ended

30.09.2006

Year ended 31.03.2007

a) Depreciation and Amortisation [item 3(c)]

Depreciation 821 572 1,600 1,066 2,400 Amortisation of tools

601 371 1,095 703 1,510

b) Interest and Finance Charges (Net) [item 5]

Interest 2,258 1,241 4,438 2,354 5,413 Finance charges 248 242 540 382 910

4. Based on our review conducted as above, other than what has been stated in paragraph 3 above, nothing has come to our notice that causes us to believe that the accompanying statement of Un-audited Financial Results prepared in accordance with Accounting Standards and other recognised accounting practices and policies has not disclosed the information required to be disclosed in terms of Clause 41 of the Listing Agreement including the manner in which it is to be disclosed, or that it contains any material misstatement.

(S. K. Deb) Partner Membership No. 13390 For and on behalf of

PRICE WATERHOUSE Chartered Accountants Plot No. Y-14, Block –EP, Sector V

Kolkata Salt Lake Electronic Complex November 30, 2007 Bidhan Nagar, Kolkata – 700 091

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58

INDUSTRY OVERVIEW The information in the section below has been derived, in part, from various public and private publications or obtained from communications with government agencies in India. This information has not been prepared or independently verified by us, the Joint Global Coordinators or any of our or their respective affiliates or advisors. The information may not be consistent with other information compiled by third parties within or outside India. THE INDIAN ECONOMY India is the world’s largest democracy in terms of population (1,129 million people) with a gross domestic product (“GDP”) of approximately US$4,164 billion (on the basis of purchasing power parity) in 2006 (estimates). This makes it the fourth largest economy in the world after the United States of America, China and Japan. (Source: CIA World Factbook, 2007). In recent years, India has experienced rapid economic growth. India’s GDP grew approximately 8.5%, 7.5% and 9.0% in financial years 2004, 2005 and 2006, respectively. The Central Statistical Organisation (“CSO”) estimates that the Indian economy grew by 9.4% during the year ending March 31, 2007. The overall macroeconomic fundamentals are robust, particularly with tangible progress towards fiscal consolidation and a strong balance of payments position. In financial year 2007, India’s agricultural, industrial and services sectors grew approximately 2.7%, 10.0% and 11.2%, respectively (Source: Advance Estimates by CSO). As a result, in the year ended March 31, 2007, while the share of agriculture in GDP declined to 18.5%, the share of industry and services sector improved to 26.4% and 55.1%, respectively. The following table sets forth the key indicators of the Indian economy.

As of and for the year ended March 31, Particulars (annual percentage change, except for foreign exchange

reserves) 2003 2004 2005 2006 2007 (%) (%) (%) (%) (%)

Real GDP growth (1) 3.8 8.5 7.5 9.0 9.4 Index of Industrial Production (2) 5.8 7.0 8.4 8.2 10.8* Wholesale Price Index (2) 3.4 4.6 5.1 4.1 6.4#

Foreign Exchange Reserves (in US$ billions) 71.9 107.5 135.6 145.1 199.2@

________ (1) At 1999-2000 prices (2) Index of industrial production; (base 1993-94=100) *April to December 2006 # As of March 24, 2007 @ As of March 30, 2007 (As of November 2, 2007 Foreign Exchange Reserve was US$ 266.5 billion) Source: Economic Survey 2006-2007, RBI THE INDIAN CONSTRUCTION INDUSTRY Construction is an important constituent of every sector in the economy and hence the key factor of socio-economic development. It plays an integral role in a country’s infrastructure, real estate and industrial development. Its presence and contribution is immense in terms of providing huge opportunities for direct and indirect employment. In India, construction is the second largest economic activity after agriculture; it employs about 31 million persons – second only to agriculture in terms of employment. It is one of the core sectors of economy with a gross value of output in excess of Rs. 3,100 billion. It consumes 40-50% of the National Plan outlay and contributes 20% of GDP (Source: Construction Industry Development Council “CIDC” and Construction Federation of India “CFI”).


59

Construction is essentially a service rather than a manufacturing industry, commissioning construction projects for clients varying from simple houses for individuals to complex infrastructure projects for government. The task involves a complex logistic management of personnel, materials and machinery. Due to low entry barriers, the construction industry comprises a wide spectrum of contracting firms, from self-employed individuals to large organized listed companies. However, in infrastructure construction there are entry barriers in the form of tough pre-qualification norms. Due to the conscious thrust of the GoI to improve the state of physical infrastructure, the construction industry is experiencing a great surge in the quantum of the work load, and has grown at the rate of over 10% annually during last five years. However, over the next five years, (2007-2012) investments in construction are expected to double compared to the investments made in the last five years (2002-2007). (Source: CRISIL Research, Construction Annual Review, May 2007) The construction sector is broadly classified into three segments.: • Real estate construction (includes residential and commercial construction), • Industrial construction (steel plants, refineries, oil pipelines etc.), • Infrastructure construction (power, ports, railways, roads, urban infrastructure etc.) Growth in the construction industry is expected to be led by growth in industrial and infrastructure investments, which are expected to grow at a faster rate than real estate construction. Table: Total Construction Investments

(Rs. in billion) 2001-02 to 2005-06 2006-07 to 2010-11 Real Estate 10,218 18,517

Housing 9,810 17,338 Commercial 408 1,179

Industrial 612 1,826 Infrastructure 3,213 6,129 TOTAL 14,043 26,472

(Source: CRISIL Research: Construction Annual Review, May 2007). Key demand factors Real Estate: Investment in real estate segment will be primarily led by housing, which is expected to account for 90% of the total housing and buildings sector. The investments in commercial construction are expected to grow faster than investments in housing, mainly due to the spurt in office space construction driven by information technology/information technology enabled services (“IT/ITES”). Industrials: Growth in investment in industrials will be driven by strong capacity additions, led by strong demand growth and high existing operating rates across some of the key industries. Oil and gas, cement and metals are expected to witness the highest level of construction investment among the key industrial sectors. Infrastructure: Although there is demand for investments in all the segments of the infrastructure sector, key drivers would be power, ports, urban infrastructure, railways, roads, irrigation. Government regulations would continue to remain the key driver for infrastructure investments, which would be further supported by growing private sector participation. Piling foundation construction and ground engineering provide stable and strong base for the superstructure above. It encompasses a thorough understanding of various soil types, load bearing capacities and the required specialised alterations so that the soil can withstand structural pressure from the super structure above. Piling and ground engineering are generally required, depending on the soil condition, for construction of building and housing, industrial structures, power plants, urban infrastructure, marine structures, bridges and flyovers, roads and railways and irrigational projects.


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REAL ESTATE SECTOR The Indian real estate sector involves the development of residential housing, commercial offices, hotels, retail outlets, multiplexes and special economic zones (“SEZs”). Over the past three years, the amount of investment in the real estate sector and the total square footage constructed has increased significantly, having recovered from a severe recession between 1995 and 1999. The Residential Segment The demand for housing in India today exceeds supply due to various factors, including a growing population, increasing urbanisation, increasing affluence, and increasing disposable income as a result of a growth in employment opportunities and a general trend towards nuclear or individual family residences. A large portion of the demand for housing, especially in urban centres such as Mumbai, Bangalore, Delhi (including the Gurgaon and Noida regions) and Pune, is likely to be for high-rise residential buildings. Since this is a relatively new segment in India, the growth of this segment is expected to increase more rapidly than the rest of the urban housing segment. The increase in the construction of high-rise apartment buildings is due to factors such as the scarcity of land in areas such as Mumbai and the high demand for housing near offices and IT parks in cities such as Gurgaon, Bangalore and Pune. This trend towards an increase in high-rise residential buildings is spreading gradually into other cities such as Kolkata, Hyderabad and Chennai. Over the next five years, housing investments are expected to grow to Rs.17,338 billion as compared with Rs.9,810 billion invested in the previous five years. Housing investments are expected to be driven by urban housing investments. The Commercial Segment Commercial construction comprises office space construction, hotels, hospitals, malls, multiplexes and schools. In India, most of the investment in this segment is driven by office space construction. Investment in commercial construction is expected to increase threefold over the next five years from Rs.408 billion to Rs.1,179 billion. Investments in the commercial sector are likely to be driven by office space projects, which are expected to go up to Rs.737 billion over 2007 - 2011 as against Rs.174 billion in 2002 - 2006. Within office space construction activity, almost 70-75% of the demand comes from IT/business process outsourcing (“BPOs”)/call centres. This dependency on IT/ITES is expected to continue due to India's emergence as a preferred outsourcing destination, despite China and Russia also emerging as strong contenders. According to CRISIL, in 2004, only about 100,000 hotel rooms in 1,800 hotels across India were registered. Compound growth in the last five years, in terms of rooms added, was the strongest in the mid market segment, where the three star hotel segment grew at about 11%, followed by the four star segment at about 9%. Foreign tourist arrivals are expected to grow to five million by 2007, and could double to 10 million by 2010-2012. Domestic tourism is expected to increase by 15-20% per annum over the next five years. Favourable demographics and rapid economic growth point to a long term secular uptrend in the domestic demand for hotels – for business and leisure. Over 100,000 hotel rooms need to be added over the next five years.


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The break-up of construction investment in the commercial segment is as follows:

2006-07 to 2010-11 (Rs. 1,179 billion)

Office Space

62%Hotels7%

Hospitals23%

Retail8%

(Source: CRISIL Research: Construction Annual Review May 2007).

The Organised Retail Segment The growth in disposable incomes, demographic changes (such as a growing number of working women who spend more, the growing number of nuclear families, higher income levels within the urban population), change in perception of branded products, growth in retail malls, entry of international players, and availability of cheap finance will drive growth in the organised retail space. Over 2007 - 2011, the expected investment in organised retail construction is Rs.176 billion. The current increase in mall construction activity across India is estimated to result in around 105 million square feet of mall space by 2010. INDUSTRIAL SECTOR Industrial construction sector involves construction of industrial units such steel mills, oil and gas refineries, cement plants, oil pipelines, textile mills and others. After a slowdown in industrial investments between 1999 and 2002, investments picked up mildly in 2003. The decline in investments between 1998-99 and 2002-03 was largely due to the absence of major capacity expansions in most manufacturing sectors. In the same period, the operating rates reached high levels, due to demand growth and lack of investments. Therefore, the sustained demand growth and the high operating rates triggered the current upturn in industrial investments. The strong growth in investment activity witnessed during the past few years continued during 2006-07, buoyed up by rising production and capacity utilisation. The investment intentions, as reflected in the Industrial Entrepreneurs Memoranda, rose sharply by 81% during 2006-07 and more than quadrupled from their levels during 2003-04.

IEMs LOIs/ DILs Year No. of Proposals Proposed

Investment (Rupees crore)

No. of Proposals Proposed Investment

(Rupees crore) 2001-02 3,094 70,994 102 1,361 2002-03 3,178 80,824 60 332 2003-04 4,130 154,954 145 3,454 2004-05 5,548 289,782 101 4,309 2005-06 6,341 382,743 135 3,638 2006-07 5,591 692,401 87 4,002 Cumulative* 69,798 2,569,658 4,241 123,085 *: August 1991 to March 2007 Note: IEM : Industrial Entrepreneurs Memoranda LOI : Letters of Intent DIL : Direct Industrial Licences, which are being issued since November 2003. Source: RBI, Annual Report for 2006-07, www.rbi.org.in


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Impressive growth posted by gross capital formation in recent years suggests that the investment climate has been conducive. In the following graph, gross fixed capital formation (“GFCF”) manufacturing is used as a proxy to industrial investments to reflect the prevalent surge in industrial investments.

(Source: CRISIL Research: Construction Annual Review, May 2007). Industrial investments in key sectors are expected to soar up to Rs.6,954 billion between 2007 and 2011. It is expected that these investments would generate construction demand of Rs.1,826 billion (26% of total investments) across various sectors. Growth in investment in industrials will be driven by strong capacity additions, led by strong demand growth and high existing operating rates across some of the key industries. Oil and gas and metals are expected to witness the highest level of construction investment among the key industrial sectors. Break-up of Investments in Industrial Sector

2001-02 to 2005-06 (Rs. 2,274 billion)

Oil & Gas53%

Metals8%

Auto12%

Textiles18%

Cement5%

Others4%

Source: CRISIL Research: Construction Annual Review, May 2007. Industrial investments are likely to be driven mainly by metals and oil and gas investments. Together, these sectors are expected to contribute around 72% of total investments anticipated in key industrial sectors. The graphs shown subsequently reflect the change in composition of industrial investments over 2007-11.

2006-07 to 2010-11 (Rs. 6,954 billion)

Oil & Gas35%

Metals37%

Auto10%

Textiles10%

Cement4%

Others4%


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Metals: The steel industry has been on a recovery trail for the past few years. The upsurge in global steel demand has led to a spurt in investment announcements in the domestic steel industry. Density of construction with respect to investment in this sector is at approximately 26% which would lead to a greater demand for construction projects. Oil and Gas: Oil and gas exploration and development (“E&D”) will witness substantial investment mainly due to the New Exploration and Licensing Policy (“NELP”) announced to enlarge the reserves and improve the domestic supply of crude oil and natural gas. In this sector investment of Rs. 2,434 billion is expected between 2007 and 2011 as compared to Rs. 1,205 billion between 2002 and 2006. Also, density of construction with respect to investment in this sector is highest at approximately 34%. Hence, it should generate substantial construction demand for the construction companies. INFRASTRUCTURE SECTOR The infrastructure sector covers the services of transportation (railways, roads and road transportation, ports, and civil aviation), communications (telecommunications and postal services), electricity and other civic infrastructure services such as water supply and sanitation, solid waste management, and urban transport. The Indian infrastructure industry is considered to be riding on a growth wave, powered largely by expenditure on ongoing infrastructure programs. Despite recent progress, India has lagged behind many other developing and developed nations in terms of infrastructure development. There is increasing recognition from the GoI that a developed infrastructure is necessary to realize potential for growth in all sectors of the economy including services, manufacturing and agriculture. Investment in infrastructure, given the intent of the GoI, is expected to continue to rise from its current level. The total spending on infrastructure development during the 11th Five-Year Plan (2007-12) is expected to be approximately Rs.14,560 billion.

Investments across infrastructure sectors Sector Amount (Rs. billion) Road & Highways 2,540 Railway (public) 1,800 Railway (private) 1,200 Civil Aviation 400 Ports (private) 500 Freight corridor 220 Power Generation 4,200 JNNURM 600 Housing 1,500 Others 1,600 Total 14,560

Source: Eleventh Fiv- year plan draft paper for construction sector released by CIDC Investments in developing infrastructure are expected to be achieved through a combination of public investment, public-private-partnerships (“PPPs”) and private investments. It is to be noted that the GoI’s focus on infrastructure improvement has led to the development of various financing models including PPPs and viability gap funding mechanisms other than the usual governments’ budgetary allocations, market borrowing and multilateral funding. Emerging success of the National Highways Development Programme has led to confidence in the credibility of such measures.


64

The importance of construction in infrastructure other asset building activities is very high. Component of construction comprises nearly 80-100% of project cost of infrastructure projects, such as roads and railways. In projects like power plants and urban infrastructure, for example, the share, though lower, is critical. Based on the construction intensity in each sector the total infrastructure investment has the potential to translate into investments worth Rs. 6,129 billion for the construction industry. Accordingly to CRISIL Research, Rs. 6,129 billion is based on total infrastructure investments of Rs. 11,886 billion. POWER India has a total installed capacity for 134,717 MW of power generation. The state sector owns or controls approximately 52.3% of India’s total installed capacity (approximately 70,457 MW) and has substantial control of most of the distribution assets. As of June 30, 2007, the total installed capacity in the country is 134,717 MWs: Installed Capacity (MWs) Installed Capacity (%) State 70,457 52.3% Central 45,841 34.0% Private 18,419 13.7% Total 134,717 100.0% Source: Ministry of Power, http://powermin.nic.in. Installed Capacity (MWs) Installed Capacity (%) Thermal 86,936 64.5% Hydro 33,486 24.6% Nuclear 4,120 3.1% Other 10,175 7.8% Total 134,717 100.0% Source: Ministry of Power, http://powermin.nic.in. The following chart shows the gap between electricity requirement and electricity availability:

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Source: Annual Report, 2005-06. Ministry of Power India faces an energy deficit of approximately 10% and a peak power deficit of approximately 15%. All regions are power deficit though individual states in some regions may be in surplus. The GoI has


65

set an ambitious target of ‘power for all’ by 2012 and proposes the addition of over 100,000 MW additional generation capacities, to bridge the gap between demand and supply of power. To boost generation, three initiatives that were taken earlier made some progress during 2006-07: Ultra Mega Power Projects, nuclear power generation and the revival of the Dabhol Power Project. In addition, the gains from past initiatives such as unbundling of state-owned utilities, the Electricity Act and government-sponsored interventions such as the Accelerated Power Development Reforms Programme have begun to show some results. As per the 11th Five-Year plan document, the total investment in power sector is expected to be Rs. 4,200 billion. The component of construction in power is approximately 38%, translating into a total construction component of Rs.1,596 billion. PORTS India has 12 major ports and 187 minor ports, of which only 60 minor ports are currently handling traffic. The major ports carry about 75% of the total traffic handled by ports in the country. High congestion at Indian ports has undermined their competitiveness. This is reflected in the average turnaround time, which is 3.5 days for the major ports in India as compared to 10 hours in Hong Kong. The congestion is mainly due to the slow evacuation of cargo (reflecting inadequate linkage to the internal networks) rather than a shortage of handling capacity. During fiscal 2007, cargo handled by the major ports registered a growth of 9.5% over the previous year, while container traffic grew at 17.9%. Private investment in new ports has been growing, for example in the state of Gujarat, which has been successful in attracting private investment into non-major ports. The 11th Five-Year Plan will develop ports and related infrastructure to bring them in line with international standards in turn-around time and clearing of both import and export cargo. Keeping in view the current and emerging constraints, the GoI has envisaged an investment of Rs.500 billion during the Eleventh Plan. RAILWAYS The railway network in India is one of the world’s busiest, with more than 13 million passengers journey each day. The Indian Railways employ about 1.5 million people, which makes it one of the biggest employers of the world. It runs about 11,000 trains everyday and has approximately 63,000 km of track - only the US, Russia, Canada and China have more. The railways have gained from the continued strong growth in the economy, tariff rationalization (albeit limited) and some other significant operational initiatives undertaken in recent years. In fiscal 2007, the railways generated a substantial cash surplus and in terms of revenue from goods traffic and passenger traffic, the year saw growth of over 17% and 14%, respectively, over the previous year. Freight accounts for around 42% of total traffic, but contributes almost 67% total revenue, whereas passenger traffic contributes 58% of the total traffic and accounts for 33% of total revenue. Accordingly, huge capital investments have been planned to bolster freight movement. Over the next five years, investments in railways are likely to be triggered by dedicated freight corridors, which the GoI has decided to build, in the western and eastern high-density routes at an estimated cost of Rs. 220 billion. Container movement by rail, which was the monopoly of a public sector entity, CONCOR, is now open to competition. Private sector entities have been made eligible for running container trains. The GoI has awarded licenses to 14 private parties for running container trains. This move is likely to attract substantial private investment in construction of terminals in the next few years.


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Over the next five years, a total investment of Rs.1,552 billion is expected as against total investment of Rs.549 billion made over the previous five years. Investments in railway are likely to lead to a construction demand of Rs.639 billion over the next five years. URBAN INFRASTRUCTURE Urban Infrastructure includes water supply and sanitation, sewerage and solid waste (“WSS”) management and projects covered under Jawaharlal Nehru National Urban Renewal Mission (“JNNURM”). JNNURM, in turn, will be driven by WSS and transport-related projects, especially metro projects. Urban population in India has grown to 27.8% of total population in 2001, from 23.3% in 1981. Going forward, urbanisation is expected to accelerate, translating to urban population growth of 2.27% until 2011, as compared to overall population growth of 1.5%. The growth in urbanisation will call for greater provisions of water, sanitation and transport projects. Major cities such as Delhi, Kolkata, Bangalore and Mumbai are developing the Mass Rail Transit System (“MRTS”) to accommodate the rapidly growing demand for public transport. During the 11th Five-Year Plan period, the outlay required for urban transport investment is Rs.574 billion, which includes as much as Rs.320 billion for MRTS for mega cities such as Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Bangalore. Many flyovers, interchanges, new city roads and MRTS are planned in these cities.

(Rs. in billion) Urban sector investment required under JNNURM

No. of cities Investment required Annual fund requirement

Cities with over 4 million population 7 571.43 81.63 Cities with 1-4 million population 28 571.43 86.13 Selected cities with less than 1 million population 28 62.50 8.93 Total 63 1205.36 176.69 Source: Crisil Research Construction Annual Review, May 2007 ROADS The implementation of the National Highway Development Project (“NHDP”) continues to remain the focus of road sector activities. Phases I and II of the NHDP were funded mainly through cesses collected on the sale of petrol and diesel in the country. However, NHDP Phase III to Phase VII will be developed entirely as PPP projects on a build, operate and transfer (“BOT”) basis by private developers, while the ‘cess’ funding will be utilized for rural roads projects. According to the Working Group on Rural Roads set up by the Planning Commission, the financial requirement for rural roads during the Eleventh Plan is Rs. 790 billion. This would mean a shift toward tolls being the dominant source of financing and a transfer of financing and traffic risk to the private sector. While private interest in roads has been sustained, progress in fiscal 2007 was limited, perhaps due to the time taken for institutional adjustment to the new scenario, and rising input costs. Despite this temporary slowdown, the GoI envisages a huge investment of Rs.2,200 billion during the Eleventh Plan. As part of NHDP Phase V, the bidding process for development of eight sub-sections of a national highway comprising 1,405 km with an estimated cost of Rs.81.2 billion is underway. The trend has been for the larger stretches of road to be developed under a single project. Therefore, the average project size is now tending toward Rs.10 billion. Larger projects tend to lead to stricter technical and financial pre-bid qualification criteria, restricting competition from smaller players. Larger projects are also more attractive to private equity and other investors, increasing the financing options available to project developers. Meanwhile, the National Highways Authority of India (“NHAI”) corridor management policy continued to be implemented. Applied through operation and


67

maintenance contracts, the policy aims at maximizing throughput in terms of velocity and number of vehicles, while minimizing the number of accidents. A model concession agreement for national highways has been issued with a view to improve transparency, secure value for public money and adopt international best practices in highway development. The following table summarises the NHDP projects:

Progress of NHAI Projects: Status as on July 31, 2007 Particulars

GQ

NSEW & Phase - I &

II

NHDP Phase III -

A

NHDP Phase -

V Port

Connectivity Other NHDP Total

Total Length (kms) 5,846 7,300+ 4,035 6,500 380 962^ 25,006

Already 4-laned (kms) 5597** 1,390 126 - 159 314 6,799 Under Implementation Length (kms) No. of Contracts

249 25

4,931 148+

1,830 30

148 2

215 8

628 16 8,029

Balance to be awarded (kms) - 821^ 2,079^ 6,352 6 20 10,178

** Out of 5,597 km, 5,342 km includes bituminous concrete layer and 255 km up to dense bituminous macadam ^ The difference in length is because of change in length after award of works +Out of 7300 Km, 981 km length is in Phase-I and remaining length is in Phase-II. Against 981 km, 874 km length was 4 laned and 516 km against phase-II including up to DBM level. Actual length at present excluding 442 km common length with the Golden Quadrilateral (“GQ”) is 7,274 km. (Source: NHAI Website) CRISILDisclaimer: CRISIL Limited has used due care and caution in preparing this report. Information has been obtained by CRISIL from sources which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. No part of this report may be published / reproduced in any form without CRISIL’s prior written approval. CRISIL is not liable for investment decisions which may be based on the views expressed in this report. CRISIL Research operates independently of, and does not have excess to information obtained by CRISIL’s Rating Divisions, which may, in its regular operations, obtain information of a confidential nature that is not available to CRISIL Research.


68

OUR BUSINESS

Overview: We are a large and well-established construction company in India with experience in civil and structural construction services since 1924. Our service offerings include design, engineering and construction using reinforced concrete and cement (“RCC”) and steel, fittings and finishing work on structures, electro-mechanical fit outs, piling foundations, ground engineering and earth works. We provide both design-and-build and build-to-design services. We are present across various construction sectors, which include piling, industrial, power, urban infrastructure, buildings and housing, marine and roads, railways, and bridges. In addition to this varied sector portfolio, our operations cover many geographical areas throughout India, as well as overseas in Qatar and the United Arab Emirates (“UAE”). The demand for construction services flows from three streams - infrastructure, industrial and real estate construction. Our presence in multiple sectors caters to all three demand streams in India and overseas. While our power, marine, urban infrastructure and roads, railways and bridges business sectors cater to the infrastructure construction demand, the building and housing sector the real estate construction demand, the industrial sector the industrial construction demand, and the piling sector caters to the demand from all three demand streams. We have over 80 years of construction experience. We were originally incorporated as Simplex Concrete Piles (India) Limited on December 19, 1924, under the Companies Act, 1913 by Mr. R.A. Lancaster, an Englishman, who invented the piling system which came to be known as the ‘Simplex’ system of piling, and came under Indian management in 1947, when the Mundhra family took over the business. We went public with an initial public offering of shares in 1993. The Company changed its name to Simplex Infrastructures Limited in 2005. Our early operations focused on the construction of cast-in-situ driven pile foundations, which became referred to in the industry as the “Simplex system of piling” throughout India and South-East Asia. Initially, piling services of all types was our primary business. Over several decades, we expanded and developed our expertise across various sectors in the construction industry. We have completed and continue to undertake projects across sectors throughout India and in Dubai, UAE and Doha, Qatar. As of June 30, 2007, 139 project sites were in process, of which 11 are located in Qatar and 3 are located in the UAE. Our client mix is diverse and comprises private and public institutions, including the National Highway Authority of India, domestic and international conglomerates and state governments. Our private sector clients include well known industrial groups in India across diverse manufacturing sectors, corporates and international EPC contractors. Our registered and head office is located in Kolkata. We organise and manage our business through our project offices, branch offices in Kolkata, Delhi, Mumbai and Chennai in India and overseas branch offices in Doha, Qatar and Dubai, UAE, employing as of September 30, 2007, 6,084 employees and hiring construction workers as needed at project sites. We enjoy several accreditations and awards. In 2003, we received ISO 9001:2000 quality management systems certification. In 2005, we were rated as the “Overall Best Managed Company (Small-Cap)” by Asia Money magazine. In 2006, we were nominated for “The Most Admired Infrastructure Company for Year 2005-2006” by the English news channel NDTV Profit. In 2007, the Company was rated by the magazine Business World among the top five largest shareholder-value creators in the last five years in the mid-cap category.


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The table below depicts our contract turnover in each sector over financial years ended March 31, 2005, 2006 and 2007, and the three months ended June 30, 2006 and 2007.

(Rs. in million) Contract Turnover 3 months ended

June 30, 2007 3 months ended June 30, 2006

FY 07 FY 06 FY 05

By Sectors:

Contract turnover


Contract turnover

% of total

contract turnover

Contract turnover

% of total

contract turnover

Contract turnover

% of total

contract turnover

Contract turnover


Piling 743.00 12.79% 556.57 15.85% 2,234.81 13.08% 1,374.03 10.23% 871.32 8.72%Industrial projects 1,823.41 31.39% 512.63 14.60% 4,110.99 24.07% 2,195.10 16.35% 1,859.94 18.62%Power 1,017.41 17.52% 1,183.24 33.69% 4,488.49 26.28% 4,413.57 32.87% 1,189.35 11.91%Roads, railways and bridges

Roads 276.71 4.76% 37.71 1.07% 444.67 2.60% 388.70 2.90% 1,310.90 13.12%Railways 99.35 1.71% 0.00 0.00% 111.92 0.66% - 0.00% - 0.00%Bridges 413.95 7.13% 242.61 6.90% 1,424.52 8.34% 827.70 6.16% 760.37 7.61%

Building and housing 678.72 11.69% 488.53 13.91% 1,792.68 10.49% 1,450.93 10.81% 908.64 9.10%Marine 151.31 2.61% 305.74 8.71% 992.62 5.81% 1,195.05 8.90% 599.40 5.99%Urban infrastructures 603.75 10.40% 185.02 5.27% 1,481.44 8.67% 1,582.31 11.78% 2,490.19 24.93%Total Contract Turnover 5,807.61 100.00% 3,512.05 100.00% 17,082.14 100.00% 13,427.39 100.00% 9,990.11 100.00% By Geographical Segments:

Domestic 5,053.69 87.02% 2,904.12 82.69% 14,574.63 85.32% 12,275.56 91.42% 9,556.72 95.66%Foreign 753.92 12.98% 607.93 17.31% 2,507.51 14.68% 1,151.83 8.58% 433.39 4.34%Total Contract Turnover

5,807.61

100.00%

3,512.05 100.00% 17,082.14 100.00% 13,427.39

100.00% 9,990.11 100.00%

As of June 30, 2007, our order book was Rs.69,391.82 million comprising 184 contracts spread over 139 project sites including 11 in Doha, Qatar and 3 in Dubai, UAE. The share of the overseas projects in the order book was Rs.20,986.09 million, being 30.24% of the total order book. Our Strengths Experience across diversified business sectors: We are a well-diversified construction company with a presence in almost all sectors of the construction business, including piling, industrials, buildings and housing, power, marine, urban infrastructure and roads, railways and bridges. Our experience includes the following:

• Industrial structures: construction of plants for cement, steel, aluminium, copper, engineering, automobiles, petrochemicals, fertilisers, paper, textiles, pharmaceuticals, chemicals and shipyards.

• Power: construction of thermal (coal, oil and gas-based), hydroelectric and nuclear power

plants.

• Piling: foundation work including pre-cast piling, pre-cast jointed piling, driven piling, bored piling and cast-in-situ piling and ground engineering work including soil compaction, soil strengthening and diaphragm walls.


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• Urban infrastructure: construction of metro transport projects (underground and above ground stations), water and sewage treatment plants and pipelines, airports, sports stadiums, and public buildings.

• Building and housing: construction of multi-storied residential and commercial towers, mass

housing, institutional buildings.

• Marine structures: construction of ports, jetties, wharves, terminals, lighthouses, breakwaters and quays.

• Roads, railways and bridges: construction of flyovers, elevated corridors, roads, laying down

of railway tracks, and related activities. Good quality and healthy order book: By diversifying our skill set and order book across sectors, we are able to pursue a broader range of project tenders and therefore maximise our business volume and contract profit margins.


Contract Value June 30, 2007


Sectors (Rs. in millions) (Rs. in millions)

Piling 3815.34 1,517.62 2.19% Industrial 21,854.53 16,526.56 23.82% Power 15,699.28 4,800.45 6.92% Roads, railway and bridges Roads 3,898.40 3,194.50 4.60% Railways 2,382.55 2,171.29 3.13% Bridges 9,491.06 6,678.38 9.62% Marine 4,814.66 2,381.39 3.43% Building and housing 26,491.33 23,939.50 34.50% Urban infrastructure 11,254.67 8,182.13 11.79% Total 99,701.82 69,391.82 100.00% Geographical Segments: Domestic 76,610.58 48,405.73 69.76% Foreign 23,091.24 20,986.09 30.24% Total 99,701.82 69,391.82 100.00%

With India’s economy growing at a rapid pace, our diverse expertise across sectors and geographies allows us to capture more opportunities than if we were focused on only one sector or geography. We also believe that our diversification protects us from downturns in any one particular sector or geography. Our clients are both private and public entities, and although many of our clients refer repeat business to us, no single client accounts for more than 10% of our current order book. Strong project management and execution expertise and capabilities: We were managing 139 project sites and 184 contracts as of June 30, 2007, in India and abroad. Managing such a large number of project sites and contracts requires significant project management and execution expertise and capabilities, which we have been able to build gradually since our inception in 1924. We have established a good track record and reputation for efficient and systematic project management and execution skills due to the following competencies:


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• Experienced project managers supported by core project teams at each project site to help expedite decision-making, project planning and execution and contract management.

• A dedicated team to facilitate efficient procurement, deployment, operation and maintenance

of construction equipment for various project sites.

• Experienced design and engineering teams.

• Strong human resource development teams to perform recruitment and training.

• All project sites are overseen by seven zonal/branch offices.

• Strategic purchasing capabilities include maintaining good relationships with multiple suppliers to reduce dependence, placing centralised large orders to receive bulk discounts and sourcing from imports if there is a price advantage.

• Maintaining strong relationships with sub-contractors enable us to secure competent

construction workers in a timely manner.

• Information technology and internet connectivity with project sites to allow for easy accessibility and communication among on-site project managers and each zonal/branch office.

• Effective management information systems (“MIS”) to help plan and monitor progress of

project execution in terms of time, cost, quality parameters, efficiency, utilisation and deployment of plant, equipment and manpower resources across locations.

Wide presence in India and locations in Qatar and the UAE: We undertake projects across the length and breadth of India, with 125 project sites in operation as of June 30, 2007. In order to capitalise on business opportunities in Qatar and the UAE, we opened branch offices in Doha, Qatar in 2003, and Dubai, UAE in 2004. This allows us to better support 14 current projects in those cities and carry out business development in the region. During the past few years, the contribution of foreign sales to our total contract turnover grew from 4.34% in 2004-05 to 14.68% in 2006-07. As of June 30, 2007, our order book comprised 30.24% overseas contracts. Experienced, qualified and motivated management team and employee base: We have significant experience with over eight decades of construction technology and project management know-how. Our management team is well qualified and experienced in the construction industry. This team is responsible for the growth in our business operations. In addition, our Board, with a strong combination of managerial acumen as well as entrepreneurial spirit, is equipped to handle both domestic and international business situations. The length and breadth of their experience and expertise, coupled with their strong client relationships and positive industry reputation, gives us a competitive edge in the construction industry. Our employees are also key to our success, which is why we strive to be an employer of choice. As of September 30, 2007, we employed 6,084 employees (including temporary job appointees and trainees, but excluding contract labourers), of which 81.5% are technically qualified and trained. This includes 3,976 engineers, 526 trained technicians and 455 science graduates and post-graduates. To manage the pan-India and overseas business, we have 114 qualified finance professionals including Chartered Accountants and Masters of Business Administration (“MBAs”). The senior management team of 51 people is highly experienced and is drawn from technical and commercial backgrounds. In our industry, clients expect quality work from contractors and, therefore, we strive to hire talented and qualified people.


