SADBHAV ENGINEERING LIMITED Our Company Was Originally Incorporated on October 3, 1988 As Sadbhav Engineering Private Limited in the State of Gujarat

LETTER OF OFFER Dated August 4, 2010 For Equity Shareholders of our Company only

SADBHAV ENGINEERING LIMITED Our Company was originally incorporated on October 3, 1988 as Sadbhav Engineering Private Limited in the State of Gujarat. Our Company became Deemed Public Company by virtue of Section 43A(1A) of the Companies Act, 1956, with effect from September 18, 1992. Our Company was converted into a Public Limited Company in the name and style of "Sadbhav Engineering Limited" and a fresh Certificate of Incorporation was obtained on May 17, 2001 Registered Office: (Registration No.04-11322) Sadbhav House, Opposite Law Garden Police Chowki, Ellisbridge, Ahmedabad 380 006 (The Registered Office of our Company was situated originally at 707, 7th Floor, Shilp Building, Near Municipal Market, C G Road, Navrangpura, Ahmedabad 380 009 and subsequently shifted to the present location with effect from January 3, 2004. For details of changes in registered office of our Company, please refer to the chapter titled “History and Other Corporate Matters” on page 119 of this Letter of Offer) Tel No: +91 79 2646 3384 Fax No: +91 79 2640 0210 Contact Person: Mr. Vijay Kalyani, Company Secretary and Compliance Officer Email: [email protected] Website: www.sadbhaveng.com Promoters: Our Company is promoted by Mr. Vishnubhai M Patel and Ms. Shantaben V Patel FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF OUR COMPANY ONLY LETTER OF OFFER ISSUE OF 6,25,000 EQUITY SHARES OF FACE VALUE OF RS. 10/- EACH FOR CASH AT A PREMIUM OF RS. 715 PER EQUITY SHARE AGGREGATING UP TO RS. 4531.25 LACS TO THE EXISTING EQUITY SHAREHOLDERS OF SADBHAV ENGINEERING LIMITED ON A RIGHTS BASIS IN THE RATIO OF 1 EQUITY SHARE FOR EVERY 20 EQUITY SHARES HELD ON THE RECORD DATE I.E JUNE 17, 2010 AND FOR EVERY 1 EQUITY SHARE ALLOTTED ON A RIGHTS BASIS, THE ALLOTTEES WILL ALSO BE ALLOTTED 3 DETACHABLE WARRANTS. TOTAL ISSUE INCLUDING CONVERSION OF WARRANTS INTO EQUITY SHARES WOULD NOT EXCEED RS. 12,500 LACS. THE ISSUE PRICE IS 72.5 TIMES THE FACE VALUE OF THE EQUITY SHARES. FOR FURTHER DETAILS, PLEASE REFER TO THE SECTION TITLED ‘TERMS AND PROCEDURE OF THE ISSUE’ ON PAGE 332 OF THIS LETTER OF OFFER GENERAL RISKS Investments in equity and equity related securities involve a high degree of risk and Investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the “Risk Factors” carefully before taking an investment decision in relation to this Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and the Issue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India ("SEBI" nor does SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to "Risk Factors" on page 10 of this Letter of Offer before making an investment 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 all information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Letter of Offer is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other material facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The existing Equity Shares of our Company are listed on The Bombay Stock Exchange Limited ("BSE") and The National Stock Exchange of India Limited ("NSE").Our Company has received “in-principle” approvals from BSE and NSE for listing of the Equity Shares and Detachable Warrants arising from this Issue vide letters dated August 19, 2009 and August 21, 2009 respectively. For the purposes of the Issue, the Designated Stock Exchange shall be BSE. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

Collins Stewart Inga Private Limited Link Intime India Private Limited A-404, Neelam Centre, C-13, Pannalal Silk Mills Compound Hind Cycle Road, LBS Road, Bhandup West, Mumbai 400 078 Worli, Mumbai 400 030 Tel No : +91 22 2596 0320 Tel No: +91 22 2498 2919 Fax No: +91 22 2596 0329 Fax No: +91 22 2498 2956 Toll Free No : 1-800-22-0320 Email: [email protected] Email: [email protected] Website: www.csinga.com Website: www.linkintime.co.in Contact Person: Ms. Deepa Mutha Contact Person: Mr. Pravin Kasare SEBI Registration No: INM000010924 SEBI Registration No: INR000004058 ISSUE PROGRAMME ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS ISSUE CLOSES ON Wednesday, August 18, 2010 Friday, August 27, 2010 Monday, September 6, 2010 TABLE OF CONTENTS

PARTICULARS PAGE NO. SECTION I : GENERAL DEFINITIONS AND ABBREVIATIONS ...... 1 FORWARD LOOKING STATEMENTS ...... 8 PRESENTATION OF FINANCIAL INFORMATION AND MARKET DATA ...... 9 SECTION II : RISK FACTORS ...... 10 SECTION III : INTRODUCTION SUMMARY OF INDUSTRY AND BUSINESS ...... 25 THE ISSUE ...... 28 SUMMARY OF FINANCIAL INFORMATION ...... 29 GENERAL INFORMATION ...... 36 CAPITAL STRUCTURE ...... 42 OBJECTS OF THE ISSUE ...... 51 BASIS FOR ISSUE PRICE ...... 67 STATEMENT OF TAX BENEFITS ...... 69 SECTION IV : DETAILS OF THE ISSUER COMPANY INDUSTRY OVERVIEW ...... 77 OUR BUSINESS ...... 84 REGULATIONS AND POLICIES ...... 112 HISTORY AND OTHER CORPORATE MATTERS ...... 119 OUR MANAGEMENT ...... 126 OUR PROMOTERS ...... 140 SUBSIDIARIES ...... 142 GROUP COMPANIES/ VENTURES PROMOTED BY OUR PROMOTERS ...... 150 DIVIDEND POLICY ...... 155 RELATED PARTY TRANSACTIONS ...... 156 SECTION V : FINANCIAL INFORMATION OF THE ISSUER COMPANY FINANCIAL STATEMENTS ...... 157 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL 270 CONDITION AND RESULTS OF OPERATIONS ......

SECTION VI : LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATIONS ...... 278 GOVERNMENT APPROVALS ...... 303 SECTION VII : STATUTORY AND OTHER INFORMATION ...... 319 SECTION VIII : TERMS AND PROCEDURE OF THE ISSUE ...... 332 SECTION IX : MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ...... 367 SECTION X : OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ...... 396 DECLARATION ...... 398

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

In the Letter of Offer, the terms “we”, “us”, “our”, “the Company”, “our Company”, “SEL” or “Sadbhav” unless the context otherwise implies, refer to Sadbhav Engineering Limited.

Unless the context otherwise requires, the following abbreviations and terms shall have the same meanings as stated herein below.

CONVENTIONAL / GENERAL TERMS

Term Description Act/ Companies Act The Companies Act, 1956 as amended from time to time AoA /Articles/Articles of Articles of Association of Sadbhav Engineering Limited Association AGM Annual General Meeting A body corporate registered with SEBI under the SEBI (Depositories and Depository Participant) Regulations, 1996, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time Depository Participant A depository participant as defined under the Depositories Act Director(s) Director(s) of our company unless otherwise specified ESI Act The Employees State Insurance Act, 1948 Foreign Exchange Management Act, 1999, as amended from time to FEMA time, and the regulations framed there under Period of twelve months ended March 31 of that particular year unless Financial Year/ Fiscal/ FY otherwise specified in the context thereof Government /GoI The Government of India Indian GAAP Generally accepted accounting principles in India I.T. Act The Income-Tax Act, 1961, as amended from time to time Memorandum / Memorandum of Memorandum of Association of Sadbhav Engineering Limited Association/ MoA Securities Contracts (Regulation) Rules, 1957, as amended from time to SCRR time The Securities and Exchange Board of India, constituted under the SEBI SEBI Act, 1992 SEBI (Disclosure and Investor Protection) Guidelines, 2000, as amended, SEBI Guidelines including instructions and clarifications issued by SEBI from time to time SEBI Regulations/ SEBI (ICDR) The Securities and Exchange Board of India (Issue of Capital and Regulations Disclosure Requirements) Regulations, 2009 SEBI (SAST) Securities and Exchange Board of India (Substantial Acquisition of Regulations / SAST / Shares and Takeovers) Regulations, 1997 and subsequent amendments SEBI Takeover Code / thereto Takeover Code

ISSUE RELATED TERMS

Term Description Allotment Allotment of Equity Shares with Detachable Warrants, pursuant to this Issue The successful applicant to whom the Equity Shares with Detachable Warrants Allottee are being issued The application (whether physical or electronic) used by an ASBA Investor to Application Supported by make an application authorizing the SCSB to block the application amount in Blocked Amount / ASBA his/ her specified bank account maintained with the SCSB

Equity Shareholders proposing to subscribe to the Issue through ASBA process and who: (a) hold the Equity Shares of the Issuer in dematerialized form as on the Record Date and has applied for Right Entitlements and / or additional Equity ASBA Investor Shares in dematerialized form; (b) has not renounced his / her Right Entitlements in full or in part; (c) is not a Renouncee; and (d) is applying through a bank account maintained with a SCSB

• HDFC Bank Limited • IDBI Bank Limited Banker(s) to the Issue • Standard Chartered Bank • Punjab National Bank • Oriental Bank of Commerce • ICICI Bank Limited • Industrial Development Bank of India Limited • Standard Chartered Bank • Punjab National Bank Bankers to our Company • Indian Overseas Bank • Karur Vysya Bank Limited • Yes Bank Limited • DBS Bank • HDFC Bank Limited Composite Application The form used by an Investor to make an application for allotment of Equity Form/CAF Shares with Detachable Warrants In case of physical certificates, our Company would issue one certificate for the Consolidated Certificate Equity Shares allotted to one folio Designated Stock The designated Stock Exchange for the Issue shall be BSE Exchange Each Detachable Warrant of our Company issued and allotted with the Equity Shares allotted on a rights basis in the Issue and which shall be exercisable into one (1) Equity Share, in each case in accordance with the terms and conditions specified in the chapter titled “Terms and Procedure of the Issue” beginning on Detachable Warrant page 332 of this Letter of Offer

Pursuant to this Issue, 3 Detachable Warrants would be issued for every 1 Equity Share allotted on a rights basis

Foreign Institutional Investor (as defined under the Securities and Exchange FII Board of India (Foreign Institutional Investors) Regulations, 1995, as amended), registered with SEBI Issue of 6,25,000 Equity Shares of Rs. 10 each for cash at a premium of Rs 715 aggregating up to Rs. 4531.25 Lacs to the Equity Shareholders of Sadbhav Engineering Limited on Rights Basis in the ratio of 1 Equity Share for every 20 Equity Shares held on the Record Date June 17, 2010 Issue

For every 1 Equity Share being allotted on a Rights Basis, the Allottee will also be allotted 3 Detachable Warrants.Total issue including conversion of Detachable Warrants into Equity Shares would not exceed Rs. 12,500 lacs Issue Opening Date August 18, 2010 2

Term Description Issue Closing Date September 6, 2010 Issue Price Rs 725 per Equity Share Means the holder (s) of Equity Shares of our Company as on the Record Date Investor(s) June 17, 2010 and Renouncees Lead Manager to the Issue Collins Stewart Inga Private Limited

This letter of offer dated August 4, 2010 filed with the Stock Exchanges after Letter of Offer/ LOF incorporating the comments received from SEBI on the Draft Letter of Offer

A mutual fund registered with SEBI under the Securities and Exchange Board of Mutual Fund India (Mutual Funds) Regulations, 1996, as amended A person resident outside India who is a citizen of India or is person of Indian NRI / Non-Resident Indian origin (as defined in Foreign Exchange Management (Deposit) Regulations, 2000) 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 OCB/Overseas which not less than 60% of beneficial interest is irrevocably held by NRIs Corporate Body directly or indirectly and which was in existence on October 3, 2003 and immediately before such date had taken benefits under the general permission granted to OCBs under the FEMA Promoters Mr. Vishnubhai M Patel and Ms. Shantaben Vishnubhai Patel • Girish N Patel (Also known as ‘Chetan N Patel’, any reference to ‘Chetan N Patel’ in the LOF, to be read as ‘Girish N Patel’) • Shashin Patel • V M Patel HUF • Sadbhav Finstock Pvt. Ltd. Promoter Group • Trustee Santokba Trust • Vikram R Patel • Vasistha C Patel • Tosha Patel • Vipul H Patel • Alpaben Patel Record Date June 17, 2010 Refund Bank HDFC Bank Limited Registrar to the Issue Link Intime India Private Limited /Registrar to our Company Shall mean the persons who have acquired Rights Entitlements from Equity Renouncees Shareholders The Issue of Equity Shares along with Detachable Warrants in terms of this Rights Issue Letter of Offer The banks which are registered with SEBI under SEBI (Bankers to an Issue) SCSB(s) Regulations, 1994 and offers services of ASBA, including blocking of bank account and a list of which is available on http://www.sebi.gov.in Shall refer to the BSE and NSE where the Shares of our Company are Stock Exchange(s) presently listed The following are the subsidiaries of our Company: • Ahmedabad Ring Road Infrastructure Limited • Sadbhav Infrastructure Project Limited • Aurangabad-Jalna Toll Way Limited • Nagpur-Seoni Express Way Limited Subsidiaries • Maharashtra Border Check Post Network Limited • Sadbhav Mining LimitadaLimited • Hyderabad-Yadgiri Tollway Private Limited • Rohtak-Panipat Tollway Private Limited • Bijapur-Hungund Tollway Private Limited The Securities and Exchange Board of India (Substantial Acquisition of Shares Takeover Code and Takeovers) Regulations, 1997, as amended 3

Term Description The period commencing after 3 months from the date of allotment of the Equity Shares in the Issue up to 18 months from the date of allotment of the Equity Shares in the Issue Warrant Exercise Period

Our Board will have one time call option of conversion of the Detachable Warrants during Warrant Exercise Period into Equity Shares The price at which the Detachable Warrant(s) shall be exercised i.e Rs 425 per Warrants Exercise Price share from each Detachable Warrant Warrant Certificate The certificate for the Detachable Warrants with a split performance Warrant Holder A holder of the Detachable Warrant(s)

COMPANY/ INDUSTRY RELATED TERMS

Term Description ALC Assistant Labour Commissioner Auditors The Statutory Auditors of our Company, Shashikant Patel Associates, Chartered Accountants Board/ Board of Board of Directors of Sadbhav Engineering Limited Directors EMD Earnest Money Deposit Equity Shares Equity Shares of our Company of Rs. 10/- each unless otherwise specified in the context thereof Equity Shareholders/ Persons holding Equity Shares of our Company unless otherwise specified in Shareholders the context thereof Face Value Face Value of Equity Shares of our Company being Rs. 10/- each Ha Hectares JV Joint Venture LOA Letter of Acceptance LoI Letter of Intent MoU Memorandum of Understanding NHAI National Highways Authority of India PG Performance Guarantee RA Bill Running Account Bill Registered Office Sadbhav House, Opposite Law Garden Police Chowki, Ellisbridge, Ahmedabad /Registered Office of – 380 006 our Company ROC Registrar of Companies, Gujarat Dadra & Nagar Haveli situated at ROC Bhavan, Opposite Rupal Park Society, Near Ankur Bus Stand, Naranpura, Ahmedabad – 380 013

ABBREVIATIONS

Abbreviation Full Form ADB Asian Development Bank AJTL Aurangabad Jalna Tollway Limited ARRIL Ahmedabad Ring Road Infrastructure Limited AS Accounting Standards issued by the Institute of Chartered Accountants of India ASBA Application Supported by Blocked Amount AY Assessment Year A/c Account B.Com Bachelor of Commerce

BOT Build Operate Transfer BOOT Build Own Operate Transfer BSE Bombay Stock Exchange Limited BHTPL Bijapur-Hungund Tollway Private Limited CAGR Compounded Annual Growth Rate Capex Capital Expenditure CCA Culturable Command Area CDSL Central Depository Services (India) Limited CEO Chief Executive Officer CFO Chief Financial Officer CRF Central Road Fund CM & CD Cross Masonary & Cross Drainage DBFOT Design, Build, Finance, Operate and Transfer DG Diesel Generator DLOF Draft Letter of Offer DPTL Dhule Palesner Tollway Limited EBITDA Earning Before Interest Tax Depreciation and Amortisation ECC Engineering Construction and Contracts EGM Extraordinary General Meeting EPC Engineering Procurement and Commissioning EPCG Export Promotion Capital Goods Scheme Earnings Per Share i.e. profit after tax divided by outstanding number of Equity EPS Shares at the year end FEMA Foreign Exchange Management Act, 1999 FII(s) Foreign Institutional Investors registered with SEBI FIPB Foreign Investment Promotion Board FDI Foreign Direct Investment FLC Foreign Letter of Credit GHCL Gujarat Heavy Chemicals Limited GIPCL Gujarat Industries Power Company Limited GDP Gross Domestic Product GMDC Gujarat Mineral Development Corporation HCC HCC Infrastructure Limited HEMM Heavy Earth Moving Machinery HSD High Speed Diesel HUF Hindu Undivided Family HNSS Handri Neeva Sujala Sravanthi HYTPL Hyderabad-Yadgiri Tollway Private Limited I&CAD Department Irrigation & Command Area Development Department ILC Inland Letter of Credit JBIC Japan Bank for International Cooperation KSHIP Karnataka State Highway Improvement Project KVA Kilo Volt Ampere km(s) Kilometer(s) LOF Letter of Offer 5

L&T Larsen & Toubro Limited MAT Minimum Alternate Tax MBCPNL Maharashtra Border Check Post Network Limited MD Managing Director MNEL Mumbai Nasik Expressway Limited MPRDC Madhya Pradesh Road Development Corporation MSRDCL Maharashtra State Road Development Corporation Limited MoRTH Ministry of Road, Transport and Highways MW Mega Watts N.A. Not Applicable NAV Net Asset Value NEFT National Electronic and Fund Transfer NHAI National Highways Authority of India NHDP National Highways Development Project NMC Narmada Branch Canal NOC No Objection Certificate NR Non-resident NRE Account Non Resident External Account NRI(s) Non-Resident Indian(s) NRO Account Non Resident Ordinary Account NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited NSEL Nagpur Seoni Expressway Limited NVDA Narmada Valley Development Authority P/E Ratio Price/Earnings Ratio PAN Permanent Account Number p.a Per Annum PIPL Patel Infrastructure Private Limited PIU Project Implementation Unit PMGSY Pradhan Mantri Gram Sadak Yojana PPP Public Private Partnerships PWD Public Works Department R&B Rehabilitation and Betterment RBI Reserve Bank of India RIDCOR Road Infrastructure Development Company of Rajasthan Limited RONW Return on Net Worth Rs. / Rupees / INR Indian Rupees RPTPL Rohtak-Panipat Tollway Private Limited RTGS Real Time Gross Settlement SAF Split Application Form SBC Saurashtra Branch Canal SEL Sadbhav Engineering Limited SIPL Sadbhav Infrastructure Projects Limited SML Sadbhav Mining LimitadaLimited

SNRL Sadbhav Natural Resources Limited SPV Special Purpose Vehicle SSNNL Sardar Sarovar Narmada Nigam Limited QIP Qualified Institutional Placement UIN Unique Identification Number US or USA United States of America USD or $ or US $ United States Dollar WCL Western Coal Fields WPI Wholesale Price Index

FORWARD LOOKING STATEMENTS

This Letter of Offer contains certain “forward-looking statements” which can generally be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue” or other words or phrases of similar import. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements.

All forward looking statements (whether made by our Company or any third party) are subject to risks, uncertainties and assumptions about our Company that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our Company’s expectations include but are not limited to:

• General economic and business conditions in the markets in which we operate and in the local, regional and national economies;

• Changes in laws and regulations relating to the sectors/areas in which we operate;

• Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and implement various projects and business plans for which funds are being raised through this Issue;

• Our ability to meet our capital expenditure requirements;

• Fluctuations in operating costs;

• Our ability to attract and retain qualified personnel;

• Changes in technology;

• Currency and exchange rate fluctuations;

• Changes in political and social conditions in India or in countries that we may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

• The performance of the financial markets in India and globally;

Neither we nor our Directors nor the Lead Manager nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, our Company, the Lead Manager will ensure that investors in India are informed of material developments of our Company until such time as the grant of listing and trading permission by Stock Exchanges for the Equity Shares with Detachable Warrants being offered on a rights basis.

For a further discussion of factors that could cause our Company’s actual results to differ, please refer to chapter titled “Risk Factors”, “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 10, 84 and 270 respectively of this Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future.

PRESENTATION OF FINANCIAL INFORMATION AND MARKET DATA

Financial Data

Unless stated otherwise, the financial data relating to our Company in this Letter of Offer is derived from our Company’s consolidated restated financial statements and non-consolidated restated financial statements, prepared in accordance with Indian GAAP, the Companies Act and in accordance with the SEBI Regulations which are included in this Letter of Offer and set out in the chapter titled “Financial Statements” on page 157 of this Letter of Offer.

Our fiscal year commences on April 1 of each year and ends on March 31 of the next year. Unless stated otherwise, references herein to a fiscal year (e.g., fiscal 2009), are to the fiscal year ended March 31 of a particular year. In this Letter of Offer, unless the context otherwise requires, all references to one gender also refers to another gender and the word “Lakhs /Lacs/Lac” means “one hundred thousand” and “million/mn./millions” means “ten lacs”, “Crore” means “ten millions” and “billion/bn./billions” means “one hundred crores”. Further, any discrepancies in any table between the total and the sum of the amounts are due to rounding-off. Throughout the Letter of Offer, currency figures have been expressed in “Lakhs /Lacs/Lac” except those, which have been reproduced/ extracted from sources as specified at the respective places.

The degree to which the Indian GAAP financial statements included in the Letter of Offer will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in the Letter of Offer should accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data.

Currency of Presentation

All references to “Rupees”, “INR” or “Rs.” are to Indian Rupees, the official currency of the Republic of India and all references to “US$” or “USD” or “$” are to United States Dollars, the official currency of the United States of America.

The Letter of Offer contains certain conversions of US$ into INR that have been presented solely to comply with requirements of of item VIII (G) of Part A to Schedule VIII of the SEBI Regulations. In the Letter of Offer, unless the context otherwise requires, all references to “India” are to the Republic of India and all references to the “US” or the “U.S.” or the “USA”, or the “United States” are to the United States of America.

In the Letter of Offer, any discrepancies in any table between the total and the sum of the amounts listed may be due to rounding off.

Use of Market Data

Market and industry data used in the Letter of Offer, has been obtained from governmental sources. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable and that their accuracy and completeness are not guaranteed and their reliability cannot be assured. We believe market data used in the Letter of Offer is reliable, but it has not been independently verified.

SECTION II: RISK FACTORS

Investors should consider the following risk factors together with all other information included in this Letter of Offer carefully, in evaluating us and our business before making any investment decision. This Letter of Offer contains forward looking statements that involve risks and uncertainties. Such statements can be identified by the use of forward-looking terminology such as “may”, “believes”, “will”, “expect”, “anticipate”, “estimate”, continue”, “plan”, “likely” or other similar words. Our actual results could differ from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the following risk factors and elsewhere in this Letter of Offer.

An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in this Letter of Offer, including the risks and uncertainties described below, before making an investment in our Equity Shares. If any of the following risks actually occur, our business, results of operations and financial condition could suffer, the price of our Equity Shares could decline, and you may loose all or part of your investment. The financial and other implications of material impact of risks concerned, wherever quantifiable have been disclosed in the risk factors mentioned below.However there are a few risk factors where the impact is not quantifiable and hence the same has not been disclosed in such risk factors.

INTERNAL RISK FACTORS

A. Risks related to the business of our Company

1. Outstanding litigation against our Company, Promoters, Group Companies/ Ventures promoted by our Promoters, Directors, JVs and Subsidiaries may adversely affect our Company’s results of operations

There are legal proceedings at different levels of adjudication pending against our Company, Promoters, Group Companies/ Ventures promoted by our Promoters, Directors, JVs and Subsidiaries which are incidental to its business and operations. Should any new developments in Indian law or unfavourable rulings against our Company by appellate courts or tribunals occur, our Company may need to make provisions in its financial statements in response to such changes in law or rulings, which could adversely impact the business results. Furthermore, if significant claims are determined against our Company and it is required to pay all or a portion of the disputed amounts, there could be a material adverse effect on our Company’s business and profitability. The details of litigation against our Company are set forth below:

Litigations against our Company (Rs. Lacs) S. No’ of outstanding Nature of the Litigation Aggregate disputed amount No Litigations 1 Civil Cases 4 3349.71 2 Cases under Labour Laws 4 3.20 3 Income Tax Cases 1 - TOTAL 9 3352.91

Litigations against the Promoters of Our Company (Rs. Lacs) Nature of the No’ of outstanding Aggregate disputed S. No Name of the Director Litigation Litigations amount 1 Mr. Vishnubhai M. Patel Civil Cases 3 3279.71 TOTAL

Litigations against Group Companies/ Ventures promoted by our Promoter

NIL

Litigations against the Directors of Our Company (Rs. Lacs) Nature of the No’ of outstanding Aggregate disputed S. No Name of the Director Litigation Litigations amount 1 Mr. Vishnubhai M. Patel Civil Cases 3 3279.71 2 Mr. Chetan N. Patel Civil Case 1 46.42 3 Mr. Amarsingh Vaghela Civil Case 1 46.42 10

4 Mr. Pravinkumar M. Civil Case 1 46.42 Ganatra 5 Mr. Nitin R. Patel Civil Case 1 46.42 6 Mr. Sashin V. Patel Civil Case 1 46.42 TOTAL 8 3511.81

Litigations against the JVs

NIL

Litigations against the Subsidiaries of our Company (Rs. Lacs) S. Nature of the No’ of outstanding Aggregate disputed Name of the Subsidiary No Litigation Litigations amount 1 Ahmedabad Ring Road Civil Case 1 The amount in dispute Infrastructure Ltd is not quantifiable TOTAL 1 -

Litigations by our Company (Rs. Lacs) S. No’ of outstanding Nature of the Litigation Aggregate disputed amount No Litigations 1 Civil Cases 11 9419.91 2 Cases under Income Tax Law 14 1065.25 3 Cases under Sales Tax Law 2 6.30 4 Cases under the Customs Law 2 105.00 5 Cases under the Service Tax Law 1 67.29 6 Cases under the Labour Laws 1 0.68 TOTAL 31 10664.43

Litigations by the Promoters of Our Company (Rs. Lacs) Nature of the No’ of outstanding Aggregate disputed S. No Name of the Director Litigation Litigations amount 1 Mr. Vishnubhai M. Patel Civil Cases 1 Not quantifiable TOTAL 1 Not quantifiable

Litigations by the Group Companies/ Ventures promoted by our Promoter

NIL

Litigations by the Directors of Our Company (Rs. Lacs) Nature of the No’ of outstanding Aggregate disputed S. No Name of the Director Litigation Litigations amount 1 Mr. Vishnubhai M. Patel Civil Cases 1 Not quantifiable TOTAL 1 Not quantifiable

Litigations by the JVs

Nature of the No’ of outstanding Aggregate disputed S. No Name of the JV Litigation Litigations amount 1 M/s. Amar Construction Co. Civil Case 1 4829.02 2 M/s. Sadbhav Prakash JV Civil Cases 2 389.65 TOTAL 3 5418.67

Litigations by the Subsidiaries of our Company

NIL

For more information on these litigations please refer to the Chapter titled “Outstanding Litigation” on page 278 of this Letter of Offer.

2. Our Company had granted a loan of Rs. 6646.50 lacs to our erstwhile subsidiary Ocean Bright Corporation Limited, a part of which is currently outstanding, and non-recovery of such loan could affect our our financial condition, results of operations and cash flows

To establish a foothold in the international mining industry, Mr. Vishnubhai Patel, one of our Promoters, acting in his individual capacity as well as on behalf of SEL and Osho Ventures FZE (Osho), a company incorporated in Dubai, United Arab Emirates and Osho’s group companies had come together. In view of this, Ocean Bright Corporation Limited (OBCL), incorporated on November 8, 2007 in Hong Kong, was acquired jointly by SEL and Osho on December 13, 2007.

SEL, Osho and OBCL entered into a Shareholders’ Agreement on May 15, 2008 wherein it was agreed that SEL and/or its affiliates and Osho and/or its affiliates would always hold 74% and 26% of the equity shareholding in OBCL respectively. SEL and Mr. Vishnubhai Patel acquired 10 and 64 equity shares respectively (i.e 74 equity shares constituting 74% of the total shareholding) in OBCL for HK$ 74 approximately Rs. 400. On June 16, 2008, the entire holding of 64 equity shares held by Mr. Vishnubhai Patel and 10 equity shares held by SEL were transferred to Sadbhav Natural Resources Private Limited (SNRL), a subsidiary of SEL.

Pending further infusion of equity, SEL funded OBCL in various tranches by extending loans to the extent of Rs. 6646.50 lacs to be utilized in the mining business. The said loan was made for the purchase of Rigs, Equipment and other accessories. During the financial year 2009-10, SEL received about Rs. 450 lacs from OBCL towards repayment of the outstanding debt.OBCL is going concern company and presently has legal ownership of the assets held by its subsidiaries in Mozambique.

Subsequently, SEL decided to disassociate itself from the business of owning of assets in natural resources space and hence divested their entire shareholding in SNRL with effect from March 31, 2009. For further details, please refer to chapter “History and other corporate matters” on page 119 of the LOF. Non-recovery of such outstanding loan could affect our financial condition, results of operations and cash flows,

3. Our Company has defaulted in complying with Accounting Standard 2 in the fiscal 2007 for which some of our directors have been penalized

For the fiscal 2007, our Company’s Directors were issued a compounding order from the Government of India and the Company Law Board for violation of Accounting Standard 2 wherein our Company valued its stock of material, spare parts and diesel at cost instead of being valued at lower of the cost and net realizable value. Therefore, our Directors viz. Mr. Vishnubhai Patel, Mr. Shashin Patel, Mr. Vikramkumar Patel, Mr. Chetan Patel and Mr. Nitin Patel for violation of AS2 read with section 211 of the Company’s Act, 1956 have paid a penalty of Rs. 1000/- each.

4. As per our consolidated restated financial statements, we have contingent liabilities which could affect our profitability adversely

As per our Consolidated Restated Financial Statements, our contingent liabilities as on March 31, 2010 are as follows: (Rs. lacs)

S. No Particulars Amount

1. Bank guarantee Outstanding 85,427.56 2. Liability on Contracts remaining to be executed on capital Accounts (Net of 1,26,254.14 Advances) 3. Corporate guarantees 17,606.56 4. Civil Suit against the Company 46.42 5. Sales Tax & Entry Tax 5.30 6. Custom Duty 104.95 7. Income Tax Matters 887.02 8. Service Tax 67.29 Total 2,30,399.24

If any of these contingent liabilities materialize, our profitability may be adversely affected. For more detailed descriptions of our contingent liabilities, see the chapter titled “Financial Statements” on page 157 of this Letter of Offer. 12

5. The proceeds from conversion of the Detachable Warrants in the Issue shall be invested in projects/ capital expenditure to be identified at a later date. However, the Board may at its discretion utilize such funds for any other purpose as it may deem fit

We intend to use the proceeds of the Issue for capital expenditure described in the section ‘Objects of the Issue’ beginning on page 51 of this Letter of Offer. We have not yet identified projects for the investment of funds raised from the conversion of the warrants and we have not entered into any definitive agreements to utilize such proceeds. We shall use the proceeds of the Issue as and when bids for projects are accepted and we are required to fund such projects.

6. Our Company had negative cash flows from operations. In the event that our future cash flows continue to be negative, it may hamper our ability to meet our financial obligations

In the preceding five financial years, we had a negative cash flow from our operating activities for the financials years 2004-05 and 2007-08 amounting to Rs.733.18 lacs and Rs. 2,825.65 lacs respectively. Further, we had a net decrease in cash and cash equivalents for the financial years 2006-07 and 2007-08 amounting to Rs. 1,443.17 lacs and Rs. 461.51 lacs respectively. On account of the aforesaid, our cash flows in the future may be negative, which may hamper our ability to meet our financial obligations.

7. Our indebtedness and the conditions and restrictions imposed on us by our loan agreements could adversely affect our ability to conduct our business

As of March 31, 2010, we have a total secured and unsecured loan of Rs. 145,543.35 lacs. We may incur additional indebtedness in the future. Our indebtedness could have several important consequences, including but not limited to the following:

• a portion of our cash flow will be used towards repayment of our existing debt, which will reduce the availability of cash to fund working capital needs, capital expenditures, acquisitions and other general corporate requirements;

• our ability to obtain additional financing in the future at reasonable terms may be restricted;

• fluctuations in market interest rates may affect the cost of our borrowings, as some of our loans are at variable interest rates; and

• we may be more vulnerable to economic downturns, may be limited in our ability to withstand competitive pressures and may have reduced flexibility in responding to changing business, regulatory and economic conditions.

We have entered into agreements with certain banks for short term loans and long term borrowings. As per the signed loan agreements with them, there are certain standard restrictions imposed on us to not to obtain any financial assistance from any other source, not to effect any change in promoter directors or in the core management team, formulating scheme of amalgamation or reconstitution or implementing any scheme of expansion, modernization, diversification, renovation or acquisition, not to finance associate concerns during the terms of the loan, not to effect any change in the capital structure of the Company, undertake guarantee obligations on behalf of other company, not to create any further charge, lien or encumbrances over the assets and properties of the Company, sale of assets during any accounting year except schemes approved by lenders, incurring capital expenditure beyond certain limits, not to declare dividends at any time while we are in default; acquisition or renewal of the permission from the Pollution Control Board from time to time, not to make material amendment to the MoA & AoA only without the prior approval of the Company’s bankers/lenders. We cannot assure you that our lenders will provide us with these approvals in the future and thus this may affect our operations.

8. We are subject to certain restrictive covenants under the Shareholders and Funding Agreements entered into by us with our Subsidiaries

Being a construction company, our business requires us to form SPVs for execution of various projects. While forming these SPVs, we have entered into certain Shareholders and Funding Agreements which expose us to restrictive covenants. Under the terms of the shareholder’s agreement, our Company is required to hold a minimum percentage of equity shareholding in the SPV and all further increases in the capital are required to be subscribed by the SPV members in the same proportion. We are thus obliged to fulfil these financial obligations which could reduce our cash flows and hinder our growth plans.

Also, the agreements include other restrictive covenants like transfer restrictions of shares of the SPVs, nomination power of the board members, prior approvals from other SPV members for certain other operational functions all of which could affect our rights as shareholders or our investment in such Project SPVs.

9. Some of our Subsidiaries and Group companies have incurred losses in the past

Some of our subsidiaries and Group companies have incurred losses in recent years, as set forth in the tables below: (Rs. Lacs) Name of the Company For financial For financial For financial For financial year year ended year ended year ended ended March 31, March 31, 2010 March 31, 2009 March 31, 2008 2007 Ahmedabad Ring Road (1886.10) (2546.68) 124.32 (88.99) Infrastructure Limited Aurangabad Jalna (1172.97) - - - Tollway Limited Maharashtra Border Checkpost Network (0.67) - - - Limited Sadbhav Infrastructure 351.32 (3.49) - - Projects Limited Sadbhav Quarry Works 37.30 8.34 16.06 (60.51) Private Limited

10. Claims made against our clients for payment of additional work done by us and failure to recover such claims could have a material adverse effect on our financial condition, results of operations and cash flows

Project claims are claims raised by us against our clients for additional work and costs incurred in excess of the contract price or amounts not included in the contract price. These claims typically arise from changes in the initial scope of work or from delays caused by the client. These claims are often subject to lengthy arbitration, litigation or other dispute resolution proceedings. The costs associated with these changes or client caused delays include additional direct costs, such as labour and material costs associated with the performance of the additional work, as well as indirect costs that may arise due to delays in the completion of the project, such as increased labour costs resulting from changes in labour markets.

We have used additional working capital in projects, pending the resolutions of the relevant project claims. The claims may continue in the future and failure to recover amounts under these claims could have a material adverse impact on our liquidity, financial condition and results of operations.

11. Our contracts/projects are awarded following a competitive bidding process for which, we may be required to reduce the prices for our services that could materially impact our operating revenues and profitability

Our contracts are awarded subject to satisfaction of certain pre-qualification criteria and a competitive bidding process. We face intense competition from big players such as international companies and major domestic construction companies who operate at the national level as well as from numerous smaller localized contractors /companies. Once the prospective bidders qualify for the technical requirements of the tender, the contract is usually awarded based on the contract price quoted by the prospective bidders. The nature of this process may cause us and other prospective bidders to quote reduced prices so as to be awarded the contracts. As a result of this competition, we may face margin pressure which could consequently have a material negative effect on our financial condition and prospects

12. Given the long-term nature of the projects that we undertake, we face various kinds of implementation risks

Infrastructure projects involve agreements that are long-term in nature. All long-term projects have inherent risks associated with them that may not necessarily be within our control and accordingly our exposure to a variety of implementation and other risks, including construction delays, material shortages, unanticipated cost increases, inability to negotiate satisfactory arrangements with joint venture partners. The long term nature of our contracts exposes us to increased risk of unforeseen business and industry changes and could have a material adverse effect on our business, financial condition and results of operations.

13. We rely substantially on government-owned and government-controlled entities for our revenues. Political or financial pressures could cause these entities to force us to renegotiate our agreements and could also adversely affect their ability to pay us

All infrastructure development projects under public private partnership in India, including a substantial portion of our projects, have been awarded by government-owned or government-controlled entities and, therefore, may be subject to political or financial pressures that may lead to such agreements being restructured or renegotiated by these entities, which could materially and adversely affect our business and results of operations.

Additionally, our projects are government-owned or government-controlled projects and these are often subject to delay. Such delays could be on account of a change in the central and/or state government, changes in policies impacting the public at large, scaling back of government policies or initiatives, changes in governmental or external budgetary allocation, or insufficiency of funds, which can significantly and adversely affect our business, financial condition and results of operations.

14. Our growth strategy depends upon the award of new contracts and failure to procure them would adversely affect our growth

The growth of our business depends on our Company being awarded new contracts. It is difficult to predict whether and when we will be awarded a new contract since many potential contracts involve a lengthy and complex bidding and selection process that may be affected by a number of factors, including changes in existing or assumed market conditions, financing arrangements, governmental approvals and environmental matters. Since, the growth of our business will be derived primarily from these contracts, our future results of operations and cash flows can fluctuate materially from period to period depending on the timing of contract awards.

15. We operate in an industry that is capital intensive and our business needs substantial working capital. Inability to obtain the necessary funds for our working capital requirements will have an adverse impact on our results of operations. This comes with the added risk of vulnerability in interest rates

Infrastructure projects are typically capital intensive and may require high levels of financing. Our business demands substantial working capital. In many cases, significant amounts of working capital are required to finance the purchase of materials and the performance of engineering, construction and other work on projects before payments are received from clients.

We have so far been able to arrange for the financing of all our projects. However, there is no assurance that market conditions and other factors would permit us to obtain financing on terms acceptable to us. Our ability to arrange financing and the costs of capital of such financing are dependant on numerous factors, including general economic and capital market conditions, credit availability from banks, investor confidence, the continued success of our current projects and other laws that are conducive to our raising capital in this manner

Our working capital requirements may increase if payment terms do not include advance payments or if project schedules are such that payments are received towards the end of the project. We are also required to provide bank guarantees, performance bonds, letters of credit or such other instruments in favour of clients to secure obligations under contracts. If we are unable to provide sufficient collateral to secure these instruments, our ability to enter into new contracts could be limited.

Since, we rely upon borrowed funds to finance our business, an increase in our costs of borrowing funds due to rising interest rates may limit our ability to borrow sufficient funds. Our attempts to complete future financings may not be successful or on favourable terms and failure to obtain financing on terms favourable to us could have an adverse effect on our business and results of operations.

16. Delays associated with the collection of receivables from our clients may adversely affect our business and results of our operations

There may be delays associated with the collection of receivables from our clients, including government owned, controlled or funded entities and related parties. As at March 31, 2010, on a consolidated basis, Rs. 2,563.54 lacs of our accounts receivable were outstanding for a period of more than six months. Our operations involve significant working capital requirements and delayed collection of receivables could adversely affect our liquidity and results of operations.

17. Our Company is substantially dependent on revenues from the ‘Roads and Highways’ segment. Any changes in government policy or our Company’s inability to bid for such Road & Highway projects will affect our revenues and profitability

Presently, we are engaged in the business of providing engineering, procurement and construction services in sectors, namely Road & Highways, Irrigation and Mining. As on March 31, 2010 revenues from Road & Highways segment have contributed approximately 77.93% to our income from operations on stand alone basis and forms approximately 76.87 % of our order book as on March 31, 2010. Any changes in government policy or our Company’s inability to bid for such Road & Highway projects will affect our revenues.

18. We depend on forming successful Joint Ventures to qualify for the bidding processes for various projects and failure to form such alliances will hinder our growth prospects

In order to bid for certain infrastructure projects, which require higher capital adequacy or technical expertise, we enter into Joint Ventures/ Memorandum of Understanding with other companies so as to meet the requisite criteria. In case we are unable to form an alliance with other companies to meet the prequalification requirements we may lose out on the opportunity to bid thereby restricting our Company’s growth prospects.

19. Non-fulfilment by our JV partners of their responsibility could adversely affect our business and results of operation

If our JV partners fail to perform their obligations satisfactorily, the Joint Venture so formed for the project may be unable to perform adequately or deliver its contracted services. In this case, we may be required to make additional investments and/or provide additional services to ensure the adequate performance and delivery of the contracted services because we are subject to joint and several liabilities as a member of the joint venture in most of our projects. These additional obligations could result in reduced profits or, in some cases, significant losses for us. The inability of a joint venture partner to continue with a project due to financial or legal difficulties could mean that we may be required to bear increased and possibly sole responsibility for the completion of the project and bear a correspondingly greater share of the financial risk of the project.

Further, in the event of any disagreements between us and our various joint venture partners regarding the business and operations of the joint ventures, there is no assurance that we will be able to resolve them in a manner that will be in our best interests, which could have a material adverse effect on our business and results of operations.

20. Projects included in our order book may be delayed, cancelled or not fully paid for by our clients, which could materially affect our cash flow position, revenues and earnings

Our order book does not necessarily indicate fixed future earnings and are contingent on the performance of that work. Projects in our order book projects represent business that has been validated by our clients but cancellations may occur. We may also encounter problems while executing the project due to factors beyond our control like contractual risks which are under the control of our clients and may postpone a project or cause its cancellation, including delays or failures to obtain necessary permits, authorizations, permissions, right-of-way, and other types of difficulties or obstructions.

Hence, we cannot predict with certainty when, if or to what extent an order book project will be performed. In addition, even where a project proceeds as scheduled, it is possible that the contracting parties may default or otherwise fail to pay amounts owed. Any delay, reduction in scope, cancellation, execution difficulty, payment postponement or payment default in regard to order book projects or any other uncompleted projects, or disputes with clients in respect of any of the foregoing, could materially affect our cash flow, revenues and earnings

21. Our profitability and results of operations may be adversely affected in the event of increases in the price of raw materials, labour or other inputs

The cost of raw materials, labour and other inputs constitutes a significant part of our operating expenses. Our construction operations require various construction raw materials including steel and cement. Our ability to pass on the increase in the purchase price of raw materials, fuel and other inputs may be limited in the case of fixed-price contracts or contracts with limited price escalation provisions. Unanticipated increases in the price of raw materials, fuel costs, labour or other inputs not taken into account in our bid can affect our profitability by increasing costs. Depending on the size of a project, these variations from estimated contract performance could have a significant effect on our results of operations.

22. Our construction contracts are dependent on adequate and timely supply of key raw materials such as steel and cement at commercially acceptable prices and any failure to procure the same in a timely manner will stall the execution of our projects and thus impact our revenues

Timely and cost effective execution of our projects is dependant on the adequate and timely supply of key raw materials. If we are unable to procure the requisite quantities of raw materials in time and at commercially acceptable prices, the performance of our business and results of operations may be adversely affected. We typically use third-party transportation providers for the supply of most of our raw materials. Any legal or regulatory restrictions placed on these transportation providers in the future, could have an adverse effect on our receipt of supplies. Further, transportation costs have been steadily increasing, and the prices of raw materials can fluctuate. In addition, the availability of supplies may not be commensurate with the rate of growth being experienced by the infrastructure sector.

23. The projects sub-contracted by us could get delayed on account of the sub-contractors performance resulting in delayed payments

Some of our projects or a part of our projects are sub-contracted and the completion of these contracts depends on the performance of the sub-contractors. Delay on the part of a sub-contractor to complete the project in time as well as failure to maintain the required performance standards or insufficiency of a sub- contractor’s performance guarantees, for any reason, could result in delayed payment to us and in turn affect our operations.

24. Our inability to adhere to set timelines could adversely affect our reputation and/or expose us to financial liability

Contracts awarded to us contain conditions for completion of the contract within stipulated timelines with liquidated damages payable if the timelines are not adhered to. Failure on our part to adhere to contractually agreed or revised timelines could result in payment of liquidated damages in addition to the damage which may be caused to our reputation within the construction industry, among clients or prospective clients.Presently we have not been penalized for non-adherence of timelines by any of our clients/awarding authority(ies) and there have been no instances of delay in projects because of our Company,but we cannot assure that in future there will be no cases of any penalties being imposed on us for the same.

25. The completion of our projects can be delayed on account of our dependency on contract labour force

The construction industry is labour intensive and continuous access to qualified labour is critical to our business. We rely on external agencies to meet our labour requirements. Currently, we share cordial relations with these agencies; however, we cannot assure that the same will continue in the future. Any strained relations with them will severely affect our business requirements, as we may not be able to meet any shortage arising due to this. Additionally, our operations may also be affected by circumstances beyond our control which may be due to work stoppages, labour disputes and or shortage of qualified skilled labour and lack of availability of adequate infrastructure services or even due to local festivities.

Thus, the execution of work on all our projects and consequently, payments for such projects will depend upon the adequate supply of qualified labour by our contractors and the adequate performance work by such labour. A deficiency of service on the part of a contractor or any error or inadequacy in the performance of any work, may result in delayed payment.

26. Our insurance coverage may not adequately protect us against possible risk of loss

We have taken contractor's all risk insurance policy in respect of projects and workmen's compensation policies to protect against losses caused to workmen through accident. While, we believe that the insurance coverage that we maintain would be reasonably adequate to cover all normal risks associated with the operation of our business, there can be no assurance that any claim under the insurance policies taken by us will be honoured fully, in part or on time. To the extent that we suffer loss or damage that is not covered by insurance or which exceeds our insurance coverage, our results of operations or cash flows may be affected.

27. Our business depends on the expertise of our senior management and skilled employees; our inability to attract and retain the skilled professionals may adversely affect our results of operation

Our business substantially depends on the continued service of our key managerial personnel including our whole-time directors. A significant number of employees are skilled engineers and we face strong competition 17 to recruit and retain skilled and professionally qualified staff. Our future success will also depend on our ability to attract and retain experienced and skilled personnel, such as engineering, project management and senior management professionals. We could experience difficulty from time to time in hiring and retaining the personnel necessary to support our business. We may also need to increase our pay structures to attract and retain such personnel. If we do not succeed in retaining our current employees and attracting new qualified employees or if we are unable to manage the attrition levels in different employee categories it may adversely affect our reputation and our future business.

28. Our inability to manage growth could disrupt our business and reduce our profitability

We have experienced high growth in recent years and expect our construction and infrastructure business to continue to grow as we gain greater access to financial resources. We expect this growth to place significant demands on us and require us to continuously evolve and improve our operational, financial and internal controls across our organization.

Continuous expansion increases the challenges involved in financial management, recruitment, training and retaining high quality human resources, preserving our culture, values and entrepreneurial environment, and developing and improving our internal administrative infrastructure. An inability to manage such growth could disrupt our business prospects, impact our financial condition and adversely affect our results of operations.

29. We require approvals or licenses to conduct our business, and the failure to obtain or renew them in a timely manner or at all may adversely affect our operations

We require several statutory and regulatory permits, licenses and approvals to operate our business, some of which may have expired and for which we may have either made or are in the process of making an application for obtaining the approval or its renewal. In certain instances our clients apply for the necessary approvals. If we fail or if our clients fail to obtain or retain any of these approvals or licenses, or renewals thereof, in a timely manner, or at all, our business may be adversely affected.

List of government approvals of our Company which are yet to be applied for:

Sr. License No./ Issuing Act Date of Expiry No. Authority 1. Inspector, Maharashtra The Standards of Weights and January 30, 2009 Standard Weights & Measures (Enforcement) Act, 1985 Measures Rules for business at Kasara 2. 4586/PCB/TS/JBP/2008 The Air (Prevention & Control of 1 year from the date The Regional Officer, Pollution) Act 1981 of Commissioning Madhya Pradesh Pollution of the project Control Board for business at Seoni (MP) 3. BO/P&L Divn.I/B-4907 The Water (Prevention & Control of 2 year from the date The Member Secretary, Pollution) Act 1981 of Commissioning Maharashtra Pollution of the project Control Board for business at village Kambadi, Thane 4. BO/P&L Divn.I/B-4906 The Water (Prevention & Control of 2 year from the date The Member Secretary, Pollution) Act 1981 of Commissioning Maharashtra Pollution of the project Control Board, For Business At Kasara, Thane 5. Inspector, Maharashtra The Standards of Weights and December 30, 2009 Standard Weights & Measures (Enforcement) Act, 1985 Measures Rules for business at Kasara 6. Inspector, Maharashtra The Standards of Weights and December 30, 2009 Standard Weights & Measures (Enforcement) Act, 1985 Measures Rules for business at Dhopipada, Kasara 7. Inspector, Maharashtra The Standards of Weights and December 31, 2009 Standard Weights & Measures (Enforcement) Act, 1985 18

Measures Rules for business at Kavind 8. The Labour The Contract Labour (Abolition & December 31, 2009 Commissioner, Madhya Registration) Act 1970 Pradesh 9. Inspector, Maharashtra The Standards of Weights and February 19, 2010 Standard Weights & Measures (Enforcement) Act, 1985 Measures Rules for business at Dhopipada, (Kasara) 10. 2510/PCB/TS/JBP/2007 The Water (Prevention & Control of May 27, 2010 The Regional Officer, Pollution) Act 1981 Madhya Pradesh Pollution Control Board for business at Seoni (MP) 11. 2509/PCB/TS/JBP/2007 The Air (Prevention & Control of May 27, 2010 The Regional Officer, Pollution) Act 1981 Madhya Pradesh Pollution Control Board for business at Seoni (MP)

For more information, please refer to the chapter titled “Government Approvals” on page 303 of this Letter of Offer.

30. We face competition in our business from other construction companies and failure to compete effectively will make our survival in the industry difficult

We operate in a competitive environment. We compete against various civil engineering and construction companies. While many factors affect the client decisions, price is a key deciding factor in most of the tender awards. We may be unable to compete with larger engineering construction companies for complex, high- value contracts as well as projects that are of comparatively lesser value, many of whom may have greater financial resources, better technology, larger manpower, economies of scale and operating efficiencies. If we are unable to bid for and win construction projects, both large and small, or compete with larger competitors, we could fail to increase, or maintain our volume of accepting orders, our results of operations may be materially adversely affected. There can be no assurance that we can continue to effectively compete with our competitors in the future, and failure to compete effectively may have an adverse effect on our business, financial condition and results of operations.

31. Our business operations are sensitive to weather conditions, which may affect our revenues

We have business activities that could be materially and adversely affected by severe weather. Severe weather conditions may require us to evacuate personnel or curtail services and may result in damage to a portion of our equipment or to our facilities, resulting in the suspension of operations, and may further prevent us from delivering materials to our project sites in accordance with contract schedules or generally reduce our productivity. Our operations are also adversely affected by difficult working conditions and extremely high temperatures during summer months and during monsoon, which restrict our ability to carry on construction activities and fully utilize our resources. During periods of curtailed activity due to adverse weather conditions, we may continue to incur operating expenses, but our revenues from operations may be delayed or reduced.

32. Our operations are subject to various laws and regulations related to environment, employee, health and safety and any failure in complying with such regulations would affect our business operations

Being a company in the infrastructure sector, we are required to comply with various laws and regulations relating to the environment. We may have to incur costs to comply with the requirements of environmental laws and regulations in the future. Any change in the existing laws and regulations, making them more stringent may impose new liabilities on us or result in the need for additional investment as per the requirements of the laws either of which could affect our business or financial condition. As a result, our overall operating expenses may increase, adversely affecting our business and results of operations.

In some of our projects, our clients are responsible for obtaining environmental permits required to proceed with the project. Any failure or inability by our clients to retain the requisite permits may have an adverse effect on our business and results of operations.

We are also subject to laws and regulations governing relationships with employees in such areas as minimum wages and maximum working hours, overtime, working conditions, hiring and terminating employees, contract labour and work permits, as well as health and safety legislation. The success of our strategy to modernize and optimize the existing operations in various divisions is contingent upon, among other things, receipt of all required licenses, permits and authorizations. Changes or concessions required by regulatory authorities could also involve significant costs and delay or prevent project completion.

33. An increase or decrease or withdrawal of tax benefits under Section 10(34), 10(35), 10(38) of the Income-tax Act, 1961 and Section 80IA of the Act by the Government will have an impact on our net income

We currently enjoy certain tax benefits and exemptions as mentioned above. Any increase in our effective tax rate as a result of the expiration of tax benefits we currently enjoy, changes in applicable tax laws or the actions of applicable income tax or other regulatory authorities could materially reduce our profitability. Furthermore, any significant increase in our future effective tax rates could adversely impact net income for future periods.

For further details on the tax benefits available to our Company, please refer to the chapter titled “Statement of Tax Benefits” on page 69 of this Letter of Offer.

34. Failure to fulfil our export obligation under the export import policy may result in financial liability

We have imported certain equipments amounting to Rs. 3,227.05 lacs at a concessional duty under various licenses pursuant to the Export Promotion Capital Goods (EPCG) scheme. As a result, we have assumed export obligations which we are required to fulfil within a period of eight years from the date of the issue of the respective licenses.The total export obligation is estimated at Rs. 5,874.72 lacs and is required to be fulfilled by our Company beginning September 11, 2013 upto February 27, 2016. The consequence of not meeting the above commitment would be a retrospective levy of import duty on items previously imported at concessional duty. Additionally, the respective authorities have rights to levy penalties and / or interest for any defaults on a case-by-case basis thus affecting the profitability of our Company. For more details, please refer to the chapter titled ‘Our Business’ on page 84 of this Letter of Offer.

35. Our Company does not have intellectual property rights for the trade name “SADBHAV” hence we cannot prohibit the use of such logo by our Subsidiaries, Group Companies and third parties by means of statutory protection

Our Company as well as our Subsidiaries and Group Companies use the name “Sadbhav” as part of their corporate and trade name for business operations. However the name ‘Sadbhav’ has not been registered by our Company with the Registrar of Trade Marks under the Trade Marks Act, 1956 (as modified by Trade Marks Act, 1999). As we do not have a registered trademark, we do not enjoy the statutory protections accorded to a registered trademark and cannot prohibit the use of such logo by our Subsidiaries, Group Companies and third parties by means of statutory protection.

Maintaining and enhancing the reputation associated with the “Sadbhav” trademark is integral to our business. Infringement of the trademark, for which we may not have recourse, may adversely and materially affect our reputation, and, thereby, our business and results of operations. This in turn could adversely affect the goodwill of our Company.

36. A part of our registered office and workshop at Ognaj from which we operate are not owned by us and If any of the owners of these leased premises do not renew the agreements on terms and conditions acceptable to us, or at all, we may suffer a disruption in our operations.

We do not own but have leased one third of our registered office through a lease agreement with our Promoter Ms Shantaben Patel while our workshop at Ognaj has been leased from Vishnubhai Patel, HUF where in our Promoter Mr. Vishnubhai Patel is the Karta. If any of the owners of these leased premises do not renew the agreements on terms and conditions acceptable to us, or at all, we may suffer a disruption in our operations.

For further details, please refer to chapter titled “Our Business” on page 84 of this Letter of Offer.

37. We have entered into various related party transactions and may continue to do so in the future

We have various transactions with related parties, including Directors, Key Managerial Personnel and their relatives, Subsidiaries, Joint Ventures and Associates. 20

These related party transactions include Sub Contract income and expense, repayment of loans, interest income on loans advanced, interest expense on loans taken, rent and service charges, grant of corporate guarantees and payment of managerial remuneration. The aggregate amount of “Related Party Transactions” on a standalone and consolidated basis is Rs. 27,618.85 lacs and Rs. 8,189.08 lacs respectively.

We believe that all such transactions have been conducted on an arm’s length basis, however in the event that obligations owed to us arising from such transactions are not fulfilled, either individually or in aggregate, our business and financial condition and/or results of operations may be adversely affected. We will continue to enter into related party transactions in the future, in the normal course of business. Such transactions, either individually or in the aggregate, may have an adverse effect on our revenues, results of operations and financial condition. For further details, please refer to chapter titled “Related Party Transactions” on page 156 of the Letter of Offer.

B. Risks related to the issue

38. We have not appointed an independent monitoring agency or an independent appraiser for the use of the proceeds of this Issue

We intend to use the net proceeds of this Issue for investing, directly or through subsidiaries, in projects including BOT and / or SPVs for purchase of machinery/ equipment and for general corporate purposes. The requirement of funds for meeting the objects of this Issue have not been appraised by any bank or financial institution and are based on our management’s internal estimates. Further, the deployment of funds is at the discretion of our Board of Directors and not subject to monitoring by any independent agency.

39. We have not entered into any definitive agreements to utilize the proceeds of the Issue. Any delay in entering into definitive agreements would delay the utilization of the proceeds and thereby adversely affect our business and results of operations

We intend to use the net proceeds of this Issue for investing, directly or through subsidiaries, in projects including BOT and / or SPVs ,for purchase of machinery/ equipment and for general corporate purposes as described in the chapter titled “Objects of the Issue” on page 51 of this Letter of Offer. Except as stated in this chapter, we have not yet identified projects/purposes for the investment of funds and we have not entered into any definitive agreements to utilize such proceeds. We shall utilize the proceeds of the Issue as and when the projects are awarded and we are required to fund such projects and for payments for purchase of equipment if we are successful in procuring them.

40. We have not placed orders for some of the equipment/ machinery to be acquired as proposed in the Objects of this Issue. Any delay in acquisition of the equipment/machinery required to be acquired herein could lead to time and cost overruns, and may have a material adverse effect on our business, results of operations and financial condition.

We have estimated the requirement of the equipment and machinery enumerated in the chapter “Objects of the Issue” on page 51 of this Letter of Offer based on quotations or internal estimates based on prevailing market prices of manufacturers/ suppliers of equipment. However, as on date of filing this Letter of Offer with SEBI and Stock Exchanges, we are yet to place orders for some of the aforesaid equipment and machinery amounting to Rs. 12,217.40 lacs constituting 74.26% of the total machinery/ equipment requirement. We cannot assure that we would be able to acquire the equipment and machinery required for the same, or acquire them at the prices as quoted/estimated in this Letter of Offer. Any delay in acquisition of the equipment/machinery required to be acquired herein could lead to time and cost overruns, and may have a material adverse effect on our business, results of operations and financial condition.

41. Along with the Equity Shares allotted on a rights basis in this Issue, our Company is also issuing Detachable Warrants exercisable between 3-18 months from the date of allotment at the option of the Warrant holder. However, our Board has an option to call the Detachable Warrants anytime between 3 to 18 months from the date of allotment. In any case tenure of warrants shall not exceed 18 months from the date of allotment. If the Warrant holder fails to convert these Detachable Warrants into Equity Shares, it will reduce our estimated fund flow from the Issue thus affecting our long term growth plans

Our Company will allot 3 Detachable Warrants for every 1 Right Equity share allotted in this Issue. The Detachable Warrants are exercisable anytime between 3 to 18 months from the date of allotment by the Warrant holder. However, our Board has an option to call the Detachable Warrants anytime between 3 to 18 months from the date of allotment. 21

Investors in this Issue will be required to pay the money due on the Detachable Warrants, even if, at that time, the market price of our Equity Shares is less than the Warrant Exercise Price. If the Warrant holder fails to convert these Detachable Warrants into Equity Shares during the Warrant Exercise Period or when the Board exercises the option to make a call on the Warrant holders, such Detachable Warrants will lapse. Also, failure by the investor to convert these Detachable Warrants into Equity Shares will result in shortage of funds than the proposed Issue size, thus hindering out long term growth plans made pursuant to this issue

42. The FIPB approval granted to our Company for the Issue of the Detachabale Warrants to Non- Residents is subject to compliance with SEBI and RBI Norms. Any non-compliance with the said norms would adversely affect the issue of Detachable Warrants to Non-Residents, estimated proceeds from the issue and results of operations

The issue and allotment of Equity Shares with the Detachable Warrants pursuant to this Issue to Non Residents may require the prior approval of the FIPB. Pursuant to a letter dated October 29, 2009, the FIPB has granted an approval for the issue and allotment of the Detachable Warrants which should be convertible into fully paid up equity shares within 18 months from the date of issue of the warrants to Non Resident Equity Shareholders and other eligible Non Resident applicants, such as FIIs, NRIs and FVCIs, subject to compliance with SEBI and RBI norms. Any non-compliance with the said norms would adversely affect the issue of Detachable Warrants to Non-Residents, estimated proceeds from the issue and results of operations.

For further details, see the section titled “Terms and Procedure of the Issue” beginning on page 332 of this Letter of Offer.

43. You may not receive the Equity Shares with Detachable Warrants that you subscribe for in the Issue until 15 days after the Issue Closing Date, which will subject you to market risk.

The Equity Shares with Detachable Warrants that you purchase in the Issue may not be credited to your demat account with the Depository Participants until 15 days from the Issue Closing Date. You can commence trading the Equity Shares and the Detachable Warrants only after receipt of the listing and trading approvals in respect thereof. There can be no assurance that the Equity Shares and the Detachable Warrants allotted to you will be credited to your demat account, or that trading in the Equity Shares and the Detachable Warrants will commence within the specified time periods. Furthermore, since the Equity Shares are already listed on the Stock Exchanges, you will be subject to market risk from the date you pay for the Equity Shares until the date such Equity Shares are listed.

44. Renunciation by any shareholder may require prior regulatory approvals, including an approval of the RBI and non-receipt of such approval may reduce the estimated proceeds from the Issue and hence, affect our business and results of operations

Any renunciation from (i) a resident Indian Equity Shareholder to a Non Resident or (ii) a Non Resident Equity Shareholder to a resident Indian or (iii) a Non Resident Equity Shareholder to a Non Resident will be subject to the renouncer(s) / renouncee(s) obtaining the necessary approvals, including the permission of the RBI under FEMA. There can be no certainty if such approval is granted or not.

For further details, see the section titled “Terms and Procedure of the Issue” beginning on page 332 of this Letter of Offer.

45. Post this Issue our Promoter and members of our Promoter Group will continue to be the largest shareholders in our Company, which will allow them to determine the outcome of shareholder resolutions in their favour and thereby adversely affects rights of non-promoter shareholders

Upon completion of the Issue, the members of our Promoters and Promoter Group will collectively hold 47.55% of the paid-up equity capital of our Company assuming full subscription to the Rights Entitlement in the Issue and full exercise of the Detachable Warrants. In case public shareholders do not exercise their right to apply for their entitled securities, our Promoters have the option of applying for such shares and thereby increasing their stake in our Company. With the largest equity stake in our Company, the Promoters and Promoter Group will be able to influence matters requiring, shareholders’ approval in their favour and thereby adversely affects rights of non-promoter shareholders.

46. Statistical and financial industry data in this Letter of Offer may be incomplete

We have not independently verified data from industry publications and other third party sources and therefore there is no assurance that they are complete. Therefore, discussions of matters relating to India, its economy 22 in this Letter of Offer are subject to the caveat that the statistical and other data upon which such discussions are based, may be incomplete.

EXTERNAL RISK FACTORS

47. The market value of an investment in our Equity Shares may fluctuate due to the volatility of the Indian securities markets

The Indian Stock Exchanges have, in the past, experienced substantial fluctuations in the prices of listed securities. Such fluctuations and volatility could affect the market price and liquidity of the securities of Indian companies, including our Equity Shares. In addition, the governing bodies of the Indian Stock Exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price movements and margin requirements.

48. An investment in the Equity Shares is subject to general risks related to investments in Indian Companies We are incorporated in India and substantially all of our assets and employees are located in India. Consequently, our financial performance and the market price of the Equity Shares will be affected by changes in exchange rates and controls, interest rates, policies of the Government of India (the “Government”), including taxation policies and policies relating to the infrastructure, as well as political, social and economic developments affecting India.

49. Changes in the policies of the Government of India or political instability could delay the further liberalization of the Indian economy and adversely affect economic conditions in India generally, which could impact our Company’s business and prospects

The role of the Indian central and state governments in the Indian economy has remained significant over the years. Since 1991, the Government has pursued policies of economic liberalization, including significantly relaxing restrictions on the private sector. There can be no assurance that these liberalization policies will continue in the future. The rate of economic liberalization could change, and specific laws and policies affecting foreign investment, currency exchange rates and other matters affecting investments in Indian companies could change as well. A significant change in India’s economic liberalization and deregulation policies could disrupt business and economic conditions in India, thus affecting our business.

PROMINENT NOTES

1. Issue of 6,25,000 Equity Shares of face value of Rs. 10/- each for cash at a premium of Rs. 715 per Equity Share on rights basis to the existing Equity Shareholders of Sadbhav Engineering Limited in the ratio of 1 Equity Share for every 20 Equity Shares held on the Record Date i.e. June 17, 2010.

For every 1 Equity Share allotted on a rights basis, the allottees will also be allotted 3 Detachable Warrants. Each Detachable Warrant will be convertible into one (1) Equity share. Total Issue including conversion of Detachable Warrants into Equity Shares at a fixed price of Rs 425 per share for each Detachable Warrant would not exceed Rs 12,500 lacs. The Issue Price is 72.5 times the face value of the Equity Shares. For further details, please refer to chapter titled “Terms and Procedure of the Issue” on page 332 of this Letter of Offer.

2. The net worth of our Company on a consolidated and stand alone basis before the Issue was Rs. 36,019.07 lacs and Rs. 39,151.30 lacs as on March 31, 2010 respectively as per the audited restated financial statements of our Company included in this Letter of Offer.

3. The book value per Equity Share as on March 31, 2010 on a consolidated and stand alone basis was Rs. 288.15 and Rs.313.21 per Equity Share respectively.

4. Our Company has entered into certain related party transactions as disclosed under the heading titled “Related Party Transactions” on page 156 of this Letter of Offer. The aggregate amount of “Related Party Transactions” on a standalone and consolidated basis is Rs. 27,618.85 lacs and Rs. 8,189.08 lacs respectively.

5. The Promoters and Promoter Group of our Company have not purchased or sold, directly or indirectly, any Equity Shares during a period of six months preceding the date of this Letter of Offer except for Mr Girish N Patel (Director and Member of Promoter Group) who has sold 5,000 Equity Shares on July 29, 2010 at a price of Rs. 1,355.00 per Equity Share.

6. For details of interests of our Company’s Directors and Key Managerial Personnel in our Company, please refer to the chapter titled “Our Management” on page 126 of this Letter of Offer. For details of the interests of the Promoters and Promoter Group, please refer to the chapter titled “Our Promoters” and “Group Companies/ Ventures promoted by our Promoters” on pages 140 and 150 of this Letter of Offer.

7. Before making an investment decision in respect of this Issue, Investors are advised to review the entire Letter of Offer, and refer to the chapter titled “Basis for Issue Price” on page 67 of this Letter of Offer.

8. You may contact the Lead Manager or Registrar to the Issue for any complaints pertaining to the Issue including any clarification or information relating to the Issue. The Lead Manager is obliged to provide the same to you.

9. All information shall be made available by the Lead Manager and by us 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.

10. Please refer to the chapter titled “Terms and Procedure of the Issue” on page 332 of this Letter of Offer for details on basis of allotment.

11. Average cost of acquisition of shares of our Company currently held by our Promoters is as follows:

• Mr. Vishnubhai M Patel – Rs 15.10 per share • Mrs. Shantaben V Patel – Rs 1.48 per share

Our Company and the Lead Manager are obliged to keep this Letter of Offer updated and inform investors of any material developments until the listing and trading of the securities offered under the Issue commences.

SECTION III: INTRODUCTION

SUMMARY OF INDUSTRY AND BUSINESS

Summary of the Industry

The India Story

India is a growing economy with a dynamic and robust financial system. Being a democracy ensures a stable policy environment and its independent institutions guarantee the rule of law. This highly diversified economy has shown rapid growth and remarkable resilience since 1991, when economic reforms were initiated with the progressive opening of the economy to international trade and investment. Events such as the Asian currency crisis, the dotcom bust and rising oil prices have had no significant impact on India’s growth; with the economy recording an average annual GDP growth of over 6% over the past decade. India’s competitiveness from a natural and human resources standpoint is making it the destination of choice for investors. India is in the global arena for increased foreign investment - both through the equity markets - termed Foreign Institutional Investment (FII) and Foreign Direct Investment (FDI). While its size and growth potential make India attractive as a market, the most compelling reason for investors to be in India is that it provides a high return on investment. India is a free market democracy with a legal and regulatory framework that rewards free enterprise, entrepreneurship and risk taking. (Source: Investment Commission of India)

Indian Infrastructure Industry

The importance of infrastructure for sustained economic development is well recognized. High transactions costs arising from inadequate and inefficient infrastructure can prevent the economy from realizing its full growth potential regardless of the progress on other fronts. Physical infrastructure covering transportation, power and communication through its backward and forward linkages facilitates growth; social infrastructure including water supply, sanitation, sewage disposal, education and health, which are in the nature of primary services, has a direct impact on the quality of life.

With the rapid growth of the economy in recent years the importance and the urgency of removing infrastructure constraints have increased. Traditionally, power, railways, roads, ports, airports and telecommunications were the exclusive domain of the government. Policy has changed gradually over the past two decades under the pressure of rising gaps between demand and supply of infrastructure and deteriorating quality of assets. Government has made an effort to facilitate the entry of private enterprise into this sector through changes in the legal framework. A role for private sector participation has also been facilitated by technological changes that allow unbundling of infrastructure, so that the public and the private sectors can take up the components most suited to their capacities. Government continues to invest significant sums in areas where private participation is minimal or not forthcoming. It will continue to play a lead role in infrastructure development during the Eleventh Plan. (Source: Economic Survey 2007-08)

Roads & Highways

India has one of the largest road networks in the world, aggregating to about 3.314 million kilometers consisting of National Highways, Expressway, State Highways, Major District Roads, other district roads and village roads. The road network comprises 66,754 kms of National Highways, 1,28,000 kms of State Highways, 4,70,000 kms of Major District Roads and about 26,50,000 kms of Other District and Rural Roads. Out of the total length of National Highways, about 27% are single lane/ intermediate lane, about 59% are standard 2-lane and balance 14% are 4-lane width or more. Though National Highways account for only 2 per cent of the total length of roads, they account for about 40 per cent of the total traffic. The share of road in total traffic has grown from 13.8% of freight traffic and 15.4% of passenger traffic in 1950-51 to an estimated 65% of freight traffic and 86.7% of passenger traffic by the end of 2004-05. The rapid expansion and strengthening of the road network, therefore, is imperative, to provide for both present and future traffic and for improved accessibility to the hinterland. In addition, road transport needs to be regulated for better energy efficiency, lesser pollution and enhanced road safety. While the Central Sector programmes pertain mainly to the National Highways, the responsibility for development of other categories of roads vests with the states/ Union Territories. In this context the Department of Road Transport has been carrying out the overall responsibility of maintenance and development of National Highways and has been successfully implementing various phases of National Highway Development Project (NHDP). (Source: Annual Report Ministry of Road Transport and Highway 2007-08) 25

Irrigation

India, which has 16% of the world’s population, has only 4% of the world’s fresh water resources. The monsoon rain is the main source of water and 76% of the rainfall is confined to the south-west monsoon. The all-India annual average rainfall is 1170 mm but it varies from 100 mm in the western deserts to 11000 mm in the north-eastern region. Irrigation, has therefore, since time immemorial, been recognized as a vital input for agriculture, contributing not only directly by meeting the evapotranspiration needs of plants, but also indirectly by recharging ground water. Understanding and addressing the irrigation sector’s problems and assessing its performance are thus essential for shaping of the future irrigation strategy. Through the ages, Indian agriculture has been sustained by natural and man-made water bodies like lakes, ponds and similar structures. It is estimated that there are about five lakh water bodies / tanks used for irrigation. (Source: Tenth Five year Plan & Ministry of Water Resources)

The irrigation projects in India are classified into three categories viz major, medium and minor. Projects which have a Cultivable Command Area (CCA) of more than 10,000 ha are termed as major projects, those which have a CCA of less than 10,000 ha but more than 2,000 ha are termed as medium projects and those which have a CCA of 2,000 ha or less are known as minor projects. A broad assessment of the area that can be ultimately brought under irrigation, both by surface and ground water, made by the various States in sixties has indicated that ultimate irrigation potential of the country would be of the order of 113 m.ha.. However, the ultimate potential is 139 m.ha, the increase being primarily due to upward revision in assessed potential of minor ground water schemes and minor surface water schemes to 64m.ha and 17m.ha respectively. Minor irrigation projects have both surface and ground water as their source, while major and medium projects mostly exploit surface water resources. (Source: Website of the Ministry of Water Resources)

Mining in India The country is endowed with huge resources of many metallic and non-metallic minerals. Mining sector is an important segment of the Indian economy. Since independence there has been a pronounced growth in the mineral production both in terms of quantity and value. India produces 86 minerals which include 4 fuels, 10 metallic, 46 non-metallic, 3 atomic and 23 minor minerals (which include building and other materials) (Source: Ministry of Mines website)

This section includes statistical data regarding the Infrastructure Industry. This data has been obtained from various industry publications, reports and other sources that our Company and the Lead Manager believe to be reliable. Neither our Company nor the Lead Manager has independently verified such data.

Summary of Business

We are an infrastructure development and construction company focusing on roads and highways, irrigation and mining operations. Incorporated on October 3, 1988 as a private company, we took over the business of M/s. Bhavna Construction Co., a partnership firm, which was engaged in construction business since 1968. We have an experience of four decades in the construction industry which includes rehabilitating, upgrading, widening and strengthening roads and highways, construction earthen dams, canals, siphons, remodelling and improving canals and excavation of overburden and mining of minerals. We are credited with the ISO 9001:2000 certification from the Joint Accreditation System of Australia and New Zealand for our Management systems.

Our current operations can be divided into –

Contracting business

Our contracting business involves the execution of EPC contracts in the road, irrigation and mining operations sectors. The road and irrigation projects are awarded by the Central and State governments while the mining operations projects are awarded by the Central and State governments and corporates as well. We secure our contracting projects through the competitive bidding process. Depending on the project size, we bid for these projects on a stand alone basis or in joint venture with other construction companies. We have also setup an international subsidiary, Sadbhav Mining Limitada, in Mozambique to venture in the international contractual mining segment.

Infrastructure Development business

Infrastructure development involves an investment in a project and a return on such investment thereafter. Presently, our focus is to build a sizable asset base in the road BOT project. We currently have invested in nine BOT projects. Subject to the fulfilment of the terms and conditions specified in the respective Concession Agreements for each project, we also propose to transfer our ownership in the current BOT projects to SIPL. We earn revenues by way of toll or fixed annuity during the concession period of the road projects. Toll based projects do not have fixed revenues since they are dependant on the traffic flow on the specified road. In case of annuity based projects we are paid a fixed sum by the relevant authority who assumes the traffic risk.

We secure contracts through a competitive bidding process either on a stand-alone or through a joint venture depending on the project size and requirements. We have undertaken projects for NHAI, SSNNL, L & T, Steel Authority of India, Grasim Industries, GIPCL, etc. We focus on improving our project management skills to ensure timely execution of quality projects.

Some of the projects completed by us include – • Improvement and widening from two lanes to four lanes of the Sardar Patel Ring Road around Ahmedabad city. • Rehabilitation and upgrading of Gagodhar-Radhanpur Road section of NH-5 on the East West Corridor • Strengthening and paving of shoulders of the Viramgam-Dhrangadhra section of SH07 in Gujarat • Construction of right bank canal section of SSNNL Four laning to Aurangabad - Jalna Road part of MSH-6 kms 10/400 to 60/200 including Zalta Byepass & Beed Byepass For the fiscal 2010 and 2009, our consolidated total income was Rs. 1,35,859.39 lacs and Rs. 1,10,926.27 lacs respectively representing an annual growth rate of over 22.47%. Our consolidated net profit for fiscal 2010 and 2009 was Rs. 2,675.81 lacs and Rs.3779.30 lacs respectively.

Our order book as on March 31, 2010 stands at Rs. 6,76,864.09 lacs of which Rs. 5,20,342.17 lacs are from the Roads & Highway sector. We have also invested in our BOT projects and are executing a sizeable amount of EPC contract work in these projects. Our main clients for the irrigation order book worth Rs.73,880.77 lacs are SSNNL and Government of Andhra Pradesh. We have 7 mining operation projects on hand worth Rs. 92,047.86 lacs from GHCL, GIPCL, Northern Coalfields Limited, Western Coalfields Limited, Mahanadi Coal Fields and NCL Khadia, UP.

As on April 30, 2010, our work force consisted of 1151 full time employees. Our asset base reflected a growth of around 48.85% from fiscal 2009 to 2010 on a consolidated basis. Our equipments and employee resources are instrumental in improving our project management skills for timely completion of projects. 27

THE ISSUE

6,25,000 Equity Shares of face value of Rs. 10/- at a premium of Rs. 715 per share each with Detachable Warrants

1 Equity Share for every 20 Equity Shares on a rights basis held on the Record Date by the existing The Issue Shareholders

For every 1 Equity Share allotted on a rights basis, 3 Detachable Warrants will also be allotted. Total issue including conversion of Detachable Warrants into Equity Shares would not exceed Rs. 12,500 lacs Record Date June 17, 2010 1 Equity Share for every 20 Equity Shares held on Rights Entitlement for Equity Shares the Record Date

3 Detachable Warrants for every 1 Equity Share Rights Entitlement for Detachable Warrants allotted on a rights basis Issue Price per Equity Share Rs. 725 Warrant Exercise Price Rs. 425 for each Detachable Warrant

Detachable Warrant: 3 to 18 months from the date of Allotment.

Warrant Exercise Period Our Board has a one time option to call the Detachable Warrant anytime between 3 to 18 months from the date of allotment.

