GANGOTRI IRON & STEEL COMPANY LIMITED Iron & Steel Company Limited 3 SECTION – I. DEFINITION AND...

LETTER OF OFFERFor the Equity Shareholders of the Company Only

ISSUE PROGRAMME

ISSUE OPENS ON LAST DATE FOR RECEIPT OF REQUESTSFOR SPLIT APPLICATION FORMS

ISSUE CLOSES ON

MARCH 30, 2009 APRIL 13, 2009 APRIL 28, 2009

GANGOTRI IRON & STEEL COMPANY LIMITED(Reg No. – 03-05129, CIN No. L27101BR1992PLC005129)

(Originally incorporated as Esskayjay Ispat Limited on 7th December, 1992The Company’s name was changed to Gangotri Iron & Steel Company Limited on 24th May 2000.)

Registered Office: 307, Ashiana Towers, Exhibition Road, Patna-800001, BiharTel No: 0612-6510777/888, Fax No: 0612-2323959, E-Mail: [email protected], Website: www.giscotmt.com

Manufacturing Plant: Present: Naya Tola, Khagaul Road, Phulwari Shariff, Patna-801505, BiharProposed: Vill: Mahadevpur, Near Reliance Petrol Pump, Phulari, Bihta, Patna – 801103, Bihar

Contact Person: Ms. Priti Somani, Compliance Officer & Company Secretary

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF THE COMPANY ONLY

GENERAL RISKS

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in thisissue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefullybefore taking an investment decision in this Issue. For taking an investment decision, investors must rely on their ownexamination of the Issuer and the Issue including the risks involved. The securities have not been recommended orapproved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or the adequacy ofthis document. Investors are advised to refer to “Risk Factors” on Page No. 6 of this Letter of Offer before making aninvestment in this Issue.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains allinformation with regard to the Issuer and the Issue, which is material in the context of the Issue, that the informationcontained in this Letter of Offer is true and correct in all material respects and is not misleading in any material respect, thatthe opinions and intentions, expressed herein are honestly held and that there are no other facts, the omission of whichmake this Letter of Offer as a whole or any of such information or the expression of any such opinions or intentionsmisleading in any material respect.

LISTING

The existing equity shares of the Company are listed at Bombay Stock Exchange Limited (BSE) and Magadh StockExchange (MgSE). Magadh Stock Exchange is derecognized by SEBI. The Company has de-listed its equity shares fromCalcutta Stock Exchange. The equity shares offered through rights issue are proposed to be listed on BSE. BSE is theDesignated Stock Exchange. The Company has received in-principle approvals from BSE for the listing of the EquityShares to be allotted pursuant to the Issue, vide letter number DCS/PREF/JA/IPRT/ 423/08-09 dated 14.05.2008.

LETTER OF OFFER

ISSUE OF 61,53,680 EQUITY SHARES OF RS. 10/- EACH FOR CASH AT A PRICE OF RS 20/- EACH INCLUDING APREMIUM OF RS. 10/- PER EQUITY SHARE AGGREGATING TO AN AMOUNT NOT EXCEEDING RS. 1230.74 LACS TOTHE EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF 4 EQUITY SHARES FOR EVERY 5 EQUITYSHARES HELD ON RECORD DATE i.e. 20.03.2009. THE ISSUE PRICE FOR THE EQUITY SHARES WILL BE PAYABLEIN TWO INSTALMENTS: 50% ON APPLICATION AND 50% ON CALL WITHIN 12 MONTHS. THE ISSUE PRICE IS 2.0TIMES OF THE FACE VALUE OF THE EQUITY SHARE.

C M Y K

C M Y K

LEAD MANAGER TO THE ISSUE

Sumedha Fiscal Services Limited8B, Middleton Street,Geetanjali, Room No.6AKolkata-700071Ph: (033) 2229 8936/6758/3237Fax: (033) 2226 4140/ 2265 5830SEBI Regn. No. INM000008753Web Site : www.sumedhafiscal.comE-mail:- [email protected] Person:- Mr. D.K Sett

S.K.Computers34/1A, Sudhir Chatterjee Street,Kolkata-700006Ph: (033) 2219 6797Fax: (033) 2219 4815SEBI Regn. No. INR000003886E-mail: [email protected] Person: Mr.Dilip Bhattacharya

REGISTRAR TO THE ISSUE

Private and Confidential

Gangotri Iron & Steel Company Limited

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TABLE OF CONTENTS

TITLE PAGE NO.

SECTION – I. DEFINITIONS AND ABBREVIATIONS 3 1. CONVENTIONAL / GENERAL TERMS 3 2. ISSUE RELATED TERMS / ABBREVIATIONS 4 3. COMPANY / INDUSTRY RELATED TERMS 5 SECTION - II. RISK FACTORS 6 1. FORWARD LOOKING STATEMENTS & MARKET DATA 6 2. RISK FACTORS 6 (A) INTERNAL RISK FACTORS 7 (B) EXTERNAL RISK FACTORS 16 SECTION - III. INTRODUCTION 20 1. SUMMARY 20 2. OFFERING DETAILS 23 3. SUMMARY OF FINANCIAL, OPERATING AND OTHER DATA 24 4. GENERAL INFORMATION 26 5. CAPITAL STRUCTURE 33 6. OBJECTS OF THE ISSUE 45 7. BASIC TERMS OF THE ISSUE 80 8. BASIS FOR ISSUE PRICE 81 9. TAX BENEFITS 84 SECTION - IV. ABOUT THE ISSUER COMPANY 91 1. INDUSTRY OVERVIEW 91 2. BUSINESS OVERVIEW 95 3. KEY INDUSTRY REGULATIONS 111 4. HISTORY AND CORPORATE STRUCTURE OF THE COMPANY 114 5. MANAGEMENT 117 6. PROMOTERS 125 7. CURRENCY OF PRESENTATION 127 8. DIVIDEND POLICY 128 SECTION - V. FINANCIAL STATEMENTS 129 1. FINANCIAL INFORMATION OF THE ISSUER COMPANY 129 2. FINANCIAL INFORMATION OF THE GROUP COMPANIES 147 3. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 155 SECTION - VI. LEGAL AND OTHER INFORMATION 159 1. OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS 159 2. GOVERNMENT APPROVALS / LICENSING ARRANGEMENTS 166 SECTION - VII. OTHER REGULATORY AND STATUTORY DISCLOSURES 167 SECTION - VIII. ISSUE INFORMATION 174 1. TERMS OF THE ISSUE 174 SECTION - IX. MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 196 SECTION - X. OTHER INFORMATION 211 1. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 211 2. DECLARATION 213


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SECTION – I. DEFINITION AND ABBREVIATIONS

1. CONVENTIONAL / GENERAL TERMS

Terms Description

AGM Annual General Meeting

Articles Articles of Association of the CompanyAS Accounting Standard Auditor Refers to M/s. ARSK & Associates, unless otherwise specified. BSE Bombay Stock Exchange Limited Board or Board of Directors

Board of Directors of Gangotri Iron & Steel Company Limited, which term shall include a committee of the Board of Directors.

Capital or Share Capital

Share Capital of the Company

CDSL Central Depository Services (India) Limited CESTAT Custom, Excise and Service Tax Appellate Tribunal CSE The Calcutta Stock Exchange Association LimitedCompanies Act The Companies Act, 1956, as amended from time to time DP Depository Participant Depository A depository registered with SEBI under the SEBI (Depositories and Participants)

Regulations, 1996, as amended from time to time. DGCEI Directoret General of Central Excise Intelligence DGS&D Directorate General of Supplies & Disposals. Equity Share(s) or Share(s)

Means the Equity Share of the Company having a face value of Rs. 10/- unless otherwise specified in the context thereof

Equity Shareholder

Means a holder of Equity Shares of the Company

FEMA Foreign Exchange Management Act, 1999FI Financial InstitutionsFII(s) Foreign Institutional Investors registered with SEBI under applicable laws

FY / Fiscal Financial Year ending March 31 HUF Hindu Undivided Family Issuer Company / GISCO

Gangotri Iron & Steel Company Limited, a company incorporated under the Companies Act, 1956.

IT Act The Income Tax Act, 1961 and amendments thereto Memorandum Memorandum of Association of the CompanyMoU Memorandum of Understanding MGSE The Magadh Stock Exchange Association NR Non Resident NRI(s) Non Resident Indian(s)NSDL National Securities Depository LimitedRBI The Reserve Bank of IndiaROC Registrar of Companies, Bihar at Patna, located at Maurya Lok Complex, Block

‘A’ Western Wing, 4th Floor, Dak Banglow Road, Patna-800001, Bihar, India.SBI State Bank of India SCSB Self Certified Syndicate Bank SEBI Securities and Exchange Board of India SEBI Act, 1992 Securities and Exchange Board of India Act, 1992 and amendments thereto SEBI (DIP) Guidelines

The SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI on January 19, 2000 read with amendments issued subsequent to that date

SICA Sick Industrial Companies (Special Provisions) Act, 1995.SIPB State Investment Promotion Board


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2. ISSUE RELATED TERMS / ABBREVIATIONS.

Allotment Issue or transfer, as the context requires, of Equity Shares pursuant to the Offer to the successful applicants as the context requires Companies Act, 1956 and subsequent amendments thereof.

Allottee The successful applicant to whom the Equity Shares are being/have been issued or transferred

Applicant Any prospective investor who makes an application for Equity Shares in terms of this Letter of Offer

Application Supported by Blocked Amount / ASBA

The application (whether physical or electronic) used by Investors to make a Bid authorizing the SCSB to Block the Bid Amount in their specific bank account.

Bankers to the Issue HDFC Bank Limited, Central Plaza Branch, 2/6 Sarat Bose Road, Kolkata –700 020

CAF Composite Application Form Co-Lead Manager VC Corporate Advisors Private Limited Designated Stock Exchange

The designated stock exchange for the Issue shall be BSE.

Directors Directors of Gangotri Iron & Steel Company Limited from time to time, unless otherwise specified

Draft Letter of Offer Draft letter of offer dated 30.01.2009 filed with SEBI for its comments First Applicant The Applicant whose name appears first in the Application Form. Indian GAAP Generally Accepted Accounting Principles in India

Investor(s) Shall mean the holder(s) of Equity Shares of the Company as on the Record Date, i.e. 20.03.2009 and Renouncees

Lead Manager/LM Being the Lead Manager appointed for the Issue. In this case being Sumedha Fiscal Services Limited

Letter of Offer / LOF Letter of Offer dated 05.03.2009 as filed with the Stock Exchanges after incorporating SEBI comments on the Draft Letter of Offer

Managing Director Mr. Sanjiv Kumar Choudhary OCBs A company, partnership, society or other corporate body owned directly or

indirectly to the extent of at least 60% by NRIs, including overseas trusts in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000

Offer The Issue of Equity Shares pursuant to the Letter of Offer Promoters Unless the context otherwise requires, refers to Mr Ramautar Jhunjhunwala

, Mr Sanjiv Kumar Choudhary & Mr Aditya Dalmiya. Promoter Group Ramautar Jhunjhunwala HUF, Sanjiv Kumar Choudhary HUF, Vandana

Sanganeria, Manju Choudhary, Ankit Choudhary, Umesh Kumar Sanganeria, Adity Choudhary, Sunita Dalmia, Mayank Sanganeria, Shakuntala Jhunjhunwala, Tara Ispat Ltd and VIP Finstock Pvt Ltd.

Record Date 20.03.2009 Registrar or registrar to the Issue

S.K.Computers, having its office at 34/1A, Sudhir Chatterjee Street, Kolkata-700006.

Registered Office of the Company

Registered Office of the Company situated at 307, Ashiana Towers, Exhibition Road, Patna-800001, Bihar

Right Issue/ Present Issue

The issue of 61,53,680 Equity Shares of Rs.10/- each at the Issue Price of Rs. 20/- (including a premium of Rs. 10/- per share) by the Company pursuant to this Letter of Offer.

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

Rights Entitlement The number of Equity Shares that a shareholder is entitled to in proportion to his/her shareholding in the Company as on the Record Date

RTGS Real Time Gross Settlement SAF Split Application Form Stock Exchange(s) Shall refer to the BSE where the Shares of the Company are presently listed


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3. COMPANY / INDUSTRY RELATED TERMS

Term Description BIS Bureau of Indian Standards CAGR Compounded Annual Growth RateCI Cast Iron DC Drive Direct Current DriveEAF Electric Arc Furnace HR Hot Rolled IDC Interest During Construction ISI Indian Standard Institution ISP Integrated Steel Plant Kgs. Kilograms KVA Kilo Volt Ampere LT Cable Low Tension Cable MP Man Power MSP Mini Steel Plant MT Metric TonnesMTPA Metric Tonnes per Annum MW Mega WattNMDC National Minerals Development Corporation QST Quenching and Self Tempering PLC Programmed Logic Control PPA Power Purchase Agreement PT Per Tonne SAIL Steel Authority of India Limited TPA Tonnes Per Annum TPD Tonnes Per Day


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SECTION - II. RISK FACTORS

1. FORWARD LOOKING STATEMENTS & MARKET DATA

Statements included in this Letter of Offer which contain words or phrases such as “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with the Company’s expectations with respect to, but not limited to:

• The Company’s ability to successfully implement its strategies, its growth and expansions, technological changes, its exposure to market risks, etc.;

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

• Investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in Domestic and Foreign Laws, Regulations and Taxes and changes in competition in the industry.

• The size, timing and profitability of significant projects. For further discussion of factors that could cause the Company’s actual results to differ, see the section titled “Risk Factors” beginning on Page No. 6 of this Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. In accordance with SEBI requirements, the Company will ensure that investors are informed of material developments, until such time as the grant of listing and trading permission by the Stock Exchanges for the Equity Shares being issued.

Use of Market Data

Unless stated otherwise, macroeconomic and industry data used throughout this Letter of Offer has been obtained from publications prepared by Government sources, industry sources and data generally available in the public domain. Such publications generally state that the information contained therein has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although Company believe that industry data used in this Letter of Offer is reliable, it has not been independently verified.

2. RISK FACTORS

The investors should consider the following risk factors together with all other information included in this Letter of Offer carefully, in evaluating the Company and its business before making any investment decision. Any projections, forecasts and estimates contained herein are forward looking statements that involve risks and uncertainties. Such statements use forward looking terminology like “may” believes”, “will”, “expect”, “anticipate”, “estimate”, “plan” or other similar words. The Company’s actual results could differ from those anticipated in these forward- looking statements as a result of certain factors including those, which are set forth in the “Risk Factors” below.

Materiality:

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

a) Some events may not be material individually, but may be found material collectively. b) Some events may have material impact qualitatively instead of quantitatively. c) Some events may not be material at present but may be having material impacts in future.

Note: Unless specified or quantified in the relevant risk factors below, Company is not in a position to quantify the financial or other implication of any risks mentioned herein under:


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(A) INTERNAL RISK FACTORS

RISKS INTERNAL TO THE BUSINESS AND OPERATIONS OF THE COMPANY

i. Search and Seizure by the Excise Department

DGCEI has conducted search in the factory and office premises of the company on dated 09.10.2007 and seized various documents in respect of contravention of Central Excise Act, 1944 and Rules made there under and in respect of evasion of Central Excise Duty on removal of excisable products by M/s Gangotri Iron & Steel Co. Ltd. and M/s Gangotri Electrocastings Ltd. Mr. Sanjiv Kumar Choudhary, MD appeared before DGCEI, Jamshedpur on 15.01.2008 on the receipt of summon under Section 14 of the Central Excise Act, 1944 but till date no charge or demand has been levied by the DGCEI. If any charge or demand is made by DGCEI, it may have adverse financial impact on the Company.

ii. As stated in our latest certified financial statements for the period ended 30.09.2008, Company is subject to certain contingent liabilities

a) No provision for Rs. 1161905/- (Previous Year Rs. 1161905/-) has been made in the accounts towards DPS charges on annual minimum charges for electricity for the years 1995-96, 1996-97 & 1997-98 against which no amount has been paid. The matter is pending before Bihar State Electricity Board for final settlement.

b) No provision has been made for disputed Excise Duty Matters u/s 3A of Central Excise Act, 1944 pending with High Court, Patna related to year 1998-99 and 1999-2000 for which outstanding demand is Rs. 1443471/-. However, there is a discrepancy as per the Commissioner’s Order according to which the liability works out to Rs. 3740926/- which the company is in the process of getting rectified.

iii. Company, promoter(s), directors and group companies are involved in certain litigations, a summary of which is given hereunder:

Sr. No.

Particulars of litigations No. of

Cases Amount

(Rs. in Lacs)

A Company (i) Litigation filed against issuer company 7 19.12 (ii) Litigation filed by issuer company Nil Nil B. Group Companies

(i) Litigation filed against group companies 8

733.61 plus Interest & Penalty

(ii) Litigation filed by Group Companies 1 Nil C. Promoter(s) / Directors

(i) Litigation filed against promoters / Directors 3 160.00

(ii) Litigation filed by promoters / Directors 1 Nil

For further details, please refer to page no. 159 to 165 of the Letter of Offer.

iv. Search & Seizure by the Income Tax Department.

The Income Tax Department has conducted Search & Survey in the factory, office premises of the Company and the residential premises of Directors and Employees of the Company on 11.06.2008 and seized various documents and CPU/Laptops. All the cases are being transferred / centralized to ACIT, Central Circle – 1, Patna but till date no charge or demand has been raised / levied by the Income Tax Department.


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v. Any delay in Rights Issue will impact the implementation of the Project

The Cost of project is funded partly from the Rights Issue. Any delay /failure of the Rights Issue will impact the implementation of the project. The promoters will bring in additional funds or will raise unsecured loans to fund the interim requirement in case there is any delay in the Rights Issue.

vi. The deployment of funds to be raised through this Issue is completely at the company’s discretion and will not be monitored by any independent agency

Company is professionally managed with persons having sufficient experience in the business and has estimated the funds requirement based upon plans to be implemented by the company but the chances of variation in the implementation of the project may occur.

vii. Manpower Availability

In order to operate and maintain the plant facilities, including the technical and general administration needs, the estimated manpower requirement for the completion of the proposed projects has been estimated to approximately 656 numbers for 3 shift work. Out of this 86 persons will be on Company Payroll and balance will be arranged through contractors. If there is any disagreement between the contractor and the company or shortage of labour, the production of the company will be effected. The manpower has been estimated based on the following considerations.

• Production units and their capacities • Type of equipments proposed for the main production shops and corresponding auxiliary facilities • Degree of automation and mechanization envisaged in different units. • Extent of manning required for the various equipments. • Number of operating shifts • Supporting personnel for off and leave reserves

viii. Mishaps or accidents at the company’s facilities could lead to property damage, production loss and accident claims.

Any mishap or accident in the company’s facilities could result in claims against the company for damages by the employees. Company could suffer loss of production; receive adverse publicity and experience diversion of management attention and resources in defending such claims. Any such significant event could have an adverse effect on the company’s business, financial condition and results of operations.

ix. Equipment failure, production curtailment and shutdown may affect performance.

Interruptions in production will inevitably increase production costs and reduce the Group's sales and earnings. In addition to equipment failures, the Company's facilities are also subject to risk of catastrophic loss due to unanticipated events including fires, explosions or adverse weather conditions. Company’s manufacturing processes depend on critical steel making equipment, including furnaces and continuous casters, as well as electrical equipments, including transformers, and these equipments may, on occasion, be out of service as a result of unanticipated failures. Company has taken utmost care while short-listing the equipments for all the major plants and have ensured that they follow the state of art and contemporary technologies. Company may experience material plant shutdowns or periods of reduced production as a result of any equipment failures. Furthermore, any interruption in its production capability may require the company to make capital expenditures, which may have a negative effect on the profitability and cash flows.

Company’s manufacturing facilities are subject to operating risks, such as the breakdown or failure of equipment, power supply or processes, performance below expected levels of efficiency, obsolescence, labour disputes, natural disasters, industrial accidents and the need to comply with the directives of relevant governmental authorities. Although the Company take precautions to minimize the risk of any significant operational interruptions at the company’s facilities, and there have been no such interruptions


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in the past, there can be no assurance that there will be no such interruptions in the future or that any such interruptions that might occur will not have a material adverse effect on the financial condition and results of operations

The Company has already filed an application in SIPB, Bihar / with Bihar State Electricity Board, Bihar for connected load of 18000 KVA for Induction Furnace and 1500 KVA for Rolling Mill. Bihar State Electricity Board (BSEB) consented to provide the required power for the proposed facility. Order for transformer has already been placed. The power supply, if uninterrupted, ensures the higher efficiency of the production facility.

x. Company’s business may be adversely affected by environmental and safety regulations to which it is subject.

Company is required to comply with Central, State and local laws and regulations governing the protection of the environment and occupational health and safety, including laws regulating the generation, storage, handling, use and transportation of hazardous materials; the emission and discharge of hazardous materials into soil, air or water; and the health and safety of the employees. The Company is also required to obtain and comply with environmental permits for some of the company’s operations. There can be no assurance that Company will at all times be in complete compliance with such laws, regulations and permits. If the Company violates or fails to comply with any of the requirements under any such laws, regulations and permits, it could be fined or face other regulatory actions. In addition, such requirements may become more stringent over time and compliance with such requirements may become more costly.

The Company propose to set up the project while conforming to all pollution control and safety norms as stipulated by State Pollution Control Board. It is installing pollution control equipments (Worth Rs.25.00 Lacs) at major pollution emitting areas. Further there has not been any major accident occurred in the existing plant of the promoter which suggests their concern of safety and necessary precautionary measures being used.

xi. Company require certain approvals or licenses in the ordinary course of business and the failure to obtain or retain them in a timely manner, or at all, may adversely effect the company’s operations

Company require certain approvals, licenses, registrations and permissions for operating the company’s business, some of which may have expired and for which the Company may have either made or are in the process of making an application for obtaining the approval or its renewal. If Company fail to obtain or retain any of these approvals or licenses, or renewals thereof, in a timely manner, or at all, the company’s business may be adversely affected. For further details please refer page 166 of this Letter of Offer.

xii. A significant portion of the project cost will be financed through debt and therefore Company would have debt servicing obligations that could affect the company’s ability to declare dividends.

Company intends to finance approximately 59% of the company’s total Project Cost through debt. This debt imposes a debt-servicing obligation on the Company, which the Company would have to meet from the company’s future cash flows. The cash flows may not be sufficient to fully meet the debt servicing obligations, and the distributable profit, if any, for declaration of dividends may be consequentially affected.

Company expect that the future cash flow will be sufficient to meet the debt-servicing obligation due to increase in proposed capacity as well as capacity utilization.

xiii. Promise Vs. Performance

The Company had come out with their maiden issue on 22nd May, 1995. The Company had made certain projections on the operating and financial performances in relation to last rights issue based on then prevailing situation. However, due to various reasons, the projections could not be achieved.


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Promise v/s Performance

(Rs. In Lacs)

Particulars 1994-95 1995-96 1996-97 1997-98

Promise Actual Variance




Capacity Utilisation (%)

44 33.20 (25) 55 36.37 (34) 70 42.70 (39) 80 41.22 (48)

Production (MT)

6000 4481.88 -25.3 11880 4909.58 -58.7 15120 5765.14 -61.9 17280 5565.34 -67.8

Gross Sales 743.04 545.13 -26.6 1436.99 612.36 -57.4 1873.34 771.89 -58.8 2146.74 831.12 -61.3PBIDT 90.04 62.10 -31.0 218.55 56.47 -74.2 317.58 43.57 -86.3 365.61 41.57 -88.6Depreciation 22.77 20.93 8.0 57.34 11.29 80.3 12.54 12.06 3.8 12.54 8.92 28.9Interest 24.81 23.67 4.8 22.17 23.50 -6.0 19.92 20.98 -5.3 17.67 19.99 -13.1PBT 38.94 17.50 -55.0 135.52 21.68 -84.0 281.60 10.53 -96.3 331.88 12.66 -96.2Provision for Tax

- - - 29.00 - 100 87.71 0.65 99.3 105.44 1.25 -98.8

PAT 38.94 17.50 -55.0 106.52 21.68 -79.6 193.88 9.90 -94.9 226.44 11.41 -95.0Dividend (%) - - - 15% - - 20% - - 20% - -Dividend - - - 64.75 - 100 86.33 - 100 86.33 - -100Equity Capital 127.14 139.36 9.6 431.65 324.35 24.8 431.65 329.52 23.7 431.65 329.52 -23.7Reserve & Surplus

25.74 12.22 -52.5 67.51 33.78 -49.9 175.07 38.14 -78.2 315.18 48.82 -84.5

Net Worth 152.88 151.59 -0.8 499.16 358.13 -28.2 606.72 367.66 -39.4 746.83 378.34 -49.3 Book Value (Rs.) 12.02 11.92 -0.8 11.56 8.30 -28.2 14.06 8.52 -39.4 17.30 8.76 -49.4

EPS (Rs.) 3.06 1.29 -57.8 2.47 0.50 -79.7 4.49 0.23 -94.9 5.25 0.26 95.0

Note: Refer Page No. 171 of the Letter of Offer for details.

xiv. Cost Overrun

Due to delay in right issue proceeds, there was the delay in implementation of project and thereby resulting into cost overrun. State Bank of India has revised the term loan to Rs. 31.94 Crores over the previous term loan limit of Rs. 27.44 Crores on the basis of self appraisal done by the Company. The revised project cost as estimated by the Company amounts to Rs. 57.28 Crores. The company has already incurred a sum of Rs 51.18 crores till 31st January 2009 towards the implementation of the project which consists Rs. 7.75 Crores of unsecured loan. The company has already provided contingency of 0.35% in the project cost to consider any cost overrun. Over and above, the internal accruals of the company are sufficient to take care of any such eventualities. Further the promoters have provided an undertaking that in case of any cost overrun, the same will be financed by either the fresh promoters contribution and/ or internal accruals of the Company.

The cost of the project as per appraisal report was estimated by SBI Capital Market Limited at Rs. 48.32 crores which was subsequently reduced by State Bank of India to Rs. 44.71 crores due to the substitution of Bank Gaurantee of Rs. 0.90 crores in place of Security Deposit of Rs. 4.50 crores with Bihar State Electricity Board as originally envisaged and accordingly renewed the term loan component from Rs. 31.06 crores to Rs. 27.44 crores and is proposed to be financed by (i) Proceeds from conversion/forfeiture of warrants into equity shares issued to Promoters/Promoter Group and Non-Promoters. (ii) proceeds of the Rights Issue and (iii) Term Loan from SBI. Due to delay in the Rights Issue proceeds, the Company could not complete the project in time resulting in cost overrun and revised cost of the project estimated by the Company on self appraisal basis amounted to Rs. 57.28 crores. The Company approached the appraising bank to revise the sanction limit based on the self appraisal done. The appraising bank (State Bank of India) accordingly sanctioned the term loan of Rs. 31.94 crores in place of original sanction of Rs. 27.44 crores.

The BSEB subsequently has refused to accept the Bank Guarantee previously agreed. Hence the Company has proposed Rs. 1.02 crores against security deposit taking into account Rs. 0.68 crore for rolling mill and Rs. 0.32 crore as first installment for Induction Furnace and Rs. 0.02 crore for other security. The remaining security deposit will be paid by the Company through internal accrual from 2008-09 which are sufficient to meet this liability without disturbing the DSCR. Even in case the internal accrual is not sufficient to meet this liability, the promoter will bring own fund to meet the liability.

Initially the project cost was estimated to Rs. 44.71 crores on the basis of appraisal done by SBI Capital Markets Ltd. State Bank of India has sanctioned the term loan of Rs. 27.44 crores. Due to delay in


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implementation of the project, the cost of the project has been increased. The revised project cost estimated by the Company on self appraisal basis amounted to Rs. 57.28 crores.

xv. Time Overrun

The Company has selected reputed suppliers for supplying equipments. The Company has engaged four different consultant for its proposed project who will supply technical know how along with plant & machinery, namely:

Name AreaMegatherm Electronics Pvt. Ltd. Induction FurnaceConcast India Ltd. ConcastA.R. Engineering Works Rolling MillH & K Rolling Mill Engineers Pvt. Ltd. Quenching System

All the above-referred consultants have expertise in their respective fields and the management is very assured of timely implementation of the project.

The company wherever possible has incorporated suitable Liquidated Damages (LDs) in the agreement with the contractor/equipment supplier for timely completion of the project.

xvi. Company have reported negative cashflows from Operations, Investment activities and

Financing activities for the year 2003-04, 2004-05, 2005-06, 2006-07 and 2007-08 and for the period ended 30.09.2008.

Company has reported negative cashflows from operating activities for the year 2003-04, 2005-06 and 2007-08, from investment activities for the year 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 and for the period ended 30.09.2008, and from financing activities for the year 2004-05 and 2006-07.

The Company has recorded negative cash flow from operating activities for the year 2004, 2006 & 2008 mainly due to increase in Trade & Other Receivables. The Company has recorded negative cash outflows from investing activities for the year 2004, 2005, 2006, 2007, 2008 and for the period ended 30.09.2008 due to addition of fixed assets for ongoing modernization and expansion plan. The same outflows are being met through raising funds through secured loans from banks. The Company has recorded negative cash outflows from financing activities for the year 2005 and 2007 due to repayment of loans & interest to the banks.

xvii. If Company unable to adapt to technological changes, the company’s business could suffer.

Company has adopted the latest technology for implementation of the integrated steel plant. The company’s future success will depend in part on the company’s ability to respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. The development and implementation of such technology entails technical and business risks. Company cannot assure you that the company will successfully implement new technologies effectively or adapt the systems to emerging industry standards. If Company unable, for technical, legal, financial or other reasons, to adapt in a timely manner to changing market conditions, customer requirements or technological changes, the company’s business, financial performance and the trading price of the company’s Equity Shares could be adversely affected.

The technology that the company intends to adopt for this plant is a proven technology. The company has identified various suppliers of machineries who have proven track record and technology. They shall also assist the companies personnel in technical training for operation of plant and machinery. The company has placed orders for most of the machineries required for the project & has already received delivery of majority of it & expected to receive delivery of balance shortly.


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xviii. The company’s operations rely on timely supply of raw materials and inputs to the company’s plant and transportation of finished products to customers, which are subject to risks and uncertainties.

The Company, depend upon various forms of transport, such as, rail and road to receive raw materials and for delivering the finished products to the company’s customers. These transportation facilities may not adequately support the operations due to traffic congestion and unavailability of respective fleet. Further, disruptions of transportation services because of weather –related problems, strikes, lock-outs, inadequacies in the road infrastructure and port facilities, or other events could impair the company’s ability to source raw materials and components and the company’s ability to supply the products to customers. Company can provide no assurance that such disruptions will not occur in future. In addition, significant increases in transportation cost may adversely impact the financial results. Company have not entered into any agreement with any transport agency on long term basis.

xix. Company has not placed orders for Plant & Machinery aggregating Rs 27.00 lacs.

Company has not placed order for Plant & Machinery to be purchased aggregating to Rs 27.00 Lacs, which is 1.07% of the total cost of Plant & Machinery required for the Project. Without this the operation is not getting disturbed and is readily available in the market. Company shall be placing the order at appropriate time.

xx. Dependence on Key Management Team.

The company’s operations rely heavily on key employees. In case of shortage of key employees or high attrition of employees, its operations could be adversely affected. Successful performance of the business operations depends on its trained key managerial personnel and any sudden disruption in the services of these personnel may have an adverse impact temporarily affecting the smooth operation of the business.

Company provides good remuneration package and a healthy work environment with lots of operational freedom to its employees. The company has been able to retain its key management team in the past, and expects that it would be able to retain them in future.

xxi. The company’s insurance cover may not be adequate to protect it against all potential losses to which Company may be subject.

Company have taken adequate insurance coverage to insure against all perceived risks. Even then, the insurance cover may not be adequate to protect against all potential losses.

xxii. Compliance with, and changes in, safety, health and environmental laws and regulations may adversely affect the company’s business, financial condition and results of operations.

Depending upon the nature of the projects undertaken by the Company, environmental laws and regulations such as Environment Protection Act, 1986; Water (Prevention and Control of Pollution) Act, 1974; Air (Prevention and Control of Pollution) Act, 1981; etc. may apply. If new safety, health and environmental regulations are introduced then there could be an effect on the company’s operations, which cannot be predicted. The failure to meet requirements could expose the company to administrative, civil and criminal proceedings by governmental authorities, as well as civil proceedings by environmental groups and other individuals, which could result in substantial fines and penalties against the company as well as orders that could limit or halt the operations.

xxiii. Future issuances or sales of the Equity Shares could significantly affect the trading price of the Equity Shares.

The future issuance of Equity Shares by the Company or the disposal of Equity Shares by any of the Company’s major shareholders or the perception that such issuance or sale if occur may significantly affect the trading price of the Equity Shares.


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xxiv. The Company has entered into transactions with related parties.

The Company has entered into various transactions with related parties, including with associate ventures. For detailed information on related party transactions, refer section “Related Party Transactions” beginning on Page No. 136 of this Letter of Offer.

xxv. The Company is subject to restrictive covenants in certain short-term and long term debt facilities provided to the company by the lenders

Company has taken long term and short term loans from FIs/Banks. As per the signed loan agreements with them, there are certain standard restrictions imposed on the company regarding entering into any scheme of merger, amalgamation, compromise or reconstruction, changing the ownership, control or management of the Company, amendment to the Memorandum or Articles of Association of the Company, effecting change in capital structure, incurring any capital expenditure in excess of the depreciation provided in previous financial year, declaration or payment of dividend out of reserves, undertaking any new project or expansion or make any investment or take assets on lease, not to create any additional encumbrances on the assets of the Company, not escrow future cash flows of the Company or create any charge or lien or interest of whatsoever nature thereon, making investments in or lending /advancing funds to or placing deposits with any other company, entering into secured or unsecured borrowing arrangements with banks, FIs, companies or other persons, undertaking guarantee obligations on behalf of any other companies or persons, sell, assign, mortgage, or otherwise dispose off any of the fixed assets, undertaking unrelated trading activities, invest by way of share capital in or lend or advance or place deposits with any other concern except normal trade credit or security deposits, undertake guarantee obligations on behalf of the firm, undertake guarantee obligations on behalf of any other company and other such matters. Company is required to obtain their prior approval before initiating such changes. Though these covenants restrict the operations of the Company, to a certain extent they also ensure financial discipline and help the Company in the long run in improving its financial performance. However, the Company has obtained the requisite approvals from the lending agencies for coming out with the proposed Rights Issue in terms of this offer document.

xxvi. Company will be required to cease using trademarks and/or technology in relation to the goods, in case of non-renewal or termination of the technology and/or trademark agreements.

Subject to the specific terms and conditions of the technology and/or trademark agreements entered into by us, upon termination or expiry and non-renewal of such agreements, Company shall be required to cease using of such technology and/or trademarks, in relation to the products.

The trademark is duly registered at present and the said registration is valid for a period of 10 years beginning 4th November 2003. Further the Thermex technology presently used by the Company is valid for a period of 5 years starting from the year 2005. For further details please refer to the section ‘Government and Other Statutory Approvals’ on Page No. 166 of this Letter of Offer.

xxvii. Force Majeure

Any mishap or accident in the factory could result eventually in damages, which may result into loss to the Company. Company could suffer loss of production; receive adverse publicity and experience diversion of management attention and resources in defending such damages. Any such significant event could have an adverse effect on the business, financial condition and results of operations. The Companies plant was closed for a fortnight in the month of October 2007 due to heavy rain and flood like situation in Bihar. As a result, the offtake of the Finished Goods was severally affected.

The Company has its policy to have comprehensive insurance against any such risks like damaged/loss from fire, flood, earthquake, riots, and malicious damage. Loss of production, etc. in respect of its fixed assets and inventory with Re Instatement of Value (RIV) clause in its insurance policy. The Company has taken adequate insurance cover in respect of its fixed assets and current assets.


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xxviii. Dependence on rights issue proceeds

The Company is dependent on the full subscriptions of the rights issue. Under-subscriptions to the issue may have an adverse impact on the implementation of the Company’s investment plan.

In the event of under-subscription of the issue promoters/promoter group intend to subscribe to the issue beyond their entitlements. In such a case the acquisition of additional shares by promoters/promoter group shall be exempt from making an open offer in terms of regulations 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulation 1997. The acquisition will not result in a change in the control of the management of the Company.

xxix. Any inability to manage the growth could disrupt the business and reduce the company’s profitability.

The Company expects business to grow significantly as a result of the planned capacity expansion. Company expect this growth to place significant demands and require the company to continuously evolve and improve the company’s operational, financial and internal controls across the organization. In particular, continued expansion increases the challenges in:

• maintaining high levels of customer satisfaction;• recruiting, training and retaining adequate skilled management, technical and marketing personnel; • adhering to quality and process execution standards that meet customer expectations; • preserving a uniform culture, values and work environment in operations; • developing and improving Company’s internal administrative infrastructure, particularly the financial, operational, communications and other internal systems.

xxx. Any disruption in supply of power at the company’s plants may have an adverse effect on the production.

The power requirements of the Company are presently met by purchase of electricity from the State Boards of Bihar. Although, the Company has a standby arrangement to substantially meet the power requirements through, any disruption in supply of power at the company’s plants may have an adverse effect on the production.

xxxi. You will not receive the Equity Shares you purchase in this Issue until several weeks after you pay for them, which will subject you to market risk

For shareholders holding shares in demat mode, the Equity Shares purchased in this Rights Issue will not be credited to their demat accounts with depository participants and for shareholders holding in physical form, completion of dispatch of physical share certificates may not be completed until approximately fifteen (15) days from the Issue Closing Date. You can start trading in your Equity Shares only after receipt of listing and trading approvals in respect of these shares which will require additional time after the credit of Equity Shares into your demat account. Since the Company’s Equity Shares are already listed on BSE, you will be subject to market risk from the date you pay for the Equity Shares to the date they are listed.

xxxii. The Company’s ability to pay dividends will depend upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and other factors.

The amount of future dividend payments, if any, will depend upon the future earnings, financial condition, cash flows, working capital requirements, capital expenditure and other factors. There can be no assurance that the Company will have distributable funds after the commence of commercial operations of the project.


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xxxiii. If investors who are issued partly paid shares do not pay the amount payable on calls, the amount raised through the Issue will be lower than the proposed Issue size of Rs. 12.31 crores.

As per the terms of the Issue, the issue proceeds would be raised in two steps, first 50% of the Issue price including premium would be payable on application, next 50% of the Issue price including premium would be called within 12 months from the date of allotment. If the call remains unpaid, the amount raised through the Issue may be lower than the proposed Issue size of Rs. 12.31 crores and may require the company to take steps for forfeiture of the shares. Based on the cash flow position at that point in time, Company may have to raise alternate source of funds or finance the projects from the company’s internal accruals if substantial number of shareholders decide not to pay their calls. Company cannot assure you that their will be sufficient cash flows or will be able to obtain financing on favourable terms or at all. If adequate funding is not available, the ability to continue to grow the business could be adversely affected.

xxxiv. The appraising Bank (State Bank of India) has highlighted some weaknesses and threats in its appraisal note in respect of new Bihta project of the company as detailed below:

a. The Company has not entered into any firm arrangement for raw material supply and off take of finished goods which can have the impact on the profitability of the business.

b. The Company is yet to develop a proper management information system commensurate with its scale of operations, which for time being can effect on the operation of the Company.

c. The products - Billets, MS Bars and Wire Rods – being manufactured by the Company are susceptible to price volatility.

d. Big players in the Industry having found opportunity in this product have started rolling out new projects / augmenting the existing lines with huge capacity expansion.

e. There are numerous smaller players in the market and thereby quality consciousness and brand promotion is to be done on a continuous basis.

xxxv. There is a possibility of conflict of interest within Group Companies/Firms etc. The company makes purchase of significant quantity of its raw material requirement from one of its group companies named Gangotri Electrocastings Limited.

The Company procures a significant requirement of its raw material from M/s Gangotri Electrocastings Limited, a group company, manufacturing non-alloy ingot and the purchases from them are based on competitive market related prices. During the year 2007-08, the Company has purchased non-alloy ingot from M/s Gangotri Electrocastings Limited worth Rs. 3690 lacs (100%) out of its total purchase value of Rs. 3690 lacs.


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(B) EXTERNAL RISK FACTORS

1. Company is subject to adverse impact of economic and political conditions.

Global economic and political factors that are beyond the control, influence forecasts and directly affect performance. These factors include interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation, deflation, consumer credit availability, consumer debt levels, tax rates and policy, unemployment trends, terrorist threats and activities, worldwide military and domestic disturbances and conflicts, and other matters that influence consumer confidence, spending and tourism. Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude.

2. Increasing employee compensation in India may erode some of the company’s competitive advantage and may reduce the profit margins.

Employee compensation in India has historically been significantly lower than employee compensation in the United States and Western Europe for comparably skilled professionals, which has been one of the company’s competitive strengths. However, compensation increases in India may erode some of this competitive advantage and may negatively affect the company’s profit margins. Employee compensation in India is increasing at a faster rate than in the United States and Western Europe, which could result in increased costs relating to engineers, managers and other mid-level professionals.

Company may need to continue to increase the levels of the employee compensation to remain competitive and manage attrition. Compensation increases may have a material adverse effect on the company’s business, results of operation and financial condition.

3. Terrorist attacks and other acts of violence or war involving India, the United States, and other countries could adversely affect the financial markets, result in a loss of business confidence and adversely affect the company’s business, results of operations and financial condition.

Terrorist attacks and other acts of violence or war, including those involving India, the United States or other countries, may adversely affect Indian and worldwide financial markets. These acts may also result in a loss of business confidence and have other consequences that could adversely affect the business, results of operations and financial condition. Increased volatility in the financial markets can have an adverse impact on the economies of India and other countries, including economic recession.

4. Competition in the Industry

The Company may face competition from the existing established companies and future entrants into the Industry.

5. Change in the Technology for production of Steel Bars.

Initially steel bars were produced from cold twisted bars called CTD technology. Now the technology has changed to “Thermex” technology, which uses a water quenching process. Any such further changes/ advancements in technology would require deployment of additional capital, since Iron & Steel Industry is a capital-intensive industry. Any failure to keep abreast with technological advancements or the company’s inability to deploy enough capital for up gradation of technologies would affect marketability of the products and in turn impact financial performance of the Company.

6. Risk of Regulatory Uncertainty

Significant changes in the regulatory laws, Indian’s economic liberalization and deregulation policies, fiscal policies adopted by the Government of India may affect the performance of the company in the future. The Company’s operations could also be affected by various factors in the international business such as district economic and business environment, restriction on trade and legal agreements,


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multiple and possible overlapping of tax structures, change in tariff structures, exchange rate fluctuations, regulatory, socio economic, political changes, to name a few. These factors may have a material impact on the business of the company.

7. Effect of natural calamities:

Natural disasters could disrupt the operations and result in loss of revenues and increase costs. The plants are vulnerable to man-made and natural disasters such as, explosions, earthquakes, storms and floods. The occurrence of a man-made or natural disaster, or other accidents could disrupt the operations of the plant and result in loss of revenues and increased costs.

8. A slowdown in economic growth in India could cause the company’s business to suffer.

The Indian economy has shown sustained growth over the last few years with gross domestic products (“GDP”) showing sustained growth. However, any slowdown in the Indian economy could lead to a slowdown in the industries in which Company operate and adversely affect the company’s financial performance.

9. Failure to comply with environmental laws, rules and regulations may adversely affect the business or operations

Environmental laws and regulations in India are becoming stringent and it is possible that they will become significantly more stringent in the future. If, as a result of non-compliance with any environmental regulations, any of the units or the operations of such units are shut down, Company will continue to incur additional costs in complying with regulations, appealing any decision to close the company’s facilities, maintaining production at the existing facilities and continuing to pay labour and other costs which continue even if the facility is closed. As a result, the overall operating expenses will increase and the company’s profits will decrease.

10. Price volatility in Raw Material

The prices of basic raw materials i.e. Non alloy Ingot, Iron Scraps have shown an upward trend in the recent past. This increase in prices of the raw materials leads to increase in cost of production. In case the Company unable to increase the prices of the finished products the margins would be affected and impact the financial performance significantly.

11. Cyclical nature of the Industry

World over, Iron and Steel Industry, is cyclical in nature leading to imbalance in the demand supply situation. When the supply exceeds the demand, the prices of the finished products would be affected. This would adversely affect the company’s margins and impact the financial performance significantly.

12. The Issue price of the company’s Equity Shares may not be indicative of the market price of the Equity Shares after the Issue.

The Issue Price of the Equity Shares will be based on numerous factors (discussed in the section ‘Basis for Issue Price’ on Page No. 81 and may not be indicative of the market price of the company’s Equity Shares after the Issue. The market price of the Equity Shares could be subject to significant fluctuations after the Issue, and may decline below the Issue Price. Company cannot assure that you will be able to resell your Equity Shares at or above the Issue Price. Among the factors that could affect the company’s share price are:

• Quarterly variations in the rate of growth of the financial indicators, such as earnings per share, net income and revenues;

• Changes in revenue or earnings estimates or publication of research reports by analysts; • Speculation in the press or investment community; • General market conditions; and • Domestic and international economic, legal and regulatory factors unrelated to the

performance.


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13. Volatility of share prices on listing

After this Issue, the price of the company’s Equity Shares may be highly volatile, or an active trading market for the Equity Shares may not develop. The prices of the company’s Equity Shares on the Stock Exchanges may fluctuate as a result of several factors, including: • Volatility in the Indian and global securities market; • the company’s results of operations and performance, in terms of market share; • Performance of the Indian economy; • Changes in Government policies; • Changes in the estimates of the company’s performance or recommendations by financial analysts; • Significant developments in India’s economic liberalization and deregulation policies; and • Significant developments in India’s fiscal and environmental regulations

NOTES:

i) The investors are advised to refer to the para on “Basis for Issue Price”, Page No. 81, before making an investment in this issue

ii) Investors may note that in case of over subscription, the allotment shall be as per the procedure stated under the Para “Basis of Allotment” given on Page No. 192

iii) Net worth of the Company as on 31/03/2008 and 30/09/2008 is Rs. 1488.97 lacs and Rs. 1344.12 lacs respectively as per Certified Restated Financial Statements. The fall in Net worth in last six months is due to increase in Pre-operative expenses of Rs. 433.17 lacs which has been incurred against the expansion project undertaken by the Company to be capitalized on commencement of commercial production of the said project.

iv) Net Asset Value of the Equity Shares of the Company, as per its restated financials as at March 31, 2008 is Rs. 19.36 per Equity Share and for September 30, 2008 is Rs 17.47 per Equity Share.

v) Other than as stated in the section titled “Management”, “Promoters” and “Financial Statements” beginning on Page No. 117, 125 and 129 of the Letter of Offer, the Promoters/ Directors/ Key Management Personnel have no interest other than reimbursement of expenses incurred or normal remuneration or benefits.

vi) There have been no transactions in the shares of the Company on the Stock Exchanges by the Promoter /Directors of the Company during the past 6 months.

vii) Other than as stated in the Letter of Offer, the other ventures of promoters have no business Interests /other interests in the issuer company.

viii) All information is being made available by the lead manager and the Company to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road shows, presentations, in research or sales reports, etc.

ix) The Rights Issue comprises of 61,53,680 equity shares of Rs.10/- at a price of Rs 20/- per share ( including a premium of Rs 10/- per share) aggregating to Rs. 1230.74 Lacs in the ratio of 4 equity shares for every 5 equity shares held as on 20.03.2009 (i.e. record date)

x) Cost per share to the promoter. Name of the promoter Average cost of

acquisition per share (Rs.)

Mr. Ramautar Jhunjhunwala 16.50 Mr. Sanjiv Kumar Choudhary 16.64 Mr. Aditya Dalmiya 15.00


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xi) The Company, its promoters / Directors, Company’s Associates or Group companies have not been prohibited from accessing the Capital Market under any order or direction passed by SEBI. The promoters, their relatives, Issuer, group companies, associate companies are not declared as willful defaulters by RBI / Government authorities and there are no violations of securities laws committed in the past or pending against them.

xii) Related Party Transactions entered into by Gangotri Iron & Steel Company Limited during the preceding five financial years and also six months period ending 30.09.2008 are given at Page No. 141 of the Letter of Offer.

xiii) No loans and advances have been made to any person(s)/companies in which directors are interested except as stated in the Auditors Report. For details please refer Page No. 129 to 146 of this Letter of Offer.

xiv) The lead manager and the Company shall update this Letter of Offer and keep the shareholders/public informed of any material changes till the listing and trading commencement and the company shall continue to make all material disclosures as per the terms of the listing agreement.

xv) The investors are advised to refer the Paragraph on promoter’s background and past financial performance of the Company before making an investment in the proposed issue.

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

xvii) For the Contingent Liabilities not provided for as on 30th September, 2008 please refer to Annexure IV in Page No. 135 of this Letter of Offer.

xviii) Investors may contact the Lead Manager or the Compliance Officer for any complaint/ clarification/information pertaining to the Issue.

xix) Details of Compliance officer & fax, e-mail address

Ms. Priti Somani 16B, Shakespeare Sarani, Kolkata-700071 Ph. No: 033- 2282 4605 Fax: 033 – 22824605 E-mail: [email protected]


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SECTION - III. INTRODUCTION

1. SUMMARY

Industry Overview

The steel industry is one of the major industries in India and the Indian government plays a very important role in the development of the steel industry in India. The origin of the modern Indian steel industry can be traced back to 1953 when a contract for the construction of an integrated steelworks in Rourkela, Orissa was signed between the Indian government and the German companies Fried Krupp und Demag AG. The initial plan was an annual capacity of 500,000 tonnes, but this was subsequently raised to 1 million tonnes. The capacity of Rourkela Steel Plant (RSP), which belongs to the SAIL (Steel Authority of India Ltd.) group, is presently about 2 million tonnes. At a very early stage the former USSR and a British consortium also showed an interest in establishing a modern steel industry in India. This resulted in the Soviet-aided building of a steel mill with a capacity of 1 million tonnes in Bhilai and the British-backed construction in Durgapur of a foundry, which also has a million ton capacity.

Till 1990, the Indian steel industry operated under a regulated environment with insulated markets and large-scale capacities reserved for the public sector. Production and prices were determined and regulated by the Government, while SAIL and Tata Steel were the main producers, the latter being the only private player. 1992 saw the onset of liberalization and the Indian economy was opened to the world. Indian steel sector also witnessed the entry of several domestic private players and large private investments flowed into the sector to add fresh capacities. The last decade saw the Indian steel industry integrating with the global economy and evolving considerably to adopt world-class production technology to produce high quality steel. The nineties were crucial for Indian steel industry too. The controlled environment has changed drastically, in the post-liberalization scenario. The sector was opened up to the entry of private players, while quantitative restrictions foreign trade have been removed. The last ten years has also seen inefficient steel mills with outdated technology perishing, while new capacities too have come up that possess latest technology expertise. The potential demand for steel in India is vast with the per capita steel consumption India being 26.7 kg compared to the global average of 121.0 kg in 2000-01. This offers a huge potential to steel manufacturers, both domestic and global.

The steel industry showed signs of recovery in the beginning of 2002 from the recessionary trend. The signs of revival were due to the increased demand for the steel products. The demand has increased due to increased demand from China. Steel Industry in India is on an upswing because of the strong global and domestic demand. India's rapid economic growth and soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad, has put Indian steel industry on the global map. According to the latest report by International Iron and Steel Institute (IISI), India is the seventh largest steel producer in the world.

(Source: indiansteelalliance.com)

Industry Structure

The Indian steel industry can be divided into two distinct producer groups:

• Major producers: Also known as Integrated Steel Producers (ISPs), this group includes large steel producers with high levels of backward integration and capacities of over 1 MT. Steel Authority of India Limited (SAIL), Tata Steel, Rashtriya Ispat Nigam Limited (RINL), Jindal Vijayanagar Steel Limited (JVSL), Essar Steel and Ispat Industries form this group.

• Other producers: This group consists of smaller stand-alone steel plants producing small quantities of steel (flat/long products) from materials procured from the market or through their own backward integration system, stand alone units making pig iron and sponge iron and small producers using scrap-sponge iron-pig iron combination produce steel ingots (for long products) using Electric Arc Furnace (EAF) or Induction Arc Furnace (IAF) route.



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Indian Steel Industry

National Steel Policy 2005

National Steel Policy, as formulated by Indian Ministry of Steel envisages the following -

• Crude steel production of 110 million tonnes by 2019-20 at CAGR of 7.1% from 2004-05.

• The demand of steel by 2020 is likely to be 90 million tonnes at CAGR of 6.9% from 04-05.

• Steel exports by 2020 are likely to grow at CAGR of 13.3% from 04-05 to 26 million tonnes.

• Steel imports to the country by 2020 shall grow at CAGR of 7.1% from 04-05 to 6 million tonnes.

(Source: www.steel.nic.in)

Business of the Company

Gangotri Iron & Steel Company Ltd (GISCO), formerly known as Esskayjay Ispat Ltd, was incorporated in 1992 having its registered office in Patna, Bihar for manufacturing of re-rolling products. In 1994, a manual steel re-rolling unit with a capacity of 12,000 MT per annum was set up and commissioned at Patna.The management modified the unit and converted the same into fully automatic plant with an expanded capacity of 22,000 MT per annum. In the year 2003, the company modernized its production facility by adopting new technology of making TMT bars and started manufacturing GISCO TMT bars in November 2003. The product, because of its better quality over other local manufacturers, was well accepted in the market and commands price premium over its competitors. Its products got ISI certification and in the year 2005 the company became an ISO 9001 and 14001 certified company. In 2006, the company has further expanded its capacity to 33000 tonnes per annum by adopting latest German THERMEX technology for the first time in state of Bihar and started Brand building process in the name and style of GISCO THERMEX TMT bars. This product, because of its high quality, has been successful in creating a niche in the market with high premium for itself in a very short period.

GISCO has been in the business of manufacturing of re-rolling products over more than a decade and has established itself as a reputed quality manufacturer of TMT bars. The Company has showed improved financial performance on a continuous basis. The turnover has increased from Rs. 27.77 crores in 2005-06 to Rs. 39.19 crores in 2006-07 and further to Rs. 45.66 crores in 2007-08 thereby showing a growth of 41.12% and 16.51% respectively over the previous years. The break up of sales is as follows

(Rs. in crores)

Particulars 31.03.06 31.03.07 31.03.2008 30.09.2008 Sale of Finished Goods 27.30 38.44 44.91 28.32

Sale of Scrap 0.46 0.64 0.75 0.60

Trading Goods 0.01 0.11 - -

Total 27.77 39.19 45.66 28.92

The company has been successful in creating brand awareness through advertising and sales promotion and has a team of 200 dedicated dealers for Companies products. The company has appointed Mr. Manoj Tewari as a brand ambassador, who is a widely renowned cine-star in Bihar & Jharkhand.

Our Financials

Total Income and Profit before Tax have increased by 16% and 5% respectively, compared to previous year ended on 31.03.2007. This was achieved due to operational efficiencies despite several adverse factors, particularly substantial increase in prices of inputs and enhanced competition. The company has been thus effective in implementing cost control measures.


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The tangible net worth of the company has increased from Rs. 8.76 crores in 2005-06 to Rs. 14.89 crores in 2007-08 due to profit and security premium during the year 2007-08. The current ratio for the period ended 30.09.2008 is at 1.12 which may be considered satisfactory.

The company has achieved a turnover of Rs. 25.04 crores (net of excise duty) and PAT of Rs. 0.75 crores for the six months ending September 2008.

Our Business strategy

Company is in the manufacturing of steel products for more than 15 years and has grown to the present level by developing quality of products, building trust in the customers. The Company wants to leverage this strength to its benefit in future so as to become an effective player in the steel industry. To provide best quality products and services to the customers is the main business strategy of the Company. Keeping in view the above, the business strategy of the Company is as under:

1. Improving the cost competitiveness. 2. Widening the customer base 3. Optimum utilization of the production capacity 4. Maintain and further consolidate the company’s position in key markets through capacity expansion. 5. Continue focus on operational efficiency improvements.

Our Competitive Strengths

The Company faces competition from large as well as small producers of the product. However, after completion of the proposed projects, the Company will be in a position to consolidate its position in the market and also to improve upon its margins.

The following inherent strengths would help in increasing our competitive capacities:

a. The promoters of the Company has sufficient past experience on this industry and has built a strong marketing network on the state of Bihar.

b. The proposed unit is going to manufacture long products like Billets, Ingots, CTD Bars, TMT bars, Wire Rods etc. They find wide application in general construction activities, engineering activities.

c. The State Government is allowing preference on price and supply factor to local industries. The unit will get price preference to the tune of 7.5% over producers of other states.

d. DGS&D approval clears the way for direct Government & Institutiional sales and the Company has already acquired the same.

e. Most of the rolling mills in Bihar are manual and not producing quality products whereas the Company is already producing quality products.

f. The Company has a distinct and established brand image. g. The Company has network of more than 200 dealers in all over Bihar. h. The new Bihar Industrial Act 2006 provides enabling provisions for establishment of new industries in

the state with attractive financial incentives. The new investments will increase the demand for steel products in the state.

i. Our Products meet BIS 1786:1985, ISO 9002 specifications. We have talented, skilled and qualified manpower to look after different activities at various levels in the organization.

For more details on our business and on our competitive strength, please refer to the section titled “Business Overview” starting from Page 95 in this Letter of Offer.


23

2. OFFERING DETAILS

Issue of 6153680 Equity Shares of Rs.10/- each for cash at a price of Rs. 20/- per Equity Share (including premium of Rs. 10/- per Equity Share) aggregating to Rs 1230.74 Lacs on rights basis to the existing Equity Shareholders of the Company in the ratio of 4 (four) Equity Shares for every 5 (five) Equity Shares held on Record Date i. e. 20.03.2009.

No. of Equity Shares to be issued 61,53,680 Equity Shares Issue Size Rs.1230.74 Lacs Entitlement Ratio 4:5 Record Date 20.03.2009 Face Value Rs 10/- Offer Price Rs.20/- Application Money Rs.10/- (including premium of Rs. 5/- per Equity Share) Equity share outstanding prior to issue 76,92,100 Equity Shares Equity share outstanding after the issue 1,38,45,780 Equity shares of Rs 10/- each (7692100 fully

paid up Equity Shares and 6153680 partly paid up Equity Shares.)

Terms of the Issue Please see the section entitled “Basic Terms of the Issue” on Page 80 of this Offer Document.

TERMS OF PAYMENT

Due Date AmountOn application Rs. 10/- which constitutes 50% of the Issue Price of Rs.

20/-, including share premium On call Rs. 10/-, which constitutes the remaining 50% of the Issue

Price of Rs. 20/-, including share premium.


24

3. SUMMARY OF FINANCIAL, OPERATING AND OTHER DATA

Rs. in thousands STATEMENT OF ASSETS & LIABILITIES AS RESTATED

Particulars As at As at 31st March30.09.2008 2008 2007 2006 2005 2004

Fixed assetsGross Block 95869.39 86698.81 76819.99 62571.76 31709.96 30578.90Less: Depreciation 24875.88 22088.18 16495.15 13990.92 11244.83 10811.33Net Block 70993.51 64610.63 60324.84 48580.84 20465.13 19767.57Capital Work-in-Progress 345514.09 233550.75 2461.90 385.02 - -Total (A) 416507.60 298161.38 62786.74 48965.86 20465.13 19767.57Investments (B) 1188.60 1188.60 4835.16 4993.41 - -Current Assets, Loans & Advances Inventories 41311.11 25312.42 26826.97 23644.48 14489.42 9442.52Sundry Debtors 59342.77 38973.63 44567.92 69105.96 12768.78 16309.83Cash & Bank Balances 8144.03 8174.60 8865.50 10422.53 3409.35 817.36Other Current Assets - - - - - -Loans & Advances 85914.27 160350.68 35536.79 27967.43 34639.10 16148.05Total (C) 194712.19 232598.33 115797.18 131140.40 65306.65 42717.76Liabilities & ProvisionsSecured Loans 326028.43 308327.39 40702.95 49659.41 16334.70 16369.23Unsecured Loans 48132.96 16100.00 6600.00 576.54 576.54 576.54Deferred Tax Liability 6334.99 6276.38 5569.60 6302.06 5673.00 2370.84Current Liabilities 87866.96 46930.52 37696.26 42461.50 20413.67 6994.82Provisions 9633.17 5629.64 5204.72 2721.45 971.84 -Total (D) 477996.50 383263.93 95773.53 101720.96 43969.75 26311.43Net Worth (A+B+C-D) 134411.89 148897.38 87645.55 83378.71 41802.03 36173.90Represented by:I. Equity Share Capital 76921.00 76921.00 52571.00 52571.00 34156.00 32952.00II. Reserves & Surplus 101994.84 94452.17 38794.95 30827.04 7831.74 3631.06III. Miscellaneous Expenditure not written off and adjusted Preliminary expenses 1187.44 881.24 - - 185.73 409.16Pre-operative expenses* 43316.51 21594.55 3720.40 19.33 - -Total Net Worth (I+II+III) 134411.89 148897.38 87645.55 83378.71 41802.03 36173.90* Pre-operative expenses of Rs. 43316.51 has been incurred against the expainsion project undertaken by the Company to be capitalized on commencement of commercial production of the Bihta project.