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The Company’s management recognises the competitive environment for talent in India, especially for junior technical staff. In response, the Company proactively increased its recruitment class of new graduates this year to ensure that our human resources are sufficient to meet the demands of our growing business. We hold training programmes for our employees on an annual basis to help them expand and develop their knowledge and skills. Training is provided in-house and covers many areas including construction technology and management. We also strive to provide a positive work atmosphere for our employees. Own large fleet of modern construction equipment: We have consistently invested in a large fleet of modern equipment. The Company owns modern construction plants and equipment, which meets most of the Company’s requirements for our present projects. With so many projects in progress at any given time, ready access to such equipment is important to our ability to execute projects and bid on additional tenders. Our major construction equipment numbering over 1,060 pieces as on June 30, 2007, includes 117 piling rigs including hydraulic rigs, 130 cranes including tower cranes, 89 batching plants, 167 transit mixers and 11 crusher plants. Business Strategy Capture high growth opportunities throughout India: We intend to target specific projects, sectors and geographies where we believe there is high potential for growth and where we enjoy competitive advantages. We intend to capitalise on our experience in executing current high growth opportunities in infrastructure, housing and industrial projects. We continue to evaluate and identify the future high growth areas in Indian construction such as marine, power and railways. We intend to expand and enhance our pan-India presence where we have previously developed a strong base of operations by capitalising on our local experience, established contacts with local clients and suppliers, and familiarity with local working conditions. In pursuing our strategies, we seek to identify markets where we believe we can utilise our technical capabilities to provide high quality construction services with significant cost advantages to our clients and distinguish ourselves from our competitors. In order to expand our operations, we also seek to identify joint venture partners whose resources, capabilities and strategies are complementary to, and are likely to enhance, our business operations in such regions. Our services in some of the sectors are dependent on construction projects of large Indian and international conglomerates and infrastructure projects undertaken by governmental authorities funded by governments or international and multilateral development finance institutions. We intend to develop or maintain relationships with this client base. A part of our business also flows from developing and maintaining strategic alliances with EPC contractors with whom we may want to enter into strategic alliances in the form of joint ventures, consortia or sub-contract relationships for specific projects. Capitalise on opportunities in Qatar, the UAE and other locations: We also intend to strengthen our presence in strategically important locations where we have established ourselves, such as Qatar and the UAE, which we believe have potential for construction projects in the building and housing, industrial construction and commercial construction. We have established branch offices in Doha and Dubai.


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In pursuing our strategies, we seek to identify markets where we believe we can leverage our technical capabilities to provide high quality construction services with significant cost advantages to our clients and distinguish ourselves from other competitors. In order to expand our operations, we also seek to identify joint venture partners whose resources, capabilities and strategies are complementary to and are likely to enhance our business operations in such regions. Selectively enter into new areas of business: We intend to explore new opportunities in areas where we can capitalise our existing strengths to increase our margins. We intend to pursue public private participation (“PPP”) arrangements in infrastructure projects and obtain turnkey and EPC contracts. Such contracts, which generally yield higher fees, will enable us to move up the value chain to become the main contractor on our projects. These will provide opportunities to bid on a higher number of international projects, deploy our resources more efficiently and improve operating margins. For certain large value projects we may also explore forming strategic alliances with other experienced and qualified contractors, which may include some of our existing or past clients. We also intend to explore other opportunities that will allow us to gain new skills while utilising our existing resources. Due to our long experience of handling the entire range of piling and drilling rigs in different kinds of locations, we recently took the first step in providing on-shore oil drilling services. In consortium with a company engaged in on-shore oil drilling, we have signed a two-year contract, further renewable on the same terms, to provide on-shore oil drilling services to an Indian oil company. In order to provide the contract on shore oil drilling services, we have procured an on-shore oil-drilling rig. The cost incurred through November 30, 2007 for this oil drilling rig and accessories is approximately Rs. 386.04 million. Continue to focus on performance and building project execution capabilities: We believe that we have developed a good reputation for undertaking complex and challenging construction projects and completing projects within quality, cost and time parameters. We intend to continue to focus on performance and project execution in order to maximise client satisfaction and profit margins. Our pan-India, international and multi-sector experience enable our engineering teams to incorporate best practices from different sectors and geographic regions. We utilise advanced technologies, designs, engineering and project management tools to increase productivity and maximise asset utilisation in capital and labour-intensive construction activities. We intend to continue to invest in and strengthen our information and communication technology infrastructure for our operations in order to maintain high quality engineering solutions to our clients. We also continue to invest in construction equipment, manpower resources and training. Attract and retain talent: The chief constraint on building or maintaining the capabilities for future growth is the availability of trained employees. We proactively recruit employees ahead of our requirements for creating the capabilities for future growth in business. Newly recruited employees are required to undergo on-the-job training and initially work as assistants to experienced staff covering various functions at sites and offices before they are given specific and direct responsibilities for any activity. The employee base has been continually growing to meet current and future growth needs. Our employee strength as of September 30, 2007, was 6,084, which included 1,451 temporary job appointees and trainees. Our employee base increased from 3,097 to 5,024 from the end of FY 2005 to the end of FY 2007, respectively. Construction Sectors: We have a diverse portfolio of projects and developed our expertise across various sectors in the construction industry by building industrial plants (cement, steel, aluminium, copper, engineering, automobiles, petrochemicals, oil and gas, fertiliser, paper, textiles, chemicals, pharmaceuticals and


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shipyards), power plants (thermal, nuclear and hydroelectric), urban infrastructure (metro stations, airports, water and sewerage treatment plants and pipelines, sports complexes and others), buildings and housing (residential and commercial multi-storied towers, mass housing and institutional buildings), marine structures (ports, jetties, wharves and others), roads, railways and bridges (flyovers, elevated corridors and other specialised structures such as silos and rocket launching pads). Below is a summary of our activities in each sector. Piling and Ground Engineering: We began our operations as a piling specialist in 1924, and piling remains one of our core activities throughout India, Qatar and the UAE. This work encompasses a thorough understanding of various soil types, load-bearing capacities and the specialised alterations required so that the soil can withstand structural pressure from the superstructure above. We are present in all types of piling and ground engineering work both on ground and marine. We also construct diaphragm walls and related work. We currently hold two patents in piling technology, with additional two patent applications pending. Piling provides us with the entry strategy to new construction sectors in new territories or for new clients, and can lead to opportunities for more business in piling or other construction sectors. A piling project may typically last for two to nine months. For FY 2007, Rs.2,234.81 million sales from piling and ground engineering contracts constituted 13.08% of our total contract turnover. Some of the major piling and ground engineering projects that we completed are:

• Installation of about 85,000 driven cast-in-situ concrete piles for a steel plant complex at

Hazira, Gujarat. • Installation of about 16,000 pre-cast concrete driven piles for a fertilizer plant at Kakinada,

Andhra Pradesh.

• Installation of about 70,000 running metre bored cast-in-situ piles for a 4x250 MW super thermal power plant at Tamnar, Raigarh, Orissa.

• Construction of a 15,425 sq. metre, 750 mm thick diaphragm wall for Paradeep Port Trust in

Orissa.

• Piling work for Supreme Court buildings in India and Myanmar, approach roads for Howrah Bridge and Bally Bridge, General Post Office building and Salt Lake Stadium in Kolkata.

Some of our contracts in progress include the following:

• Piling, ground engineering, site preparation work and installation of about 100,000 running meter bored cast-in-situ piles for a 1,100 MW Sugen combined cycle power plant at Surat, Gujarat for a contract value of Rs. 575 million.

• Piling and ground engineering work for construction of Qanat Quartier precinct and 31 villas

in La Plage and Bahriya precincts in Pearl, Qatar for a contract value of Rs. 258 million.

• Construction of a 14,000 sq. meter, 800 mm thick concrete diaphragm wall for Noida Mall at Noida, Delhi for a contract value of Rs. 230 million.


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Industrial Projects:

We have been present in the industrial construction sector since 1935, and currently have projects in India, Qatar and the UAE. For FY 2007, our contract turnover of industrial construction contracts was Rs.4,110.99 million, representing 24.07% of our total contract turnover. We enjoy a list of long associations in the construction of industrial structures for large industrial houses and governments. Industrial projects include civil and structural construction in industries such as cement, steel, copper, aluminum, petrochemicals, oil and gas, chemical, fertilisers, textile, paper, pharmaceuticals, automobiles, engineering and shipyards.

Some of the major industrial contracts we have completed are:

• Raw water supply system for 1.4 million metric tonne per annum alumina refinery at Lanjigarh, Orissa.

• Civil and structural steel construction work for plant buildings for PET resin project at Haldia,

West Bengal.

• Civil and structural work for a petroleum refinery at Jamnagar, Gujarat. Some of our contracts in progress include the following:

• Civil and structural erection, civil works and commissioning assistance of contract items and onshore supply items for a 5,000 tonnes per day cement plant at Qatar for a contract value of Rs.6,105 million.

• Civil and structural work for the Kotputli cement plant of at Jaipur, Rajasthan for a contract

value of Rs.1,973 million.

• Civil, structural, mechanical, piping, equipment assembly, fabrication and erection, and electrical and other associated works for a 29 MTPA petroleum refinery and petrochemical complex at Jamnagar, Gujarat for a contract value of Rs.2,100 million.

Power Projects: The Company has been present in the construction of power stations since 1960, throughout India. For FY 2007, our contract turnover of power construction contracts was Rs.4,488.49 million, representing 26.28% of our total contract turnover. Our services include civil and structural construction of thermal power plants, such as coal, gas and oil based plants, nuclear power plants and hydroelectric power plants.

Some of the major power contracts we have completed are:

• Civil and structural construction of a 4 x 250 MW power plant at Raigarh, Chhattisgarh.

• Civil and structural work for a 2 x 500 MW boiler at Bunker Bay Power House at Simhadri Thermal Power Plant in Visakhapatnam, Andhra Pradesh.

• Civil and structural work for a 200 MW diesel power plant, Basin Bridge Combined Cycle

Power Plant, Chennai, Tamil Nadu.

• Civil works for construction of a 208 MW of Godavari gas power project at Kakinada, Andhra Pradesh.



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• Design, engineering, laying, supply, installation and commissioning of long distance raw water intake and delivery system for a captive power plant project at Jharsuguda, Orissa for a contract value of Rs.755 million.

• Construction of turbine buildings, emergency power supply buildings, cable and pipe tunnels,

400 KV GIS buildings, 220 KV GIS buildings and switchyard central control building for the Kudankulam nuclear power project for a contract value of Rs.3,497 million.

• Civil, structural and architectural work of main plant civil package for a 2 x 250 MW at Mejia

Thermal Power Station at Durgapur, West Bengal for a contract value of Rs.1,279 million.

• Civil, structural and architectural work of coal handling system for a 1 x 210 MW Amarkantak Thermal Power Station at Amarkantak, Madhya Pradesh for a contract value of Rs.433 million.

• Civil, structural and architectural work including plant and machinery, road, earth work and

Bailey Bridge for construction of Teesta Low Dam for a 4 x 33 MW hydroelectric power project for a contract value of Rs.2,095 million.

Urban Infrastructure and Utilities:

We have provided urban infrastructure and utilities construction services since 1965 throughout India. For FY 2007, our contract turnover of urban infrastructure construction contracts was Rs.1,481.44 million, representing 8.67% of our total contract turnover. We undertake turnkey or standalone civil works in water and sewage treatment plants and pipelines, public buildings, airports and sports complexes, entertainment complexes, and metro rails.

Some of the major urban infrastructure contracts we have completed are:

• Construction of a rocket launching station for GoI, Department of Space in Shriharikota, Andhra Pradesh.

• Construction of sewage pumping station and laying down of sewage pipe-line in Chennai,

Tamil Nadu.

• Construction of several metro station buildings including stations for the Delhi Metro Rail Corporation Limited (“DMRC”) at Dwarka, Shahadara, ISBT, Prem Bihar, Om Vihar, Ganesh Nagar, Janak Puri, Uttam Nagar and Tis Hazari.

Some of our contracts in progress including the following:

• Design and construction of a viaduct and structural work of three elevated stations at Chattarpur, Ghitorni and Arjangarh on the Qutub Minar-Gurgaon corridor of Delhi MRTS for a contract value of Rs.2,121 million.

• Design and construction of the Capital City Complex (Assembly and High Court complexes)

at Chingmeirong, Imphal, Manipur for the Government of Manipur for a contract value of Rs.2,292 million.

• Construction of the mega sports complex at Hatwar, Ranchi, Jharkhand for a contract value of

Rs.2,393 million.

• Construction of new international terminal buildings and allied works at the Jaipur and Udaipur airports in Rajasthan for a contract value of Rs.1,114 million.


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Building and Housing: We have been present in building and housing construction since 1955. While most of our projects are located in India, we also have projects in Qatar and the UAE. In this sector, we provide a range of services related to the construction of multi-storied towers for residential and commercial use, independent housing colonies, low-cost mass housing and commercial complexes. We also undertake construction of storm water drains, underground drains and storage tanks, which are supplemental to work we undertake for the residential and commercial buildings. Currently we are constructing over 20 million square feet of buildings and housing. For FY 2007, our contract turnover from building and housing construction contracts was Rs.1,792.68 million, representing 10.49% of our total contract turnover.

Some of the major building and housing contracts we have completed are:

• Construction of a hospital building and research centre in Delhi.

• Construction of 3,168 low cost tenements and 72 shops with site development and landscaping work in Mumbai, Maharashtra.

• Construction of a hostel building for an educational institution at Guwahati, Assam.

• Civil and structural work, architectural and finishing work, and public health engineering

works for a hospital complex at Pune, Maharashtra. Some of our contracts in progress including the following:

• Construction of U-Bora Towers at Business Bay at Dubai, UAE for a contract value of Rs.4,258 million.

• Construction of six buildings at Liwan, Dubailand, Dubai, UAE for a contract value of

Rs.3,549 million.

• Construction of high-rise residential development at Kanakapura-Elita Horizon, Bangalore, Karnataka for a contract value of Rs.1,580 million.

• Structural work for two parcels of ‘The Pearl’ in Qatar for a contract value of Rs.1,146

million.

• Civil and construction work for residential tower at Rajarhat, Kolkata in West Bengal for a contract value of Rs.810 million.

• Civil and structural works for construction of Brigade Metropolis at Whitefields Bangalore,

Karnataka for a contract value of Rs.1,096 million.

• Civil construction work of three 35-storied residential towers “Beaumonde” at Prabhadevi, Mumbai, Maharashtra for a contract value of Rs.148 million.

Marine Structures: Our first marine project was the King George Docks in Mumbai in 1940. Since then, we have been associated with many of the major ports in India. For FY 2007, our contract turnover from marine construction contracts was Rs.992.62 million, representing 5.81% of our total contract turnover. The marine sector comprises the design and civil construction of ports and harbours, wharves,


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breakwaters, jetties, lighthouses, berths and quays, among other things. As a pioneer in piling work in India, we believe that the Company’s progression into marine construction was a logical and natural step as the marine sector requires specialised deep-sea piling foundation work.

Some of the major marine contracts we have completed are:

• Wharf and approach bridge construction and causeway reclamation works at Jawaharlal Nehru Port in Mumbai, Maharashtra.

• Design and construction of container terminal T-2 at Mundra, Kutch in Gujarat.

• Civil work for a breakwater at Porbandar Port in Gujarat.

• Construction and extension of a wet basin including integrated dry rock at Paradip Port in

Orissa. Some of our contracts in progress including the following:

• Construction for an approach jetty, main berth and mooring dolphins at Dahej, Gujarat for a contract value of Rs. 840 million.

• Construction of berths at Karaikal Port, Pondicherry for a contract value of Rs. 597 million.

• Reconstruction of Mattancherry Wharf, Cochin in Kerala for a contract value of Rs. 452

million. Roads, Railways and Bridges: We have been present in road, railway and bridge construction since the early 1980s. For FY 2007, our contract turnover of road, railway and bridge contracts was Rs.1,981.11 million, representing roads (2.60%), railways (0.66%), bridges (8.34%) aggregating 11.60% of our total contract turnover. In this sector, we are constructing highways, expressways, flyovers, and bridges. We are also laying railway tracks and doing other related work. Roads and bridges: Our work on roads and bridges includes construction of flyovers in several Indian cities and portions of highway in the Golden Quadrilateral (“GQ”) . We have substantial experience in building bridges using RCC pre-stressed concrete girders and well foundations for water sites. Some of the major road and bridge contracts we have completed are:

• Constructed four-lanes of Kolhapur-Satara road up to Maharashtra State Border.

• Rehabilitation and upgrade of an existing two-lane road to four-or-six lane divided carriageway in Andhra Pradesh for National Highway Authority of India (“NHAI”).

• Construction of flyovers in Delhi, Jaipur, Mumbai, Kolkata, Bangalore and others. In 1996,

we were awarded the “Most Outstanding Bridge” award by the Indian Institute of Bridge Engineers following our construction of the S.V. Patel flyover in Mumbai.


• Construction of a 13 km long elevated expressway corridor in Hyderabad, Andhra Pradesh on an EPC basis for a contract value of Rs. 4,170 million.


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• Construction of a 41 km four-lane highway in Uttar Pradesh for NHAI for a contract value of

Rs. 2,727 million.

• Improvement of access to GQ corridor by construction of free flow facilities within Chennai City, Tamil Nadu for a contract value of Rs. 2,155 million.

Railways: We entered into the railway sector with projects involving the construction of related buildings, bridges and platforms. Among other projects, we completed construction of Mahar Bridge between railway stations Kharepaten and Humrat on the new coastal railway line between Mumbai and Mangalore via Goa for Konkan Railway Corporation Limited. Some of our contracts in progress including the following:

• Railway track doubling of the Guntakal Raichur section of the South Central Railway for a contract value of Rs. 1,707 million.

• Construction of a bridge over Mahanadi and Luna in connection with construction of a new

line between Haridaspur and Paradeep of the East Coast Railway for a contract value of Rs. 675 million.

Our Operations Business process: Marketing and business development for construction services is carried out centrally and at each zonal/branch office. Potential opportunities are brought to our attention through discussions with our local contacts, existing clients and partners, as well as through research of local and national publications. The various offices track and report new opportunities and the outcome to the head office on a weekly basis. We enter into contracts primarily through a competitive bidding process, which often requires a pre-qualification process especially in the public sector. Before a tender is submitted, we perform preliminary due diligence at the proposed project site. Once the tender is accepted by the client, it is converted into a letter of intent, and a project manager and the project team are identified. Detailed project planning occurs to estimate resources, cost of completion and profitability. Once all of these items are determined and after final negotiations, a construction contract is signed with the client. Resources are then mobilised at the project site and execution of work is started. Construction begins when the client hands over the site, plans and drawings to our on-site team. The project execution work is carried out as per the plan and the on-going requirements of the client. The monthly bill is raised for the actual work completed and duly measured, and after certification by the client, the bill is paid by the client as per the contract term and conditions, after reaching the threshold limit of the agreed level of the preparatory work or the construction work. The actual cost of the work done and the revised estimates of the cost to complete the remaining work are carried out every quarter. The quality control and safety, health and environment efforts at the site offices are further supplemented by the efforts from the zonal or branch office and the head office by way of technical audits, quality audits, and International Standardisation Organisation (“ISO”) audits as to cost and time parameters as well as client satisfaction.


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PQ submission (especially for GoI contracts)

Due diligence (project and contract)

Site visit and evaluations of material, labour, equipment and other costs

Submission and approval of design and drawings

or receipt from client

Direct enquiry

Planning of resources, logistics and work Mobilization of resources

Execution of the work

Final inspection Dues clearance and hand

over of project

De-mobilization of resources

End

Due diligence (client, project and contract)

Job awarded?

Yes

No

Post-tender / Quotation discussions and negotiations

Business Development and Marketing

Tendering (preparation of tender documents) and Bidding

Submission of the quotations

Defect liability and repair (if any) and realization of

retention, BG etc.

Site visit and evaluations of material, labour, equipment

and other costs

Invitation of expression of interest and Pre-qualification (“PQ”)

Monthly quarterly survey, billing, client certification

and payment

The following diagram depicts our business process at a glance:


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Project management, supervision and organisational functions: As of June 30, 2007, we had 139 project sites under construction. These sites are managed by on-site project managers who are experienced engineers and are assisted by other engineers in charge of project planning, construction and plant operations and maintenance. Each site is supervised and controlled by one of the zonal offices in Kolkata, Delhi, Chennai, sub-zonal offices in Mumbai and Baroda, or a branch office in Doha or Dubai. Each zonal office is managed by a technical director and supported by senior members of management. The zonal office in Kolkata handles all construction sectors, while Delhi handles all sectors except marine, and Chennai handles mainly piling foundation and ground engineering works. The Kolkata and Delhi zonal offices delegate some oversight functions to the sub-zonal offices from time to time for some of the projects in the vicinity. We utilise advanced computerised facilities and software programs to connect the project sites, zonal/branch offices and head office. Monthly progress reports are generated from each project site to its relevant zonal/branch office, where project coordinators evaluate progress and make necessary adjustments to the schedule, design and resources. Senior management at the head office in Kolkata monitors and supervises the offices through MIS. Joint Ventures: For certain larger projects that require resources beyond those available to us, such as financial strength, equipment, manpower or local content resources, or when we wish to share the risk on a particularly large project, or where we do not possess requisite qualifications on our own, we seek to make alliances through the formation of project-specific joint ventures with other contracting, engineering and construction companies. In FY2007, we had seven joint venture agreements with domestic and foreign partners. Competition: Our industry is competitive. Our competition includes both domestic and foreign competitors. However, the level of competition varies from sector to sector. Competition for any contract depends on the size, nature and complexity of the project, as well as the geographical region in which the project is to be implemented. We believe that our multi-sector expertise and execution capabilities, our multi-location presence across geographies, as well as our diverse project portfolio, help distinguish us from our competitors and protect us from downturns in any particular sector or geography. Human Resources: Our Human Resource Development (“HRD”), being a key function is manned by professionally qualified and experienced personnel and receives attention from senior management. We believe in practicing effective HRD, resulting in greater employee satisfaction and retention levels. Our major HRD practices are:

• Manpower planning and proactive recruitment ahead of requirements, greater pan-India campus recruitment and maintaining strong relationships and interactions with technical and management institutions.

• Ongoing regular internal on-the-job training programmes including professional development,

behaviour, management and communication training and training of the trainees.


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• Ongoing competency mapping throughout our entire organisation to identify training needs for each employee, plan the career path of employees and profile and track the expertise within the organisation.

• Systematic job-rotation, regular performance review, promotion programme, rewards and

recognition.

• Mentoring and providing career progression opportunities.

• Performance based reward system and planning the career growth path.

• Striving to provide and promote a positive work atmosphere for employees. The following table sets forth the analysis of our employees, including temporary staff and trainees, as of September 30, 2007.

Qualifications No. of

employees Graduate engineers 1,217 Diploma engineers 2,759 Technicians 526 Science graduates and post graduates 455 (A) Total technically qualified professionals 4,957 Chartered Accountant/ MBAs 114 Commerce graduates and post-graduates 622 Commerce undergraduates 391 (B) Total commercially qualified professionals 1,127 (C) Total employees (A+B) 6,084

• 81.5% of our employee base is engineers and technically qualified. • Our 51 senior management team includes members who have been associated with us for an

average 14 years and 268 middle level managers who have been associated with us for an average of 10 years.

• 5,634 employees in India and 450 employees in Qatar and the UAE.

Plant and equipment: The Company owns modern construction plants and equipment, which meet most of the Company’s requirements for our present projects. As our projects diversified and our order book increased over the past decades, investment in equipment has increased. Our fleet of construction plant, equipment and accessories is capable of handling almost any type of civil and structural construction project. A designated department headed by general managers is responsible for identifying the need to procure or hire, deploy, maintain and monitor the plant, equipment and accessories. Machinery deployed to a specific site is monitored by an activity log to track the capacity utilisation, fuel consumption, idleness, cost effectiveness and other operational details. Some of the major plants and equipment we possess are comprised of:

• 117 different types of piling rigs including Hydraulic Rigs • 130 different types of cranes including Tower Cranes • 89 batching plants • 167 transit mixers • 11 crusher plants


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• Other equipment includes concrete pumps, loaders, tippers, excavators, pavers, hot mix plants, soil compactors, tandem rollers, weigh bridges, generators, trucks, trailers and others.

IT infrastructure and MIS: Our MIS enables the management to plan and monitor progress of project execution in terms of time, cost, quality parameters, efficiency, utilisation and deployment of diverse plant, equipment and manpower resources at all locations. We have also undertaken the development and deployment of an ERP application that we developed in-house to meet construction specific requirements. This new program, which is currently being tested at 19 sites, allows us to integrate the planning, execution, performance and financial results of our projects. Research and development: We have in-house R&D teams carrying out various types of work including customisation of imported equipment for local conditions, design and development of specialised plants as required by planners of the construction techniques for the projects, development of the spare parts and tools for equipment to improve equipment maintenance and longevity, operational efficiency, cost reduction and timely availability, improvement of the equipment by design-change or modifications suggested to vendors, design, development, fabrication and sourcing of shuttering, scaffolding and other construction accessories to expedite construction time and reduce construction cost and shuttering wood consumption and improvement in construction processes, gradually increase mechanisation and automation to reduce waste of construction materials, diesels and consumables and improving productivity and efficiency. The R&D teams also consider the use of alternative construction materials for improving quality and reducing costs and utilize computer aided design techniques in the fields of soil analysis, structural analysis and machine design. Intellectual Property: We hold two patents and have two applications pending, all in India. The first patent (Registration Certificate No. 177544) was granted on April 18, 1996, related to a method of making a deformation controlled pre-stressed stabilising granular foundation for a civil engineering structure in weak compressible soil and a foundation made thereby. The second patent (Registration Certificate No. 195281) was granted on November 26, 1999, related to a vertically reinforced stabilised solid retaining wall for deep excavation and a method of making the same. We do not hold any registered trademarks or other registered intellectual property rights. Health, Safety and Environment: The Company conducts its construction business through a well established environmental and safety management system. At the Company, we are committed to achieve excellence in building structures, which are not only safe for use but also have been produced without compromising safety and environmental standards. We continually strive to improve the effectiveness of the environmental and safety management system by adopting and implementing environmental responsibilities and safe-working practices, methods and standards and complying with legislative and regulating requirements. Every project site is manned by trained and qualified safety personnel. Our practices are continually audited by our technical audit and ISO audit teams.


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Insurance: We have taken many types of insurance policies such as contractor’s all risk insurance policies, standard fire and special perils insurance for work in progress, theft and burglary policies, contractor’s plant and machinery and workmen’s compensation policies. We constantly evaluate the risks in an effort to be sufficiently covered for all known risks. We believe that the amount of insurance coverage presently maintained by the Company represents an appropriate level of coverage required to insure Company’s business and operations and is in accordance with the industry standard in India.


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REGULATIONS AND POLICIES There are no specific regulations in India governing the construction industry. Set forth below are certain significant legislations and regulations that generally govern this industry in India: General The Company is engaged in the business of, inter alia, carrying on public and private civil and infrastructural works, engineers, builders, and contractors. Contracts are executed in pursuance of tenders/quotations issued by the Government, Government agencies, private companies, public companies and multinational companies or by orders placed by them. For the purpose of executing the work undertaken by the Company, we may be required to obtain licenses and approvals depending upon the prevailing laws and regulations applicable in the relevant state. Foreign Ownership Under the Industrial Policy and FEMA, foreign direct investment up to 100% is permitted in construction and related engineering services. Further, the Industrial Policy now also permits foreign direct investment under the automatic route in projects for construction and maintenance of roads, highways, vehicular bridges, toll roads, ports and harbours. Similarly up to 100% foreign direct investment is also allowed in projects for electricity generation, transmission, and distribution produced in hydroelectric power plants, coal/lignite based thermal plants and oil based thermal power plants. Subject to certain conditions and guidelines, the Industrial Policy and FEMA further permit up to 100% foreign direct investment in townships, housing, built-up infrastructure and construction development projects which include, but are not restricted to, housing, commercial, premises, hotels, resorts, hospitals, educational institutions, recreational facilities and city and regional level infrastructure. In respect of the companies in infrastructure/ service sector, where there is a prescribed cap for foreign investment, only the direct investment is considered for the prescribed cap and foreign investment in an investing company may not be set off against this cap provided the foreign direct investment in such investing company does not exceed 49% and the management of the investing company is with the Indian owners. The RBI by its A.P. (DIR Series) circular No. 16 dated October 4, 2004 granted general permission for the transfer of shares of an Indian company by Non-Residents to residents, subject to the terms and conditions, including pricing guidelines, specified in this circular. Investment by Foreign Institutional Investors Foreign Institutional Investors (“FIIs”) including institutions such as pension funds, investment trusts, asset management companies, nominee companies and incorporated, institutional portfolio managers can invest in all the securities traded on the primary and secondary markets in India. FIIs are required to obtain an initial registration from SEBI and a general permission from the RBI to engage in transactions regulated under FEMA. FIIs must also comply with the provisions of the SEBI (Foreign Institutional Investors) Regulations, 1995, as amended from time to time. The initial registration and the RBI’s general permission together enable the registered FII to buy (subject to the ownership restrictions discussed below) and sell freely securities issued by Indian companies, to realise capital gains or investments made through the initial amount invested in India, to subscribe or renounce rights issues for shares, to appoint a domestic custodian for custody of investments held and to repatriate the capital, capital gains, dividends, income received by way of interest and any compensation received towards sale or renunciation of rights issues of shares.


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Ownership restrictions on FIIs Under the portfolio investment scheme, the overall issue of equity shares or convertible debentures to FIIs on a repatriation basis should not exceed 24% of post-issue paid-up capital of the Company. However, the limit of 24% can be raised up to the permitted sectoral cap for that company after approval of the board of directors and shareholders of the Company. The offer of equity shares/convertible debentures to a single FII should not exceed 10% of the post-issue paid-up capital of the company or 5% of the total paid-up capital in case such sub-account is a foreign corporate or an individual. In respect of an FII investing in equity shares/convertible debentures of a company on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of the total issued capital of that company. Environmental and Labour Regulations Depending upon the nature of the projects undertaken by the company, applicable environmental and labour laws and regulations include the following:

• Apprentices Act, 1961 • Building and Other Construction Workers’ (Regulation of Employment & Conditions of

Service) Act, 1996 • Contract Labour (Regulation and Abolition), 1970 • Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 • Employers’ Liability Act, 1938 • Emigration Act, 1983 • Employees’ State Insurance Act, 1948 • Fatal Accidents Act, 1855 • Industrial Disputes Act, 1947 • Inter State Migrant Workmen (Regulation of Employment and Conditions of Service) Act,

1979 • Minimum Wages Act, 1948 • Payment of Wages Act, 1936 • Payment of Bonus Act, 1965 • Payment of Gratuity Act, 1972 • Workmen Compensation Act, 1923


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BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors Under our Articles of Association, the number of directors shall not be less than three and not more than 12. At present, the Board comprises 12 Directors, (seven non–executive independent Directors with no professional and/ or business relationship with the Company and five Wholetime Directors) headed by the Chairman and Managing Director. The present composition of the Board of directors and its proceedings are in accordance with the Companies Act and the norms of the code of corporate governance applicable to listed companies in India. The following table sets forth details regarding the Board of Directors as of the date of this Preliminary Placement Document:

Name Designation

Term (in years)

Nationality

Age

Shareholding in the

Company as on

November 16, 2007

Other Directorships

Mr. B.D. Mundhra

Chairman & Managing Director

5 Indian 65 2,794,950 1.Simplex Finance Limited 2.Reseshwar Engineers & Consultants Private Limited 3.Simplex Concrete Piles (Southern India) Pvt. Limited 4.Mundhra Education Foundation 5.Anupriya Consultants Private Limited 6.RBS Credit & Financial Developments Pvt. Limited 7.Shree Farms Private Limited 8.BSL Limited 9.Simplex Mining Limited 10.Simplex Piling Limited

Mr. H.B. Guha Biswas

Non-Executive Independent Director

Retirement by rotation

Indian 79 505 NIL

Mr. A.D. Mundhra

Wholetime Director


Indian 39 1,961,570 1.Tips Industries Limited 2.Kalindi Agro Biotech Limited 3.Anupriya Consultants Private Limited 4.Asnew Finance & Investment Private Limited 5.Pahal Investment Private Limited 6.RBS Credit & Financial Developments Pvt. Limited 7.Shree Farms Private Limited


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Name Designation

Term (in years)

Nationality

Age

Shareholding in the

Company as on

November 16, 2007

Other Directorships

8.Simplex Mining Limited 9.Simplex Piling Limited 10.Simplex Technologies Private Limited

Mr. A. Mukherjee

Wholetime Director


Indian 69 500 1.Bagryys India Limited

Mr. B. Sengupta

Non-Executive independent Director


Indian 71 500 NIL

Dr. R. Natarajan



Indian 77 500 NIL

Mr. S. Dutta Wholetime Director


Indian 68 500 NIL

Mr. P.K. Nandy



Indian 64 500 1.Cogentich Management Consultants (P) Limited 2.Conmat Technology (P) Limited

Mr. Rajiv Mundhra

Wholetime Director

5 Indian 31 1,569,870 1.Anupriya Consultants Private Limited 2.Basuri Finance Private Limited 3.Drilltec International Private Limited 4.Evergreen Residency Private Limited 5.Pahal Investment Private Limited 6.Parop Finance & Investment Private Limited 7.RBS Credit & Financial Developments Pvt. Limited 8.Simplex Mining Limited 9.Simplex Piling Limited 10.Simplex Technologies Private Limited

Mr. N.N. Bhattacharyya



Indian 68 500 NIL


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Name Designation

Term (in years)

Nationality

Age

Shareholding in the

Company as on

November 16, 2007

Other Directorships

Mr. Kunal Shroff



Indian 32 500 1.Chrysalis Investment Advisors (India) Pvt. Limited 2.ChrysCapital Management Company I, LLC 3.New Path Ventures 4.Parksons Packaging Limited

Mr. Sheo Kishan Damani



Indian 66 500 1.Utkal Polyweave Industries Pvt. Limited

*The tenure of each of Mr. B. D. Mundhra, Chairman & Managing Director and Mr. Rajiv Mundhra, Wholetime Director, has been fixed for five years. However, Mr. Rajiv Mundhra is liable to retire by rotation. No tenure has been fixed for other Wholetime Directors of the Company, but they are liable to retire by rotation. Profiles Mr. B.D. Mundhra, Chairman and Managing Director, aged 65 years, has been associated with the Company since 1961. He became a Director of the Company in 1969, Managing Director of the Company in 1987 and Chairman and Managing Director of the Company in 1999. Mr. B.D. Mundhra has several years of experience in handling responsibilities ranging from tendering, planning and execution, material management, equipment management, human resource, information technology, administration to financial control. Mr. B.D. Mundhra’s experience has helped the Company to expand its horizons from ground engineering to other verticals including power, industrial construction, building and housing, urban utilities, marine structures and water resources management. He has also led the Company in the expansion of its business activities in Asia, namely in Qatar, UAE and Sri Lanka. He has also contributed towards development of plant and machinery, human resources, information technology, planning, monitoring sections, and others. Mr. B.D. Mundhra is a founder member and trustee of the National Institute of Construction Management & Research (“NICMAR”), a premier institute established to promote talent in the infrastructure industry, and is the founder member of the Construction Industry Development Council (“CIDC”). He is also a member of the Builders’ Association of India, among various other chambers of commerce and trade organizations. Mr. B.D. Mundhra has also been associated with philanthropic activities, various social welfare organizations and charitable trusts. He has an active interest in literature, modern science and classical music, and is the president and life member of the Bharatiya Samakriti Samsad, Kolkata. Mr. A. D. Mundhra, Wholetime Director, aged 39 years, has been associated with the Company since 1990, and has been a Director of the Company since 1995. He has several years of experience in commercial, administrative and project monitoring. Mr. A.D. Mundhra is responsible for leading the operations of our Company. His responsibilities include project implementation and monitoring, business development both domestic and overseas and project progress and realization of the Company’s vision and mission. Mr. A.D. Mundhra is keenly involved in expanding the verticals of the Company in India and abroad. Mr. A.D. Mundhra holds positions of responsibility in several industry organisations. He is the founder trustee and member of the Managing Committee of the Construction Federation of India (“CFI”), is on the Board of Directors of NICMAR, is a member of Managing Committee of the Builders’ Association of India and is a member of the Technical Committee of the CIDC. He is also the member of the Board of Governors of Construction Industry Arbitration Association (“CIAA”), a premier arbitral institution jointly set up by CIDC with the Singapore International Arbitration Centre (“SIAC”) in India.