125,00,000 Equity Shares of face value of Rs. 10/- Equity Shares outstanding prior to the Issue each Equity Shares outstanding before exercise of 131,25,000 Equity Shares of face value of Rs. 10/- Detachable Warrants * each Equity Shares outstanding after exercise of 150,00,000 Equity Shares of face value of Rs. 10/- Detachable Warrants ** each For more information please refer to chapter titled Terms of the Issue “Terms and Procedure of the Issue” on page 332 of this Letter of Offer

* Assuming full subscription to the Rights Issue **Assuming conversion of all Detachable Warrants allotted into Equity Shares

SUMMARY OF FINANCIAL INFORMATION

The following tables sets forth our selected historical financial information derived from our Consolidated restated for the fiscal years ended March 31, 2007, 2008, 2009 and 2010 and Standalone financial statements for the fiscal years ended March 31, 2006, 2007, 2008, 2009 and 2010 all prepared in accordance with Indian GAAP, the Companies Act and SEBI Regulations and restated which has been included in the chapter titled “Financial Statements” on page 157 of this Letter of Offer. This table should be read in conjunction with the financial statements mentioned therein and the notes thereto.

SUMMARY OF CONSOLIDATED RESTATED ASSETS AND LIABILITIES (Rs. Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 A. Fixed Assets Gross Block 1,08,132.55 73,976.31 47,485.18 43,293.40 Less :- Accumulated Depreciation 19,209.10 14,239.55 11,297.39 9,296.04 Net Block 88,923.45 59,736.76 36,187.79 33,997.36

Capital Work in progress including capital advances 41,082.27 41,492.68 39,364.49 5,779.83 Total 1,30,005.72 1,01,229.44 75,552.28 39,777.19

B. Investments 8,638.68 2,545.00 6,374.39 1,240.81

C. Current Assets, Loans and Advances Sundry debtors 44,081.20 27,504.96 13,334.82 11,512.09 Cash & Bank Balances 5,068.12 3,241.50 2,050.37 2,901.89 Inventories 5,835.08 2,755.03 8,501.50 4,667.84 Other Current Assets 4,641.13 1,592.54 2,710.65 5,287.69 Loans & Advances 36,951.09 26,645.12 15,609.70 12,018.30 Total 96,576.62 61,739.15 42,207.04 36,387.81

D. Liabilities & Provisions Current Liabilities & Provisions 46,422.49 28,576.66 25,844.09 25,650.91 Secured Loan 1,29,124.44 93,289.91 55,617.20 12,841.99 Unsecured Loan 16,418.91 538.05 5,148.21 19,307.18 Total 1,91,965.84 1,22,404.62 86,609.50 57,800.08

E. Deferred Tax Liability 1,410.64 1,100.45 971.39 902.92 F. Minority Intrest 5,825.47 6,776.94 5,223.13 1,535.80 G. Net Worth ( A+B+C-D-E-F) 36,019.07 35,231.58 31,329.69 17,167.01

Net Worth represented by : H. Equity share Capital 1,250.00 1,250.00 1,250.00 1,090.00 I. Warrant Application Money - 345.00 -

J. Reserves and Surplus Capital Reserve 1,017.27 3,225.00 2,880.00 2,880.00 Security Premium Account 14,875.17 14,875.17 14,875.17 6,075.00 Debenture Redemption Reserve 614.80 14.80 - - General Reserve 4,810.18 4,160.18 3,510.18 2,975.32 Profit and Loss Account 13,487.17 11,835.96 8,640.94 4,403.70 Total of Reserve & Surplus 34,804.59 34,111.11 29,906.29 16,334.02

K. Miscellaneous Expenditure 35.52 129.53 171.60 257.01

36,019.07 35,231.58 31,329.69 17,167.01 L. Net Worth (H+I+J-K)

Note :-

• The above statement should be read with the Notes to Restated Consolidated Financial Statements appearing in Annexure D appearing on page 164 of this Letter of Offer.

• Increase in sundry debtors from Rs. 13,334 lacs as on March 31, 2008 to Rs. 27,504.96 lacs as on March 31, 2009 is mainly on account of:

i. Delay in payments due to change in scope of work in MNEL project ii. Delay in payments from the Irrigation Department of Andhra Pradesh for Anantpur Canal project and iii. Delay in payments by RIDCOR in the Kota project

SUMMARY OF CONSOLIDATED RESTATED PROFIT AND LOSS ACCOUNT

(Rs. Lacs) Year Ended Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 I. Income Operating Income 1,33,438.01 1,09,893.26 92,033.37 48,846.61 Increase/ (Decrease) in Work-in-progress 436.00 (226.58) (6.79) 354.02 Exceptional Income - - 596.82 - Other Income 1,985.38 1,259.59 417.83 127.60 Total - A 1,35,859.39 1,10,926.27 93,041.23 49,328.23 II. Expenditure Construction, Toll Plaza and Road 84,910.54 62,862.40 52,590.35 25,985.39 Maintenance Exp. Material Consumed 21,185.58 27,409.72 23,389.38 14,053.09 Adiministration & Other Expenses 7,430.82 3,723.53 2,700.99 2,582.61 Employee Remuneration & benefits 2,158.17 1,732.19 1,552.59 1,051.30 Finance Charges 11,319.60 6,176.40 3,371.33 788.75 Depreciation 5,644.91 3779.56 2569.76 1,776.72 Amortization of Miscellaneous expenditure 94.68 86.36 86.06 86.39 1,32,744.30 105770.16 86260.46 46,324.25 Transferred to Capital Work in Progress (4,146.99) (589.59) (1,056.19) (738.70) Total - B 1,28,597.31 105180.57 85204.27 45,585.55 III. Profit before taxation ( A-B) 7,262.08 5745.70 7836.96 3,742.68 Less : Provision for taxation Current 3,141.53 1,780.95 2,321.99 1,279.32 Deferred 310.19 129.06 76.15 (115.43) Fringe bebefit tax - 16.38 14.37 8.37 IV. Profit After Taxation as per audited 3,810.36 3819.31 5424.45 2,570.42 statement of accounts Add/(less): Excess/(short) provision of Taxation for (1,134.55) (40.01) (63.22) (81.78) ealier years Excess/(short) provision for Deferred Tax - - - 60.95 of ealier Years Net Profit After Tax But Before Extra 2,675.81 3779.30 5361.23 2,549.59 Ordinary Items Extra Ordinary Items - - - - Net Profit After Tax & Extra Ordinary Items as per Audited Statement of 2,675.81 3779.30 5361.23 2,549.59 Accounts ( C) Adjustments on account of changes in (50.40) 42.55 7.85 - accounting policies Impact on account of prior period items (141.10) 172.10 42.43 (125.52) Total adjustments (191.50) 214.65 50.28 (125.52) Tax impact on adjustments (47.96) 58.50 14.42 (42.66) Total adjustments net of tax impact ( D) (143.54) 156.15 35.86 (82.86) V. Adjusted profit / ( loss) ( C + D) 2,532.27 3,935.45 5,397.09 2,466.74 Share of (Profit) / Loss Transferred to 951.98 509.34 (24.87) 17.80 Minority Intrest 3,484.25 4,444.79 5,372.22 2,484.54

Surplus / (Deficit) Brought forward from the 11,835.96 8,640.94 4,403.70 2,731.01 Previous year* VI. Profit available for appropriation 15,320.21 13,085.74 9,775.92 5,215.55 Debenture Redemption Reserve 600.00 14.80 - - Transfer to General Reserve 650.00 650.00 550.00 300.00 Proposed equity dividend ( Interim / Final) 500.00 500.00 500.00 437.50 Tax on dividend 83.04 84.98 84.98 74.35 VII. Adjusted Available Surplus/ ( 13,487.17 11,835.96 8,640.94 4,403.70 Deficit) carried forward

* Balance of Profit brought forward from Previous Year have been adjusted for giving effect of Prior Period Items

Note: Increase in Income from Rs. 49,328.23 lacs as on March 31, 2007 to Rs. 93,041.23 lacs as on March 31, 2008 is mainly on account of

• Increase in contract receipts in road projects which include Aurangabad Jalna, Nagpur-Seoni, Shivpuri and Chiraidongri projects as well in Irrigation sector in Jabalpur, Orissa & Anantpur projects

• Increase in other income from Rs. 127.60 lacs in 2006-07 to Rs. 417.83 lacs in 2007-08 because of dividend received from Mutual Fund and profit on sale of fixed assets

• Exceptional income of Rs. 596.82 lacs because of an award through arbitration proceeding in respect of a claim filed against GIPCL

For further details, please refer to chapter “Financial Information of the Issuer Company” on page 157 of this Letter of Offer.

SUMMARY OF STANDALONE RESTATED ASSETS AND LIABILITIES

(Rs. Lacs) As At As At As At As At As At Particulars 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 A. Fixed Assets Gross Block 33220.98 26064.84 24139.69 20204.68 17992.51 Less :- Accumulated Depreciation 12211.87 10610.30 9837.63 9009.94 7608.23 Net Block 21009.11 15454.54 14302.06 11194.74 10384.28

B. Investments 14412.87 12460.27 12046.13 4606.58 1043.93

C. Current Assets, Loans and Advances Sundry Debtors 44077.84 27817.63 15371.81 13393.83 8462.31 Cash & Bank Balances 4483.47 1003.05 1026.11 2507.13 4321.64 Inventories 5399.08 2755.03 8501.50 4667.84 4630.55 Other Current Assets 281.95 53.43 1614.92 1913.69 799.52 Loans & Advances 46675.26 23594.71 16848.76 11986.98 6358.85 Total 100917.60 55223.85 43363.10 34469.47 24572.87

D. Liabilities & Provisions Current Liabilities & Provisions 53357.41 26568.63 25294.12 27676.30 17474.14 Secured Loan 27403.78 21111.22 15019.44 7158.69 4616.65 Unsecured Loan 15019.10 --- 12.10 140.51 602.72 Total 95780.29 47679.85 40325.66 34975.50 22693.51

E. Deferred Tax Liability 1407.98 1100.45 971.39 933.60 1079.29

F. NET WORTH (A+B+C-D-E) 39151.30 34358.36 28414.24 14361.69 12228.28

Net Worth Represented By : G. Equity Share Capital 1250.00 1250.00 1250.00 1090.00 1090.00

H. Warrant Application Money ------345.00 ------

I. Reserves and Surplus Capital Reserve 345.00 345.00 ------Security Premium Account 14875.17 14875.17 14875.17 6075.00 6075.00 Debenture Redemption Reserve 614.80 14.80 ------General Reserve 4810.18 4160.18 3510.18 2975.32 2675.32 Profit and Loss Account 17256.15 13798.10 8604.84 4478.38 2731.03 Total 37901.30 33193.25 26990.19 13528.70 11481.35 J. Miscellaneous Exp. 0.00 84.89 170.95 257.01 343.07 K. NET WORTH (G+H+I-J) 39151.30 34358.36 28414.24 14361.69 12228.28

SUMMARY OF STANDALONE RESTATED PROFIT AND LOSS ACCOUNT

(Rs. Lacs) As At As At As At As At As At Particulars 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 I. INCOME Operating Income 125692.62 106248.06 89482.85 48322.38 28363.71 Increase / (Decrease) in Work in Progress 0.00 (226.58) (6.79) 354.02 596.46 Exceptional Income ------596.82 ------Other Income 1664.97 1169.13 388.72 141.89 67.45 Total – A 127357.59 107190.61 90461.60 48818.29 29027.62

II. EXPENDITURE Material Expenditure 21066.47 27409.72 23389.38 14053.59 6445.31 Construction Expenses 84146.72 62561.45 52419.64 25960.31 16735.85 Administration & Other Exp 4745.19 3559.85 2497.25 1639.43 1437.95 Employee Remuneration and Benefits 1884.17 1573.47 1447.90 1032.18 754.50 Finance Charges 3308.62 2138.55 1573.07 694.67 905.77 Depreciation 2325.21 1568.08 1388.61 1490.63 1386.73 Amortization of Miscellaneous Exps. 84.89 86.06 86.06 86.06 86.06 Total – B 117561.27 98897.18 82801.91 44956.37 27752.17

III. PROFIT BEFORE TAXATION (A-B) 9796.32 8293.43 7659.69 3861.92 1275.45 Less :- Provision for Current Tax 2970.01 1780.82 2300.97 1279.25 108.44 Deferred Tax 307.53 129.06 45.47 (84.75) 3.72 `Fringe Benefit Tax 0.00 14.10 13.13 8.00 6.75

IV. Profit After Taxation 6518.78 6369.45 5300.12 2659.42 1156.54 Excess / (Short) provision of Taxation for Earlier Years (1134.55) (40.01) (63.22) (81.78) 228.44 Excess / (Short) provision of Depreciation for Earlier Years ------Excess / (Short) provision of Defered Tax for Earlier Years ------60.95 --- Net Profit After Tax but befor Extra Ordinary Items 5384.23 6329.44 5236.90 2638.59 1384.98

Extra Ordinary Items ------Net Profit for the Year after Extra Ordinary Items as per audited statement of accounts (C) 5384.23 6329.44 5236.90 2638.59 1384.98 Adjustment on account of changes in accounting policies ------Impact on account of prior period items (141.10) 172.10 37.18 (120.27) 64.80 Total Adjustments (141.10) 172.10 37.18 (120.27) 64.80 Tax Impact on adjustments (47.96) 58.50 12.64 (40.88) 22.03 Total adjustments net of tax impact (D) (93.14) 113.60 24.54 (79.39) 42.77

As At As At As At As At As At Particulars 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 V. Adjusted Profit / (Loss) (C + D) 5291.09 6443.04 5261.44 2559.20 1427.75 Surplus / (Deficit) Brought forward from Previous Year 13798.10 8604.84 4478.38 2731.03 1651.84 VI. Profit Available for Appropriation 19089.19 15047.88 9739.82 5290.23 3079.60 Debenture Redemption Reserve 600.00 14.80 ------Transfer to General Reserve 650.00 650.00 550.00 300.00 100.00 Proposed Equity Dividend 500.00 500.00 500.00 437.50 218.00 Tax on Proposed Dividend 83.04 84.98 84.98 74.35 30.57 VII. Adjusted Available Surplus carried forward 17256.15 13798.10 8604.84 4478.38 2731.03

* Balance of Profit brought forward from Previous Year have been adjusted for giving effect of Prior Period Items

GENERAL INFORMATION

Dear Equity Shareholder(s),

Pursuant to the resolution passed by Board of Directors of our Company at its Meeting held on March 27, 2009 and Shareholders approval in the EGM held on April 29, 2009, our Company has decided to make the following offer to the Equity Shareholders of our Company.

ISSUE OF 6,25,000 EQUITY SHARES OF FACE VALUE OF RS. 10/- EACH FOR CASH AT A PREMIUM OF RS. 715 PER EQUITY SHARE ON A RIGHTS BASIS TO THE EQUITY SHAREHOLDERS OF OUR COMPANY IN THE RATIO OF 1 EQUITY SHARE FOR EVERY 20 EQUITY SHARES HELD ON THE RECORD DATE I.E. JUNE 17, 2010.

UNDER THE ISSUE, FOR EVERY 1 EQUITY SHARE ALLOTTED ON RIGHTS BASIS THE ALLOTTEES WILL ALSO BE ALLOTTED 3 DETACHABLE WARRANTS. EACH DETACHABLE WARRANT IS CONVERTIBLE INTO ONE (1) EQUITY SHARE EACH. TOTAL ISSUE INCLUDING CONVERSION OF DETACHABLE WARRANTS INTO EQUITY SHARES WOULD NOT EXCEED RS. 12,500 LACS. THE ISSUE PRICE IS 72.5 TIMES THE FACE VALUE OF THE EQUITY SHARES.

Important

1. This offer is applicable only to those Equity Shareholders whose names appear as beneficial owners in respect of the Equity Shares held in the electronic form and on the Register of Members of our Company in respect of the Equity Shares held in physical form as on June 17, 2010 i.e. the Record Date fixed in consultation with the Designated Stock Exchange i.e., BSE.

2. Your attention is drawn to “Risk Factors” appearing on Page 10 of this Letter of Offer.

3. Please ensure that you have received the Composite Application Form (‘CAF’) along with this Letter of Offer. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar will issue a duplicate CAF on the request of the shareholder who should furnish the registered folio number/DP ID number/client ID number and his/her full name and address to the Registrar. Please note that those applicants who are making the application in the duplicate CAF should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. In case the original and the duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored.

4. Please read this Letter of Offer and the instructions contained therein and in CAF carefully, before filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefully followed. Application is liable to be rejected for any non-compliance with the terms of this Letter of Offer or the CAF.

5. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrars to the Issue i.e. Link Intime India Private Limited quoting the registered folio number/ Depository Participant (DP) Number and Client ID Number and the CAF numbers, as mentioned in the CAF.

6. The Issue will be kept open for a minimum period of 15 (Fifteen) days. If extended, with the approval of the Board, will be kept open for a maximum period of 30 (Thirty) days.

7. The Lead Manager and our Company shall update this Letter of Offer and keep the public informed of any material changes till the listing and trading commences for Equity Shares offered through this Issue.

ISSUE SCHEDULE

The subscription will open upon the commencement of the banking hours and will close upon the close of banking hours on the dates mentioned below:

LAST DATE FOR REQUEST FOR ISSUE OPENS ON ISSUE CLOSES ON SPLIT APPLICATION FORMS Wednesday, August 18, 2010 Friday, August 27, 2010 Monday, September 6, 2010 36

REGISTERED OFFICE Sadbhav House, Opposite Law Garden Police Chowki Ellisbridge, Ahmedabad 380 006 Tel.: +91 79 2646 3384 Fax: +91 79 2640 0210 Website: www.sadbhaveng.com Email: [email protected]

REGISTRATION NO: 04-11322 CORPORATE IDENTIFICATION NO: L29199GJ1988PLC011322

REGISTRAR OF COMPANIES (ROC) Gujarat Dadra & Nagar Haveli situated at ROC Bhavan Opposite Rupal Park Society Near Ankur Bus Stand Naranpura, Ahmedabad 380 013

The Equity Shares of our Company are listed on the BSE and the NSE.

BOARD OF DIRECTORS

Name Category/ Designation Mr. Vishnubhai M. Patel Managing Director and CEO Mr. Shashin V. Patel Joint Managing Director Mr. Girish N. Patel Whole time Executive Director Mr. Nitinkumar R. Patel Whole time Executive Director Mr. Pravinkumar M Ganatra Independent Non-Executive Director Mr. Amarsinh J Vaghela Independent Non-Executive Director Mr. Sandip V. Patel Independent Non-Executive Director Mr. Atul N Ruparel Independent Non-Executive Director

For further details of our Company’s Directors, please refer to chapter titled “Our Management’ on page 126 of this Letter of Offer.

COMPLIANCE OFFICER AND COMPANY SECRETARY

Mr. Vijay Kalyani Sadbhav House Opp. Law Garden Police Chowki Ellisbridge, Ahmedabad 380 006 Tel No: +91 79 2646 3384 Fax No: +91 79 2640 0210 E-mail: [email protected]

Investors may also contact the Registrars to the Issue/Compliance Officer in case of pre-issue /post Issue related queries such as non-receipt of Letter of Offer/CAF/Letter of Allotment/Share Certificate/credit of allotted shares in respective beneficiary account/refund order, etc.

BANKERS TO THE ISSUE

HDFC Bank Limited FIG – OPS Department Lodha – I Think Techno Campus O-3 Level Next to Kanjurgmarg Railway Station Kanjurgmarg (East) Mumbai – 400 002 Tel No: +91 22 3075 2928 37

Fax No: +91 22 2579 9801 E-mail: [email protected] Website: www.hdfcbank.com Contact Person: Mr. Deepak Rane

IDBI Bank Limited IDBI Complex Muni. Staff Quarter Near Lal Bungalow Off C. G Road Post Bag No. 22 Ahmedabad 380 006 Tel No: +91 79 6607 2753 Fax No: +91 79 2656 5106 E-mail: [email protected] Contact Person: Mr. Kevendra Khedle

Standard Chartered Bank 270, D N Road Fort, Mumbai 400 001 Maharashtra Tel No: +91 22 2683 3955 Fax No: +91 22 2209 6067 E-mail: [email protected] Website: www.standardchartered.com Contact Person: Mr, Joseph George

Punjab National Bank 2nd Floor, PNB House Sir P.M Road Fort, Mumbai 400 001 Tel No: +91 22 2262 1122 Fax No: +91 22 2262 1124 E-mail: [email protected] Website: www.pnbindia.in Contact Person: Mr. K K Khurana

SELF CERTIFIED SYNDICATE BANKS

The lists of banks that have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in. For details on designated branches of SCSBs collecting the CAF, please refer the above mentioned SEBI website.

BANKERS OF OUR COMPANY

Oriental Bank of Commerce “Neel Kamal”, Opp. Sales India Ashram Road Ahmedabad – 380 009 Tel: +91 79 2754 1843 Fax: +91 79 2754 1113 E-mail: [email protected]

ICICI Bank Limited 9th Floor, JMC House Opp. Parimal Garden Ambawadi, Ahmedabad - 3800 009 Tel: +91 79 6652 3775 Fax: +91 79 6652 3779 E-mail: [email protected]

Indian Overseas Bank Chinu Bhai Towers, Opp. Handloom House Ashram Road, P.B. No. 2 Ahmedabad - 380 009 Tel: +91 79 2658 6969 Fax: +91 79 2658 7979 E-mail: [email protected]

The Karur Vysya Bank Limited Ground Floor, Sakar VIINehru Bridge Corner Ahmedabad - 380 009 Tel: +91 79 2658 2475 Fax: +91 79 2658 2474 E-mail: [email protected]

Industrial Development Bank of India Limited IDBI Complex, Opp. Municipal Staff Quarters Near Lal Bungalow, Off C.G. Road Post Bag No.22 Ahmedabad – 380 006 Tel.: +91 79 2656 3911 Fax: +91 79 2640 0814 E-mail: [email protected]

Standard Chartered Bank Abhijeet II Near Mithakali Six Roads Ahmedabad – 380 009 Tel.: +91 79 2647 0060 Fax: +91 79 6605 1572 E-mail: [email protected]

Punjab National Bank Ground Floor, “A” Wing Pelican Building, Ashram Road Ahmedabad – 380 009 Tel.: +91 79 2657 6446 Fax: +91 79 2658 6405 E-mail: [email protected]

Yes Bank Limited 102/103, C.G Centre C.G. Road, Panchwati Ahmedabad – 380 009 Tel.: +91 79 6631 9000 Fax: +91 44 6631 8430 E-mail: [email protected]

DBS Bank Limited 3rd Floor, Fort House 221, D.N. Road, Fort Mumbai 400 001 Tel.: +91 22 6752 8344 Fax: +91 22 6614 7599 E-mail: [email protected]

HDFC Bank Limited “Astral House”, 2nd Floor Near Mithakhali Six Roads Navragpura 39

Ahmedabad - 380 009 Tel.: +91 79 3981 7278 Fax: +91 79 3981 7295 E-mail: [email protected]

ISSUE MANAGEMENT TEAM

LEAD MANAGER TO THE ISSUE

Collins Stewart Inga Private Limited A-404, Neelam Centre Hind Cycle Road Worli, Mumbai 400 030 Tel. No.: +91 22 2498 2919 Fax No.: +91 22 2498 2956 Email: [email protected] Website: www.csinga.com Contact Person: Ms. Deepa Mutha

LEGAL ADVISORS TO THE ISSUE

Messrs ANS Law Associates Advocates & Solicitors 41-A, Filmcenter, 4th Floor 68 Tardeo Road Mumbai 400 034 Tel No.: +91 22 6660 4761 Fax No.: +91 22 6660 4763 Email: [email protected] Contact Person: Mr. Sharad D.Abhyankar

AUDITORS OF OUR COMPANY

Shashikant Patel Associates Chartered Accountants 203-A Sagun Castle B/h, Satellite Complex Satellite, Ahmedabad – 380 015 Tel No.: +91 22 2676 6396Email: [email protected]

REGISTRAR TO THE ISSUE

Link Intime India Private Limited C-13, Pannalal Silk Mills Compound LBS Road, Bhandup West Mumbai – 400 078 Tel: + 91 22 2596 0320 Fax: + 91 22 2596 0329 Toll Free No: 1-800-22-0320 Email: [email protected] Website: www.linkintime.co.in Contact Person: Mr. Pravin Kasare

STATEMENT OF RESPONSIBILITIES AS LEAD MANAGER TO THE ISSUE

Collins Stewart Inga Private Limited is the sole Lead Manager to the Issue and all the responsibilities relating to coordination and other activities in relation to the Issue shall be performed by them.

CREDIT RATING

This being a Rights Issue of Equity Shares, no credit rating is required. 40

DEBENTURE TRUSTEE

As the issue consists of the Equity Shares, the appointment of trustees is not required.

MONITORING AGENCY

In terms of regulation 16 of the SEBI (ICDR) Regulations, the size of the issue being less than Rs. 5000 million, we are not required to appoint a monitoring agency.

APPRAISING ENTITY

Not applicable.

BOOK BUILDING PROCESS DETAILS

Not applicable.

UNDERWRITING DETAILS

The present issue is not underwritten.

CAPITAL STRUCTURE

The Share Capital of our Company as at the date of the LOF is set forth below:

(Rs. lacs) Aggregate Aggregate Particulars Nominal Value at Value Issue Price Authorized Share Capital 2,00,00,000 Equity Shares of Rs. 10/- Each 2,000.00 Issued, Subscribed and Paid-up capital 1,25,00,000 Equity Shares of Rs. 10/- Each 1,250.00 Present Issue being Offered to the Equity Shareholders through this Letter of Offer Equity Shares of Rs. 10/- each at a premium of 6,25,000 62.50 4,531.25 Rs 715 each at a total price of Rs 725 each Paid up Capital after the Issue 1,31,25,000 Equity Shares of Rs. 10/- Each 1,312.50 (Pursuant to full subscription of all the Equity Shares offered) Paid up Capital after Conversion of Detachable Warrants 1,50,00,000 Equity Shares of Rs. 10/- Each 1,500.00 (Pursuant to full subscription of all the Right Shares and conversion of all

Detachable Warrants into Equity Shares) Share Premium Account Existing share premium account 14,875.17

Share premium account after the Issue 19,343.92

Share premium account after the conversion of Detachable Warrants 27,125.17 (Assuming all the Detachable Warrants are converted into Equity Shares)

NOTES TO THE CAPITAL STRUCTURE

1) Changes in Authorized Capital of our Company

Total No. of Face Value Authorized Date Particulars Shares (Rs.) Capital (Rs.) October 03, 1988 5,000 100 5,00,000 Incorporation September 29, 1989 25,000 100 25,00,000 Increase March 10, 1993 1,00,000 100 1,00,00,000 Increase Subdivision of Equity Shares of our February 28, 2001 10,00,000 10 1,00,00,000 Company from Rs. 100 per share to Rs 10 per share. January 06, 2005 1,00,00,000 10 10,00,00,000 Increase July 27, 2005 1,50,00,000 10 15,00,00,000 Increase April 29, 2009 2,00,00,000 10 20,00,00,000 Increase

2) Share Capital History of our Company

Fac Iss Prem No. of e ue Cumulative ium Cumulative Nature Date of Issued Equity Val Pric paid-up per Share of Reason for allotme Capital Shares ue e Capital share Premium consid Allotment nt (in Rs.) Allotted (in (in (in Rs.) (In (in Rs) eration Rs) Rs) Rs) Subscriptio Novemb n to er 1, 2 100 100 200 200 - - Cash Memorandu 1988 m Other Allotment to October 22,500 100 100 22,50,000 22,50,200 - - than promoter 4, 1989 cash and others Allotment to March Cash 27,498 100 100 27,49,800 50,00,000 - - promoter 31, 1993 and others Bonus March 1, 25,000 100 100 25,00,000 75,00,000 - - Bonus Issue in 1994 Ratio 1:2 Allotment to March 25,000 100 100 25,00,000 100,00,000 - - Cash promoter 30, 1994 and others FV split from Rs. February - 10 100 to Rs. 10 per 100,00,000 - - - Share Split 28, 2001 share January Bonus in 50,00,000 10 10 500,00,000 600,00,000 - - Bonus 20, 2005 Ratio 5:1 Preferential March Allotment to 20,00,000 10 60 200,00,000 800,00,000 50 1000,00,000 Cash 31, 2005 Promoters and Others March 1, Initial Public 29,00,000 10 185 290,00,000 1090,00,000 175 6075,00,000 Cash 2006 Offer July 11, 16,00,000 10 575 160,00,000 1250,00,000 565 15115,00,000* Cash QIP 2007

*From the above Share Premium, an amount of Rs 239,83,000 has been written off as QIP Share Issue Expenses. Thus, present amount in Share Premium a/c stands at Rs 14,875.17 lacs

• In addition to the above, pursuant to the Guidelines for Preferential Issues contained in Chapter XIII of the erstwhile SEBI [Disclosure & Investor Protection] Guidelines 2000, our Company had allotted 6,00,000 warrants on July 31, 2007 to Mr. Vishnubhai M. Patel, the Promoter of our Company, entitling him to subscribe to one equity share at a price of Rs. 575/- per equity share for every warrant held. Mr. Vishnubhai M. Patel has decided not to exercise his option to convert the said warrants in to Equity Shares and the right has since lapsed.

3) Equity Shares issued for consideration other than cash

Date of Issue No. Shares Persons to whom issued Issue Price Reasons for Issue

October 4, 22,500 1. Shri Vishnubhai M.Patel NIL Allotment made to 1989 2. Smt.Santoben Mafatlal Patel promoters and other 3. Shri Chandradev Singh Gore partners, when our Singh Company took over 4. Shri.Gautambhai Rambhai the running Patel business of of M/s. 5. Shri.Girishbhai Nandubhai Patel Bhavna 6. Shri.Arunkumar Singh Construction Co., a Goresingh partnership firm 7. Shri. Pareshbhai Chandrakant Patel 43

8. Shri.Arvindkumar Singh Goresingh 9. Shri.Kirtibhai Anubhai Patel

There are no benefits that have accrued to our Company by virtue of the above allotment

4) Shareholding Pattern of our Company

The table below represents the shareholding pattern of our Company as on July 30, 2010:

Categor Category of Number of Total Number of Total shareholding as Shares pledged or y Shareholder Shareholders(I number shares held a percentage of total otherwise code (II) II) of in number of shares encumbered (I) shares dematerializ As a As a Numb As a (IV) ed form percentag percentag er of percentage (V) e of(A+B) e of shares IX=(VIII/(IV (VI) (A+B+C) (VIII) )* 100 (VII)

(A) Shareholding of Promoter and Promoter Group 1 Indian (a) Individuals/ 9 5263540 5218540 42.11 42.11 0 0 Hindu Undivided Family (b) Central 0 0 0 0 0 0 0 Government/ State Government( s) (c) Bodies 1 342000 342000 2.74 2.74 0 0 Corporate (d) Financial 0 0 0 0 0 0 0 Institutions/ Banks (e) Any 1 332820 332820 2.66 2.66 0 0 Others(Trust) Sub 11 5938360 5893360 47.51 47.51 0 0 Total(A)(1)

2 Foreign A Individuals 0 0 0 0 0 0 0 (Non- Residents Individuals/ Foreign Individuals)

B Bodies 0 0 0 0 0 0 0 Corporate C Institutions 0 0 0 0 0 0 0 d Any 0 0 0 0 0 0 0 Others(Specif y) Sub 0 0 0 0 0 0 0 Total(A)(2)

Total 11 5938360 5893360 47.51 47.51 0 0 Shareholding of Promoter and Promoter Group (A)= (A)(1)+(A)(2)

(B) Public shareholding 1 Institutions (a) Mutual 42 2205340 2205340 17.64 17.64 0 0 Funds/ UTI (b) Financial 2 59328 59328 0.47 0.47 0 0 Institutions / Banks (c) Central 0 0 0 0 0 0 0 Government/ State Government( s) (d) Venture 0 0 0 0 0 0 0 Capital Funds (e) Insurance 0 0 0 0 0 0 0 Companies (f) Foreign 31 2985829 2985829 23.89 23.89 0 0 Institutional Investors (g) Foreign 0 0 0 0 0 0 0 Venture Capital Investors (h) Any Other 0 0 0 0 0 0 0 (specify) Sub-Total 75 5250497 5250497 42.00 42.00 0 0 (B)(1)

B 2 Non- institutions (a) Bodies 157 952952 952952 7.62 7.62 0 0 Corporate (b) Individuals I Individuals 5060 342405 342402 2.74 2.74 0 0 i. Individual shareholders holding nominal share capital up to Rs 1 lakh II ii. Individual 0 0 0 0 0 0 0 shareholders holding nominal share capital in excess of Rs. 1 lakh.

(c-ii) NRI 99 6635 6635 0.05 0.05 0 0 (c-iii) OCB 0 0 0 0 0 0 0 (c-iv) NRI (Non 28 1454 1454 0.01 0.01 0 0 Repatriable) Sub-Total 5393 1311143 1311140 10.49 10.49 0 0 (B)(2)

(B) Total Public 5468 6561640 6561637 52.49 52.49 0 0 Shareholding (B)= (B)(1)+(B)(2)

TOTAL 5479 12500000 12454997 100 100 0 0 (A)+(B)

(C) Shares held by Custodians and against which Depository Receipts have been issued GRAND 5479 12500000 12454997 100 100 0 0 TOTAL (A)+(B)+(C)

The table below represents the shareholding pattern of the Company, as adjusted for the Issue:

Post-Issue on Post-Issue of Right Category Category of Pre-Issue conversion of Shares Detachable Warrants

% of No. of % of post No. of code Shareholder No. of Equity % of Pre- post Equity Issue Equity (I) (II) Shares Issue Capital Issue Shares capital Shares capital

(A) Shareholding of Promoter and Promoter Group 1 Indian (a) Individuals/ Hindu 5263540 42.11 5526717 42.11 6316248 42.11 Undivided Family (b) Central Government/ 0 0.00 0 0.00 0 0.00 State Government(s)

(d) Financial Institutions/ 0 0.00 0 0.00 0 0.00 Banks (e) Any Others(Trust) 332820 2.66 349461 2.66 399384 2.66 Sub Total(A)(1) 5938360 47.51 6235278 47.51 7126032 47.51

2 Foreign 0.00 0 0.00 0 0.00

A Individuals (Non- 0 0.00 0 0.00 0 0.00 Residents Individuals/ Foreign Individuals) 0.00 0 0.00 0 0.00 B Bodies Corporate 0 0.00 0 0.00 0 0.00

C Institutions 0 0.00 0 0.00 0 0.00 d Any Others(Specify) 0 0.00 0 0.00 0 0.00 Sub Total(A)(2) 0 0.00 0 0.00 0 0.00 Total Shareholding of 5938360 47.51 6235278 47.51 7126032 47.51 Promoter and Promoter Group (A)= (A)(1)+(A)(2) (B) Public shareholding 0.00 0 0.00 0 0.00

1 Institutions 0.00 0 0.00 0 0.00 (a) Mutual Funds/ UTI 2205340 17.64 2315607 17.64 2646408 17.64 (b) Financial Institutions / 59328 0.47 62294 0.47 71194 0.47 Banks (c) Central Government/ 0 0.00 0 0.00 0 0.00 State Government(s) (d) Venture Capital 0 0.00 0 0.00 0 0.00 Funds (e) Insurance Companies 0 0.00 0 0.00 0 0.00 (f) Foreign Institutional 2985829 23.89 3135120 23.89 3582995 23.89 Investors (g) Foreign Venture 0 0.00 0 0.00 0 0.00 Capital Investors (h) Any Other (specify) 0 0.00 0 0.00 0 0.00 Sub-Total (B)(1) 5250497 42.00 5513022 42.00 6300596 42.00 B 2 Non-institutions 0.00 0 0.00 0 0.00 (a) Bodies Corporate 952952 7.62 1000600 7.62 1143542 7.62 (b) Individuals 0.00 0 0.00 0 0.00 I Individuals i. 342405 2.74 359525 2.74 410886 2.74 Individual shareholders holding nominal share capital up to Rs 1 lakh II ii. Individual 0 0.00 0 0.00 0 0.00 shareholders holding nominal share capital in excess of Rs. 1 lakh. (c) Any Other (specify) 0.00 0 0.00 0 0.00 (c-i) Clearing Member 7697 0.06 8082 0.06 9236 0.06 (c-ii) NRI 6635 0.05 6967 0.05 7962 0.05 (c-iii) OCB 0 0.00 0 0.00 0 0.00 (c-iv) NRI (Non 1454 0.01 1527 0.01 1745 0.01 Repatriable) Sub-Total (B)(2) 1311143 10.49 1376700 10.49 1573372 10.49 (B) Total Public 6561640 52.49 6889722 52.49 7873968 52.49 Shareholding (B)= (B)(1)+(B)(2) TOTAL (A)+(B) 12500000 100 13125000 100.00 15000000 100.00 GRAND TOTAL 12500000 100 13125000 100.00 15000000 100.00 (A)+(B)+(C)

The number of shares held and percentage of holding described above is based on the assumption that all the equity shareholders subscribe to their entitlement and also exercise their right to convert the Detachable Warrants into Equity Shares.

5) Our Promoters and Promoter Group have confirmed that they intend to subscribe to the full extent of their entitlement in the Issue. Further, they have also confirmed that should there be renunciation by any of the members of the Promoter Group, the other members of the Promoter Group have undertaken to subscribe to the renounced portion of the entitlement of the said member of the Promoter Group. Our Promoters and Promoter Group undertake to subscribe to any unsubscribed portion of the Issue, including by subscribing for renunciation, if any, made by the Promoter Group or any other shareholder. Our Promoters and Promoter Group have provided an undertaking dated June 24, 2010, to our Company to apply for additional Equity Shares with Detachable Warrants in the Issue, to the extent of any unsubscribed portion of the Issue.

However, the said member of the Promoter Group who has renounced their entitlement to other Promoter or Promoter Group, shall not apply for the additional Equity Shares in the Issue.

As a result of this subscription and consequent allotment including allotment of Equity Shares on conversion of additional Detachable Warrants, our Promoters and 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 our Promoters and Promoter Group, if any, will not result in change of control of the management of our Company and shall be exempt in terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirements indicated in the chapter titled “Objects of the Issue” on page 51 of this Letter of Offer, there is no other intention/purpose for this Issue, including any intention to delist our Company, even if, as a result of allotment to our Promoters and Promoter Group, in this Issue, our Promoter’s shareholding in our Company exceeds their current shareholding. Our Promoters and Promoter Group shall subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to our Promoters and 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.

6) Our Company undertakes that in the event of this Rights Issue by our Company is completed with our Promoters subscribing to additional Equity Shares over and above their entitlement and such additional allotment shall be restricted to the maximum number of shares which can be allotted so that the minimum level of public shareholding will not be breached as required under Clause 40A of the Listing Agreement.

7) If our Company does not receive minimum subscription of 90% of the Issue (excluding the amount to be raised pursuant to exercise of Detachable Warrants) on the date of closure of the Issue or the subscription level falls below 90% after the closure of the Issue, on account of cheques having being returned unpaid or withdrawal of applications, our Company shall forthwith refund the entire subscription amount received within 15 days. If there is a delay beyond eight days after the date from which our Company becomes liable to pay the amount, our Company shall pay interest as prescribed under Section 73 of the Companies Act, 1956.

8) The details of Top ten Shareholders

(a) Top ten shareholders as on July 30, 2010

S No. Name of Shareholders No. of shares 1. Vishnubhai M. Patel 1991580 2. Shantaben V. Patel 1350000 3. PCA India Infrastructure Equity Open LIM 572290 4. Nomura India Investment Fund Mother Fund 537992 5. Shashin V. Patel 480060 6. V.M. Patel (HUF) 411900 7. Copthall Mauritius Investment Limited 350000 8. Mogra Investments Pvt Ltd 350000 48

9. Sadbhav Finstock Pvt Ltd 342000 10. Trustee Santokba Trust 332820

(b) Top Ten shareholders ten days prior i.e July 23, 2010

S No. Name of Shareholders No. of shares 1. Vishnubhai M. Patel 1991580 2. Shantaben V. Patel 1350000 3. Gammon India Limited 650000 4. BSMA Limited 635000 5. PCA India Infrastructure Equity Open Limited 572290 6. Citigroup Global Markets Mauritius Private Limited 865920 7. Nomura India Investment Fund Mother Fund 512274 8. Shashin Vishnubhai Patel 480060 9. HDFC Trustee Company Limited - HDFC Infr 424911 10. V.M. Patel (HUF) 411900

9) The Promoters and Promoter Group, Directors of our Company and their immediate relatives have not purchased or sold, directly or indirectly, any Equity Shares during a period of six months immediately preceding the date of this Letter of Offer except for Mr Girish N Patel (Director and Member of Promoter Group) who has sold 5,000 Equity Shares on July 29, 2010 at a price of Rs. 1,355.00 per Equity Share.

10) No financing arragments have been made by Promoters, Promoter Group, Directors of our Company and their relatives for the purchase by any other person of securities of the Company other than in the normal course of business of the financing entity during the period of six months immediately preceding the date on which the Letter of Offer is filed.

11) The present issue being rights issue, as per regulation 34(c) SEBI Regulations, the requirement of Promoters’ contribution and lock-in are not applicable.

12) As on date, none of the Equity Shares held by our Promoters and Promoter Group have been pledged.

13) The Shareholders of our Company in the Annual General Meeting held on September 27, 2008 considered to issue Equity Shares of our Company and/or Warrants (whether attached to the security or not) to permanent employees and Directors (including Whole-Time Directors) of our Company/ Subsidiaries and Group Companies (ESOS Scheme 2008). The Equity Shares offered and Equity Shares upon conversion of warrants shall not exceed 2,50,000 Equity Shares under the Sadbhav Employees Stock Option Scheme 2008. However, as on date no options have been granted or no securities have been issued to any of the employees under the said scheme.

14) We have 5,479 Equity Shareholders as on July 30, 2010.

15) No further issue of equity capital whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner will be made by our Company during the period commencing from 49

submission of the Letter of Offer with SEBI until the securities referred to in this Letter of Offer have been listed or application money is refunded in case of failure of the Issue.

16) We presently do not have any intention or proposal to alter our capital structure for a period of 6 (six) months from the Issue Opening Date, by way of split/consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible / exchangeable, directly or indirectly for Equity Shares) whether on preferential basis or otherwise. However,in case of any business requirements and/or if we go in for acquisitions and joint ventures, our Company might consider raising additional capital to fund such activity or use shares as currency for acquisition and/or participation in such joint venture.

17) We have not raised any bridge loan against the proceeds of this Issue.

18) At one time, there shall be only one denomination of the Equity Shares of our Company. Except as disclosed, the Equity Shareholders of our Company do not hold any warrant, option or convertible loan or debenture, which would entitle them to acquire further shares in our Company.

19) The Issue will remain open for at least 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.

20) Neither we nor our directors nor the Lead Manager has entered into any buy-back arrangements for purchase of Equity Shares of our Company.

21) The securities are being offered in this Issue on a fully – paid up basis.

22) The loan agreements in respect of some of the debt taken by our Company contain certain covenants inter alia for altering our share capital. We have consents from our lenders wherever required.

23) Our Company has not issued any Equity Shares out of revaluation reserve.

24) Neither the Lead Manager nor their associates hold any Equity Shares in our Company except Inga Managment and Investments Pvt Ltd which holds 7,163 Equity Shares as on the date of the Letter of Offer.

25) Our Company has made a Qualified Institutional Placement in July 2007 in compliance with relevant provisions of erstwhile SEBI Gudelines

OBJECTS OF THE ISSUE

We are an infrastructure construction and development company in India having interests in building of roads & highways, irrigation, mining operations and development, maintenance & operations of roads (BOT). As part of our business strategy, we bid for various infrastructure projects (BOT) and when bids are successful, depending upon the contractual terms, we form Special Purpose Vehicles (SPVs) to facilitate execution of such projects. Our Company currently has a substantial ownership in a number of SPVs across various infrastructure sectors. Further, we are also required to regularly invest a significant proportion of capital expenditure towards the purchase of machinery/equipment for roads, irrigation and mining operations.

In view of the above, our Company proposes to raise funds through the issue of Equity Shares with Detachable Warrants for the investment in projects including BOT projects directly or through subsidiaries, SPVs and Joint Ventures, for investment in machinery/ equipment, for investment towards general corporate purposes which may include repayment of loans, strategic investments, long term working capital etc and meeting the rights issue expenses.

The assessment of fund requirement and deployment is based on internal management estimates and has not been appraised by any bank or financial institution or any independent organisation. The aforesaid investment are subject to a number of variables, including possible cost overruns; construction/development delays or defects; including availability of working capital finance on acceptable terms; and changes in management's views of the desirability of current plans, among others. In case of any variations in the actual utilization of funds earmarked for the above activities or increased fund deployment for a particular activity, the shortfall, if any, may be met with by surplus funds, if any available in the other areas and/or our Company's internal accrual, and/or the term loans/ working capital loans that may be availed from the banks/ financial institutions. Further, the Board of Directors of our Company may at their discretion may interchangeably use the proceeds of the issue for any of the matters mentioned in the ‘Objects of the Issue’ in order to meet the business requirements /opportunities of our Company that may arise at a later date.

The main objects and the objects incidental and ancillary to the main objects set out in our Memorandum of Association enable us to undertake our existing activities and the activities for which funds are being raised by us through this Issue.

FUND REQUIREMENT

The estimated fund requirement for the above objects is set forth below: (Rs. Lacs) S. Particulars Amount No 1. Investment in projects directly or through Subsidiaries / Joint Ventures / SPVs 1,848.00 2. Margin Money/Investment for purchase of Capital Equipment* 1,645.10 3. General Corporate Purposes 866.09 4. Issue Expenses 172.06 Total 4,531.25 *Out of the total investment of Rs. 16,451.00 lacs required for purchase of machinery/equipment, Banks/Lenders have sanctioned Rs. 14,739.15 lacs. Our Company intends to utilize part of the proceeds of the Issue towards the margin money required against the loans sanctioned.

MEANS OF FINANCE (Rs. Lacs) S. Sources Amount No 1. Present Issue 4531.25 Total 4531.25

In the event of a shortfall in raising the requisite capital from the proceeds of the Issue, towards meeting these objects, the extent of the shortfall will be met by internal accruals. As per our audited financial statements for the year ended March 31, 2010, the free Reserves & Surplus stand at Rs. 37,286.50 lacs.

Our Company hereby confirms that firm arrangements have been made through verifiable means towards more than 75% of the stated means of finance, excluding the amount to be raised through proposed Rights Issue.

DETAILED USE OF PROCEEDS

1. Investment in Projects directly or through Subsidiaries /Joint Ventures / SPVs

As part of our long term growth strategy, we participate in bids for various BOT projects either independently or in joint venture with other construction or infrastructure or financial companies. When we are awarded contracts (BOT projects), we are required to invest in these projects either directly or through a SPV as a part of the contract terms for execution of the project. We currently have substantial ownership in a number of SPVs which are our subsidiaries or associates.

Our Company intends to invest part of the proceeds in the following BOT projects directly or through our subsidiaries by way of either equity or debt. Our Board, however, will have the flexibility to use the funds from the proceeds of this Issue for these projects and / or similar or other projects for which we have pre- qualified or are in the bidding stage or which may be identified on a later date.

We have been awarded the following BOT projects:

• Maharashtra Border Checkpost Network Limited

Our Company, in consortium with SREI Infrastructure Finance Limited and SREI Sahaj E-village Limited, was awarded the project for the modernization and computerization of Integrated Border Check Posts at 22 locations in the state of Maharashtra on BOT basis by the Maharashtra State Road Development Corporation Limited estimated initially at a total project cost of Rs 1,57,100.00 lacs. SEL entered into a joint venture with SREI Infrastructure Finance Limited and SREI Sahaj E-village Limited in the ratio of 51:39:10 respectively for this project and formed an SPV in the name of Maharashtra Border Checkpost Network Limited (“MBCPNL”) for its execution. The total project is equivalent to construction of RCC road of 147.7 km distributed at 22 locations across the state of Maharashtra in addition to other infrastructure facilities.

Further, on account of changes in the cost of raw material compared to the basic cost considered while submission of tender along with rates prevailing in the current market, the cost has been revised to Rs. 1,42,637.00 lacs.The SPV has signed the Concession Agreement dated March 30, 2009 with Maharashtra State Road Development Corporation Limited.

Subsequently, SEL entered into an amended Memorandum of Understanding (“MOU”) dated September 04, 2009 with SREI Infrastructure Finance Limited and SREI Sahaj E-village Limited with regard to this project. As per this amended MOU, the consortium members will have the following equity participation in the project:

Name of the Consortium Member Equity Contribution Sadbhav Engineering Limited and/or its Associates 90% SREI Infrastructure Finance Limited 5% SREI Sahaj E-village Limited 5%

This project involves modernization and computerization of integrated border check posts at 22 locations in the state of Maharashtra on BOT basis. The concession period is for 24 years and six months inclusive of construction period of 18 months. The salient features of the project include prompt verification of all commercial vehicles including private buses coming from the adjoining states of Gujarat, Madhya Pradesh, Chattisgarh, Andhra Pradesh, Karnataka and Goa at entry points. Apart from toll charges, the consortium will also enjoy advertisement, weighment, commercial rights and parking rights for the entire concessionaire period.

MBCPNL shall be responsible for the construction, operation and maintenance of the infrastructure required at the check posts. As part of the up gradation, each check post would have facilities for Regional Transport Office checks including weighing of loaded vehicles, sales tax and excise clearances. The entire process will be computerized and the data will be transmitted to the central monitoring station in Mumbai on a real time basis. The purpose of the integrated check posts is to improve/streamline the processes at the check post 52 and serve the purpose of single window clearance at these check posts. The various works to be carried out by MBCPNL as part of up gradation/ modernization and computerization of the check posts can be broadly classified into five categories viz. a. Road Works: The scope of work in this segment includes:

• Design and development of entry and exit points & lanes • Development of parking area and detention area • Service Roads • Signages • Other Works - Apart from the above mentioned facilities, MBPCNL shall be required to upgrade and widen the existing culverts, footpaths, Road Over Bridges wherever necessary. Standard road furniture such as cat eyes, kerbs, parapets, railings, guard stones and road markings shall be installed for an orderly flow of traffic. b. Electric and Electronic Works:

The electrical system to be setup and maintained at the check posts would comprise of sub-stations & lighting systems. MBPCNL would set up appropriate installations for internal lighting, street lighting, parking area lighting, air-conditioning, fire fighting systems, public announcement systems and water supply. MBPCNL would also provide installations for back-up power by setting diesel generator sets at each check post, where required. c. Computer Works:

• Installation & maintenance of various computer hardware and software at the various check posts and central control room would comprise of desktop computers, servers, hand held devices, high speed scanners and data backup devices • Installation and maintenance of networking equipment • Development, installation & maintenance of check post software and waybill application • Integration of developed systems viz the Checkpost Software with existing applications at various administrative offices. The Checkpost Software would be developed to integrate the data collection from various departments and transmission to the central control centre. It would include modules for waybill, taxes and vehicle monitoring d. Support Infrastructure:

Additional support infrastructure such as administration block, transport parking office, operator booths, residential blocks, hostels, loading and unloading area with warehouse, electrical panel room, generator room, water tanks, toilet blocks, compound wall, facility center, central control room, etc will be constructed to enable the personnel to operate.

Apart from providing the above facilities, MBPCNL would also develop infrastructure to provide water supply through a network of main lines, distribution lines, bore wells, pump house and storage reservoir. e. Miscellaneous Works:

In addition to the abovementioned facilities, MBPCNL would develop the following:

• Landscaping and beautification: As part of the landscaping and beautification works, MBPCNL proposes to develop lawns with sprinklers, gardens, islands for beautification and traffic regulation, sculptures and murals.

• Facility centers: MBPCNL proposes to develop facility centers at the border check posts which would act as shelters for rest and recreation to the various users of the National Highway and BCP. The facilities to be developed at the facility center include dhabas / eateries, tyre repair centers, general merchandise shops, medical shops / dispensary, retiring dormitories, STD / PCO booths, cybercafés and bank ATM machines.

The details of the project cost and means of finance are as follows:

The total cost of the project which has been estimated at Rs. 1,42,637.00 lacs is proposed to be funded through a debt and equity mix of 4:1. The breakup of the same is as stated below: (Rs. in lacs) Particulars Amount % of Total Equity Sadbhav Engineering Limited and/or its Associates 25,674.30 18.00 SREI Infrastructure Finance Limited 1,426.35 1.00 SREI Sahaj E-village Limited 1,426.35 1.00 Total Equity 28,527.00 20.00 Debt Rupee Term Loan 1,14,110.00 80.00 Total Debt 1,14,110.00 80.00 Total 1,42,637.00 100.00 Debt Equity Ratio 4:1

Our Company proposes to utilize an amount of Rs. 400.00 lacs from the issue proceeds (excluding proceeds from conversion of warrants) towards this project. As per the understanding between consortium members each member will bring the equity share capital to the extent of holding only.

As on March 31, 2010, the consortium members have already brought a total amount of Rs. 4,135.00 Lacs towards the equity contribution out of which Rs 4,134.50 Lacs, Rs 0.25 Lacs and Rs.0.25 Lacs have been contributed by Sadbhav Engineering Limited and its Associates, SREI Infrastructure Finance Ltd. and SREI Sahaj E Village Ltd. respectively. The same will be allocated towards equity and subordinate debt as both these components are included in the definition of equity by the lenders. In addition, an amount of Rs. 296.00 Lacs has been brought in as unsecured loans by Sadbhav Engineering Limited to fund the operational expenditure till the formal financial closure. The balance equity contribution will be induced from time to time as and when required by the project.

Out of the total debt financing of Rs. 1,14,110.00 lacs, ICICI Bank vide its letter dated March 31, 2009 had agreed to provide Rupee Term Loan of Rs. 1,14,110.00 lacs and debt syndication for the said project has been completed.

The following are the brief terms of sanction:

Sanction S. Name of Amount Letter Brief terms of Sanction No the Lender (Rs. Lacs) dated 1. ICICI Bank March 31, 1. Rate of interest shall be a sum of 5.25% p.a. 1,14,110.00 2009 below ICICI Bank Bench Mark Advance Rate (IBAR) and the Term Premium prevailing on the date of disbursement of such tranche of the Facility, plus applicable interest tax or other statutory levy, if any.

2. Repayable in 50 structured quarterly installments with the first repayment starting from the end of 15th quarter from the date of first drawdown.

3. A first ranking mortgage / charge / pledge over:

c. all insurance policies, contractors guarantees, contractor performance bonds and liquidated damages d. all revenues, receivable of the Borrower (as permitted by the Concession Agreement) e. subject to section 19(2) , (3) of Banking Regulation Act, 1949, pledge of 30% of equity held by the sponsors in the Borrower.

The aforesaid charge will rank pari-passu with the mortgages and charges created/ to be created in favor of participating institutions/banks.

Subsequently, ICICI Bank sub-syndicated the total debt as mentioned below with a consortium comprising of Bank of India, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab National Bank, Union Bank of India and Vijaya Bank. The following are the brief terms of sanctions:

S. Name of Sanction Sanctioned No the Letter Brief terms of Sanction Amount Lender dated (Rs. Lacs) 1. Vijaya Bank Dec 14, 1. Rate of Interest shall be 11.25% p.a.[floating] i.e. 10,000.00 2009 BPLR -1.25% + 0.25%.(TP) payable and compounded monthly.Interest shall be reset every year reckoned from the date of 1st drawn down.

2. It shall be repaid in 50 stepped up quarterly instalments commencing after initial moratorium of 14 quarters reckoned from the date of first drawal.

3. Its secured by the first ranking mortgage, charge, pledge, hypothecation over the following a. all the immovable and movable properties both present and future (as permitted by the Concession Agreement) b. all the rights, titles and interests of the Borrower in respect of all assets of the Project and all Projects Agreements (as permitted by the Concession Agreement) c. all insurance policies, contractors guarantees, contractor performance bonds and liquidated damages d. all revenues, receivable of the Borrower (as permitted by the Concession Agreement) e. subject to section 19(2), (3) of Banking Regulation Act, 1949, pledge of 30% of equity held by the sponsors in the Borrower.

The aforesaid charge will rank pari-passu with the mortgages and charges created/ to be created in favour of participating lenders to the project. 2. Punjab Oct Facility No -1(fund based) 30,000.00 National 13,2009 Bank 1. Rate of Interest shall be 11.25% p.a.[floating] i.e. BPLR + 0.5%.(TP)-0.25, payable monthly

2. Repayable in 50 structured quarterly instalment with first repayment starting from end of the 15th quarter from the first draw –down.

3. Its secured by the first ranking mortgage, charge, 55

pledge over the following

a. all the immovable and movable properties both present and future (as permitted by the Concession Agreement) b. all the rights, titles and interests of the Borrower in respect of all assets of the Project and all Projects Agreements (as permitted by the Concession Agreement) c. all insurance policies, contractors guarantees, contractor performance bonds and liquidated damages d. all revenues, receivable of the Borrower (as permitted by the Concession Agreement) e. Subject to section 19(2), (3) of Banking Regulation Act, 1949, pledge of 30% of equity held by the sponsors in the Borrower.

The aforesaid charge will rank pari-passu with the mortgages and charges created/ to be created in favour of participating institutions/ banks.

Further our Company has been sanctioned non fund based facility being Inland Letter of Guarantee (Performance) and ILC/ FLC.

3. Indian Nov 19, 1. Rate of interest shall be 11.25% with reset clause 10,000.00 Overseas 2009 every year Bank 2. Repayable in 50 structured quarterly instalment with first repayment starting from end of the 15th quarter from the first draw –down.The date of last repayment shall not exceed 16 years from the date of first draw-down

3. Its secured by the first ranking mortgage, charge, pledge over the following

a. all the immovable and movable properties both present and future (as permitted by the Concession Agreement) b. all the rights, titles and interests of the Borrower in respect of all assets of the Project and all Projects Agreements (as permitted by the Concession Agreement) c. all insurance policies, contractors guarantees, contractor performance bonds and liquidated damages d. all revenues, receivable of the Borrower (as permitted by the Concession Agreement) e. pledge of 30% of equity held by the sponsors in the Borrower.

The aforesaid charge will rank pari-passu with the 56

mortgages and charges created/ to be created in favour of participating institutions/ banks

4. Indian Bank Dec 3,2009 1. Rate of interest shall be BPLR+TP-1.25% 10,000.00 i.e.11.25% with reset clause every year

2. Repayable in 50 structured quarterly instalment with first repayment starting from end of the 15th quarter from the first draw –down.

3. Its secured by the first ranking mortgage, charge, pledge over the following

a. all the immovable and movable properties both present and future (as permitted by the Concession Agreement) b. all the rights, titles and interests of the Borrower in respect of all assets of the Project and all Projects Agreements (as permitted by the Concession Agreement) c. all insurance policies, contractors guarantees, contractor performance bonds and liquidated damages d. all revenues, receivable of the Borrower (as permitted by the Concession Agreement) e. subject to section 19(2), (3) of Banking Regulation Act, 1949, pledge of 30% of equity held by the sponsors in the Borrower.

The aforesaid charge will rank pari-passu with the mortgages and charges created/ to be created in favour of participating institutions/ banks

5. Bank of Nov 1. Rate of interest shall be .75% below BPLR 20,000.00 India 11,2009 presently 11.25% p.a. with reset clause every year.

2. Repayable in 50 structured quarterly instalment with first repayment starting from end of the 15th quarter from the first draw –down.

3. Its secured by the first ranking mortgage, charge, pledge over the following

a. all the immovable and movable properties both present and future (as permitted by the Concession Agreement) b. all the rights, titles and interests of the Borrower in respect of all assets of the Project and all Projects Agreements (as permitted by the Concession Agreement) c. all insurance policies, contractors guarantees, contractor performance bonds and liquidated damages d. all revenues, receivable of the Borrower (as permitted by the Concession Agreement) e. subject to section 19(2), (3) of Banking Regulation Act, 1949, pledge of 30% of equity held by the sponsors in the Borrower.

The aforesaid charge will rank pari-passu with the mortgages and charges created/ to be created in favour of participating institutions/ banks

Collateral security: Mortgage of immovable property at Mumbai valued at Rs 6.5 Crores ( our share Rs 1.14 crores)

6. Oriental Oct 1. Rate of interest shall be PLR-0.75% presently 15,000.00 Bank of 30,2009 11.25% p.a. payable monthly. commerce 2. Repayable in 50 structured quarterly instalment with first repayment starting from end of the 15th quarter from the first draw –down.

3. Its secured by the first ranking mortgage, charge, pledge over the following

a. all the immovable and movable properties both present and future (as permitted by the Concession Agreement) b. all the rights, titles and interests of the Borrower in respect of all assets of the Project and all Projects Agreements (as permitted by the Concession Agreement) c. all insurance policies, contractors guarantees, contractor performance bonds and liquidated damages d. all revenues, receivable of the Borrower (as permitted by the Concession Agreement) e. subject to section 19(2) , (3) of Banking Regulation Act, 1949, pledge of 30% of equity held by the sponsors in the Borrower.

The aforesaid charge will rank pari-passu with the mortgages and charges created/ to be created in favour of participating institutions/ banks

7. Union Bank Nov 1. Rate of interest shall be BPLR-0.50% presently 20,000.00 23,2009 11.25% p.a.(fixed).It shall be reset at the end of every 12 months from the date of first disbursement. At the rest date the spread will remain static (i.e.0.50%)and the change in ROI based on then prevailing BPRL -0.05% will be fixed for the next year.

2. Repayment of principle amount to commence from the end of 15th quarter from the date of first drawdown or at the end of 8th quarter from SCOD whichever is earlier in 50 structured quarterly instalment

3. Its secured by the first ranking mortgage, charge, pledge over the following

a. all the immovable and movable properties both present and future (as permitted by the 58

Concession Agreement) b. all the rights, titles and interests of the Borrower in respect of all assets of the Project and all Projects Agreements (as permitted by the Concession Agreement) c. all insurance policies, contractors guarantees, contractor performance bonds and liquidated damages d. all revenues, receivable of the Borrower (as permitted by the Concession Agreement) e. subject to section 19(2), (3) of Banking Regulation Act, 1949, pledge of 30% of equity held by the sponsors in the Borrower.

The aforesaid charge will rank pari-passu with the mortgages and charges created/ to be created in favour of participating institutions/ banks

8. ICICI Bank March 31, 1. Rate of interest shall be a sum of 5.25% p.a. 10,000.00 2009 below ICICI Bank Bench Mark Advance Rate (IBAR) and the Term Premium prevailing on the date of disbursement of such tranche of the Facility, plus applicable interest tax or other statutory levy, if any.

2. Repayable in 50 structured quarterly installments with the first repayment starting from the end of 15th quarter from the date of first drawdown.

3. A first ranking mortgage / charge / pledge over:

a. all the immovable and movable properties both present and future (as permitted by the Concession Agreement) b. all the rights, titles and interests of the Borrower in respect of all assets of the Project and all Projects Agreements (as permitted by the Concession Agreement) c. all insurance policies, contractors guarantees, contractor performance bonds and liquidated damages d. all revenues, receivable of the Borrower (as permitted by the Concession Agreement) e. subject to section 19(2), (3) of Banking Regulation Act, 1949, pledge of 30% of equity held by the sponsors in the Borrower.

The aforesaid charge will rank pari-passu with the mortgages and charges created/ to be created in favor of participating institutions/banks.

• Dhule Palasner Tollway Limited

Our Company, in consortium with Hindustan Construction Company Limited (“HCC”) and John Laing Investments Limited (“John Laing”), was awarded the project of design, engineering, finance, procurement, construction, operation and maintenance of 4/6 laning of MP/ Maharashtra Border- Dhule section of NH- 3 from kms 168.500 to kms 265.000 in the State of Maharashtra under NHDP Phase IIIA on BOT (Toll) basis from National Highways Authority of India (Ministry of Shipping, Road Transport and Highways). An SPV, in

59 the name of Dhule Palasner Tollway Limited (“DPTL”), has been formed by HCC Limited, John Laing and Sadbhav Infrastructure Projects Limited (“SIPL”).

Our Board of Directors has decided that either our Company and/or SIPL will invest in this project. The total cost of the said project stands at Rs 1,41,500 lacs and the Concession Period is for 18 years, inclusive of construction period of 30 months. The concession agreement between NHAI and DPTL was signed on June 24, 2009.

The details of the project cost and means of finance are as follows:

The initial total cost of the project of Rs 1,41,500.00 lacs is proposed to be funded through a debt and equity mix of 3:1. However, due to escalation in the EPC costs of the project, the total revised cost now stands at Rs. 1,42,000.00 lacs. Our Company proposes to utilize an amount of Rs.1,448.00 lacs from the issue proceeds (excluding proceeds from conversion of warrants) towards this project. The details of the same are given below: (Rs. in lacs) Particulars Amount % of Total Equity HCC Limited 13135.00 9.25 John Laing Investments Limited 12,780.00 9.00 Sadbhav Engineering Limited & Associates 9,585.00 6.75 Total Equity 35,500.00 25.00 Total Debt 1,06,500.00 75.00 Total 1,42,000.00 100.00 Debt Equity Ratio 3:1

With respect to DPTL, the stake holders have entered into a MOU for their respective equity contribution. Further, the equity contribution of Rs. 35,500.00 lacs will be brought in by the consortium partners ‘HCC – Laing – Sadbhav’ in the ratio of 37:36:27 respectively. The consortium partners propose to bring in their contribution by way of equity and/or quasi equity i.e. subordinated debt. In case of any of the consortium members fail to bring in their part of equity contribution, then other parties are jointly and severally liable to fulfill the obligations of the defaulting member.

Initially, Rs. 18.50 Lacs, Rs. 18.00 Lacs and Rs. 13.50 Lacs has been brought in by Hindustan Construction Company Limited & its associates, John Laing Investments Limited & its associates and Sadbhav Engineering Limited & its associates respectively amounting to Rs. 50.00 Lacs, out of the total equity portion of Rs. 35,500.00 lacs.Further, the current investment by SEL in DPTL is Rs 646.10 lacs towards equity contribution and Rs 3363.23 lacs as a subordinate debt through its subsidiary, SIPL. The balance equity contribution will be induced from time to time as and when required by the project.

Out of the total debt financing of Rs. 1,06,500.00 Lacs, DPTL had obtained following sanctions amounting to a total of Rs. 130,000.00 Lacs

S. Name of the Sanction Amount Brief terms of Sanction No Lender Letter dated (Rs. Lacs) 1. Rate of Interest 11.00% 2. Repayable in 46 quarterly installments United Bank August 10, 3. A first mortgage and charge on over all the 1 10,000.00 of India 2009 borrower’s properties and assets both present and future excluding project assets (as defined in the Concession Agreement) etc.

1. Applicable State Bank Advance Rate minus applicable spread (applicable spread as of now 75 basis points) August 17, 2. Repayable in 46 quarterly installments 2 UCO Bank 15,000.00 2009 3. A first mortgage and charge on over all the borrower’s properties and assets both present and future excluding project assets (as defined in the Concession Agreement) etc. 60

1. Rate of interest 11.50% 2. Repayable in 46 equal quarterly installments Corporation August 25, 3. A first mortgage and charge on over all the 3 10,000.00 Bank 2009 borrower’s properties and assets both present and future excluding project assets (as defined in the Concession Agreement) etc.

1. Applicable State Bank Advance Rate minus applicable spread (applicable spread as of now 75 basis points Bank of August 29, 2. Tenure not exceeding 14.75 years 4 15,000.00 Baroda 2009 3. A first mortgage and charge over all the Borrower’s properties and assets, both present and future, excluding the Project Assets (as defined in Concession Agreement) etc.

1. Applicable State Bank Advance Rate minus applicable spread (applicable spread as of now 75 basis points ) Allahabad September 2. Tenure not exceeding 14.75 years 5 10,000.00 Bank 10, 2009 3. A first mortgage and charge over all the Borrower’s properties and assets, both present and future, excluding the Project Assets (as defined in Concession Agreement) etc. 1. Rate of Interest 11.00% and Applicable State Bank Advance Rate minus applicable spread (applicable spread as of now 75 basis points) Punjab September 2. Repayable in 46 quarterly instalments 6 National 20,000.00 23, 2009 3. A first mortgage and charge on over all the Bank borrower’s properties and assets both present and future excluding project assets (as defined in the Concession Agreement) etc. 1. Rate of Interest 11.00% 2. Repayable in 46 quarterly installments State Bank of October 12, 3. A first mortgage and charge on over all the 7 5,000.00 Indore 2009 borrower’s properties and assets both present and future excluding project assets (as defined in the Concession Agreement) etc. 1. Rate of Interest 11.00% 2. Repayable in 46 quarterly instalments Indian October 21, 3. A first mortgage and charge over all the 8 Overseas 15,000.00 2009 Borrower’s properties and assets, both present Bank and future, excluding the Project Assets (as defined in Concession Agreement) etc.

1. Applicable State Bank Advance Rate minus applicable spread (applicable spread as of now 75 basis points) State Bank of October 29, 2. Repayable in 46 quarterly instalments 9 10,000.00 Patiala 2009 3. A first mortgage and charge over all the Borrower’s properties and assets, both present and future, excluding project assets (as defined in the Concession Agreement) etc.

1. Rate of Interest 11.00% 2. Repayable in 46 quarterly instalments Syndicate November 3, 3. A first mortgage and charge over all the 10 10,000.00 Bank 2009 Borrower’s properties and assets, both present and future, excluding the Project Assets (as defined in Concession Agreement) etc. 1. Applicable State Bank Advance Rate minus applicable spread (applicable spread as of now 75 basis points) November 2. Repayable in 46 quarterly instalments 11 Dena Bank 10,000.00 19, 2009 3. A first mortgage and charge over all the Borrower’s properties and assets, both present and future, excluding the Project Assets (as defined in Concession Agreement) etc. TOTAL 130,000.00

Our Company has received appropriate licenses, approvals or permission in relation to the above mentioned BOT Projects. For more details, please refer to the chapter titled “Government Approvals” on page 303 of this Letter of Offer

Our management, in accordance with the policies established by the Board, will have the flexibility to apply the funds allocated for equity investments in SPVs and Joint Ventures in such other projects and SPVs either directly or through our wholly owned subsidiaries.

2. Margin Money/ Investment for purchase of Capital Equipment

Due to the nature of the industry we operate in, our Company is required to make investments in capital equipments on a recurring basis. We intend to purchase these equipments at an estimated cost of Rs. 16,451.00lacs for which we have already received sanction letters as mentioned below. The lenders require our Company to contribute at least 10% of the total cost of the machinery as margin money while the balance will be financed from the sanctioned loan amounts.

We propose to use Rs. 1,645.10lacs from the proceeds of the Issue for margin money/ investment for purchase of Capital Equipment required for various projects and future requirements as estimated by our management. The following table sets out the estimated costs (including the costs of associated spares, attachments and other accessories as well as transportation, taxes and other incidental expenses) of the equipment that are currently under consideration for placement of order based on the quotations received by our Company on June 18, 2010 for the equipments mentioned in sr. no. 2 and 4 Per Quantity of S. Description of Equipment/ Name of the Equipment Equipments Total No Machinery Supplier Rate required (Rs. lacs) (Rs. lacs) (in Number) Scania P380 CB 8x4 (18M3) M/s Larsen & 3,345.60* 1. 69.70 48 Tipper Truck Chassis Toubro Limited

Komatsu HD785-7 Dump Truck M/s Larsen & 2. 410.32 15 6,154.80 with a 91 ton capacity Toubro Limited

L&T Komatsu Hydraulic M/s Larsen & 888.00* 3. 111.00 8 Excavator PC 450LC-7 Toubro Limited Komatsu PC2000-8 Hydraulic Excavator powered by 976hp M/s. L&T 4. 1,515.65 4 6,062.60 engine with 12M3 backhoe Komatsu Limited bucket

TOTAL 16,451.00

*Out of the above mentioned Equipment/ Machinery, our Company has purchased the machinery mentioned in serial no. 1 for an amount of Rs. 3,448.73 lacs for 61 equipments as against 48 equipments envisaged earlier and the machinery mentioned in serial no. 3 for Rs. 819.76 lacs for 8 equipments. Our Company has paid a total of Rs.426.88 lacs towards the margin money for the purchase of these equipments. We have not placed the purchase orders for the balance machinery.

However, our Company would decide on the placing of orders and reserve the right to utilize the above proceeds at their discretion for purchase of any other capital equipment in case of change/priority of the business requirement. We intend to place purchase orders for the balance machinery/equipment as and when our Company is awarded projects and expect the delivery of the same within 9 months from the date of placing the order.

Following are the details of sanctions obtained by our Company:

S. Sanction Letter Amount Name of the Lender Brief terms of Sanction No dated (Rs. Lacs) 1. Rate of Interest is as negotiated with & agreed by the Bank 1. Standard Chartered Bank April 15, 2009 2. Repayable in 48 monthly 5,111.90 instalments 3. First charge on the Equipments financed 1. Rate of Interest is as negotiated with & agreed by the Bank 2. Standard Chartered Bank April 15, 2009 2. Repayable in 30 monthly 627.25 instalments 3. First charge on the Equipments financed 1. Rate of Interest 11% 2. Repayable in 12 quarterly instalments from the date of Oriental Bank of 3. May 11, 2009 first disbursement 5,000.00 Commerce 3. First charge on equipments/machineries to be procured out of the term loan 1. Rate of interest to be decided at the time of disbursement 2. Repayable in 12 equal 4. IndusInd Bank Limited July 17, 2009 quarterly instalments from the 3,000.00 date of first disbursement 3. Exclusive charge on the assets financed 1. Rate of interest as mutually agreed upon at the time of disbursement February 16, 2. Repayable in 12 quarterly 5. Kotak Mahindra Bank 1,000.00 2009 instalments from the date of first disbursement 3. Exclusive hypothecation charge on the assets financed TOTAL 14,739.15

Our Company obtained additional sanctions from the following lenders for machinery already purchased, as mentioned above. The brief terms of the letters/ Agreements is enumerated below:

S. No Name of the Lender Date of Deed of Brief Terms of the Loan Amount Hypothecation/ Agreement availed Loan Agreement (Rs. Lacs) 1. Rate of Interest 9.41% 2. Repayable in 47 monthly instalments 92.70 September 27, from the date of first 1. HDFC Bank Limited 2009 disbursement 3. First charge on equipments/machine ries to be procured out of the term loan 1. Rate of Interest 8.65% 2. Repayable in 47 monthly instalments September 26, from the date of first 102.26 2. HDFC Bank Limited 2009 disbursement 3. First charge on equipments/machine ries to be procured out of the term loan 1. Rate of Interest 8.65% 2. Repayable in 47 monthly instalments from the date of first 3. HDFC Bank Limited October 07, 2009 153.39 disbursement 3. First charge on equipments/machine ries to be procured out of the term loan 1. Rate of Interest 8.81% 2. Repayable in 47 monthly instalments from the date of first 4. HDFC Bank Limited August 8, 2009 255.56 disbursement 3. First charge on equipments/machine ries to be procured out of the term loan 1. Rate of Interest 8.81% 2. Repayable in 47 monthly instalments from the date of first 5. HDFC Bank Limited August 8, 2009 255.56 disbursement 3. First charge on equipments/machine ries to be procured out of the term loan 1. Rate of Interest Facility Agreement 8.81% dated October 7, 2. Repayable in 47 2009 monthly instalments USD 9697866 i.e 6. Standard Chartered Bank from the date of first Rs. 4542.48 lacs Supplemental disbursement Deed dated March 3. First charge on 30, 2010 equipments/machine 64

ries to be procured out of the term loan

3. Issue Expenses

The expenses of the Issue include fees payable to the Lead Manager, fees payable to the Registrar to the Issue, fees payable to the Legal Advisors to the Issue, fees payable to Auditors, printing and stationery, distribution, postage, etc expenses, advertisement and marketing expenses and other miscellaneous expenditure. The amounts mentioned herein are estimates of the expenses and are subject to change. These expenses will be determined on closure of the issue. The total expenses for this Issue are estimated at Rs. 172.06 lacs, which will be paid by our Company.

% of total % of total Sr. Amount Particulars proceeds from expenses of the No. (Rs. lacs) the Issue* Issue 1 Fees to the Lead Manager, 138.00 3.05 80.20 2 Fees to the Registrar to the Issue 1.70 0.04 0.99 3 Fees to the Legal Advisors to the Issue 7.19 0.16 4.18 4 Fees to the Auditors 4.97 0.11 2.89 Printing and stationery, distribution, 5 4.00 0.09 2.32 postage, etc. 6 Advertisement and marketing expenses 3.20 0.07 1.86 Other Expenses (includes fees paid to 7 13.00 0.28 7.56 SEBI, BSE and NSE) Total 172.06 3.80 100.00 *Excluding conversion of Detachable Warrants

Proceeds from conversion of Detachable Warrants

Our Company requires to fund the Built-Operate-Transfer projects and other infrastructure projects which have been bid for or to be identified on a later date. These projects may be funded directly or by investing in subsidiaries and/or in Special Purposes Vehicles. Further, our company is required to regularly invest a significant proportion of capital expenditure towards the purchase of machinery/equipment for roads, irrigation and mining operations. However, the Board may at its discretion utilize such funds for any other purpose as it may deem fit including but not restricted to funding for equipment, working capital or any other general corporate purposes.

If all the Detachable Warrants proposed to be issued, are not exercised by the warrant holders within the Warrant Exercise Period then the proceeds from the warrant conversion will reduce. In case of such eventuality, the balance amount required for financing shall be part financed from internal accruals or external borrowing as approved by the Board.

FUNDS DEPLOYED

As per the certificate dated June 8, 2010 issued by our auditors, M/s Shashikant Patel Associates, Chartered Accountants, we have incurred a sum of Rs. 8903.73 lacs towards the Cost of the projects as on date of filing of this Letter of Offer. The details of funds deployed and its sources are as follows: (Rs. Lacs) S. Particulars Amount No Funds Deployed 1 Equity Contribution in Maharashtra Border Check Post Network Limited 4.49 2 Sub Debt in Maharashtra Border Check Post Network Limited 4419.48 3 Equity Contribution in Dhule Palasner Tollway Limited 646.10 4 Sub Debt in Dhule Palasner Tollway Limited through Subsidiary 3363.23 5 Margin Money for purchase of Capital Equipment 426.88 6 Issue Expenses 43.55 TOTAL 8903.73 Sources of Funds 1 Internal Accruals 8903.73 65

In case of business requirements, required funds will be deployed out of internal accruals towards the Objects of the Issue and will be recouped from the proceeds of the Issue.