STATEMENT OF THE BUILDUP OF RESERVE Rs. in thousands

STATEMENT OF ASSETS & LIABILITIES AS RESTATEDParticulars As at As at 31st March

30.09.2008 2008 2007 2006 2005 2004

Opening Reserve & Surplus 94452.17 38794.95 30827.04 7831.74 3631.06 7039.36Profit & Loss Account 7542.67 8625.97 10429.30 7790.79 4200.68 (3408.30)Less : Dividend paid - 2461.39 2836.49Capital Reserve 1468.75 - 18041.00Share Premium 45562.50Closing Reserve & Surplus 101994.84 94452.17 38794.95 30827.04 7831.74 3631.06


25

Rs. in thousands SUMMARY STATEMENT OF PROFIT & LOSS ACCOUNT AS RESTATED

Particulars For 6

months ended

For the year ended 31st March

30.09.2008 2008 2007 2006 2005 2004IncomeSales: Of Products Manufactured by the Company (TMT Bars) (Net of Excise Duty)

250449.61 395289.00 337356.16 239371.71 201211.06 137578.25

Of Products traded in by the Company (TMT Bars)

- - 1099.20 94.64 946.63 -

Sub Total 250449.61 395289.00 338455.36 239466.35 202157.69 137578.25Other Income 350.52 1037.64 1272.92 2111.31 236.85 8754.36Increase / (Decrease) in Inventories

13410.69 1473.44 2911.06 6836.17 8861.75 (5442.70)

Total Income (A) 264210.82 397800.08 342639.34 248413.83 211256.29 1408899.91ExpenditureRaw Materials Consumed 201224.34 308196.89 262019.63 189445.95 172256.99 124093.18Trading Goods Purchased - - - 1064.41 1046.72 -Staff Cost 2241.25 4131.83 4502.30 2333.73 1827.38 1759.58Other Manufacturing Expenses

19132.86 23112.35 19250.15 13538.56 11918.75 9010.59

Administrative Expenses 12401.99 17299.10 13073.46 11014.83 4705.29 3285.12Other Expenses - - - -State VAT 11001.15 17366.90 15046.68 10587.27 6449.86 -Interest (Net) 3712.79 7090.41 6680.66 3740.28 2442.32 1846.72Depreciation 2663.78 5452.01 7624.39 5585.73 2134.28 2296.13Total Expenditure (B) 252378.15 382649.49 328197.27 237310.76 202781.59 142291.32Net Profit / (Loss) Before Tax (A-B) 11832.66 15150.58 14442.07 11103.07 8474.70 (1401.41)

Taxation: Current Tax (4145.39) (4959.07) (4615.69) (2523.45) (971.84) -Deferred Tax (58.61) (706.77) 732.46 (629.05) (3302.17) (2004.25)Fringe Benefits Tax (86.00) (213.01) (136.21) (161.80) -Income Tax of Earlier Years Written Back/Short Provision

- (645.77) 6.66 2.02 - (2.64)

Net Profit / (Loss) After Tax (E) 7542.66 8625.97 10429.29 7790.79 4200.69 (3408.30)

Appropriations:Dividend - - 2158.65 2487.60 - -Tax on Dividend - - 302.70 348.89 - -Balance Brought Forward (F) 29379.92 20753.95 12786.05 7831.75 3631.06 7039.36

Balance Carried to Balance Sheet (E+F) 36922.58 29379.92 20753.95 12786.05 7831.75 3631.06


26

4. GENERAL INFORMATION

Gangotri Iron & Steel Company Limited (Company Registration No.: 03-05129) (Corporate Identity No.: L27101BR1992PLC005129) [Incorporated on 7th December, 1992 under the Companies Act, 1956 as ‘ESSKAYJAY ISPAT LIMITED ’ vide Certificate of Incorporation issued by the Registrar of Companies, Bihar at Patna. The name of the company was changed subsequently to GANGOTRI IRON & STEEL COMPANY LIMITED and a fresh certificate of incorporation was received on dt 24th May, 2000 from Registrar of Companies, Bihar at Patna]

Registered Office: 307, Ashiana Towers, Exhibition Road, Patna-800001, Bihar Tel : (0612)-6510-777/888 Fax :(0612)-2323959 Website : www.giscotmt.comE-mail : [email protected]

Corporate Office: 16B, Shakespeare Sarani, Kolkata-700071 Tel : (033) 2282-4605 Fax : (033)22824605 E-mail : [email protected]

Manufacturing Plant Present: Naya Tola, Khagaul Road, Phulwari Shariff, Patna-801505 Tel : (0612)-2555-233 Fax : (0612)-2555-687 Proposed: Vill: Mahadevpur, Near Reliance Petrol Pump, Phulari, Bihta, Patna – 801103, Bihar

Registrar of Companies Bihar at Patna.Maurya Lok Complex, Block ‘A’ Western Wing, 4th Floor, Dak Banglow Road, Patna-800001. Tel : (0612) 2222-172 Fax :(0612)-2222-172 E-mail : [email protected]

Contact Person: Ms. Priti Somani, Compliance OfficerTel : (033)-2282-4605 Fax: (033)-2282-4605 E-mail : [email protected]

Listing: - The existing equity shares of the Company are listed at BSE and MGSE. The Company has delisted its equity shares from CSE. MGSE is derecognized by SEBI. The equity shares offered through rights issue are proposed to be listed on BSE. BSE is the Designated Stock Exchange.


27

Dear Shareholder(s),

Pursuant to the resolutions passed by the Board of Directors of the Company at its meetings held on 13.12.2007 and the resolution approved by the shareholders in the Extra-Ordinary General Meeting held on 11.01.2008 & subsequent meeting of The Board of Directors held on 16.04.2008, it has been decided to make the following offer to the Equity Shareholders of the Company:

ISSUE OF 61,53,680 EQUITY SHARES OF RS. 10/- EACH FOR CASH AT A PRICE OF RS 20/- EACH INCLUDING A PREMIUM OF RS. 10/- PER EQUITY SHARE AGGREGATING TO AN AMOUNT NOT EXCEEDING RS. 1230.74 LACS TO THE EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF 4 EQUITY SHARES FOR EVERY 5 EQUITY SHARES HELD ON THE RECORD DATE I.E. 20.03.2009 (“ISSUE”). THE ISSUE PRICE FOR THE EQUITY SHARES WILL BE PAYABLE IN TWO INSTALLMENTS: 50% ON APPLICATION AND 50% ON CALL WITHIN 12 MONTHS. THE ISSUE PRICE IS 2.0 TIMES OF THE FACE VALUE OF THE EQUITY SHARE.

Important Information:

This Issue is applicable to those Equity Shareholders whose names appear as beneficial owners based on the list to be furnished by the Depositories in respect of the Shares held in the electronic form and on the Register of Members of the Company at the close of business hours on the Record Date 20.03.2009.


28

Board of Directors of the Company

The Company is run and managed by Board of Directors comprising of 6 (six) Directors. The day-to-day affairs of the Company are being managed by Sri Sanjiv Kumar Choudhary, Managing Director of the Company. Our Board of Directors comprises of the following:

Name of the Director Designation StatusMr. Ramautar Jhunjhunwala Chairman Non – Executive & PromoterMr. Sanjiv Kumar Choudhary Managing Director Executive & PromoterMr. Aditya Dalmiya Director Non – Executive & PromoterMr. Ashok Agarwal Director Non – Executive & IndependentMr. Debabrata Banerjee Director Non – Executive & IndependentMr.Narendra Kumar Jaiswal Director Non – Executive & Independent

BRIEF DETAILS OF THE CHAIRMAN:

Mr. Ramautar Jhunjhunwala

Mr. Ramautar Jhunjhunwala is the Chairman and non- executive director of the Company since incorporation. He is having a work experience of 53 years out of which 19 years as the CEO of M.L.Dalmiya & Co., a leading construction company of India involved in successful implementation of civil & structural engineering contracts in India & outside India to mention a few like Ravindra Sadan, Airtel Hotel, New Terminal Building, Calcutta Hospital, Assembly of God Church Building etc., in Kolkata, Factory Building in Hindustan Aeronautic Ltd. At Sunabeda, Orissa, TV tower for AIR, Jalandhar, Tall Thermal Chimneys for WBSEB, HSEB etc, & Hulule Airport at Maldives. He is a Member of Cricket Association of West Bengal since 1987 till date.

BRIEF DETAILS OF THE EXECUTIVE DIRECTOR:

Mr. Sanjiv Kumar Choudhary

Mr. Sanjiv Kumar Choudhary, aged 45 years is a commerce graduate from Calcutta University with an experience of 25 years in diverse business activities. He is working as a Managing Director of the Company and is associated with Iron & Steel Industry for the last 15 years. Mr. Sanjiv Kumar Choudhary held many position of repute. Presently, he is the Senior Vice President of Bihar Chamber of Commerce. Recently, he has been awarded with Great Entrepreneur Award by Global Entrepreneurship and Management Academy. He has also received the Best Citizen of India Award by International Publishing House in the year 2006.


29

Issue Management Team

LEAD MANAGER TO THE ISSUE: Sumedha Fiscal Services Limited 8B, Middleton Street,Geetanjali, Room No.6A Kolkata-700071 Tel: (033) 2229 8936/6758/3237 Fax: (033) 2226 4140/ 2265 5830 E-mail: [email protected] Website : www.sumedhafiscal.com SEBI Regn. No. INM000008753

Contact Person : Mr. D.K.Sett

CO - LEAD MANAGER TO THE ISSUE: VC Corporate Advisors Pvt. Limited 31, Ganesh Chandra Avenue 2nd Floor, Suite No. 2C, Kolkata – 700 013 Tel : 033 2225 3940 / 3941 Fax : 033 2225 3941 E-mail : [email protected] Site : www.vccorporate.comSEBI Regn. No: INM000011096

Contact Person : Mr. Tanmay Kumar Saha

REGISTRAR TO THE ISSUE: S.K.Computers 34/1A, Sudhir Chatterjee Street, Kolkata- 700006 Tele : 033-2219 6797 Fax : 033-2219 4815 E-mail : [email protected] SEBI Regn. No. INR000003886

Contact Person : Mr. Dilip Bhattacharya

LEGAL ADVISOR TO THE ISSUE: Mr. Amit Shrivastava 41, ‘Vasundhara’, Road No. 3, New Pataliputra Colony, Patna-800013 Tel : 0612-2262317 E-mail : [email protected]

Contact Person : Mr. Amit Shrivastava

COMPLIANCE OFFICER: Ms. Priti Somani 16B, Shakespeare Sarani, 3rd Floor Kolkata-700071 Tel : 033-2282 4605 Fax : 033-2282 4605 Email : [email protected]

AUDITORS: M/s. ARSK & Associates 22, R. N. Mukherjee Road, 3rd Floor Kolkata-700001 Tel: 033-4006 3380 Fax:033-4006 3385 E-mail: [email protected]

Contact Person: Mr. Ravindra Khandelwal

BANKER TO THE ISSUE:

HDFC Bank Limited Central Plaza Branch 2/6, Sarat Bose Road Kolkata – 700 020 Tel : 033-3057 8217/9330838422 Fax : 033-22836922 Email : [email protected]

Contact Person : Mr. Zafar Ehsan

Note: Investors are advised to contact the Registrar to the Issue/Compliance Officer in case of any pre-issue / post issue related problems such as non-receipt of letters of allotment/ credit of allotted Equity Shares in the respective beneficiary accounts, refund orders etc.


30

BANKERS TO THE COMPANY:

State Bank of India

Commercial Branch, Patliputra, Patna-800013

Tel : 0612-2267657 Fax : 0612-2266086 Email : [email protected]

Contact Person: Mr. Sanjay Kumar

The Hongkong And Shanghai Banking Corporation Limited Kataruka Nivas, Municipal Survey No. 877 South Gandhi Maidan Patna-800001 Tel: 0612-3202595 Fax: 0612-2500698 Email: [email protected]

Contact Person: Mr. Rohit Sinha

Standard Chartered Bank Bhagwati Dwaraka Arcade

Plot No. 830P, Exhibition Road, Patna-800014

Tel: 0612-2223135 Fax:0612-2223124 Email: [email protected]

Contact Person: Mr. Amit Kumar

The Federal Bank Limited 21A, 1st Floor, Shakespeare Sarani Kolkata-700071 Tel: 033-2282 8292 Fax: 033-22822562 Email: [email protected]

Contact Person: Mr. Reggie V. John

STATEMENT OF INTERSE ALLOCATION OF RESPONSIBILITIES AMONGST LEAD MANAGERS.

No. Activities Responsibility Coordinator

1. Capital structuring with the relative components and formalities such as type of instruments, due diligence of the Company's operations/management/business plans/legal etc.

Sumedha Fiscal Services Limited


2. Drafting and Design of the Offer Document and of statutory advertisement / publicity material including newspaper advertisements and brochure / memorandum containing salient features of the Offer Document.



3. Selection of various agencies connected with the Issue, namely Registrars to the Issue, printers, bankers and advertisement agencies.


VC Corporate Advisors Private Limited

4. Marketing of the Issue, which will cover, inter alia, formulating marketing strategies, preparation of publicity budget, arrangements for selection of (i) ad-media, (ii) centres of holding conferences of brokers, investors etc. (iii) bankers to the issue, (iv) collection centres, (v) brokers to the Issue, distribution of publicity and issue material including application form and Letter of Offer



5. Follow-up with bankers to the Issue to get quick estimates of collection and advising the issuer about closure of the issue, based on the correct figures.



6. The post-Issue activities viz. essential follow-up steps, which must include finalisation of basis of allotment / weeding out of

VC Corporate Advisors Private

VC Corporate Advisors


31

multiple applications, listing of instruments and dispatch of certificates and refunds, co-ordination with the various agencies connected with the work such as registrar to the Issue, bankers to the Issue, and bank handling refund business.

Limited Private Limited

CREDIT RATINGThis being an issue of Equity Shares, no credit rating is required.

IPO GRADINGThis being a rights issue of equity shares, IPO grading is not required.

TRUSTEES This being a Rights Issue of Equity Shares, appointment of Trustees is not required.

MONITORING AGENCY In terms of clause 8.17.1 of the Guidelines, since the issue size will not be exceeding Rs. 500 Crores, Company has not appointed any monitoring agency. However, the Board of Directors of the Company will monitor the utilization of the proceeds of the Issue.

PROJECT APPRAISAL Please refer Section “Objects of the Issue” on page no. 45 of this Letter of Offer.

MINIMUM SUBSCRIPTION CLAUSE

a) If the Company does not receive the minimum subscription of 90% of the issued amount the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the issue.

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

c) All monies received out of this Rights Issue through this Letter of Offer shall be transferred to a separate bank account.

UNDERWRITING

The present Rights Issue is not underwritten. However, the Promoters have confirmed vide their Letter of Intent dated 16.04.2008 that they intend to subscribe to the full extent of their entitlement in the Issue. Promoters intend to apply for additional Equity Shares in the Issue such that at least 90% of the Issue size is subscribed. As a result of this subscription and consequent allotment, the Promoters may acquire Equity Shares over and above their entitlement in the Issue, which may result in their shareholding in the Company being above their current shareholding.

This subscription and acquisition of additional Equity Shares by the Promoters, if any, will not result in change of control of the management of the Company and shall be exempt in terms of provision to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. As such, other than meeting the requirements indicated in Objects of the Issue (refer “Particulars of the Present Issue”), there is no other intention/purpose for this Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoters through this Issue, the Promoter shareholding in the Company exceeds their current shareholding.

However, the Promoters have confirmed vide the letter dated 16.04.2008 that in case the Rights Issue of the Company is completed with their subscribing to Equity Shares over and above their entitlement and as a result, if the public shareholding in the Company after the Rights Issue falls below the “permissible minimum level” on the basis of which the securities of the Company continue to be listed, they will make an offer for sale of their holdings so that the public shareholding is raised to the “permissible minimum


32

level” within a period of 3 months from the date of allotment in the proposed Issue, as per the requirements of sub-clause 17.1 and 17.2 of SEBI (Delisting of Securities) Guidelines, 2003 or as per any amendment thereto or any other period as may be directed by SEBI or any appropriate authority.

In this context, the Promoters of Gangotri Iron & Steel Company Limited have provided following undertaking:

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


33

5. CAPITAL STRUCTURE

The share capital of the company as on the date of filing of the letter of offer with SEBI and Stock Exchanges is as setforth:

(Rs. in Lacs)PARTICULARS NOMINAL VALUE AGGREGATE

VALUE AT ISSUE PRICE

A. AUTHORISED: 2,00,00,000 Equity Shares of Rs.10/- each 2000.00

B. ISSUED, SUBSCRIBED & PAID UP CAPITAL:76,92,100 Equity Shares of Rs.10/- each 769.21

C. PRESENT ISSUE:61,53,680 Equity Shares of Rs. 10/- each for cash at an Issue Price of Rs. 20/- per Equity Share (including premium of Rs. 10/- per Equity Share) on rights basis to the existing equity shareholders of the company in the ratio of 4 (four) Equity Shares for every 5 (five) Equity Shares held on the record date i.e. 20.03.2009

615.37 1230.74

D. PAID UP SHARE CAPITAL AFTER THE ISSUE:1,38,45,780 Equity Shares of Rs.10/- each 1384.58

E. SHARE PREMIUM ACCOUNTBefore the Issue After the Issue

-- --

455.62 1070.99*

* Assuming all call money due on all Equity Shares offered under the Rights Issue are duly paid up.

Details of Changes in Authorized Capital: Sr. No. Particulars of Increase Date of Meeting Nature of Meeting

1 As on Incorporation Rs. 50 Lacs 07.12.1992 ----- 2 From Rs. 50 Lacs to Rs. 75 Lacs 07.06.1993 EGM 3 From Rs. 75 Lacs to Rs. 600 Lacs 19.11.1994 EGM 4 From Rs. 600 Lacs to Rs. 900 Lacs 09.01.2006 EGM 5 From Rs. 900 Lacs to Rs.2000 Lacs 16.08.2007 EGM


34

NOTES TO THE CAPITAL STUCTURE

1. The present capital structure of the Company has been built-up as under: Date of

Allotment

No. of

Equity

Shares

Face

Value

(Rs.)

Issue

Price

(Rs.)

Nature of

Consider

ation

Nature of

Allotment

No. of

Equity

Shares

Cumulative

Paid up

Capital

(Rs.)

07.12.1992 700 10.00 10.00 Cash Subscriber to the

MOA

700 7000

16.04.1993 700 10.00 10.00 Cash Further Allotment 1400 14000



06.07.1995 3045700 10.00 10.00 Cash Public Issue 4317100 43171000

23.07.2007 3375000* 10.00 23.50 Cash Preferential Issue 7692100 76921000

Total 7692100

* Detail of Issue of Warrants

Date Name of the Allottee Conversion Price (Rs.)

Number of Warrants

issued

Number of

Warrants Converted

Number of

Warrants Forfeited

24.01.2006 Mr Ramautar Jhunjhunwala 23.50 100000 100000 - 24.01.2006 Mrs Shakuntala Jhunjhunwala 23.50 50000 50000 - 24.01.2006 Mrs. Vandana Sanganeria 23.50 50000 50000 - 24.01.2006 Mr. Mayank Sanganeria 23.50 50000 50000 - 24.01.2006 Mr. Umesh Kumar Sanganeria 23.50 50000 50000 - 24.01.2006 Mr. Sanjiv Kumar Choudhary 23.50 100000 100000 - 24.01.2006 Sanjiv Kumar Choudhary (HUF) 23.50 100000 - 100000 24.01.2006 Mrs Manju Choudhary 23.50 100000 100000 - 24.01.2006 M/s Sekhwell Trading & Finance Pvt Ltd 23.50 300000 300000 - 24.01.2006 M/s Sarvamangala Builders Pvt Ltd 23.50 200000 200000 - 24.01.2006 M/s ABI Trading Pvt Ltd 23.50 200000 200000 - 24.01.2006 M/s Prashan Commotrade Pvt. Ltd. 23.50 350000 350000 - 24.01.2006 Mr Upendra Kandoi 23.50 200000 200000 - 24.01.2006 Mr Mahesh N Pujara 23.50 250000 250000 - 24.01.2006 Mrs Vilas M Pujara 23.50 250000 250000 - 24.01.2006 Mrs Hemali M Pujara 23.50 125000 - 125000 24.01.2006 Mr Mitesh M Mujara 23.50 125000 125000 - 24.01.2006 Mr Sandip B Sheth 23.50 100000 - 100000 24.01.2006 Mrs. Nita S Sheth 23.50 100000 - 100000 24.01.2006 Mr Sandeep J Merchant 23.50 200000 - 200000 24.01.2006 Mr Rishab P Siroya 23.50 100000 100000 - 24.01.2006 M/s Wise Consultancy Services Pvt. Ltd. 23.50 100000 100000 - 24.01.2006 Mr Mahaveer G Chowdhari 23.50 100000 100000 - 24.01.2006 M/s GBK Resources Pvt. Ltd. 23.50 100000 100000 - 24.01.2006 M/s GBK Resources Pvt. Ltd. 23.50 100000 100000 - 24.01.2006 Mr Arun Ganatra 23.50 100000 100000 - 24.01.2006 Mrs Kavita A Shah 23.50 100000 100000 - 24.01.2006 Mr Upendra Kandoi 23.50 50000 50000 - 24.01.2006 M/s Keynesian Financial Services Ltd. 23.50 50000 50000 - 24.01.2006 Rajkumar Basudev Agarwal HUF 23.50 200000 200000 -

Total 4000000 3375000 625000


35

10% upfront payment received against Warrants not converted has been forfeited.

Note : 1803400 equity shares were forfeited on dated 04.06.2005 which were reissued on different

dates as under

Date of

Allotment

No. of

Equity

Shares

Face

Value

(Rs.)

Issue

Price

(Rs.)

Nature of

Consider

ation

Nature of

Allotment

30.06.2005 217000 10.00 15.00 Cash Reissue of

forfeited shares

29.07.2005 586600 10.00 15.00 Cash Reissue of forfeited shares

09.09.2005 999800 10.00 15.00 Cash Reissue of forfeited shares

Total 1803400

Statement showing the details of the reissue of forfeited shares

Date of Allotment

Name No. of Equity Shares

Face Value (Rs.)

Issue Price (Rs.)

30.06.2005 GOURI SHANKER DALMIYA, TARA DALMIYA 1000 10 1530.06.2005 VANDANA SANGANERIA 1000 10 1530.06.2005 NIRANJAN BARICK 500 10 1530.06.2005 SUNITA DALMIYA, ADITYA DALMIYA 5000 10 1530.06.2005 SHIV AWATAR AGARWAL 500 10 15

30.06.2005 RAMAUTAR JHUNJHUNWALA, SHAKUNTALA JHUNJHUNWALA 1000 10 15

30.06.2005 SHAKUNTALA JHUNJHUNWALA, RAMAUTAR JHUNJHUNWALA

100010 15

30.06.2005 PUSHPA KANDOI 1000 10 15 30.06.2005 ADITYA DALMIYA, SUNITA DALMIYA 1000 10 15 30.06.2005 PAWAN KUMAR AGARWAL 500 10 15 30.06.2005 SARITA AGARWAL 500 10 15 30.06.2005 SANGITA AGARWAL 1000 10 15 30.06.2005 DIPALI BANERJI, PRABHAT BANERJI 1000 10 15 30.06.2005 ABHIJIT GHOSH, BAISAKHI GHOSH 500 10 15

30.06.2005 PRAKASH MOHAN CHOUDHARY, RITA CHOUDHARY

500 10 15

30.06.2005 ASHOK AGARWAL 1000 10 15 30.06.2005 BANARSILAL PARASRAMPURIA 1000 10 15 30.06.2005 RAJIV JAIN 1000 10 15 30.06.2005 RANJANA JHUNJHUNWALA 500 10 15 30.06.2005 INDU KHAITAN 500 10 15 30.06.2005 ALOK JHUNJHUNWALA 500 10 15 30.06.2005 PRITI SOMANI 3000 10 15 30.06.2005 RAGHUNATH SARAOGI 1000 10 15 30.06.2005 RAJEEV KUMAR SINHA 500 10 15 30.06.2005 TARA ISPAT LTD. 50000 10 15 30.06.2005 MERRILL INVESTMENT & TRADING PVT. LTD 50000 10 15 30.06.2005 PARAS FINVEST PVT. LTD. 50000 10 15 30.06.2005 MANISH KUMAR PODDAR 2000 10 15 30.06.2005 RICHA KANDOI 1000 10 15 30.06.2005 PANKAJ KUMAR 500 10 15 30.06.2005 SUNITA KHEMKA 1000 10 15


36

30.06.2005 GOPAL NARAYAN 1000 10 15 30.06.2005 GANESH PRASAD PATODIA 1000 10 15 30.06.2005 GOPAL PATHAK 500 10 15 30.06.2005 MUKESH RATAWA 1000 10 15 30.06.2005 SANJIV KUMAR CHOUDHARY (HUF) 20000 10 1530.06.2005 JEETENDRA KUMAR NOPANY 1000 10 15 30.06.2005 PREMLATA CHOUDHARY 2000 10 15 30.06.2005 PRITI NOPANY 2000 10 15 30.06.2005 RAJAT KHEMKA 2000 10 15 30.06.2005 DEVENDRA KUMAR JHUNJHUNWALA 7000 10 15 29.07.2005 ADITY CHOUDHARY (MINOR) 10000 10 15 29.07.2005 AJAY KUMAR JAGNANI (HUF) 1000 10 15 29.07.2005 BHAWAR LAL KABRA 1000 10 15 29.07.2005 MANJU CHOUDHARY 66500 10 15 29.07.2005 MADHU KABRA 1000 10 15 29.07.2005 VIKASH JAIN, VARSHA JAIN 5000 10 15 29.07.2005 VARSHA JAIN, VIKASH JAIN 5000 10 15 29.07.2005 VANDANA SANGANERIA 66500 10 15 29.07.2005 MANSI KANORIA, SADAY KRISHNA KANORIA 1000 10 15 29.07.2005 UJJAL SARKAR 500 10 15 29.07.2005 RAGHUNATH SARAOGI 2500 10 15 29.07.2005 MANJU MOHANKA 50000 10 15 29.07.2005 MANJARI DALMIYA, ANAND DALMIYA 500 10 15 29.07.2005 JAYSHREE JAGNANY 1000 10 15 29.07.2005 MANJU DEVI DHOOT 5000 10 15 29.07.2005 GORDHAN DAS DHOOT (HUF) 5000 10 15 29.07.2005 SEEMA DHOOT 5000 10 15 29.07.2005 BITTHAL DAS DHOOT (HUF) 5000 10 15 29.07.2005 ANAND KANODIA (HUF) 1700 10 15 29.07.2005 GAUTAM KANODIA (HUF) 1700 10 15 29.07.2005 RAMA KANODIA 1700 10 15 29.07.2005 KAMLA DEVI PARASRAMPURIA 10000 10 15 29.07.2005 SHANKARLAL PARASRAMPURIA 10000 10 15 29.07.2005 PREM KUMAR PARASRAMPURIA 10000 10 15 29.07.2005 BANARSILAL PARASRAMPURIA 10000 10 15 29.07.2005 PRAMILA PARASRAMPURIA 10000 10 15 29.07.2005 SUNITA DALMIYA, ADITYA DALMIYA 10000 10 15 29.07.2005 ANKIT CHOUDHARY 6500 10 15 29.07.2005 SANJIV KUMAR CHOUDHARY 133000 10 15 29.07.2005 PRAKASH KUMAR AGRAWAL 1000 10 15 29.07.2005 ASHISH PODDAR 5000 10 15 29.07.2005 VANITA KATARUKA 1000 10 15 29.07.2005 MEENAKSHI BHUTRA, SHANTI DEVI BHUTRA 1000 10 15 29.07.2005 MANOJ AGARWAL 70000 10 15 29.07.2005 LILY AGARWAL 70000 10 15 29.07.2005 MANOJ AGARWAL HUF 2500 10 15 09.09.2005 RAJAT BOOBNA 500 10 15 09.09.2005 SUSHIL KUMAR KHEMKA 1000 10 15 09.09.2005 ANITA KHEMKA 1000 10 15 09.09.2005 SHWETA AGRAWAL 1000 10 15 09.09.2005 PREETI AGRAWAL 1000 10 15 09.09.2005 SARIKA SINGHANIA 100000 10 15 09.09.2005 RAMKARAN R. KARWA, MRUDULA R.

KARWA 25000 10 15

09.09.2005 RAMKARAN R. KARWA HUF 25000 10 1509.09.2005 SAMEER KARWA, MRUDULA KARWA 25000 10 1509.09.2005 AMAN R. KARWA, SAMEER R. KARWA 32500 10 15


37

09.09.2005 MRUDULA R. KARWA, RAMKARAN R. KARWA 25000 10 15

09.09.2005 MADHULIKA KARWA, SAMEER KARWA 10000 10 1509.09.2005 VIVEK KUMAR AGARWAL 25000 10 1509.09.2005 SEEMA AGARWAL 75000 10 1509.09.2005 ANITA BAGRI 50000 10 1509.09.2005 USHA AGARWAL 110000 10 1509.09.2005 MANJU AGARWAL 110000 10 1509.09.2005 ANIL AGARWAL HUF 80000 10 1509.09.2005 VISHAL DHAWAN 1000 10 1509.09.2005 MONIKA DHAWAN 1000 10 1509.09.2005 ARUNA DHAWAN, SATYAPAL DHAWAN 1000 10 1509.09.2005 GOPAL PODDAR 1000 10 1509.09.2005 SARIKA SINGHANIA 20000 10 1509.09.2005 KUSUM DEVI SARAF 40000 10 1509.09.2005 NITU SARAF 60000 10 1509.09.2005 ANSU SARAF 90000 10 1509.09.2005 SHILPA BANKA 40000 10 1509.09.2005 NEHA BANKA 40000 10 1509.09.2005 RITESH KUMAR 1000 10 1509.09.2005 SAMIR PAUL 2000 10 1509.09.2005 BINOD KUMAR 2000 10 1509.09.2005 VISWAMOHAN SINGH 1000 10 1509.09.2005 GANESH PRASAD PATODIA 1800 10 1509.09.2005 RAJKUMAR SARAOGI, USHA SARAOGI 1000 10 15

TOTAL 1803400

Basis of issue price for the reissue of forfeited shares

The reissue of forfeited shares at Rs. 15/- per share has been done by the company in compliance with the Secretarial Standard which stipulates that the pricing of the reissued shares should not be lower than the amount of the call(s) due and unpaid on the share at the time of forfeiture. Further, the Company, being a listed company, has also considered the pricing formula prescribed under Chapter XIII of the SEBI (DIP) Guidelines, 2000 which has been enumerated as below:

Particulars AmountThe average of the weekly high & low of the closing price of the shares during the six months preceding the relevant date (16.06.2005)

13.98

The average of the weekly high & low of the closing prices of shares during the two weeks preceding the relevant date (16.06.2005)

19.09

So, the price for the reissue of forfeited shares fixed at Rs 15/- per share is not lower than the amount of the call(s) due and unpaid i.e. Rs. 5/- on the share at the time of forfeiture and also in compliance with the chaptes XIII of the SEBI (DIP) Guidelines, 2000 taking into consideration payment of Rs. 5/- already made on those shares earlier. 2. Present Rights Issue

Type of

Instrument

Ratio Issue Price

(Rs.)

No. of Shares Nominal Value

(Rs.)

Issue size

(Rs.)

Equity Shares 4:5

(four shares for

every five equity

shares)

Rs.20/-

(including a

premium of Rs.

10/- each)

61,53,680 6,15,36,800 12,30,73,6

00


38

3. Pre issue shareholding pattern of the Company as on 31st December, 2008, is as per Clause 35 of

the listing agreement:

Category Code Category of Shareholder

No. of shareholder Total

Total Shareholding as a percentage of total number of shares.

As A% of

(A+B)

As a percentage of (A+B+C)

A Shareholding of Promoter and Promoter Group

(1) Indian Individuals 20 1082030 14.07 14.07

Bodies Corporate 1 60000 0.78 0.78Sub-Total (A)(1) 21 1142030 14.85 14.85

(2) Foreign Nil 0 0.00 0.00

Sub-Total (A)(2) Nil 0 0.00 0.00Total Shareholding of Promoter and Promoter Group (A) = (A)(1)+A(2)

21 1142030 14.85 14.85

(B) Public shareholding (1) Institutions (a) Mutual Funds & UTI Nil 0 0.00 0.00 (b) Banks, Financial Institutions,

Insurance Nil 0 0.00 0.00

(c) Central Govt. / State Govt. Nil 0 0.00 0.00

(d) FIIs Nil 0 0.00 0.00 Sub-Total (B)(1) Nil 0 0.00 0.00 (2) Non – Institutions (a) Corporate Bodies 135 2522660 32.80 32.80 (b) Individuals

I. Individual Shareholders holding nominal shares capital upto Rs. 1 lakh.

2563 1688124 21.95 21.95

II. Individual Shareholders holding nominal shares capital in excess of Rs. 1 lakh.

30 2339286 30.41 30.41

(c) Any other (specify) Nil 0 0.00 0.00Sub-total (B) (2) 2728 6550070 85.15 85.15Total public share holding (B)=(B)(1)+(B)(2)

2728 6550070 85.15 85.15

Total (A)+(B) 2749 7692100 100.00 100.00

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

Nil 0 0.00 0.00

GRAND TOTAL (A)+(B)+(C) 2749 7692100 100.00 100.00


39

4. The Pre and Post issue shareholding of the Promoters/ Promoter Group as on 31st December 2008

is as follows:

Particulars Present Post Rights Issue

No. of

Shares

Share

holding

%

No. of

Shares

Share

holding

%

a. Promoters

I. Indian

Mr Ramautar Jhunjhunwala . 121100 1.57 217980 1.57

Mr Sanjiv Kumar Choudhary 298730 3.88 537714 3.88Mr Aditya Dalmiya 1000 0.01 1800 0.01

420830 5.46 757494 5.46

II. Foreign -- -- -- --

Total (a) 420830 5.46 757494 5.46

b. Promoter Group

Ramavtar Jhunjhunwala HUF 87500 1.14 157500 1.14

Sanjiv Kumar Choudhary HUF 20000 0.26 36000 0.26

Shakuntala Jhunjhunwala 52000 0.68 93600 0.68

Manju Choudhary 171500 2.23 308700 2.23

Ankit Choudhary 18000 0.23 32400 0.23

Adity Choudhary 10000 0.13 18000 0.13

Umesh Kumar Sanganeria 110600 1.44 199080 1.44

Mayank Sanganeria 54000 0.70 97200 0.70

Vandana Sanganeria 122600 1.59 220680 1.59

Sunita Dalmia 15000 0.20 27000 0.20

Tara Ispat Limited. 60000 0.78 108000 0.78

Total (b) 721200 9.39 1298160 9.39

Total Promoters and Promoter Group Holding (a)+(b)

1142030 14.85 2055654 14.85

Note: Assuming that the issue will be fully subscribed without the promoters/promoter group subscribing for additional shares beyond their right entitlements (although there may be inter se transfer of right entitlements between the promoter/promoter group). In case of under subscription the Promoter/Promoter group shall subscribe to the additional shares to make the issue fully subscribed. In that case, the post-rights issue holdings of the promoter/promoter group will be different from above to that extent.


40

5. Capital built up of the promoters is detailed below:

SL. NO. NAME OF PROMOTER

DATE OF ALLOTME

NT / TRANSFER & MADE

FULLY PAID UP

CONSIDERATION

(RS.)NO. OF

SHARESFACE

VALUE

ISSUE / TRANSF

ER PRICE NATURE OF ALLOTMENT

1RAMAUTAR JHUNJHUNWALA 07.12.1992 1000 100 10.00 10.00 SUBSCRIPTION TO MOA

31.03.1994 200000 20000 10.00 10.00 FURTHER ALLOTMENT

30.06.2005 15000 1000 10.00 15.00 FORFEITED SHARES REISSUED

23.07.2007 2350000 100000 10.00 23.50 PREFERENTIAL ALLOTMENT

2566000 121100

2SANJIV KR. CHOUDHARY 31.03.1994 557300 55730 10.00 10.00 FURTHER ALLOTMENT




5002300 298730

3ADITYA DALMIYA 30.06.2005 15000 1000 10.00 15.00 FORFEITED SHARES REISSUED

15000 1000

4UMESH KUMAR SANGANERIA 07.12.1992 1000 100 10.00 10.00 SUBSCRIPTION TO MOA

31.03.1994 600000 60000 10.00 10.00 FURTHER ALLOTMENT 17.03.1997 5000 500 10.00 10.00 OFF-MARKET


1781000 110600

5VANDANA SANGANERIA 07.12.1992 1000 100 10.00 10.00 SUBSCRIPTION TO MOA





2238500 122600 6MAYANK SANGANERIA 31.03.1994 40000 4000 10.00 10.00 FURTHER ALLOTMENT


1215000 54000 7ANKIT CHOUDHARY 06.07.1995 50000 5000 10.00 10.00 PUBLIC ISSUE

16.06.2004 7800 6500 10.00 1.20 OFF-MARKET


155300 18000 8MANJU CHOUDHARY 06.07.1995 50000 5000 10.00 10.00 PUBLIC ISSUE


41



3397500 171500

9ADITY CHOUDHARY 29.07.2005 150000 10000 10.00 15.00 FORFEITED SHARES REISSUED

150000 10000

10SHAKUNTALA JHUNJHUNWALA 06.07.1995 10000 1000 10.00 10.00 PUBLIC ISSUE



1200000 52000

11SUNITA DALMIYA 30.06.2005 75000 5000 10.00 15.00 FORFEITED SHARES REISSUED


225000 15000

12RAMAUTAR JHUNJHUNWALA (HUF) 31.03.1994 50000 5000 10.00 10.00 FURTHER ALLOTMENT

31.03.1994 300000 30000 10.00 10.00 FURTHER ALLOTMENT 12.01.1995 525000 52500 10.00 10.00 FURTHER ALLOTMENT 875000 87500

13SANJIV KUMAR CHOUDHARY (HUF) 30.06.2005 300000 20000 10.00 15.00

FORFEITED SHARES REISSUED

300000 20000

14TARA ISPAT LTD. 13.05.2005 100000 10000 10.00 10.00 OFF-MARKET

. 30.06.2005 750000 50000 10.00 15.00 FORFEITED SHARES REISSUED

850000 60000

TOTAL 19970600 1142030

6. Details of the transactions in Equity Shares by the Promoter / Promoter Group during the last six

months

There have been no transactions in the Equity Shares of the Issuer Company by the Promoter/Promoter Group during the last six months.

7. The top ten shareholders as on 03.03.2009

Sl. No. Shareholders Name No. of Shares % of Issued Capital

1 GBK RESOURCES PVT. LTD. 877841 11.41

2 UPENDRA KANDOI 349900 4.55

3 SANJIV KUMAR CHOUDHARY 298730 3.88

4 RISEWELL CREDIT PVT. LTD. 255029 3.32

5 VILAS PUJARA 250000 3.25

6 SYSTEMATIX FINCORP INDIA LTD. 250000 3.25

7 DEVENDRA KUMAR JHUNJHUNWALA 230288 2.99


42

8 HITESH RAMJI JAVERI 200001 2.60

9 SARVAMANGLA BUILDERS PVT. LTD.TD. 200000 2.60

10 RAJKUMAR BASUDEV AGARWAL (HUF) 200000 2.60

Total 3111789 40.45






4 RISEWELL CREDIT PVT. LTD. 255029 3.32

5 VILAS PUJARA 250000 3.25

6 SYSTEMATIX FINCORP INDIA LTD. 250000 3.25


8 HITESH RAMJI JAVERI 200001 2.60

9 SARVAMANGLA BUILDERS PVT. LTD.TD. 200000 2.60

10 RAJKUMAR BASUDEV AGARWAL (HUF) 200000 2.60

Total 3109136 40.42






4 MTL SHARE AND STOCK BROKER LTD. 177481 4.11

5 SUNIL K PUROHIT 141478 3.28

6 ARTI JAYESH RUSHI 123103 2.85

7 SAROJSHREE PROPERTIES & MERCHANDISE

PVT. LTD.

120000 2.78


9 JOINDRE CAPITAL SERVICES LTD. 89475 2.07

10 GSK FINANCES PVT. LTD. 88247 2.04

Total 1884311 43.65

10. The Issuer Company has not made any public offering within the immediately preceding two years.11. The Directors, Promoters and Promoter Group of the Company have not entered into any purchase or

sale transactions of the Company’s shares during the period of six months preceding the date on which the Letter of Offer is filed with the Board.

12. The total number of members of the Company as on 31st December 2008 is 2749.


43

13. The Aggregate Shareholding of the Promoter Group is 11,42,030 Equity Shares forming 14.85% of the total Issued and Paid-up Share Capital as on 31st March 2008.

14. The terms of Issue to Resident / Non-Resident Equity Shareholders have been presented under the “Basic Terms of the Issue” Section of this Letter of Offer on Page No. 80

15. The present Issue being a Rights Issue, as per clause 4.10.11 of extant SEBI (DIP) Guidelines, the requirement of promoter/ promoter group contribution is not applicable. At present 500000 equity shares of Promoters/promoter Group are under the lock-in-period till 23.01.2009

16. The Company has not instituted any employee stock option scheme as on the date of this Letter of Offer.17. As on the date of this Letter of Offer, there are no outstanding warrants, options or rights to convert

debentures, loans or other instruments into Equity Shares.18. The Promoter and Directors of the Company and Lead Manager of the Issue have not entered into any

buy-back, standby or similar arrangements for any of the securities being issued through this Letter of Offer.

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

20. The Company does not have any Revaluation Reserves.21. The Company has not issued any Equity Share for consideration other than cash or out of Revaluation

Reserve in the past.22. All information shall be made available by the Lead Manager and the Issuer to the public and investors at

Large and no selective or additional information would be available for a section of investors in any manner whatsoever including road shows, presentations, research or sales reports etc.

23. The company does not have any partly paid up equity shares and there are no calls in arrears.24. The Equity shares to be issued through this Issue would be made fully paid up within 12 months from the

date of allotment of securities in the manner specified in clause 8.6.2 of this guidelines.25. No further issue of capital by way of issue of bonus shares, preferential allotment, rights issue or public

issue or in any other manner which will affect the equity capital of the Company, shall be made during the period commencing from the filing of the Letter of Offer with the SEBI and the date on which the Equity Shares issued under the Letter of Offer are listed or application moneys are refunded on account of the failure of the Issue.

26. The Company does not have any intention to alter the equity capital structure by way of split/ consolidation of the denomination of the shares or issue of shares on a preferential basis or issue of bonus or rights or public issue of shares or any other securities within a period of six months from the date of opening of the Issue.

27. The Issue will remain open for minimum of 15 days. However, the Board will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date.

28. The promoters, directors and Lead Managers to the Issue will not pay any amount, whether directly or indirectly and in cash or kind, in the nature of discount, commission, allowance or otherwise to any person for the subscription of this Rights Issue.

29. The Promoter/ promoter groups have confirmed that they intend to subscribe to the full extent of their entitlement in the Issue. The Promoter/ promoter group reserves the right to subscribe to their entitlement in the Issue either by themselves, or a combination of entities controlled by them, including by subscribing for renunciation if any made within the promoter group to another person forming part of the Promoter Group. The Promoter/promoter group will also apply for additional Equity Shares in the Issue, such that at least 90% of the Issue is subscribed. As a result of this subscription and consequent allotment, the Promoter/promoter group may acquire shares over and above their entitlement in the Issue, which may result in an increase of the shareholding being above the current shareholding with the entitlement of Equity Shares under the Issue. This subscription and acquisition of additional Equity Shares by the Promoter/ promoter group, if any, will not result in change of control of the management of the Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirements indicated in the Letter of Offer, there is no other intention/purpose for this Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoter, in this Issue, the Promoter shareholding in the Company exceeds their current shareholding. The Promoter/ Promoter Group intends to subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to the Promoter/promoter group of any unsubscribed portion, over and above their entitlement shall be done in compliance with the Listing Agreement and other applicable laws prevailing at that time relating to continuous listing requirements. However, the Promoter/promoter group have


44

confirmed that in case the Rights Issue of the Company is completed with their subscribing to Equity Shares over and above their entitlement and as a result, if the public shareholding in the Company after the Rights Issue falls below the permissible minimum level on the basis of which the securities of the Company continue to be listed they will either individually or jointly with other Promoters make an offer for sale of their holdings so that the public shareholding is raised to the permissible minimum level within a period of 3 months from the date of allotment in the proposed Issue, as per the requirements of sub-clause 17.1 and 17.2 of SEBI (Delisting of Securities) Guidelines, 2003 or as per any amendment thereto or any other period as may be directed by SEBI or any appropriate authority. In this context, the promoters/promoter group of GANGOTRI IRON & STEEL COMPANY LIMITED have provided following undertaking:“We hereby undertake that, in case the Rights Issue of Gangotri Iron and Steel Company Limited, is completed with the promoter/promoter group subscribing to equity shares over and above their entitlement and as a result, if the public shareholding in the Company after the Rights Issue falls below the “permissible minimum level” being 25% of the paid up share capital of the Company as specified in the listing condition or listing agreement, we will either individually or jointly with other promoter/ promoter group shareholders make an offer for sale of our holdings so that the public shareholding is raised to the permissible minimum level within a period of 3 months from the date of allotment in the proposed Issue, as per the requirements of sub-clause 17.1 and 17.2 of SEBI (Delisting of Securities) Guidelines, 2003 or as per any amendment thereto or any other period as may be directed by SEBI or any appropriate authority.”


45

6. OBJECTS OF THE ISSUE

The rights issue is being made to raise funds for the following purpose:

1. To set up a 300 TPD Fully Automatic Thermex TMT Bar Plant / wire/Rod Plant along with 2 nos. 15 MT Induction Furnaces and a continuous Billet Casting Machine including margin for working capital requirement;

2. General corporate purpose; 3. To repay the Unsecured Loan 4. To meet the expenses of the rights issue.

The object clause of the Memorandum of Association of the Company enables us to undertake the existing activities and the activities for which the funds are being raised by us through the present rights issue.

Initially the project cost was estimated to Rs. 44.71 crores on the basis of appraisal done by SBI Capital Markets Limited for the project of setting up a 300 TPD Fully Automatic Thermax TMT Bar Plant. The State Bank of India, Commercial Branch, Patliputra, Patna – 800 013 has sanctioned the term loan of Rs. 27.44 Crores in October, 2006. Later, on the basis of self appraisal by the Company project cost is estimated to Rs. 57.28 crores towards cost over run. On the basis of the revised project cost, the term loan has been revised to Rs. 31.94 Crores by the The State Bank of India on 29.09.2008 vide sanction letter no. ADV/2008-09/208.

Cost of the Project and Means of Finance.

i. Cost of the Project

(Rs. In Crores) Particulars Original

Amount

Revised

Amount

300 TPD Fully Automatic Thermex TMT Bar Plant / Wire/Rod Plant along with 2

nos. 15 MT Induction Furnaces and a continuous Billet Casting Machine

44.71 57.28

General Corporate Purpose 2.82 2.82

Rights Issue Expenses 0.30 0.30

Total 47.83 60.40

ii. Means of Finance

(Rs. In Crores) Particulars Original

Amount Revised Amount

Proceeds from conversion of warrants into equity shares and forfeiture of warrant proceeds issued to Promoters/Promoter Group and Non-Promoters.

8.08 8.08

Proceeds from Rights Issue 12.31 12.31Term Loan from SBI 27.44 31.94Unsecured Loan 0.00 3.50Internal Accrual 0.00 4.57Total 47.83 60.40

Proceeds from conversion of warrants into equity shares and forfeiture of warrant. Particulars Promoters

/ Promoter Group Non

Promoters Total

Proceeds from conversion of warrants into equity 1.17 6.76 7.93Proceeds from forfeiture of warrants 0.02 0.13 0.15Total Proceed 1.19 6.89 8.08


46

The proceeds from Unsecured Loan will be as follows. Particulars Amount

(Rs in Crores) VIP Finstock Private Limited 3.00Suraj Laxmi Private Limited 0.35Suraj Nirman Private Limited 0.15TOTAL 3.50

Current Account of Internal Accruals Particulars Amount

(Rs in Crores) Profit & Loss Account (Credit Balance as on 31.03.2008) 2.94 Add : Profit & Loss Account (Credit Balance for six months period 30.09.2008) 0.75 Profit & Loss Account (Credit Balance as on 30.09.2008) 3.69

The Internal Accruals of the Company are sufficient to meet the shortfall of funds. The unsecured loan was taken on short term basis as to bridge the gap and will be serviced on the availability of internal accrual and rights issue proceed.

It hereby confirmed that firm arrangements have been made for the stated means of finance, excluding the amount proposed to be raised by way of this rights issue as per cluase 6.8.4.3 of the SEBI (DIP) Guidelines, 2000.

A Break up of cost of project of Rs 44.71 crores has been revised to Rs. 57.28 crores for setting

up a 300 TPD Fully Automatic Thermex TMT Bar Plant along with 2 nos. 15 MT induction

Furnaces and continuous Billet Casting Machine.

The total cost of the project of setting up a 300 TPD Fully Automatic Thermex TMT Bar Plant is estimated by the management at Rs. 44.71 crores revised to Rs. 57.28 crores as per detail below:-

(Rs in crores)

Sr No.

Details OriginalProject

Cost

Cost Over Run

Revised Project

Cost

% of total revised

project cost 1 Land & Site Development 1.92 0.56 2.48 4.33%

2 Building & Civil Construction 6.78 1.59 8.37 14.61%

3 Plant & Machinery 25.12 4.04 29.16 50.91%

4 Electric Installation 2.08 0.87 2.95 5.15%

5 Misc. Fixed Assets 0.35 0.10 0.45 0.78%

6 Provision for Contingencies* 0.85 (0.65) 0.20 0.35%

Total Hard Cost 37.10 6.51 43.61 76.13%

7 IDC 0.63 1.73 2.36 4.12%

8 Security Deposit 0.00 1.02 1.02 1.78%

9 BG Margin 0.90 (0.90) 0.00 0.00%

10 Prelim. & Pre-Op. Expenses 0.79 1.03 1.82 3.18%

11 Working Capital Margin 5.29 3.18 8.47 14.79%

Total Soft Cost 7.61 6.06 13.67 23.87%

Total Project Cost 44.71 12.57 57.28 100.00%


47

* considered at 2.50% on hard costs

Project Appraisal

The project of setting up a 300 TPD Fully Automatic Thermex TMT Bar Plant originally has been appraised by SBI Capital Markets Limited based on the estimates provided by T.M. consultants’ Network Private Limited- TMCNPL (SBI empanelled Technical Consultant). The State Bank of India, Commercial Branch, Patliputra Branch, Patna-800013 has sanctioned the term loan of Rs. 27.44 Crores in October, 2006 towards the same. However, the term loan of Rs. 27.44 Crores has been revised to Rs. 31.94 Crores by The State Bank of India on dated 29.09.2008 vide sanction letter no. ADV/2008-09/208 on the basis of self appraisal by the Company.

Scope and Purpose of Appraisal

The appraisal had been carried out to sanction rupee term loan for the purpose of setting up a new Fully Automatic TMT Thermex Bar Plant.

Cost of Project and Means of Finance as per the appraisal report

The cost of the project as per appraisal report was estimated by SBI Capital Market Limited at Rs. 48.32 crores which was subsequently reduced by State Bank of India to Rs. 44.71 crores due to the substitution of Bank Gaurantee of Rs. 0.90 crore in place of security deposit of Rs. 4.50 crores with Bihar State Electricity Board as originally envisaged and accordingly renewed the term loan component from 31.06 crores to 27.44 crores and is proposed to be financed by (i) Proceeds from conversion/forfeiture of warrants into equity shares issued to Promoters/Promoter Group and Non-Promoters. (ii) proceeds of the rights issue, (iii) Term Loan of SBI and (iv) Unsecured Loan / Internal Accrual. Due to delay in the Rights Issue proceeds, the Company could not complete the project in time resulting in cost overrun and revised cost of the project estimated by the Company on self appraisal basis amounted to Rs. 57.28 crores. The Company approached the appraising bank to revise the sanction limit based on the self appraisal done. The appraising bank (State Bank of India) accordingly sanctioned the term loan of Rs. 31.94 crores in place of original sanction of Rs. 27.44 crores.

Disclaimer Clause inserted by SBI Capital Markets Limited in the appraisal note for sanction of financial assistance to GISCO

This Financial Appraisal Note (FAN) contains proprietary and confidential information regarding Gangotri Iron & Steel Co. Limited’ (‘GISCO’ or ‘the Company’). This has been prepared by SBI Capital Markets Ltd. (‘SBICAP’) on the basis of information provided by the company, technical consultants and publicly available sources, to be used for the purpose of raising funds from Banks/FIs.

There are financial projections presented in this FAN based on information made available by GISCO. A financial projection presents, to the best of management’s knowledge and belief, a company’s expected financial position, results of operations and cash flow for the projected period. Financial projections require the exercise of judgment and are subject to uncertainties concerning the effects that change in legislation or economic or other circumstances may have on future events, and different people may have a different view in future. There will usually be differences between projected and actual results because events and circumstances do not occur as expected, and those differences may be material. Under the circumstances, no assurance can be provided that the assumptions or data upon which these projections have been based are accurate or whether these business plan projections will actually materialize. Neither SBICAP, nor State Bank of India or any of its associates, nor any of their respective directors, employees or advisors make any expressed or implied representation or warranty and no responsibility or liability is accepted by any of them with respect to the accuracy, completeness or reasonableness of the facts, opinions, estimates, forecasts, projections, or other information set forth in this FAN or the underlying assumptions on which they are based or the accuracy of any computer model used and nothing contained herein is, or shall be relied upon as a promise or representation regarding the historic or current position or performance of the company, or any future events or performance of the company


48

Weaknesses and threats given in appraisal report

Weaknesses

• The company has not entered into any firm arrangement for raw material supply and off take of finished goods. However, several sponge iron plant are being commissioned in Bihta and neighboring areas and states and there is no dearth of supply of sponge Iron, cast iron and Scrap.

• The company is yet to develop a proper management information system commensurate with its scale of operations. The company is in the process of implementing ERP system.

• The products –Billets, MS Bars and Wire Rods- being manufactured by the company are susceptible to price volatility. The demand for long products is expected to increase due to increase in activities in the Infrastructure sector and housing boom.

Threats• Big players like Tata Steel, SAIL, Jindal having found opportunity in this product have started rolling

out new projects / augmenting the existing lines with huge capacity expansion.

• There are numerous smaller players in the market and thereby quality consciousness and brand promotion is to be done on a continuous basis. The company has been able to establish technical tie up with Thermex and the brand as been widely accepted due to good marketing policy adopted by the company.

The domestic demand-supply scenario is expected to be balanced even though a number of capacity expansions are expected to be implemented by various companies over the next 1-2 years. In this scenario, the player with lower production costs would be in a position to utilize capacities optimally. The company would be able it to withstand competition due to nearness of raw material, over a decade of marketing experience in long products.

A-1 Land & Site Development

The total area of land which is already identified by the company for the project is about 14.94 acres at Bihta, district Patna, Bihar. The cost of land would be approximately Rs. 1.40 crores and the cost of site development is estimated at Rs 0.52 crores on the basis of the estimates provided by the technical consultant. The total cost of Land and site development is about 4.29% of the total project cost. The details of the cost of land and site development are given below:

As per the revised self appraisal report as estimated the cost of land would be approximately Rs. 1.80 crores and the cost of site development is estimated at Rs. 0.68 crores. The revised total cost of land & site development is about 4.33% of the total project cost. The details of the cost of land and site development as revised are given below: (Rs in Crores)

Description Original Cost Revised Cost Land and Site Development Land 1.40 1.80 Boundary Wall 0.23 0.26 Leveling & Filling of Land 0.10 0.20 Internal Roads for Plant 0.08 0.08 Bore well 0.03 0.03 Drainage System 0.06 0.06 Iron Gates 0.02 0.04 Plantation 0.01 0.02 Total 1.92 2.48


49

Of the above the company has already acquired freehold land admeasuring 12.13 acres and lease hold land admeasuring 2.81 acres and get registered for the plant site located at Bihta near Patna. The company has received the possession certificate for the entire area of 14.94 acres.

The Company has incurred a sum Rs. 2.51 crores towards the aforesaid head till 31.01.2009

A-2 Civil & Structural Works

The estimated cost of civil and structural works has been worked out on the basis of the estimates provided by the technical consultant. The cost under this head Rs. 6.78 crores, which is 15.17% of the project cost.

As per the revised self appraisal report as estimated the cost of civil and structural works would be approximately Rs. 8.37 crores, which is 14.61% of the total project cost: The facility wise civil and structural works cost is as given below.

(Rs in Crores) Description Original

Cost Revised

Cost Furnace and Concast Shed on steel trusses & heavy structure Main shed 1.32 1.21 Furnace and Concast Shed on steel trusses & heavy structure Billet shed 1.01 0.76Furnace Platform 0.53 0.65Gasifier Shed 0.00 0.17Electric Substation 0.05 0.15 Rolling Mill Production Shed 1.28 1.37 Water Tank Overhead 0.06 0.15 Water Tank Underground for Furnace 0.08 0.12 Water Tank Underground for Rolling Mill 0.20 0.24 Water Tank Underground for CCM 0.00 0.15 Rolling Mill & Concast Foundation 0.70 0.80 F.G.Yard-2 0.60 0.50 Work Shop & Electric Room 0.00 0.13 Coal Shed 0.08 0.33 Oxygen Plant Shed 0.12 0.17 Stores Room 0.08 0.06 Laboratory 0.04 0.03 Weighbridge Room 0.01 0.00Labour Quarters 0.27 0.58Staff Quarters 0.12 0.32Administrative Building 0.15 0.20 Toilets 0.02 0.05 Security Room 0.02 0.02 Staff Canteen 0.00 0.05 Architect Fees 0.05 0.15 Total 6.78 8.37


A-3 Plant and Machinery

The total estimate under this head would be approximately Rs. 25.12 crores, which is 56.19% of the project cost. The cost is based on the estimates provided by the technical consultant based on quotations and agreements received and entered into by the company with the suppliers. The breakup of the total plant and machinery cost is as given below.


50

As per the revised self appraisal report as estimated the cost of plant & machinery would be approximately Rs. 29.16 crores, which is 50.91% of the total project cost.

(Rs in Crores) Description Original Cost Revised Cost Rolling Mill Section 13.35 13.68 Concast & Furnace Section 8.30 9.98 Miscellaneous 2.74 4.38 Erection, Installation & Freight 0.73 1.12 TOTAL 25.12 29.16

Statement showing details of Plant & Machinery for which orders have been placed and delivery received by the company:

Sl. No. Supplier Name Name of Plant & Machinery Qty Bill No. Amount

Imported Machineries

1 E. M. Moulds Itly 1000 Pcs Copper Mould Tubes

10 183 703813

Clearing Charges 33064

Custom Duty 231975

Total Cost of Imported Machinery (A) 968852

Indigenous Machineries

1 Paharpur Cooling Towers Ltd.,Ghaziabad

Chilling Plant and their accessories Various 436 797389

Freight for Machine

2 Toshniwal Industries [P] Ltd,Ajmer

Infrared Radiation Thermometre 1 770 121979

3 The Behar Potteries Ltd. Burdwan

Fire Bricks 12000

Pcs 663 271920

Fire Bricks 10000 Pcs

64 226600

Fire Bricks 2000 Pcs 67 45320

4 Technotherma Furnaces [P] Ltd

1 No. Suspended Roof Casting , 1 No. Recuperator, Flue Damper 2 No.

302 623150

5 Steel Centre , Chas

HR Sheet Coil for Gantry 20.020

MT 350 697585

HR Sheet Coil for Gantry 23.010 MT

495 822945

6 Sparkonix India [P] Limited,Pune Special Propose Roll Branding 1 463 829623

7 Sparkonix India [P] Limited,Pune

Rib Cutting Machine 1 454 2768409

8 Sharma Mill Store

Kirrlosker made Pumping Set complete with all assoceries 1 N0. 1124 20480

Kirrlosker made Pumping Set complete with all assoceries ,5BH at 1500RPM

1 N0. 1140 44747

Piston,Gasket,Nizzole, Delivery Valve 1 N0. 1146 2879


51

Pre delivery Pipe 487 Mtrs 1141 8610

Sunction Pipe Foot Valave , Nipple 1 N0. 1144 3182

9 Shankar & Co., Patna

Fire Clay Mortar supplied by Shankar & Co.

28 Tonne 132 101920

Caluandum supplied by Shankar & Co.

10 Tonne [200

Bags] 151 164320

Fire Clay Mortar supplied by Shankar & Co.