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Mr. Rajiv Mundhra, Wholetime Director, aged 31 years, has been associated with the Company since 1997. He started his career with the Company as Vice President and joined the Board of the Company in 2003. Mr. Rajiv Mundhra has several years of experience in finance, material management, administration, site management and project planning, monitoring and control, and is responsible for finance, budgeting, project planning, monitoring and control in India and overseas. Mr. Rajiv Mundhra contributes actively to various industry associations and fora. He is the co-chairman of the Infrastructure & Transport Committee of the Federation of Indian Chambers of Commerce and Industry (“FICCI”) and member of the Entrepreneurs Organization. Mr. S. Dutta, Wholetime Director, aged 68 years, M. Com., LLB, A.C.A., is a finance professional with over 44 years of experience with proficiency in corporate finance and accounts, taxation, management consultancy, mergers and acquisitions, financial management and general management in large corporates of repute. After passing the Chartered Accountancy Examination in 1963 from the Institute of Chartered Accountants of India, Mr. Dutta started his career in Price Waterhouse Peat & Co., an international firm of chartered accountants in India. He subsequently joined Guest Keen Williams Limited, a subsidiary of Guest Keen Nettlefold PLC (GKN) and worked in various senior positions including that of President-Finance of the company and was also the head of leasing and financing services. He has also worked as a director and chief executive of Sankey Wheels Limited, a GKN group company for approximately 3 years and has the distinction of spearheading the process of viability planning and implementing the revival plan of a sick company and its subsequent merger with a large corporate body. The Ministry of Finance and Policy Planning, Government of Sri Lanka has previously appointed him as an associate consultant under a World Bank technical assistance programme. Mr. Dutta is associated with the Company as a Director since 2001, actively involved in the overall planning, implementation and control of the finances of the Company. Mr. Apurba Mukherjee, Wholetime Director, aged 69 years is a graduate in civil engineering from Jadavpur University, India, and a post-graduate from D.C.T, Leeds University, U.K. He was elected as a member of the Institution of Civil Engineers and Institution of Structural Engineers, London. He has worked with Bridge & Roof Company, India and Consulting Engineers, U.K. He has expertise and experience in both construction and engineering design in large structural works. He has been associated with the Company for over 40 years in different managerial capacities and has been a Director of the Company since 1997. Mr. Mukherjee has played a pivotal role in securing specialized jobs on turnkey basis entailing engineering design, construction, management and delivery in time of many projects including bridges, treatment plants, major components of power stations, and others. Mr. Mukherjee is involved in overall management of procuring processes, monitoring of execution including cost control, administration, and others. of large industrial projects including power stations, roads, highways and bridges, petrochemical and hydrocarbon complexes, large cement plants, and others. in India and abroad. Mr. H. B. Guha Biswas, Non-Executive Independent Director, aged 79 years, B.Sc., B.E., C.E., has been associated with the Company since 1962. Mr. Guha Biswas has experience of over five decades in wide range of civil engineering and execution of turnkey project especially power plants, industrial structures, public utility structures, and others. He has successfully handled a wide range of turnkey civil engineering contracts, especially thermal and gas based power station projects. He brings to the Board several years of experience in the fields of infrastructure projects, turnkey projects, thermal and nuclear power projects, and technical evaluation of projects and tenders. Mr. B. Sengupta, Non-Executive Independent Director, aged 71 years, is a graduate in civil engineering and has several years of experience in the construction industry, particularly in the field of designing, competitive bidding for major projects, contract procurement, and human resource development. Mr. Sengupta has been associated with the Company since 1956 and held various senior positions in the Company. He became a Non-Executive Director in 2001. He is currently the Chairman of the Shareholders’ Committee and the Remuneration Committee of the Company. Mr. P.K. Nandy, Non-Executive Independent Director, aged 64 years, B.Sc., F.C.A., is a former partner of Price Waterhouse, Chartered Accountants. He has several years of experience in the fields


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of accounts, audit, finance, administration and management. He joined the Company in 2002 as a Non-Executive Director and is currently the Chairman of the Audit Committee of the Company. Mr. N. N. Bhattacharyya, Non-Executive Independent Director, aged 68 years, M. Com., F.C.A., is a chartered accountant by profession. He has several years of experience in corporate restructuring, finance, accounts and auditing. He was the executive director and acting managing director of Industrial Reconstruction Bank and has expertise in core banking and industrial finance matters. He joined the Company in 2005 as a Non-Executive Director and is currently a member of the Audit Committee, Shareholders’ Committee and Remuneration Committee of the Company. Dr. R. Natarajan, Non-Executive Independent Director, aged 77 years, M.Sc., Ph.D., C. Chem., F.R.S.C., is a chemist by profession with several years of experience in the Research and Development Works, Water & Sewage Treatment and Desalinisation Plants and also in the fields of emergency road and airfield development, corrosion, drugs and pharmaceuticals. He has previously worked with Thermax Limited. He joined the Company in 2001 as a Non-Executive Director. Mr. S. K. Damani, Non-Executive Independent Director, aged 66 years, B.Com., is a past president of the Indian Plastic Federation. He joined the Company in 2005 as a Non-Executive Director. He has several years of experience both in India and China. Mr. Kunal Shroff, Non-Executive Independent Director, aged 32 years is a B.S. in Computer Science with Magna Cum Laude Honors from Cornell University, USA. He is a financial consultant by profession. He joined Chrys Capital in September 1999 and has previously worked with Chilton Investment Company, a major US-based hedge fund, and with Goldman Sachs where he was involved in the pursuit of investment opportunities and monitoring portfolio companies. Mr. Shroff has several years of experience in the field of financial planning and investment management. Shareholding of the Directors in the Company The respective shareholding of the Directors in the Company is as indicated above. As per Article 94 of the Articles of Association of the Company, Directors need to hold 100 Equity Shares as qualification shares. Term of Office The tenure of each of Mr. B. D. Mundhra, Chairman & Managing Director and Mr. Rajiv Mundhra, Wholetime Director, has been fixed for five years. However, Mr. Rajiv Mundhra is liable to retire by rotation. No tenure has been fixed for other Wholetime Directors of the Company but they are liable to retire by rotation. Interest of Directors All the Directors, including independent Directors, may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration and reimbursement of expenses payable to them under the Articles of Association. The Wholetime Directors will be interested to the extent of remuneration paid to them for services rendered as officers or employees of the Company. All the Directors, including independent Directors, may also be deemed to be interested to the extent of any dividend payable to them and other distributions in respect of Shares, if any, already held by or that may be subscribed for and allotted to them or to the companies, firms and trusts, in which they are interested as directors, members, partners and/or trustees. Certain Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered into by the Company with any company in which they hold Directorships or any partnership firm in which they are partners as declared in their respective declarations. Except as stated otherwise in this Preliminary Placement Document and statutory registers maintained by the


92

Company in this regard, the Company has not entered into any contract, agreements or arrangements during the preceding two years from the date of the Placement Document in which the directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements which are proposed to be made to them. Details of Remuneration of Chairman and Managing Director and Wholetime Directors Mr. B.D. Mundhra, Chairman and Managing Director, was reappointed pursuant to a resolution of the members dated August 18, 2006. His salary is to be determined by the Board of Directors, within the range of Rs. 450,000 to Rs. 1,000,000 per month. In addition, commission will be paid to him as determined by the Board of Directors, not exceeding 1% of the Company’s net profit in the relevant year. He is also entitled to fully furnished accommodation and perquisites including, among other things, reimbursement of medical expenses for himself and his dependents, premium for personal accident policy, contribution on his behalf to the Company’s provident fund, leave, leave travel concession and leave encashment as per the rules of the Company and gratuity of up to half a month’s salary for each completed year of service. Mr. A. D. Mundhra, Wholetime Director, was reappointed pursuant to a shareholders resolution dated September 10, 2005. His salary is to be determined by the Board of Directors, within the range of Rs. 150,000 to Rs. 600,000 per month. He is also entitled to fully furnished accommodation or house rent allowance within the range of Rs.10,000 to Rs.50,000 per month and perquisites including, among other things, reimbursement of medical expenses for himself and his dependents, premium for personal accident policy, contribution on his behalf to the Company’s provident fund, leave, leave travel concession and leave encashment as per the rules of the Company and gratuity of up to half a month’s salary for each completed year of service. Mr. Rajiv Mundhra, Wholetime Director, was reappointed pursuant to an agreement with the Company dated September 19, 2007. His salary is to be determined by the Board of Directors, within the range of Rs. 150,000 to Rs. 600,000 per month. He is also entitled to fully furnished accommodation or house rent allowance within the range of Rs.10,000 to Rs.50,000 per month and perquisites including, among other things, reimbursement of medical expenses for himself and his dependents, premium for personal accident policy, contribution on his behalf to the Company’s provident fund, leave, leave travel concession and leave encashment as per the rules of the Company and gratuity of up to half a month’s salary for each completed year of service. Mr. A. Mukherjee, Wholetime Director, was reappointed pursuant to a resolution of the members dated August 18, 2006. His salary is to be determined by the Board of Directors, within the range of Rs. 150,000 to Rs. 600,000 per month. He is also entitled to fully furnished accommodation or house rent allowance within the range of Rs.10,000 to Rs.50,000 per month and perquisites including, among other things, reimbursement of medical expenses for himself and his dependents, premium for personal accident policy, contribution on his behalf to the Company’s provident fund, leave, leave travel concession and leave encashment as per the rules of the Company and gratuity of up to half a month’s salary for each completed year of service. Mr. S. Dutta, Wholetime Director, was reappointed pursuant to a resolution of the members dated September 19, 2007. His salary is to be determined by the Board of Directors, within the range of Rs. 150,000 to Rs. 600,000 per month. He is also entitled to fully furnished accommodation or house rent allowance within the range of Rs.10,000 to Rs.50,000 per month and perquisites including, among other things, reimbursement of medical expenses for himself and his dependents, premium for personal accident policy, contribution on his behalf to the Company’s provident fund, leave, leave travel concession and leave encashment as per the rules of the Company and gratuity of up to half a month’s salary for each completed year of service.


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Changes in the Board of Directors during the Last Three Years

Name Date of Appointment Date of Cessation Reason Mr. Kunal Shroff, Nominee Director

May 19, 2006 February 26, 2007 Mr. Kunal Shroff ceased to be the Nominee of Beethoven Limited as Beethoven Limited sold out its entire stake.*

Mr. Kunal Shroff, Non-Executive Independent Director

September 19, 2007 Continuing Reappointment

Mr. A. Mukherjee, Wholetime Director

August 18, 2006 Continuing Reappointment

Mr. H.B. Guha Biswas, Non-Executive Independent Director

August 18, 2006 Continuing Reappointment

Mr. B. Sengupta, Non-Executive Independent Director


Mr. S. K. Damani, Non-Executive Independent Director

August 18, 2006 Continuing Appointment

Mr. Ashish Dhawan, Nominee Director

October 6, 2005 May 19, 2006 Resignation

Prof. K. N. Vaid, Non-Executive Independent Director

March 31, 2004 February 28,2005 Resignation

Mr. N. N. Bhattacharya, Non-Executive Independent Director


Mr. Rajiv Mundhra, Wholetime Director


Mr. A.D. Mundhra, Wholetime Director

September 10, 2005 Continuing Appointment

Dr. R. Natarajan, Non-Executive Independent Director

September19, 2007 Continuing Reappointment

Mr. S. Dutta, Wholetime Director


* Pursuant to an agreement dated September 6, 2005, Beethoven Limited, a company incorporated in Mauritius, subscribed to 1,285,000 Equity Shares, constituting 14.99% of the Equity Share capital of the Company at the time. Pursuant to this agreement, Beethoven Limited acquired the right to appoint one Director to the Board of Directors of the Company. However, Beethoven Limited subsequently sold its entire stake and has no remaining shareholding in the Company as of this date. Corporate Governance The Company has been complying with all the requirements of the guidelines on corporate governance as per Clause 49 of the listing agreement entered into with the Stock Exchanges.


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Committees of the Board Committee of Directors The Committee of Directors comprises of five directors, Mr. B. D. Mundhra, Mr. A. D. Mundhra, Mr. B. Sengupta, Mr. S. Dutta and Mr. Rajiv Mundhra. The Committee of Directors (COD) meet as and when required, to perform the powers delegated by the Board of Directors of the Company from time to time. Broadly, the COD has the power to approve purchase of capital goods, borrow monies, invest in funds, to make loans and advances and other day to day business matters. Audit Committee The terms of reference of Audit Committee comply with the requirements of Companies Act, 1956 and Clause 49 of the listing agreement between the Company and the Stock Exchanges. The Audit Committee is comprised of four Directors, all of whom are Non-Executive Independent Directors. The Committee consists of Mr. P.K. Nandy as Chairman and Dr. R. Natarajan, Mr. B. Sengupta and Mr. N.N. Bhattacharya as other members. The Chairman of the Committee is a senior chartered accountant. Mr. S Dutta, Wholetime Director looking after the financial matters of the Company and Mr. N K Kakani, Executive Director in charge of internal audit are permanent invitees to the meetings of the Committee. The Statutory Auditors are also invitees to the meeting. The Company Secretary acts as the Secretary to the Committee. The minutes of the Audit Committee meetings are noted by the Board of Directors at the subsequent Board meetings. The Audit Committee’s role includes overview of the Company’s financial reporting process, recommending the appointment and removal of statutory auditors, fixing audit fees, reviewing the annual financial statements with management prior to submitting these to the Board, reviewing related party transactions, reviewing the Company’s internal audit function, reviewing findings of any internal investigations by the internal auditors and reviewing the Company’s financial and risk management policies. Remuneration Committee The Remuneration Committee consists of four Non-Executive Independent Directors, Mr. B. Sengupta as the Chairman of the Committee and Dr. R. Natarajan, Mr. P.K. Nandy, and Mr. H.B. Guha Biswas as other members. The broad terms of reference of the Remuneration Committee are to recommend to the Board the salary (including annual increments), perquisites, commission and other benefits of the Wholetime Directors, within the overall ceiling as fixed by the Companies Act from time to time. Shareholders’ Committee

The Shareholders’ Committee consists of four Non-Executive Independent Directors, Mr. B. Sengupta as the Chairman of the Committee and Dr. R. Natarajan, Mr. P.K. Nandy and Mr. N.N. Bhattacharya as the other members. The Shareholders’ Committee’s role is to look into shareholders’ complaints and speedy disposal thereof.


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Key Managerial Personnel All of Company’s Wholetime Directors are its Key Management Personnel. The details of the Company’s other Key Managerial Personnel are provided below: Mr. A. K. Chatterjee, Technical Director, aged 67 years, is a civil engineer. He joined the Company in 1963 as an assistant engineer. He has over 44 years of experience in the construction industry, especially in project planning, design and execution. He is responsible for overall coordination of projects including profitability. He also plays an important role in business development and strategic business alliances and the decision-making process. Mr. Chatterjee is also involved in manpower planning and training of fresh engineers to serve the Company. Mr. S. Guha, Technical Director, aged 73 years, is a civil engineer from Calcutta University. He has over 50 years of experience in the construction industry and has previously worked with Hindustan Construction Company Limited, Mumbai and its associate company Shib Banerjee Construction Private Limited. He is a pioneer in pile foundation and ground engineering. He is a member of the Technology Development and Application Group, Department of Science and Technology, Government of India and has contributed several technical papers and has attended various seminars as speaker/ lecturer both in India and abroad. Mr. Guha joined the Company in 1970 and heads the Southern Zone of the Company and is responsible for overall coordination of projects including profitability. He is actively involved in business development and strategic business alliances especially in South India. Mr. A.K. Dutta, Technical Director, aged 65 years, is a civil engineer from Calcutta University. He has been associated with the engineering fraternity for over four decades and has several years of experience in varied fields of construction, business management and human resource. He has previously worked with companies of repute. Prior to joining the Company in 2002, he was the managing director and chief executive officer of Bridge & Roof Company (India) Limited. He is a member of the Institute of Engineers (India) and has previously been a member of the CIDC. Mr. Dutta has expertise in coordination, project management, marine structures, hydraulic and electromechanical works. He is responsible for marketing, coordinating, business development, planning and execution of projects including manpower planning and profitability. Mr. N. K. Kakani, Executive Director, 54, joined the Company in 2005. He has over 32 years of experience in corporate planning, growth strategies, management, business development and corporate finance. Mr. Kakani holds a bachelor’s degree in commerce and qualified as a chartered accountant in 1974. Prior to joining the Company, he has worked in diverse industries, based in Mumbai, with multi-location and multi-product manufacturing facilities in India and abroad. All of the Company’s Key Management Personnel, except the Non-Executive Directors of the Company, are permanent employees of the Company. Shareholding of Key Managerial Personnel As on November 16, 2007, none of the Company’s Key Management Personnel held over 1% of the Company’s Equity Share capital, other than the Wholetime Directors of the Company. Apart from the Directors, Mr. A. K. Chatterjee and Mr. S. Guha, who hold 750 Equity Shares and 500 Equity Shares of the Company respectively, Mr. N. K. Kakani and Mr. A. K. Dutta do not hold any Equity Shares of the Company. There have been no changes in the Company’s Key Managerial Personnel during the preceding three years.


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ORGANISATIONAL STRUCTURE AND MAJOR SHAREHOLDERS We were originally incorporated as Simplex Concrete Piles (India) Limited on December 19, 1924, and changed our name to Simplex Concrete Piles (India) Private Limited on August 2, 1957. On March 12, 1991 and with effect from June 15, 1988, the word “Private” was deleted from the name of the Company under section 43A(1A) of the Companies Act. We changed our name to Simplex Infrastructures Limited on November 8, 2005. The registered office of the Company was changed from 12/1 Nellie Sengupta Sarani, Kolkata- 700 087 to the present Registered Office at Simplex House, 27, Shakespeare Sarani, Kolkata- 700 017 with effect from November 8, 2005.

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The Company made an initial public offer of 815,000 Equity Shares of par value Rs. 10 each, for cash at a premium of Rs. 50 per equity share, aggregating Rs. 48.9 million, through a prospectus dated January 15, 1993. This issue was oversubscribed 4 times. The Company made a follow-on public offer of 1,352,600 Equity Shares of par value Rs. 10 each, for cash at a premium of Rs. 90 per equity share, aggregating Rs. 135.26 million, through a prospectus dated January 31, 1996, as well as a rights issue of 2,033,168 17% secured party optionally convertible debentures of par value Rs. 55 each for cash at par aggregating Rs. 111.82 million, through a letter of offer dated January 29, 1996. There are no convertible securities issued by the Company currently outstanding. On October 4, 2007, the Board allotted 5.50 million Warrants to RBS Credit and Financial Developments Private Limited, a company belonging to the Promoter group at a price of Rs. 401 per Warrant. As per the SEBI Guidelines, RBS Credit and Financial Developments Private Limited paid 10% of the issue price i.e. Rs. 220.55 million and balance 90% i.e. Rs. 1,984.95 million is to be paid on conversion of the said Warrants to Equity Shares. Such option has to be exercised by the Warrant holders within 18 months from the date of allotment of Warrants. In the event the option to exercise the Warrant is not exercised, the amount paid shall stand forfeited.

Shareholding pattern as on November 16, 2007

Category of shareholder Total number of shares Total shareholding as a percentage of total number

of shares (A) Shareholding of Promoter and Promoter Group

(1) Indian (a) Individuals/ Hindu Undivided Family 8,866,440 20.68 (b) Central Government/ State Government(s) - - (c) Bodies Corporate 13,234,058 30.87 (d) Financial Institutions/Banks - - (e) Any Other (Specify) - - Sub-Total (A)(1) 22,100,498 51.55 (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)

22,100,498 51.55

(B) Public shareholding (1) Institutions (a) Mutual Funds/ITI 4,669,537 10.90 (b) Financial Institutions/ Banks 1,500 0 (c) Central Government/ State Government(s) - - (d) Venture Capital Funds - - (e) Insurance Companies - - (f) Foreign Institutional Investors 4,399,195 10.26 (g) Foreign Venture Capital Investors - - (h) Any Other (specify) - - Sub-Total (B)(1) 9,070,232 21.16 (2) Non-institutions (a) Bodies Corporate 7,207,558 16.81 (b) Individuals - i. Individual shareholders holding nominal share capital up to Rs. 1,00,000. 2,112,613 4.93 ii. Individual shareholders holding nominal share capital in excess of Rs. 1,00,000 1,956,720 4.56


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(c) Any Other (specify) - - NRIs 417,664 0.97 Trustees 7,045 0.02 Sub-Total (B)(2) 11,701,600 27.29 Total Public Shareholding (B)= (B)(1)+(B)(2) 20,771,832 48.45 Sub-Total (A)+(B) (C) Shares held by Custodians and against which Depository Receipts have been issued

- -

TOTAL (A)+(B)+(C) 42,872,330 100.00 List of Shareholders holding more than 1% of the paid up capital of the Company as on November 16, 2007: S. No Name Pre-Issue

SHARES % EQUITY

PROMOTER & PROMOTER GROUP 1. Anupriya Consultants Pvt. Ltd. 7,059,912 16.47 2. RBS Credit and Financial Developments Pvt Ltd 4,152,396 9.69 3. Ms. Yamuna Mundhra 2,043,385 4.77 4. Mr. Amitabh Das Mundhra 1,961,570 4.58 5. Mr. Rajiv Mundhra 1,567,370 3.66 6. Mr. Bithal Das Mundhra 2,794,950 6.52 7. Baba Basuki Distributors (P) Ltd. 750,000 1.75 8. Anjali Trade links (p) Ltd. 750,000 1.75 MUTUAL FUND 9. Franklin India Smaller Companies Fund 1,000,000 2.33 10. Templeton Mutual Fund A/C Franklin India Opportunities Fund 1,000,000 2.33 11. Templeton Mutual Fund A/C Franklin India Flexi Cap Fund 896,371 2.09 12. Templeton Mutual Fund A/C Franklin India Prima Fund 500,000 1.17 13. Sundaram BNP Paribas Mutual Fund A/C Sundaram BNP Paribas Select

Midcap 603,659 1.41 14. Tata Trustee Co. Pvt. Ltd. A/C Tata Mutual Fund – Tata Infrastructure

Fund 433,760 1.01 F.I.I 15. FID Funds (Mauritius) Limited 3,669,591 8.56 BODIES CORPORATE 16. East End Trading & Engg. Co. Pvt. Ltd. 1,252,930 2.92 17. Sandeepan Exports (P) Ltd 1,000,000 2.33 18. Zevit Commercial Pvt. Ltd 1,000,000 2.33 19. South Asia Finvest P vt. Ltd. 557,500 1.30 20. Prashray Overseas Private Limited 512,500 1.20 INDIVIDUAL 21. Laxmi Narayan Bajaj 455,000 1.06


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ISSUE PROCEDURE Below is a summary intended to present a general outline of the procedure relating to the application, payment, allocation and allotment of the Equity Shares. The procedure followed in the Issue may differ from the one mentioned below and the investors are assumed to have apprised themselves of the same from the Company or the Joint Global Coordinators. The investors are advised to inform themselves of any restrictions or limitations that may be applicable to them.

Qualified Institutional Placements

The Issue is being made in reliance on Chapter XIII-A of the SEBI Guidelines through the mechanism of Qualified Institutional Placements (“QIP”) wherein a listed company may issue and allot equity shares/fully convertible debentures/ partly convertible debentures or any other security (excluding warrants) on a private placement basis to Qualified Institutional Buyers (“QIBs”) as defined in clause 2.2.2B (v) of the SEBI Guidelines.

The Company has applied for and received the in-principle approval of the Stock Exchanges under Clause 24 (a) of its listing agreements for the listing of the Equity Shares on the Stock Exchanges. The Company has also filed a copy of the Preliminary Placement Document with the Stock Exchanges.

Issue Procedure

1. The Issuer and the Joint Global Coordinators shall circulate serially numbered copies of the Preliminary Placement Document and the Application Form, either in electronic form or physical form, to not more than 49 QIBs.

2. The list of QIBs to whom the Application Form is delivered shall be determined by the Joint Global Coordinators at their sole discretion. Unless a serially numbered Preliminary Placement Document along with the Application Form is addressed to a particular QIB, no invitation to subscribe shall be deemed to have been made.

3. QIBs may submit the Applications through the Application Form during the Application period to either of the Joint Global Coordinators.

4. QIBs will be required to indicate the following in the Application:

a. Name of the QIB to whom Equity Shares are to be allotted; b. Number of Equity Shares, and c. Price at which they are agreeable to apply for the Equity Shares, provided that QIBs

may also indicate that they are agreeable to submit an Application at “Cut-off Price” which shall be any price as may be determined by the Issuer in consultation with the Joint Global Coordinators at or above the minimum price calculated in accordance with Clause 13A.3 of the SEBI Guidelines which shall be the Floor Price.

d. The details of the dematerialized account(s) to which the Equity Shares should be credited.

Note: Each sub-account of an FII will be considered as an individual QIB and separate forms would be required from each such sub-account for submitting Applications.

5. Once the Application Form is submitted by the QIB, the Application cannot be withdrawn.

6. Upon receipt of the completed Application Form, the Issuer shall confirm the allocation to the QIBs, subject to the receipt of application moneis from the QIBs.


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7. Upon receipt of the application monies from the QIBs, the Issuer shall issue and allot the Equity Shares to the QIBs as per the details provided in the respective CANs. The Issuer will intimate to the Stock Exchanges the details of the allotment.

8. After receipt of the in-principle approval of the Stock Exchanges, the Issuer shall credit the Equity Shares into the depository participant accounts of the QIBs.

9. The Issuer shall then apply for the final trading and listing permissions from the Stock Exchanges.

10. The Equity Shares that have been so allotted and credited to the depository participant accounts of the QIBs shall be eligible for trading on the Stock Exchanges only upon the receipt of final trading and listing approvals from the Stock Exchanges.

11. The Stock Exchanges shall notify the final trading and listing permissions, which are ordinarily available on their websites, and the Issuer or the JGCs shall communicate the receipt of the final trading and listing permissions from the Stock Exchanges to the QIBs who have been allotted the Equity Shares. The Issuer or the JGCs shall not be responsible for any delay or non-receipt of the communication of the final trading and listing permissions from the Stock Exchanges or any loss arising from such delay or non-receipt. QIBs are advised to apprise themselves of the status of the receipt of the permissions from the Stock Exchanges, the Issuer or the JGCs.

Qualified Institutional Buyers

Only QIBs as defined in clause 2.2.2B (v) of the SEBI Guidelines are eligible to invest. Currently these include:

• Public financial institutions as defined in Section 4A of the Companies Act; • Scheduled commercial banks; • Mutual funds registered with SEBI (“Mutual Funds”); • Foreign institutional investors registered with SEBI (“FIIs”); • Multilateral and bilateral development financial institutions; • Venture capital funds registered with SEBI; • Foreign venture capital investors registered with SEBI; • State industrial development corporations; • Insurance companies registered with Insurance Regulatory and Development Authority,

India; • Provident Funds with minimum corpus of Rs.250 million; and • Pension Funds with minimum corpus of Rs.250 million.

FIIs are permitted to participate through the portfolio investment scheme in this Issue. FIIs are permitted to participate in the QIP subject to compliance with all applicable laws and such that the shareholding of the FIIs does not exceed specified limits as prescribed under applicable laws in this regard.

The Issuer and either of the Joint Global Coordinators are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Preliminary Placement Document. QIBs are advised to make their independent investigations and satisfy themselves that they are eligible to submit an Application. QIBs are advised to ensure that any single Application from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation or as specified in this Preliminary Placement Document. Further, QIBs are required to satisfy themselves that their Applications would not eventually result in triggering a tender offer under the Takeover Code.


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A minimum of 10% of the Equity Shares in this Issue shall be allotted to Mutual Funds. If no Mutual Fund is agreeable to take up the minimum portion as specified above, such minimum portion or part thereof may be allotted to other QIBs.

Note: Affiliates or associates of the Joint Global Coordinators who are QIBs may participate in the Issue in compliance with applicable laws.

Application Process

Application Form

QIBs shall only use the specified Application Form supplied by the Joint Global Coordinators in either electronic form or by physical delivery for the purpose of making an Application (including revision of Application) in terms of the Preliminary Placement Document and the Placement Document.

By making an Application (including revision) for Equity Shares pursuant to the terms of the Preliminary Placement Document and the Placement Document, the QIB will be deemed to have made the following representations and warranties and the representations, warranties and agreements made under “Selling Restrictions”:

1. The QIB confirms that it is a QIB in terms of Clause 2.2.2B (v) of the SEBI Guidelines and is eligible to participate in this Issue;

2. The QIB confirms that it is not a Promoter and is not a person related to the Promoters, either directly or indirectly and its Application does not directly or indirectly represent the Promoter or Promoter group of the Issuer;

3. The QIB confirms that it has no rights under a shareholders agreement or voting agreement with the Promoters or persons related to the Promoters, no veto rights or right to appoint any nominee director on the Board of the Issuer other than that acquired in the capacity of a lender which shall not be deemed to be a person related to the Promoters;

4. The QIB has no right to withdraw its Application after submitting the Application Form;

5. The QIB confirms that if allotted Equity Shares pursuant to the Preliminary Placement Document and Placement Document, the QIB shall not, for a period of one (1) year from allotment, sell the Equity Shares so acquired otherwise than on the Stock Exchanges; and

6. The QIB confirms that the QIB is eligible to apply and hold Equity Shares so allotted and together with any Equity Shares held by the QIB prior to the Issue. The QIB further confirms that the holding of the QIB, does not and shall not, exceed the level permissible as per any applicable regulations applicable to the QIB.

7. The QIB confirms that the Application would not eventually result in triggering a tender offer under the Takeover Code.

8. The QIB confirms that to the best of its knowledge and belief together with other QIBs in the Issue that belong to the same group or are under common control, the allotment to the QIB shall not exceed 50% of the Issue Size. For the purposes of this statement:


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a. The expression “belongs to the same group” shall derive meaning from the concept of “companies under the same group” as provided in sub-section (11) of Section 372 of the Companies Act;

b. “Control” shall have the same meaning as is assigned to it by clause (c) of Regulation 2 of the Takeover Code.

Submission of Application Form

All Application Forms shall be duly completed with information including the name of the QIB, the price and the number of Equity Shares applied. The Application Form shall be submitted to Joint Global Coordinators either through electronic form or through physical delivery at the following addresses: JM Financial Consultants Private Limited 141, Maker Chambers III, Nariman Point, Mumbai 400 021, India SSKI Corporate Finance Private Limited 803/804, Tulsiani Chambers, 8th Floor Nariman Point, Mumbai 400 021, India The Joint Global Coordinators shall not be required to provide any written acknowledgement of the same. Pricing and Allocation Build up of the Book The QIBs shall submit their Applications through the Application Form within the Application period to the Joint Global Coordinators who shall maintain the Book.

Price discovery and allocation

The Issuer, in consultation with the Joint Global Coordinators, shall finalize the Issue Price for the Equity Shares which shall be at or above the Floor Price.

After finalization of the Issue Price, the Issuer shall update the Preliminary Placement Document with the Issue details and file the same with the Stock Exchanges as the Placement Document.

Method of Allocation

The Issuer shall determine the allocation in consultation with the Joint Global Coordinators on a discretionary basis and in compliance with Chapter XIII-A of the SEBI Guidelines.

Applications received from the QIBs at or above the Issue Price shall be grouped together to determine the total demand. The Allocation to all such QIBs will be made at the Issue Price. Allocation to Mutual Funds for up to a minimum of 10% of the Issue Size shall be undertaken subject to valid Applications being received at or above the Issue Price.

THE DECISION OF THE ISSUER AND JOINT GLOBAL COORDINATORS IN RESPECT OF ALLOCATION SHALL BE BINDING ON ALL QIBS. QIBS MAY NOTE THAT ALLOCATION OF ISSUE SECURITIES IS AT THE SOLE AND ABSOLUTE DISCRETION OF THE ISSUER


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AND QIBS MAY NOT RECEIVE ANYALLOCATION EVEN IF THEY HAVE SUBMITTED VALID APPLICATIONS AT OR ABOVE THE ISSUE PRICE. NEITHER OF THE ISSUER NOR THE JOINT GLOBAL COORDINATORS IS OBLIGED TO ASSIGN ANY REASONS FOR SUCH NON-ALLOCATION.

Number of Allottees

The minimum number of allottees in the Issue shall not be less than: (a) two, where the issue size is less than or equal to Rs. 2.5 billion; (b) five, where the issue size is greater than Rs. 2.5 billion. Provided that no single allottee shall be allotted more than 50% of the aggregate amount of the issue.

Provided further that QIBs belonging to the same group or those who are under common control shall be deemed to be a single allottee for the purpose of this clause. For details of what constitutes “same group” or “common control” see “Application Process— Application Form.”

The maximum number of allottees of Equity Shares shall not be greater than 49 allottees.

Submission of Application Form

All Application Forms duly completed along with payment and a copy of the PAN card or application for PAN shall be submitted to the Joint Global Coordinators.