BALANCE FUNDS FOR DEPLOYMENT (Rs. Lacs) Funds Balance S. Already Funds to be Particulars Total No Deployed for Deployed the Issue upto FY2011 Investment in BOT projects directly or through 1 1848.00 - 1848.00 Subsidiaries / Joint Ventures / SPVs Margin Money/ Investment for purchase of Capital 2 426.88 1,218.22 1,645.10 Equipment 3 General Corporate Purposes - 866.09 866.09 4 Issue Expenses 43.55 128.51 172.06 Total 2318.43 2212.82 4,531.25

INTERIM USE OF ISSUE PROCEEDS

The Issue proceeds would be used to meet all the objects as described above. Pending any use, we intend to invest the Issue proceeds in high quality, interest bearing liquid investments including deposits with banks. Such investments would be in accordance with the investment policies as approved by the Board of Directors from time to time.

We may also utilize a part of the proceeds pending utilization for our working capital requirements. Should we utilize the funds towards our working capital requirements, we undertake that we will ensure consistent and timely availability of the proceeds so temporarily used to meet the fund requirement for the objects of the Issue contained herein.

No part of the Issue proceeds will be paid by us as consideration to our Promoters, our Directors, Key Management Personnel, Ventures promoted by our Promoters.

MONITORING OF UTILIZATION OF FUNDS

Our Board of Directors shall monitor the utilization of the proceeds of the Issue. Our Company will disclose the utilization under a separate head in the Balance Sheet clearly specifying the purpose for which such proceeds have been utilized as also the amount that has not been utilized and indicating investments of such unutilized proceeds of the Issue.

BASIS FOR ISSUE PRICE

The Issue Price of Rs. 725/- has been determined by our Company in consultation with the Lead Manager for the Equity Shares offered on a rights basis. The face value of the Equity Shares is Rs. 10 and the Issue Price is 72.5 times the face value.

The Equity shares being offered are subject to the provision of the Companies Act, 1956, the Memorandum and Articles of Association of our Company, the terms of the Letter of Offer and other terms and conditions as may be applicable and other documents / certificates that may be executed in respect of the Issue. The Equity Shares shall also be subjected to laws as applicable, guidelines, notifications and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, Government of India, RBI, ROC and/or other authorities as in force on the date of the Issue and to the extent applicable.

Investors should read the following along with the “Risk Factors” beginning on page 10 and the details about our Company and its consolidated and standalone financial statements included in this Letter of Offer. The trading price of the Equity shares of our Company could decline due to these risks and the investors may lose all or part of their investments.

QUALITATIVE FACTORS

1. Our Promoter, Mr. Vishnubhai M Patel has an experience of over 40 years in the construction industry. His vision and foresight has helped our Company grow over the years.

2. The Board maintains a fine balance with a composition of individuals who bring to the table their vast experience in project management-both on technical and the financial side.

3. We have a track record of completing all the projects in the stipulated time schedule without compromising on the quality of work

4. We are ISO 9001-2000 certified for our Management Systems

5. The order book position of our Company as on March 31, 2010 is Rs. 6,76,864.09 lacs.

6. We have our own workshop at Ognaj, Ahmedabad where our equipment is maintained and overhauled regularly.This ensures that we minimize any project delays due to break down of machinery. We own and employ modern, specialised and critical equipment like Excavators, Dumpers, bulldozers, WMM Sensor Paver, Bituminous Sensor Paver, Hot Mix Plants, Crushing Plants etc. which are essential to execute large projects effectively.

7. Over the years, we have built up a diversified base of customers and have continuously received repeat awards from most of our customers such as NHAI, SSNNL and Roads & Building, Irrigation Departments of State Governments.

QUANTITATIVE FACTORS

The information presented in this section is derived from Company’s restated standalone financial statements prepared in accordance with Indian GAAP.

1. Earnings per Share (EPS) (as adjusted for changes in capital)

Basic EPS Diluted EPS Particulars Weight (in Rs.) (in Rs.) Year ended March 31, 2008 43.63 43.62 1 Year ended March 31, 2009 51.54 51.54 2 Year ended March 31, 2010 42.33 42.33 3 Weighted Average 45.62 45.62

Note: • The EPS has been computed on the basis of restated profits and losses (after extra-ordinary items and prior year adjustments) for the respective years/periods after considering the impact of 67

accounting policy changes, prior period adjustments/re-groupings pertaining to earlier years as per the auditors report (i.e. in accordance with Accounting Standard 20 – “Earnings per share” issued by the Institute of Chartered Accountants of India). • The face value of each equity share is Rs.10/-.

2. Price Earning (P/E) ratio in relation to the Issue Price of Rs.725

1. P/E based on the basic EPS of financial year ended March 31, 2010 is 17.13 times at the Issue Price 2. P/E based on the diluted EPS of financial year ended March 31, 2010, is 17.13 times at the Issue Price.

3. Industry P/E:(Construction)

Highest 163.0 Lowest 4.7 Industry Composite 31.6 (Source: Capital Market, Vol.XXV/06, May 17-30, 2010, Category “Construction”)

3. Average Return on Net worth (RoNW)

Particulars Average RoNW (%) Weight Year ended March 31, 2008 18.52 1 Year ended March 31, 2009 18.75 2 Year ended March 31, 2010 13.51 3 Weighted Average 16.09 The average RoNW has been calculated on the basis of the restated standalone profit and losses of the respective years.

4. Minimum Return on increased Net Worth required to maintain pre Issue EPS is 12.72%

5. Net Asset Value (NAV) per Equity Share

Particulars NAV per Equity Share (Rs.) As on March 31, 2010 313.21 After the Issue 332.82 Issue Price 725.00

6. Comparison of Accounting Ratios

Face EPS NAV per Equity Company Value P/E RONW % (Rs.) Share (Rs.) (Rs.) Sadbhav Engineering Limited ( as on March 31, 2010) 10 42.33 17.13* 13.51 313.21 Industry Data Category Nagarjuna Construction 2 5.9 26.8 9.5 80.0 Company Limited Patel Engineering Limited 1 24.7 18.3 19.1 189.6 IVRCL Infrastructure & Projects 2 8.4 66.2 13.3 67.7 India Limited Madhucon Projects Limited 1 5.9 2 6.7 9.1 78.1 (Source: Capital Market, Vol. XXV/06, May 17-30, 2010, Category “Construction”) *Calculated based on issue price of Rs 725 per Equity Share.

The Lead Managers believe that the Issue Price of Rs. 725 with a face value of Rs. 10 per Equity Share and a premium of Rs. 715 per Equity Share is justified in view of the above parameters. See the chapter titled “Risk Factors” on page 10 of this Letter of Offer and the financials of our Company including important profitability and return ratios, as set out in the chapter “Financial Statements” on page 157 of this Letter of Offer to have a more informed view.

STATEMENT OF TAX BENEFITS

To The Board of Directors Sadbhav Engineering Limited Sadbhav House, Opp. Law Garden Police Chowki, Ahmedabad-380006

We hereby confirm that the enclosed annexure states the possible tax benefits available to Sadbhav Engineering Limited (the Company) and the shareholders of the Company under the Income-tax Act, 1961 (‘IT Act’) and the Wealth Tax Act, 1957, presently in force in India. Several of these benefits are dependent on the company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the Act. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which is based on the business imperatives, the company may or may not choose to fulfil.

The benefits discussed in the Annexure are not exhaustive and the preparation of the contents stated is the responsibility of the Company’s management. We are informed that this statement is only intended to provide general information to the investors and hence is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences, 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.

Our confirmation is 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 the interpretation of the current tax laws in force in India

We do not express any opinion or provide any assurance as to whether:

• The company or its shareholders will continue to obtain these benefits in future; or • The conditions prescribed for availing the benefits, where applicable have been/would be met.

No assurance is given that the revenue authorities/courts will concur with the views expressed herein. Our views are based on the existing provisions of law and its interpretation, which are subject to change from time to time.

For Shashikant Patel Associates Chartered Accountants Firm Reg. No. 113672W

(S.D. Patel) Proprietor Membership No. 37671

Place: Ahmedabad Date: June 8, 2010

Annexure: Statement of Possible Tax Benefits Available To Sadbhav Engineering Limited and Its Shareholders

(A) Special Tax Benefits to the Company and its Shareholder under the Act

There are no special tax benefits available to the Company and its Shareholders under the Income Tax Act, 1961.

The following general tax benefits are available to all companies or to the shareholders of any company after fulfilling certain conditions as required under the repective Act.

(B) General Tax Benefits to the company under Act

1. Dividends exempt under section 10(34) and 10(35) of the IT Act.

Dividend (whether interim or final) received by the company from its investment in shares of another domestic company would be exempted in the hands of the company as per the provisions of section 10(34) read with section 115-O of the IT Act.

In terms of section 10(35) of the IT Act, any income received from units of a Mutual Fund specified under section 10(23D) of the IT Act is exempt from tax, subject to such income not arising from the transfer of units in such Mutual Fund.

2. Computation of capital gains

Capital assets are to be categorized into short-term capital assets and long-term capital assets based on the period of holding. All capital assets except shares held in a company or any other security listed in a recognized stock exchange in India or units of Unit Trust of India (‘UTI’) or Mutual Fund units specified under section 10(23D) of the IT Act or zero coupon bonds are considered to be long-term capital assets, if they are held for a period exceeding thirty-six months. Shares held in a company or any other security listed in a recognised stock exchange in India or UTI or Mutual Fund units specified under section 10(23D) of the IT Act or zero coupon bonds are considered as long-term capital assets, if these are held for a period exceeding twelve months.

As per the provisions of section 10(38) of the IT Act, long term capital gain arising to the company from transfer of a long term capital asset being an equity share in a company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the transaction is chargeable to Securities Transaction Tax (‘STT’).

As per the provisions of section 112 of the IT Act, long-term capital gains other than those covered under section 10(38) of the IT Act are subject to tax at a rate of 20% (plus applicable surcharge and cess).However, proviso to section 112(1) specifies that if the long-term capital gains other than those covered under section 10(38) of the IT Act arising on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20% with indexation benefit exceeds the capital gains computed at the rate of 10% without indexation benefit, then such capital gains are chargeable to tax at the rate of 10% without indexation benefit (plus applicable surcharge and cess).

However, from Assessment Year 2007-2008, such long-term capital gains will be included while computing book profits for the purpose of payment of Minimum Alternate Tax (“MAT”) under the provisions of section 115JB of the IT Act.

As per provisions of section 111A of the IT Act, short term capital gains arising from transfer of short term capital asset, being an equity share in a company or a unit of an equity oriented mutual fund shall be taxable at the rate of 15% (plus applicable surcharge and cess), if such sale is entered into on or after October 1, 2004 and the transaction is chargeable to STT.

3. Securities Transaction Tax

In terms of STT, transactions for purchase and sale of the securities in the recognized stock exchange by the shareholder will be chargeable to STT. As per the said provisions, any delivery based purchase and 70 sale of equity share in a company through the recognized stock exchange is liable to securities transaction tax @ 0.125% of the value payable by both buyer and seller individually.

The non-delivery based sale transactions are liable to tax @ 0.025% of the value payable by the seller.

4. Depreciation

Subject to compliance with certain conditions laid down in Section 32 of the IT Act, the Company will be entitled to deduction for depreciation:

In respect of tangible assets (being buildings, machinery, plant or furniture) and intangible assets(being know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature acquired on or after 1st day of April, 1998) at the rates prescribe under the Income-tax Rules, 1962;

5. MAT credit

In terms of section 115JAA(1A), the company is eligible to claim credit for any tax paid as MAT under section 115JB of the IT Act for any Assessment Year commencing on or after April 1, 2006 against income tax liabilities incurred in subsequent years as prescribed. MAT credit eligible in subsequent years is the difference between MAT paid and the tax computed as per the normal provisions of the IT Act. Such MAT credit will be available for set-off up to ten years succeeding the year in which the MAT credit initially arose.

1. Dividends exempt under section 10(34) of the IT Act

Dividend (whether interim or final) received by a resident shareholder from its investment in shares of a domestic company would be exempt in the hands of the resident shareholder as per the provisions of section 10(34) read with section 115-O of the IT Act.

2. Computation of capital gains

Capital assets are to be categorized into short-term capital assets and long-term capital assets based on the period of holding. All capital assets [except shares held in a company or any other security listed in a recognized stock exchange in India or units of UTI or Mutual Fund units specified under section 10(23D) of the IT Act and zero coupon bonds] are considered to be long-term capital assets, if they are held for a period exceeding thirty-six months. Shares held in a company or any other security listed in a recognized stock exchange in India or units of UTI or Mutual Fund units specified under section 10(23D) of the IT Act and zero coupon bonds are considered as long-term capital assets, if these are held for a period exceeding twelve months.

As per the provisions of section 48 of the IT Act, the amount of capital gain shall be computed by deducting from the sale consideration, the cost of acquisition and expenses incurred in connection with the transfer of a capital asset. However, in respect of long-term capital gains arising to a resident shareholder, a benefit is permitted to substitute the cost of acquisition/ improvement with the indexed cost of acquisition/ improvement. The indexed cost of acquisition/ improvement, adjusts the cost of acquisition/ improvement by a cost inflation index, as prescribed from time to time.

As per the provisions of section 10(38) of the IT Act, long term capital gain arising to a resident shareholder from transfer of a long term capital asset being an equity share in a company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the transaction is chargeable to STT.

As per the provisions of section 112 of the IT Act, long-term capital gains [other than those covered under section 10(38) of the IT Act] are subject to tax at a rate of 20% (plus applicable surcharge and cess). However, proviso to section 112(1) specifies that if the long-term capital gains [other than those covered under section 10(38) of the IT Act] arising on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20% with indexation benefit exceeds the capital gains computed at the rate of 10% without indexation benefit, then such capital gains are chargeable to tax at the rate of 10% without indexation benefit (plus applicable surcharge and cess). 71

As per provisions of section 111A of the IT Act, short term capital gains arising from transfer of short term capital asset, being an equity share in a company or a unit of an equity oriented mutual fund shall be taxable @ 15% (plus applicable surcharge and cess), if such sale is entered into on or after October 1, 2004 and the transaction is chargeable to STT.

3. Exemption of capital gains arising from income tax

As per the provisions of section 54EC of the IT Act and subject to the conditions specified therein capital gains arising to a resident shareholder on transfer of a long-term capital asset other than those covered under section 10(38) of the IT Act shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of such capital gain is invested, the exemption shall be proportionately reduced.

However, if the resident shareholder transfers or converts the notified bonds into money (as stipulated therein) within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable in such year. The bonds specified for this section are bonds issued on or after April 1, 2006 by NHAI and REC. The IT Act has restricted the maximum investment in such bonds up to Rs 5 million per assessee during any financial year.

Further, as per the provisions of section 54F of the IT Act and subject to conditions specified therein, long- term capital gains other than a capital gains arising on sale of resident house and those covered under section 10(38) of the IT Act arising to an individual or Hindu Undivided Family (‘HUF’) on transfer of shares of the company will be exempted from capital gains tax, if the net consideration from sale of such shares are used for either purchase of residential house property within a period of one year before or 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.

However, if the resident shareholder transfers the residential house property within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable in such year.

(D) General Tax Benefits to the Non-resident shareholders of the company other than Foreign Institutional Investors and Foreign Venture Capital Investors

1. Dividends exempt under section 10(34) of the IT Act

Dividend (whether interim or final) received by a non-resident shareholder from its investment in shares of a domestic company would be exempt in the hands of the non-resident shareholder as per the provisions of section 10(34) read with section 115-O of the IT Act.

2. Computation of capital gains

As per the provisions of section 48 of the IT Act, the amount of capital gain shall be computed by deducting from the sale the consideration, the cost of acquisition and expenses incurred in connection with the transfer of a capital asset. Under first proviso to section 48 of the IT Act, the taxable capital gains arising on the transfer of capital assets being shares or debentures of an Indian company need to be computed by converting the cost of acquisition, expenditure in connection with such transfer and full value of the consideration received or accruing as a result of the transfer into the same foreign currency in which the shares were originally purchased. The resultant gains thereafter need to be reconverted into Indian currency. The conversion needs to be done at the prescribed rates prevailing on dates stipulated. Hence, in computing such gains, the benefit of indexation is not available to non-resident shareholders. 72

As per the provisions of section 10(38) of the IT Act, long term capital gain arising to a non-resident shareholder from transfer of a long term capital asset being an equity share in a company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October1, 2004, and the transaction is chargeable to STT.

As per the provisions of section 112 of the IT Act, long-term capital gains (other than those covered under section 10(38) of the IT Act) are subject to tax at a rate of 20% (plus applicable surcharge and cess).However, proviso to section 112(1) specifies that if the long-term capital gains [other than those covered second proviso to section 48 and under section 10(38) of the IT Act] arising on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20% with indexation benefit exceeds the capital gains computed at the rate of 10% without indexation benefit, then such capital gains are chargeable to tax at the rate of 10% without indexation benefit (plus applicable surcharge and cess).

As per provisions of section 111A of the IT Act, short term capital gains arising from transfer of short term capital asset, being an equity share in a company or a unit of an equity oriented mutual fund shall be taxable @ 15% (plus applicable surcharges and cess), if such sale is entered into on or after October 1, 2004 and the transaction is chargeable to STT.

3. Exemption of capital gain from income-tax

As per the provisions of section 54EC of the IT Act and subject to the conditions specified therein capital gains arising to a non-resident shareholder on transfer of a long-term capital asset (other than those covered under section 10(38) of the IT Act) shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of such capital gain is invested, the exemption shall be proportionately reduced.

However, if the non-resident shareholder transfers or converts the notified bonds into money (as stipulated therein) within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable in such year. The bonds specified for this section are bonds issued on or after April 1, 2006 by NHAI and REC. The IT Act has restricted the maximum investment in such bonds up to Rs 5 million per assessee during any financial year.

Further, as per the provisions of section 54F of the IT Act and subject to conditions specified therein, long- term capital gains (other than a capital gains arising on sale of resident house and those covered under section 10(38) of the IT Act) arising to an individual or HUF on transfer of shares of the company will be exempted from capital gains tax, if the net consideration from sale of such shares are used for either purchase of residential house property (subject to prior approval from Reserve Bank of India) within a period of one year before or 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.

However, if the non-resident shareholder transfers the residential house property within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable in such year.

4. Tax Treaty Benefits

As per section 90(2) of the IT Act, the provisions of the IT Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the non-resident shareholder. Thus, a non-resident shareholder can opt to be governed by the beneficial provisions of an applicable tax treaty.

5. Non resident taxation

Under section 115-I of the IT Act, the non-resident Indian shareholder has an option to be governed by the provisions of Chapter XIIA of the IT Act viz. “Special Provisions Relating to Certain Incomes of Non- Residents” which are as follows: a) Under section 115E of the IT 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, will [in cases not covered under section 10(38) of the IT Act],

73 be concessional taxed at the flat rate of 10% (plus applicable surcharge and cess) (without indexation benefit but with protection against foreign exchange fluctuation). b) Under provisions of section 115F of the IT Act, long-term capital gains [in cases not covered under section 10(38) of the IT Act] arising to a non-resident Indian from the transfer of shares of the company subscribed to in convertible foreign exchange will 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 will be proportionately reduced. However the amount so exempted will be chargeable to tax subsequently, if the specified assets are transferred or converted into money within three years from the date of their acquisition. c) Under provisions of section 115G of the IT Act, non-resident Indians are not required to file a return of income under section 139(1) of the IT 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 IT Act. d) Under section 115H of the IT Act, where the non-resident Indian becomes assessable as a resident in India, such person may furnish a declaration in writing to the Assessing Officer, along with the return of income for that year under section 139 of the IT Act to the effect that the provisions of the Chapter XIIA will continue to apply to such person in relation to the investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

(E) General Tax Benefits to Institutional Investors (‘FII’)

1. Dividends exempt under section 10(34) of the Act

Dividend (whether interim or final) received by a FII from its investment in shares of a domestic company would be exempt in the hands of the FII as per the provisions of section 10(34) read with section 115-O of the Act.

2. Long term capital gains exempt under section 10(38) of the Act

As per the provisions of section 10(38) of the Act, long term capital gain arising to the FII from transfer of a long term capital asset being an equity share in a company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the transaction is chargeable to STT.

3. Capital gains

As per the provisions of section 115AD of the Act, FIIs are taxed on the capital gains income at the following rates:

Rate of tax

Nature of Income (%)* Long-term capital gains 10 Short-term capital gains covered by Sec 111A 15 Any other Short-term capital gains 30 * Plus applicable surcharge and cess

The benefits of foreign currency fluctuation protection and indexation as provided by section 48 of the Act are not available to a FII.

As per the provisions of section 10(38) of the Act, long term capital gain arising to FII from transfer of a long term capital asset being an equity share in a company listed on a recognized stock exchange in India, shall be exempt from tax, if such sale is entered into on or after October 1, 2004, and the transaction is chargeable to STT.

As per provisions of section 111A of the Act, short term capital gains arising from transfer of short term capital asset, being an equity share in a company or a unit of an equity oriented mutual fund shall be taxable

74 at the rate of 15% (plus applicable surcharge and cess), if such sale is entered into on or after October 1, 2004 and is chargeable to STT.

4. Tax Treaty Benefits

As per section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the FII. Thus, an FII can opt to be governed by provisions of the Act or the applicable tax treaty whichever is more beneficial.

(F) General Tax Benefits to the Mutual Funds

1. Dividends exempt under section 10(34) of the Act

Dividend (whether interim or final) received by a Mutual Fund from its investment in shares of a domestic company would be exempt in the hands of the Mutual Fund as per the provisions of section 10(34) read with section 115-O of the Act.

2. As per the provisions of section 10(23D) of the Act, any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 (‘SEBI’) or regulations made there under, Mutual Funds set up by public sector banks or public financial institutions or Mutual Funds authorised by the Reserve Bank of India, would be exempt from income tax, subject to the prescribed conditions.

(G) General Tax Benefits to the Venture Capital Companies / Funds

1. Dividends exempt under section 10(34) of the Act

Dividend (whether interim or final) received by a Venture Capital Company (‘VCC’)/ Venture Capital Funds (‘VCF’) from its investment in shares of another domestic company would be exempt in the hands of the VCC/VCF as per the provisions of section 10(34) read with section 115-O of the Act.

2. Income exempt under section 10(23FB) of the Act

As per the provisions of section 10(23FB) of the Act, any income of VCC/VCF registered with the SEBI, set up to raise funds for investment in a venture capital undertaking (‘VCU’) would be exempt from income tax, subject to the conditions specified. The Finance Act 2007 has restricted the definition of venture capital undertaking (‘VCU’) to mean such domestic company whose shares are not listed on a recognized stock exchange in India and which is engaged in the following specified business viz:

• Nanotechnology; • Information technology relating to hardware and software; • Seed research and development; • Bio-technology; • Research and development of new chemical entities in the pharmaceutical sector; • Production of bio-fuels; • Building and operating composite hotel-cum-convention centre with seating capacity of more than 3,000; • Developing or operating and maintaining or developing, operating and maintaining any infrastructure facility as defined in Explanation to clause (i) of sub-section (4) of section 80-IA and • Dairy or poultry industry.

(H) Benefits available under the Wealth-tax Act, 1957 (Common to all)

Asset 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.

Notes:

1. All the above benefits are as per the current tax law as amended by the Finance Act, 2010

2. The stated benefits will be available only to the sole/first named holder in case the share are held by joint holders

3. In respect of non-residents, the tax rates and the consequent taxation mentioned above will be further subject to any benefits available under the relevant DTAA, if any, between India and the country in which the non-resident has fiscal domicile.

4. In view of the individual nature of tax consequences, each investor is advised to consult his/her own tax advisor with respect to specific tax consequences of his/her participation in the scheme.

SECTION IV: DETAILS OF THE ISSUER COMPANY

INDUSTRY OVERVIEW

• Investment Commission of India • Economic Survey 2007-08 • Annual Report Ministry of Road Transport and Highway 2007-08 • Tenth Five year Plan & Ministry of Water Resources • Website of the Ministry of Water Resources • Website of Sardar Sarovar Narmada Nigam • Director General of Mines & Safety website • Website of Kalpasar project • Website of NHAI • Website of Ministry of Mines

The India Story

India is a growing economy with a dynamic and robust financial system. Being a democracy ensures a stable policy environment and its independent institutions guarantee the rule of law. This highly diversified economy has shown rapid growth and remarkable resilience since 1991, when economic reforms were initiated with the progressive opening of the economy to international trade and investment. Events such as the Asian currency crisis, the dotcom bust and rising oil prices have had no significant impact on India’s growth; with the economy recording an average annual GDP growth of over 6% over the past decade. India’s competitiveness from a natural and human resources standpoint is making it the destination of choice for investors. India is in the global arena for increased foreign investment - both through the equity markets - termed Foreign Institutional Investment (FII) - and Foreign Direct Investment (FDI). While its size and growth potential make India attractive as a market, the most compelling reason for investors to be in India is that it provides a high return on investment. India is a free market democracy with a legal and regulatory framework that rewards free enterprise, entrepreneurship and risk taking. (Source: Investment Commission of India)

Indian Infrastructure Industry

With the rapid growth of the economy in recent years, the importance and the urgency of removing infrastructure constraints has increased. Traditionally, power, railways, roads, ports, airports and telecommunications were the exclusive domain of the government. Policy has changed gradually over the past two decades under the pressure of rising gaps between demand and supply of infrastructure and deteriorating quality of assets. Government has made an effort to facilitate the entry of private enterprise into this sector through changes in the legal framework. A role for private sector participation has also been facilitated by technological changes that allow unbundling of infrastructure, so that the public and the private sectors can take up the components most suited to their capacities. Government continues to invest significant sums in areas where private participation is minimal or not forthcoming. It will continue to play a lead role in infrastructure development during the Eleventh Plan. (Source: Economic Survey 2007-08)

Roads & Highways

India has one of the largest road networks in the world, aggregating to about 3.314 million kms consisting of National Highways, Expressways, State Highways, Major District Roads, other district roads and village

77 roads. The road network comprises 66,754 kms of National Highways, 1,28,000 kms of State Highways, 4,70,000 kms of Major District Roads and about 26,50,000 kms of Other District and Rural Roads. Out of the total length of National Highways, about 27% are single lane/ intermediate lane, about 59% are standard 2- lane and balance 14% are 4-lane width or more. Though National Highways account for only 2 per cent of the total length of roads, they account for about 40 per cent of the total traffic. The share of road in total traffic has grown from 13.8% of freight traffic and 15.4% of passenger traffic in 1950-51 to an estimated 65% of freight traffic and 86.7% of passenger traffic by the end of 2004-05. The rapid expansion and strengthening of the road network, therefore, is imperative, to provide for both present and future traffic and for improved accessibility to the hinterland. In addition, road transport needs to be regulated for better energy efficiency, lesser pollution and enhanced road safety. While the Central Sector programmes pertain mainly to the National Highways, the responsibility for development of other categories of roads vests with the states/ Union Territories. In this context the Department of Road Transport has been carrying out the overall responsibility of maintenance and development of National Highways and has been successfully implementing various phases of National Highway Development Project (NHDP). (Source: Annual Report Ministry of Road Transport and Highway 2007-08)

The Government of India is devising various programmes for building a road infrastructure. Some of them are detailed below –

National Highway Development Programme (NHDP)

The National Highways Authority of India (NHAI) constituted by the National Highways Authority Act, 1988, started operations in 1995. It was entrusted with the responsibility of developing, maintaining and managing the National Highways. The NHAI commenced the National Highway Development Project involving the conversion of 14,279 kms of National Highways to 4/6-lanes, at a total estimated cost of Rs. 54,000 crore. This development program is founded on a revenue model comprising tolls and a cess on fuel, to build roads which deliver sustained performance.

The NHDP Plan

The NHDP is a seven phased program to connect the length and breadth of the country with a good road network. It includes the Golden Quadrilateral, North South East West Corridor, upgrading single lane to 2 lanes and 2 lanes to 4 lane roads, expressways to connect important commercial and industrial townships, ring roads, flyovers, etc.

Following programmes have been approved by Government for implementation in addition to NHDP-I & II which were approved earlier:

• Up-gradation of 12,109 kms of National Highways (NHs) under NHDP Phase-III at an estimated cost of Rs. 80,626 crore. • Six laning of 6,500 kms of NHs comprising 5,700 kms of GQ and balance 800 kms of other sections of NHs under NHDP phase-V at a cost of Rs 41,210 crore. • Construction of 1,000 kms of expressways with full access control on new alignments at a cost of Rs. 16,680 crore under NHDP-phase VI. • Construction of ring roads including improvement of NH Links in City, grade separated intersections, flyovers, elevated highways, Under Passes and Service Roads at a cost of Rs. 16,680 crore under NHDP Phase-VII.

NHDP-II & III are sanctioned as ongoing programmes and is scheduled to be completed by December 2009 & December 2012 respectively. NHDP-V has been approved by the Committee on Infrastructure and preparatory work has begun with a view to complete it by December 2012. Cabinet approval to NHDP-IV, VI & VII is yet to be accorded and would be taken up under the Eleventh Five Year Plan depending upon resource availability. These would be awarded by December 2012 and the works completed by December 2015. (Source: Annual Report Ministry of Road Transport and Highway 2007-08)

The current status of NHAI projects are detailed below

Particulars NHDP & Other NHAI Projects (Status as on March 31, 2009) NHDP Port Phase Phase Others Total by NHAI GQ NSEW Total Connectivity III V Total length - kms 5846 7300 12109 6500 31755 380 962 33097 Already 4-Laned- 5721 3436 787 106 10050 206 781 11037 kms Under implementation -kms 125 2915 1878 928 5846 168 161 6175 -no. of contracts 15 127 28 2 172 8 13 193 Balance to be 791 9444 5470 15705 6 20 15731 awarded - kms - (Source: NHAI website)

There have been several decisions at the PM/ Cabinet level emphasizing the need to shift from the traditional construction contracts to BOT mode of delivery for the road projects. The Committee on Infrastructure, under the Chairmanship of the Prime Minister, decided that besides awarding contracts for 2100kms under NHDP-II all future projects will be on BOT basis (Toll or Annuity or Hybrid model) with EPC awards being made in specified exceptional cases only. This gives an insight into the increasing importance placed on BOT models for road infrastructure development in India. In order to increase foreign participation in India’s infrastructure development the Government is considering increasing the length of road per project. It is also considering selective tolling of 2-laned highways depending on the location and traffic density.

Pradhan Mantri Gram Sadak Yojana

The Pradhan Mantri Gram Sadak Yojana (PMGSY) was launched in December 2000 as a 100% Centrally Sponsored Scheme to provide rural connectivity to unconnected habitations by the end of the Tenth Plan period. It is funded by the diesel cess in the Central Road Fund, and through borrowing from domestic financial institutions and multilateral funding agencies. The scope of PMGSY has been expanded to include both construction of new links and upgradation of existing routes associated with such link routes to form one complete sub-network, for providing connectivity between the village and the market.

Over 1.70 lakh unconnected habitations need to be taken up under the PMGSY which would require new construction of 3.69 lakh kilometer and upgradation of 3.68 lakh kilometers of rural roads, at a total cost of Rs.1, 33,000 crore. The PMGSY also includes projects for maintenance of link routes for 5 years and 10- year maintenance of through routes.

Corridor Management

The substantial completion of the initial phases of NHDP has necessitated greater emphasis on corridor management, that is, on managing highways in such a manner as to deliver maximum throughput in terms of speed and traffic volume while minimizing the cost of operation and enhancing road safety. The concept of corridor management is being applied on completed sections of NHDP through operation and maintenance contracts. The scope of work, among other things, includes road maintenance, road property management, incident management, traffic management, toll fee collection, wayside amenities and engineering improvements. (Source: Economic Survey 2007-08)

Financing of NHDP

The Central Government has created a dedicated fund called Central Road Fund (CRF) from collection of cess on Petrol and High Speed Diesel Oil. Presently, Rs.2/- per litre is collected as cess on Petrol and High Speed Diesel (HSD) Oil. The fund is distributed for development and maintenance of National Highways, state roads, rural roads, and for railway over bridges/under bridges and other safety features, as provided in Central Road Fund Act, 2000. During 2007-08, an amount of Rs. 8,106.39 crore has been provided for the National Highways and for State roads out of the same. Of this amount, Rs. 6,541.07 crore is for National 79

Highways and Rs. 1,565.32 crore for State roads. An amount of Rs. 173.93 crore has also been allocated during 2007-08 for the development of State Roads. The funds allocated from the cess are leveraged by NHAI to borrow additional funds from the domestic market. The Government of India has also taken loans from the World Bank (US$ 1,965 million), Asian Development Bank (US$ 1,605 million) and the Japan Bank for International Cooperation (JBIC) (Yen 32,060 million) for financing the projects under NHDP. These loans are passed on to NHAI by the Government partly in the form of grant and partly as loan. NHAI has also negotiated a direct loan of US$ 165 million from the ADB for one of its projects. The funds provided to NHAI including the borrowings from the market are utilized for the projects and for servicing and repayment of borrowings from the domestic market.

(Rs. Crores) External Assistance Year Cess Borrowings Budgetary Support Grant Loan 1999-2000 1032.0 492.0 - 656.6 - 2000-01 1800.0 461.0 120.0 804.4 - 2001-02 2100.0 887.0 113.0 5592.9 - 2002-03 2000.0 1202.0 301.0 - - 2003-04 1993.0 1159.0 290.0 - - 2004-05 1848.0 1239.0 361.0 - - 2005-06 3269.7 2400.0 500.0 1289.0 700.0 2006-07 6407.5 1582.5 395.5 1500.0 110.0 2007-08 6541.5 1788.8 447.2 2000.0 265.0

(Source: Economic Survey 2007-08)

Public Private Partnerships

Historically, investments in the infrastructure sector, particularly in the highways, were being made by the Government mainly because of the large volume of resources required, long gestation period, uncertain returns and various associated externalities. The galloping resource requirements and the concern for managerial efficiency and consumer responsiveness also have led in recent times to an active involvement by the private sector. To encourage participation of private sector, the government has also announced several incentives such as tax exemptions and duty free import of road building equipments and machinery etc. to encourage private sector participation. It has been decided that all the subprojects in NHDP Phase-III to Phase-VII would be taken up mainly on Public Private Participation (PPP) route following either Build Operate and Transfer (BOT) toll mode or BOT (Annuity) mode. The private sector participation envisaged in Phase- II of NHDP has also been increased. Only in exceptional circumstances project would be implemented using Engineering Procurement and Construction (EPC) basis. (Source: Annual Report Ministry of Road Transport and Highway 2007-08)

Irrigation

80 potential of minor ground water schemes and minor surface water schemes to 64 m.ha and 17 m.ha respectively. Minor irrigation projects have both surface and ground water as their source, while major and medium projects mostly exploit surface water resources. (Source: Website of the Ministry of Water Resources)

Growth Potential

From the point of agricultural production, the single most effective supply side constraint is that irrigation coverage still extends to only about 40 per cent of net sown area. Substantial irrigation potential has been created through major, medium and minor irrigation schemes. The total irrigation potential in the country has increased from 81.1 million ha in 1991-92 to 102.8 million ha in 2006-07.

In million hectares Eighth Plan Ninth Plan Tenth Plan Cumulative potential created Major and medium 33.0 37.1 42.4 Minor 53.3 56.9 60.4 Total 86.3 94.0 102.8

Cumulative potential utilized Major and medium 28.4 31.0 34.4 Minor 48.8 50.0 52.8 Total 77.2 81.1 87.2 (Source: Economic Survey 2007-08)

Sardar Sarovar Narmada Nigam Limited

The Sardar Sarovar Project was initiated in the early eighties to bring water to irrigate the arid regions of Gujarat and Rajasthan. It is one of the largest multipurpose river valley projects in India. It envisaged the construction of concrete gravity dam, hydropower complex and very large network of canal system to irrigate about 18-lakh hectares of culturable command area. The aim of the project was to meet the power requirement in the four states of Madhya Pradesh, Maharashtra, Gujarat and Rajasthan through the hydro power project and accelerate agricultural, industrial and tertiary sector development. The canal is classified into the conveyance system and the delivery network. The canal system involves a 458 kms long main canal and 2750 kms length of branches /sub branches. The distribution network of 66000 kms consists of branch canals, distributaries, minors and sub minors. 42 branch canals take off from the main canal of which Miyagam, Vadodara, Saurashtra and Kachch branch canals are the major ones. The project is to benefit 8215 villages and 135 towns in the four states. (Source: Sardar Sarovar Narmada Nigam website)

Current Status

Main Canal – The Narmada Main Canal from ch. 0 to 458 kms is completed except for three canal syphons on river Saraswati, Khari-II and Banas. Work on these Canal Syphons is in progress. Water is flown in Canal up to 458 kms i.e. Rajasthan Border.

Branch Canals

Branch Canal Nos. Status Ch 0 to 263 kms 22 Completed Civil work of Viramgam-I, Viramgam-II, Kharaghoda and Zinzuwada branch canals are completed and installation of gates is under Ch 263 to 458 kms 17 progress. Work of Goraiya, Bolera, Rajpura, Amarapura and Radhanpur is under progress. Work of 90 kms of SBC is completed and the remaining reach is in progress. Work of 3 sub branches is completed and work of 4 sub Saurashtra Branch Canal 7 branches is in progress. Out of five Pumping Stations on SBC-PS, 1 is commissioned and the work of remaining four Pumping Stations is in progress.

Work of 25 kms length of Kachchh Branch Canal is completed and work in further 30.68 kms is in progress. Detailed project report for Kachchh Branch Canal three Power stations is under preparation. Tenders for three pumping stations are invited.

Distribution System - Work of distribution system in reach 0 to 312 kms of NMC (except command area of SBC) is in full swing. It is expected that the entire project will be completed by 2009-10.

Bharat Nirman

The Bharat Nirman project was launched in 2005 to be implemented over a period of four years and to cover irrigation, road development, water supply, housing, rural electrification and rural telecom connectivity. The government proposes to bring an additional one crore hectare of land under irrigation and provide an additional 74000 habitations with drinking water. Most of the programs are to be executed by the States and the funding will be shared by them, though the Centre will give the bulk of the money. Finance ministry estimates that providing assured irrigation for 10 mn hectares could cost Rs. 67,000 crore at the rate of Rs. 75,000 per hectare for major and medium irrigation projects and Rs. 50,000 per hectare for minor irrigation schemes. The progress made under the Bharat Nirman programme is detailed below –

Year Units in thousand hectares under irrigation 2005-06 1676.916 2006-07 1943.346 2007-08 1701.394 2008-09 (April –September 2008) 620.845 (Source: Website of the Ministry of Water Resources)

National Project for Repair, Renovation and Restoration of Water Bodies Directly Linked to Agriculture

The Government of India sanctioned a pilot scheme for ‘National Project for Repair, Renovation and Restoration of Water Bodies Directly Linked to Agriculture’ in January 2005 with an estimated cost of Rs.300 crores to be shared by Centre and states in the ratio of 3:1 to be implemented during the remaining period of Xth Plan. The objective of the Scheme was to restore and augment storage capacities of water bodies, and also to recover and extend their lost irrigation potential. The water bodies having culturable command area of more than 40 hectares and up to 2000 hectares were included under the pilot scheme. The scheme has been approved for 26 district projects in 15 states at an estimated cost of Rs.299.92 crores and the Center’s share of Rs.197.3 crores has been released to the states. These projects cover about 1098 water bodies with total original culturable command area of 1.72 lakh hectares. An additional irrigation potential of 0.78 lakh hectares is likely to be generated. The physical works for restoration have been completed in 894 water bodies in 13 states so far.

Kalpasar Project

The Kalpasar project envisages the construction of a 64.16 kms long dam across the Gulf of Khambhat joining Ghogha on the west coast and Hansot on the east coast, thereby creating a fresh water basin of more than 2000 square kms impounding 12 rivers flowing into the Gulf including Narmada, Mahi and Sabarmathi. The project will lead to – • Reduction in the distance between the east and west coast of Gujarat by 240 kms. • Irrigation potential of about 10.54 lakh hectares. • Four-lane road and broad gauge railway track • Renewable and environmentally sustainable tidal power to the tune of 5880 MW • 660 kms canal system • Provision of water for drinking and industrial purposes.

This project, with an estimated cost of Rs. 55,000 crores, has tremendous potential for public private partnership in power generation, water supply, transportation, land development and navigation. Currently the topographical survey is complete and the oceanographic survey is in progress. The construction of the entire dam is scheduled to begin in the next two years. 82

The pre-feasibility report and six specific studies conducted thereafter have shown the technical viability of closure of Gulf of Khambhat on the basis of the known and tried out techniques. Action has been initiated for preparation of detailed bankable report of the project. (Source: Kalpasar Website)

Mining Operations

GDP of the Mining Industry

(Source: Ministry of Statistics and Program Implementation)

Lignite

Lignite is a dark brown to black combustible mineral having a high content of volatile matter which makes it more convertible into gas and liquid petroleum products than the higher ranking coals. However, its high moisture content and susceptibility to spontaneous combustion may cause problems in transportation and storage. The total lignite deposit of the country is estimated at about 2800 million tones, out of which major deposits are found in Tamil Nadu, Gujarat, J & K and Rajasthan. Further exploration activities are indicative of additional lignite resources in Rajasthan, Gujarat and Tamil Nadu. There are three lignite mines in Gujarat, two in Tamil Nadu and one in Rajasthan (Source: Director General of Mines & Safety website

OUR BUSINESS

INTRODUCTION

We are an infrastructure development and construction company focusing on roads and highways, irrigation and mining operations. Our Company was incorporated on October 3, 1988 as a private company. Our Company took over the business and assets of M/s. Bhavna Construction Co., a partnership firm, as an ongoing concern which was engaged in the construction business since 1968. We have an experience of four decades in the construction industry which includes rehabilitating, upgrading, widening and strengthening roads and highways, construction earthen dams, canals, syphons, remodelling and improving canals and excavation of overburden and mining of minerals. We are credited with the ISO 9001:2000 certification from the Joint Accreditation System of Australia and New Zealand for our Management systems.

We secure contracts through a competitive bidding process either on a stand-alone or through a joint venture depending on the project size and requirements. We have undertaken projects for NHAI, SSNNL, Larsen & Toubro, Steel Authority of India, Grasim Industries, GIPCL, etc. We focus on improving our project management skills to ensure timely execution of quality projects.

Some of the projects completed by us include:

• Four laning to Aurangabad - Jalna Road MSH-6 and parts of the Zalta Byepass & Beed Byepass • Improvement and widening from two lanes to four lanes of the Sardar Patel Ring Road around Ahmedabad city • Rehabilitation and upgrading of Gagodhar-Radhanpur Road section of NH-5 on the East West Corridor • Strengthening and paving of shoulders of the Viramgam-Dhrangadhra section of SH07 in Gujarat • Construction of right bank canal section of SSNNL

For the fiscal 2010 and 2009, our consolidated income was Rs. 1,35,859.39 lacs and Rs. 1,10,926.27 lacs respectively representing an annual growth rate of over 22.47%. Our consolidated net profit for fiscal 2010 and 2009 was Rs.2675.81 lacs and Rs. 3,779.30 lacs respectively.

Our order book as on March 31, 2010 stands at Rs. 6,76,864.09 lacs, of which Rs. 5,20,342.17 lacs are from the Roads & Highway sector. We have invested in BOT projects and are also executing a sizeable amount of EPC contract work in them. Our main clients for the irrigation order book worth Rs. 64,474.06 lacs are SSNNL and Government of Andhra Pradesh. We have 7 mining operation projects on hand from GHCL, GIPCL, Northern Coalfields Limited, Western Coalfields Limited, Mahanadi Coal Fields and NCL Khadia, UP.

As on April 30, 2010, our work force consisted of 1,151 full time employees. Our asset base reflected a growth of around 48.85% from fiscal 2009 to 2010. Our equipments and employee resources are instrumental in improving our project management skills for timely completion of quality projects.

COMPETITIVE STRENGTHS

Execution capabilities Our key strength is to execute high quality projects within the stipulated time. The main requirements for thorough project execution are management, personnel and equipment. Our senior management has an average experience of over 20 years, which, combined with their hands-on approach, ensures timely completion of quality projects. The Joint Accreditation System of Australia and New Zealand has certified that the Management systems of our Company comply with ISO 9001:2000 requirements. Each site is under the direct supervision of a senior employee which ensures adequate control and faster decision making. We employ 1,151 personnel including 177 engineers and professionals. We own the requisite critical equipment leading to better cost control and avoidance of delays

Significant experience and strong track record With over four decades of experience as a construction contractor, we believe that we are one of the significant players in the Indian construction industry. We have an established track record for executing quality infrastructure projects within the stipulated time. We completed the widening and strengthening of the NH-8A section 11 months ahead of schedule and the rehabilitation of the Shedhi Branch Canal 5 months ahead of schedule. We were awarded a bonus of Rs.160 lacs for early completion of the NH79 project. We also received a letter of appreciation from the World Bank for our excellent quality of work in the Hattigudur- 84

Bidar project. Our portfolio of completed construction projects includes over 18 irrigation projects, 17 road and highway projects which involved the construction of over 1348.43 kms of roads and 5 mining projects.

Prequalification credentials We currently meet the requirements of NHAI and SSNNL in the road and irrigation sectors respectively in terms of possessing the requisite expertise, experience and financial considerations. Our extensive prequalification credentials enable us to bid for larger projects. Our bid capacity for NHAI projects is Rs. 110175.00 lacs and Rs. 460791.00 lacs for SSNNL projects as on March 31, 2010.

Diversified business and versatile capabilities We have a presence in different sectors of the Indian construction industry and in different geographical regions in India. The variety of projects in our portfolio enables us to keep our business diversified and not be overtly dependant on any segment of the infrastructure industry. We have successfully executed challenging projects like the concrete lining of the 13.87 kms Kakrapar Left Bank Canal which was completed in a record period of 75 days in the financial year 2000-01.

Order book Our order book of Rs. 6,76,864.09 lacs as on March 31, 2010 is well balanced with approximately 76.87% road projects, 9.52 % irrigation projects and 13.59% mining projects. (Rs. lacs) Total Work Order in Balance Work to be Sector No. of Projects Hand done Roads & Highways 14 635992.59 520342.17 Irrigation 12 95667.30 64474.06 Mining Operations 7 129901.55 92047.86 Total 33 861561.44 676864.09

BOT projects

The public private partnership model is an important factor for the growth of the infrastructure sector and will be a major revenue driver. To capitalize on this opportunity, we propose to concentrate our asset base of all our BOT projects in our subsidiary, Sadbhav Infrastructure Projects Limited, subject to the terms and conditions in their respective Concession Agreements and other documents. We are also executing a significant portion of the EPC contracts in these projects. Therefore the revenue for the EPC contracts will flow into our Company whereas the return on investment during the concessionaire period will be earned by our subsidiary. Currently Rs. 4,63,413.37 lacs of our order book are for contracts from these BOT projects. We commenced toll collection for ARRIL on January 1, 2007 for the existing 2 lane Sardar Patel Ring Road while we have completed the EPC work for the project, the Commercial Operation Date certificate of which was issued on May 30, 2008. Our SPV AJTL has achieved its Commercial Operation Date and has been authorized by the Government of Maharashtra to collect the toll from July 28, 2009. Further, our SPV MNEL has been issued a Gazette notification from the Government of India prescribing the base toll rates for different category of vehicles using the Mumbai Nasik (Vadape Gonde) section from the km 539.500 to km 440.000 of NH3 in the State of Maharashtra.

Machinery owned and regular maintenance

One of our key advantages is our captive equipment bank which has the critical machinery related to road, irrigation and mining projects like Bituminous Sensor Paver, Hot Mix Plant, and Crushing Plants etc. This reduces our dependence on leased out machinery which plays an important role in timely execution of projects. We have a 28,227 sq. meters workshop at Ognaj, Ahmedabad, wherein all our equipment are regularly overhauled and maintained thereby reducing the risks of accidents and break-down. We have ensured consistent increase and churning in our asset base in line with our work on hand. Please refer to the chart below for the details of increase in the fixed assets of our Company.

(Source: Audit Reports of SEL)

OUR STRATEGY

Continued focus on quality We believe quality to be a prerequisite for the sustenance and growth of an infrastructure company. We intend to continue our focus on quality construction and timely completion of projects. We understand the requirement for excellent personnel and equipment for the same. We constantly churn our asset base for optimum utilization and in line with the existing order book position. We believe these initiatives will augur well for our continued focus on quality projects.

Continue to focus on the high growth opportunities in the construction and infrastructure sector. We believe that there is a huge scope for infrastructure development in the country. Public private partnerships will be a major driver for growth in the infrastructure space. We intend to take advantage of available opportunities in infrastructure development by strengthening our existing expertise and continuing to pursue growth opportunities in India. We shall continue our focus on the roads & highways, irrigation and mining operations sector to exploit the opportunities available.

Exploit opportunities in other areas of expertise We have a proven track record for execution of irrigation and mining operations projects. There are numerous initiatives by the Central and State governments in these sectors like Kalpasar project, repair, renovation of water bodies, etc. We believe prospects such as these will further our growth and improve margins and we are well placed for exploiting these opportunities. We have also identified operations and maintenance of roads as potential for future growth. We intend to actively pursue these projects. We are responsible for the operations and maintenance in our existing BOT projects. This will enhance our reputation in this regard which will be favourable for us to secure more such contracts.

Explore international avenues in the Mining Industry We have set up a 100% subsidiary, Sadbhav Mining Limitada, in Mozambique to enter into the mining exploration segment overseas. This will help our Company foray into the international markets, thus enhancing expertise and broadening our base in the mining industry.

Foray into other sectors of infrastructure There are many sectors where we do not currently have a presence like ports, pipelines, airports, etc. We intend to diversify into other infrastructure sectors where we can leverage our skills and equipment. We have commenced the process of identifying sectors for us to establish our presence and intend to take advantage of opportunities available.

Creation of revenue generating asset base We intend to actively pursue the opportunities in the BOT space. We believe this will be a preferred model for infrastructure growth. As a first step in this direction, we have invested in nine BOT projects in consortium 86 with other major infrastructure players or by our selves. We intend to build a strong asset base with constant revenue flows and high value potential. Our track record for execution stands us in good stead for more such projects in the future.

OUR CURRENT OPERATIONS

SADBHAV ENGINEERING LIMITED

CONTRACTING SERVICES INFRASTRUCTURE

BUSINESS DEVELOPMENT BUSINESS

ROADS & IRRIGATION MINING ROADS & HIGHWAYS HIGHWAYS OPERATIONS

SADBHAV INFRASTRUCTURE PROJECTS

Investment in 8 toll based & 1 annuity based BOT project*

* Our Company proposes to transfer their shareholding in the BOT projects to its subsidiary, SIPL

Our current operations can be divided into contracting services and infrastructure development.

CONTRACTING BUSINESS

Our contracting business involves the execution of EPC contracts in the road, irrigation and mining operations sectors. The road and irrigation projects are awarded by the Central and State governments while the mining operations projects are by bodies corporate. We secure our contracting projects through the competitive bidding process. Depending on the project size, we bid for these projects on a stand alone basis or in joint venture with other construction companies.

We were awarded the first SSNNL Canal Project in the year 1989-90. Our track record of timely and successful execution of the projects helped us secure many projects of the construction of Narmada Main Canal. We have executed the contract for four canal syphons out of the 12 canal syphons on Narmada Main Canal across rivers Watrak, Pushpawati, Khari-I and Banas respectively. Our first mining project was for L&T Limited in fiscal 1990 for rock excavation of copper at Hindustan Copper Limited in Madhya Pradesh. We executed the excavation of overburden and lignite mining at Vastan Mines of GIPCL, which was completed in the year 2003. We have also executed mining projects for various organizations such as L & T, GMDC, GIPCL, GHCL, etc.

We gained adequate experience and expertise in the business of executing contracts for construction of roads & highways with our foray into this business in the year 1993 when we bagged our first contract for the 87 strengthening and widening of the Sambalpur-Rourkela Road from L&T and thereafter executed eleven contracts for road projects successfully. Among the prestigious contracts won by us was the contract from NHAI which included widening to four lanes and strengthening of existing two lanes of National Highway 8A from Samakhiyali to Bhachau in Gujarat.

The contribution to turnover from each of the above mentioned areas of business during the last three years is given below: (Rs. lacs) Fiscal 2010 2009 2008 Sector Turnover % to total Turnover % to total Turnover % to total Roads & Highways 97,923.47 77.93 76,722.55 72.32 74,809.60 85.98 Irrigation 7,523.11 5.99 14,617.51 13.78 9,534.14 10.96 Mining Operations 20,206.97 16.08 14,751.76 13.90 2,661.33 3.06 Total 1,25,653.54 100.00 1,06,091.82 100.00 87,005.07 100.00

Our revenues are skewed towards the roads sector but with the current order book position this trend is expected to shift towards a balanced order book.

The funding arrangement for any project is a key consideration. We ensure that we have the right mix of funding, thereby minimizing the receivable risk. The projects currently under execution are funded by the following agencies: (Rs. lacs) No. of Funding Agency Project Value % to total Work on hand % to total projects World Bank / ADB 2 19,775.00 2.29% 1,493.03 0.22% Government aided 24 3,35,501.66 38.94% 2,35,602.48 34.81% BOT projects 7 5,06,284.77 58.77% 4,39,768.58 64.97% Total 33 8,61,561.43 100.00 6,76,864.09 100.00

Roads and Highways

Our growth in the construction segment is dependant on the type and number of orders received. We have to meet the requisite prequalification criteria for being awarded such contracts. The key elements of the prequalification are net worth and bid capacity. We enter into project-specific joint ventures for tenders wherein we do not meet the prequalification criteria on a stand-alone basis. Our current bid capacity is Rs. 110175.00 lacs for NHAI projects.

Details of the on-going road projects on hand as on March 31, 2010 are given below: (Rs. lacs) Date of Stipulated Issue of S. Project Work on date of Project Details Client Work No Value Hand completio Order/ n LoA Rehabilitation and strengthening of existing 2 National lane road and widening to 4 Highways lane divided carriageway from April 12, April 21, 1. Authority of 57,332.97 5823.71 kms 539.500 to 440.000 2006 2010 India, (Vadape-Gonde Section) of New Delhi NH-3 in the state of Maharashtra. Maharashtra Construction of Road in Multi- Airport Model International Hub March 20, 638.23 June 30, 2. Development 7118.11* Airport at Nagpur (MIHAN) 2006 2010 Corp Ltd., Project Complex. Nagpur

Design, Construction, Development, Finance, Operation and Maintenance of the work of Rehabilitation National and Upgrading to four lane Highway January April 30, 3. 41,400.00 23,644.79 from kms 596/750 to kms Authority of 08, 2007 2010 653/225 on National Highway India No. 7 (NH-7) in the state of Madhya Pradesh under North-South corridor Construction of Civil works Septemb under MPSRSP-II: Package -I MPRDC, October 4. er 26, 1,493.03 Shivpuri- Sheopur-Rajasthan Bhopal 11466.60* 31, 2010 2007 Border (SH-06) Road Project

Construction of Civil works Septemb under MPSRSP-II: Package - MPRDC, June 30, 5. er 26, 11 Seoni- Chiraidongri (SH- Bhopal 8308.40* 2010 2007 0.00 11A) Road project Investigation, survey, design The and construction of BRTS Commission corridor from Pendurthi to er, Grater DRM office ("PTC Corridor") October October 6. Vishakhapat via NAD Jn. Kancharapalem, 06, 2008 8276.83 5,337.59 05, 2010 nam railway station with 2 years Municipal defect liability period under Corporation EPC Design & Build) system Additional Construction of cement City concrete pavement and allied Engineer, works within Surat city limit for October April 13, 7. Surat Package -IV (a) Varachha 14, 2008 5437.88 3548.79 2010 Municipal road (b) Bamroli road ( c) corporation, Rander road Surat Design, engineering, finance, procurement, construction, operation and maintenance of National 4/6 laning of MP/Maharashtra Highway January June 17, 8. Border-Dhule section of NH-3 116971.80 106931.42 Authority of 15, 2009 2012 from kms 168.500 to kms India 265.000 in the state of Maharashtra under NHDP phase IIIA on BOT basis Modernization and Maharashtra computerization of Integrated October State Road May 05, 9. Border check post at 22 83400.00 78433.45 31, 2011 Development 2009 locations in the state of Corporation Maharashtra

Improvement works of Ranchi Jharkhand ring Road (Section III Ch. km Road Septemb 0.600 to Ch. km 13.350 and Projects September 10. er 23, 25200.00 24130.71 Section IV Ch. km 0.000 to Implemention 22, 2011 2009 km 6.335) in Jharkhand Company (Package ID : RRRI Limited

Improvement works of Ranchi Jharkhand ring Road (Section V Ch. km Road Septemb 0.000 to Ch. km 10.007 and Projects September 11. er 23, 22500.00 21780.45 Section VI Ch. km 0.000 to Implemention 22, 2011 2009 km 7.100) in Jharkhand Company (Package ID : RRR II) Limited

National Four Laning Of Hyderabad- Highway Decembe Yadgiri Section Of NH-202 In June 03, 12. Authority of r 31, 39880.00*** 39880.00 State Of Andhra Pradesh 2012 India, 2009 from (18.600-54.000 km) New Delhi

Four laning Of Rohtak National Panipat Section Of Nh-71a Highway From Km 0.000 (km 63.300 of January March 03, 13. Authority of 106200.00*** 106200.00 NH-10) to km 80.858 (km 04, 2010 2013 India, 83.339 OF NH-1) in state of New Delhi Haryana Four laning of Bijapur - National Hungund section of NH-13 Highway from Km. 102.000 to km. February March 03, 14. Authority of 102500.00*** 102500.00 202.000 in the state of 02, 2010 2013 India, Karnataka (Package No. New Delhi NHDP-III/BOT/KNT/05) TOTAL 635992.59 520342.17

* Projects with price escalation

*** For these 3 new BOT projects, our Company will be executing the EPC contracts for which the Letters of Acceptance have been received while the EPC contracts have been signed after March 31, 2010

Detailed below are some of the major completed projects in the roads & highways sector – (Rs. lacs)

S. Project Year of Project details Client No. Value completion

Road Infrastructure Integrated Improvement cum Performance Development 1. Based Maintenance on Lalsot to Kota Road (LJ- Company of Rajasthan 29300.00 2009 1) in Rajasthan Ltd (RIDCOR), Rajasthan Providing Four laning to Aurangabad - Jalna Road part of MSH-6 kms 10/400 to 60/200 PWD, Aurangabad, 2. including Zalta Byepass (kms 0/00 to kms 9725.70 2009 Maharashtra 2/800) & Beed Byepass (kms 292/500 to kms 305/600)** Rehabilitation and upgrading of Abhanpur (kms Project Director, PIU, 3. 27) - Rajim (kms 45) - Gariyabad (kms 90.22 ) 4836.59 2009 PWD, Chhattisgarh section of SH 2B in Chhattisgarh Rehabilitation and upgrading of Rajim (kms 0) to Project Director, PIU, 4. Mahasamund (kms 39.12) section of SH 2B in 3370.41 2009 PWD, Chhattisgarh Chhattisgarh Improvement & Widening to four lane of 2 lane Ahmedabad Urban 5. Sardar Patel Ring Road around Ahmedabad city Development 21600.00 2008 on a BOT basis Authority, Ahmedabad

Rehabilitation and strengthening of Jabalpur to Madhya Pradesh State Amarkantak Road (SH-22) in MP (Project Road 6. Road Sector 8792.66 2008 No. 16) from kms 0.000 to 221.800 Contract Development Project Package -7 East West Corridor Project- Rehabilitation and National Highway Upgrading of Gagodhar- Radhanpur Road 7. Authority of India, New 16389.12 2008 Section of NH-15 from kms 245.00 to kms Delhi 138.80 in the state of Gujarat

Strengthening and Paving of shoulders of SH Executive Engineer 07:Viramgam-Dhrangadhra (kms 58/825 to kms State Road Project 8. 7001.00 2008 104/263)and Dhrangadhra - Halvad (kms Dn.Kashi Vishwanath 126/000 to kms 51/500) Contract No.GSHP/12 Plot Rajkot Up gradation of Road from Hattigudur to Bidar The Project Director, 9. (Contract U3) in Joint Venture with Hindustan PIU,KSHIP, K.R.Circle, 5234.86 2006 Construction Company Bangalore Widening to 4/6 lanes and strengthening of existing 2-lane carriageway of NH-5 in the state 10. L & T Limited, Chennai 12159.00 2005 of Orissa - Package OR-II - Chandikhole - Bhadrak - for the section kms 61.00 to 98.00 Rehabilitation and upgrading to 4/6 lane divided carriageway for 4/6 lane divided carriageway for National Highway Bhilwara - Chittorgarh - Udaipur section of NH- 11. Authority of India, New 9642.76 2005 8, NH-79 & NH-76 from (kms172.900 of NH-8) Delhi Mangalwar to (kms 113.828 of NH-76) Pratap nagar crossing - Udaipur Rehabilitation and Upgradation to 4/6 lane divided carriageway for Kishangarh - Nasirabad National Highway - Bhilwara - Chittorgarh - Udaipur Section of 12. Authority of India, New 11021.00 2004 NH-8, NH-79 and NH-76 Package (KU-1) from Delhi Kishangarh (kms 363.000 of NH–8) to Nasirabad (kms 15.000 of NH–79) in Rajast Widening to four lane including strengthening of National Highway 13. existing Two lane of NH8A from Samkhiyali Authority of India, New 4243.00 2001 (kms 306) to Bhachau(kms 324) in Gujarat Delhi Widening to four lane including strengthening of National Highway 14. existing Two lane of NH8A from Padana (kms Authority of India, New 1021.00 2001 346) to Gandhidham(kms 361.160) in Gujarat Delhi Widening to four lane including strengthening of National Highway 15. existing two lane of NH 8A from 135 to 170 kms 3477.00 2001 Division, Rajkot Tal & Dist. Rajkot Widening to four lane including strengthening of National Highway 16. existing two lane of NH 8B from 185 to 207 kms 2446.00 2001 Division, Rajkot Nr.Bamanbore, Tal & Dist:Rajkot L & T Ltd. ECC Strengthening and widening of Sambalpur - 17. construction group, 5551.39 1997 Rourkela Road Project Package - S2 Chennai TOTAL 155811.50 - ** This project has been completed and has achieved its Commercial Operation Date in July 2009. It has been authorized by the Government of Maharashtra to collect toll from July 28, 2009

Irrigation

Our first irrigation project was awarded by Sardar Sarovar Narmada Nigam Limited (SSNNL) for a section of the Sardar Sarovar Main Canal which was completed in fiscal 1990. We executed a significant portion of the

91 world’s largest concrete lined Narmada Main Canal having capacity of 40,000 cusecs. We have executed 55 kms of the total 357 kms of the main canal and 33 kms are underway.

We have executed 4 out of the total 12 canal syphons on Narmada Main Canal across rivers Watrak, Pushpawati, Khari and Banas. The concrete lining of Kakrapar Left Bank Canal of 13.87 kms was completed in a record period of 75 days. The rehabilitation of the Shedhi Branch Canal by providing brick lining and additions and alterations to the structures was completed 5 months ahead of scheduled date of completion. Our current bid capacity for SSNNL is Rs. 460791.00 lacs.

Given below are the on-going irrigation projects on hand as on March 31, 2010: (Rs. lacs) Date of Issue of Stipulated S. Project Work on Project Details Client Work date of No. Value Hand Order/ completion LoA Constructing NMC Reach November April 30, 1 388.164to 421.977 kms SSNNL 9707.00* 771.87 24, 2004 2010 (Package NMC-1) Constructing canal earthwork, Executive structures, lining and service Engineer., March 01, September 2 road to Kachchh Branch Canal 3407.00* 998.65 KBC 2005 15, 2009 (KBC) Ch.0.00to 8.82 kms Radhanpur (Package-I) Constructing canal earthwork, structures, lining and service Executive March 01, April 30, 3 road to Kachchh Branch Canal Engr., KBC 3143.00* 627.33 2005 2010 Ch.8.82to 20.01 kms (Package- Radhanpur II) Investigation, preparation of Hydraulic Particulars, designs, Government Excavation, Construction of CM of Andhra December June 04, 4 & CD works of HNSS Main 4205.83 1553.81 Pradesh I & 4, 2006 2011 Canal reach kms 230.000 to CAD Dept. kms 245.000 in Anantapur District. Investigation, preparation of Hydraulic Particulars, designs, Drawing and Earthwork Government Excavation and Construction of of Andhra December December 5 CM & CD works of HNSS Main 8287.10 6066.41 Pradesh I & 04, 2006 04, 2011 Canal reach kms 245.000 to CAD Dept. kms 260.000 and Distributory system to feed an ayacut of 16000 acres under khariff I. D Investigation, preparation of Hydraulic Particulars, Excavation and Construction of Government CM & CD works of HNSS Main of Andhra December December 6 Canal reach kms 320.000 to 9141.79 8,755.33 Pradesh I & 15, 2006 15, 2011 kms 340.000 and Distributory CAD Dept. system for an ayacut of 2800 acres khariff I. D. under HNSS Phase-II, in Anantapur District Package No. HNSS Phase- II/52, Investigation, Preparation Government of Hydraulic Particulars, of Andhra July 12, July 11, 7 3863.55 2898.97 Designs, Land Plan Schedules, Pradesh I & 2007 2010 Drawings and Excavation of CAD Dept. Madakasira Branch Canal under 92

HNSS Phase-II from kms 0.000 to kms 20.00 including CM & CD works l Package No.HNSS Phase-II/53, Investigation, Preparation of Hydraulic Particulars, Designs, Government Land Plan Schedules Drawings of Andhra July 12, July 11, 8 and Formation of Gollapalli 5187.83 5,187.83 Pradesh I & 2007 2010 Reservoir with a capacity of CAD Dept. 1.61 TMC on Madakasira Branch Canal between kms 8.000 to kms 10.000 Providing cement concrete Water lining in the selected reaches of resources March 27, March 26, 9 Left Bank Canal in between Department, 3862.18* 2133.69 2007 2011 R.D. 29.177 kms to kms 71.313 Govt. of " under OECF Package No. 22. Orissa Earth work, Excavation, forming embankment and construction of CD & CM works of Main Government canal and Distributory system of Andhra April 23, April 22, 10 up to water course level and CC Pradesh, 8677.73 2563.97 2008 2012 lining to main canal and other Irrigation& allied works including CAD Dept. investigation, designing and estimation of Gouravelly Office of the Executive Execution of Omkareshwar Engineer, Project canal system (Phase-III) Narmada February February 11 comprising of right bank flow Development 31020.00 28440.40 28, 2008 27, 2011 canal from RD 68.92 kms to Division No. 162.95 kms 20 , Khargone, MP Investigation design and execution of canal network Government system in Karimnagar dist under of Andhra February 12 Kodimal, Potharam, Surampet, Pradesh, 5164.29 4475.81 February 19, 2009 Lachupet and new tank at Irrigation& 18, 2011 +450.00 and its concerned CAD Dept. Gravity Canals TOTAL 95667.30 64474.06

* Projects with price escalation

Some of the major irrigation projects completed are:

(Rs. lacs) S. Year of N Project Details Client Project Value completion o Constructing canal syphons across river 1 Banas on NMC Reach at Ch.362.011 SSNNL 7669.00 2010 (Package-2)

Construction of Right Bank canal from kms Narmada 56.00 to 63.00, Excavation, Earthwork, 2 Development division 1771.25 2005 cement concrete lining and structures -2, Jabalpur complete (Group-III) Grasim Industries Construction of Raw Water Tank and allied 3 Ltd., Haveri, 1320.00 2005 works at Grasim Industries Ltd. Karnataka Providing & laying double layered burnt clay tiles lining and constructing canal service 4 road, catch water dowels and boundary SSNNL 1882.91 2004 gutter on SBC reach 0.55 to 70.976 kms (Package-III) kms 19.8 to 29.5 Providing & laying double layered burnt clay tiles lining and constructing canal service 5 road, catch water dowels and boundary SSNNL 2188.19 2004 gutter on SBC reach 0.55 to 70.976 kms (Package-IV) kms 35.5 to 29.5

Constructing Narmada Main Canal (Earthwork, Lining, Structures, Service 6 SSNNL 4951.95 2003 Road & Canal Constructing Road) reach Ch.314.356 to 328.843 (Package-6) Constructing Narmada Main Canal (Earthwork, Lining, Structures, Service 7 SSNNL 5091.67 2003 Road & Canal Constructing Road) reach Ch.290.605 to 300.336 (Package-4) Constructing Canal Syphons across the 8 river Khari on NMC at ch.321.115 kms SSNNL 2830.62 2003 (Pack-2/2) Constructing Canal Syphons across the 9 river Pushpawati on NMC at ch.314.696 SSNNL 2861.83 2003 kms (Pack-2/1) Narmada Water Rehabilitation to Kakrapar Left Bank Main Resources and 10 Canal R.D. 0.0 to 20.60 (Chainage 0.0 to 892.25 2001 Water Supply 6.28 kms) Package I Department Narmada Water Rehabilitation to Kakrapar Left Bank Main Resources and 11 Canal R.D. 20.60 to 45.50 (Chainage 6.28 686.30 2001 Water Supply to 13.87 kms) Package II Department Constructing Canal syphons across river 12 Watrak at ch.196.188 kms on NMC SSNNL 9890.00 2001 Kapadwanj, Dist. Kheda Construction of canal earthwork and 13 SSNNL 2409.13 2000 structures of Vallabhipur sub-branch canal

Construction of Maliya Branch canal 14 SSNNL 3459.00 2000 earthwork and structures

Construction of Narmada main Canal in its 15 SSNNL 8904.00 1999 reach 155.030 to 168.436 kms (Package-II) Construction of Narmada main Canal ( Earthwork, Lining, structure and service 16 SSNNL 10058.00 1997 road) ch 108.326 to 127.559 kms Package Slice-I

Improvement of Shedhi Branch Canal kms 17 SSNNL 3140.70 1995 0.00 to 46.03 kms Majalgaon Right Bank Canal kms 40 to 54 Majalgaon Canal 18 514.60 1992 in Dist Beed Divn. TOTAL - 70,521.40

Mining Operations

We execute projects involving excavation of overburden, rock, lignite and copper. At present our operations are in the mines located in Gujarat. Our first mining project was for L&T Limited in fiscal 1990 for rock excavation of copper for Hindustan Copper Limited in Madhya Pradesh. The value of work completed was Rs.1,018.70 lacs. It was followed by contract of excavation of overburden and lignite at Vastan Mines for GIPCL in fiscal 1997. The five year project was completed in fiscal 2001 and a further extension given which was completed in December 2003. It involved removal of 7,000,000 cubic meters overburden and 6,00,000 cubic meters of Lignite. The peak progress was 60,000 cubic meter per day and 17,11,000 cubic meters in January 2001. Currently we have 7 projects in hand which are to be executed over a period of two to seven years.

With a view to establish our foothold in the international mining industry, our Company has incorporated a subsidiary, “Sadbhav Mining Limitada” (SML), on May 23, 2008 as a limited liability company under the laws of Mozambique.

Mr. Vishnubhai Patel, one of our Promoters, acting in his individual capacity as well as on behalf of SEL and Osho Ventures FZE (Osho), a company incorporated in Dubai, United Arab Emirates and Osho’s group companies had come together.to establish a foothold in the international mining industry and extend its business in the mining segment. In view of this, Ocean Bright Corporation Limited (OBCL), incorporated on November 8, 2007 in Hong Kong, was acquired jointly by SEL and Osho on December 13, 2007. For further details of OBCL, please refer to chapter titled “History and Other Corporate Matters” and sub-section “Companies with which the promoters have disassociated themselves in the last three years” on page 119 and page 154 of this Letter of Offer respectively.

The mining projects on hand as on March 31, 2010 are given below: (Rs. lacs) Date of Issue of Stipulated S. Project Work on Project Details Client Work date of No. Value Hand Order/ completion LoA Excavation of overburden and GHCL, April 30, May 01, 1 lignite at Khadsaliya Lignite Khadsaliya, 30500.00* 23528.86 2016 2004 mines Bhavnagar. GIPCL, Excavation work at Mangrol October October 10, 2 Surat, 27089.23 24399.07 Lignite Mines 11, 2008 2016 Gujarat Removal of Over Burden of First Dig (Solid) by Hiring of Equipments: such as Excavators, Tippers/Dumpers, Drills, Dozers, Graders and Northern Water Tankers for Composite coal fields March 12, March 11, 3 Work Consisting of Blast Hole Limited, 24524.21* 3680.72 2008 2011 Drilling, Blasting, Excavation, Singaraulli, Loading, Transportation of M.P. Broken Rocks/Soil/Earth, Unloading/ dumping, spreading, dozing, water sprinkling and grading

Removal of all type of material in all kinds of strata by hiring of equipment such as HEMM, Western Tippers, Drills Dozers, Graders coalfields January July 22, 4 and water sprinkler including Limited, 4756.20* 706.08 23, 2008 2010 drilling, excavation, loading, Nagpur, transportation, dumping, Maharashtra spreading, dozing, grading and water sprinkling

Removal of all types of material in all kinds of strata by hiring of equipments at specified places July 18, November 5 WCL 6806.59 4940.56 as per instruction of Engineer-in- 2009 30, 2011 charge at Junad OCM of Wani north area

Hiring of HEMM for transfer and transportation of materials in various strata including drilling, excavation, dumping, spreading, dozing and other allied works in Mahanadi September October 29, 6 22542.56 21173.81 specified areas for dumping as Coal Fields 11, 2009 2014 per the instructions of project officer/ management of lakhanpur project, lakhanpur Area

Removal of Over Burden of first dig by hiring of equipments for composite work by mechanical NCL Khadia, February March 06, 7 13682.76 13618.76 means as per instruction of UP 06, 2010 2013 Engineer Incharge at Specified Places at Khadia OCP of NCL

TOTAL 129901.55 92047.86 * Projects with price escalation

Some of the major projects completed are as follows – (Rs. lacs) S. Project Year of Project Details Client No Value completion Hiring of Equipments with excavation Gujarat Industries Power staff and facilities for excavation work at 1 Company Limited Mangrol, 26122.30 2003 Vastan Mines of Gujarat Industries Surat Power Co. Ltd Hiring of Equipments with excavation Gujarat Industries Power staff and facilities for excavation work at 2 Company Limited Mangrol, 413.04 2002 Vastan Mines of Gujarat Industries Surat Power Co. Ltd Hiring of Equipments with excavation Gujarat Industries Power staff and facilities for excavation work at 3 Company Ltd. Manglore, 855.70 1997 Vastan Mines of Gujarat Industries Surat Power Co. Ltd Excavation of soil & rock for basement 4 L & T Ltd. Chennai 518.00 1993 of Barat Diamond

Rock Excavation at Hindustan Copper 5 L & T Ltd. Chennai 1018.70 1992 Ltd, Malajkhand Project TOTAL 28927.74 -

PROJECT SPECIFIC JOINT VENTURES AND STRATEGIC ALLIANCES

We form Joint Ventures or enter into MOU to form consortium with other companies whereby the capacities put together will pre-qualify us to bid for the project. These joint ventures and MOUs are usually for the specific projects only. A list of Joint Ventures and MOUs entered into by us for which projects have been awarded and for others where we have bid and awaiting results are detailed in the chapter titled “History and other Corporate Matters” on page 119 of this Letter of Offer.

INFRASTRUCTURE DEVELOPMENT BUSINESS

Infrastructure development involves an investment in a project and a return on such investment thereafter. Presently, our focus is to build a sizable asset base in the road BOT project. We currently have invested in seven BOT projects.We also propose to transfer our ownership in the current BOT projects to SIPL. We earn revenues by way of toll or fixed annuity during the concession period of the road projects. Toll based projects do not have fixed revenues since they are dependant on the traffic flow on the specified road. In case of annuity based projects we are paid a fixed sum by the relevant authority who assumes the traffic risk.

Roads & Highways We currently have invested in nine BOT projects. We are in the process of transferring our ownership in all the BOT projects to SIPL and we have initiated the process of such transfer by making an application vide letter dated October 30, 2008 to NHAI w.r.t our ownership in NSEL It is also proposed that future investment in road BOT projects will be made by SIPL independently or jointly with our Company.

Details of our BOT projects are as follows:

Project Type of project % shareholding Concession period MNEL Toll 20% 20 years ARRIL Toll 80% 20 years AJTL Toll 51% 23 years and 6 months NSEL Annuity 51% 20 years MBCPNL Toll 90 % 24 years and 6 months DPTL Toll 27 % 18 years HYTPL Toll 60% 23 years RPTPL Toll 100% 25 years BHTPL Toll 77% 20 years

Mumbai Nasik Expressway Limited (MNEL)

We signed a Memorandum of Understanding (MOU) dated March 2, 2004 with Gammon India Limited and B.E. Billimoria & Co. Limited for the joint empanelment for various Non-NHDP BOT Projects of the Ministry of Road Transport and Highways (MoRTH). Pursuant to the MOU, a consortium consisting of our Company, Gammon India Limited, and B.E. Billimoria & Co. Limited was awarded the project for the four-laning of the 99.5 kilometer Vadape-Gonde (Mumbai Nasik) section of NH- 3, which is part of the NHDP Phase III. MNEL, an SPV, was incorporated on July 22, 2005 for the implementation of the project, in which our Company has subscribed for 20% of the shareholding while Gammon India Limited will be the Lead Member contributing 70% and B.E. Billimoria & Co. Limited – 10% to the equity capital. The concession period for the project is twenty (20) years, including a construction period of three (3) years. The total project cost is estimated to be Rs. 75,300 lacs. Upto February 2010, our Company has completed 92% of the total estimated project cost.

Some of the salient features of the Concession Agreement between National Highway Authorities of India (NHAI) and MNEL (Concessionaire) dated October 14, 2005 are as follows:

• Concession Period: The concession period is for twenty (20) years commencing from 180 days from the date of this agreement i.e. October 14, 2005. The construction period of three (3) years was scheduled 97

for completion on April 13, 2009. MNEL has been granted extension for completing the project vide letter dated April 11, 2009 from NHAI for an extension of the scheduled project completion date by 374 days i.e. up to April 21, 2010.

• Fees: MNEL is entitled during the operations period to levy and collect fees from the users of the project highway pursuant to a schedule of user fees set forth in the concession agreement. MNEL can also collect fees during the construction period, subject to completion of at least 50 kilometers of a continuous stretch of the project highway including the Kasara Ghat by-pass.

The fee notification provides for an annual revision of the fees linked to the WPI. Under the concession agreement, limits have been set on the fees that MNEL may collect from local traffic. Such fees may not be in excess of the following discounted rates:

¾ local personal traffic: 25% of the applicable fees for the specific category of vehicle; or ¾ local commercial traffic: 50% of the applicable fees for the specific category of vehicle.