240Bagsx50

=12000 Kgs

152 284544

10 Param Shanti Steel [P] Ltd,Muzaffarpur

Shed Fabrication Materials ( Flat Cutting )

17.820 MT

11 463320

Shed Fabrication Materials ( Flat Cutting )

17.850 MT

12 464100

Crane Gentry ( Rail for Gantry ) 28 376506

Crane Gentry ( Rail for Gantry ) 30 384540Crane Gentry ( Rail for Gantry ) 29 381160

11 Phoenix Trading Corporation,Kol

Bearing having No. 24030/24032 72 and 48

pcs 2585 1226399

4 No. Bearing24030K,4 NO. Bearing 22212 and sleeve No. 2312 4 Pcs

4 No. 2616 28652

12 Ratna Udyog, Kolkata

1 No. Power distribution Board,1 No. Starter Control Panel for 1200HP Mort0r and 1 No. Starter Control Panel for 800 HP Motor

1 No. RU/M/34/07-

09 937300

1 No. each LIghting Distribution Board 1 No. 37 41600

Transportaion charges of 4 Nos Electrical Control Panel

16800

120mm2 Electrical Cable 1940 5480

Misc. Expenses 4314

13 Tee Saif Tools Corporation,Patna

Workshop Machine 2 ps 1834 26936 welding machine

Consumables ( Fabrication) 2398 126017 Welarc, Brass Stand,Gloves,Welding Holder , White Glas

200 Mtrs Copper Cable, Welding Electrodes and other Tools

2451 111503

Miscellaneous Stores and Cutting Tourch, Oxygen Regulator, Electrods 2528 132349

85 Case Welding Rod , 1 No. Chain Pully Block 5Tonne capacity. Nozzel .. Hand Scr een and Tape

2578 233470

30 Case welding Rod, Alenkey, Taper Drill Bit, hand gloves

2631 67167


52

Welding Electrodes, White Glass,Welding Holder Measuring Tape, Regulator abd Gas

2717 143114

Welding Electrodes, Welding Cable,Hose Pipe, Gas Cutter and Gas Regulator

2718 127588

Consumables ( Fabrication) Welding Electrodes, 20 Cases 2727 49130

Store & Consumables

Try Square, Hammer,Wrench,Gas Cutting Tourch and Measuring Tape

2722 5506

Welding Electrodes,Welding Glass,German Glass and PP Rope 2720 101465

Store & Consumables

Copper Welding Cable ,Center Punch,Drill and Drill Sleev[100 Mtrs,and 2 Pcs each

2721 23895

Workshop Machine

Advani Olricon Welding Machine and Welding Transjormer Welding Transformer Machine one Number

2719 75400

Consumables ( Fabrication) ALuminium Wire 6 Kg, Preemod paper-2Pc, Varnish 2 Ltrs 2748 1431

Store & Consumables

Brass Bolt with Nut -30 Pcs, Rotary Swirch Switch for W. Machine-5 Pc,Aluminium DC Wire-6.1 Kg,Pespond Bond 1 mm 6 Pc. Cotton Tape-6Pc,Miralex paper-600Gr,Aluminium DPC Wire5.950Kg,

2766 6398

Arc Welding Air Cooled Transformer-1 Set and 5 case Welding Electrodes

2767 60580

40 Case welding Electrodes and Sliding Plate for Maganetic Machine 15 set

2768 105339

1 Drum Hydraulic Oil 1 Drum and 5 Case Welding Electrodes

2769 20072

30 Case Welding Electrodes and 1 Drum Hdraulic Oil 2770 80522

1 No. Drill Machine, Regulator,Drill Bit 2846 4046

SS Wire,Round File,Drill Bit, Taper Shank,Thrading Tap etc. and Metro Hydraulic Oil 1 Drum Emery Paper-1 Roll

2986 21809

Store & Consumables

Welding Head Helmet3 Pcs,PVC Tape-30 Pcs,Welding Electrodes3 Case,and Cotton Tape1" 10 Pcs

2985 5392

Store & Consumables


53

`Welding Electrodes,Griding Wheel, Welding Cable,Piano Wire,Germany Welding Glass, White Glass etc. supplied

2983 62450

Store & Consumables

Wire Rope,-2 No. each,PVC Pipe-[100+102]Mtrs,,GI Patti[10.5 Kg,Gloves-50Pairs,,Measuring Tape-10Pcs,, and Hose Pipe-100Mtrs

2982 36614

Store & Consumables

Welding Electrodes-30 Case,Cutting Nozzle-12 Nos,Cable Compound-10 Kg,Snatch Double Bearing2 NOs,

2981 84989

Pulley, Measuring Tape, Regulator and Weklding Electordes, Welding Glass

3024 115781

Store & Consumables

Bolts,Washer,White Glass Centre Punch

3143 44761

Tools

Tools , Try Square,Hammer,Centre Punch,Spanner

3144 4528

1 No. Welding Machine ,Lather Grinder, Electric Blower, Spanner 3145 123048

Tools Vernier,,Micrometre,Dial Indicator,Lather Chuk 3146 63284

Store & Consumables

Copper Welding Cable ,Electrodes, Wire Brush

3147 111759

Workshop Machine

Miscellaneous Tools [Micrometre,Allen Key Grease Gun

3162 187949

Electrodes,Griding Wheel and Piller,Cutting Piller,Wrench, CI Pulleyand Cutting Set

3160 110770

Workshop Machine

Tools & TYackels [Air Compressure Machine,Magnetic Stand ,Spring Callipers,Spanner Set,Brill Bit,Grinding Machine,Copper Welding Cable

3163/64/65/66

207289

Workshop Machine Water Level Pipe, Drill Bit , Drilling Machine, Wheel 3323 8455

�� Freight for Machine 78750

14 Havells India Ltd.Alwar

industrial Electric Cable 7948 1355612 3x6 AYWY 1.1 KV Industrial Cable 7972 21635

3x6 A2XFY 1.1 KV Industrial Insulated Cable

7973 29098


54

7x1.5 VWY 1.1 KV,10x1.5YWY 1.1 KV and 3x1.5 YWY [1000/.505/.484 KM ]

7984 157021

50 Nos Orion Nova 250W,50 Nos,Acrylic Orion Nova 250W SV,50 NOs250WHPSV/MHOC Ballast SPL and 50 Nos.BNG 2x40W FTL CU OCB

BA-

8851000904 137323

Industrial Cable .772 KM 8.35E+09 716512

Misc. Electrical Goods Lamp , Blaster 8.3E+09 186848 Industrial Cable XLPE Insulated .258 KM

10123 269576

Industrial Cable XLPE Insulated .515 KM

10124 239186

` 10125 124635

15 Concast India Limited

Ajax India, Thane 4 284583

Componants and Parts of CCM(Steel Structure and Chequred Plate)

Ajax India, Thane 6 1228723 Componants and Parts of CCM(Steel Structure and Chequred Plate)

Ajax India, Thane 5 187337Components & Parts of CCM


Componants and Parts of CCM(Steel Structure and Structural Plate supplied by Ajexe

Concast Machinery 589686Freight for Machine

difference of Bill No. 04/05/'06in costing and for freight of Rs. 32030+95160]

Concast Machinery 700 105480Freight for Machine

Difference of Ajex Invoice N0.07 and freight for Machine [32030]

Rashmi Fabricators [P] Ltd., Thane 56 813539

Concast Machinery

Freight for Machine

2 No. Intermediate Roller Table [PCRT] and 2 Nos. Discharge Roller Table


Components and parts of CCM Machine , Spray Camber Wall and Chequred Plate and Hand rails

Concast Machinery 934/935 616917Freight for Machine

Difference of Ajex Invoice N0.13 / 02.10.2007 for Machine and freight

Shivshakti Engineers, Thane 70 822065


55

2 Nos. Withdrawal Straightner Assy. and 2 Nos. Bridging Frame[ Loose]

Freight for Machine 961 36650

Freight for Withdrawl and Straightning Unit supplied by Shivshakti Engineers and Overheight Charges and Statistical Charges charged by Concast

Freight for Machine 962 35560

Freight for Withdrawl and Straightning Unit supplied by Shivshakti Engineers and Overheight Charges and Statistical Charges charged by Concast

Concast Machinery 121 154800

Withdrawl and Straightning Unit and Bridging Frame supplied by Shiv shakti Engineers , difference of the Price charged by Concast

Concast Machinery 1411100

Machinery containing Tundish,Cylinders,Exhaust Fan,Motors,Bar Assemble,Bar Head Link and Bar Trtansition Link

Preston Hydraulics,Mumnai 162 481098

1 No. Hydraulic Power Pack [Straitner Dummy Bar recover and Pusher and their Spares

Kavitsu Transmission [P] Ltd.,Satara 399274

12 NOs Plantary Gear Box for Staighter,DRT and PCRT

Mathbros Engineers [P] Ltd.,Thane 108 537486

Components/Parts/ of CIC Machine[Mould Assly,Aluminium Tepplate.

Artech Instruments & Control [P] Ltd,Mumbai 2732 85019

Universal Pyrometre with 2" display, Display MPS,

J. S. Control,Thane. 70 1174664

MCC Panael , AC Drive Panel JUnction Box , Intermediate Opertor Staiion Mould Operators Pendent supplied by JS Control


Tundish,Festoon Arrangement,Spray Nozzle,Aluminium Wire Feeder Cardon Shaft,Seal Kit for Hyd. Cylinder, Hyd. Cylinder for Straightner etc.



56

Equipment for 2 Strand 4/7 M Radius Continuous Machine [Instrumentation/MCC/AC Drive PLC Based Water Automation equipmemnts

Spartan ElectricalsMumbai 814 36449 4 No. Straightner and Wire Feeder 2 NOs

Spartan ElectricalsMumbai 815 110904 4 No. Straightner and Wire Feeder 2 NOs

Spartan ElectricalsMumbai 60660

6 No. Discharge Roller Table and Steam Exhaust 1 Nos

Spartan ElectricalsMumbai 817 15500

2 No. Intermediate Roller Table Concast Machinery 1672 753311

difference in value of Machines supplied by Kavustu, Artech and Math Brothrs [Section Size related Castings Equipments,Accessories, Instrumention and Spares


Tundish ,Feston Arrangements,Roller Arpon Assy ,Mould Cooling Circuit,Pressure Switches with Accessories, Spares, Seal Kit for Hydraulic Cylinder, Limit Switches

Sahib Equipments Pvt. Ltd..Mumbai 94 742943

Roller Apron Assembly,Mould Occiliation Table supplied by Sahib Equipments Pvt Ltd.

Concast Machinery 642087

difference invalue of Materials supplied by Sahib Equipments Pvt. Ltd. [Roller Apron Assembly etc]


Tundish Car Assembly ,Cable and Cable glands , Slid gate System and Spares


Control Valve for PLC Based Secondary Water Automation

Dashmesh Fabricators Pvt. Ltd,Thane 102 484963

Hydraulic Pusher, Dummy Bar Receiver,REtracible Dummu Bar Supplied by Dashmesh Fabricator



57

difference amount invalue of Hydraulic Pusher, Dummy Bar Receiver,REtracible Dummu Bar Supplied by Dashmesh Fabricator

16

Composit Aqua Systems & Equipments[P] Ltd

2 No. Cooling Tower [Modle CL-Case=RT-0814-01] and [CL-Case-RT-1414-1]

2 No. 110 412000

1 No. Cooling Tower Modle Nod. IF-CASE-RT-1416-1

1 No. 169 824000

Freight for Machine 36040 2 Set Cooling Tower [Modle MS-Case=RT-0808-1CFH No. 88 2 Set 133 77250


17 Avon Crane [P] Ltd, Gurraon

Overhead Cranes 2567452 1 No. EOT Crane having 10 MT Capacity 1 No. 142

1 No. EOT Crane [40/15 Tone] supplied by Avon Cranes

1 No. 210 3287299

1 No. EOT Crane [40/15 Tone] supplied by Avon Cranes

1 No. 211 2999360

1 No. EOT Crane [10 Tone] supplied by Avon Cranes

1 No. 289 2639437

1 No. EOT Crane [10 ToneCaoacity] supplied by Avon Cranes

1 No. 306 2567452

1 No. EOT Crane [40/15 Ton Caoacity] supplied by Avon Cranes

1 No. 320 2999360

Part Consignment of 40/15 Tonne EOT Crane 319 3287299

18 Areva T & D [India] Ltd., Patna

33 KV, 1250A, 25 KA Polrcelain clad VCB Type with Accessories and Structures

20883 561882

33 KV, 1250A, 25 KA Polrcelain clad VCB Type with Accessories and Structures

20882 1113764

VDG 13/U/V Relay VDG 13 AF 9101A(M0 3 NOs. and VDG 11 Relay 110 VAC

21159 49429

33KV 1250A 25KA Outdoor Vaccum Circuit Braker Typer PCOB along with Control Relay

21542 552122

19 Appex Traders, Kolkata

Re-Heating Furnace 125mm Butter Fly Valve 10 Nos and 200mm Butter Fly Valve -1 Nos

10 397 35412

20 A L I C O Traders, Patna

Store & Consumables 248 34632

Bend, Flange Long and Short

Store & Consumables 247 105560 Different sizes Bend and Fnage

21 Alfa Enterprioses,Batala

1 No. 16 '' Lathe Macvhine and 1 No. 16'' Extra Havey Duty Lather 30" Shaper Machine and 1No. 2" Radial Drill Machine

1 551 1006310


58

24'' 1 No. shaper Machine,1 No. 12' Lather Machine ,10' Lather Machine,,1 No. Drill Machine

1 550 687525

22 Jindal Electric & Machinery Corpn,Ludhiana

JEMC make automatic Voltage Stablizer 1 54 359164

23 Multiserve Rolls Ltd,KOLKATA

Roll 14 253 1595602

Roll 6 340 299341

24 Poineer Cranes

& Elevators, Ludhiana

Wire Rope Hoist 5Ton Capacity 1 889 131235

Debit Note No. ... dated 14.02.2008 agaisnt Invoice NO.889 / 04.02.2008

889 10000

Freight for Machine 3541

Less:- Deduction on settlement -5235

25 A.R. Engineering Works,ND

Foundation Bolt 5 Lots and Motor Base Plate

39 90 1646649

320mm Pinion Stand 2 Nos each and 260 mm Mill stand and Base Plate each of 2 Nos.

2 161 2336322

High Speed Fly Wheel -6 MT Dia 2 Mtrs and 1 Set Internals for Pinion Stand

163 1464887

1 No. 510mm Pinion Stand 1200HP @85RPM fitted with Geared Coupling and Base Plate for Pinion Stand

1 175 2868588

1 No. Base Plate for Mill Stand and Pinion Stand 1 183 108876

1 No. 510mm Mill Stand and 2 No. Base Plate

1 181 3308895

1 No. Reduction Gear,, Fabricated Base Frame for Gear Box and 2 No. Mill Stand 260mm

1 180 2663336

1 No. 330mm Mill Stand. Base Plate for Mill Stand -2 No. 260mm Mill Stand -2 No. and Base Plate

1 186 1726911

1 No. Reduction Gear BOx and 1 No. Fabricated Base Frame

1 189 2517331

2 No. 330mm Oinion Stand ,330mm Mill Stand-1 NO. Base Plate for Pinion Stand -4 No. Pinch Roll -1 No and Fixed Rotary Sheer

2 191 3308123

Roller table and Furnace Charging Roller Table and 330mm Mill Stand 203 3586844

26

Bengal Machinery Corporation , Kol

L & T Make Maganetic Release DNI ACB

5 Nos 5556 368708

L & T Make 633ARelease Type ACB 4 Nos. 5558 677708

L & T Make 1600A 3P T- Maganetic Release ACB and 1000A ACB

4 Nos. 5557 262328

L & T Make diffent Types of Relay Fuse 71 Nos 5555 501674

L & T Make Shunt release for ACB 5554 1062 L & T Make Power Contractor,Relay,Switches 5553 136671


59

27 Electron,Patna Motors 8 166 109146

28 Dinesh & Company,Patna

Electronics Weigh Bridge 1 No. 1 245 927800

29

Deem RollTech [P] Ltd,Chhatral(Gujrat)

14 Nos. [5550 Kgs] Metal Rolls 14 147 789062

08 Nos. [3660kgs] Metal Rolls 8 117 531511 Metal Roll 7 Nos.Supplied by Metal Roll 7 247 543214

Metal Roll 5 Nos.Supplied by Metal Roll

5 212 1348362

30

Continental Thermal Engineers, Chenai

Oil Heating and Pumping Unit ,120Amps Contractor Box , Heater,Temperature Controller, Burner Block and C I Front Plate for Burner each of one

1298 289918

Gas Burner,Conversion Kit,Microtrol Oil Valves,Centrifugal Air Blower, Screwed Type ZButerfly Vlave with Spring Loaded Handle , Flexible Air Hodse etc 11 Nos& 1 No

1294 648294

31 Chinar Steel Segnent Centre, Bokaro

05.400 MT Chequred Plate 05.400

MT 466 205660

16.940 MT H. R. Plate 16.940

MT 465 558632

32 Case Neuberg Solutions ,Ndelhi

Crude Gas Sttion Project CNS 3.2[Producer Gas Generator] 1 NO.

1 3 7725000

debit note for packing, forwarding and clearing charged by the party

100000


33 Capital Machinery Store

82.5 KVA Generator Set supplied by Capital Machinery 61 562000

34 Bharat Machinery & Mill Store Patna

1 No. Monoblock Pump Set 1 434 2912 1 No. Crompton 1 HP Motor for Pumop Set 1 897 5408

Purchase 1 Nos. Cromption 1 H.P. Jet Pump (0.75k.w.) Singal Phase Pump, Model- SWJI

1 957 5408

Purchase For L & T Starter 970 2600

35 Bhusan International, Patna

1 N. Summersible Pump Set ,Control Panal and Summersible Cable 1 434 13374

1 No. Submercible Pump Set , Control Panel ,Cable , Clamp and 4" Folding Cap

1 674 13162

Less:- Excess amount reversed -212

36 Bhusan International, Patna

Elgi Make screw Air Compressor 2 Nos. and 1 No. Air Receiver -1000 Ltrs Capacity

2 604 1359000

37 BSP Multiworth India [P] Limited

3655 Kgs CI Castings and 11 Kg Assembled Finished Goods

323 188322

38 Gupta Steel Fabricators, Roukels

M. S, Plate [24.245+2.310+2.565] MT Supplied by Gupta Steel Fabricators, Rourkela

455 1045396


60

M. S, Plate 26.710 MT for Wheel Gantry 454 958879

M. S, Plate [24.245+2.310+2.565] MT 455 9624698.910 MT MS Plate supplied by Gupta Steel Fabricator for Gantry

486 316663

27.310 MT 25 mm Plate supplied by Gupta Steerl Fabricator 506 1024131

2 MT 25 mm Plate supplied by Gupta Steerl Fabricator

507 75000

16.130 MT 20 mm &16 mm Plate supplied by Gupta Steerl Fabricator 505 564557

39

Escort Construction Equp. Limited, F/Bad

1 No. Hdraulic Mobole C rane 1 No DS/70322 882817

40 Interface Industrial System,Delhi

Jackson 3462 1155001

difference amount in supplying the Generator Set , Freight

9 116740

41 H. K. Rolling Mills Engineers [P] Ltd.,Mumbai

PD Pumps,Pum Sets , Valves and Machine Tools supplied by kirlosker 5700005669 638926

difference of Value in High Pressure Pump with AC Motor supplied earlier by Kirlosker Brothers [5665/29.09.2007]

1 642400

Swuitzer Instruments Ltd. Chennai Pressure Switch 4 Nos. 1525 PerPcs with Cable Gland 4 Bill No.

7/3529 7465

Wika Instruments India [P] Ltd

Lower Mount Case fillin Fluid , Pressure Guage etc.

4821 5201

Intergrated Electric Company [P] Ltd.

the value of Motors supplied by Integrated Electric Co. transfered to H & K Rolling Mills Engineers [P] Ltd.

853018

Lower Mount Case fillin Fluid , Pressure Guage etc. Diff amjount

4 5770

Pressure Switch 4 Nos. 1525 PerPcs with Cable Gland supplied by Switzer Instrument Limited, Chennai Bill No. 7/3529 dated 30.10.2007 Tr to HK account as Bill 03 / 30.10.2007

4 3 3920

5 NOs DC Motor supplied by Integrated Electic Co. through their Bill No. 656 / 17.10.2007 sent throgh BIll No. TCI on behalf of H & K Rolling Mills [P] Ltd. tr to HK account as per Bill 17.10.2007

210840

Supreme Controls . Bombay

value of Motor Control System and Junction Boxes supplied by Supreme Control vide Bill No. 29 / 07.02.08

190550

Pneucon Valves Pvt. Ltd,Thane


61

Pneucon Glob 2 way Motorised Control Valves with PPT Size -6 " supplied by Pneucon Valves Pvt. Ltd.

842 118121

Aeroflex Industries Limited

Hose SS3231,SS304SWB4" Assly supplied by Aeroflex Industries through their Bill No. 001541/7.2.2008 on behalf of HK Rolling Mill BBY Teransfered to HK Rolling Mills

1541 20936

Land Del Inrared Pvt. Ltd. Mumbai

Thermameter , Cooled Jacket , Pre Wired Cable supplied by Land Del Infrared Pvt. Ltd. [91/06.02.2008]

91 215954

1 No. Therometer-2 NOs, Prewired Cable and Single Axis Mounting -2 No.,Water Cooled jacket -2 Nos. supplied by Land Del Infrared Pvt. Ltd. 00090 / on behalf of HK Rolling Mill[Diff Amt. transfered to HK Rolling Mill] as per 05/7.02.08

5 170700

1 No. Motor Copntrol Centrre 1 No. and 6 Nos. Juctiomn Boxes supplied by Supreme Control vide Bill No. 29 / 07.02.2008 on behalf of HK Rolling Mill[ Diff Amt transfered to hk Account as per Bill 07 / 07.02.2005

7 235840

CI Gate Valve with Electrical Contact , Isolating Valve ,CS Swing Check Valve and CS Ball valve total in 29 Nos. supplied by VIP Valve India Pvt. Ltd. vide Bill No. 278 / 07.02.2008 tr. to HK account as per Bill NO. 08/07.02.2008

8 165000

Pneucon Glob 2 way Motorised Control Valves with PPT Size -6 " supplied by Pneucon Valves Pvt. Ltd. vide Bill No. 842 / 07.02.2008[Tr to HK AQccount vide Bill No. 09/07.02.2008]

9 83360

Vega Control [P] Ltd

Thyristor Drive for Rotary Shear, Pinch Roll,Tail Braker etc supplied by Vega Control vide their Bill No. 455 / 08.02.2008 tr. to HK Rolling

455 1907593

Thyristor Drive for Rotary Shear, Pinch Roll,Tail Braker etc supplied by Vega Control vide their Bill No. 455 / 08.02.2008[Diff amount tr to HK vide their Bill No. 10 / 07.02.2008

213600

VIP Valves (India ) Pvt. Ltd. Mumbai


62

CI Gate Valve with Electrical Contact , Isolating Valve ,CS Swing Check Valve and CS Ball valve total in 29 Nos. supplied by VIP Valve India Pvt. Ltd. vide Bill No. 278 / 07.02.2008 tr to HK Rolling

278 165939

Komal Engineering Mumbai

3 Nos Thermex Quinching Assembly supplied by Komal Engineering vide their Bill No. 098/21.03.2008 though Shiv Ganga Transport on to be billed b asis tr to HK Rolling Mills Engineers Pvt. Ltd.

966391

Komal Engineering Mumbai

Trolly .Wheel Assembly, Water & Air Piping on Trolly supplied by Komal Engineering on Behalf of HK Rolling Mill vide Bill No. 099/21.03.2008 through Shiv Ganga Transport pn Topay basis tr to HK Rolling Mills

398096

amount of Difference as charged by HK Rolling Mills agaisnt supply of Thermax Quinching Assemble by Komal Engineering as per Bill Nol,11 / 21.03.2008

1641513

42 Kanhaiya Castings Pvt. Ltd.Patna

2730 Kgs Castings 2730 Kgs 63 100533

43 J C B India Limited,Ballabhgarh

1 No. Diging & Lifting Machine [JCB] 1 6.71E+09 1820000

44

Mittal Enterprises, Kolkata

Pipe Line for Induction Furnace 604010

90 Pcs 8" Black Puipe 281

Pipe Line for Induction Furnace 424495

11.360 MT Black Pipe 261

45 Kathuria Roll Mill [P] Ltd

9 NO. Twin Channel Assembly 9 77 1405393

46 Kirloskar Brothers Ltd.Mumbai

Pumps, and Pump Base for Machinerie

5.7E+09 1343728

47 Kirloskar Electric Co. Ltd.

Kaytee Switchgear Ltd. Tumkur 2 Nos. Electrical Motor PM1260M 11KC4 2 3297 36816

Kaytee Switchgear Ltd. Tumkur 1 Nos. Electrical Motor PM160L 15KC4

1 3556 21885

Kaytee Switchgear Ltd. Tumkur

1 Nos. Electrical Motor PM160L 15KC4 and4 Nos PM132M 7.5 KC4

1 2632 67905


2 Nos. Electrical Motor SC 250M 55KC4

2 2525 197740


63

Kaytee Switchgear Ltd. Tumkur 1 Nos. Electrical Motor SC 250M 55KC4 1 2526 98872


Rating RPM Volts Volts Ph Hz Frame,37.00 1000 415 3 50 SC250M[Electrical Goods]

8005 101715


Rating RPM Volts Volts Ph Hz Frame,45.00 1000 415 3 50 SC280S[Electrical Goods]

7352 123106

Kaytee Switchgear Ltd. Tumkur 1 No. Electric Motor SC 180L,15KC6 1 NO and SC200L 22 KC6 -5 Nos 1 2468 275764

Kaytee Switchgear Ltd. Tumkur 3 No. Electric Motor SC 225M,45KC4 3 3311 194854Kaytee Switchgear Ltd. Tumkur

8 No. Electric Motor SC 200L,30KC4 8 3310 362135Kaytee Switchgear Ltd. Tumkur

2 No. Electric Motor SC 225M,45KC4 and 2 Nos. Electricla Motor SC 225S 37KC4

2 2527 249174


1 No. Electric Motor SC 225M,45KC4 and 1 Nos. Electricla Motor SC 225S 37KC4

1 2528 124588


20 Nos Electrical Motor PM 100L 2.2 KC4

20 3261 103312

1 NO each KEC Make Incomer Panel 2000/2500 Amps 1 2312 683545

KEC Make 450KWDigital NOn-Regen Thyristor Convertor

2309 589263

Freight for Machine 177627Kaytee Switchgear Ltd. Tumkur 4115410

48 Kirlosker Pneumatics Co. Ltd.

Assembly Compressor 1 No. Pulley Motor 1 No. [7 Grooves]

1 81000601 1589661

Freight 61939

49

Maa Kalyaneshwari Refactories, Burdwan

9000 Pcs Fire Bricks 9000 Pcs 103 78795




50 National Refactories,Burdwan

700 Pairs Fire Bricks 934 15957

3475 Pairs Fire Bricks for Furnace 933 200118 4175 Pairs Fire Bricks 940 177349


64



3340 Pairs Fire Bricks 1043 89261 Fire Bricks [SMT9TFRB-2 480 Pcs] and TFRB-1 520 Pcs ] 1521 162398

FireBricks [28+26+75+800+350] 1522 121594

Fire Bricks [510+600+225+550] 1539 163703

51 Mortex India , Kolkata

ACE Refactories Limited 7036 31793 HDEP Bag containing 25 Kgs [2 MT]

ACE Refactories Limited 7037 277141 PCPF Accmon LC [4.620 MT]

ACE Refactories Limited 7035 56688 Calundum HDPE Bag containing 50 Kgs [4.5 MT]

Katni Minerals [P] Limited,Kanni 924 10361 Firectic SUPG 20 Bag conntaining 50 Kgs [1 MT]

Katni Minerals [P] Limited,Kanni 923 19796 Secoset 50-Fine 60 Bags conntaining 50 Kgs [3 MT]

Ceramic Fibre Blanket [16+18+60 Rolls,SS Stud, Washer ext.

1181 216366

Hysile 456 Pcs 1180 63407

52 Maithan Ceramics Limited,Chas

Being Mortar 660 Bags [28 MT] 3777 53748

53

Madhya Pradesh Transformer,Indore

1 No. 7200 KVA Transformer wirth accessories 1 389 4537325

54 Megatherm Electronics [P] Ltd.

1 No. Static Frequency Convertal Panel,Capacitor Bank, Control Desk- i No. each

1 873 2489469

1 No. Smoothing Re-actor[Choke] ,1 No. DM Water recirculating Unit

1 671 1079770

1 NO. Induction Furnace curicible in Knock down condition 1 808 3599232

1 No. each Stastic Frequency Convertor Pan .Remot Control Desk,CI Cooling Unit,DC Choke

1 934 2849392

17 Nos Commutating Capicitor 17 1007 1199744 1 No. Hydraullic Power Manually Control Valve and 1 No. Stand 1 935 457831

Induction Furnace Crucible in Knock Down Condition -1 No. and Power Sources Accessories -1 No.

1 1037 3741820

Capicitor Bank Assembly[6000 Kw,4000V, Crucible Accessories, Power Sources Accessories [1+2+1] Pcs

987 2857926


65

��Everest Kanto Cylender Ltd �� 1602795

��Sanghi Oxygen Gas, Mumbai

�� 1767789

��Sanghi Oxygen Gas, Mumbai

�� !��"�� !��#��

�� 665867

�� Sanghi Air products

"�� $��%��&��'�("�)��

*� $� �� 1271995

�+� Kathuria Roll Mill p Ltd

,-��.��/��"��)�� -��.�� 0� ��1�� 2��

*� $� �� 3276589

�� Pioneer Cranes ��,� ��,�� 1771325

��National Commercial Corporation

'3�2��4�� *�� *��)� �� 90660


"�� 5� � �� '�� *6�+�),� 198165

�*�National Commercial Corporation

"�� 5� � �� '�� 6�*��),� 129901

�'�National Commercial Corporation

"�� 5� � �� *�6��),� 12256


"�� 5� � �� 6�*�),� 11791


"�� 5� � �� +�� 161162


"�� 5� � �� *�� 447935


"�� 5� � �� 204071

�+�National Commercial Corporation

"�� 5� � �� +�� 41494

�� Mamta Refactories

7� ��2 ��4�� "8� 85170

�� Mamta Refactories

7� ��2 ��4�� "8� 85170

�� Mamta Refactories 29�)��

):�8;";��9�+;�*�

��

�*�Techno Therma Furnace Pvt ltd ��5�2 ��4�� *�� 197000

�'� Techno Therma Furnace Pvt ltd

��5�2 ��4�� *�� 228000

��Techno Therma Furnace Pvt ltd ��5�2 ��4�� *�� 170000

�� Phoenix Trading Corporation

��*�'��0**�)�<= �2�� '�� '� 678825

��Phoenix Trading Corporation ��*�'��0**�)�<= �2�� *�'�� '� 41268


66

��A.R. Engineering Works

,��,�/��)�� .�:�� ,�/��

�� 2946315

�+�A.R. Engineering Works

:��1�� 2��1�� 5� �:��)��

�� 2898938


6��*�'��=)2*�0��=:8�2�� +�� '� 19776


�**��)��8��2��"��5� �)��8�� / ��>��-��.��

�� 1210936

�� Gupta Steel Fabricators

8��"�� +� ��6��),� 696491

�*� Gupta Steel Fabricators

8��"�� 6�),� 62251

�'�A.R. Engineering Works

:��1�� 2��."��2��7 ��"��8��

�� 2520869


�*��<= ��*�#��6�*��<= ��2� �� *� *� 9362


)��-� 4��:�� ,�/��5 ��:��:�� ,�/��

�+� �� 3535578


��(&�)��8��*(��"��8��(��"��8��&�2��"��?�@�@�@�A�#��

�*� $� �� 2635184

�� Morgardshammer India Ltd.

�:��)��1��!�� *�� *� 1171745

�+�A.R. Engineering Works

��#�6��0� �8.�� #�6� �/ ��>��"��9��#�6��7��2��'��#��

**� $� �� 1155350

+��A.R. Engineering Works

�� *�� $� �� 2218523

+��A.R. Engineering Works

�� '�� $� �� 1575563

+�� G. S. Engineers, Howrah

6&6�7�� 96408

+*�A.R. Engineering Works

�� 1020032

+'� A.R.GEARS PVT LTD

�� 2709970

+�� Phoenix Trading Corporation

2�� +�� $� �� 42905

+�� A.R.GEARS PVT LTD

�� 1750626

+�� A.R.GEARS PVT LTD

�� '� �� 925264

+�� Piyush Sales [India], Kol

��8��.�"��))�8��.�"��

��+� �� 576132

++� Phoenix Trading Corporation

�� *�'� �� 27194


�� +�� 12868


67

��Phoenix Trading Corporation �� +*�� 11399


&��5� � �� +�� 933667

��*� Multi Serve rolls Ltd

:�� +� '� 302938

��'� Multi Serve rolls Ltd

:�� 294047

�� Multi Serve rolls Ltd

:�� 179137

�� Modern industries

:�� +�� 643947


:�� 1369919


:�� 160986

��+� Modern industries

:�� '�� 536625

��Madhya Pradesh Transformer

*��=$��, ��5� �� +� �� 2180273

�� Concast India ltd

�/��B��/��1�� '�� 216845

��Concast India ltd C�� '�� 116903

��*�Concast India ltd ��.��/��B��/��1�� 412000

��'� B.R.enterprises .�!� ��"�� 704505

��Madhya Pradesh transformer

��=$��, ��5� �� 4493273

�� Bharat metal store

�� 7�� 316857

��Megatherm Electronics P Ltd

&��7� �� 3501252

�� Swati Trade Centre

2��$��%��7�� '�� 50960

��+� Swati Trade Centre

2��$��%��7�� '�� 47216

�� Steel centre :�5��$��%��1&�"�� 45095

��Megatherm Electronics P Ltd

��&��7� �� /��B��

+�@�� $� �� 4301620

��Macshe Equipment P Ltd 89��"��B�8�� 62244

��*�Maruti engineering works

�� 7��2�� *� �� 28764

��'� Sharma Mill Store

"�� 50000

�� Sharma Mill Store

�� "�� 24440

�� Sharma Mill Store

&��)�� *� �� 36372

�� Steeltech Engeering co.

��5��;��,�� *� 1256317


68

�� Lift Master magnet Works

��3�C��0��5��:��5�� , ��5� �� 8� ��4��.��

*�� 749700

��+� Ion Exchange Service Ltd

"� ��/��)2��6�-��.�� /��-� � �� 70237

�*�� Ion Exchange Service Ltd 0�� 5�� -��.�� +� �� 356323

�*��

Composite Aqua Systems & Equipments P Ltd

�� "�� !�� 1248000

�*��Bhagwati Steel Processors

Chequred Coil & Plate 234/235 788781

�**�

National Commercial Corporation Patna

Pipe Line for rolling mill 736 447935

�*'�



�*��



�*��



�*��


Pipe Line for rolling mill 161564

�*�� Shanker & co. Bricks 32 528407

�*+�Phoenix Trading corporation

Bearing 1097/05-08/2008

42905

�'�� A.R. engineering Gear Boxes 1750626

�'�� A.R. engineering

Gear Boxes 925264

�'�� Piyush Sales India simlesh pipe

269/29-08-2008 576132

�'*� Phoenix Trading corporation

Bearing 1364/22-08-2008

27194

�''�Phoenix Trading corporation Bearing

791/28-06-2008 12868

�'�� Phoenix Trading corporation

Bearing 938/14-07-2008

11399

�'�� A.R. Engineering

Gear Boxes 933667

�'�� Bhushan international

Air compressor 28/16.10.08 149760

�'�� Shanker Tremix P Ltd Refactory laddle 33 768180

�'+� Shanker Tremix P Ltd

Refactory laddle 20908794 756665

��Shanker Tremix P Ltd Refactory laddle 101472


69

��Shanker Tremix P Ltd Refactory laddle 47877

��Everest Kanto Cylender Ltd

Oxygen Cylender 566 2222128

��*� Shanker & co. Fire Bricks 411497

��'� Shanker & co. Fire Bricks 528407

��A.R. Engineering Roller table Mill Stand 113 1167084

�� A.R. Engineering Roller table Mill Stand 119 1167084

�� Shanker Tremix P Ltd

Refactory laddle 32 528407

�� Kairali Engineering

Steel Melting Shop Commissioning 4 219619

��+� Kairali Engineering

Steel Melting Shop Commissioning 21 219619

�� various Material Suppliers

Steel Melting Shop Furnace Materials 6400000


Foundation & steel Fabrication of Colling Bed

10000000


Gasifire Structure 2500000

��*� Shanker Tremix P Ltd

Plates for tundies 500000

��'� A.R. engineering

Repeater for rolling mill 1000000

�� various Material Suppliers Shed Fabrication Material for gasifire 500000


Chimini & Civil works for Re- heating Furnace

2500000


Concast foundation 2000000


Structure Material & Civil Work for Construction of rolling Mill Section 8000000

��+�Everest Kanto Cylender Ltd Oxygen Cylender 624 952341

�� Bhagwati Steel Processors

HS Mill Plate , HR Sheet 338/339/340/341

713373

��Patwari Forgings (P) Ltd, Patna

M.S. Angle 337 169628

�� Dadiji Steels Ltd MS Section , Angle, Channel , Flat 1798 289799��*� Dadiji Steels Ltd MS Section , Angle, Channel , Flat 1791 304936��'� Dadiji Steels Ltd MS Section , Angle, Channel , Flat 1785 300836

��H. K. Rolling Mills Engineers [P] Ltd.,Mumbai

Erection & Commissioning charge 9007/LIC Fee/ 07-

08/01 561800


Erection & Commissioning charge 9007/LIC Fee/ 07-

08/02 589890


Erection & Commissioning charge 1 252810

��Techno Therma Furnace Pvt ltd

Erection of Re- Heating Furnace 352 496069


70

��+� Techno Therma Furnace Pvt ltd Erection of Re- Heating Furnace 113 171349

�� Techno Therma Furnace Pvt ltd

Erection of Re- Heating Furnace 236 119102

�� Phoenix Trading corporation Bering 1689 36246

�� Phoenix Trading corporation

Bering 1983 37837

��*� R.K. TRADING Semles Tubes 107 439876

��'� Phoenix Trading Corporation

Bering 2094 39045

��A.R.Engineering Works Roll Mill Equipment 140 700250

��Abhya Processing (P) Ltd

Roll Mill Guide 257 201552

�� Prakash Enterprises

S. System, Barrel 328 26696

��Hardware & Pneumatics

Airmax Penumatic Cylender , Spare Seal Kit 28400

��+�Phoenix Trading Corporation Bering 2347 28538

�+�� Sparkonix India [P] Limited,Pune

Roll Branding Machine Copper Electrods

678 88575

�+�� Sparkonix India [P] Limited,Pune

Roll Branding Machine Copper Electrods 679 119035

�+�� A.R.GEARS PVT LTD Spares For Roll Mill 38 104000

�+*�H. K. Rolling Mills Engineers [P] Ltd.,Mumbai

Rotary Shear, Pinch Roll 12 442728

�+'�H. K. Rolling Mills Engineers [P] Ltd.,Mumbai

Motor Control Valve 9007 180360

�+��H. K. Rolling Mills Engineers [P] Ltd.,Mumbai

Freight for Thermax Quinching Assembly and Trolley Dr 6 74000

�+��Bhusan International, Patna

Elgi Make Compressor 28 149760

�+��Bhusan International, Patna

5HP Air Compressor 74739

�+�� Lift Master magnet Works

Lifting Magnet 66 545700

�++�


Pipe Line for rolling mill 25616

��



�� ALICO Traders Water Pump Equipment 52128�� ALICO Traders Water Pump Equipment 93709


71

��*�

Composite Aqua Systems & Equipments P Ltd

Air Pollution Control Equipment 486000

��'�Interface Industrial System,Delhi

Generator Set 10 1325000

205 Kirlosker Electric Company Ltd.

KCC Make Thyristor cnverter Pnel with accessories

2 2310 707116


KEC Make Digital Non-Regen Thyristor Converter Control

1 2308 589263

207 Kaytee Switchgear Ltd. Tumkur

Electric Morter [SC315 L ,150KC4 ] 1 8078 220123


Kirlosker Make DC Morter 450 KW 1 1588 1743381


600KW,750RPM,415 Volts,KCW 500 Rotal AC Motor

1 200700333 1361833


200 KW Digital Non Regn Thyristor Convertor Panel with Encoder

4 2311 1414231


Electric Motor SC 315 S 75 KC 6 1 4646 176099


Electric Motor SC 200 L 30 KC 4 2 8618 88897


Kirlosker Make DC Motor,450kw,460V,500/1000RPMKLDC450L

1 4249 1743381


Kirlosker Make Electric Motor ,SC315L 132KC6

1 9363 242083


Electric Motor PM 132S-2 Nos, Motor PM 100L-1No.,Motor-PM90L 2 Nos 5 242 34684


600KW,750RPM,450 Volts,KCW 500C Roted AC Motor 1 200700098 1390833


600KW,750RPM,450 Volts,KCW 500C Roted AC Motor

1 200700095 1925350


differential amount in various invoices supplied by Kaytee Switch Gear during the F.Y-2007-08 & 2008-09 charged by Kirlosker Electric Co. Ltd

293533


ELECTRIC MOTOR 1 1962 90037


ELECTRICAL ITEM various 12663 501937


72

221 Prem Iron & Steel co. Ltd 200MS Joist & 250MM MS Channel 6.160 MT 850 206337

222 Freight 1392

223 Industrial Tools & Machinery Welding Machine & Electrods 2 ITMS/113 52000

224 Paharpur Cooling Towers Ltd.,Ghaziabad

Cooling Tower (TMT) Suppmentary Bill

78654

225

Continental Thermal Engineers, Chenai

Re-Heating Furnace Suppmentary Bill

55392

226 Delight Marketing

Re-Heating Furnace 319 3120

227 Freight for Rolling Mill 436025


Bearing for Rolling mill 1631 25349

229 Phoenix Trading Corporation,Kol Bearing for Rolling mill 2630 21828


Bearing for Rolling mill 2351 23585

231 Calcutta Forging & Steel Industries

Alloy steel Bars 833 KG 876 25945

232 Ahluwalia Trading Corporation

Exide battery 3 1219 14283

233 Freight for Rolling Mill 212284

234 Phoenix Trading Corporation,Kol Bearing for Rolling mill 74 Pcs 2532 89274

235 Abhya Processing (P) Ltd

Vertical lopper for Rolling mill 325 102752

236 Sparkonix India [P] Limited,Pune

Roll Branding Machine & Copper Electrods

4 828 15076

237 Phoenix Trading Corporation,Kol Bearing for Rolling mill 2814 14807

238 R.K. TRADING Simlesh Tube 439876

239

Enginerring Supervision & Errection/ Commissioning charge

82725

240 Freight for Rolling Mill

48445

241 Freight on Roll 20600

242 Concast India ltd Gear Boxes 1331 56100

243 Concast India ltd

Supplementary Bill 147 31427

244 Concast India ltd

Cable & cable gland 148 71425

245 Shanker Tremix P Ltd

Tata Cast 11 227665


73

246 Shanker Tremix P Ltd Ref pack 12 81616

247 Shanker Tremix P Ltd

Optel laddle , optel tundis 13 40811

248 Sharma Mill Store

Kirlosker Make Mod dn MW 13218

249 Gautam mitra Errection & Commissioning charge (CCM)

20000

250 Blue star Tensile machine 287714

251 National Commercial corporation

Pipe Line 76391

252 Impex machinery Corporation

Pumps 69680

253 ALICO Traders Water Pump Equipment 112616

254 RDMS Controls Water Pump Equipment 3272

255 Askib engineer Pvt ltd

Weigh box 1760

256 Dinesh & Company,Patna

Electronic weighing machine 9360

Total Cost of Indigenous Machinery (B) 305488506TOTAL (A+B) 306457358

Details of Plant & Machinery for which orders have been placed but not yet received:

Sl No.

Name of Machinery

Date of Order

Name of Supplier/ Vendor

Amount (Rs)

Quotation No./ Date Qty

Expected Date of receipt

1 Crane 25-09-2008 Enrich Engineers [P] Ltd.

5,00,000 Nil/ dated 25/09/2008

1 Mar-09

2 Billet Shairing machine

22-05-2008 K.S.Matharoo & Sons 5,00,000

KSM/113/2008-09 1 Mar-09

3 Rolling Mill Guide Sep-08 Morgardshammer

India Ltd. 73,096 DL:647 various Mar-09

4 Extra laddle 08-08-2008 Pamaji Steel House

7,60,000 PS/GISL/01/888

2 End of Jan 2009

TOTAL 18,56,544

Further the Company has yet to place order for one crane for appx value of Rs 27 lacs for which the order shall be placed by the Company if required in due course of time.

The Company has incurred a sum Rs. 30.83 crores till date 31.01.2009 towards the aforesaid head. The increase in cost of Plant & Machinery is due to non estimate of small machinery required in the rolling mill and also there was a price escalation in steel which increased the cost of cooling bed.


74

A-4 Electrical Installation

These include Transformers, Cables, and Panels etc. The estimated cost for the same is envisaged as Rs 2.08 crores which is 4.65% of the total project cost as provided by the technical consultant. The break-up of the Electrical installation cost is as follows.

As per the revised self appraisal report as estimated the cost of total electrical installation would be approximately Rs. 2.95 crores, which is 5.15% of the total project cost: (Rs in Crores)

Description OriginalCost

Revised Cost

Rolling Mill DivisionTransformer 3500 KVA 0.23 0.25Cables, Panels, Switch Board Expenses 0.48 1.0833 KVA OCB with CT, PT 0.06 0.06VEGA Controls for DC Drive 0.42 0.00AB Switches & Misc. Electrical 0.00 0.05Furnace DivisionAuxiliary Transformer 1000 KVA 0.10 0.13Transformer 750 KVA for sintering 0.08 0.1033 KVA OCB with CT, PT 0.19 0.17HT Cables, LT Cables, LT Panels & Misc 0.30 0.60AB Switches & Misc. Electrical 0.00 0.10Line affordable Charges 0.20 0.40Total 2.08 2.95

The Company has incurred a sum Rs. 3.26 crores towards the aforesaid head till 31.01.2009. The increase in cost of Electrical Installation is due to price escalation and more requirement of cables which was not estimated earlier.

A-5 Miscellaneous Fixed Assets

These include office equipment, furniture & fixture and motor vehicle. The total estimated cost for the same is envisaged at Rs. 0.35 crores which is 0.78% of the total project cost as per the technical consultants report. The break up of the miscellaneous fixed cost is as follows:

As per the revised self appraisal report as estimated, the miscellaneous fixed assets would be approximately Rs. 0.45 crores, which is 0.79% of the total project cost:

(Rs in Crores)


A-6 Preliminary Expenses & Preoperative Expenses

The preliminary & preoperative expenses of Rs. 0.79 crores which is 1.77% of the total project cost have been considered, which include start up expenses, upfront fees at 0.25% charged by lenders, technical know-how & engineering, traveling expenses etc. The detailed breakup of the preliminary and preoperative expenses is as follows.

Description Original Cost Revised Cost

Office Equipment, Computer 0.10 0.15 Furniture & Fixture 0.10 0.15

Motor Cycle, Car 0.15 0.15

TOTAL 0.35 0.45


75

The same has been revised by self appraisal report as estimated, the preliminary and preoperative expenses would be approximately Rs. 1.82 crores, which is 3.18% of the total project cost and IDC (Interest during construction) would be approximately Rs. 2.36 crores, which is 4.12% of the total project cost: (Rs. In Crores)

Description Original Cost Revised CostProject Report/Consultancy/Technical Services 0.20 0.20 Enviornment Impact Report 0.00 0.07Authorised Capital Expenses 0.05 0.25Conveyance & Traveling Expenses 0.15 0.15Insurance Charges During Construction 0.02 0.02Start Up & Miscellaneous Expenditure 0.10 0.10 Rent, Rates & Taxes 0.05 0.05 Printing & Stationery & Other Exp. 0.03 0.03 Sales Promotion Expenses 0.00 0.20 Technical Know How Fees 0.12 0.20 Bank Processing Charges 0.07 0.40 Salary during Construction / Installation 0.00 0.15Interest During Construction (IDC) 0.63 2.36Total 1.42 4.18

The Company has incurred a sum Rs. 5.81 crores towards the aforesaid head till 31.01.2009. The increase is due to interest accrued and paid on term loan amouting to Rs. 3.69 crores and other expenses due to time over run.

A-7 Computation of Working Capital requirements

The working capital margin requirement of the project is estimated at Rs. 5.29 crores based on the calculations for the first full year of operations (FY 2007-08) for the project, which is the 11.83% of the total project cost. The break-up is given below:

The same has been revised by self appraisal report as estimated, the working capital margin requirement of the project would be approximately Rs. 8.47 crores, which is 14.79% of the total project cost:

(Rs. In Crores) Particulars Month Mar-09 RevisedCurrent AssetsRaw Materials 0.50 4.48 6.26 Stock-in-Process 0.20 2.31 3.12Finished Goods 0.50 6.02 7.55Consumables 1.00 0.53 0.53 Receivables (Debtors) 0.75 12.57 14.33 Total Current Assets 25.92 31.79Current LiabilitiesSundry Creditors 0.50 4.75 0.00 Raw Materials & Consumables 0.00 6.53 Total Current Liabilities 4.75 6.53

Working Capital Gap 21.71 25.27 Margin Money 5.29 8.47

B General corporate purpose

The company intends to use approximately Rs. 2.82 crores from the net proceeds of the issue towards general corporate purpose.


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C Right Issue Expenses

For the purposes of the Rights issue, following expenses are required to be incurred. Sl. No.

Particulars Amount (Rs. Lacs)

% of Total Issue Exp.

% of Total Issue Size

1 Fees of Lead Manager, Registrar, Legal Advisor, Auditors, Tax Auditors, etc

15.00 50.00% 1.22%

2 Printing & Stationery, Distribution, Postage, etc 7.00 23.33% 0.57%3 Advertisement & Marketing Expenses 7.00 23.33% 0.57%4 Other Expenses (incl. Filing Fees, Listing Fees,

Depository Charges, etc.)1.00 3.34% 0.08%

TOTAL 30.00 100.00% 2.44%

No part of the Rights Issue proceeds, will be paid by the Company, as consideration to Promoters, Directors, Company’s Key Managerial Personnel or companies promoted by the Promoters.

Details of the Bank Loan agreements for the ProjectSl. No.

Name of Bank Original Amt.(Rs. In Crores)

Revised Amt.(Rs. In Crores)

Loan Type Project

1 State Bank of India 27.44 31.94 Term Loan Fully Automatic Thermex TMT Bar Plant

Total 27.44 31.94

Term Loan

The company proposes to raise Rupee Term Loans to the extent of Rs. 31.94 Crores (Previous Rs. 27.44 Crores) from Banks & Financial Institutions to part finance the project. The broad terms of the proposed loan is as given below:

Nature of borrowing Original Term Loan Revised Term LoanLoan Amount Rs. 27.44 Crores Rs. 31.94 Crores Interest Rate At 1% below SBAR, minimum 10.50%

p.a. with monthly rests. (with reset option after two years)

Fresh TL limit Rs. 4.50 crs at 1% above SBAR, minimum 14.75% p.a. with monthly rest. Existing TL as per earlier sanction

Upfront Fee / Processing Fee / Miscellaneous

50% of the applicable rate 50% of the applicable rate

First drawl of debt Quarter ended March 2007 Quarter ended March 2007Repayment Starts on 30.09.2008 30.12.2008Repayment 23 quarterly installments of Rs. 1.20

crores each with balloon repayment of Rs. 1.04 crores in the last instalment.

23 quarterly installments of Rs. 1.33 crores each with balloon repayment of Rs. 1.35 crores in the last instalment.

Repayment Ends on Quarter ended March 2014 Quarter ended September 2014 Door to Door Tenor 30 quarters 32 quarters Security First charge by way of :

i. Hypothecation of entire fixed assets of the Company, both present & future.

ii. Equitable Mortgage of proposed factory land & building at Bihta, Patna.

First charge by way of : iii. Hypothecation of entire fixed

assets of the Company, both present & future.

iv. Equitable Mortgage of proposed factory land & building at Bihta, Patna.


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Working Capital Loan

Working capital requirement for the project will be for procurement of raw materials and other current assets and to meet the recurring expenses. Total working capital sanctioned by SBI for the proposed project for the first full year amouts to Rs. 18.27 Crores.

The terms and conditions for the proposed facility are as given below:

Existing Revised

Nature of borrowing Working capital facility Nature of borrowing Working capital facility

Loan Amount:

a) CC (stock) - 10 crs.

b) CC (Book-debt) - 5.89 crs

c) B/G Limit - 2.38 crs

Rs. 18.27 Crores

Loan Amount:

a) CC (stock) – 12.30 crs.

b) CC (Book-debt) – 7.30 crs

c) B/G Limit - 2.94 crs

Rs. 22.54 Crores

Interest Rate At 1% below SBAR, minimum 10.50% p.a. with monthly rests

Interest Rate SBAR ,PLR 13.75% p.a. with monthly rest.

Security Hypothecation of Company’s entire stocks / receivables

Security Hypothecation of Company’s entire stocks / receivables

Collateral (i) hypothecation of movable fixed assets valued at Rs. 1.51 crores.

(ii) hypothecation of plant and machinery valued at Rs. 0.54 crores.

(iii) hypothecation of CNC machine valued at Rs. 0.25 crores

(iv) pledge of shares valued at Rs. 0.19 crores.

(v) Pledge of STDR worth Rs. 0.10 crores.

(vi) Pledge of combinations of STDR/TDR/NSCs worth Rs. 0.30 crore.

Collateral (i) Hypothecation over the entire fixed assets.

(ii) Equitable mortgage over the proposed factory land & building.

(iii) Equitable Mortgage over the registered lease hold land

(iv) Pledge of shares valued at Rs. 0.19 cr.

(v) Pledge of STDR worth Rs. 0.10 cr.

(vi) Pledge of combinations of STDR/TDR/NSCs worth Rs. 0.30 cr.

In case the Rights Issue does not go as planned, Company will make alternative arrangements like availing of fresh loans from bank(s) and/or utilizing internal accruals.

Our capital expenditure plans are subject to a number of variables, including possible cost overruns, construction/development delays, receipt of critical government approvals, availability of working capital finance on acceptable terms.


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Schedule of Implementation

Reasons for delay

(1) The company had initially revised its project implementation schedule on 14.05.07 under intimation to its banker wherein the date of commercial production was revised from June’2007 to Nov’ 2007 as the company was waiting for bank’s sanction before taking major steps for project implementation.

(2) The project was again revised and date of commercial production was revised to June’2008 due to heavy rains and flood during Aug to Oct’2007. During that period the civil work could not be carried on due to high water level in the factory land.

(3) Further delay was due to non receipt of pollution consent, which was received on 09.01.2009. And also due to delay in getting electricity from B.S.E.B.

Implementation Schedule Revised Implementation Schedule

Particulars Duration Expected date of

commencement

Expected date of

completion

Duration date of commen-cement

Expected date of

completion

Acquisition of Land Already acquired Already acquired Land development Boundary wall,

leveling & filling of road

Already done Already done

Drainage system, internal road etc

Aug 2007 Sep 2007 Aug 2007 Already done

Civil Works� Factory

Building � Machinery

Foundation � Auxiliary

Building � Admn. Building � Misc. Buildings

6 Months

5 Months 4 Months 4 Months 4 Months

April’2007

May’ 2007 June’ 2006 July’ 2007 July’2007

Sep’ 2007

Sep’ 2007 Sep’ 2007 Oct’ 2007 Oct’ 2007

10 Months

9 Months 8 Months 8 Months 8 Months

April’2007

May’ 2007 June’ 2006 July’ 2007 July’2007

Already done

Plant & Machinery and other fixed assets

Placement of orders 13 Months June 2006 June 2007 19 Months June 2006 Already done

Delivery at site 4 Month June 2007 Sep 2007 9 Month June 2007 Already done

Erection & installation

4 Months June 2007 Sep 2007 4 Months Nov 2007 Already done

Arrangement of Power

6 Months May 2007- Applied

Oct 2007 10 Months May 2007- Applied

Already done

Arrangement of Water

Already arranged Already arranged

Commissioning 2 Months Sep 2007 Oct 2007 2 Months Feb 2008 Already done

Training of Personnel

4 Months July 2007 Oct 2007 4 Months Nov 2007 Complete

Trial Production 1 month Oct 2007 Oct 2007 1 month Mar 2008 14 January 2009

Start of Commercial Production

Nov, 2007 June 2008 Mid of February 2009


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Sources and Deployment Of Funds:

As per certificate-dated 03.03.2009 received from Abhishek VL Agrawal & Associates, Chartered Accountants, the Company has deployed a sum of Rs.51.18 crores till 31.01.2009 which is as under:

Amount (Rs. In Crores)

Deployments of Fund

Land & Site Development 2.51Building & Civil Construction 8.53Plant & Machinery 30.83Electric Installation 3.26Misc. Fixed Assets 0.11Pre-operative Expenses 5.81Right Issue Expenses 0.04Sundry advance to supplier and refundable 0.09Total 51.18

Means of Finance

Term Loan from SBI, Patliputra (Incl. Interest accrued and due Rs. 0.68 crs) 32.62

Issue of Equity Share against Warrants 7.93

Warrants forfeited 0.15

Unsecured Loan 7.75

Internal Accrual 2.73

Total 51.18

Monitoring of Utilization of funds

The Board of Directors of Company will monitor the utilization of the proceeds of the Issue. Company has not appointed any monitoring agency. The Company will disclose the utilization of proceeds of the Issue under a separate head in its balance sheet and periodical disclosure statements specifying the purpose for which such proceeds have been utilized. Company, in its balance sheet will provide details, if any, in relation to all such proceeds of the Issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue.

As disclosed under the head “Objects of the Issue” a significant portion of the Rights Issue proceeds will be used towards setting up the expansion cum modernization project. No part of the Rights Issue proceeds, will be paid by the Company, as consideration to Directors, Company’s Key managerial personnel’s or companies promoted by the Promoters except in the normal course of business.


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7. BASIC TERMS OF THE ISSUE

Terms of the Issue The Equity Shares proposed to be issued on rights basis are subject to the terms and conditions contained in this Letter of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum andArticles of Association of the Company, the provisions of the Companies Act, approvals from RBI, guidelines issued by SEBI, approvals from the stock exchanges where equity shares of the Company are listed, FEMA guidelines, notifications and regulations for issue of capital and for listing of securities and/ or other statutory authorities and bodies from time to time, the terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate, the provisions of the Depositories Act, to the extent applicable, and any other legislative enactments and rules as may be applicable and introduced from time to time.

Terms of Payment Due Date AmountOn application Rs. 10/- which constitutes 50% of the full amount of the Issue Price of Rs. 20/-(

including premium) On call Rs. 10/- which constitutes the remaining 50% of the full amount of the Issue Price of

Rs. 20/- (including premium)

Authority for the Present Issue The authority for the present issue has been obtained vide the resolution passed by the Board of Directors of the Company at its meeting held on 13.12.2007 and the shareholders approval obtained at Extra Ordinary General Meeting of the Shareholders held on 11.01.2008 & subsequent meeting of The Board of Directors held on 16.04.2008.

Basis of the Issue 61,53,680 Equity shares of Rs.10/- each at issue price of Rs 20/- each (including share premium of Rs 10/- per share) are being offered to the Members of the Company on rights basis in the ratio of 4 equity shares for every 5 equity shares (i.e. 4:5), whose names appear on the Register of Members of the Company as on the close of business hours on 20.03.2009, being the record date fixed by the Company in consultation with BSE.

Ranking of the Equity Shares The Equity Shares shall be subject to the memorandum and articles of association of the Company. The dividend payable on Equity Shares allotted in this issue, until fully paid up shall rank for dividend in proportion to the amount paid up. The Equity shares allotted in this issue, once fully paid shall be pari passu with the existing Equity Shares in all respects including dividend. No member shall be entitled to vote on any question either personally or by proxy or as a proxy for another member at any General Meeting or upon a poll or be reckoned in a quorum whilst any call or other sum shall be due and payable presently to the Company in respect of any of the shares of such member.

Entitlement Ratio The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the company in the ratio of 4 (four) Equity Shares for every 5(five) Equity Shares held as on the record date i.e. 20.03.2009.

Fractional Entitlement On applying the Rights ratio, the rights entitlement may contain certain fractional entitlements, in such case the fractional rights entitlement will be rounded off to the nearest integer. The resulting shortfall in allotment of shares, if any, shall be adjusted against the entitlement of the promoters.

Face Value Each Equity Share shall have the face value of Rs. 10/- each.

Issue Price Each Equity Share is being offered at a price of Rs.20/-(including a premium of Rs.10/-).

Market Lot The market lot for the Equity Share is 1. In case of physical certificates, the Company would issue one share certificate to a single Shareholder.


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8. BASIS FOR ISSUE PRICE

Investors should read the following summary with the Risk Factors and the details about the Company and its financial statements included in this Letter of Offer. The trading price of the Equity Shares of the Company could decline due to these risks and you may lose all or part of your investments.

Qualitative Factors

• The Company has strong marketing and distribution network. • The Company is strategically located in proximity to the source of materials and main customers

for finished products. • The Company has been making Profit over a period of 3 years. • The Company is having experienced management team and efficient work force. • The Company has a healthy Balance Sheet, which supports its proposed project by way of

Internal Accruals.

Quantitative Factors

Information presented in this section is derived from the Company’s consolidated summary statement of assets and liabilities and summary statement of profits and losses, as restated and cash flows, as restated, under Indian GAAP as at and for the year ended 31st March, 2008 prepared in accordance with Indian GAAP. Some of the Quantitative factors, which form the basis for computing the price, are as follows:

1. Earnings Per Share (EPS)

Year Ended EPS based on Restated Financial

Statements (Rs)

Weight

March 31, 2006 2.06 1

March 31, 2007 2.42 2

March 31, 2008 1.30 3

Weighted Average 1.80

Note:

• The Earning per share has been computed by dividing net profit attributable to equity shareholders as restated, by weighted average number of equity shares outstanding during the year/ period.

• Net profit, as restated and appearing in the summary statement of profits and losses of the Company has been considered for the purpose of computing the above ratio

• The face value of each equity share is Rs. 10/- • Weighted average number of equity shares outstanding and EPS is calculated in accordance with

Accounting Standard 20 on “Earnings per Share” issued by ICAI

2. Price/Earning Ratio (P/E) in relation to issue price of Rs. 20/- per share

(a) Based on 2007-08 EPS of Rs. 1.30 15.38

(b) Based on Weighted Average EPS of Rs. 1.80 11.11


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3. Industry P/E ratio:

i) Highest 19.2

ii) Lowest 1.2

(iii) Average 4.1

(Source: Capital Market Volume – XXIII/23 January 12 – 25, 2009.) 4. Average Return on Networth (RoNW)

Year Ended RoNW (%) Weight

March 31, 2006 9.34 1

March 31, 2007 11.90 2

March 31, 2008 5.79 3

Weighted Average 8.42

Note:

• The RoNW has been computed by dividing net profit after tax as restated, by Net Worth at the end of the year / period

• Net profit, as restated and appearing in the summary statement of profits and losses of the Company has been considered for the purpose of computing the above ratio

5. Minimum Return on Total Net Worth after issue needed to maintain Pre-Issue EPS of 1.30 for the year ended March 31, 2008 is 6.99%.

6. Net Asset Value (NAV)

Particulars. Amt. In Rs

(a) As on 31st March, 2006 22.00

(b) As on 31st March, 2007 20.30

(c) As on 31st March, 2008 19.36

(a) After issue 19.64

(b) Issue Price 20.00

Note:

• NAV per equity share has been calculated as net worth, as restated, at the end of the year divided by number of equity shares outstanding at the end of the year / period

7. Comparison with Industry Peers:

Comparison of the accounting ratios of the issuer company as mentioned above with the industry average and with the accounting ratio of the peer group (i.e. company of the comparable size in the same industry) for the year ending 31st March 2008 is as follows:


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Comparison of accounting ratios of the Company with the accounting ratios of peer group.