The submission of Application Form by the QIB shall be deemed a valid, binding and irrevocable contract for the QIB to pay the entire Issue Price for all the Equity Shares allocated to such QIB by the Issuer.

Bank Account for Payment of Application Money

The Issuer has opened a special bank account with ICICI Bank Limited, India (“Bank”) in terms of the arrangement between the Issuer and the Bank. The QIB will be required to deposit the entire amount payable for the Equity Shares allocated to it by the Pay-In Date as mentioned in the respective CAN.

If the payment is not made favouring the “Simplex Infrastructures QIP Escrow” Account within the time stipulated in the CAN, the Application Form and the CAN of the QIB are liable to be cancelled.

In case of cancellations or default by the QIBs, the Issuer, the Joint Global Coordinators have the right to reallocate the Equity Shares at the Issue Price among existing or new QIBs at their sole and absolute discretion.

Payment Instructions

• The payment of application money shall be made by the QIBs in the name of “Simplex Infrastructures QIP Escrow” as per the payment instructions provided in the CAN.

• QIBs may make payment through cheques, overdraft or electronic fund transfer or RTGS.


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Note: Payment of the amounts through outstation cheques are liable to be rejected. Payments through cheques should be only through high value cheques payable in Mumbai..

Designated Date and Allotment of Equity Shares

1. The Equity Shares will not be allotted unless the QIBs pay the application money to the “Simplex Infrastructures QIP Escrow” Account as stated above.

2. In accordance with the SEBI Guidelines, Equity Shares will be issued and allotment shall be made only in the dematerialized form to the allottees. Allottees will have the option to re-materialize the Equity Shares, if they so desire, as per the provisions of the Companies Act and the Depositories Act.

3. The Issuer reserves the right to cancel the Issue at any time up to Allotment without assigning any reasons whatsoever.

4. Post Allotment and credit of Equity Shares into the QIBs’ depository participant accounts, the Issuer would apply for trading/listing approvals from the Stock Exchanges.

5. In the event of the any delay in the Allotment or credit of Equity Shares, or receipt of trading or listing approvals or cancellation of the Issue, no interest or penalty would be payable by the Issuer.

Submission to SEBI

The Issuer shall submit the Preliminary Placement Document to SEBI within thirty (30) days of the date of Allotment for record purposes.

Other Instructions

Permanent Account Number or PAN

Each QIB should mention its Permanent Account Number (PAN) allotted under the IT Act. The copy of the PAN card or PAN allotment letter is required to be submitted with the Application Form. Applications without this information will be considered incomplete and are liable to be rejected. It is to be specifically noted that applicant should not submit the GIR number instead of the PAN as the Application Form is liable to be rejected on this ground.

Our Right to Reject Applications

The Issuer, in consultation with the Joint Global Coordinators, may reject Applications, in part or in full, without assigning any reasons whatsoever. The decision of the Issuer, Joint Global Coordinators in relation to the rejection of an Application Form shall be final and binding.

Equity Shares in dematerialised form with NSDL or CDSL

The allotment of the Equity Shares in this Issue shall be only in dematerialised form, (i.e., not in the form of physical certificates but be fungible and be represented by the statement issued through the electronic mode).

1. A QIB applying for Equity Shares must have at least one beneficiary account with a depository participant of either NSDL or CDSL prior to making the Application.


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2. Allotment to a successful QIB will be credited in electronic form directly to the beneficiary account (with the depository participant) of the QIB.

3. Equity Shares in electronic form can be traded only on the stock exchanges having electronic connectivity with NSDL and CDSL. All the stock exchanges where our Equity Shares are proposed to be listed have electronic connectivity with CDSL and NSDL.

4. The trading of the Equity Shares of the Issuer would be in dematerialized form only for all QIBs in the demat segment of the respective stock exchanges.

5. The Issuer will not be responsible or liable for the delay in the credit of Equity Shares due to errors in the Application Form or on the part of the QIBs.


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SELLING RESTRICTIONS Certain Distribution and Solicitation Restrictions The distribution of this Preliminary Placement Document and the offer, sale or delivery of the Equity Shares is restricted by law in certain jurisdictions. Persons who come into possession of this Preliminary Placement Document are advised to take legal advice with regard to any restrictions which may be applicable to them and to observe such restrictions. This Preliminary Placement Document may not be used for the purpose of an offer or sale in any circumstances in which such offer or sale is not authorised or permitted. European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), the Joint Global Coordinators have not made and will not make an offer of the Equity Shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Equity Shares which have been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Equity Shares to the public in that Relevant Member State at any time: (a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than Euro 43,000,000 and (3) an annual net contract turnover of more than Euro 50,000,000, as shown in its last annual or consolidated accounts; or (c) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an “offer of Equity Shares to the public” in relation to any Equity Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Equity Shares to be offered so as to enable an investor to decide to purchase or subscribe the Equity Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. Hong Kong The Joint Global Coordinators: (a) have not offered or sold, and will not offer or sell, in Hong Kong, by means of any document, any Equity Shares other than (i) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) (“SFO”) and any rules made under the SFO, or (ii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32) or which do not constitute an offer to the public within the meaning of that Ordinance; and (b) have not issued, or had in its possession for the purposes of issue, and will not issue, or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement,


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invitation or document relating to the Equity Shares, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Equity Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made under the SFO. Singapore This Preliminary Placement Document has not been registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289 of Singapore (the “Securities and Futures Act”). The Equity Shares may not be offered or sold or made the subject of an invitation for subscription or purchase nor may this Preliminary Placement Document or any other document or material in connection with the offer or sale or invitation for subscription or purchase of any Equity Shares be circulated or distributed, whether directly or indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or other person falling within Section 274 of the Securities and

Futures Act, (b) to a relevant person, or any person pursuant to Section 275(1A) of the Securities and Futures

Act, and in accordance with the conditions specified in Section 275 of the Securities and Futures Act, or

(c) otherwise than pursuant to, and in accordance with the conditions of, any other applicable

provision of the Securities and Futures Act. Each of the following relevant persons specified in Section 275 of the Securities and Futures Act which has subscribed or purchased Equity Shares, namely a person who is: (a) a corporate (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, should note that shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the Equity Shares under Section 275 of the Securities and Futures Act except: (1) to an institutional investor under Section 274 of the Securities and Futures Act or to a relevant person, or any person pursuant to Section 275(1A) of the Securities and Futures Act, and in accordance with the conditions, specified in Section 275 of the Securities and Futures Act; (2) where no consideration is given for the transfer; or (3) by operation of law.

United Kingdom The Joint Global Coordinators: (a) have only communicated or caused to be communicated and will only communicate or cause

to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) in connection with the issue or sale of any Equity Shares in circumstances in which Section 21(1) of FSMA does not apply to the Company; and

(b) have complied and will comply with all applicable provisions of FSMA with respect to

anything done by it in relation to the Equity Shares in, from or otherwise involving the United Kingdom.


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United States The Equity Shares have not been and will not be registered under the Securities Act, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in certain transactions exempt from the registration requirements of the Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act. The Equity Shares are being offered and sold outside of the United States to non-U.S. persons in reliance on Regulation S under the Securities Act. Each purchaser of the Equity Shares offered by this Preliminary Placement Document will be deemed to have made the representations, agreements and acknowledgements as described under “Transfer Restrictions”. India The Preliminary Placement Document has not been and will not be registered as a prospectus with the Registrar of Companies in India and the Equity Shares will not be offered or sold directly or indirectly, to the public or any members of the public in India or any other class of investors other than QIBs. Kuwait This Preliminary Placement Document has not been approved by the Kuwait Central Bank or the Kuwait Ministry of Commerce and Industry, nor has the Company received authorisation or licensing from the Kuwait Central Bank or the Kuwait Ministry of Commerce and Industry to market or sell the Equity Shares within Kuwait. Furthermore, this Preliminary Placement Document does not constitute the marketing or offering of securities in Kuwait pursuant to the Kuwaiti Securities Law (Law No. 31 of 1990, as amended). Luxembourg The Equity Shares offered in this Preliminary Placement Document may not be offered, sold or delivered to the public within the Grand Duchy of Luxembourg. This document is only intended for institutional investors. It is personal to each offeree and does not constitute an offer to any other person or to the public generally in Luxembourg to subscribe for or otherwise acquire the Equity Shares. Distribution of this Preliminary Placement Document to any person other than the offeree and those persons, if any, retained to advise such offeree with respect thereto is unauthorized and any disclosure of any of its contents, without prior written consent of the Company, is prohibited. Qatar The Equity Shares have not been offered, sold or delivered, and will not be offered, sold or delivered at any time, directly or indirectly, in the state of Qatar in a manner that would constitute a public offering. This Preliminary Placement Document has not been reviewed or registered with Qatari Government Authorities, whether under Law No. 25 (2002) concerning investment funds, Central Bank resolution No. 15 (1997), as amended, or any associated regulations. Therefore, this Preliminary Placement Document is strictly private and confidential, and is being issued to a limited number of sophisticated investors, and may not be reproduced or used for any other purposes, nor provided to any person other than the recipient thereof. United Arab Emirates This Preliminary Placement Document is strictly private and confidential and is being distributed to a limited number of investors and must not be provided to any person other than the original recipient, and may not be reproduced or used for any other purpose. By receiving this Preliminary Placement Document, the person or entity to whom it has been issued understands, acknowledges and agrees that


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this Preliminary Placement Document has not been approved by the U.A.E. Central Bank, the U.A.E. Ministry of Economy and Planning or any other authorities in the U.A.E., nor has the placement agent, if any, received authorisation or licensing from the U.A.E. Central Bank, the U.A.E. Ministry of Economy and Planning or any other authorities in the United Arab Emirates to market or sell securities within the United Arab Emirates. No marketing of any financial products or services has been or will be made from within the United Arab Emirates and no subscription to any securities, products or financial services may or will be consummated within the United Arab Emirates. It should not be assumed that the placement agent, if any, is a licensed broker, dealer or investment advisor under the laws applicable in the United Arab Emirates, or that it advises individuals resident in the United Arab Emirates as to the appropriateness of investing in or purchasing or selling securities or other financial products. The interests in the Equity Shares may not be offered or sold directly or indirectly to the public in the United Arab Emirates. This does not constitute a public offer of securities in the United Arab Emirates in accordance with the Commercial Companies Law, Federal Law No. 8 of 1984 (as amended) or otherwise. By receiving this Preliminary Placement Document, the person or entity to whom it has been issued understands, acknowledges and agrees that the Equity Shares have not been and will not be offered, sold or publicly promoted or advertised in the Dubai International Financial Centre other than in compliance with laws applicable in the Dubai International Financial Centre, governing the issue, offering or sale of securities. The Dubai Financial Services Authority has not approved this Preliminary Placement Document nor taken steps to verify the information set out in it, and has no responsibility for it. Nothing contained in this Preliminary Placement Document is intended to constitute investment, legal, tax, accounting or other professional advice. This Preliminary Placement Document is for your information only and nothing in this Preliminary Placement Document is intended to endorse or recommend a particular course of action. You should consult with an appropriate professional for specific advice rendered on the basis of your situation.


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TRANSFER RESTRICTIONS Purchasers of the Equity Shares in this Issue are not permitted to sell the Equity Shares for a period of one year from the date of allotment except through the Stock Exchanges. Subject to the foregoing: Each purchaser of the Securities outside the United States pursuant to Regulation S will be deemed to have represented and agreed as follows: ● It is authorized to consummate the purchase of the Securities in compliance with all

applicable laws and regulations. ● It acknowledges (or if it is a broker-dealer acting on behalf of a customer, its customer has

confirmed to it that such customer acknowledges) that such Securities have not been and will not be registered under the U.S. Securities Act.

● It certifies that either (A) it is, or at the time the Securities are purchased will be, the

beneficial owner of the Securities and it is not a U.S. person and is located outside the United States (within the meaning of Regulation S) or (B) it is a broker-dealer acting on behalf of its customer and its customer has confirmed to it that (i) such customer is, or at the time the Securities are purchased will be, the beneficial owner of the Securities, and (ii) such customer is not a U.S. person and is located outside the United States (within the meaning of Regulation S).

● It agrees that it will not offer, sell, pledge or otherwise transfer such Securities except in an

offshore transaction complying with Rule 903 or Rule 904 of Regulation S or pursuant to any other available exemption from registration under the U.S. Securities Act and in compliance with the Investment Company Act and in accordance with all applicable securities laws of the States of the United States and any other jurisdiction, including India.

● It acknowledges that we, the Joint Global Coordinators and their affiliates, and others will

rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that, if any of such acknowledgements, representations or agreements deemed to have been made by virtue of its purchase of the Securities are no longer accurate, it will promptly notify us. Any resale or other transfer or attempted resale or other transfer, made other than in compliance with the above-stated restrictions will not be recognized by us.


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THE SECURITIES MARKET OF INDIA The information in this section has been extracted from publicly available documents from various sources, including officially prepared materials from SEBI, CSE, BSE and NSE, and has not been prepared or independently verified by the Company or the Joint Global Coordinators or any of their respective affiliates or advisers. The Indian Securities Market India has a long history of organised securities trading. In 1875, the first stock exchange was established in Mumbai. Stock Exchange Regulations The Stock Exchanges are regulated primarily by SEBI, as well as by the Indian Government acting through the Ministry of Finance, Stock Exchange Division, under the Securities Contracts (Regulation) Act, 1956 (“SCRA”) and the Securities Contracts (Regulation) Rules, 1957 (“SCRR”). The SCRR, along with the rules, by-laws and regulations of the respective stock exchanges, regulates the recognition of stock exchanges, the qualifications for membership thereof and the manner in which contracts are entered into and enforced between members. The SEBI Act granted powers to SEBI to, among other things, regulate the Indian securities market, including stock exchanges and other financial intermediaries in the capital markets, to promote and monitor self-regulatory organisations, to prohibit fraudulent and unfair trade practices and insider trading, to regulate substantial acquisitions of shares and takeovers of companies, to call for information, to undertake inspections and conduct inquiries and audits of stock exchanges, self-regulatory organisations, intermediaries and other persons associated with the securities market. SEBI also issues guidelines and regulations concerning minimum disclosure requirements by public companies, rules and regulations concerning investor protection, insider trading, substantial acquisition of shares and takeovers of companies, buyback of securities, delisting of securities, employees’ stock option schemes, stockbrokers, merchant bankers, underwriters, mutual funds, FIIs, credit rating agencies and other capital market participants. Listing The listing of securities on a recognised Indian stock exchange is regulated by the Companies Act, the SCRA, the SCRR, the SEBI Act and various guidelines issued by SEBI and the listing agreements of the respective stock exchanges (“Listing Agreements”), under which the governing body of each stock exchange is empowered to suspend trading of or dealing in a listed security for breach of the company’s obligations under such agreement, subject to the Company being given reasonable opportunity by prior notice from the relevant exchange to show cause against the suspension. In the event that a suspension of a company’s securities continues for a period in excess of three months, the company may appeal to the Securities Appellate Tribunal (“SAT”) to set aside the suspension. SAT has the power to set aside stock exchange decisions in this regard. Further, SEBI has the power to waive or relax strict enforcement of the listing requirements and to amend the Listing Agreements and direct stock exchanges to amend their bylaws. A listed company can be delisted under the provisions of SEBI (Delisting of Securities) Guidelines, 2003 (“Delisting Guidelines”) which govern voluntary and compulsory delisting of shares of Indian companies from the stock exchanges. A company may be delisted through a voluntary delisting sought by the promoters of the said company or a compulsory delisting by a stock exchange due to any acquisition of shares of the said company or scheme of arrangement, or consolidation of holdings by the person in control pursuant to which the public shareholding in the company falls below the minimum limit specified in the listing conditions or in the Listing Agreement. A company may voluntarily delist from the stock exchange where its securities are listed provided that an exit opportunity has been given to the investors at an exit price determined in accordance with a specified


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formula. The procedure for compulsory delisting also requires the company to make an exit offer to the shareholders in accordance with the above-mentioned guidelines. The Delisting Guidelines provide that if for any reason the securities of a company become liable to be delisted from the relevant stock exchange, the company may, if it desires to maintain listing, follow the procedure laid down in the Delisting Guidelines for such continuous listing. Pursuant to the Delisting Guidelines, the company may, within six months, issue new shares to the public or the promoters of the company may sell a portion of their shares to the public, such that the minimum level of public shareholding is re-established. The Delisting Guidelines also provide that if a company fails to issue new shares or if the promoters fail to sell a portion of their shares to the public, so as to bring the public shareholding back to the minimum required level, SEBI may delist that company (after giving notice and as per the procedure laid down in the Delisting Guidelines). The procedure essentially requires the promoter to make an offer to buy the securities from the public at a fair value (“fair value” being determined in accordance with the Takeover Code). Pursuant to a circular dated April 13, 2006, SEBI has made certain amendments to the form of listing agreement. All listed companies, other than (a) companies which, at the time of initial listing, had offered less than 25% but not less than 10%. of the total number of issued shares of a class or kind, or companies desiring to list their shares by making an initial public offering of at least 10%, and (b) companies which, irrespective of the percentage of their shares with the public at the time of initial listing, have reached a size of twenty million or more in terms of number of listed shares and Rs.10 billion or more in terms of market capitalisation are required to ensure a minimum level of public shareholding at 25% of the total number of issued shares of a class or kind for the purpose of continuous listing. The companies described in (a) and (b) above would be required to maintain a minimum level of public shareholding at 10%. of the total number of issued shares of a class or kind for the purpose of continuous listing. The provisions of this circular are not applicable to government companies, infrastructure companies, and companies pending reference before the Board for Industrial and Financial Reconstruction. In order to restrict abnormal price volatility in any particular stock, SEBI has instructed stock exchanges to apply daily circuit-breakers for most stocks, which do not allow transactions beyond certain price volatility. An index-based market-wide (equity and equity derivatives) circuit-breaker system has been implemented and applies at three stages of the index movement - at 10%, 15% and 20%. These circuit breakers, when triggered, bring about a coordinated trading halt in all equity and equity derivative markets nationwide. The market-wide circuit breakers are triggered by movement of either the “SENSEX” of BSE or “NIFTY” of NSE, whichever is breached earlier. Additionally, there are currently in place varying individual scrip-wise bands. Circuit-breakers are not applicable to certain stocks listed in the “A” category of BSE, on which stocks, futures and options are traded. The Indian stock exchanges can also exercise the power to suspend trading during periods of market volatility. Margin requirements are imposed by stock exchanges that are required to be paid by stockbrokers. At the discretion of stock exchanges and under instructions from SEBI, stock exchanges can also impose ad hoc margins for specific stocks in the event of extreme volatility in price movements. Listing Agreement The company has entered into Listing Agreements with each of the Indian stock exchanges on which its equity shares are listed. A listed company is subject to continuing disclosure requirements pursuant to the terms of its listing agreement with the relevant stock exchange, including the requirement to publish unaudited financial statements on a quarterly basis and to inform stock exchanges immediately of all events which will have a bearing on the performance/operations of the company as well as any stock price-sensitive information. The listing agreements also provide that whenever a take-over offer is made or there is any change in the control of the management of the company, the person who secures the control of the management of the company and the company whose shares have been acquired shall comply with the relevant provisions of the Takeover Code.


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Disclosures under the Companies Act and Securities Regulations Public limited companies are required under the Companies Act and SEBI Guidelines and Listing Agreements to prepare, file with the Registrar of Companies and circulate to their shareholders, audited annual accounts which comply with the Companies Act’s disclosure requirements and regulations governing their manner of presentation and which include sections pertaining to corporate governance, related-party transactions and the management’s discussion and analysis as required under the listing agreement. In addition, a listed company is subject to continuing disclosure requirements pursuant to the terms of its listing agreement with the relevant stock exchange. Accordingly, the companies are also required to publish unaudited financial statements, although subject to a limited review by the company’s auditors, on a quarterly basis and are required to inform stock exchanges immediately regarding any stock price-sensitive information. The Companies Act further requires mandatory compliance with accounting standards issued by the Institute of Chartered Accountants of India (“ICAI”). Indian Stock Exchanges There are now 23 stock exchanges in India. Most of the stock exchanges use their own governing board for self-regulation. A number of these exchanges have been directed by SEBI to file schemes for demutualisation as part of a move towards greater investor protection. NSE and BSE together hold a dominant position among the stock exchanges in terms of number of listed companies, market capitalisation and trading activity. BSE BSE, the oldest stock exchange in India, was established in 1875. BSE switched to online trading from May 1995. Pursuant to SEBI’s BSE (Corporatization and Demutualization) Scheme, 2005, with effect from August 20, 2005, BSE has been corporatised and demutualised and is now a company under the Companies Act. Only a member of BSE has the right to trade in the stocks listed on BSE. Derivatives trading commenced on BSE in 2000. Retail trading in government securities commenced on BSE in January 2003. As of October 31, 2007, there were 4,867 listed companies whose securities were trading on BSE, the average daily turnover of BSE in October, 2007 was Rs. 90.49 billion, and BSE’s market capitalisation was approximately Rs. 63,320.93 billion. (Source: BSE) NSE NSE serves as a national exchange, providing nationwide online satellite-linked screen-based trading facilities with market makers and electronic clearing and settlement for securities, including government securities, debentures, public sector bonds and units. The principal aim of NSE is to enable investors to buy or sell securities from anywhere in India, serving as a national market for securities. Deliveries for trades executed on-market are exchanged through the National Securities Clearing Corporation Limited. NSE does not categorise shares into groups as in the case of BSE, except in respect of the trade-to-trade category. NSE commenced operations in the wholesale debt market in June 1994, in capital markets in November 1994 and derivatives in June 2000. NSE launched the NSE 50 Index, now known as S&P CNX NIFTY, on April 22, 1996 and the Mid-cap Index on January 1, 1996. The securities in the NSE 50 Index are highly liquid. With a wide network in major metropolitan cities, screen-based trading, a central monitoring system and greater transparency, NSE has recently recorded high volumes of trading. As at October 31, 2007, there were 1,327 companies listed on NSE, the average daily turnover of NSE in October 2007 was Rs. 207.09 billion and NSE’s market capitalisation was approximately Rs. 57,722.27 billion. (Source: NSE). CSE The Calcutta Stock Exchange Association Limited was established in 1908 and was registered as a limited liability concern in 1923. It was granted recognition under the Securities Contract


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(Regulation) Act, 1956 in 1980. CSE’s automated trading platform, the CSE Screen Based Trading and Reporting System (“CSTAR”) was launched in 1997. CSE currently has over 900 broker members and over 3,000 companies are currently listed on CSE. In 2005-06, CSE’s annual trading turnover was Rs. 28 billion. Pursuant to the Calcutta Stock Exchange Association Limited (Demutualisation) Scheme, 2005, the demutualisation of CSE is currently under way. (Source: CSE) Settlement With effect from December 31, 2001, trading in all securities listed in the equity segment of BSE takes place in one market segment, known as the Compulsory Rolling Settlement Segment. With effect from April 1, 2003, in accordance with SEBI directives, stock exchanges in India operate on a trading day plus 2, or T+2 rolling settlement system, although SEBI has proposed to move to a T+1 settlement system. T+2, settlement requires that a transaction is settled on the second business day following the relevant trade date. The Equity Shares are listed in the B-1 segment on BSE and trades in the Equity Shares are settled on a T+2 basis. Internet-based Securities Trading and Services SEBI approved Internet trading in January 2000. Internet trading takes place through order routing systems, which route client orders to exchange trading systems for execution. Stockbrokers interested in providing this service are required to apply for permission to the relevant stock exchange and also have to comply with certain minimum conditions stipulated by SEBI. NSE became the first exchange to grant approval to its members for providing Internet-based trading services. Internet trading is possible on both the equities as well as the derivatives segments of NSE. Takeover Code Disclosure and mandatory bid obligations for listed Indian companies under Indian law are governed by the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended) (“Takeover Code”) which prescribes certain thresholds or trigger points that give rise to certain obligations under the Takeover Code. The Takeover Code is under constant review by SEBI and was last amended in August 2006. Since the Company is an Indian listed company, the provisions of the Takeover Code will apply to acquisition of its shares. The principal features of the Takeover Code are as follows: • “Shares” is defined to mean equity shares or any other security, which entitles a person to

acquire shares with voting rights but shall not include Preference Shares. • Any acquirer (defined as a person who, directly or indirectly, acquires or agrees to acquire

shares or voting rights in a company or acquires or agrees to acquire control over a company, either by himself or with any person acting in concert) who acquires shares or voting rights that (taken together with shares or voting rights, if any, held by such person) would entitle the acquirer to more than 5%, 10%, 14%, 54% or 74% of the shares or voting rights, as the case may be, in a company is required to disclose at every stage the aggregate of his shareholding or voting rights in that company to the company and to each of the stock exchanges on which the company’s shares are listed within two days of (i) the receipt of allotment information or (ii) the acquisition of shares or voting rights, as the case may be. The company in turn is also required to disclose the same to the stock exchanges on which the company’s shares are listed. A person who holds more than 15% of the shares or voting rights in any company is required to make annual disclosure of his holdings as at March 31 to that company within 21 days of the financial year ending March 31). The company is required to disclose the same to each of the stock exchanges on which the company’s shares are listed.

• Further, a person who holds 15% or more but less than 55% of the shares or voting rights in

any company is required to disclose any purchase or sale of shares exceeding (in aggregate)


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2% of the share capital of the company to the company (which in turn is also required to disclose the same to each of the stock exchanges on which the company’s shares are listed) and to each of the stock exchanges where the shares of the company are listed within two days of (i) the receipt of allotment information or (ii) the acquisition, sale or disposal of shares or voting rights. Promoters or persons in control of a company are also required to make periodic disclosure of shares or voting rights held by them along with persons acting in concert, in the same manner as above, annually within 21 days of the end of the financial year as well as from the record date for entitlement to a dividend. The company is also required to disclose the holdings of its promoters or persons in control as on March 31 of the respective year and on the record date fixed for the declaration of dividends to each of the stock exchanges on which its equity shares are listed. An acquirer who, along with persons acting in concert, acquires 15% (taken together with existing equity shares on voting rights, if any, held by it or persons acting in concert with it) or more of the shares or voting rights of a company would be required to make a public announcement to acquire a further minimum 20%. of the shares of the company at a price not lower than the price determined in accordance with the Takeover Code. Such offer has to be made to all public shareholders of the company (defined as holders of shareholdings held by persons other than the promoter (as defined under the Takeover Code).

An acquirer who, together with persons acting in concert with him, holds 15% or more but less than 55% of the shares or voting rights in a company cannot acquire additional shares or voting rights that would entitle him to exercise more than 5% of the voting rights in any financial year ending on March 31unless such acquirer makes a public announcement offering to acquire a further minimum 20% of the shares or voting rights at a price not lower than the price determined in accordance with the Takeover Code. Any acquisition of shares or voting rights by an acquirer who, together with persons acting in concert, holds 55% or more but less than 75% of the shares or voting rights in a company (or, where the company concerned had obtained the initial listing of its shares by making an offer of at least 10 % of the issue size to the public pursuant to Rule 19(2)(b) of the SCRR, less than 90% of the shares or voting rights in the company) would require such an acquirer to make an open offer to acquire a minimum of 20% of the shares or voting rights which it does not already own in the company. However, if an acquisition made pursuant to an open offer results in the public shareholding in the target company being reduced below the minimum level required under the listing agreement with the stock exchanges, the acquirer would be required to take steps to facilitate compliance by the target company with the relevant provisions of the listing agreement with the stock exchanges, within the time period prescribed therein. In addition, regardless of whether there has been any acquisition of shares or voting rights in a company, an acquirer cannot directly or indirectly acquire control over a company (for example, by way of acquiring the right to appoint a majority of the directors or to control the management or the policy decisions of the company) unless such acquirer makes a public announcement offering to acquire a minimum of 20%. of the shares or voting rights which it does not already own in the company. Where an acquirer who (together with persons acting in concert) holds 55% or more, but less than 75% of the shares or voting rights in a target company (or, where the concerned company had obtained the initial listing of its shares by making an offer of at least 10% of the issue size to the public pursuant to Rule 19(2)(b) of the SCRR, less than 90% of the shares or voting rights in the company), intends to consolidate its holdings while ensuring that the public shareholding in the target company does not fall below the minimum level permitted by the listing agreement with the stock exchanges, the acquirer may do so only by making an open offer in accordance with the Takeover Code. Such open offer would be required to be made for the lesser of (i) 20% of the voting capital of the company, or (ii) such other lesser percentage of the voting capital of the company as would, assuming full subscription to the open offer, enable the acquirer (together with persons acting in concert), to increase the holding to the maximum level possible, which is consistent with the target company meeting the requirements of minimum public shareholding laid down in the listing agreement with the stock exchanges. The open offer for the acquisition of a further minimum of 20%. of shares of the company or such other percentage as prescribed under the Takeover Code has to be made by way of a public announcement which must be made within four working days of entering into an agreement for the acquisition of, or decision to acquire directly,


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shares or voting rights exceeding the relevant percentages of shareholding in the company and/or control over the company. Unless otherwise provided in the Takeover Code, an acquirer who seeks to acquire any shares or voting rights whereby the public shareholding in the company would be reduced to a level below the limit specified in the listing agreement with the stock exchange for the purpose of continuous listing may acquire such shares or voting rights only in accordance with the regulations prescribed for delisting of securities by SEBI. The Takeover Code sets out the contents of the required public announcement as well as the minimum offer price. The minimum offer price depends on whether the shares of the company are “frequently” or “infrequently” traded (as defined by the Takeover Code). In case the shares are frequently traded, then the minimum offer price would be the higher of: • the negotiated price under the agreement for the acquisition of shares in the company;

• the highest price paid by the acquirer or persons acting in concert with him for any acquisitions, including through an allotment in a public, preferential or rights issue, during the 26-week period prior to the date of public announcement; and

• the average of the weekly high and low of the closing prices of the shares of the company quoted on the stock exchange where the shares of the company are most frequently traded during the 26-week period prior to the date of public announcement, or the average of the daily high and low of the closing prices of the shares as quoted on the stock exchange where the shares of the company are most frequently traded during the two weeks preceding the date of public announcement, whichever is higher.

The Takeover Code permits conditional offers and provides specific guidelines for the gradual acquisition of shares or voting rights. Specific obligations of the acquirer and the board of directors of the target company in the offer process have also been set out. Acquirers making a public offer are also required to deposit into an escrow account a prescribed percentage of the total consideration, which amount will be forfeited in the event that the acquirer does not fulfill its obligations. In addition, the Takeover Code introduces the “chain principle” by which indirect acquisition by virtue of an acquisition of companies, whether listed or unlisted, whether in India or abroad, of a company listed in India will oblige the acquirer to make a public offer to the shareholders of each such Indian company that is indirectly acquired. The public open offer provisions of the Takeover Code, subject to certain conditions, do not apply, among other things, to certain specified acquisitions, including the acquisition of shares: (i) by allotment in a public and rights issue subject to the fulfillment of certain conditions; (ii) pursuant to an underwriting agreement; (iii) by registered stockbrokers in the ordinary course of business on behalf of clients; (iv) in unlisted companies (unless such acquisition results in an indirect acquisition of shares in excess of 15%. in a listed company); (v) pursuant to a scheme of reconstruction or amalgamation approved by a court in India or abroad; (vi) pursuant to an inter se transfer between promoters, relatives, or group companies, subject to certain conditions; (vii) pursuant to a scheme under the SICA; (vii) through inheritance on succession, (viii) resulting from transfers by Indian venture capital funds or foreign venture capital investors registered with SEBI, to their respective promoters or to other venture capital undertakings or (ix) by companies controlled by the Indian Government except where such acquisition is made pursuant to a disinvestment process undertaken by the Indian Government or a State Government (x) change in control by takeover/restoration of the management of the borrower company by the secured creditor in terms of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (xi) acquisition of shares by a person in exchange of equity shares received under a public offer made under the Takeover Code and (xii) in terms of guidelines and regulations relating to delisting of securities as specified by SEBI. The Takeover Code does not apply to acquisitions in the ordinary course of business by public financial institutions either on their own account or as pledgee. An application may also be filed with SEBI seeking exemption from the requirements of the Takeover Code. The general requirements to make such a public announcement do not, however, apply entirely to bailout takeovers of a financially weak company but not a “sick industrial company” pursuant to a rehabilitation scheme approved by a public financial institution or a scheduled bank. A “financially


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weak company” is a company which has at the end of the previous financial year accumulated losses which have resulted in the erosion of more than 50%. but less than 100% of the total sum of its paid up capital and free reserves as at the beginning of the previous financial year. A sick industrial company is a company registered for not less than five years which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth. The obligation to make an open offer also does not arise in case of acquisition of global depository receipts so long as they are not converted into shares carrying voting rights. The Takeover Code does not apply to the requisition of shares in companies whose shares are not listed on any stock exchange. Minimum Level of Public Shareholding In order to ensure availability of floating stock of listed companies, SEBI has recently notified amendments to the Listing Agreement. All listed companies are required to ensure that their minimum level of public shareholding remains at or above 25% of the total number of issued shares of a class or kind, for every such class or kind of its shares which are listed. This requirement does not apply to those companies who at the time of their initial listing had offered at least 10% of the issue size to the public pursuant to Rule 19(2)(b) of the SCRR, and agree to maintain on a continuous basis, public shareholding of at least 10% of the total number of issued shares of such class or kind and to such companies where the number of outstanding listed shares of any class or kind is 20 million or more and where market capitalisation in respect of shares is Rs.10,000 million or more, and who agree to maintain on a continuous basis, public shareholding of at least 10% of the total number of issued shares of such class or kind. Failure to comply with this clause in the Listing Agreement requires the listed company to delist its shares pursuant to the terms of the SEBI Delisting Guidelines and may result in penal action being taken against the listed company pursuant to the Securities and Exchange Board of India Act, 1992. Insider Trading Regulations SEBI (Prohibition of Insider Trading) Regulations 1992 (“Insider Trading Regulations”) have been notified by SEBI to prohibit and penalize insider trading in India. The Insider Trading Regulations prohibit an “insider” from dealing, either on his own behalf or on behalf of any other person, in the securities of a company listed on any stock exchange when in possession of unpublished price-sensitive information. The terms “insider” and “unpublished price-sensitive information” are defined in the Insider Trading Regulations. The insider is also prohibited from communicating, counseling or procuring, directly or indirectly, any unpublished price-sensitive information to any other person who while in possession of such unpublished price-sensitive information is prohibited from dealing in securities. The prohibition under the Insider Trading Regulations also extends to all persons, including a company dealing in the securities of a company listed on any stock exchange, while in the possession of unpublished price-sensitive information. SEBI has amended the Insider Trading Regulations in 2002 to provide certain defences to the prohibition on companies in possession of unpublished price-sensitive information dealing in securities. The Insider Trading Regulations make it compulsory for listed companies and certain other entities associated with the securities market to establish an internal code of conduct to prevent insider trading deals and also to regulate disclosure of unpublished price-sensitive information within such entities so as to minimise misuse of such information. To this end, the Insider Trading Regulations provide a model code of conduct. The company has its own Code of Conduct in line with the Insider Trading Regulations. On a continuing basis, any person who holds more than 5% of the shares or voting rights in any listed company is required to disclose to the company the number of shares or voting rights held by him and change in shareholding or voting rights, even if such change results in the shareholding falling below 5%, if there has been a change in such holdings from the last disclosure made, provided such change exceeds 2%. of the total shareholding or voting rights in the company. Such disclosure is required to be made within four working days of either:


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(i) the receipt of intimation of allotment of shares; or

(ii) the acquisition or sale of shares or voting rights, as the case may be. Further, all directors and officers of a listed company are required to disclose to the company the number of shares or voting rights held by such person in such company within four working days of becoming a director or officer of such company. All directors and officers are also required to make periodic disclosures of their shareholding in the company as specified in the Insider Trading Regulations. Derivatives (Futures and Options) Trading in derivatives in India is governed by the SCRA, the SCRA Rules and the SEBI Act. The SCRA was amended in February 2000 and derivative contracts were included within the term “securities”, as defined in the SCRA. Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on separate segments of an existing stock exchange. The derivative exchange or derivative segment of a stock exchange functions as a self-regulatory organisation under the supervision of SEBI. Derivatives products were introduced in four phases in India, starting with futures contracts in June 2000 and index options, stock options and stock futures in June 2000, July 2001 and November 2001, respectively. Depositories The Depositories Act, 1996 provides a legal framework for the establishment of depositories to record ownership details and effect transfers in book-entry form. The Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 provide for, inter alia, the registration of depositories and participants, the rights and obligations of the depositories, participants, issuer companies and beneficial owners, creation of pledge of securities held in dematerialised form, and the procedure for dematerialisation of shares held in physical form. Under the Depositories Act, a company is required to give the option to subscribers/shareholders to receive the security certificates or hold securities in dematerialised form with a depository. Trading of securities in book-entry form commenced towards the end of 1996. In January 1998, SEBI notified scrips of various companies for compulsory dematerialised trading by certain categories of investors such as FIIs and other institutional investors. SEBI has subsequently significantly increased the number of scrips in which dematerialised trading is compulsory for all investors. However, even in the case of scrips notified for compulsory dematerialised trading, investors, other than institutional investors are permitted to trade in physical shares on transactions outside the stock exchange where there are no requirements of reporting such transactions to the stock exchange and on transactions on the stock exchange involving lots of less than 500 securities. Transfers of shares in book-entry form require both the seller and the purchaser of the equity shares to establish accounts with depository participants registered with the depositories established under the Depositories Act. Charges for opening an account with a depository participant, transaction charges for each trade and custodian charges for securities held in each account vary depending upon the practice of each depository participant and have to be borne by the account holder. Upon delivery, the shares shall be registered in the name of the relevant depository on the issuer’s books and this depository shall enter the name of the investor in its records as the beneficial owner. The transfer of beneficial ownership shall be effected through the records of the depository. The beneficial owner shall be entitled to all rights and benefits and subject to all liabilities in respect of his securities held by a depository.