Concession Fee: The concession fee payable by MNEL to NHAI is Rs. 1.00 per year during the term of the concession agreement.

• Equity Shareholding: Aggregate Equity Shareholding of the Consortium Members and their Associates in the issued and paid up Equity Capital during the Concession period in MNEL shall not be less than (a) 51% during the construction period for 3 yrs following the Commercial Operations Date (COD) date and (b) 26% during the balance remaining operations period.

As on date, equity contribution made by all the consortium members is Rs. 5,200 Lacs out of which Rs. 1,040.00 Lacs, Rs. 0.5 Lac and Rs. 4,159.49 Lacs have been contributed by SEL, B.E.Billimoria Limited and Gammon Infrastructure Project Limited respectively.

• Financing Arrangement: Financial closure of the project was achieved on July 12, 2006, for a total debt of Rs. 65,000 lacs, out of the total project cost of Rs. 75,300 lacs. As per the concession agreement, MNEL will also receive a grant of Rs. 5,100 lacs from NHAI during the construction period. The project is currently in the implementation phase.

• Engineering, Procurement & Construction Contract: Under the concession agreement, MNEL was required to carry out by itself or through a contractor, the design, engineering, procurement and construction and all other works and things necessary for the completion of the MNEL road project. MNEL awarded GIL the EPC contract for carrying out the construction works who in-turn sub-contracted the EPC contract to our Company through agreement dated March 23, 2006 for a total contract price of Rs 50,100 lacs

• Termination: Following are some of the events that could lead to termination of the agreement:

a) Equity Shareholding of the consortium members falls below the minimum prescribed level mentioned above and the concessionaire does not cure such default within 90 days of its occurrence b) Material breach by either of the parties c) The Concessionaire fails to achieve the project as per the scheduled project completion date d) The Concessionaire abandons the operations of the project for fifteen (15) days without prior consent of NHAI

The Ministry of Road Transport and Highways by a notification dated April 21, 2010 authorised MNEL to collect the toll for the entire project stretch from Km.539.500 to Km. 440.00. Further, MNEL has been issued a Gazette notification from the Government of India prescribing the base toll rates for different category of vehicles using the Mumbai Nasik (Vadape Gonde) section from the km 539.500 to km 440.000 of NH3 in the State of Maharashtra.

Ahmedabad Ring Road Infrastructure Limited (ARRIL)

This project involves improvement and widening to four lanes the existing 76 kms two lane ring road around Ahmedabad city. This road links Ahmedabad to 5 national highways and 14 state highways. We were awarded this project in consortium with Patel Infrastructure Limited. It has a concession period of 20 years 98 including 18 months construction period. ARRIL, an SPV, was incorporated on August 31, 2006 for the implementation of the project, in which our Company has subscribed for 80% of the shareholding

Salient Features of the Concession Agreement between Ahmedabad Urban Development Authority (AUDA) and ARRIL (Concessionaire) dated September 7, 2006 are as follows:

• Concession Period: The concession period is for 20 years commencing after 90 days from the date of this agreement i.e. September 7, 2006. The construction period is for eighteen (18) months.

• Fees: ARRIL is entitled to levy and collect fees from the users of the project highway on the existing 2- laned road during the construction period and on the widened 4-laned road after its construction pursuant to a schedule of use fees set forth in the concession agreement.

The fee notification provides for a revision of the fees to be implemented every year after the commercial operation date is achieved linked to the WPI. Under the concession agreement, limits have been set on the fees that ARRIL may collect from local traffic. Such fees may not be in excess of the following discounted rates:

¾ local personal traffic: 50% of the applicable fees for the specific category of vehicle; or ¾ local commercial traffic: 50% of the applicable fees for the specific category of vehicle.

Concession Fee: The concession fee payable by ARRIL to AUDA is Re. 1.00 per year during the term of the concession agreement.

Development Fee: Development Fee include cost payable by ARRIL to AUDA for the project development and monitoring activities, process bids and other project development expenses which will be 2% of the total project cost.

Lease Fee: ARRIL shall pay a lease fee of Rs. 1.00 per year during the term of the concession agreement as a consideration of grant of the project land on lease for completion of project by ARRIL.

• Financing Arrangement: Financial closure of the project was achieved on December 28, 2006 for a total debt of Rs. 40,500 lacs, out of the total project cost of Rs. 50,080 lacs. As per the concession agreement, ARRIL will also receive a grant of Rs. 3,600 lacs from AUDA during the construction period.

• Equity Shareholding: Aggregate Equity Shareholding of the Consortium Members and their Associates in the issued and paid up Equity Capital during the Concession period in ARRIL shall not be less than (a) 51% during the construction period for 3 yrs following the Commercial Operations Date (COD) date and (b) 26% during the balance remaining operations period.

The total equity contribution by our Company and PIPL are Rs. 836.80 lacs and Rs. 209.20 lacs respectively. • Engineering, Procurement & Construction Contract: Under the concession agreement, ARRIL was required to carry out by itself or through a contractor, the design, engineering, procurement and construction and all other works and things necessary for the completion of the ARRIL project. ARRIL awarded our Company the EPC contract for carrying out the construction works for a total cost of Rs.21, 600 lacs and the same has been completed on May 30, 2008.

• Termination: Following are some of the events that could lead to termination of the agreement: a) Equity Shareholding of the consortium members falls below the minimum prescribed level mentioned above and the concessionaire does not cure such default within 90 days of its occurrence b) Material breach by either of the parties c) The Concessionaire abandons the operations of the project for more than 15 consecutive days without prior consent of AUDA, except such abandonment is not a result of Force Majeure Event or breach of obligation by AUDA.

This ring road was an existing tolled road and our consortium was given rights to collect toll from January 1, 2007. The project obtained the completion certificate on May 30, 2008 and is currently fully operational. Our consortium also has advertisement rights on this road. Our consortium has entered into an agreement with M/s Chitra Publicity Company Private Limited through which they have been assigned the rights for 300 99 hoardings, 19 overhead gantries and 16 circles (subject to permission from AUDA) on Sardar Patel Ring Road for 5 years wef June 1, 2007, subject to the Concession Agreement entered into between ARRIL and AUDA. Our consortium will receive fixed payments from Chitra Publicity for 5 years, irrespective of actual display business generated.

Aurangabad Jalna Tollway Limited (AJTL)

A consortium consisting of our Company and PBA Infrastructure Limited (at the time of submitting the bid, the JV was known as Sadbhav-Prakash JV) (Consortium Members) was awarded the project for the four laning of the Aurangabad – Jalna Road (MHS-6) from kms 10/400 to 60/200, Beed Bypass kms 292/500 to 305/650 and Zalta Bypass with kms 0/00 to 2/850 on BOT basis. Aurangabad Jalna Tollway Limited (AJTL), an SPV, was incorporated on January 19, 2007 for the implementation of the project, in which our Company has subscribed for 51% of the proposed shareholding. The concession period for the project is twenty three (23) years and six (6) months, including a construction period of thirty (30) months. The total project cost is estimated to be Rs.27,770 lacs. The project has achieved its Commercial Operation Date and has been authorized by the Government of Maharashtra to collect the toll from July 28, 2009.

Salient Features of the Agreement between the Executive Engineer, World Bank Project Division, Aurangabad and M/s Sadbhav – Prakash Joint Venture dated December 20, 2006 are as follows:

• Concession Period: The concession period is for twenty three (23) years and six (6) months, including a construction period of thirty (30) months.

• Fees: AJTL is entitled during the operations period to levy and collect fees from the users of the project road pursuant to pre-determined rates of user fees set forth in a schedule to the concession agreement.

• Engineering, Procurement & Construction Contract: Under the agreement, AJTL was required to carry out by itself or through a contractor, the design, engineering, procurement and construction of the project. AJTL awarded our Company the EPC contract for carrying out the construction works. Our Company and AJTL entered into an agreement on April 23, 2007 for the design, engineering, procurement of raw materials and equipment, construction and all other works and things necessary for the completion of the AJTL project. The contract price payable by AJTL to us is Rs.9,725 lacs.

• Financing Arrangement: Financial closure of the project was achieved on November 30, 2007 for a total debt of Rs. 19,400 lacs, out of the total project cost of Rs. 27,770 lacs. As on date, the total equity contribution made by Sadbhav and its Associates is Rs. 2,794.80 Lacs and by PBA Infrastructure Limited is Rs. 2,685.20 Lacs respectively (including premium).

In addition to the toll revenue, our consortium also has the rights to advertisement on this road stretch.

Nagpur Seoni Expressway Limited (NSEL)

A consortium consisting of our Company and SREI Infrastructure Limited (Consortium Members) was awarded the project of implementing a four-lane divided carriageway standards for North-South Corridor in the Seoni District including the Design, Construction, Development, Finance, Operation and Maintenance of kms 596.750 to kms 653.225 on National Highway no. 7 (NH-7) in the state of Madhya Pradesh on Build, Operate and Transfer (BOT) Annuity Basis. NSEL, an SPV, incorporated on February 8, 2007 for the implementation of the project, in which our Company has subscribed for 51% of the shareholding. The concession period for the project is twenty three (23) years and six (6) months, including a construction period of thirty (30) months. The total project cost is estimated to be Rs. 48,970 lacs.

Salient Features of the Concession Agreement between National Highways Authority of India (NHAI) and NSEL (Concessionaire) dated May 30, 2007 are as follows:

• Concession Period: The concession period is for twenty three (23) years and six (6) months, including a construction period of thirty (30) months and the scheduled completion date of the project is May 25, 2010.

• Annuity: The NHAI shall pay the Concessionaire, on each Annuity Payment Date, the sum of Rs 3,540 lacs semi-annually beginning in the year 2010 up to the year 2027.

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• Fees: ¾ Concession fee payable by the Concessionaire to the NHAI shall be Rs. 1.00 per year during the concession period. ¾ The concessionaire will not have the right to levy, demand or collect from ay vehicle or person any toll or fee.

• Financing Arrangement: Financial closure of the project was achieved November 22, 2007 for a total debt of Rs. 38, 210 lacs, out of the total project cost of Rs. 48,970 lacs.

As on date, the total equity contribution made by Sadbhav and its Associates is Rs. 2,448.00 Lacs and by SREI Infrastructure Limited and its Associates is Rs. 2,352.00 Lacs respectively.

• Equity Shareholding: Aggregate Equity Shareholding of the Consortium Members and/or their Associates in the issued and paid up equity capital of the concessionaire shall not be less than (a) 51% during the construction period and (b) 26% during the balance remaining operations period.

• Engineering, Procurement & Construction Contract: Under the concession agreement, NSEL was required to carry out by itself or through a contractor, the design, engineering, procurement and construction of the project. NSEL awarded our Company the EPC contract for carrying out the construction works. Our Company and NSEL entered into an agreement on July 20, 2007 for the design, engineering, procurement of raw materials and equipment, construction and all other works and things necessary for the completion of the NSEL project. The contract price payable by NSEL to us is Rs.41,670 lacs.

• Termination: Following are some of the events that could lead to termination of the agreement: a) Equity Shareholding of the consortium members falls below the minimum prescribed level mentioned above and the concessionaire does not cure such default within 90 days of its occurrence b) Material breach by either of the parties c) The Concessionaire abandons the operations of the project for more than 15 consecutive days without prior consent of NHAI, except such abandonment is not a result of Force Majeure Event or breach of obligation by NHAI

Maharashtra Border Check Post Network Limited (MBCPNL)

A consortium consisting of our Company, SREI Infrastructure Finance Limited (SREI) and SREI Sahaj e- village Limited (Consortium Members) was awarded the project for the Modernization and computerization of Integrated Border Check Posts at 22 locations in the state of Maharashtra on BOT basis. MBCPNL, an SPV, was incorporated on March 9, 2009 for the implementation of the project, in which our Company has subscribed for 50.88% of the proposed shareholding. The concession period for the project is twenty four (24) years and six (6) months, including a construction period of eighteen (18) months. The total project cost is estimated to be Rs. 85,100 lacs. Further, on account of changes in the cost of raw material compared to the basic cost considered while submission of tender along with rates prevailing in the current market, the cost has been revised to Rs. 1,42,637.00 lacs.

Salient Features of the Concession Agreement between the Governor of Maharashtra (Transport Department) (“GOM”) and MBCPNL (Concessionaire) dated March 30, 2009 are as follows:

• Concession Period: The concession period is for 24 years and 6 months commencing from the work order dated May 5, 2009. The project is scheduled to be completed 18 months from the date the work order has been issued. In the event the project is not completed in the stipulated time, the concessionaire would be liable to pay liquidated damages to the extent of Rs 10 lacs per week for every week of delay.

• Fees: MBCPNL is entitled during the operations period to levy and collect Service Fees from the users of the project road pursuant to pre-determined rates of user fees set forth in a schedule to the concession agreement.

• Performance Security: The Concessionaire has provided GOM a Performance Security of Rs. 3000 lacs for the construction period. Further, the Concessionaire will provide a performance security for a sum of 101

3% of the project cost of which 1.5% is in the form of Cash/DD and 1.5% in the form of bank guarantees for the first 3 years from the date the commercial operations of the project begins. Thereafter, an increase of 5% every year till the end of concession period. The Performance Security shall be released after one year of handing over of the project to GOM on completion of concession period.

• Equity Shareholding: Aggregate Equity Shareholding of the members of the Consortium in the issued and paid up equity share capital of the Concessionaire shall not be less than (a) 51% until expiry 3 yrs following the date the commercial operations of the project begin and (b) 26% during the remaining operations period.

Dhule Palesner Tollway Limited (DPTL)

Dhule Palesner Tollway Limited was incorporated on March 25, 2009 as a Special Purpose Vehicle promoted by HCC Infrastructure Limited (HCC), John Laing Investments Mauritius Limited (Laing) and Sadbhav Infrastructure Projects Limited (SIPL) for the purpose of design, engineering, finance, procurement, construction, operation and maintenance of 4/6 laning of MP/Maharashtra Border-Dhule section of NH – 3 from kms 168.50 to kms 265.00 in the state of Maharashtra under NHDP Phase III A.

HCC. Laing and SEL entered into a Joint bidding Agreement dated January 16, 2008 for submitting the prequalification bid for this project. Subsequently, on the project being awarded, DPTL and NHAI have entered into a Concession Agreement dated June 24, 2009 for a concession period of 18 years, including a construction period of 910 days. Some of the salient features of the Concession Agreement are as follows: • Equity Shareholding: Aggregate Equity Shareholding of the Consortium Members together with their Associates, in the issued and paid up equity capital of the concessionaire, shall not be less than (a) 51% at the time of the Concession Agreement (b) 26% during the construction period

• Advertising on the Site: The concessionaire shall be allowed to advertise only on the Toll plazas, rest areas, bus shelters and telephone booths located on the project highway if the advertising thereon does not, in the opinion of the Authority, distract the users or violate the extant guidelines of MoRTH.

• Concession Fee: The concession fee payable by DPTL to NHAI is Re. 1.00 per year during the term of the concession agreement. Further, the concessionaire will pay the Authority, for each year during the concession period but commencing from the day falling after 2610 days from the Commercial Operation Date, a premium in the form of an additional concessional fee equal to 2% of the total Realisable Fee as share of the authority. The additional concessional fee shall be subject to an increasing amount of premium in the respective year by an additional 1% as compared to the immediately preceding year.

• User Fee: On and from the commercial operation date till the transfer date, the Concessionaire shall have the sole and exclusive right to demand and collect appropriate fees from the users subject to and in accordance with the concession agreement and the National Highways Fee (determination of rates collection) rules, 2008.

Hyderabad – Yadgiri Tollway Private Limited (HYTPL)

Hyderabad-Yadgiri Tollway Private Limited (“HYTPL”), was incorporated on January 20, 2010 as a Special Purpose Vehicle promoted by Sadbhav Engineering Limited for the work of design, engineering, construction, development, finance, operation and maintenance of 4 laning of Hyderabad-Yadgiri section from Km. 18.600 to Km. 54.000 of NH-202 in the state of Andhra Pradesh under NHDP Phase – III on DBFOT (Toll Basis) as well as to construct Toll plazas and other works or conveniences of public and private utility for the purpose of smooth traffic on the roads.

The Concession Agreement for the project was signed on February 24, 2010 between National Highways Authority of India (NHAI) and HYTPL (Concessionaire). Some of the Salient Features of the Concession Agreement are as below:

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• Concession Period: The concession period is for twenty three (23) years including a construction period of 650 days and the scheduled completion date of the project is May 25, 2010.

• Financial Close: the concessionaire will achieve financial close of the project within 180 days from the date of the concession agreement and in the event of any delay, a further period of 120 days subject to the payment of damages to the Authority shall be applicable.

• Concession Fee: The concession fee payable by HYTPL to NHAI is Re. 1.00 per year during the term of the concession agreement. Further, the concessionaire will pay the Authority, for each year during the concession period, a premium in the form of an additional concessional fee equal to Rs. 11.7 crores out of the gross revenues of the project as share of the authority. The additional concessional fee shall be subject to an increasing amount of premium in the respective year by an additional 5% as compared to the immediately preceding year.

Bijapur-Hungund Tollway Private Limited

Bijapur – Hungund Tollway Private Limited (“BHTPL”) was incorporated on February 22, 2010 as a Special Purpose Vehicle promoted by Sadbhav Engineering Limited (“SEL”) and Montecarlo Construction Limited (“MCL”) for the design, engineering, construction and development of 4 laning of Bijapur – Hungund Section of NH-13 from Km. 102.000 to Km. 202.000 in the state of Karnataka on DBFOR Toll Basis under NHDP Phase – III as well as to construct Toll plazas and other works or conveniences of public and private utility for the purpose of smooth traffic on the roads.

SEL and MCL entered into a Joint Bidding Agreement on April 11, 2009 to jointly bid for the above mentioned project wherein the parties agreed to maintain a minimum initial equity participation in the SPV as follows:

Name % of paid up equity share capital Sadbhav Engineering Limited 77

Montecarlo Construction Limited 23

The concession period for the project is twenty (20) years, including a construction period of 910 days. The total project cost is estimated to be Rs. 748 crores. Salient Features of the Concession Agreement between National Highways Authority of India (NHAI) and BHTPL (Concessionaire) dated March 9, 2010 are as follows:

• Equity Shareholding: Aggregate Equity Shareholding of the Consortium Members together with their Associates in the issued and paid up equity capital of the concessionaire shall not be less than (a) 51% at the time of the Concession Agreement (b) 26% during the construction period and two years thereafter.

• Grant: NHAI shall provide to the Concessionaire cash support by way of an outright Grant for an amount of Rs. 273.60 crores. The grant shall be disbursed to the Concessionaire by way of Equity Support. In

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consideration of the grant of Concession, the concessionaire shall pay NHAI by way of Concession fee a sum of Re. 1.00 per annum.

Rohtak-Panipat Tollway Private Limited

Rohtak-Panipat Tollway Private Limited (“RPTPL”) was incorporated on January 25, 2010 as a Special Purpose Vehicle promoted by Sadbhav Engineering Limited for the work of design, engineering, construction, development, finance, operation and maintenance of 4 laning of Rohtak – Panipat section from Km. 0.000 (Km. 63.30 of NH 10) to Km. 80.858 (Km. 83.50 of NH 1) in the state of Haryana on a BOT Basis under NHDP Phase – III on DBFOT (Toll Basis) as well as to construct Toll plazas and other works or conveniences of public and private utility for the purpose of smooth traffic on the roads.

Subsequently, RPTPL and NHAI will enter into a Concession Agreement for a concession period of 25 years to record the terms and conditions of the project.

INSURANCE

Our operations are subject to hazards inherent in providing engineering and construction services, such as risk of equipment failure, work accidents, fire, earthquake, flood and other force majeure events, acts of terrorism and explosions including hazards that may cause injury and loss of life, severe damage to and the destruction to property, equipment and environmental damage. We have insurance policies for our sites, registered office, heavy vehicles, machinery, light vehicles and for our employees to mitigate such risks.

As on April 30, 2010, our Company has obtained the following insurance policies (Rs. Lacs) S. Particulars Of Insurance No. of Policies Sum Insured No 1 Car Insurance (Site) 3 72156.53 2 Heavy Vehicles & Machinery (HV Files) 298 7062.44 3 Heavy Vehicles & Machinery (HM Files) 103 6222.50 4 Light Vehicles (LV Files) 102 347.91 5 Light Vehicles for Fire Insurance 28 2286.07 18 6 W.C. & Accident (Premium Amount) 43.14

TOTAL 552 88118.59

RAW MATERIALS

The key raw materials included for our projects include diesel, furnace oil, aggregate and bitumen. The purchase of raw materials is centralized at our purchase department. The raw material is procured based on the delivery schedule of each project. A proper inventory system is maintained to ensure the availability of materials when required. The materials purchased are tested before usage of the same.

We have a set of suppliers for HSD, furnace oil, bitumen, crude oil and other Petroleum products with whom we enter into long term contract thus ensuring regular supply and at a pre decided/ agreed upon price. We also enter into project specific contracts with suppliers in line with project requirements. This ensures steady supply of steel and cement during the period of execution of the project. In case of small requirements we procure from local suppliers.

Aggregate is a major raw material and is difficult to procure from local markets. Lands near the construction sites are taken on lease from Government or private parties for boulders which are crushed using the crushing plants installed at the site. 104

WATER

Water is largely project specific and is procured locally by way of boring wells at the site.

ELECTRICITY

This is generated by DG sets. We own 111 DG Sets with capacity ranging from 0.75 KVA to 500 KVA. Electricity is also procured from State Electricity Board as per the requirement.

HUMAN RESOURCES

We have 1151 permanent employees working with us as on April 30, 2010 as detailed below:

Engineers Others S. No Site Total Post Degree Diploma Graduate Graduate Others 1 Head Office 8 9 23 41 30 111 2 Workshop - 4 - 3 7 14 3 Canal Section 7 2 1 3 9 22 4 Roads Section 55 75 12 85 437 664 5 Mining Works 17 7 19 297 340 Total 70 107 43 151 780 1151

RECRUITMENT POLICY OF PERSONNEL

Our recruitment policy for fresh projects received is as under:- First we explore the possibility of manning the new posts by reallocation or promotion of the existing employees. The other required personnel are invited for recruitment through known contacts and advertisements. The qualified personnel are recruited at the respective sites once they qualify the technical and HR interview.

BID CAPACITY

Our business is project specific and not in the nature of a manufacturing concern with specified installed capacity and hence the capacity details cannot be determined. However our current bid capacity details are given below:

For projects awarded by NHAI - Rs.110175.00 lacs For projects awarded by SSNNL- Rs. 460791 lacs

QUALITY ASSURANCE

A detailed quality assurance programme is followed for every project undertaken. We establish our own laboratory at the project site at which the instruments required for carrying out the quality tests are installed. The team includes a quality control engineer, laboratory assistants and skilled workers. Samples collected are tested and records are maintained as per the client specification. The results of the test have to be approved by the client. Suppliers of cement, reinforcement steel, etc. also provide a test certificate and the same has to be approved by the client. Each client has their own set of specification for quality of concrete for structures, concrete for linings, construction materials, etc. Our laboratory staff ensures compliance with the client’s quality control parameters at all stages of the project.

HEALTH, SAFETY AND ENVIRONMENT

Our Company believes that ensuring the health and safety of our personnel is critical to the successful conduct of our business and operations. We are therefore committed in complying, in all material respects, with applicable health, safety and environmental regulations and other requirements in our operations and also in maintaining adequate workmen’s compensation and personal accident insurance policies. We 105 believe that accidents and occupational health hazards can be significantly reduced through a systematic analysis and control of risks and by providing appropriate training to management, employees and sub- contractors. Project managers appointed by us for a project are principally responsible for ensuring that safety standards are met at the relevant project sites.

EXPORT OBLIGATIONS

We have imported equipments and tools worth Rs. 3,227.05 lacs for our Radhanpur/ Rajasthan/Nasik/Seoni projects against which we have an export obligation of Rs. 5,874.72 lacs which has to be fulfilled before the expiry date and is required to be fulfilled by our Company beginning September 11, 2013 upto February 27, 2016. Our Company fulfils the Export Obligation through deemed exports. However, we are yet to discharge whole of the obligation till date.

Amount of Export S Details of Capital License Expiry EPCG License No. Date Obligation No. Goods purchased Date (Rs. lacs)

200 TPH Portable 1. 0830000952/2/11/00 September 12, 316.10 September 11, Crushing & 2005 2013 Screening Plant 200 TPH Portable 2. 0830000973/2/11/00 September 22, 318.46 September 21, Crushing & 2005 2013 Screening Plant 500 KVA-3412B 3. 0830001011/2/11/00 62.54 October 18, 2005 Caterpillar DG Set & October 17, 2013 Air Cleaner 4. 0830001010/2/11/00 Batching Plant CPL 35.90 October 18, 2005 October 17, 2013 CP 30 5. 0830001009/2/11/00 Hindustan 2021 Z 60.34 October 18, 2005 October 17, 2013 Bar Loader 6. 0830001458/2/11/00 PC 200-6 Hydraulic 193.54 August 2, 2006 August 1, 2014 Exavatore 7. 0830001483/2/11/00 EX 210 Hitachi 189.82 August 25, 2006 August 24, 2014 Hydraulic Exavatore Komatau PC 130-7 8. 0830001501/2/11/00 207.96 August 31, 2006 Hydraulic Excavator August 30, 2014 (High Seac)

Apollo Model WM 0830001530/2/11/00 200 Wet Mix Plant 9. September 19, 895.94 September 18,

0830001530/2/11/00 2006 2014 Apollo Asphalt Batch Mix Plant 160 TPH

10. 0830001541/2/11/00 September 21, 27.42 September 20, 500 KVA DG Set 2006 2014 11. 0830001540/2/11/00 September 21, 27.42 September 20, 500 KVA DG Set 2006 2014 12. 0830001561/2/11/00 Ingersoll Rand Make 129.08 October 5, 2006 October 4, 2014 Paver Titan 4360 13. 0830001562/2/11/00 17.77 October 5, 2006 Fine Rock Breaker October 4, 2014

14. 0830001563/2/11/00 35.53 October 5, 2006 Fine Rock Breaker October 4, 2014 106

Amount of Export S Details of Capital License Expiry EPCG License No. Date Obligation No. Goods purchased Date (Rs. lacs)

Komatau PC 130-7 15. 0830001619/2/11/00 November 7, 138.64 November 6, Hydraulic Excavator 2006 2014 (High Seac)

Ingersoll Rand Make 16. 0830001706/2/11/00 December 11, 90.35 December 10, Soil Vibratory 2006 2014 Compactor SD 110 Ingersoll Rand Make 17. 0830001705/2/11/00 December 11, 90.35 December 10, Soil Vibratory 2006 2014 Compactor SD 110 18. 0830001735/2/11/00 December 26, 38.72 December 26, 380 KVA DG Set 2006 2014 19. 0830001768/1/11/00 PC 200-6 Hydraulic 187.36 January 9, 2007 January 9, 2015 Exavatore 20. 0830001842/2/11/00 27.96 February 6, 2007 Fine Rock Breaker February 5, 2015

21. 0830001886/2/11/00 February 19, 43.21 February 18, 500 KVA DG Set 2007 2015

22. 0830001887/2/11/00 February 19, 200 TPH 3 Crushing 596.74 February 18, 2007 Plant Machinery 2015

23. 0830001894/2/11/00 February 20, Concrete Pump BP 32.61 February 19, 2007 350 XTD 2015 24. 0830002038/2/11/00 TATA Tipper LPK 367.94 April 24, 2007 April 23, 2015 1613

25. 0830002095/2/11/00 Ashok Leyland 142.49 June 13, 2007 June 12, 2015 Tipper 1613H/1

26. 0830002172/2/11/00 Ashok Leyland 71.34 August 30, 2007 August 29, 2015 Tipper 1613H/1

27. 0830002161/2/11/00 TATA Tipper LPK 60.82 August 17, 2007 August 16, 2015 1613

28. 0830002187/2/11/00 September 24, TATA Tipper LPK 60.82 September 23, 2007 1613 2015

29. 0830002229/2/11/00 Jaw Crusher & 54.23 October 30, 2007 October 29, 2015 Granulator Vibratory Tandem Compector DD 90 0830002242/2/11/00 November 6, L&T Komatsu PC 30. 0830002242/2/11/00 218.22 November 5, 2007 200 2015

0830002242/2/11/00 Ashok Leyland Tipper 1613H/1

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Amount of Export S Details of Capital License Expiry EPCG License No. Date Obligation No. Goods purchased Date (Rs. lacs)

200 TPH 3 Stage 31. 0830002250/2/11/00 November 16, 574.64 November 15, Skid Mounted 2007 2015 Crushing Plant Volvo Make Sensor Paver 32. 0830002325/2/11/00 292.33 January 17, 2008 January 16, 2016 500 KVA D.G. Set

380 KVA DG Set TATA Tipper LPK 1613

33. 0830002338/2/11/00 January 24, 2008 144.93 Hindustan 2021 Z January 23, 2016

Bar Loader

380 KVA DG Set TATA Tipper LPK 0830002367/2/11/00 February 28, 1613 34. 123.19 February 27, 2008 0830002367/2/11/00 2016 DM 60 Drum Mix Plant

* Our Company had made applications in the fiscal 2008 to the Joint Director General of Foreign Trade to amend the nature of export obligation from for the above mentioned EPCG licenses from “Construction & Related Engineering Services” to “Macadam, Aggregate and Ready Mix Concrete”. The renewed licenses reflecting the change have been received and thus, the Export Obligation of all the licenses will now be fulfilled through export of Macadam, Aggregate and Ready Mix Concrete.

TECHNICAL COLLABORATIONS

Our Company has no technical Collaborations

OUR EQUIPMENT

We believe that our investment in equipment and fixed assets is an advantage that enables us to rapidly mobilize our equipment to project sites as and when the need arises. Having such an asset base is in our view an important advantage in serving the technically challenging and diverse nature of the construction projects in which we are engaged. Our equipment is managed, maintained and operated by our plant and machinery department at our workshop at Ognaj.

The following table provides a list of some of our more substantial equipment as on April 30, 2010:

S. No. Description of Equipment Quantity GENERAL EQUIPMENTS 1 High Capacity D G 63 2 Hydraulic PRESS 1 3 Low Capacity D G 48 4 Magnatic Drill Machine 1 5 Monoblock Pump 7 6 Overhead Crane 1

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7 Rock Breakers 6 8 Water Tanker 25 9 Air Compressors 9 10 Crane 3 11 Diesel Tank 3 12 Electric Dewaterring Pumps 13 13 Electric Vibrators 3 14 Engine Dewaterring Pumps 21 15 Welding Machine 37 16 Steel Bar Cutter 2 17 Trailor 1 18 Truck 1 19 Weigh Bridge 16 20 Welding D.G. Set 7 IRRIGATION AND ROADS 21 Dumper 86 22 Earth Compactor 3 23 AMP Batch Apollo Plant 3 24 AMP Batch Speco Plant 6 25 Baby Roller 5 26 Backhoe and Loader 3 27 Bitumin Sprayer 11 28 Broomers 8 29 Concrete Batching Gayatri 12 30 Concrete Pumps 8 31 Crushing Plant 13 32 Diesel Bowser 9 33 Diesel Needle Vibrators 5 34 Dozer 14 35 Excavator 42 36 Grader 27 37 Kerb Cutting Machine 5 38 Kerb Paving Machine 9 39 Loader 18 40 Paver Finisher 17 41 Pillar Drilling Machine 1 42 Plate Compactor 9 43 Plate Vibrators 7 44 Pneumatic Tyred Roller 8 45 Power Hexa Machine 1 46 Rcc Braker 3 47 Rock Breakers 6 48 Soil (Vibro) Compactor 38 49 Tandem Roller 22 50 Tractor 12

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51 Tractor Dozer 2 52 Transit Mixer 26 53 Wmm Apollo Plant 11 MINING OPERATIONS 54 Volvo FM 400 37 55 Scania Tipper P 380 82 56 BH 40 Tipper 5 57 O&K Mining RH 30 E 6008K 2 58 Volvo EC460, EC 700 9 59 Drilling Machine 2 60 DTH Drilling Rings (Chassis Type) 1

COMPETITION

We operate in a highly competitive environment. The construction sector sees a variety of entities ranging from small niche players with specific experience to large, well established companies. Our competition depends on a host of factors, such as the type of project, contract value and potential margins, the complexity and location of the project, the reputation of the client and the risks relating to revenue generation. While service quality, technical ability, performance record, experience, health and safety records and the availability of skilled personnel are key factors in client decisions among competitors, price is often the deciding factor in most tender awards. Some of our competitors are Hindustan Construction Company Limited, Ircon, Nagarjuna Construction Co., Patel Engineering Limited, Madhucon Projects Ltd, Gayatri Projects Limited and IVRCL.

OUR PROPERTIES

Owned Properties - The details of the properties owned by our Company are as follows: –

Date and Type of Location and Description of the S. No. Seller Agreement Property

1. Sale Deeds dated 1. Ms. Joytsnaben Vasantlal Shah July 20, 1992 2. Smt. Prem-Subhashchandra

3. Shah Satishbhai Jashubhai and Shah Mitinkumar Jashubhai

4. Shah Vibhaben Dineshkumar

5. Shah Ashokkumar Chimanlal and Rekhaben Asokkumar Shah Colony at Ognaj,

6. Jyotiben Babulal Patel and Hemant Taluka Daskroi, Dist Ahmedabad Rasiklal Joshi

7. Pore Rameshbhai chandrakant and Pore Deviben Rameshbhai

8. Agrawal Jagdishpal Butiram

9. Agrawal Silarani Jagdishlal

10. Savitaben Ishwarbhai Patel and Mahendrasinh Prabhatsingh Vaghela and Atmaram Ambalal Patel

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Date and Type of Location and Description of the S. No. Seller Agreement Property

11. Desai Sambhulal Kodarlal

12.Thakkar Bhanumatiben Santilal

13. Shah Sardaben Jyantilal

14. Shah Pravinkumar Ranchhodlal

Registered office of SEL located at: Sale Deed dated 2. Mr. Harshadbhai Zinzuwadi April 26, 1996 Plot no. 438 Sadbhav House, Opp Law Garden Police Chowki, Ellisbridge, Ahmedabad

Abhimanyu Apartment, Sale Deed dated Flat No. B/17 – 4th Floor 3. September 2, Mr. Amit Dahyabhai Patel Opposite Shreddha Deep 2006 Complex Naranpura, Ahmedabad

Sale Deed dated Manoramya Retreat Bungalows, 4. Mr. Bhavanising Khengarsing Charan June 26, 2007 Bungalow No. 38 Koba Village, Gandhinagar

Sale Deed dated Mrs Sushma Setia and Mr. Rajeev Block J-59 , Malviya Nagar 5. July 6, 2009 Setia Extension Residential Scheme, Saket, New Delhi

Allotment Letter st Oberoi Splendor, 21 Floor of 6. dated July 29, Oberoi Constructions Private Limited Building 1, Wing – D, Andheri, 2009 Mumbai

Leased Properties – The details of the properties taken on lease by our Company are as follows –

Date and Type of the Location and Description S. No. Lessor Term/ Expiry instrument of the Property

Registered office of SEL located at: Lease Ms. Lease agreement dated July agreement valid 1. Shantaben 26, 2005 Plot no. 438/06 Sadbhav till March 31, Patel House, Opp Law Garden 2015 Police Chowki, Ellisbridge, Ahmedabad

Workshop located at: Vishnubhai M Rent Note valid 2. Rent Note dated May 1, 2010 Patel HUF for 11 months Village Ognaj, Taluka Daskroi, Dist Ahmedabad

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REGULATIONS AND POLICIES

Introduction

We are engaged inter alia in the business as a project developer, which invests in SPVs for infrastructure projects as well as in the field of excavation in the Mining Industry.

We also carry out O&M contracts directly in some sectors such as roads, construction and irrigation.

The current projects of our subsidiaries and of the joint ventures entered into by us are in the sectors viz. roads and highways, irrigation and mines. The SPVs established for carrying out activities in these sectors are subject to certain regulations in India.

A. Regulations applicable in the sector of Infrastructure

The primary central legislations governing the roads sector are the National Highways Act, 1956 and the National Highways Authority of India Act, 1988 (NHAI Act). i. National Highways Act, 1956

Under this Act, the central government is vested with the power to declare a highway as a National Highway and also to acquire land for this purpose. The central government may by notification, declare its intention to acquire any land when it is satisfied that for a public purpose such land is required for the building, maintenance, management or operation of a national highway. The National Highways Act prescribes the procedure for the same. Such procedure relates to declaration of an intention to acquire, entering and inspecting such land, hearing of objections, declaration required to be made for the acquisition and the mode of taking possession.

The central government is responsible for the development and maintenance of national highways. However, it may direct that such functions may also be exercised by state governments. Further, the central government has the power to enter into an agreement with any person for the development and maintenance of a part or whole of the highway. Such person would have the right to collect and retain fees at such rates as may be notified by the central government.

The National Highways (Collection of Fees by any Person for the use of Section of National Highways/ Permanent Bridge/ Temporary Bridge on National Highways) Rules, 1997 provide that the central government may enter into agreements with persons for development and maintenance of the whole or part of a national highway/permanent bridge/temporary bridge on national highway. Such person may invest his own funds for development or maintenance and is allowed to collect and retain the fees at agreed rates from different categories of vehicles for an agreed period for the use of the facilities created herein.

The rates of fees and the period of collection are decided by the central government and the factors taken into account to decide the same include expenditure involved in building; maintenance, management and operation of the whole or part of such section; interest on the capital invested; reasonable return, the volume of traffic; and the period of such agreement.

Once the period of collection of fees by the person is completed, all rights pertaining to the section, permanent bridge or the temporary bridge on the national highway would be deemed to have been taken over by the central government. ii. National Highways Authority of India

The NHAI Act provides for the constitution of an authority for the development, maintenance and management of national highways. Pursuant to the same NHAI was set up in 1995. Under the NHAI Act, the central government carries out development and maintenance of the national highway system through NHAI, an autonomous body. Pursuant to the same, NHAI has the power to enter into and perform any contract necessary for the discharge of its functions under the NHAI Act.

In an effort to provide for additional financing of its projects, the NHAI has taken measures to attract private sector participation in development of projects. The NHAI Act prescribes a limit in relation to the value of the 112 contracts that may be entered into by NHAI. However, such contracts can exceed the value so specified with the prior approval of the central government. The NHAI provides that the contracts for acquisition, sale or lease of immovable property cannot exceed a term of thirty (30) days.

The Government aims to attract both foreign and domestic private investments in construction and maintenance of National Highways. Projects may be offered on BOT basis to private agencies. The concession period can be unto a maximum of 30 years, after which the road is transferred back to NHAI by the concessionaries.

The bidding for the projects takes place in two stages as per the process provided below:

• In the pre-qualification stage, NHAI selects certain bidders on the basis of technical and financial expertise, prior experience in implementing similar projects and previous track record; and

• In the second stage, NHAI invites commercial bids from the pre-qualified bidders on the basis of which the right to develop the project is awarded.

Where projects are funded by multilateral funding agencies such as the World Bank or the Asian Development Bank, the selection takes place in consultation and concurrence with the funding organisation. For other types of projects, selection is as per standards work procedures. Wide publicity is given to NHAI tenders so as to attract attention of leading contractors and consultants. Notice inviting tenders is posted on the web site of the NHAI and published in leading newspapers.

Private sector participation in the road sector is sought to be promoted through the following initiatives as well:

• The Government ensures that all preparatory work including land acquisition and utility removal is completed before awarding of the project;

• Right of way is made available to the concessionaires free from all encumbrances;

• NHAI / Government may provide capital grant up to 40% of project cost to enhance viability on a case to case basis;

• 100% tax exemption for 5 years and 30% relief for next 5 years, which may be availed of in 20 years; and

• Duty free import of specified modern high capacity equipment for highway construction. iii. Environment Regulation

Infrastructure projects must also ensure compliance with environmental legislation such as the Water (Prevention and Control of Pollution) Act 1974 (Water Pollution Act), the Air (Prevention and Control of Pollution) Act, 1981 (Air Pollution Act) and the Environment Protection Act, 1986 (Environment Act).

The Water Pollution Act aims to prevent and control water pollution. This legislation provides for the constitution of a Central Pollution Control Board and State Pollution Control Boards. The functions of the Central Board include coordination of activities of the State Boards, collecting data relating to water pollution and the measures for the prevention and control of water pollution and prescription of standards for streams or wells. The State Pollution Control Boards are responsible for the planning for programmes for prevention and control of pollution of streams and wells, collecting and disseminating information relating to water pollution and its prevention and control; inspection of sewage or trade effluents, works and plants for their treatment and to review the specifications and data relating to plants set up for treatment and purification of water; laying down or annulling the effluent standards for trade effluents and for the quality of the receiving waters; and laying down standards for treatment of trade effluents to be discharged. This legislation debars any person from establishing any industry, operation or process or any treatment and disposal system, which is likely to discharge trade effluent into a stream, well or sewer without taking prior consent of the State Pollution Control Board.

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The Central and State Pollution Control Boards constituted under the Water Pollution Act are also to perform functions as per the Air Pollution Act for the prevention and control of air pollution. The Air Pollution Act aims for the prevention, control and abatement of air pollution. It is mandated under this Act that no person can, without the previous consent of the State Board, establish or operate any industrial plant in an air pollution control area.

The Environment Act has been enacted for the protection and improvement of the environment. The Act empowers the central government to take measures to protect and improve the environment such as by laying down standards for emission or discharge of pollutants, providing for restrictions regarding areas where industries may operate and so on. The central government may make rules for regulating environmental pollution.

With respect to forest conservation, the Forest (Conservation) Act, 1980 prevents state governments from making any order directing that any forest land be used for a non-forest purpose or that any forest land is assigned through lease or otherwise to any private person or corporation not owned or controlled by the Government without the approval of the central government. The Ministry of Environment and Forests mandates that Environment Impact Assessment (EIA) must be conducted for projects. In the process, the Ministry receives proposals for the setting up of projects and assesses their impact on the environment before granting clearances to the projects. iv. The Explosives Act, 1884

The Explosives Act, 1884 is aimed at regulating the manufacture, possession, use, sale, transport, import and export of explosives. Central Government has been empowered to make rules for regulating import, export, transport, manufacture, possession, sale and use of explosives such as gun powder, nitrate mixtures, nitro compound, chlorate mixture, fulminate, ammunition, fireworks, and liquid oxygen explosives. The Explosives Act and Rules notified there under to a large extent prescribe requirements relating to technical aspects of handling, storage and use of explosives, compressed gases etc. v. Minimum Wages Act, 1948

Under the Minimum Wages Act, 1948 the State Government is empowered to 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.

Further, an employer is required to pay a workman overtime at overtime rates stipulated by the appropriate government. 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. vi. Payment of Bonus Act, 1965

Pursuant to the Payment of Bonus Act, 1965, as amended from time to time (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.

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 of up to Rs. 1,000 or both, against persons in charge of, and responsible to our Company for the conduct of the business of our Company at the time of contravention. vii. 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. 350,000.

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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. viii. Employees State Insurance Act, 1948

The Employees State Insurance Act, 1948 (the “ESI Act”) provides for certain benefits to employees in case of sickness, maternity and employment injury. All employees in establishments covered by the ESI Act are required to be insured, with an obligation imposed on the employer to make certain contributions in relation thereto. In addition, the employer is also required to register itself under the ESI Act and maintain prescribed records and registers. ix. Employees Provident Fund 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. x. Contract Labour (Regulation and Abolition) Act, 1970:

Under the Contract Labour (Regulation and Abolition) Act, 1970, if any contractor employees 20 or more workers then he is required to get license under the above Act and the principal employer is also required to get the registration certificate. xi. Workmen’s Compensation Act, 1923

The Workmen’s Compensation Act, 1923 requires the employer to grant relief to injured person or dependents of the deceased in relation to any injury suffered by a workman, out of and during the course of his employment.

B. Regulations and Policies applicable in the sector of Mining

We are governed by the Mines Act, 1952 as amended till date, Mines and Minerals (Development and Regulations) Act, 1957, as amended till date, (the “MMDR Act”) and the Mineral Concession Rules, 1960, as amended (the “MC Rules”), in respect of mining rights and the operations of mines in India. The Government of India announced the National Mineral Policy, 1993, (the “Mineral Policy”), and has also made subsequent amendments to the Mineral Policy to reflect principles of sustainable development. The MMDR Act and the MC Rules have been amended from time to time to reflect the Mineral Policy. Mining leases are granted under the MMDR Act, which was expressly enacted to provide for the development and regulation of mines and minerals under the control of the Union of India. Though we are only into excavation of the mines, based on the terms of the Contract the employer and/or our Company may have to apply for certain statutory and/or approvals from the local authority for such excavation of mines:

Brief descriptions on certain statutory legislations applicable to the mining industry are as follows: i. The Mines Act, 1952

The Mines Act was enacted with an object to amend and consolidate the law relating to the regulation of labour and safety in mines. Under this Act, every person who is the immediate proprietor or lessee or occupier of a mine is responsible for giving notice to inspectors and to ensure that all the provisions of the Mines Act and allied acts and rules, regulations and bye-laws are complied with. ii. The Mines and Minerals (Development and Regulation) Act, 1957

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The Mines and Minerals (Development and Regulation) Act, 1957 (the “MMDR Act”) was enacted with a view to bring the regulation of mines and the development of minerals, under the control of the Union to a certain extent. The MMDR Act primarily regulates

(a) the conditions, procedure and manner of granting licenses for prospecting and reconnaissance operations in the mining sector and matters incidental thereto; and

(b) the conditions, procedure and manner of granting and renewal of mining licenses.

The MMDR Act also regulates the extent of the activities of the license holders and constitutes and empowers authorities to ensure that the license holders are carrying out their activities within the scope of the provisions of the MMDR Act and their respective licenses. iii. The Mining Leases (Modification of Terms) Rules, 1956

The Mining Leases (Modification of Terms) Rules, 1956 (the Rules) were enacted under the Mines and Minerals (Development and Regulation) Act, 1957, in order to bring into conformity with the Act, the leases that were entered into before the enactment of the Act. iv. The Mineral Concession Rules, 1960

The Mineral Concession Rules, 1960 (the Rules) were enacted under the Mines and Minerals (Development and Regulation) Act, 1957 (the Act). The Rules regulates the process of application for licenses under the Act and also the subsequent activities of the lease/license holders. v. Environmental Regulations

All mining activities have to comply with the provisions of various environmental legislations for the time being in force in India. We are required to obtain various clearances before commencing the operations of the mines, inter alia, under the following laws:

(a) the Environment Act;

(b) the Forest Act, if the mining operations or activities are intended to be carried out in or affect any forest land; and

• the Water (Prevention and Control of Pollution) Act, 1974, as amended till date (the “Water Act”); • the Water (Prevention and Control of Pollution) Cess Act, 1977, as amended (the “Water Cess Act”); and • the Air (Prevention and Control of Pollution) Act, 1981, as amended (the “Air Act”) v. Environmental Clearance:

The Ministry of Environment and Forests, in exercise of the powers conferred on it under the provisions of the Environment (Protection) Act, 1986, read with the Environment (Protection) Rules, 1986, issued a notification dated September 14, 2006 dealing with environmental clearances in relation to construction of new projects or activities or the expansion or modernization of existing projects or activities in the areas specified there under. Under the said notification, in relation to mining of minerals and extraction of natural resources an environmental clearance must be obtained from:

(a) the State Environment Impact Assessment Authority (SEIAA) in case any construction work, or preparation of land by the project management except for securing the land, is started on the project or activity in an area exceeding 5 Hectares but less than 50 Hectares of the mining lease area; or

(b) the Ministry of Environment and Forests, in case any construction work, or preparation of land by the project management except for securing the land, is started on the project or activity in an area 116

exceeding 50 Hectares of the mining lease area.

An application seeking prior environmental clearance in all cases shall be made in the prescribed Form. After an application is made it is referred to either the State Level Expert Appraisal Committee or the Central Level Expert Appraisal Committee depending upon the nature of the activity, which shall determine the detailed and comprehensive Terms Of Reference (TOR) addressing all relevant environmental concerns for the preparation of an Environment Impact Assessment (EIA) Report.

For obtaining responses in writing from other concerned persons having a plausible stake in the environmental aspects of the project or activity, the concerned regulatory authority and the State Pollution Control Board (SPCB) or the Union territory Pollution Control Committee (UTPCC) shall invite responses from such concerned persons by publication of the Summary EIA report prepared in the specified format. After completion of the public consultation, the applicant shall address all the material environmental concerns expressed during this process, and make appropriate changes in the draft EIA report and Environmental Management Plan (EMP). The final EIA report, so prepared, shall be submitted by the applicant to the concerned regulatory authority for appraisal.

The concerned regulatory authority shall consider the recommendations the Appraisal Committee concerned and convey its decision to the applicant within one hundred and five days of the receipt of the final Environment Impact Assessment Report, and where Environment Impact Assessment is not required, within one hundred and five days of the receipt of the complete application with requisite documents. vi. Water (Prevention and Control of Pollution) Act, 1974

Under the provisions of the Water Act, any individual, industry or institution discharging industrial or domestic wastewater is required to obtain consent of the State Pollution Control Board. Such consent is granted for a specific period on the expiry of which the conditions stipulated at the time of granting consent are reviewed by the State Pollution Control Board. Even before the expiry of the consent period, the state pollution control board is authorized to carry out regular checks on any industry to verify if the standards prescribed under the Act are being complied with by the concerned person/company. If such standards are not complied with, the State Pollution Control Board is authorized to serve a notice to the concerned person/company. In the event of non-compliance, the State Pollution Control Board may close the mine or withdraw its water supply to the mine or apply to a Magistrate to pass injunctions to restrain such polluters. vii. Water (Prevention and Control of Pollution) Cess Act, 1977

Mining is a specified industry under the Water Cess Act and an individual, industry or institution carrying out mining activity is required to pay the surcharge as stipulated on the basis of water consumed. The assessing authority at the state level levies and collects the surcharge based on the amount of water consumed by such industries. The rate is also determined on the basis of the purpose for which the water is used. Based on the surcharge returns to be furnished by the industry every month, the amount of cess is assessed by the relevant authorities. A rebate of up to 25% on the surcharge payable is available to those industries which install any plant for the treatment of sewage or trade effluents provided that they consume water within the quantity prescribed for that category of industries and also comply with the effluents standards prescribed under the Water Act or the Environment Act. viii. Air (Prevention and Control of Pollution) Act, 1981

Under the provisions of the Air Act any individual, industry or institution responsible for emitting smoke or gases by way of use as fuel or chemical reactions must apply in a prescribed form and obtain consent from the State Pollution Control Board prior to commencing any mining activity. The board is required to grant consent within four months of receipt of the application. The consent may contain conditions relating to specifications of pollution control equipment to be installed.

For ensuring the continuation of the mining operations, a yearly consent certification from the State Pollution Control Board is required both under the Air (Prevention and Control of Pollution) Act, 1981 and Water (Prevention and Control of Pollution) Act, 1974, as discussed above. ix. The Hazardous Wastes (Management and Handling) Rules, 1989

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These rules are aimed at control of generation, collection, treatment, transport, import, storage, and disposal of specified hazardous wastes. These are also applicable to factories and establishments which use, handle or generate hazardous wastes. The enforcement of these rules is carried out by the State Pollution Control Boards. Some of the duties of the enforcement authority are:

• provide authorization to units for handling hazardous waste • ensure safe handling of hazardous waste • monitor and carry out tests • identify and notify the sites for disposal

The occupiers of the factories are required to take necessary adequate steps to contain contaminants and prevent accidents and limit their consequences on human and the environment while handling hazardous wastes. They are also required to provide persons working with information, training and equipment necessary to ensure their safety.

C. Other Regulations applicable to our Company in general i. Investment by Foreign Institutional Investors

Foreign Institutional Investors (“FIIs”) including institutions such as pension funds, mutual funds, investment trusts, insurance and reinsurance companies, international or multilateral organisations or their agencies, foreign governmental agencies, foreign central banks, asset management companies, investment managers or advisors, nominee companies and institutional portfolio managers can invest in all the securities traded on the primary and secondary markets in India. FIIs are required to obtain an initial registration from SEBI and a general permission from the RBI to engage in transactions regulated under FEMA. FIIs must also comply with the provisions of the SEBI (Foreign Institutional Investors) Regulations, 1995, as amended. The initial registration and the RBI’s general permission together enable the registered FII to buy (subject to the ownership restrictions discussed below) and sell freely securities issued by Indian companies, to realise capital gains or investments made through the initial amount invested in India, to subscribe or renounce rights issues for shares, to appoint a domestic custodian for custody of investments held and to repatriate the capital, capital gains, dividends, income received by way of interest and any compensation received towards the sale or renunciation of rights issues of shares. ii. Export Import Policy 2004-09

Pursuant to the Export Promotion Capital Goods Scheme issued under the Export Import Policy an EPCG licence can be issued for import of capital goods for supply to projects notified by the Central Board of Excise and Customs. The export obligation for such EPCG licences is eight times the duty saved. The duty saved is the difference between the effective duty under the aforesaid Customs Notification and the concessional duty under the EPCG Scheme. Under the Scheme Import of capital goods is subject to Actual User condition till the export obligation is completed. The export obligation is to be fulfilled by the export of goods capable of being produced by the use of the capital goods imported under the scheme or by other good(s) manufactured or service(s) provided by the same firm/company or group company/ managed which has the EPCG licence. Similarly, deemed exports as specified in paragraph 8.2 (a), (b), (d), (f), (g) & (j) of Policy is also counted towards fulfilment of export obligation along with the usual benefits available under paragraph 8.3 of the Policy. iii. Ownership restrictions of FIIs

Under the portfolio investment scheme, the total holding of all FIIs together with their sub-accounts in an Indian company is subject to a cap of 24% of the paid-up capital of our Company, which may be increased up to the percentage of sectoral cap on FDI in respect of the said company pursuant to a resolution of the board of directors of our Company and the approval of the shareholders of our Company by a special resolution in a general meeting. The aggregate FII limit for the Issuer is currently 24% of its issued Equity Shares, and it has obtained board or shareholders approval to increase such limit to the maximum of 49 % that may be permitted for our Company. The total holding by each FII, or in case an FII is investing on behalf of its sub-account, each sub-account, should not exceed 10% of the total paid-up capital of that company.

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HISTORY AND OTHER CORPORATE MATTERS

Sadbhav Engineering Private Limited was incorporated on October 3, 1988 as a private limited company in the State of Gujarat by Mr. Vishnubhai M Patel and Ms. Shantanben V Patel with its main object being to engage in the construction business.

Our Company took over the assets and ongoing business of M/s Bhavna Construction Co, a partnership firm w.e.f. from October 1, 1989 at its book value. Mr. Vishnubhai M. Patel, Mrs. Santokben Mafatlal Patel, Mr. Jayantibhai and Mr. Kanubhai Mafatlal Patel were the first partners of this partnership firm which was formed in 1968. By virtue of the partnership deed dated September 16, 1988, Mr. Jayantibhai and Mr. Kanubhai Mafatlal Patel retired from the partnership and eight new partners were inducted in the partnership firm. The new partners were Mr. Chandradevsingh Goresingh, Mr. Gautambhai Rambhai Patel, Mr. Chetan Nandubhai Patel, Mr. Arunkumar Goresingh, Mr. Pareshbhai Chandrakant Patel, Mr. Arvindkumarsingh Goreshingh, Mr. Anilkumarsingh Goresingh and Mr. Kiritbhai Anubhai Patel.

The partners of M/s Bhavna Construction Co. were issued 22,500 Equity Shares of Rs. 100/- amounting to Rs. 22.50 lacs as consideration towards the sale of their business to our Company. The partnership firm was dissolved with effect from March 11, 1992.

Our Company became a Deemed Public Company by virtue of section 43A (1A) of the Companies Act, 1956, w.e.f. September 18, 1992. This section was subsequently removed from the Act and therefore our Company was converted into a Public Limited Company "Sadbhav Engineering Limited" with a fresh Certificate of Incorporation dated May 17, 2001. The registered office of our Company which was initially situated at 707, 7th Floor, Shilp Building, Near Municipal Market, C G Road, Navrangpura, Ahmedabad 380009 was subsequently shifted to “Sadbhav House”, Opposite Law Garden Police Chowki, Ellisbridge, Ahmedabad 380 006 with effect from January 3, 2004.

The main thrust areas of operations of our Company are:

(1) Roads and Highways (2) Irrigation (3) Mining

Our first irrigation project was awarded by Sardar Sarovar Narmada Nigam Limited (SSNNL) for a section of the Sardar Sarovar Main Canal which was completed in 1990. While continuing the endeavors to diversify, we commenced operations in 1990 for rock excavation. We also forayed into the road sector with a sub- contract in 1993 for the strengthening and widening of the 50 kms Sambalpur – Rourkela road. As a logical extension of our construction business, we entered the BOT space in 2005 by undertaking the project for improvement, operation and maintenance, rehabilitation and strengthening of existing 2 lane road and widening to 4 lane for NH-3 section in Maharashtra and presently we are focusing to build a sizable asset base in the road BOT project.

Till date, we have completed construction of 4 syphons for the project across Khari, Pushpavati, Watrak and Banas rivers. Currently, our Company has a 10 year contract from GHCL apart from the first single largest mining contract from Northern Coalfield Limited which involves execution of 15 million bench cubic meters (BCM) per annum. Our mining operations involve excavation of overburden, rock, coal lignite and copper.

Our Company had acquired 74% stake in OBCL and granted a loan of Rs.6646.50 lacs to OBCL. Subsequently, our Company disassociated itself from OBCL. Mr. Vishnubhai Patel, one of our Promoters, acting in his personal capacity as well as on behalf of SEL and Osho Ventures FZE (Osho), a company incorporated in Dubai, United Arab Emirates and Osho’s group companies had come together to establish a foothold in the international mining industry and extend its business in the mining segment.

In view of the above, Ocean Bright Corporation Limited (OBCL), incorporated on November 8, 2007 in Hong Kong, was acquired jointly by SEL and Osho on December 13, 2007. SEL, Osho and OBCL entered into a Shareholders’ Agreement on May 15, 2008 wherein it was agreed that SEL and/or its affiliates and Osho and/or its affiliates would always hold 74% and 26% of the equity shareholding in OBCL respectively. SEL and Mr. Vishnubhai Patel acquired 10 and 64 equity shares (i.e 74 equity shares constituting 74% of the total shareholding) in OBCL for HK$ 74 approximately Rs.400. On June 16, 2008, the entire holding of 64 equity shares held by Mr. Vishnubhai Patel and 10 equity shares held by SEL were transferred to Sadbhav 119

Natural Resources Private Limited (SNRL), a subsidiary of SEL. Pending further infusion of equity, SEL funded OBCL in various tranches by extending loans to the extent of Rs. 6646.50 lacs to be utilized in the mining business. The said loan was given for the purchase of Rigs, Equipment and other accessories.

The following are the main terms and conditions of the loan:

i. The loan shall be repayable within 30 Months from the supply of Rigs and equipments i.e around March 31, 2011. ii. Rate of interest has been kept as prime rate of State Bank of India. iii. In case of default, SEL has the right to convert the outstanding loan into equity as well the right to sell or transfer the ownership of assets in favor of any other entity.

SEL has during current financial year 2009-10 received around Rs. 450 lacs from OBCL as repayment towards outstanding dues. OBCL is going concern company and presently has legal ownership of the assets held by its subsidiaries in Mozambique.

With effect from March 31, 2009, SEL disassociated itself from the business of owning of assets in natural resources space and hence divested their entire shareholding of 10,000 equity shares in SNRL to Vital Connections Private Limited at the face value of Rs. 10 each per share amounting to Rs. 1,00,000 on March 28, 2009. There was no independent valuation done before selling the shareholding of our Company in SNRL.On account of this, OBCL ceased to be a step down subsidiary of SEL.

Our Company has executed numerous projects as main contractors for National Highway Authority of India (NHAI). In addition to our existing 6 BOT projects, we have been awarded 3 new BOT projects in 2010 by NHAI worth Rs 248580.00 lacs. Thus, presently we have invested in a total of nine BOT projects. In view of consolidation of all BOT projects into one Company and better management of them and subject to fulflment of the terms and conditions in each of their concession agreements, we are in the process of transferring our beneficial ownership in respect of our shareholding in the SPVs of all of our BOT projects to SIPL together with the right to vote, receive dividends and accretions, we have initiated the process of such transfer by making an application vide letter dated October 30, 2008 to NHAI w.r.t our ownership in NSEL. The application is currently under progress with NHAI.

Milestones achieved by our Company since incorporation is listed below:

Year Events Received first main canal construction project (reach kms 108 to kms 127) worth 1989 – 90 Rs.19,058 lacs from SSNNL Granted the status of ‘Deemed Public Company’ by the Registrar of Companies, Gujarat 1992 – 93 based on the turnover criterion Received first road project work order as a nominated sub-contractor for strengthening 1992 – 93 and widening of Sambalpur-Rourkela Road to the tune of Rs. 5,551.39 lacs from Larsen & Toubro Limited (ECC Construction Group) Received Sunsari Morang Irrigation Project work order to the tune of Rs. 323 lacs from 1994 – 95 Larsen & Toubro Ltd. for earthwork outside India (Biratnagar-Nepal) and completed the same successfully Received first Mining Excavation work order from Gujarat Industries Power Company 1995 – 96 Limited, Baroda to the tune of Rs. 855.70 lacs Received first road project work order in the private sector from Reliance Industries 1996 – 97 Limited, Jamnagar for constructing roads in their township and refinery site at Moti Khavdi, Jamnagar Awarded first mining contract for overburden removal at Vastan Lignite Mines (Dist. Surat) 1997 – 98 to the tune of Rs.26,122.30 lacs from Gujarat Industries Power Company Limited Received first independent roadwork order from NHAI for widening to four lanes of NH-8A 1997 – 98 at Bhachau (Kutch) to the tune of Rs.4,243 lacs 1998 – 99 Crossed the turn over of Rs.10,000 lacs for the first time since incorporation

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Received four work orders to the total tune of Rs.15,100 lacs from SSNNL for construction 1999 – 00 of canal Successfully completed rehabilitation of Kakrapar Left Bank Main Canal R.S. 0.00 to 2000 – 01 45.5(Ch. 0.0 to 13.87 kms Package I & II) to the tune of Rs. 1,578.55 lacs in a record period of 75 days 2001 – 02 Completed first Canal Syphon across river Watrak 2001 – 02 Became public limited company Successfully completed construction of canal syphon on river Pushapavati and river Khari 2002 – 03 on Narmada Main Canal which was awarded by SSNNL Earned Bonus of Rs. 160 lacs from NHAI due to early completion of work relating to 2003 - 04 Rehabilitation and Upgrading to 4/6 lane divided carriageway from Kishangarh to Nasirabad Section of NH-79A (Package KU-I) Completed East-West Corridor Project - Rehabilitation and Upgrading of Gagodhar- 2004 – 05 Radhanpur Road Section of NH-15 to the tune of Rs.16,389.12 lacs as a part joint venture with Jillin Corporation, China Awarded our first BOT project for the project for iimprovement, ooperation and maintenance, rehabilitation and sstrengthening of the existing 2 lane road and widening to 2005 – 06 4 lane at divided carriageway from kms 539.500 to kms 440.000 (Vadape-Gonde Section) of NH-3 in the Maharashtra State on Build, Operate and Transfer (BOT) basis in Joint Venture with Gammon India Limited and B.E. Billimoria & Co. Received the ISO-9001-2000 certification for Management Systems assessed by the 2005 – 06 International Certifications Limited Awarded the Certificate of Excellence in Productivity, Quality, Innovation & Management 2005 – 06 by the Institute of Economic Studies, New Delhi 2005 – 06 Raised Rs. 5365 lacs through Initial Public Offering and was listed in BSE and NSE Awarded the Ahmedabad Ring Road Project for improvement and widening to four lanes 2006 – 07 the existing 76 kms two lane ring road around Ahmedabad city on BOT (Toll) basis by AUDA Awarded the Aurangabad Jalna Project for of widening the existing 65 kms two laned road 2006 – 07 stretch between Aurangabad and Jalna on MSH-6 to four lanes on BOT (Toll) basis by The Executive Engineer, World bank Project Division, Aurangabad Awarded the Nagpur- Seoni Expressway Project for design, construction and development 2007 - 08 of the existing 2 lane stretch of 56kms between Nagpur and Seoni on NH-7 into four lanes on BOT basis by NHAI 2007 - 08 Raised Rs. 9200 lacs through a Qualified Institutional Placement 2008 – 09 Incorporated Sadbhav Mining Limitada on May 23, 2008 under the laws of Mozambique Awarded the project for modernization and computerization of integrated border check 2008 – 09 posts at 22 locations in the state of Maharashtra on BOT basis by The Governor of Maharashtra Issued 300 Secured Redeemable Non-Convertible Debentures of Rs 10,00,000 each on a 2008 – 09 private placement basis to the LIC of India aggregating to Rs 3,000 lacs Awarded the project for operation and maintenance of 4/6 laning of Madhya Pradesh/ 2008 – 09 Maharashtra Border- Dhule section of NH- 3 on BOT (Toll) Basis by NHAI Awarded the project for design, engineering, construction, development, finance, operation 2009 – 10 and maintenance of 4 laning of Hyderabad-Yadgiri section from Km. 18.600 to Km. 54.000 of NH-202 in the state of Andhra Pradesh under NHDP Phase – III on a Toll Basis Awarded the project for the work of design, engineering, construction, development, finance, operation and maintenance of 4 laning of Rohtak – Panipat section from Km. 2009 – 10 0.000 (Km. 63.30 of NH 10) to Km. 80.858 (Km. 83.50 of NH 1) in the state of Haryana on a BOT Toll Basis under NHDP Phase – III

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Awarded the project for the work of design, engineering, construction and development of 2009 – 10 4 laning of Bijapur – Hungund Section of NH-13 from Km. 102.000 to Km. 202.000 in the state of Karnataka on BOT Toll Basis under NHDP Phase – III

Awards & Recognitions

• Our Company has been awarded the ”Excellence Award” by the Institute of Economic Studies (IES) for ‘Excellence in Quality, Innovation and Management’ on October 15, 2005. • Received Letter of Appreciation from Mr. Guang Z. Chen, Sector Manager, Transport, World Bank for the quality of work done on Hattigudur to Bidar, Package U3 road project. • ISO 9001-2000 certification for Quality Management Systems assessed by Moody International Certification Limited from the Joint Accreditation System of Australia and New Zealand

Main Objects of our Company

Our main objects as contained in our Memorandum of Association are:

1. To carry on the business as civil, electrical and mechanical contractors, designers and engineers, structural, contractors, earthwork contractors, consulting engineers, architects, developers, builders, general construction contractors, contractors for repairs, reconstructions, renovation, demolitions and construction canals, irrigation projects, roads, dams, bridges, culverts, ropeways, residential, industrial, commercial buildings, factories, shops and offices, theatres, cinema houses, indoor and outdoor auditorial, stadium, hotels, motels, clubs, restaurants, cafes, bars, wood houses, holiday inns, tourist resort centres, guest houses, rest houses, water sheds, drains and receivers and other conveniences.

2. To build, establish, maintain, operate, lease or transfer canals, irrigation projects, dams, bridges, roads, state and national highways, by-pass, railway platforms, air ports, sea ports, theatres, culverts, ropeways, residential, industrial, commercial buildings, factories, shops and offices, hotels, motels, drains, reservoirs, tourist resort centres, guest houses, rest houses, water sheds anywhere in India and/or outside India under various schemes, such as Build, Operate and Transfer (BOT) , Build, Operate, Lease and Transfer (BOLT) & Build, Operate, Own and Transfer (BOOT).

Changes in the Memorandum of Association

Date of shareholders Changes approval The authorized share capital of our Company was increased from Rs. 5 lacs September 29, 1989 comprising of 5,000 Equity Shares of Rs. 100/- each to Rs. 25 lacs comprising of 25,000 shares of Rs.100/- each The authorized share capital of our Company was increased from Rs. 25 lacs March 10, 1993 comprising of 25,000 Equity Shares of Rs. 100/- each to Rs. 100 lacs comprising of 1,00,000 Equity Shares of Rs. 100/- each The equity share capital was sub-divided from 1,00,000 Equity Shares of Rs. 100/- each to 10,00,000 Shares of Rs. 10/- each.

February 28, 2001 Insertion of new clause III (A) 2 in the main object clause of the MOA for allowing our Company to execute BOT projects and other ancillary functions related to execution of BOT projects. The authorized share capital of our Company was increased from Rs. 100 lacs January 6, 2005 consisting of 10,00,000 shares of Rs. 10/- each to Rs. 1000 lacs consisting of 100,00,000 shares of Rs. 10/- each

The authorized share capital of our Company was increased from Rs. 1000 lacs July 27, 2005 consisting of 100,00,000 shares of Rs. 10/- each to Rs. 1500 lacs consisting of 150,00,000 shares of Rs. 10/- each

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Commencement of new businesses covered by the sub-clause (52), (59) & (60) of September 27, 2008 the Other Objects of the Memorandum of Association of our Company

The authorized share capital of our Company was increased from Rs. 1500 lacs April 29, 2009 consisting of 150,00,000 shares of Rs. 10/- each to Rs. 2000 lacs consisting of 200,00,000 shares of Rs. 10/- each

The details of the capital raised by our Company are given in the chapter titled “Capital Structure” on page 42 of this Letter of Offer.

Subsidiaries

Our Company’s subsidiaries as on date are as follows:

1. Ahmedabad Ring Road Infrastructure Limited 2. Aurangabad Jalna Toll Way Limited 3. Nagpur Seoni Expressway Limited 4. Sadbhav Infrastructure Projects Limited 5. Maharashtra Border Check Post Network Limited 6. Sadbhav Mining Limitada 7. Hyderabad-Yadgiri Tollway Private Limited 8. Rohtak-Panipat Tollway Private Limited 9. Bijapur-Hungund Tollway Private Limited

For further details on our Subsidiaries, refer to chapter titled “Subsidiaries” on page 142 of this Letter of Offer.

Shareholders Agreement

Our Company has not entered into any Shareholders Agreement.

Summary of Key Agreements

Detailed below are summaries of key agreements entered into by our Company.

Joint venture Agreements

The pre qualification criteria specified by the client may not be fully satisfied by a company independently. In such cases two or more contractors form a Joint Venture whereby their capacities put together will be eligible to make a pre qualification bid to the client. These Joint Ventures are usually on a project-to-project basis and are discontinued on completion of the project. A list of Joint Ventures for projects which are under execution are as detailed below:

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S JV Type and Project Client Our Total No. Partner date of Shar Contract Agreement e Value (%) (Rs. lacs) Investigation, Designs and execution of Canal Network system including Earthwork excavation and forming Embankment construction of CM & Joint CD works and lining of canals up to Government of Venture GKC sub minors and formation of field Andhra agreement 1 Projects channels including structures to serve Pradesh and 52.00 9931.32 dated Limited to an extent of 58800 acres in C.A.D August 27, Karimnagar Dist under Kodimial, Department 2008 Potharam, Surampet Lachupet and New tanks at +450.00 and its concerned Gravity canals. (Canal Network Package No. 3)

Joint Investigation, Survey, Design and Venture Construction of Bus Rapid Transit Greater GKC agreement System (BRTS) corridor from Visakhapatna 2 Projects 50.00 16553.66 dated Pendurthi to DRM Office via NAD m Municipal Limited August 9, junction, Kancharapalem and Railway Corporation 2008 Station.

Earth-work excavation, forming embankment and construction of CD Gokulkri Joint & CM works of main canal and Government of shna Venture distributor system up to water course Andhra Construc agreement level and CC lining to main canal and 3 Pradesh and 52.00 16687.94 tions dated other allied works including C.A.D Private November investigation, designing and Department Limited 12, 2007 estimation of Gouravelly right side canal from 0.00 to 47.725 kms and left side canal in Karimnagar District Joint Maharashtra PBA Venture Construction of road in Multi- model Airport Infrastru agreement 4 International Hub Airport at Nagpur Development 50.00 14236.22 cture dated (MIHAN) Project Complex Company Limited March 23, Limited 2006 Improvement, Operation and Gammon Maintenance, Rehabilitation and - Strengthening of existing 2 lane road National MOU dated Sadbhav and widening to 4 lane divided Highway 5 March 11, 20.00 65000.00 Billimoria carriageway from kms 539 to kms 440 Authority of 2004 consortiu (Vadape-Gonde section) of NH-3 on India m Build-Operate-Transfer (BOT) basis in the state of Maharashtra

There is no equity contribution for the other JVs as they are formed for the purpose of completion of the project, except for the consortium with Gammon India Limited and B.E. Billimoria & Co. Limited as mentioned above, an SPV viz ‘MNEL’ was incorporated for the project wherein the equity contribution is as mentioned below.

S. No. Name of the Shareholder No. of Shares % of paid-up capital 1. Sadbhav Engineering Limited 10400000 20.00

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2. B.E Billimoria Limited 5000 0.01 3. Gammon Infrastructure Project Limited 41594960 79.99 4. Others 40 0.00 TOTAL 52000000 100.00

Strategic Partners

Our Company does not have any strategic partners.

Financial Partners

Our Company does not have any financial partners.

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OUR MANAGEMENT

As per our Articles of Association, we are required to have not less than 3 and not more than 12 directors. We currently have eight directors on our Board. Our CEO and Managing Director, Mr. Vishnubhai M Patel manages our day-to-day operations under the overall supervision, direction and control of our Board of Directors.

The following table sets forth details regarding our Company’s Board of Directors as on the date of this Letter of Offer.

Sr. Name, Designation, Father’s Name, Age Directorship in Other Nationality No. Address, Occupation, DIN and Term (years) Companies

1. Mr. Vishnubhai M Patel 67 Indian a. Sadbhav Quarry Works Managing Director and CEO Private Limited b. Sadbhav Finstock S/o Mr. Mafatlal Patel Private Limited c. Mumbai Nasik ‘Shashin’ 11, Hindu Colony, Expressway Limited Nr. Sardar Patel Stadium, d. Ahmedabad Ring Road Navrangpura Infrastructure Limited Ahmedabad-380 009 e. Sadbhav Infrastructure Projects Limited Occupation: Business f. Aurangabad Jalna DIN: 00048287 Tollway Limited Term: Five years w.e.f July 1, 2009 g. Nagpur Seoni Expressway Limited h. Dinabandhu Steel & Power Limited i. S.V.Tradelink Private Limited j. Maharashtra Border Check Post Network Limited k. Dhule Palesner Tollway Limited l. Sadbhav Mining Limitada m. Hyderabad-Yadgiri Tollway Private Limited n. Rohtak- Panipat Tollway Private Limited o. Bijapur-Hungund Tollyway Private Limited

Trustee a. Santokba Trust b. Sadbhav Public Charitable Trust

Others a. Vishnubhai M Patel HUF

2. Mr. Shashin V Patel 28 Indian a. Ahmedabad Ring Road Joint Managing Director Infrastructure Limited b. Sadbhav Realty Private S/o Mr. Vishnubhai Patel Limited c. Sadbhav Infrastructure ‘Shashin’ 11, Hindu Colony, Projects Limited 126

Nr. Sardar Patel Stadium, d. Aurangabad Jalna Navrangpura Tollway Limited Ahmedabad-380 009 e. Nagpur Seoni Expressway Limited Occupation: Business f. S.V. Tradelink Private DIN: 00048328 Limited Term: Five years w.e.f July 1, 2009 g. Bhavna Tradelink Private Limited h. Maharashtra Border Check Post Network Limited

3. Mr Girish N Patel 47 Indian a. Shivam Biotech Private Whole Time Director Limited

S/o Mr. Nandubhai Patel Others a. Girish N Patel HUF 9, Vasudha Society Naranpura Ahmedabad-380013

Occupation: Business DIN: 00466287 Term: Five years w.e.f July 1, 2009

4. Mr Nitin R Patel 40 Indian a. Ahmedabad Ring Road Whole Time Director Infrastructure Limited b. Aurangabad Jalna S/o Mr. Rameshchandra Patel Tollway Limited c. Nagpur Seoni ‘Keshav Laxmi’, Expressway Limited Opp. Ever Bella Flats d. Dinabandhu Steel & Ankur Road Power Limited Naranpura e. Sadbhav Quarry Ahmedabad-380013 Works Private Limited f. Maharashtra Border Occupation: Service Check Post Network DIN: 00466330 Limited Term: Five years w.e.f July 1, 2009 g. Hyderabad-Yadgiri Tollway Private Limited h. Rohtak- Panipat Tollway Private Limited i. Bijapur-Hungund Tollyway Private Limited Others a. Nitin R Patel HUF

5. Mr Pravinkumar M Ganatra 65 Indian -NIL- Independent Non-executive Director

S/o Mr. Mathuradas. Ganatra

5/373, ‘Gayatri’, Vijay Raj Nagar, Adarsh Society, Dairy Road Bhavnagar-364003

Occupation: Consultant DIN: 00048271 Term: Liable to retire by rotation

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6. Mr Amarsinh J Vaghela 63 Indian -NIL- Independent Non-executive Director

S/o Mr. Jivaji Vaghela

Plot No. 1121/1, Sector–2D, Gandhinagar – 382 002.

Occupation: Consultant DIN: 00048179 Term: Liable to retire by rotation 7. 31 Indian Partner Mr. Sandip V Patel a. Shah & Patel, Independent Non-executive Director Chartered Accountants

S/o Mr.Vinodkumar Patel

3 Matrumilan Society, Ankur Road, Naranpura, Ahmedabad -380013

Occupation: Chartered Accountant DIN: 00449028 Term: Liable to retire by rotation

8. Mr. Atul N Ruparel 41 Indian a. Kutchh Gujarat Finstock Independent Non-executive Director Limited b. STEPS Corporate S/o Mr. Nandlalbhai Ruparel Services Private Limited 1-Aryaman Bunglow,10, Hira Baug Society, Opp. Ambawadi Municipal Partner School, Ahmedabad- 380 006 a. Sukumar & Atul, Chartered Accountants Occupation : Chartered Accountant DIN: 00485470 Proprietorships Term: Liable to retire by rotation a. A N Ruparel & Co., Chartered Accountants

Others

a. Atul N Ruparel – HUF

Brief details of our Directors

Mr. Vishnubhai M Patel (67 years) is the promoter of our Company and has completed his S.S.C. He has 40 years of experience in the construction business. Since 1968, he has been actively involved in the family construction business as partner of M/s Bhavna Construction Co. where he was in charge of canal and road projects. In the year 1988, our Company was incorporated and took over the business of M/s. Bhavna Construction Co. Our Company has successfully completed various canal works for one of the largest irrigation projects in the world viz. Sardar Sarovar Narmada Project under his leadership. Mr. Vishnubhai has been conferred the ‘Udyog Ratna Award’ by the Institute of Economic Studies of New Delhi for outstanding performance in the field of Industrial Development of our country. Under the guidance of Mr.Vishnubhai M Patel, we have successfully completed various projects displaying high quality standards and our Company has also been awarded the “Excellence Award’ for “Excellence in Quality, Innovation and Management.” He has also been awarded the “Patidar Ratna Award’ by Akhil Gujarat Kadva Patidar Parishad.