Company Name

Face Value

Per Share

Equity (Rs. in Crores)

Book Value (Rs)

EPS (Rs)

P/E Ratio

Return on net worth

(%) Gangotri Iron & Steel Co. Ltd. 10 7.69 19.36 1.30 13.61 5.79 Gallant Metal 10 76.32 14.43 4.03 5.94 32.51 Godawari Power 10 28.07 136.83 33.84 5.00 32.24

Kamdhenu Ispat 10 19.01 34.58 7.25 3.59 23.09 Kanishk Steel Industries Ltd. 10 28.47 23.64 3.84 7.21 17.32 Rathi Bars 10 16.33 32.77 1.23 11.76 11.64

Rathi Steel Ltd. (Rathi Udyog Ltd) 10 24.31 55.13 3.53 6.94 6.59

Shri Bajrang Alloys Ltd 10 9.00 16.09 3.55 8.64 23.86

(Source: Capital Line plus) The Face Value per share is Rs. 10/- and the Issue Price of Rs. 20/- is at premium of Rs. 10/-.

The issue price of Rs. 20 per share is 2 times of the face value of Rs.10/- per share of the Equity Shares being issued. The minimum return on net worth required to maintain pre-issue EPS of Rs. 1.30 is 6.99 % whereas the Company has earned RONW of 5.79% for the year ended 31st March 2008 and 11.90% for the year ended 31st March 2007. The offer price of Rs. 20 is 15.38 times the pre-issue EPS, as compared to average P/E multiple 4.10 for the comparable companies in the industry in which the Company operates. In view of the reasons mentioned above, Company and the Lead Managers to the issue, in consultation with whom the Price has been decided, are of the opinion that the Issue Price is reasonable and justified.


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9. TAX BENEFITS

The Board of Directors GANGOTRI IRON & STEEL COMPANY LIMITED

We, the auditors of GANGOTRI IRON & STEEL COMPANY LIMITED hereby confirm that the attached annexure details the generally available tax benefits to the Company and its shareholders under the Income Tax Act, 1961. The tax benefits available to the “Company” and its Shareholders are as under the current tax law 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 business imperatives the Company faces in the future, the Company may or may not choose to fulfill.

The benefits discussed in the Annexure are not exhaustive.

This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for the professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue. We do not express any opinion or provide any assurance as to whether:

i. The Company or its shareholders will continue to obtain these benefits in future; or

ii. The conditions prescribed for availing of these benefits have been / would be met with.

The contents of this Annexure are based on the information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company and interpretations of the current tax laws.

For ARSK & ASSOCIATES Chartered Accountants

(Ravindra Khandelwal) Membership No: 054615 Place: Kolkata March 2, 2009


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TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS:

The Company is advised that under the current provisions of the Income tax Act, 1961 (hereinafter referred to as “The Act”) and existing laws for the time being in force, the following benefits are available to the Company and to its Shareholders.

(a) Benefits Available to the Company under the Income-Tax Act, 1961 ('the Act')

1. As per the provisions of section 10(34) of the Act, dividends referred to in Section 115O of the Act (i.e. dividends declared, distributed or paid on or after 1 April 2003) received on the shares of a domestic company is exempt from tax.

2. As per the provisions of section 10(38) of the Act, any long term capital gains arising to a shareholder from transfer of long term capital asset being equity shares in a Company would not be liable to tax in the hands of the shareholder if the following conditions are satisfied:

i. the transaction of sale of such equity share is entered into on or after 10th September 2004 ii. the transaction is chargeable to such securities transaction tax as explained below.

3. In terms of Securities Transaction Tax as enacted by Chapter VII of the Finance (No. 2) Act, 2004, transactions for purchase and sale of the securities in a recognized stock exchange by the shareholder, shall be chargeable to securities transaction tax. As per the said provisions any delivery based purchase and sale of equity share in a Company through the recognized stock exchange is liable to securities transaction tax @ 0.125% (wef 01 June 2006) of the value payable by both buyer and seller. The non-delivery based sale transactions are liable to tax @ 0.025 % (wef 1 June 2006) of the value payable by the seller.

4. In accordance with and subject to the conditions specified in section 35D of the Income Tax Act, the Company is entitled to amortization, over a period of five years, of all expenditure in connection with the proposed Public Issue subject to the overall limit prescribed in the said section as the Public Issue is for the extension of the business.

5. Under section 48 of the Act, if the investments in shares are sold after being held for not less than twelve months, the gains (in cases not covered under section 10(38) of the Act), if any, will be treated as long term capital gains and the gains shall be calculated by deducting from the gross consideration, the indexed cost of acquisition.

6. Under section 54EC of the Act and subject to the conditions and to the extent specified therein, long term capital gains (in cases not covered under section 10(38) of the Act) arising on the transfer of investment in shares will be exempt from capital gains tax if the capital gain are invested within a period of 6 months after the date of such transfer for a period of at least 3 years in bonds issued by;

i. National Highway Authority of India constituted under section 3 of The National Highway Authority of India Act, 1988;

ii. Rural Electrification Corporation Limited, the company formed and registered under the Companies Act, 1956;

7. Under section 54ED of the Act and subject to the conditions and to the extent specified therein, long term capital gains (in case not covered under section 10(38) of the Act) on the transfer of investment in shares will be exempt from capital gains tax if the capital gains are invested in shares of an Indian Company forming part of an eligible public issue, within a period of 6 months after the date of such transfer and held for a period of at least one year. Eligible public issue means issue of equity shares which satisfied the following conditions, namely –

(i) the issue is made by a public company formed and registered in India;

(ii) the shares forming part of the issue are offered for subscription to the public.*


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Note: There is a legal uncertainty over whether the benefit under this section can be extended to shares forming part of the offer for sale by the selling shareholders.

8. Under section 112 of the Act and other relevant provisions of the Act, Long term capital gains, (i.e. if shares are held for a period exceeding 12 months) (in cases not covered under section 10(38) of the Act), arising on transfer of investment in shares, shall be taxed at a rate of 20% (plus applicable surcharge & cess) after indexation as provided in the second proviso to section 48. The amount of such tax should however be limited to 10% (plus applicable surcharge & cess) without indexation, at the option of the shareholder.

9. Under section 111A of the Act and other relevant provisions of the Act, short-term capital gains (i.e., if shares are held for a period not exceeding 12 months), arising on transfer of investment in shares on a recognized stock exchange, shall be taxed at a rate of 15% (plus applicable surcharge & cess).

(b) Benefits Available to Resident Shareholders under the Income-Tax Act, 1961 ('the Act')

As per the provisions of section 10(34) of the Act, dividends referred to in Section 115O of the Act (ie dividends declared, distributed or paid on or after 1 April 2003) received on the shares of the Company is exempt from tax.


(i) the transaction of sale of such equity share is entered into on or after 10th September 2004 (ii) the transaction is chargeable to such securities transaction tax as explained below.


3. In terms of section 88E of the Act, the securities transaction tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of his business would be eligible for rebate from the amount of income-tax on the income chargeable under the head “Profit and gains of business or profession” arising from taxable securities transactions. As such, no deduction will be allowed in computing the income chargeable to tax as capital gains, such amount paid on account of securities transaction tax.

4. Under section 48 of the Act, if the company’s in shares are sold after being held for not less than twelve months, the gains (in cases not covered under section 10(38) of the Act), if any, will be treated as long term capital gains and the gains shall be calculated by deducting from the gross consideration, the indexed cost of acquisition.





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6. Under section 54ED of the Act and subject to the conditions and to the extent specified therein, long term capital gains (in case not covered under section 10(38) of the Act) on the transfer of shares in the Company, as and when it is listed, will be exempt from capital gains tax if the capital gains are invested in shares of an Indian Company forming part of an eligible public issue, within a period of 6 months after the date of such transfer and held for a period of at least one year. Eligible public issue means issue of equity shares which satisfied the following conditions, namely –


(ii) the shares forming part of the issue are offered for subscription to the public.


7. Under section 54F of the Act, long term capital gains (in cases not covered under section 10(38) of the Act) arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the company will be exempt from capital gain tax subject to other conditions, if the net consideration from such shares are used for purchase of residential house property within a period of one year before and two years after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.


9. Under section 111A of the Act and other relevant provisions of the Act, short-term capital gains (i.e., if shares are held for a period not exceeding 12 months), arising on transfer of investment in shares on a recognized stock exchange, shall be taxed at a rate of 15% (plus applicable surcharge & cess).

(c) Benefits Available to Non-Resident Indians/Non-Resident Shareholders under the Income-Tax Act, 1961 ('the Act')

1. As per the provisions of section 10(34) of the Act, dividends referred to in Section 115O of the Act (ie dividends declared, distributed or paid on or after 1 April 2003) received by a non-resident Indian shareholder (ie an individual being a citizen of India or person of Indian origin who is not a 'resident') on the shares of the Company is exempt from tax.


i. the transaction of sale of such equity share is entered into on or after 10th September 2004 ii. the transaction is chargeable to such securities transaction tax as explained below.


4. In terms of section 88E of the Act, the securities transaction tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of his business would be eligible for rebate from the amount of income-tax on the income chargeable under the head “Profit and gains of


88

business or profession” arising from taxable securities transactions. As such, no deduction will be allowed in computing the income chargeable to tax as capital gains, such amount paid on account of securities transaction tax.




6. Under section 54ED of the Act and subject to the conditions and to the extent specified therein, long term capital gains (in case not covered under section 10(38) of the Act) on the transfer of shares of the Company, as and when it is listed, will be exempt from capital gains tax if the capital gains are invested in shares of an Indian Company forming part of an eligible public issue, within a period of 6 months after the date of such transfer and held for a period of at least one year. Eligible public issue means issue of equity shares which satisfied the following conditions, namely –

i. the issue is made by a public company formed and registered in India; ii. the shares forming part of the issue are offered for subscription to the public.


7. Under section 54F of the Act, long term capital gains (in cases not covered under section 10(38) of the Act) arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the company will be exempt from capital gain tax subject to other conditions, if the net consideration from such shares are used for purchase of residential house property within a period of one year before and two years after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer.


9. Under section 115-I of the Act, the non-resident Indian shareholder has an option to be governed by the provisions of Chapter XIIA of the Income Tax Act, 1961 viz. “Special Provisions Relating to Certain Incomes of Non-Residents” which are as follows:

a) Under section 115E of the Act, where shares in the company are acquired or subscribed to in convertible Foreign Exchange by a Non-Resident Indian, capital gains arising to the non-resident on transfer of shares held for a period exceeding 12 months, shall (in case not covered under section 10(38) of the Act) be concessionally taxed at the flat rate of 10% (plus applicable surcharge & cess) (without indexation benefit but with protection against foreign exchange fluctuation).

b) Under provisions of section 115F of the Act, long-term capital gains (in cases not covered under section 10(38) of the Act) arising to a non-resident Indian from the transfer of shares of the company subscribed to the convertible Foreign Exchange shall be exempt from Income tax, if the net consideration is reinvested in specified assets within six months of the date of transfer. If only part of the net consideration is so reinvested, the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted into money within three years from the date of their acquisition.


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c) Under provisions of section 115G of the Act, Non-Resident Indians are not required to file a return of income under section 139(1) of the Act, if their only income is income from forex asset investments or long-term capital gains in respect of those assets or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.

d) 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 the year under Section 139 of the Act to the effect that the provisions of the Chapter XIIA shall continue to apply to him in relation to such investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

(d) Benefits Available to Foreign Institutional Investors ('FII')

1. As per the provisions of section 10(34) of the Act, dividends referred to in Section 115O of the Act (ie dividends declared, distributed or paid on or after 1 April 2003) received on the shares of the Company is exempt from tax.


(i) the transaction of sale of such equity share is entered into on or after 10th September 2004 (ii) the transaction is chargeable to such securities transaction tax.

3. In terms of section 88E of the Act, the securities transaction tax paid by the shareholder in respect of the taxable securities transactions entered into in the course of his business would be eligible for rebate from the amount of income-tax on the income chargeable under the head “Profit and gains of business or profession” arising from taxable securities transactions. As such, no deduction will be allowed in computing the income chargeable to tax as capital gains, such amount paid on account of securities transaction tax.

4. The income by way of short term capital gains or long term capital gains (in cases not covered under section 10(38) of the Act) realized by FIIs on sale of shares in the company would be taxed @ 15% as per section 115AD of the Act. However in case of such long term capital gains, the tax is levied on the capital gains computed without considering the cost indexation and protection against foreign exchange fluctuation.




6. Under section 54ED of the Act and subject to the conditions and to the extent specified therein, long term capital gains (in case not covered under section 10(38) of the Act) on the transfer of shares of the Company, as and when it is listed, will be exempt from capital gains tax if the capital gains are invested in shares of an Indian Company forming part of an eligible public issue, within a period of 6 months after the date of such transfer and held for a period of at least one year. Eligible public issue means issue of equity shares which satisfied the following conditions, namely –



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(ii)the shares forming part of the issue are offered for subscription to the public.


(e) Benefits Available to Venture Capital Companies/Funds

In terms of Section 10(23FB) of the Act, all venture capital companies/funds registered with Securities & Exchange Board of India, subject to the conditions specified, are eligible for exemption from income tax on all their income, including dividend from and income from sale of shares of the Company.

(f) Benefits Available to Mutual Funds

As per the provisions of Section 10(23D) of the Act, all Mutual Funds set up by Public Sector Banks or Public Financial Institutions of Mutual Funds registered under the Securities and Board of India Act/regulation thereunder or Mutual Funds authorized by the Reserve Bank of India, subject to the conditions specified, are eligible for exemption from income tax on all their income, including income from investment in the shares of the Company.

(g) Benefits Available to Shareholders under the Wealth Tax Act, 1957

Assets as defined under section 2 (ea) of the Wealth Tax Act, 1957 does not include shares in companies and hence, shares are not liable to wealth tax.

(h) Benefits Available to Shareholders under the Gift tax Act, 1958

Gift tax is not leviable in respect of any gifts made to relatives on or after September 1, 2004. Therefore, any gift of shares to relative will not attract gift tax. Meaning of Relative

a) Spouse of individual b) Brother or Sister of the individual c) Brother or sister of the spouse of the individual d) Brother or sister of either of the parents of the individual e) Any lineal ascendant or descendant of the individual f) Any lineal ascendant or descendant of the spouse of the individual g) Spouse of the person referred to in (b) to (g)

Notes: All the above tax benefits will be available only to the sole / first named holder in case the shares are held by joint holders. Legislation, its judicial interpretation and the policies of the regulatory authorities are subject to change from time to time and these may have a bearing on the advice that we have given. Accordingly, any change or amendment in the law or relevant regulations would necessitate a review of the above. Unless specifically requested, we have no responsibility to carry out any review of our comments for changes in laws or regulations occurring after the date of issue of this Note.

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 Agreements, if any, between India and country in which the nonresident has fiscal domicile.

The above Statement of Possible Direct Tax Benefits sets out 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 ordinary shares. The statements made above are based on the tax laws in force as also under the Finance Bill, 2008 and as interpreted by the relevant taxation authorities as of date. The Investors in your Company are advised to consult their tax advisors with respect of the tax consequences of their holdings based on their residential status and the relevant double taxation conventions.


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SECTION - IV. ABOUT THE ISSUER COMPANY

The information presented in this section has been extracted from publicly available documents, which have not been prepared or independently verified by the Company, the Lead Manager or any of their respective affiliates or advisors or the sources referred to herein. In this Section, we have relied on and referred to information regarding the industry and competitors from market research reports, other publicly available sources and information provided by the Company. Although we believe that this information is reliable, we have not independently verified the accuracy and completeness of the information.

1. INDUSTRY OVERVIEW Introduction:

The steel industry is one of the major industries in India and the Indian government plays a very important role in the development of the steel industry in India. The origin of the modern Indian steel industry can be traced back to 1953 when a contract for the construction of an integrated steelworks in Rourkela, Orissa was signed between the Indian government and the German companies Fried Krupp und Demag AG. The initial plan was an annual capacity of 500,000 tonnes, but this was subsequently raised to 1 million tonnes. The capacity of Rourkela Steel Plant (RSP), which belongs to the SAIL (Steel Authority of India Ltd.) group, is presently about 2 million tonnes. At a very early stage the former USSR and a British consortium also showed an interest in establishing a modern steel industry in India. This resulted in the Soviet-aided building of a steel mill with a capacity of 1 million tonnes in Bhilai and the British-backed construction in Durgapur of a foundry, which also has a million ton capacity.

Till 1990, the Indian steel industry operated under a regulated environment with insulated markets and large-scale capacities reserved for the public sector. Production and prices were determined and regulated by the Government, while SAIL and Tata Steel were the main producers, the latter being the only private player. 1992 saw the onset of liberalization and the Indian economy was opened to the world. Indian steel sector also witnessed the entry of several domestic private players and large private investments flowed into the sector to add fresh capacities. The last decade saw the Indian steel industry integrating with the global economy and evolving considerably to adopt world-class production technology to produce high quality steel. The nineties were crucial for Indian steel industry too. The controlled environment has changed drastically, in the post-liberalization scenario. The sector was opened up to the entry of private players, while quantitative restrictions foreign trade have been removed. The last ten years has also seen inefficient steel mills with outdated technology perishing, while new capacities too have come up that possess latest technology expertise. The potential demand for steel in India is vast with the per capita steel consumption India being 26.7 kg compared to the global average of 121.0 kg in 2000-01. This offers a huge potential to steel manufacturers, both domestic and global.

The steel industry showed signs of recovery in the beginning of 2002 from the recessionary trend. The signs of revival were due to the increased demand for the steel products. The demand has increased due to increased demand from China. Steel Industry in India is on an upswing because of the strong global and domestic demand. India's rapid economic growth and soaring demand by sectors like infrastructure, real estate and automobiles, at home and abroad, has put Indian steel industry on the global map. According to the latest report by International Iron and Steel Institute (IISI), India is the seventh largest steel producer in the world.


Industry Structure

The Indian steel industry can be divided into two distinct producer groups:

• Major producers: Also known as Integrated Steel Producers (ISPs), this group includes large steel producers with high levels of backward integration and capacities of over 1 MT. Steel Authority of India Limited (SAIL), Tata Steel, Rashtriya Ispat Nigam Limited (RINL), Jindal Vijayanagar Steel Limited (JVSL), Essar Steel and Ispat Industries form this group.

• Other producers: This group consists of smaller stand-alone steel plants producing small quantities of steel (flat/long products) from materials procured from the market or through their own backward integration system, stand alone units making pig iron and sponge iron and small producers using


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scrap-sponge iron-pig iron combination produce steel ingots (for long products) using Electric Arc Furnace (EAF) or Induction Arc Furnace (IAF) route.


Indian Steel Industry

National Steel Policy 2005

National Steel Policy, as formulated by Indian Ministry of Steel envisages the following -

• Crude steel production of 110 million tonnes by 2019-20 at CAGR of 7.1% from 2004-05.



• Steel imports to the country by 2020 shall grow at CAGR of 7.1% from 04-05 to 6 million tonnes. (Source: www.steel.nic.in)

Demand Scenario

Demand for steel is a derived demand stemming from growth and development of the sectors that are end users of steel such as manufacturing, housing, infrastructure, automobile etc. Consequently GDP growth is a key determinant of steel demand. A recovery in the EU-15 and Japan, which have experienced slow economic growth in recent years, coupled with still-buoyant activity in emerging Asian countries and Russia, is expected to increase world output growth, according to the IMF World Economic Outlook report of 2006.

Global factors that have contributed to increasing steel demand are accelerated infrastructure activity in China, CIS and India, the housing boom in the USA, resurgence of the auto industry in the emerging markets and the resurgence of white goods in Europe.

The other major consumers of steel include the EU, USA and Japan. Economic expansion in these developed economies particularly arising out the manufacturing and housing sectors have added to the increased steel demand globally.

Current Scenario

Indian economy growing @ 8 to 9 %, is one of the fastest growing economies in the world. Industrial production showing encouraging trends. Index of industrial production for Capital goods is growing by 8.4% CAGR and growth in index for consumer durables was by 10.5% CAGR during 2005-06. The 10th plan investment in infrastructure has been envisaged at around Rs.880,550 crores. The major sector wise anticipated investment is likely to be Rs.292000 crores in Power, Rs.145000 crores in Roads & Bridges, irrigation Rs. 111000 crores. During 11th plan (2007-08 to 2011-12), the projected investment towards infrastructure is likely to be Rs. 2027000 crores, an increase of 180% over 10th plan. Lot of steel projects both brownfield and Greenfield likely to come up and are in various stage of execution. Steel Minister has projected India's steel production to be around 124 million tonnes by 2012 and a capacity of around 275 million tonnes by 2019-20. During the year 06-07, India produced around 49 million tonnes of finished steel which was higher by 11 % over 05-06. Imports at 4.1 million tonnes during 06-07 was higher by 6.5%. Exports at 4.7 million tonnes grew by 6.1% during 06-07. During April - Sept.'07 crude steel production at 25.7 million tonnes, exhibited a growth of 5 % over corresponding period last year. Exports at 2.6 million tonnes shows an increase by around 8% over the same period of last year. Imports were around 3.2 million tonnes which was an increase by 63% over April-Sept'06.

Due to infrastructure focus, production of long products is gradually increasing and ratio of flat to long products is narrowing. During Ap-Sept'07 non flat steel produced at 12.4 million tonnes showed an increase


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of around 9% over April-Sept'06. In case of flat products prodn. during April-Sept'07 at 12.2 million tonnes was almost at same level of last year. With due focus on infrastructure development and strong economic indicators, the demand for steel in India shall continue to remain robust.


Steel Prices

The domestic prices of steel have been market-determined ever since the de-regulation of prices for integrated steel plants in India in 1991-92. Market prices in India remain closely related to international prices, though generally lower. The main policy instrument available to influence prices is the adjustment of the customs and excise duty structure. One of the main reasons for lack of price regulation in the steel sector is the dispersal of the supply chain in the steel industry.

During the period 1998 to 2002, the Indian steel industry experienced significant deterioration in prices which adversely affected the profitability of domestic steel mills. However, certain steel mills remained profitable during this period due to price control over key inputs, value addition in the production chain and product diversity. The cyclical nature of the steel industry deters fresh investments due to recessionary risks. The mismatch between demand and supply also leads to price volatility witnessed during recent times. The stagnation in steel prices for long periods followed by sudden spurt also affects the consumers and the infrastructure industry. To mitigate price risks inherent in the steel industry the National Steel Policy 2005 supports the efforts of various steel players to develop risk-hedging instruments like futures and derivatives.

In India, domestic prices of Hot Rolled Coil increased from Rs 32,500/tonne in October 2006 to Rs 33,700/tonne in October 2007 reflecting a 4.1% yearly growth. Domestic prices of Cold Rolled Sheets went up from Rs 34,800/ tonne in October 2006 to Rs 36,950/tonne in October 2007. The prices of Galvanized Plain Sheets went from Rs 39,500/ tonne in October 2006 to Rs 48,000/tonne in October 2007. The prices of Galvanized Corrugated Sheets went up from Rs 39,500/ tonne in October 2006 to Rs 48,000/tonne in October 2007.

(Source: CRIS INFAC Steel Update, November, 2007).

Global Steel Market

Steel is the most widely-used metal globally. Global steel production has now crossed the 1.2 billion tonne mark (2006) due to an upturn in steel demand during the last two years on the back of recovery in the global economy. The world steel industry has entered a new phase. During 2001-06 global steel production increased by 394 Mt. This was 55% higher than the increase achieved during the period 1970-2000. (Source: IISI). Since 2001, finished steel consumption increased by 338.7 Mt at an average annual rate of around 7.5 percent. In the three decades prior to 2000 the average annual increase was 1.2%. According to IISI, the apparent steel use for the world in 2006 was 1,113.2 Mt. A summary of the global steel market is set forth in the table below:

Apparent Steel Use (Figures in MT.)

European Union (25)

Other Europe

North America

Central and South

America Africa India

2006 179.3 33.3 154.9 36.0 21.6 43.1 2005 161.4 29.1 139.4 32.3 19.7 39.2

Growth % 11.1% 14.4% 11.1% 11.5% 9.6% 9.9% Source: International Iron and Steel Institute (IISI)

Types of steel

All steel products are made from semi-finished steel that comes in the form of slabs, billets and blooms. Though today there are over 3500 varieties of regular and special steel available, steel products can be broadly classified into two basic types according to their shape:


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Flat products

Derived from slabs this category includes plates and Hot Rolled Steel such as Coils/Sheets. While plates are used for applications such as shipbuilding etc. HR Steel is the most widely used variety of steel and other downstream flat products such as Cold Rolled Steel and Galvanised steel are made from it. HR Steel has a variety of applications in the manufacturing sector. It is primarily used for making pipes and has many direct industrial and manufacturing applications, including the construction of tanks, railway cars, bicycle frames, ships, engineering and military equipment and automobile and truck wheels, frames and body parts. Cold Rolled Steel is used primarily for precision tubes, containers, bicycles, furniture and for use by the automobile industry to produce car body panels. Galvanised Steel is used for making roofs in the housing and construction sector.

Long products These products derive their name from their shape. Made using billets and blooms they include rods, bars, pipes, ropes and wires, which are used largely by the housing/construction sector. There are also other products like rail tracks in the category. Semi finished steel is also used to produce other varieties of specialized steel such as Alloy Steel.



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2. BUSINESS OVERVIEW

Introduction:

Gangotri Iron & Steel Company Ltd (GISCO), formerly known as Esskayjay Ispat Ltd, was incorporated in 1992 having its registered office in Patna, Bihar for manufacturing of re-rolling products. In 1994, a manual steel re-rolling unit with a capacity of 12,000 MT per annum was set up and commissioned at Patna. The management modified the unit and converted the same into fully automatic plant with an expanded capacity of 22,000 MT per annum. In the year 2003, the company modernized its production facility by adopting new technology of making TMT bars and started manufacturing GISCO TMT bars in November, 2003. The product, because of its better quality over other local manufacturers, was well accepted in the market and commenced price premium over its competitors. Its products got ISI certification and in the year 2005 the company became an ISO 9001 and 14001 certified company. In 2006, the company has further expanded its capacity to 33000 tonnes per annum by adopting latest German THERMEX technology for the first time in state of Bihar and started Brand building process in the name and style of GISCO THERMEX TMT bars. This product, because of its high quality, has been successful in creating a niche market with high premium for itself in a very short period.

The Company is planning to set up a 300 tonnes per day (tpd) Fully Automatic Thermex TMT Bar/ Wire/ Rod Plant along with 2 nos.15 MT Induction Furnaces and a Continuous Billet Casting Machine at Bihta near Patna. The expanded installed Capacity of the Re-rolling Mill will be 100,000 MT per annum and that of Induction furnace and Continuous Casting Machine will be 108900 MT per annum. The Company has already acquired land for the project measuring 14.94 acres at Bihta near Patna. The expansion project on the basis of appraisal by SBI Caps has been funded from State Bank of India.

a. LOCATION OF THE PROJECT

The proposed Re-Rolling Mill along with Continuous Billet Casting machine and Induction Furnaces will be located at Village & P.O.: Bihta, Dist- Patna, Bihar, which is 30 km away from administrative office of the company at Patna. The plant location on National Highway No. 30 at Bihta has already been developed as an Industrial area and has all necessary infrastructure facilities such road, nearness to rail head, telephone facilities and electric power with electric sub station. The Railway Siding is just 15 kms away at Danapur from the proposed site.

• The site is located very close to the suppliers of Sponge Iron, Scrap, CI skull which can be procured from Ramgarh, Koderma, Jamshedpur, Durgapur, Bankura or other areas from Orissa or Chattisgarh.

• The proposed site is located at a distance of about 0.25 km only from NH-30. The nearest railhead is at Danapur which is about 15 km from the proposed site and Airport is at Patna which is 300 km from the site.

• Power supply shall be tapped from the Power Grid lines up to a switching station to be located near the project site.

• The total water requirement for the proposed project is estimated at 798000 liters /day. The requisite water shall be drawn through bore wells. It may be mentioned that river Sone is 3 km. from the proposed site.

• Transportation facilities to access various markets are readily available. • Both skilled and unskilled labour is available in the area.

b. PLANT, MACHINERY, TECHNOLOGY & PROCESS

Plant & Machinery

The total estimate under this head would be approximately Rs. 25.12 crores which is 56.19% of the project cost. The cost is based on the estimates provided by the technical consultant based on quotations and agreements received and entered into by the company with the suppliers.

As per the revised self appraisal report as estimated the cost of plant & machinery would be approximately Rs. 29.16 crores, which is 50.91% of the total project cost.


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The breakup of the total plant and machinery cost is as given below. (Rs in Crores)

Description Total Cost Revised Cost Rolling Mill Section 13.35 13.68 Concast & Furnace Section 8.30 9.98 Miscellaneous 2.74 4.38

Erection, Installation & Freight 0.73 1.12

TOTAL 25.12 29.16

The details of Plant & Machinery and other equipment proposed to be purchased for the modernization and expansion of project are given in the Section “Object of the Issue” of the letter of the offer on page no. 45.

Technology

From the very inception of the Company in 1992, the Company has engaged highly experienced technical personnel who, over the years, have made continuous improvement in plant, machinery, process and quality assurance.

The existing technical staff members are highly experienced; some of them have as much as 15 to 20 years of experience. They have made good contribution for continuous improvement in the plant & machinery and process development over the years. Besides, senior technical personnel have gained excellent exposure to the latest ‘State of the Art’ technology by regularly attending seminars.

The Company has necessary skill and experience at its disposal to carry out the expansion plans without any external help.

Company undertakes technology up gradation from time to time to meet the growing demands of quality products and need for reduction in process cost. During the process of technology upgradation/modernization, Company has made following ddition in the Fixed Assets for the last 5 years.

(Rs. in lacs)

Particulars 2008 2007 2006 2005 2004Addition to Fixed Assets 98.79 196.38 337.03 28.32 58.27

Process Control

Established, well-defined processes are laid down at various stages of manufacturing Billet, TMT Bars, M.S. Bar, Wire rod and other products so as to optimize the yield percentage and reduce the wastage percentage.

Manufacturing Process

Billet Manufacturing

The continuous casting process technology in the global steel scenario has brought a significant change in technology where it has been proved that the steel produced of sponge iron mixed with cast or pig iron and MS melting scrap coupled with Electric Induction Furnace, medium frequency, constant power track can offer better economies at relatively smaller scale operations. The process involves the charge of raw materials – mainly sponge iron 70%, cast iron 20%, MS steel skull and bundled scrap 10% into molten bath (crucible) where through heat energy the iron & steel is melted at a temperature of 1550ºC. Scraps containing higher carbon percentage are used for sandwiching sponge iron. Sponge iron contains less percentage of carbon and cast iron with high percentage of carbon makes the mix charge perfect to melt. As soon as the mix charge is completely melted, necessary Ferro Alloys and deoxidiser are added.

The liquid metal from the furnace is tapped into one of the ladles and the ladle is brought to the casting position. After ascertaining the temperature of liquid metal it is poured into the tundish for distribution to the mould. The mould tube is made of copper. Primary water circulates around the periphery of the mould. During casting a lubricants agent is fed to the inner mould walls to reduce the friction between mould and solidified


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strand. The newly formed strand leaves as a thick shell and is cooled further from all sides by spraying water to complete the solidification process. The cooling water volume can be adjusted to suit the steel grade, strand and size and casting speed. The exhauster sucks off steam arising during water cooling.

The strand reaches the withdrawal-cum-straightening unit through strand guide frame. The strand cutting facilities & roller tables are arranged after the withdrawal-cum-straightening unit. The strand cutting requires oxygen which will be available from the proposed captive oxygen plant. Before starting to cast the mould is closed by a dummy-bar head which is connected to a dummy bar. The dummy bar is lowered at a pre-set speed as soon as the liquid metal reaches a pre-determined level in the mould. When the dummy bar has been severed from the hot strand by means of the torch cutter, the roller tables drive it into the dummy bar holder. The dummy bar holder is swung out of the area of the roller tables.

The cut-to-length billets are conveyed on the roller tables up to the fixed stops. The skid bank pusher transfers the billets on to the cooling bed and then returns to home position. As soon as the ladle is empty, this is removed from casting position and a second ladle is placed in to casting position before it gets empty. Thus continuous or sequence casting is carried out.

M.S.Bars (TMT) Manufacturing Process

The billet manufactured as described above is cut into required sizes and then fed into a coal fired furnace and re-heated to temperatures of 1200º C to 1250º C, the rate at which heat is absorbed by the billet has to be controlled to avoid partial rolling. Normally it takes 45 minutes to one hour for the re-heating of the raw material. The charge material is taken out for rolling. The adequately heated billet pieces are introduce into the re-rolling mill in which a number of carbon steel and chilled steel rolls work successively. The hot metal is passed through number of rolls, which are driven with the help of motor & flywheel. The section of the material reduces by pre-determined amount after every pass. Products of desired cross sections can be obtained by adjusting the roll passes and designing. The desire shaped product is obtained from last or finishing rolls. There after the product is passed through the Thermex Water Quenching system.

Thermex is a simple to use unique ‘Quenching & Self Tempering’ QST, Technology that was developed by Mr. Franz Tamm, Managing Director of Hennigsdorfer Stahl Engineering GMbh, of Germany. The Thermex® Quenching Technology is a process licensed worldwide. The license holder, M/s Hennigsdorfer Stahl Engineering Gmbh of Germany has signed a collaboration agreement with H&K for exclusive marketing and technology rights for India, Nepal, Bangladesh, Bhutan, Pakistan, Myanmar and Sri Lanka for the know-how and equipment for the production of thermo processed reinforcement steel bars (rebars) as per the Thermex Quenching System and have the rights to license customers in this region the use of this Licensed Thermex Quenching Technology. The are also assigned the right to control the quality of Thermex rebars produced.

All Thermex® QST Systems are designed for Grade 500 as per international demands of civil engineers. The bar as it leaves the rolling mill is guided through specially designed proprietary Thermex® Pipes wherein the surface temperature of 850-1000º C is brought down drastically in a relatively short period of time on account of the intense and uniform water colling. The temperature of the core is largely unaffected. The amount of water and time for quenching depends on the parameters of the rolling mill. This is a very important part of the engineering. The pre-determined cooling of the bar periphery transforms the peripheral structure to martensite and then annealed through the heat available at the core. The peripheral and core temperature difference finally equalizes at around 600º C and the resultant bar structure is of tempered martensite at the periphery and of fine-grained ferrite-pearlite at the core. Generally speaking, the resultant soft core forms about 65 – 75% of the area (depending upon the desired minimum yield strength) and the rest are the hardened periphery. The entire Thermex manufacturing process will be operated through Computerized PROGRAMMED logic Control (PLC) to ensure consistency in quality.

It is this Thermex® QST process which results in a product with high yield strength, surface hardness, toughness, ductility and weldability. To ensure proper and uniform ribbing of the Thermex TMT bars, GISCO proposes to install special CNC Machines to cut the rib patterns on the finishing rolls of the rolling mill. After processing through water quenching system, the finished product is kept over the cooling bed for the cooling. The product is then cut to standard lengths and is properly bundled and tagged for dispatch.


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Flow Chart I: Blast Furnace route for producing steel


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Flow Chart II: Electric Arc Furnace route for producing steel

Sponge Iron /Scrap

Electric Arc/ Induction Furnace

Molten Steel

Continuous caster

Ingots /Ingots moulder

Slabs

Hot Rolling Mills

Flats

Billets/Blooms

Longs

Plate Hot Rolled Coil

Tube Mills Slitting Cold Rolling

Welded Tubes Metallic Coating

Tin Plating

Painting

Profiling


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Wire Rod Manufacturing Process

For manufacture of wire rods, the hot billets from the re-heating furnace are taken to the wire/rod rolling mill in which number of carbon steel and chilled steel rolls work successively gradually reducing the diameter of the material to the required size. The material is then put through a coiler and product is cut to desired length and weight and is properly bundled for dispatch.

Quality assurance

The entire process of manufacture is governed by standard opening procedures and Quality Assurance Plans (QAP) drawn as per ISO 9001:2000 and ISO 14001:1996.

Quality Control is an essential process in producing the correct products. This can be divided broadly in four groups:

1. Testing of raw materials 2. Testing of Liquid metal while in furnace ; 3. Testing of intermediate product 4. Testing of Final Product.

Functions of the above groups are: 1. Testing of raw-material will ensure the right type of material for charge mix in furnace for getting

finished products of desired composition. Thus excess/shortage of ferro alloys to be charged can be predetermined and also time will be saved during the melting cycle. This will be done by in-house chemical laboratory.

2. Testing of liquid metal ensures that the finished metal tapped is of absolute composition. For this, the chemical laboratory will test few elements of steel. Immersion Pyrometer will also be used to check that the steel is being tapped at desired pouring temperature.

3. Testing of intermediate goods involves the checking of grain size of the fracture of casting and surface condition.

4. Testing of Final products like M.S. twisted Bars, M.S. TMT bars and wire rod involves checking of strength and elongation through tensile machine, flexibility thruough bend-rebend test and testing of chemical composition.

5. The existing units of the Company are already ISO 9001 and ISO 14001 certified and also are ISI certified. The products of the company are also registered with DGS&D. GISCO will apply for similar certification of the products of the proposed plant.

c. COLLABORATIONS, PERFORMANCE GUARANTEES OR ASSISTANCE IN MARKETING BY THE COLLABORATORS The Company has no foreign collaboration at present.

d. INFRASTRUCTURE FACILITIES

1. Raw Material

Sponge iron, C.I. scrap, Commercial Scrap, CI. Skull, side trimmings etc. are the main raw materials for electric induction furnace unit. The time taken for one heating cycle is dependent on the charge mix For example higher proportion of sponge iron increases the heat time whereas higher quantity of commercial scrap (heavy melting scrap) decreases the heat time. The Company proposes to use an ideal mix which constitutes 70% sponge iron 20% cast iron scrap and 10%commercial scrap. This charge mix proves economical considering cost, quality and efficiency.

Adequate quantities of the raw materials are available from many small sponge iron unit located at Ramgarh, Koderma, Jamshedpur in Jharkhand and Durgapur and Bankura in West Bengal. Sponge iron can also be


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purchased from Tata Sponge Iron Ltd. (Orissa), Bihar Sponge Iron Ltd. (Chandil), Jindal Steel & Power Ltd. (Raigarh) and others in bulk quantity through railway rake. Commercial scrap will be easily available from Durgapur Steel Plant. Scrap in abundance is also available locally. Cast iron scrap can be procured from Bokaro Steel Plant which is also nearby. Some mini plants in Jharkhand are also producing pig iron and which is easily available. Gangotri Electrocasting Ltd., an associate company at Patna has been procuring sponge iron from the above plants regularly and the quality and rates are satisfactory.

For producing 1 MT of MS billet the input of different raw materials would be as follows: Item Raw Material Qty MT1. Sponge Iron 0.81 2. Cast Iron 0.23 3. Scrap 0.12 Total 1.16

The cost of raw material has been taken at the prevailing market prices as follows:

Items for Billets Rs. per MT Sponge Iron 16000 Pig/ C.I. Iron 20000 MS Scrap 15000

2. Utilities

a) Water Water is required for cooling and sanitation purpose. Water is abundantly available at minimum ground level. Moreover Bihta is 3 Km away from the river Sone. The bore wells shall be installed at the plant through which required quantity will be available. There is also provisions for overhead water tank and underground reservoir for water storage. Plant will require soft water, untreated water and demineralised water. For water treatment R.O. Plant and Water Softening Plant of required capacities will be installed.

Requirement of water is estimated as under:

Base water requirement is 225000 Ltrs in Furnace and 400000 Ltrs in Rolling Mill Make up water requirement will be

For Furnace Section : 60000 Ltrs per day water will come from Softening Plant For Concast machine : 50000 Ltrs per day requires Raw Water For Rolling Mill Section : 40000 Ltrs per day water will be supplied from the RO Plant For Other Consumption : 20000 Ltrs per day.

b) Fuel

The coal consumption shall be approximately 70 kg per MT of Billet for heating at the Coal furnace. Coal shall be procured form nearby local sources and no difficulty is envisaged in the availability of the same.

c) Power

The proposed production facility with two 15 MT 5500 KW Induction Melting Furnace with 4 (four) crucibles and other auxiliary equipment viz., crane, water cooling system, general lighting etc., and continuous casting machine require connected load of 12000 KVA. However, as per existing power tariff of Bihar State Electricity Board, which is applicable only for 7 MT Induction furnaces, the unit will have to take minimum load of 600 KVA per MT capacity of Induction furnace resulting in required connected load of 18000 KVA. The Company has already received the sanction from SIPB, Bihar for lowering of the minimum load to 450 KVA per Mt capacity as the actual consumption of electricity reduces with the increase of furnace capacity. The re-rolling mill section also requires a connected load of 1500 KVA. BSEB has consented to provide the required power to the proposed facility. The KVA charges currently in force by BSEB is Rs. 700 per KVA per month.


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Consumption of power per MT of Billet has been estimated as 750 units. The power consumed per MT depends on the charge mix in the crucible. On the basis of ideal mix, i.e. 70% sponge iron, 20% cast iron scrap and 10% commercial scrap, power consumption per MT has been calculated at 750 KWH. Power consumption may vary if the charge mix changes. In re-rolling Mill, consumption of power per MT of M.S.Bars has been assumed as 100 units.

Rate of electricity has been calculated on the basis of power tariff and concessions offered by BSEB. Under Incentive Policy ‘2006, the proposed unit is also eligible for waiver of Electricity Duty for 5(five) years. At present the demand charges for per KVA connected load is Rs.700 and unit rate is Rs 1.20.

d) Oxygen Plant

The strand cutting requires about 1250 cum oxygen per day, which, instead of purchasing from the market is proposed to be produced from the captive Oxygen plant of 100 cum/hr. Oxygen generated from this plant will be cost effective and company has plans to sell any excess production in the market as there is huge demand of oxygen in the area.

e) Fire Fighting Facilities In order to combat any occurrence of fire in plant premises the fire protection facilities have been envisaged for the various units of the plant. All plant units, office buildings, stores, laboratories, etc will be provided with adequate number of portable fire extinguishers to be used as first aid fire appliances.

f) Transportation

Road

The proposed project site is located near NH-30, which connects Patna –Bihta-Area. The proposed site is thus connected to all the states of Eastern region through a network of National and State Highways. The location is also just 30 Kms away from Patna. The other major industrial towns like Jamshedpur, Durgapur, Rourkela in Jharkahand , West Bengal and Orissa are nearer to Patna.

Rail

The Railway siding is just 15 kms away at Danapur from the proposed site.

3. Manpower

Total requirement of man power in the proposed production plant comes to approximately 656 numbers for 3 shift work. Out of this 86 persons will be on Company Payroll and balance will be arranged through contractors. From unloading of raw materials to loading of finished goods one or more labour contracts will be awarded to outside contractors. They in turn will employ work men with the required grades of skill on their payroll. Only the maintenance staff, administrative staff, supervisory staff and marketing staff will be employed directly by the Company.

In terms of skilled, semiskilled and unskilled category the following requirements of man power is proposed: Grade Billet Section Rolling Mill Section Total

Skilled 80 45 125Semi Skilled 100 45 145Un-Skilled 100 200 300Total 280 290 570

The manpower has been estimated above based on the following considerations.

• Production units and their capacities • Type of equipments proposed for the production unit and corresponding auxiliary facilities • Degree of automation and mechanization envisaged in different units. • Extent of manning required for each equipment. • Number of operating shifts • Supporting personnel for off and leave reserves.


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Availability wise least difficulty is expected in case of unskilled person as the same is available in plenty in and around Patna. However, skilled, experienced and semiskilled manpower requirement in connection with this industry needs to be fulfilled by recruiting people from other States. The existing plants of GISCO are being operated in a similar way. The cost of man power has been considered accordingly.

e. PRODUCTS

The billet being a semi-finished product is used for further processing for production of suitable products. It is used as a feedstock to rolling mills for production of long products like wire rods, bars/rods and light structural. Billet is also used extensively in forge shops and machine shops for production of engineering goods and also as feedstock for seamless tubes.

f. Customer Profile

The product is getting sold through the authorized dealers and direct customer reach is minimum.

List of Top Customers The details showing Top Customers of Company and percentage of sales contributed by them during last 5 years are given in the following table: (Rs. in Lacs) Sl. Name of Party 2007-08 (Upto

Dec’07) 2006-07 2005-06 2004-05 2003-04

Amt. % Amt % Amt. % Amt. % Amt. %1 A.K. Traders, Patna 15.14 0.48 28.7 0.72 10.65 0.47 0.53 0.02 - 2 Aman Multipurpose Cold

Storage19.04 0.60 - - - - - - -

3 Aruna Trading Co. 13.14 0.42 12.55 0.32 5.92 0.26 2.95 0.13 4.56 0.29 4 Birla Institute of

Technology78.37 2.48 93.93 2.40 - - - - -

5 Foundation Engineers 29.44 0.93 74.59 1.90 - - - - - 6 Geeta Traders 11.11 0.35 3.27 0.08 3.82 0.17 - - 3.14 0.207 Harinagar Sugar Mills Ltd 94.23 2.99 - - - - - - - 8 Jai Jagdamba Iron Store 21.97 0.70 12.77 0.33 2.63 0.12 - - -9 Kailash Mart 13.46 0.43 2.08 0.05 - - - - -

10 M.A.Traders 13.99 0.44 6.27 0.16 - - - - - 11 M.L.Sah & Sons 15.31 0.49 10.75 0.27 - - - - -12 Mahadeo Memraj 13.47 0.43 15.05 0.38 2.69 0.12 5.04 0.22 - 13 Mother India Construction

Pvt Ltd 32.23 1.02 29.49 0.75 1.87 0.08 - - -

14 Niyagri Builders 15.04 0.48 2.36 0.06 - - - - - 15 Prakash Construction 19.07 0.60 2.92 0.07 2.83 0.12 4.08 0.18 1.92 0.1216 R.G.Iron 20.59 0.65 35.85 0.91 - - - - - 17 R.M.Traders 185.06 5.86 148.53 3.79 - - - - -18 Shalimar Cold Storage 35.58 1.13 5.24 0.13 3.03 0.13 4.20 0.19 4.16 0.26 19 Tantia Construction Ltd 69.68 2.21 12.46 0.32 - - - - -20 Touch Stone 34.96 1.11 6.31 0.16 - - - - -21 Ujjawal Iron & Cement

Store122.34 3.88 90.79 2.32 2.98 0.13 - - -

22 Hemkund Traders 6.06 0.19 25.56 0.65 1.72 0.08 - - - 23 Samdarshi Khad Bhandar 20.70 0.66 34.24 0.87 54.33 2.39 12.13 0.54 10.16 0.6424 Ganesh Ram Dukania - - 25.86 0.66 0.58 0.03 - - -25 Kothari Trading Co. 11.07 0.35 29.64 0.76 29.88 1.31 16.39 0.73 3.88 0.24 26 Nirman Cement Ltd - 0.00 29.61 0.76 31.25 1.37 - - -

911.05 28.86 738.82 18.82 154.18 6.77 45.32 2.01 27.82 1.74


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MARKET AND COMPETITION

The products being made by us are extensively used for the construction of roads, buildings and other construction activities in the Indian market. Construction is the largest end-use sector of steel, accounting for nearly 35% of steel consumption. The steel industry in India is estimated at 49 million tonnes (2006-07) by volumes.

Domestic Market: The Indian Steel industry is almost 100 years old now. Till 1990, the Indian steel industry operated under a regulated environment with insulated markets and large scale capacities reserved for the public sector. Production and prices were determined and regulated by the Government, while SAIL and Tata Steel were the main producers, the latter being the only private player. In 1990, the Indian steel Industry had a production capacity of 23 MT. 1992 saw the onset of liberalization and the Indian economy was opened to the world. Indian steel sector also witnessed the entry of several domestic private players and large private investments flowed into the sector to add fresh capacities.

The last decade saw the Indian steel industry integrating with the global economy and evolving considerably to adopt world-class production technology to produce high quality steel. The total investment in the Indian steel since 1990 is over Rs 19,000 crores mostly in plant equipments, which have been installed after 1990. The steel industry also went through a turbulent phase between 1997 and 2001 when there was a downturn in the global steel industry. The progress of the industry in terms of capacity additions, production, consumption, exports and profitability plateaued off during this phase. But the industry weathered the storm only to recover in 2002 and is beginning to get back on its feet given the strong domestic economic growth and revival of demand in global markets.

With a current capacity of 35 MT the Indian Steel Industry is today the 8th largest producer of steel in the world. Today, India produces international standard steel of almost all grades/varieties and has been a net exporter for the past few years, underlining the growing acceptability of its products in the global market.

Current Scenario

During April - Sept.'07 following has been the performance- • Crude steel prodn. at 25.7 million tonnes, exhibited a growth of 5 % over corresponding period last

year. • Exports at 2.6 million tonnes shows an increase by around 8% over the same period of last year. • Imports were around 3.2 million tonnes which was an increase by 63% over April-Sept'06. • Apparent Consumption of steel during April-Sept'07 was 22 million tonnes which was an increase by

11 % over April-Sept'06. While long products (excl. semis) at 12.3 million tonnes registered a growth of 9%, the flat products consumption at 12.5 million tonnes indicated an increase of 12%.

National Steel Policy, as formulated by Indian Ministry of Steel envisages the following - • Crude steel production of 110 million tonnes by 2019-20 at CAGR of 7.1% from 2004-05.



• Steel imports to the country by 2020 shall grow at CAGR of 7.1% from 04-05 to 6 million tonnes.

(Source: www.steel.nic.in)

Global Market:

Steel is the most widely-used metal globally. Global steel production has now crossed the 1.2 billion tonne mark (2006) due to an upturn in steel demand during the last two years on the back of recovery in the global economy. The world steel industry has entered a new phase. During 2001-06 global steel production increased by 394 Mt. This was 55% higher than the increase achieved during the period 1970-2000. (Source: IISI). Since 2001, finished steel consumption increased by 338.7 Mt at an average annual rate of around 7.5


105

percent. In the three decades prior to 2000 the average annual increase was 1.2%. According to IISI, the apparent steel use for the world in 2006 was 1,113.2 Mt.

Source: International Iron and Steel Institute (IISI)

Marketing Set up:

Company manufactures Billet, TMT Bars, M.S. Bar, Wire rod and other steel products. Due to our technical expertise and superior quality, the Company over the years has earned reputation in the steel industry. Company’s Executive Directors having management skills and are proven entrepreneurs having more than 40 years of experience in the steel industry. The Company has adopted a pro-active marketing policy, with a trained team, a network of dealer line-up. The Company has well spread network reaching the remotest part of the state of Bihar giving an unparallel position in the market arena.

Marketing Strategy:

With the proposed expansion and modernization of the Company’s manufacturing facility, the Company proposes to utilize installed capacity to the optimum level by adopting the following marketing strategy:

• Adopting a pro-active marketing policy, • Identifying existing and potential markets. • Focusing on the value addition • Minimizing risk through a detailed, multi functional customer appraisal system. • Regular technical and commercial training of the team • Direct marketing to large infrastructure and construction project. • To increase the competitiveness in the market through reduction in the overall cost of production.

BUSINESS STRATEGY

Brief statement about Business Strategy:

The Company is in the manufacturing of steel products for more than 15 years and has grown to the present level by developing quality of products, building trust in the customers. The Company wants to leverage this strength to its benefit in future so as to become an effective player in the steel industry. To provide best quality products and services to the customers in the main business strategy of the Company. Keeping in view the above, the business strategy of the Company is as under:

� Improving the cost competitiveness. � Widening the customer base � Optimum utilization of the production capacity � Maintain and further consolidate company’s position in key markets through capacity expansion. � Continue focus on operational efficiency improvements.

(i) Brief statement about Future Prospects:

The steel market is said to be growing at 9% per annum and its future growth is likely to be around 7% per annum. The reason for such fast growth in the market is attributed to following reasons:

• During 11th plan (2007-08 to 2011-12), the projected investment towards infrastructure is likely to be Rs. 2027000 crores, an increase of 180% over 10th plan.

• Due to infrastructure focus, production of long products is gradually increasing and ratio of flat to long products is narrowing.

• The product, because of its better quality over other local manufacturers, was well accepted in the market and commenced price premium over its competitors.

Thus, these above factors will make the steel industry one of the fastest growing industries.


106

(ii) Capacity & Capacity Utilization

The present installed capacity, past three years capacity utilization and proposed capacity utilization (including existing and proposed) is given as under:

(in MT) Existing Installed Capacity Actual

2005-06 2006-07 2007-08Installed Capacity 33000.000 33000.000 36000.000 Utilized Capacity 12769.063 16667.122 17315.573 Utilization as % of installed capacity 38.69% 50.51% 48.10% Proposed Capacity (Existing + Proposed) Proposed

2008-09 2009-10 2010-11Installed Capacity 61667.000 145000.000 145000.000 Utilized Capacity 31816.272 116000.000 123250.000 Utilization as % of installed capacity 51.59% 80% 85% Notes:

• The Installed Capacity of the existing plant (Unit-I) increased from 33000 MT to 45000 MT on 01.01.2008. i.e. {(33000*9)+(45000*3)}/12 = 36000MT installed capacity for the year 2007-08.

• The Installed Capacity of the existing plant (Unit-I) is 45000 MT and new plant (Unit-II) is 100000 MT from February 2009 i.e.{(45000*12)+(100000*2)}/12 = 61667MT installed capacity for the year 2008-09.

• The installed capacity will get changed to145000 MT i.e. (45000+100000) MT from February 2009. • The production under expansion plan will commence from mid of February 2009.

Capacity utilization

The Company has proposed modernization and expansion plans to create additional facility and upgrade technology, thereby increasing the production capacity from 45000 MT per annum to 145000 MT per annum. The expected increase in production upon commencement of expansion capacity and modernization of the existing capacity would help in reduction of the cost of production thereby making the product more competitive.

COMPETITIVE STRENGTHS

The Company faces competition from large as well as small producers of the product. However, after completion of the proposed projects, the Company will be in a position to consolidate its position in the market and also to improve upon its margins.

The following inherent strengths would help in increasing our competitive capacities:

a. The promoters of the Company has sufficient past experience on this industry and has built a strong marketing network in the state of Bihar.

b. The proposed unit is going to manufacture long products like Billets, Ingots, CTD Bars, TMT bars, Wire Rods etc. They find wide application in general construction activities, engineering activities.

c. The State Government is allowing preference on price and supply factor to local industries. The unit will get price preference to the tune of 7.5% over producers of other states.

d. DGS&D approval clears the way for direct Government & Institutiional sales and the Company has already acquired the same.

e. Most of the rolling mills in Bihar are manual and not producing quality products whereas the Company is already producing quality products.

f. The Company has a distinct and established brand image. g. The Company has network of more than 200 dealers in all over Bihar. h. The new Bihar Industrial Act 2006 provides enabling provisions for establishment of new industries in

the state with attractive financial incentives. The new investments which will increase the demand for steel products in the state.

i. Our Products meet BIS 1786:1985, ISO 9002 specifications. We have talented, skilled and qualified manpower to look after different activities at various levels in the organization.


107

A new Industrial Incentive Policy - 2006 has been prepared in consultation with Bihar Industries Association, Bihar Chamber of Commerce, Confederation of Indian Industry and all concerned Government Departments. Under this Industrial Incentive Policy- 2006 there are provisions for granting preproduction incentive of subsidy/exemption from stamp duty and registration fee and post production incentive of grant/exemption for preparation of project reports, purchase of land/shed, technical know-how, captive power generation/diesel generating set, quality certificate, Vat, luxury tax, electricity duty, conversion fee, market fee etc.

The proposed project is eligible to get the following incentives as per the new industrial policy:

� Vat refund to the tune of 80% of Vat paid for Raw Materials subject to maximum of 300% of Capital Investment per annum

� Waiver of Electricity Duty which is presently 6% � Waiver of Annual minimum guarantee Charges � Waiver of Stamp duty on registration of land � Reduction Central Sales Tax from 4% to 1%

PROPERTY The following are the properties (land) owned or taken on long-term lease basis by the Company for Unit - II: Schedule of the Property & Use

Area (Acres)

Consideration (Rs.)

Nature of Interest

Date of Purchase and Document

No.

Name of the Vendor

Village & P.O. Bihta, District- Patna, Bihar ---Company’s Unit-II is located on this land

1.25 1316705 Registered Freehold

04.03.2006 Doc. No. 973

Yadunandan Rai Brijnandan Rai Ramkeswar Rai Suryanath Rai Rambhawan Rai Satya Rai



29.03.2006 Doc. No. 1346

Kamta Prasad



29.03.2006 Doc. No. 1347

Lalan Prasad Krishnadeo Prasad



30.03.2006 Doc No. 1374

Rambahadur Rai Atwaru Rai Ramsakal Rai



23.05.2006 Doc. No. 2223

Krishna Prasad Yadaw Surender Yadaw Mahender Yadaw Saguni Ray



26.05.2006 Doc. No. 2318

Krishna Rai Bundela Rai Mahendra Rai



26.05.2006 Doc. No. 2303

Binod Verma Devpoojan Mehto Deepraj Mehto

Village & P.O. Bihta, District- Patna, Bihar ---Company’s


29.05.2006 Doc. No. 2357

Surender Singh


108

Unit-II is located on this land Village & P.O. Bihta, District- Patna, Bihar ---Company’s Unit-II is located on this land


14.06.2006 Doc. No. 2767

Rajnandan Rai Rajdeo Rai Jayram Rai Gobinda Prasad



16.06.2006 Doc. No. 2796

Laxman Rai



28.06.2006 Doc. No. 3114

Bindeswari Ray Girja Ray Hrdya Gope Chandeswar Kumar Birender Kumar Satender Kumar Kameswar Kumar Ramesh Kumar



11.08.2006 Doc. No. 4103

Krishna Prasad Surender Yadaw Mahender Yadaw Saguni Ray



02.09.2006 Doc. No. 2796

Laxman Rai



02.01.2007 Doc. No. 5

Rajnandan Rai Rajdeo Rai Jayram Rai Suryamani Rai



15.04.2006 Doc. No. 473

Awadesh Prasad Singh



03.07.2007 Doc. No. 473

Awadesh Prasad Singh


2.8125 Lease Rent Rs. 9000/- per month

Registered Leasehold

Om Prakash Sharma

Total 14.9375 Registered Freehold Land in Acre 12.125

Registered Leasehold Land in Acre 2.8125 Total 14.9375

The following are the properties owned or taken on long-term lease basis by the Company for Unit – I:Schedule of the Property & Use

Area (Acres)

Consideration Nature of Interest

Date of Arrangement of

Lease

Name of the Vendor

Phulwari Shariff, Nayatola, Patna, Bihar---Company’s Unit-I

0.17158 Rs 4000/- pm plus 5% increment

every year

Leasehold 05.09.00 to 04.09.05 (5 years)

Shyam Nandan Singh


109

is located on this land Phulwari Shariff, Nayatola, Patna, Bihar---Company’s Unit-I is located on this land

0.17159 Rs 4000/- pm plus 5% increment

every year

Leasehold 05.09.00 to 04.09.05 (5 years)

Dwarka Singh

Phulwari Shariff, Nayatola, Patna, Bihar---Company’s Unit-I is located on this land

0.21698 Rs. 2835/- pm plus 10% increment on

every 3 years

Leasehold 01.02.93 to 31.12.178 (25

years)

Kamlesh Kumar Roy


0.43052 Rs. 5625/- pm plus 10% increment on

every 3 years

Leasehold 01.01.95 to 31.12.17 (23

years)

Ram Nandan Roy


0.28708 Rs. 3750.90 pm plus 10%

increment on every 3 years

Leasehold 13.07.93 to 12.08.18 (25

years)

Binay Kumar Ray


0.24082 Rs. 3146.4 pm plus 10% increment on

every 3 years

Leasehold 05.07.93 to 04.08.18 (25

years)

Dinesh Kumar Ray


0.35840 Rs. 4682.40 pm plus 10%

increment on every 3 years

Leasehold 01.02.93 to 31.01.18 (25

years)

Dinesh Kumar Singh


0.07180 Rs 938.10 pm plus 10% increment on

every 3years

Leasehold 01.02.93 to 31.01.18 (25

years)

Dinesh Kumar Singh

Total 1.94876

INSURANCE COVER TAKEN BY THE COMPANY

Company keeps all critical immovable and movable properties duly insured.

Unit:I

Sl No Type of Policy Policy

No. Date of Policy

Date of Expiry

Sum Assured

(Rs)

Premium (Rs) Insurance Co.

1 Miscellaneous Vehicle (JCB)

331406/31/2009/840

21.06.2008 20.06.2009 1600000/- 21452/- The Oriental Insurance Co.

Ltd. 2. Bldg, P/M &

Stock (Fire and Special Peril)

11/2008/151


Ltd. 3. Stock-in-trade

(Burglary) 48/2008/546


Ltd. 4. Cash

Insurance 48/2008/547


Ltd.


110

5. Package Policy for Zone B, Private Car

331190/31/2009/123


Ltd. 6. Hyundai

Santro Xing XP

331406/31/2009/2226


Ltd. 7 Two Wheeler

BR 01 A 0001 331406/31/2009/1239


Ltd. 8. Package

Policy for Zone B, Mack – Mobile Crane

331406/31/2009/1245


Ltd.

9 Two Wheeler 31/2008/2250

04.02.2008 03.02.2009 28500/- 755/- The Oriental Isurance Co. Ltd.

Unit:II

Sl No Type of Policy Policy

No. Date of Policy

Date of Expiry

Sum Assured

(Rs)

Premium (Rs) Insurance Co.

1 Standard Fire & Special Perils (Building/Shed, P&M, Electrical Installation)

540801/11/07/11/00000891


Ltd.