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DESCRIPTION OF THE EQUITY SHARES Set forth below is certain information relating to the share capital of the company including a brief summary of some of the provisions of the Memorandum and Articles of Association of the Company and the Companies Act relating to the rights attached to the Equity Shares. General The Company’s authorized share capital is Rs.750 million divided into 374.90 million Equity Shares of par value Rs.2 each and 0.02 million 15% cumulative preference shares of Rs.10 each. Articles of Association The Company is governed by its Articles of Association. The last amendment to the Articles of Association (in relation to the alteration of the authorized capital of the Company) was carried out by a resolution passed by the members of the Company at the AGM held on 18th August, 2006. Table A is not applicable to the Articles of the Company. Dividends Under the Companies Act, an Indian company pays dividend upon a recommendation by its board of directors and subject to approval by a majority of the members, who have the right to decrease but not to increase the amount of the dividend recommended by the board of directors. The decision of the Board and shareholders of the Company may depend on a number of factors, including but not limited to the Company’s profits, capital requirements and overall financial condition. The dividend recommended by the board of directors and approved by the members at a general meeting is distributed and paid to the members in proportion to the paid-up value of their equity shares on the record date for which such dividend is payable. In addition, as is permitted by the articles of association of a company, the board of directors may announce and pay interim dividends. Under the Companies Act, dividends can only be paid in cash to shareholders listed on the register of shareholders or those persons whose names are entered as beneficial owners in the record of the depository on the date specified as the “record date” or “book closure date.” Article 139 of the Articles of Association of the Company empowers the Board of Directors of the Company to declare dividend. No unpaid or unclaimed dividend shall be forfeited unless the claim thereto becomes barred by law. The Company shall comply with the provisions of Sections 205A of the Act in respect of unpaid or unclaimed dividend. Where the Company had declared a dividend which has not been paid or in respect of which the dividend warrant has not been claimed by the shareholders entitled to the payment of such dividend, the Company shall within seven days from the expiry of thirty days from declaration of such dividend open a special account in any scheduled bank, under the name “Unpaid Dividend Account of Simplex Infrastructures Limited”. Any dividend payments unclaimed by the shareholders for over seven years from the date of disbursement need to be deposited by the Company with the Investor Education and Protection Fund constituted by the Central Government, from where the amounts deposited can neither be claimed by the shareholders nor by the Company. Under the Companies Act, dividends may be paid out of profits of a company in the year in which the dividend is declared or out of the undistributed profits or reserves of the previous fiscal years or out of both in compliance with the provisions of Companies (Declaration of Dividend out of Reserves) Rules, 1975. Under the Companies Act, a company may pay a dividend in excess of 10% of paid-up capital in respect of any year out of the profits of that year only after it has transferred to the reserves of the company a percentage of its profits for that year, ranging between 2.5% to 10% depending on the rate of dividend proposed to be declared in that year. The Companies Act further provides that if the profit for a year is insufficient, the dividend for that year may be declared out of the accumulated profits earned in previous years and transferred to reserves, subject to the following conditions:


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(i) the rate of dividend to be declared may not exceed the lesser of the average of the rates at which dividends were declared in the five years immediately preceding the year, or 10% of paid-up capital; (ii) the total amount to be drawn from the accumulated profits from previous years may not exceed an amount equivalent to 10% of paid-up capital and reserves and the amount so drawn is first to be used to set off the losses incurred in the financial year before any dividends in respect of preference or equity shares; and (iii) the balance of reserves after withdrawals must not be below 15% of paid-up capital. Capitalisation of Profits Article 137 of the Articles of Association of the Company provide that the Company in a general meeting may capitalise the whole or any part of the amount for the time being standing to the credit of either of the Company's reserve account or profit and loss account or otherwise available for distribution. The relevant SEBI guidelines prescribe that no company shall, pending conversion of convertible securities, issue any shares by way of bonus unless similar benefit is extended to the holders of such convertible securities, through reservation of shares in proportion to such conversion. Further, as per the Companies Act, for the issuance of bonus shares a company should not have defaulted in the payment of interest or principal in respect of fixed deposits and interest on existing debentures or principal on redemption of such debentures. The bonus issue must be made out of free reserves built out of genuine profits or share premium account collected in cash only. Pre-Emptive Rights and Alteration of Share Capital The Articles of the Company provide that if the Company wishes to issue any share capital or any other securities convertible into or exchangeable for share capital, it shall do so only in accordance with Sections 81 and 81(1A) of the Act. The Articles of the Company provide that the Company from time to time, by ordinary resolution: (a) consolidate all or any of its Shares into shares of larger amount than its existing Shares; (b) sub-divide its existing Shares all or any of them into shares of smaller amount than is fixed by the Memorandum so, however, that in the sub-division the proportion between the amount paid and the amount if any, unpaid on each reduced share shall be the same as it was in the case of the Share from which the reduced share is derived; and (c) cancel any Share which, at the date of passing of the resolution, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of Shares so cancelled. General Meetings of Shareholders In accordance with Section 166 of the Companies Act, a company must hold its annual general meeting each year within 15 months of the previous annual general meeting or within six months after the end of each accounting year, whichever is earlier, unless extended by the Registrar of Companies at the request of the company for any special reason. Every member of the company shall be entitled to attend every general meeting either in person or by proxy, and the auditor of the company shall have the right to attend and to be heard at any general meeting on any part of the business which concerns him as auditor. Article 65 and 66 of the Articles of Association of the Company provide that the Directors may, whenever they think fit, call an Extraordinary General Meeting, and an Extraordinary General Meeting may also be requisitioned as provided by Section 169 of the Act. Written notices convening a meeting setting out the date, place and agenda of the meeting must be given to members at least 21 days prior to the date of the proposed meeting in accordance with Section 171 of the Act. A general meeting may be called after giving shorter notice if consent is received from all shareholders at an Annual General Meeting, or from shareholders holding not less than 95% of the paid-up capital of the company, at any other general meeting. A document may be


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served by the company on any member thereof and the notice of every meeting of the company shall be given to every member in any manner authorized by and as provided in Sections 53 and 172 of the Companies Act. The accidental omission to give notice of any meeting to or the non-receipt of any, notice by the member or other person to whom it should be given shall not invalidate the proceedings at the meetings. All businesses transacted at an extraordinary general meeting or an annual general meeting (except declaration of dividend, consideration of accounts, balance sheet, reports of the Board and auditors, election of directors in place of those retiring by rotation and appointment of and fixing remuneration of the auditors) shall be deemed to be special businesses in which case an explanatory statement as required under Section 173 of the Act shall accompany the notice of the meeting. The Articles of the Company provide that no business shall be transacted at any General Meeting unless a quorum of members is present at the time when the meeting proceeds to business. Five members present in person shall constitute the quorum. If the quorum is not present within half an hour of the time appointed for a meeting, the meeting, if convened upon such requisition as aforesaid, shall be dissolved; but in any other case it shall stand adjourned in accordance with provisions of sub-sections (3), (4) and (5) of Section 174 of the Act. Voting Rights Subject to the provisions of the Companies Act and the Articles, votes may be given either personally or by proxy, and in the case of a body corporate, a duly authorized representative under Section 187 of the Companies Act shall be entitled to exercise the same powers on behalf of the corporation as if it were an individual member of the company. On a show of hands, every member holding equity shares and present in person shall have one vote. On a poll, every member holding equity shares therein shall have voting rights in proportion to his share of the paid-up equity share capital and such a member holding more than one vote need not use all his votes in the same way. In the case of joint holders, the vote of the first named person of such joint holders who tenders a vote whether in person or proxy shall be accepted to the exclusion of the votes of the other joint holders. At any general meeting, a resolution put to the vote at the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded in accordance with the provisions of Section 179 of the Act. Unless a poll is so demanded, a declaration by the Chairman that resolution has, on a show of hands, been carried unanimously or by a particular majority, or lost and an entry made to that effect in the book of the proceedings of the company shall be conclusive evidence of the fact without proof of the number of proportion of the votes cast in favour of or against that resolution. If a poll is duly demanded, it shall be taken in such manner as the Chairman directs and the results of the poll shall be deemed to be the decision of the meeting on the resolution in respect of which the poll was demanded. The Chairman of the meeting has a casting vote in addition to the vote or votes to which he is entitled to as a member. A demand for a poll may be withdrawn at any time by the person or persons who made that demand. A poll demanded on any other question (not being a question relating to the election of the Chairman) shall be taken at such time not being later than 48 hours from the time when the demand was made, as the Chairman may direct. A member present by proxy may not vote except on a poll and he shall not have the right to speak at the meetings. The Act provides that to amend the Articles a special resolution is required to be passed in a general meeting. Votes may be given either personally or by proxy or in the case of a body corporate by a representative duly authorized as per the Articles. The instrument appointing a proxy is required to be lodged with the company at least 48 hours before the time of the meeting in accordance with Schedule IX of the Companies Act as far as possible. A vote given in accordance with the terms of an instrument appointing a proxy shall be valid notwithstanding the prior death or insanity of the principal, or revocation of the instrument, or transfer of the share in respect of which the vote is given, provided no intimation in writing of the death, insanity, revocation or transfer of the share shall have been received by the company at the office before the vote is given. Provided nevertheless that the Chairman of the meeting shall be entitled to require such evidence as he may in his discretion think fit, of the due execution of instrument of proxy and that the same has not been revoked. Further no member shall be entitled to exercise any voting right personally or by proxy at any meeting of the Company in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid in regard to which the Company has exercised any right of lien.


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Register of Transfers and of Members The Company is required to maintain a register of members wherein the particulars of the members of the Company are entered. The Board is required to give not less than seven days previous notice by advertisement in a newspaper circulating in the district in which the registered office of the company is situated to close the transfer books, the register of members or register of debenture holders at such time and for such period not exceeding 45 days in any one year or 30 days at any one time at such times, as the Board may deem expedient in accordance with the provisions of the Companies Act. Under the listing agreements of the Stock Exchanges on which the Company’s outstanding shares are listed, the Company may, upon at least 15 days’ advance notice to such stock exchanges, set a record date and/or close the register of shareholders in order to ascertain the identity of shareholders. The trading of shares and the delivery of certificates in respect thereof may continue while the register of shareholders is closed. Directors Pursuant to the Companies Act and our Articles of Association, directors may be appointed by the Board or by the shareholders in a general meeting. The Board may appoint any person as an additional director, but such a director shall hold office up to the date of the next annual general meeting unless appointed by the shareholders in accordance with the provisions of the Companies Act. A casual vacancy on the Board due to death or resignation of a director appointed by the shareholders can be filled by the Board at a meeting of the Board, and a person so appointed shall hold office only until the date which the director in whose place he is appointed would have held office. The directors may appoint an alternate director to act for a director during his absence for a period of not less than three months from the date in which the meetings of the board are ordinarily held in accordance with the provisions of the Companies Act. Pursuant to the Companies Act not less than two-thirds of the total numbers of directors shall be persons whose period of office is subject to retirement by rotation and one-third of such directors, or if their number is not three or a multiple of three, then the number nearest to one-third, shall retire from office at every annual general meeting. The directors to retire are those who have been the longest in the office since their last appointment. Our directors are required to hold 100 Equity Shares by way of qualification shares. Annual Report and Financial Results The annual report must be laid before the annual general meeting of the shareholders of a company. This includes financial information about the company such as the audited financial statements as of the date of closing of the financial year, directors’ report, management’s discussion and analysis and a corporate governance section, and is sent to the shareholders of the company. Under the Companies Act, a company must file the annual report with the Registrar of Companies within seven months from the close of the accounting year or within 30 days from the date of the annual general meeting, whichever is earlier. As required under the listing agreements with the Stock Exchanges, copies are required to be simultaneously sent to the Stock Exchanges. The Company files certain information on-line, including its Annual Report, six-month and quarterly financial statements and the shareholding pattern statement, in accordance with the requirements of the listing agreements and as may be specified by SEBI from time to time. Transfer of Shares Shares held through depositories are transferred in the form of book entries or in electronic form in accordance with the regulations laid down by SEBI. These regulations provide the regime for the functioning of the depositories and the participants and set out the manner in which the records are to be kept and maintained and the safeguards to be followed in this system. Transfers of beneficial ownership of shares held through a depository are exempt from stamp duty. The Company has entered into an agreement for such depository services with the National Securities Depository Limited and


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the Central Depository Services India Limited. SEBI requires that the Company’s shares for trading and settlement purposes be in book-entry form for all investors, except for transactions that are not made on a stock exchange and transactions that are not required to be reported to the stock exchange. The Company shall keep a book called the register of transfer in which every transfer or transmission of shares will be entered. The shares are freely transferable, subject only to the provisions of the Companies Act, under which, if a transfer of shares contravenes SEBI provisions or the regulations issued under it, or the Sick Industrial Companies (Special Provisions) Act, 1985 (“SICA”), or any other similar law, the Company Law Board may, on an application made by a company, a depository incorporated in India, an investor, SEBI or other parties, direct a rectification of the register of members. If a company without sufficient cause refuses to register a transfer of shares within two months from the date on which the instrument of transfer is delivered to the company, the transferee may appeal to the Indian Company Law Board seeking to register the transfer of equity shares. The Company Law Board may, in its discretion, issue an interim order suspending the voting rights attached to the relevant equity shares before completing its investigation of the alleged contravention. Under the Companies (Second Amendment) Act, 2002, the Indian Company Law Board will be replaced with the National Company Law Tribunal. Further, under the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, which is expected to come into force shortly, the SICA is sought to be repealed and the Board of Industrial and Financial Reconstruction, as constituted under the SICA, is to be replaced with the National Company Law Tribunal. Pursuant to the listing agreements, in the event the Company has not effected the transfer of shares within one month or where the Company has failed to communicate to the transferee any valid objection to the transfer within the stipulated time period of one month, the Company is required to compensate the aggrieved party for the opportunity loss caused during the period of the delay. The Companies Act provides that the shares or debentures of a publicly listed company shall be freely transferable. However, the Board may, subject to Section 111A of the Companies Act, at any time in their discretion by giving reasons, decline to register shares on grounds mentioned under the Companies Act. However, this may not be done on the grounds that the transferor is indebted to the company on any account whatsoever. Notice of such refusal must be sent to the transferee within one month of the date on which the transfer was lodged with the company. A transfer may also be by transmission. According to the Company’s Articles, any guardian of a lunatic or minor member or any person becoming entitled to a Share in consequence of insolvency of any member upon producing such evidence that he sustains the character in respect of which he proposes to act under this Article or of his title as the Board thinks sufficient, may with the consent of the Board (which the Board shall not be bound to give) be registered as a member in respect of such Share, or may subject to the regulation as a member in respect of such Share, or may subject to the regulation as to transfer, herein contained transfer such Shares. Acquisition by the Company of its own Equity Shares A company is prohibited from acquiring its own shares unless the consequent reduction of capital is effected by an approval of at least 75% of its shareholders, voting on the matter in accordance with the Companies Act and sanctioned by the High Court of Judicature in the city where the Company’s registered office is located. Subject to certain conditions, a company is prohibited from giving, whether directly or indirectly and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person for any shares in the company or its holding company. However, pursuant to the Companies Act by way of Sections 77A, 77AA and 77B, the Company has been empowered to purchase its own shares or other specified securities out of its free reserves, or the securities premium account or the proceeds of the issue of any shares or other specified securities (other than from the proceeds of an earlier issue of the same kind of shares or other specified securities proposed to be bought back) subject to certain conditions, including: (i) the buy-back should be authorized by the Articles of Association of the company;


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(ii) a special resolution has been passed in the general meeting of the company authorizing the buy-back;

(iii) the buy-back is limited to 25% of the total paid-up capital and free reserves; (iv) the debt owed by the company is not more than twice the capital and free reserves after such

buy-back; and (v) the buy-back is in accordance with the Securities and Exchange Board of India (Buy-Back of

Securities) Regulation, 1998. The condition mentioned above in (ii) would not be applicable if the buy-back is for less than 10% of the total paid-up equity capital and free reserves of the company and provided that such buy-back has been authorized by the board of directors of the company. A company buying back its securities is required to extinguish and physically destroy the securities so bought back within seven days of the last date of completion of the buy-back. Further, a company buying back its securities is not permitted to buy back any securities for a period of one year from the buy-back and to issue securities for six months. Every buy-back must be completed within a period of one year from the date of passing of the special resolution or resolution of the Board, as the case may be. The Company is also prohibited from purchasing its own shares or specified securities through any subsidiary company, including its own subsidiary companies, or through any investment company (other than a purchase of shares in accordance with a scheme for the purchase of shares by trustees of or for shares to be held by or for the benefit of employees of the company) or if the company is defaulting on the repayment of deposit or interest, redemption of debentures or preference shares or payment of dividend to a shareholder or repayment of any term loan or interest payable thereon to any financial institution or bank, or in the event of non-compliance with certain other provisions of the Companies Act. Liquidation Rights Subject to the rights of creditors, of employees and of the holders of any other shares entitled by their terms of issue to preferential repayment over the shares, in the event of a winding-up of the company, the holders of the shares are entitled to be repaid the amounts of capital paid up or credited as paid up on such shares. All surplus assets after payments due to employees, the holders of any preference shares and other creditors belong to the holders of the equity shares in proportion to the amount paid up or credited as paid up on such shares, respectively, at the commencement of the winding-up. In case assets available are insufficient to repay the whole of the paid up capital, the assets shall be so distributed such that the losses are borne to the extent possible by the shareholders in the ratio of capital contributed. In case any of the shares involve a liability to call or otherwise, any person may, within 10 days after the passing of the resolution, by notice in writing direct the liquidators to sell his proportion and pay him the net proceeds and the liquidator shall, if practicable, act accordingly. The division of assets on winding up, if thought expedient, may subject to the provisions of the Companies Act, be otherwise than in accordance with the legal rights of the contributories (except when unalterably fixed by the Memorandum) and in particular, any class may be given preferential or special rights which may be excluded altogether or in part but any contributory who is prejudiced by the same would have a right to dissent and possess ancillary rights as though such determination were a special resolution under Section 494 of the Companies Act.


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TAXATION The information provided below sets out the possible tax benefits available to the shareholders of a company in India 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, under the current tax laws presently in force in India. It is not exhaustive or comprehensive and is not intended to be a substitute for professional advice. Investors are advised to consult their own tax consultant with respect to the tax implications of an investment in the Equity Shares particularly in view of the fact that certain recently enacted legislation may not have a direct legal precedent or may have a different interpretation on the benefits, which an investor can avail. STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS UNDER THE INCOME TAX ACT, 1961 AND OTHER DIRECT TAX LAWS PRESENTLY IN FORCE IN INDIA TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS • This Statement sets out below 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 or its shareholders 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 the changing tax laws, each investor is advised to consult his or her or their own tax consultant with respect to the specific tax implications arising out of their participation in the issue;

• 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. I. Tax Benefits available to the Company under the Income tax Act, 1961 (“IT Act”) 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. 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. Thus, any expense incurred to earn the dividend income is not an allowable expenditure.

2. Subject to fulfillment of conditions, the Company will be eligible, inter alia, for the following

specified deductions in computing its business income:


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(a) Section 35(1)(i) and (iv) of the IT Act, in respect of any revenue or capital expenditure incurred, on scientific research other than expenditure on the acquisition of any land, related to the business of the company. (b) Subject to compliance with certain conditions laid down in Section 32 of the IT Act, in addition to normal depreciation allowance on tangible assets used for the purpose of its business the Company will be entitled to deduction for depreciation on the following: (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 deprecation in the year in which the new plant and machinery is first put to use.

3. Any sum paid by the company as donation to specified fund/institutions will be eligible for

deduction under Section 80G based on specified percentage as provided. 4. Any sum contributed by the company to any political party in terms of Section 293A of the

Companies Act, 1956 shall be allowed as deduction under section 80GGB. 5. Based on the opinion of an eminent counsel, the company is eligible to the benefit envisaged

under Section 80 IA of the Income Tax Act, 1961 except cases where the company enters into a works contract (i.e., becomes a sub-contractor) with an eligible undertaking or an enterprise under Section 80 IA (4) of the Income Tax Act, 1961.

6. Minimum Alternate Tax (“MAT”) and credit for the same

The Company would be required to pay tax on its book profits under the provisions of section 115JB in case where tax on its “total income”( the term defined under Section 2(45) of the IT Act) is less than 10% of its book profit (the term defined under Section 115JB of the IT Act). Such tax is referred to as Minimum Alternate Tax (MAT.)

The difference between the MAT payable under Section 115JB of the IT Act and the tax on its total income payable for that assessment year shall be allowed to be carried forward as “MAT credit” up to 7 assessment years succeeding the assessment year in which such MAT was paid. The MAT credit can be utilized to be set off against taxes payable on the total income in the subsequent assessment years.

II. Tax Benefits available to shareholders of the Company under the IT Act 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(IA) of the IT Act, will be exempt from tax to the extent of Rs.1,500 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. Thus, any expenses incurred to earn the dividend income is not an allowable expenditure.


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3. The characterization of the gains/ losses, arising from sale of 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 shares in a transaction carried out through 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 shares in a transaction carried out through a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, tax will be chargeable at 10% [plus applicable surcharge and education cess] as per provisions of Section 111A. Further no deduction under Chapter VI-A would be allowed in computing such short term capital gains subjected to tax under 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.

(c) As per the provisions of Section 112 of the Act, long term gains accruing to the members of

the Company from the transfer of shares of the Company being listed in recognized stock exchanges, otherwise than as mentioned in point 4(a) above, shall be charged to tax at 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 at 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 IT 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 on and after April 1, 2007 for the purposes 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 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. Section 88E provides that where the total income of a person includes income chargeable under the head “Profits and gains of business or profession” arising from purchase or sale of an equity share in a company carried out through a recognized stock exchange, i.e., from taxable securities transactions, he shall get rebate equal to the securities transaction tax paid by him in the course of his business. Such rebate is to be allowed from the amount of income tax in respect of such transactions calculated by applying average rate of income tax. Thus, where the income from purchase and sale of equity shares in a company is taxable as business income and not as capital gains, a rebate of STT paid is available to such person.


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B. 1 Non-resident shareholders – other than Non-Resident Indians & 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(IA) of the IT Act, will be exempt from tax to the extent of Rs.1,500 per minor child whose income is so included.

2. Dividend (whether interim or final) declared, distributed or paid, under Section 115-O of the IT

Act, by the Company are exempt in the hands of shareholders as per the provisions of Section 10(34) of the Act. 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. Thus, any expenses incurred to earn the dividend income is not an allowable expenditure.

3. The characterization of the gains/ losses, arising from sale of 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, being a non-resident, on

sale of the Company’s shares in a transaction carried out through 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).

5. The short-term Capital Gains accruing to the members of the Company on sale of the

Company’s shares in a transaction carried out through a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, tax will be chargeable at 10% plus applicable surcharge and education cess as per provisions of Section 111A. Further no deduction under Chapter VI-A would be allowed in computing such short term capital gains subjected to tax under 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 rate 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, being non-residents, from the transfer of shares of the Company being listed in recognized stock exchanges, otherwise than as mentioned in point 4 above, shall be charged to tax at 20% plus applicable surcharge and education cess after deducting from the sale proceeds the cost of acquisition. Such non-resident Members are allowed to adjust the cost of acquisition by the amount of foreign exchange rate fluctuations in computing long term capital 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. 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 the provisions of the DTAA shall be applicable.

8. 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 IT 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 purposes 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


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would become chargeable to tax as long term capital gains in the year in which such bonds are transferred or otherwise converted into money.

9. Individual members can avail exemption under Section 54F by utilization of the sales

consideration arising from the sale of 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.

B.2 Non-resident shareholders – Non Resident Indians In addition to clauses 1 to 9 mentioned under sub-heading B.1 above the following clauses are

applicable to NRIs: 1. 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.

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 company’s shares will be charged to income tax at 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. The above mentioned rate is however subjected to any beneficial rate available as per the DTAA entered with the country of residence of such NRI.

As per the provisions of Section 115F of the IT Act and subject to the fulfillment of the

conditions specified therein, the Long Term Capital Gains [not covered under Section 10(38)] arising on the transfer of 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 the provisions of Section 115G of the Act, Non-Resident Indians are not obliged to

file a return of income under Section 139(1) of the Act, if their only source of income is income from investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.

Under Section 115H of the Act, where the Non-Resident Indian becomes assessable as a

resident in India, he may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year under Section 139 of the IT Act to the effect that the provisions of Chapter XII A shall continue to apply to him in relation to such investment income derived from the specified assets( except shares in an Indian company) for that year and subsequent assessment years until such assets are converted into money.

As per the provisions of 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 by furnishing his return of income for that 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


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accordingly his total income for that assessment year will be computed in accordance with the other provisions of the Act.

B.3 Non-resident shareholders – Foreign Institutional Investors 1. 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.

2. The characterization of the gains/ losses, arising from sale of shares, as capital gains or business

income would depend on the nature of holding in the hands of the member and various other factors.

3. (a) The long-term Capital Gains accruing to the members of the Company on sale of the

Company’s shares in a transaction carried out through 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 shares in a transaction carried out through a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, tax will be chargeable at 10% 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, as per the provisions of Section 115AD of the Act, the short term capital gains would be chargeable to tax at 30% plus applicable surcharge and education cess.

(c) As per the provisions of Section 115AD of the Act, long term gains accruing to the members

of the Company from the transfer of shares of the Company being listed in recognized stock exchanges and purchased in foreign currency, otherwise than as mentioned in point 3(a) above, shall be charged to tax at 10% plus applicable surcharge and education cess. The benefit of indexation and the adjustment with respect to fluctuation in foreign exchange rate would not be allowed to such Members. The filing of return under section 139(1) for income computed under Section 115AD is mandatory. Further, where the Gross Total Income (GTI) of the members includes any income on which tax has been paid as per special rates provided under Section 115AD, then the GTI shall be reduced by the amount of such income and deduction under chapter VIA shall be allowed in respect of reduced GTI.

(d) The members are entitled to claim exemption in respect of tax on long term capital gains

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 purposes 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.

4. 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 the provisions of the DTAA shall be applicable.


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III. Tax Benefits available to the shareholders under the Wealth-Tax Act, 1957 Shares of company held by the shareholder will not be treated as an asset within the meaning of Section 2(ea) of Wealth Tax Act, 1957. Hence no Wealth Tax will be payable on the market value of shares of the Company held by the shareholder of the Company. IV. Tax Benefits available to the shareholders under the Gift Tax Act, 1958 Gift Tax is not leviable in respect of any gifts made on or after 1st October, 1998. Therefore, any gift of shares of the company will not attract gift tax.


133

LEGAL PROCEEDINGS Except as set forth below, the Company is not involved in any legal proceedings and no legal proceedings are threatened, which may have, or have had, during the 12 months preceding the date of this Preliminary Placement Document, a material adverse effect on our business, properties, financial conditions or operation. We believe that the number of legal proceedings in which we are involved is not unusually large for a company of our size in the context of doing business in India. Tax Proceedings The Company had contingent liabilities of Rs. 45.10 million as on June 30, 2007, predominately comprised of disputed sales tax claims amounting to approximately Rs. 43.97 million. The Company has received a show cause cum demand notice dated August 2, 2007, from the Commissioner of Service Tax, for approximately Rs. 264.33 million on the ground that free issue of material supplied by the client to the Company has not been considered for the purpose of payment to service tax authorities. The Company has challenged the contention of the service tax authorities and has filed a writ petition before the Calcutta High Court, which is pending. Project-related Claims There are 32 proceedings initiated by the Company against various parties, and 2 proceedings initiated against the Company, which relate primarily to claims for non-payment of final bills, recovery of additional expenditure, damages for delay in execution of contracts, recovery of costs incurred during extended contract periods, and release of retention money. Claims and counterclaims in relation to our contracts, including those under arbitration, are accounted for on their final disposition. Other contract claims (not subject to arbitration or other proceedings) are recognized when there is reasonable certainty as to their recoverability. Accordingly, a quantification of pending project-related claims has not been prepared. Proceedings involving the Company and its Directors The Company has filed a first information report (“FIR”) in the Kolhapur Police Station against Mr. Manjeet Singh, a partner of M/s. M.G. Construction Co., erstwhile sub-contractor of the Company, on the ground that M/s. M.G. Construction Co. and Mr. Manjeet Singh have raised false and fabricated bogus bills against the Company. The Company has also filed a criminal case before the Judicial Magistrate First Class, Vadgaon, against M/s. M.G. Construction Co., which is currently pending. M/s. M.G. Construction Company and Mr. Manjeet Singh have also filed an FIR in the Kolhapur Police Station, against the Company, its Directors and certain officers of the Company. The Company has filed an application in the Mumbai High Court to quash and set aside this FIR. The Investigating Officer has submitted his report stating that no offence was made out and the case was of civil nature. The Mumbai High Court has referred the matter to the Judicial Magistrate First Class, Vadgaon, where the matter is currently pending. M/s. M.G. Construction Co. has also filed a criminal complaint under Sections 138 and 141 of Negotiable Instrument Act, before the 10th Metropolitan Magistrate, Andheri, Mumbai, against the Company and the Directors, alleging that cheques issued by the Company amounting to Rs. 4 million were dishonoured. The Company has filed a petition challenging the complaint before the Mumbai High Court, under Section 482 of the Criminal Procedure Code, on the ground that undated cheques of the said amount were issued by certain officials of the Company, without due authority, in collusion with Mr. Manjeet Singh. The Mumbai High Court has granted a stay order and the matter has been remanded to the Sessions Court, Greater Bombay, where the matter is currently pending.


134

INDEPENDENT ACCOUNTANTS Our financial statements as of and for each of the years ended March 31, 2005, 2006 and 2007 included in this Preliminary Placement Document have been examined by M/s Price Waterhouse, as stated in their report appearing in this Preliminary Placement Document. Our profit and loss data for the years ended March 31, 2005, March 31, 2006 and March 31, 2007, our balance sheet data as of March 31, 2005, March 31, 2006 and March 31, 2007 and our cash flow statements for the years ended March 31, 2005, March 31, 2006 and March 31, 2007, have been prepared in accordance with Indian GAAP, collectively referred to as the “Financial Statements”. The financial statements as of and for the year ended March 31, 2005, March 31, 2006 and March 31, 2007 have been audited by M/s. Price Waterhouse, statutory auditors and independent chartered accountants in India. See “Financial Statements”. The unaudited financial statements of the Company as of and for the three-month period ended June 30, 2007 and June 30, 2006 have been prepared in accordance with accounting principles generally accepted in and pursuant to the relevant laws of India consistently applied. The financial information set out in the unaudited financial statement are consistent with the financial information for the fiscal years ended March 31, 2007 and March 31, 2006. With respect to the unaudited interim financial statements of the Company for the three-month period ended June 30, 2007 (together with the corresponding previous three-month period ended June 30, 2006) included in this Preliminary Placement Document, Price Waterhouse, Chartered Accountants reported that they have applied limited review procedures in accordance with professional standards for a review of such information. However, their separate report dated October 29, 2007 appearing herein, states that they did not audit and they do not express an opinion on that unaudited interim financial statements. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. See “Financial Statements”.


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GENERAL INFORMATION 1. The Company was incorporated in the Republic of India under CIN number

L99999WB1924PLC004969. The registered office of the Company is at Simplex House, 27, Shakespeare Sarani, Kolkata- 700 017.

2. The Issue was authorised and approved by our Board of Directors on July 31, 2007 and

approved by the shareholders in their meeting on September 19, 2007. 3. The Company has applied for in-principle approval to list the Equity Shares on CSE, NSE

and BSE. 4. Copies of our Memorandum and Articles of Association will be available for inspection

during usual business hours on any weekday between 10.00 A.M. to 1.00 P.M. (except Saturdays and public holidays) at our registered office.