Mr. Shashin V Patel (28 years) holds a Masters Degree in Business Administration from K.S. School of Business Management, Gujarat University. He is on our Board since May 23, 2000. He was re-designated as Joint Managing Director from. December 21, 2006. His scope of work includes overview of the day to day 128 affairs of our company in consultation with the Managing Director and making strategic management decisions. He is also in-charge of the Management Information System in our office.

Mr. Girish N Patel (47 years) is a Commerce Graduate from Gujarat University. He has been involved in the business of our Company since inception. He has to his credit the successful execution of several large construction projects undertaken by our Company all over India in the last fifteen years. He has 15 years of experience in the irrigation and mining operations. Some of the canal projects successfully completed by him include improvement of Shedhi Branch Canal, Construction of Narmada Main Canal at Satamana and Thasra, remodeling of Kakrapar left Bank Main Canal, construction of syphon at Watrak, Pushpawati and Khari river, etc. He was also incharge of the mining work at the GIPCL mines involving removal of overburden of 57 mn cubic meters and removal of lignite of 0.6 mn cubic meters. This project achieved a peak progress of 60,000 cubic meters of excavation per day. Presently he is in charge of the MP3 Seoni to MP Border NH project, Shivpuri to Seoni SH project, Seoni to Cheraidongri SH project (Road projects), Bina extension mining project, Neeljay mining project, GIPCL Mangrol Lignite project ( Mining Projects) in Gujarat.

Mr. Nitin Patel (40 years) is a Chartered Accountant. He was associated with M/s Manubhai & Co., Chartered Accountants before joining our Company in 1999 as an Internal Auditor, with specific responsibilities of auditing and income tax matters. He was subsequently appointed as a Whole Time Director in August 1999. His current areas of responsibility include execution of project, cost analysis, claims, arbitration, human resources and purchase policies as well as overall functioning of the entire corporate affairs of our company. He was involved in the overall management of the project of widening and strengthening of the 2-lane carriage way of NH-5 in the state of Orissa which was successfully completed in April 2005. He also plays an important role in policy implementation and liaisoning with banks & financial institutions for obtaining funds.

Mr. Pravinkumar Mathurdas Ganatra (65 years) is a Graduate in Civil Engineering from Sardar Patel University. He is on our Board since September 28, 2002. He has 40 years of experience in the construction line. He possesses sound knowledge and experience of construction of roads, highways and bridge projects including projects funded by NHAI and international funding institutions. He is also instrumental in sourcing funds for various projects. He was with Gujarat State Roads & Bridges Department from 1965-1998. He joined the State Government in 1965 as an Assistant Engineer and was promoted to Executive Engineer. He was actively involved in preparation and scrutiny of designs of Highways, Bridges and Buildings. He retired from NHAI as Deputy General Manager. In NHAI he was entrusted with the job of execution of Samkhiyali- Gandhidam four lane project on NH-8A. He was also in-charge of the liaison activities for the Expressway project in Gujarat. He was also responsible for the overall administration and execution management of the Hattigudur to Bidar road up gradation project.

Mr. Amarsinh J Vaghela (63 years) is a Graduate in Civil Engineering and has more than 30 years of experience in the field of construction of dams and canals. He is on our Board since July 2, 2005. Previously, he was associated with Sardar Sarovar Nigam Limited for around 20 years as an Engineer. From 1970-1979 he worked as a Junior Engineer for the Kadana Dam Project. In 1979 he joined Sardar Sarovar Nigam Dam as a Deputy Executive Engineer. He was in charge of the projects related to this dam till 2004. During the years 1995-1998 he served as Deputy General Manager and was in charge of the Management Information Systems of Sardar Sarovar Nigam Limited.

Mr. Sandip V Patel (31 years) is a Practicing Chartered Accountant and has a vast experience in taxation, audit including statutory audit of Companies and Financial Institutions, revenue audit of nationalized banks, audit of stockbroking houses and DP. He has also experience in management consultancy, structuring international transactions, developing internal control systems, cost planning and project financing, raising funds for working capital requirements etc. He has also the experience of consulting and representing before authorities in respect of direct taxation for domestic and international client. He has worked as a committee member of the Ahmedabad branch of Wetern Regional Council of ICAI.

Mr. Atul N Ruparel (41 years) is a Practicing Chartered Accountant having more than 15 years experience in the field of audit, taxation, finance and consultancy which consists of Statutory and Internal Audits, Management Consultancy, Tax Planning, Project Financing etc.

Borrowing Powers of Directors

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The shareholders of our Company, through a resolution passed at the AGM dated September 27, 2008, pursuant to Section 293(1) (d) of the Companies Act, 1956, authorized our Board to borrow monies together with monies already borrowed by us (apart from temporary loans obtained from the bankers of our Company in the ordinary course of business), in excess of the aggregate paid up capital and free reserves, not exceeding Rs.100000 lacs at any time. For provisions of Articles regulating the borrowing powers of the Directors refer chapter “Main Provisions of the Articles of Association” on page 367 of this Letter of Offer.

Compensation to our Directors

MANAGING DIRECTOR

The terms of re-appointment for the Managing Director and CEO, Mr. Vishnubhai M Patel, were approved in the Board Meeting held on June 8, 2009. The Board approved that with effect from July 1, 2009, the salary payable to the Managing Director and CEO shall be up to a maximum of Rs.20,00,000/- per month with the authority of the Board or committee thereof to fix the salary within the said maximum amount from time to time. The following terms, conditions and perquisites are subject to the applicable approvals including the approval of the members of our Company at the next general meeting:

Commission: Commission on profit as may be determined by the Board

Perquisites:

Category “A”

1. Housing: House Rent Allowance subject to a maximum of 60% of the salary or house accommodation shall be provided by our Company and 10% of salary shall be recovered by way of rent. Expenditure incurred by our Company on electricity, water and furnishing shall be as per the Income Tax Rules subject to a ceiling of 10% of the salary

2. Medical Reimbursement: Not to exceed one month salary in the year or three months salary in a block of three years

3. Leave Travel Concession: As per the rules of our Company

4. Club Fees: Subject to a maximum of 2 clubs

5. Personal Accident Insurance: Premium not to exceed Rs 50,000 p.a

Category “B”

Other Statutory benefits not included in the permissible remuneration are Earned Privilege Leave, contribution to Provident Fund and Family Benefit Funds and Gratuity

Category “C”

Other facilities for performing the official duties, not considered as perquisites, are:

1. Free use of Company’s car for business, telephone at residence 2. Personal long distance calls and use of car for private purposes shall be billed 3. Reimbursement of entertainment expenses, travelling and all other expenses actually and properly incurred for the purpose of our Company’s business

Terms of office

Mr. Vishnubhai M Patel has been appointed for a period of five years w.e.f. July 1, 2009. He is not liable to retire by rotation.

JOINT MANAGING DIRECTOR AND WHOLE TIME DIRECTORS

The terms of re-appointment of the Joint Managing Director and Whole Time Directors was approved in the Board Meeting held on June 8, 2009, subject to the approval of the members at the next general meeting. 130

The remuneration for the Joint Managing Director was approved up to a maximum of Rs. 10,00,000/- per month and for each Whole Time Directors at Rs.4,00,000/- per month with the following perquisites:

Commission: Commission on profit as may be determined by the Board

Perquisites:

Category “A”

2. Medical Reimbursement: Not to exceed one month salary in the year or three months salary in a block of three years

3. Leave Travel Concession: As per the rules of our Company

4. Club Fees: Subject to a maximum of 2 clubs

5. Personal Accident Insurance: Premium not to exceed Rs 50,000 p.a

Category “B”

Other Statutory benefits not included in the permissible remuneration are Earned Privilege Leave, contribution to Provident Fund and Family Benefit Funds and Gratuity

Category “C”

Other facilities for performing the official duties, not considered as perquisites, are:

Term of Office

The Joint Managing Director and the Whole time Directors have been appointed for a period of five years from July 1, 2009.

INDEPENDENT DIRECTORS

Our Independent Non-Executive Directors are paid sitting fees of Rs. 10,000 for every meeting of the Board with effect from July 31, 2009. The Non-Executive Independent Directors are required to retire by rotation.

Corporate Governance

We have complied with the requirements of the applicable regulations, including Clause 49 of the Listing Agreement entered into with Stock Exchanges and SEBI Regulations, in respect of Corporate Governance especially with respect to broad basing of board, constituting the committees such as audit committee, shareholding / investor grievance committee, remuneration committee etc.

Currently our Board has eight Directors, of which the Chairman of the Board is an Executive Director, and in compliance with the requirements of Clause 49 of the Listing Agreement, we have 4 Executive and 4 Non Executive Directors. All the Non Executive Directors are Independent Directors.

We have complied with the Corporate Governance provisions with regard to statutory committees–

Audit Committee 131

The Audit Committee was reconstituted w.e.f October 31, 2008 and continues to function as prescribed under Section 292(A) of the Companies Act and clause 49 of the Listing Agreement. The Audit Committee is comprised of the following members of the Board:

Name Category Mr. Sandip V Patel - Chairman Independent Non Executive Director Mr. Pravinkumar M Ganatra -Member Independent Non Executive Director Mr. Amarsinh J Vaghela - Member Independent Non Executive Director

The principal functions of our Company’s Audit Committee are as under:

• Overview of our Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible.

• Recommending to the Board, the appointment, re-appointment and if required, the replacement or removal of the statutory auditor and the fixation of audit fees

• Approval of payment to statutory auditors for any other services rendered by the statutory auditors

• Reviewing with the management, the annual financial statements before submission to the Board of Directors for approval, with particular reference to:

♦ Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956 ♦ Changes, if any, in accounting policies and practices and reasons for the same ♦ Major accounting entries involving estimates based on the exercise of judgment by Management. ♦ Significant adjustments made in the financial statements arising out of audit findings ♦ Compliance with listing and other legal requirements relating to financial statements ♦ Disclosure of any related party transactions ♦ Qualifications in the draft audit report

• Reviewing with the management, the quarterly financial statement before submission to the Board of Directors for approval

• Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems

• Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit

• Discussion with internal auditors any significant findings and follow up thereon

• Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board

• Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern

• To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (incase of non-payment of declared dividends) and creditors

Remuneration Committee

The Remuneration Committee was reconstituted w.e.f. October 31, 2008 and is comprised of the following members of the Board:

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Name Category Mr. Atul N Ruparel - Chairman Independent Non Executive Director Mr. Pravinkumar M Ganatra - Member Independent Non Executive Director Mr. Sandip V Patel - Member Independent Non Executive Director

Remuneration Policy

The Remuneration Committee has been constituted to review and recommend the remuneration of the Managing Director and Whole-Time Directors and to determine the detailed terms and conditions of the Employees Stock Option Scheme in accordance with erstwhile SEBI guidelines. The Directors’ remuneration is then approved by the Board and subsequently by the shareholders at the General Meeting as required under Companies Act, 1956. The components of the total remuneration to management staff vary for different grades and are governed by qualifications, experience, responsibilities handled, individual performance, etc. The Remuneration Policy is directed towards rewarding performance, based on review of achievements on a periodic basis. The Remuneration Policy is in consonance with the existing industry practice.

Terms of Reference

The broad terms of reference of the Committee are: • To review our Company’s remuneration policy on specific remuneration packages to executive directors including pension rights and any compensation payment while striking a balance with the interest of our Company and the shareholders • To approve the annual remuneration plan of our Company

Shareholders’/ Investors’ Grievance Committee

The Shareholders/Investors’ Grievance Committee was reconstituted w.e.f October 31, 2008 and is comprised of the following members of the Board:

Name Category Mr. Amarsinh J Vaghela – Chairman Independent Non Executive Director Mr. Girish N Patel – Member Whole-time Director Mr. Sandip V Patel – Member Independent Non Executive Director

The terms of reference for our Shareholders/Investors’ Grievance Committee includes investor relations and redressal of shareholders’ grievances in general and relating to non receipt of dividends, annual reports, etc. and such other matters, as may from time to time be required by any statutory, contractual or other regulatory requirements.

Finance Committee

The Finance Committee was constituted vide Board Meeting dated October 24, 2007 and is comprised of the following members of the Board:

Name Category Mr. Vishnubhai M Patel – Chairman Executive Director Mr. Shashin V Patel – Member Executive Director Mr. Nitin R Patel – Member Executive Director Mr. Amarsinh Vaghela – Member Independent Non Executive Director

Terms of reference: • To review banking arrangements, review and approve certain short terms and long term loans, investment transaction etc. • To meets as and when the need to consider any matter assigned to it arises.

Shareholding of the Directors in our Company

Name No. of shares % of pre issue capital

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Mr. Vishnubhai M Patel 1991580 15.93 Mr. Shashin V Patel 480060 3.84 Mr. Girish N Patel 490000 3.92 Mr. Nitin R Patel 1000 0.01

Qualification shares

A Director need not hold any shares of our Company to qualify for the office of a Director of our Company.

Interest of Directors

All our Directors may be deemed to be interested to the extent of remuneration paid to them for services rendered as an officer of our Company or fees payable to them for attending meetings of the Board or a committee as well as to the extent of reimbursement of expenses payable to them.

Our directors may also be regarded as interested in the Equity Shares, if any, held by them or that may be subscribed by or allotted to the companies, firms, trusts in which they are interested as directors, members, partners, trustees and promoters. All our directors may also be deemed to be interested to the extent of any dividend payable to them and other distribution in respect of the said Equity Shares.

Our company has entered into an 11 month and 29 days lease agreement dated May 1, 2010 with Vishnubhai Patel HUF for the land of the workshop at Ognaj. Our company pays a lease rental of Rs. 30,227 per month for the said land. All Directors may be deemed to be interested in the contracts, agreements /arrangements entered into or to be entered into by our Company with any company in which they hold Directorships or any partnership firm in which they are partners as declared in their respective declarations.

The Directors may also be interested to the extent of any stock options that may be granted to them pursuant to the Employee Stock Option Scheme 2008 or the Equity Shares that may be allotted to them pursuant to the exercise of any stock options as approved in our AGM dated September 27, 2008.

Except as mentioned above, our Company has not entered into any contract, agreements, or arrangements nor has purchased any property during the preceding two years from the date of the Letter of Offer in which the directors are interested directly or indirectly and no payments have been made or proposed to be made to them for the same.

Except Mr. Vishnubhai M Patel, no other director had any interest in the promotion of our Company.

Changes in our Directors during the last three years

Date of Name Date of Cessation Reason Appointment Mr. Keshavji Vania Jul 2, 2005 March 31, 2006 Resigned Mr. Vipin Modi Jul 2, 2005 June 26, 2006 Resigned Mr.Prashantkumar Raval Jul 2, 2005 June 26, 2006 Resigned Mr. Shailesh Patel June 27, 2006 October 31, 2008 Resigned Mr. Sandip Patel June 27, 2006 - Appointed Mr. Dilip Sarkar June 27, 2006 April 1, 2008 Resigned Mr. Vikram Patel July 1, 2004 October 31, 2008 Resigned Mr. Vasishta Patel July 1, 2004 April 1, 2008 Resigned Dr. Amrish Parikh Jul 2, 2005 October 23, 2008 Resigned Mr. Atul N Ruparel October 23, 2008 - Appointed

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Organization Structure

CEO & MANAGING DIRECTOR

Jt. Managing Director

General Senior Executive Executive GM Chief GM VP Manager VP Director Director (Purchase) (CPE) (IT,HR (Works) (Projects (Execution) (Finance) &Admn) ) SM Sr. Sr. GM (Works) Sr. Engr Manager GM Manager (Works) Mining HR IT Dy. Chief Project Manager SM Manager SM Manager Equipment Admin (Works) Contracts Civil SM SM HR Tech Audit Project Manager Manager SM HR Tech & Liaison Dy. Project Manager Officer Liaison

Company AGM Legal Sr. GM Chief Financial Dy. GM Secretary Finance Officer Business Development

Officer Sr. Manager Sr. Manager Sr. Manager (Legal) Accounts Audit Taxation

SM – Senior Manager HR – Human Resource IT – Information Technology GM – General Manager VP – Vice President CPE – Construction, Planning & Equipment

Key Managerial Personnel

The persons whose names appear as key managerial personnel are on the rolls of our Company as permanent employees. There is no arrangement or understanding with major shareholders, customers, suppliers or others pursuant to which any person was selected as a member of senior management.

The following are brief biographies of our senior management.

Mr. P.K. Doshi, 43 years, is Senior Vice President of our Company. He holds Master’s Degree in Civil Engineering and has 18 years of work experience in the field of Road & Bridge Construction. Before joining our Company in May 2005, he handled the project preparation of Kishangarh – Ajmer – Udaipur – Ahmedabad Section of NH-8, project implementation, monitoring of various National Highways Projects under PWD, Rajasthan and National Highways Authority of India. Our Radhanpur – Gagodhar 4-lane Road Project (106 kms length) on NH-15 in the state of Gujarat was completed well in time under his overall control of project as Chief Project Manager. He joined our Company on May 1, 2005. As Senior Vice President of our Company, he heads the Roads and Highways segment, reporting to the Board of Directors and his responsibilities include but are not limited to bidding, overall planning of highways projects, monitoring of implementation of works on cash contracts BOT as well as BOT (Annuity) projects, looks after Contractual matters and any other issue related to Highway Sector requiring intervention of Management of our Company. The remuneration paid to him is Rs 30.00 lacs p.a

Mr. Siddu (Siddappa) B. Jakkannavar, 37 years, is designated as Chief General Manager – Plant & Machinery). He holds a Diploma in Mechanical engineering and has 16 years of working experience in various engineering fields such as production, engineering, manufacturing, marketing and project management. During his 16 years of career he held many key positions and served industrial sectors like power, cement, mining & pyro-technology for minerals, sugar, textiles, engineering & manufacturing. Before joining full time in our organization he was associated with M/s. Basic Engineering Equipments (P) Limited (Mumbai), a business house for highway construction solutions and products and held a key position of General Manager – Products and served more than 8 years to some of the leading highway construction 135 companies of India. He joined our company on February 1, 2008 and is in-charge of plant & machinery (Construction equipment fleets) management. The remuneration paid to him is Rs. 16.98 lacs p.a

Mr. Tarun H Dutta, 60 years, is designated as the General Manager (works). He holds a Licentiate in Mechanical Engineering. He has about 36 years of work experience of which he has been associated with our Company for 5 years. Prior to joining our Company he was associated with Saurastra Cement Limited and Gammon India Limited. He joined our Company on August 11, 2003 and is in charge of overall monitoring of the Mechanical Division and Regional workshop at Ognaj. His areas of responsibility include planning and purchase of equipments, spares and consumables, inspection of mechanical department at all the project sites and maintenance also safety measures at various sites. He has undergone the practical training for Heavy Earth Moving Equipment and Light Vehicles C.W.P.C. (Central Water & Power Commission-New Delhi) at Kota. The remuneration paid to him is Rs. 6.76 lacs p.a

Mrs. Rajeshree Patel, 37 years, is designated as the Vice President (IT, HR & Admn.) of our Company. She holds a Masters degree in Computer Science, USA. She has around 8 years of total experience of which she has been with our Company for 4 years. Prior to our Company, she was associated with Rudolph Technologies Inc. She joined us on July 1, 2006. She is in charge of the overall functioning of the Administration and Human Resource Department. The remuneration paid to her is Rs. 6.00 lacs p.a

Mr. Rambhai S Patel, 44 years, is designated as the Senior Manager (Technical Audit) of our Company. He holds a Bachelors Degree in Civil Engineering (Gold Medalist). He has about 18 years of total work experience throughout which he has been associated with our Company. He joined our Company on April 5, 1990. Presently, he is responsible for the Technical Auditing and verification of Running Bills. The remuneration paid to him is Rs.7.00 lacs p.a

Mr. Vijay Kalyani, 51 years, is designated as our Company Secretary in our Company. He is a qualified Company Secretary and has more than 20 years experience in Secretarial, Company Law Matters, Accounts, Finance, Taxation, Auditing, Public Issue Management and Capital Markets related matters and has also been involved in liaison with statutory bodies like SEBI, ROC, RBI and Stock Exchanges. Prior to joining our Company he was associated with Polad Group of Companies. He joined our Company on May 1, 2006. He is our Company’s compliance officer and is responsible for all the secretarial work .The remuneration paid to him is Rs. 7.20 lacs p.a

Mr. Vishwanathan R, 50 years, is designated as the Sr.General Manager (Finance) of our Company. He holds done C.A.IIB from Indian Institute of Bankers. He has a total experience of 24 years of which he has been associated with our Company for more than a year. Prior to joining our Company he was associated with HDFC Bank Limited. He joined our Company on August 8, 2007. He is in charge of Finance. The remuneration paid to him is Rs. 13.26 lacs p.a

Mr. Parulkumar R Shah, 43 years, is designated as the Deputy General Manager (Business Development) of our Company. He holds a degree in Civil Engineering. He has around 15 years experience in the engineering industry of which he has been with our Company for 9 years. Prior to our Company, he was associated with J.D. Corporation. He joined us on December 1, 1999. He is in charge of Business Development. The remuneration paid to him is Rs. 8.40 lacs p.a

Mr. Sharmil K Nanavati, 38 years, is designated as the Sr. Manager (Audit) of our Company. He is a Chartered Accountant. He has a total work experience of 9 years of which he has been associated with our Company for over a year. Prior to joining our Company, he was associated with Deloitte Haskins and Sells, Chartered Accountants. He joined our Company on June 19, 2007. He is in charge of the Internal Audit of our Company. The remuneration paid to him is Rs. 4.82 lacs p.a

Mr. Ajay H. Kadia, 27 years, was re-designated as Chief Financial Officer of our Company with effect from January 31, 2009. He is a qualified Chartered Accountant and has a total work experience of 4 years of which he has been associated with our Company for 3 years. Prior to joining our Company, he was associated with Jasmin B. Shah & Co., Chartered Accountants. He joined our Company on October 1, 2005. He is in charge of the Accounts Department of our Company. The remuneration paid to him is Rs. 6.10 lacs p.a

Mr. Manoj Dwivedi, 59 years, is designated as the Sr. General Manager (Mining) of our Company. He is a graduate in Electrical Engineering. He has about 29 years of experience of which he has been associated with our Company for 10 years. Prior to joining our Company, he was associated with SLM Industries 136

Limited as Deputy General Manager – Corporate (Administration and Maintenance). He has also worked with Mafatlal Group and Tata Iron & Steel Co. Limited in the course of which he was responsible for mining projects, maintenance of mining equipment, electrical installations and repairs. He joined our Company on April 1, 1999. His areas of responsibility include business development of mining sector, preparation of bid documents, project planning and execution, compliance of Mining Regulations, geological analysis, qualitative and volumetric analysis, submission and certification of RA bills, etc. The remuneration paid to him is Rs. 6.00 lacs p.a

Mr. Vipul Patel, 34 years, is designated as the Project Manager of our Company. He is a Graduate in Civil Engineering. He has about 12 years of work experience of which he is associated with our Company for 7 years. Prior to joining our Company he was associated with Nitin Construction Limited. He joined our Company on April 1, 2002. Presently he is in charge of the improvement cum performance based maintenance project on the Lalsot to Kota Road in Rajasthan. His area of responsibilities include monitoring of the construction activity and structural work, maintaining environmental and safety measures, establishment of quarries, plants, site laboratories, site offices, etc. He is also responsible for the preparation of the documents for monthly Interim Payment Certificates, sub-contractors bill, etc. The remuneration paid to him is Rs. 6.50 lacs p.a

Mr. Bhaskar Patel, 60 years, is designated as the General Manager (Tech & Liaisioning) of our Company. He is a Graduate in Civil Engineering. He has about 33 years of work experience of which he has been associated with our Company for 7 years. He was managing his own business before joining our Company on April 1, 2002. He is in charge of the overall execution of the Mumbai Nasik Expressway Project which involves Planning, execution, monitoring etc. The remuneration paid to him is Rs. 9.60 lacs p.a

Mr. Amit Mehta, 45 years, is designated as the Sr.Manager (Technical Audit) of our Company. He holds a Diploma in Civil Engineering. He has 18 years of work experience throughout which he has been associated with our Company. He joined our Company on January 1, 1990. Presently, he is incharge of Technical Auditing of our Company. The remuneration paid to him is Rs. 7.48 lacs p.a

Mr. Kapil Bokadia, 25 years, is designated as the Sr.Manager-Taxation of our Company. He is a qualified Chartered Accountant with a total work experience of 8 months of which he has been associated with our Company for 2 months. Prior to joining our Company, he was associated with Delhi Assam Roadways Corporation Limited. He joined our Company on December 1, 2008. He is in charge of the Direct Taxation & Service Tax department. The remuneration paid to him is Rs.5.46 lacs p.a

Mr. Kamlesh Shah, 50 years, is designated as Assistant General Manager (Legal) of our Company. He is a qualified Member of the Institute of Company Secretaries of India., New Delhi with more than 20 years experience of serving various corporates. He has been associated with this company since February 2008. Prior to joining our Company, he has associated with M/s. Rajiv Oil Industries Limited, Santosh Industrial Fats Limited, Rainbow Papers Limited and Core Healthcare Limited. He has also served for more than 9 years with Gujarat State Financial Corporation. At present he looks after the work of SPV’s & foreign subsidiary of our Company. The remuneration paid to him is Rs 7.28 lacs p.a

Mr. Anant N. Batavi, 54 years, is designated as Chief Project Manager of our Company. He is a graduate in Civil Engineering and has around 29 years of experience in the construction industry. He joined our organization on February 1, 2004 and was in charge of work relating to rehabilitation and upgrading of Gagodhar – Radhanpur section of NH-15 in Gujurat. Before joining us, he has worked with various or organiztions engaged in the construction line like Mahalinga Shetty & Co. Ltd, Hubli as a Project Manager, for Salauli Irrigation Canal at Aquaduct at Goa State, Narmada Main Canal as Senior Co-ordinating Engineer, Hasdeo Bango Project – remodelling at Madhya Pradesh as Project Director, HDMC Corporation, Hubli as Consulting Engineer with R.S Shetty & Co, Hubli as Senior Project Manager for construction of tunnels, road formations, track linking project at Ratnagiri of Konkan Railway Corporation Limited Maharashtra etc. At present he is looking after the the NH-7 “4” laning from Ch: 596+ 750 to Ch: 653+225 km Nagpur to Jabalpur road BOT (Annuity) as a Chief Project Manager. The remuneration paid to him is Rs 12.00 lacs p.a

Mr. Mittal D Shah, 29 years, is designated as General Manager (Purchase) of our Company. He is an MBA in Finance from KS School of Business Management. He joined our organization in 2003 as Material Manager in Viramgam- Dhrandhra Halvad State Highway road project in Gujarat and held position until the competition of the project in 2007. Before joining us, he has worked with Dinabandhu Steel and Power limited in the state of Orissa as General Manager and looking after the overall management of the steel 137 industry till March 2009. His scope of work includes overall purchase of major construction raw materials like steel, cement, bitumen, emulsion, HSD, aggregate etc. for various projects. The remuneration paid to him is Rs 5.50 lacs p.a

Shareholding of Key Managerial Personnel as on April 30, 2010

S No. Name No. of shares % of pre issue capital 1. Mr. Tarun Dutta 108 0.001 2. Mr. Vipul Patel 15000 0.12 3. Mr. Amit Mehta 700 0.006 4. Mr. Rambhai Patel 102 0.001 5. Mr. Parulkumar Shah 1200 0.009 6. Mr. Kamlesh Shah 100 0.001

Bonus or Profit Sharing Plan for our Key Managerial Personnel

There is no Profit Sharing Plan for the Key Managerial Personnel. Our Company makes bonus payments as per their terms of appointment.

Changes in our Key Managerial Personnel during the last three years

Date of Joining/ Name Designation Remarks Resignation 2009-10 Mr. Chinmoy Mukherjee General Manager (HR) December 31, 2009 Resigned Vice President (HR & January 18, 2010/June Mr. Kaniayalal V.Doshi Joined /Resigned Admin) 8,2010 Vice President- Mr. Paramjit Dhadwal May 17, 2009 Resigned Corporate Mr. Chinmoy Mukherjee General Manager-(HR) May 12, 2009 Joined General Manager- Mr. Mittal Shah April 1, 2009 Joined (Purchase) 2007-08 Mr. Nilesh Gohil Sr. Executive-Accounts June 25, 2007 Resigned Mr. Sharmil Nanavati Audit Manager June 19, 2007 Joined Mr. Rajnish Saxena Project Head June 30, 2007 Resigned General Manager Mr. Vishwanathan August 08,2007 Joined (Finance) Senior Executive Mr. Shailesh B. Gelada October 20, 2007 Resigned (Taxation) Mr. Alok A. Karmarkar Manager (Contract) January 09, 2008 Resigned Mr. Siddappa B. Chief General Manager February 01, 2008 Joined Jakkannavar (P & M) Senior Vice President Mr. T .Ravijumar March 31, 2008 Resigned

2006-07 Asst. General Manager Mr. Kamlesh Shah February 8, 2007 Joined (Legal) Mr. Vijay Kalyani Company Secretary May 01, 2006 Joined

Stock Option Scheme / Employees Stock Purchase Scheme

Our Board of Directors were authorized on behalf of our Company, to create, offer, issue and allot, to or for the benefit of such person(s) who are in the permanent employment and the Directors (including the wholetime Directors) of our Company, at any time, Equity Shares of our Company and/or warrants (which upon exercise or conversion could give rise to the issue of Equity Shares not exceeding 2,50,000, under Sadbhav 138

Employees Stock Option Scheme 2008 (“ESOS Scheme 2008”), option being exercisable for one Equity Share of a face value of Rs. 10/- each fully paid-up on payment of the requisite exercise price. However, as on date, no options have been granted or no securities have been issued to any of the employees under the said scheme.

For further details of the ESOS Scheme 2008, refer to the chapter titled “Capital Structure” on page 42 of this Letter of Offer

Payment of Benefit to Employees of our Company

Our all eligible employees are covered under the Workmen Compensation Policy. Our employees are covered under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. We provide free residential and canteen facilities to staff working at sites.

Our Company has also made provisions for the benefit of some of our permanent employees who are aged not less than 18 years and not more than 58 years, upon their retirement from service under a non- contributory Employee Group Gratuity Scheme. This scheme is managed by Sadbhav Employee Group Gratuity Trust which was formed in April 1994.

The Trust has also entered into a scheme of insurance with the Life insurance Corporation of India. The policy amount paid by our Company for the year ended March 31, 2010 is Rs.11.11 lacs.

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OUR PROMOTERS

Mr. Vishnubhai M Patel

Voter ID He does not have a voter’s ID

Driving License GJ01/916373/01

Qualification S.S.C.

Mr. Vishnubhai M Patel, 67 years, has been in the construction business for the last 40 years. He was in charge of his family business which was involved in construction activities. The family business was a partnership firm in the name of Bhavna Construction Co. The projects executed by the partnership firm under Mr. Vishnubhai’s guidance were:

• Irrigation – Construction of an earthen dam, approach channel, masonry work of the spillway of Deo Irrigation Scheme, construction of earthwork and lining work on Damanganga Left Bank Main Canal. • Mining Operations – Land development for heavy engineering complex for L&T, Filling work of Nhava Sheva Port Trust. Reclamation and site grading works of the iron plant site of Essar Gujarat Ltd. and site levelling work of Rourkela Steel Plant of SAIL. • Roads & Highways – Upgradation of Road from Hattigudur to Bidar (Contract U3) in Joint Venture with Hindustan Co., Widening to four lane including strengthening of existing two lane of NH 8A from 135 to 170 kms Tal & Dist. in Rajkot and strengthening and widening of Sambalpur - Rourkela Road Project Package – S2 with L & T Ltd. ECC Construction Group, Kolkata.

The profile of Mr. Vishnubhai Patel is detailed in the chapter titled “Our Management” on page 126 of this Letter of Offer

Ms. Shantaben V Patel

Voter ID She does not have a voter’s ID

Driving License She does not have a driving license

Qualification S.S.C.

Ms. Shantaben V Patel, 63 years, has been associated with our Company since incorporation. She was the Director in our Company from September 9, 1989 to July 2, 2005.

We confirm that Permanent Account Number, Bank Account Number and Passport Number of the Promoters have been submitted to BSE & NSE at the time of filing the Letter of Offer with them.

Relationship between our Promoters, Directors and Key Managerial Personnel

Mr. Shashin V Patel, Joint Managing Director, is the son of our Promoters. Mr. Girish N Patel, Whole Time Director is the son-in-law of our Promoters. Mrs. Shantaben Vishnubhai Patel is the wife of Mr. Vishnubhai Patel. Ms. Rajshree Patel, Senior General Manager (HR), is the daughter of our Promoters

Except as stated, there is no relation between our Promoters, Directors and Key Managerial Personnel of our Company.

Common Pursuits

There are no common pursuits in the business of our Company and other Companies promoted by our Promoters. 140

Interest of our Promoters

Our Promoters are interested to the extent of their shareholding in our Company and benefits derived from their holding directorship in our Company. As on the date of filing of this Letter of Offer, Mr. Vishnubhai M Patel holds 1991580 Equity Shares and Ms. Shantaben Patel holds 1350000 Equity Shares.

Our Promoters may also be interested to the extent of their Rights Entitlement that will be subscribed for and any additional Equity Shares with Detachable Warrants that may be allotted to them in the present Issue as well as Equity shares on conversion of Detachable Warrants as per the terms of this Letter of Offer and also to the extent of any dividend payable to them in respect of the said Equity Shares and/or the Equity Shares received upon exercise of the Detachable Warrants.

Mr Vishnubhai M Patel, who is also the Managing Director and CEO of our Company, may be deemed to be to the extent of remuneration payable to him. For further details of the remuneration payable to our Directors, please refer to the chapter titled “Our Management” on page 126 of this Letter of Offer.

Mr. Vishnubhai M Patel is also interested to the extent of rent of Rs. 30,227 per month received by him in his capacity as a Karta of HUF for the Ognaj property. Ms. Shantaben Patel is interested to the extent of rent of Rs. 2,40,000 p.a being paid to her for the portion of “Sadbhav House” being land owned by her. Our Company has a 20 year lease agreement with her which is valid till March 31, 2015 whereby 20% incremental rental is payable to Ms. Shantaben Patel every 3 years. Our Promoters are not interested in any property acquired by our Company within two years from the date of the Letter of Offer.

Apart from the above and as stated in the Related Party Transactions given in the Auditor’s Report beginning on page 157 of this Letter of Offer, Our Promoters have no interest in our Company.

Payment or benefit to Promoter of Our Company

There is no payment or benefit to the Promoters except as stated above under the heading “Interest of our Promoters” on page 141 of this Letter of Offer.

Related Party Transactions

The details of Related Party Transactions are disclosed in Annexure G to the Auditor’s Report begining on on pages 172 and 208 of this Letter of Offer.

Our Promoters have further confirmed that they have not been declared as willful defaulters by the Reserve Bank of India or any other governmental authority and there are no violations of securities laws committed by them in the past and no proceedings pertaining to such penalties are pending against them.

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SUBSIDIARIES

None of our subsidiaries mentioned below have made any public or rights issue in the last three years.

None of our subsidiaries is a sick company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 or are under winding up or have any BIFR proceedings initiated against them or have been struck off as a defunct company by any Registrar of Companies in India.

There are no Litigations pending against/ by any of Subsidiaries except for those mentioned in chapter titled “Outstanding Litigations” on page 278 of this Letter of Offer.

Our Company’s subsidiaries as on date are as follows:

1. AHMEDABAD RING ROAD INFRASTRUCTURE LIMITED

Ahmedabad Ring Road Infrastructure Limited (“ARRIL”) was incorporated on August 31, 2006 under the Act as a Special Purpose Vehicle promoted by Sadbhav Engineering Limited (“SEL”) and Patel Infrastructure Private Limited (“PIPL”) for implementing the Sardar Patel Ring Road Project around the municipal limit of Ahmedabad city. The project involved the widening of the existing 76 kms two-lane ring road around Ahmedabad to four lanes on Build, Operate & Transfer (BOT) basis.

Under the terms of the formation of the SPV, SEL & PIPL (either directly or through their Associates) have agreed to fund ARRIL from time to time as may be required for the project. The proportion of shareholding of the Consortium Members in the company shall be as follows:

Name % of paid up equity share capital Sadbhav Engineering Limited 80 Patel Infrastructure Private Limited 20

The total equity contribution by our Company and PIPL are Rs. 836.80 lacs and Rs. 209.20 lacs respectively. The construction of the project has been completed and the COD was received on May 30, 2008.

Board of Directors

• Mr. Vikram R Patel • Mr. Vishnubhai M Patel • Mr. Shashin V Patel • Mr. Nitin R Patel • Mr. Arvind V Patel

Shareholding Pattern

The shareholding pattern of ARRIL as on date is as follows:

Shareholder No. of shares % of shareholding Sadbhav Engineering Limited 8367940 80.00

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Patel Infrastructure Private Limited 2092000 20.00 Others 60 0.00 Total 10460000 100.00

Financial Highlights

The summary of the audited financial statements for the past three years are as follows: (Rs. lacs) For financial For financial For financial Particulars year ended year ended year ended March 31, 2010 March 31, 2009 March 31, 2008 Equity Share Capital 1046.00 1046.00 837.60 Share Application 0.00 0.00 332.02 Money Reserves 7764.00 7764.00 6965.73 Sales/ Other Income 5329.24 3750.66 2596.17 Profit/ (Loss) after Tax (1886.10) (2546.68) 124.34 Basic Earning per share (18.03) (28.05) 1.48 (EPS) (Rs.) Return on Net Worth % NA NA 1.00 Net Asset Value (NAV) 84.22 84.22 93.16 (Rs.)

2. AURANGABAD JALNA TOLL WAY LIMITED

Aurangabad Jalna Toll Way Limited (“AJTL”) was incorporated on January 19, 2007 as a Special Purpose Vehicle promoted Sadbhav Engineering Limited (“SEL”) and PBA Infrastructure Limited (PBA) for the purpose of development, implementation and operation & maintenance of the Aurangabad Jalna Road project. The project involves 4 laning of 50 kms existing two lanes Aurangabad Jalna Road (MHS-6) from kms 10/400 to kms 60/200, 13 kms Beed by-pass from kms 292/500 to kms 305/650 and 3 kms long Zalta by-pass from kms 0/00 to kms 2/850 in Maharashtra on BOT basis. The project achieved its Commercial Operation Date and has been authorized by the Government of Maharashtra to collect the toll from July 28, 2009.

Name % of paid up equity share capital Sadbhav Engineering Limited & 51 Sadbhav Infrastructure Project Limited/ Associates PBA Infrastructure Limited / Associates 49

Of the total equity contribution of Rs. 197.11 lacs, we have subscribed to equity worth Rs. 100.52 lacs and the balance subscription has been subscribed by PBA.

Board of Directors

• Mr. Vishnubhai M Patel • Mr. Shashin V Patel • Mr. Nitin R Patel • Mr. Ramlal R Wadhawan • Mr. Balkrishan P Wadhawan • Mr. Narayan G Thatte

Shareholding Pattern

The shareholding pattern of AJTL as on date is as follows:

Name of the shareholder No. of shares % of shareholding Sadbhav Engineering Limited 1005207 51.00 143

PBA Infrastructure Limited 965796 49.00 Others 50 0.00 Total 1971053 100.00

Financial Highlights

Since the Company was incorporated in January 2007, the summary of the audited financial statements for the past two years are as follows:

(Rs. lacs) For financial year For financial year For financial year Particulars ended March 31, ended March 31, 2010 ended March 31, 2009 2008* Equity Share Capital 197.11 197.11 5.00 Share Application Money 0.00 0.00 2584.55 Reserves 5282.90 5282.90 0.00 Sales/ Other Income 1236.53 0.00 0.00 Profit/ (Loss) after Tax (1172.97) 0.00 0.00 Basic Earning per share (59.50) NA NA (EPS) (Rs.) Return on Net Worth % NA NA NA Net Asset Value (NAV) (in 278.00 278.00 9.36 Rs.)

* For the period 19/1/2007 to 31/3/2008

3. NAGPUR - SEONI EXPRESS WAY LIMITED

Nagpur Seoni Expressway Limited (“NSEWL”) was incorporated on February 8, 2007 as a Special Purpose Vehicle (SPV) promoted by Sadbhav Engineering Limited (SEL) and SREI Infrastructure Finance Limited (SREI) for implementing a four-lane divided carriageway standards, for North-South Corridor in the Seoni District of Madhya Pradesh in India on National Highway 7.

Board of Directors

• Mr. Vishnubhai M. Patel • Mr. Shashin V. Patel • Mr. Nitin R. Patel • Mr. Kishor K. Mohanty • Mr. Nilabhra Sinha • Mr. Pravin Sethia

Shareholding Pattern

The shareholding pattern of NSEWL as on date is as follows:

Name of the shareholder No. of shares % of shareholding Sadbhav Engineering Limited 24479940 51.00 SREI Venture Capital Trust a/c 18720000 39.00 SREI Infrastructure Finance Limited 4800000 10.00 Others 60 0.00 Total 48000000 100.00

Financial Highlights

144

Since the Company was incorporated in February 2007, the summary of the audited financial statements for the past three years are as follows: (Rs. lacs) For financial year For financial year For financial year ended Particulars ended March 31, 2010 ended March 31, 2009 March 31, 2008* Equity Share Capital 4800.00 4800.00 10.00 Share Application Money 979.60 979.60 4790.00 Reserves 0.00 0.00 0.00 Total Income 0.47 6.09 10.74 Profit/ (Loss) after Tax 0.00 0.00 0.00 Basic Earning per share NA NA NA (EPS) (Rs.) Return on Net Worth % NA NA NA Net Asset Value (NAV) (in 12.04 12.04 9.67 Rs.)

* For the period 08/2/2007 to 31/3/2008

4. SADBHAV INFRASTRUCTURE PROJECTS LIMITED

Sadbhav Infrastructure Projects Limited (“SIPL”) was incorporated on January 18, 2007 under the Act. The main objects of the company are to provide, develop, own, maintain, operate, instruct, execute, carry out, improve, construct, repair, work, administer, manage, control, transfer on a build, operate and transfer (BOT) basis.

SIPL has been incorporated as an asset holding company for road BOT projects. We are in the process of transferring our ownership in 6 BOT projects to SIPL and we have initiated the process of such transfer by making an application vide letter dated October 30, 2008 to NHAI w.r.t our ownership in NSEL. It is also proposed that future investment in road BOT projects will be made by SIPL independently or jointly with our Company.

Board of Directors

• Mr. Vishnubhai M. Patel • Mr. Vasistha C. Patel • Mr. Shashin V. Patel • Mr. Narendra Patel • Mr. Ravi Kapoor

Shareholding Pattern

The shareholding pattern of SIPL as on date is as follows:

Name of the shareholder No. of shares % of shareholding Sadbhav Engineering Limited 49940 99.88 Others 60 0.12 Total 50000 100.00

Financial Highlights

Since SIPL was incorporated on January 18, 2007 and no business has been carried out since then up to the financial year ending March 31, 2008, the summary of the audited financial statements for the past year is as follows: (Rs. Lacs) Particulars For financial year For financial year For financial year ended March 31, ended March 31, 2010 ended March 31, 2009 2008 Equity Share Capital 5.00 5.00 5.00 145

Share Application Money 0.00 0.00 0.00 Reserves and Surplus 347.83 0.00 0.00 Total Income 1951.80 7.30 0.00 Profit/ (Loss) after Tax 351.32 (3.49) 0.00 Basic Earning per share 702.65 (6.98) NA (EPS) (Rs.) Return on Net Worth % 110.61 NA NA Net Asset Value (NAV) (in 635.27 (77.99) (25.89) Rs.)

5. MAHARASHTRA BORDER CHECK POST NETWORK LIMITED

Maharashtra Border Check Post Network Limited (“MBCPNL”) was incorporated on March 9, 2009 as a Special Purpose Vehicle promoted by Sadbhav Engineering Limited. (“SEL”), SREI Infrastructure Finance Limited (SREI) and SREI Sahaj e-village Limited (SREI Sahaj) for the purpose of Modernization and computerization of Integrated Border Check Posts at 22 (Twenty Two) locations in the state of Maharashtra on BOT basis.

The concession period is 24 years and six months inclusive of construction period of 18 months. The salient features of the project include installation and operation system for prompt verification of all commercial vehicles including private buses coming from the adjoining states of Gujarat, Madhya Pradesh, Chattisgarh, Andhra Pradesh, Karnataka and Goa at entry points. Apart from toll chares, the consortium will also enjoy advertisement, weighment, commercial rights and parking rights for the entire concessionaire period

SEL, SREI & SREI Sahaj entered into a Memorandum of Understanding dated July 4, 2008 to bid for this project wherein the minimum equity shareholding was in the ratio 51:39:10 respectively. Subsequently, on the project being awarded, a Concession Agreement dated March 30, 2009 was entered into between MBCPNL and the Governor of Maharashtra for a period of 24 years and 6 months from the date of work order i.e. May 5, 2009. Further, SEL, SREI & SREI Sahaj entered into an amended MOU on September 4, 2009, wherein the parties agreed to modify their minimum equity share capital in the company until completion and thereafter for a period of three years from the date of commencement of operation of the project, in the ratio of 90:5:5 respectively.

Board of Directors

• Mr. Vishnubhai Patel • Mr. Nitin Patel • Mr. Shashin V. Patel • Mr. Vasistha C. Patel

Shareholding Pattern

The shareholding pattern of MBCPNL as on date is as follows:

Name of the shareholder No. of shares % of shareholding Sadbhav Engineering Limited 44940 89.88 SREI Infrastructure Finance Limited 2500 5.00 SREI Sahaj E-Village Limited 2500 5.00 Others 60 0.12 Total 50000 100.00

Financial Highlights

Since the Company was incorporated on March 9, 2009, the summary of the audited financial statements for the past year are as follows:

(Rs. Lacs) 146

Particulars For financial year ended March 31, 2010* Equity Share Capital 5.00 Reserves and Surplus 0.00 Total Income 0.00 Profit/ (Loss) after Tax (0.67) Basic Earning per share (EPS) (Rs.) (1.35) Return on Net Worth % NA Net Asset Value (NAV) (in Rs.) 10.00 * For the period 09/3/2009 to 31/3/2010

6. SADBHAV MINING LIMITADA

Sadbhav Mining Limitada (“SML”) was incorporated on May 23, 2008 as a limited liability company, under the laws of Mozambique. The main objects of the company include research in the mining industry, import, export and transport of mineral resources as well as all activities relating to the Mining industry.

Board of Directors

• Mr. Vishnubhai Patel

Shareholding Pattern

The shareholding pattern of SML as on date is as follows:

Name of the shareholder No. of shares* % of shareholding Sadbhav Engineering Limited 49500 99.00 Mr. Vishnubhai Patel 500 1.00 Total 50000 100.00 * Face value of each share is 1 MZM (Mozambique Metical)

Financial Highlights

The financial statements have not been prepared, since SML has been incorporated on May 23, 2008 and no business has been carried out since then.

7. Hyderabad-Yadgiri Tollway Private Limited

Hyderabad-Yadgiri Tollway Private Limited (“HYTPL”) was incorporated on January 20, 2010 as a Special Purpose Vehicle promoted by Sadbhav Engineering Limited for the work of design, engineering, construction, development, finance, operation and maintenance of 4 laning of Hyderabad-Yadgiri section from Km. 18.600 to Km. 54.000 of NH-202 in the state of Andhra Pradesh under NHDP Phase – III on DBFOT (Toll Basis) as well as to construct Toll plazas and other works or conveniences of public and private utility for the purpose of smooth traffic on the roads.

The concession agreement for the project was signed between NHAI and HYTPL on February 24, 2010. The concession period is for 23 years with a construction period of 1.75 years.

Board of Directors

• Mr. Vishnubhai M. Patel • Mr. Nitin R. Patel • Mr. Vasisthakumar C. Patel

Shareholding Pattern

The shareholding pattern of HYTPL as on date is as follows:

147

Name of the shareholder No. of shares % of shareholding SIPL 10,00,000 99.00 Sadbhav Engineering Limited 9990 1.00 Mr. Vishnubhai Patel 10 0.00 Total 10,10,000 100.00

Financial Highlights

Since the Company was incorporated on January 20, 2010 and no business activities have commenced since then, the financial statements have not been prepared.

8. Rohtak-Panipat Tollway Private Limited

Board of Directors

• Mr. Vishnubhai M. Patel • Mr. Nitin R. Patel • Mr. Vasisthakumar C. Patel

Shareholding Pattern

The shareholding pattern of RPTPL as on date is as follows:

Name of the shareholder No. of shares % of shareholding Sadbhav Engineering Limited 9990 99.90 Mr. Vishnubhai Patel 10 0.10 Total 10,000 100.00

Financial Highlights

Since the Company was incorporated on January 25, 2010 and no business activities have commenced since then, the financial statements have not been prepared.

9. Bijapur-Hungund Tollway Private Limited

SEL and MCL entered into a Joint Bidding Agreement on April 11, 2009 to jointly bid for the above mentioned project wherein the parties agreed to maintain a minimum intial equity participation in the SPV as follows: Name % of paid up equity share capital Sadbhav Engineering Limited 77

Montecarlo Construction Limited 23

148

Board of Directors

• Mr. Vishnubhai M. Patel • Mr. Nitin R. Patel • Mr. Vasisthakumar C. Patel • Mr. Kanubhai Patel

Shareholding Pattern

The shareholding pattern of BHTPL as on date is as follows:

Name of the shareholder No. of shares % of shareholding Sadbhav Engineering Limited 15,390 1.50 SIPL 7,70,000 75.50 Montecarlo Construction Limited 2,34,600 23.00 Mr. Vishnubhai Patel 10 0.00 Total 10,20,000 100.00

Financial Highlights

Since the Company was incorporated on February 22, 2010 and no business activities have commenced since then, the financial statements have not been prepared.

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GROUP COMPANIES/ VENTURES PROMOTED BY OUR PROMOTERS

There has been no public or rights issue made by any of our Group Companies and Ventures Promoted by our Promoters mentioned below in the last three years.

None of our Group companies/ Ventures Promoted by our Promoters is a sick company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1985 or a Union of India are under winding up or have any BIFR proceedings initiated against them or have been struck off as a defunct company by any Registrar of Companies in India.

Our Group Companies and Ventures Promoted by our Promoters as on date are as follows:

1. SADBHAV FINSTOCK PRIVATE LIMITED

Sadbhav Finstock Private Limited (“SFPL”) was incorporated on May 18, 1994 for carrying on investment activities. The company amended its existing main objects at the Extra-ordinary General Meeting held on July 1, 2000 and substituted it with the object of carrying on the business of manufacturing, developing or otherwise dealing in all kinds of computers and electrical apparatuses (Software/ Hardware business) as well as in promoting and establishing computer training centers and computer consultancy businesses.

Board of Directors

• Mr. Vishnubhai M Patel • Mrs. Shantaben V Patel

Shareholding Pattern

The shareholding pattern of SFPL as on date is as follows:

Shareholder No. of shares* % of shareholding Vishnubhai M Patel 4540 45.40 Shashin V. Patel 4550 45.50 Others 910 9.10 Total 10000 100.00

* Equity shares of the face value of Rs. 100/- per share

Financial Details

The summary of audited financial statements is as follows: (Rs. lacs) For financial year For financial year For financial year Particulars ended March 31, ended March 31, ended March 31, 2010 2009 2008 Equity Share Capital 10.00 10.00 10.00 Reserves 19.29 16.22 13.19 Sales/ Other Income 15.57 13.68 11.97 Profit/ (Loss) after Tax 14.77 13.56 11.91 Basic Earning per Share (EPS) (Rs.) 147.74 135.64 119.08 Return on Net Worth % 50.43 51.73 51.35 Net Asset Value (NAV) (Rs.) 292.97 262.23 231.90

150

2. SADBHAV QUARRY WORKS PRIVATE LIMITED

Sadbhav Quarry Works Private Limited (“SQWPL”) was incorporated on August 16, 1994 to carry on the quarry business. The main activity is to purchase, take on lease or acquire land to be used as quarry and to undertake the business of quarry masters, explorers and prospectors and to manufacture, process, purchase, sell and deal in gravel, rubble, grit, kapachi, sand and stones of all types and sizes. SQWPL has its quarry at Sevalia, Gujarat, spread over 110 acres. The site has an estimated yield capacity of 30-35 lacs of brass mineral including black- trap.

Board of Directors

• Mr. Vishnubhai M Patel • Mr. Nitin R Patel

Shareholding Pattern

The shareholding pattern of SQWPL as on date is as follows:

Name of the shareholder No. of shares* % of shareholding Vishnubhai M. Patel 2170 43.40 Shantaben V. Patel 2760 55.20 Others 70 1.40 Total 5000 100.00

* Equity shares of the face value of Rs. 100/- per share

Financial Details

The summary of audited financial statements is as follows:

(Rs. lacs) For financial year For financial year For financial year Particulars ended March 31, ended March 31, ended March 31, 2010 2009 2008 Equity Share Capital 5.00 5.00 5.00 Reserves 115.85 78.54 70.20 Sales/ Other Income 676.28 345.18 275.08 Profit/ (Loss) after Tax 37.30 8.34 16.06 Basic Earning per Share (EPS) (Rs.) 746.17 166.80 321.10 Return on Net Worth % 30.87 9.98 21.35 Net Asset Value (NAV) (Rs.) 2416.93 1670.75 1504.00

3. VISHNUBHAI M PATEL HUF

Name Status Vishnubhai Patel Karta Shantaben Patel Coparcener Shashin Patel Coparcener Shruti Patel Coparcener Priya Patel Coparcener

Financial Details

The summary of audited financial statements is as follows: (Rs. lacs)

151

For financial year For financial year For financial year Particulars ended March 31, 2009 ended March 31, 2008 ended March 31, 2007 Capital A/c 316.14 302.11 297.56

Total Income 29.11 6.73 45.43

Net Profit/ (Loss) 14.02 4.55 39.75

4. SANTOKBA TRUST

Santokba Trust, a family trust having its office at Ahmedabad was formed under the Deed of Declaration dated March 27, 2001 between Mr. Vishnubhai Patel and Smt. Shantaben Patel, as the heirs of the properties of Late Smt. Santokben Patel by virtue of her will dated May 1, 1989. The Trust would exist for a period of 18 years from the date of implementation and on cessation the trustees would distribute the said properties of the Trust as they deem fit.

The business of the trust is to invest in properties, shares, debentures, loan or fixed deposits in private firms as also in savings certificate.

Board of Trustees

• Mr. Vishnubhai Patel and • Smt. Shantaben Patel

The Beneficiaries of the Trust are:

• Mr. Vishnubhai Patel • Smt. Shantaben Patel • Mr. Shashin Patel • Mr. Shashin Patel’s wife and children • Smt. Truptiben Patel • Smt. Alpaben Patel • Smt. Rekhaben Patel • Smt. Rajeshriben Patel

Financial Details

The summary of audited financial statements is as follows:

(Rs. lacs) For financial year For financial year For financial year Particulars ended March 31, ended March 31, ended March 31, 2009 2008 2007 Trust Fund 185.77 122.28 111.28 Total Income 15.63 11.65 12.36 Net Income/ (Loss) 15.39 11.00 11.10

5. SADBHAV PUBLIC CHARITABLE TRUST

Sadbhav Public Charitable Trust is a Public Charitable Trust having its office at Ahmedabad. The Trust was formed under the Deed of Declaration of Trust dated November 18, 1995 by Mr. Vishnubhai Patel with the object to undertake all activities of public interest like construction of hospitals, dispensary/ clinics, roads, wells, reformation of backward community and village upliftment etc. The trust assists people / institutions who apply to it for aid on a case to case basis.

Board of Trustees

● Shri Vishnubhai M. Patel 152

● Smt. Shantaben V. Patel ● Shri Jayantibhai M. Patel

Financial Details

The summary of audited financial statements is as follows:

(Rs. lacs) For financial year For financial year For financial year Particulars ended March 31, ended March 31, ended March 31, 2009 2008 2007 Trust Fund 145.02 120.03 111.98 Total Income 0.00 0.00 0.05 Net Income/ (Loss) 25.05 (10.73) (12.40)

6. SADBHAV SAHAKARI SAMUDAYAK KHETI MANDAL

Sadbhav Sahakar Mandal is an Association of Persons (AOP) registered with the Ahmedabad Zilla Panchayat on September 3, 1994. The AOP was formed to buy and own land. The members of this AOP are:

• Shri Vishnubhai Patel • Shri Nanubhai Patel • Shri Deepakbhai Patel • Smt. Shantaben Patel • Shri Girishbhai Patel • Shri Pathikbhai Patel • Shri Dharminbhai Patel • Smt Alpaben Patel • Smt Induben Patel • Shri Shashin Patel • Shri M.V. Patel

Common Pursuits

There are no common pursuits between our Company and Group Companies/ Ventures promoted by our Promoters.

Other Confirmations

Except as disclosed above and in the chapter titled “Related Party Transactions” beginning on page 156 of the Letter of Offer, the Group Companies/ Ventures promoted by our Promoters do not have any interest in any venture that is involved in any activities similar to those conducted by our Company. For details of the amount of commercial business that any Group Companies/ Ventures promoted by our Promoters, Subsidiary or Associate has with our Company, please refer to chapter titled “Related Party Transactions” on page 156 of this Letter of Offer.

Litigation

For details relating to the Litigations filed by our Group Companies/ Vnetures Promoted by our Promoter, please refer to the chapter titiled “Outstanding Litigations” on page 278 of this Letter of Offer.

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Companies with which the promoters have disassociated themselves in the last three years

Quantity of Name of the Date of Name of the Holding % of Reasons for Company Disassociation Purchaser (no’ of Holding Disassociation shares) SEL decided to disassociate itself from the Sadbhav business of owning of Natural Vital assets in natural Resources Connections March 31, 2009 9999 99.99 resources space and Private Private hence divested their entire Limited Limited shareholding in SNRL with (SNRL) effect from March 31, 2009.

The net worth of SNRL as on March 31, 2008 (the latest available audited financial statements at the time of disassociation), was Rs.21,315.00 (Comprising of Equity Share capital of Rs. 1,00,000 adjusted by Miscellaneous Expenditure to the extent not written off of Rs. 78,685.00).

There was no independent valuation done before selling the shareholding of our Company in SNRL.The shareholding in SNRL was sold at par & there was no profit or loss incurred.

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DIVIDEND POLICY

Our Company has been a dividend paying Company and has paid dividends in each of the last five years. The following are the details of the dividend pay outs by our Company:

For For For For For financial financial financial financial financial Particulars year ended year ended year ended year ended year ended March 31, March 31, March 31, March 31, March 31, 2010 2009 2008 2007 2006 Rate of 40.00 40.00 40.00 35.00 20.00 Dividend (%) Dividend Amount 583.04 584.98 584.98 511.85 248.57 (Rs. lacs) Number of Equity 125,00,000 125,00,000 125,00,000 109,00,000 109,00,000 Shares Dividend per Equity Share 4.00 4.00 4.00 3.50 2.00 (Rs.)

The amounts paid as dividend in the past are not necessarily indicative of our dividend policy or dividend amounts, if any, to be paid in future. Any future dividends declared will be recommended by the Board of Directors and approved by the Equity Shareholders at their discretion and will depend on the financial condition, results of operations, capital requirements and surplus, contractual obligations and restrictions, the terms of the credit facilities and other financing arrangements of our Company at the time a dividend is considered, and other relevant factors.

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RELATED PARTY TRANSACTIONS

Our Company has various transactions with related parties, including the Subsidiaries, the Associates, the Directors, Key Managerial Employees and their relatives.

For details on our Company’s Related Party Transactions, including business interests of group companies, Subsidiaries and Associates in the Company, on an unconsolidated/ standalone basis, please refer to page 208 of the Letter of Offer.

For details on our Company’s Related Party Transactions, including business interests of group companies, Subsidiaries and Associates in the Company, on a consolidated basis, please refer to page 172 of the Letter of Offer.

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SECTION V : FINANCIAL INFORMATION OF THE ISSUER COMPANY

FINANCIAL STATEMENTS

Auditor’s report for the Consolidated Financial Statements

To, The Board of Directors Sadbhav Engineering Limited Sadbhav House Opp. Law Garden Police Chowki Ellisbridge, Ahmedabad

1. We have examined the annexed Consolidated financial information of Sadbhav Engineering Limited and its subsidiaries for the four financial years ended as on 31st March 2007, 2008, 2009 and 2010 being the last date to which the accounts of the Company have been made up and audited by us. The financial statements for the year ended on that dates are approved by the Board of Directors of the Company for the purpose of disclosure in the Offer Document being issued by the Company in connection with the Rights Issue of Equity Shares in the Company (referred to as ‘the Issue’), which is in accordance with

(i) Paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 (“the Act”).

(ii) The Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations 2009 (‘the SEBI Regulations’) issued by the Securities and Exchange Board of India (“SEBI”) on August 26, 2009;

(iii) Our terms of reference with the Company letter dated 09th June, 2009 requesting us to carry out work in connection with the Offer Document as aforesaid.

(iv) We did not audit the financial statements of Ahmedabad Ring Road Infrastructure Ltd., Nagpur Seoni Expressway Ltd., Aurangabad Jalna Toll Way Ltd., Sadbhav Infrastructure Project Ltd., and Maharashtra Border Check Post Network Ltd. These financial statements have been audited by other auditors whose report have been furnished to us and in our opinion, in so far as it relates to the amounts included in respect of said audited subsidiaries are based solely on the report of the other auditors.

2. Financial information as per audited financial statements:

(i) We report that the restated consolidated assets and liabilities of the Company as at the end of each of the four financial years ended 31st March, 2007 to 2010 are set out in Annexure A to this report after making such adjustments/ restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies and Notes to Accounts as appearing in Annexure D to this report.

(ii) We report that the restated consolidated profits of the Company for the each financial year ended 31st March, 2007 to 2010 are as set out in Annexure B to this report. These profits have been arrived at after charging all expenses including depreciation and after making such adjustments/restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies and Notes to Accounts as appearing in Annexure D to this report.

(iii) These statements are prepared from the Profit and Loss Account for the financial years ended 31st March, 2007 to 2009 and the Balance Sheet as at 31st March, 2007 to 2009 adopted by the members at the Annual General Meeting. The statement of Profit and Loss Account for the financial year ended 31st March, 2010 and the Balance Sheet as at 31st March, 2010 have been approved by the Board of Directors at its meeting held on 21st May, 2010 and are subject to approval of the members at the next Annual General Meeting. 157

3. Other Financial Information:

We have examined the following financial information relating to the Company proposed to be included in the Offer Document and annexed to this report.

Annexures

Annexure A Summary of Restated Assets & Liabilities (Consolidated) Annexure B Summary of Restated Profit & Loss Account(Consolidated) Annexure C Cash Flow Statement (Consolidated) Annexure D Significant Accounting Policies and Notes to Accounts (Consolidated) Annexure E Statement of Contingent Liabilities (Consolidated) Annexure F Statement of Dividend Declared (Consolidated) Annexure G Details of Related Party Transactions (Consolidated) Annexure H Details of Other Income (Consolidated) Annexure I Summary of Accounting Ratios (Consolidated) Annexure J Statement of Secured Loans (Consolidated) Annexure K Statement of Unsecured Loans (Consolidated) Annexure L Schedule for Current Liabilities & Provisions (Consolidated) Annexure M Statement of Debtors (Consolidated) Annexure N Details of other Current Assets (Consolidated) Annexure O Details of Loans & Advances (Consolidated) Annexure P Details of Investments (Consolidated) Annexure Q Capitalization Statement (Consolidated) Annexure R Segmental Reporting (Consolidated)

4. This report is being provided solely for the use of Sadbhav Engineering Limited, for the purpose of inclusion in the Offer Document of the company.

5. This report may not be used or relied upon by, or disclosed, referred to or communicated by yourself (in whole or in part) to, any third party for any purpose other than the stated use, except with our written consent in each instance, and which consent may be given, only after full consideration of the circumstances at that time.

For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Reg. No. 113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671

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ANNEXURE A:-SUMMARY OF RESTATED ASSETS AND LIABILITIES (CONSOLIDATED)

(Rs. in Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 A. Fixed Assets Gross Block 1,08,132.55 73,976.31 47,485.18 43,293.40 Less :- Accumulated Depreciation 19,209.10 14,239.55 11,297.39 9,296.04 Net Block 88,923.45 59,736.76 36,187.79 33,997.36

Capital Work in progress including capital 41,082.27 41,492.68 39,364.49 5,779.83 advances Total 1,30,005.72 1,01,229.44 75,552.28 39,777.19

B. Investments 8,638.68 2,545.00 6,374.39 1,240.81

E. Deferred Tax Liability 1,410.64 1,100.45 971.39 902.92 F. Minority Intrest 5,825.47 6,776.94 5,223.13 1,535.80 G. Net Worth ( A+B+C-D-E-F) 36,019.07 35,231.58 31,329.69 17,167.01

Net Worth represented by : H. Equity share Capital 1,250.00 1,250.00 1,250.00 1,090.00 I. Warrant Application Money -345.00 -

K. Miscellaneous Expenditure 35.52 129.53 171.60 257.01

L. Net Worth (H+I+J-K) 36,019.07 35,231.58 31,329.69 17,167.01 Note :- The above statement should be read with the Notes to Restated Consolidated Financial Statements appearing in Annexure D. For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Reg. No. 113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671 159

ANNEXURE B: - SUMMARY OF RESTATED PROFIT AND LOSS ACCOUNT (CONSOLIDATED)

(Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 I. Income Operating Income 1,33,438.01 1,09,893.26 92,033.37 48,846.61 Increase/ (Decrease) in Work-in-progress 436.00 (226.58) (6.79) 354.02 Exceptional Income - - 596.82 - Other Income 1,985.38 1,259.59 417.83 127.60 Total – A 1,35,859.39 1,10,926.27 93,041.23 49,328.23

II. Expenditure Construction, Toll Plaza and Road 84,910.54 62,862.40 52,590.35 25,985.39 Maintenance Exp. Material Consumed 21,185.58 27,409.72 23,389.38 14,053.09 Adiministration & Other Expenses 7,430.82 3,723.53 2,700.99 2,582.61 Employee Remuneration & benefits 2,158.17 1,732.19 1,552.59 1,051.30 Finance Charges 11,319.60 6,176.40 3,371.33 788.75 Depreciation 5,644.91 3779.56 2569.76 1,776.72 Amortization of Miscellaneous expenditure 94.68 86.36 86.06 86.39 1,32,744.30 105770.16 86260.46 46,324.25 Transferred to Capital Work in Progress (4,146.99) (589.59) (1,056.19) (738.70) Total – B 1,28,597.31 105180.57 85204.27 45,585.55

III. Profit before taxation ( A-B) 7,262.08 5745.70 7836.96 3,742.68 Less : Provision for taxation Current 3,141.53 1,780.95 2,321.99 1,279.32 Deferred 310.19 129.06 76.15 (115.43) Fringe bebefit tax - 16.38 14.37 8.37

IV. Profit After Taxation as per audited 3,810.36 3819.31 5424.45 2,570.42 statement of accounts Add/(less): Excess/(short) provision of Taxation for (1,134.55) (40.01) (63.22) (81.78) ealier years Excess/(short) provision for Deferred Tax of - - - 60.95 ealier Years

Net Profit After Tax But Before Extra 2,675.81 3779.30 5361.23 2,549.59 Ordinary Items Extra Ordinary Items - - - - Net Profit After Tax & Extra Ordinary 2,675.81 3779.30 5361.23 2,549.59 Items as per Audited Statement of Accounts ( C) Adjustments on account of changes in (50.40) 42.55 7.85 - accounting policies Impact on account of prior period items (141.10) 172.10 42.43 (125.52) Total adjustments (191.50) 214.65 50.28 (125.52) Tax impact on adjustments (47.96) 58.50 14.42 (42.66) Total adjustments net of tax impact ( D) (143.54) 156.15 35.86 (82.86) V. Adjusted profit / ( loss) ( C + D) 2,532.27 3,935.45 5,397.09 2,466.74 160

Share of (Profit) / Loss Transferred to 951.98 509.34 (24.87) 17.80 Minority Intrest 3,484.25 4,444.79 5,372.22 2,484.54 Surplus / (Deficit) Brought forward from the 11,835.96 8,640.94 4,403.70 2,731.01 Previous year* VI. Profit available for appropriation 15,320.21 13,085.74 9,775.92 5,215.55 Debenture Redemption Reserve 600.00 14.80 - - Transfer to General Reserve 650.00 650.00 550.00 300.00 Proposed equity dividend ( Interim / Final) 500.00 500.00 500.00 437.50 Tax on dividend 83.04 84.98 84.98 74.35 VII. Adjusted Available Surplus/ ( Deficit) 13,487.17 11,835.96 8,640.94 4,403.70 carried forward

* Balance of Profit brought forward from Previous Year ending 31-03-2006 has been adjusted for giving effect of Prior Period items

Note :- The above statement should be read with the Notes to Restated Consolidated Financial Statements appearing in Annexure D.

For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Reg. No. 113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671

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ANNEXURE C:- CONSOLIDATED CASH FLOW STATEMENT PREPARED FROM RESTATED FINANCIAL STATEMENTS (Rs. in Lacs) Year Ended Year Ended Year ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 A. CASH FLOW FROM OPERATING

ACTIVITIES Net Profit before taxation and extraordinary 7,070.58 5,960.35 7,887.24 3,617.16 items :

Adjustments for : Depreciation 5,695.31 3,737.01 2,561.91 1,776.72 (Profit) / Loss on sale of fixed assets (Net) (181.84) 54.96 (8.55) 14.08 Fixed assets written off - - - Dividend Income (18.29) (71.62) (44.52) (1.68) Finance charges 9,091.86 5,283.46 1,208.24 638.49 Preliminary Expenses 94.01 86.36 86.06 86.39 Cash generated from operations before 21,751.63 15,050.52 11,690.38 6,131.16 Working Capital Changes

Changes in Trade and Other Receivables (22,704.88) (7,305.55) (3,079.35) (7,575.24) Loans & Advances (10,078.59) (5,092.30) (564.81) (4,285.47) Changes in Trade Payables 22,025.14 2,750.54 (2,022.19) 5,832.96 Cash generated from/ ( used in ) operations 10,993.30 5,403.21 6,024.03 103.41

Income Tax, Wealth Tax & FBT paid (4,255.86) (2,292.85) (2,231.13) (620.24) Net Cash Flow from / ( used in ) Operating 6,737.44 3,110.36 3,792.90 (516.83) Activities

B. CASH FLOW FROM / (USED IN)

INVESTING ACTIVITIES Purchase of Fixed Assets (35,410.03) (28,793.45) (4,985.28) (25,477.17) Sale of Fixed Assets 709.90 1,451.64 241.13 73.28 Payment mad for Capital Work in Progress 410.41 (250.36) (32,721.57) (5,779.83) Investments in Subsidiary Companies (net) (3,471.96) 1.65 - (1,777.56) Investments against QIP Proceeds (net) 1,499.00 2,106.00 (3,605.00) -

Other Investment (net) (6,328.45) 1,580.67 1,721.74 (1,528.59) Investment in Fixed Deposits against Margin (71.68) 69.24 1,019.50 371.36 Loan to Subsidiary Companies (4,040.36) 1,082.44 (1,082.96) - Loans to Others (336.67) (6,646.50) - - Dividend Received 18.29 89.90 51.09 1.68 Interest Received 949.48 1,026.27 430.70 166.06 Net Cash from / (used in ) Investing Activities (46,072.07) (28,141.43) (42,180.98) (30,841.51)

C. CASH FLOW FROM / ( USED IN )

FINANCING ACTIVITIES Proceeds from issue of Shares/Share - - 9,545.00 - Application Money

Proceeds from Minority Interest 0.51 3,655.10 833.60 2,063.15

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Proceeds / (Repayment) from / of Short Term 15,244.57 (1,457.33) (8,207.59) 21,259.46 borrowings (net) Proceeds / (Repayment) from / of Long Term 36,435.00 34,519.93 36,823.83 5,670.34 borrowings (net) Capital Grant Received - - 3,600.00 QIP Shares Expenses - (239.83) (0.33) Finance Charges Paid (10,005.59) (8,204.99) (2,508.60) (804.55) Preliminary Expenses - (44.29) - - Dividend Paid ( including dividend distribution (584.98) (584.98) (511.85) (248.57) tax) Net Cash from / (used in) Financing Activities 41,089.51 26,291.49 38,556.06 30,309.95 Net increase / (decrease) in Cash and Cash 1,754.88 1,260.42 167.98 (1,048.39) Equivalents Cash and Cash Equivalents at the beginning 3,213.70 1,953.28 1,785.30 2,833.69 of the year Cash and Cash Equivalents at the end of the 4,968.58 3,213.70 1,953.28 1,785.30 year

Components of cash and cash equivalent Cash and cheques on hand 41.69 24.93 30.63 17.94 with banks On current account 4,347.77 1,957.33 939.67 298.79 On deposit account restricted - - - On deposit account unrestricted 579.13 1,231.39 982.98 1,468.57

NOTE :- i) Figures in brackets denote outflows.

ii) The above statement should be read with the Notes to Restated Consolidated Financial Statements appearing in Annexure D.

For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Reg. No. 113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671

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ANNEXURE D:- SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (CONSOLIDATED)

A. SIGNIFICANT ACCOUNTING POLICIES

1. Principles of consolidation:

The consolidated financial statements relate to Sadbhav Engineering Ltd. ('the Company') and its subsidiary companies. The consolidated financial statements have been prepared on the following basis:

a) The financial statements of the Company and its subsidiary companies have been consolidated on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealized profits or losses in accordance with Accounting Standard (AS) 21 - "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India.

b) The financial statements are based on historical cost convention and are prepared on accrual basis.

c) The difference between the costs of investment in the subsidiaries, over the net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital Reserve as the case may be.

d) Minority Interest's share of net profit / (loss) of consolidated subsidiaries for the year is identified and adjusted against the income of the group in order to arrive at the net income attributable to shareholders of the company.

e) Minority Interest's share of net assets of consolidated subsidiaries is identified and presented in the consolidated balance sheet separate from liabilities and the equity of the company's shareholders.

f) As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company's separate financial statements.

2. Other significant accounting policies:

These are set out in the “Annexure – D: - Significant Accounting Policies and Notes to Accounts” of the Restated Financial Statements of the stand alone Company. Further to those policies, the accounting policies adopted by subsidiaries are as follows:

a) Recognition of contract revenue and expenses:

Toll collection from its users has been accounted when amount is received. Income of monthly pass is recognized as and when it received in entirety.

b) Grant:

Government grant received or receivable from AUDA by the subsidiary Ahmedabad Ring Road Infrastructure Ltd. is in the nature of promoters’ contribution and is treated as capital receipt and accounted as capital reserve.

c) Fixed Assets and Depreciation:

Depreciation in case of holding company is provided for all assets except for vehicles on straight- line method and depreciation on vehicles is provided on written down value method at the rates specified in schedule XIV of The Companies Act, 1956. Software used at Head office and workshop are amortised over a period of three years and software used at Project sites are amortised over the project completion period. Whereas in case of subsidiary Maharashtra Border Check

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Post Network Limited, depreciation is provided on the basis of Written Down Value Method at the rates specified in schedule XIV of The Companies Act, 1956.

In case of a subsidiary Maharashtra Border Check Post Network Limited, depreciation on assets used for construction has been treated as part of Incidental Expenditure Pending Capitalization which shall be allocated to Fixed Asset on Commercial Operation Date (COD).

In case of a subsidiary Aurangabad – Jalna Toll Way Ltd., Depreciation on fixed assets, other than Project Assets, (except computers and other hardwares related to tolling system) is provided on the Written Down Value Method (WDV) at rates prescribed in Schedule - XIV to the Companies Act. 1956. Project Assets, other than Computers & other hardwares related to tolling system, are amortized over the Concession Period. (23.5 years from February 1, 2007).

In case of a subsidiary Ahmedabad Ring Road Infrastructure Limited, Depreciation on fixed assets, other than Project Assets, is provided on the Written Down Value Method (WDV) at rates prescribed in Schedule - XIV to the Companies Act, 1956. Project Assets, as defined under Concession Agreement, are amortised over the Concession Period.

d) Intangible Assets:

Intangible asset is recognized as per criteria specified in Accounting Standard (AS) 26 “Intangible Assets”

Capital Work in Progress comprises cost of road development till it is ready for its intended use (including advances given for acquiring asset) as at the reporting date of the financial statements and “Incidental Expenditure Pending Capitalization”, which shall be capitalized as an intangible asset on its Commercial Operation Date (COD).

In case of subsidiary Ahmedabad Ring Road Infrastructure Ltd. and Aurangabad – Jalna Toll Way Ltd, the Infrastructure Project Assets i.e. toll collection right received are amortized over the Concession period.

e) Derivative Transactions:

In case of Ahmedabad Ring Road Infrastructure Ltd., premium paid, gains/losses on settlement and provision for losses for cash flow hedges are recognized in the Profit and Loss Account, except in case where they relate to borrowing costs that are attributable to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets.

In case of Nagpur Seoni Express Way Ltd., provision for losses on restatement and gains/losses on settlement are recognized along with the underlying transactions and charged to Incidental Expenditure Pending Capitalization during construction period.

B. NOTES ON ACCOUNTS

1) As on 31st March, 2010 Company has following subsidiary companies.

Proportion of Country of Ownership Interest Name of Subsidiary Incorporation as on 31-03-2010 Ahmedabad Ring Road Infrastructure Limited India 80% Sadbhav Infrastructure Project Limited India 100% Aurangabad-Jalna Toll Way Limited India 51% Nagpur-Seoni Express Way Limited India 51% Maharashtra Border Check Post Network Ltd. India 90% Sadbhav Mining Limitada, Mozambique Mozambique 100% Rohtak Panipat Tollway Pvt. Ltd. India 100% 165

Bijapur Hungund Tollway pvt. Ltd India 77% Hydrabad Yadgiri Toll Way Pvt. Ltd India 100%

The financial statements of Rohtak Panipat Tollway Pvt. Ltd., Bijapur Hungund Tollway Pvt. Ltd., Hydrabad Yadgiri Toll Way Pvt. Ltd and Sadbhav Mining Limitada, Mozambique has not been considered for consolidation, as the said subsidiaries have not started its activities as on 31st March, 2010.