111

3. KEY INDUSTRY REGULATIONS

Depending upon the nature of the projects undertaken by the Company, applicable laws and regulations include the following:

• The Workmen’s Compensation Act, 1923 • The Employee’s State Insurance Act, 1948 • Payment of Bonus Act, 1965 • Payment of Wages Act, 1936 • Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 • Contract Labour (Regulation and Abolition) Act, 1970 • Payment of Gratuity Act, 1972 • Factories Act, 1948 • The Air (Prevention and Control of Pollution) Act, 1981 • The Water (Preventation and Control of Pollution) Act, 1974

Workmen’s Compensation Act, 1923

The Workmen’s Compensation Act, 1923 (“WCA”) has been enacted with the objective to provide workmen and/or their dependents some relief in case of accidents arising out of and in the course of employment, and for occupational diseases resulting in death or disablement. Every employee (including those employed through a contractor but excluding casual employees), who is engaged for the purposes of employer’s business and who suffers an injury in any accident arising out of and in the course of his employment, shall be entitled for compensation under the Act. In case the employer fails to pay compensation due under the WCA within one month from the date it falls due, the commissioner appointed under the WCA may direct the employer to pay the compensation amount along with interest and may also impose a penalty.

The Employee’s State Insurance Act, 1948

Purpose to the Employee’s State Insurance Act, 1948, as amended by the Amendment Act, 1989, it is an act to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provisions for certain other matters in relation thereto. It shall apply to all factories including factories belonging to the Government other than seasonal factories. For the purpose factory means any premises including the precincts thereof-

a) whereon ten or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or

b) whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power or is ordinarily so carried on,

but does not include a mine subject to the operation of the Mines Act, 1952 or a Railway running shed.

Payment of Bonus Act, 1965 Purpose to the Payment of Bonus Act, 1965, as amended (the “Bonus Act”), an employee in a factory or in any establishment where 20 or more persons are employed on any day during an accounting year, who has worked for at least 30 working days in a year is eligible to be paid a bonus. Bonus is to be paid within eight months from the expiry of the accounting year. Computation of bonus is to be worked out as per Schedule I to IV of the Act. Contravention of the provisions of the Bonus Act by a company is punishable with imprisonment for a term of up to six months or a fine up to Rs. 1000/- or both, against persons in charge of, and responsible to the Company for the conduct of the business of the Company at the time of contravention.

Minimum Wages Act, 1948 The enactment was made to ensure regular and prompt payment of wages and to prevent the exploitation of wage earner by prohibiting arbitrary fines and deductions from his wages, State Governments may stipulate the minimum wages applicable to a particular industry. The minimum wages may consist of a basic rate of wages and a special allowance; or a basic rate of wages and the cash value of the concessions in respect of supplies of essential commodities; or an all-inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of the concessions, if any. Workmen are to be paid for overtime at overtime rates stipulated by the appropriate government.


112

Contravention of the provisions of this legislation may result in imprisonment for a term up to six months or a fine up to Rs. 500/- or both.

Employee’s Provident Funds and Miscellaneous Provisions Act, 1952 The Employees Provident Fund and Miscellaneous Provisions Act, 1952 (the “EPF Act”) provides for the institution of compulsory provident fund, pension fund and deposit linked insurance funds for the benefit of employees in factories and other establishments. A liability is placed both on the employer and the employee to make certain contributions to the funds mentioned above.

Contract Labour (Regulation and Abolition) Act, 1970 The Act applies to every establishment in which 20 or more workmen are employed or were employed on any day on the preceding 12 months as contract labour and to every contractor who employs or who employed on any day of the preceding 12 months 20 or more workmen. The establishments covered under the Act are required to be registered as per Principal Employer. Likewise, every contractor to whom the Act applies is required to obtain a license and not to undertake or execute any work through contract labour except under and in accordance with the license issued. The Act has provided for establishment of canteens. For the welfare and health of contract labour, provision is made for restrooms, first aid, wholesome drinking water, latrines and urinals. In case of failure on the part of the contractor to provide such facilities, the Principal Employer is made liable to provide the amenities.

The contractor is required to pay wages and a duty is cast on him to ensure disbursement of wages in the presence of the authorized representative of the Principal Employer. In case of failure on the part of the contractor to pay wages either in part or in full, the Principal Employer is liable to pay the same. In case the contract labour performs same or similar kind of work as regular workmen, they will be entitled to the same wages and service conditions as regular workmen as per the Contract Labour (Regulation and Abolition) Central Rules, 1971. In the event the contractor fails to provide these amenities, the Principal Employer is under an obligation to provide these facilities within a prescribed time period. Penalties, including both fines and imprisonment, may be imposed for contravention of the provisions of the CLRA.

Payment of Gratuity Act, 1972

Under the Payment of Gratuity Act, 1972 as amended (the “Gratuity Act”), an employee who has been in continuous service for a period of five years will be eligible for gratuity upon his retirement or resignation, superannuation or death or disablement due to accident or disease. However, the entitlement to gratuity in the event of death or disablement will not be contingent upon an employee having completed five years of continuous service. The maximum amount of gratuity payable may not exceed Rs. 350000/-.

An employee in a factory is said to be ‘in continuous service’ for a certain period notwithstanding that his service has been interrupted during that period by sickness, accident, leave, absence, without leave, lay-off, strike, lock-out or cessation of work not due to the fault of the employee. The Employee is also deemed to be in continuous service if the employee has worked (in an establishment that works for at least six days in a week) for at least 240 days in a period of 12 months or 120 days in a period of six months immediately preceding the date of reckoning.

Factories Act, 1948 The industries in which Ten (10) or more that Ten workers are employed on any day of the preceding twelve months and are engaged in manufacturing process being carried out with the aid of power or twenty or more than twenty workers are employed in manufacturing process being carried out without the aid of power, are covered under the provisions of this Act.

The enforcement of this legislation is being carried out on district basis by the District Inspectors of Factories with respect to Health, Safety, Welfare Facilities, Working Hours, Employment of young persons, Annual Leave with wages etc. After inspection, improvement notices are issued to the defaulting managements and ultimately action is taken against the defaulting managements. The Inspectors of Factories file challans against the defaulters, in the Courts of Metropolitan Magistrates. The work of Inspectors of Factories is supervised by the Dy. Chief Inspector of Factories on district basis. This act provides for a maximum punishment up to two years and or a fine up to Rupees One lakh or both.


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The Air (Prevention and Control of Pollution) Act, 1981

The Air (Prevention and Control of Pollution) Act was enacted by the Parliament in 1981 with an objective to prevent, control & for abatement of air pollution. No person operating any industrial plant, in any air pollution control area shall discharged the emission of any air pollution in excess of the standards laid down by the State Board. State Board can also approach the court to stop any person from doing air pollution. DPCC office have powers to inspect any premises in performance of their duties, take samples, examine records, documents etc. or performing any other duty entrusted to him by the board. Every person operating any equipment is bound to provide all assistance to the person who is inspecting. Any person failing to comply with the provisions can be punished by way of imprisonment from 1-1/2 years to 6 years, with fine up to Rs. 5000/- per day. If violation continues beyond one year imprisonment can be increased upto 7 years with fine. Whoever contravenes any of the provisions of this Act or any order or directions issued there under, for which no penalty has been elsewhere provided in this act, shall be punishable with imprisonment for a term which may extend to three months or with fine which may extend to ten thousand rupees or with both, and in case of continuing contravention with an additional fine which may extend to Rs. 5000/- for every day during which such contravention continues after conviction for the first such contravention.

The Water (Prevention and Control of Pollution) Act, 1974. The Water Act was enacted by Parliament Act, 1974 purpose to provide for the prevention of control of water pollution and the maintaining or restoring of wholesomeness of water. As per the enactment no person shall without the previous consent to Establish or take any step to establish any industry, operation or process or any treatment and disposal system for any extension or addition thereto, which is likely to discharge sewage or trade effluent into a stream or well or sewer or on land or bring into use any new or altered outlet for the discharge of sewage or being to make any new discharge of sewage. Under this section the state board may grant consent to the industry after satisfying itself on pollution control measures taken by the unit or refuse such consent for reasons to be recorded in writing. Whoever contravenes any of the provisions of this Act or fails to comply with any order or direction given under this Act for which no penalty has been elsewhere provided in this Act, shall be punishable with imprisonment, which may extend to three months or with fine, which may extent to ten thousand rupees or with both.


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4. HISTORY AND CORPORATE STRUCTURE OF THE COMPANY

1. History & Background of the Company

“Gangotri” is universally known and regarded as the source and fountain-head of purest and most sacred river, Ganga. We drive our name with an avowed intention to be the fountain-head and the harbinger of industrial catalyst in the State of Bihar.

Gangotri Iron & Steel Company Limited (GISCO), formerly known as ESSKAYJAY Ispat Limited was incorporated on 7th December, 1992 as a Public Limited Company. It received the certificate of commencement of business on 9th December, 1992. On 24th May, 2000, the name of the Company was changed to Gangotri Iron & Steel Company Limited. The company with its registered office at 307 Ashiana Towers, Exhibition Road, Patna - 800001, Bihar, started commercial production from March1, 1994 and was engaged in the production of M.S. Deformed Cold Twisted Bars, M.S. Rounds, M.S. Flats etc. at its re-rolling mill at Naya Tola, Phulwari Shariff, Patna. The plant was converted to a fully automatic rolling mill in 2000 with an increased capacity of 21,000 MT per annum. In 2006, the company got engaged in manufacturing M.S. Steel bars in the name and style of GISCO THERMEX TMT Bars. The present installed capacity of the unit is to manufacture 33000 MT of Steel Bars per annum. GISCO THERMEX TMT Bars is premium product in the medium segment of Steel Industries in the State of Bihar being manufactured with German Technology and has all laurels viz. ISI certification, ISO 9001 & 14001 certification, DGS&D approval.

The company came with the Public Issue of 30,45,100 Equity Shares of Rs 10/- each for cash at par aggregating Rs. 304.51 lacs on 22nd May, 1995. The shares of the Company are listed at Bombay Stock Exchange Limited, The Calcutta Stock Exchange Association Limited and The Magadh Stock Exchange Association. During the Financial Year 2006-07, the Company has achieved a turnover of Rs. 40 crores. Last year the Company had acquired 12.125 acres of free hold land and 2.81 acres lease hold land to set up a fully Integrated Steel Plant at Bihta near Patna with a capacity to manufacture 1 lac MT per annum of “GISCO THERMEX TMT Bars” and Wire Rods with a capital outlay of Rs. 50 crores. The construction of the plant is almost complete and is expected to commence its production by mid of February 2009.

2. Major Events in the History of the CompanyYEAR MAJOR EVENTS1992 Incorporated on 7th December 1992 as a Public Limited Company in the name of

ESSKAYJAY Ispat Limited. Set up a unit for manufacturing M.S. Deformed Cold Twisted Bars, M.S. Rounds, M.S.Flats etc. with installed capacity of 12000 MT at Naya Tola, Phulwari Shariff, Patna.

1995 • Initial Public Issue of 30,45,100 Equity Shares of Rs. 10/- each for cash at par in May 1995

• Listing of shares at BSE, CSE, MGSE 2000 • On 24th May 2000, the name of the Company was changed to Gangotri Iron

& Steel Company Limited. • The plant was converted to a fully automatic rolling mill with an increased

capacity of 21000 MT per annum. 2003 The Company modernized its production facility by adopting new technology of

making TMT Bars and started manufacturing GISCO TMT Bars. 2005 The Company products got ISI certification and became an ISO 9001 and 14001

certified company. 2006 • The Company has further expanded its capacity to 33,000 MT per annum

by adopting latest German THERMEX technology for the first time in state of Bihar.

• The company had acquired approx 12.125 acres of free hold land and 2.8125 acres lease hold land to set up a fully Integrated Steel Plant at Bihta near Patna with a capacity to manufacture 1 lac MT per annum of “GISCO THERMEX TMT Bars”.


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CHANGES IN THE MEMORANDUM OF ASSOCIATION

Since Incorporation, the following changes have been incorporated in Memorandum of Association of the Company.

1. Change in Name Clause

Sl. No.

Particulars Date of Meeting Nature of Meeting

1. Change in Name ClauseResolution for change of name of the Company from ESSKAYJAY Ispat Limited to Gangotri Iron & Steel Company Limited was passed. Fresh cirtificate of incorporation was granted to the Company by ROC on 24th May 2000.

21.04.2000 EGM

2. Change in Authorized Share Capital

Sl. No.

Particulars Date of Meeting Nature of Meeting

I. Increase in the authorized share capital of the Company from Rs. 50 lacs to Rs. 75 lacs

07.06.1993 EGM

II. Increase in the authorized share capital of the Company from Rs. 75 lacs to Rs. 6 crores

19.11.1994 EGM

III. Increase in the authorized share capital of the Company from Rs. 6 crores to Rs. 9 crores

09.01.2006 EGM

IV. Increase in the authorized share capital of the Company from Rs. 9 crores to Rs. 20 crores

16.08.2007 EGM

3. Main Objects of the Company

Our main objects as contained in the Memorandum of Association (MOA) are:

1. To carry on the business or businesses as exporters, importers, buyers, sellers, dealers, buying and selling agents, inventors, manufacturers, processors, fabricators, drawing roller and re rollers of ferrous and non-ferrous metals, steels, alloy steels, special and stainless steels for steel shafting, bars, including twisted and bright bars, rod, flats, squares from scrap, billets, slabs, ingots including wires and wire ropes and all kinds of wire products, nails, screws, bolts, nuts, rivets, expanded metal, hinges, plates sheets, utensils of all metals, strips, hoops, round circles, buckles, pins, angles, steel tubes and pipes, pipe fitting rolled sections, alloyed chilled rolls and all other types of rolls and to manufacture process, buy, sell, import, export and otherwise deal in any other products of iron, steel, copper, stainless steel, lead and any other ferrous and non-ferrous metals of all sizes, specifications and descriptions.

2. To carry on the business of inventors, designers, manufacturers, fabricators, repairs, buyers, sellers, agents, lessors, exporters, importers of all kinds of engineering items, dies and fixtures, precision instrument conveyors, elevators, hydraulic cranes, hydraulic road roller, hydraulic power pack, hydraulic truck un-loaders, generators, transport vehicles, cars, buses, motor cycles, scooters, mopeds, tractors, earth moving equipments, materials handling equipments, road rollers, trolleys, tankers, trailers, bodies of all vehicles, fuel saving equipment for cars and other vehicles, leading of all equipments, vehicles and any other tools, parts, impleme, raw materials, accessories, stores products, by products, by-product required in a connection therewith.

3. To carry on the business or businesses of manufacturers, repairers, importers and exporters of the dealers in wrought iron, pig iron, ferrous and non-ferrous castings of all kinds and in particular of


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continuous castings, chilled and malable castings, special alloy castings, steel castings, gunmetal, copper, brass, aluminium castings, foundry work off all kinds, ceramics, wall tiles, floor tiles and chemicals.

4. To carry on the business as proprietors of electric and blast furnaces, iron master, iron and steel conventors steel fabricators, smelters, iron and brass founders, metal, steel, steel plates, iron ore, minerals and tin plates makers and refiners.

4. Subsidiary of the Company, if any and their business

The company does not have any subsidiary as on the date of the filing this Letter of Offer.

5. Shareholders Agreements

The Company does not have any Shareholders Agreement as on the date of filing of this Letter of Offer

6. Other Agreements

The Company does not have any other Agreement as on date of filling of this Letter of Offer other those entered into in the ordinary course of business.

7. Strategic Partner & Financial Partner

The Company does not have any strategic or financial partners as on the date of filling of this Letter of Offer.


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5. MANAGEMENT

i. Board of Directors

The details of the Directors of the Company are given below:

Name, Address, Occupation & Qualification

Designation Date of Birth

Experience Directorship in other Companies

Mr. Ramautar Jhunjhunwala, 401-Panchsheel, 8/1, Diamond Harbour Road, Kolkata – 700027, Business, B.Sc., LLB, P.G in Business Management

Chairman 09.04.1935 53 years Gangotri Electrocastings Ltd. Ganga Carriers Pvt. Ltd. Tara Ispat Ltd. Unimed Drugs Pvt Ltd. Akash Ganga Homes Pvt Ltd. Gangotri Industries Ltd.

Mr. Sanjiv Kumar Choudhary, 1/39 Vivekanand Path, North Shri Krishna Puri, , Patna - 800013 Business, B.Com

Managing Director

25.03.1963 25 years Ganga Carriers Pvt Ltd Gangotri Electrocastings Ltd. Akash Ganga Homes Pvt Ltd. Gangotri Sponge Ltd. Gangotri Industries Ltd. VIP Finstock Pvt. Ltd. Gangotri Infotech Pvt. Ltd.

Mr. Aditya Dalmiya, 76 Ashutosh Mukherjee Road, Kolkata – 700025, Business, B.Com (Hons), P.G Diploma in Business Management

Director 25.04.1961 25 years Vijaydevpro Estates Pvt Ltd Akash Ganga Homes Pvt Ltd. Gangotri Infotech Pvt Ltd. Tara Ispat Ltd.

Mr. Ashok Agarwal, 12N/1 Block A, New Alipore, Kolkata – 700053, Business, B.Com

Independent Director

10.11.1962 24 years

--

Mr. Debabrata Banerjee, C-VII/8 Mahavir Vikas, Block – HC, Salt Lake City, Kolkata – 700091, Practicing Advocate Bachelor in Law


26.09.1955 27 years

--

Mr. Narendra Kumar Jaiswal, 13 D.L.Roy Street, Kolkata – 700006, Service, B.E


08.01.1957 29 years

--


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Brief Profile of Directors

Name: Mr. Ramautar Jhunjhunwala

Father’s Name: Late Kishorilal Jhunjhunwala

Date of Birth: 09.04.1935

Qualification: B.Sc, L.L.B., PGDBM

Experience: Mr. Ramautar Jhunjhunwala is the Chairman and non- executive director of the Company since incorporation. He is having a work experience of 53 years out of which 19 years as the CEO of M.L.Dalmiya & Co., a leading construction Company of India involved in successful implementation of civil & structural engineering contracts in India & outside India to mention a few like Ravindra Sadan, Airtel Hotel, New Terminal Building, Calcutta Hospital, Assembly of God Church Building etc., in Kolkata, Factory Building in Hindustan Aeronautic Ltd. at Sunabeda, Orissa, TV tower for AIR, Jalandhar, Tall Thermal Chimneys for WBSEB, HSEB etc, & Hulule Airport at Maldives. He is a member of Cricket Association of West Bengal since 1987 till date.

Name: Mr. Sanjiv Kumar Choudhary

Father’s Name: Late Shew Bhagwan Choudhary


Qualification: B.Com

Experience: Mr. Sanjiv Kumar Choudhary, aged 45 years is a commerce graduate from Calcutta University with an experience of 25 years in diverse business activities. He is working as a Managing Director of the Company and is associated with Iron & Steel Industry for the last 15 years. Mr. Sanjiv Kumar Choudhary held many position of repute. Presently, he is the Senior Vice President of Bihar Chamber of Commerce. Recently, he has been awarded with Great Entrepreneur Award by Global Entrepreneurship and Management Academy. He has also received the Best Citizen of India Award by International Publishing House in the year 2006.

Name: Mr. Aditya Dalmiya

Father’s Name: Late Govind Prasad Dalmiya


Qualification: B.Com, PGDBM (Post Graduate)

Experience: Mr. Aditya Dalmiya aged 46 years, a commerce graduate & PGDBM, is a businessman and is engaged in the business of C & F Agent of Castrol, Eternit Everest, Monsanto Chemicals, Lafarge India etc., stockist & distributor of cement, steel, water proofing chemicals, real estate development at Patna and Kolkata and in software development and information technology business.

Name: Mr. Ashok Agarwal

Father’s Name: Mr. Brij Mohan Agarwal


Qualification: B. Com

Experience: Mr. Ashok Agarwal, aged 45 years is a commerce graduate with solid business background. He is associated with the Company for the last 5 years as an independent, non-executive director.


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Name: Mr. Debabrata Banerjee

Father’s Name: Late Indu Bhusan Banerjee


Qualification: L.L.B (Post Graduate)

Experience: Mr. Debabrata Banerjee, aged 52 years is a bachelor in Law from Calcutta University. He is a practicing advocate for the last 27 years having specialization in Income Tax & Property matters.

Name: Mr. Narendra Kumar Jaiswal

Father’s Name: Late Pancham Lal Jaiswal


Qualification: B.E

Experience: Mr. Narendra Kumar Jaiswal, aged 51 years, Bachelor in Engineering from Calcutta University is having experience in the field of construction for more then 29 years. He worked as site engineer in M.L Dalmiya & Co. Ltd., from 1978-1980, as senior site engineer in M/s Gannon Dunnkerley & Co. Ltd., from 1980-1984, as resident engineer in M/s M.L.Dalmiya & Co. Ltd from 1984-1987 & as senior partner of M/s Kopila Engineering Co & M/s The Millenium Construction Company since 1987 till date. He is actively associated with the company for the last two years in site construction & other works.

Borrowing Powers of the Directors in the Company

Resolution passed at the Extra Ordinary General Meeting of the Company held on 16th August, 2007 and pursuant to Section 293(1)(d) of the Companies Act, 1956 and other applicable provisions, if any, and subject to the approval of the shareholders the consent of the Company be and is hereby accorded to the Board of Directors to borrow from time to time, moneys as they deem requisite or proper for the purpose of the business of the Company notwithstanding that the moneys to be borrowed together with the moneys already borrowed by the Company (apart from temporary loans obtained from the Company’s Bankers in the ordinary course of business) will exceed the aggregate of the paid up capital of the Company and free reserves, that is to say, reserves not set apart for any specific purpose. Provided that the total amount up to which moneys borrowed and to be borrowed by the Board of Directors, apart from the temporary loans obtained from the Company’s Bankers in the ordinary course of business, shall not exceed Rs. 100 crores (Rupees One hundred crores only).

ii Details of compensation to Managing Director

Mr. Sanjiv Kumar Choudhary

Mr. Sanjiv Kumar Choudhary was appointed as the Managing Director of the Company with effect from 1st

July, 2007, pursuant to a board resolution dated 16th August, 2007 for a period of five years (with liberty to the Board of Directors to alter or vary the terms and conditions of the said appointment) at a remuneration and other terms as set out: Salary Rs. 80000 per monthPerquisites Perquisites shall be allowed in addition to salary as here under:

Accommodation (furnished or otherwise) or house rent allowance in lieu thereof, gas, electricity, water, furnishings, medical reimbursement and leave travel concession for self and family, club fees, use of Company cars, medical and personal accident insurance and other benefits, amenities and facilities. The expenditure on such perquisites shall be valued as per Income Tax Act, 1961.


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iii. Compliance with Corporate Governance requirements

The Company’s philosophy of corporate governance is to enhance long-term shareholders value, achieve operational efficiencies and business results in all areas of Company’s operations, with compliance of all statutory and regulatory provisions. The Company believes in transparency, openness and disclosure of information consistent with the business environment in which the Company operates.

The Company stands committed to good corporate governance practice by way of displaying highest standard transparency, fairness, accountability and business ethics. The Company continues to lay great emphasis on the broad principles of Corporate Governance. Our pursuit towards achieving good corporate governance is an on going process. Our Corporate Governance policies lay emphasis on communication, both internal and external and reporting.

Committees of the Board of Directors

Company has the following committees formed out of the members of the Board.

Audit Committee

The Audit Committee consists of four Directors and the Company Secretary as the secretary of the audit committee.

Name of the Members Designation Nature of DirectorshipMr. Debabrata Banerjee Chairman Independent Director Mr Ramautar Jhunjhunwala Member Promoter & Non Executive Director Mr. Ashok Agarwal Member Independent Director Mr. Narendra Kumar Jaiswal Member Independent Director The Statutory Auditors, Internal Auditors and Heads of Finance, Marketing, Production and Commercial functions are invitees to the meetings. During the financial year ended 31.03.2007 four meetings were held on 29.06.2006, 29.07.2006, 30.10.2006 and 29.01.2007. In Fiscal Year 2008, the Audit Committee met on 26.04.2007, 28.06.2007, 30.07.2007, 29.10.2007 and 30.01.2008.

The roles and terms of reference of the Audit Committee cover the matters specified for Audit Committees under clause 49 of the Listing Agreement as well as section 292A of the Companies Act. The Audit Committee further reviews the internal control

Remuneration Committee

As per Clause 49 of the Listing Agreement, formation of the Remuneration Committee by any listed company is not a mandatory requirement. Further the company has only one Managing Director whose remuneration is duly approved by the shareholders in the AGM held on dated 28.09.2007. Investors/ Shareholders Grievance CommitteeAs a part of its Corporate Governance initiative, the Company has constituted the Shareholders/Investors grievance commiteee to specifically look into the matters relating to shareholders grievance such as approval to transfer/transmission/demat/remat of shares, issue of duplicate, split-up, consolidation, renewal of share certificate, non-receipt of Annual Report, non-receipt of declared dividends and such other issues.

Ms. Priti Somani, Company Secretary acts as Compliance Officer of the Committee. The Committee consists of the following members:

Name of the Members Designation Nature of DirectorshipMr. Ramautar Jhunjhunwala Chairman Promoter & Non Executive Director Mr. Ashok Agarwal Member Independent & Non Executive Director


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iv Shareholding of Directors

The details of shareholding of Directors of the Company are as under: Sl. No. Name of the Director No. of shares held % of total holding

1. Mr. Ramautar Jhunjhunwala (includes 87500 equity shares in the capacity of Karta)

208600 2.71

2. Mr. Sanjiv Kumar Chaudhary (includes 20000 equity shares in the capacity of Karta)

318730 4.14

3. Mr. Aditya Dalmiya 1000 0.01 4. Mr. Ashok Agarwal Nil 0.00 5. Mr. Debabrata Banerjee Nil 0.00 6. Mr. Narendra Kumar Jaiswal Nil 0.00

Qualification shares required to be held by the Directors

As per Clause 77 of the Articles of Association of the Company, no qualification share is required for being appointed as or holding the office as a Director of the Company

v. Interest of Directors:

Except as stated in “Related Party Transactions” on Page No. 136 of this Letter of Offer and to the extent of remuneration (received by them in their respective capacities) and to the extent any equity shares of the Company held by them, there are no interest of Promoters / Directors or payment or benefit to Promoters / Directors except as mentioned on Page No. 119 under the heading “Compensation to Managing Director” in the Letter of Offer.

All Directors may be deemed to be interested in the contracts, agreements / arrangements entered into or to be entered into by the Company with any company in which they hold directorship as declared in their respective declarations.

vi. Change in the Directors during the last three years: Name of Director Date of

AppointmentDate of ceasing Reason

Mr, Debabrata Banerjee 20.08.2005 - Appointment as Independent & Non Executive Director

Mr. Narendra Kumar Jaiswal 20.08.2005 - Appointment as Independent & Non Executive Director

Mr. Debabrata Mukherjee 24.03.2006 - Appointment as Independent & Non Executive Director

Mr. Sanjiv Kumar Choudhary 01.07.2007 Appointment as Managing Director

Mr. Debabrata Mukherjee - 15.02.2009 Ceasing as Independent & Non Executive Director


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vii. Management Organisation Chart

MANAGING DIRECTOR

MANAGER SALES

MANAGER MARKETING

MANAGER ACCOUNTS &

FINANCE

MANAGER PRODUCTION

EXECUTIVE (THREE NOS.)

EXECUTIVE (THREE NOS.)

SALES MAN (THIRTY NOS.)

ASSISTANTS

ACCOUNTANTS (TWO NOS.)

SUPERVISOR ELECTRICAL &

MAINTENANCE

SUPERVISOR MECHANICAL

CLERKS / STAFFS

BOARD OF DIRECTORS

COMPANY SECRETARY

ASSISTANTS


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viii. Corporate Governance

The issuer company had complied with the requirements of corporate governance contained in the equity listing agreement relating to the comosition of BOD, constitution of Committees such as Audit Committee, Remuneration Committee, Shareholders / Investor Grievance committee.

ix. Key Managerial Personnel:

The key managerial personnel of the Company heading various functions are as under: Name Age

Yrs.Date of Joining

Designation Qualification Last Employment

Experience(in years)

No.of share held

Mr. Raghunath Saraogi

31 14.01.2000 Manager (Sales)

B.Com (Hons)

- 15 26600

Mr. Manish Kumar Poddar

37 01.06.1995 Manager (Production)

B.Com (Hons)

- 12 4500

Mr. Afzal Ahmad Nadeem

31 06.03.2006 Manager (Marketing)

Pol. Science (Hons)

- 12 Nil

Mr. Ramesh Kumar Pandey

34 02.01.2006 Electrical Engineer

Dip. In Industrial Planning

Lumbini Bewerage Pvt. Ltd.

7 Nil

Mr. Mahesh Roy

39 01.12.2006 Laboratory & quality incharge

B.Sc. (Hons) - 12 Nil

Ms. Priti Somani

29 19.05.2003 Company Secretary

B. Com (Hons), ACA,

ACS

5 Nil

The Company has all its key managerial personnel as its permanent employees on the payroll of the Company.

Bonus or profit sharing plans for the Key Managerial Personnel.

There are no bonus and profit sharing plans for the Key Managerial Personnel of the Company.

Loans to Key Managerial Personnel.

There are no loans given to the Key Managerial Personnel of the Company.

Changes in the Key Managerial Personnel during last one Financial Years.

Name Designation Date of Appointment / Cessation

Reason

Mr. Abhishek Jain Manager Accounts & Finance

31.05.2007 Cessation

Mr. Mukesh Ratawa Manager Works 01.09.2007 Cessation

x. ESOS / ESPS Scheme to Employees of the Company

Company has not issued any equity shares under ESOS/ESPS to its employees since inception. Company does not intend to grant any shares to its employees under ESOS/ESPS scheme from the proposed Rights Issue.


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xi. Payment or Benefits to Officers of the Company

The Officers of the Company do not have any interest in the Company other than to the extent of the remuneration or benefit as per the terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business. The Company does not intend to pay or give any consideration for payment of giving of the benefits.

None of the directors / key managerial personnel are inter related.


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6. PROMOTERS

Mr. Ramautar Jhunjhunwala is the Chairman and non- executive director of the Company since incorporation. He is having a work experience of 53 years out of which 19 years as the CEO of M.L.Dalmiya & Co., a leading construction Company of India involved in successful implementation of civil & structural engineering contracts in India & outside India to mention a few like Ravindra Sadan, Airtel Hotel, New Terminal Building, Calcutta Hospital, Assembly of God Church Building etc., in Kolkata, Factory Building in Hindustan Aeronautic Ltd. at Sunabeda, Orissa, TV tower for AIR, Jalandhar, Tall Thermal Chimneys for WBSEB, HSEB etc, & Hulule Airport at Maldives. He is a member of Cricket Association of West Bengal since 1987 till date.

Passport No.: A6933934 Driving License No.: Not Available Voter ID No.: WB/23/148/018650 PAN No.: ACEPJ3772EMr. Sanjiv Kumar Choudhary, aged 45 years is a commerce graduate from Calcutta University with an experience of 25 years in diverse business activities. He is working as a Managing Director of the Company and is associated with Iron & Steel Industry for the last 15 years. Mr. Sanjiv Kumar Choudhary held many position of repute. Presently, he is the Senior Vice President of Bihar Chamber of Commerce. He has been awarded with Great Entrepreneur Award by Global Entrepreneurship and Management Academy. He has also received the Best Citizen of India Award by International Publishing House in the year 2006.

Passport No.: A1226002 Driving License No.: 6620/83 Voter ID No.: JBX6466866 PAN No.: ACAPC1201FMr. Aditya Dalmiya aged 46 years, a commerce graduate & PGDBM, is a businessman and is engaged in the business of C & F Agent of Castrol, Eternit Everest, Monsanto Chemicals, Lafarge India etc., stockist & distributor of cement, steel, water proofing chemicals, real estate development at Patna and Kolkata and in software development and information technology business.

Passport No.: A7017831 Driving License No.: WB-011984574352 Voter ID No.: WB/23/148/177084 PAN No.: ADOPD0525E

Declaration:

The Permanent Account Number, Bank Account Number and Passport Number of the individual Promoters have been submitted to the stock exchange on which securities are proposed to be listed at the time of filling of the Letter of Offer with them. There are no litigations, disputes towards tax liabilities or criminal / civil prosecution / complaint against the above-mentioned Promoters other than as mentioned in the chapter “Outstanding Litigation, Defaults and Material Developments” of this letter of Offer.

RELATIONSHIP BETWEEN THE PROMOTERS, DIRECTORS AND THE MANAGERIAL PERSONNEL

There is no relationship among any Promoters, Directors and the Managerial Personnel.


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COMMON PURSUIT

There is no Common Pursuit in the business of the Company and other group companies other than those mentioned in the Annexure VII to the Auditor’s Report of this Letter of Offer. The group companies are either engaged in manufacturing of steel products, which are altogether of different range and applications, or are engaged in job work / compounding activities. Since no other entity is engaged in the line of activity in which the Company is engaged, there is no conflict of interest that arises from the financial transactions dealt with among the group companies.

RELATED PARTY TRANSACTIONS

The details of related party transactions are mentioned in Annexure VII to the Auditor’s Report of this Letter of Offer

INTEREST OF DIRECTORS AND PROMOTERS

Except as stated elsewhere in this Letter of Offer, all the Directors may be deemed to be interested to the extent of remuneration and / or sitting fees payable to them for attending the meeting of the Board or Committee thereof apart from reimbursement of traveling/incidental expenses, if any, as per the Articles of Association of the Company.

The Managing Director/Directors/Promoters of the Company shall be deemed to be interested to the extent of shares held by them and/or their friends and relatives and which may be allotted to them out of the present rights issue, and are also deemed to be interested to the extent of remuneration and perquisites being drawn by them from the Company.

Except as stated otherwise in this Letter of Offer, the Company has not entered into any contract, agreements or arrangement during the preceding two years from the date of this letter of offer in which the Directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements which are proposed to be made to them.


127

7. CURRENCY OF PRESENTATION

Through out the letter of offer unless the context otherwise requires all the references to “Rupees”/ “Rs” is the legal currency of the Republic of India.


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8. DIVIDEND POLICY

The declaration and payment of dividends on Equity Shares is recommended by the Board of Directors and approved by the shareholders of the Company based on the recommendation by the Board of Directors. The Board of Directors may recommend dividend, at its discretion, to be paid to our members after considering several factors, including but not limiting to, future expansion plans and capital requirement, profits earned during the financial year, cost of raising funds from alternate sources, liquidity, applicable taxes including tax on dividend, as well as exemption under tax laws available to various categories of investors from time to time and money market conditions.

The summary of dividends declared by GISCO for the last 5 financial years are as follows: Particulars For the year ended on

31.03.08 31.03.07 31.03.06 31.03.05 31.03.04Face Value of Equity Shares (Rs. Per share) 10 10 10 10 10 Dividend including Dividend Tax (Rs. Lakhs) 0 24.61 28.36 0 0 Dividend per Equity Share (Rs.) 0 0.50 0.75 0 0 Dividend Rate (%) 0% 5% 7.5% 0% 0% The amount paid as dividend in past is not indicative of the Company’s dividend policy in future.

Due to loss in 2004, the Company did not pay any divided. Further in 2005 and 2008 the Company inspite of having reasonable profit in order to conserve the resources for achiving the business goals did not consider the payment of dividend.

Further the Company has being paying dividend @7.5% and 5% from the two financial year 2006 and 2007 respectively.


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SECTION - V. FINANCIAL STATEMENTS

1. FINANCIAL INFORMATION OF THE ISSUER COMPANY

AUDITOR’S REPORT AS REQUIRED BY PART II OF SCHEDULE II OF THE COMPANIES ACT, 1956

To The Board of Directors Gangotri Iron & Steel Co. Ltd. 307, Ashiana Towers Exhibition Road Patna - 800001

Dear Sirs,

Sub: Proposed Right Issue

Offer to issue and allot 61,53,680 Equity Shares of Rs 10/- each at a price of Rs. 20/- per share on Rights basis in the ratio of 4 Equity Shares for every 5 Equity Shares held.

We have examined the financial information contained in the statements annexed to this report i.e. Annexure I to XVIII which are proposed to be included in the Letter of Offer of Gangotri Iron & Steel Company Limited in connection with the proposed Rights Issue as required by Clause B of Part II of Schedule II of the Companies Act, 1956 and Guidelines titled Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (‘Guidelines’) issued by the Securities and Exchange Board of India (SEBI) in pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992, and in accordance with the terms of reference received from the company, requesting us to carry out engagement to include the same in the letter of offer of the company in connection with its proposed right issue of the equity shares in the Company and we report that :

1. These information have been extracted by the Management from the Financial Statements for the year ended on 31st March 2004, 2005, 2006, 2007, 2008 and for the six months period ending 30th

September 2008. 2. In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI

Guidelines and in terms of our engagement agreed with you, we further report that: a. The ‘Restated Summary Statement of Assets and Liabilities’ of the Company as at 31st March

2004, 2005, 2006, 2007, 2008 and for the six months period ending 30th Septemberf 2008, examined by us, as set out in Annexure-I of this report are after making such adjustments and regrouping as in our opinion were appropriate and is more fully described in significant Accounting Policies & Notes and Statement of Adjustments (Refer III & IV).

b. The ‘Restated Summary Statement of Profits and Losses’ of the Company for each of the years ended on 31st March 2004, 2005, 2006, 2007, 2008 and for the six months period ending 30th September 2008 examined by us, as set out in Annexure – II to this report are after making such adjustments and regrouping as in our opinion were appropriate and is more fully described in Significant Accounting Policies & Notes and Statement of Adjustments (Refer Annexure III & IV).

c. The ‘Restated Statement of Cash Flows’ of the Company in respect of each of the years ended on 31st March 2004, 2005, 2006, 2007, 2008 and for the six months period ending 30th

September 2008 examined by us, as set out in Annexure-V to this report, in our opinion, has been prepared by the Company in accordance with the requirement of Accounting Standard 3 (Cash Flow Statements) issued by The Institute of Chartered Accountants of India.

d. Without qualifying our opinion, we draw attention to the fact that for the purpose of these summary statements, due to practical difficulties in retrospective application of various Accounting Standards such standards have been applied from the dates they became applicable to the Company and not for all the periods restated.

e. Based on above, we are of the opinion that: i. The restated financial information have been made after incorporating:


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a) Adjustments for the changes in accounting policies retrospectively in the respective financial years to reflect the same accounting treatment as per accounting policy for all the reporting periods.

b) Adjustments for the material amounts in the respective financial years to which they relate;

ii. There are no extra-ordinary items that need to be disclosed separately in the Summary Statements; and

f. At your request, we have also examined the following other financial information prepared by the management and approved by the Committee of Directors relating to the Company for the year ended on 31st March, 2004, 2005, 2006, 2007, 2008 and for the six months ending 30th September, 2008.

i. Statement of Accounting Ratios based on the adjusted profits relating to earning per share, net asset value, return on net worth, enclosed as Annexure-VI

ii. Statement of Related Party Transactions enclosed as Annexure-VII iii. Statement of Dividend paid enclosed as Annexure-VIII iv. Capitalization Statement as at 30.09.2008 enclosed as Annexure-IX v. Statement of Tax Shelter as Annexure-X vi. Statement of Earning Per Share enclosed as Annexure-XI vii. Statement of Balance of Debtors enclosed as Annexure-XII viii. Statement of Loans & Advances enclosed as Annexure-XIII ix. Statement of Other Income enclosed as Annexure-XIV x. Statement of Secured Loans enclosed as Annexure-XV xi. Statement of Unsecured Loans as Annexure-XVI xii. Statement of Current Liabilities enclosed as Annexure-XVII xiii. Statement of Investments enclosed as Annexure-XVIII

g. In our opinion the financial information contained in Annexure VI to XVIII of this report read along with the Significant Accounting Policies and Notes (Refer III & IV) prepared after making such adjustments and regrouping as were considered appropriate, has been prepared in accordance with Part IIB of Schedule II of the Act and the SEBI Guidelines.

3. Our report is intended solely for use of the management and for inclusion in the offer document in connection with the proposed Right Issue of Equity Shares of the Company. Our report should not be used for any other purpose except with our consent in writing.

For ARSK & Associates Chartered Accountants

CA. Ravindra Khandelwal Partner Membership No. 054615

Place: Kolkata Date: 13th January, 2009


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Annexure-I

STATEMENT OF ASSETS & LIABILITIES AS RESTATED Rs. in thousands

Particulars As at As at 31st March30.09.2008 2008 2007 2006 2005 2004

Fixed assetsGross Block 95,869.39 86698.81 76819.99 62571.76 31709.96 30578.90Less: Depreciation 24,875.88 22088.18 16495.15 13990.92 11244.83 10811.33Net Block 70,993.51 64610.63 60324.84 48580.84 20465.13 19767.57Capital Work-in-Progress 345514.09 233550.75 2461.90 385.02 - -Total (A) 416507.6 298161.38 62786.74 48965.86 20465.13 19767.57Investments (B) 1188.6 1188.60 4835.16 4993.41 - -Current Assets, Loans & Advances

Inventories 41311.11 25312.42 26826.97 23644.48 14489.42 9442.52Sundry Debtors 59342.77 38973.63 44567.92 69105.96 12768.78 16309.83Cash & Bank Balances 8144.03 8174.60 8865.50 10422.53 3409.35 817.36Other Current Assets - - - - - -Loans & Advances 85914.27 160350.68 35536.79 27967.43 34639.10 16148.05Total (C) 194712.19 232598.33 115797.18 131140.40 65306.65 42717.76Liabilities & ProvisionsSecured Loans 326028.43 308327.39 40702.95 49659.41 16334.70 16369.23Unsecured Loans 48132.96 16100.00 6600.00 576.54 576.54 576.54Deferred Tax Liability 6334.99 6276.38 5569.60 6302.06 5673.00 2370.84Current Liabilities 87866.96 46930.52 37696.26 42461.50 20413.67 6994.82Provisions 9633.17 5629.64 5204.72 2721.45 971.84 -Total (D) 477996.5 383263.93 95773.53 101720.96 43969.75 26311.43

(A+B+C-D) 134411.89 148897.38 87645.55 83378.71 41802.03 36173.90Represented by:I. Equity Share Capital 76921.00 76921.00 52571.00 52571.00 34156.00 32952.00II. Reserves & Surplus 101994.84 94452.17 38794.95 30827.04 7831.74 3631.06III. Miscellaneous Expenditure not written off and adjusted

Preliminary expenses 1187.44 881.24 - - 185.73 409.16Pre-operative expenses 43316.51 21594.55 3720.40 19.33 - -Total Net Worth (I+II+III) 134411.89 148897.38 87645.55 83378.71 41802.03 36173.90

The accompanying significant accounting policies (Annexure-III) and notes (Annexure-IV) are integral part of this statement.


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Annexure-II

SUMMARY STATEMENT OF PROFIT & LOSS ACCOUNT AS RESTATED Rs. in thousands

Particulars For 6

months ended

For the year ended 31st March

30.09.2008 2008 2007 2006 2005 2004IncomeSales:Of Products Manufactured by the Company (TMT Bars) (Net of Excise Duty)

250449.61 395289.00 337356.16 239371.71 201211.06 137578.25

Of Products traded in by the Company (TMT Bars)

- - 1099.20 94.64 946.63 -

Sub Total 250449.61 395289.00 338455.36 239466.35 202157.69 137578.25Other Income 350.52 1037.64 1272.92 2111.31 236.85 8754.36Increase / (Decrease) in Inventories 13410.69 1473.44 2911.06 6836.17 8861.75 (5442.70)Total Income (A) 264210.82 397800.08 342639.34 248413.83 211256.29 140889.91ExpenditureRaw Materials Consumed 201224.34 308196.89 262019.63 189445.95 172256.99 124093.18Trading Goods Purchased - - - 1064.41 1046.72 -Staff Cost 2241.23 4131.83 4502.30 2333.73 1827.38 1759.58Other Manufacturing Expenses 19132.86 23112.35 19250.15 13538.56 11918.75 9010.59Administrative Expenses 12401.99 17299.10 13073.46 11014.83 4705.29 3285.12Other Expenses - - - -State VAT 11001.15 17366.90 15046.68 10587.27 6449.86 -Interest (Net) 3712.79 7090.41 6680.66 3740.28 2442.32 1846.72Depreciation 2663.78 5452.01 7624.39 5585.73 2134.28 2296.13Total Expenditure (B) 252378.15 382649.49 328197.27 237310.76 202781.59 142291.32Net Profit / (Loss) Before Tax (A-B) 11832.66 15150.58 14442.07 11103.07 8474.70 (1401.41)

Taxation:Current Tax (4156.85) (4959.07) (4615.69) (2523.45) (971.84) -Deferred Tax (58.61) (706.77) 732.46 (629.05) (3302.17) (2004.25)Fringe Benefits Tax (86.00) (213.01) (136.21) (161.80) -Income Tax of Earlier Years Written Back/Short Provision - (645.77) 6.66 2.02 - (2.64)

Net Profit / (Loss) After Tax (E) 7542.66 8625.97 10429.29 7790.79 4200.69 (3408.30)Appropriations:Dividend - - 2158.65 2487.60 - -Tax on Dividend - - 302.70 348.89 - -Balance Brought Forward (F) 29379.95 20753.99 12786.05 7831.75 3631.06 7039.36Balance Carried to Balance Sheet (E+F) 36922.58 29379.92 20753.99 12786.05 7831.75 3631.06

The accompanying significant accounting policies (Annexure-III) and notes (Annexure-IV) are integral part of this statement.


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Annexure-III

SIGNIFICANT ACCOUNTING POLICIES

1) FIXED ASSETS AND DEPRECIATION:

a) Fixed Assets are stated in their original cost of acquisition including all related expenses of acquisition and installation.

b) Depreciation on Fixed Assets is provided on straight-line method in accordance with the rates as specified in Schedule XIV of the Companies Act, 1956 (As amended). Leasehold land is written off over the period of the lease. Depreciation on addition in fixed assets has been provided on pro-rata basis.

c) The company assesses at each Balance Sheet date whether there is any indication of an asset being impaired. In case, the recoverable amount of fixed assets is lower than its carrying amount, a provision is made for impairment loss.

2) INVESTMENT:

a) Investments are stated at cost. Provision for diminutions in the value is not considered unless such shortfall is permanent in nature.

3) INVENTORIES:

Description Basis of Valuationi) Coal : At Cost ii) Stores & Spare Parts : At Cost iii) Raw Materials : At Cost iv) Finished Goods : At cost or market price whichever is less v) Scrap : At estimated realizable value

4) The value of the Opening Stock and Closing Stock of Finished Goods includes Excise Duty as per Guidance Note issued by ICAI “ACCOUNTING TREATMENT OF EXCISE DUTY”

5) REVENUE RECOGNITION:

a) Sale is recognized on the basis of dispatch of goods to the customers. b) Interest income is accounted for on accrual basis.

6) EXPENDITURE:

a) All the recurring expenses are accounted for mercantile basis.

7) EMPLOYEE BENEFITS:

a) The Company has schemes of retirement benefits of Provident Fund, Superannuation Fund and Gratuity in respect of which the Company’s contribution to the respective funds are charged to Profit & Loss Account. The Company contributes to Provident Fund administered by Government and provides for Liability of Gratuity and Superannuation on the basis of actuarial valuation as at the year-end. Further, liability for encashment of earned leave has been provided on actual assessment basis.

8) TAXES ON INCOME:

a) Current Tax is determined on the amount of tax payable in respect of tax payable in respect of taxable income for the year.

b) The deferred tax charge or credit is recognized using current tax rates. Where there are unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets/liabilities are reviewed as at


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each balance sheet date based on developments during the year and available case laws, to reassess realization/liabilities.

9) EARNING PER SHARE:

a) The basic Earning Per Share (EPS) is computed by dividing the net profit after tax for the year by the weighted average number of Equity Shares outstanding during the year. For the purpose of calculating Diluted Earning Per Share, Net Profit After Tax for the year and the weighted average number of the share outstanding during the year are adjusted for the effect of all dilutive potential equity shares. The Dilutive potential equity shares are deemed converted at the beginning of the period, unless they have issued at later date.


135

Annexure-IV

NOTES ON ACCOUNTS:

1) Contingent Liability not provided for in respect of as on 30th September 2008:

a) No provision for Rs. 11,61,905 (Previous Year Rs. 11,61,905) has been made in the accounts towards DPS charges on annual minimum charges for electricity for the years 1995-96, 1996-97 & 1997-98 against which no amount has been paid. The matter is pending before Bihar State Electricity Board for final settlement.

b) No provision has been made for disputed Excise Duty Matters u/s 3A of Central Excise Act, 1944 pending with High Court, Patna related to years 1998-99 and 1999-2000 for which outstanding demand is Rs. 14,43,471/-. However, there is a discrepancy as per the Commissioner’s Order according to which the liability works out to Rs. 37,40,925/- which the company is in the process of getting rectified.

2) Capital contracts outstanding are for Rs. 132104600/- (PY – 135559168/-) against which advances are made of Rs. 77572496.24 (PY – 74815179.08)

3) Managing Director’s Remuneration:

30.09.2008 31.03.2008(Rs.) (Rs.)

Basic Salary 480000 870000 480000 870000

4) Auditor’s Remuneration:

30.09.2008 31.03.2008(Rs.) (Rs.)

i) Statutory Audit Fees 33708 60000 ii) Tax Audit Fees - 10000 iii) For other Services - 41000

33708 111000

5) Major Components of Deferred Tax Assets/Liability:

Particulars

30.09.2008 31.03.2008Deferred Tax

Assets Deferred Tax

Liabilities Deferred Tax

Assets Deferred Tax

Liabilities Rupees Rupees Rupees Rupees

Difference between book value of Depreciable Assets as per books of Account and W.D.V. for tax purposes

- 65,04,836 -

63,77,936

Unpaid Statutory Liabilities debited to Profit and Loss A/c paid during the year

1,69,851 - 2,13,506 -

Unpaid Statutory Liabilities debited to Profit and Loss A/c during (2007-08) paid during the current year

- - - 1,11,945

Total 1,69,851 65,04,836 2,13,506 64,89,881

Net Deferred Tax Liability 63,34,985 62,76,375 Net Incremental liability charged to Profit & Loss Account

58,610 7,06,772


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6) Related Party Disclosure:

As per Accounting Standard (AS-18) issued by the Institute of Chartered Accountants of India, the related parties disclosure is as under:

A) List of Related Parties:

i. Company in which Directors have substantial interest: Gangotri Electrocastings Limited Akash Ganga Homes Private Limited

ii. Key Management Personnel Sanjiv Kumar Choudhary, Managing Director

iii. Relatives of Key Management Personnel: Smt. Manju Choudhary (Wife of Mr. Sanjiv Choudhary) Mr. Ankit Choudhary (Son of Mr. Sanjiv Kumar Chudhary)

B) Transaction with Related Parties:

Particulars Associates Relatives of Key

Management PersonnelKey Management

Personnel 30.09.2008

Rs. 31.03.2008

Rs. 30.09.2008

Rs. 31.03.2008

Rs. 30.09.2008

Rs. 31.03.2008

Rs. Purchase of Goods 241682158 368950719 - - - -Sale of Goods 5908959 7297885 - - - -Car Hire Charges (Smt. Manju Coudhary)

- - 126000 252000 - -

Salary (Mr. Ankit Choudhary) - - 37500 37500 - -

Purchase of Old Furniture (Mr. Sanjiv Kumar Choudhary)

- - - - - 125000

Rendering of Services (Mr. Sanjiv Kumar Choudhary)

- - - - 480000 870000

Net Balance at the year end

7512352 42665297 55709 62571 (100857) -

7) There are no outstanding dues to the Small Scale Industrial Undertakings as has been identified on the basis of information available with the Company.

8) Pre-operative Expenses of Rs. 43316513/- has been incurred against the expansion project undertaken by the Company to be capitalized on commencement of commercial production of the said project.

9) In accordance with the requirements of Accounting Standard (AS 17) on Segment Reporting issued by the Institute of Chartered Accountants of India, the Company operates in only one primary segment i.e. M. S. Bars. There are no reportable geographical segments.

10) The actuarial valuation in respect of gratuity and leave encashment liability is done at the end of relevant financial year. Pending which, the liability in respect of the aforesaid is recognized on management estimates.


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11) The basis of the calculation of Earning Per Share (EPS) as per the requirement of the AS-20 is as under:

Particulars As at 30.09.2008

As at 31.03.2008

Earnings:Net Profit for the year (for basic and diluted EPS) (Rs) 7542664 8625968

Shares:Total number of the equity shares outstanding at the end of the year 7692100 7692100

Weighted average number of the equity shares outstanding during the year (for the basic EPS)

7692100 6650092

Weighted average number of the equity shares outstanding during the year (for the diluted EPS) 7692100 6650092

Earning per share of par value Rs. 10/- - Basic 0.98 1.30- Diluted 0.98 1.30

12) Previous year figures have been re-arranged or re-grouped wherever necessary.

13) Additional information pursuant to the provisions of paragraph 3 and 4 of Part II of Schedule VI to the Companies Act, 1956:

Quantitative Informationa) Particulars in respect of goods manufactured: i) Licensed Capacity : Not Applicable ii) Installed Capacity (as certified by the management) : 45000 MT

iii) Particulars in respect of Production, Turnover, Opening & Closing Stock of goods

: As per Annexure ‘A’

iv) Particulars in respect of Raw Materials Consumed : As per Annexure ‘A’ v) CIF value of Import : Nil vi) Expenditure in Foreign Currency : Nil vii) F.O.B. value of Export : Nil


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ANNEXURE – A

QUANTITATIVE DETAILS OF RAW MATERIALS & FINISHED GOODS FOR THE PERIOD ENDED 30.09.2008

Name of the Items Opening Balance Purchase/Production Consumption/Sales Closing Stock

Qty. inMT Value Rs.

Qty. inMT Value Rs.

Qty. inMT Value Rs.

Qty. inMT Value Rs.

RAW MATERIALSNon Alloy Ingot (2008-09) 62.118 1430888 10154.985 203455125 10034.339 201224336 182.764 3661677Non Alloy Ingot (2007-08) 271.826 3948273 18270.540 305679509 18480.248 308196894 62.118 1430888

TOTAL (2008-09) 62.118 1430888 10154.985 203455125 10034.339 201224336 182.764 3661677 TOTAL (2007-08) 271.826 3948273 18270.540 305679509 18480.248 308196894 62.118 1430888

FINISHED GOODSM.S. Bars (2008-09) 1010.804 22205989 9732.376 - 8907.585 283185541 1475.595 35455892M.S. Bars (2007-08) 1020.888 20564882 17374.651 - 17384.735 449098953 1010.804 22205989

Scrap (2008-09) 16.558 274712 364.024 - 341.450 5787760 39.132 604460Scrap (2007-08) 36.309 338342 554.404 - 574.155 7136922 16.558 274712

Scrap Rolls (2008-09) 14.080 168960 - - 14.080 251321 - -Scrap Rolls (2007-08) 27.300 273000 14.080 - 27.300 363782 14.080 168960

TRADING GOODS

Wire Rod (2007-08) - - - - - - - -Wire Rod (2006-07) - - - - - - - -

M.S. Bar (2007-08) - - - - - - - -M.S. Bar (2006-07) - - - - - - - -

TMT Bar (SAIL) (2007-08) - - - - - - - - TMT Bar (SAIL) (2006-07) - - - - - - - -

TOTAL (2008-09) 1041.442 22649661 9736.400 - 9263.115 289224622 1514.727 36060352TOTAL (2007-08) 1084.497 21176224 17943.135 - 17986.190 456599657 1041.442 22649661


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Annexure-V

SUMMARY OF CASH FLOW STATEMENTS Rs. in thousand

As at 30.09.2008

As at 31st March2008 2007 2006 2005 2004

Cash Flow from Operating Activities:

Net Profit / (Loss) Before Tax 11832.66 15150.85 14442.07 11103.07 8474.70 (1401.41) Adjustments for:Depreciation 2663.78 5452.01 7624.39 5587.06 2134.28 2296.13 Interest Exp. (Net of Capitalization) 3712.79 7090.41 6680.66 3740.28 2442.32 1846.72 Profit/(Loss) on Fixed Assets Sold/Discarded

- - - - - 35.93

Share issue & Preliminary Expenses Written off

- - - 185.73 223.43 223.43

Provision for leave liability - - - - - - Interest (Net) & Dividend Income (348.44) (752.47) (400.55) (337.63) (231.51) (217.96) Operating Profit before Working Capital Changes:

17860.80 26940.53 28346.57 20278.51 13043.22 2782.84

Increase/(Decrease) in Trade Payables

44625.80 9522.98 (2281.97) 23797.43 14390.69 3902.74

Increase/(Decrease) in Trade & Other Receivables

53867.27 (119083.40) 17129.08 (49469.28) (14767.26) (10267.07)

Increase/(Decrease) in Inventories (15998.69) 1514.55 (3182.49) (9155.06) (5046.90) 957.64 Cash Generated from Operations 100355.18 (81105.34) 40011.19 (14548.40) 7619.75 (2623.85) Direct Taxes (Paid) / Refund (4231.39) (5817.84) (4745.24) (2683.24) (971.84) (2.64) Net Cash from Operating Activities (A) 96123.79 (86923.19) 35265.95 (17231.64) 6647.91 (2326.49)

Cash Flow from Investing Activities:

Sale or Redemption of Investments (Net)

- 3646.56 158.25 - - 1325.00

Dividend Received - 37.63 21.70 9.00 - - Purchase of Investments - - - (4993.41) - - Maturity of Fixed Deposits / FD taken (247.61) (2488.62) (171.44) (3059.69) - -Purchase of Fixed Assets (121133.93) (240967.67) (21452.04) (34087.80) (2831.84) (5441.19) Pre-operative expenses (21598.04) (17733.14) (3694.30) (19.33) - -Interest Received 348.44 714.84 378.85 328.63 231.51 217.96 Loan given / repaid 200.00 - (160.41) (196.22) (182.75) (167.70) Net Cash from /(used in) Investing Activities (B) (142431.14) (256790.40) (24919.39) (42018.82) (2783.08) (4065.93)

Cash Flow from Financing Activities:

Calls in Arrear - - - 5.00 1204.00 - Issue of Equity Shares - - - 27051.00 - -Share Warrants - 24350.00 - 9400.00 - - Securities Premium 45562.50 - - - -Capital Reserve (forfeiture of Convertible Warrants)

- 1468.75 - - - -

Proceeds from Borrowings (11805.72) 23783.97 (6230.50) 18807.74 1085.26 7904.84Term Loan from Bank 29506.77 243840.47 (2725.96) 14516.97 (1119.79) - Share Issue Expenses (306.20) (881.24) Increase / (Decrease) in Unsecured Loan

32032.96 9500.00 6023.46 - - -

Interest Paid (3712.80) (7090.41) (6680.66) (3740.28) (2442.32) (1846.72)Dividend Paid (For earlier years) - - (2461.39) (2836.49) - - Net Cash used in Financing Activities (C) 45715.01 340534.05 (12075.05) 63203.94 (1272.85) 6058.12

Net Changes in Cash & Cash Equivalents (A+B+C))

(592.34) (3179.53) (1728.49) 3953.48 2591.98 (634.30)

Cash & Cash Equivalents - Opening Balance 2362.64 5542.13 7270.62 3317.14 725.16 1359.46 - Closing Balance 1770.30 2362.64 5542.13 7270.62 3317.14 725.16 Notes: 1. Figures in brackets represent outflows 2. Previous year figures have been recast/restated wherever necessary


140

Annexure-VI

STATEMENT OF ADJUSTED ACCOUNTING RATIOS

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004Earning per Share (Rs.) (Nominal Value Rs. 10 per share) 0.98 1.12 2.42 2.06 1.27 (1.03)

Net Asset Value per Share (Rs) 17.48 19.36 20.30 22.00 12.64 10.94Return on Net Worth (%) 5.63 5.79 11.90 9.34 10.05 (9.42)

Notes:

Definition of Ratios: a) Earning Per Share (EPS): Adjusted Profit / (Loss) after tax as per statement of Restated Profit/(Loss)

divided by the weighted average number of outstanding equity shares during the year.

b) Net Asset Value Per Share: Net worth as per statement of Restated Assets and Liabilities, as reduced by Preference Share Capital and arrear dividend thereon, dividend by the weighted average number of outstanding equity shares during the year.

c) Return on Net Worth: Profit / (Loss) after tax as per statement of Restated Profit and Loss as (reduced) / increased by preference dividend for the year, dividend by net worth, as reduced by Preference Shares and arrear dividend thereon.

Calculation of Net Assets Value per Share Rs. In thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004Net Worth 134411.89 148897.38 87645.55 83378.71 41802.03 36173.90Number of Equity Shares (in ‘000) 7692.10 7692.10 4317.10 3789.48 3308.06 3308.06NAV 17.47 19.36 20.30 22.00 12.64 10.94Profit/(Loss) available for Equity Shareholders

7542.66 8625.97 10429.29 7790.79 4200.69 (3408.30)

Net Worth 134411.89 148897.38 87645.55 83378.71 41802.03 36173.90Return on Net Worth 5.61 5.79 11.90 9.34 10.05 (9.42)

Annexure-VII

STATEMENT OF RELATED PARTY TRANSACTIONS

A) List of Related Parties

1. Associate company in which Directors have substantial interest Gangotri Electrocasting Limited Akash Ganga Homes Private Limited

2. Key Management Personnel Sanjiv Kumar Choudhary (Managing Director)

3. Relatives of Key Management Personnel Smt. Manju Choudhary (Wife of Mr. Sanjiv Kumar Choudhary) Mr. Ankit Choudhary (son of Mr. Sanjiv Kumar Choudhary)


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B) Transaction with Related Parties: Rs. in thousands

Related Party Nature of Transaction 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

Relatives of Key Management Personnel

Smt. Manju Choudhary Car hire charges 126 252 252 180 180 180

Mr. Ankit Choudhary Salary 37.50 37.50 - - - -

Associate Company in which Directors have substantial interest

Purchase of Goods

241682 368951 247200 221738 3000 -

Sale of Goods 5909 7298 45 - - -Job Work - - - - 56625 -

Key Management Personnel

Rendering of services 480 870 600 487 120 -

Purchase of Old Furniture

- 125 - - - -

Annexure-VIII

STATEMENT OF DIVIDEND PAID Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004EQUITY CAPITALNo. of Equity Shares of Rs. 10 each - - 4317100 4317100 - -Rate of Dividend (%) - - 5.00 7.50 - -Amount of Dividend - - 2158.65 2487.60 - -Corporate Dividend Tax - - 302.74 348.89 - -Dividend Paid - - 2029.41 2412.19 - -

PREFERENCE CAPITALNo. of Preference Shares of Rs. 100 each

- - - - - -

Rate of Dividend(%) - - - - - -Amount of Dividend - - - - - -Dividend Tax - - - - - -Dividend Paid - - - - - -

Note: a. As at 31.03.2006, their were calls in arrears on 9,99,800 shares and accordingly, the company had paid

dividend only on 33,17,300 shares. b. The difference in the amount of dividend and dividend paid is represented by the unpaid dividend

account.