5. We have obtained all consents, approvals and authorisations required in connection with this

Issue. 6. There has been no material change in our financial or trading position since March 31, 2007,

the date of the latest audited financial statements included in this Preliminary Placement Document, except as disclosed herein.

7. Except as disclosed in this Preliminary Placement Document, there are no litigation or

arbitration proceedings against or affecting us or our assets or revenues, nor are we aware of any pending or threatened litigation or arbitration proceedings, which are or might be material in the context of this Issue of Equity Shares.

8. The Company’s auditors are M/s Price Waterhouse, who have audited the financial statements

of the Company as of and for each of the years ended March 31, 2005, 2006 and 2007. 9. We confirm that we are in compliance with the minimum public shareholding requirements as

required under the terms of the listing agreements with the Stock Exchanges. 10. The Floor Price for the Issue is Rs. 366.69, calculated in accordance with clause 13A.3.1 of

the SEBI Guidelines, as certified by M/s Price Waterhouse.


136

SIMPLEX INFRASTRUCTURES LIMITED FINANCIAL STATEMENTS

Index to Financial Statements Page A Simplex Infrastructures Limited Audited Financial Statements for the year ended 31 March 2007,

2006,2005

Auditors Report

137

Balance Sheet

138

Profit and Loss Account

139

Notes on Accounts

157

Cash Flow Statement

176

B Simplex Infrastructures Limited Unaudited Financial Statements for the three-month period ended

June 30, 2007 and June 30, 2006

Auditors Review Report

178

Balance Sheet

179

Profit and Loss Account

180

Notes on Accounts

198

Cash Flow Statement

209


137

REPORT OF THE AUDITORS TO THE BOARD OF DIRECTORS ON THE FINANCIAL STATEMENTS OF SIMPLEX INFRASTRUCTURES LIMITED FOR THE YEARS ENDED

MARCH 31, 2007, MARCH 31, 2006 AND MARCH 31, 2005 1. We have audited the attached Balance Sheet of Simplex Infrastructures Limited as at March

31, 2007, March 31, 2006 and March 31, 2005 and the related Profit and Loss Account and the Cash Flow Statement for the years ended on those dates annexed thereto, collectively hereinafter referred to as ‘the Financial Statements’, all of which we have signed under reference to this report. These Financial Statements are the responsibility of the Company’s management and have been prepared for the purpose of inclusion in the Preliminary Placement Document of 2007 relating to the offering of equity shares of the Company to Qualified Institutional Buyers (as such term is defined under Chapter XIII A of the SEBI (Disclosure and Investor Protection) Guidelines, 2000, as amended). Our responsibility is to express an opinion on these Financial Statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework and are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. Based on our audit and to the best of our information and according to the explanations given

to us, in our opinion, the Financial Statements together with the notes thereon, give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Balance Sheet, of the state of affairs of Simplex Infrastructures

Limited as at March 31, 2007, March 31, 2006 and March 31, 2005; (b) in the case of the Profit and Loss Account, of the profits for Simplex Infrastructures

Limited for the years ended on those dates; and (c) In the case of Cash Flow Statement, of the cash flows of Simplex Infrastructures

Limited for the years ended on those dates.

(S K Deb) Partner

Membership No. 13390 For and on behalf of

PRICE WATERHOUSE Chartered Accountants

Kolkata, October 29, 2007


138

SIMPLEX INFRASTRUCTURES LIMITED BALANCE SHEET AS AT MARCH 31, 2007, MARCH 31, 2006 AND MARCH 31, 2005

(Rupees in million) As at March 31,

Schedule Reference

2007 2006 2005

SOURCES OF FUNDS Shareholders' Fund Share Capital 1 86.13 86.13 73.28 Reserves and Surplus 2 2,530.71 2,104.14 848.78 Loan Funds Secured Loans 3 2,829.35 1,073.46 1,016.33 Unsecured Loans 4 4,047.43 3,378.08 2,526.60 Deferred Tax Liability (Net) [Note 3 on Schedule 19]

259.89 201.70 183.88

TOTAL 9,753.51 6,843.51 4,648.87APPLICATION OF FUNDS Fixed Assets 5 Gross Block 4,304.55 2,904.96 1,893.65 Less: Depreciation 913.88 682.34 561.15 Net Block 3,390.67 2,222.62 1,332.50 Capital Work in Progress 228.29 47.50 111.07 3,618.96 2,270.12 1,443.57 Investments 6 52.62 3.07 0.17 Current Assets, Loans & Advances Inventories 7 2,851.89 1,800.53 1,561.38 Sundry Debtors 8 8,500.40 5,378.64 3,948.78 Cash and Bank Balances 9 424.84 444.86 231.62 Other Current Assets 10 408.14 445.51 291.75 Loans and Advances 11 1,706.82 783.06 585.77 13,892.09 8,852.60 6,619.30 Less: Current Liabilities & Provisions Liabilities 12 7,729.35 4,232.90 3,376.77 Provisions 13 80.81 49.38 37.40 7,810.16 4,282.28 3,414.17 Net Current Assets 6,081.93 4,570.32 3,205.13 TOTAL 9,753.51 6,843.51 4,648.87 Notes on Accounts 19 This is the Balance Sheet referred to in ourreport of even date.

The Schedules referred to above form an integral part of the Balance Sheet

(S.K.Deb) B.L.Bajoria B.D.Mundhra S.Dutta Partner Secretary Chairman & Managing Director Director Membership Number: 13390 Mumbai, October 29, 2007 For and on behalf of PRICE WATERHOUSE Chartered Accountants Kolkata , October 29, 2007


139

SIMPLEX INFRASTRUCTURES LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2007, MARCH 31, 2006 AND MARCH 31, 2005 (Rupees in million)

For the year ended March 31,

Schedule Reference 2007 2006 2005

INCOME Contract Turnover 17,082.14 13,427.39 9,990.11Less: Contract Expenses (other than related depreciation / amortization ) (Net)

14 14,676.41 11,734.25 8,805.28

Profit on Contract Work done 2,405.73 1,693.14 1,184.83Company's Share in profit of Joint Venture 27.50 18.42 - (Refer Note 21.2(i) on Schedule 19) Other Income 15 106.27 32.81 2.66

2,539.50 1,744.37 1,187.49

EXPENSES Interest and Finance Charges (net) 16 632.25 403.56 330.60Amortisation of Tools 151.04 99.97 60.22Depreciation 240.04 129.33 88.96Other Administrative Expenses 17 814.55 530.48 363.66

1,837.88 1,163.34 843.44

PROFIT BEFORE TAX 701.62 581.03 344.05PROVISION FOR TAXATION Current Tax 97.00 140.50 52.50Fringe Benefit Tax 9.31 6.27 -Provision for Taxation Written Back (credit) - - (4.00)

PROFIT BEFORE DEFERRED TAX 595.31 434.26 295.55Deferred Tax 58.19 17.82 43.79

PROFIT AFTER TAX 537.12 416.44 251.76Transfer from Debenture Redemption Reserve - 22.50 -Balance Brought Forward from Previous Year (Note 31) 753.49 413.43 224.30

AMOUNT AVAILABLE FOR APPROPRIATIONS 1,290.61 852.37 476.06

APPROPRIATIONS Transfer to General Reserve 60.00 50.00 25.20Proposed Dividend 68.59 42.87 32.80Tax thereon (Note 29 on Schedule 19) 11.66 6.01 4.63

140.25 98.88 62.63Year-end Surplus 1,150.36 753.49 413.43

1,290.61 852.37 476.06

Basic and Diluted Earning Per Share (Rs.) (Note 22 on Schedule 19) 12.53 10.53 6.91Notes on Accounts 19

This is the Profit and Loss Account referred to in our report of even date.

The Schedules referred to above form an integral part of the Profit and Loss Account.

(S.K.Deb) B.L.Bajoria B.D.Mundhra S.Dutta Partner Secretary Chairman & Managing Director Director Membership Number: 13390 Mumbai, October 29, 2007 For and on behalf of PRICE WATERHOUSE Chartered Accountants Kolkata , October 29, 2007


140


(Rupees in million)

As at March 31, 2007 2006 2005 Schedule 1 SHARE CAPITAL Authorised (Note 1 below) 374,900,000 (2006 - 24,980,000, 2005 - 24,980,000) Equity Shares of Rs. 2/- (2006 Rs.10/-, 2005 Rs 10/-) each 749.80 249.80 249.80Nil (2006 - 2,500,000, 2005 - 2,500,000) Redeemable Cumulative Preference Shares of Rs.10/- each - 250.00 250.0020,000 15% Cumulative Preference Shares of Rs.10/- each 0.20 0.20 0.20 750.00 500.00 500.00 Issued and Subscribed and Paid-up (Notes 1 and 2 below) 42,872,330 Equity Shares of Rs. 2/- (2006 - 8,574,466 of Rs.10/- each, 2005 - 7,289,466 of Rs 10/- each) fully paid up 85.74 85.74 72.89 126,000 (2006 - 126,000, 2005 - 126,000) Equity shares of Rs.10/- each. (Equivalent to 630,000 shares Rs. 2/- each) forfeited. 0.39 0.39 0.39 86.13 86.13 73.28 Notes : 1. Pursuant to the approval of the Shareholders at the Annual General Meeting held on 18th August, 2006, the

authorised share capital of the Company stands increased and reclassified as indicated above with denomination of shares being subdivided into Equity Shares of Rs.2/- each. Accordingly, the equity shares of the Company of face value of Rs.10/- each were subdivided into Equity Shares of Rs.2/- each, on 20th September, 2006.

2. Of the year-end 2007 paid-up shares a) 13,925 shares of Rs 10/- each (equivalent of 69,625 shares of Rs 2/- each) allotted as fully paid up

pursuant to a contract without payments being received in cash. b) 1,844,321 shares of Rs. 10/- each (equivalent of 9,221,605 shares of Rs 2/- each) allotted as fully paid

Bonus Shares by capitalisation of Reserves, Undistributed Profit and Securities Premium Account. c) 1,996,530 shares of Rs. 10/- each (equivalent of 9,982,650 shares of Rs 2/- each) allotted at par on

conversion of Partly Optionally Convertible Debentures on 1st January, 1998 and on 1st January, 1999. d) 1,285,000 shares of Rs.10/- each (equivalent of 6,424,000 shares of Rs 2/- each) issued in October,

2005 on preferential basis.


141


(Rupees in million)

As at March 31, 2007 2006 2005 Schedule 2 RESERVES AND SURPLUS Capital Reserve 3.24 3.24 3.24Capital Redemption Reserve 0.10 0.10 0.10Securities Premium Account As per last Account 1,007.20 118.61 118.61 Add: Addition during the year * - 920.45 - 1,007.20 1,039.06 118.61 Less: Adjusted against share issue expenses - 1,007.20 31.86 1,007.20 - 118.61 Debenture Redemption Reserve As per last Account - 22.50 22.50 Less: Transfer to Profit & Loss Account - - 22.50 - - 22.50 General Reserve As per last Account (Note 31) 340.90 290.90 265.70 Add: Transfer from Profit and Loss Account 60.00 400.90 50.00 340.90 25.20 290.90 Foreign Currency Translation Reserve Account (Note 1(j) on Schedule 19)

As per Last Account (0.79) - - Adjustment during the year (30.30) (31.09) (0.79) (0.79) - -

Profit and Loss Account Balance (Surplus) 1,150.36 753.49 413.43 2,530.71 2,104.14 848.78 * Arising from issue of shares on preferential basis referred to in Note 2 (d) on Schedule 1


142

SIMPLEX INFRASTRUCTURES LIMITED (Rupees in million)

As at March 31, 2007 2006 2005 Schedule 3 SECURED LOANS 11.5% Secured Non Convertible Debenture - - 30.00 (Secured by mortgage by way of title deed of certain immovable property of the Company - redeemed during the year ended 31st March 2006)

Rupee Term Loan from Banks 550.80 172.85 108.80

(Term Loan from The Federal Bank Ltd 28.25 (2006 - 31.55, 2005 - 34.48) is secured by way of Mortgage by deposit of title deed of an immovable property and term loans from other Banks 522.55 (2006 - 141.30, 2005 - 74.32) are secured by an exclusive charge on Plant & Machinery purchased under the Schemes. Term loans from ICICI Bank Ltd (up to 2006), ABN Amro Bank, HDFC Bank, IndusInd Bank and Citi Bank 172.38 (2006 - 101.10, 2005 - 39.73) are also covered by personal guarantee by Managing Director of the Company)

Term Loans from Financial Companies 613.35 212.44 249.82

(Term loans are Secured / to be Secured by exclusive charge on Plant and Machinery purchased under the Schemes of individual companies and such Loans from Citicorp Finance India Ltd 96.38 (2006 -77.10, 2005 - 116.04) and Infrastructure Leasing & Financial Services Limited 5.56 (2006 - 27.78, 2005 -50.00) are also covered by personal guarantee by Managing Director of the Company)

FCNRB Loan - from a Bank 97.38 - -

(Security as recited under Working Capital Demand Loan/ Cash Credit from Banks

Corporate Loan from ICICI Bank Limited - - 11.56

(Secured by hypothecation of certain movable Plant and Machinery as also by first charge on an immovable property by deposit of title deeds/documents, repaid during the year ended 31st March 2006.)

Corporate Loan from State Bank of Patiala 101.25 176.25 123.75

(Secured by hypothecation of certain movable Plant and Machinery and by personal guarantee by Managing Director of the Company.) Foreign currency loans

- Term Loans from Bank 21.51 131.42 -

(Secured against equipments acquired at Qatar and Dubai out of Foreign currency loans and through assignment of receivables and inventories at Dubai and Qatar.)

- Term Loan from Exim Bank 177.16 52.34 -

(Secured by an exclusive charge on Plant & Machinery purchased and covered by personal guarantee by Managing Director of the Company.)

1Working Capital Demand Loan/ Cash Credit from Banks 1,220.05 304.76 478.22

[Secured by hypothecation of stocks, stores, book debts and movable Plant and Machinery etc. ranking pari passu amongst the Banks on the point of security, as also by second charge on certain immovable properties by deposit of title deeds / documents subject to exclusive first charge on certain specified machinery purchased out of the proceeds of above corporate loans / term loans. Such loans from certain banks are also covered by personal guarantee by Managing Director and a Wholetime Director of the Company.] Auto Loan

From Banks 44.16 21.76 11.75

(Secured by hypothecation of the vehicles acquired)

Interest accrued and due On Working Capital Demand Loan/ Cash Credit from Banks 3.69 1.64 2.43

2,829.35 1,073.46 1,016.33


143


(Rupees in million)

As at March 31, 2007 2006 2005

Schedule 4 UNSECURED LOANS Short Term Loan from Financial Companies 20.00 - 80.00 Temporary Overdraft from Banks 0.05 0.52 0.06 Commercial Paper - 1,200.00 700.00 Term Loan from Banks 3,993.80 2,087.49 1,282.00 (Repayable within one year - 3,743.80, 2006 -1,887.49, 2005 - 1,107.00) (Such Loans from certain banks 3,743.80 (2006 -2,037.49, 2005 - 1,232.00) covered by personal guarantee by Managing Director and WholetimeDirector of the Company) Inter Corporate Deposits (Short Term) 0.50 0.50 328.50 Public Fixed Deposits 27.25 81.50 129.95 (Repayable within one year - 21.73, 2006 - 52.29, 2005 - 70.71) Interest Accrued and Due on Term loans, Inter Corporate Deposits and Public Fixed Deposits (Net of tax deductible at source) 5.83 8.07 6.09 4,047.43 3,378.08 2,526.60

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se h

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lued

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ppro

ved

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s at 3

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2002

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03, (

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aggr

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ue 7

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spec

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e re

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e N

et B

ook

valu

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such

reva

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ion

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d 10

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uild

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incl

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ng th

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4) e

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r the

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N

otes

: a)

C

erta

in F

reeh

old

/Lea

se h

old

land

and

bui

ldin

gs w

ere

reva

lued

by

an a

ppro

ved

Val

uer a

s at 3

1st D

ecem

ber,2

002

and

31st

Dec

embe

r,200

3, (t

he a

ggre

gate

Boo

k V

alue

7.5

1 an

d 22

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resp

ectiv

ely

) but

the

resu

ltant

in

crea

se i

n th

e N

et B

ook

valu

e on

such

reva

luat

ion

46.9

8 an

d 10

8.21

resp

ectiv

ely

have

not

bee

n co

nsid

ered

in th

e ac

coun

t. b)

B

uild

ings

incl

ude

0.85

bei

ng th

e or

igin

al c

ost o

f a b

uild

ing

erec

ted

on la

nd ta

ken

on re

ntal

leas

e an

d de

prec

iate

d ov

er th

e pe

riod

of le

ase.

The

bui

ldin

g (o

rigin

al c

ost o

f 0.2

4) e

rect

ed o

n la

nd b

elon

ging

to th

e co

ntra

ctee

who

will

take

ove

r the

bui

ldin

g at

dep

reci

ated

val

ue in

due

cou

rse.

c)

Th

e O

rigin

al C

ost a

s at

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arch

,200

6 of

Pla

nt &

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hine

ry in

clud

es 1

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tem

s acq

uire

d un

der H

ire P

urch

ase

arra

ngem

ents

up

to 3

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ch,2

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of w

hich

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inal

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f M

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icle

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lude

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or it

ems

acqu

ired

unde

r Aut

o Fi

nanc

ing

Sche

me

of B

anks

of w

hich

21.

76 (2

005

- 11.

75) w

as o

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g 0.

44 b

eing

adj

ustm

ent i

n fo

reig

n cu

rren

cy te

rm lo

ans a

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st c

hang

e of

exc

hang

e ra

te.

f)

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ital W

ork

in P

rogr

ess i

nclu

des 1

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ards

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le a

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udes

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ount

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atar

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nch.

h)

In

clud

es 0

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nt o

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hang

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just

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t for

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ar B

ranc

h.

priv

ilege

d &

con

fiden

tial

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SIM

PLE

X I

NF

RA

STR

UC

TUR

ES

LIM

ITE

D

Sche

dule

5

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ED

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ETS

(R

upee

s in

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OSS

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CK

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(Rupees in million)

As at 31st March 2007 2006 2005 Schedule 6 INVESTMENTS LONG TERM - other than trade - At Cost Unquoted 5-Fully paid-up Ordinary Shares of Rs.50/- each in Mercantile Apartments Co-operative Housing Society Ltd., Mumbai - Face value Rs.250/- **

5-Fully paid-up Ordinary Shares of Rs.50/- each in Pallavi Beach Angle Co-operative Housing Society Ltd., Mumbai - Face value Rs.250/- **

5-Fully paid-up Ordinary Shares of Rs.50/- each in Borlo Co-operative Housing Society Ltd., Chembur, Mumbai - Face value Rs.250/- **

5-Fully paid-up Ordinary Shares of Rs.50/- each in Saket Co-operative Housing Society Ltd, Mumbai - Face value Rs.250/- **

7 Year National Savings Certificates (Matured)**

(Lodged as Security Deposits.) 6 Year National Savings Certificates 0.13 0.12 0.12 (Lodged as Security Deposits - Matured) Indira Vikash Patra (encashed during the year ended 31st March 2006) - - 0.05 Investment in Joint Ventures (see Note 21.2(i) on Schedule 19) 23.75 2.95 - 4,900 shares of BD 50 each of Simplex Almoayyed W.L.L. Fully paid-up.(Refer Note 21.2 (ii) on Schedule 19) 28.74 52.62 - 3.07 - 0.17 Quoted 20,000 Equity Shares of Rs.10/- each (Rs.5/- paid up) of M/s Parasrampuria Synthetics Ltd. 0.10 0.10 0.10 4,700 - Equity Shares of Rs.10/- each at a Premium of Rs.35/- each of Pennar Patterson Securities Ltd- Fully Paid 0.21 0.31 0.21 0.31 0.21 0.31 52.93 3.38 0.48Less: Provision for diminution in value of Investments 0.31 0.31 0.31 52.62 3.07 0.17Aggregate market value of quoted investments - * * ** (Year-end official quotation is not

available)


148

As at 31st March 2007 2006 2005 Schedule 6 INVESTMENTS ** Denotes amount less than Rs 5,000

Note: Amount ( Rs. in Million) Face Value (Rs.)

Year 2006 Current Investments acquired and sold during the year I) Units of HDFC Liquid Fund

Premium Plan-Dividend Daily Reinvestment 100.00 10.00

II) Units of Birla Cash Plus - Institutional Daily Dividend Reinvestment 20.00 10.00

III) Units of Prudential ICICI Liquid Plan Institutional Plus-Daily Dividend Option 100.00 10.00


149


(Rupees in million)

As at March 31, 2007 2006 2005

Schedule 7 INVENTORIES At lower of cost and estimated net realisable value Work-in-Progress (Net of Advance from clients 157.01, 2006 - 41.62, 2005 - 37.04) (Note 23 on Schedule 19) 216.39 72.67 79.21Materials at Sites 1,620.98 986.15 941.14Materials in Transit 8.35 27.68 35.30Trading Items 0.10 0.10 0.12At or below cost Stores (including Tools 805.04, 2006 - 545.54, 2005 - 357.56) * 1,006.07 713.93 505.61(Note 1 (d) on Schedule 19) 2,851.89 1,800.53 1,561.38 * Includes tools acquired under Hire Purchase arrangements

amounting to 16.63 (2006 - 21.58, 2005 - 26.59).

As at March 31, 2007 2006 2005

Schedule 8 SUNDRY DEBTORS, Unsecured Debts Outstanding for a period exceeding six months Considered Good (Note 31) 2,068.50 1,227.22 682.07 Considered Doubtful 9.41 31.71 16.85 Other Debts Considered Good [Note 8 on Schedule 19] 6,431.90 4,151.42 3,266.71 8,509.81 5,410.35 3,965.63Less: Provision for Doubtful debts 9.41 31.71 16.85 8,500.40 5,378.64 3,948.78


150


(Rupees in million)

As at March 31, 2007 2006 2005

Schedule 9 CASH AND BANK BALANCES Cash in Hand and Cheques in Transit 26.36 16.58 19.30[Cheques in Transit 17.59 (2006 - 16.18, 2005 - Nil)] Balances with Scheduled Banks-

Current Accounts 308.22 357.52 150.60Unpaid Dividend Account 0.78 0.72 0.65Share Application Money ** Term Deposit on Margin Account 36.96 36.13 33.19[ Note 2 on Schedule 19] Fixed Deposits (Lodged as Security Deposits 0.01, 2006 - 0.01, 2005 - 0.01) 2.36 3.33 6.79Balance in Debenture Repurchase Account - 0.08 0.10

Balance with Non-Scheduled Banks ICICI Bank - Colombo 12.25 - -

[Maximum amount outstanding at anytime during the year 24.11 ( 2006 - Nil, 2005 - Nil )] Standard Chartered Bank - Dubai 8.05 - -[Maximum amount outstanding at anytime during the year 46.43 ( 2006 - Nil, 2005 - Nil )] Standard Chartered Bank - Manama, Bahrain 1.91 0.88 1.38[Maximum amount outstanding at anytime during the year 3.09 ( 2006 - 3.65, 2005 - 3.69)] Bank of Baroda - Guyana - 0.04 -[Maximum amount outstanding at anytime during the year 0.05 (2006 - 11.33, 2005 - Nil)] Doha Bank - Doha, Qatar 1.01 1.19 -[Maximum amount outstanding at anytime during the year 37.28 (2006 - 6.92, 2005 - Nil)] Standard Chartered Bank - Doha, Qatar 26.94 28.39 19.61[Maximum amount outstanding at anytime during the year 98.49 (2006 - 223.94, 2005 - 69.18)]

424.84 444.86 231.62** Denotes amount less than Rs 5,000


151


(Rupees in million)

As at March 31, 2007 2006 2005

Schedule 10 OTHER CURRENT ASSETS, Unsecured Considered Good Interest Receivable 10.27 16.72 19.49Excise Duty Recoverable 64.44 208.18 179.94Accruals under Duty Free Credit Entitlement 88.24 18.67 -Deposit for Contracts 68.77 66.00 30.06Security Deposits 65.60 37.28 22.49[Including 0.03 (2006 - 0.03, 2005 - 0.03) on Savings Bank Account with Scheduled Banks. The Pass Book is lodged as Security Deposit] Deposit under Investment Deposit Scheme 1.51 1.51 1.51Prepaid Expenses 109.31 97.15 38.26Considered Doubtful Deposit for Contracts 0.16 0.16 0.16Security Deposits 0.03 0.03 0.03 408.33 445.70 291.94Less: Provision for Doubtful Deposit 0.19 0.19 0.19 408.14 445.51 291.75Above includes Amount due by Firm in which Directors of the Company are Partners Security Deposit with Mundhra Estates 0.07 0.07 0.07


152


(Rupees in million)

As at March 31, 2007 2006 2005

Schedule 11 LOANS AND ADVANCES, Unsecured Considered good (unless stated otherwise below) Advances recoverable in cash or in kind or for value to be received (Refer Note 21.2(i) on Schedule 19) Considered Good 1,435.03 529.54 478.84 [including Capital advance 228.13 (2006 - 22.50, 2005 - 29.24) and Considered Doubtful 3.93 (2006 - 2.41, 2005 - 2.41)] Advance against Investment in Simplex Almoayyed W.L.L. - 30.97 - Inter Corporate Deposits 66.15 125.15 95.95 Advance payment of Current Taxes Net of provision 209.57 99.81 13.39 [Advance Tax 486.64 (2006 - 292.70, 2005 - 104.60), Provision for Current Tax 277.07 (2006 -192.89, 2005 -91.21)] 1,710.75 785.47 588.18 Less: Provision for Doubtful Advance 3.93 2.41 2.41 1,706.82 783.06 585.77


153


(Rupees in million)

As at 31st March 2007 2006 2005 Schedule 12 CURRENT LIABILITIES Acceptances 103.39 111.45 135.69Sundry Creditors Due to Small Scale Industrial undertakings 10.01 8.04 8.98 (Note 18(a) on Schedule - 19) Others 4,015.08 2,747.50 2,357.86 4,025.09 2,755.54 2,366.84 Other Liabilities 335.50 128.08 56.43Advance from Clients 3,211.60 1,218.00 793.34Interest Accrued but not Due 50.19 14.15 19.13Investor Education and Protection Fund shall be credited by the following amounts namely [Note below]

a) Unpaid dividend 0.78 0.72 0.66 b) Unpaid matured deposit 2.26 4.45 4.19 c) Unpaid matured Debenture - 0.06 0.06 d) Interest accrued on ( b ) and ( c ) above 0.54 0.45 0.43 7,729.35 4,232.90 3,376.77

Note : None of above unclaimed amounts is due at the Balance Sheet date for actual credit. As at 31st March 2007 2006 2005 Schedule 13 PROVISIONS Provision for Fringe Benefit Tax (Net) 0.56 0.50 - Proposed Dividend 68.59 42.87 32.80Tax thereon 11.66 6.01 4.60 80.25 48.88 37.40 80.81 49.38 37.40


154


(Rupees in million) 2006-2007 2005-2006 2004-2005 Schedule 14 CONTRACT EXPENSES Stores consumed 7,751.86 6,483.19 5,236.12* Salaries & Wages 5,045.87 4,037.04 2,603.57 (including amount paid/payable to Sub-contractors) Contract Expenses 29.88 101.23 21.61 Sales Tax on Works Contract 240.47 99.68 70.41 Purchase Tax - 0.03 0.26 Repairs & Renewals 4.91 5.04 5.36 Other Expenses 1,603.42 1,008.04 867.95 (including Rent 56.35, 2006 - 56.06, 2005 - 49.46) 14,676.41 11,734.25 8,805.28 * Stores consumed of 5,236.12 is net of 153.54 being received / receivable on reversal of duties and taxes on inputs in respect of prior periods.

(Rupees in million) 2006-2007 2005-2006 2004-2005 Schedule 15 OTHER INCOME Profit on Sale of Fixed Assets (Net) - - 0.79 Equipment Hire Charges 2.34 - - Liability no longer required written back 11.33 12.30 1.10 Accruals under Duty Free Credit Entitlement 87.03 18.67 - Income from Dividend - 0.18 - Income from Wind Mill - Electricity 0.59 0.58 0.61 Sale of Scrap 0.79 0.87 0.04 Miscellaneous Receipts 4.19 0.21 0.12 106.27 32.81 2.66


155


2006-2007 2005-2006 2004-2005 Schedule 16 INTEREST AND FINANCE CHARGES Interest Debentures / Other Term Loans 61.04 35.52 46.90 Bank Loans 421.89 260.57 185.56 Public Fixed Deposits 4.62 10.93 15.13 Other Loans / Advance 64.86 49.78 41.50 552.41 356.80 289.09 Less: Interest Received/Receivable [Tax Deducted at Source 12.70, (2006 - 4.33, 2005 - 2.43)] 11.09 20.02 9.40 541.32 336.78 279.69 Add: Finance charges Bank Charges 27.54 16.82 8.59 Guarantee Charges 63.39 49.96 42.32 90.93 66.78 50.91 632.25 403.56 330.60 (Rupees in million) 2006-2007 2005-2006 2004-2005 Schedule 17 OTHER ADMINISTRATIVE EXPENSES Salaries and Bonus 287.86 191.44 122.54 Staff Welfare Expenses 15.15 17.47 7.45 Contribution to Provident & other Funds 64.66 42.84 15.84 Rent (Net) 31.15 22.84 10.32 Rates and Taxes [includes Wealth Tax 6.57 1.91 1.54 0.28, 2006 – 0.20, 2005 - 0.19] Repairs and Maintenance – Buildings 9.32 6.24 2.60 Insurance 82.54 34.29 28.69 Trading Activities (Net) - 0.01 0.03 Loss on Sale of Fixed Assets 2.04 7.04 - Expenses of Wind Mill 0.31 0.27 0.26 Commission to Managing Director (Schedule 18) - 0.09 0.09 Provision for Doubtful Debts / Advances 9.46 14.86 12.47 Bad Debts / Advances written off (Net of Provision Written back 30.25, 2006 - Nil, 2005 - 11.23) 58.55 10.49 12.13 Share Issue Expenses - 31.86 - Less: Adjusted against Securities Premium Account - 31.86 - - - - Miscellaneous expenses 246.94 180.69 149.70 (including exchange loss 3.22, 2006 - 1.68, 2005 - 1.82) 814.55 530.48 363.66


156


2006-2007 2005-2006 2004-2005 Schedule 18 MANAGING AND OTHER DIRECTORS' REMUNERATION INCLUDED IN PROFIT AND LOSS ACCOUNT

Salaries and allowances 18.30 17.52 3.70 Contribution to Provident and Gratuity Fund 2.44 5.22 0.35 Commission to Managing Director - 0.09 0.09 Estimated Cost of benefits 0.51 0.41 0.36 Sitting Fee 0.37 0.34 0.12 21.62 23.58 4.62 Computation of Net Profit under Section 198 read with Sections 309/349 of the Companies Act, 1956 for the purpose of Commission payable to the Managing Director: 2006-2007 2005-2006 2004-2005 Profit before taxation as per Profit and Loss Account 701.62 581.03 344.05 Add : Directors’ Remuneration 21.62 23.58 4.62 Wealth Tax 0.28 0.20 0.19 Provision for Doubtful Debts / Advances written back (30.25) - (11.23) Provision for Doubtful Debts / Advances 9.46 14.86 12.47 Net Profit in accordance with Section 198 of the Companies Act,1956 702.73 619.67 350.10 Commission at 1% on the above profit 7.03 6.20 3.50 Restricted to * 0.09 0.09 * waived


157


Schedule 19 Notes on Accounts

(Rupees in million) 1. Significant Accounting Policies

a) FIXED ASSETS are stated at cost of acquisition and related expenditure. The cost of fixed assets acquired on finance lease is comprised of present value of minimum hire purchase / lease payments at the inception of lease and residual value of the related assets. The discounting factor considered in calculating the present value of the minimum hire purchase / lease payments is the rate of interest implicit in the lease.

DEPRECIATION is provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act,1956, except as indicated below where higher rates are used to reflect the charge over useful life :

i) Leasehold land and building on leasehold land are amortised over the period of lease. ii) Building on contractee's land is depreciated at 5% on Straight Line Method. iii) Construction equipments included in Plant and Machinery are depreciated at 12.5% and 20%. iv) In case of branches outside India, depreciation is provided on Plant & Machinery at 10%. (2006 -

10%, 2005 - 4.75% - refer note 26)

b) IMPAIRMENT LOSS is recognised wherever the carrying amount of the fixed assets exceeds the recoverable amount i.e. the higher of the asset's net selling price and value in use.

c) LONG TERM investments are valued at cost less provision for permanent diminution, if any, in value

of such investments.

d) INVENTORIES other than tools / stores comprising various construction implements and tackles which are more of a type of equipment having a short life, are valued at lower of cost and net realisable value. The cost, in general, are determined under FIRST IN FIRST OUT method. Tools / stores are stated on the basis of their cost and year end values based on physical inventory and effective future life determined on technical evaluation.

e) REVENUE is recognised under percentage of completion method. The stage of completion is

determined on the basis of completion of physical proportion of the contract work. Extra work, to the extent that it is probable that they will result in revenue and can be reliably measured is also covered.

f) SITE DEVELOPMENT including initial expenses (shown in Work in Progress) thereon is charged off

proportionately within the stipulated period of contract from the date of revenue recognition.

g) BORROWING COST as and when attributable to the acquisition of qualifying assets are added to the cost up to the date when such assets are ready for their intended use. Other borrowing costs are recognised as expenses in the period in which these are incurred.

h) CLAIMS AND COUNTER CLAIMS (related to customers), including those under arbitration, are

accounted for on their final disposal. Other contract related claims are recognised when there is reasonable certainty as to their recoverability.

i) RETIREMENT BENEFITS are provided for in the books of account and payments are made to the

Trustees of the Company's respective Funds on the basis of year end actuarial valuation, where appropriate. The Funds are administered by independent Board of Trustees.

j) TRANSACTION IN FOREIGN CURRENCY outstanding at the Balance Sheet date (i.e. monetary

items) are accounted for at the contracted rate when covered by forward contracts and at exchange rates prevailing on the Balance Sheet date in case of others. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate at the date of the transactions. Exchange differences are dealt with in the Profit and Loss Account, other than those relating to acquisition of Fixed Assets which are capitalised. Such capitalisation is restricted to only acquisition of fixed assets from a country outside India.