2) All amounts in the financial statements are presented in Rupees Lacs except per share data and as otherwise stated.

3) Prior Period income and expenditure has been restated in respective years.

4) There has been no revaluation of Fixed Assets of the Company and its Subsidiaries since inception.

5) As the Company is engaged in Construction business, the provision of Para 3 and Para 4C of Part II of Schedule VI to The Companies Act, 1956 regarding quantitative details, licence capacity and installation capacity are not applicable.

6) The Company has complied with AS 7, AS 23, AS 27 and as well as all the accounting policies of the Company are in line with the Accounting Standards issued by ICAI.

7) In the opinion of the Board, the current assets, loans and advances are approximately of the value stated if realized in ordinary course of business. Provision for known liabilities are adequate and not in excess of the amount reasonably necessary.

8) Secured Loans:

SADBHAV ENGINEERING LTD.

Please refer to Notes on Accounts No. 08 of “Annexure – D : - Significant Accounting Policies and Notes to Accounts” of the Restated Financial Statements of Sadbhav Engineering Ltd.

AHMEDABAD RING ROAD INFRASTRUCTURE LTD.

1. The facility of First Banking Rupee loan, interest thereon and all amounts in respect thereof shall be secured by;

(a) First charge on all the Company’s immovable and movable assets (including but not limited to all current / non-current assets goodwill, uncalled capital but excluding Project Assets) both present and future;

(b) First charge over all Fees, revenues and receivables (including the book debts, commissions, operating cash flows) of the Company from the Project or otherwise;

(c) First charge over / assignment of all the rights, titles and interests of the Company in, to and in respect of all Project Documents, all guarantees, performance guarantees or bonds, letters of credit, liquidated damages that may be provided by any party to any Project Document in favour of the Company and Clearances (to the extent permitted) and all rights, titles, approvals, permits, clearances and interest and the Company’s right, title, interest, benefit and claim in, to or under the Project Documents and Clearances;

(d) Assignment of all the Company’s right, title, interest, benefit and claim of the Company in, to or under the Insurance Contracts, insurance policies and the Insurance Proceeds;

(e) First charge over all bank accounts of the Company including without limitation, the Escrow Account (or any account in substitution thereof) and the Debt Service Reverse Account in all funds from time to time deposited therein and in all Permitted Investments or other securities representing all amounts credited to the Escrow and Debt Service Reserve Account and any

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other bank accounts of the company established pursuant to the Project Documents and otherwise.

(f) Pledge of 30% of equity share capital held by the sponsors in the share capital of the Company

(g) Non-Disposal Undertaking (NDU) from the Sponsors, undertaking not to dispose off 70% of equity share capital (in addition of the shares pledged under the Share Pledge Agreement) held by the Sponsors during construction period and thereafter 45% of the equity share capital (in addition of the shares pledged under the Share Pledge Agreement) of the Company till 80% of the Debt is paid off and thereafter 21% of the equity share capital (in addition of the shares pledged under the Share Pledge Agreement) of the Company until the Final settlement date; and

(h) An irrevocable corporate guarantee from the Sponsors in favour of the Security trustee, for the benefit of senior lenders, to cover any shortfall in the amount payable in respect of the Rupee Loan in the event of termination on any account as per the terms of the Concession Agreement.

2. In respect of Second Ranking Rupee Loan :

The Second Ranking Rupee Loan together with interest, additional interest, default interest, prepayment premium, costs, charges, expenses and other monies whatsoever stipulated and due to second Ranking Lenders are secured by way of second ranking charge on the Security interest stipulated in (a) to (h) in Para (1) above to be created in favour of the Security Trustees for the benefits of the Second Ranking Lenders.

AURANGABAD JALNA TOLL WAY LTD.

1. The Rupee loans, and the payment and other obligations of the Company under the Common Rupee Loan agreement, are secured by;

(a) Charge on all the immovable, moveable and intangible assets of the Company, (including but not limited to all receivables) both present and future, except the project assets,

(b) Charge over all book debts, operating cash flows, Toll Collection, revenues of whatsoever nature and wherever arising, receivables, from the Project or otherwise, commissions, present and future, intangibles, goodwill and uncalled capital of the Company, present and future,

(c) A pledge of 51% equity share capital of the company held by the Promoters, till payment of 75% of loan to each Rupee lender and thereafter pledge of 26% equity share capital of the Company held by the Promoters;

(d) Charge by way of assignment or creation in favour of the Rupee lenders over,

(i) All the right, title, interest, benefits claims and demand whatsoever of the Company in all Project Documents, duly acknowledged and consented to be the relevant counter-parties to such project Document, all as amended, varied or supplement from time to time; (ii) All the right, title, interest, benefits claims and demand whatsoever of the Company in the Clearances; (iii) All the rights, titles, interest, benefits, claims and demands whatsoever of the Company in any letter of credit, guarantee, performance guarantee or bond that may be provided by any party to any Project Document in favour of the Company and; (iv) All insurance contracts/insurance proceeds. (e) Charge over all the letter of credit, Trust and Retention Account, Debt Service Reserve Account and other reserves and any other bank accounts of the Company wherever maintained.

NAGPUR SEONI EXPRESS WAY LTD.

1. The facility of loan, and the payment and other obligations of the Company under the Finance Documents, are secured by ;

(a) Charge on all the immovable and moveable assets of the Company, both present and future, 167

(b) An assignment by way of security over all the Company’s rights, title and interest in and to each Transaction Document.

MAHARASHTRA BORDER CHECK POST NETWORK LIMITED

1. The Rupee Loans together with Interest, Additional Interest, Default Interest, Prepayment premium, Costs, Charges, expenses and other monies whatsoever stipulated and due to the Secured Parties in accordance with the Financing Documents shall, to the extent permitted by the Article 21.1 of the Concession Agreement (as produced in Schedule VIII) be secured by : a) A First Ranking mortgage and charge over:

I. All the borrower’s immovable and movable properties, both present and future (other than the Project Site and the Project Facility) ;

II. All Tangible and Intangible assets of the borrower including but not limited to its goodwill, undertaking and uncalled capital, both present and future;

III. All Fees, revenues and receivables of the Borrower, both present and future;

IV. All the Borrower’s rights title and interest under all agreements entered into by the borrower, including each of the Project Documents, duly acknowledged and conseted to, where required, by the relevant counter parties to such Project Documents, all the Borrower’s rights under each letter of credit / guarantee or performance bond that may be provided by any party to the Project Document for the Borrower’s benefit and all the borrower’s rights under all authorizations, clearances, permissions, approvals and consents including but not limited to clearances (to the extent assignable under applicable Law);

V. All the borrower’s accounts, (including but not limited to the Accounts and Permitted Investments) and each of the other accounts required to be created by the borrower under any Transaction Agreements, including without limitation, the Trust and Retention Account Agreement, including in each case, all monies lying credited/deposited in to such accounts;

VI. All insurance contracts entered in to by the borrower including but not limited to the Insurance Contracts including all rights and receivables there under; and

b) Subject to Applicable Law, a pledge by the Sponsors of the Shares constituting /representing at all times not less than thirty (30%) of the total shares of the Borrower; . 9) Capitalization of fixed assets:

a) In the case of Nagpur Seoni Expressway Ltd., Rohtak Panipat Tollway Pvt. Ltd., Bijapur Hungund Tollway pvt. Ltd. & Hydrabad Yadgiri Toll Way Pvt. Ltd no Profit & Loss account has been prepared since the company has not commenced commercial operations. The expenditures incurred during the construction period are classified as “Construction Work–In-Progress” and “Incidental Expenditure Pending Capitalization”. The same will be apportioned to the Assets on the completion of the Project.

b) The subsidiary Aurangabad – Jalna Toll Way Limited has acquired right to collect toll on the project road. Such right is capitalized as intangible asset and is being amortized over the concession period.

10) The subsidiary Ahmedabad Ring Road Infrastructure Ltd. has changed the method of providing depreciation on Project Assets from written down value to amortization of cost over the Concession Period i.e. 20 years from January 1, 2006. Had the company continued to follow the same method of depreciation as was in earlier year, the charge of depreciation upto 31st March, 2010 would have been higher by Rs.120.78 Lacs and consequently, consolidated profit for the year would have been lower by the same amount. The effect of change of depreciation method is given in respective years.

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11) Differed Tax Assets & Liabilities: As per accounting standard-22 on “Accounting for taxes on Income” issued by the Institute of Chartered Accountants of India, Deferred Tax Assets arising are as follows:- (Rs. in Lacs) Particulars 2009-10 2008-09 2007-08 2006-07 Op. Bal. of Deferred Tax Liability 1100.45 971.39 902.92 1079.29 Add: Deferred Tax Liability/(Assets) accrued during the 312.14 3686.98 2080.61 662.18 year Due to Timing difference of Depreciation Add: Pre Operative Exp. 2.72 ------Less: Provision of Tax on Short Provision of Gratuity (4.61) (0.60) (8.34) --- Less: Effect of Preliminary Expenses (0.06) (0.04) (0.07) (0.08) Less: Effect of Carried forward of Losses Nil (3540.98) (1987.43) (838.47) Less: Deferred Tax Assets generated on QIP. Share Nil (16.30) (16.30) --- Expense Cl. Bal. of Deferred Tax Liability 1410.64 1100.45 971.39 902.92

12) Contingent Liabilities: Disclosure for Contingent Liabilities are given in Annexure E.

13) Disclosure of transactions with Related Parties as defined in Accounting Standard 18 “Related Party Disclosure” is given in Annexure G.

14) As per the Accounting Standard-27 ‘Financial Reporting of Interest in Joint Venture’ issued by the Institute of Chartered Accountants of India, Joint Ventures entered into by the Company as on 31st March, 2010 are as follows:

Sr Name of Description of % of No. Joint Venture Interest Involvement 1 Sadbhav-Prakash (Malvan Project) Jointly controlled operation 50% 2 HCC-SEL (Gulbarga Project) Jointly controlled operation 35% 3 Jilin-Sadbhav (Radhanpur Project) Jointly controlled operation 48% 4 JMC-Sadbhav (Agra By Pass Project) Jointly controlled operation 49.50% 5 SEL-GKC (Vishakapatnam Project) Jointly Controlled Operation 50% 6 SEL-GKC (Gouravelly Project) Jointly Controlled Operation 52% 7 SEL-GKC (Karimnagar Package III) Jointly Controlled Operation 52% 8 SEL-PBA (Nagpur Airport project) Jointly Controlled Operation 50%

15) There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further, the management has informed us that during the review of assets of the company, those assets, which were found to be having NIL market value, have been written off in the accounts.

16) In the case of Subsidiary Company Ahmedabad Ring Road Infrastructure Ltd. depreciation on some of the assets is provided on Written Down Value basis as against Straight Line Method used by Holding Company. The total amount of assets and percentage of cost of said assets to total assets of consolidated statement are as follows; (Rs. in Lacs) 2009-10 2008-09 2007-08 2006-07 Amount of assets on which Depreciation is calculated on WDV basis (Other than 844.04 52.97 63.79 47.82 vehicles) % of Total Consolidated Assets 0.78% 0.07% 0.13% 0.11%

17) Payment to Auditors (Rs. in Lacs) 2009-10 2008-09 2007-08 2006-07 Audit Fees 12.41 8.91 8.87 5.84 Tax Audit Fees 2.20 1.78 2.53 1.42 Certification fees 2.58 2.43 1.66 1.00 169

Reimbursement of Expenses 0.18 0.17 0.11 0.24 TOTAL 17.37 13.29 13.17 8.51

18) The company and its subsidiaries have entered into various forward / derivative contracts for hedging interest and currency related risks. The net receipts / payments are credited / charged to the profit and loss account.

19) Derivative Instruments The subsidiary Nagpur Seoni Express Way Ltd. uses Currency swap and interest rate swap to hedge the interest and currency related risks on its capital account. Such transactions are governed by the strategy approved by the board of directors which provide principles on the use of these instruments, consistent with the Company’s Risk Management Policy. The company does not use these contracts for speculative purposes. Out standing Currency Swap and Interest Swap to hedge against foreign currency exchange rates and fluctuations in interest rate changes are: (Rs. in Lacs) As on As On As on 31/03/2010 31/03/2009 31/03/2008 No. of Contracts 1 1 Currency Swap – Disbursement - Equivalent INR Nil 21098.69 33008.69 - Equivalent USD Nil 514.60 805.09 Currency Swap – Repayment - Equivalent INR 18810.05 21179.42 - Equivalent USD 418.24 418.24 Interest Swap - Equivalent INR 21952.30 24123.31 24956.66 - Equivalent USD 488.10 476.37 Forward Contract to Sell USD Equivalent INR 7591.15 3392.67 1287.77 Equivalent USD 160.03 65.01 32.11

20) We confirm that there are no other material notes to our report which has a bearing on the financial status of the Company.

For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Reg. No. 113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671

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ANNEXURE E:- DETAILS OF CONTINGENT LIABILITIES (CONSOLIDATED)

(Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Bank guarantee Outstanding 85,427.56 45,012.06 38,350.94 41,793.20 Liability on Contracts remaining to be executed on capital Accounts ( Net of Advances) 1,26,254.14 26,713.69 46,165.05 14,936.80 Corporate guarantees 17,606.56 4,506.56 4,506.56 - Civil Suit against the Company 46.42 46.42 - - Bills Discounting - - - 299.26 Sales Tax & Entry Tax 5.30 146.36 5.30 5.30 Custom Duty 104.95 104.95 170.50 170.50 Income Tax Matters 887.02 56.03 46.18 - Wealth Tax - - - 0.45 Service Tax 67.29 67.29 67.29 - Total 2,30,399.24 76,653.36 89,311.82 57,205.51

ANNEXURE F:- STATEMENT OF DIVIDEND DECLARED (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Equity Dividend Equity Share Capital 1250 1250.00 1250.00 1090.00 Rate of Dividend 40% 40% 40% 35% Amount of Dividend 500 500.00 500.00 437.50 Tax on Dividend 83.04 84.98 84.98 74.35

171

ANNEXURE G :- RELATED PARTY TRANSACTIONS (CONSOLIDATED)

A. KEY MANAGERIAL PERSONNEL (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Salary Paid 235.77 89.05 65.10 25.80 Interest Paid - - 7.86 10.23 Deposit Received during the Year - 2.00 788.01 535.11 Deposit Paid during the Year - 14.10 897.31 618.58 Cl. Bal. of Deposits - 0.01 12.10 113.54 Dividend Paid 135.18 130.70 120.70 68.99

B. RELATIVES OF KEY MANAGERIAL PERSONNEL (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Exp. 1,952.80 8,093.19 8,992.28 3,675.04 Interest Paid - - - 15.50 Rent & Service Charges Paid 6.99 6.75 7.75 9.15 Fixed Assets Purchased/ (Sold) (84.40) Balance payable at the year end 35.52 349.57 3.00 23.21 Mobilization Adv. Given - - 170.25 2,412.81 Mobilization Balanace at the end - - 954.73 2,412.81 Deposit Received during the Year 840.02 5.64 575.85 497.23 Deposit Paid during the Year 800.00 22.59 800.68 739.30 Cl. Bal. of Deposits 42.83 5.64 22.59 247.42 Dividend Paid 75.00 79.48 63.31 36.72

C. ASSOCIATES (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 SubContracting Income 6857.12 - - - Interest Received - 71.30 29.70 - Balance Receivable at Year End 1971.07 Sub Contracting Expenditure 3532.75 5,017.78 2,124.53 - Interest Paid 35.4 8.51 - 5.70 Purchases made - 43.35 - Other Expenses 52.00 25.00 7.80 - Balance payable at the Year End 50.07 37.64 463.97 - Loan Received During the Year 925.67 428.82 - - Loan Received outstanding at the end 1354.49 428.82 - - Deposit Received during the Year 2991.51 267.01 - 6.50 Deposit Paid during the Year 690.64 691.59 5.12 76.98 Cl. Bal. of Deposits 2300.87 21.09 134.82 5.12 Dividend Paid 26.99 26.99 23.62 13.50

D. JOINT VENTURES (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Income 6303.01 6,955.69 17,553.27 18,458.79 172

Balance receivable at the year end 1266.53 1,356.10 1,803.12 800.39 Deposit Received 4.87 3,043.25 2,094.67 1,142.65 Deposit Paid 562.56 1,793.33 3,487.95 3,579.17 Cl. Bal. of Deposits 618.45 1,176.13 (73.79) 1,394.27

DETAILS OF RELATED PARTY TRANSACTIONS FOR EACH RELATED PARTY

1. VISHNUBHAI M. PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Salary Paid 97.5 30.00 21.25 9.00 Interest Paid - - 7.86 5.44 Deposit Received during the Year - 2.00 787.09 510.61 Deposit Paid during the Year - 14.10 888.48 495.63 Cl. Bal. of Deposits - - 12.10 105.63 Dividend Paid 96.14 79.66 69.71 39.83

2. GIRISH N. PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Salary Paid 25.5 12.00 8.25 3.00 Interest Paid - - - 0.36 Deposit Received during the Year - - - - Deposit Paid during the Year - - 4.33 0.16 Cl. Bal. of Deposits - 0.01 - 4.33 Dividend Paid 19.8 19.80 17.32 9.90

3. NITIN R. PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Salary Paid 25.5 12.00 8.25 3.00 Dividend Paid 0.04 0.04 0.07 0.06

4. SHASHINBHAI V. PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Salary Paid 48.00 12.00 8.25 3.00 Interest Paid - - - 1.66 Deposit Received during the Year - - 0.72 10.10 Deposit Paid during the Year - - 2.01 54.37 Cl. Bal. of Deposits - - - 1.29 Dividend Paid 19.20 16.80 9.60

5. RAJESHREEBEN PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Salary Paid 5.77 2.42 2.60 1.80 Interest Paid - - - 1.48

173

Deposit Received during the Year - - - 4.60 Deposit Paid during the Year - - 1.33 40.80 Cl. Bal. of Deposits - - - 1.33

6. VIKRAM R. PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Salary Paid 16.75 10.88 8.25 3.00 Interest Paid - - - 1.01 Deposit Received during the Year - - - 6.00 Deposit Paid during the Year - - 0.91 17.21 Cl. Bal. of Deposits - - - 0.91 Dividend Paid - 12.00 10.50 6.00

7. VASISTHA C. PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Salary Paid 16.75 9.75 8.25 3.00 Interest Paid - - - 0.28 Deposit Received during the Year - - 0.20 3.80 Deposit Paid during the Year - - 0.25 10.41 Cl. Bal. of Deposits - - - 0.05 Dividend Paid - 7.20 6.30 3.60

8. SHANTABEN V. PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Paid - - - 1.62 Rent & Service Charges Paid 3.36 2.40 2.90 3.60 Deposit Received during the Year - - - 52.00 Deposit Paid during the Year - - 9.46 69.66 Cl. Bal. of Deposits - - - 9.46 Dividend Paid 54.00 54.00 47.25 27.00

9. MAMTABEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Paid - - - 1.51 Rent & Service Charges Paid - - 0.50 1.20 Deposit Received during the Year - - - 47.25 Deposit Paid during the Year - - 1.35 73.41 Cl. Bal. of Deposits - - - 1.35

10. BHAVNABEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Paid - - - 1.45 Deposit Received during the Year - - - 25.00 174

Deposit Paid during the Year - - 1.30 84.28 Cl. Bal. of Deposits - - - 1.30

11. ALPABEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Paid - - - 0.37 Deposit Received during the Year - - - 3.60 Deposit Paid during the Year - - 0.33 16.98 Cl. Bal. of Deposits - - - 0.33 Dividend Paid - - 0.07 0.58

12. TRUPTIBEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Paid - - - 6.38 Deposit Received during the Year - - - 23.00 Deposit Paid during the Year - - 5.67 147.75 Cl. Bal. of Deposits - - - 5.67

13. REKHABEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Paid - - - 1.92 Deposit Received during the Year - - - 32.30 Deposit Paid during the Year - - 1.72 64.07 Cl. Bal. of Deposits - - - 1.72

14. VINUBHAI PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Rent & Service Charges Paid - 0.72 0.72 0.72 Balance payable at the year end - - - -

15. MINOR TOSHA PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Dividend Paid 1.8 1.80 1.58 0.90

16. V. M. PATEL – HUF - Enterprise over which Key Management Personnel have significant influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Paid - - - 2.25 Rent & Service Charges Paid 3.63 3.63 3.63 3.63 Deposit Received during the Year - - - 87.40 Deposit Paid during the Year - - 2.02 154.08 Cl. Bal. of Deposits - - - 2.02 175

Dividend Paid - 16.48 14.41 8.24

17. SARJAN INFRACON PVT. LTD. - Enterprise over which Key Management Personnel have significant influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Exp. 1737.77 135.23 - - Balance payable at the year end 8.59 20.00 - - Deposit Received during the Year 35.16 5.64 - - Deposit Paid during the Year - - - - Cl. Bal. of Deposits 37.98 5.64 - -

18. MONTECARLO PROJECTS PVT. LTD. - Enterprise over which Key Management Personnel have significant influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Deposit Received during the Year 800 - 50.00 - Deposit Paid during the Year 800 - 50.00 - Cl. Bal. of Deposits - - - -

19. VEER TRANS - Enterprise over which Key Management Personnel have significant influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Exp. 215.03 - 194.53 276.19 Balance payable at the year end 51.83 2.63 17.27 Deposit Received during the Year 4.86 - 5.08 10.92 Deposit Paid during the Year - 22.59 - - Cl. Bal. of Deposits 4.86 22.59 17.51

20. BHAVNA ENGINEERING CO. - Enterprise over which Key Management Personnel have significant influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Exp. - 3.03 - 131.15 Balance payable at the year end - - - (1.14) Deposit Received during the Year - - - - Deposit Paid during the Year - - - 128.54 Cl. Bal. of Deposits - - - -

21. MONTECARLO CONSTRUCTION LTD. - Enterprise over which Key Management Personnel have significant influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Exp. - 7,954.93 8,797.75 3,267.70 Balance payable at the year end - 329.57 0.37 7.08 Mobilization Adv. Given - - 170.25 2,412.81 Mobilization Bal. at the Year end - - 954.73 2,412.81 Deposit Received during the Year - - 520.77 215.76

176

Deposit Paid during the Year - - 728.83 0.53 Cl. Bal. of Deposits - - - 208.06

22. SADBHAV PUBLIC CHARITABLE TRUST - Associate (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Other Expenses 52.00 25.00 7.80 -

23. SADBHAV FINSTOCK PVT. LTD. - Associate (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Dividend Paid 13.68 13.68 11.97 6.84 Interest Paid 1.9 0 0 0

24. SADBHAV QUARRY WORKS PVT. LTD. - Associate (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Paid 15.31 8.51 - - Purchases made - - 43.35 - Balance payable at the Year End - - 1.82 - Deposit Received during the Year 447.06 267.01 - - Deposit Paid during the Year 447.06 277.34 - - Cl. Bal. of Deposits - - - -

25. SANTOKBA TRUST - Associate (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Paid - - - 5.70 Deposit Received during the Year - - - 6.50 Deposit Paid during the Year - - 5.12 76.98 Cl. Bal. of Deposits - - - 5.12 Dividend Paid 13.31 13.31 11.65 6.66

26. PBA INFRASTRUCTURE LTD. - Associate (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Interest Received - 71.30 29.70 - Sub Contracting Expenditure - 5,017.78 2,124.53 - Balance payable at the Year End - 37.64 462.15 - Loan Received During the Year - 428.82 - - Loan Received outstanding at the year end - 428.82 - - Deposit Paid during the Year - 414.25 - - Cl. Bal. of Deposits - 21.09 134.82 -

27. JMC – SADBHAV J.V. - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Income - 437.34 145.88 - 177

Balance receivable at the year end 5.25 5.25 144.23 -

28. HCC – SEL J.V. Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Income - - (307.46) 162.06 Balance receivable at the year end - - - 606.01 Deposit Received 4.87 19.32 1.00 - Deposit Paid - - - - Cl. Bal. of Deposits 49.59 (54.47) (73.79) -

29. PBA – SADBHAV J.V. (NAGPUR) - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Income 1348.93 1,756.32 3,269.53 1,480.88

30. SADBHAV - PRAKASH J.V. (MALVAN) -Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Income 343.66 144.78 1,591.46 1,543.70 Balance receivable at the year end - 11.62 222.81 (623.92) Deposit Received - 1,328.47 1,862.57 438.41 Deposit Paid - 1,328.47 2,090.04 303.54 Cl. Bal. of Deposits - - (0.00) 227.46

31. JILIN – SADBHAV J.V. -Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Income 383.5 2,161.79 12,853.86 15,272.15 Balance receivable at the year end 189.83 342.57 1,436.08 818.30 Deposit Received - - 231.10 704.24 Deposit Paid - - 1,397.91 3,275.63 Cl. Bal. of Deposits - - - 1,166.82

32. SEL – GKC J.V. (VISHAKHAPATNAM) - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Income 2665.15 274.09 - - Balance receivable at the year end 806.20 74.25 - - Deposit Received - 827.68 - - Deposit Paid 301.16 30.97 - - Cl. Bal. of Deposits 495.55 796.71 - -

33. SEL – GKC J.V. (KARIMNAGAR) - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contract Income 1561.78 2,181.37 - - Balance receivable at the year end 265.25 922.41 - - 178

Deposit Received - 867.78 - - Deposit Paid 261.4 433.89 - - Cl. Bal. of Deposits 172.49 433.89 - -

ANNEXURE H :- DETAILS OF OTHER INCOME (CONSOLIDATED)

(Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Related or Nature of not related Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Income to business activity Other Income Interest on Others 1517.95 738.02 171.55 12.39 Recurring Related Dividend Income 66.56 71.62 44.52 1.68 Recurring Related Rent Receipts 6.00 10.43 7.21 - Recurring Not Related Miscellaneous 68.39 339.19 99.14 113.53 Recurring Related receipts Profit of sale of Non- 326.48 100.33 95.41 - Related fixed assets Recurring Total ( Gross 1,985.38 1,259.59 417.83 127.60 other income) Net Profit before 7070.58 5,960.35 7,887.24 3,617.16 tax as restated % of Other 28.08% 21.13% 5.30% 3.53% Income

Notes: 1. The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd and its subsidiaries.

2. The classification of other income as recurring / non recurring and related / not related to business activity is based on the current operations and business activity of the company as determined by the management.

ANNEXURE I :- SUMMARY OF ACCOUNTING RATIOS (CONSOLIDATED) (Rs. in Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007

Restated Net Profit After Tax and Minority Interest 3,484.25 4,444.79 5,372.22 2,484.54 Add :- Interest that would have been saved on - - 42.56 - exercise of Warrant (Net of Tax) Net Profit After Tax for Diluted EPS 3,484.25 4,444.79 5,414.78 2,484.54

Net Worth 36,019.07 35,231.58 31,329.69 17,167.01

Earnings per Share Basic - Rs. 27.87 35.56 44.55 22.79 Diluted _ Rs. 27.87 35.56 44.54 22.79

Net Asset Value per Share - ( Rs) 288.15 281.85 259.81 157.50

Return on Net Worth ( %) 9.67% 12.62% 17.15% 14.47%

179

Weighted Average number of Equity shares 12500000 12500000 12058470 10900000 outstanding during the year Weighted Average number of Diluted Equity 12500000 12500000 12158470 10900000 shares outstanding during the year

NOTES :- 1. The above ratios are calculated as under ;

Net Profit after Tax after Extraordinary Items Basic Earning Per Share (Rs.) = ------Weighted Average number of Equity Shares outstanding during the year

Net Profit after Tax after Extraordinary Items Diluted Earning Per Share (Rs.) = ------Weighted Average number of Diluted Equity Shares outstanding during the year

Net Worth excluding Revaluation Reserve Net Asset Value Per Share (Rs.) = ------Weighted Average Number of Equity Shares outstanding during the year

Net Profit after Tax before Extraordinary Items Return on Net Worth (%) = ------Net Worth excluding Revaluation Reserve

Net Worth = Equity Share Capital + Reserves & Surplus (Excluding revaluation reserve) – Miscellaneous Expenditure + Preference Share Capital

2. The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd. and its subsidiaries.

3. Earning per Share (EPS) calculations are done in accordance with the Accounting Standard 20 “Earnings per Share” issued by The Institute of Chartered Accountants of India.

ANNEXURE J :- STATEMENT OF SECURED LOANS (CONSOLIDATED)

(Rs. in Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 11.95% Redeemable Non Convertible Debentures 3,000.00 3,000.00 - - Term Loan from Banks 95072.27 63,421.86 36,536.33 5,205.39 Term Loans from Financial Institutions 9648.39 8,756.83 4,061.43 477.91 Machinery and Vehicle loan from Banks 6532.62 1,885.94 2,361.47 2,180.56 Machinery and Vehicle loan from Financial 3370.18 4,123.76 3,709.28 1,980.82 Institutions Short Term Demand Loan 6750.00 4,180.00 6,720.17 1,500.00 Cash Credit facility 4715.23 7,921.52 2,228.52 1,497.31 Interest Accrued on Short Term Loans 35.75 - - - Total 1,29,124.44 93,289.91 55,617.20 12,841.99

Note: 1. The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd. and its subsidiaries.

2. The details of security charged on above loans are given in Notes to Accounts no. B-5 of “Annexure – D:- Significant Accounting Policies and Notes to Accounts (Consolidated)”. 180

3. There has been no Reschedulement, Pre-closure, Penalty, Defaults, Etc. on any of the above loans.

4. DETAILS OF FINANCING FACILITIES FROM BANKS AND FINANCIAL INSTITUTIONS OUTSTANDING AS ON 31ST MARCH, 2010.

LIFE INSURANCE CORPORATION OF INDIA (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a 11.95% Non Convertible At the end of 1 3,000.00 3,000.00 payable Debentures 5 Year, i.e. 23.03.2014 quarterly

IDBI BANK LTD. (Rs. in Lacs)

Nature of Sanctioned Interest Sr. No Outstanding Repayment Terms borrowing/debt Amount Amount Rate p.a PLR 1 Cash Credit 1500.00 On Demand 1002.61 Less:-1.50% 2 Long Term Loan 3000.00 3000.00 11.25% 5 Years

STANDARD CHARTERED BANK (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a 1 Cash Credit 3,000.00 852.91 10.50% On Demand

PUNJAB NATIONAL BANK (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a 1 Cash Credit 1,500.00 825.59 PLR On Demand

INDIAN OVERSEAS BANK (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a PLR 1 Cash Credit 3,000.00 1,863.93 Less:- On Demand 0.75%

OREINTAL BANK OF COMMERCE (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a PLR 1 Cash Credit 4,000.00 123.56 On Demand Less:-0.50% 2 Short Term Loan 3,200.00 3,200.00 7.25% 90 Days

KARUR VYSYA BANK (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a

181

PLR 1 Cash Credit 2,000.00 46.64 On Demand Less:-3% 2 Short Term Loan 1,800.00 1,800.00 8.25% 90 Days

YES BANK (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a 1 Short Term Loan 1,750.00 1,750.00 7.40% 90 Days

NAGPUR SEONI EXPRESSWAY LTD. FROM ICICI BANK – SINGAPORE & HONGKONG BRANCHES (Rs. in Lacs) Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a Payable in 15 half LIBOR yearly installments + 1.35% upto starting from the end of 7 Years and 1 Term Loan 38,212.00 17,113.31 the 36th month from the thereafter date of first LIBOR disbursement +1.90%

COMMON RUPEE TERM LOAN BY AURANGABAD JALNA TOLL WAY LTD. (Rs. in Lacs)

Sr. Sanctioned Outstanding Interest Repayment Name of the Institution No Amount Amount Rate p.a Terms 1 IDBI Bank 5400.00 5060.42 37 Quarterly IDBI PLR 2 India Infrastructure Finance Co. Ltd 5000.00 4685.56 Installments Less- starting from 3 Oriental Bank of Commerce 4500.00 4217.01 165bps 4 Canara Bank 4500.00 4217.01 October 1, 2011 TOTAL 19400.00 18180.00

TERM LOAN BY MAHARASHTRA BORDER CHECK POST NETWORK LTD. (Rs. in Lacs)

Interest Rate Repayment Terms Sr Sanctioned Outstanding Bank's Name p.a No. Amount Amounts

1 Bank of India 18,000.00 4,133.00 BPLR - 0.75% 50 structured quaterly 2 ICICI Bank 10,000.00 2,296.00 BPLR - 2.50% installments starting 3 Indian Bank 9,600.00 2,204.00 BPLR + 0.50% from the end of 15th 4 Indian Overseas Bank 9,600.00 2,204.00 BPLR - 0.75% quarter from the date of first 5 Oriental Bank of Commerce 14,610.00 3,355.00 BPLR - 0.75% drawdown 6 Punjab National Bank 24,700.00 5,671.00 BPLR + 0.50% 7 Union Bank of India 18,000.00 4,133.00 BPLR - 0.50% 8 Vijaya Bank 9,600.00 2,204.00 BPLR - 1.25% Total 1,14,110.00 26,200.00

COMMON RUPEE TERM LOAN BY AHMEDABAD RING ROAD INFRASTRUCTURE LTD. (Rs. in Lacs) Sr. Sanctioned Outstanding Interest Repayment Name of the Institution No Amount Amount Rate p.a* Terms 1 Canara Bank 3000.00 2977.50 11% Fixed 50 Monthly

182

PLR intallments 2 Central Bank of India 5000.00 4962.50 Less -1% at starting from present 11% August 31, 2009 3 ICICI Bank Ltd. 3000.00 2977.50 at present 11% India Infrastructure Finance Co. 4 5000.00 4962.50 11% Fixed Ltd. PLR 5 Indian Overseas Bank 5000.00 4962.50 Less-2% at Present PLR 6 Oriental Bank of Commerce 7500.00 7443.75 Less-2% at Present 10% PLR 7 Punjab National Bank 5000.00 4962.50 Less-0.5% at Present at present 8 Syndicate Bank 5000.00 4962.50 10.75% 52 Monthly intallments ICICI Bank -Second Ranking at present 9 2000.00 2000.00 starting from Rupee Loan 11.5% August 31, 2011

* Interest rates are considered as per the latest rate revision by banks. However, these rates are subject to reset at the end of every 12 months from the date of first disbursement

DETAILS OF MACHINERY AND VEHICLE LOANS FROM BANKS AND FINANCIAL INSTITUTIONS

ABN AMRO BANK (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Tipper - 5 Nos. 261.00 166.20 11.75% 8.84 2 Tractor D6G 55.15 36.60 11.65% 1.87

KOTAK MAHINDRA BANK LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Quaterly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 JCB, Loader & Excavator 30.28 25.24 9.40% 2.52

TATA CAPITAL LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Scani tippers - 16 Nos. 828.02 828.02 9.00% 26.90

MAGMA FINCORP LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment Volvo Excavator - 3 Nos. & 1 1,196.97 737.88 12.66% 41.17 Tipper - 15 Nos. 2 Hydraulic Excavator 279.55 238.56 9.63% 7.16

183

RELIANCE CAPITAL LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Loader 54.07 18.25 8.60% 1.72 2 Hydraulic Excavator 106.56 35.83 8.51% 3.36 3 Tipper 224.96 76.07 9.00% 7.16 4 Dumper 28.00 10.14 9.00% 0.89 5 Caterpillar 57.00 20.83 8.50% 1.8 6 Tipper 110.48 38.44 9.00% 3.6

CITICORP FINANCE (I) LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Loader 22.00 1.65 9.00% 0.55 2 D. G. Sets 52.14 2.67 8.75% 1.31 3 Titan Sensor Paver - 4360 47.74 3.36 8.75% 1.21 4 Wet Mix Plant 85.71 16.99 8.75% 2.87 5 Tata Tipper (4 Nos.) 27.68 4.42 9.50% 0.91 6 Dumper 466.56 22.06 9.25% 15.26 7 Dumper (11 Nos.) 570.24 224.85 9.17% 17.37 8 Paver 91.69 31.34 7.54% 2.49

HDFC BANK LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Innova Car 6.00 1.30 9.88% 0.19 2 Innova Car 6.00 1.30 9.88% 0.19 3 Kerbing Paver 54.25 19.26 9.25% 1.55 4 Vogle Paver 108.70 40.27 7.48% 3.01 5 PC 200 38.76 15.58 9.05% 1.1 6 Paver D. G. Set 48.71 19.62 9.25% 1.39 7 D. G. Set 380 KVA 43.29 17.81 9.25% 1.24 8 Sensor Paver 133.65 53.87 9.25% 3.72 9 Sensor Paver 111.72 46.35 9.25% 3.08 10 Dumper 145.20 70.47 11.00% 4.27 Volvo Vibratory Compactor 11 41.75 20.18 10.50% 1.22 DD90-2 Nos 12 Sensor Paver 50.74 25.33 10.50% 1.48 Volvo Vibratory Compactor 13 44.08 22.58 11.50% 1.31 DD90-2 Nos 14 Tractor & Grader 162.06 90.03 13.18% 5.04 Caterpillar, Hyd. Excavator 15 264.73 235.94 9.41% 6.72 & Scania tipper 16 BMW Car Loan 104.48 98.40 7.59% 3.48 17 Komatsu Bull Dozer 140.10 122.47 9.80% 3.60 18 LPT 1613 15.69 13.72 9.80% 0.40 19 Scania PC 380 Tripper 153.39 139.42 8.65% 3.85 20 Motor Grader 3 75.43 65.94 9.80% 1.93 21 Scania PC 380 Tipper 511.30 445.95 8.90% 12.92 184

22 709 TATA 5.55 4.96 9.80% 0.14

STANDARD CHARTERED BANK (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Batching Plant 50.74 4.94 8.75% 1.65 2 Tata Dumper - 15 Nos. 117.88 3.92 11.25% 3.96 Volvo Tipper & Vibratory 3 90.50 22.94 9.50% 2.97 Compactor 4 Tipper 28.97 6.45 9.50% 0.95 5 PC 200 33.65 8.86 9.50% 1.1 6 Volvo Tipper - 4 Nos. 207.36 57.22 9.50% 6.81 7 Paver 48.20 19.61 10.35% 1.6 SCB ECB- Equipment As per Annexure 8 4,542.48 4,542.48 9.00% Financing below 9 VOVLO Tripper 93.80 67.40 10.75% 31.34

Note :- SCB ECB Equipment loan was for USD 96,97,866 which was converted to Indian currency at the rate applicable on the date of transaction, i.e. Rs. 46.84 per USD. The loan was taken at the interest rate of 3m USD Libor + 250bps payable in USD. The Company has taken a “Coupon Only Swap + Call spread on principal repayment " with Standard Chartered Bank under which Company will pay interest fixed @ 9% in INR to Standard Chartered Bank to hedge coupon exchange risks (both libor and usd-inr currency risk)completely and partially hedge Principal payment risk till usd-inr-52levels where as right to participate fully in INR appreciation. (Rs. in Lacs)

Annexure I - REPAYMENT SCHEDULE OF PRINCIPAL AMOUNT Date of Repayment Amounts Date of Repayment Amounts Date of Repayment Amounts 20/04/2010 227.12 20/07/2012 227.12 20/01/2014 227.12 20/10/2010 454.26 22/10/2012 227.12 21/04/2014 227.12 20/04/2011 227.12 21/01/2013 227.12 21/07/2014 227.12 20/10/2011 454.26 22/04/2013 227.12 20/10/2014 454.26 20/01/2012 227.12 22/07/2013 227.12 20/04/2012 227.12 21/10/2013 454.26 Grand Total 4542.48

SREI INFRASTRUCTURE FINANCE LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment Batching Plant D.G. Sets - 1 181.27 1.38 6.20% 4.35 3 Nos. 2 Ker Laying Machine 39.31 2.93 8.75% 0.99 3 Concrete Pump BP 350 16.91 1.39 8.75% 0.43 4 Loader 2021 22.00 2.25 8.75% 0.55 5 Hydraulic Excavator 67.29 9.90 8.75% 1.7 6 Dumper - 8 Nos. 64.80 6.49 10.75% 2.17 Volvo Hydraulic Excavator 7 468.18 162.94 9.25% 13.36 - 2 Nos. Hitachi Hydraulic 8 147.83 56.07 9.25% 4.22 Excavator

185

Volvo Hydraulic Excavator 9 113.83 29.03 9.25% 3.71 460 10 Crusher Plant 296.90 94.97 10.00% 9.82 Refinance on Old 11 1,000.00 433.47 10.75% 33.41 Machineries 12 SCANNIA L& T 258.00 258.00 8.80% 6.39

ANNEXURE K :- STATEMENT OF UNSECURED LOANS (CONSOLIDATED)

(Rs. in Lacs) As at As at As at As at Particulars 31-12-2010 31-12-2009 31-03-2008 31-03-2007 Loan from Others 1417.60 453.82 25.00 26.98 Loan from Directors - - 12.10 113.53 Deferred Payment Credit 45.32 84.23 5,111.11 19,166.67 Working Capital Loan From Banks 14000.84 - - - Working Capital Loan From Financial 955.15 - - - Institutuins Total 16,418.91 538.05 5,148.21 19,307.18

Note: 1. The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd. and its subsidiaries.

2. Deferred Payment Credit is Amount payable towards purchase of Electronic Tolling System by Ahmedabad Ring Road Infrastructure Ltd.

3. There are no specific terms and conditions in the case of “Loan from Others” and “Loan from Directors” and all the loans are repayable on demand.

4. DETAILS OF UNSECURED FINANCING FACILITIES FROM BANKS AND FINANCIAL INSTITUTIONS OUTSTANDING AS ON 31ST MARCH, 2010.

IDBI BANK LTD. (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a 1 Short Term Loan 8000.00 8000.00 7.00% 90 Days

PUNJAB NATIONAL BANK (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a 1 Short Term Loan 2,500.00 2,500.00 9.00% 90 Days 2 Short Term Loan 1,500.00 1,500.00 9.00% 90 Days

KARUR VYSYA BANK (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a 1 Bills Discounting 2,800.00 0.84 10.75% 30 Days

186

YES BANK (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a 1 Short Term Loan 2,000.00 2,000.00 8.10% 90 Days

SREI INFRASTRUCTURE FIN. LTD. (Rs. in Lacs)

Nature of Sanctioned Outstanding Interest Sr. No Repayment Terms borrowing/debt Amount Amount Rate p.a Rs. 138 Lacs 1 Short Term Loan 2,362.00 955.15 over the loan 282 Days period

ANNEXURE L :- STATEMENT OF CURRENT LIABILITIES AND PROVISIONS (CONSOLIDATED)

(Rs. in Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Current Liabilities Sundry Creditors 26447.72 5,619.77 9,968.47 5,835.82 Advance from Customers 12756.59 11,554.96 6,525.79 14,201.59 Deposits & Retention 5230.01 5,257.12 3,399.19 2,362.58 Unpaid Dividends 2.27 1.88 1.65 - Other Liabilities 1174.46 720.92 484.38 371.17 Intrest Accrued but not Due 25.97 470.30 49.50 - Book Overdrafts 116.46 116.94 555.65 268.56 Total Current Liabilities 45,753.48 23,741.89 20,984.63 23,039.72

Provisions Proposed Dividend 500 500.00 500.00 437.50 Dividend Tax on proposed dividend 83.04 84.98 84.98 74.35 Provision for taxes 42.7 4,193.13 4,218.01 2,082.55 Provision of Fringe Benefit Tax 2.58 29.51 22.58 14.75 Wealth Tax Provision 0.94 0.97 0.99 2.04 Retirement Benefits 39.73 26.18 32.90 - Total Provisions 668.99 4,834.77 4,859.46 2,611.19

Net Current Liabilities 46,422.47 28,576.66 25,844.09 25,650.91

Note: The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd. and its subsidiaries.

ANNEXURE M :- STATEMENT OF SUNDRY DEBTORS (CONSOLIDATED)

(Rs. in Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Outstanding for a period exceeding six months -- Considered good 2563.54 1,586.51 1,621.59 3,115.53 -- Considered Doubtful - - - -

187

Other Debts -- Considered good 41517.66 25,918.45 11,713.23 8,396.56 -- Considered Doubtful - - - Less : Provision - - - Total 44,081.20 27,504.96 13,334.82 11,512.09

Note: 1. The above includes debts due from related parties for which details are given in Annexure G.

2. The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd. and its subsidiaries.

3. Amounts due from Associates; (Rs. In Lacs) Particulars As at As at As at As at As at 31/03/2010 31/032009 31/3/2008 31/03/2007 31/03/2006 Dues from Associates ---- - Dhule Palasner Tollway Ltd. 1971.07 - - - -

ANNEXURE N :- STATEMENT OF OTHER CURRENT ASSETS (CONSOLIDATED)

(Rs. in Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Inventories Construction Materials, Stores, Spares & 4469.49 1,825.44 3,817.05 2,249.84 Others Work - in - Progress 1365.59 929.59 4,684.45 2,418.00 Total 5,835.08 2,755.03 8,501.50 4,667.84

Other Current assets

Intrest Accured on Fixed Deposits with banks 21.36 21.28 127.49 96.90

Excise Claim Receivable 269.13 47.06 1,487.43 1,816.79 AUDA Grant Receivable 642.4 642.40 1,095.73 3,374.00 Currency Swap Contracts - 881.80 - - Other Current Assets 3,708.24 - - - Total 4,641.13 1,592.54 2,710.65 5,287.69

Cash & Bank Balance Cash on hand 41.69 24.93 30.63 17.94 Balance with Bank in Current Accounts 4347.77 1,957.33 939.67 298.79 Balance in Fixed Deposit- Margin Money 99.53 27.85 97.09 1,116.59 Balance in Fixed Deposit- Others 579.13 1,231.39 982.98 1,468.57 Total 5,068.12 3,241.50 2,050.37 2,901.89

Note: The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd. and its subsidiaries.

ANNEXURE O :- STATEMENT OF LOANS AND ADVANCES (CONSOLIDATED)

(Rs. in Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Loan to Subsidiaries 4040.88 0.52 1,082.96 - 188

Loan to others 6983.17 6,646.50 - - Advances recoverable in cash or in kind or for value to be received -- Considered good 18580.45 6,661.78 7,327.76 3,945.55 -- Considered Doubtful - - - - Deposits & Retentions 6858.58 8,698.66 2,940.37 5,757.78 Advance tax 420.44 4,613.31 4,241.08 2,298.51 Advance Fringe Benefit tax 67.57 24.35 17.53 16.46 Less : Provision for doubtful advances - - - - Total 36,951.09 26,645.12 15,609.70 12,018.30

Note: 1. The above includes debts due from related parties for which details are given in Annexure G.

2. The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd. and its subsidiaries.

3. Loan to Others includes 31/03/2010 31/03/2009 Ocean Bright Corporation (Hongkong) 6983.17 6646.50

4. Amounts due from Subsidiaries & Associates, (Rs. In Lacs) As at As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Loan to Subsidiaries Maharashtra Border Checkpost Network Ltd. 64.88 0.52 - 64.88 0.52 - - -

Loan to Associates Dhule Palasner Tollway Ltd. 3,976.00 - - 3,976.00 - - - -

Advance Recoverable In Cash or Kind Bijapur Hungud Tollway Ltd. 1.14 1.14 - - - -

ANNEXURE P :- STATEMENT OF INVESTMENTS (CONSOLIDATED)

(Rs. in Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Traded Investments - Quoted Money Market Mutual Fund - 1,499.00 3,326.76 - Total - A - 1,499.00 3,326.76 -

Traded Investments - Unquoted Subsidiaries 596.62 3.34 4.99 197.53 Associates 1,710.95 1,040.00 1,040.00 1,040.00 Total - B 2,307.57 1,043.34 1,044.99 1,237.53

Other Investments - Unquoted 6,331.11 2.66 2,002.64 3.28 Total - C 6,331.11 2.66 2,002.64 3.28

189

Less : Provision for diminution in investments ( - - - - D) Net Investments ( A + B + C - D ) 8,638.68 2,545.00 6,374.39 1,240.81

Market value of Quoted Investments - 1,520.97 3,348.32 -

Note: The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd. and its Subsidiaries.

ANNEXURE Q :- STATEMENT OF CAPITALIZATION AS AT 31ST MARCH 2010 (CONSOLIDATED)

(Rs. in Lacs) Pre - Issue Particulars As per latest Audited Post-Issue* Statements Secured Debt as at 31.03.2010 Long Term Debt 117623.46 Short Term Debt 11500.98 Total Debt 129124.44

Shareholders' Fund Share Capital - Equity 1250.00 - Preference - Reserves 34804.59 Total Shoreholders' Fund 36054.59 Long term Debt/ Shareholders' Funds ( Ratio) 326.24%

*Share capital and Reserves & surplus post issue can be calculated only on the conclusion of the Issue Note: The figures disclosed above are based on the restated consolidated financial statements of Sadbhav Engineering Ltd. and its subsidiaries.

ANNEXURE R :- SEGMENTAL REPORTING

As per Accounting Standard-17, “Segment Reporting” issued by The Institute of Chartered Accountants of India, Company who is dealing in multiple products/service and operates in different geographical areas are required to report under this Accounting Standard, hence no disclosure is required as the company operates in a single primary business segment namely “Engineering, Construction & Infrastructure development” activities and at single geographical area namely India.

190

Auditor’s report for the financial statement

To, The Board of Directors Sadbhav Engineering Limited Sadbhav House Opp. Law Garden Police Chowki Ellisbridge, Ahmedabad

1. We have examined the annexed financial information of Sadbhav Engineering Limited (the Company) for the five financial years ended as on 31st March 2006, 2007, 2008, 2009 and 2010 being the last date to which the accounts of the Company have been made and audited by us. The financial statements for the year ended on that dates are approved by the Board of Directors of the Company for the purpose of disclosure in the Offer Document being issued by the Company in connection with the Rights Issue of Equity Shares in the Company (referred to as ‘the Issue’), which is in accordance with

(v) Paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 (“the Act”).

(vi) The Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations 2009 (‘the SEBI Regulations’) issued by the Securities and Exchange Board of India (“SEBI”) on August 26, 2009;

(vii) Our terms of reference with the Company letter dated 09th June, 2009 requesting us to carry out work in connection with the Offer Document as aforesaid.

2. Financial information as per audited financial statements:

(iv) We report that the restated assets and liabilities of the Company as at the end of each of the five financial year ended 31st March, 2006 to 2010 are set out in Annexure A to this report after making such adjustments/ restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies and Notes to Accounts as appearing in Annexure D to this report.

(v) We report that the restated profits of the Company for the each financial years ended 31st March, 2006 to 2010 are as set out in Annexure B to this report. These profits have been arrived at after charging all expenses including depreciation and after making such adjustments/restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies and Notes to Accounts as appearing in Annexure D to this report.

(vi) These statements are prepared from the Profit and Loss Account for the financial years ended 31st March, 2006, 2007, 2008 and 2009 and the Balance Sheet as at 31st March, 2006, 2007, 2008 and 2009 adopted by the members at the Annual General Meeting. The statement of Profit and Loss Account for the financial year ended 31st March, 2010 and the Balance Sheet as at 31st March, 2010 have been approved by the Board of Directors at its meeting held on 21st May, 2010 and are subject to approval of the members at the next Annual General Meeting.

3. Other Financial Information:

We have examined the following financial information relating to the Company proposed to be included in the Offer Document and annexed to this report.

Annexure Particulars

191

Annexure A Summary of Restated Assets & Liabilities Annexure B Summary of Restated Profit & Loss Account Annexure C : Cash Flow Statement Annexure D Significant Accounting Policies and Notes to Accounts Annexure E Statement of Contingent Liabilities Annexure F Statement of Dividend Declared Annexure G Details of Related Party Transactions Annexure H Details of Other Income Annexure I Summary of Accounting Ratios Annexure J Statement of Secured Loans Annexure K Statement of Unsecured Loans Annexure L Schedule for current Liabilities & Provisions Annexure M Statement of Debtors Annexure N Details of other Current Assets Annexure O Details of Loans & Advances Annexure P Details of Investments Annexure Q Capitalization Statement Annexure R Statement of Tax Shelters Annexure S Segmental Reporting Summary of Restated Assets & Liabilities, Profit & Loss Account, Annexure T Cash Flow Statement, Accounting Policies and Notes to Accounts of Ahmedabad Ring Road Infrastructure Ltd. Summary of Restated Assets & Liabilities, Profit & Loss Account, Annexure U Cash Flow Statement, Accounting Policies and Notes to Accounts of Aurangabad Jalna Toll Way Ltd. Summary of Restated Assets & Liabilities, Cash Flow Statement, Annexure V Accounting Policies and Notes to Accounts of Nagpur Seoni Express Way Ltd. Summary of Restated Assets & Liabilities, Profit & Loss Account, Annexure W Cash Flow Statement, Accounting Policies and Notes to Accounts of Sadbhav Infrastructure Project Ltd. Summary of Restated Assets & Liabilities, Profit & Loss Account, Annexure X Cash Flow Statement, Accounting Policies and Notes to Accounts of Maharashtra Border Check Post Network Ltd.

4. This report is being provided solely for the use of Sadbhav Engineering Limited, for the purpose of inclusion in the offer document of the company.

For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Registration No.113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671

192

ANNEXURE A :- SUMMARY OF RESTATED ASSETS AND LIABILITIES (Rs. in Lacs) As at As at As at As at As at Particulars 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 A. Fixed Assets Gross Block 33220.98 26064.84 24139.69 20204.68 17992.51 Less :- Accumulated Depreciation 12211.87 10610.30 9837.63 9009.94 7608.23 Net Block 21009.11 15454.54 14302.06 11194.74 10384.28

B. Investments 14412.87 12460.27 12046.13 4606.58 1043.93

E. Deferred Tax Liability 1407.98 1100.45 971.39 933.60 1079.29

F. NET WORTH (A+B+C-D-E) 39151.30 34358.36 28414.24 14361.69 12228.28

Net Worth Represented By : G. Equity Share Capital 1250.00 1250.00 1250.00 1090.00 1090.00

H. Warrant Application Money ------345.00 ------

Note :- The above statement should be read with the Notes to Restated Financial Statements appearing in Annexure D.

For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Registration No.113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671

193

ANNEXURE B :- SUMMARY OF RESTATED PROFIT AND LOSS ACCOUNT (Rs. in Lacs) As at As at As at As at As at Particulars 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 I. INCOME Operating Income 125692.62 106248.06 89482.85 48322.38 28363.71 Increase / (Decrease) in Work in 0.00 (226.58) (6.79) 354.02 596.46 Progress Exceptional Income ------596.82 ------Other Income 1664.97 1169.13 388.72 141.89 67.45 Total – A 127357.59 107190.61 90461.60 48818.29 29027.62

II. EXPENDITURE

Material Expenditure 27409.72 23389.38 14053.59 6445.31 21066.47 Construction Expenses 84146.72 62561.45 52419.64 25960.31 16735.85 Administration & Other Exp 4745.19 3559.85 2497.25 1639.43 1437.95 Employee Remuneration and 1884.17 1573.47 1447.90 1032.18 754.50 Benefits Finance Charges 3308.62 2138.55 1573.07 694.67 905.77 Depreciation 2325.21 1568.08 1388.61 1490.63 1386.73 Amortization of Miscellaneous 84.89 86.06 86.06 86.06 86.06 Exps. Total – B 117561.27 98897.18 82801.91 44956.37 27752.17

III. PROFIT BEFORE 9796.32 8293.43 7659.69 3861.92 1275.45 TAXATION (A-B) Less :- Provision for Current Tax 2970.01 1780.82 2300.97 1279.25 108.44 Deferred Tax 307.53 129.06 45.47 (84.75) 3.72 `Fringe Benefit Tax 0.00 14.10 13.13 8.00 6.75

IV. Profit After Taxation 6518.78 6369.45 5300.12 2659.42 1156.54 Excess / (Short) provision of (1134.55) (40.01) (63.22) (81.78) 228.44 Taxation for Earlier Years Excess / (Short) provision of ------Depreciation for Earlier Years Excess / (Short) provision of ------60.95 --- Defered Tax for Earlier Years Net Profit After Tax but befor 5384.23 6329.44 5236.90 2638.59 1384.98 Extra Ordinary Items Extra Ordinary Items ------Net Profit for the Year after Extra Ordinary Items as per 5384.23 6329.44 5236.90 2638.59 1384.98 audited statement of accounts (C) Adjustment on account of ------changes in accounting policies Impact on account of prior period (141.10) 172.10 37.18 (120.27) 64.80 items Total Adjustments (141.10) 172.10 37.18 (120.27) 64.80 Tax Impact on adjustments (47.96) 58.50 12.64 (40.88) 22.03 Total adjustments net of tax (93.14) 113.60 24.54 (79.39) 42.77 impact (D)

V. Adjusted Profit / (Loss) 5291.09 6443.04 5261.44 2559.20 1427.75 (C + D) 194

Surplus / (Deficit) Brought 13798.10 8604.84 4478.38 2731.03 1651.84 forward from Previous Year VI. Profit Available for 19089.19 15047.88 9739.82 5290.23 3079.60 Appropriation Debenture Redemption Reserve 600.00 14.80 ------Transfer to General Reserve 650.00 650.00 550.00 300.00 100.00 Proposed Equity Dividend 500.00 500.00 500.00 437.50 218.00 Tax on Proposed Dividend 83.04 84.98 84.98 74.35 30.57 VII. Adjusted Available 17256.15 13798.10 8604.84 4478.38 2731.03 Surplus carried forward

* Balance of Profit brought forward from Previous Year have been adjusted for giving effect of Prior Period Items

Note :- The above statement should be read with the Notes to Restated Financial Statements appearing in Annexure D.

For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Registration No.113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671

195

ANNEXURE C :- CASH FLOW STATEMENT PREPARED FROM RESTATED FINANCIAL STATEMENTS

(Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 A. CASH FLOW FROM

OPERATING ACTIVITIES Net Profit before taxation and 9655.22 8465.53 7696.87 3741.65 1340.25 extraordinary items : Adjustments for : Depreciation 2325.21 1568.08 1388.61 1490.63 1386.73 (Profit) / Loss on sale of fixed (181.94) 54.96 (8.55) 14.08 (30.23) assets (Net) Fixed assets written off 0.00 0.00 0.00 0.00 0.00 Finance charges 2383.63 1279.00 1208.24 544.44 819.51 Preliminary Expenses 84.89 86.06 86.06 86.06 86.06 Cash generated from operations before Working 14267.01 11453.63 10371.23 5876.86 3602.32 Capital Changes

Changes in Trade and Other (19132.78) (5137.86) (5512.87) (6082.98) (4066.65) Receivables Loans & Advances (9533.64) (4987.57) (907.28) (4253.78) (3360.95) Changes in Trade Payables 26964.52 5313.40 (4570.47) 7856.64 9816.60 Cash generated from/ ( used in 12565.11 6641.60 (619.39) 3396.74 5991.32 ) operations

Income Tax, Wealth Tax & FBT (3933.23) (2345.03) (2206.26) (620.26) (464.08) paid Net Cash Flow from / ( used in ) 8631.88 4296.57 (2825.65) 2776.48 5527.24 Operating Activities

B. CASH FLOW FROM / (USED

IN) INVESTING ACTIVITIES Purchase of Fixed Assets (8401.18) (4223.76) (4728.50) (2388.46) (4176.82) Sale of Fixed Assets 703.35 1448.24 218.87 73.28 194.89 Invst. in Subsidiary Companies (2805.50) (2520.22) (3834.55) (3563.94) (1040.00) (net) Investments in Associate (646.10) 0.00 0.00 0.00 0.00 Company Investments against QIP 1499.00 2106.00 (3605.00) 0.00 0.00 Proceeds (net) Other Investment (net) 0.00 0.08 0.00 1.29 0.00 Investment in Fixed Deposits (71.68) 69.24 1019.50 371.36 (912.67) against Margin Loan to Subsidiary Companies (13507.41) 1300.84 (2023.60) 0.00 0.00 Loans to Others (336.67) (6646.50) 0.00 0.00 0.00 Interest Received 898.19 862.31 375.27 166.03 101.57

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Net Cash from / (used in ) (22668.00) (7603.77) (12578.01) (5340.44) (5833.03) Investing Activities C. CASH FLOW FROM / ( USED

IN ) FINANCING ACTIVITIES Proceeds from issue of 0.00 0.00 9545.00 0.00 5365.00 Shares/Share Application Money Proceeds / (Repayment) from / of 14382.81 3140.73 5822.97 2092.79 -3131.05 Short Term borrowings (net) Proceeds / (Repayment) from / of 6893.10 2938.95 1909.37 -12.96 1542.87 Long Term borrowings (net)

QIP Shares Expenses 0.00 0.00 -239.83 0.00 0.00

Finance Charges Paid (3246.07) -2141.31 -1583.51 -710.47 -921.08

Preliminary Expenses 0.00 0.00 0.00 0.00 -424.46

Dividend Paid ( including dividend (584.98) -584.98 -511.85 -248.57 -44.98 distribution tax) Net Cash from / (used in) 17444.86 3353.39 14942.15 1120.79 2386.30 Financing Activities Net increase / (decrease) in 3408.74 46.19 (461.51) (1443.17) 2080.51 Cash and Cash Equivalents Cash and Cash Equivalents at 975.20 929.01 1390.52 2833.68 753.17 the beginning of the year Cash and Cash Equivalents at 4383.94 975.20 929.01 1390.52 2833.68 the end of the year

Components of cash and cash equivalent

Cash and cheques on hand 7.02 6.04 20.59 10.54 9.05 with banks

On current account 3995.79 437.83 125.50 261.43 541.65

On deposit account restricted

On deposit account unrestricted 381.13 531.33 782.93 1118.57 2282.99

NOTE :- i) Figures in brackets denote outflows. ii) The above statement should be read with the Notes to Restated Financial Statements appearing in Annexure D.

For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Registration No.113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671 197

ANNEXURE D :- SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

A) COMPANY OVERVIEW The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in the line of canals, irrigations projects, roads, bridge, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and construction of canals, irrigations projects, roads, bridge, dams. Company also establishes maintain, operate, lease or transfer the above infrastructure facilities on BOT, BOLT and BOOT basis. Company is also engaged in mining activities on contract basis.

B) SIGNIFICANT ACCOUNTING POLICIES

a) Method of Accounting: The Financial Statements are based on historical cost convention and prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP) comprising the mandatory accounting standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.

b) Use of accounting Estimates: The preparation of the financial statements in conformity with Indian GAAP requires management to make estimates and assumptions that affect the balance sheet of assets and liabilities and disclosures relating to contingent liabilities as at the reporting date of the financial statements and amount of income and expenses during the year of account. Example of such estimates includes contract costs expected to be incurred to complete construction contracts, provision for doubtful debts, income taxes etc. Management periodically assesses weather there is an indication that an assets may be impaired and makes provision in the account for any impairment losses estimated. Contingencies are recorded when it is probable that a liabilities will be incurred and the amount can be reasonably estimated. Actual result could differ from those estimates.

c) Recognition of contract revenue and expenses:

(i) Revenue from contract is recognized on the percentage completion method based on billing schedules agreed with the client on a progressive completion basis.

(ii) An expected loss on construction contract is recognized as an expense immediately when it is certain that the total contract costs will exceed the total contract revenue.

(iii) Price escalation and other Claims and/or variations in the contract work are included in contract revenue only when:

(a) Negotiations have reached an advanced stage such that it is probable that customer will accept the claim; and

(b) The amount that is probable will be accepted by the customer can be measured reliably.

(iv) Incentive payments, as per customer-specified performance standards, are included in contract revenue only when:

(a) The contract is sufficiently advanced that it is probable that the specified performance standards will be met; and

(b) The amount of the incentive payment can be measured reliably.

(v) Insurance claims are accounted for on cash basis.

(vi) Site mobilization (Camp) Expenditure for site installation is written of over the period of contract in proportion to the value of work done.

(vii) Dividend income is accounted when the right to receive dividend is established.

d) Recognition of receipt on joint venture contracts: 198

In case of Construction Contracts received in the name of joint ventures the income and expenditure are included in financial statements of the company to the extent of share of the company in the joint ventures. e) Fixed Assets and Depreciation:

(i) Fixed Assets are valued at cost less accumulated depreciation. Direct cost is inclusive of all expenditure of capital in nature attributable to bring the fixed assets to working conditions, duties and taxes, incidental expenses including interest relating to acquisition and cost of improvements thereon are capitalized until fixed assets are ready for use.

(ii) Depreciation is provided for all assets except for vehicles on straight-line method and depreciation on vehicles is provided on written down value method at the rates specified in schedule XIV to the Companies Act, 1956, except Heavy Earthmoving Equipments, on which higher rate has been charged.

(iii) Depreciation on assets sold, discarded or demolished during the year is being provided at their respective rates on pro-rata up to the date on which such assets are sold, discarded or demolished.

(iv) Software used at Head Office and Work-shop are amortised over a period of three years and software used at Project sites are amortised over the project completion period. f) Impairment of Assets:

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of carrying amount of company’s fixed assets. If any indication exists, the recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable value. An impairment loss is charged to profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting year is reversed if there has been a change in the estimate of recoverable amount. g) Value of Inventories:

(i) Stock of material, Spare-parts, Diesel oil is valued at cost or net realizable value, whichever is less. Cost is determined on first-in-first-out basis.

(ii) Work in progress is valued at contract rate. h) Retirement Benefits:

(i) Contribution to “Defined Contribution Schemes” such as Provident Fund is charged to the profit and loss account as incurred. Provident Fund contribution is made to the Government Administered Provident Fund. Company has no further obligation beyond this contribution charged in financial statement.

(ii) Company also provides for Retirement Benefits in the form of Gratuity. Such Benefits are provided for, based on valuation, as at the Balance Sheet date, made by independent actuaries. Company has taken Group Gratuity Policy of L.I.C. of India and Premium paid is recognized as expenses when it is incurred. Actuarial gains and loss in respect of Gratuity are charged to Profit & Loss Account.

(iii) Leave encashment is paid to employees on annual basis and recognized as expenses when it is incurred i) Investments:

Current investments are carried at the lower of cost or quoted / fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary. 199

j) Foreign Currency Transactions:

(i) Imported Machinery spare parts, Diesel and Raw materials are recorded at the exchange rate prevailing on the date of transaction and exchange rate difference arises on account of payment and foreign currency rate on balance-sheet date are charged/credited to Profit & Loss Account.

(ii) In case of advance received in foreign currency for construction projects in India, the exchange rate difference arises on account of repayment of advances received from customers are debited to foreign exchange rate difference and charged to Profit & Loss Account.

(iii) Any foreign currency exchange rate difference arises on account of deemed exports are debited to foreign exchange rate difference account and charged to Profit and Loss Account.

(iv) Exchange rate difference arising on account of payment made during current year for outstanding liability as on last day of previous financial year on account of imported spare parts & Raw materials are debited/credited to foreign exchange rate difference account and charged/credited to Profit & Loss Account.

(v) In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognized as exchange difference and the premium or discount on forward contracts is recognized over the life of the contract. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognised as income or as expenses for the period

k) Borrowing Costs:

Borrowing Costs directly attributable and identifiable to the acquisition or construction of qualifying assets are capitalized till the date such qualifying assets are ready to be put to use. A qualifying asset is one that required substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Profit & Loss Account as period costs.

l) Income Taxes:

Tax Expenses comprise Current Tax and Deferred Tax.

Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961.

Deferred Tax is recognized on timing difference being the differences between the taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred Tax Assets subject to the consideration of prudence are recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such Deferred Tax Assets can be realized. The tax effect is calculated on the accumulated timing difference at the year end based on the tax rates and laws enacted or substantially enacted on Balance Sheet date.

m) Provisions:

n) Earning per share (EPS):

In carrying at the EPS, the company’s net profit after tax, computed in terms of the Indian GAAP, is divided by the weighted average number of Equity Shares outstanding on the last day of the reporting period. In determining EPS, the company considers the net profit after tax and it includes the short provision of current tax and deferred tax of earlier year and the exceptional item. The EPS thus arrived is known as Basic EPS. To arrive at diluted EPS, net profit after tax, refereed as above is increased by the amount of dividend, interest and other expenses that will be saved and reduced by the amount of income that will cease to accrue, on the conversion of the dilutive potential equity 200

shares, is divided by average number of Equity Shares as computed above and weighted number average of Equity Share that could have been issued on conversion of shares/warrants having potentials dilute effect subject to the terms of the issue of those potential shares. The amounts of dividends, interest and other expenses or income are adjusted for any attributable taxes. The date of issue of such potential shares determined the amount of the weighted average number of potential shares.

o) Contingent Liabilities & contingent assets:

Contingent liabilities are not provided for and are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statement

p) General:

Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

C) NOTES ON ACCOUNTS

1) All amounts in the financial statements are presented in Rupees Lacs except per share data and as otherwise stated.

2) Prior Period income and expenditure has been restated in respective years.

3) There has been no revaluation of Fixed Assets during any of the reported five years period.

4) As the Company is engaged in Construction business, the provision of Para 3 and Para 4C of Part II of Schedule VI to The Companies Act, 1956 regarding quantitative details, licence capacity and installation capacity are not applicable.

5) The Company has complied with AS 7, AS 23, AS 27 and as well as all the accounting policies of the Company are in line with the Accounting Standards issued by ICAI.

6) The financial statements of Rohtak Panipat Tollway Pvt. Ltd., Bijapur Hungund Tollway Pvt. Ltd., Hydrabad Yadgiri Toll Way Pvt. Ltd and Sadbhav Mining Limitada, Mozambique have not been included, as the said subsidiaries have not started its activities as on 31st March, 2010.

8) Details of Securities given in respect of Secured Loans

1. Redeemable Non Convertible Debentures

The debentures are secured by the first legal Registered Mortgage and charge on the specific movable fixed assets of the Company and specific immovable properties i.e. Bunglow (Manorama Retreat) and Flat (Abhimanyu) belonging to the Company. The security has been created on the said assets on 29th May, 2009 and same has been registered with Registrar of Company on 2nd June, 2009.

2. Term Loans From Banks & Financial Institutions

Secured by way of hypothecation of specific machineries and equipments purchased.

3. Working Capital From Banks

a. Secured by hypothecation of stock of construction materials lying at sites, books debts and other receivables

201

b. First charge by way of mortgage of immovable property (Sadbhav House) and immovable property situated at Village Ognaj alongwith furnitures, fixtures etc. owned by company and second charge on machineries owned by the company. c. Freehold land admeasuring 1,15,556 Sq. mts. of Group company Sadbhav Quarry Works Pvt. Ltd. situated at Tulsigam, Tal. Savli, Dist. Baroda. d. Corporate Guarantee of Group Company Sadbhav Quarry Works Pvt. Ltd. e. All the limits are also secured by Personal Guarantee and certain properties of Promoter Directors.

9) Deferred Tax Assets & Liabilities:

As per accounting standard-22 on “Accounting for taxes on Income” issued by the Institute of Chartered Accountants of India, Deferred Tax Assets/Liabilities arising are as follows:- (Rs. in Lacs) Particulars 2009-10 2008-09 2007-08 2006-07 2005-06 Op. Bal. of Deferred Tax Liability 1100.45 971.39 933.60 1079.29 1075.57 Add: Deferred Tax Liability/(Assets) accrued during the year Due to Timing 312.14 147.31 61.77 (145.69) 3.72 difference of Depreciation Less: Provision of Tax on Short Provision (4.61) (1.95) (7.68) ------of Gratuity Less: Deferred Tax Assets generated on 0.00 (16.30) (16.30) ------QIP. Share Expense Cl. Bal. of Deferred Tax Liability 1407.98 1100.45 971.39 933.60 1079.29

10) Contingent Liability : Disclosure for Contingent Liabilities are given in Annexure E

11) Company is purchasing its bulk construction material like steel, cement, diesel and bitumen etc. from big government undertaking companies and private sector companies and hence there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the company owes any dues on account of principal amount together with interest and accordingly no additional disclosures have been made

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.

12) The Finance Act, 2009 has amended an explanation of section 80(1A) of the Income Tax Act, 1961 by giving retrospectively effect from 01-04-2000. Assessment u/s 143(3) of the Income Tax Act for the A.Y. 2008-09 has been completed during the year and liability as per assessment order has been paid and provided in books of accounts by debiting Income Tax of earlier years. The Company has also provided liability of Income Tax for A.Y. 2009-10 by debiting Income Tax of earlier years. Tax liability for the current year has been provided as per the current tax provisions. The Company has received Notice u/s 148 of the Income Tax Act for re-opening of assessment for the A.Y. 2003- 04 to A.Y. 2007-08, against which Company has filed a Special Civil Applications in the High Court of Gujarat and hence estimated tax liability of Rs. 7.30 Crores has not been provided in books of accounts.

13) Disclosure of transactions with Related Parties as defined in Accounting Standard 18 “Related Party Disclosure” is given in Annexure G.

14) Disclosures as per Clause 32 of the Listing Agreements with the stock exchanges

a) Interest free Loans given to subsidiary companies, having no repayment schedule. (Rs. In lacs) 2009-10 2008-09 2007-08 Name of the Subsidiary Maximum Closing Maximum Closing Maximum Closing Balance Balance Balance Balance Balance Balance Aurangabad-Jalna Tollway 1466.70 1419.70 737.34 456.44 737.34 737.34 202

Ltd. Nagpur Seoni Expressway ------2013.30 203.30 203.30 203.30 Ltd. Sadbhav Infrastructure Proj. ------62.50 62.50 ------Ltd. Maharashtra Border ------0.52 0.52 ------Checkpost Network Ltd.

b) Interest bearing Loans given to subsidiary companies, having no repayment schedule. (Rs. In lacs) 2009-10 2008-09 2007-08 Name of the Subsidiary Maximum Closing Maximum Closing Maximum Closing Balance Balance Balance Balance Balance Balance Aurangabad-Jalna Tollway ------Ltd. Nagpur Seoni Expressway 4984.87 4962.88 ------Ltd. Sadbhav Infrastructure Proj. 3412.86 3363.23 ------Ltd. Maharashtra Border 4491.56 4484.36 ------Checkpost Network Ltd.

c) Company has not given any loans and advances to any subsidiaries in the year 2006-07 and 2005-06.

d) Company has not given any loans and advances to any associates and firms/companies in which directors are interested.

e) None of the loanees have made investments in shares of the Company.

16) Pledge of Shares The Company has pledged the following shares of Subsidiary/Associate Companies in favour of the lenders of the respective companies:

Number of Equity Shares Pledged As At Name of the Company 31/03/10 31/03/09 31/03/08 31/03/07 31/03/06 Ahmedabad Ring Road 25,10,400 25,10,400 20,10,240 ------Infrastructure Ltd. Aurangabad Jalna Toll Way Ltd. 5,14,496 5,14,496 ------Nagpur Seoni Expressway Ltd. 96,00,000 96,00,000 ------Mumbai Nasik Expressway Ltd. 1,04,00,000 1,04,00,000 1,04,00,000 ------

17) As per the Accounting Standard-27 ‘Financial Reporting of Interest in Joint Venture’ issued by the Institute of Chartered Accountants of India, Joint Ventures entered into by the Company as on 31st March, 2009 are as follows:

Sr Name of Description of % of No. Joint Venture Interest Involvement 1 Sadbhav-Prakash Jointly controlled operation 50% (Malvan Project) 2 HCC-SEL Jointly controlled operation 35% (Gulbarga Project) 3 Jilin-Sadbhav Jointly controlled operation 48% (Radhanpur Project) 4 JMC-Sadbhav Jointly controlled operation 49.50%

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(Agra By Pass Project) 5 SEL-GKC (Vishakapatnam Jointly Controlled Operation 50% Project) 6 SEL-GKC Jointly Controlled Operation 52% (Karimnagar Project)

18) Details of proportionate share in the Assets, Liabilities, Income and Expenditure of the Company in its Joint Venture Entity “Mumbai Nasik Expressway Ltd.” is given below: (Rs. in Lacs) % of 2009-10 Particulars 2008-09 2007-08 2006-07 2005-06 Holding (Provisional) Assets 20% 14793.50 12432.05 7815.83 3923.92 978.40 Liabilities 20% 12749.99 10727.29 6775.83 2883.92 8.66 Income 20% ------Expenditure 20% ------

Details of proportionate share in the Assets, Liabilities, Income and Expenditure of the Company in its Joint Venture Entity “Dhule Palesner Tollway Ltd.” is given below: (Rs. in Lacs) % of 2009-10 Particulars 2008-09 2007-08 2006-07 2005-06 Holding (Provisional) Assets 37% 6921.89 Liabilities 37% 5995.78 Income 37% ------Expenditure 37% ------

Note:- Figures for the year 2009-10 are provided on Provisional basis as the audited accounts of the above companies are not available at time of signing the annual accounts of the company.

19) Employee Benefits:

As per Accounting Standard -15 “Employee Benefits”, the disclosures of Employee Benefits as defined in the accounting Standard is given as below:

(a) Defined Contribution Plan:

Contribution to Defined Contribution Plan, recognized as expenses for the year is as under

Particulars 2009-10 2008-09 Employer’s Contribution to Provident Fund 42,47,416/- 22,66,337/-

(b) Defined Benefit Plan:

The company made annual contributions to the employee's Group Gratuity cash accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees.

The present value of the defined benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following tables sets out the funded status of the gratuity plan and the amount recognised by the company's financial statements as at March 31, 2010.

I. Net Assets /Liability recognized in the Balance Sheet are as follows: (Rs. in Lakhs) 2009-10 2008-09 (a) Present Value Funded Obligations 94.83 68.41 (b) Fair Value of Plan Assets 55.10 42.23 (c) Liability Recognized in the Balance Sheet 39.73 26.18

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II. Expenses recognized in the statement of Profit & Loss Account (Rs. In Lakhs) 2009-10 2008-09 (a) Current Service Cost 19.46 8.02 (b) Interest on obligation 5.65 4.11 (c) Expected Return on plan assets (4.21) (2.93) (d) Net Actuarial Losses / (Gains) recognized in the year 3.88 (2.01) (e) Past Service Cost NIL NIL (f) Losses/Gain on curtailment & Settlement NIL NIL NET GRATUITY COST 24.78 7.19

III. Reconciliation of Opening & Closing balance of Gratuity is as follows (Rs. in Lakhs) 2009-10 2008-09 (a) Opening Defined Benefit Obligation 68.41 54.75 (b) Service Cost for the year 19.46 8.02 (c) Interest Cost for the year 5.64 4.10 (d) Actuarial Losses 3.47 1.54 (e) Benefits Paid (2.15) NIL (f) Closing Defined Benefit obligation 94.83 68.41

IV. Reconciliation of Opening & Closing Balance of Fair Value of Plan Assets: (Rs. in Lakhs) 2009-10 2008-09 (a) Opening fair value of plan assets 42.23 22.82 (b) Expected Return 4.21 2.93 (c) Actuarial Gains (0.41) 3.55 (d) Contribution by the employer 11.11 12.93 (d) Benefits paid (2.04) NIL (e) Closing fair value of the plan assets 55.10 42.23

V. Major Category of plan assets as a percentage of total plan assets as on 31-03-2009 is as under 2009-10 2008-09 (a) Government of India Securities - - (b) High Quality Corporate Bonds - - (c) Equity Shares of Listed Companies - - (d) Property - - (f) Policy administered by L.I.C. of India 100% 100% (g) Bank Balance - -

VI. Principal Actuarial assumptions at the Balance Sheet Date: 2009-10 2008-09 (a) Discount Rate as on 31-03-2010 8.25% 7.50% (b) Expected return on plan assets at 31-03-2010 9.00% 9.00% (c) Proportion of employees opting for early retirement - - • At Younger Ages 5.00% 5.00% • At Older Ages 1.00% 1.00% (d) Annual increase in salary cost 6.00% 6.00%

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

20) As per Accounting Standard-17, “Segment Reporting” issued by The Institute of Chartered Accountants of India, Company who is dealing in multiple products/service and operates in different geographical areas are required to report under this Accounting Standard, hence no disclosure is required as the company operates in a single primary business segment namely “Engineering, Construction & Infrastructure development” activities and at single geographical area namely India.