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Annexure-IX

CAPITALISATION STATEMENT AS AT 30.09.2008 Rs. in thousands Particulars Pre-issue Post Right IssueBorrowingsShort-Term 40247.99 40247.99Long-Term 314380.44 314380.44Total 354628.43 354628.43

Shareholder’s FundsEquity Capital 76921.00 138457.80Preference Capital -Reserves & Surplus 101994.84 163531.64Less: Deferred Revenue Expenditure -Total 178915.84 301989.44Long Term Debt / Equity Ratio 1.76 1.04

Notes: 1. The above has been computed on the basis of restated statement of accounts 2. Short term debts are debts maturing within next year


143

Annexure-X

STATEMENT OF TAX SHELTER BASED ON ADJUSTED PROFITS / (LOSSES) Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Central Income Tax Tax Rate (Including Surcharge and Education Cess)

33.99 33.99 33.66 33.66 36.60 35.88

Net Profit/(Loss) before Tax as per P & L A/c 11832.66 15150.58 14442.07 11103.07 8474.70 (1401.41) Tax at Notional Rate 4021.92 5149.68 4861.20 3737.29 3101.74 (502.83) Adjustments: Dividend - (37.63) 21.70 9.00 - - Difference in Book Depreciation & Depreciation under Income Tax Act 1961

(497.27) (1602.08) (882.79) (3618.59) (1504.43) (19.51)

Net Disallowable sum under section 43B of the I.T.Act

- 170.57 675.02 445.85 86.13 97.35

Net Disallowable sum under section 40A(3) of the I.T.Act

75.15 67.75 9.26 - 19.77 31.05

Other Adjustments 22.40 178.09 (156.02) (71.00) 23.31 54.05 Net allowable sum, disallowed in the previous year - (424.04) - - (96.00) (166.94)

Income from Other Sources - - - - - - Others [Capital gains (considered separately)] - (283.83) 619.31 594.29 - -Net Adjustments 11432.94 13219.42 13446.53 7256.04 7003.48 (1405.41) Tax Savings Thereon Tax on Income (excluding Capital Gains) 3886.06 3965.83 4526.10 2442.38 - - Taxable Capital Gains - 92.65 69.49 66.68 - - Interest payable on Tax - - - 7.73 - - Total Taxation 3886.06 4058.48 4595.59 2516.79 - - Taxable Profit/(Loss) for the year (Excluding Capital Gains)

11432.94 13219.42 13446.53 7256.04 - -

Taxable Capital Gains - 926.53 619.31 594.29 - -Total Taxable Profit 11432.94 14145.95 14065.84 7850.33 7003.48 - Brought forward loss and unabsorbed depreciation from previous year

- - - - - 1405.41

Brought forward loss and unabsorbed depreciation adjusted

- - - - (4353.14) -

Cumulative carried forward loss and unabsorbed depreciation

- 642.70 - - - 4353.14

Taxable Income/(Loss) as per Profit & Loss Account

14145.95 - - 2650.34 (1405.41)

Tax as per Profit & Loss Account 3886.06 4058.48 4595.59 2516.79 970.02 - Taxable Income as per MAT - - 11103.07 - - Tax as per MAT - - 832.73 - - Excess Provision of Income Tax for earlier year - (645.77) - - - - Fringe Benefit Tax 86.00 213.01 136.21 161.80 - -


144

Annexure-XI

STATEMENT OF EARNING PER SHARE Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Profit / (Loss) after Tax 7542.66 8625.96 10429.29 7790.794 4200.69 (3408.30) Total 7542.66 8625.96 10429.29 7790.794 4200.69 (3408.30)Weighted average no. of equity shares outstanding at the end of the year (Basic EPS)

7692.10 6650.09 4317.10 3789.48 3308.06 3308.06

Weighted average no. of equity shares outstanding at the end of the year (Diluted EPS)

7692.10 6650.09 4317.10 4523.73 - -

Nominal Value of Equity Shares (Rs.) 10 10 10 10 10 10 Basic Earning per Share 0.98 1.30 2.42 2.06 1.27 (1.03) Diluted Earning per Share 0.98 1.30 2.42 1.72 - -

Annexure-XII

STATEMENT OF BALANCE OF DEBTORS Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Outstanding for more than 6 months Secured, Considered Good - - - - - - Unsecured, Considered Good 7121.02 4910.35 8713.31 14217.24 619.27 718.40Considered Doubtful - - - - - - Outstanding for less than 6 months 52221.76 34063.28 35854.61 54888.71 12149.52 15591.43Total Debtors 59342.77 38973.63 44567.92 69105.95 12768.79 16309.83 Less: Provision - - - - - - Net Balance 59342.77 38973.63 44567.92 69105.95 12768.79 16309.83

Annexure-XIII

STATEMENT OF LOANS & ADVANCES Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 LOANS (Considered Good, except stated otherwise) 2664.91 2464.91 2464.91 2304.51 2108.28 1925.54

ADVANCES:Advances recoverable in cash or in kind or for value to be received

43492.16 130698.89 27283.08 17939.66 28098.48 10379.10

Advance payment of Income Tax 4550.00 1000.00 1172.63 2382.44 1485.88 510.31Balance with Excise Authorities 28767.63 19772.32 822.07 2465.02 55.00 435.00 Other Deposits 6176.51 6040.27 3794.08 2875.80 2891.43 2898.08Total Loans and Advances 85651.21 159976.39 35536.77 27967.43 34639.07 16148.03 Less: Provisions - - - - - - Total 85651.21 159976.39 35536.77 27967.43 34639.07 16148.03

Annexure-XIV

STATEMENT OF OTHER INCOME Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Income from Long Term Investments Interest Earned on Loans and Deposits 348.44 714.84 378.85 328.62 231.50 214.27 Dividends (Other than Trade) - 37.63 21.70 9.00 - -Commission - - - - - 8533.14 Profit/(Loss) on Derivatives Trading (218.03) (1113.89) (646.55) 1178.70 - - Profit on Sale of Investment - 283.84 619.31 594.30 - -State Subsidy on ISO - - 75.00 - - - Profit on Sale of Fixed Assets - - 237.52 - - - Liabilities no longer required written back 1.18 - 585.48 - - - Miscellaneous Receipts .90 1.33 1.61 0.69 5.34 6.96 Total 132.49 (76.25) 1272.92 2111.31 236.84 8754.37


145

Annexure-XV

STATEMENT OF SECURED LOAN Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Term Loan (S.B.I Patliputra) 285748.16 256241.39 12400.92 15126.88 609.92 1729.70Cash Credit with S.B.I Patliputra 35393.70 47170.52 23190.94 31586.42 13905.75 14639.53 SME Plus from S.B.I Patliputra 4854.29 4850.10 4817.77 2525.50 1819.03 -HDFC Bank Car Loan - - 173.09 420.60 - - SBI Car Loan 32.28 65.38 120.23 - - -

Name of Bank /

Institution / Others

Sanctioned Amount (Rupees)

Rate of Interest (%)

Balance as on 30th

September, 2008 Nature of Security Repayment

Schedule

State Bank of India

Cash Credit:

Stock : 190 lacs

Book Debt: 130 lacs

SME Credit plus: 79 lacs

Term Loan: 150 lacs

Car Loan: 3 lacs

SBAR+2%

SBAR with effect from 27.02.2008 for loan upto 5 years is minimum 10.25%

Cash Credit: 353.94 lacs

SME Credit plus: 48.54 lacs

Term Loan: 2857.48 lacs

Car Loan: 0.32 lacs

Primary Security: Hypothecation of all kinds of inventory, stock, in trade/transit, book debt and other current assets.

Collateral Security: 1. Hypothecation of entire properties standing on factory land, i.e. plant & machinery, shed & building etc. 2. Pledge of shares 3. Pledge of STDR

Additional Collateral Security 1. STDR of Rs 30 lacs. 2. Hypothecation of CNC Machine, present value of which has been Rs. 25 lacs.

Gurantee Personal Guarantee of under noted existing guarantors: 1. Shri Ramautar jhunjhunwala 2. Shri Sanjeev Kumar Choudhary 3. Shri Aditya Dalmiya 4. Shri Asok Agarwal 5. Shri U. Sanganeria 6. Smt. Manju Choudhary 7. Shri Vijay Kandoi

Cash Credit - payable on demand

Term Loan-

Repayment of principal amount of Rs. 150 lacs in proposed in 60 installments of Rs. 2.5 lacs each month from 30th April, 2006.

Annexure-XVI

STATEMENT OF UNSECURED LOAN Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Inter Corporate Deposits from Body Corporate 48132.96 16100.00 6,600.00 576.54 576.54 576.54 Total 48132.96 16100.00 6,600.00 576.54 576.54 576.54

Rs. in thousands Particulars Rate of Interest Interest Payment Schedule Amount Suraj Luxmi Private Limited Interest free loan N.A. 3500.00 Suraj Nirman Private Limited Interest free loan N.A. 1500.00 VIP Finstock Private Limited Interest free loan N.A. 23600.00 Bankey Bihari Food Private Limited Interest free loan N.A. 1000.00D.K.Gupta(HUF) Interest free loan N.A. 1000.00 Ganpati Laxmi Construction Private Limited Interest free loan N.A. 50.00 Jublee Dealers Private Limited Interest free loan N.A. 15000.00 Permeshwari Enterprises Private Limited Interest free loan N.A. 482.96 Ujjawal Iron & Cement Store Interest free loan N.A. 1000.00 Rita Kamalia Interest free loan N.A. 1000.00 Total 48132.96


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Annexure-XVII

STATEMENT OF CURRENT LIABILITIES & PROVISIONS Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 A. Current Liabilities Sundry Creditors For Goods 5221.49 3291.36 1250.36 18572.10 5180.42 2887.62 For Capital Goods 24096.08 11195.02 574.30 607.19 - - For Expenses & Taxes 26100.51 17190.42 10337.06 8434.95 5643.40 2782.28 Advance received against conversion of warrants - - 10493.59 - - - Advance from Customers 29335.23 12306.85 12376.31 12552.31 8134.30 - Security Deposit from Dealers 2799.48 2946.87 2664.65 2294.95 1455.56 1324.93 Bank overdraft due to excess cheques issued 314.17 -Sub-Total 87866.96 46930.52 37696.27 42461.50 20413.68 6994.83

B. Deferred Payment Liabilities - - - - - -

C. Provisions Gratuity & Leave Encashment 442.71 457.57 589.03 198.00 - - Income Tax 9104.46 4959.07 4615.69 2523.45 971.84 - Sub-Total 9547.17 5416.64 5204.72 2721.45 971.84 -

Total (A+B+C) 97414.12 52347.16 42900.99 45182.95 21385.52 6994.83

Annexure-XVIII

DETAILS OF INVESTMENT Rs. in thousands

Particulars 30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Quoted Investments In Promoter’s Companies - - - - - - In Promoter’s Group Companies - - - - - - In Associate Company - - - - - - Others 1188.60 1188.60 4835.16 4993.41 - -Total (A) 1188.60 1188.60 4835.16 4993.41 - -

Unquoted Investments Government Securities - - - - - - Bonds in Public Sector Undertakings - - - - - - Units in Mutual Funds - - - - - - Fully Paid up Debentures - - - - - -Investment in Group Companies - - - - - - Investment in other than Group Companies - - - - - - Total (B) - - - - - - Grand Total (A+B) 1188.60 1188.60 4835.16 4993.41 Less: Provision for diminution in value of Investments

- - - - - -

Net Investments 1188.60 1188.60 4835.16 4993.41 - - Repurchase Price / NAV of units in Mutual Fund - - - - - -


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2. FINANCIAL INFORMATION OF THE GROUP COMPANIES

A. DETAILS OF LISTED COMPANIES

There are no listed group Companies

B. DETAILS OF UNLISTED COMPANIES

1. Gangotri Electrocastings Limited:

Gangotri Electrocastings Limited was incorporated on 17th June, 1994 by Mr. Ram Avatar Jhunjhunwala, Mr. Vinod Kumar and Mr. Sanjiv Kumar Choudhary with the main object (i) to carry on business as Manufacturers, Producers, Founders, Consignment Agent, C&F Agent, Stockiest, Distributors, Importers, Exporters and Dealer off all kind of Steel, Stainless Steel, Aluminium, Copper and their products, Rolling Materials, Hot Rolled/Cold Rolled coils and sheets, Structural Materials and Building Materials, Cable, Wires & Ropes, Agricultural Machinery, Tool & Spares, Bio-Gas Plants, Electrical & Electronic Equipment, Agriculture, Food & Fruit Products, Fire & Clay Bricks, Fiber Glass & Foams, Ferrous & Non-Ferrous Materails, Furnitures & Furnishings and scrap. (ii) To carry on the business of Transporter, Repairer, Fabricator, Cutter of CR/HR Coils, Processor of all kinds of wires & sheets, Gulvenising, Annealing & Heat Treatment of all kinds of Metals & Wires. (iii) to carry on the business of Civil Contractor & General Order Supplier, Handling Agent, Warehousing, Broker & Consultants. and (iv) to carry on the business of Import & Export, Traders, agent, Consignment Agent, Handling Agent, Commission, Agent, C&F Agent, Broker & Stockiest. The present Board of Directors of the Company comprises of Mr. Ram Avatar Jhunjhunwala, Mr. Gouri Shankar Dalmiya and Mr. Sanjiv Kumar Choudhary

The Authorized Share Capital of the Company is Rs. 3,42,00,000/- (Rupees Three crores forty two lacs only.) divided into 28,20,000 (Twenty eight lacs twenty thousand only) Equity Shares of Rs. 10/- (Rs. Ten only) each and 60,000 (Sixty thousand only) 6% Non-cumulative Redeemable Preference Shares of Rs. 100/- (Rs. Hundred only.) each. The Issued, Subscribed and Paid-up Equity Shares capital of the Company is Rs. 2,81,60,000/- (Rupees ) divided into 28,16,000 (Twenty eight lacs sixteen thousand) Equity Shares of Rs. 10/- (Rs. Ten only) each.

Shareholding pattern as on 30th September 2008.

Name of Shareholder No. of Shares % of holding UPENDRA KANDOI 317,500 11.27 VIP FINSTOCK PVT. LTD. 232,500 8.26 SANJEEV KUMAR CHOUDHARY 166,610 5.92 GOURI SHANKAR DALMIA 120,000 4.26 SHAMBHU PD.KHEMKA 108500 3.85 INTEC SHARE & STOCK BROKERS LTD. 98,350 3.49 SUNITA DEVI 73500 2.61 MANISHA DIDWANIA 69000 2.45 RAJESH KUMAR MASKARA 61000 2.17 ESKAYJAY PLANTATIONS LTD. 55,000 1.95 GIRDHARILAL MASKARA 50400 1.79 GANGA CARRIERS PVT LTD 50,000 1.78 S.S.TRACOM LTD. 50,000 1.78 HANUMAN TRADING & FEEDS (P) LTD. 50,000 1.78 PARAS FINVESTPVT. LTD. 50,000 1.78 PLUS JET FINVEST PVT LTD 50,000 1.78 SHANTI STEEL PVT LTD 50,000 1.78 LAXMAN DAS AGARWAL 50000 1.78 MAMTA AGARWAL 50000 1.78 SWEETY VANIJAYA VINIYOG PVT. LTD. 47,500 1.69 UPENDER KANDOI 45500 1.62 SANTTOSH DEVI AGARWAL 43000 1.53


148

SHREE SAKUN TRADE & COMMERECE PVT.LTD. 40,000 1.42 KIRAN DEVI KHEMKA 37500 1.33 SANGITA DEVI KHAITAN 31000 1.10 MOM'S FOODPAKS LTD. 30,000 1.07 HINDON INVESTMENT PVT.LTD. 30,000 1.07 GOVGAY ELECTRO TRADERS PVT.LTD. 30,000 1.07 BHAGWATI PD. RAJESH KR. 30000 1.07 Others 699140 24.82 Total 2816000 100.00

Financial Performance: The brief financials of Gangotri Electrocastings Limited for the last three financial years based on audited financial statements are as under:

(Rs. In lakhs) For the Financial Year as at March 31

2008 Audited

2007 Audited

2006 Audited

Sales 5365.58 4304.51 3424.57 Total Income 5665.76 4403.07 3443.65 Profit after Taxation 28.59 25.93 10.95 Share Capital 281.60 281.60 256.60 Reserves & Surplus 155.66 127.06 76.12 Net Worth 437.26 408.66 382.73 Earning Per Share (EPS) (Rs.) 1.02 0.90 0.37 Net Asset Value per Share (Rs.) 15.53 14.51 14.91 Dividend (%) (including Interim Dividend) - - -

GEL has not made any rights / public issue during last three years. GEL is not a Sick Industrial Company within the meaning of the SICA.

2. Akash Ganga Homes Private Limited

Akash Ganga Homes Private Limited was incorporated on 23rd March, 1994 by Mr. Arun Dutta and Mr. Ram Avtar Jhunjhunwala with the main object to carry on the business of (i) to construct, develop, purchase, acquire, hold, posses, takeover and to deal in land, houses, buildings and premises and other property of any tenure and any interest therein and to sell, dispose of and deal in freeholds, leaseholds, ground rents and other lands and properties and to erect residential and business flats and to make advances upon the security at land or house or other property or any interest therein and generally to deal in traffic by way of sale, lease, exchange, let out, finance, grant option of purchase or other wise with land and house property and any other property whether real or otherwise and to undertake or direct the management of any property, buildings, lands and estates of any tenure or king whatsoever and transact on commission or otherwise the general business of houses, lands and building agents to carry on business as proprietors if lands, flats and house, and to let and/or sale on lease or other wise lands, flats and apartments therein and to provide for the tenants and occupiers thereof all or any of the conveniences provided in lands, flats, suiters, sheds and residential and business quarters and to construct, erect, maintain, renovate, improvise, buldings, residentials, bungalows, flats, quarters, offices, warehouses, structures, erections, work-shops, mills, factories, foundries or place for manufacturing plants, machineries accessories, implements, appliances, apparatus, markets, hats etc. and to develop, maintain and run the marketing centers and to act as maintenance and commission agents. The present Board of Directors of the Company comprises of Mr. Ram Avtar Jhunjhunwala, Mr. Aditya Dalmiya and Mr. Sanjiv Kumar Choudhary

The Authorized Share Capital of the Company is Rs. 20,00,000/- (Rupees Twenty lacs only.) divided into 2,00,000 (Two lacs) Equity Shares of Rs. 10/- (Rs. Ten only) each. The Issued, Subscribed and Paid-up Equity Shares capital of the Company is Rs. 9,98,000/- (Rupees Nine lacs ninty eight thousand only.) divided into 99,800 (Ninty nine thousand eight hundred) Equity Shares of Rs. 10/- (Rs. Ten only) each.


149


Name of Shareholder No. of Shares % of holdingRamautar Jhunjhunwala 2900 2.91Arun Dutta 2700 2.71Ujjal Sarkar 200 0.20Umashankar Pandey 7500 7.52Ganga Kumari Saraf 7500 7.52Sunita Devi Mishra 5000 5.01Ramautar Dalmia 5000 5.01D.K.Vyapar Viniyog Pvt Ltd 10000 10.02Aditya Dalmiya 3000 3.00Vandana Sanganeria 500 0.50Ratan Kumar Agarwal 10000 10.02Sangita Agarwal 1500 1.50Pushpa Kandoi 1500 1.50Sarojshree Properties & Merchandise Pvt Ltd 42500 42.58Total 99800 100.00

Financial Performance:

The brief financials of Akash Ganga Homes Private Limited for the last three financial years based on audited financial statements are as under:

(Rs. in lacs)

Particulars For the Financial Year as at March 31

2008 Audited

2007 Audited

2006 Audited

Total Income 1.23 1.26 1.22Profit / (Loss) after Taxation (0.52) (1.02) 0.55Share Capital 9.98 9.98 9.98Reserves & Surplus 10.10 10.62 11.64Net Worth 20.07 20.60 21.62Earning Per Share (EPS) (Rs.) (0.52) (1.02) 0.37Net Asset Value per Share (Rs.) 20.16 20.64 21.66Dividend (%) (including Interim Dividend) - - -Akash Ganga Homes Private Limited has not made any rights / public issue during last three years. Akash Ganga Homes Private Limited is not a Sick Industrial Company within the meaning of the SICA.

3. Ganga Carriers Private Limited

Ganga Carriers Private Limited was incorporated on 19th August, 1988 by Mr. Ramavtar Jhunjhunwala, Mr. Sanjiv Kumar Choudhary and Smt. Vandana Sanganeria with the main object (i) to carry on business as transporters forewarders of goods, passengers, live-stock and materials by road, rail, waterways or air and to own, purchase, take or give on leave, charter or hire or otherwise run, use or acquire transport vechiles, and carriers of all kind required for the transport business and to act as forwarding agents, work-house-men and booking agets. (ii) to carry on the business of transporters, handling agents, consignment agents, commission agents, contractors, hirers, buyears, sellers, dealers, manufacturers, producers, processors, agents, brokers, of goods including cement, brick, stone, marble flooring tiles and sheets, china wares, sanitary materials pipes, tobes paints, sheets, roofings, furniture& fittings, electrical goods, water storage equipment, floor polish, door clousers, building materials, plastic or other natural or synthetic substance chemicals. The present Board of Directors of the Company comprises of Mr. Ramavtar Jhunjhunwala, Mr. Sanjiv Kumar Choudhar and Smt. Vandana Sanganeria. The Authorized Share Capital of the Company is Rs. 25,00,000/- (Rupees Twenty five lacs only.) divided into 2,50,000 (Two lacs fifty thousand) Equity Shares of Rs. 10/- (Rs. Ten only) each. The Issued, Subscribed and


150

Paid-up Equity Shares capital of the Company is Rs. 14,37,000/- (Rupees Forteen lacs thirty seven thousands.) divided into 1,43,700 (One lac forty three thousands seven hundred.) Equity Shares of Rs. 10/- (Rs. Ten only) each.


Name of Shareholder No. of Shares % of holdingParas Finvest Pvt. Ltd. 38000 26.44 Sudarshan Electro System Pvt. Ltd. 20000 13.92 Wartsila Dealers Pvt Ltd 16000 11.13 Dipnarayan Management Pvt Ltd 12000 8.35 ABI Trading Pvt Ltd 12000 8.35 Jayprakash Agarwal 10000 6.96 Rajiv Jain 10000 6.96 N. K Jain HUF 6000 4.18 Sanjay Kumar Kejriwal 5000 3.48 Sekhwell Trading & Finance Pvt Ltd 5000 3.48 D. K. Vyapar Viniyog Pvt Ltd 4000 2.78 Ashok Agarwal 2000 1.39 Sohan Lal Sharma 2000 1.39 Others 1700 1.18 Total 143700 100.00


The brief financials of Ganga Carriers Private Limited for the last three financial years based on audited financial statements are as under:

(Rs. in lacs)


2008 Audited

2007 Audited

2006 Audited

Total Income 764.77 665.63 458.07Profit / (Loss) after Taxation 21.67 27.73 8.37Share Capital 14.37 14.37 12.67Reserves & Surplus 142.58 120.80 82.91Net Worth 156.95 135.17 107.48Earning Per Share (EPS) (Rs.) 15.08 19.29 6.61Net Asset Value per Share (Rs.) 109.22 94.06 84.83Dividend (%) (including Interim Dividend) - - - Ganga Carriers Private Limited has not made any rights / public issue during last three years. Ganga Carriers Private Limited is not a Sick Industrial Company within the meaning of the SICA.

4. Tara Ispat Limited

Tara Ispat Limited was incorporated on 18th June, 1995 by Mr. Gouri Shanker Dalmia, Mr. Ramautar Jhunjhunwala and Mr Aditya Dalmiya with the main object (i) to carry on all or any of the business of manufacturers, fabricators, processors, job workers, dealers, distributors, agents, stokiest, indentor, importers, exporters, of all kinds of bread and its materials. (ii) to carry on the business as manufacturesrs, producers, founders, consignment agant, C.F Agent, Stockiest, Distributors, Importers, Exporters and dealers of all kind of steel, stainless steel, special steel, mild steel, aluminium, copper and their products. (iii) to carry on the business of transporters, repairer, fabricator, cutter of CR/HR Coils, processors of all kinds of wires & sheets, galvanizing annealing and heat treatment of all kinds of metals and wires. (iv) to carry on the business or business as exporters, importers, buyers, sellers, dealers, buying and selling agents, indenters, manufacturers, fabricators, processors, drawing rollers and re-rollers of ferrous and non-ferrous metals, steel,


151

alloy steels, special and stainless steels for steel shafting, bars, including twisted and bright bars, rod flats, squares from scrap, billets, slabs, ingots etc. (v) to construct, develop, purchase, acquire, hold, possess, take over, and to deal in land, houses, building flats and premises and other property of any tenure and any interest therein (v) to acquire and hold and otherwise seal with share, stocks, debenture, debenture stocks, bonds, obligations and securities, issued or guaranteed by any Company and debentures, debenture-stocks, bonds obligations, municapl local and to invest and deal with the money of the Company in such manner as may be determined from time to time. The present Board of Directors of the Company comprises of Mr. Gouri Shanker Dalmia, Mr. Ramautar Jhunjhunwala and Mr Aditya Dalmiya.

The Authorized Share Capital of the Company is Rs. 50,00,000/- (Rupees Fifty lacs only.) divided into 5,00,000 (Five lacs) Equity Shares of Rs. 10/- (Rs. Ten only) each. The Issued, Subscribed and Paid-up Equity Shares capital of the Company is Rs. 16,54,850/- (Rupees Sixteen lacs fifty four thousand eight hundred fifty only.) divided into 1,65,485 (One lac sixty five thousands four hundred eighty five) Equity Shares of Rs. 10/- (Rs. Ten only) each.


Name of Shareholder No. of Shares % of holdingGouri Shanker Dalmiya 48275 29.17 Mala Goenka 15000 9.06 Ramautar Jhunjhunwala 13010 7.86 Govind Ram Sharma 10000 6.04 Kavita Devi Mishra 10000 6.04 Vijaydevpro Estates Pvt Ltd 10000 6.04 Merrill Investment & Trading Pvt Ltd 9000 5.44 Sanwarmal Singhania 9000 5.44 Jai Prakash Chotia 9000 5.44 Santosh Sharma 6000 3.63 Hari Lal Shaw 6000 3.63 Vishnu Prasad Gupta 6000 6.63 Sandeep Kumar Goenka 5000 3.02 Sunita Dalmiya 5000 3.02 Ashok Kumar Sonkar 2500 1.51 Others 1700 1.03 Total 165485 100.00


The brief financials of Ganga Carriers Private Limited for the last three financial years based on audited financial statements are as under:

(Rs. in lacs)


2008 Audited

2007 Audited

2006 Audited

Total Income 1.55 1.91 1.71Profit / (Loss) after Taxation 0.40 0.49 (1.76)Share Capital 16.55 16.55 16.55Reserves & Surplus 0.67 (1.07) (0.65)Net Worth 15.88 15.48 15.89Earning Per Share (EPS) (Rs.) 0.24 0.30 -Net Asset Value per Share (Rs.) 9.60 9.36 9.61Dividend (%) (including Interim Dividend) - - - Tara Ispat Limited has not made any rights / public issue during last three years. Tara Ispat Limited is not a Sick Industrial Company within the meaning of the SICA.


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5. Gangotri Industries Limited

Gangotri Industries Limited was incorporated on 30th April, 2007 by Mr. Sanjiv Kumar Choudhary, Mr. Ramautar Jhunjhunwala and Mr. Gouri Shanker Dalmiya (i) to generate electrical power by conventional, non-conventional methods including coal, gas lignite, oil, bio-mass, waste, thermal, solar, hydel, geo-hydel, wind and tidal waves (ii) to promote, own, acquire, erect, construct, establish, maintain, improve, manage, operate, alter, carry on, control, take on hire/lease power plants, co-generation power plants, energy conservation projects, power houses, transmission and distribution systems for generation, distribution, transmission and supply of electrical energy and buy, sell, supply, exchange, market, function as a license and deal in electrical power, energy to the State Electricity Board, State Government, Appropriate Authorities, licenses, specific industrial units and other consumers for industrial, commercial, agricultural, household and any other purpose in India and elsewhere in any area to be specified by the State Government, Central Government, Local Authority, State Electricity Boards and any other competent authority in accordance with the provisions of India Electricity Act, 1910 and/ or Electricity (Supply) Act, 1948 or any statutory modifications or re-enactment thereof and rules made thereunder. (iii) to establish captive power plants on a co-operative basis for a group of industrial and other consumers and supply power to the participants in the co-operative effort either directly or through the transmission lines of the State Electricity Boards or other authorities by entering into appropriate arrangements. (iv) to purchase, manufacture, produce, boil, refine, prepare, import, export, sell and generally to deal in sugar, sugar-candy, jaggery, sugar-beet, sugar-cane, molasses, syrups, melada, alcohol, spirits, and all sugar products such as confectionery, glucose, sugar-candy, canned fruit, golden syrup and aerated waters and/or by-products such as bagasse boards, paper pulp, paper, beetyl alcohol acetone, carbon dioxide, hydrogen, potash, can wax and fertilizers and food products generally, and in connection therewith to acquire, construct, operate factories for the manufacture of sugar or any of its products or by-products and acquire or manufacture machinery for any of the above purposes. (v) to cultivate, plant, produce and raise or purchase sugar-cane, sorghum, sugar-beet, sago, palmyra juice and other crops or raw materials and to transaction such other work or business as may be proper, necessary or desirable in connection with the above objects or any of them. (vi) to manufacture, produce, refine, prepare, distil, cure, process, purchase, sell, export, import, trade-in and otherwise deal in sugar, sugar beats, sugar canes, sugar candy, sugar cubes sweetmeats, jaggery (gur) khandsari, rasi, molasses and all other kinds of sugar products and to manufacture, produce, prepare and deal in saccharine, syrups, melade rum, alcohol and all kinds of alcoholic preparations liquors tinctures and chemicals of all kinds and carry on business as manufacturers and dealers in all kinds of sugar, its products and all kinds of its by products thereof. The present Board of Directors of the Company comprises of Mr. Ramautar jhunjhunwala, Mr. Sanjiv Kumar Choudhary and Mr. Gouri Shanker Dalmiya.

The Authorized Share Capital of the Company is Rs. 1,00,00,000/- (Rupees One Crore only.) divided into 10,00,000 (Ten lacs) Equity Shares of Rs. 10/- (Rs. Ten only) each. The Issued, Subscribed and Paid-up Equity Shares capital of the Company is Rs. 5,00,000/- (Rupees Five lacs only.) divided into 50,000 (Fifty thousand) Equity Shares of Rs. 10/- (Rs. Ten only) each.


Name of Shareholder No. of Shares % of holdingSanjiv Kumar Choudhary 10000 20.00Ankit Choudhary 10000 20.00Shakuntala Jhunjhunwala 10000 20.00Ramautar Jhunjhunwala 5000 10.00Gouri Shanker Dalmiya 5000 10.00Manju Choudhary 5000 10.00Vandana Sangenaria 5000 10.00Total 50000 100.00


As the Company incorporated on 30th April 2007, the financial statement for the last three years is not available.

Gangotri Industries Limited has not made any rights / public issue during last three years. Gangotri Industries Limited is not a Sick Industrial Company within the meaning of the SICA.


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6. Gangotri Infotech Private Limited

Gangotri Infotech Pvt. Ltd. was incorporated on 11th June 2007 by Mr. Aditya Dalmiya , Mr. Sanjiv Kumar Choudhary and Mr. Susanta Nag to carry on the business of data processing center, software development, run e-governance, to deal in I.T and I.T enable product and services relating to hardware and software, to act as direct sales associates or direct marketing associates of all I.T and non I.T products, to run B.P.O for I.T products and services and other I.T products. The present board of directors of the Company comprises of Mr. Aditya Dalmiya, Mr. Sanjiv Kumar Choudhary and Mr. Umesh Kumar Sanganeria.

The Authorized Share Capital of the Company is Rs. 5,00,000/- (Rupees Five lacs only.) divided into 50,000 (Fifty thousand) Equity Shares of Rs. 10/- (Rs. Ten only) each. The Issued, Subscribed and Paid-up Equity Shares capital of the Company is Rs. 1,00,000/- (Rupees One lacs only.) divided into 10,000 (Ten thousand) Equity Shares of Rs. 10/- (Rs. Ten only) each.


Name of Shareholder No. of Shares % of holdingAditya Dalmiya 3400 34.00Sanjiv Kumar Choudhary 3300 33.00Snigdha Dalmiya 3300 33.00Total 10000 100.00Financial Performance:

As the Company incorporated on 11th June 2007, the financial statement for the last year is only available.

The brief financials of Gangotri Infotech Private Limited for one financial years based on audited financial statements are as under:

(Rs. in lacs)

Particulars

For the Financial Year as at March 31 2008 Audited

Total Income 16.33Profit / (Loss) after Taxation (3.57)Share Capital 1.00Reserves & Surplus 0.00Net Worth (2.75)Earning Per Share (EPS) (Rs.) 0.00Net Asset Value per Share (Rs.) 0.00Dividend (%) (including Interim Dividend) -

Disassociation of Promoters from the Companies / Firms preceding during three years.

The promoters have not disassociated themselves from any of the Companies during three preceding years.

Common pursuits

There is no Common Pursuit in the business of the Company and other group companies other than those mentioned in the Annexure VII to the Auditor’s Report of this Letter of Offer. The group companies are either engaged in manufacturing of steel products, which are altogether of different range and applications, or are engaged in job work / compounding activities. Since no other entity is engaged in the line of activity in which the Company is engaged, there is no conflict of interest that arises from the financial transactions dealt with among the group companies.


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Related party transactions

The details of related party transactions are mentioned in Annexure VII to the Auditor’s Report of this Letter of Offer.

Purchase/sale of more than 10% from Group Companies

There are no transactions with Companies in the Promoter Group exceeding 10% of the total sales / purchases. However, the Company has purchased 18270.540 MT (value Rs. 3690 lacs) of Non Alloy Ingot from M/s Gangotri Electrocastings Limited, a group company, out of its total purchase of 18270.540 MT (value Rs. 3690 lacs) of Non Alloy Ingot in the year 2007-08.

CHANGES IN ACCOUNTING POLICIES IN THE LAST THREE YEARS

There has been no change in the Accounting Policies of the Company during the last three years, which would materially affect the results of the Company.


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3. MANAGEMENT DISCUSSION & ANALYSIS OF FINANCIAL CONDITION

1. Overview of the business of the Company:

The Company Gangotri Iron & Steel Company Limited (GISCO), formerly known as Esskayjay Ispat Limited was incorporated in 1992 having its registered office in Patna, Bihar for manufacturing of re-rolling products. In 1994, a manual steel re-rolling unit with a capacity of 12,000 MT per annum was set up and commissioned at Patna.The promoters of the Company are Mr. Ramautar Jhunjhunwala, Chairman, Mr. Sanjiv Kumar Choudhary – Managing Director and Mr. Aditya Dalmiya – Director.

The management modified the unit and converted the same into fully automatic plant with an expanded capacity of 22,000 MT per annum. In the year 2003, the company modernized its production facility by adopting new technology of making TMT bars and started manufacturing GISCO TMT bars in November 2003. The product, because of its better quality over other local manufacturers, was well accepted in the market and command price premium over its competitors. Its products got ISI certification and in the year 2005 the company became an ISO 9001 and 14001 certified company. In 2006, the company has further expanded its capacity to 33000 tonnes per annum by adopting latest German THERMEX technology for the first time in state of Bihar and started Brand building process in the name and style of GISCO THERMEX TMT bars.

The company came out with its maiden IPO in the year 1995-96 and shares of the company are presently being traded on Bombay Stock Exchange. The Company has also issued 40 lacs Share Warrants at a premium of Rs. 13.50 each in the F.Y 2005-06 and against these warrants 3375000 equity shares were issued/ allotted in the FY 2007-08.

The Company is having major presence in the Iron & Steel Industry in the State of Bihar & U.P, having excellent rapport with our customers.

2. Significant Developments subsequent to the last financial year

The Company is setting up a 300 tonnes per day (tpd) Fully Automatic Thermex TMT Bar/ Wire/ Rod Plant along with 2 nos.15 Mt Induction Furnaces and a Continuous Billet Casting Machine at Bihta near Patna. The installed Capacity of the Re-rolling Mill will be 100,000 Mt per annum and that of Induction furnace and Continuous Casting Machine will be 111000 MT per annum. The new Bihta unit has started its trial production in January 2009 and will start commercial production by mid of February 2009.

3. Factors affecting results of operations

General economic and business conditions: The demand for our products is dependent on general economic conditions in the country. Our manufacturing operations would be affected by any adverse change in the Government Policies, Rules & Regulations.

Political condition: In case of political instability, government could change the spending pattern. This change in policy framework can affect our business.

Competition: Selling prices of our products may be affected if competition intensifies. Further, as a result of increased capacity of production, adoption of aggressive pricing strategies by our competitors in order to gain market share or new competitors entering the markets, may adversely affect our operations and financial results.

Raw Material Prices: The prices of basic raw materials i.e. Non alloy Ingot, Iron Scraps have shown an upward trend in the recent past. This increase in prices of the raw materials leads to increase in cost of production. In case we are unable to increase the prices of our finished products our margins would be affected and impact the financial performance significantly.


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Capacity: We are currently expanding our capacity for production. Our ability to fulfil larger orders will depend upon our ability to complete our expansion plans as scheduled. We believe that the scale of our production, and lower per unit operating costs due to economies of scale, will give us an edge over our competitors.

Comparison of significant items of income and expenditure of the Company for the last five years (Rs. in lacs) For the year March 31 2008 2007 2006 2005 2004IncomeGross Sales 4566.00 3918.58 2777.35 2258.40 1599.12Less : Excise Duty 613.11 534.02 382.68 236.83 223.33Net Sales 3952.89 3384.56 2394.67 2021.57 1375.79Other Income 10.38 12.73 21.11 2.37 87.54Increase/Decrease in Stock 14.73 29.11 68.36 88.62 (54.43)Total 3978.00 3426.40 2484.14 2112.56 1408.90Expenditure Raw material Consumption 3081.97 2620.20 1894.45 1722.57 1240.93Manufacturing Expenses 231.12 192.50 135.39 119.19 90.11Personnel Expenses 41.32 45.02 23.34 18.27 17.59Administrative & Other Exp. 346.66 281.21 226.67 122.02 32.85Total 3701.07 3138.93 2279.85 1982.05 1381.48Op. Profit before Int. Dep. & Prior Item

276.93 287.47 204.29 130.51 27.42

Interest and Finance Charges 70.90 66.81 37.40 24.42 18.47Depreciation 54.52 76.24 55.86 21.34 22.96Amortization ---- -- --- -- ---Operating Profit before Prior Period Expenses

151.51 144.42 111.03 84.75 (14.01)

Profit before Tax & Extraordinary Items

151.51 144.42 111.03 84.75 (14.01)

Current Tax 49.59 46.16 25.23 9.72 --Fringe Benefit Tax 2.13 1.36 1.62 -- --Deferred Tax 7.07 -- 6.29 33.02 20.04NP after Tax Before Extraordinary items

92.72 96.90 77.89 42.01 (34.05)

Add: Tax provision for earlier years W/back

--- 0.07 .02 -- --

Add: Deferred Tax reversed -- 7.32 -- -- --Less: Tax paid for earlier year 6.46 -- -- -- .03NP after Tax before Extraordinary Item

86.26 104.29 77.91 42.01 (34.08)

Impact of material adjustment for establishment in corresponding years

0 0 0 0 0

Add/(Less): W/back of liability 0 0 0 0 0Add/(Less): Deferred Tax 0 0 0 0 0

Add/(Less): Deferred TaxProvided earlier now reversed

0 0 0 0 0

Add/(Less): Tax adjustment 0 0 0 0 0Add/(Less): Others 0 2.38 (2.38) 0 0Adjusted Profit (A+B) 86.26 106.67 75.53 42.01 (34.08)

FY 2004-05

During the year, production of M.S. Bar was 12392 MT against 9704 MT in the previous year representing an increase of 27.7% whereas the increase in total income has been 34.04%. The Net Sales of the Company


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was increased by 41.23% to Rs.2258.40 lakhs from Rs.1599.12 lakhs in the corresponding previous year. The company has taken various steps, which has resulted in improved operation and profitability. The Company has also altered the product mix in favour of more value added TMT Bar which has resulted in a better product realization.

FY 2005-06

During the FY 2005-06, the net sales of the Company increased by 22.98% to Rs.2777.35 lakhs from Rs.2258.40 lakhs in FY 2004-05. The production of M.S. Bar was 12796MT as against 12392MT in the previous year representing a modest increase of 3% despite suspension of production for about a month at a stretch due to modernization and installation of new machineries. Although the expansion and modernization was completed but necessary enhanced load of electricity was made available by PESU on 3rd April, 2006 and as such the commercial production could be commenced from middle of April, 2006. In spite of this Company has achieved an increase in total income by 85%.

FY 2006-07

During the year, the Net Sales of the Company was increased by 41.09% to Rs.3918.58 lakhs from Rs.2777.35 lakhs in the corresponding previous year. The production of M.S.Bar was 16667 MT as against 12769MT in the previous year representing an increase of 31%. Total Income Profit before Tax and Profit after Tax have increased by 40%, 30% and 34% respectively, compared to previous year ended on 31.03.2006. This was achieved due to operational efficiencies despite several adverse factors, particularly substantial increase in prices of inputs and enhanced competition.

FY 2007-08

During the year, the Net Sales of the Company was increased by 16.52% to Rs.4566.00 lakhs from Rs. 3918.58 lakhs in the corresponding previous year. The production of M.S.Bar was 17375 MT as against 16667 MT in the previous year representing an increase of 4.25%. Total Income and Profit before Tax have increased by 16.41% and 4.91% respectively, compared to previous year ended on 31.03.2007. This was achieved due to operational efficiencies despite several adverse factors, particularly substantial increase in prices of inputs and enhanced competition.

Reasons for Negative Cash flow

The Company has recorded negative cash flow from operations for the year 2006 due to increase in Working Capital and expansion of the Unit. The Company has recorded cash out flows from investing activities for the year 2005, 2006 & 2007 due to addition of fixed assets for ongoing modernization and expansion plan. The same out flows are being met through raising funds through secured loans from bank, by issue of Share Warrants and re-issue of Forfeited Shares.

4. Analysis of reasons for the changes in significant items of income and expenditure in respect of the following:

Unusual or infrequent events or transactions: There are no unusual or infrequent events or transactions

Significant Economic changes that materially affected or are likely to affect income from continuing operations: There are no significant economic changes that have effected or will affect the industry except the cost of the basic raw material and power, which are vital input in the manufacturing. It is apparent that with the strong demand for steel, the demand for raw materials will also go up which is the matter of concern, particularly if there is a shortage of raw material and fierce competition between the procedures. It has been observed in Bihar, during Monsoon, flood like situation occurs frequently, which affect supply of raw materials, production and transportation of finish goods. As a consequence of which, the profitability of the industry may be affected.

Known Trends or uncertainties: Our country’s economy is growing exceedingly well and therefore it is hoped that the consumption of steel will also grow correspondingly and significantly. The profitability of the industry, particularly SME’s, would be dependent upon supporting infrastructure like quality power, good


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roads, unhindered supply of raw materials, increase in demand for housing and favourable weather conditions. Over the years, secondary producers like us have made a significant contribution to the growth of the national economy. We hope that the secondary steel segment would continue to remain driver in the future growth of the steel industry and as well as the Nation’s Economy.

Future changes in relationship between costs and revenues: Due to increase in the demand for the Company’s product and better realization, there is scope for increase in the revenues of the company. The future increase in the revenue will offset any increase in cost price of the raw material and labour cost. After commencement of the new project at Bihta Company will have operation leverage in terms of maximization of production.

The extent to which material increase in net sales or revenue is due to increased sales volume, introduction of new products or services or increased sale prices: The Company has a setup at PhulwriShariff, Patna and to cope up with the increasing demand it is establishing a set up a 300 tonnes per day (tpd) Fully Automatic Thermex TMT Bar/ Wire/ Rod Plant along with 2 nos.15 Mt Induction Furnaces and a Continuous Billet Casting Machine at Bihta near Patna. The installed Capacity of the Re-rolling Mill will be 100,000 Mt per annum and that of Induction furnace and Continuous Casting Machine will be 111000 MT per annum. The new Bihta unit has started its commercial production in January 2009 and will start its commercial production by mid of February 2009 as per revised schedule of implementation.Therefore, with higher production, the Company would increase its sales volume with competitive prices.

Seasonality of business: The Company’s business is not seasonal. However in the rainy season sales and production goes down relatively due to decrease in demand of steel.

Availability of raw materials: The Company has made cordial relationship with its suppliers and it is in position to arrange the raw materials to manufacture the MS Bars to cope with increased demand. The raw materials are abundantly available in the near by States like Jharkhand, West Bengal, Orrisa. Hence the company does not foresee any shortage in the supply of raw materials for production.

Competitive Conditions: The Company operates in competitive conditions. The Company has also been awarded ISO 9001:2000 and ISO 14001:1996 certification for its quality management system, practices and environmental concerns. The product of the Company continues to carry ISI mark and also registered with DGS & D and above all its quality of products enjoys good reputation amongst customers.

Material developments after the date of the last Balance Sheet: The new Bihta unit will start within the current financial year up to March 2009.Capacity of the Re-rolling Mill will be 100,000 Mt per annum and that of Induction furnace and Continuous Casting Machine will be 108900 MT per annum.

Adverse events: There are no adverse events except the heavy rain and floods in Bihar, affecting the operations of the Company occurring within one year prior to the date of filling of the Letter of Offer with the BSE.

5. Directors’ Statement:

In the opinion of the Directors, there have not arisen, since the date of the last financial statements disclosed in the Letter of offer, any circumstances that materially and adversely affect the business or profitability of the Company, or the value of its assets, or its ability to pay liabilities within the next 12 months.


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SECTION - VI. LEGAL & OTHER INFORMATION

1. OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS

Save as stated herein, the Company has not defaulted in meeting any of its statutory or institutional dues and have made all payments/refunds on fixed deposits and no proceedings have been initiated against the Company, for any of the offences specified in paragraph 1 of Part I of Schedule XIII of the Companies Act, 1956. Further, there are no disputes/litigations towards tax liabilities or criminal prosecutions against the Company and its Directors for any offence, economic or otherwise civil litigations against the Company and its Directors, there are no material disputes/legal actions other than those disclosed below.

There are no pending proceedings initiated for economic offences against the Company. No disciplinary action/investigation has been taken by the SEBI against the Company, and its respective directors.

Promoters, their relatives (as per Companies Act, 1956) and the Company, Group Companies, Associate Companies are not detained as willful defaulters by RBI/Government authorities and there are no violations of securities laws committed by them in the past and are pending against them.

There are no past cases in which penalties were imposed by the regulatory authorities on the Company or its Directors.

There are no cases of pending litigations/defaults in respect of firms/Companies with which the Promoters are associated in the past but are no longer associated.

OUTSTANDING LITIGATIONS AGAINST THE COMPANY:

[A] OUTSTANDING LITIGATIONS INVOLVING ISSUER COMPANY

1. Outstanding litigations against the Company.

Sl. No. 1 Case No./ Date Execution Case 4/2002 In the Court of Execution Munsiff, Patna Applicant Mr Satish Singh Vs Esskayjay Ispat Ltd. Status Stayed by the Hon’ble High Court Background Immediate neighbour, adjoining northern wall of the unit, filled suit 75/93 against the

unit and Bihar State Pollution Control Board alleging that the factory was generating noise pollution. The suit was decreed in his favour on 10.05.1996 and the appeal of the unit bearing TA No 86/96 was dismissed by the appellate court on 13.04.1999. Thereafter the unit filed second appeal no. 259/99 before Hon’ble High Court, Patna. The appeal was admitted for hearing after hearing the plaintiff respectively. Thereafter by an order the proceeding in the execution case was stayed by the Hon’ble Patna High Court. The petition by the plaintiff was dismissed by the Hon’ble High Court by order dt. 28/07/05. Consent u/s 21 of the Air Act 1981 has been regularly granted by the BSPCB, the competent authority under the Act, right from 1993 to till date on yearly basis.

Sl. No. 2Case No./ Date 14/AC/GAYA/06 DT.29.12.2006In the Court of Commissioner (Appeal)Applicant Assistant Commissioner Vs GISCOStatus The company has deposited Rs. 3163/- towards interest as asked by the department.

Next hearing is awaited.


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Background The department raised a show cause notice on 08.02.2006 for demand of excise duty on differential amount of sale realization at depot and stock transfer value at factory. The company has deposited duty of Rs.77276/- and penalty was set aside by Assistant Commissioner, division, Gaya vide its order dt.14/AC/Gaya/2006 dt.29.12.2006. The department has filed an appeal against the order of Assistant Commissioner before Commissioner (Appeal), Patna against non imposition of penalty.

Amount Penalty Rs. 77276/-

Sl. No. 3 Case No./ Date 08/AC/Gaya/05 dt12.08.05 In the Court of CESTAT, kolkata Applicant GISCO Vs Commissioner (Appeal) Status Deposited Rs. 92935/- towards penalty Background The Central Excise Team raided in the factory on 23.10.2002 and found some

shortages in raw materials and finished goods. The Asst. Commissioner raised show cause notice of Excise duty of Rs.92935/- and equivalent penalty. The same is confirmed by him, vide his order No.08/AC/Gaya/05 dt.12.08.05. The company has deposited duty however an appeal has been filed for setting aside the order of Asst. Commissioner. The Commissioner (Appeal) has disallowed the appeal vide his order no. 346/Pat/Cex/Appeal/2005 dt.19.12.2005. The company has again filed an appeal before CESTAT, Kolkata against the order of Commissioner (appeal).

Amount Penalty Rs. 92935/-

Sl. No. 4 Case No./ Date 65-72/MP/Comm/2001 dt. 20.09.2001 In the Court of Commissioner, Patna Applicant GISCO Vs Commissioner, Patna Status The matter is pending with Commissioner, Patna for re-adjudication Background A new provision in excise law was introduced in Sep'1997 under Section 3A of Central

Excise Act, 1944 for payment of excise duty in a re-rolling mill on the basis of installed capacity of the mill. As per law, our capacity was fixed at 16014.610 MT. The company made some modification in the plant on 28.08.1998 and applied for re-determination of capacity. The capacity was fixed at 5241.165 MT w.e.f.20.01.1999. The company filed an appeal before Hon'ble High Court, Patna for re-determination of capacity w.e.f.28.08.1998. The appeal is still pending. In the meanwhile, the Commissioner, Patna passed an order for demand of excise duty of Rs.5752226/- along with equivalent penalty and interest. The company has filed an appeal against this order and deposited Rs.2000000/- as per direction of CESTAT. Later CESTAT vide its order dt.19.12.2002 remanded the matter back to Commissioner, Patna for re-adjudication.

Amount Excise Duty Rs. 1443471/-

Sl. No. 5 Case No./ Date 20/INV/JRU/Gr-A/GISCO/CE/07/302 dated 28.12.2007 In the Court of DGCEI, Jamshedpur Applicant DGCEI vs. GISCO Status Summon has been issued by DGCEI under section 14 of the Central Excise Act, 1944

for producing documents by the directors Mr. Ramautar Jhunjhunwala and Mr. Sanjiv Kumar Choudhary.

Background DGCEI has conducted search in factory and office premises of the company on dated 09.10.2007 and seized various documents in respect of contravention of Central Excise Act, 1944 and Rules made there under and in respect of evasion of Central Excise Duty on removal of excisable products by M/s Gangotri Iron & Steel Co. Ltd. and M/s Gangotri Electrocastings Ltd. Mr. Sanjiv Kumar Choudhary, MD appeared before DGCEI, Jamshedpur on dated 15.01.2008 on the receipt of summon under section 14 of the Central Excise Act, 1944 but till date no charge has been levied by DGCEI.

Sl. No. 6


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Case No./ Date Search & Seizure U/s 132 of I. tax Act 1961 dated 11.06.2008 In the Court of ACIT Central Circle-1, Patna Applicant ACIT vs. GISCO Group Status I.Tax Search & Survey has been conducted by I. tax department on 11th June 2008 at

the factory premises, office premises of the petitioner Group Company as well as residence of its director and employees at different locations.

Background I.Tax Department has conducted Search & Survey in factory, office premises of the company and the residential premises of Directors & employees of the Company and seized various documents and CPU/ Laptops. All the cases are being transferred / centralized to ACIT, Central Circle-1 , Patna

Sl. No. 7 Case No./ Date SCN C. No.-V(12) 63-CEP/2008/10801 dt. 03.10.2008 In the Court of Commissioner, Patna Applicant GISCO Vs Commissioner, Patna Status The matter is pending with Commissioner, Patna for re-adjudication Background The depart has alleged that Gangotri Iron & Steel Co. Ltd. has availed wrong Cenvat

credit amounting to Rs. 2,92,564.40 and ED Rs5,848/- total Rs. 2,98,412/- during the year 2004-2005 on the strength of fake/ fraudulent invoices issued by M/s U.K. Ispat , Howrah and M/s M.K. Steel, N.S. Road, Lilluah, Howrah.

Amount Excise Duty Rs. 2,92,546.40 & ED 5,448/-

2. Amounts owed to Small Scale Undertakings:

None of the suppliers has informed the company of being registered under the Micro, Small and Medium Enterprises Development Act 2006 and therefore there is no information for submission under the said Act.

[B] OUTSTANDING LITIGATIONS INVOLVING SUBSIDIARY COMPANIES

Not applicable as the Company has no Subsidiary Companies

[C] OUTSTANDING LITIGATIONS INVOLVING GROUP COMPANIES

1. Cases filed against Gangotri Electrocastings Limited:

Sl. No. 1 Case No./ Date 36/MP/Addl. Comm./2004 dated 31.12.2004 passed by Addl. Comm. Central Excise,

Patna In the Court of CESTAT (Kolkata) Applicant GEL Vs. Commissioner (Appeal), Patna Status Regular hearing is pending, demand is stayed except Rs. 200000/- which is deposited. Background The team of Excise Preventive conducted a raid in the factory premises and found

shortage of raw materials and finished goods. During investigation they have also found that there was unaccounted raw material of 541.780 MT. The department has raised a show cause notice date 02.07.2004 for demand of excise duty of Rs. 795766/-, Rs. 28787/- and Rs. 278160/- along with equivalent penalty and interest. The Joint Commissioner has confirmed demand vide its order no. 36/MP/JC/2004 date 31.12.2004. The Company has deposited excise duty of Rs. 306947/- however, the Company has preferred an appeal before Commissioner (Appeal), Patna but appeal was disallowed vide order No. 246/PAT/CEX/Appeal/2005 date 05.10.2005. There after, the Company filed an appeal before CESTAT and its stay order CESTAT directed to deposit Rs. 200000/- and remaining remand was stayed.

Amount Excise Duty: Rs. 1102713/-, Penalty: Rs. 1102713/- and interest @13% p.a. (total duty deposited Rs. 506947/-)

Sl. No. 2Case No./ Date 13/AC/Gaya/06 date 31.10.2006 passed by Asst. Commissioner, Gaya DivisionIn the Court of CESTAT (Kolkata)


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Applicant GEL Vs. Commissioner (Appeal), Patna Status Appeal to be filed Background The matter is related to short payment of duty on sale of old furnace. Amount Excise Duty: Rs. 19162/-, Penalty: Rs. 19162/- and Interest @ 13% p.a.

Sl. No. 3 Case No./ Date 05/ST/Additional Commissioner/2006 date 10.08.2006 In the Court of CESTAT (Kolkata) Applicant GEL Vs. Commissioner (Appeal), Patna Status Appeal to be filed Background During the year 2000-01 to 2004-05 the Company has received commission income

from different party on account of procurement of orders for their products. The department has raised a show cause notice date 20.10.2005 for Service Tax of Rs. 31,09,417/- along with the penalty u/s 75, 76, 77, 78 of the Finance Act. The demand is confirmed vide its order no. 05/ST/Additional Commissioner/2006 date 10.08.2006. The Company has filled an appeal before Commissioner (Appeal), Patna but appeal was rejected due to non-deposit of Rs. 10,00,000/- as directed by them. The Company is going for filling an appeal before CESTAT. In the similar matter in M/s GISCO, demand was set aside by Additional Commissioner.

Amount S. Tax: Rs. 3109417/-, Penalty under section 75, 76, 77 & 78 of the finance act.

Sl. No. 4 Case No./ Date V(72)37/Gaya/SCN-Cell/Adjn./07/3546 date 02.08.2007In the Court of Commission, Central Excise, Patna Applicant Commissioner, Patna Status Matter is under adjudication Background During the excise audit of the Company for the FY 2002-03 to 2006-07, it is detected

by the department that the Company is selling its goods to its sister concern M/s GISCO not following the Central Excise Valuation Rules according to which goods should have been valued at 110% of cost of production. Accordingly on the basis of objection raised by audit team, a show cause notice date 02.08.2007 is raised by the department. However later the audit team has dropped its objection.

Amount Excise Duty Rs. 17995066/- and Penalty U/s 11AC and Interest U/s 11AB

Sl. No. 5 Case No./ Date RPF Case No. 47/2004 In the Court of Railway Magistrate, Patna Applicant State Vs Harendra Singh & Others Status The prosecution evidence has been closed by the learned Railway Magistrate.

Procedurally now the case is fixed for argument and defence witness. The seized materials were legally purchased by the unit from Railways in public auction, as per documents.

Background The Railway Police Force (RPF), Danapur, conducted a raid in the factory premises of GEL at Phulwarisharrif on 09.10.2004. The raiding team checked the raw material lying unused, which were ingredient to be used for production by the unit. Relevant purchase orders of railway scraps were shown to the raiding team, but without taking into consideration the same and with obvious malafide intention they continued the search and left the premises in the late hours of 09.10.2004. Again they came on 10.10.2004 and seized material worth Rs.25000/- approx. and consequently RPF Case No. 47/2004 was lodged by the RPF.

Amount Rs. 25000/-

Sl. No. 6 Case No./ Date CWJC No. 3792/2006 In the Court of Bihar State Electricity Board Applicant GEL Vs BSEB Status Pending for hearing on admission in Hon’ble High Court, Patna


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Background The BSEB had raised a bill of Rs. 1.05 crores approx., including the AMG charges for the year 1995-96 & 1996-97. The major part of the said bill being Rs. 74,30,651.10 was for the period when the unit was closed due to blast in the unit in June 1996. A write petition was filed being CWJC No. 7942/1997, challenging the said bills raised by the BSEB on the ground that the bill could not have been raised due to closure of the factory due to the said blast. Under the orders of the Hon’ble Patna High Court dated 19.09.1997, a sum of Rs. 10 lacs was directed to be deposited and the said amount was deposited by the Company. Further, the Hon’ble Patna High Court directed to approach the competent authority under Clause 13 for redressal of the pending grievance. The Competent Authority (General Manager) did not allow the prayers made. Being aggrieved by the said action, another writ petition being CWJC No. 9080/2003 was filed, which was disposed of by order dated 01.09.2003 with a directed upon the General Manager to reconsider the matter. Thereafter, no reconsideration a relief of Rs. 55,72,913.20 for the said AMG bill of 1996-97and relief of Rs. 46238.76 was granted for the year 1995-96 and a sum of Rs. 23.61 lacs was directed to be paid. On further appeal a relief of Rs. 14.85 lacs was granted and Rs. 8.76 lacs was directed to be paid. But the BSEB has raised a bill charging DPS of Rs. 19.27 lacs on the said amount of Rs. 8.76 lacs totaling Rs. 28.24 lacs. Being aggrieved by this action the unit has filed CWJC No. 3792/2006 before the Hon’ble Patna High Court which is pending for hearing on admission.

Amount Rs. 2823737/- (amount paid Rs. 1243149/-) as per chart enclosed.

Sl. No. 7 Case No./ Date V(72)21/Pat/SCN-Cell/Adjn./2008/5489- date 06.06.2008 In the Court of Commission, Central Excise, Patna Applicant Commissioner, Patna Status Matter is under adjudication Background During the excise audit of the Company for the FY 2007-08, it is detected by the

department that the Company is selling its goods to its sister concern M/s GISCO not following the Central Excise Valuation Rules according to which goods should have been valued at 110% of cost of production. Accordingly on the basis of objection raised by audit team, a show cause notice date 06.06.2008 is raised by the department.

Amount Excise Duty Rs. 11267388/- and Penalty U/s 11AC and Interest U/s 11AB

2. Cases filed by Gangotri Electrocastings Limited:

Sl. No. 1Case No./ Date 2567(C)/2004In the Court of Shri D.N.M Tripathy, JM 1st Class, PatnaApplicant Gangotri Electrocastings Ltd. Vs Ajay Sharma & OthersStatus Pending for evidenceBackground Due to false and malafide FIR resulting into RPF Case No. 47/2004, GEL has filed a

complaint petition u/s 182/211/120/379 of IPC against RPF officials who were part of the raiding team because their acts were not in accordance with law and they assaulted the factory officials. On the failure to make this payment they lodged a false and malafide FIR resulting in RPF Case No. 47/2004.