158

Financial Statements of foreign branches are treated as non-integral operation. In translating the financial statements of foreign branches, the assets and liabilities, both monetary and non-monetary, has been translated at the closing rate and income and expenses items are translated at the average rate for the period. The resultant exchange differences are accumulated in Foreign Currency Translation Reserve Account. Exchange differences arising on monetary items that is receivable from or payable to non-integral operation for which settlement is neither planned nor likely to occur in the foreseeable future forms part of net investment in non-integral foreign operations and are also accumulated in Foreign Currency Translation Reserve Account.

k) CURRENT TAX in respect of taxable income is provided for the year based on applicable tax rates and

laws. Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to re-assess realisability thereof.

Fringe Benefit Tax is accounted for based on the estimated fringe benefit for the period as per related provisions of the Income-tax Act,1961.

l) PROVISION AND CONTINGENT LIABILITIES

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources or there is a present obligation, reliable estimate of the amount of which cannot be made. Where there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote, no provision or disclosure for contingent liability is made.

m) MATERIAL EVENTS occurring after the Balance Sheet date are taken into cognizance.

2. There are outstanding guarantees given on behalf of the Company by Banks amounting to 10,155.06 (2006

- 6,071.28, 2005 - 4,503.93). The above guarantees are secured by the security as recited under Working Capital Demand Loan/ Cash Credit from Banks in Schedule 3. Banks also hold margin money deposit receipts in few cases against outstanding guarantees (Schedule 9).

3. Year-end Deferred Tax balance comprises the following

As at 31st March, 2007



Tax impact due to timing differences resulting in liabilities / assets (Note 31) on account of

Depreciation as per tax law and books 285.65 234.41 211.59 Provision for doubtful debts/ advances etc (25.76) (32.71) (27.71) Net Deferred Tax Liability 259.89 201.70 183.88


159

4. Obligations under Finance Lease arrangements entered into on/after 1st April, 2001:

The Company acquired Vehicles, Plant & Machineries and Loose Tools under Finance Lease/ Hire Purchase Scheme. Minimum lease payments outstanding as at 31st March, 2007 in respect of these assets are as under:

Due As on 31st March

Total minimum lease payments

outstanding Interest not due

Present Value of minimum lease

payments

2007 3.01 0.18 2.83 2006 17.27 1.65 15.62 Within one Year

2005 21.10 3.75 17.35 2007 0.55 0.08 0.47 2006 3.55 0.25 3.30 Later than one year and not

later than five years 2005 19.99 1.64 18.35 2007 3.56 0.26 3.30 2006 20.82 1.90 18.92 Total

2005 41.09 5.39 35.70 5. (a) The Company has non cancellable lease obligation of 67.56 (2006 - 16.20, 2005 - 0.17) payable

within one year and 32.16 (2006 - 7.36, 2005 - 0.68) payable later than one year but not later than five years and payable after five years Nil (2006 - Nil, 2005 - Nil) as on 31.3.2007. Rental expenses towards non cancellable operating lease charged to the Profit and Loss Account for the year amounts to 10.90 (2006 - 4.39, 2005 - 0.17).

(b) The Company has entered into cancellable operating lease for office, warehouses and employee

accommodation. Tenure of leases generally vary between 1 to 3 years. Terms of the lease include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rentals aggregating 13.14 (2006 - 10.42, 2005 - 3.13) have been debited to Profit and Loss Account.

6. Contingent Liabilities

31st March, 2007

31st March, 2006

31st March, 2005

a) Claims not acknowledged as Debts Disputed Interest (others) 0.60 0.60 0.60 Professional Tax 0.43 0.43 0.43 b) Uncalled liability on partly paid shares 0.10 0.10 0.10 c) Disputed Sales Tax 41.26 39.05 3.48 d) Disputed Entry Tax 0.08 0.08 0.08 e) Disputed Excise duty - - 0.30

7. Capital commitments not provided for (Net of advance) 778.09 (2006 – 231.12, 2005 – 36.38). 8. Other debts includes retention money, not due for payment as per related terms of contract –

31st March, 2007

31st March, 2006

31st March, 2005

– More than Six Months 862.11 503.83 230.82 – Others 452.44 282.05 147.29


160

9. Information pursuant to the Provisions of Paragraphs 3 and 4 of the Part II of Schedule VI to the

Companies Act, 1956.

i) Licensed Capacity ii) Installed Capacity iii) Actual Production iv) Opening & Closing Stock of goods produced v) Raw Material Consumption vi) Turnover

Not applicable as the Company is a Civil Engineering Concern doing mainly the Contractor's Business, manufacturing and trading activities under taken being very insignificant.

10. C.I.F. Value of Imports

2006-2007 2005-2006 2004-2005 Capital Goods 689.50 501.77 63.80 Tools and Equipments 5.52 68.80 - Components and Spare Parts 42.73 106.00 148.43 737.75 676.57 212.23

11. Expenditure in Foreign Currency

2006-2007 2005-2006 2004-2005 Traveling 10.91 7.67 7.48 Interest 49.45 1.40 - Overseas Contract Expenses 1,229.17 833.11 291.56 Miscellaneous 96.54 50.09 53.11 1,386.07 892.27 352.15

12. Earning in Foreign Currency

2006-2007 2005-2006 2004-2005 On Contract Work (Gross billing) 2,590.66 1,198.44 433.38 Interest Received - 0.01 - Others 0.49 2.19 - 2,591.15 1,200.64 433.38

13. Stores Consumed

2006-2007

2005-2006

2004-2005

Value % of total Value % of total Value % of total Consumption Consumption Consumption Imported 56.43 0.73 152.24 2.35 126.67 2.35Indigenous 7,695.43 99.27 6,330.95 97.65 5,262.99 97.65 7,751.86 100.00 6,483.19 100.00 5,389.66 100.00


161

14. Particulars in respect of Trading Items

2006-2007 2005-2006 2004-2005 Unit Quantity Value Quantity Value Quantity Value a) Opening Stock Reverse Osmosys system No. 5 0.10 6 0.13 9 0.19 0.10 0.13 0.19 b) Sales Reverse Osmosys system No. - - 1 0.01 3 0.03 - 0.01 0.03 c) Closing Stock Reverse Osmosys system No. 5 0.10 5 0.10 6 0.13 0.10 0.10 0.13

15. Particulars in respect of Manufacturing Operations

2006-2007 2005-2006 2004-2005 Unit Quantity Quantity Quantity

a) Installed Capacity (As certified by the management)

Electro Dialysis Unit Nos. 12 12 12 Electricity KW 820 820 820 b) Production Electricity KW 219 216 227 2006-2007 2005-2006 2004-2005 Unit Quantity Value Quantity Value Quantity Value c) Sales Electricity KW 219 0.59 216 0.58 227 0.61

16. Information in accordance with the requirements of the revised Accounting Standard - 7 on Construction

Contracts issued by The Institute of Chartered Accountants of India:

2006-07 2005-06 2004-05 Contract revenue recognised 17,082.14 13,427.39 9,990.11 Aggregate amount of contract costs incurred and recognized profits (less recognized losses) for all the contracts in progress 31,205.06 22,087.31 15,457.85 The amount of customer advances outstanding for contracts in progress as at year-end 2,893.97 1,231.83 765.22 The amount of retention due from customers for contracts in progress as at year-end 965.15 602.40 322.58 Gross amount due from customers for contracts in progress [ included in Work in Progress 216.39 (2006 - 72.67, 2005 - 79.21) and Sundry Debtors 3,142.94 (2006 - 1,789.85, 2005 - 1,390.25 )] 3,359.33 1,862.52 1,469.46 Gross amount due to customers for contracts in progress - 209.24 -


162

17. Dividend remitted in Foreign Currency

2006-2007 2005-2006 2004-2005 Number of Non Resident Shareholders 4 4 5 Number of Shares held 73,100 73,100 73,760 Year for which Dividend Paid 2005-2006 2004-2005 2003-2004 Dividend remitted 365.50 328.95 110.64*

* As per non-resident shareholders’ mandate, dividend of 0.001 remitted to a Bank in India.

18. Sundry Creditors include

(a) Dues to the following Small Scale Industrial Undertakings to whom the Company owes a sum for more than 30 days:

As on 31st March, 2007 As on 31st March, 2006 As on 31st March, 2005

Monsa Industries Monsa Industries Monsa Industries Sanjoy Engineering Co. Sanjoy Engineering Co. Sanjoy Engineering Co. Scaffs Engineering & Fabricators

Scaffs Engineering & Fabricators

Scaffs Engineering & Fabricators

K.K.Engineering Works K.K.Engineering Works K.K.Engineering Works Gamzen Plast (P) Ltd Gamzen Plast (P) Ltd Gamzen Plast (P) Ltd Steel Industries Corporation of Bombay

Steel Industries Corporation of Bombay

Steel Industries Corporation of Bombay

Dossisen Fabrico Dossisen Fabrico Dossisen Fabrico Ashok Engineering and Construction Limited

Ashok Engineering and Construction Limited Super Steel Windows

Air Bridge Air Bridge Scaf Line SAS Computers Pvt Limited SAS Computers Pvt Limited Prakash & Co. Super Steel Windows Scaf Line

(b) (i) 2.78 (2006 - 18.31, 2005 - 35.69) on account of outstanding installment dues under Hire

Purchase Scheme. (ii) 0.52 (2006 - 0.61, 2005 - 0.05) on account of outstanding installment dues under Finance Lease.

19. Based on the opinion of an eminent counsel obtained by the Company, the Company is eligible to the benefit envisaged under Section 80IA of the Income-tax Act,1961, and year end tax provision has been made accordingly.


163

SIMPLEX INFRASTRUCTURES LIMITED Schedule 19 Notes on Accounts

(Rupees in million) 20. Related Party Disclosures pursuant to Accounting Standard 18 issued by The Institute of Chartered

Accountants of India

List of Related Parties and Relationship: (a) Parties where Significant influence exists

2006-2007 2005-2006 2004-2005

Giriraj Apartments Pvt Ltd Giriraj Apartments Pvt Ltd Giriraj Apartments Pvt Ltd Govind Das Madho Das Govind Das Madho Das Govinda Das Madho Das Mundhra Estate Mundhra Estate Mundhra Estate Safe Builders Safe Builders Safe Builders Simplex Technologies Pvt Ltd Simplex Technologies Pvt Ltd Simplex Technologies Pvt Ltd RBS Credit & Financial Development Private Limited Simplex Equipments Pvt Ltd Simplex Equipments Pvt Ltd

Anupriya Consultants Private Limited Vasundhara Apartment Pvt Ltd Vasundhara Apartment Pvt Ltd

Vishwapati Estates Pvt Ltd Vishwapati Estates Pvt Ltd

(b) Co-Venturer

2006-2007 2005-2006 2004-2005 Gayatri Projects Limited Gayatri Projects Limited -

(c) Joint Venture

2006-2007 2005-2006 2004-2005

Simplex – Gayatri Consortium Simplex – Gayatri Consortium Simplex – Gayatri Consortium HO-HUP Simplex Joint Venture HO-HUP Simplex Joint Venture HO-HUP Simplex J V Simplex - Subhash Joint Venture Simplex - Subhash Joint Venture Somdutt Builders - Simplex Joint Venture

Somdutt Builders - Simplex Joint Venture

Simplex Almoayyed W.L.L. Simplex Almoayyed W.L.L. Simplex - Somdutt Builders Joint Venture

Laing - Simplex Joint Venture


164

(d) Key Management personnel

2006-2007 2005-2006 2004-2005 Mr.B.D.Mundhra Mr.B.D.Mundhra Mr.B.D.Mundhra Mr. A.D.Mundhra Mr. A.D.Mundhra Mr. A.D.Mundhra Mr.Apurba Mukherjee Mr.Apurba Mukherjee Mr.Apurba Mukherjee Mr. Rajiv Mundhra Mr. Rajiv Mundhra Mr. Rajiv Mundhra Mr.S.Dutta Mr.S.Dutta Mr.S.Dutta

(e) Relatives of Key Management personnel

2006-2007 2005-2006 2004-2005

Mrs. Krishna Devi Mundhra Mrs. Krishna Devi Mundhra Mrs. Krishna Devi Mundhra Smt. Yamuna Mundhra Smt. Yamuna Mundhra Smt. Yamuna Mundhra

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170


(Rupees in million) 21.1 Disclosure in respect of Joint Ventures :

Sr. No Name of Joint Venture Year Description of

Interest

Proportion of Ownership

Interest

Country of Incorporation /

Residence 1 HO-HUP – Simplex Joint

Venture 2006-07 Jointly Controlled

Entity *50% India

2005-06 *50% 2004-05 *50%

2 Simplex - Gayatri Consortium

2006-07 Jointly Controlled Entity

*70% India

2005-06 *70% 2004-05 *70%

3 Simplex - Subhash Joint Venture


50% India

2005-06 50% 2004-05 -

4 Somdutt Builders-Simplex Joint Venture


*50% India

2005-06 *50% 2004-05 -

5 Simplex - Almoayyed W.L.L.


49% Bahrain

2005-06 49% 2004-05 -

6 Simplex-Somdutt Builders Joint Venture


*50% India

2005-06 - 2004-05 -

7 Laing – Simplex Joint Venture


*50% India

2005-06 - 2004-05 - * Above are subject to such modifications as and when mutually decided in terms of related clauses of the Joint Venture Agreements and the supplementaries thereof.


171

21.2 Financial interest in Jointly Controlled Entities as at 31st March,2007 :

(i) Partnership

Sr. No

Name of the Joint Ventures Year

Assets Liabilities Income

Expenses

Tax

1 HO-HUP - Simplex Joint Venture 2006-07 -

2005-06 - 2004-05 ** ** ** ** -

2 Simplex - Gayatri Consortium 2006-07 -

2005-06 - 2004-05 ** ** ** ** -

3 Simplex - Subhash Joint Venture 2006-07 23.29 13.78 208.67 194.29 -

2005-06 105.03 103.20 251.14 233.83 - 2004-05 - - - - -

4 2006-07 271.09 265.14 495.43 490.60 -

Somdutt Builders-Simplex Joint Venture 2005-06 158.06 156.94 114.19 113.08 -

2004-05 - - - - - 5 2006-07 393.40 388.41 194.21 189.22 -

Simplex-Somdutt Builders Joint Venture 2005-06 - - - - -

2004-05 - - - - - 6 Laing - Simplex Joint

Venture 2006-07 352.57 349.27 246.05 240.52 2.23 2005-06 - - - - - 2004-05 - - - - - Total 2006-07 1,040.35 1,016.60 1,144.36 1,114.63 2.23 2005-06 263.09 260.14 365.33 346.91 - 2004-05 - - - - - Share of Net Assets / Profit 2006-07 23.75 27.50 after Tax 2005-06 2.95 18.42

2004-05 - -

(ii) Limited Liability Company - Year 2006-07

Sr. No Name of the Joint Ventures Assets Liabilities Income Expenses Tax

1 Simplex Almoayyed W.L.L. 58.85 13.45 17.53 10.62 -

(Acquired during the year out of advances given during the year ended 31st March, 2006)

There were no contingencies and commitments of existing joint ventures as at 31st March, 2007, 2006 and 2005 as per audited accounts.


172

** Net amount due from HO-HUP - Simplex Joint Venture and Simplex Gayatri Consortium amounting to 40.14 (2006 - 45.45, 2005 - 43.25 ) and 0.10 (2006 - 0.10, 2005 - 0.05) respectively have been included under loans and advances as the proportion of ownership interest is subject to modification as and when mutually decided in terms of the related clauses of Joint Venture and other related agreements and as the revenue is accounted for under completed contract method, no income is accounted for as these contracts are now under progress.

22. Computation of Earning Per Share (Basic and Diluted)

2006-2007 2005-2006 2004-2005 (I) Basic

a) (I) Number of Equity Shares at the beginning of the year

42,872,330

36,447,330

36,447,330

(II) Number of Equity Shares at the end of the year 42,872,330 42,872,330 36,447,330

(III) Weighted average number of Equity Shares outstanding during the year 42,872,330 39,563,015 36,447,330

(IV) Face Value of each Equity Share (Rs.) * 2 2 2b) Profit after tax available for Equity Shareholders 537.12 416.44 251.76 c) Basic Earning Per Share [ I (b) / I (a)(III)] (Rs.) 12.53 10.53 6.91

(II) Diluted a) Dilutive Potential Equity Share - - -b) Diluted Earning Per Share [ I(b) / I (a)(III)] (Rs.) 12.53 10.53 6.91

* In view of sub division of paid up share capital as indicated in Note 1 on schedule 1, the Earning Per Share for the Current year and year ended March 31, 2006 and 2005 have been recast to make them comparable.

23. Work in Progress include salaries & wages (including payment to contractors) 45.75; (2006- 24.10.2005-

28.86) and rent 1.59; (2006 - 0.67, 2005 - 0.28) 24. Miscellaneous Expenses include:

2006-2007 2005-2006 2004-2005 a) Auditors’ Remuneration paid / payable for the year As Auditors : Audit Fee* 2.40 2.34 1.59 Certificates etc. 1.73 1.05 1.06 Service Tax 0.46 - 0.11 Reimbursement of Expenses** 0.04 0.04 0.04

* Includes Nil (2006 - 0.34, 2005 - 0.39) for Branch Auditors ** Exclusive of Service Tax Nil, (2006 - 0.24, 2005- 0.03) not routed through Profit and Loss Account during the year.


173


(Rupees in million) 25. Segment information

The Company is engaged in construction business both within India as well as outside India and its primary reporting format is based on the Geographical Locations of its Operations. Consequently, there is no reportable secondary segment in accordance with AS-17 issued by The Institute of Chartered Accountants of India.

Year Domestic Foreign Total of Reportable Segment

Contract Turnover 2006-07 14,574.63 2,507.51 17,082.14 2005-06 12,275.56 1,151.83 13,427.39 2004-05 9,556.72 433.39 9,990.11 Company's Share in Profit of Joint Venture 2006-07 27.50 - 27.50 2005-06 18.42 - 18.42 2004-05 - - - Other Income 2006-07 101.11 0.25 101.36 2005-06 29.73 2.06 31.79 2004-05 2.72 - 2.72 Segment Revenue 2006-07 14,703.24 2,507.76 17,211.00 2005-06 12,323.71 1,153.89 13,477.60 2004-05 9,559.44 433.39 9,992.83 Segment Result (PBIT) 2006-07 1,530.92 6.56 1,537.48 2005-06 1,196.29 (27.62) 1,168.67 2004-05 728.04 94.77 822.81 Segment Assets 2006-07 15,012.57 2,119.77 17,132.34 2005-06 9,522.22 1,190.51 10,712.73 2004-05 7,527.06 222.02 7,749.08 Segment Liabilities 2006-07 6,625.67 976.80 7,602.47 2005-06 3,428.79 805.77 4,234.56 2004-05 3,185.15 112.74 3,297.89 Capital Expenditure (net) 2006-07 1,417.73 214.45 1,632.18 2005-06 1,807.91 497.27 2,305.18 2004-05 310.83 37.98 348.81 Depreciation 2006-07 171.07 67.26 238.33 2005-06 115.98 12.03 128.01 2004-05 88.77 0.19 88.96 Non cash expenses other than depreciation 2006-07 224.61 24.68 249.29 2005-06 118.40 6.92 125.32 2004-05 84.82 - 84.82


174

Reconciliation of Reportable Segments with the Financial Statements

Year Revenues Results / Net Profit Assets Liabilities

Total of Reportable Segment 2006-07 17,211.00 1,537.48 17,132.34 7,602.47 2005-06 13,477.60 1,168.67 10,712.73 4,234.56 2004-05 9,992.83 822.81 7,749.08 3,297.89 Corporate - Unallocated (net) 2006-07 4.91 (203.61) 431.33 7,344.36 2005-06 1.02 (184.08) 495.37 4,783.27 2004-05 (0.06) (148.16) 313.96 3,843.09 Interest and Finance Charges (net) 2006-07 - (632.25) - - 2005-06 - (403.56) - - 2004-05 - (330.60) - - Provision for Taxation - Current (Net of written back) 2006-07 - (97.00) - -

2005-06 - (140.50) - - 2004-05 - (48.50) - - Provision for Taxation - Fringe Benefit 2006-07 - (9.31) - -

2005-06 - (6.27) - - 2004-05 - - - - Provision for taxation - Deferred 2006-07 - (58.19) - - 2005-06 - (17.82) - - 2004-05 - (43.79) - - As per Financial Statements 2006-07 17,215.91 537.12 17,563.67 14,946.83 2005-06 13,478.62 416.44 11,208.10 9,017.83 2004-05 9,992.77 251.76 8,063.04 7,140.98


175


(Rupees in million) 26. Year 2006

Effective this year, depreciation on Plant and Machinery at Qatar Branch, hitherto accounted for at Schedule XIV rates, has been charged at a higher rate as indicated in Note 1(a) (iv) above, with insignificant effect on current year's profit.

27. Year 2006

12,85,000 Equity Shares of Rs 10/- each at a premium of Rs 716.30 per share amounting to Rs. 933.30 mns were issued on preferential basis during the year and the proceeds of such issue were utilised in the following manner :

Repayment of Short Term Loan 762.23 Repayment of Term Loan 50.00 L.C and Other Payments 89.21 Share issue expenses 31.86 933.30

28. Year 2006

Miscellaneous Expenses includes donation paid to Bhartiya Janata Party 0.10 29. Provision for Dividend Tax includes Nil (2006 - Nil, 2005 - 0.03) paid in respect of earlier year. 30. Year 2005

11.5% Secured Non Convertible Debentures : (a) 162,500 and 137,500 debentures of Face Value of Rs.100/- each were allotted for cash at par on 24th

April, 1999 and 1st July,1999 respectively. (b) The debentures shall be redeemable at par at the end of 6th year from the date of allotment. (c) Debentures are secured by mortgage by way of deposit of title deeds of certain immovable properties

of the Company. 31. For the purpose of these financial statements, adjustments have also been made for items which were

subject matter of audit qualification in the audited statutory accounts of the respective years. As a result, in the opening balance as at 01 April, 2004 the balance of Sundry Debtors has been written down by 41.71 (net of deferred tax benefit) with the corresponding impact to profit and loss account balance (surplus) and also the deferred tax liability has been increased by 100.20 with the corresponding decrease to the general reserve by the same amount.

32 Previous year's figures have been rearranged / regrouped where necessary. Signatures to Schedules 1 to 19

B. L. Bajoria B. D. Mundhra S. Dutta Secretary Chairman & Managing Director Director


176

SIMPLEX INFRASTRUCTURES LIMITED Cash Flow Statement for the year ended March 31, 2007, March31, 2006 and March 31, 2005

(Rupees in million) 2007 2006 2005

A. CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before tax 701.62 581.03 344.05 Adjustments for: Depreciation 240.04 129.33 88.96 Interest and Finance charges (Net) 632.25 403.56 329.19 (Gain) /Loss on sale of Fixed Assets 2.04 7.04 (0.79) Bad Debts/Advances written off 58.55 10.49 12.13 Provision for Doubtful Debts, Advances and Deposits 9.46 14.86 12.47 Tools written off / amortised 151.04 99.97 60.22 Liability no longer required written back (11.33) (12.30) (1.10) Wealth Tax 0.28 0.20 0.19 Exchange (Gain)/ Loss (Net) 8.35 - - Effect of Change in Foreign Exchange Translation (18.87) 2.62 - 1,071.81 655.77 501.27 Operating Profit before Working Capital Changes 1,773.43 1,236.80 845.32 Adjustments for: Trade and other receivables (3,864.05) (1,669.18) (1,713.65) Inventories (1,202.39) (341.09) (702.69) Trade Payables 3,461.66 865.04 1,165.30 (1,604.78) (1,145.23) (1,251.04) Cash generated from / (used in) operations 168.65 91.57 (405.72) Direct Taxes( Paid) (216.21) (232.88) (23.81) Net Cash ( used in ) Operating Activities (47.56) (141.31) (429.53)

B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of Fixed Assets (1,834.40) (981.89) (373.22) Sale/Disposal of Fixed Assets 44.26 6.93 11.32 Purchase of investment (0.01) - - Interest Received 17.54 22.80 4.73 Investment in Joint Venture (20.81) (2.94) - Sale of investment - 0.05 0.50 Investment in Simplex Almoayyed WLL - (5.54) - Intercorporate Deposit 59.00 (29.20) (59.47) Net Cash ( used in ) Investing Activities (1,734.42) (989.79) (416.14) Carried Forward (1,781.98) (1,131.10) (845.67)


177

2007 2006 2005 Brought Forward (1,781.98) (1,131.10) (845.67)

C. CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from issue of Share Capital - 901.44 - Partly Optionally Convertible Debenture Repayment - (30.00) (30.00) Proceeds from long term borrowings 1,103.65 474.11 196.58 Proceeds from short term borrowings 6,002.60 4,189.85 2,413.41 Repayment of long term borrowings (293.73) (243.22) (183.63) Repayment of short term borrowings (4,392.56) (3,483.50) (1,118.00) Interest Paid (607.39) (427.38) (336.53)

Dividend Paid [including Dividend Tax 6.01 (2006-4.63, 2005-1.40)] (48.82) (37.34) (12.71)

Net Cash flow from Financing Activities 1,763.75 1,343.96 929.12 Net Increase/(Decrease) in Cash and Cash Equivalents (18.23) 212.86 83.45

D. Exchange Differences on Translation of Foreign Currency Cash and Cash Equivalents (1.79) 0.38 - (20.02) 213.24 83.45 Cash and cash equivalents Opening Balance 444.86 231.62 148.17 [Refer Schedule 9 to Accounts] Cash and cash equivalents Closing Balance 424.84 444.86 231.62 [Refer Schedule 9 to Accounts] (20.02) 213.24 83.45

Notes: 1 The above cash flow statement has been prepared under the indirect method as set out in the Accounting

Standard - 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. 2 Cash Flow from Investing activities does not include investment - 28.74 by way of adjustment against

advance made in 2005-2006 in Simplex Almoayyed W.L.L. at Bahrain. Refer Schedule 6 to Accounts. 3 Schedules referred to above form an integral part of the Cash Flow Statement. 4 Previous year's figures have been regrouped/rearranged whereever necessary. This is the Cash Flow Statement referred to in our report of even date. (S K Deb) B.L Bajoria B.D.Mundhra S.Dutta Partner Secretary Chairman & Managing Director Director Membership Number :13390 For and on behalf of PRICE WATERHOUSE Chartered Accountants Kolkata, October 29,2007 Mumbai, October 29, 2007


178

SIMPLEX INFRASTRUCTURES LIMITED UNAUDITED FINANCIAL STATEMENTS FOR THE THREE-

MONTH PERIOD ENDED JUNE 30, 2007 AND JUNE 30, 2006

The Board of Directors, Simplex Infrastructures Limited, 27, Shakespeare Sarani Kolkata -700 017

Report on Review of the Financial Statements of Simplex Infrastructures Limited for the quarter

ended June 30, 2007 1. We have reviewed the accompanying Balance Sheet of Simplex Infrastructures Limited as at

June 30, 2007, and the related Profit and Loss Account and the Cash Flow Statement for the quarter then ended, collectively hereinafter referred to as ‘the Financial Statements’, all of which we have signed under reference to this report. These financial statements have been approved by the Committee of Directors of the Company and are the responsibility of the Company’s management and have been prepared for the purpose of inclusion in the Preliminary Placement Document of 2007 relating to the offering of equity shares of the Company to Qualified Institutional Buyers (as such term is defined under Chapter XIII A of the SEBI (Disclosure and Investor Protection) Guidelines, 2000, as amended). Our responsibility is to issue a report on these financial statements based on our review.

2. We conducted our review in accordance with the Auditing and Assurance Standard (AAS) 33,

Engagements to Review Financial Statements issued by the Institute of Chartered Accountants of India. This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of Company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. We have not performed an audit and, accordingly, we do not express an audit opinion.

3. Based on our review, conducted as above, nothing has come to our attention other than non

disclosure of certain information prescribed under Accounting Standard 15 (Revised) on Employee Benefits issued by the Institute of Chartered Accountants of India (for reasons stated in Note 17 on Schedule 18 to the said Financial Statements), that causes us to believe that the accompanying financial statements are not prepared in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and other recognised accounting practices and policies or that it contains any material misstatement.

(S K Deb)

Partner Membership No. 13390

For and on behalf of PRICE WATERHOUSE

Chartered Accountants Kolkata, October 29, 2007


179

SIMPLEX INFRASTRUCTURES LIMITED BALANCE SHEET AS AT 30TH JUNE, 2007 (Rupees in million)

Schedule Reference 30th June, 2007 30th June, 2006

SOURCES OF FUNDS Shareholders' Fund Share Capital 1 86.13 86.13 Reserves and Surplus 2 2,671.21 2,757.34 2,225.08 2,311.21

Loan Funds Secured Loans 3 3,190.93 1,368.43 Unsecured Loans 4 4,726.10 7,917.03 3,834.89 5,203.32Deferred Tax Liability (Net) [Note 3 on Schedule 18] 274.89 205.02

TOTAL 10,949.26 7,719.55

APPLICATION OF FUNDS Fixed Assets 5 Gross Block 4,876.82 3,309.84 Less: Depreciation 985.74 730.10

Net Block 3,891.08 2,579.74 Capital Work in Progress 323.75 4,214.83 30.73 2,610.47Investments 6 62.58 8.82Current Assets, Loans & Advances Inventories 7 3,232.13 1,933.43 Sundry Debtors 8 8,758.37 5,690.73 Cash and Bank Balances 9 533.35 590.43 Other Current Assets 10 451.37 322.62 Loans and Advances 11 2,120.71 1,204.83

15,095.93 9,742.04

Less: Current Liabilities & Provisions Liabilities 12 8,342.30 4,590.77 Provisions 13 81.78 51.01

8,424.08 4,641.78

Net Current Assets 6,671.85 5,100.26

TOTAL 10,949.26 7,719.55

Notes on Accounts 18

This is the Balance Sheet referred to in our report of even date.

The Schedules referred to above form an integral part of the Balance Sheet.

(S.K.Deb) B.L.Bajoria B.D.Mundhra S.Dutta Partner Secretary Chairman & Managing Director Director Membership Number: 13390 For and on behalf of Mumbai, October 29, 2007 PRICE WATERHOUSE Chartered Accountants Kolkata ,October 29, 2007


180

SIMPLEX INFRASTRUCTURES LIMITED PROFIT AND LOSS ACCOUNT FOR THE THREE MONTHS ENDED 30TH JUNE, 2007

(Rupees in million)

Schedule Reference April 2007 - June 2007 April 2006 – June

2006

INCOME

Contract Turnover 5,807.61 3,512.05

Less: Contract Expenses (other than related depreciation / amortisation ) (Net) 14 4,999.86 3,030.74

Profit on Contract Work done 807.75 481.31

Company's Share in profit of Joint Venture 9.96 8.25

(Refer Note 14.2(i) on Schedule 18)

Other Income 15 44.30 862.01 19.33 508.89

EXPENSES

Interest and Finance Charges (net) 16 247.21 125.32

Amortisation of Tools 49.45 33.21

Depreciation 77.87 49.37

Other Administrative Expenses 17 237.02 611.55 174.23 382.13

PROFIT BEFORE TAX 250.46 126.76

PROVISION FOR TAXATION

Current Tax 38.70 11.00

Fringe Benefit Tax 2.47 1.64

PROFIT BEFORE DEFERRED TAX 209.29 114.12

Deferred Tax 15.00 3.32

PROFIT AFTER TAX 194.29 110.80

Balance Brought Forward from Previous Year (Note 18) 1,150.36 753.49

AMOUNT AVAILABLE FOR APPROPRIATIONS 1,344.65 864.29

Period-end Surplus 1,344.65 864.29

1,344.65 864.29

Basic and Diluted Earning Per Share (Rs.) (Note 16 on Schedule 18)

4.53 2.58

Notes on Accounts 18

This is the Profit and Loss Account referred to in our report of even date.

The Schedules referred to above form an integral part of the Profit and Loss Account.

(S.K.Deb) B.L.Bajoria B.D.Mundhra S.Dutta Partner Secretary Chairman & Managing Director Director Membership Number: 13390 For and on behalf of Mumbai, October 29, 2007 PRICE WATERHOUSE Chartered Accountants Kolkata , October 29, 2007


181


(Rupees in million)

30th June, 2007 30th June, 2006

Schedule 1 SHARE CAPITAL Authorised (Note 1 below) 374,900,000 (June 2006 - 24,980,000) Equity Shares of Rs. 2/- (June 2006 Rs.10/-) each 749.80 249.80 Nil (June 2006 - 2,500,000) Redeemable Cumulative Preference Shares of Rs.10/- each - 250.00 20,000 15% Cumulative Preference Shares of Rs.10/- each 0.20 0.20

750.00 500.00

Issued and Subscribed and Paid-up (Notes 1 and 2 below) 42,872,330 Equity Shares of Rs. 2/- each (June 2006 - 8,574,466 of Rs.10/- each) fully paid up 85.74 85.74 126,000 (June 2006 - 126,000) Equity shares of Rs.10/- each (equivalent to 630,000 shares of Rs. 2/- each) forfeited. 0.39 86.13 0.39 86.13

86.13 86.13 Notes: 1. Pursuant to the approval of the Shareholders at the Annual General Meeting held on 18th August, 2006, the

authorised share capital of the Company stands increased and reclassified as indicated above with denomination of shares being subdivided into Equity Shares of Rs.2/- each. Accordingly, the equity shares of the Company of face value of Rs.10/- each were subdivided into Equity Shares of Rs.2/- each, on 20th September, 2006.