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21) Remuneration to Managing Director is paid on monthly basis and therefore statement showing computation of net profit U/s 349 of the Companies Act, 1956 is not given.

22) Payment to Auditors: (Rs. in Lacs) Particulars 2009-10 2008-09 2007-08 2006-07 2005-06 Audit Fees 8.82 6.00 6.00 5.00 4.25 Tax Audit Fees 1.65 1.50 1.25 1.25 1.25 Certification & Other Fees 2.13 2.00 1.00 1.00 1.00 Reimbursement of Expenses 0.18 0.17 0.11 0.27 --- TOTAL 12.78 9.67 8.36 7.49 6.50

23) We confirm that there are no other material notes to our report which has a bearing on the financial status of the Company.

For SHASHIKANT PATEL ASSOCIATES Chartered Accountants Firm Registration No.113672W

(S. D. PATEL) Place: Ahmedabad PROPRIETOR Date: 08th June, 2010 Membership No.37671

206

ANNEXURE E :- DETAILS OF CONTINGENT LIABILITIES (Rs. in Lacs) Particulars Year Ended Year Ended Year Ended Year Ended Year Ended 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Bank guarantee Outstanding 85,427.56 45,012.06 38,350.94 41,093.20 29,531.09 Corporate guarantees 17,606.56 4,506.56 4,506.56 - - Civil suil against the Company 46.42 46.42 Capital Contract - - - - 55.75 Bills Discount - - - 299.26 2,177.41 Sales Tax & Entry Tax 5.30 146.36 5.30 5.30 5.30 Custom Duty 104.95 104.95 170.50 170.50 170.50 Income Tax Matters 887.02 56.03 46.18 - 7.21 Wealth Tax - - - 0.45 0.45 Service Tax 67.29 67.29 67.29 - - Total 1,04,145.10 49,939.67 43,146.77 41,568.71 31,947.71

* Note:- Contingent Liability includes the liability for the Income Tax Matters for the year ended 31st March, 2010 includes Rs. 730 lacs in respect of effect of retrospective amendment of Sec. 80(IA) of the Income Tax Act, 1961 for the A.Y. 2003-04 to A.Y. 2007-08. However, no demand notice has been raised by the department till date, but department has issued Notice u/s. 148 for re-opening of assessment for the A.Y. 2003-04 to A.Y. 2007-08, against which Company has filed a Special Civil Applications in the High Court of Gujarat.

ANNEXURE F :- STATEMENT OF DIVIDEND DECLARED (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Equity Dividend Equity Share Capital 1250.00 1250.00 1250.00 1090.00 1090.00 Rate of Dividend 40% 40% 40% 35% 20% Amount of Dividend 500.00 500.00 500.00 437.50 218.00 Tax on Dividend 83.04 84.98 84.98 74.35 30.57

207

ANNEXURE G :- RELATED PARTY TRANSACTIONS

A. KEY MANAGERIAL PERSONNEL (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Salary Paid 202.27 75.42 65.10 25.80 23.35 Interest Paid - - 7.86 10.23 9.39 Deposit Received during the Year - 2.00 788.01 535.11 161.15 Deposit Paid during the Year - 14.10 897.31 618.58 58.49 Cl. Bal. of Deposits - 0.01 12.10 113.54 186.79 Dividend Paid 135.18 130.70 120.70 68.99 22.66

B. RELATIVES OF KEY MANAGERIAL PERSONNEL (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Exp. 1,952.80 8,093.19 8,992.28 3,675.04 349.41 Receiving of Services - - - - 415.57 Sale of Fixed Assets (84.40) - - - - Interest Income - - - - - Interest Paid - - - 15.50 41.61 Rent & Service Charges Paid 6.99 6.75 7.75 9.15 9.15 Balance payable at the year end 35.52 349.57 3.00 23.21 28.80 Mobilization Adv. Given - - 170.25 2,412.81 1,370.19 Mobilization Balanace at the Year end - - 954.73 2,412.81 1,370.19 Deposit Received during the Year 840.02 5.64 575.85 497.23 90.15 Deposit Paid during the Year 800.00 22.59 800.68 739.30 354.18 Cl. Bal. of Deposits 42.83 5.64 22.59 247.42 481.16 Dividend Paid 75.00 79.48 63.31 36.72 11.88

C. ASSOCIATES (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid 17.21 8.51 - 5.70 5.73 Purchases made - - 43.35 - - Other Expenses 52.00 25.00 7.80 - - Balance payable at the Year End - - 1.82 - - Deposit Received during the Year 2,922.06 267.01 - 6.50 2.00 Deposit Paid during the Year 690.94 267.01 5.12 76.98 0.58 Cl. Bal. of Deposits 2,231.12 - - 5.12 69.90 Dividend Paid 26.99 26.99 23.62 13.50 4.44 Sub Contracting Income 4986.07 Balance Receivable at the year end 1971.07

D. SUBSIDIARY COMPANIES (Rs. in Lacs) Nature of transaction Year Ended Year Ended Year Ended Year Ended 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contractor income 13,872.75 17,644.08 23,136.94 5,008.95 Receiving of Services 24.60 24.60 44.19 16.00 Balance Receivable at the year end 1,545.86 365.24 2,043.11 1881.74 208

Interest Paid - 56.46 16.52 - Loan given during the year 19,213.79 9,964.17 2,035.59 - Intrest rec.on loan 354.71 572.53 - - Loan outstanding at the year end 14,230.17 7,369.26 2,023.59 - Deposit Received during the Year 14,146.27 7,327.76 6,055.67 2,156.20 Deposit Paid during the Year 1,114.17 8,593.44 3,685.90 - Cl. Bal. of Deposits 16,310.46 3,278.36 4,487.58 2,156.20 Fixed Assets Purchase/Sales 6.49

E. JOINT VENTURES (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Income 6,303.01 6,955.69 17,553.27 18,458.79 8,345.23 Balance receivable at the year end 1,266.53 1,356.10 1,803.12 800.39 2,223.49 Interest Paid - - - - - Deposit Received 4.87 3,043.25 2,094.67 1,142.65 6,670.50 Deposit Paid 562.56 1,793.33 3,487.95 3,579.17 4,534.64 Cl. Bal. of Deposits 618.45 1,176.13 (73.79) 1,394.27 3,830.79

DETAILS OF RELATED PARTY TRANSACTIONS FOR EACH RELATED PARTY

1. VISHNUBHAI M. PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Salary Paid 97.50 30.00 21.25 9.00 7.60 Interest Paid - - 7.86 5.44 2.11 Deposit Received during the Year - 2.00 787.09 510.61 133.10 Deposit Paid during the Year - 14.10 888.48 495.63 50.20 Cl. Bal. of Deposits - - 12.10 105.63 85.21 Dividend Paid 96.14 79.66 69.71 39.83 13.10

2. GIRISH N. PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Salary Paid 25.50 12.00 8.25 3.00 3.00 Interest Paid - - - 0.36 0.37 Deposit Received during the Year - - - - - Deposit Paid during the Year - - 4.33 0.16 0.59 Cl. Bal. of Deposits - 0.01 - 4.33 4.13 Dividend Paid 19.80 19.80 17.32 9.90 3.25

3. SHASHINBHAI V. PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Salary Paid 48.00 12.00 8.25 3.00 3.00 Interest Paid - - - 1.66 2.42 209

Deposit Received during the Year - - 0.72 10.10 20.95 Deposit Paid during the Year - - 2.01 54.37 3.50 Cl. Bal. of Deposits - - - 1.29 43.90 Dividend Paid 19.20 19.20 16.80 9.60 3.16

4. NITIN R. PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Salary Paid 25.50 12.00 8.25 3.00 3.00 Dividend Paid 0.04 0.04 0.07 0.06

5. RAJESHREEBEN PATEL - Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2009 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Vehicle Rent Paid - - - - - Salary Paid 5.77 2.42 2.60 1.80 0.75 Interest Paid - - - 1.48 3.14 Deposit Received during the Year - - - 4.60 - Deposit Paid during the Year - - 1.33 40.80 2.27 Cl. Bal. of Deposits - - - 1.33 36.05 Dividend Paid - - - - -

6. VIKRAM R. PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Salary Paid - 7.00 8.25 3.00 3.00 Interest Paid - - - 1.01 0.92 Deposit Received during the Year - - - 6.00 1.90 Deposit Paid during the Year - - 0.91 17.21 1.10 Cl. Bal. of Deposits - - - 0.91 11.11 Dividend Paid 12.00 12.00 10.50 6.00 1.97

7. VASISTHA C. PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Salary Paid - - 8.25 3.00 3.00 Interest Paid - - - 0.28 0.43 Deposit Received during the Year - - 0.20 3.80 5.20 Deposit Paid during the Year - - 0.25 10.41 0.83 Cl. Bal. of Deposits - - - 0.05 6.38 Dividend Paid 7.20 7.20 6.30 3.60 1.18

8. SHANTABEN V. PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid - - - 1.62 7.55 Rent & Service Charges Paid 3.36 2.40 2.90 3.60 3.60 210

Deposit Received during the Year - - - 52.00 13.65 Deposit Paid during the Year - - 9.46 69.66 138.57 Cl. Bal. of Deposits - - - 9.46 25.50 Dividend Paid 54.00 54.00 47.25 27.00 8.88

9. MAMTABEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid - - - 1.51 3.22 Rent & Service Charges Paid - - 0.50 1.20 1.20 Deposit Received during the Year - - - 47.25 5.20 Deposit Paid during the Year - - 1.35 73.41 24.84 Cl. Bal. of Deposits - - - 1.35 26.01 Dividend Paid

10. BHAVNABEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid - - - 1.45 4.53 Deposit Received during the Year - - - 25.00 24.00 Deposit Paid during the Year - - 1.30 84.28 34.91 Cl. Bal. of Deposits - - - 1.30 59.13 Dividend Paid - - - - -

11. ALPABEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid - - - 0.37 1.68 Deposit Received during the Year - - - 3.60 - Deposit Paid during the Year - - 0.33 16.98 11.49 Cl. Bal. of Deposits - - - 0.33 13.34 Dividend Paid - - 0.07 0.58 -

12. TRUPTIBEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid - - - 6.38 10.31 Deposit Received during the Year - - - 23.00 3.10 Deposit Paid during the Year - - 5.67 147.75 2.69 Cl. Bal. of Deposits - - - 5.67 124.04 Dividend Paid - - - - -

13. REKHABEN PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid - - - 1.92 1.30 Deposit Received during the Year - - - 32.30 20.95 211

Deposit Paid during the Year - - 1.72 64.07 4.13 Cl. Bal. of Deposits - - - 1.72 31.57 Dividend Paid - - - - -

14. VINUBHAI PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Rent & Service Charges Paid - 0.72 0.72 0.72 0.72 Balance payable at the year end - - - - -

15. NANDUBHAI M. PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid - - - - 6.77 Deposit Received during the Year - - - - - Deposit Paid during the Year - - - - 114.80 Cl. Bal. of Deposits - - - - -

16. MINOR TOSHA PATEL - Relative of Key Management Personnel (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Dividend Paid 1.80 1.80 1.58 0.90 0.30

17. V. M. PATEL – HUF - Enterprise over which Key Management Personnel having Significant Influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid - - - 2.25 6.25 Rent & Service Charges Paid 3.63 3.63 3.63 3.63 3.63 Deposit Received during the Year - - - 87.40 16.45 Deposit Paid during the Year - - 2.02 154.08 22.12 Cl. Bal. of Deposits - - - 2.02 66.45 Dividend Paid - 16.48 14.41 8.24 2.71

18. SARJAN INFRACON PVT. LTD. - Enterprise over which Relative of Key Management Personnel having Significant Influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Exp. 1,737.77 135.23 - - - Balance payable at the year end 8.59 20.00 - - - Deposit Received during the Year 35.16 5.64 - - - Deposit Paid during the Year - - - - - Cl. Bal. of Deposits 37.98 5.64 - - - Sale of assets 84.40 Cl. Bal. of Assets (24.90) - - - -

19. VEER TRANS - Enterprise over which Relative of Key Management Personnel having Significant Influence (Rs. in Lacs) 212

Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Exp. 215.03 - 194.53 276.19 Receiving of Services 415.57 Balance payable at the year end 51.83 2.63 17.27 28.80 Deposit Received during the Year 4.86 - 5.08 10.92 6.80 Deposit Paid during the Year - 22.59 - - 0.62 Cl. Bal. of Deposits 4.86 22.59 17.51 6.59

20. BHAVNA ENGINEERING CO. - Enterprise over which Relative of Key Management Personnel having Significant Influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Exp. - 3.03 - 131.15 - Sale of Fixed Assets Interest Paid Balance payable at the year end - - - (1.14) - Deposit Received during the Year Deposit Paid during the Year - - - 128.54 - Cl. Bal. of Deposits - 128.54

21. MONTECARLO CONSTRUCTION LTD. - Enterprise over which Relative of Key Management Personnel having Significant Influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Exp. - 7,954.93 8,797.75 3,267.70 349.41 Sale of Fixed Assets - - - - - Interest Income - - - - - Interest Paid - - - 0.00 Balance payable at the year end - 329.57 0.37 7.08 - Mobilization Adv. Given - - 170.25 2,412.81 1,370.19 Mobilization Bal. at the Year end - - 954.73 2,412.81 1,370.19 Deposit Received during the Year 800.00 - 520.77 215.76 - Deposit Paid during the Year 800.00 - 728.83 0.53 - Cl. Bal. of Deposits - - - 208.06 -

22. MONTECARLO PROJECTS PVT. LTD. - Enterprise over which Relative of Key Management Personnel having Significant Influence (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Deposit Received during the Year - - 50.00 Deposit Paid during the Year - - 50.00 Cl. Bal. of Deposits - - -

23. SADBHAV PUBLIC CHARITABLE TRUST - Associate (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Other Expenses 52.00 25.00 7.80 - -

213

24. SADBHAV QUARRY WORKS PVT. LTD. - Associate (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid 15.31 8.51 - - - Purchases made - - 43.35 - - Balance payable at the Year End - - 1.82 - - Deposit Received during the Year 447.06 267.01 - - - Deposit Paid during the Year 447.06 277.34 - - - Cl. Bal. of Deposits - - - - -

25. SADBHAV FINSTOCK PVT. LTD. - Associate (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Dividend Paid 13.68 13.68 11.97 6.84 2.25 Interest exp. 1.90 Balance payable at the Year End Deposit Received during the Year 33.00 Deposit Paid during the Year Cl. Bal. of Deposits 33.00

26. SANTOKBA TRUST - Associate (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Interest Paid - 5.70 5.73 Deposit Received during the Year - 6.50 2.00 Deposit Paid during the Year 5.12 76.98 0.58 Cl. Bal. of Deposits - 5.12 69.90 Dividend Paid 13.31 13.31 11.65 6.66 2.19

27. AHMEDABAD RING ROAD INFRASTRUCTURE LTD. - Subsidiary Company (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contractor income - 1,622.78 14,930.28 5,008.95 Receiving of Services 15.00 15.00 16.54 16.00 Balance Receivable at the year end - - 588.35 1881.74 Deposit Received during the Year 30.00 - 843.10 2,156.20 Deposit Paid during the Year 30.00 - 2,944.39 - Cl. Bal. of Deposits - - - 2,156.20

28. AURANGABAD JALNA TOLL WAY LTD. - Subsidiary Company (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contractor income 2,231.25 5,213.01 2,211.24 - Receiving of Services 3.60 3.60 10.79 - Balance Receivable at the year end 20.70 318.85 501.84 - Interest Paid - 56.46 16.52 - Loan given during the year 1,247.07 456.44 737.34 - 214

Loan outstanding at the year end 1,419.70 456.44 737.34 - Deposit Received during the Year 65.54 431.15 972.57 - Deposit Paid during the Year 43.59 1,170.93 327.72 - Cl. Bal. of Deposits - (21.95) 661.37 -

29. MAHARASHTRA BORDER CHECK POST NETWORK LTD.- Subsidiary Company (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Loan given during the year 8,054.78 0.52 - - Loan outstanding at the year end 4,484.36 0.52 - - Deposit Received during the Year 12,259.33 499.00 - - Deposit Paid during the Year 248.33 - - - Cl. Bal. of Deposits 12,510.00 499.00 - - Sub Contractor income 4966.55 - - - Interest received 72.08 - - -

30. NAGPUR SEONI EXPRESSWAY LTD. - Subsidiary Company (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Sub Contractor income 1,723.89 10,808.29 5,995.42 - Receiving of Services 6.00 6.00 16.86 - Balance Receivable at the year end 1,302.09 46.39 952.92 - Loan given during the year 4,561.59 2,750.00 203.30 - Loan outstanding at the year end 4,962.88 203.30 203.30 - Deposit Received during the Year 324.90 6,397.61 4,240.00 - Deposit Paid during the Year 792.81 7,422.51 413.79 - Cl. Bal. of Deposits 2,333.40 2,801.31 3,826.21 - interest received 219.99 - - -

31. SADBHAV INFRASTRUCTURE PROJECT LTD. - Subsidiary Company (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 Loan given during the year 5,320.36 62.50 12.00 - Loan outstanding at the year end 3,363.23 62.50 - - Interest received 62.64 - - -

32. OCEAN BRIGHT CORPORATION, HONG KONG - Subsidiary Company (Rs. in Lacs) Year Ended Year Ended Year Ended Nature of transaction 31-03-2009 31-03-2008 31-03-2007 Loan given during the year 4,998.48 1,082.95 - Intrest rec.on loan 565.07 - - Loan outstanding at the year end 6,646.50 1,082.95 -

Note:- Ocean Bright Corporation was cease as a subsidiary of a company w.e.f. 31st March, 2009.

33. SADBHAV NATURAL RESOURCES PVT. LTD. - Subsidiary Company (Rs. in Lacs) Year Ended Year Ended Year Ended Nature of transaction 31-03-2009 31-03-2008 31-03-2007

215

Loan given during the year 1,696.23 - - Intrest rec.on loan 7.46 - -

Note:- Sadbhav Natural Resources Pvt. Ltd. was cease as a subsidiary of a company w.e.f. 31st March, 2009.

34. BIJAPUR HUNGUD TOLLWAY PVT. LTD. - Subsidiary Company (Rs. in Lacs) Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 Loan given during the year - - - Loan outstanding at the year end - - Deposit Received during the Year - - - Deposit Paid during the Year - - - Cl. Bal. of Deposits - - - Sub Contractor income 4951.05 Interest received 0

35. HYDRABAD-YADGIRI TOLLWAY LTD.- Subsidiary Company (Rs. in Lacs) Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 Loan given during the year - - - Loan outstanding at the year end - - Deposit Received during the Year 1,496.50 - - Deposit Paid during the Year 29.44 - - Cl. Bal. of Deposits 1,467.06 - - Sub Contractor income 0 Interest received 0

36. DHULE PALESNER TOLLWAY LTD.- Associate Company (Rs. in Lacs) Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 Sub Contract Income 4,986.07 - - Balance Receivable at Year End. 1,971.07 - - Loan given during the year - - - Loan outstanding at the year end - - Deposit Received during the Year 2,442.00 - - Deposit Paid during the Year 243.88 - - Cl. Bal. of Deposits 2,198.12 - - Sub Contractor income 4986.07 Interest received 0

37. SADBHAV - PRAKASH J.V. (MALVAN) - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Income 343.66 144.78 1,591.46 1,543.70 1,806.60 Balance receivable at the year end - 11.62 222.81 (623.92) - Deposit Received - 1,328.47 1,862.57 438.41 22.78 Deposit Paid - 1,328.47 2,090.04 303.54 932.62 Cl. Bal. of Deposits - - (0.00) 227.46 92.58

216

38. SADBHAV – PRAKASH J.V. (UDAIPUR) - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Income - - - - 258.51 Balance receivable at the year end - - - - 0.30 Interest Paid - - - - - Deposit Received - - - - - Deposit Paid - - - - - Cl. Bal. of Deposits - - - - -

39. PBA – SADBHAV J.V. (NAGPUR) - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Income 1,348.93 1,756.32 3,269.53 1,480.88 - Balance receivable at the year end -

40. HCC – SEL J.V. - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Income - - (307.46) 162.06 2,212.96 Balance receivable at the year end 606.01 1,422.82 Deposit Received 4.87 19.32 1.00 - - Deposit Paid Cl. Bal. of Deposits (49.59) (54.47) (73.79) - -

41. JILIN – SADBHAV J.V. - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Income 383.50 2,161.79 12,853.86 15,272.15 4,067.16 Balance receivable at the year end 189.83 342.57 1,436.08 818.30 800.37 Deposit Received - - 231.10 704.24 6,647.72 Deposit Paid - - 1,397.91 3,275.63 3,602.02 Cl. Bal. of Deposits - - - 1,166.82 3,738.21

42. JMC – SADBHAV J.V. - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Income - 437.34 145.88 - - Balance receivable at the year end 5.25 5.25 144.23 - -

43. SEL – GKC J.V. (VISHAKHAPATNAM) - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Income 2,665.15 274.09 - - - Balance receivable at the year end 806.20 74.25 - - - Deposit Received - 827.68 - - - Deposit Paid 301.16 30.97 - - -

217

Cl. Bal. of Deposits 495.55 796.71 - - -

44. SEL – GKC J.V. (KARIMNAGAR) - Joint Venture (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Year Ended Nature of transaction 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Sub Contract Income 1,561.78 2,181.37 - - - Balance receivable at the year end 265.25 922.41 - - - Deposit Received - 867.78 - - - Deposit Paid 261.40 433.89 - - - Cl. Bal. of Deposits 172.49 433.89 - - -

218

ANNEXURE H :- DETAILS OF OTHER INCOME

(Rs. in Lacs) Year Year Year Year Year Related Ended Ended Ended Ended Ended or not related Nature of Particulars to Income 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 busines s activity Other

Income Interest on 1214.99 704.18 170.65 12.36 31.54 Recurring Related Others Rent Not 24.60 25.43 23.75 16.00 0.00 Recurring Receipts Related Miscellaneou 98.90 339.19 98.91 113.53 5.68 Recurring Related s receipts Profit of sale Non- of fixed 326.48 100.33 95.41 0.00 30.23 Related Recurring assets Total ( Gross other 1664.97 1169.13 388.72 141.89 67.45 income) Net Profit before tax as 9655.22 8465.53 7696.87 3741.65 1340.25 restated % of Other 17.24% 13.81% 5.05% 3.79% 5.03% Income

Notes:

1. The figures disclosed above are based on the restated financial statements of Sadbhav Engineering Ltd.

2. The classification of other income as recurring / non recurring and related / not related to business Activity is based on the current operations and business activity of the company as determined by the management.

ANNEXURE I :- SUMMARY OF ACCOUNTING RATIOS (Rs. in Lacs) As at As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006

Restated Net Profit After Tax 5291.09 6,443.04 5,261.44 2,559.20 1,427.75 Add :- Interest that would have been saved on exercise of Warrant (Net of Tax) - - 42.56 - - Net Profit After Tax for Diluted EPS 5,291.09 6,443.04 5,304.00 2,559.20 1,427.75

Net Worth 39151.30 34,358.36 28,414.24 14,361.69 12,228.28

Earnings per Share Basic - Rs. 42.33 51.54 43.63 23.48 17.20 Diluted - Rs. 42.33 51.54 43.62 23.48 17.20

Net Asset Value per Share - ( Rs) 313.21 274.87 235.64 131.76 147.29

219

Return on Net Worth ( %) 13.51% 18.75% 18.52% 17.82% 11.68%

Weighted Average number of Equity 12500000 12500000 12058470 10900000 8301918 shares outstanding during the year Weighted Average number of Diluted Equity shares outstanding during the 12500000 12500000 12158470 10900000 8301918 year

NOTES :- 1. The above ratios are calculated as under ;

Net Profit after Tax after Extraordinary Items Basic Earning Per Share (Rs.) = ------Weighted Average number of Equity Shares outstanding during the year

Net Profit after Tax after Extraordinary Items Diluted Earning Per Share (Rs.) = ------Weighted Average number of Diluted Equity Shares outstanding during the year

Net Worth excluding Revaluation Reserve Net Asset Value Per Share (Rs.) = ------Weighted Average Number of Equity Shares outstanding during the year

Net Profit after Tax before Extraordinary Items Return on Net Worth (%) = ------Net Worth excluding Revaluation Reserve

Net Worth = Equity Share Capital + Reserves & Surplus (Excluding revaluation reserve) – Miscellaneous Expenditure + Preference Share Capital

2. The figures disclosed above are based on the restated financial statements of Sadbhav Engineerig Ltd.

3. Earning per Share (EPS) calculations are done in accordance with the Accounting Standard 20 “Earnings per Share” issued by The Institute of Chartered Accountants of India.

220

ANNEXURE J :- STATEMENT OF SECURED LOANS (Rs. in Lacs) As at As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006

11.95% Redeemable Non 3,000.00 3,000.00 - - - Convertible Debentures Term Loan from IDBI Bank 3,000.00 - - - - Machinery and Vehicle loan from 6,532.62 1,885.94 2,361.47 2,180.56 2,137.81 banks Machinery and Vehicle loan from 3,370.18 4,123.76 3,709.28 1,980.82 2,036.53 Financial Institutions Cash Credit facility 4,715.23 7,921.52 2,228.52 1,497.31 399.73 Short Term Demand Loan 6,750.00 4,180.00 6,720.17 1,500.00 42.58 Interest Accrued on Short Term 35.75 - - - - Loans Total 27,403.78 21,111.22 15,019.44 7,158.69 4,616.65

Note:

1. The figures disclosed above are based on the restated financial statements of Sadbhav Engineering Ltd.

2. There has been no Reschedulement, Pre-closure, Penalty, Defaults, Etc. on any of the above loans.

3. The details of security charged on above loans are given in Notes to Accounts no. C-6.

4. DETAILS OF FINANCING FACILITIES FROM BANKS AND FINANCIAL INSTITUTIONS OUTSTANDING AS ON 31ST MARCH, 2010.

LIFE INSURANCE CORPORATION OF INDIA (Rs. in Lacs)

Nature of Interest Sanctioned Outstanding Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a 11.95% Non Convertible At the end of 1 3,000.00 3,000.00 payable Debentures 5 Year, i.e. 23.03.2014 quarterly

IDBI BANK LTD. (Rs. in Lacs)

Nature of Interest Sr. No Sanctioned Outstanding Repayment Terms borrowing/debt Amount Amount Rate p.a PLR 1 Cash Credit 1500.00 On Demand 1002.61 Less:-1.50% 2 Long Term Loan 3000.00 3000.00 11.25% 5 Years

STANDARD CHARTERED BANK (Rs. in Lacs)

Interest Nature of Sanctioned Outstanding Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a 1 Cash Credit 3,000.00 852.91 10.50% On Demand

PUNJAB NATIONAL BANK (Rs. in Lacs)

Interest Nature of Sanctioned Outstanding Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a 1 Cash Credit 1,500.00 825.59 PLR On Demand

221

INDIAN OVERSEAS BANK (Rs. in Lacs)

Interest Nature of Sanctioned Outstanding Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a PLR 1 Less:- On Demand Cash Credit 3,000.00 1,863.93 0.75%

OREINTAL BANK OF COMMERCE (Rs. in Lacs)

Sanctioned Outstanding Interest Nature of Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a PLR 1 4,000.00 123.56 On Demand Cash Credit Less:-0.50% 2 Short Term Loan 3,200.00 3,200.00 7.25% 90 Days

KARUR VYSYA BANK (Rs. in Lacs)

Sanctioned Outstanding Interest Nature of Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a PLR 1 2,000.00 46.64 On Demand Cash Credit Less:-3% 2 Short Term Loan 1,800.00 1,800.00 8.25% 90 Days

YES BANK (Rs. in Lacs)

Interest Nature of Sanctioned Outstanding Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a 1 Short Term Loan 1,750.00 1,750.00 7.40% 90 Days

5. DETAILS OF MACHINERY AND VEHICLE LOANS FROM BANKS AND FINANCIAL INSTITUTIONS

ABN AMRO BANK (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Tipper - 5 Nos. 261.00 166.20 11.75% 8.84 2 Tractor D6G 55.15 36.60 11.65% 1.87

KOTAK MAHINDRA BANK LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Quaterly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 JCB, Loader & Excavator 30.28 25.24 9.40% 2.52

TATA CAPITAL LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Scani tippers - 16 Nos. 828.02 828.02 9.00% 26.90

MAGMA FINCORP LTD. (Rs. in Lacs)

222

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Volvo Excavator - 3 Nos. & 12.66% 41.17 Tipper - 15 Nos. 1,196.97 737.88 2 Hydraulic Excavator 279.55 238.56 9.63% 7.16

RELIANCE CAPITAL LTD. (Rs. in Lacs)

CITICORP FINANCE (I) LTD. (Rs. in Lacs)

Sanctioned Outstanding Interest Monthly Sr. No Particulars of Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Loader 22.00 1.65 9.00% 0.55 2 D. G. Sets 52.14 2.67 8.75% 1.31 3 Titan Sensor Paver - 4360 47.74 3.36 8.75% 1.21 4 Wet Mix Plant 85.71 16.99 8.75% 2.87 5 Tata Tipper (4 Nos.) 27.68 4.42 9.50% 0.91 6 Dumper 466.56 22.06 9.25% 15.26 7 Dumper (11 Nos.) 570.24 224.85 9.17% 17.37 8 Paver 91.69 31.34 7.54% 2.49

HDFC BANK LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Innova Car 6.00 1.30 9.88% 0.19 2 Innova Car 6.00 1.30 9.88% 0.19 3 Kerbing Paver 54.25 19.26 9.25% 1.55 4 Vogle Paver 108.70 40.27 7.48% 3.01 5 PC 200 38.76 15.58 9.05% 1.1 6 Paver D. G. Set 48.71 19.62 9.25% 1.39 7 D. G. Set 380 KVA 43.29 17.81 9.25% 1.24 8 Sensor Paver 133.65 53.87 9.25% 3.72 9 Sensor Paver 111.72 46.35 9.25% 3.08 10 Dumper 145.20 70.47 11.00% 4.27 11 Volvo Vibratory Compactor 41.75 20.18 10.50% 1.22 DD90-2 Nos 12 Sensor Paver 50.74 25.33 10.50% 1.48 13 Volvo Vibratory Compactor 44.08 22.58 11.50% 1.31 DD90-2 Nos 14 Tractor & Grader 162.06 90.03 13.18% 5.04 15 Caterpillar, Hyd. Excavator 264.73 235.94 9.41% 6.72 & Scania tipper

223

16 BMW Car Loan 104.48 98.40 7.59% 3.48 17 Komatsu Bull Dozer 140.10 122.47 9.80% 3.60 18 LPT 1613 15.69 13.72 9.80% 0.40 19 Scania PC 380 Tripper 153.39 139.42 8.65% 3.85 20 Motor Grader 3 75.43 65.94 9.80% 1.93 21 Scania PC 380 Tipper 511.30 445.95 8.90% 12.92 22 709 TATA 5.55 4.96 9.80% 0.14

STANDARD CHARTERED BANK (Rs. in Lacs)

Sanctioned Outstanding Interest Monthly Sr. No Particulars of Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Batching Plant 50.74 4.94 8.75% 1.65 2 Tata Dumper - 15 Nos. 117.88 3.92 11.25% 3.96 3 Volvo Tipper & Vibratory 90.50 22.94 9.50% 2.97 Compactor 4 Tipper 28.97 6.45 9.50% 0.95 5 PC 200 33.65 8.86 9.50% 1.1 6 Volvo Tipper - 4 Nos. 207.36 57.22 9.50% 6.81 7 Paver 48.20 19.61 10.35% 1.6 As per Annexure 8 SCB ECB- Equipment 4,542.48 4,542.48 9.00% Financing below 9 VOVLO Tripper 93.80 67.40 10.75% 31.34

(Rs. in Lacs) Annexure I - REPAYMENT SCHEDULE OF PRINCIPAL AMOUNT Date of Repayment Amounts Date of Repayment Amounts Date of Repayment Amounts 20/04/2010 227.12 20/07/2012 227.12 20/01/2014 227.12 20/10/2010 454.26 22/10/2012 227.12 21/04/2014 227.12 20/04/2011 227.12 21/01/2013 227.12 21/07/2014 227.12 20/10/2011 454.26 22/04/2013 227.12 20/10/2014 454.26 20/01/2012 227.12 22/07/2013 227.12 20/04/2012 227.12 21/10/2013 454.26 Grand Total 4542.48

SREI INFRASTRUCTURE FINANCE LTD. (Rs. in Lacs)

Particulars of Sanctioned Outstanding Interest Monthly Sr. No Machineries/Vehicles Amount Amount Rate p.a Instalment 1 Batching Plant D.G. Sets - 181.27 1.38 6.20% 4.35 3 Nos. 2 Ker Laying Machine 39.31 2.93 8.75% 0.99 3 Concrete Pump BP 350 16.91 1.39 8.75% 0.43 4 Loader 2021 22.00 2.25 8.75% 0.55

224

5 Hydraulic Excavator 67.29 9.90 8.75% 1.7 6 Dumper - 8 Nos. 64.80 6.49 10.75% 2.17 7 Volvo Hydraulic Excavator 468.18 162.94 9.25% 13.36 - 2 Nos. 8 Hitachi Hydraulic 147.83 56.07 9.25% 4.22 Excavator 9 Volvo Hydraulic Excavator 113.83 29.03 9.25% 3.71 460 10 Crusher Plant 296.90 94.97 10.00% 9.82 11 Refinance on Old 1,000.00 433.47 10.75% 33.41 Machineries 12 SCANNIA L& T 258.00 258.00 8.80% 6.39

ANNEXURE K :- STATEMENT OF UNSECURED LOANS

(Rs. in Lacs) As at As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Loan from Others 63.11 - - 26.98 432.76 Loan from Directors - - 12.10 113.53 169.96 Working Capital Loans from Banks 14,000.84 Working Capital Loans from Financial 955.15 Institutions Total 15,019.10 - 12.10 140.51 602.72

Note: 1. The figures disclosed above are based on the restated financial statements of Sadbhav Engineering Ltd. 2. There are no specific terms and conditions in the case of “Loan from Others” and “Loan from Directors” and all the loans are repayable on demand

3. DETAILS OF UNSECURED FINANCING FACILITIES FROM BANKS AND FINANCIAL INSTITUTIONS OUTSTANDING AS ON 31ST MARCH, 2010.

IDBI BANK LTD. (Rs. in Lacs)

Interest Nature of Sanctioned Outstanding Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a 1 Short Term Loan 8000.00 8000.00 7.00% 90 Days

PUNJAB NATIONAL BANK (Rs. in Lacs)

Interest Nature of Sanctioned Outstanding Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a 1 Short Term Loan 2,500.00 2,500.00 9.00% 90 Days 2 Short Term Loan 1,500.00 1,500.00 9.00% 90 Days

KARUR VYSYA BANK (Rs. in Lacs)

Interest Nature of Sanctioned Outstanding Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a 1 Bills Discounting 2,800.00 0.84 10.75% 30 Days

YES BANK (Rs. in Lacs)

225

Interest Nature of Sanctioned Outstanding Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a 1 Short Term Loan 2,000.00 2,000.00 8.10% 90 Days

SREI INFRASTRUCTURE FIN. LTD. (Rs. in Lacs)

Sanctioned Outstanding Interest Nature of Repayment Terms Sr. No borrowing/debt Amount Amount Rate p.a Rs. 138 Lacs 1 Short Term Loan 2,362.00 955.15 over the loan 282 Days period

ANNEXURE L :- STATEMENT OF CURRENT LIABILITIES AND PROVISIONS (Rs. in Lacs) As at As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Current Liabilities Sundry Creditors 14,311.32 5,290.57 4,952.20 7,930.17 3,273.76 Advance from Customers 32,421.39 14,606.48 11,353.46 14,201.59 11,581.25 Deposits & Retention 5,230.01 5,257.12 3,399.19 2,362.58 2,041.10 Unpaid Dividends 2.27 1.88 1.65 1.52 Other Liabilities 649.67 507.16 198.85 298.98 310.65 Book Overdrafts 116.46 116.94 555.65 268.56 Total Current Liabilities 52,731.12 25,780.15 20,461.00 25,063.40 17,206.76

Provisions Proposed Dividend 500.00 500.00 500.00 437.50 218.00 Dividend Tax on proposed dividend 83.04 84.98 84.98 74.35 30.57 Provision for taxes - 173.60 4,194.11 2,084.33 17.70 Provision of Fringe Benefit Tax 2.58 2.88 21.13 14.75 - Wealth Tax Provision 0.94 0.84 0.97 1.97 1.11 Retirement Benefits 39.73 26.18 31.93 - Total Provisions 626.29 788.48 4,833.12 2,612.90 267.38

Net Current Liabilities 53,357.41 26,568.63 25,294.12 27,676.30 17,474.14

Note: The figures disclosed above are based on the restated financial statements of Sadbhav Engineering Ltd.

ANNEXURE M :- STATEMENT OF SUNDRY DEBTORS (Rs. in Lacs) As at As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006

Outstanding for a period exceeding six months -- Considered good 2,562.71 1,583.42 1,621.59 3,115.53 3,122.39 -- Considered Doubtful - -

Other Debts -- Considered good 41,515.13 26,234.21 13,750.22 10,278.30 5,339.92 -- Considered Doubtful - - Less : Provision 226

Total 44,077.84 27,817.63 15,371.81 13,393.83 8,462.31

Note: 1. The above includes debts due from related parties for which details are given in Annexure G. 2. The figures disclosed above are based on the restated financial statements of Sadbhav Engineering Ltd. 3. Amounts due from Subsidiaries & Associates; (Rs. In Lacs) As at As at As at As at As at Particulars 31/03/2010 31/032009 31/3/2008 31/03/2007 31/03/2006 Dues from Subsidiaries Aurangabad Jalna Tollway Ltd. 17.24 318.85 492.73 ------BIjapur Hungud Tollway Ltd. 223.07 ------Nagpur Seoni Expressway Ltd. 1258.45 8.51 959.17 ------Ahmedabad Ring Road Infra Ltd. ------585.09 1881.74 --- TOTAL 1498.76 327.36 2036.99 1881.74 ---

Dues from Associates Dhule Palasner Tollway Ltd. 1971.07

227

ANNEXURE N :- STATEMENT OF OTHER CURRENT ASSETS (Rs. in Lacs) As at As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Inventories Construction Materials, 4,469.49 1,825.44 3,817.05 2,249.84 1,880.65 Stores, Spares & Others Work - in – Progress 929.59 929.59 4,684.45 2,418.00 2,749.90 Total 5,399.08 2,755.03 8,501.50 4,667.84 4,630.55

Other Current assets Intrest Accured on Fixed 12.82 6.37 127.49 96.90 57.76 Deposits with banks Excise Claim Receivable 269.13 47.06 1,487.43 1,816.79 741.76 Total 281.95 53.43 1,614.92 1,913.69 799.52

Cash & Bank Balance cash on hand 7.02 6.04 20.59 10.54 9.05 Balance with Bank in Current 3,995.79 437.83 125.50 261.43 541.65 Accounts Balance in Fixed Deposit- 99.53 27.85 97.09 1,116.59 1,487.95 Margin Money Balance in Fixed Deposit- 381.13 531.33 782.93 1,118.57 2,282.99 Others Total 4,483.47 1,003.05 1,026.11 2,507.13 4,321.64

Note: The figures disclosed above are based on the restated financial statements of Sadbhav Engineering Ltd.

ANNEXURE O :- STATEMENT OF LOANS AND ADVANCES (Rs. in Lacs) As at As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Loan to Subsidiaries 14,230.17 722.76 2,023.60 - - Loan to others 6,983.17 6,646.50 - - - Advances recoverable in cash or in kind or value to be Received -- Considered good 18,256.97 6,606.60 7,304.16 3,859.29 3,068.88 -- Considered Doubtful - - - - Deposits & Retentions 6,843.19 8,959.90 3,274.76 5,812.35 2,348.98 Advance tax 359.68 658.95 4,228.71 2,298.51 939.14 Advance Fringe Benefit tax 2.10 - 17.53 16.83 1.85 - - - Less : Provision for doubtful advances Total 46,675.26 23,594.71 16,848.76 11,986.98 6,358.85

Note: 1. The above includes debts due from related parties for which details are given in Annexure G

2. The figures disclosed above are based on the restated financial statements of Sadbhav Engineering Ltd.

3. Loan to Others includes; 31/03/2010 31/03/2009 Ocean Bright Corporation (Hongkong) 6983.17 6646.50 228

4. Amounts due from Subsidiaries & Associates, (Rs. In Lacs) As at As at As at As at As at PARTICULARS 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006

Loan to Subsidiaries Aurangabad Jalna Tollway Ltd. 1,419.70 456.44 737.34 - Nagpur Seoni Expressway Ltd. 4,962.88 203.30 203.30 - Maharashtra Border Checkpost 4,484.36 0.52 - Network Ltd. Sadbhav Infrastructure Projects Ltd. 3,363.23 62.50 - 14,230.17 722.76 940.64 - -

Advance Recoverable In Cash or

Kind Ahmedabad Ring Road Infra Ltd. 1.56 - 3.26 - - Aurangabad Jalna Tollway Ltd. 3.46 - 9.11 - - Bijapur Hungud Tollway Ltd. 1.14 Nagpur Seoni Expressway Ltd. 43.64 37.88 - 49.80 37.88 12.37 - -

Deposits & Retentions Aurangabad Jalna Tollway Ltd. - 21.95 - - - - 21.95 - - -

ANNEXURE P :- STATEMENT OF INVESTMENTS

(Rs. in Lacs) As at As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 31-03-2006 Traded Investments -

Quoted Group Companies - - Money Market Mutual Fund - 1,499.00 1,605.00 - Total - A - 1,499.00 1,605.00 - -

Traded Investments -

Unquoted Subsidiaries 12,724.21 9,918.71 7,398.49 3,563.94 Associates 1,686.10 1,040.00 1,040.00 1,040.00 1,041.24 Total - B 14,410.31 10,958.71 8,438.49 4,603.94 1,041.24

Other Investments - 2.56 2.56 2,002.64 2.64 2.69 Unquoted Total - C 2.56 2.56 2,002.64 2.64 2.69

Less : Provision for - - - - - diminution in investments ( E) Net Investments 14,412.87 12,460.27 12,046.13 4,606.58 1,043.93 ( A + B + C + D - E )

229

Market value of Quoted - 1,520.97 1,626.56 - - Investments

Note: The figures disclosed above are based on the restated financial statements of Sadbhav Engineering Ltd.-

ANNEXURE Q :- STATEMENT OF CAPITALIZATION AS AT 31ST MARCH 2010 (Rs. in Lacs) Pre - Issue Particulars As per latest Audited Post-Issue* Statements Debt as at 31.03.2010 Long Term Debt 15902.80 Short Term Debt 26520.08 Total Debt 42422.88

Shareholders' Fund Share Capital - Equity 1250.00 - Preference Reserves 37901.30 Total Shoreholders' Fund 39151.30 Long term Debt/ Shareholders' Funds ( Ratio) 40.62%

*Share capital and Reserves & surplus post issue can be calculated only on the conclusion of the Issue

Note: The figures disclosed above are based on the restated financial statements of Sadbhav Engineering Ltd.

ANNEXURE R :- STATEMENT OF TAX SHELTERS (Rs. in Lacs) As at As at As at As at As at Particulars 2009-10 2008-09 2007-08 2006-07 2005-06

Profit/(loss) before tax but after Extraordinary items 9796.32 8293.43 7659.68 3861.93 1275.48 as per books (A) Tax Rate 0.34 0.34 0.34 0.34 0.34 Tax at Notional rate on Profit 3330.00 2819.00 2604.00 1300.00 429.00 Adjustements: Permanent Difference (B) Dividend Exempt u/s 10(33), (34) & (35) 38.06 70.47 129.83 0.00 0.00 Other adjustement 0.00 (0.77) 0.00 26.92 (49.85) Capital Expenditure 0.00 (11.75) (21.49) (33.62) (21.47) Cash payment disallowed u/s 40A(3) 0.00 (0.24) (1.68) 0.00 (0.22) Amount disallowed u/s 40(a) (ia) 0.00 (7.13) Previous Year Expenses 0.00 (7.17) (22.56) 100.40 (9.60) Penalties (6.26) (3.02) (1.24) (6.84) (1.70) Provision for Gratuity (13.55) 5.75 (9.12) (0.84) 0.00 Interest on short payment of Tax (54.58) (64.31) (47.60) 0.00 0.00 Preliminary Expenditure (31.82) 14.97 14.97 (32.99) (32.99) Donations (149.68) (98.33) (68.31) (22.67) (18.02) Deduction u/s 80 GGA 0.00 0.00 0.00 0.40 0.00 Deduction u/s 80G 39.39 30.57 21.99 9.93 5.04 Donation allowable u/s 35 39.78 23.80 26.25 0.00 0.00

230

Deduction u/s 80IA 0.00 2654.74 822.39 307.95 986.04 Total Permanent Difference (B) (138.66) 2607.58 843.43 348.64 857.23

Timing Difference (C) Difference between Tax depreciation and Book 918.32 433.33 206.21 (190.02) (385.90) depreciation Disallowance u/s 43B 103.43 (103.20) 3.66 (6.51) 2.01 Loss on Sale of Fixed Assets 181.94 (54.96) 8.55 (14.08) 30.23 Total Timing Difference (C) 1203.69 275.17 218.42 (210.61) (353.66)

Net Adjustement (B+C) 1065.03 2882.75 1061.85 138.03 503.57 Tax Saving thereon 362.00 980.00 361.00 46.00 170.00

Profit/(Loss) as per Income Tax Return (D)= ( A-B- 8731.29 5410.68 6597.83 3723.90 771.91 C) Brought forward Losses adjusted (E) Taxable Income/(Loss) (D+E) 8731.29 5410.68 6597.83 3723.90 771.91 Taxable Income/(Loss) as per MAT 9812.84 8277.70 7577.46 3861.93 1275.48

Tax as per Income Tax Return 2969.09 1779.63 2242.60 1253.46 259.83 Interest u/s 234 0.00 0.00 13.85 38.82 0.00 Total Tax as per return 2969.09 1779.63 2256.45 1292.28 259.83

Notes:

1. For the years ended March 31, 2006, 2007, 2008 and 2009 the above statement has been prepared based on the Income-tax Returns filed.

2. For the year ended March, 2010, the statement has been prepared based on the audited financial statements drawn up for the relevant year.

Further, the Management has represented to us that the re-statements made to the statutory financial statements (in order to confirm with SEBI guidelines) would not have a tax impact.

ANNEXURE S :- SEGMENTAL REPORTING

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ANNEXURE T :- SUMMARY OF FINANCIAL STATEMENTS OF AHMEDABAD RING ROAD INFRASTRUCTURE LIMITED

RESTATED ASSETS & LIBILITIES (Rs. in Lacs) As at As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 A. Fixed Assets Gross Block 48,174.51 47,908.35 23,343.14 23,088.71 Less :- Accumulated Depreciation 6,153.29 3,628.03 1,459.40 286.09 Net Block 42,021.22 44,280.32 21,883.74 22,802.62 Capital Work in progress - 168.13 22,028.80 7,936.03 Total 42,021.22 44,448.45 43,912.54 30,738.65

B. Investments 1,838.59 0.10 1,721.86 0.64

C. Deferred Tax Asset - - - 30.68

D. Current Assets, Loans and Advances Sundry debtors 3.36 6.18 - - Cash & Bank Balances 258.39 1,666.34 797.96 394.77 Other Current Assets 650.94 657.31 1,095.73 3,374.00 Loans & Advances 33.56 31.68 57.98 89.52 Total 946.25 2,361.51 1,951.67 3,858.29

E. Liabilities & Provisions Current Liabilities 127.55 152.41 777.00 2,072.07 Provisions - - 23.44 0.45 Share Application Money - - 332.02 32.02 Secured Loan 40,220.65 40,199.37 33,506.32 5,683.30 Unsecured Loan 45.31 109.23 5,136.11 19,166.67 Total 40,393.51 40,461.01 39,774.89 26,954.50

F. Net Worth ( A+B+C+D-E) 4,412.55 6,349.05 7,811.18 7,673.76

Net Worth represented by : G. Equity share Capital 1,046.00 1,046.00 837.60 837.60

H. Reserves and Surplus Securities Premium Account 4,164.00 4,164.00 3,330.40 3,330.40 Profit and Loss Account (4,397.45) (2,460.95) 43.18 (94.24) General Reserve 3,600.00 3,600.00 3,600.00 3,600.00 Total of Reserve & Surplus 3,366.55 5,303.05 6,973.58 6,836.16

I. Net Worth (G+H) 4,412.55 6,349.05 7,811.18 7,673.76

Note :- The above statement should be read with the Notes to Restated Financial Statements of Ahmedabad Ring Road Infrastructure Ltd.

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RESTATED PROFIT & LOSS ACCOUNT

(Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 I. Income Operating Income 5,266.53 3,645.20 2,550.52 524.23 Other Income 62.71 105.47 45.65 1.71 Total – A 5,329.24 3,750.67 2,596.17 525.94

II. Expenditure Operating Expenses 246.84 265.51 161.31 - Adiministration & Other Expenses 136.32 184.74 228.81 971.06 Employee Remuneration & benefits 189.94 158.23 104.70 19.11 Finance Charges 4,165.27 4,038.22 1,799.13 107.27 Depreciation 2,476.97 2,211.48 1,181.15 286.09 Amortization of Miscellaneous - - - 0.33 expenditure Total 7,215.34 6,815.63 3,467.25 1,383.87 Less: Transferred to Incidentel - 563.24 1,056.19 738.70 Expenditure Pending Capitalisation Total- B 7,215.34 6,294.94 2,418.91 645.17

III. Profit before taxation ( A-B) (1,886.10) (2,544.27) 177.26 (119.23) Less : Provision for taxation Wealth Tax - 0.13 0.02 0.08 Current Tax - - 21.00 - Deferred Tax - - 30.68 (30.68) Fringe bebefit tax - 2.28 1.24 0.37

IV. Profit After Taxation as per audited (1,886.10) (2,546.68) 124.32 (88.99) statement of accounts

Adjustments on account of changes in (50.40) 42.55 7.85 - accounting policies Impact on account of prior period items - - 5.25 (5.25) Total adjustments (50.40) 42.55 13.10 (5.25) Tax impact on adjustments - - - - Total adjustments net of tax impact ( (50.40) 42.55 13.10 (5.25) D)

V. Adjusted profit / ( loss) ( C + D) (1,936.50) (2,504.13) 137.42 (94.24)

Surplus/(Deficit) Brought forward from (2,460.95) 43.18 (94.24) previous year

VI. Profit available for appropriation (4,397.45) (2,460.95) 43.18 (94.24) Transfer to General Reserve - - - - VII. Adjusted Available Surplus/( (4,397.45) (2,460.95) 43.18 (94.24) Deficit) carried forward

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Note :-

1. The above statement should be read with the Notes to Restated Financial Statements of Ahmedabad Ring Road Infrastructure Ltd.

2. There is not tax impact of prior period adjustments due to carried forward loss.

CASH FLOW STATEMENT (Rs. in Lacs) Year Ended Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 31-03-2007 A. CASH FLOW FROM OPERATING

ACTIVITIES Net Profit before taxation and (1,936.50) (2,501.72) 190.36 (124.48) extraordinary items : Adjustments for : Depreciation 2,527.37 2,168.93 1,173.30 286.09 Fixed assets written off - 3.40 - - Finance charges 4,102.72 3,932.76 1,753.71 105.56 Cash generated from operations before 4,693.59 3,603.37 3,117.37 267.17 Working Capital Changes

Changes in Trade and Other Receivables 9.19 432.24 2,278.27 (3,374.00) Loans & Advances (7.35) 3.34 53.77 (89.52) Changes in Trade Payables (24.87) (625.56) (1,294.33) 2,072.08 Cash generated from/ ( used in ) 4,670.56 3,413.39 4,155.08 (1,124.27) operations

Income Tax, Wealth Tax & FBT paid 5.47 (1.92) (22.33) - Net Cash Flow from / ( used in ) 4,676.03 3,411.47 4,132.75 (1,124.27) Operating Activities

B. CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES Purchase of Fixed Assets - - - (23,088.71) Sale of Fixed Assets 6.53 Advance Given to Construction - - - (2,171.85) Contractors Investments in Mutual Funds (net) (1,822.34) 1,721.77 (1,721.12) (0.64) Amount paid for incidental expenses - - - (738.70) pending Capitalization Amount paid for Construciton Work in (106.77) (2,708.24) (14,347.20) (5,025.48) Progress Dividend Received 13.41 71.70 44.52 1.68 Interest Received 33.10 33.76 0.90 0.03 Net Cash from / (used in ) Investing (1,876.07) (881.01) (16,022.90) (31,023.67) Activities

C. CASH FLOW FROM / ( USED IN ) FINANCING ACTIVITIES Proceeds from issue of Shares/Share 709.98 300.00 4,200.02 Application Money

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Proceeds / (Repayment) from / of Long 213.78 6,693.05 27,823.02 5,683.30 Term borrowings Increase in Capital Reserve - AUDA Grant - - - 3,600.00 Increase / (Decrease) in deferred (256.42) (5,026.88) (14,030.56) 19,166.67 payment Credit Finance Charges Paid (4,165.27) (4,038.22) (1,799.13) (107.27) Net Cash from / (used in) Financing (4,207.91) (1,662.07) 12,293.33 32,542.72 Activities Net increase / (decrease) in Cash and (1,407.95) 868.39 403.18 394.78 Cash Equivalents Cash and Cash Equivalents at the 1,666.34 797.96 394.78 - beginning of the year Cash and Cash Equivalents at the end 258.39 1,666.35 797.96 394.78 of the year

Components of cash and cash equivalent Cash and cheques on hand 27.90 18.71 9.88 7.41 with banks On current account 32.49 947.63 588.08 37.36 On deposit account 198.00 700.00 200.00 350.00

NOTE :-The above statement should be read with the Notes to Restated Financial Statements of Ahmedabad Ring Road Infrastructure Ltd.

SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS

1. Method of Accounting:

The financial statements are based on historical cost convention and prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP), comprising Accounting Standards prescribed under the provisions of the Companies Act, 1956.

3. Depreciation: Depreciation on fixed assets, other than Project Assets, is provided on the Written Down Value Method (WDV) at rates prescribed in Schedule - XIV to the Companies Act, 1956. Project Assets, as defined under the Concession Agreement, are amortized over the Concession Period.

4. Fixed Assets: Fixed Assets (including intangible assets) are valued and stated at cost less accumulated depreciation. Direct costs is inclusive of all expenditure of capital in nature attributable to bring the fixed assets to working condition, duties and taxes, incidental expenses including interest relating to acquisition and cost of improvements thereon are capitalized until fixed assets are ready for use. 5. Intangible Assets: Intangible asset is recognized as per criteria specified in Accounting Standard (AS) 26 “Intangible Assets”. The Infrastructure Project Assets i.e. toll collection right received from AUDA are amortised over the Concession period. 6. Impairment of Assets: 1) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the company’s fixed assets. If any indication exists an assets

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recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

2) Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

7. Revenue recognition 1) Toll collection from users has been accounted when the amount is received. Income of monthly pass is recognized as and when it is received in entirety.

2) Dividend Income is accounted when the right to receive dividend is established.

8. Grant Grant received or receivable from Ahmedabad Urban Development Authority (AUDA) is in the nature of promoters’ contribution is treated as capital receipt and accounted as Capital Reserve.

9. Investments Current investments are carried at lower of cost and fair value. Long term investments are carried at cost less provision for diminution, other than of temporary nature, in value of such investments.

10. Employee Benefits 1) Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

2) Post employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged of is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gain and losses in respect of post employment and other long term benefits are charged to Profit & Loss Account.

11. Borrowing costs. Borrowing costs that are attributable to the acquisition and construction of qualifying assets are capitalized as part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Profit & Loss Account as period costs.

12. Tax on Income: Income Tax expense comprises of current tax and deferred tax (charge or credit). 1) Current tax is determined as the amount of tax payable in respect of taxable income for the year. Provision is made for income tax annually based on the tax liability computed, after considering tax allowances and exemptions under the Income Tax Act, 1961. Provisions are recorded when it is estimated that a liability due to disallowance or other matter is probable. 2) Deferred tax assets and / or liabilities are recognized, subject to prudence, on timing difference, being the difference between taxable income and accounting income, that originating in one period and capable of reversal in one or more subsequent periods and quantified using the tax rates and laws enacted or substantively enacted by the reporting date. The deferred tax assets are recognized only if there is reasonable certainty that they will be realized are reviewed for appropriateness of their respective carrying values at each balance sheet date.

13. Provisions, Contingent Liabilities and Contingent assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow or resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. 236

14. Derivative Contracts: In respect of derivative contracts, premium paid, gains / losses on settlement and provision for losses for cash flow hedges are recognized in the Profit and Loss Account, except in case where they relate to borrowing costs that are attributable to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets.

15. General Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

NOTES TO ACCOUNTS

1. Overview of the Company: - Ahmedabad Ring Road Infrastructure Ltd. (ARRIL) is the Special Purpose Vehicle (SPV) promoted by Sadbhav Engineering Ltd (SEL) and Patel Infrastructure Pvt. Ltd (PIPL) for implementing the four laning of 76 Kms. Sardar Patel Ring Road Project around the municipal limit of Ahmedabad city on Build, Operate & Transfer (BOT) basis. ARRIL has commenced the collection of Toll Fee from January 1, 2007.

2. The company has lodged a claim for extension of Concession Period to Ahmedabad Urban Development Authority (AUDA) for the loss of revenue due to change in law under clause 33 of the Concession Agreement dated 7th September 2006.

3. During the year the company has changed the method of providing depreciation on Project Assets from written down value to amortization of cost over the Concession Period i.e. 20 years from January 1, 2006. Had the company continued to follow the same method of depreciation as was in earlier year, the charge of depreciation would have been higher by Rs.12077.90 Thousands and consequently, loss for the year would have been higher by the same amount.

4. Security Charged on Secured Loans

I. IN RESPECT OF FIRST RANKING RUPEE LOAN

The First Ranking Rupee Loans together with interest, additional interest, default interest, prepayment premium, costs, charges, expenses and other monies whatsoever stipulated and due to the First Ranking Lenders are secured by:

i. a first ranking pari passu mortgage/ charge over all the Companys’ immovable assets and on all movable assets (including but not limited to all current / non-current assets goodwill, uncalled capital but excluding Project Assets) both present and future;

ii. a first ranking pari passu charge over all Fees, revenues and receivables (including the book debts, commissions, operating cash flows) of the Company from the Project or otherwise;

iii. a first ranking pari passu charge over/ assignment of all the rights, titles and interests of the Company in, to and in respect of all Project Documents, all guarantees, performance guarantees or bonds, letters of credit, liquidated damages that may be provided by any party to any Project Document in favour of the Company and Clearances (to the extent permitted) and all rights, titles, approvals, permits, clearances and interests and the Company’s right, title, interest, benefit and claim in, to or under the Project Documents and Clearances;

iv. assignment of all the Company’s right, title, interest, benefit and claim of the Company in, to or under the Insurance Contracts, insurance policies and the Insurance Proceeds;

v. a first ranking pari passu charge over all bank accounts of the Company including without limitation, the Escrow Account (or any account in substitution thereof) and the Debt Service 237

Reserve Account in all funds from time to time deposited therein and in all Permitted Investments or other securities representing all amounts credited to the Escrow Account and the Debt Service Reserve Account and any other bank accounts of the Company established pursuant to the Project Documents or otherwise;

vi. a pledge of 30% of the equity share capital held by the Sponsors in the share capital of the Company;

vii. a non-disposal undertaking from the Sponsors, undertaking not to dispose off 70% of the equity share capital (in addition to the shares pledged under the Share Pledge Agreement) held by the Sponsors in the Company during Construction Period and thereafter 45% of equity share capital (in addition to the shares pledged under the Share Pledge Agreement) of the Company till 80% of the Debt is paid off and thereafter 21% of the equity share capital (in addition to the shares pledged under the Share Pledge Agreement) of the Company until the Final Settlement Date; and

viii. an irrevocable corporate guarantee from the Sponsors in favour of the Security Trustee, for the benefit of Senior Lenders, to cover any shortfall in the amount payable in respect of the Rupee Loan in the event of termination on any account as per the terms of the Concession Agreement

II. IN RESPECT OF SECOND RANKING RUPEE LOAN

The Second Ranking Rupee Loan together with interest, additional interest, default interest, prepayment premium, costs, charges, expenses and other monies whatsoever stipulated and due to the Second Ranking Lenders are secured by way of a second ranking charge on the Security Interest stipulated in (i) to (viii) in para (I) above to be created in favour of the Security Trustee for the benefits of the Second Ranking Lenders.

5. The Company has not received any intimation from ‘suppliers’ regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard as per Schedule VI of the Companies Act, 1956 could not be provided.

6. In the opinion of the Board of Directors, current assets, loans and advances are approximate of the value stated, if realized in the ordinary course of business. The provision for depreciation and all known liabilities are adequate and not in excess of the amount reasonably necessary.

7. As the Company is engaged in Construction business, the provision of Para 3 and Para 4C of Part II of Schedule VI to The Companies Act, 1956 regarding quantitative details, license capacity and installation capacity are not applicable.

8. Since Managing Director is not paid commission, statement showing computation of net profit under section 349 of the Companies Act, 1956 is not given.

9. Employee Benefits:

Defined Benefit Plan:

The employee’s gratuity fund scheme managed by a Trust is a Defined Benefit Plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method as prescribed by the Accounting Standard. Gratuity has been recognized in the financial statements as per details given below:

Particulars (Rs. In Lacs)

Reconciliation of liability recognised in the Balance Sheet Present Value of Funded Obligations 3.55 Fair Value of Plan Asset 3.65

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Net Asset in the Balance Sheet 0.10

Amount recognized in the statement of Profit & Loss A/c Current Service Cost 1.81 Interest Cost 0.19 Acturial Gain (0.55) Expected return on Plan Assets (0.31) 1.14 Reconciliation of Gratuity liability Defined benefit obligation as at beginning of the year 2.32 Current Service Cost 1.81 Interest Cost 0.19 Actuarial Gain (0.55) Benefits Paid (0.23) Defined benefit obligation as at year end 3.54

Reconciliation of Fair Value of Plan Assets Plan Assets as at the beginning of the year 3.56 Expected Return on Plan Assets 0.31 Contribution during the year 0 Benefits Paid (0.23) Fair Value of Plan Assets at year end 3.64

Principal Actuarial assumptions at the Balance Sheet Date Discount Rate as on 31-03-2010 8.25% Annual increase in salary cost 6.00% Expected Return on plan assets at 31-03-2010 9.00% Mortality Rate 1994-96 Published table of Mortality rate

10. The Company is engaged in one reportable segment viz infrastructure development. Therefore Accounting Standard (AS) – 17 “Segment Reporting” is not applicable to the Company.

11. Related Party Disclosures:

Related party disclosures as required under the Accounting Standard (AS) – 18 on “Related Party Disclosures” are given below:

a. Related Parties and their relationships:

Sr. Name of the Company Relation No. (A) Enterprises where significant control exists 1 Sadbhav Engineering Limited Holding Company

(B) Enterprises where significant influence exists 1 Patel Infrastructure Pvt. Limited Associate Company 2 Sadbhav Infrastructure Project Limited Fellow Subsidiary 239

(C) Key Management Personnel 1 Shri Vikramkumar R Patel Managing Director 2 Shri Vishnubhai M Patel Director* 3 Shri Shashin V Patel Director* 4 Shri Nitin R Patel Director* 5 Shri Arvind V Patel Director* *No transactions during the current financial year

b. Transactions with Enterprises Having Significant Control

Sr. 2009-10 2008-09 2007-08 Particulars No. Amount (in Rs. Lacs) Transactions during the year Share application money received 00.00 601.58 200.00 Performance of Contract 00.00 1622.77 14930.28 Mobilization advance paid - - - Mobilization advance recovered - - 2156.20 Retention Money recovered - - 788.19 Payment of Rent 16.55 16.82 16.54 Reimbursement of Guarantee 2.90 0.61 - Fees Reimbursement of Other 0.72 2.00 - Expenses Advance money received 30.00 Sale of Asset 6.49

c. Transactions with Enterprises Having Significant Influence.

Sr. 2009-10 2008-09 2007-08 Particulars No. Amount (in Rs. Lacs) Transactions during the year Share application money received 00.00 108.40 100.00 Supervision Charges 0.00 7.30 -

Outstanding Balance as at March 31 Share Application money Pending -100.00 - Allotment Balance payable on account of: Guarantee Commission 1.30 1.96 - Supervision charges - -

d. Transactions with Key Managerial Personnel

Sr. 2009-10 2008-09 2007-08 Particulars No. Amount (in Rs. Lacs) Transactions during the year Remuneration paid 16.75 3.88 -

12. No provision is made for income-tax, in view of losses during the year

13. Deferred Tax:

In accordance with Accounting Standard 22 “Accounting for Taxes on Income”, the Company has accounted for deferred tax liabilities of Rs.5,317.86 Lacs. The Company also has deferred tax assets of Rs.6691.12 Lacs by way of unabsorbed depreciation under the Income Tax Act, 1961. Out of which as a matter of prudence deferred tax assets only to the extent of the amount of 240

deferred tax liabilities, as above, have been recognized. Accordingly, there is no impact of the same in these accounts.

2009 - 10 2008 - 09 Particulars (Rs. in Lacs) (Rs. in Lacs) Deferred Tax Liability Due to depreciation on Fixed assets 5317.86 3541.62 Total 5317.86 3541.62 Deferred Tax Assets Effect of preliminary expenses written off 0.02 0.04 Effect of Provision for Gratuity Expense 0.13 0.60 Effect of carried forward loss 6690.97 4764.20 Total 6691.12 4764.84 Net Deferred Tax Liability / (Asset) NIL NIL

14. Payment to Auditors (including Service Tax, wherever applicable):

Sr. 2009-10 2008-09 Particulars No. (Rs. in Lacs) (Rs. in Lacs) 1 Statutory Audit 1.38 1.38 2 Tax Audit 0.27 0.27 3 Certification etc. 0.14 0.14

15. Derivative Transactions:

The company has entered into derivative contract for hedging interest rate related risks. The net receipts / payments are credited / charged to the profit and loss account.

16. The previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary to facilitate comparability with current year’s figures

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ANNEXURE U :- SUMMARY OF FINANCIAL STATEMENTS OF AURANGABAD JALNA TOLL WAY LIMITED

RESTATED ASSETS & LIBILITIES (Rs. in Lacs) As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 A. Fixed Assets Gross Block 25,944.81 3.13 2.36 Less :- Accumulated Depreciation 818.32 1.21 0.37 Net Block 25,126.49 1.92 1.99 Capital Work in progress - 21,194.57 10,612.51 Total 25,126.49 21,196.49 10,614.50

B. Current Assets, Loans and Advances Cash & Bank Balances 248.96 495.01 169.70 Loans & Advances 55.42 46.49 10.60 Total 304.38 541.50 180.30

C. Liabilities & Provisions Current Liabilities 126.61 464.30 5,580.09 Provisions 42.70 42.70 - Share Application Money - - 2,584.55 Secured Loan 18,180.34 14,866.04 1,888.13 Unsecured Loan 2,774.19 885.26 737.35 Total 21,123.84 16,258.30 10,790.12

D. Miscellaneous Expenditure 1,172.97 0.32 0.32

E. Net Worth ( A+B-C+D) 5,480.00 5,480.01 5.00

Net Worth represented by : F. Equity share Capital 197.10 197.11 5.00

J. Reserves and Surplus Securities Premium Account 5,282.90 5,282.90 - Total of Reserve & Surplus 5,282.90 5,282.90 -

K. Net Worth (F+J) 5,480.00 5,480.01 5.00

Note :- The above statement should be read with the Notes to Restated Financial Statements of Aurangabad Jalna Toll Way Ltd.

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RESTATED PROFIT & LOSS ACCOUNT :

(Rs. in Lacs) Year Ended Particulars 31-03-2010 I. Income Operating Income 1,214.79 Other Income 21.74 Total – A 1,236.53

II. Expenditure Operating Expenses 80.62 Adiministration & Other Expenses 47.26 Employee Remuneration & benefits 55.89 Finance Charges 2002.94 Depreciation 817.10 Amortization of Preliminary expenditure 0.32 Total 3,004.13 594.63 Less: Transferred to Incidentel Expenditure Pending Capitalisation Total- B 2,409.49

III. Profit before taxation ( A-B) (1,172.97) Less : Provision for taxation Wealth Tax - Current Tax - Deferred Tax - Fringe bebefit tax -

(1,172.97) IV. Profit After Taxation as per audited statement of accounts

Adjustments on account of changes in accounting policies - Impact on account of prior period items - Total adjustments - Tax impact on adjustments - Total adjustments net of tax impact ( D) -

V. Adjusted profit / ( loss) ( C + D) (1,172.97) Surplus/(Deficit) Brought forward from previous year -

VI. Profit available for appropriation (1,172.97) Transfer to General Reserve - (1,172.97) VII. Adjusted Available Surplus/( Deficit) carried forward

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CASH FLOW STATEMENT :

(Rs. in Lacs) Year Ended Year Ended As at Particulars 31-03-2010 31-03-2009 31-03-2008 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before taxation and extraordinary items : (1172.97) 0.00 Adjustments for : Depreciation 817.10 Preliminary Expenses Written Off 0.32 Fixed assets written off Finance charges 2571.32 Cash generated from operations before Working Capital 2215.77 Changes

Changes in Trade and Other Receivables Loans & Advances (4.81) (6.44) Changes in Trade Payables (337.69) (5073.09) Cash generated from/ ( used in ) operations 1873.27 (5079.53) 0.00

Income Tax, Wealth Tax & FBT paid (4.12) (29.45) Net Cash Flow from / ( used in ) Operating Activities 1869.15 (5108.97) 0.00

B. CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES Purchase of Fixed Assets (4,747.11) (0.78) (2.36) Advance Given to Construction Contractors - (1,200.00) (1,583.68) Increase/(Decrease) in Loans & Advances - (10.60) Increase/(Decrease) in Current Liabilities & Provisions - 5,580.09 Amount paid for incidental expenses pending Capitalization - (136.88) (211.88) Amount paid for Construciton Work in Progress - (8,251.25) (8,661.77) Preliminary Expenses - - (0.32) Dividend Received 4.89 12.26 5.04 Interest Received 18.19 130.18 46.22 Net Cash from / (used in ) Investing Activities (4,724.03) (9,446.47) (4,839.26)

C. CASH FLOW FROM / ( USED IN ) FINANCING ACTIVITIES Proceeds from issue of Shares/Share Application Money - 2,890.45 2,589.55 Proceeds / (Repayment) from / of Secuerd borrowings 3,314.29 12,977.91 1,888.13 Proceeds / (Repayment) from / of Unsecured borrowings 1,888.93 147.91 737.35 Finance Charges Paid (2,594.40) (1,135.52) (206.07) Net Cash from / (used in) Financing Activities 2,608.83 14,880.75 5,008.96 Net increase / (decrease) in Cash and Cash Equivalents (246.05) 325.31 169.70 Cash and Cash Equivalents at the beginning of the year 495.01 169.70 - Cash and Cash Equivalents at the end of the year 248.96 495.01 169.70

NOTE :-

The above statement should be read with the Notes to Restated Financial Statements of Aurangabad Jalna Toll Way Ltd.

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SIGNIFICANT ACCOUNTING POLICIES :

1. Method of Accounting:

The financial statements are based on historical cost convention and prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP) comprising the Accounting Standards notified under Companies ( Accounting Standard) Rules, 2006.

2. Use of Accounting Estimates:

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

3. Preliminary Expenses:

The preliminary expenses shall be charged to Profit & Loss account in the first year when the company draws up the Profit & Loss account.

4. Fixed Assets:

Fixed Assets are valued and stated at cost less accumulated depreciation. Direct cost inclusive of all expenditure of capital in nature attributable to bring the fixed assets to working condition, duties and taxes, incidental expenses including interest relating to acquisition and cost of improvements thereon are capitalized until fixed assets are ready for use.

5. Depreciation:

Depreciation on fixed assets, other than Project Assets, (except computers and other hardwares related to tolling system) is provided on the Written Down Value Method (WDV) at rates prescribed in Schedule - XIV to the Companies Act. 1956. Project Assets, other than Computers & other hardwares related to tolling system, are amortized over the Concession Period. (23.5 years from February 1, 2007).

6. Intangible Assets:

a. Intangible asset is recognized as per criteria specified in Accounting Standard (AS) 26 “Intangible Assets”.

b. Capital Work in Progress comprises Cost of Road Development till it is ready for its intended use (including advances given for acquiring asset) as at the reporting date of the financial statements and Incidental Expenditure Pending Capitalization, which shall be capitalized as intangible asset on Commercial Operation Date (COD).

7. Impairment of Assets:

i. Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the company’s fixed assets. If any indication exists an assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

ii. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

8. Revenue recognition a. Dividend Income is accounted when the right to receive dividend is established.

245 b. Interest income is accounted for on accrual basis.

9. Investments

Current investments are carried at lower of cost and fair value. Long term investments are carried at cost less provision for diminution in value of such investments, which is other than of temporary nature.

10. Employee Benefits

i. Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii. Post employment and other long term employee benefits are charged off in the year in which the employee has rendered services. The amount charged of is recognized at the present value of the amounts payable determined using actuarial valuation techniques.

iii. Post employment benefits under defined benefit plan are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable towards contributions. The present value is determined using the market yields of government bonds, at the balance sheet date, at the discounting rate.

iv. Actuarial gains and losses in respect of post employment and other long-term benefits are charged to the profit and loss account.

11. Borrowing costs.

Borrowing costs that are attributable to the acquisition and construction of qualifying assets are capitalized as part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of time to get ready for its intended use. All other borrowing costs, if any, are charged to the Profit & Loss Account as period costs.

12. Tax on Income:

Income Tax expense comprises of current tax and deferred tax (charge or credit).

a. Current tax is determined as the amount of tax payable in respect of taxable income for the year. Provision is made for income tax annually based on the tax liability computed, after considering tax allowances and exemptions under the Income Tax Act, 1961. Provisions are recorded when it is estimated that a liability due to disallowance or other matter is probable.

b. Deferred tax assets and / or liabilities are recognized, subject to prudence, on timing difference, being the difference between taxable income and accounting income, that originate in one period and is capable of reversal in one or more subsequent periods and is quantified using the tax rates and laws enacted or substantively enacted by the reporting date. The deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for appropriateness of their respective carrying values at each balance sheet date.

13. Provisions, Contingent Liabilities and Contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow or resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

14. General

Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

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NOTES TO ACCOUNTS

1. Overview of the Company

Aurangabad - Jalna Toll Way Ltd. (AJTL), an SPV promoted by Sadbhav Engineering Ltd. (SEL) and PBA Infrastructure Ltd. (PBA) was incorporated in January 2007 for the purpose of development, implementation and operation & maintenance of the Aurangabad Jalna Road Project. The project involves four laning of 50 kms existing two lanes Aurangabad Jalna Road (MSH 6) from Km 10.400 to 60.200, 13 kms Beed by-pass from Km 292.500 to Km 305.650 and 3 kms long Zalta bypass from 0.00 Km to Km 2.850 in Maharashtra on Built Operate and Transfer (BOT) basis. The project is awarded under concession agreement for a period of twenty three years and six months from work order (given on February 1, 2007).

The company has received concurrence of the Government of Maharashtra for collections of Toll Fee on the project road vide Notification No.PSP-2006/CR/Road-9, issued on July 24, 2009 and accordingly the company has commenced collection of toll fee with effect from July 28, 2009.

2. Since this is the first year after commencement of revenue operations previous year figures of Profit & Loss account are not available. The expenditures incurred during the construction period are classified as “Construction Work- In – Progress” and “Incidental Expenditure Pending Capitalisation” and the same has been apportioned to the Assets on the completion of the Project.

3. Contingent Liabilities Liability in respect of contracts remaining to be executed on Capital Accounts (net of advances) and not provided for Rs. 1,281.69 lakhs ( Rs. 4,669.69 lakhs).

4. Details of Security Charged on Secured Loans

The facility of loan, interest thereon and all amounts in respect thereof shall be secured by;

i. charge on all the immovable and moveable assets of the Company, (including but not limited to all receivables both present and future, except the project assets);

ii. charge over all book debts, operating cash flows, Toll Collection, revenues of whatsoever nature and wherever arising, receivables, from the Project or otherwise, commissions, present and future, intangibles, goodwill and uncalled capital of the Company, present and future;

iii. a pledge of 51% equity share capital of the company held by the Promoters, till payment of 75% of loan to each Rupee Lender and thereafter pledge of 26% equity share capital of the Company held by the Promoters;

iv. charge by way of assignment or creation in favour of the Rupee Lenders over,

(a) all the right, title, interest, benefits, claims and demand whatsoever of the Company in all Project Documents, duly acknowledged and consented to by the relevant counter-parties to such project Documents, all as amended, varied or supplemented from time to time;

(b) all the rights, title, interest, benefits, claims and demands whatsoever of the Company in the Clearances;

(c) all the rights, titles, interest, benefits, claims and demands whatsoever of the Company in any letter of credit, guarantee, performance guarantee or bond that may be provided by any party to any Project Document in favour of the Company and;

(d) all insurance contracts/insurance proceeds;

v. charge/ assignment on all the intangible assets of the Company (Other than project assets) including but not limited to goodwill, rights, undertakings, uncalled capital and intellectual property rights of the project company, both present and future; and

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vi. charge over all the letter of credit, Trust and Retention Account, Debt Service Reserve Account and other reserves and any other bank accounts of the Company wherever maintained

5. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the balance sheet date. The above information has been determined to the extent such parties have been identified on the basis of the information available with the Company. This has been relied upon by the auditor.