3. Cases filed against Ganga Carriers Private Limited:

Sl. No. 1 Case No./ Date 01-02/ST/Comm./2007 dated 30.11.2007 In the Court of CESTAT Applicant GCPL Vs. Comm. Of Central Excise & Service Tax, Patna Status No regular hearing


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Background The dispute is with regard to non-payment of service tax on the reimbursed amounts. The Company has paid all the Service Tax received from their principals as commissions and on other heads where Service Tax was applicable. No Service Tax was received from principals towards re-imbursement head, because Service Tax was not applicable. The department disputed this reimbursement and want to include such expenses towards the Taxable service of clearing and fowarding agent.

Amount Demand of Service Tax Rs 158.97 lacs for the short payment for the period from 2001-02 to September 2006. Penalty imposed on the said non-payment of S. Tax: @200/- per day and thereafter @2% per month + Rs. 200 lacs as additional penalty.

[D] OUTSTANDING LITIGATIONS INVOLVING DIRECTORS / PROMOTERS

Litigations against the Promoters/ Directors

There are no outstanding litigations, disputes, non-payment of statutory dues, overdues to banks / financial institutions, defaults against banks / financial institutions, defaults in dues towards instrument holders like debenture holders, fixed deposits, and arrears on cumulative preference shares issued, defaults in creation of full security as per terms of issue, other liabilities, proceedings initiated for economic / civil / any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of Part I of Schedule XIII of the Companies Act, 1956) against the promoters and director of the Company, except the followings:

1. Cases filed against Promoter – Mr. Sanjiv Kumar Choudhary

Sl. No. 1 Case No./ Date 1082(M)/1996 (Criminal Case) In the Court of Shri. B. Pandey, JM 1st Class, Patna Applicant State Vs. Sanjiv Kumar Choudhary Status The case has been fixed for evidence of the prosecution, but the prosecution has not

produced any witness till date. One formal witness has been examined which evidence has got no locus standii.

Background On 14.06.1996, there was a blast in the factory. The factory inspector inspected the factory and found that some rules had not been fulfilled as per the Factories Act and there was a violation of the Rules and the Factory Inspector filed a complaint case in the Court of CJM, Patna

Sl. No. 2Case No./ Date 671(C)/2006In the Court of Shri S.K. Dixit, JM 1st Class, DanapurApplicant Binod Kumar Vs Girdharilal Khemka & Sanjiv Kumar ChoudharyStatus The case is fixed for hearing on the discharge petitionBackground This case has been filed by one Mr. Binod Kumar against Shri Sanjiv Kumar

Choudhary, Director of GISCO and one Shri Girdhari Lal Khemka. This is completely a false case because the Director, Shri Sanjiv Kumar Choudhary was present on the date of occurrence, as alleged, whereas he was out of Patna on the date of occurrence and the entire allegation was false.

Sl. No. 3 Case No./ Date 01-02/ST/Comm./2007 dated 30.11.2007 In the Court of CESTAT Applicant Comm. Of Central Excise & Service Tax, Patna Status No regular hearing


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Background The dispute is with regard to non-payment of service tax on the reimbursed amounts. The Company has paid all the Service Tax received from their principals as commissions and on other heads where Service Tax was applicable. No Service Tax was received from principals towards re-imbursement head, because Service Tax was not applicable. The department disputed this reimbursement and want to include such expenses towards the Taxable service of clearing and fowarding agent. Accordingly, penalty imposed on Mr. Sanjiv Kumar Choudhary, Director under section 78 of Chapter V of the Finance Act, 1994.

Amount Penalty of Rs. 160 lacs

2. Cases filed by Promoter – Mr. Sanjiv Kumar Choudhary

Sl. No. 1Case No./ Date Phulwari P.S. Case No. 702/2005In the Court of CJM, PatnaApplicant State through Sanjiv Kr Choudhary Vs. Arun Kumar ChoudharyStatus Pending for submission of final report by the PoliceBackground This case was filed by the Director of the Company one Mr. Arun Kumar Choudhary.

This case was filled before the CJM, Patna due to deposit of false demand draft amounting to Rs. 2.81 lacs by the sain person to take delivery of Steel Bars.


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2. GOVERNMENT APPROVALS/ LICENSING ARRANGEMENTS

The Company has obtained following licenses, permissions and approvals from the Central and State Government and Other Agencies required for carrying out the business:

1. Certificate of Incorporation issued by Registrar of Companies, Bihar, Patna, No. 03-05129 dated 07.12.1992

2. Certificate of Change of Name issued by the Registrar of Companies, Bihar, Patna No. 99-2000/821/1497 dated 10.03.2000.

3. Factory License No. 62038/PTN. Valid till 14.01.2009. Applied for renewal on dated 14.12.2008

4. Certificate of Registration under Bihar Tax on Entry of Goods - ET TIN No. – 10100734258

5. Central Sales Tax Registration Certificate No. 10100734161

6. Service Tax Registration No. AAACE5452BST001 dated 12.07.2007

7. Bihar Value Added Tax Registration No. 10100734064 dated 01.04.2005

8. Tax deduction Account No. CALG03062D

9. The Importer-Exporter Code (IEC) from Government of India, Ministry of Commerce issued from the file no. 21/04/130/00131/AM08/1846 dated 03.12.2007 and the IEC Number of the Company is “2107001294”.

10. Central Excise Registration No.AAACE5452BXM002

11. Consent Order No.PT-546/T-7382 for operation of plant under section 25/26 of the Water (Prevention and Control of Pollution) Act, 1974 from Bihar State Pollution Control Board. Valid till 30.09.2009

12. Consent Order No.PT-94/T-7381 for operation of plant under section 21/22 of the Air (Prevention and Control of Pollution) Act, 1981 from Bihar State Pollution Control Board. Valid till 30.09.2009

13. ISIN No. INE437F01015 for Equity Shares issued by NSDL and CDSL

14. Certificate from Directorate of Industries for Registration as a Small Scale Industrial Unit No. 031014152 PMT/SSI dated 24.11.1994

15. Certificate No. P/42-11233-53 dated 27.04.1994 issued by Regional Director, Employees State Insurance Corporation

16. Certificate No. BR/PAT/7384 issued by the Office of the Regional Provident Fund Commissioner

17. Certificate No. P2-581/93 (2005) dated 14.03.2007 issued Weight and Measurement Department

18. Certificate No. DGS&D/REGN.PAT/S-003-2005/G dated 25.07.2006 issued by Government of India, Ministry of Commerce & Industries.

19. Certificate No. 1248475 of Registration of Trade Mark, Section 23(2), Rule 62(I).

MAJOR AGREEMENTS ENTERED IN TO BY THE COMPANY:

The Company does not have any other Agreement as on the date of filling of this Letter of Offer other than those entered into in the ordinary course of business.


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SECTION - VII. OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Present Issue

The authority for the present issue has been obtained vide the resolution passed by the Board of Directors of the Company at its meeting held on 13.12.2007 and the shareholders approval obtained at Extra Ordinary General Meeting of the Shareholders held on 11.01.2008 & subsequent meeting of The Board of Directors held on 16.04.2008.

Prohibition by SEBI

The Company, its Directors, its Promoters, and any of the Company Associates or Group Companies with which the Directors of the Company are associated, as Directors or Promoters have not been prohibited from accessing the capital market under any order passed by SEBI.

Eligibility of the Issue:

The Company is an existing listed Company and it is eligible to offer this Rights Issue in terms of Clause 2.4.1 (iv) of the SEBI Guidelines.

DISCLAIMER CLAUSE

AS REQUIRED, A COPY OF THIS LETTER OF OFFER HAS BEEN SUBMITTED TO THE SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI).

“IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THE LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. THE LEAD MANAGER SUMEDHA FISCAL SERVICES LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD MANAGER SUMEDHA FISCAL SERVICES LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED 30TH APRIL, 2008 IN ACCORDANCE WITH THE SEBI (MERCHANT BANKERS) REGULATIONS, 1992 WHICH READS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE THERETO IN CONNECTION WITH THE FINALISATION OF THE LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY;


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WE CONFIRM THAT:

a. THE LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

b. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE GUIDELINES, INSTRUCTIONS ETC., ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH;

c. THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO INVESTMENT IN THE PROPOSED ISSUE; AND

d. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE LETTER OF OFFER ARE REGISTERED WITH SEBI AND TILL DATE SUCH REGISTRATION IS VALID.

THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCE AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGER, SUMEDHA FISCAL SERVICES LIMITED ANY IRREGULARITIES OR LAPSES IN THE LETTER OF OFFER.”

DISCLAIMER

The Company and the Lead Manager to the issue accepts no responsibility for statements made otherwise than in this Letter of Offer or in any advertisement or other material issued by the Company or by any other persons at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his own risk.

CAUTION

The Lead Manager and the Company shall make all information available to the Equity Shareholders and no selective or additional information would be available for a section of the Equity Shareholders in any manner whatsoever including at presentations, in research or sales reports etc. after filing of the Letter of Offer with SEBI. The Lead Manager and the Company shall update the Letter of Offer and keep the public informed of any material changes till the listing and trading commences.

Disclaimer with respect to Jurisdiction

This Letter of offer has been prepared under the provisions of Indian Laws and the applicable rules and regulations hereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Patna, India only.

The distribution of the Letter of offer and the offering of securities on a rights basis to persons in certain jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons into whose possession the LOF may come are required to inform themselves about and observe such restrictions. Any disputes arising out of such issue will be subject to the jurisdiction of appropriate courts in Patna, India only.

No action, has been, or will be taken, to permit offering of these securities in any jurisdiction where action would be required for that purpose, except that the LOF has been filed with SEBI and SEBI has given its observations and that the Letter of offer would be filed with the relevant Stock Exchanges in India. Accordingly, the Equity Shares may not be offered or sold directly or indirectly, and the LOF may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of the LOF, nor any sale hereunder, shall under any circumstances create any implication that the affairs of the Company have remained unchanged since the date hereof or that the information herein is correct as of any time subsequent to this date


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Disclaimer Clause of the BSE (the Designated Stock Exchange)

BSE (“the Exchange”) has given vide its letter dated 14.05.2008 permission to the Company to use the Exchange’s name in this Letter of offer on which this Company’s Securities are proposed to be listed. The Exchange has scrutinized this Letter of offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company.

The Exchange does not in any manner:

i. warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or

ii. warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or iii. take any responsibility for the financial or other soundness of the Company, its Promoters, its

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

FILING

This Letter of Offer has been filed with SEBI, L & T Chambers, 16 Camac Street, Kolkata-700017 The Letter of Offer has been filed with the Designated Stock Exchange as per the requirements of the law. All the legal requirements applicable till the date of filing the Letter of Offer with the Stock Exchanges have been complied with. The company is registered with the Registrar of Companies, Bihar located at Maurya Lok Complex, Block ‘A’ Western Wing, 4th Floor, Dak Banglow Road, Patna-800001, Bihar

DESIGNATED STOCK EXCHANGE

The designated stock exchange for the purpose of the issue is BSE.

LISTING

The existing Equity Shares are listed on BSE (Designated Stock Exchange) and MGSE. The Company has delisted its equity shares from CSE. MGSE is derecognized by SEBI. The Company has made application to BSE for permission to deal in and for an official quotation in respect of the securities being offered in terms of this Letter of offer vide letter dated 30.04.2008. The Company has received in-principle approval from BSE vide letter number DCS/PREF/JA/IP-RT/423/08-09 dated 14.05.2008.

If the permission to deal in and for an official quotation of the securities is not granted by the Designated Stock Exchange mentioned above, within fifteen days from the Issue Closing Date, the Company shall forthwith repay, without interest, all monies received from applicants in pursuance of this Letter of Offer. If such money is not paid within eight days after the Company becomes liable to repay it, then the Company and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under the Section 73 of the Act.

Consents

The written consents of Promoters, Directors, Auditors, Lead Manager to the Issue, Co-Lead Manager, Registrars to the Issue, Legal Advisor & Bankers to the Company to act in their respective capacities, have been obtained and such consents have not been withdrawn up to the time of delivery of the Letter of offer with the Stock Exchanges.

The Auditors of the Company have given their written consent for inclusion of their report in the form and content appearing in this Letter of offer and such consent and report have not been withdrawn up to the time of delivery of the Letter of offer to the Stock Exchange.


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The Auditors of the Company have given their written consent for inclusion of income tax benefits in the form and content appearing in this Letter of Offer, accruing to the Company and its members.

To the best of our knowledge, there are no other consents required for making this Rights Issue. However, should the need arise, necessary consents shall be obtained by us.

Expert Opinion

The Company has not obtained any expert opinion apart from whatever is already mentioned in this Letter of Offer.

Expenses of the Issue

The expenses of the Rights Issue payable by the Company inclusive of brokerage, fees payable to the Lead Manager and Co-Lead Manager to the Issue, Registrar to the Issue, Stamp duty, printing, publication, advertising and distribution expenses, bank charges, listing fees and other miscellaneous expenses will not exceed Rs. 30 Lakhs and will be met out of the proceeds of the Rights Issue.

Details of Fees Payable

The expenses for the issue include among others, lead management fees, advertising costs, printing and distribution expenses, fees payable to the Stock Exchange, Registrar and depository fees and other miscellaneous expenses. The estimate of the issue expenses of Rs. 30 Lakhs is as follows which is 2.44% of the total issue size.

Rs. in lacs Sl. No.

Particulars Amount (Rs. Lacs)

% of Total Issue Exp.

% of Total Issue Size

1 Fees of Lead Manager, Registrar, Legal Advisor, Auditors, Tax Auditors, etc

15.00 50.00% 1.22%

2 Printing & Stationery, Distribution, Postage, etc 7.00 23.33% 0.57%3 Advertisement & Marketing Expenses 7.00 23.33% 0.57%4 Other Expenses (incl. Filing Fees, Listing Fees,

Depository Charges, etc.)1.00 3.33% 0.08%

TOTAL 30.00 100.00% 2.44%

Underwriting Commission, Brokerage and Selling Commission

The Rights Issue has not been underwritten. No fee under this head is payable.

Previous Public or Rights Issues

There was no public/right issue done by the Company in the last 5 years.

Previous issues of Shares otherwise than for Cash

There is no issue of shares in past for consideration otherwise than cash.

Commission or Brokerage on Previous Issues

The Company has not made any public issue in last five years. Hence no commission or brokerage has been paid on any public issue in the last five years.

Particulars in regard to the Company and other listed companies under the same management within the meaning of Section 370(1)(B) of the Companies Act, 1956, which made any public issue during the last three years.


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The Company as well as the other Companies under the same management have not done any Public Issue / Rights Issue in last three years.

PROMISES VS PERFORMANCE Initial Public Offer

Particulars 1994-95 1995-96 1996-97 1997-98

Pro Act Var Pro Act Var Pro Act Var Pro Act Var Production (MT) 6000 4481.88 -25.3 11880 4909.58 -58.7 15120 5765.14 -61.9 17280 5565.34 -67.8 Gross Sales 743.04 545.13 -26.6 1436.99 612.36 -57.4 1873.34 771.89 -58.8 2146.74 831.12 -61.3PBIDT 90.04 62.10 -31.0 218.55 56.47 -74.2 317.58 43.57 -86.3 365.61 41.57 -88.6Depreciation 22.77 20.93 8.0 57.34 11.29 80.3 12.54 12.06 3.8 12.54 8.92 28.9Interest 24.81 23.67 4.8 22.17 23.50 -6.0 19.92 20.98 -5.3 17.67 19.99 -13.1PBT 38.94 17.50 -55.0 135.52 21.68 -84.0 281.60 10.53 -96.3 331.88 12.66 -96.2Provision for Tax - - - 29.00 - 100 87.71 0.65 99.3 105.44 1.25 -98.8 PAT 38.94 17.50 -55.0 106.52 21.68 -79.6 193.88 9.90 -94.9 226.44 11.41 -95.0Dividend (%) - - - 15% - - 20% - - 20% - -Dividend - - - 64.75 - 100 86.33 - 100 86.33 - -100Equity Capital 127.14 139.36 9.6 431.65 324.35 24.8 431.65 329.52 23.7 431.65 329.52 -23.7Reserve & Surplus 25.74 12.22 -52.5 67.51 33.78 -49.9 175.07 38.14 -78.2 315.18 48.82 -84.5Net Worth 152.88 151.59 -0.8 499.16 358.13 -28.2 606.72 367.66 -39.4 746.83 378.34 -49.3Book Value (Rs.) 12.02 11.92 -0.8 11.56 8.30 -28.2 14.06 8.52 -39.4 17.30 8.76 -49.4 EPS (Rs.) 3.06 1.29 -57.8 2.47 0.50 -79.7 4.49 0.23 -94.9 5.25 0.26 95.0

1994-95: Projected capacity utilization of the Company fell below the actual capacity utilization by 25%. This shortfall affected all the financial aspects. Actual production was also 25% less than the projected. Consequently, company was not able to meet its sales target and witnessed a negative variance of 26.6% between projected and actual. Company reported more variation in their bottom line. Due to operating cost overrun, PBIT witness 31% variance. Inspite of less than expected depreciation and interest burden, net profit of the company was hefty 55% less than the expectation.

1995-96: Performance less than projected trend continued in this year also. Actual capacity utilization was 35% less than what had been projected. This affected more than proportionally to production, which fell short by 59% than projected. Consequently, sales also fell short by similar percentage than projected. This time also almost all the cost overheads were more than expectation, which resulted into 80% shortfall in actual PAT than projected.

1996-97:Actual sales were 59% lower than expected on account of less than projected production due to again less than projected capacity utilization. Company conservative approach in anticipation cost overheads resulted into 96% shortfall in PBT. However, negligible actual tax payment as against projected has partially set of the effects of earlier cost overrun. Consequently, PAT fell short by 95%.

1997-98:Company utilized only 50% of their projected capacity and produced 68% lower output than projected. Production of the Company suffered due to its existing plant & machinery modification programme for enhancing efficiency and productivity. However, due to better than expected price, sales shortfall was 61%, lower than production shortfall. Company could not manage its cost efficiently. As a result, PBT witnessed a negative variance of 96.2%. However, due to minimal actual tax payment against hefty projection, reduced PAT variance.

Comment: The domestic iron & steel sector experienced a slow down in the last decade of the 20th century. The steel market remained sluggish and price levels of steel and steel products remained stagnant. The major reasons for the slow growth in the steel sector are: (a) Cost escalation in the input materials of iron and steel, (b) Continuous reduction in import duty on iron and steel. In the domestic markets, the industry faced increased competition from cheap imports from countries with highly depreciated currencies. This resulted in intense pressure on domestic prices, which fell in sympathy with the low landed cost of imports. The problem was compounded by a slowdown in growth of steel intensive industries like consumer durables and capital goods leading to negligible growth in demand.


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Listed Venture of Promoters There is no other listed venture promoted by the Promoters

Outstanding Bonds/Debentures There are no outstanding debentures or bonds or redeemable preference shares or any other instruments issued by the issuer company outstanding as on the date of Letter of Offer.

STOCK MARKET DATA The Company’s shares are listed on BSE and MGSE. The shares are actively traded on BSE. The high and low closing prices recorded on BSE for the preceding three years and the number of shares traded on the days the high and low prices were recorded are stated below:

The Ordinary Shares of the Company are actively traded on the Bombay Stock Exchange Limited.

i. The following is the movement in the share price of the Company on the BSE.

Year High Low Average

Price (Rs.) Date Rs. Volume Date Rs. Volume

2008 01.01.2008 47.00 256963 21.11.2008 6.10 1542 16.972007 12.09.2007 49.50 397465 02.01.2007 19.75 5731 30.492006 27.04.2006 25.95 16707 19.06.2006 13.00 13054 17.95

ii. The total volume of securities traded in each month during the preceding six months on BSE are as follows:

Month Details of High Price Details of Low Price Total Volume Date Rs. Volume Date Rs. Volume

September’2008 04.09.2008 19.80 338 30.09.2008 12.00 5415 179095 October’2008 14.10.2008 16.69 14939 27.10.2008 7.80 8199 128518

November’2008 06.11.2008 11.69 1220 21.11.2008 6.10 1542 162633 December’2008 23.12.2008 8.95 106910 31.12.2008 6.90 85912 539371 January’2009 05.01.2009 9.40 5775 27.01.2009 6.00 1327 164749 February’2009 16.02.2009 8.25 3733 20.02.2009 6.00 5937 117760

iii. Weekend price of Equity Shares of the Company on the BSE appear as under:

Week ended Highest Price during the week (Rs.)

Lowest Price during the week (Rs.)

Average Price for the period

(Rs.) 06.02.2009 7.99 6.25 6.8113.02.2009 8.00 6.28 7.3120.02.2009 8.25 6.00 7.0627.02.2009 7.99 6.04 6.97

Market Price as on 14th December 2007, immediately after the date of passing the Board Resolution for approving the Issue: Rs. 42.30 Per Share

Disclosure on Investor Grievances and Redressal System The Company has set up Investors/Shareholders Grievance Committee. The committee consists of Mr. Ramautar Jhunjhunwala and Mr. Ashok Agarwal with the Company Secretary as the compliance officer.

The Committee looks into the matter relating to transfer of shares, demat of shares, issue of duplicate share certificates, redressal of investor complaints regarding non- receipt of dividends, Annual Reports, dividend warrants etc. The Company has developed well-arranged correspondence system for letters of routine nature. The company has appointed S. K. Computers as its Share Transfer Agents both for the physical as well as for demat shares. Letters are filed category wise after having attended to Redressal norm for response time for all correspondence including shareholders complaints is ten days. However, the Company ensures to redress all the investor grievances well within the said ten days from the date of receipt of the complaint.


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The Compliance Officer Ms. Priti Somani takes care for redressal of complaints on a regular basis.

Status of Complaints No. of shareholders complaints as of 31st December, 2008 NIL Total number of complaints received during the current financial year (2008-09) 4 Total number of complaints received during last financial year (2007-08) 27 Status of Compliants Compliant is resolved Time normally taken by it for disposal of various types of investor grievances 15 days

Investor Grievances arising out of this Issue

The Company’s investor grievances arising out of this issue will be handled by S.K. Computers, Registrars to the Issue. The Registrars will have a separate team of personnel handling only our post issue correspondence. Investor grievances will be settled expeditiously and satisfactorily by the registrar in consultation with the Compliance Officer of the Company. The agreement between Registrar and the Company will provide for retention of records with the Registrars for a period of at least one year from the last date of dispatch of Letter of Allotment/Share Certificate/Warrant/refund order to enable the Registrars to redress grievances of Investors.

All grievances related to the issue may be addressed to the Registrars to the issue giving full details such as folio no., name and address of the first applicant, number and type of shares applied for, Application Form Serial number, amount paid on application and the name of the bank and the branch where the application was deposited, along with a photocopy of the acknowledgement slip. In case of renunciation, the same details of the renouncee should be furnished.

Investor may contact the Compliance Officer in case of any pre-issue/post-issue related problems such as non-receipt of letter of allotment/share certificates/demat credit/refund orders etc.

Changes in the Auditors in the last three years

There has been a change in the Auditor as M/s ABS Associates, Chartered Accountants, signified their inability to continue as auditor. M/s ARSK & Associates, Chartered Accountants was appointed as auditors of the Company with effect from 29.07.2005

Capitalization of Reserves or Profits (during last Five Years) There is no capitalization of reserve / profits during the last five years

Revaluation of Assets, if any (during last five years) There is no revaluation of assets during the last five years

Working Result of the Company for the period from 01.04.2008 to 31.01.2009, as per clause 6.48.1 of SEBI (DIP) Guidelines.

Particulars Amount (Rs. In lakhs)

Sales / Turnover 4508.01Other Income 11.40Estimated Gross Profit before Dep. & Tax 199.76Provision for Depreciation 59.76Provision for Taxes 16.00Estimated Net Profit / Loss 124.00

Note: Based on overall annual estimates for 2008-09 and start of production of new unit, tax estimates has been revised by the management on the basis of Minimum Alternate Tax (MAT) applicability.


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SECTION - VIII. ISSUE INFORMATION

1. TERMS OF THE ISSUE

The Equity Shares, now being offered are subject to the provisions of the Act and terms and conditions of this Letter of Offer, CAF, the Memorandum & Articles of Association of the Company, approvals under the Foreign Direct Investment Scheme of Government of India, FEMA, if applicable, provisions of the Act, guidelines issued by SEBI, guidelines, notifications and regulations for the issue of capital and for listing of securities issued by Government of India and/ or other statutory authorities and bodies from time to time, Listing Agreement entered into by the Company with the Stock Exchange, such terms and conditions as may be incorporated in the Letter of Allotment /Share Certificate or any deed or document executed by the Company regarding the Rights Issue.

Authority for the Issue

The Issue is being made pursuant to the provisions of Section of 81(1) of the Act and resolution passed by the members of the Company at its Extra Ordinary General Meeting held on 11.01.2008.

Basis of the Issue

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the Depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of the Company in respect of Equity Shares held in the physical form at the close of business hours on the Record Date 20.03.2009 fixed in consultation with the Designated Stock Exchange.

The Equity shares are being offered for subscription in the ratio of Four [4] Equity Share for every Five [5] Equity Shares held by the Equity Shareholders.

Ranking of Equity Shares

The Equity Shares shall be subject to the memorandum and articles of association of the Company. The dividend payable on Equity Shares allotted in this issue, until fully paid up shall rank for dividend in proportion to the amount paid up. The Equity shares allotted in this issue, once fully paid shall be pari passu with the existing Equity Shares in all respects including dividend. No member shall be entitled to vote on any question either personally or by proxy or as a proxy for another member at any General Meeting or upon a poll or be reckoned in a quorum whilst any call or other sum shall be due and payable presently to the Company in respect of any of the shares of such member.

Mode of payment of Dividend

The dividend will be paid to all the eligible shareholders in terms of the provisions of the Act and Articles of Association with regard to payment of dividend. The unclaimed dividend will be transferred to Investor Protection Fund as prescribed under the Act.

Face Value

The face value of the Equity Shares of the Company is Rs.10/-.

Issue Price

The equity shares of Rs.10/- each are being issued at a price of Rs. 20/- per share (including premium of Rs. 10/- per equity share) in the present rights issue.

Premium

The Equity Shares of Rs.10/- each are being issued at a premium of Rs. 10/- per share.


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Rights of the Equity Shareholders

Subject to applicable laws, the Equity Shareholders shall have the following rights: • Right to receive dividend, if declared. • Right to attend general meetings and exercise voting powers, unless prohibited by law. • Right to vote on a poll either in person or by proxy • Right to receive offers of rights shares and be allotted bonus shares, if announced • Right to receive surplus on liquidation • Right of free transferability and • Such other rights, as may be available to a shareholder of a listed public company under the Act or

any other applicable law from time to time and Memorandum and Article of Association of the Company.

For a detailed description of the main provisions of the Company’s Articles of Association relating to voting rights, dividend, forfeiture and lien, transfer and transmission and/or consolidation/splitting, see “Main Provisions of the Articles of Association” on Page No. 196 in this Letter of Offer.

Market Lot

The market lot for the Equity shares in dematerialized mode is one. In case of physical certificates, the Company would issue one certificate for the Equity Shares allotted to one folio (Consolidated Certificate)

Nomination facility to the Investors

Nomination facility

In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose.

The sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders (being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity Shares. Person(s), being a nominee, becoming entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same rights to which he would be entitled if he/she were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale/disposal of the Equity Share by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. When two or more persons hold the Equity Share(s), the nominee shall become entitled to receive the shares only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the Registered Office of the Company located at “307 Ashiana Towers, Exhibition Road, Patna – 800 001, Bihar, India” or such other place at such addresses as may be notified by the Company. The applicant can make the nomination by filling in the relevant portion in the CAF.

Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder has already registered the nomination with the Company, no further information needs to be made for the Equity Shares to be allotted in the issue under the same folio.

In case the allotment of equity shares is in dematerialized form, there is no need to make a separate nomination for the Equity Shares to be allotted in the Rights Issue. Nominations registered with respective Depository Participant of the applicant would prevail. If the applicants wish to change the nomination, they are requested to inform their respective Depository Participants.

Minimum Subscription

If the Company does not receive the minimum subscription of 90% of the Rights Issue, the entire subscription shall be refunded to the applicants within fifteen days from the date of closure of the Issue. If there is a delay in the refund of subscription by more than 8 days after the Company becomes liable to repay the subscription amount, (i.e.fifteen days after closure of the Issue), the Company will pay interest for the delayed period, at rates prescribed in sub-section (2) and (2A) of Section 73 of the Act.This Rights Issue will become under


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subscribed after considering the number of Equity Shares applied as per entitlement plus additional Equity Shares.

The Promoters/ promoter group shall subscribe to such under subscribed portion as per the relevant provisions of the law. The undersubscribed portion shall be applied only after the close of the Issue.If any person presently in control of the Company desires to subscribe to such under subscribed portion and if disclosure is made pursuant to SEBI (SAST) Regulations, such allotment of the under subscribed portion will be governed by the provisions of the SEBI (SAST) Regulations. Allotment to the Promoters of any unsubscribed portion, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement.

The above is subject to the terms mentioned under the “Basis of Allotment”.

Arrangements for disposal of Odd Lots

The Equity Shares are being issued in the ratio of Four Equity Share for every Five Equity Shares held as on record date. The market lot is one share. Therefore there is no possibility of odd lot.

Restriction on Transfer and Transmission of Shares

Nothing contained in the Articles of Association of the Company shall prejudice any power of the Company to refuse to register the transfer of share.

No fee shall be charged for sub-division and consolidation of share certificates (physical form), debenture certificates and detachable warrants and for sub-division of letters of allotment and split, consideration, renewal and pucca transfer receipts into denomination corresponding to the market units of trading.

Rights Entitlement

As your name appears in the Register of Members as an Equity Shareholder/Beneficial Owner (as per the list provided by the Depositories) of the Company on the Record Date 20.03.2009 you are entitled to the number of Equity Shares by way of Rights as shown in Part A of the enclosed CAF on the basis mentioned above.

Fractional Entitlement

“For Equity Shares being offered on rights basis under this issue, if the shareholding of any of the Equity Shareholders is less than five or not in the multiples of five, then the fractional entitlement of such holders for Equity Shares shall be rounded up to the next higher integer. The Equity Shares needed for such shares will be adjusted from the Promoters’ entitlement. “

ISSUE PROCEDURE

Principal Terms and Conditions of the Issue

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the Depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of the Company in respect of Equity Shares held in the physical form at the close of business hours on the Record Date 20.03.2009 fixed in consultation with the Designated Stock Exchange.

Entitlement Ratio

The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the Company in the ratio of 4 (Four) Equity Shares for every 5 (Five) Equity Share held as on the Record Date.

Terms of payment

On application, Rs. 10/-, which constitutes 50% of the full amount of the Issue Price of Rs. 20/- shall be payable (“Application Money”), the remaining 50% of the full amount of the Issue Price shall become payable


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at the option of the Company, anytime within 12 months after the Allotment Date as per clause 8.6.2 of the SEBI (DIP) Guildelines, 2000. The payment on application and on call would be applied as under.

Towards Share Capital Towrads Share Premium AccountOn Application Rs. 5.00 per Equity Share Rs. 5.00 per Equity Share On Calls Rs. 5.00 per Equity Share Rs. 5.00 per Equity Share

If the sum payable in respect of any call or installment be not paid on or before the day appointed for the payment thereof, the holder for the time being of the share in respect of which the call shall have been or the installment shall be due, shall pay interest for the same at the rate of 12 per cent per annum, from the day appointed for payment thereof upto the time of the actual payment or at such other rate as the Directors may determine but they shall have power to waive the payment thereof wholly or in part. The Directors may, if they think fit, agree to and receive from any member willing to advance the same whole or any part of the moneys due upon the shares held by him beyond the sums actually called for, and upon the amount so paid or satisfied in advance, or so much thereof as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advance has been made, the Company may pay interest at such rate, as the member paying such sum in advance and the Directors agree upon provided that money paid in advance of calls shall not confer a right to participate in profits or dividends. The Directors may at any time repay the amount so advanced. The members shall not be entitled to any voting rights in respect of moneys so paid by him until the same would but for such payment, become presently payable. If any member fails to pay any call or installments on or before the day appointed for the payment of the same, the Directors may, at any time thereafter, during such time as the call or installment remains unpaid, serve a notice on such member requiring his to pay the same, together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment. If the requisitions of any such notice as aforesaid be not complied with, any shares in respect of which such notice has been given may, at any time thereafter before payment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture. When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in whose name it stood immediately prior to the forfeiture and any entry of the forfeiture with the date thereof, shall forthwith be made in the Register but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make such entry as aforesaid.

Ranking of the Equity Shares

The Equity Shares shall be subject to the memorandum and articles of association of the Company. The dividend payable on Equity Shares allotted in this issue, until fully paid up shall rank for dividend in proportion to the amount paid up. The Equity shares allotted in this issue, once fully paid shall be pari passu with the existing Equity Shares in all respects including dividend. No member shall be entitled to vote on any question either personally or by proxy or as a proxy for another member at any General Meeting or upon a poll or be reckoned in a quorum whilst any call or other sum shall be due and payable presently to the Company in respect of any of the shares of such member.

Procedure for Calls

The schedule set out below for listing and trading of the partly paid and fully paid shares is based on the current regulatory framework applicable thereto. Accordingly, any change in the regulatory regime would accordingly affect the schedule.

Calls

The Company would convene meetings of the Board from time to time to pass the required resolution(s) for making Calls and suitable intimation would be given by the Company to the Stock Exchanges. Further, advertisements for the same will be issued in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper in Patna.


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Record date for Calls and suspension of trading The Company would fix a record date giving atleast 15 days prior notice to the Stock Exchanges for the purpose of determining the list of shareholders to whom the notice for call money (“Call Money Notice”) would be sent.

In addition to the present ISIN for the existing fully paid up Equity Shares, the Company would obtain separate ISIN Nos. for its 50% paid up Equity Shares.

The 50% paid up Equity Shares offered under the Issue will be traded under a separate ISIN No. for the period from the date of listing of these Equity Shares and up to five days prior to the record date of the call. The ISIN No. representing 50% paid up Equity Shares will be terminated after the record date for the call.

On payment of the call in respect of the 50% paid up Equity Shares, such shares on which call has been duly paid would be converted into fully paid up Equity Shares and merged with the existing ISIN for fully paid Equity Shares of the Company.

Listing of partly paid shares

The 50% paid up shares would be listed on the Stock Exchanges. Once, the Call Money Notice for respective calls has been sent, the listing of then existing partly paid up Equity Shares would be terminated.

The Company will make necessary application to Stock Exchanges for listing of partly paid up shares. The 50% paid up shares will be issued in accordance with the Letter of Offer and would be listed for the period as per the following details.

� The allotment of 50% paid up shares will be made within 15 days from the closure of Issue and the same will be listed within 10 days thereafter.

� The fully paid up shares will be listed within approximately 15 days from the last date fixed for payment of call money.

The process of corporate action for crediting 50% paid up and fully paid up shares to the Demat Account may take about two weeks time from the last date of payment of the account under the call money notice. During this period the partly paid up shares would not be tradeable.

Payment period for the call

As per the Article 17 of the Articles of Association of the Company, the shareholders would be given not less than 21 days time for the payment of the call money for each call.

Option available to the Equity Shareholders

The Composite Application Form (CAF) clearly indicates the number of Equity Shares that the Equity Shareholder is entitled to.

The Equity Shareholders will be having the following options:

• Apply for his entitlement in part.• Apply for his entitlement in part or renounce the other part• Apply for his entitlement in full.• Apply for his entitlement in full and also apply for additional Equity Shares.• Renounce his entitlement in full.• Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for

additional Equity Shares.• Applicants to the Equity Shares of the Company issued through the Rights Issue shall have an option

either to receive security certificates or to hold the securities in dematerialized form with a Depository.


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Offer to Non-Resident Equity Shareholders / Applicants

Applications received from NRIs and other NRI shareholders for allotment of Equity Shares shall be, inter alia, subject to the conditions imposed from time to time by RBI under the FEMA in the matter of refund of application moneys, allotment of Equity Shares, issue of Letter of Allotment / share certificates, payment of interest, dividends, etc. General permission has been granted to any person resident outside India to apply shares offered on rights basis by an Indian Company in terms of FEMA and the rules and regulations there under.

The Equity Shares issued under the Rights Issue and purchased by NRI shall be subject to the same conditions including restrictions in regard to the repatriability as are applicable to the previously held Equity Shares against which Equity Shares under the Rights Issue are issued. As per the Provisions of AP DIR Circular No. 14 dated September 16, 2003 (Issued by RBI), such Equity Shareholders who have been allotted equity shares as OCBs, would not be permitted to participate in the issue. Accordingly the Shareholders/ applicants who are OCBs and wishing to participate in the issue would be required to submit the approval in relation thereto from FIPB and RBI.

The Board of Directors may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBI while approving the allotment of Equity Shares, payment of dividend etc. to the Equity Shareholders who are NRI.

How to Apply

Option Available Action Required1. Accept whole or part of your

entitlement without renouncing the balance.

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares to be left blank or Nil to be mentioned (All joint holders must sign)

2. Accept your entitlement in full and apply for additional Equity Shares

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

3. Renounce your entitlement in full to one person (joint renounces are considered as one)

Fill in and sign Part B (All joint holders must sign) indicating the number of shares renounce and hand it over to the renouncee. The Renouncee must fill in and sign Part C (All joint holders [Renouncees] must sign)

4. Accept a part of your entitlement and renounce the balance to one or more renounces or Renounce your entitlement in full offered to you to more than one renouncee

Fill in and sign Part D (all joint holders must sign) requesting for split Application Form. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once. On receipt of the Split Form take action as indicated below. For the Equity Shares you wish to accept, if any, fill in and sign Part A. For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand it over to the authorized person. Each of the renounces should fill in and sign Part C for the Equity Shares accepted by them.

5. Introduce a joint holder or change the sequence of joint holders

This will be treated as a renunciation. Fill in and sign Part B and the renounces must fill in and sign Part C.

Availability of Application Form

Resident Equity Shareholders

Application should be made only on the enclosed CAF provided by the Company. The enclosed CAF should be completed in all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the Lead Manager or by the Registrar to the Issue or by the Company at any offices except in the case of postal applications as per instructions given in the Letter of Offer.


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Non-Resident Equity Shareholders

Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall, interalia, be subject to the conditions as may be imposed from time to time by the Reserve Bank of India, in the matter of Refund of application moneys, allotment of Equity Shares, issue of Letters of Allotment/ certificates/ payment of dividends etc.

The CAF consists of four parts:

Part A: Form for accepting the Equity Shares offered and for applying for additional Equity SharesPart B: Form for renunciation Part C: Form for application for Renouncee Part D: Form for request for Split Application Forms

Availability of Duplicate CAF

In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the Registered Folio Number/ DP and Client ID No. and his / her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not use the original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the applicant violates any of these requirements, he/ she shall face the risk of rejection of both the applications as well as forfeiture of amounts remitted along with the applications.

Procedure for Application through the Application Supported by Blocked Amount (“ASBA”) Process

This section is for the information of Equity Shareholders proposing to subscribe to the Issue through the ASBA Process. The Company and the Lead Manager is not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of this Letter of Offer. Equity Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and ensure that the number of Equity Shares applied for by such Equity Shareholders do not exceed the applicable limits under laws or regulations. Equity Shareholders applying under the ASBA Process are also advised to ensure that the CAF is correctly filled up, stating therein the bank account number maintained with the SCSB in which an amount equivalent to the amount payable on application as stated in the CAF will be blocked by the SCSB.

The list of banks who have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in/pmd/scsb.pdf. For details on designated branches of SCSB collecting the CAF, please refer the above mentioned SEBI link.

Equity Shareholders who are eligible to apply under the ASBA Process

The option of applying for Equity Shares in the Issue through the ASBA Process is only available to Equity Shareholders of the Company on the Record Date and who

• is holding Equity Shares in dematerialised form and has applied towards his/her rights entitlements or additional Securities in the Issue in dematerialised form;

• Has not renounced his entitlements in full or in part; • Has not split the CAF; • Is not making an application on plain paper; • Is not a Renouncee to the Issue; • Who applies through a bank account with one of the SCSBs.

CAF

The Registrar will dispatch the CAF to all Equity Shareholders as per their entitlement on the Record Date for the Issue. Those Equity Shareholders who wish to apply through the ASBA payment mechanism will have to select for this mechanism in part A of the CAF and provide necessary details. Equity Shareholders desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option in part A of the CAF only. Application in electronic mode will only be available with such SCSB who provides such facility. The method of applying under ASBA process will not be available for Investors applying on plain paper. The Equity Shareholder shall submit the CAF to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB.


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Acceptance of the Issue

You may accept the Issue and apply for the equity shares offered, either in full or in part, by filling part A of the respective CAFs sent by the Registrar, selecting the ASBA process option in part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of the Company in this regard.

Mode of payment

The Equity Shareholder applying under the ASBA process agrees to block the entire amount payable on application (including for additional Equity, if any) with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB.

After verifying that sufficient funds are available in the bank account provided in the CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF until it receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount as per Registrar’s instruction allocable to the Equity Shareholders applying under the ASBA process from bank account with the SCSB mentioned by the Equity Shareholder in the CAF. This amount will be transferred in terms of the SEBI Guidelines, into the separate bank account maintained by the Company as per the provisions of section 73(3) of the Companies Act, 1956. The balance amount remaining after the finalisation of the basis of allotment shall be either unblocked by the SCSBs or refunded to the investors by the Registrar on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Managers to the respective SCSB.

The Equity Shareholders applying under the ASBA process would be required to block the entire amount payable on their application at the time of the submission of the CAF.

The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of which have been provided by the Equity Shareholder in the CAF does not have sufficient funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, the Company would have a right to reject the application only on technical grounds. Options available to the Equity Shareholders applying under the ASBA Process

The summary of options available to the Equity Shareholders is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the respective CAFs received from Registrar:

Option Available Action Required1. Accept whole or part of your entitlement

without renouncing the balance. 2. Accept your entitlement in full and apply for

additional Equity Shares.

Fill in and sign part A of the CAF (All joint holders must sign)

Fill in and sign part A of the CAF including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

The Equity Shareholder applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required necessary details. However, in cases where this option is not selected, but the CAF is tendered to the SCSB with the relevant details required under the ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as if the Equity Shareholder has selected to apply through the ASBA process option.

Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity (as the case may be) that you are entitled too, provided that (i) you have applied for all the Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under “Basis of Allotment” on page 192 of this Letter of Offer. If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional Securities in Part A of the CAF.

Renunciation under the ASBA Process

Renouncees cannot participate in the ASBA Process.

Application on Plain Paper


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Applications on plain paper cannot be made by Equity Shareholders availing of the ASBA Process.

Last date of Application

The last date for submission of the duly filled in CAF is 28.04.2009. The Issue will be kept open for a minimum of 15 (fifteen) days and the Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue Opening Date.

If the CAF together with the amount payable is not received by the Banker to the Issue/Registrar to the Issue or if the CAF is not received by the SCSB on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/Committee of Directors, the offer contained in this Letter of Offer shall be deemed to have been declined and the Board/Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under “Basis of Allotment”.

Option to receive Securities in Dematerialized Form

EQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE BEING HELD ON RECORD DATE.

General instructions for Equity Shareholders applying under the ASBA Process

(a) Please read the instructions printed on the respective CAF carefully.

(b) Application should be made on the printed CAF only and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/or which are not completed in conformity with the terms of this Letter of Offer are liable to be rejected. The CAF must be filled in English.

(c) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose bank account details are provided in the CAF and not to the Bankers to the Issue/Collecting Banks (assuming that such Collecting Bank is not a SCSB), to the Company or Registrar or Lead Manager to the Issue.

(d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAFs without PAN will be considered incomplete and are liable to be rejected.

(e) All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cash payment is not acceptable. In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon.

(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with the Company/or Depositories.

(g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with the Company. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(h) All communication in connection with application for the Securities, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first/sole applicant Equity Shareholder, folio numbers and CAF number.

(i) Only the person or persons to whom Securities have been offered and not renouncee(s) shall be eligible to participate under the ASBA process.

Do’s: a. Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in. b. Ensure that you submit your application in physical mode only. Electronic mode is only available with certain

SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to you. c. Ensure that the details about your Depository Participant and beneficiary account are correct and the beneficiary

account is activated as Equity Shares will be allotted in the dematerialized form only. d. Ensure that the CAFs are submitted at the SCSBs whose details of bank account have been provided in the

CAF.


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e. Ensure that you have mentioned the correct bank account number in the CAF. f. Ensure that there are sufficient funds (equal to {number of Equity Shares applied for} X {Issue Price of Equity

Shares}) available in the bank account maintained with the SCSB mentioned in the CAF before submitting the CAF to the respective Designated Branch of the SCSB.

g. Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on application mentioned in the CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same.

h. Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form. i. Each applicant should mention their Permanent Account Number (“PAN”) allotted under the I. T.Act. j. Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is

held with the Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the CAF.

k. Ensure that the Demographic Details are updated, true and correct, in all respects.

Don’ts: 1) Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB. 2) Do not pay the amount payable on application in cash, by money order or by postal order. 3) Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting Banks (assuming that such

Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of the SCSB only.

4) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground. 5) Do not instruct your respective banks to release the funds blocked under the ASBA Process.

Grounds for Technical Rejection under the ASBA Process:

In addition to the grounds listed under “Grounds for Technical Rejection” on page 190 of this Letter of Offer, applications under the ABSA Process are liable to be rejected on the following grounds:

a) Application on plain paper or on split form. b) Application for entitlements or additional shares in physical form. c) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with the

Registrar. d) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank is not a

SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company. e) Renouncee applying under the ASBA Process. f) Insufficient funds are available with the SCSB for blocking the amount. g) Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen pursuant

to regulatory orders. h) Account holder not signing the CAF or declaration mentioned therein.

Depository account and bank details for Equity Shareholders applying under the ASBA Process

IT IS MANDATORY FOR ALL THE EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF.

Equity Shareholders applying under the ASBA Process should note that on the basis of name of these Equity Shareholders, Depository Participant’s name and identification number and beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the Depository demographic details of these Equity Shareholders such as address, bank account details for printing on refund orders and occupation (“Demographic Details”). Hence, Shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF.

These Demographic Details would be used for all correspondence with such Equity Shareholders including mailing of the letters intimating unblock of bank account of the respective Equity Shareholder. The Demographic Details given by Equity Shareholders in the CAF would not be used for any other purposes by the Registrar. Hence, Equity Shareholders are advised to update their Demographic Details as provided to their Depository Participants.


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By signing the CAFs, the Equity Shareholders applying under the ASBA Process would be deemed to have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records.

Letters intimating allotment and unblocking or refund (if any) would be mailed at the address of the Equity Shareholder applying under the ASBA Process as per the Demographic Details received from the Depositories. Refunds, if any, will be made directly to the bank account in the SCSB and which details are provided in the CAF and not the bank account linked to the DP ID. Equity Shareholders applying under the ASBA Process may note that delivery of letters intimating unblocking of bank account may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the Equity Shareholder in the CAF would be used only to ensure dispatch of letters intimating unblocking of bank account.

Note that any such delay shall be at the sole risk of the Equity Shareholders applying under the ASBA Process and none of the Company, the SCSBs or the Lead Managers shall be liable to compensate the Equity Shareholder applying under the ASBA Process for any losses caused to such Equity Shareholder due to any such delay or liable to pay any interest for such delay.

In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Equity Shareholders (including the order of names of joint holders), the DP ID and the beneficiary account number, then such applications are liable to be rejected.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the uplicate CAF may make an application to subscribe to the Rights Issue on plain paper, along with an Account Payee Cheque drawn on a local bank at Kolkata / Demand Draft payable at Kolkata (net of demand draft charges and postal charges) which should be drawn in favour of the Company and send the same by registered post directly to the Registrar to the Issue. The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Date of Closure of the Issue and should contain the following particulars:

• Name of Issuer • Name and address of the Equity Shareholder including joint holders • Registered Folio Number/ DP and Client ID No. • Number of Equity Shares held as on Record Date • Number of Rights Equity Shares entitled • Number of Rights Equity Shares applied for • Number of additional Equity Shares applied for, if any • Total number of Equity Shares applied for • Total amount paid per Equity Share • Particulars of Cheque/ Draft • Savings/Current Account Number and name and address of the bank where the Equity Shareholder

will be depositing the refund order PAN/GIR number and Income Tax Circle/Ward/District where the application is for Equity Shares and for each applicant in case of joint names, and

• Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company.

Please note that those who are making the application otherwise than on original CAF shall not be entitled to renounce their Rights and should not utilize the original CAF for any purpose including renunciation even if it is received subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications.

Mode of Payment

Payments in such cases, should be through a cheque/ demand draft payable at Kolkata to be drawn in favour of the Bankers to the Issue marked “A/c Payee” and marked “GISCO - Rights Issue” Acceptance of the Rights Issue


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You may accept the Offer and apply for Equity Shares offered, either in full or in part by filling Block III of Part “A” of the enclosed CAF and submit the same along with the application money payable to the “Bankers to the Issue” or any of the branches as mentioned on the reverse of the CAF before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board thereof in this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the cheque drawn on a local bank at Kolkata /demand draft payable at Kolkata (net of demand draft charges and postal charges) to the Registrar to the Issue at S.K.Computers, 34/1A Sudhir Chatterjee Street, Kolkata - 700006, by registered post.

Renunciation

As an Equity Shareholder, you have the right to renounce your entitlement for the Equity Shares in full or in part in favour of one or more person(s). Your attention is drawn to the fact that the Company shall not allot and/or register any Equity Shares in favour of:

• More than three persons including joint holders • Partnership firm(s) or their nominee(s) • Minors • Hindu Undivided Family • Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any

other applicable Trust laws and is authorized under its Constitutions to hold Equity Shares of a Company)

The right of renunciation is subject to the express condition that the Board/ Committee of Directors shall be entitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason thereof.

Any renunciation from Resident Indian Shareholder(s) to Non–Resident Indian or from Non-Resident Indian Shareholder(s) to other Non-Resident Indians(s) is subject to Prevailing RBI Guidelines.

By virtue of circular No 14 dated September 16,2003 issued by RBI, Overseas Corporate Bodies (‘OCBs”) have been derecognized as an eligible class of investors and RBI has subsequently issued the Foreign Exchange Management (withdrawal of General Permission to Overseas Corporate Bodies (OCB) Regulation, 2003. Accordingly the existing Shareholders of the company who do not wish to subscribe to the equity shares being offered but wish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCBs.

Procedure for Renunciation

To renounce the whole offer in favour of one renouncee

If you wish to renounce the offer indicated in Part A in whole, please complete Part B of the CAF. In case of joint holding, all joint holders must sign Part B of the CAF. The person in whose favour renunciation has been made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees, must sign this part of the CAF.

To renounce in part/or renounce the whole to more than one person(s)

If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more renouncees, the CAF must be first split into requisite number of forms.

Please indicate your requirement of split forms in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests for split forms. On receipt of the required number of split forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed.

In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with the specimen registered with the Company, the application is liable to be rejected.


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Renouncee(s)

The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the Application Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date along with the application money.

Change and /or introduction of additional holders

If you wish to apply for Equity Shares jointly with any other person or persons, not more than three, who is/are not already joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed.

However, this right of renunciation is subject to the express condition that the Board of Directors of the Company shall be entitled in its absolute discretion to reject the request for allotment from the renouncee(s) without assigning any reason thereof.

Please note that

a. Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid.

b. Only the person to whom this Letter of offer has been addressed to and not the renouncee(s) shall be entitled to renounce and to apply for Split Application Forms. Forms once split cannot be split again.

c. Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to, provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made in the manner prescribed in the Letter of Offer under the section “Basis of Allotment”. The authorized person applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares.

In case of application for additional Equity Shares by non-resident Equity Shareholders, the allotment of additional securities will be subject to the permission of the Reserve Bank of India.

Where the number of additional Equity Shares applied for exceeds the number available for allotment, the allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.

The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF:

Option Available Action Required1 Accept whole or part of your entitled without

renouncing the balance. Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares to be left blank or Nil to be mentioned (All joint holders must sign)

2 Accept your entitlement in full and apply for additional equity shares

Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

3 Renounce your entitlement in full to one person (joint renouncees are consider as one)

Fill in and sign Part B (All joint holders must sign) indicating the number of shares renounced and hand it over to the renouncee. The renouncees must fill in and sign Part C (All joint holders [renounces] must sign)

4 Accept a part of your entitlement and renounce the balance to one or more

Fill in and sign Part D (all joint holders must sign) requesting for split Application Form. Send the


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renouncees or renounce your entitlement of all the equity shares offered to you to more than one renouncee

CAF to the Registrar to the issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once. On receipt of the Split Form take action as indicated below. For the Equity Shares you wish to accept, if any, fill in and sign Part B indicating the number of Equity Shares renounced and hand it over to the renouncee. Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them.

5 Introduce a joint holder or change the sequence of joint holders

This will be treated as a renunciation. Fill in and sign Part B and the renouncees must fill in and sign Part C.

Last Date of Application

The last date for submission of CAF is 28.04.2009. The Board / Committee of Directors will have the right to extend the said date for such period as it may determine from time to time but not exceeding thirty days from the date of issue opens. If the CAF together with the amount payable is not received by the Bankers to the Issue/ Registrar on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/ Committee of Directors, the offer contained in this Letter of offer shall be deemed to have been declined and the Board/ Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under the heading “Basis of Allotment”.

Equity Shares in Dematerialised Form

Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the securities in authorized (electronic) form at the option of the applicant. The Company and S. K. Computers, the Registrar to the Company, have signed a tripartite agreement with CDSL on 29th May 2002 and with NSDL on 7th May 2002, which enables the investors to hold and trade in securities in dematerialized form, instead of holding the securities in the form of physical certificates.

In this Rights Issue, the allottees who have opted for Equity Shares in Dematerialized form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a Depository Participant.

Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No separate applications for securities in physical and dematerialized form should be made. If such applications are made, the application for physical securities will be treated as multiple applications and is liable to be rejected. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares.

Procedure for availing this facility for allotment of Equity Shares in this issue in the electronic form is as under.

1. Open a Beneficiary Account with any Depository Participant (care should be taken that the Beneficiary Account should carry the name of the holder in the same manner as is exhibited in the records of the Company. In case of joint holding, the Beneficiary Account should be opened carrying the names of the holders in the same order as with the Company). In case of Investors having various folios in the Company with different joint holders, the investors will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such Beneficiary Account (s) need not adhere to this step.

2. For Equity Shareholders already holding Equity Shares of the Company in Dematerialized form as on Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Rights Equity Shares by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of securities arising out of this Issue may be made in dematerialized form even if the original equity shares of the Company are not dematerialized. Nonetheless, it should be ensured that the Depository Account is in the name(s) of the Equity Shareholders and the names are in the same order as in the records of the Company.


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3. Responsibility for correctness of applicant’s age and other details given in the CAF vis a vis those with the applicant’s Depository Participant would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be same as registered with the applicant’s Depository Participant.

4. If incomplete / incorrect Beneficiary Account details are given in the CAF the applicant will get Equity Shares in physical form.

5. The Rights Equity Shares allotted to investors opting for Dematerialized form, would be credited to the Beneficiary Account as given in the CAF after verification. Allotment advice, Refund Order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s Depository Participant will provide to him the confirmation of the credit of the Rights Equity Shares to the applicant’s Depository Account.

6. Renouncees will also have to provide the necessary details about their Beneficiary Account for allotment of securities in this Issue. In case these details are incomplete or incorrect, the allotment of shares will be made in physical form.

Utilisation of Proceeds

Subscription received against this Issue will be kept in a separate bank account(s) and the Company would not have access to such funds unless it has received minimum subscription of 90%, of the Issue and the necessary approvals of the Designated Stock Exchange, to use the amount of subscription.

General instructions for applicants Do’s & Don’t’s

(a) Please read the instructions printed on the enclosed CAF carefully.

(b) Application should be made on the printed CAF, provided by the Company and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of this Letter of offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest within stipulated time period and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the applicants, details of occupation, address, contact no., father’s / husband’s name must be filled in block letters.

(c) The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting Bank or to the Registrar and not to the Company or Lead Managers to the Issue. Applicants residing at places other than cities where the branches of the Bankers to the Issue have been authorized by the Company for collecting applications, will have to make payment by Demand Draft payable at Kolkata (net of demand draft charges and postal charges) and send their application forms to the Registrar to the Issue by REGISTERED POST. If any portion of the CAF is / are detached or separated, such application is liable to be rejected.

(d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAFs without PAN will be considered incomplete and are liable to be rejected.

(e) Applicants are advised to provide information as to their savings/current account number and the name of the Bank with whom such account is held in the CAF to enable the Registrar to print the said details in the Refund Orders, if any, after the names of the payees. Application not containing such details is liable to be rejected.

(f) The payment against the application should not be effected in cash if the amount to be paid is Rs. 20,000/- or more. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded within the stipulated time period and no interest will be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.


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(g) Signatures should be either in English or Hindi or in any other language specified in the 8th Schedule of the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with the Company.

(h) In case of an application under Power of Attorney or by a body corporate or by a society, a certified true copy of the relevant Power of Attorney or relevant resolution or authority to make investment and sign the application along with a copy of the Memorandum & Articles of Association and / or bye laws must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closure Date, then the application is liable to be rejected.

(i) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with the Company. Further, in case of joint applicants who are renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(j) Application(s) received from Non-Residents / NRIs, or persons of Indian origin residing abroad for allotment of Equity Shares shall, interalia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of Equity Share certificates, etc. In case a Non-Resident or NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

(k) All communication in connection with application for the Equity Shares, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to the Registrar and Transfer Agents of the Company (i.e. S. K. Computers) in the case of equity shares held in physical form and to the respective DP, in case of equity shares held in Dematerialized form.

(l) Split forms cannot be re-split.

(m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled to obtain split forms.

(n) Applicants must write their CAF number at the back of the cheque / demand draft.

(o) Only one mode of payment per application should be used. The payment must be either in cash or by cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing House located at the Centre indicated on the reverse of the CAF where the application is to be submitted.

(p) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated cheques and postal / money orders will not be accepted and applications accompanied by such cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash. (For payment against application in cash please refer point (f) above)

(q) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar will acknowledge receipt of the same by stamping and returning the acknowledgement slip at the bottom of the CAF.

(r) An applicant, which is a mutual fund can make a separate application in respect of each scheme of the fund and such applications shall not be treated as multiple applications. The application made by the


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asset management company or custodians of a mutual fund shall clearly indicate the name of the concerned scheme for which application is being made.

Grounds for Technical Rejection

Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:

1) Amount paid does not tally with the amount payable for;2) Bank account details (for refund) are not given;3) Age of first applicant not given;4) Permanent Account Number not mentioned;5) In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant

documents are not submitted;6) If the signature of the existing shareholder does not match with the one given on the application form

and for Renouncees, if the signature does not match with the records available with their Depositories;7) If the Applicant desires to have shares in electronic form, but the application form does not have the

applicant’s Depository account details;8) Application forms are not submitted by the applicants within the time prescribed as per the application

form and the Letter of Offer;9) Applications not duly signed by the sole/joint Applicants;10) Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to

invest in the issue;11) Applications accompanied by Stock invest;12) In case no corresponding record is available with the Depositories that matches three parameters,

namely, names of the applicants (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and the beneficiary’s identity;

13) FIIS applying on forms used for accepting shares renounced in their favour or applications for additional shares, without the copy of RBI permission / approval enclosed will be rejected;

14) Applications by ineligible Non-residents (including on account of restriction or prohibition under applicable local laws) and where last available address in India has not been provided.

Payment Instructions

Resident Shareholders

All cheques / drafts accompanying the CAF should be drawn in favour of the Collecting Bank (specified on the reverse of the CAF), crossed “A/c Payee only” and marked “GISCO - Rights Issue”. Applicants residing at places other than places where the bank collection centers have been opened by the Company for collecting applications, are requested to send their applications together with Demand Draft for the full application amount (Net of demand draft and postal charges) favouring the Bankers to the Issue, crossed “A/c Payee only” and marked “GISCO - Rights Issue” payable at Kolkata directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. The Company or the Registrar will not be responsible for postal delays or loss of applications in transit, if any.

Non-Resident Equity Shareholders / Applicants

As regards the application by non-resident Equity Shareholders, the following further conditions shall apply:

Payment by Non-Residents must be made by demand draft / cheque drawn in favour of the Banker to the Issue and marked “GISCO - Rights Issue – NR” payable at Kolkata (net of demand draft charges and postal charges) or funds remitted from abroad in any of the following ways:

1. Application with repatriation benefits.

a) By Indian Rupee drafts purchased from abroad and payable at Kolkata or funds remitted from abroad (submitted along with Foreign Inward Remittance Certificate); or

b) By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Kolkata; or


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c) By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable at Kolkata; or

d) FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.

2. Application without repatriation benefits

As far as non-residents holding shares on non-repatriation basis is concerned, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Kolkata or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Kolkata. In such cases,the allotment of Equity Shares will be on non-repatriation basis.

All cheques/drafts submitted by non-residents should be drawn in favour of the Bankers to the Issue and marked “GISCO - Rights Issue – NR” payable at Kolkata and must be crossed “A/c Payee only” for the amount payable. The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

Applicants may note that where payment is made by drafts purchased from NRE/ FCNR/ NRO accounts as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise the application shall be considered incomplete and is liable to be rejected.

Note: • In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the

investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to IT Act.

• In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Shares cannot be remitted outside India.

• The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on the aforesaid Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

• In case application received from Non-Residents, allotment, refunds and other distribution, if any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals.

Disposal of application and application money

No acknowledgment will be issued for the application moneys received by the Company. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF.

In case an application is rejected in full, the whole of the application money received will be refunded within six weeks from the close of the Issue. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the applicant within six weeks from the close of the Issue.

Fictitious Applications Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Companies Act, 1956 which is reproduced below: “Any person who:

a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or


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b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.”

Basis of Allotment

1) Subject to provisions contained in this Letter of Offer, the Articles of Association and approval of the Designated Stock Exchange, the Board will proceed to allot the Equity Shares in the following order of priority

(a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in part and also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or in part.