2. Of the period-end paid-up shares a) 13,925 shares of Rs 10/- each (equivalent of 69,625 shares of Rs 2/- each) allotted as fully paid up

pursuant to a contract without payments being received in cash. b) 1,844,321 shares of Rs. 10/- each (equivalent of 9,221,605 shares of Rs 2/- each) allotted as fully paid

Bonus Shares by capitalisation of Reserves, Undistributed Profit and Securities Premium Account. c) 1,996,530 shares of Rs. 10/- each (equivalent of 9,982,650 shares of Rs 2/- each ) allotted at par on

conversion of Partly Optionally Convertible Debentures on 1st January,1998 and on 1st January,1999. d) 1,285,000 shares of Rs.10/- each (equivalent of 6,424,000 shares of Rs 2/- each) issued in October,

2005 on preferential basis


182


(Rupees in million) 30th June,2007 30th June,2006

Schedule 2

RESERVES AND SURPLUS Capital Reserve 3.24 3.24Capital Redemption Reserve 0.10 0.10Securities Premium Account 1,007.20 1,007.20 General Reserve (Note 18) 400.90 340.90 Foreign Currency Translation Reserve Account (Note 1(j) on Schedule 18)

As per Last Account (31.09) (0.79) Adjustment during the period (53.79) (84.88) 10.14 9.35

Profit and Loss Account Balance (Surplus) 1,344.65 864.29

2,671.21 2,225.08


183


(Rupees in million)

30th June,2007 30th June,2006

Schedule 3

SECURED LOANS Rupee Term Loan from Banks 829.89 173.75 (Term Loan from The Federal Bank Ltd 27.37(June 2006 - 30.75) is secured by way of Mortgage by deposit of title deed of an immovable property and term loans from other Banks 802.52 (June 2006 - 143.00) are secured by an exclusive charge on Plant & Machinery purchased under the Schemes and in case of term loan from Standard Chartered bank also secured by hypothecation of book debts and inventories at Dubai. Term loans from ABN Amro Bank, HDFC Bank, IndusInd Bank and Citi Bank 220.76 (June 2006 - 53.58) are also covered by personal guarantee by Managing Director of the Company) Term Loans from Financial Companies 675.21 287.83(Term loans are Secured / to be Secured by exclusive charge on Plant and Machinery purchased under the Schemes of individual companies and such Loans from Citicorp Finance India Ltd 181.33 (June 2006 - 66.86) and Infrastructure Leasing & Financial Services Limited Nil (June 2006 - 22.22) are also covered by personal guarantee by Managing Director of the Company) Corporate Loan from State Bank of Patiala 82.50 157.50(Secured by hypothecation of certain movable Plant and Machinery and by personal guarantee by Managing Director of the Company.) Foreign currency loans Term Loans from Bank 360.06(Secured against equipments acquired at Qatar out of Foreign currency loans and through assignment of receivables and inventories at Qatar.) Term Loan from Exim Bank 96.04 194.43(Secured by an exclusive charge on Plant & Machinery purchased and covered by personal guarantee by Managing Director of the Company.) Working Capital Demand Loan/ Cash Credit from banks 1,454.49 165.00[Secured by hypothecation of stocks, stores, book debts and movable Plant and Machinery etc. ranking pari passu amongst the Banks on the point of security, as also by second charge on certain immovable properties by deposit of title deeds / documents subject to exclusive first charge on certain specified machinery purchased out of the proceeds of above corporate loans / term loans. Such Loans from certain banks are also covered by personal guarantee by Managing Director and a Wholetime Director of the Company.] Auto Loan From Banks 44.41 27.03(Secured by hypothecation of the vehicles acquired) Interest accrued and due on working capital demand loan/ cash credit from banks 8.39 2.83

3,190.93 1,368.43


184


(Rupees in million)

30th June,2007

30th June,2006

Schedule 4

UNSECURED LOANS Short Term Loan from Financial Companies 20.00 -Temporary Overdraft from Banks 4.58 18.29Commercial Paper - 1,200.00Term Loan from Banks 4,668.53 2,553.00(Repayable within one year – 4,398.53; June 2006 –2,453.00) (Such Loans from certain banks 4,418.53 (June 2006 – 2,520.00) covered by personal guarantee by Managing Director and Wholetime Director of the Company) Inter Corporate Deposits (Short Term) 0.50 0.50Public Fixed Deposits 17.88 62.71(Repayable within one year - 15.41; June 2006 - 41.23) Interest Accrued and Due on Term loans, Inter Corporate Deposits and Public Fixed Deposits (Net of tax deductible at source) 14.61 0.39

4,726.10 3,834.89

priv

ilege

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con

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tial

185

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88.

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62.

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N

otes

: a)

C

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reeh

old

/Lea

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old

land

and

bui

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gs w

ere

reva

lued

by

an a

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Val

uer a

s at 3

1st D

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ber,2

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and

31st

Dec

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r,200

3, (t

he a

ggre

gate

Boo

k V

alue

7.5

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d 22

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resp

ectiv

ely

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the

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se i

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et B

ook

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such

reva

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46.9

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d 10

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resp

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in th

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uild

ings

incl

ude

0.8

5 be

ing

the

orig

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cos

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bui

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ecte

d on

land

take

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rent

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ase

and

depr

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ted

over

the

perio

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leas

e. T

he b

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(orig

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cos

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ere

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on

land

bel

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the

cont

ract

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ho w

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ke o

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uild

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at d

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in d

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ours

e.

c)

The

Orig

inal

Cos

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at 3

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ne,2

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of P

lant

& M

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nery

incl

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1.2

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ms a

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unde

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Pur

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50 (J

une

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- 42

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for

item

s ac

quire

d un

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of B

anks

of w

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46.

57 (J

une

2006

- 27

.03)

was

out

stan

ding

as a

t 30t

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ne,2

007.

e)

In

clud

ing

Nil

(Jun

e 20

06 -

11.7

6) b

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adj

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n cu

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rm lo

ans a

gain

st c

hang

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in P

rogr

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nclu

des 2

1.02

(Jun

e 20

06 -

17.7

2) t

owar

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tang

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ass

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(sof

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of

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acco

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For

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s.


186

SIPLEX INFRASTRUCTURES LIMITED

(Rupees in million)

30th June,2007 30th

June,2006

Schedule 6 INVESTMENTS LONG TERM - other than trade - At Cost Unquoted 5-Fully paid-up Ordinary Shares of Rs.50/- each in Mercantile Apartments Co-operative Housing Society Ltd., Mumbai - Face value Rs.250/- ** 5-Fully paid-up Ordinary Shares of Rs.50/- each in Pallavi Beach Angle Co-operative Housing Society Ltd., Mumbai - Face value Rs.250/- ** 5-Fully paid-up Ordinary Shares of Rs.50/- each in Borlo Co-operative Housing Society Ltd., Chembur, Mumbai - Face value Rs.250/- ** 5-Fully paid-up Ordinary Shares of Rs.50/- each in Saket Co-operative Housing Society Ltd, Mumbai - Face value Rs.250/- ** 7 Year National Savings Certificates (Matured) (Lodged as Security Deposits) ** 6 Year National Savings Certificates 0.13 0.13 (Lodged as Security Deposits - Matured) Investment in Joint Ventures (see Note 14.2(i) on Schedule 18.) 33.71 8.69 4900 shares of BD 50 each of Simplex Almoayyed W.L.L. Fully paid-up.(Refer Note 14.2 (ii) on Schedule 18.) 28.74 62.58 - 8.82 Quoted 20,000 Equity Shares of Rs.10/- each (Rs.5/- paid up) of M/s Parasrampuria Synthetics Ltd. 0.10 0.10 4700 - Equity Shares of Rs.10/- each at a Premium of Rs.35/- each of Pennar Patterson Securities Ltd- Fully Paid 0.21 0.31 0.21 0.31 62.89 9.13Less: Provision for diminution in value of Investments 0.31 0.31 62.58 8.82 Aggregate market value of quoted investments - * ** (Period-end official quotation is not available) ** Denotes amount less than Rs. 5,000.


187


(Rupees in million)


Schedule 7

INVENTORIES

At lower of cost and estimated net realisable value Work-in-Progress (Net of Advance from clients 174.64; June 2006 - 19.70) 224.85 95.39Materials at Sites 1,862.24 1,122.91Materials in Transit 42.78 0.80Trading Items 0.10 0.10At or below cost Stores (including Tools 904.99; June 2006 - 576.97) * 1,102.16 714.23 (Note 1 (d) on Schedule 18)

3,232.13 1,933.43

* Includes tools acquired under Hire Purchase arrangements amounting to 15.40 ( June 2006 – 16.74)


188


(Rupees in million)


Schedule 8

SUNDRY DEBTORS, Unsecured

Debts Outstanding for a period exceeding six months Considered Good (Note 18) 2,112.11 1,289.22 Considered Doubtful 21.33 41.71 Other Debts Considered Good [Note 8 on Schedule 18] 6,646.26 4,401.51

8,779.70 5,732.44 Less: Provision for Doubtful debts 21.33 41.71

8,758.37 5,690.73


189


(Rupees in million)


Schedule 9

CASH AND BANK BALANCES Cash in Hand and Cheques in Transit 150.55 47.48 [Cheques in Transit 91.43 (June 2006 - 29.21)] Balances with Scheduled Banks-

Current Accounts 271.77 467.99Unpaid Dividend Account 0.78 0.72Share Application Money * Term Deposit on Margin Account 36.91 36.14 [ Note 2 on Schedule 18] Fixed Deposits (Lodged as Security Deposits 0.01 ; June 2006 - 0.01) 5.22 10.15Balance in Debenture Repurchase Account - 0.08

Balance with Non-Scheduled Banks ICICI Bank - Colombo 16.44 -

Standard Chartered Bank - Dubai 32.48 -Standard Chartered Bank - Manama, Bahrain 1.89 0.91Commercial Bank of Qatar 0.34 -Doha Bank - Doha, Qatar 0.21 0.69Standard Chartered Bank - Doha, Qatar 16.76 26.27

533.35 590.43

* Denotes amount less than Rs. 5,000.


190


(Rupees in million)

30th June,2007 30th

June,2006

Schedule 10

OTHER CURRENT ASSETS, Unsecured Considered Good Interest Receivable 9.84 17.48Excise Duty Recoverable 70.44 5.34Accruals under Duty Free Credit Entitlement 126.73 19.59Deposit for Contracts 59.97 101.08Security Deposits 70.43 39.68[ including 0.03 (June 2006 - 0.03 ) on Savings Bank Account with Scheduled Banks. The Pass Book is lodged as Security Deposit] Deposit under Investment Deposit Scheme 1.51 1.51Prepaid Expenses 112.45 137.94Considered Doubtful Deposit for Contracts 0.16 0.16Security Deposits 0.03 0.03

451.56 322.81Less: Provision for Doubtful Deposit 0.19 0.19

451.37 322.62


191


(Rupees in million)

30th June,2007

30th June,2006

Schedule 11

LOANS AND ADVANCES, Unsecured

Considered good (unless stated otherwise below) Advances recoverable in cash or in kind or for value to be received (Refer Note 14.2(i) on Schedule 18) Considered Good 1,759.53 960.78[including Capital advance 204.29 (June 2006 - 203.77) and Considered Doubtful 3.93 (June 2006 - 1.93)]

Advance against Investment in Simplex Almoayyed W.L.L. - 30.97 Inter Corporate Deposits 83.65 73.25Advance payment of Current Taxes Net of provision 281.46 141.76[Advance Tax 596.70 ( June 2006 - 345.25), Provision for Current Tax 315.24 (June 2006 - 203.49) ]

2,124.64 1,206.76Less: Provision for Doubtful Advance 3.93 1.93

2,120.71 1,204.83


192


(Rupees in million)

30th June,2007 30th

June,2006

Schedule 12

CURRENT LIABILITIES Acceptances 3.32 139.94Sundry Creditors Due to Small Scale Industrial undertakings 8.56 8.84 Others 4,234.20 4,242.76 2,914.40 2,923.24

Other Liabilities 319.33 105.59Advance from Clients 3,697.72 1,395.55Interest Accrued but not Due 75.44 23.27Investor Education and Protection Fund shall be credited by the following amounts namely [Note below] a) Unpaid dividend 0.78 0.72 b) Unpaid matured deposit 2.44 1.96 c) Unpaid matured Debenture - 0.06 d) Interest accrued on ( b ) and ( c ) above 0.51 0.44

8,342.30 4,590.77 Note : None of above unclaimed amounts is due at the Balance Sheet date for actual credit.


193


(Rupees in million) 30th June,2007 30th June,2006

Schedule 13

PROVISIONS

Provision for Fringe Benefit Tax (Net) 1.53 2.13 Proposed Dividend 68.59 42.87 Tax thereon 11.66 80.25 6.01 48.88

81.78 51.01


194


April 2007- June 2007

April 2006 - June 2006

Schedule 14 CONTRACT EXPENSES Stores consumed 2,491.28 1,638.91 Salaries & Wages 1,841.65 1,036.15 (including amount paid/payable to Sub-contractors) Contract Expenses 5.64 9.98 Sales Tax on Works Contract 81.65 33.18 Repairs & Renewals 1.58 0.96 Other Expenses 578.06 311.56 (including Rent 50.76; June 2006 - 24.83 )

4,999.86 3,030.74


195




Schedule 15 OTHER INCOME Equipment Hire Charges 1.94 - Liability no longer required written back 0.34 0.07 Accruals under Duty Free Credit Entitlement 38.49 18.37 Income from Wind Mill - Electricity 0.06 0.08 Sale of Scrap 1.66 - Miscellaneous Receipts 1.81 0.81

44.30 19.33


196


April 2007- June 2007 April 2006 -

June 2006

Schedule 16 INTEREST AND FINANCE CHARGES Interest Debentures / Other Term Loans 32.69 12.80 Bank Loans 160.88 83.19 Public Fixed Deposits 0.54 1.72 Other Loans / Advances 26.50 17.61

220.61 115.32 Less: Interest Received/Receivable 2.60 3.99

218.01 111.33 Add: Finance charges Bank Charges 14.53 8.59 Guarantee Charges 14.67 29.20 5.40 13.99

247.21 125.32


197




Schedule 17 OTHER ADMINISTRATIVE EXPENSES Salaries and Bonus 86.40 62.25 Staff Welfare Expenses 3.99 3.56 Contribution to Provident & other Funds 19.38 12.07 Rent (Net) 8.60 6.77 Rates and Taxes [includes Wealth Tax 5.91 0.41 0.08; June 2006 – 0.05] Repairs and Maintenance - Buildings 2.08 1.00 Insurance 27.10 18.26 Loss on Sale of Fixed Assets - 0.49 Expenses of Wind Mill 0.33 0.31 Provision for Doubtful Debts / Advances 11.92 10.00 Bad Debts / Advances written off (Net of Provision Written back 0.26 ; June 2006 - 0.49 ) 1.46 0.06

Miscellaneous expenses (including exchange loss 6.86; June 2006 - 1.05) 69.85 59.05

237.02 174.23


198


(Rupees in million) 1. Significant Accounting Policies

a) FIXED ASSETS are stated at cost of acquisition and related expenditure. The cost of fixed assets acquired on finance lease is comprised of present value of minimum hire purchase / lease payments at the inception of lease and residual value of the related assets. The discounting factor considered in calculating the present value of the minimum hire purchase / lease payments is the rate of interest implicit in the lease.

DEPRECIATION is provided on Straight Line Method at the rates prescribed in Schedule XIV to the Companies Act,1956, except as indicated below where higher rates are used to reflect the charge over useful life :

i) Leasehold land and building on leasehold land are amortised over the period of lease. ii) Building on contractee's land is depreciated at 5% on Straight Line Method. iii) Construction equipments included in Plant and Machinery are depreciated at 12.5% and 20%. iv) In case of branches outside India, depreciation is provided on Plant & Machinery at 10%.

b) IMPAIRMENT LOSS is recognised wherever the carrying amount of the fixed assets exceeds the

recoverable amount i.e. the higher of the asset's net selling price and value in use.

c) LONG TERM investments are valued at cost less provision for permanent diminution, if any, in value of such investments.

d) INVENTORIES other than tools / stores comprising various construction implements and tackles

which are more of a type of equipment having a short life, are valued at lower of cost and net realisable value. The cost, in general, are determined under FIRST IN FIRST OUT method. Tools / stores are stated on the basis of their cost and effective future life determined on technical evaluation.

e) REVENUE is recognised under percentage of completion method. The stage of completion is

determined on the basis of completion of physical proportion of the contract work. Extra work, to the extent that it is probable that they will result in revenue and can be reliably measured is also covered.

f) SITE DEVELOPMENT including initial expenses (shown in Work in Progress) thereon is charged off

proportionately within the stipulated period of contract from the date of revenue recognition.

g) BORROWING COST as and when attributable to the acquisition of qualifying assets are added to the cost up to the date when such assets are ready for their intended use. Other borrowing costs are recognised as expenses in the period in which these are incurred.

h) CLAIMS AND COUNTER CLAIMS (related to customers), including those under arbitration, are

accounted for on their final disposal. Other contract related claims are recognised when there is reasonable certainty as to their recoverability.

i) EMPLOYEE BENEFITS

The Company has adopted Accounting Standard 15 (Revised) on Employee Benefits, with effect from 1st April, 2007 which is accounted for as follows:

(i) Provision for gratuity is made on the basis of latest year – end actuarial valuation. (ii) Contributions to Provident Fund during the period are charged as expenses.

j) TRANSACTION IN FOREIGN CURRENCY outstanding at the Balance Sheet date (i.e. monetary

items) are accounted for at the contracted rate when covered by forward contracts and at exchange rates prevailing on the Balance Sheet date in case of others. Foreign currency non-monetary items carried in terms of historical cost are reported using the exchange rate at the date of the transactions. Exchange differences are dealt with in the Profit and Loss Account. Exchange differences arising on acquisition


199

of fixed assets including from a country outside India are also dealt with in the Profit and Loss Account with effect from 1st April,2007 (Refer Note 9 below) .

Financial Statements of foreign branches are treated as non-integral operation. In translating the financial statements of foreign branches, the assets and liabilities, both monetary and non-monetary, has been translated at the closing rate and income and expenses items are translated at the average rate for the period. The resultant exchange differences are accumulated in Foreign Currency Translation Reserve Account. Exchange differences arising on monetary items that is receivable from or payable to non-integral operation for which settlement is neither planned nor likely to occur in the foreseeable future forms part of net investment in non-integral foreign operations and are also accumulated in Foreign Currency Translation Reserve Account.

k) CURRENT TAX in respect of taxable income is provided for the period based on applicable tax rates

and laws. Deferred tax is recognised subject to the consideration of prudence in respect of deferred tax assets, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to re-assess realisability thereof.

Fringe Benefit Tax is accounted for based on the estimated fringe benefit for the period as per related provisions of the Income-tax Act,1961.

l) PROVISION AND CONTINGENT LIABILITIES

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources or there is a present obligation, reliable estimate of the amount of which cannot be made. Where there is a possible obligation or a present obligation and the likelihood of outflow of resources is remote, no provision or disclosure for contingent liability is made.

m) MATERIAL EVENTS occurring after the Balance Sheet date are taken into cognizance.

2. There are outstanding guarantees given on behalf of the Company by Banks amounting to 9,561.64 (June

2006 - 6,138.85). The above guarantees are secured by the security as recited under working capital demand loan/ cash credit from banks in Schedule 3. Banks also hold margin money deposit receipts in few cases against outstanding guarantees (Schedule 9).

3. Period-end Deferred Tax balance comprises the following

As at 30th June,2007

As at 30th June,2006

Tax impact due to timing differences resulting in liabilities / assets (Note 18) on account of

Depreciation as per tax law and books 300.93 241.10Provision for doubtful debts / advances etc (26.04) (36.08)

Net Deferred Tax Liability 274.89 205.02


200

4. Obligations under Finance Lease arrangements entered into on/after 1st April, 2001:

The Company acquired Vehicles, Plant & Machineries and Loose Tools under Finance Lease/ Hire Purchase Scheme. Minimum lease payments outstanding as at 30th June, 2007 in respect of these assets are as under:

Due Total minimum lease

payments outstanding as on 30th June,2007

Interest not due

Present Value of minimum

lease payments

0.60 0.09 0.51 Within one Year

15.00 1.14 13.86

0.45 0.06 0.39 Later than one year and not later than five years

1.05 0.15 0.90

1.05 0.15 0.90 Total

16.05 1.29 14.76 Figures in italics relate to Previous Period

5. (a) The Company has non cancellable lease obligation of 61.55 (June 2006 - 45.01) payable within one

year and 19.09 (June 2006 - 31.24) payable later than one year but not later than five years and payable after five years Nil (2006 - Nil) as on 30.6.2007. Rental expenses towards non cancellable operating lease charged to the Profit and Loss Account for the period amounts to 18.63 (June 2006 - 13.04).

(b) The Company has entered into cancellable operating lease for office, warehouses and employee

accommodation. Tenure of leases generally vary between 1 to 3 years. Terms of the lease include operating term for renewal, increase in rent in future periods and term of cancellation. Related lease rentals aggregating 3.60 ( June 2006 - 2.56) have been debited to the Profit and Loss Account.

6. Contingent Liabilities


a) Claims not acknowledged as Debts Disputed Interest (others) 0.60 0.60 Professional Tax 0.43 0.43b) Uncalled liability on partly paid shares 0.10 0.10c) Disputed Sales Tax 43.97 38.99d) Disputed Entry Tax - 0.08e) Disputed Service Tax

A show cause cum demand notice for 264.33 was issued by Commissioner of Service Tax on 2.8.2007 on the ground that free issue of material supplied by the client to the company has not been considered for the purpose of payment to service tax authorities. The company challenged the contention of the service tax authorities that free issue of material supplied by the client will be chargeable to service tax and filed a writ petition with the Calcutta High Court which is still pending. Further, according to the opinion obtained from an eminent counsel in this regard, the contention of the service tax authorities and consequent demand of service tax is not valid in law.

7. Capital commitments not provided for (Net of advance) 742.80 (June 2006 – 324.24)


201

8. Other debts includes retention money, not due for payment as per related terms of contract -

30th June 2007 30th June 2006

– More than Six Months 926.81 542.49– Others 491.87 291.72

9. Pursuant to The Companies (Accounting Standard) Rules 2006 becoming applicable to the Company w.e.f.

1st April,2007, exchange gain of 7.95 on Foreign Currency Loans/Credits taken for acquisition of certain imported Fixed Assets (hitherto adjusted with the carrying amount of such fixed assets) is now recognised as income, thereby increasing profit by the corresponding amount.

10. Information in accordance with the requirements of the revised Accounting Standard - 7 on Construction

Contracts issued by The Institute of Chartered Accountants of India :



Contract revenue recognised for the period ended 30th June,2007 5,807.61 3,512.05 Aggregate amount of contract costs incurred and recognised profits (less recognised losses) up to 30th June, 2007 for all the contracts in progress 32,866.17 23,158.61 The amount of customer advances outstanding for contracts in progress as at 30th June,2007 3,663.79 1,366.13 The amount of retention due from customers for contracts in progress as at 30th June,2007 1,103.70 660.40 Gross amount due from customers for contracts in progress [ included in Work in Progress 224.85 (June,2006 - 95.39) and Sundry Debtors 1,545.22 (June,2006 - 1,476.84 ) ] 1,770.07 1,572.23 Gross amount due to customers for contracts in progress - -

11. Sundry Creditors include

(i) 0.40 ( June 2006 - 14.18) on account of outstanding installment dues under Hire Purchase Scheme. (ii) 0.50 ( June 2006 - 0.58) on account of outstanding installment dues under Finance Lease.

12. Based on the opinion of an eminent counsel obtained by the Company, the Company is eligible to the

benefit envisaged under Section 80IA of the Income-tax Act,1961, and period end tax provision has been made accordingly. The tax impact of the benefit obtained up to 30th June,2007 amounting to 181.71.

13. Related Party Disclosures pursuant to Accounting Standard 18 issued by The Institute of Chartered

Accountants of India Related Parties

Name Relationship

Giriraj Apartments Pvt Ltd Parties where Significant influence exists Govind Das Madho Das - Do - Mundhra Estate - Do - Safe Builders - Do - Simplex Technologies Pvt Ltd - Do - RBS Credit & Financial Development Private Limited - Do - Anupriya Consultants Private Limited - Do -

Gayatri Projects Limited Co-Venturer


202

Related Parties

Name Relationship

Simplex – Gayatri Consortium Joint Venture HO-HUP Simplex Joint Venture - Do - Simplex - Subhash Joint Venture - Do - Somdutt Builders - Simplex Joint Venture - Do - Simplex Almoayyed W.L.L. - Do - Simplex - Somdutt Builders Joint Venture - Do - Laing - Simplex Joint Venture - Do - Mr.B.D.Mundhra Key Management personnel Mr. A.D.Mundhra - Do - Mr.Apurba Mukherjee - Do - Mr. Rajiv Mundhra - Do - Mr.S.Dutta - Do - Mrs. Krishna Devi Mundhra Relatives of Key Management personnel

Smt. Yamuna Mundhra - Do -

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205

14.1 Disclosure in respect of Joint Ventures :

Sr. No Name of Joint Venture Description of Interest

Proportion of Ownership

Interest

Country of Incorporation /

Residence 1 HO-HUP - Simplex Joint Venture Jointly Controlled Entity *50%

*50% India

2 Simplex - Gayatri Consortium Jointly Controlled Entity *70% *70%

India

3 Simplex - Subhash Joint Venture Jointly Controlled Entity 50% 50%

India

4 Somdutt Builders-Simplex Joint Venture

Jointly Controlled Entity *50% *50%

India

5 Simplex - Almoayyed W.L.L. Jointly Controlled Entity 49% -

Bahrain

6 Simplex-Somdutt Builders Joint Venture

Jointly Controlled Entity *50% -

India

7 Laing - Simplex Joint Venture Jointly Controlled Entity *50% -

India

* Above are subject to such modifications as and when mutually decided in terms of related clauses of the Joint Venture Agreements and the supplementaries thereof.


206

14.2 Financial interest in Jointly Controlled Entities as at 30th June, 2007 :

(i) Partnership


1 HO-HUP - Simplex Joint Venture ** ** ** ** -

2 Simplex - Gayatri Consortium ** ** ** ** -

3 Simplex - Subhash Joint Venture 31.97 19.66 40.56 37.76 -

130.56 123.62 110.43 102.82 -

4 Somdutt Builders-Simplex Joint Venture 348.91 341.72 140.64 139.40 -

155.06 153.31 61.48 60.84 -

5 Simplex-Somdutt Builders Joint Venture 364.05 355.17 152.22 148.32 -

- - - - -

6 Laing - Simplex Joint Venture 460.74 455.41 145.82 142.40 1.40

- - - - -

Total 1,205.67 1,171.96 479.24 467.88 1.40 285.62 276.93 171.91 163.66 - Share of Net Assets / Profit after Tax 33.71 9.96 8.69 8.25

Figures in italics relate to Previous period There were no contingencies and commitments as at 30th June, 2007, as per un-audited accounts. ** Net amount due from HO-HUP - Simplex Joint Venture and Simplex Gayatri Consortium amounting to 40.14 (June 2006 - 45.45) and 0.10 (June 2006 - 0.10) respectively have been included under loans and advances as the proportion of ownership interest is subject to modification as and when mutually decided in terms of the related clauses of Joint Venture and other related agreements and as the revenue is accounted for under completed contract method, no income is accounted for as these contracts are now under progress.

(ii) Limited Liability Company


1 Simplex Almoayyed W.L.L. Figures not readily available 15. Segment information for the period ended 30th June, 2007

The Company is engaged in construction business both within India as well as outside India and its primary reporting format is based on the Geographical Locations of its Operations. Consequently, there is no reportable secondary segment in accordance with AS-17 issued by The Institute of Chartered Accountants of India.


207

Domestic Foreign Total of

Reportable Segment

Contract Turnover 5,053.69 753.92 5,807.61

2,904.12 607.93 3,512.05

Company's Share in Profit of Joint Venture 9.96 - 9.96 8.25 - 8.25

Other Income 43.60 0.70 44.30 19.33 - 19.33

Segment Revenue 5,107.25 754.62 5,861.87 2,931.70 607.93 3,539.63

Segment Result (PBIT) 466.57 106.24 572.81 301.62 22.07 323.69

Segment Assets 16,665.03 2,225.58 18,890.61 10,270.15 1,634.83 11,904.98

Segment Liabilities 7,272.02 913.42 8,185.44 3,579.28 898.39 4,477.67

Capital Expenditure 904.46 20.22 924.68 215.21 154.82 370.03

Depreciation 60.98 16.44 77.42 34.35 14.60 48.95

Non cash expenses other than depreciation 54.67 8.41 63.08 38.39 5.37 43.76

Reconciliation of Reportable Segments with the Financial Statements

Revenues Results /Net Profit Assets Liabilities

Total of Reportable Segment 5,861.87 572.81 18,890.61 8,185.44 3,539.63 323.69 11,904.98 4,477.67

Corporate - Unallocated (net) - (75.14) 482.73 8,430.56 - (71.61) 456.35 5,572.45

Interest and Finance Charges (net) - (247.21) - - - (125.32) - -

Provision for Taxation - Current - (38.70) - - - (11.00) - -

Provision for Taxation - Fringe Benefit - (2.47) - - - (1.64) - -

Provision for taxation - Deferred - (15.00) - -

- (3.32) - -

As per Financial Statements 5,861.87 194.29 19,373.34 16,616.00 3,539.63 110.80 12,361.33 10,050.12

Figures in italics relate to Previous period


208

16. Computation of Earning Per Share (Basic and Diluted)

30th June, 2007

30th June, 2006

(I) Basic a) (I) Number of Equity Shares at the beginning of the period 42,872,330 42,872,330 (II) Number of Equity Shares at the end of the period 42,872,330 42,872,330

(III) Weighted average number of Equity Shares outstanding during the period 42,872,330 42,872,330

(IV) Face Value of each Equity Share Rs. 2 2b) Profit after tax available for Equity Shareholders 194.29 110.80c) Basic Earning Per Share [ I (b) / I (a)(III)] Rs. 4.53 2.58

(II) Diluted a) Dilutive Potential Equity Share - - b) Diluted Earning Per Share [ I(b) / I (a)(III)] Rs. 4.53 2.58

In view of sub division of paid up share capital as indicated in note 1 on schedule 1, the Earning Per Share for the Current period and period ended June 30, 2006 have been recast to make them comparable. 17. A detailed break-up of fair value of plan assets, Current Service Cost, Interest Cost, Actuarial gains /

(losses) and other relevant information as required to comply with the disclosure requirements of Accounting Standard 15 (Revised) will be compiled and disclosed in the annual Financial Statements for the year ending 31st March, 2008.

18. For the purpose of these financial statements, adjustments have also been made for items which were

subject matter of audit qualification in the audited statutory accounts of certain earlier years up to 31March, 2007 and also in the Limited Review report on un-audited Financial Results for the quarter ended 30th June, 2007. As a result, in the opening balance as at 01 April, 2004 the balance of Sundry Debtors has been written down by 41.71 (net of deferred tax benefit) with the corresponding impact on profit and loss account balance (surplus) and also the deferred tax liability has been increased by 100.20 with the corresponding decrease to the general reserve by the same amount.

19. Previous period’s figures have been rearranged / regrouped where necessary. Signatures to Schedules 1 to 18 B. L. Bajoria B. D. Mundhra S. Dutta Secretary Chairman & Managing Director Director


209

Simplex Infrastructures Limited Cash Flow Statement for the period ended 30th June, 2007

(Rupees in million) April 2007 - June 2007 April 2006 - June 2006

A CASH FLOW FROM OPERATING ACTIVITIES:

Net Profit before tax 250.46 126.76

Adjustments for:

Depreciation 77.87 49.37

Interest & Finance charges (Net) 247.21 125.32 Bad Debts/Advances written off 1.46 0.06

Provision for Doubtful Debts, Advances and Deposit 11.92 10.00

Tools written off / amortised 49.45 33.21

Liability no longer required written back (0.34) (0.07)

Wealth Tax 0.08 0.05

Exchange (Gain)/ Loss (Net) (9.31) 0.00*

Effect of Change in Foreign Exchange Translation (13.59) (10.83)

364.75 207.11

Operating Profit before Working Capital Changes 615.21 333.87

Adjustments for:

Trade and other receivables (664.21) (448.95)

Inventories (429.70) (166.11)

Trade Payables 528.47 (565.44) 307.47 (307.59)

Cash generated from operations 49.77 26.28

Direct Taxes( Paid) / Refund - Net (112.09) (52.96)

Net Cash used in Operating Activities (62.32) (26.68)

B CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of Fixed Assets (672.68) (495.74)

Sale/Disposal of Fixed Assets 45.49 -

Interest Received 3.03 3.23

Investment in Joint Venture (9.95) (5.75)

Intercorporate Deposit (17.50) 51.90

Net Cash used in Investing Activities (651.61) (446.36)

Carried Forward (713.93) (473.04)* Denote amount less than Rs. 5000.


210

April 2007 - June 2007 April 2006 - June 2006 Brought Forward (713.93) (473.04)

C CASH FLOW FROM FINANCING ACTIVITIES: Proceeds from long term borrowings 408.38 481.96 Proceeds from short term borrowings 1,838.96 820.00 Repayment of long term borrowings (279.83) (67.90) Repayment of short term borrowings (931.40) (490.03) Interest Paid (211.13) (126.69) Net Cash flow from Financing Activities 824.98 617.34

Net Increase/(Decrease) in Cash and Cash Equivalents 111.05 144.30

D Exchange Differences on Translation of Foreign Currency

Cash and Cash Equivalents (2.54) 1.27 108.51 145.57

Cash and cash equivalents Opening Balance 424.84 444.86 Cash and cash equivalents Closing Balance 533.35 108.51 590.43 145.57 [Refer Schedule 9 to Accounts] Notes: 1 The above cash flow statement has been prepared under the indirect method as set out in the Accounting

Standard - 3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. 2 Schedules referred to above form an integral part of the Cash Flow Statement 3 Previous period's figures have been regrouped/rearranged where ever necessary This is the Cash Flow Statement referred to in our report of even date. (S K Deb) B.L.Bajoria B.D.Mundhra S.Dutta Partner Secretary Chairman and Managing Director Director Membership Number :13390 For and on behalf of Mumbai, October 29, 2007 PRICE WATERHOUSE Chartered Accountants Kolkata, October 29, 2007


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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 Preliminary Placement Document is contrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or rules made or guidelines issued thereunder, as the case may be. We further certify that all statements in this Preliminary Placement Document are true and correct. Signed by:

Mr. Rajeev Mundhra Director Mr. S. Dutta Director Date: Place: Kolkata


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OUR REGISTERED OFFICE

Simplex House, 27, Shakespeare Sarani, Kolkata 700 017, India

JOINT GLOBAL COORDINATORS

J M Financial Consultants Private Limited

141, Maker Chambers III, Nariman Point

Mumbai 400 021

SSKI Corporate Finance Private Limited 803/4, Tulsiani Chambers, 7th Floor,

Nariman Point, Mumbai 400 021

LEGAL ADVISORS

As to U.S. federal laws

Jones Day

29th Floor, Edinburgh Tower The Landmark

15 Queen's Road Central Hong Kong

As to Indian law

Amarchand & Mangaldas & Suresh A. Shroff & Co.

Peninsula Chambers, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel (West),

Mumbai 400 013, India

Amarchand Towers, 216, Okhla Industrial Estate, Phase III,

New Delhi 110 020

AUDITORS

M/s. Price Waterhouse Chartered Accountants

Plot No, Y –14, Block – EP, Sector V Salt Lake Electronic Complex, Bidhan Nagar

Kolkata 700 091, India

Documents

SIMPLEX INFRASTRUCTURES LIMITED - CSE-India Infrastructures Limite… · name Simplex Concrete Piles (India) Limited. The name of the Company was changed to Simplex Concrete Piles