(b) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as rights and have also applied for additional Equity Shares. The allotment of such additional Equity Shares will be made as far as possible on an equitable basis having due regard to the number of Equity Shares held by them on the Record Date, provided there is an under-subscribed portion after making full allotment in (a) above. The allotment of such Equity Shares will be at the sole discretion of the Board/Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Rights Issue and not preferential allotment.

(c) Allotment to the renouncee who having applied for the Equity Shares renounced in their favour has also applied for additional Equity Shares provided there is an under-subscribed portion after making full allotment in (a) and (b) above. The allotment of such additional Equity Shares will be made on a proportionate basis at the sole discretion of the Board/ Committee of Directors but in consultation with the Designated Stock Exchange, as a part of the Rights Issue and not as a preferential allotment.

(d) The Issue will become under-subscribed after considering the number of Equity Shares applied as per entitlement plus additional Equity Shares. The Promoters and the Promoter group shall subscribe to such under-subscribed portion as per the relevant provisions of the law to ensure that the Issue is successful. If any person presently in control of the Company desires to subscribe to such under subscribed portion and if disclosure is made pursuant to SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, such allotment of the under subscribed portion will be governed by the provisions of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations,1997.

(e) After taking into account the allotments made under 1(a), 1(b) and 1(c) above, if there is still any under-subscription, the unsubscribed portion shall be disposed off by the Board or Committee of Directors authorized in this behalf by the Board upon such terms and conditions and to such person/persons and in such manner as the Board / Committee of Directors may in its absolute discretion deem fit, as part of the Rights Issue and not as a preferential allotment. The decision of the Board or committee of Directors of the Company in this regard shall be final and binding. In the event of over subscription, allotment will be made within the overall size of the issue. Allotment to the Promoters of any unsubscribed portion, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement and other applicable laws prevailing at that time.

Allotment / Refund

The Company shall give credit to the beneficiary account with Depository Participants within two working days from the date of the allotment of Equity Shares. Applicants having bank accounts at any of the 15 centres where clearing houses are managed by the Reserve Bank of India (RBI) will get refunds through Electronic Credit Service (ECS) only, except where applicant is otherwise disclosed as eligible to get refunds through direct credit or Real Time Gross Settlement (RTGS). In case of other applicants, the Company shall ensure despatch of refund orders, if any, of value up to Rs. 1,500 “Under Certificate of Posting”, and shall dispatch refund orders of Rs. 1,500 and above, if any, by registered post or speed post. Applicants to whom refunds are made through Electronic transfer of funds will be sent a letter (refund advice) “Under Certificate of Posting” intimating them about the mode of credit of refund within fifteen days weeks from the date of closure of Issue.


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The Company shall ensure dispatch of refund orders/refund advice, if any, “Under Certificate of Posting” or registered post or speed post or Electronic Clearing Service or Direct Credit or RTGS, as applicable, only at the sole or First shareholder’s name and all communication will be addressed to the person whose name appears on CAF within 15 days of the Issue Closing Date, and adequate funds for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be made available to the Registrar by the Issuer.

Shareholders should note that on the basis of name of the shareholders, Depository Participant’s name, Depository Participant- Identification (DP ID) number and Beneficiary Account Number provided by them in the Composite Application form, the Registrar to the Issue will obtain from the Depository, the Bidders bank account details including the nine digit Magnetic Ink Character Recognition (MICR) code as appearing on a cheque leaf. Hence, Shareholders are advised to immediately update their bank account details as appearing on the records of the depository participant. Please note that failure to do so could result in delays in credit of refunds to shareholders at the shareholders sole risk and neither the Lead Manager nor the Company nor the Refund Banker nor the Registrar shall have any responsibility and undertake any liability for the same.

In accordance with the requirements of the Stock Exchanges and SEBI Guidelines, the Company undertakes that:

Dispatch of refund orders/ refund advice shall be done within 15 days from the Issue Closing Date; and the company shall pay interest at the rate of 15% per annum (for any delay beyond the 15-days time period as mentioned above), if allotment is not made, refund orders/credit intimation are not dispatched and in case where a refund is made through electronic mode, the refund instructions have not been given to the clearing system, and demat credit within the 15-days time prescribed above, provided that the beneficiary particulars relating to such shareholder as given by the shareholder is valid at the time of the upload of the electronic transfer. The Company will provide adequate funds required for the cost of dispatch of refund orders/ refund advice/ allotment advice to the Registrar to the Issue. Save and except refunds effected through the electronic mode i.e. ECS, direct credit or RTGS, refunds will be made by cheques, pay orders or demand drafts drawn on the Refund Bank and payable at par at places where applications are received. The bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the shareholders.

Payment of Refund

In case of shareholder applying for physical shares, refunds will be made on the basis of the bank account details provided by them in the Composite Application Form.

Mode of Making Refunds

The payment of refund, if any, would be done through various modes in the following order of preference

(i) ECS - Payment of refund would be done through ECS for applicants having an account at any of the 15 centers where clearing houses for ECS are managed by Reserve Bank of India. This mode of payment of refunds would be subject to availability of complete bank acccount details including the nine digits Magnetic Ink Character Recognition (MICR) code as appearing on a cheque leaf, from the depository. The payment of refund through ECS is mandatory for applicants having a bank account at any of the 15 centers referred above, except where applicant is otherwise disclosed as eligible to get refunds through direct credit or RTGS

(ii) Direct Credit – Applicants having their bank account with the Refund Banker, i.e. HDFC Bank Limited shall be eligible to receive refunds, if any, through direct credit. The refund amount, if any, would be credited directly to the eligible applicant’s bank account with the Refund Banker.

(iii) RTGS – Applicants having a bank account at any of the 15 centers referred above, and whose application amount exceeds Rs, 1 lakh, shall be eligible to exercise the option to receive refunds, if any, through RTGS. All applicants eligible to exercise this option shall mandatorily provide the IFSC code in the Composite Application Form. In the event of failure to provide the IFSC code in the Composite Application Form, the refund shall be made through the ECS or direct credit, if eligibility disclosed.

Please note that only applicants having a bank account at any of the 15 centres where clearing houses for ECS are managed by the RBI are eligible to receive refunds through the modes detailed in I, II and III hereinabove. For all the other applicants, including applicants who have not updated their bank particulars


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alongwith the nine digit MICR Code, the refund orders would be dispatched “Under Certificate of Posting” for refund orders of value up to Rs. 1,500 and through Speed Post/Registered Post for refund orders of Rs. 1,500 and above.

LETTERS OF ALLOTMENT / SHARE CERTIFICATES

In case the Company issues Letters of Allotment, the corresponding Security Certificates will be kept ready within three months from the date of allotment thereof or such extended time as may be approved by the Company Law Board under Section 113 of the Companies Act, 1956 or other applicable provisions, if any. Allottees are requested to preserve such Letters of Allotment, which would be exchanged later for the Security Certificates.

As regards allotment/ refund to Non-Residents, the following further conditions shall apply.

In case of Non-Residents, who remit their application monies from funds held in NRE/ FCNR accounts, refunds and/ or payment of interest/ dividend and other disbursement, if any, shall be credited to such accounts, details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of nonresidents, who remit their application monies through Indian Rupee draft purchased from abroad, refund and/ or payment of dividend/ interest and any other disbursement, shall be credited to such accounts (details of which should be furnished in the CAF) and will be made net of bank charges/ commission in US Dollars, at the rate of exchange prevailing at such time. The Company will not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupee amount into US Dollars. The Equity Share certificate(s) will be sent by registered post at the Indian address of the non-resident applicant.

Letters of Allotment / Equity Share Certificates

Letter(s) of Allotment/ Equity Share certificates or Letters of Regret along with refund order will be dispatched to the registered address of the first named applicant or respective beneficiary accounts will be credited within six weeks, from the date of closure of the subscription list. In case the Company issues Letters of Allotment, the relative Equity Share certificates will be dispatched within three months from the date of allotment. Allottees are requested to preserve such Letters of allotment (ifany) to be exchanged later for Equity Share certificates.

Export of Letters of Allotment (if any)/ Equity Share certificates to non-resident allottees will be subject to the approval of RBI.

Undertakings by the Company The Company undertakes as follows:

a. That the complaints received in respect of this issue shall be attended to expeditiously and satisfactorily; b. That all steps will be taken for the completion of the necessary formalities for listing and commencement

of trading at all the stock exchanges where the Equity Shares are proposed to be listed within seven working days of finalisation of the basis of allotment;

c. That the funds required for dispatch of refund orders or allotment advice or Share certificates by registered post or speed post shall be made available to the Registrar to the issue;

d. Where refunds are made through electronic transfer of funds, suitable communication shall be sent to the applicant within 15 days of closure of the issue giving details of the bank where refunds shall be credited along with the amount and expected date of electronic credit of refund that funds required for dispatch of refund orders/allotment letters/certificates by registered post shall be made available to the Registrar to the Issue by the Issuer Company.

e. That the refund orders or allotment advice to the NRIs or FIIs shall be dispatched within the specified time; and

f. That no further issue of Equity Shares shall be made till the Equity shares issued through this Letter of offer are listed or until the application monies are refunded on account of non-listing, under-subscription etc.


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Utilisation of Issue Proceeds

The Board of Directors of the Company certify that:

i. All monies received out of the fresh issue shall be transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Act.

ii. Details of all monies utilised out of fresh issue referred to above shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the purpose for which such monies have been utilised; and

iii. Details of all unutilised monies out of the fresh issue, if any, shall be disclosed under the appropriate separate head in the balance sheet of the Company indicating the form in which such unutilised monies have been invested.

The funds received against this Issue will be kept in a separate bank account and the Company will not have any access to such funds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that the minimum subscription of 90% of the Issue has been received by the Company.

Pending utilisation of net proceeds of the fresh issue as specified under the section “Objects of the Issue”, the net proceeds will be invested by the Company in high quality interest bearing liquid instruments including but not limited to deposits with banks for the necessary duration.

Restrictions on Foreign Ownership of Indian Securities

Foreign investment in Indian securities is regulated through the industrial policy of Govt. of India or the Industrial Policy and FEMA. While the Industrial Policy prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy, unless specifically restricted, foreign investment is freely permitted in all sectors of Indian economy to any extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures for making such investment. The government bodies responsible for granting foreign investment approvals are the Foreign Investment Promotion Board of the Govt. of India (FIPB) and the RBI.

The existing non-resident shareholders may apply for issue of additional shares and the company may allot the same subject to the condition that the overall issue of shares to non-residents in the total paid up capital does not exceed the sectoral cap. In other words, non-residents may subscribe for additional shares over and above shares offered on rights basis by the company and renounce the shares offered in full or part thereof in favour of a person named by them.

By way of Circular No. 53 dated December 17, 2003, the RBI has permitted FIIs to subscribe to shares of an Indian company in a public issue without prior RBI approval, so long as the price of Equity shares to be issued is not less than the price at which Equity shares are issued to residents.

The transfer of Equity shares of NRIs, FIIs, Foreign Venture Capital Investors registered with SEBI and Multilateral and Bilateral Development Financial institutions shall be subject to the conditions as may be prescribed by the Government of India or RBI while granting such approvals.


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SECTION - IX. MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

3 Subject to the provisions of these Articles, and of section 80 of the Act, the Company shall, have power to issue Preference Shares, which are liable to be redeemed on such terms and in such manner as the Company may determine.

4 Subject to the provisions of Section 81 of the Act and these Articles, the shares in the capital of the Company for the time being shall be under the control of the Directors who may issue, allot or otherwise dispose of the same or any of them to such persons, in such proportion and on such terms and conditions and either at a premium or at par or (subject to the compliance with the provision of section 79 of the Act) at a discount and at such time as they may from time to time think fit and with the sanction of the Company in the General Meeting to give to any person or persons the option or right to call for any shares either at par or premium during such time and for such consideration as the Directors think fit, and may issue and allot shares in the capital of the Company on payment in full or part of any property sold and transferred or for any services rendered to the Company in the conduct of its business and any shares which may so be allotted may be issued as fully paid up shares and if so issued, shall be deemed to be fully paid shares. Provided that option or right to call of shares shall not be given to any person or persons without the sanction of the Company in the General Meeting.

5 i Where at the time after the expiry of two years from the formation of the Company or at any time after the expiry of one year from the allotment of shares in the Company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the Company by allotment of further shares whether out of the in issued capital or out of the increased share capital then:

(a) Such further shares shall be offered to the persons who at the date of the offer, are holders of the equity shares of the Company, in proportion, as near as circumstances admit, to the capital paid up on those shares at the date.

(b) Such offer shall be made by a notice specifying the number of shares offered and limiting a time not less than thirty days from the date of the offer and the offer if not accepted, will be deemed to have been declined.

(c) The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to them in favour of any other person and the notice reffered to in sub clause (b) hereof shall contain a statement of this right. PROVIDED THAT the Directors may decline, without assigning any reason to allot any shares to any person in whose favour any member may renounce the shares offered to him.

(d) After expiry of the time specified in the aforesaid notice or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose off them in such manner and to such person(s) as they may think, in their sole discretion, fit.

ii Notwithstanding anything contained in sub-clause (1) thereof, the further shares aforesaid may be offered to any persons (whether or not those persons include the persons referred to in clause (a) of sub-clause (1) hereof) in any manner whatsoever.

(a) If a special resolution to that effect is passed by the company in General Meeting, or (b) Where no such special resolution is passed, if the votes cast (whether on a show of hands or on

a poll as the case may be) in favour of the proposal contained in the resolution moved in the general meeting (including the casting vote, if any, of the Chairman) by the members who, being entitled to do so, vote in person, or where proxies are allowed, by proxy, exceeds the votes, if any, cast against the proposal by members, so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf, that the proposal is most beneficial to the Company.

iii Nothing in sub-clause (c) of (1) hereof shall be deemed: (a) To extend the time within which the offer should be accepted; or (b) To authorize any person to exercise the right of renunciation for a second time on the ground that

the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.

iv Nothing in this Article shall apply to the increase of the subscribed capital of the company caused by the exercise of an option attached to the debenture issued or loans raised by the Company:

(i) To convert such debentures or loans into shares in the Company; or(ii) To subscribe for shares in the Company (whether such option is conferred in these Articles or

otherwise). Provided that the terms of issue of such debentures or the terms of such loans include a term providing for such option and such term:


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(a) Either has been approved by the Central Government before the issue of the debentures or the raising of the loans or is in conformity with the Rules, if any, made by the Government in this behalf.

(b) In the case of debentures or loans or other than debentures issued to or loans obtained from Government or any institution specified by the Central Government in this behalf, has been approved by a special resolution passed by the Company in General Meeting before the issue of the debentures or raising of the loans.

6 Subject to the provisions of the Act it shall be lawful for the Company to issue at a discount shares of a class already issued.

7 The Company may, subject to compliance with the provisions of Section 76 of the Act, exercise the power of paying commission on the issue of shares and debentures. The commission may be paid or satisfied in cash or in shares, debentures, debentures-stocks of the Company.

8 The Company may pay a reasonable sum for brokerage. 9 Save as herein otherwise provided, the Company shall be entitled to treat the registered holder for any

shares as the absolute owner thereof and accordingly shall not except as ordered by a Court of competent jurisdiction or as by law required, be bound to recognize any trust benami or equitable or other claim to or interest in such share on the part of any other person or any interest in any fractional part of a share whether or not it shall have express of other notice thereof

CERTIFICATES10 The certificate of title to shares shall be issued under the Seal of the Company. 11 Every member shall be entitled, without payment, to one or more certificates in marketable lots, for all

the shares of each class or denomination registered in his name, or if the Directors so approve (upon paying such fee as the Directors may from time to time determine) to several certificates, each for one or more of such shares and the Company shall complete and have ready for delivery such certificates within three months from the date of allotment, unless the conditions of issue thereof otherwise provide, or within one month of the receipt of application of registration of transfer, transmission, sub-division, consolidation or renewal of any of its shares as the case may be. Every certificates of shares shall be under the Seal of the Company and shall specify the numbers and distinctive numbers of shares in respect of which it is issued and amount paid up thereon and shall be in such form as the Directors may prescribe or approve, provided that in respect of a share or shares held jointly by several persons, the Company shall not be bound to issue more than one certificate and delivery of a certificate of shares to one of several joint holders shall be sufficient delivery to all such holder.

12 If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the back thereof for endorsement of transfer, then upon production and surrender thereof to the Company, a new certificate may be issued in lieu thereof, and if any certificate lost or destroyed then upon proof thereof to the satisfaction of the Company and on execution of such indemnity as the Company deem adequate, being given, a new certificate in lieu thereof shall be given to the party entitled to such lost or destroyed certificate, Every certificate under the Article shall be issued without payment of fees if the Directors so decide, or on payment of such fees (not exceeding Rs.2/- for each certificate) as the Directors shall prescribe. Provided that no fee shall be charged for issue of new certificates in replacement of those which are old, decrepit or worn out or where there is no further space on the back thereof for endorsement of transfer. Provided that not withstanding what is stated above the Directors shall comply with such Rules or Regulation or requirements of any Stock Exchange or the Rules made under the Act or the rules made under Securities Contracts (Regulation) Act, 1956 or any other Act, or rules applicable in this behalf. The provisions of this Articles shall mutatis mutandis apply to debenture of the Company.

13 The provision of the Article under heading shall mutatis mutandis apply to the debentures of the Company.

JOINT-HOLDERS OF SHARES14 Where two or more persons are registered as the holders of any share they shall be deemed to hold the

same as joint-tenants with benefit of survivorship subject to the provisions following and to the other provisions of these Articles relating to joint-holders.

(a) The Company shall not be bound to register more than three persons as the joint-holders of shares

(b) The joint-holders of shares shall be liable severally as well as jointly in respect of all payments which ought to be made in respect of such share.


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(c) On the death of any one of such joint-holders the survivor or survivors shall be the only person or persons recognized by the Company as having any title to or interest in such share but the Board may require such evidence of death as it may deem fit.

(d) Only the person whose name stands first in the Register as one of the joint-holders of any share shall be entitle to delivery of the Certificate relating to such share and to the payment of dividend in respect thereof.

CALLS15 Subject to the provisions of the Act the Directors may, from time to time subject to the terms on which

any shares may have been issued, make such calls as they think fit upon the members in respect of all moneys unpaid on the shares held by them respectively, and not by the conditions of allotment thereof made payable at fixed times, and each member shall pay the amount of every call so made on him to the persons and at the time and place appointed by the Directors. A call may be made payable in installments. A call may be revoked or postponed at the discretion of the Directors.

16 A call shall be deemed to have been made at the time when the resolution of the Directors authorizing such call was passed.

17 Not less than 21 days notice of any call shall be given specifying the time and place of payment and to whom such call shall be paid.

18 If by the terms of issue of any share or otherwise, the whole or part of the amount or issue price thereof is made payable at any fixed time or by installments at fixed times, every such amount of issue price or installment shall be payable as if it were calls duly made by the Directors and of which due notice had been given, and all the provisions, herein contained in respect of calls shall apply to such amounts, or issue price or installment accordingly.

19 If the sum payable in respect of any call or installment be not paid on or before the day appointed for the payment thereof, the holder for the time being of the share in respect of which the call shall have been or the installment shall be due, shall pay interest for the same at the rate of 12 per cent per annum, from the day appointed for payment thereof of the time of the actual payment or at such other rate as the Directors may determine but they shall have power to waive the payment thereof wholly or in part.

20 On the trail or hearing of any action of suit brought by the Company against any member or his representative to recover any debt or money claimed to be due to the Company in respect of his shares, it shall be sufficient to prove that the name of the defendant is, or was, when the claim arose, on the Register of the Company as a holder or one of the holders of the number of shares in respect of which such claim is made, that the resolution making the call is duly recorded in the minute book and that the amount claimed is not entered as paid in the books of the Company, and it shall not be necessary to prove the appointment of the Directors who made any call, nor that the quorum of Directors was present at the meeting at which any call was made or that such meeting was duly convened or constituted, nor any other matter whatsoever; and the proof of the matters aforesaid shall be conclusive evidence of the debt.

21 The Directors may, if they think fit, subject to the provisions of Section 92 of the Act, agree to and receive from any member willing to advance the same whole or any part of the moneys due upon the shares held by him beyond the sums actually called for, and upon the amount so paid or satisfied in advance, or so much thereof as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advance has been made, the Company may pay interest at such rate, as the member paying such sum in advance and the Directors agree upon provided that money paid in advance of calls shall not confer a right to participate in profits or dividends. The Directors may at any time repay the amount so advanced. The members shall not be entitled to any voting rights in respect of moneys so paid by him until the same would but for such payment, become presently payable. The provisions of these Articles shall mutatis mutandis apply to the calls on debentures of the Company.

FORFEITURE AND LIEN22 If any member fails to pay any call or installments on or before the day appointed for the payment of the

same, the Directors may, at any time thereafter, during such time as the call or installment remains unpaid, serve a notice on such member requiring his to pay the same, together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment.


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23 The notice shall name a day (not being less than 21 days from the date of the notice) and a place or places on and at which such call or installment and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the event of non-payment at or before the time and at the place or places appointed, the share in respect of which such call was made or instalment is payable will be liable to be forfeited.

24 If the requisitions of any such notice as aforesaid be not complied with, any shares in respect of which such notice has been given may, at any time thereafter before payment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture. Neither the receipt by the Company of a portion of any money which shall from time to time be due from any member of the Company in respect of his shares, either by way of principal or interest, nor any indulgence granted by the Company in respect of the payment of any such money shall preclude the Company from thereafter proceeding to enforce a forfeiture of such shares as herein provided.

25 When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in whose name it stood immediately prior to the forfeiture and any entry of the forfeiture with the date thereof, shall forthwith be made in the Register but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make such entry as aforesaid.

26 Any share so forfeited shall be deemed to the property of the Company and the Directors may sell, re-allot or otherwise dispose of the same in such manner as they think fit.

27 The Directors may at any time before any shares so forfeited shall have been sold, re-alloted or otherwise disposed of, annul the forfeiture thereof upon such conditions as they think fit.

28 Any member whose shares have been forfeited shall notwithstanding such forfeiture be liable to pay and shall forthwith pay to the Company all calls, installments, interest and expenses, owing upon or in respect of such shares at the time of the forfeiture, together with interest thereupon from the time of the forfeiture until payment at 12 per cent per annum or such other rate as the Directors may determine and the Directors may enforce the payment thereof without any deduction or allowance for the value of the shares at the time of forfeiture but shall not be under any obligation to do so.

29 The forfeiture of a share shall involve the extinction of all interest in and also of all claims and demand against the Company in respect of the share, and all other rights incidental to the share except only such of those rights as by these Articles are expressly saved.

30 A duly verified declaration in writing that the declarant is a Director of the Company and the certain shares in the Company have been duly forfeited on a date stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claming to be entitled to the shares, and such declaration and the receipt of the Company for the consideration if any given for the shares on the sale or disposition thereof shall constitute a good title to such shares.

31 The Company shall have a first and paramount lien upon all the shares/debentures (other than fully paid-up shares/debentures) registered in the name of each member (whether solely or jointly with others) and upon the proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares/debentures and no equitable interest in any share shall be created except upon the footing and conditions that this Article will have full effect. Any such lien shall extend to all dividends and bonus from time to time declared in respect of share/debentures. Unless otherwise agreed the registration of transfer of shares/debentures shall operate as a waiver of the Company’s lien if any, on such shares/debentures. The Directors may at any time declare any shares/debentures wholly or in part to be exempt from the provisions of this clause.

32 For the purpose of enforcing such lien, the Directors may sell the shares subject thereto in such manner as they think fit, but no sale shall be made until such period as aforesaid shall have elapsed and until notice in writing of the intention to sell shall have been served on such member, his executors and administrators, or his committee, curator bonis or other person recognized by the Company as entitled to represent such member and default shall have been made by him or them in the payment of the sum payable as aforesaid for seven days after such notice. The net proceeds of any such sale shall be applied in or towards satisfaction of such part of the amount in respect of which the lien exists as is presently payable by such members and the residue (if any) paid to such members, his executors, administrators, or other representatives or persons so recognized as aforesaid.


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33 Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers by these presents given, the Directors may appoint some person to execute an instrument of transfer of the shares sold and cause the purchaser’s name to be entered in the Register in respect of the shares sold, and the purchaser shall not be bound to see the irregularity of the proceedings, nor the application of the purchase money and after his name has been entered in the Register in respect of such shares his title to such shares shall not be affected by any irregularity or invalidity in the proceedings in reference to such forfeiture, sale or disposition, and shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damage only and against the Company exclusively.

34 Where any share under the powers in that behalf herein contained are sold by the Directors and the certificate thereof has not been delivered to the Company by the former holder of the said shares the Directors may issue a new certificate for such shares distinguishing it in such manner as they may think fit from the certificate not so delivered up.

TRANSFER AND TRANSMISSION35 Subject to the provision of the Act, no transfer of shares shall be registered unless a proper instrument

of transfer duly stamped and executed by the transferor and transferee has been delivered to the Company together with the Certificate or Certificates of the shares, or if no such certificate is in existence, along with the letter of allotment of shares. The instrument of transfer of any shares shall be signed both by the transferor, and the transferee and shall contain the name and other particulars both of the transferor and the transferee, and the transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register in respect thereof. The Directors may also call for such other evidence as may reasonable be required to show the right of the transferor to make the transfer.

36 Applications for the registration of the transfer of share may be made either by the transferor or the transferee, provided that, where such application is made by the transferor no registration shall in the case of partly paid share be effected unless the company gives notice of the application to the transferee in the manner prescribed by the act, and subject to the provisions of Article 9 and 39(a) hereof the Company may, unless objection is made by the transferee within two weeks from the date of receipt of the notice, enter the Register the name of the transferee in the same manner and subject to the same conditions as if the application for registration of the transfer was made by the transferee.

37 Before registering any transfer tendered for registration the Company may, if it so thinks fit, give notice by letter posted in the ordinary course to the Registered holder that such transfer deed has been lodged and that, unless objection is taken the transfer will be registered. If such registered holder fails to lodged an objection in writing at the office of the Company within ten days from the posting of such notice to him, he shall be deemed to have admitted the validity of the said transfer. Where no notice is received by the registered holder, the Company shall be deemed to have decided not to give notice and in any event the non receipt by the registered holder of any notice shall not entitle to him to make any claim of any kind against the Company in respect of such non-receipt.

38 Neither the Company nor its Directors shall incure any liability for registering or acting upon a transfer of shares apparently made by sufficient parties, although the same may, by reason of any fraud or other cause not known to the Company or its Directors be legally inoperative or insufficient to pass the property in the shares reposed to professed to be transferred, and although the transfer may, as between the transferor and the transferee, be liable to be set aside, and notwithstanding that the Company may have notice that such instrument of transfer was signed or executed and delivered by the transferor in blank as to the name of the transferee or the particulars of the shares transferred, or otherwise in defective manner. And in every such case the person registered as transferee, his executors, administrators and assignees alone shall be entitled to be recognized as the holder of such share and the previous holder shall so far as the Company is concerned be deemed to have transferred his whole title thereto.

39 a) Subject to the provisions of Section 111 of the Act and Section 22A of the Securities Contract (Regulation) Act, 1956, the Directors may, at their own absolute and uncontrolled discretion and by giving reasons, decline to register or acknowledge any transfer of shares whether fully paid or not and the right of refusal, shall not be affected by the circumstances that the proposed transferee is already a member of the Company but in such cases, the Directors shall within one month from the date on which the instrument of transfer was lodged with the Company, send to the transferee and transferor notice of the refusal to register such transfer provided that registration of transfer shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except when the Company has a lien on the shares. Transfer of shares/debentures in whatever lot shall not be refused.


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b) Noting in Section 108,109 and 110 of the Act shall prejudice this power to refuse to register the transfer of, or the transmission by operation in law or the rights to, any shares or interest of a member in, or debentures of the Company.

40 a) Instrument of transfer of any share shall be in writing and all the provisions of section 108 of the Act and of any statutory modification thereof for the time being, shall be duly complied with in respect of all transfer and of registration thereof.

b) In the case of any share registered in any Register outside India, the instrument of transfer shall be in a form, recognized by the law of the place where the register is maintained but subject thereto shall be as near to the form prescribed in Sub clause (a) hereof as circumstances shall permit.

c) No fee shall be charged for registration of transfer, transmission, probate, succession certificates and letter of administration, certificate of death or marriage, power of attorney or similar other document.

41 All instruments of transfer which shall be registered, shall be retained by the company. 42 If the Directors refuse to register the transfer of any shares, the Company shall, within two months from

the date on which the instrument of transfer was lodged with the Company, send to the transferee and the transferor notice of the refusal.

43 On giving seven days notice by advertisement in a newspaper circulating in the district in which the office of the Company is situated the Register of Members may be closed during such time as the Directors think fit not exceeding in the whole forty five days in each year but not exceeding thirty days at a time.

44 The executors or administrators or the holder of a succession certificate in respect of share of a deceased member (not being one of several joint-holders) shall be the only person whom the Company shall recognize as having any title to or interest in such shares but nothing herein contained, shall be taken to release the estate of a deceased joint-holder from any liability on shares held by him jointly with any other person. Before recognizing any legal representative or heir or a person otherwise claiming title to the shares the Company may require him to obtain a grant of probate or letters of administration or succession certificate or other legal representation, as the case may be from a competent Court, provided nevertheless that in any case where the Board in its absolute discretion thinks fit, it shall be lawful for the Board to dispense with the production of probate or letters of administration or a succession certificate or such other legal representation upon such terms as to indemnity or otherwise as the Board may consider desirable.

45 Any person becoming entitled to or to transfer shares in consequence of the death or 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 Directors think sufficient may with the consent of Directors (which they shall not be under any obligation to give) be registered as a member in respect of such shares or may, subject to the regulations as to transfer hereinbefore contained, transfer such shares. This Article is hereinafter referred to as The ‘Transmission Article’. Subject to any other provisions of these Articles, if the person so becoming entitled to shares under this or the last preceding Articles shall elect to register himself, he shall deliver or sent to the Company a notice in writing signed by him stating that he so elects. If he shall elect to transfer the shares to some other persons he shall execute an instrument of transfer in accordance with the provisions of these Articles relating to transfer of shares. All the limitations, restrictions and provisions of the Articles relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice of transfer as aforesaid.

46 Subject to any other provisions of these Articles; and if the Directors in their sole discretion are satisfied in regard thereto, a person becoming entitled to a share in consequence of the death or resolvancy of a member may receive and give a discharge for any dividends or other moneys payable in respect of the same.

SHARE WARRANTS47 Subject to the provisions of Section 114 and 115 of the Act and Subject to the discretion which may be

given by the Company in General Meeting, the Board may issue Share Warrants in such manner and on such terms and conditions as the Board may deem fit. In case of such issue Clause 40 to 43 of Table ‘A’ in Schedule to the Act, shall apply.

STOCKS48 The Company may exercise the power of conversion of its shares into stock and in that case Clause 37

to 39 of Table ‘A’ in Schedule 1 to the Act, shall apply. ALTERATION OF CAPITAL

49 The Company may by Ordinary Resolution from time to time alter the conditions of the Capital Clause of Memorandum of Association as follows.


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(a) Increase the Share Capital by such amount, to be divided into shares of such amount as may be specified in the resolution.

(b) Consolidate and divide all or any of its Share Capital into shares of larger amount than its existing shares.

(c) Subdivide its existing shares 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 same as it was in the case of the share from which the reduced share is derived, and

(d) 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 its Share Capital by the amount of the shares so cancelled.

50 The resolution whereby any share is sub-divided or consolidated may determine that, as between the members registered in respect of the shares resulting from such sub-division or consolidation, one or more of such shares, shall have some preference or special advantages as regards dividend, capital, voting or otherwise over or as compared with the other or others subject nevertheless to the provisions of section 85, 87, 93, 99 and 106 of the Act.

51 Subject to the provision of Section 100 to 104 of the Act, the Board may accept from any member the surrender of all or any of his shares on such terms and conditions as shall agreed.

MODIFICATION OF RIGHTS52 Whenever the capital (by reason of the issue of Preference Shares or Otherwise) is dividend into

different classes of shares, all or any of the rights and privileges attached to each classes may be varied in the manner provide in Section 106 of the Act and all the provisions hereinafter contained as to General Meeting shall, mutatis, mutandis apply to the class meetings. Provided that the rights conferred upon the holders of the shares of any class issued in preference to other shares shall not, unless otherwise expressly provided by the terms of issue of the shares of that class be deemed to be varied under the Article by the creation of issue of further shares. Any such new shares may be issued with such preferential rights as may be decided at the time of issue thereof.

LOAN AND DEBENTURES53 The Board from time to time at its discretion, subject to the provisions of the Act, raise or borrow from

any source and secure payment of any sum or sums of money for the purpose of the Company. 54 The Board may raise or secure the repayment of such sum or sums in such manner and upon such

terms and conditions in all respects as its thinks fit and in particular by the issue of bonds, notes, convertible redeemable or otherwise, perpetual or redeemable debentures or debenture-stock or any mortgage or other security on the undertaking of the whole or any part of the property of the Company (both present and future) including its uncalled Capital for the time being.

55 Any debentures, debenture-stock, bonds and other securities may be issued at a discount premium or otherwise and with any special privileges as the redemption, surrender, drawings, allotment of shares of conversion, appointment of Directors or otherwise. Debentures, debenture-stock, bonds and other securities may be made assignable free from equity between the Company and the person to whom the same may be issued. Provided that debenture-stock or bonds, with the right of allotment of or conversion into shares shall not be issued except with the sanction of the Company in General Meeting.

56 Directors or any of them may guarantee the whole or any part of the loans or debts raised or incurred by or on behalf of the Company or any interest payable thereon, and shall be entitled to receive such payment as consideration for the giving of any such guarantee as may determined by the Directors with power to them to indemnify the guarantors from or against liability under their guarantees by means of a mortgage or charge on the undertaking of the Company or upon any of its property or assets or otherwise. If the Directors or any of them or any other persons shall become personally liable for the payment of any sum primarily due from the Company the Directors may execute or cause to be executed any mortgage, charge or security over or affecting the whole or any part of the Assets of the Company by way of indemnity to secure the Directors or persons so becoming liable as aforesaid from any loss in respect of such liability.


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RESERVES57 The Board may, before recommending any dividend, set aside out of the profits of the Company such

sums as it thinks proper as a reserve or reserves which shall, at the discretion of the Board be applicable for any purpose to which the profits of the Company may be properly applied and pending such application may at the like discretion either be employed in the business of the Company or be invested in such investments (other than shares of the Company) as the Board may from time to time think fit. The Board may also carry forward any profits which it may think prudent not to divide without setting them aside as a reserve.

GENERAL MEETING58 (a) The Board may, whenever it thinks fit, call an extraordinary General Meeting provided however, if

at any time there are not in India Directors capable of acting who are sufficient in number to form a quorum, any Director may call an Extraordinary General Meeting in the same manner as nearly as possible, as that in which such a meeting may be called by the Board.

(b) Each Director shall be entitled to attend and speak at any General Meeting of the Company.

PROCEEDINGS AT GENERAL MEETINGS 59 The quorum for a General Meeting shall be five members present in person.60 At every General Meeting, the Chair shall be taken by the Chairman of the Board of Directors. If at any

meeting the Chairman of the Board of Directors be not present within fifteen minutes after the time appointed for holding the meeting or, though present, be unwilling to act as Chairman, the members present shall choose one of the directors present to be Chairman, or if no Director shall be present and willing to take the Chair, then the members present shall choose one of their number, being a member entitled to vote to be Chairman.

61 Any act or resolution which, under the provisions of these Articles or of the Act, is permitted or required to be done or passed by the Company in General Meeting, shall be sufficiently so done or passed if effected by an ordinary resolution unless either the Act or the Articles specifically require such act to be done or resolution to be passed as a special resolution.

62 If within half an hour from the time appointed for the meeting a quorum be not present, the meeting if convened upon a requisition of shareholders shall be dissolved but in any other case it shall stand adjourned to the same day in the next week at the same time and place, unless the same shall be a public holiday when the meeting shall stand adjourned to the next day not being a public holiday at the same time and place and if such adjourned meeting the quorum be not present within half an hour from time appointed for the meeting, those members who are present and not being less than two persons shall be a quorum and may transact the business for which the meeting was called.

63 In the case of an equality of votes, the Chairman shall both on a show of hands and at a poll have a casting vote in addition to the vote to which he may be entitled as a member.

64 The Chairman of a General Meeting may adjourn the same, from time to time, and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. If shall not be necessary to give notice to the members of such adjournment or of the time, date and place appointed for the holding of the adjourned meeting.

65 (a) Before or on the declaration of result of the voting on any resolution on a show of hands: i) a poll may be ordered to be taken by the Chairman of the meeting of his own motion, and ii) shall be ordered to be taken by him on a demand made in that behalf by any member or

members present in person or by proxy and holding shares in the Company which confer a power to vote on the resolution not being less than one-tenth of the total voting power in respect of the resolution or on which an aggregate sum of not less than Rs. 50,000/- has been paid up.

(b) The demand for a poll may be withdrawn at any time by the person or person who made the demand.

(c) If the poll be demanded, the demand of a poll shall not prevent the continuance of a meeting for the transaction of any business other than the question on which a poll has been demanded.

VOTES OF MEMBERS 66 On a show of hands, every holder of Equity Shares entitled to vote and present in person shall have

one vote and upon a poll, every holder of Equity Shares entitled to vote and present in person or by proxy shall have one vote for every share held by him.


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67 Subject to the provisions of the Articles, any person entitled under the Transmission Article to transfer any shares may vote at any General Meeting in respect thereof in the same manner as if he was the registered holder of such shares, provided that seventy-two hours at least before the time of the holding the meeting or adjourned meeting as the same may be at which he proposes to vote he shall satisfy the Directors of his right to transfer such shares, or the Directors shall have previously admitted his right to vote at such meeting in respect thereof. If any member be a lunatic, idiot or non-composements he may vote whether on a show of hands or at a poll by his committee, cutator bonis or other person recognized by the Company as entitled to represent such member and such last mentioned persons may give their votes by proxy.

68 Where there was joint-holders of shares any one of such persons may vote at any meeting either personally or by proxy in respect of such shares as if he was solely entitled thereto and if more than one of such joint-holders be present at any meeting either personally or by proxy then that one of the said persons so present whose name stands prior in order on the Register in respect of such share shall alone be entitled to vote in respect thereof. Several executors or administrators of a deceased member in whose name any share stands for the purpose of this Article be deemed joint-holders thereof.

69 The instrument appointing a proxy shall be in writing under the hand of the appointor or of his Attorney duly authorized in writing or if such appointor is a corporation under its common seal or the hand of its Attorney.

70 The instrument appointing a proxy and the power of Attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at the office not less than forty eight hours before the time for holding the meeting at which the person named in the instrument proposes to vote and in default the instrument or proxy shall not be treated as valid.

71 A vote given in accordance with the terms of an instrument appointing a proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the instrument of proxy or transfer for 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 at the office or by the Chairman of the Meeting before the vote is given. Provided nevertheless, that the Chairman of any meeting shall be entitled to require such evidence as he may in his discretion think fit of the due execution of an instrument of proxy and that the same has not been revoked.

72 Every instrument appointing a proxy shall, as nearly as circumstances will admit, be in the form set out in Schedule IX of the Act.

73 No member shall be entitled to vote on any question either personally or by proxy or as a proxy for another member at any General Meeting or upon a poll or be reckoned in a quorum whilst any call or other sum shall be due and payable presently to the Company in respect of any of the shares of such member.

74 No objection shall be taken to the validity of any vote except at the meeting or poll at which such vote shall be tendered and every vote not disallowed at such meeting or poll and whether given personally or by proxy or otherwise shall be deemed valid for all purposes.

DIRECTORS 75 Until otherwise determined by the Company in General Meeting, the number of Directors shall not be

less than three or more then twelve.76 First Directors: —The persons hereinafter named shall be the First Directors of the Company: — 1. Mr. Ramavtar Jhunjhunwala 2. Mr. Ajay Kajaria 3. Mr. Umesh Sanganeria 77 A Director need not hold any shares in the Capital of the Company to qualify himself to act as a Director

of the Company. 78 (a) Each Director shall be entitled to be paid out of the funds of the Company by way of remuneration

for his services in attending board or committee meeting such sum as may be fixed by the Directors from time to time within such limites as may be prescribed by the Act or the Central Government from time to timefor every meeting of the Board of Directors or Committee thereof attended by him.


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(b) Subject to the provisions of Section 198, 139 and 310 of the Act (wherever applicable and without prejudice to Articles 90(1), (O)(3) and 91 hereof the Directors (other than a Managing Director and a Director in the whole time employment of the Company) may be paid further remuneration by way of commission if the Company by a Special Resolution authorizes such payment provided that such commission shall not in the aggregate exceed 3% of the net profits of the company (to be reduced to 1% of the net profit of the Company if the Company has a Managing Director or Director in its whole time employment) computed in the manner laid down in Section 309(5) of the Act and further that such remuneration shall be paid to all the Directors for the time being in office (other than a Managing Director and a Director in the whole time employment of the Company) to any one or more of them in such proportion as the Board may by Resolution decide when authorized such payment and in default of such decision equally to all the Directors.

(c) Subject to the provisions of the Act the Directors may allow and pay to any Director, who for the time being is resident out of place where any meeting of the directors may be held and who shall come to that place for the purpose of attending such meeting such sum as the Directors may consider fair and reasonable for his expenses in connection with his attending at the meeting in addition to his remuneration as specified. If any Director, being willing, shall be called upon to perform extra services or to make any special exertions for any of the purposes of the Company the Directors shall be entitled to remunerate such Director in any manner as may be determined by them in addition to the remuneration above provided.

79 The continuing Directors may act notwithstanding any vacancy in their body, but if the number falls below the minimum above fixed the Directors shall not, except for the purpose of filling vacancies or for summoning a General Meeting, act so long as the number is below the minimum.

80 Subject the provisions of the Act, the Directors (including a Managing Director) shall not be disqualified by reason of his or their office as such from holding office under the Companies or from contracting with the Company either as vendor, purchaser, lender, agent, broker, lessor or lessee or otherwise, nor shall any such contract or any contract or arrangement entered into by or on behalf of the Company with any Director or with any Company or partnership, of or in which any Director shall be a member or otherwise interested be avoided, nor shall any Director so contracting or being such member or so interested be liable to account to the Company for any profit realized by such contract or arrangement by reason only of such Director holding that office or the fiduciary relation thereby established.

81 The Company in General Meeting, may, subject to the provisions of these Articles and the Act, at any time elect any person to be a Director and may from time to time increase or reduce the number of Directors and may also determine in what rotation such increased or reduced number is to go out of office.

82 The Directors shall have power at any time and from time to time, to appoint any person other than a person who has been removed from the office of a Director of the Company to be a Director of the Company as an addition to the Board but so that the total number of Directors shall not at any time exceed the maximum number fixed. Any Director so appointed shall hold office only until the conclusion of the next following Annual General Meeting of the Company when he shall be eligible for re-appointment.

83 The Directors shall also have power to fill a vacancy in the Board. Any Director so appointed shall hold office only so long as the vacating Director would have held the same if no vacancy had occurred.

84 Whenever the Directors enter into a contract with any person for borrowing any money or for providing any guarantee or security or for technical collaboration or assistance or enter into any other agreement, the Director shall have, subject to the provisions of Section 225 of the Act, the power to agree that such person shall have the right to appoint or nominate by a notice in writing addressed to the Company one or more Directors on the Board for such period and upon such conditions as may be mentioned in the Agreement and that any such Director may not be liable to retire by rotation nor required to hold any qualification shares. Such Directors may also be removed, from time to time, by the person aforesaid who may appoint another in his place and also fill in any vacancy which may occur as result of any such Director ceasing to hold that office for any reason whatever. The Directors appointed or nominated under this Article, shall be entitled to exercise and enjoy all or any of the rights and privileges exercise and enjoyed by the Directors of the Company including the payment of remuneration and traveling expenses as may be agreed by the Company with such person.


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85 The Board may appoint any person to act as an alternate Director for a Director during the latter’s absence for period of not less than three months from the State in which meetings of the Board ordinarily held and such appointment shall have effect and such appointee, whilst he holds office as an alternate Director, shall be entitled to notice of meeting of the Board and to attend and vote there at accordingly, but he shall ipso facto vacate office if and when the absent Director returns to the State in which meetings of the Board are ordinarily held or the absent Director vacates office as a Director.

86 At every Annual General Meeting of the Company one third of the Directors for the time being, liable to retire by rotation (and if their number is not three or a multiple of three than the number nearest thereto), shall retire from office. The Directors to retire at such Annual General Meeting, shall be the Directors (other than Managing Directors) and or any other Director who by virtue of the provisions of any agreement referred to in Article 84 is not liable to retire) who shall have been longest in office since their last appointment. As between Directors who become Directors on the same day, those to retire shall (in default of an agreement between them) be determined by lot. For the purpose of this Article as a Director appointed to fill a vacancy under the provisions of Article 83, shall be deemed to have been in office since the date on which the Director, in whose place he was appointed, was last appointed as a Director.

87 a) A retiring Director shall be eligible for re-election and shall act as a Director throughout the meeting at which he retires.

b) A person who is not a retiring Director shall subject to the provisions of the act, be eligible for appointment to the office or Director at any General Meeting if he or some member intending to propose him, has not less than fourteen days before the meeting, left at the office of the Company a notice in writing under his hand signifying his candidature to the office of Director or the intention of such member to propose him as a candidate for that office as the case may be along with a deposit of five hundred rupees which shall be refunded to such person or as the case may be, to such member if the person succeeds in getting selected as a Director.

88 Subject to any resolution for reducing the number of Director, if at any meeting at which an election of Directors ought to take place the places of the retiring Directors are not filled-up, the meeting shall stand adjourned till the same day in the next week or if that day is a public holiday till the next succeeding day which is not a public holiday at the same time and place and if at the adjourned meeting the places of the retiring Directors are not filled-up the retiring Directors or such of them as have not had their places filled-up shall (if willing to continue in office) be deemed to have been re-elected at the adjourned meeting.

89 The office of a Director shall be deemed to have been vacated.a) Ipso facto, in the eventualities mentioned in Section 283 of the Companies Act, 1956

b) In the event of the resignation by a Director or the withdrawal of his nomination in the case of a nominated Director, on the date on which the letter of resignation or the letter of withdrawal of his nomination, as the case may be, is received by the Company.

PROCEEDINGS OF DIRECTORS 90 The Directors may meet together for the dispatch of business, adjourn and otherwise regulate their

meetings and proceedings as they think fit. 91 The Secretary may at any time, and upon request of any two Directors shall summon a meeting of the

Director. 92 Subject to the provisions of the Act, questions arising at any meeting shall be decided by a majority of

votes, each Director having one vote, and in case of an equality of votes, the Chairman shall have a second or casting vote.

93 The Chairman of the Board of Directors shall be the Chairman of the meetings of Directors; provided that if, the Chairman of the Board of Directors is not present the Directors present shall choose one of their member to be Chairman of such meeting.

94 A meeting of Directors in which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions, which by or under the Article of the Company and the Act for the time being, vested in or exercisable by the Directors.


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95 The Directors may, subject to compliance of the provisions of the Act, from time to time delegate any of their powers to Committees consisting of such members of their body as they think fit and may from time to time revoke such delegation. Any Committee so formed shall in the exercise of the powers so delegated conform to any regulations that may, from time to time, be imposed on it by the Directors. The meeting and proceedings of any such Committee, if consisting of two or more members, shall be governed by the provisions for regulating the meetings and proceedings of the Directors so far as the same are applicable thereto and, are not super-ceded by any regulations made by the Directors under this Article.

96 All act done at any meeting of Directors or of a Committee of the Directors or by any person acting as a Director, shall notwithstanding that it be afterward discovered that there was some defect in the appointment of any such Directors, Committee or person acting as aforesaid or had they or any of them were disqualified, be as valid as if every such person has been duly appointed and was duly qualified. Provided always the noting in this nothing in this Article shall be deemed to give validity to acts done by such Directors, Committee or person acting as aforesaid after it has been shown that there was some defect in any appointment or that they or any of them were disqualified.

97 A resolution may be passed by the Board by circulation in accordance with the provisions of Section 289 of the Act.

98 The Directors shall cause minutes to be duly entered in the books provided for the purpose. a) of all appointments of officers and Committees made by the Directors; b) of the names of the Directors present at each meeting of the Directors and of any Committee

of Directors; c) of all orders made by the Directors and Committee of Directors; d) of all resolutions and proceedings of General Meetings and of meetings of Directors and

Committees.

POWERS OF DIRECTORS99 The business of the Company shall be managed by the Directors who in addition to the powers and

authorities by these presents or otherwise expressly conferred upon them may exercise all such powers and do all such acts and things as may be exercised or done by the Company and are not hereby or by law expressly directed or required to be exercise or done by the Company in General Meeting but subject nevertheless to the provisions of any law and of these presents and to any regulations, not being inconsistent with these present, from time to time made by the Company in General Meeting; provided that no regulation so made shall invalidate any prior act of the Directors which would have been valid if such regulation had not been made.

100 a) With out prejudice to the general powers conferred by the proceeding Article, the Directors, may, from time to time, subject to the restrictions contained in the Act, delegate to any of the Directors, employees or other persons including any firm or body corporate, any of the powers, authorities and discretions for the time being vested in the Directors.

b) All deeds, agreements, and all cheques, promissory notes, drafts, hundies, bills of exchange and other negotiable instruments and all receipts of moneys paid to the Company shall be signed, drawn accepted, or endorsed or otherwise executed, as the case may be by such person (including any firm or body corporate) whether in the employment of the Company or not and in such manner as the Directors shall, from time to time, determine.

101 The Directors may make such arrangements as may be thought fit for the management of the Company’s affairs abroad, and may for this purpose (without prejudice to the generally of their powers) appoint attorneys and agents and fix their remuneration, and deligate to them such powers as may be deemed requisite or expedient. The Company may have for use abroad such official seal as is provided for by Section 50 of the Act. Such seal shall be affixed by the authority and in the presence of, and the instruments sealed therewith shall be signed by such persons as the Directors shall, from time to time, by writing under the Seal appoint. The Company may also exercise the powers of keeping Foreign Registers as provided by the Act.


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MANAGEMENT 102 The Board of Directors may appoint managing or wholetime Directors or Managers to manage the

affairs of the Company and/or a secretary or other officers for such period and of such remuneration and on such terms and conditions with the sanction, when so required by the Act, of the shareholders in a General Meeting and / or approval of the Central Government. Managing or wholetime Directors, if any shall not be liable to retire by rotation. The Board of Directors would also have the powers to frame terms and conditions of employment applicable to all employees of the Company except the Directors.

103 The Board of Directors shall provide a seal for the purpose of the Company and shall have power, from time to time, the destroy the same and substitute a new seal in lieu thereof and, shall provide for the safe custody of the Seal and the seal shall except as otherwise empowered under the Act or rules there under, never be used except by the authority of the Board of Directors or a Committee of the Board of Directors and, one Directors shall sign every instrument to which the Seal is fixed; provide nevertheless, that any instrument bearing the Seal of the Company and issued for valuable consideration shall be binding on the Company notwithstanding any irregularity touching the authority of the Directors to issue the same.

BOOKS OF ACCOUNT104 The books of account shall be kept at the office of the Company or at such other place as the

Directors think fit. 105 The Board shall, from time to time determine whether and to what extent and at what times and under

what conditions or regulations, the accounts and books of the Company or any of them shall be open to the inspection of the members not being Directors, and no member (not being a Director) shall have any right of inspecting any books of account or document of the Company except as conferred by law authorized by the Directors or by the Company in General Meeting.

106 (a) A copy of every Balance Sheet (including the Profit and Loss Account, the Auditors Report and every document required by law to be annexed or attached to the Balance Sheet or a Statement in the prescribed from as may be required shall, as provided by Section 219 of the Act) not less than twenty-one days before the meeting, be sent to every such member, debenture-holder, trustee and other person to whom the same is required to be sent by the said section.

(b) Every Balance Sheet and Profit and Loss Account when audited and approved by the General Meeting shall be conclusive except as regards any error discovered therein within three months next after the approval thereof. Whenever any such error is discovered within that period the account shall forthwith be corrected and therefore shall be conclusive, subject to the approval of the Company in General Meeting.

DIVIDENDS 107 The net profits of the Company (after making provision, if any, for sinking, depreciation and reserve

funds and for carrying forward balances for the next year) shall subject to the rights of holders of preference shares and to any resolution of the Company attaching any special privileges to other shares and to the provisions of these Articles be divisible among the Equity Shareholders subject as provided in Article 21 in proportion to the amounts paid up on the Equity Shares held by them respectively.

108 When capital is paid-up in advance of calls upon the footing that the same shall carry interest such capital shall not whilst carrying interest, confer a right to participate in profits.

109 The Company in General Meeting may declare a dividend to be paid to the members according to their rights and interest in the profits and may fix the time for payment subject to the provision of Section 207 of the Act.

110 No larger dividend shall be payable except out of the profits of the Company of the year or any other undistributed profits, and no dividend shall carry interest as against the company.

111 No dividend shall be payable except out of the profits of the Company of the year or any other undistributed profits and no dividend shall carry interest as against the company.

112 The declaration of the Directors as to the amount of the net profits of the Company in any year shall be conclusive subject to the provisions of the Act.

113 The Directors may, from time to time, pay to the members such interim dividends as in their judgement the position of the Company justifies.


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114 The Directors may retain any dividends payable on shares on which the Company has a lien and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists.

115 The Directors may retain the dividend payable upon shares in respect of which any person is under “The Transmission Article” entitled to become a member or which any person under that Article is entitled to transfer, until such person shall become a member in respect thereof or shall duly transfer the same.

116 Any General Meeting declaring a dividend may make a call on the members of such amount as the meeting fixes, but so that the call on each member shall not exceed the dividend payable to him and so that the call made earlier and payable at the same time as the dividend and the dividend may, if so arranged between the Company and the members, be set off against the call.

117 Any General Meeting may, upon the recommendation of the Directors, resolve that any assets, moneys, investments, or other assets forming part of the undivided profits of the Company, standing to the credit of any reserve fund or special account or in the hands of the Company and available for dividend including any profits arising from the same or any part thereof or by reasons of any other accretion to capital assets or representing premium received on the issue of shares and standing to the credit of the share premium account, be capitalized and distributed (in the manner and to the extent permissible under the provisions of the Act) amongst such of the shareholders as would be entitled to receive the same if distributed by the way of dividend and in the same proportions on the footing that they become entitled thereto as capital and that all or any part of such capitalized fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the resolution may provide, any un issued shares, debentures or debenture-stock (in the manner and to the extent aforesaid) of the Company which shall be allotted and distributed accordingly or towards payment of the uncalled liability on any issued shares or debentures or debenture-stock and that such distribution or payment shall be accepted by such shareholder in full satisfaction of their interest in the said capitalized sum.

118 For the purpose of giving effect to any resolution under the preceeding Article, the Director may settle any difficulty which may arise in regard to the distribution as they think expedient and in particular, may issue fractional certificate or ignore fractions or may vest the same in trust for the persons entitled as may seem expedient to the Directors. A proper contract shall be filed in accordance with the provisions of the Act where necessary and the Directors may appoint any persons to sign such contract on behalf of the persons entitled to the dividend or capitalized fund, and such appointment shall be effective.

119 Any one of the several persons who are registered as joint-holders of any share may give effective receipts for all dividends and payments on account of dividends in respect of such shares.

120 a) Unless otherwise directed and dividend may be paid by cheque warrant or postal money order sent through the post to the registered address of the member or person entitled thereto or in the case of joint-holders to the registered address of that one whose name stands first on the Register in respect of the joint-holder or to such person and such address as the member or person entitled to such joint-holders, as the case may be, may, direct.

b) Where any instrument of transfer of shares has been delivered to the Company for registration and the transfer of such shares has not been registered by the Company, it shall notwithstanding anything contained in any other provisions of the Act.

i) transfer the dividend in relation to such shares not be special account referred to in section 205A unless the company is authorized by the registered holder of such share in writing to pay such dividend to the transferee specified in such instrument of transfer; and

ii) keep in abeyance in relation to such shares any offer of rights shares under Clause (a) of sub-section (1) of Section 81 and any issue of fully paid-up bonus shares in pursuance of sub-section (3) of section 205.

121 The payment of every cheque or warrant sent under the provisions of the preceeding Article shall, if such cheque or warrant purports to be duly endorsed be a good discharge to the company in respect thereof, provided nevertheless that the Company shall not be responsible for the loss of any cheque, dividend, warrant or postal money-order which shall be sent by post to any member or by his order to any other person in respect of any dividend.


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121A Where the Company has declared a dividend but which has not been paid or the dividend warrant in respect thereof has not been posted within 42 days from the date of declaration to any share holder entitled to the payment of dividend, the Company shall within 7 days from the date of expiry of the said period of 42 days, open a special account in that behalf in any schedule bank called “Unpaid Dividend of Esskayjay Ispat Ltd.” and transfer to the said account, the total amount of dividend which remains unpaid or in relation to which no dividend warrant has been posted.

Any money transferred to the unpaid dividend account of the Company which remain unpaid or unclaimed for a period of 3 years from the date of such transfer, shall be transferred by the Company to the general revenue account of the Central Government. A claim to any money so transferred to the general revenue account may be preferred to the Central Government by the shareholders to whom the money is due. “No unclaimed or unpaid dividend shall be forfeited by the Board”.


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SECTION - X. OTHER INFORMATION

1. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into the ordinary course of business carried on by the Company), which are or may be deemed material have been entered or are to be entered into by the Company. Copies of these contracts and also the documents referred to hereunder will be delivered to BSE (Designated Stock Exchange). These documents may be inspected at the Registered Office of the Company at “307, Ashiana Towers, Exhibition Road, Patna – 800001 from 11:00 am to 2:00 pm on all working days, from the date of this Letter of Offer until the date of closure of the Subscription List.

Material Contracts

1. Memorandum of Understanding entered into between the Issuer Company, Sumedha Fiscal Services Limited and VC Corporate Advisors Pvt. Ltd., Lead Manager to the Issue dated 04.02.2008

2. Tripartite agreement entered between the Company, Central Depository Services (India) Limited and S. K. Computers dated 29.05.2002

3. Tripartite agreement entered between the Company, National Security Depository Limited and S. K. Computers dated 07.05.2002.

4. Copy of Memorandum of Understanding dated 04.02.2008 between the Company and S. K. Computers, Registrar to the Rights Issue for the proposed rights issue.

Material Documents for Inspection

1. Memorandum and Articles of Association of the Company

2. Certificate of Incorporation dated 7th December, 1992 of the Company

3. Resolution passed by the Board of Directors of the Company at their meeting held on 13th December, 2007 authorizing the proposed Rights Issue.

4. Resolution passed by the Members at the Extra Ordinary General Meeting held on 11th January, 2008 authorizing the proposed Rights Issue.

5. Consents from Directors, Auditors, Bankers to the Company, Lead Manager to the Issue, Registrar to the Issue and Legal Advisors to the Issue and Compliance Officer.

6. Annual Reports of the Issuer Company for the last five years and promoter Group Companies for last 3 years.

7. Audited Report by the Statutory Auditors, M/s ARSK & Associates, Chartered Accountants dated 13th

January, 2009 giving the financial information given in the Letter of Offer.

8. Copy of the Certificate from the Statutory Auditors, M/s ARSK & Associates, Chartered Accountants dated 2nd March, 2009 regarding tax benefits.

9. Copy of the Certificate from the M/s. Abhishek V L Agrawal & Associates, Chartered Accountants, dated 03.03.2009 regarding the sources and deployment of funds as on 31st January, 2009.

10. Resolution approving the present terms of employment and remunaration between the Company and the Managing Director as approved by the Board.

11. Letter of intent dated 16.04.2008 for the subscription to rights entitlement and unsubscribed portion, received from the promoters.


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12. Copies of Initial Listing Applications made to the BSE, CSE and MGSE.

13. In-principal approvals dated 14.05.2008 from BSE for listing of the securities offered to this issue.

14. State Bank of India Sanction Letter No. ADB/2006-07/483 dated 29.01.2007 and ADV/2008-09/208 dated 29.09.2008 for providing Term Loan and other facility.

15. Due Diligence Certificate dated 30th April, 2008 to SEBI from the Lead Manager, Sumedha Fiscal Services Limited.

16. Copy of SEBI Observation Letter No SEBI/ERO/JJ/155666/2009 dated 26.02.2009.


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2. DECLARATION

This is to confirm that all the relevant provisions of the Act, and the guidelines issued by the Government have been complied with and no statement made in this Letter of Offer is contrary to the provisions of the Act, and rules made there under. All the legal requirements connected with this said offer as also the guidelines, instructions etc., issued by SEBI, the Government and any other Competent Authority in this behalf have been duly complied with.

Undertaking

We, the Directors of Gangotri Iron & Steel Company Limited, declare and confirm that no information/material likely to have a bearing on the decision of the investor in respect of the equity shares offered in terms of this Letter of Offer have been suppressed / withheld and / or amounts to misstatement / misrepresentation, we undertake to refund the entire application moneys to all the subscribers within seven days thereafter, without prejudice to the provisions of section 63 of the Act.

Since the date of last financial statement disclosed in this Letter of Offer, there have been no circumstances that materially and adversely affect or are likely to effect the profitability of the Company or the value of its assets or its ability to pay of its liabilities within a period of next twelve months.

All the Directors of the Company certify that all disclosure made in the Letter of Offer are true and correct.

SIGNED BY ALL THE DIRECTORS OF GANGOTRI IRON & STEEL COMPANY LIMITED

Name: Mr. Ramautar Jhunjhunwala

Name: Mr. Sanjiv Kumar Choudhary

Name: Mr. Aditya Dalmiya

Name: Mr. Ashok Agarwal

Name: Mr. Debabrata Banerjee

Name: Mr. Narendra Kumar Jaiswal

SIGNED BY THE COMPANY SECRETARY AND COMPLIANCE OFFICER

Name: Ms. Priti Somani

Place: Kolkata Date: 05.03.2009

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GANGOTRI IRON & STEEL COMPANY LIMITED Iron & Steel Company Limited 3 SECTION – I. DEFINITION AND...

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