6. In the opinion of the Board of Directors, current assets, loans and advances are approximate of the value stated, if realized in the ordinary course of business. The provision for all known liabilities are adequate and not in excess of the amount reasonably necessary.

8. The Company is engaged in one reportable segment viz infrastructure development. Therefore, Accounting Standard (AS) – 17 “Segment Reporting” notified in Companies (Accounting Standards) Rules, 2006 is not applicable to the Company.

9. Related party disclosures as required under the Accounting Standard (AS) – 18 on “Related Party Disclosures” notified in Companies (Accounting Standards) Rules, 2006 are given below:

a. Enterprise where significant control exists:

Sr. No. Name of the Company Relation

1 Sadbhav Engineering Limited Holding Company 2 PBA Infrastructure Limited Associate Company

b. Key Management Personnel:

Sr. No. Name of the Key Management Personnel Designation 1 Vishnubhai Patel Director* 2 Shashin Patel Director* 3 Nitin Patel Director* 4 Ramlal R Wadhawan Director* 5 Balkrishnan P Wadhawan Director* 6 Narayan G Thatte Director* * No transactions during the Year

c. Transactions with Related Parties for the year ended March 31st, 2010:

Associate Sr. Holding Company Particulars Company No. Amount (in Rs. Lacs) (A) Transactions during the Year NIL NIL 1 Share application money received (1415.70) (1474.75)

803.26 925.67 2 Sub-ordinate Loan received (456.44) (428.82) 333.81 Nil 3 Unsecured Loan repaid (737.34) (Nil) NIL Unsecured Loan Received 493.81 (NIL) (NIL) 4 Bills for Construction Work 2231.25 2143.75

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(5222.59) (5017.78) 0.51 Nil 5 Payment of Rent (4.04) (Nil) Nil Nil 6 Professional Fees (NIL) (Nil) NIL 18.19 7 Interest on Mobilisation and Additional Advance (56.46) (71.30) (B) Outstanding Balance as on March 31, 2010 Nil Nil 1 Share Application Money Pending Allotment (NIL) (NIL) 1259.70 1354.49 2 Sub-ordinate Loan (456.44) (428.82) 160.00 Nil 3 Unsecured Loan (NIL) (Nil) 17.24 36.28 4 Due against construction work performed (327.45) (44.17)

5 Retention Money NIL NIL (21.96) (21.09) 7.23 13.79 6 Reimbursement of Expenditures (NIL) (8.35)

10. Payment to Auditors ( including Service Tax, wherever applicable):

For the Year Ended For the Year Ended Particulars March 31,2010 March 31,2009 (Amount in Rs. Lacs) (Amount in Rs. Lacs) For Statutory Audit 0.72 0.73 For Tax Audit 0.16 NIL For Certification etc. 0.16 0.22

11. Provision for Income Tax has been made as per provision of Income Tax Act. 1961.

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ANNEXURE V :- SUMMARY OF FINANCIAL STATEMENTS OF NAGPUR SEONI EXPRESS WAY LIMITED

RESTATED ASSETS & LIBILITIES (Rs. in Lacs) As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 A. Fixed Assets Gross Block - - - Less :- Accumulated Depreciation - - - Net Block - - - Capital Work in progress 26,844.17 23,181.51 11,550.86 Total 26,844.17 23,181.51 11,550.86

B. Current Assets, Loans and Advances Cash & Bank Balances 43.25 60.82 56.65 Other Current Assets 3,481.73 881.80 Loans & Advances - 0.79 1.90 Total 3,524.98 943.41 58.55

C. Liabilities & Provisions Current Liabilities 2,513.69 1,029.03 1,400.23 Provisions 0.00 0.00 2.90 Share Application Money 979.60 979.60 4,790.00 Secured Loan 17,113.31 17,113.31 5,203.31 Unsecured Loan 4,962.88 203.30 203.30 Total 25,569.48 19,325.24 11,599.74

D. Miscellaneous Expenditure 0.33 0.33 0.33 E. Net Worth ( A+B-C+D) 4,800.00 4,800.00 10.00

Net Worth represented by : F. Equity share Capital 4,800.00 4,800.00 10.00

J. Reserves and Surplus Securities Premium Account - - - Profit and Loss Account - - - Total of Reserve & Surplus - - -

K. Net Worth (F+J) 4,800.00 4,800.00 10.00

Note :- The above statement should be read with the Notes to Restated Financial Statements of Nagpur Seoni Express Way Ltd.

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CASH FLOW STATEMENT (Rs. in Lacs) Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 A. CASH FLOW FROM OPERATING ACTIVITIES NIL NIL NIL

B. CASH FLOW FROM / (USED IN) INVESTING

ACTIVITIES Purchase of Fixed Assets Advance Given to Construction Contractors - (4,025.98) Increase/(Decrease) in Loans & Advances 0.79 1.11 (1.90) Increase/(Decrease) in Current Assets (2599.93) (881.80) - Increase/(Decrease) in Current Liabilities & Provisions 1484.66 (374.10) 1,368.58 Amount paid for incidental expenses pending (2320.97) (315.78) (818.27) Capitalization Amount paid for Construciton Work in Progress (1342.17) (10,430.96) (5,995.42) Preliminary Expenses - - (0.33) Dividend Received 0.47 6.02 1.52 Interest Received 0.01 0.01 9.21 Net Cash from / (used in ) Investing Activities (4,777.14) (11,995.50) (9,462.59)

C. CASH FLOW FROM / ( USED IN ) FINANCING

ACTIVITIES Proceeds from issue of Shares/Share Application Money 979.60 4,800.00 Proceeds / (Repayment) from / of Secuerd borrowings 11,910.00 5,234.97 Proceeds / (Repayment) from / of Unsecured borrowings 4759.58 - 203.30 Finance Charges Paid (889.94) (719.02) Net Cash from / (used in) Financing Activities 4,759.58 11,999.66 9,519.25 Net increase / (decrease) in Cash and Cash (17.57) 4.16 56.66 Equivalents Cash and Cash Equivalents at the beginning of the 60.82 56.66 - year Cash and Cash Equivalents at the end of the year 43.25 60.82 56.66

Note :- The above statement should be read with the Notes to Restated Financial Statements of Nagpur Seoni Express Way Ltd.

Significant Accounting policies

1. Method of Accounting:

2. Use of Accounting Estimates:

3. Preliminary Expenses:

The preliminary expenses shall be charged to Profit & Loss account in the first year when the company draws up the Profit & Loss account.

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4. Depreciation:

As the company has no depreciable fixed assets as at the reporting date, no depreciation has been calculated.

5. Intangible Assets:

Intangible asset is recognized as per criteria specified in Accounting Standard (AS) 26 “Intangible Assets”.

Fixed Capital Expenditure comprises Cost of Road Development till it is ready for its intended use (including advances given for acquiring asset) as at the reporting date of the financial statements and Incidental Expenditure Pending Capitalization, which shall be capitalized as intangible asset on Commercial Operation Date (COD).

6. Revenue recognition

1) Dividend Income is accounted when the right to receive dividend is established.

2) Interest income is accounted for on accrued basis.

7. Investments

Investments are classified into current and long-term investments. Long-term investments are carried at cost as reduced by provision for diminution in the value of investment, other than of temporary nature. Current Investments are stated at lower of cost and net realisable value.

8. Borrowing costs.

Borrowing costs, after reducing there from the interest / dividend earned on the temporary investment from the borrowed funds, that are attributable to the acquisition and construction of qualifying assets are capitalized as part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of time to get ready for its intended use. All other borrowing costs, if any, are charged to the Profit & Loss Account as period costs.

9. Tax on Income:

Income Tax expense comprises of current tax and deferred tax (charge or credit).

b. Deferred tax assets and / or liabilities are recognized, subject to prudence, on timing difference, being the difference between taxable income and accounting income, that originating in one period and capable of reversal in one or more subsequent periods and quantified using the tax rates and laws enacted or substantively enacted by the reporting date. The deferred tax assets are recognized only if there is reasonable certainty that they will be realized are reviewed for appropriateness of their respective carrying values at each balance sheet date.

10. Provisions, Contingent Liabilities and Contingent assets

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11. Foreign Currency Transactions

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

b. Any income or expense on account of exchange difference either on settlement or on translation till commercial operation date is charged / credited to Incidental Expenditure Pending Capitalization.

12. Derivative Transactions

In respect of Derivative Contracts, provision for losses on restatement and gains/losses on settlement are recognized along with the underlying transactions and charged to Incidental Expenditure Pending Capitalization during construction period.

13. General

Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

Notes to Accounts

1. Overview of the Company: Nagpur-Seoni Express Way Limited (NSEWL) was incorporated on 8th February, 2007 as a Special Purpose Vehicle (SPV) promoted by Sadbhav Engineering Ltd (SEL) and SREI Infrastructure Finance Limited (SREI) for implementing a four-lane divided carriageway standards, for North-South Corridor in the Seoni District of Madhya Pradesh (MP) in India on National Highway 7 (NH 7). The Concession has been awarded on Built Operate and Transfer (Annuity) basis and NHAI will make an assured payment of a defined annuity amount to NSEWL payable after commencement of commercial operations of the Project.

2. Contingent Liability: iability on contract remaining to be executed on Capital Accounts (net of advances) and not provided for Rs.180.28 Crores (Previous Year Rs 250.96 Crores.

3. The company is developing the four-lane divided carriage way, for North-South Corridor in the Seoni District of Madhya Pradesh. No Profit & Loss account has been prepared since the company has not commenced revenue operations. The expenditures incurred during the construction period are classified as “Construction Work- In – Progress” and “Incidental Expenditure Pending Capitalisation”. The same will be apportioned to the Assets on the completion of the Project.

4. Security Charged on Secured Loans

The facility of loan and the payment and other obligations of the Company under the Finance Documents, are secured by:

(i) Charge on all the Company’s immovable and movable properties (both present and future),

(ii) An assignment by way of security over all the Company’s rights, title and interest in and to each Transaction Document.

6. In the opinion of the Board of Directors, current assets, loans and advances are approximate of the value stated, if realized in the ordinary course of business. The provision for all known liabilities are adequate and not in excess of the amount reasonably necessary.

7. The Company is neither a trading Company nor manufacturing Company. Therefore, the information required by clause 3(i)(a), (4c) and 4(d)(a) of Part – II of Schedule – VI of the Companies Act, 1956 is not furnished.

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8. The Company is engaged in only one reportable segment viz infrastructure development and therefore Accounting Standard (AS) – 17 “Segment Reporting” notified in Companies (Accounting Standards) Rules, 2006 is not applicable to the Company.

9. Related party disclosures as required under the Accounting Standard (AS) – 18 on “Related Party Disclosures” notified in Companies (Accounting Standards) Rules, 2006 are given below :

a. Enterprise where significant control exists:

Sr. No. Name of the Company Relation 1 Sadbhav Engineering Limited Holding Company 2 SREI Infrastructure Finance Limited Associate Company

b. Transaction with Related Parties for the year ended March 31, 2010: (Rs. in Lacs) Sr. Particulars Transactions During the Year Outstanding Balance No. Holding Associate Holding Associate Company Company Company Company Share application money NIL NIL NIL NIL 1 received ( 499.60) ( 480.00) ( 499.60) ( 480.00) 2 Unsecured Loan Loan Received 4781.58 Nil Nil ( 2750.00) (Nil) 4759.58

Loan Paid NIL Nil ( NIL) (Nil) (2750.00) (Nil) 4 Bills for Construction Work 1723.89 Nil 1249.94 Nil (10808.29) (Nil) ( NIL) (Nil) 5 Payment of Rent 6.62 Nil 8.36 Nil ( 6.73) (Nil) (2.60) (Nil) 6 Professional Fess Nil Nil Nil Nil ( NIL) (Nil) ( 9.96) (Nil) 7 Advance for Construction Work NIL Nil 2669.80 Nil (5454.33) (Nil) ( 4025.98) (Nil) 8 Reimbursement of Expenditures Expenditures Incurred by 0. 79 0.72 (35.27) (0.63) 0.72 36.05

Reimbursed to NIL 0.63 (35.27) (0.63) (1.49) (Nil) 8 Retention Money Account Retention money deducted 86.19 Nil (515.44) (Nil) Nil 336.40

Retention money released NIL Nil (250.21) (Nil) (465.00) (Nil)

4. Auditors’ Remuneration

2009-10 2008-09 Particulars (Rs. in Lacs) (Rs. in Lacs) For Statutory Audit Fees 0.72 0.72 For Certification etc 0.07 0.07 254

ANNEXURE W :- SUMMARY OF FINANCIAL STATEMENTS OF SADBHAV INFRASTRUCTURE PROJECT LIMITED

B. Investments 32.91

C. Current Assets, Loans and Advances Inventories 436.00 - - Sundry debtors - 7.13 Cash & Bank Balances 6.58 16.23 0.37 Other Current Assets 226.51 - Loans & Advances 8,610.43 0.17 Total 9,279.52 23.53 0.37

D. Liabilities & Provisions Current Liabilities 5,628.90 3.51 0.06 Unsecured Loan 3,363.23 62.50 13.26 Deferred Tax Liability 2.66 - Total 8,994.80 66.01 13.32

E. Miscellaneous Expenditure 35.20 43.99 17.95 F.Profit and Loss account -3.49 -

G. Net Worth ( A+B+C-D+E+F) 352.83 5.00 5.00

Net Worth represented by : - H. Equity share Capital 5.00 5.00 5.00

I. Reserves and Surplus Profit and Loss Account 347.83 - - Total of Reserve & Surplus 347.83 - -

J. Net Worth (G+H) 352.83 5.00 5.00

Note :- The above statement should be read with the Notes to Restated Financial Statements of Sadbhav Infrastructure Project Ltd.

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RESTATED PROFIT AND LOSS ACCOUNT : (Rs. in Lacs) As at As at As at Particulars 31-03-2010 31-03-2009 31-03-2008 I. Income Operating Income 1,264.06 7.30 Other Income 251.74 - Increase in work in Progress 436.00 - Total – A 1,951.80 7.30

II. Expenditure Contract Related Direct Expenses 508.11 - Adiministration & Other Expenses 33.49 36.84 17.62 Interest & Finance Chg. 875.88 - Amortization of Miscellaneous expenditure - 0.30 Pre Operative Expenses Written off 8.80 - Total 1,426.29 37.14 17.62 Less: Transferred tp Pre Operative Expenses - 26.35 17.62 Total-B 1,426.29 10.79

III. Profit before taxation ( A-B) 525.51 (3.49) Less : Provision for taxation Current Tax 171.52 - Deferred Tax 2.66 - Fringe bebefit tax

IV. Profit After Taxation as per audited statement of 351.32 (3.49) accounts

Adjustments on account of changes in a accounting - - policies Impact on account of material adjustments and prior period items Total adjustments Tax impact on adjustments Total adjustments net of tax impact ( D) - -

V. Adjusted profit / ( loss) ( C + D) 351.32 (3.49) (3.49) - Surplus / (Deficit) Brought forward from the Previous year

VII. Adjusted Available Surplus/ ( Deficit) carried 347.83 (3.49) forward to Balance Sheet

Note :- The above statement should be read with the Notes to Restated Financial Statements of Sadbhav Infrastructure Project Ltd.

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CASH FLOW STATEMENT (Rs. in Lacs) Year Ended Year Ended Year Ended Particulars 31-03-2010 31-03-2009 31-03-2008 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before taxation and extraordinary items : 525.51 (3.49) NIL Adjustments for : Preliminaty Expenses Written Off 8.80 0.30 NIL Gain on Sale of Investments (0.07) - - Cash generated from operations before Working 534.24 (3.19) - Capital Changes

Changes in Trade and Other Receivables (655.38) (7.13) - Loans & Advances (8572.58) (0.16) - Changes in Trade Payables 5625.39 3.45 0.02 Cash generated from/ ( used in ) operations (3,068.32) (7.03) 0.02

Income Tax, Wealth Tax & FBT paid (209.21) - - Net Cash Flow from / ( used in ) Operating Activities (3,277.53) (7.03) 0.02

B. CASH FLOW FROM / (USED IN) INVESTING

ACTIVITIES Purchase of Equity Share Capital (32.91) Investment in Units of Mutual Fund 0.07 Net Cash Flow from / ( used in ) Investmenting (32.85) NIL NIL Activities

C. CASH FLOW FROM / ( USED IN ) FINANCING

ACTIVITIES Repayment of Loan - (13.26) - Unsecured Loan Received 3300.73 62.50 13.00 Increase in Pre-Operative Exps. - (26.35) (17.62) Net Cash from / (used in) Financing Activities 3,300.73 22.89 (4.62) Net increase / (decrease) in Cash and Cash (9.58) 15.86 (4.60) Equivalents Cash and Cash Equivalents at the beginning of the 16.23 0.37 4.97 year Cash and Cash Equivalents at the end of the year 6.58 16.23 0.37

Note :- The above statement should be read with the Notes to Restated Financial Statements of Sadbhav Infrastructure Project Ltd.

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SIGNIFICANT ACCOUNTING POLICIES :

1. Method of Accounting:

2. Use of Accounting Estimates:

3. Fixed Assets and Depreciation:

The company has no Fixed assets as at the reporting date. Consequently no depreciation has been calculated

4. Revenue From EPC Contracts :

Revenue from EPC contract is recognized on the percentage of completion method based on billing schedules agreed with the client on a progressive completion basis. An expected loss on construction contract is recognized as an expense immediately when it is certain that the total contract costs will exceed the total contract revenue.

5. Revenue recognition:

a. Revenue from consultancy service is recognized on Percentage Completion Method based on billing schedule agreed with the client.

b. All other revenue income and expenditures are recognized on accrual basis except that income and expenses up to Rs. 10,000 are recognized in the same year.

c. Dividend Income is accounted when the right to receive dividend is established.

6. Work In Progress

Work in Progress is valued at Contract Rate.

7. Investments:

Deferred Revenue Expenditure incurred in connection with rising of resources by way of capital is treated as deferred revenue expenditure. Such expenditure shall be written off over a period of five years. 9. Employee Benefits:

Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

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10. Tax on Income:

Income Tax expense comprises of current tax and deferred tax (charge or credit).

11. Provisions, Contingent Liabilities and Contingent assets

12. General

Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

NOTES TO ACCOUNTS

1. Overview of the Company :

During the year the company has entered into EPC contract with Maharashtra Border Check Post Network Limited for execution of IT and Electrification related work, which included the integration of 22 Check Post in the state of Maharashtra. The company has also provided consultancy in project finance to Hyderabad Yadgiri Tollway Pvt. Ltd.

2. Expenditure incurred in connection with raising of resources by way of capital or borrowings is treated as deferred revenue expenditure (shown as pre operative expenses in Schedule-5). Such expenditure shall be written off over a period of five years on completion of the said activities.

3. As per information available on company records, there are no micro, small and medium enterprises to whom the company owes dues which are outstanding or more than 45 days as at the balance sheet date.

4. In the opinion of the Board of Directors, current assets, loans and advances are approximate of the value stated, if realized in the ordinary course of business. The provision for all known liabilities are adequate and not in excess of the amount reasonably necessary.

5. The Company is neither a trading Company nor manufacturing Company. Therefore, the information required by clause 3(i)(a), (4c) and 4(d) of Part – II of Schedule – VI of the Companies Act, 1956 is not furnished.

6. Since Managing Director is not paid commission, statement showing computation of net profit under section 349 of the Companies Act, 1956 is not given.

7. The remuneration of Managing Director was revised w.e.f. January 1, 2010 as per the resolution passed by the share Holders in extra ordinary general meeting held on January 16, 2010 for which approval of Central Government is awaited. Particulars of remuneration paid to Managing Director during the year: 259

(Rs. In Lacs) Particulars For the year ended For the year ended March 31,2010 March 31,2009 Amount Amount

Remuneration 14.25 9.00 Leave Salary 2.50 0.75

8. Payment to Auditors (including Service Tax, wherever applicable): (Rs. in Lacs) Sr. No. Particulars 2009-10 2008-09 1 For Statutory Audit 0.22 0.08 2 For Tax Audit 0.11 Nil 3 For Certification etc. Nil Nil

9. The details of reportable segments under Accounting Standard (AS) – 17 “Segment Reporting” is mentioned below. However this is the first year of application of Accounting Standard (AS) – 17, corresponding previous year figures in respect of segment reporting are not given :

(Rs. In Lacs) Project BOT Works Total Consultancy 1. REVENUE

External Revenue 1200.06 500.00 1700.06 Total Revenue 1200.06 500.00 1700.06

2. RESULTS Segment Results 8 06.95 385.00 1191.95

3. OTHER INFORMATION

a. Unallocated Corporate Expense Nil Nil (855.54)

b. Operating Profit Nil Nil 336.41

c. Interest Expense Nil Nil ( 62.64)

d. Interest Income Nil Nil 251.67

e. Other Income Nil Nil 0.07

f. Profit from ordinary activities Nil Nil 525.51

g. Segment Assets 8571.00 Nil 8571.00

h. Unallocated Corporate Assets Nil Nil 741.44

Total Assets 8571.00 Nil 9312.44

i. Segment Liabilities 5498.33 82.73 5581.05

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j. Unallocated Corporate Liabilities Nil Nil 3413.74

Total Liabilities 5498.33 82.73 8994.80

10. Related Party Disclosures:

Related party disclosures as required under the Accounting Standard (AS) – 18 on “Related Party Disclosures” are given below:

a. Related Parties and their relationships:

Sr. Name of the Company Relation No. (A) Enterprise where significant control exist Sadbhav Engineering Limited Holding Company (B) Enterprise where significant influence exist Ahmedabad Ring Road Infrastructure Limited Fellow Subsidiary (C) Key Management Personnel Mr. Vashistha C Patel Managing Director Mr. Vishnubhai Patel Director* Mr. Shashin V Patel Director* Mr. Chetankumar N Patel Director* Mr. Narendra M Patel Director* Mr. Ravi Kapoor Director* * No transactions during the year

b. Transactions with Related Parties for the year ended March 31st, 2010:

Sr. Particulars Enterprise Enterprise Key No. Significant Significant Management Control Exist Influence Exist Personnel (Amount in Rs. Lacs.) (A) Transactions during the year 1 Investment in Equity Share Capital Nil 13.50 Nil (Nil) (Nil) (Nil) 2 Sale of Investment in Equity Share 13.00 Nil Nil Capital (Nil) (Nil) (Nil) 3 Investment in share Application Money Nil 24.35 Nil (Nil) (Nil) (Nil) 4 Payment towards Sub Ordinate Debt. Nil 8110.15 Nil (Nil) (Nil) (Nil) 5 Unsecured Loan received 336323 Nil Nil (62.50) (Nil) (Nil) 6 Contract Receipt Nil 1871.05 Nil (Nil) (Nil) (Nil) 7 Retention Money Received 69.45 Nil (Nil) (Nil) (Nil) 8 Mobilisation Advance Received Nil 4485.00 Nil (Nil) (Nil) (Nil) 9 Revenue from Supervision of contract Nil Nil Nil work (Nil) (7.30) (Nil) 10 Reimbursement of Expenditures 44.27 Nil Nil (Nil) (Nil) (Nil) 11 Managerial Remuneration Nil Nil 16.75 (Nil) (Nil) (9.75) (B) Outstanding Balance as on March 31, 261

2010 1 Investment in Equity Share Capital Nil 0.50 Nil (Nil) (Nil) (Nil) 2 Investment in Share Application Money Nil 24.35 Nil (Nil) (Nil) (Nil) 3 Sub Ordinate Debt Nil 8110.15 Nil (NIL) (Nil) (Nil) 4 Unsecured Loan received 3363.23 Nil Nil (62.50) (Nil) (Nil) 5 Revenue from Supervision of contract Nil Nil Nil work (Nil) (7.13) 6 Mobilisation Advance Nil 4485.00 Nil (Nil) (Nil) (Nil) 7 Managerial Remuneration Nil Nil 5.78 (Nil) (Nil) (0.75)

11. Earning Per Share:

Earning per share is calculated by dividing the profit attributable to the equity shareholders by the weighted number of equity shares outstanding during the year, as under: (Rs. in Lacs) Particulars 2009-10 2008-09 Basic and Dilutive Earning Per Share Profit as per Profit & Loss account 351.32 (3.49) Weighted average number of equity shares outstanding during 50 000 50 000 the year. Basic and dilutive Loss per share of face value of Rs. 10 Each 702.65 (6.98)

12. Calculation of Deferred Tax: (Rs. in Lacs)

Particulars 2009 - 10 2008 - 09

Deferred Tax Liability on account of

Pre Operative Expenditures 2.72 NIL Total 2.72 NIL

Deferred Tax Assets on account of Effect of preliminary expenses written off 0.06 0.08 Effect of carried forward loss NIL 1.01 Total 0.06 1.08

Net Deferred Tax Liability / (Asset) 2.66 NIL

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ANNEXURE X :- SUMMARY OF FINANCIAL STATEMENTS OF MAHARASHTRA BOREDER CHECK POST NETWORK LIMITED.

RESTATED ASSETS & LIBILITIES :

(Rs. in Lacs) As at Particulars 31-03-2010 A. Fixed Assets Gross Block 792.25 Less :- Accumulated Depreciation 25.63 Net Block 766.62 Capital Work in progress 33,902.92 Total 34,669.54

B. Investments 4,481.89

B. Current Assets, Loans and Advances Cash & Bank Balances 27.54 Other Current Assets - Loans & Advances 4.86 Total 32.40

C. Liabilities & Provisions Current Liabilities 4,419.50 Provisions 0.00 Share Application Money - Secured Loan 26,206.37 Unsecured Loan 8,553.63 Total 39,179.50

D. Miscellaneous Expenditure 0.67 E. Net Worth ( A+B-C+D) 5.00

Net Worth represented by : F. Equity share Capital 5.00

J. Reserves and Surplus Securities Premium Account - Profit and Loss Account - Total of Reserve & Surplus -

K. Net Worth (F+J) 5.00

Note :- The above statement should be read with the Notes to Restated Financial Statements of Maharashtra Border Check Post Network Limited.

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RESTATED PROFIT AND LOSS ACCOUNT

(Rs. in Lacs) As at Particulars 31-03-2010 I. Income Operating Income Other Income 2.72 Increase in work in Progress Total – A 2.72

II. Expenditure Employee Emoluments 24.59 Adiministration & Other Expenses 231.83 Interest & Finance Chg. 3,273.03 Depreciation and Amortisation 25.63 Pre Operative Expenses Written off 0.67 Total 3,555.76 Less: Transferred to Pre Operative Expenses 3,552.37 Total-B 3.39

III. Profit before taxation ( A-B) (0.67) Less : Provision for taxation Current Tax Deferred Tax Fringe bebefit tax

(0.67) IV. Profit After Taxation as per audited statement of accounts

Adjustments on account of changes in a accounting policies -

Impact on account of materialadjustments and prior period items Total adjustments Tax impact on adjustments Total adjustments net of tax impact ( D) -

V. Adjusted profit / ( loss) ( C + D) (0.67) Surplus / (Deficit) Brought forward from the Previous year

(0.67) VII. Adjusted Available Surplus/ ( Deficit) carried forward to Balance Sheet

Note :- The above statement should be read with the Notes to Restated Financial Statements of Maharashtra Border Check Post Network Limited.

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CASH FLOW STATEMENT :

(Rs. in Lacs) Year Ended Particulars 31-03-2010 A. CASH FLOW FROM OPERATING ACTIVITIES (0.67)

B. CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES Purchase of Fixed Assets (792.25) Advance Given to Construction Contractors - Increase/(Decrease) in Loans & Advances (4.86) Increase/(Decrease) in Current Assets Increase/(Decrease) in Current Liabilities & Provisions 4,419.50 Amount paid for incidental expenses pending Capitalization (3,526.74) Mobilisation Advacne to Construction Contractors (16,995.00) Amount paid for Construciton Work in Progress (13,355.55) Purchase of Investments - Mutual Fund (6,127.72) Sale of Investments - Mutual Fund 1,645.83 Preliminary Expenses - Dividend Received Interest Received Net Cash from / (used in ) Investing Activities (34,736.78)

C. CASH FLOW FROM / ( USED IN ) FINANCING ACTIVITIES Proceeds from issue of Shares 5.00 Proceeds / (Repayment) from / of Secuerd borrowings 26,206.37 Proceeds / (Repayment) from / of Unsecured borrowings 8,553.63 Finance Charges Paid - Net Cash from / (used in) Financing Activities 34,765.00 Net increase / (decrease) in Cash and Cash Equivalents 27.54 Cash and Cash Equivalents at the beginning of the year - Cash and Cash Equivalents at the end of the year 27.54

Note :- The above statement should be read with the Notes to Restated Financial Statements of Maharashtra Border Check Post Network Limited.

Significant Accounting policies

1. Method of Accounting: a. The financial statements are based on historical cost convention and prepared on accrual basis in accordance with Generally Accepted Accounting Principles (Indian GAAP), comprising Accounting Standards prescribed under the provisions of the Companies Act, 1956.

2. Use of Accounting Estimates: The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized. 3. Fixed Assets: a. Fixed Assets are valued and stated at cost less accumulated depreciation. Direct cost inclusive of all expenditure of capital in nature attributable to bring the fixed assets to working condition, duties and taxes, incidental expenses including interest relating to

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acquisition and cost of improvements thereon are capitalized until fixed assets are ready for use. 4. Depreciation: a. Depreciation on fixed assets is provided on Written Down Value (WDV) method at rates prescribed in Schedule – XIV to the Companies Act, 1956. b. The depreciation on assets used, directly or indirectly for construction has been treated as part of Incidental Expenditure Pending Capitalization which shall be allocated to Fixed Asset on Commercial Operation Date (COD). 5. Intangible Assets: a. Intangible asset is recognized as per criteria specified in Accounting Standard (AS) 26 “Intangible Assets”. b. Capital Work in Progress comprises cost of road and building development, other capital assets till they are ready for their intended use (including advances given for acquiring asset) as at the reporting date of the financial statements and “Incidental Expenditure Pending Capitalization”, which shall be capitalized as an intangible asset after its Commercial Operation Date (COD). 6. Revenue recognition : a. Dividend Income is accounted when the right to receive dividend is established. b. Interest income is accounted for on accrued basis.

7. Investments : a. Current investments are carried at lower of cost and fair value. b. Long term investments are carried at cost less provision for diminution, other than of temporary nature, in value of such investments.

8. Borrowing costs : a. Borrowing costs that are attributable to the acquisition and construction of qualifying assets are capitalized as part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one that requires substantial period of time to get ready for its intended use. All other borrowing costs, if any, are charged to the Profit & Loss Account as period costs. 9. Tax on Income: a. Income Tax expense comprises of current tax and deferred tax (charge or credit). b. Current tax is determined as the amount of tax payable in respect of taxable income for the year. Provision is made for income tax annually based on the tax liability computed, after considering tax allowances and exemptions under the Income Tax Act, 1961. Provisions are recorded when it is estimated that a liability due to disallowance or other matter is probable. c. Deferred tax assets and / or liabilities are recognized, subject to prudence, on timing difference, being the difference between taxable income and accounting income, that originate in one period and is capable of reversal in one or more subsequent periods and is quantified using the tax rates and laws enacted or substantively enacted by the reporting date. The deferred tax assets are recognized only if there is reasonable certainty that they will be realized.Deferred Tax Assets and Deferred Tax Liabilities are reviewed for appropriateness of their respective carrying values at each balance sheet date. 10. Provisions, Contingent Liabilities and Contingent assets Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow or resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

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11. General

a. Accounting policies not specifically referred to are consistent with generally accepted accounting policies.

Notes to Accounts

1. Overview of the Company: -

Maharashtra Border Check Post Network Limited (MBCPNL), an SPV promoted by Sadbhav Engineering Ltd (SEL), was incorporated in March 2009 and has entered into Concession Agreement with Government of Maharashtra for the purpose of Modernisation and Computerisation of Integrated Border Check Post at 22 locations in the state of Maharashtra on Build, Operate and Transfer (BOT) basis.

2. The Rupee Loans together with Interest, Additional Interest, Default Interest, Prepayment premium, Costs, Charges, expenses and other monies whatsoever stipulated and due to the Secured Parties in accordance with the Financing Documents shall, to the extent permitted by the Article 21.1 of the Concession Agreement (as produced in Schedule VIII) be secured by

a) A First Ranking mortgage and charge over :

I. All the borrower’s immovable and movable properties, both present and future (other than the Project Site and the Project Facility) ;

II. All Tangible and Intangible assets of the borrower including but not limited to its goodwill, undertaking and uncalled capital, both present and future;

III. All Fees, revenues and receivables of the Borrower, both present and future;

VI. All insurance contracts entered in to by the borrower including but not limited to the Insurance Contracts including all rights and receivables there under; and

Subject to Applicable Law, a pledge by the Sponsors of the Shares constituting /representing at all times not less than thirty (30%) of the total shares of the Borrower.

3. Contingent Liabilities: -

Liability in respect of contracts remaining to be executed on Capital Accounts (net of advances) and not provided for Rs. 1,06,944.45 lakhs.

4. The company has not commenced revenue operations. Hence the expenditures incurred during the development period are classified as ‘Incidental Expenditure Pending Capitalisation’ and will be allocated to the Assets on the completion of the development work.

5. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the balance sheet date. The above information has been

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determined to the extent such parties have been identified on the basis of the information available with the Company. This has been relied upon by the auditor.

6. In the opinion of the Board of Directors, current assets, loans and advances are approximate of the value stated, if realized in the ordinary course of business. The provision for all known liabilities are adequate and not in excess of the amount reasonably necessary.

7. The Company is neither a trading Company nor manufacturing Company. Therefore, the information required by clause 3(i)(a), (4c) and 4(d) of Part – II of Schedule – VI of the Companies Act, 1956 is not furnished.

8. Payment to Auditors (Including Service Tax, wherever applicable):

(Rs. in Lacs) Sr. No. Particulars 2009-10 1 For Statutory Audit 0.55 2 For Certification etc. 0.08

9. The Company is engaged in one reportable segment viz infrastructure development and therefore Accounting Standard (AS) – 17 “Segment Reporting” notified in Companies (Accounting Standards) Rules, 2006 is not given.

10. Related Party Disclosure:

Related party disclosures as required under the Accounting Standard (AS) – 18 on “Related Party Disclosures” notified in Companies (Accounting Standards) Rules, 2006 are given below:

a. Enterprise where significant control exists:

Sr. No. Name of the Company Relation

1 Sadbhav Engineering Limited Holding Company

2 Sadbhav Infrastructure Project Ltd. Fellow Subsidiary

b. Key Management Personnel:

Sr. No. Name of the Company Relation

1 Shri Vishnubhai M Patel Director* 2 Shri Nitin R Patel Director* 3 Shri Vasistha C Patel Director* 4 Shri Shashin V Patel Director* *No transactions during the current financial year

c. Transaction with Related Parties for the period ended March 31, 2010:

Associate Outstanding as at Holding Company Particulars Company March 31, 2010:

(Rs. in Lacs) Finance Received: Equity Share Capital 4.99 Nil 4.99 Sub Ordinate Debt 4419.48 4134.15 8553.63 Performance of contract 4966.56 1389.00 Nil Mobilisation advance paid 12510.00 4485.00 16995.00 268

Reimbursement of Expenditures 127.45 Nil 127.45

11. This being the first year of the Company; previous year’s figures are not given.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements included in this Letter of Offer. You should also read the section titled “Risk Factors” on page 10 of this Letter of Offer, which discusses a number of factors and contingencies that could impact our financial condition, results of operations and cash flows. The following discussion is based on our restated financial statements, which have been prepared in accordance with Indian GAAP, the accounting standards referred to in Section 211(3C) of the Companies Act,1956 and other applicable legal provisions. The following discussion is also based on internally prepared statistical information and on publicly available information. Our financial year ends on March 31, so all references to a particular financial year are to the twelve-month period ended March 31. Certain industry, technical and financial terms used in this discussion shall have the meanings ascribed to them in the section entitled ‘Definitions and Abbreviations’ beginning on page 1 of this Letter of Offer.

Overview

We are an infrastructure development and construction company primarily focusing on roads, irrigation and mining operations. Incorporated in October, 1988 as a private company, we took over the business of M/s. Bhavna Construction Co., a partnership firm, engaged in construction business since 1968. The main focus areas of our Company are: • Roads and Highways- Rehabilitating, upgrading, widening, and strengthening of roads and highways • Irrigation – Construction earthen dams, canals siphons, remodeling and improving canals • Mining Operations- Excavation of minerals

We have an established track record for timely completion of projects without compromise on its quality.

For the financial years 2010 and 2009, our consolidated income was Rs. 1.35,859.39 lacs and Rs. 1,10,926.27 lacs respectively representing an annual growth rate of over 22.4 %. Our consolidated net profit for financial years 2010 and 2009 was Rs. 2675.81 lacs and Rs. 3779.30 lacs respectively.

For the financial years 2010 and 2009, our standalone income was Rs. 1,27,357.59 lacs and Rs. 1, 07,190.61 lacs respectively representing an annual growth rate of over 18.81%. Our standalone net profit for financial years 2010 and 2009 was Rs. 5384.23 lacs and Rs. 6329.44 lacs respectively.

Our order book as on March 31, 2010 stands at Rs. 6,76,864.09 lacs of which around 76.88% is from the roads & highway sector and the balance from irrigation and mining operations. We have invested in seven BOT projects and are also executing sizeable amount of EPC contract work in each project. We have executed numerous irrigation contracts for the Sardar Sarovar Narmada Nigam Limited and Government of Andhra Pradesh and are currently executing projects worth over Rs. 64,474.06 lacs for them

The order book as on March 31, 2010 of Rs. 6,76,864.09 lacs is detailed below – (Rs. Lacs) Total Work Order in Balance Work to be Sector No. of projects Hand done Roads & Highways 14 635992.59 520342.17 Irrigation 12 95667.30 64474.06 Mining Operation 7 129901.55 92047.86 Total 33 861561. 44 676864.09

As on April 30, 2010, our work force consisted of 1151 full time employees. Our consolidated asset base reflected a growth of around 48.85% from financial year 2009 to 2010. Our equipments and employee resources are instrumental in improving our project management skills for timely completion of quality projects.

Significant developments subsequent to the last financial year ended on March 31, 2010

There are no such significant developments that have taken place from the date of the last Financial Statements which materially and adversely affect or are likely to affect the business or profitability of the issuer company, or the value of its assets, or its ability to pay its liabilities within the next twelve months. 270

Factors that affect results of operations

Sources of funding for infrastructure projects

Historically, funding for infrastructure projects in India has been provided by the Government of India (GoI) and the various state and local governments. However, the trend is moving towards PPP, such as BOT or BOOT contracts and arrangements, where selected private companies are awarded contracts to build and operate certain infrastructure, and to collect revenues through the operation of such completed infrastructure with the objective of recovery of investment and ultimately profit making. Infrastructure spending is still dependent to a large extent on the priority given by the GoI and the state and local governments towards such projects, as well as funding from certain multinational aid agencies. Further, if infrastructure projects put up for tender requires relevant experience and in case we do not pre-qualify then this may adversely affect our chances of being short-listed to tender for or participate in such projects. The budgetary and financial positions of the GoI, and the various state and local governments also play an important role in determining their respective abilities to implement infrastructure projects, including determining the nature and scale of the projects to be undertaken. This factor is also instrumental in affecting our cash flows for such projects, as well as the timely completion of such projects. As our work primarily involves the construction of infrastructure projects undertaken by the Indian central and various state and local governments of India, funding for such projects are usually from the budget allocations of the GoI, or the state or local government undertaking the project. Funding is also obtained from various multinational aid agencies, such as the World Bank, Asian Development Bank and certain domestic development finance corporations, including the Housing and Urban Development Finance Corporation and the National Bank for Agriculture and Rural Development. Such organizations act as sponsors for various infrastructure projects in the country.

Market prices of key raw materials and skilled labour

Our profitability generally arises from the excess of our revenues over cost incurred for the projects we undertake. A significant portion of our cost is attributed to the cost of raw materials and labour. Given that the majority of the projects we undertake are awarded based on the lowest tender price quoted, our profitability is largely related to minimizing our project costs. Our project costs mainly comprise of construction related raw materials, of which steel and cement comprise a large portion, and a skilled labour force. The utilities required by us are primarily water, power, building tools and site specific infrastructure, which are primarily project specific in nature. As the construction related raw materials are commodity products, changes in their prices during the execution of the project may affect our profitability on the contracts. We attempt to keep this in check by including in our contracts price escalation provisions, which allow for an adjustment in the contract price to take into account any increases in the prices of raw materials during the construction period. However, there is no assurance that we are able to include price escalation provisions in all of our contracts. Our ability to complete the projects we undertake also largely depends on the availability of skilled labour, which may be scarce. This is especially so in the construction sector. In order to secure an adequate number of skilled personnel, we may need to pay salaries which are slightly above the market rate. This would result in the lowering of our profit margins.

Our capabilities to participate and execute

The tendering process of the Indian central, state and local bodies is based on the pre-qualifications of the tendering contractors as evidenced by such contractors’ expertise and involvement in previous infrastructure projects of similar nature. Only appropriately qualified contractors are permitted to bid for new infrastructure projects undertaken by the respective governments. In addition to contractors who are on their own appropriately qualified, another way that a contractor (who is not on its own qualified to tender for a project) may tender for an infrastructure project is to submit for tenders jointly with one or more appropriately qualified contractors, or to partake in a consortium as a sub-contractor for appropriately qualified contractors. Further, the ability to jointly tender with other contractors having specific expertise and qualifications may increase a contractor’s chance to win an award in the project(s) bided for.

Dependence on government policy and regulation towards infrastructure

The growth of the infrastructure industry in India and our business is dependent on the establishment of stable government policies and prudent regulation. Infrastructure development in India has historically been undertaken by the central and state governments, and has been constrained by various factors such as 271 shortages of public funding, political considerations and issues of transparency and accountability. Changes in government policies, which began in the 1990s, facilitated the entry of private capital into infrastructure and have led to rapid growth in certain sectors. More recently, policy changes in the transportation, energy, urban infrastructure and industrial and commercial infrastructure sectors have begun to attract significant private sector interest. We believe that with the policy and regulatory reforms continuing to move in the right direction, our growth and financial conditions and operations will be positively impacted.

Tax benefits and incentives

Our project SPVs are eligible for certain tax benefits and incentives that accord favourable treatment to infrastructure-related activities. Moving forward, we believe that any change in the existing tax benefits and incentives can affect our financial condition.

Competition

Despite the fact that we are not affected by competition in the short-term due to our arrangements under our concession and license agreements, our results of operations could be affected by competition in the infrastructure sector in India in the future. We expect competition to intensify due to possible new entrants in the market, existing competitors further expanding their operations and our entry into new geographical markets where we may compete with well-established infrastructure companies. This we believe may impact our financial condition and operations.

Basis of Preparation

The following discussion is based on our Standalone Financial Statements, which are based on our audited financial statements restated in accordance with paragraph B(1) of Part II of Schedule II of the Companies Act and the SEBI ICDR Regulations for the financial years 2007, 2008, 2009 and 2010. The audited financial statements are prepared in accordance with Indian GAAP.

There was no requirement to prepare consolidated financial statements for the periods prior to fiscal 2007 as the Company did not have any subsidiaries and accordingly the Company did not prepare consolidated financial statements for any periods prior to fiscal 2007. Therefore, comparisons of the results of operations on a standalone basis have been made for the last four financial years.

RESULTS OF OPERATIONS (Rs. Lacs) As at As at As at As at Particulars 31/03/2010 31/03/2009 31/03/2008 31/03/2007 I. INCOME Operating Income 125692.62 106248.06 89482.85 48322.38 Increase / (Decrease) in Work in 0.00 (226.58) (6.79) 354.02 Progress Exceptional Income ------596.82 --- Other Income 1664.97 1169.13 388.72 141.89 Total – A 127357.59 107190.61 90461.60 48818.29

II. EXPENDITURE Material Expenditure 21066.47 27409.72 23389.38 14053.59 Construction Expenses 84146.72 62561.45 52419.64 25960.31 Administration & Other Exp 4745.19 3559.85 2497.25 1639.43 Employee Remuneration and Benefits 1884.17 1573.47 1447.90 1032.18 Finance Charges 3308.62 2138.55 1573.07 694.67 Depreciation 2325.21 1568.08 1388.61 1490.63 Amortization of Miscellaneous Exps. 84.89 86.06 86.06 86.06 Total – B 117561.27 98897.18 82801.91 44956.37

III. PROFIT BEFORE TAXATION 9796.32 8293.43 7659.69 3861.92 (A-B) Less :- Provision for 272

Current Tax 2970.01 1780.82 2300.97 1279.25 Deferred Tax 307.53 129.06 45.47 (84.75) `Fringe Benefit Tax 0.00 14.10 13.13 8.00

IV. Profit After Taxation 6518.78 6369.45 5300.12 2659.42 Excess / (Short) provision of Taxation (1134.55) (40.01) (63.22) (81.78) for Earlier Years Excess / (Short) provision of ------Depreciation for Earlier Years Excess / (Short) provision of Defered ------60.95 Tax for Earlier Years Net Profit After Tax but befor Extra 5384.23 6329.44 5236.90 2638.59 Ordinary Items Extra Ordinary Items ------Net Profit for the Year after Extra Ordinary Items as per audited 5384.23 6329.44 5236.90 2638.59 statement of accounts (C)

Comparison of performance for the financial year ended March 31, 2010 to the financial year ended March 31, 2009

Operating income This has gone up by 18.3% from Rs. 1,06,248.06 lacs in 2008-09 to Rs. 1,25,692.62 lacs in 2009-10 because of increase in contract receipts and income in the order book from the Road & Highways and Mining sector.

Other income This has significantly gone up by 42.41% from Rs. 1,169.13 lacs in 2008-09 to Rs. 1,664.97 lacs mainly on account of huge increase in interest income charged on the loans given to subsidiaries.

Direct Expenditure This consists of expenses relating to material consumed and construction expenses. These have gone up by 16.94% from Rs.89,971.17 lacs in 2008-09 to Rs. 1,05,213.19 in 2009-10 mainly on account of increase in construction expenses by 34.5%. This increase in expenses is in line with the increase of contract work.

Administration and other expenses These have gone up by 33.30% from Rs. 3,559.85 lacs in 2008-09 to Rs. 4,745.19 lacs mainly account of increase in key constituents viz. rates & taxes and legal & consultation fee by 87.78% and 17.87% respectively.

Employee remuneration & benefits These have gone up by 19.75% from Rs.1,573.47 lacs in 2008-09 to Rs. 1,884.17 lacs in 2009-10 mainly on account of increase in salaries and wages.

Finance Charges These have gone up by 54.71% from Rs. 2,138.55 lacs in 2008-09 to Rs. 3,308.62 lacs in 2009-10 mainly because of because of increase in term loans & cash credit facilities as there is a significant addition in fixed assets. Further, there has been pending payments from RIDCOR in Kota Project and from NHAI in Mumbai- Nashik project for change of scope work.

Depreciation This is has gone up by 48.28% from Rs. 1,568.08 lacs in 2008-09 to Rs. 2,325.21 lacs in 2009-10 mainly on account of additions to fixed assets during the financial year 2009-10.

Profit before tax This has gone up by approximately 18.12% from Rs. 8,293.43 lacs in 2008-09 to Rs. 9,796.32 lacs in 2009- 10. Further, profit before tax as a percentage of total income has gone down from 7.74% in 2008-09 to

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7.69% in 2009-10 mainly on account of increase in construction expenses, depreciation and finance charges.

Comparison of performance for the financial year ended March 31, 2009 to the financial year ended March 31, 2008

Operating income This has gone up by 18.7% from Rs. 89,482.85 lacs in 2007-08 to Rs. 1,06,248.06 lacs in 2008-09 because of the increase in contract receipts and income from mining sector. Income from mining sector has increased as a result of efficiency of and investment in fixed assets.

Other income This has significantly gone up by 201% from Rs.388.72 lacs in 2007-08 to Rs. 1169.13 lacs in 2008-09 mainly on account of huge increase in interest income because of investment of unutilized proceeds from QIP in mutual funds and amount received as insurance claims.

Direct Expenditure This consists of expenses relating to material consumed and construction expenses. These have gone up by 18.7% from Rs. 75,809.02 lacs in 2007-08 to Rs. 89,971.17 lacs in 2008-09 mainly on account of increase in cost of material consumed and labour expenses by 17.2% and 25% respectively. This increase in expenses is in line with the increase of contract work.

Administration and other expenses These have gone up by 42.6% from Rs. 2,497.25 lacs in 2007-08 to Rs. 3,559.85 lacs in 2008-09 mainly account of increase in key constituents viz.rates & taxes, legal & consultation fee, bank guarantee commission by 78%, 148.5% and 88% respectively.

Employee remuneration & benefits These have gone up by 8.7% from Rs. 1,447.90 lacs in 2007-08 to Rs.1, 573.47 lacs in 2008-09 mainly on account of increase in salaries, wages and bonus. The proportion of increase is less compared to the overall growth in expenditure as material cost has contributed to the growth.

Finance Charges These have gone up by 36% from Rs. 1,573.07 lacs in 2007-08 to Rs. 2,138.55 lacs in 2008-09 mainly because of increased borrowings in the form of term loans, demand loans and cash credit facilities availed by our Company. These borrowings have been increased due to the delayed payment by Anantpur Irrigation Department and also pending payment of extra scope of work in Mumbai-Nashik Project. The investment in fixed assets has also increased mainly due to projects in mining.

Depreciation This is has gone up by 13% from Rs. 1,388.61 lacs in 2007-08 to Rs. 1,568.08 lacs in 2008-09 mainly on account of additions to fixed assets during the financial year 2008-09.

Profit before tax This has gone up by approximately 8.3% from Rs. 7,659.69 lacs in 2007-08 to Rs. 8,293.43 lacs in 2008-09. Further, profit before tax as a percentage of total income has gone down from 8.47% in 2007-08 to 7.74% in 2008-09 mainly on account of increase in administration and other expenses and finance charges.

Comparison of performance for the financial year ended March 31, 2008 to the financial year ended March 31, 2007

Operating income This has gone up by 85.2% from Rs. 48,322.38 lacs in 2006-07 to Rs. 89,482.85 lacs in 2007-08 because of the increase in contract receipts. The increase in operating income is due to projects related to Mumbai - Nasik highway, Ahmedabad Ring Road, Nagpur-Seoni in road sector and Anantpur & Banas in Irrigation Sector.

Other income This has significantly gone up by 174% from Rs. 141.89 lacs in 2006-07 to Rs. 388.72 lacs in 2007-08 mainly on account of receipt of income from Mutual Fund and profit on sale of fixed assets.

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Direct Expenditure This consists of expenses relating to material consumed and construction, t. These have gone up by 89.46% from Rs. 40,013.90 lacs in 2006-07 to Rs. 75,809.02 lacs in 2007-08 mainly on account of increase in cost of material consumed and labour expenses by 66.4% and 118.3% respectively.

Administration and other expenses These have gone up by 52.3% from Rs. 1,639.43 lacs in 2006-07 to Rs. 2,497.25 lacs in 2007-08 mainly account of increase in rates & taxes, legal & consultation fee by 61.5% and 38.4% respectively.

Employee remuneration & benefits These have gone up by 40.3% from Rs. 1032.18 lacs in 2006-07 to Rs. 1,447.90 lacs in 2007-08 mainly on account of increase in salaries, wages and bonus.

Finance Charges These have gone up by 126.4% from Rs. 694.67 lacs in 2006-07 to Rs. 1,573.07 lacs in 2007-08 mainly because of very high borrowings in the form of term loans, demand loans and cash credit facilities availed by our Company. These borrowings have been made to finance the expansion in terms of projects, etc.

Depreciation This is has gone down by 6.8% from Rs.1,490.63 lacs in 2006-07 to Rs. 1,388.61 lacs in 2007-08 mainly on account of sale of some fixed assets during the financial year 2007-08.

Profit before tax This has gone up by 98.3% from Rs.3, 861.92 lacs in 2006-07 to Rs. 7,659.69 lacs in 2007-08.

OTHER INFORMATION

1. Unusual or infrequent events or transactions

There are no unusual or infrequent events or transactions that have significantly affected operations of the Company.

2. Significant economic changes that materially affected or likely to affect income from continuing operations

• Any major change in Government Policies will have an impact on the operations of our Company.

• Changes in prices of raw materials and consumables such as petroleum products in case of BOT project will have an effect on margins on income.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations

Our sales, revenue and thus income from operation would be affected by Delay and Non payment of dues by clients for additional work carried out by us.

4. The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales price

There has been material increase in operating income for the financial years 2006-07 and 2007-08 compared to their previous financial years by 70.4% and 85.2% respectively due to the reasons mentioned above.

5. Future changes in relationship between costs and revenues. In case of events such as future increase in labour or material costs or prices that will cause a material change are known

We are focussing on the road and mining sectors where projects are awarded by the competitive bidding process. We could lose out on projects wherein we do not qualify as the lowest bidder and thus can result in the reduction of profit margins for our company.

6. Total turnover of each major industry segment in which the Company operates 275

Our Company operates only in one industry segment i.e Construction.

7. Status of any publicly announced new products or business segment

Our Company has not publicly announced for any new business segement on the date of filing of this Letter of Offer.

8. The extent to which business is seasonal

Our business is not seasonal in nature. However the construction activities are affected by monsoon and extreme weather conditions.

9. Any significant dependence on single or few suppliers or customers

Most of the irrigation projects are from SSNNL and road projects are secured from NHAI. However we have been participating in tenders floated by State Governments also.

10. Competitive conditions

There is tough competition from other larger players in the market. However with a proven track record and financial capability we have been able to procure larger projects; for example the project for operation and maintenance of 4/6 laning of Madhya Pradesh/ Maharashtra Border- Dhule section of NH- 3 on BOT (Toll) Basis by NHAI, the project for modernization and computerization of integrated border check posts at 22 locations in the state of Maharashtra on BOT basis by The Governor of Maharashtra, etc .

WORKING RESULTS

1. Standalone Unaudited Financial Results for the period between the last date of the balance sheet and Profit & Loss a/c sent to the Shareholders and up to the end of the last but one month preceding the date of the Letter of Offer is given below:

Standalone Unaudited Financial Results for the quarter ended June 30, 2010

Amount Particulars (Rs. Lacs) Net Sales 42,532.79 Other Income 20.24 Total Income 42,553.03 Expenditure 37,467.47 Operating Profit 5,085.56 Interest 604.62 Depreciation 647.34 Profit before Tax 3,833.60 Provision for Tax 1,279.91 Profit after Tax 2,553.69

2. There are no material changes and commitments, which are likely to affect the financial position of our Company after March 31, 2010 (i.e. the last date up to which audited information is incorporated in this Letter of Offer)

3. Week end prices of Equity Shares of our Company for the last four weeks on BSE and NSE along with the highest and lowest price are as below:

BSE

Volume Volume Week Closing High Date of Low Date of on high on low ending on (Rs.) (Rs.) High price (Rs.) Low price price date price date

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July 9, July 8, July 2, 1322.40 1346.40 2491 1272.35 15144 2010 2010 2010 July 16, July 13 July 16, 1300.95 1336.40 816 1300.95 230 2010 ,2010 2010 July 23 July 20, July 19, 1305.85 1314.80 85 1293.55 350 2010 2010 2010 July 30 July 26, July 26, 1336.45 1347.65 1019 1285.10 13 2010 2010 2010 (Source: www.bseindia.com)

NSE

Volume Volume Week Closing High Date of Low Date of on high on low ending on (Rs.) (Rs.) High price (Rs.) Low price price date price date July 9, July 8, July 7, 1312.95 1342.45 3223 1279.10 27859 2010 2010 2010 July 16, July 14, July 16, 1302.95 1337.75 2409 1302.95 641 2010 2010 2010 July 23 July 23, July 19, 1305.35 1311.90 210 1296.5 416 2010 2010 2010 July 30 July 28, July 26, 1344.30 1346.85 998 1290 244 2010 2010 2010 (Source: www.nseindia.com)

Closing market price of the Equity Shares of face value of Rs.10/- of our Company as on August 3, 2010 on BSE and NSE was Rs.1430.30 and Rs.1430.05 respectively.

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SECTION VI : LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATIONS

Except as described below, there are no outstanding litigations, suits or criminal or civil prosecutions, proceedings or tax liabilities against our Company, our Directors, our Subsidiaries, JVs, there are no defaults, non payment of statutory dues, over dues to banks/financial institutions, defaults against banks/financial institutions, defaults in dues payable to holders to any debentures, bonds or fixed deposits issued by our Company (including past cases where penalties may or may not have been awarded and irrespective of whether they are specific under paragraph (i) of Part I of Schedule XIII of the Act)

LITIGATIONS FILED BY OUR COMPANY

I. Civil Cases

Case No. / Amount S Forum / Court Filed Against Current Particulars involved No. / Title of the (Respondents) status (Rs. lacs) matter 1. Arbitration SSNNL & anr. Our Company had 3111.10 The Arbitral Reference No. constructed the Narmada reference is 16 of 2002 Main Canal Reach kms pending before the 155.030 to kms 168.436 before the Gujarat Public (Package II), which was Arbitral Works delayed due to reasons Tribunal for Contracts attributable to the hearing and Disputes Respondents. The final Arbitration Respondents refused to pay disposal. Tribunal, the additional expenses Ahmedabad incurred by Company. Our Company has initiated arbitration proceedings against the Respondents for reliefs including for recovery of additional expenses incurred. 2. Arbitration SSNNL & anr. Our Company had 1057.47 The Arbitral Reference No. constructed the extension reference is 16 of 2003 and improvement of Shedhi pending before the Branch Canal Ch. 0.00 kms before the Gujarat Public to 46.03 kms even before the Arbitral Works time specified but the Tribunal for Contracts Respondents failed to fulfil hearing and Disputes their obligations. Our final Arbitration Company has initiated disposal. Tribunal, arbitration proceedings Ahmedabad against the Respondents for reliefs including for recovery of its dues. 3. Arbitration SSNNL Our Company executed a 441.19 The Arbitral Reference No. project for constructing the Reference is 11 of 2006 Narmada Main Canal pending before the Package 4. Company had to before the Gujarat Public incur additional cost due to Arbitral Works extension of the project Tribunal. Contracts requested by SSNNL. Disputes However, SNNL refused to Arbitration make the additional Tribunal, payments. Our Company has Ahmedabad initiated arbitration

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proceedings against the Respondents for reliefs including for recovery of additional costs incurred. 4. Arbitration SSNNL Our Company executed a 433.77 The Arbitral Reference No. Project for constructing along with Reference is 9 of 2006 Narmada Main Canal interest pending before the Package 6. Additional costs thereon before the Gujarat Public were incurred by Company Arbitral Works which SSNNL refused to pay. Tribunal. Contracts Our Company has initiated Disputes arbitration proceedings Arbitration against the Respondents for Tribunal, reliefs including for recovery Ahmedabad of additional costs.

5. Arbitration SSNNL Our Company had executed 368.60 The Arbitral Reference No. a project for constructing Reference is 8 of 2006 Canal Syphons across river pending before the Khari-I on Narmada Main before the Gujarat Public Canal. Our Company Arbitral Works incurred additional cost on Tribunal. Contracts account of extension of the Disputes works requested by SSNNL. Arbitration SSNNL refused to make Tribunal, payment towards the Ahmedabad additional costs. Our Company has initiated arbitration proceedings against the Respondents for reliefs including for recovery of additional costs incurred.

6. Arbitration SSNNL Our Company executed a 347.37 The Arbitral Reference No. project for construction of a Reference is 10 of 2006 Canal Syphons across river pending before the Pushpavati on Narmada Main before the Gujarat Public Canal. SSNNL requested for Arbitral Works an extension of the project Tribunal. Contracts due to which Company had to Disputes incur additional costs, which Arbitration subsequently SSNNL refused Tribunal, to pay. Our Company has Ahmedabad initiated arbitration proceedings against the Respondents for reliefs including for recovery of additional costs incurred.

7. Arbitration SSNNL Our Company executed a 162.13 The Arbitral Reference No. project for laying double Reference is 37 of 2006 layered burnt clay tiles lining pending before the and under drainage before the Gujarat Public arrangement and service Arbitral Works road on Saurashtra Branch Tribunal Contracts Canal for Slice III. Our Disputes Company had to incur Arbitration additional costs for the Tribunal, project which SSNNL refused Ahmedabad to pay. Our Company has 279

initiated arbitration proceedings against the Respondents for reliefs including for recovery of additional costs incurred.

8. Arbitration SSNNL Our Company executed a 167.68 The Arbitral Reference No. project for laying double Reference is 50 of 2006 layered burnt clay tiles lining pending before the and constructing canal before the Gujarat Public service road, catch water Arbitral Works drain, dowels and boundary Tribunal. Contracts gutter on Saurashtra Branch Disputes Canal for Slice IV. SSNNL Arbitration refused to pay our Company Tribunal, the additional costs incurred Ahmedabad for the project. Our Company has initiated arbitration proceedings against the Respondents for reliefs including for recovery of additional costs incurred.

9. Special Civil (1) Commissioner of Our Company was carrying 49.20 The matter Application Transport out excavation of mines (Our is pending No. 3147 of around Surat when the Company before the 2004, High (2).Regional Regional Transport Officer, has Gujarat High Court of Transport Officer Surat (RTO) issued a notice already Court. Gujarat. for payment of road tax and deposited (3).The State of penalty under the Bombay the said Gujarat. Motor Vehicles Act, 1958 on amounts) 40 dumpers used at the site. Our Company disputed the demand made by the RTO and approached the Gujarat High Court against the Commissioner of Transport and the RTO. The Gujarat High Court by an interim order dated March 11, 2004 directed Company to deposit the road tax (without penalty) under the Bombay Motor Vehicles Act, 1958 for the period July 28, 2000 to March 31, 2004 in equal monthly instalments. Company has complied with the order and has deposited Rs. 49.20 Lacs.

10. High Court of Osho Ventures FZE (1) Mr Vishnubhai Patel; (2) N.A. The Appeal Gujarat, First Sadbhav Engineering is pending Appeal (Stmp) Limited; and (3) Ocean Bright before the No. 2662 of Corporation Limited have High Court 2009 challenged the Order passed of Gujarat by the City Civil Court in Civil Miscellaneous Application No. 317 of 2009, wherein the City Civil Court had restrained the Appellants 280

herein from reducing their respective shareholding as provided for in the Shareholders Agreement executed between the Appellants and the Respondent. The Appellants and the Respondent had entered into a Shareholders’ Agreement with regard to the companies of the Respondent in Mozambique. Disputes pertaining to the Shareholders Agreement arose and the same is proposed to be resolved by Arbitration. The Respondent had filed an Arbitration Petition before the City Civil Court, Ahmedabad, seeking injunctive reliefs against the Appellants.

11. Arbitration SSNNL & Anr The Company has filed a 3,281.47 Pending for Reference No. Claim against SSNNL for hearing 3 of 2009 recovery on account of before the excess work done by our Gujarat Public Company and the damages Works for amount not paid in time. Contracts Our Company was awarded a Disputes contract for construction of Arbitration canal work on river Vatrak. Tribunal, Ahmedabad

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II. Income Tax Cases

Case No. / Amount S Forum / Court / Current Filed Against Particulars involved No. Title of the status (Rs. lacs) matter 1. Gujarat High The Asstt. Our Company has filed an 12.14 Pending Court Commissioner of appeal before the Gujarat (Company before the Appeal No. Income Tax, Circle – High Court challenging the has High Court. TAXAP/1798/200 8, Ahmedabad. Order dated April 03, 2009 already 9 passed by the ITAT. The paid all of ITAT has dismissed the the A.Y. 2001-02 appeal filed by our Company disputed challenging the Order amount) passed by the Commissioner (Appeals). Our Company had filed Appeal before the ITAT against an Order passed by the Commissioner of Income Tax (Appeals) XIV, Ahmedabad passed on April 25, 2005. By the said Order dated April 25, 2005, the CIT (Appeals) had confirmed the demand of Rs 12.10 lacs for AY2001- 2002 raised by the Assistance Commissioner of Income Tax on account of the disallowance of TDS claimed on mobilization/ machinery advances received by Company.

2. Gujarat High The Asstt. Our Company has filed an 61.74 Pending Court Commissioner of appeal before the Gujarat (Company before the Appeal No. Income Tax, Circle – High Court challenging the has High Court TAXAP/1799/200 8, Ahmedabad. Order dated April 03, 2009 already . 9 passed by the ITAT. The paid all of A.Y. 2002-03 ITAT has dismissed the the appeal filed by our Company disputed challenging the Order amount) passed by the Commissioner (Appeals). Our Company had filed Appeal before the ITAT against an order passed by the Commissioner of Income Tax (Appeals) XIV, Ahmedabad on April 25, 2005. By the said Order, the CIT (Appeals) had confirmed the demand of 61.74 Lacs for AY2002- 2003 raised by the Assistance Commissioner of Income Tax on account of the disallowance of TDS claimed on mobilization/ machinery advances received by Company.

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3. ITAT, The Dy. The Company has filed 125.66 The appeal Ahmedabad. Commissioner of appeal before the ITAT (Company is pending Appeal No. Income Tax Circle - against the Order passed by has before ITAT, 762/2007, 8, Ahmedabad the Commissioner of Income already Ahmedabad. A.Y.2003-04. Tax (Appeal) XIV, paid all of Ahmedabad passed on the January 19, 2007. By the disputed said Order the CIT (Appeals) amount) partially disallowed the deduction u/s 80IA of the Income Tax Act-1961 for the A.Y. 2003-04. At the time of passing the assessment orders, the Assessing Officer did not consider the Interest payment for the purpose of allocation of gross expenditure. Assessing officer also reduced the loss suffered by other unit from the eligible income of other sites while granting the deduction u/s 80IA.

4. ITAT, The Dy. Our Company has filed an 442.35 The appeal Ahmedabad. Commissioner of appeal before the ITAT (Company is pending Appeal No. Income Tax Circle - against the Order passed by has before ITAT, 763/2007, A.Y. 8, Ahmedabad the Commissioner of Income already Ahmedabad. 2004-05 Tax (Appeal) XIV, paid all of Ahmedabad received on the January 19, 2007. By the disputed said Order CIT (Appeals) amount) partially disallowed the deduction u/s 80IA of the Income Tax Act-1961 for the A.Y. 2004-05. At the time of passing the assessment orders, Assessing Officer did not consider the Interest payment for the purpose of allocation of gross expenditure. Assessing officer also reduced the loss suffered by other unit from the eligible income of other sites while granting the deduction u/s 80IA. Our Company has already paid the tax on the said disallowed amount.

5. ITAT, The Dy. Our Company has filed an 339.44 The appeal Ahmedabad. Commissioner of appeal before the ITAT (Company is pending Appeal No. Income Tax Circle - against the Order passed has before ITAT, 610/2008, A.Y 8, Ahmedabad dated December 13, 2007 by already Ahmedabad. 2005-06 the Commissioner of Income paid all of Tax (Appeal) XIV, the Ahmedabad. By the said disputed Order the CIT (Appeals) amount) partially disallowed the deduction u/s 80IA of the 283

Income Tax Act-1961 for the A.Y. 2005-06. At the time of passing the Assessment Orders, the Assessing Officer did not consider the Interest payment for the purpose of allocation of gross expenditure. Assessing Officer also reduced the loss suffered by other unit from the eligible income of other sites while granting the deduction u/s 80IA.

6. ITAT, Assistant Our Company has filed an Company - Ahmedabad Commissioner of appeal before the ITAT, has Appeal No Income Tax (OSD), Ahmedabad; challenging the already 1834/Ahd-2009, Circle 8, Order dated April 13, 2009 paid the A.Y. 2006-07 Ahmedabad. passed by the Commissioner entire (Appeals) in Appeal nos disputed 360/07-08 & 317/2008-09. amount. The Commissioner (Appeals) No further has partly allowed the Liability is Appeal filed by the to be Company. Our Company had raised. filed an appeal before the Commissioner Income Tax (Appeals) – XIV, Ahmedabad against the order passed by the Asst. Commissioner of Income Tax, Circle-8, Ahmedabad for the assessment year 2006-07 who had partially disallowed the deduction u/s 80IA, , the Employee’s Provident Fund Contribution, & the Service Tax Expenses.

7. ITAT, Assistant Our Company has filed an 56.02 Appeal is Ahmedabad Commissioner of appeal before the ITAT, (Company pending for Appeal No Income Tax Ahmedabad, challenging the has admission 1834/Ahd-2009, Order dated April 13, 2009 already A.Y. 2007-08 passed by the Commissioner paid the (Appeals) in Appeal nos disputed 360/07-08 & 317/2008-09. amounts) The Commissioner (Appeals) has partly allowed the Appeal filed by the Company.

Our Company had filed an appeal before Commissioner Income Tax (Appeals) against the order dated April 13, 2009 passed by the Asst. Commissioner of Income Tax. The Commissioner Income Tax (Appeals) has ordered Company to pay 284

Rs.56.02 lacs towards the demand.

8. High Court of Union of India & Ors Company has filed a writ NA NA Gujarat, petition before the Gujarat High Court challenging the Special Civil validity of the amendment, in Application No the explanation of the Sec 11287 of 2009 80-IA of the Income Tax Act, made by the Finance Act, 2009. In the said writ petition Company has covered all the previous assessment years in which company has claimed deduction u/s 80-IA. Company had claimed deduction of Rs 26.54 crore in FY 2008-09 u/s 80-IA after making proper payment under protest and claimed refund of Rs 9.02 crore which is equal to tax liability. In the event of deduction being disallowed u/s 80-IA the Company has made no provision in respect of said liability. 9. Appeal before Addl. Commissioner Company has filed an appeal 27.90 Appeal is CIT(A) for AY of Income Tax against the Order dated Company pending for 2008-09 March 29, 2010 passed by has hearing. Assessing Officer. The already Assessing officer has paid the disallowed: (a) an amount of entire Rs 3.76 towards amount as administration expenditure; per the (b) an amount of Rs 4.79 Mn Order being the expenditure in respect of QIP of shares of the Company; (c) an amount of Rs 82.23 Mn deduction claimed u/ 80IA(4) of IT Act; The Assessing officer has also recomputed the quantum of deduction u/s 80IA(4) by reallocating certain expenditure at 78.94 Mn and interest thereon. 10. High Court of Union of India & Ors Our Company has No Pending for Gujarat, Special challenged the notice issued demand admission Civil Application u/s 148 of Income Tax Act by notice has and final 5846 of 2010 AY the Income Tax department. been hearing 2003-04 Aforesaid notice is issued by issued by the Income Tax Department dept. on the basis of amendment made by the Finance Act, 2009 in an explanation in Sec 80IA of the Income Tax Act. 11. High Court of Union of India & Ors Our Company has No Pending for Gujarat, Special challenged the notice issued demand admission Civil Application u/s 148 of Income Tax Act by notice has and final 285

5847 of 2010 the Income Tax department. been hearing AY 2004-05 Aforesaid notice is issued by issued by the Income Tax Department dept. on the basis of amendment made by the Finance Act, 2009 in an explanation in Sec 80IA of the Income Tax Act. 12. High Court of Union of India & Ors Our Company has No Pending for Gujarat, Special challenged the notice issued demand admission Civil Application u/s 148 of Income Tax Act by notice has and final 5848 of 2010 the Income Tax department. been hearing AY 2005-06 Aforesaid notice is issued by issued by the Income Tax Department dept. on the basis of amendment made by the Finance Act, 2009 in an explanation in Sec 80IA of the Income Tax Act. 13. High Court of Union of India & Ors Our Company has No Pending for Gujarat, Special challenged the notice issued demand admission Civil Application u/s 148 of Income Tax Act by notice has and final 5849 of 2010 the Income Tax department. been hearing AY 2006-07 Aforesaid notice is issued by issued by the Income Tax Department dept. on the basis of amendment made by the Finance Act, 2009 in an explanation in Sec 80IA of the Income Tax Act. 14. High Court of Union of India & Ors Our Company has No Pending for Gujarat, Special challenged the notice issued demand admission Civil Application u/s 148 of Income Tax Act by notice has and final 5850 of 2010 the Income Tax department. been hearing AY 2007-08 Aforesaid notice is issued by issued by the Income Tax Department dept. on the basis of amendment made by the Finance Act, 2009 in an explanation in Sec 80IA of the Income Tax Act.

III. Sales Tax Cases

Case No. / Amount S Forum / Court / Current Filed Against Particulars involved No. Title of the status (Rs. lacs) matter 1. Sales Tax, Sales Tax Officer, Our Company has filed 4.60 The Appeals Tribunal, Sambalpur, Circle-I Appeals against the are pending Bhuvaneshwar, respective excess sales tax before Sales Case No. AA350 demand made by the Tax Tribunal, (SAI) of 96-97 department for the Bhuvaneshw Case No. assessment year 1993-94, ar. AA35(SAI) of 98- 1994-95, 1995-96, 1996-97 99 & 1997-98. Case No. AA36(SAI) of 98- 99 286

Case No. AA37(SAI) of 98- 99 Case No. AA144(SAI) of 00-01

2. Commissioner of 1.7 The matter is Sales Tax, Our Company executed a (Compan pending Cuttack road construction project in y has before the State of Orissa. The already Commission Sales Tax Officer, Cuttack III deposited er of Sales, Circle, passed an order Rs One Cuttack . under Entry Tax Regulations Lac) of the State directing our Company to pay Rs. 1.7 Lacs for the year 2000-2001. Our Company has already deposited Rs. 1 Lac against the said demand.

IV. Cases under the Customs Law

Case No. / Amount S Forum / Court / involved Current Filed Against Particulars No. Title of the (Rs. lacs) status matter 1. CESTAT, Commissioner of Our company has filed an 105.00 Pending for Ahmedabad Customs.- Mumbai appeal and application for (Compan hearing of wavier of pre deposit y has Stay and against the Order dated already admission of December 1, 2009 passed paid Rs the Appeal by the Commissioner 12 lacs (Appeals), wherein the pursuant Commissioner (Appeals) to the has dismissed the appeal Orders of filed by the Company the High against the Order passed Court) by the Deputy Commissioner of Customs confirming the demand in the show cause notice.

Our Company had received a show cause notice from the Customs Department demanding Rs 116.61 lcas towards the customs duty on import of the one Asphalt Mixing Plant valued at Rs. 229.00 lacs by our Company claiming nil rate of customs duty in terms of Notification No. 17/2001. Company filed a Special Civil Application (No. 10779 of 2004) on March 4, 2005 in the Gujarat High 287

Court for a stay against the demand made by the Assistant Commissioner. The Gujarat High Court passed an order requiring Company to deposit ten percent (10%) of the customs duty (i.e. Rs. 12 Lacs), demanded by the department and remanded the matter to the Commissioner of Customs (Appeals).

2. High Court at Union of India & Ors Our Company has NA NA Gujarat challenged the Coercive action initiated by the Writ Petition of Customs department 2010 pursuant to Order dated March 12, 2010 for recovery of customs duty allegedly payable by our Company. Our Company has challenged the said order dated March 12, 2010 passed by the Department on the grounds that despite the appeal along with Application for waiver of pre-deposit pending before the CESTAT, the Customs Department has initiated coercive actions against our Company. The Customs department have initiated action against the Company pursuant to the Order dated December 1, 2009 passed by the Commissioner (Appeals).

V. Cases under Service Tax Laws

Amount Case No. / Forum S involved Current / Court / Title of Filed Against Particulars No. (Rs. lacs) status the matter

1. CESTAT Case No. Commissioner of Our Company has filed an 67.29 The Appeal ST/S/1239/08 Service Tax, Appeal in the CESTAT is pending Ahmedabad Ahmedabad against an order passed before in Appeal by the CESTAT. Commissioner of Service Tax, Ahmedabad on June 3, 2008 demanding penalty of Rs. 67.29 Lacs for the assessment year 2005-06.

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VI. Cases under Labour Laws

Amount Case No. / Forum / S involved Current Court / Title of the Particulars No. Filed Against (Rs. lacs) status matter

1. ESI Application No. (1) Joint Director, The ESI Authorities held 0.68 The matter is 12 of 2007 before Regional Office ESI that the employees/ pending Employee’s State Corporation, Hubli workers of the project of before the Insurance Court at Grasim Industries at ESI Court at Hubli. (2) Grasim Industries Kumarapatnam are Hubli. Ltd. Kumarapatnam, entitled to benefits under Harihar, Dist: Haveri. the ESI Act. Our Company has challenged such view taken by the ESI Authorities before the ESI Court at Hubli

LITIGATIONS FILED AGAINST OUR COMPANY

I. Civil Cases

Case No. / Amount Forum / Court / involved Current S No. Filed By Particulars Title of the (Rs. lacs) status matter.

1 Civil Reliance Industries Ltd. Reliance Industries 70.00 The matter Miscellaneous Limited (RIL) has filed is pending Application No. an application before the 71 of 2004, Civil challenging the Award District Judge, Senior passed by the Arbitral Court, Division, Tribunal in the Jamnagar. Jamnagar. arbitration proceeding between RIL and our Company. Our Company executed a project for Reliance Industries Limited (RIL) at Jamnagar, Gujarat in July 1997 involving construction of roads in the refinery and township at Jamnagar, Gujarat. Our Company completed the project but various disputes arose with RIL in relation to the additional costs of the project. Our Company initiated arbitration proceedings against RIL and the Arbitration Tribunal directed RIL to make this payment with interest to our Company.

2 Special Civil Suit M/s. Sarda Energy and Sarda Energy and 46.42 The matter No: 1054/08, Minerals Limited, Minerals Limited has is pending 289

Court of Civil (Formerly Raipur Alloys filed a suit for recovery before the Judge Senior Limited) Rs. 46.42 Lacs against Civil Court Division at our Company and its at Nagpur. Nagpur. directors and officers holding them jointly and severally liable. Our Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs.46.42 Lacs balance to be paid and filed the present Suit. Our Company has challenged the jurisdiction of the Court.

3. City Civil Court Osho Ventures FZE Osho Ventures FZE has The matter Ahmedabad filed the aforesaid civil ------is pending Civil application seeking before the Miscellaneous injunctive reliefs against Civil Court. Application No. our Company, SNRL 1167 of 2009 and OBCL with respect to further allotment of 9899 shares of OBCL to SEL and SNRL till the disputes between the parties are settled by Arbitration Proceedings.

Osho Ventures FZE, SEL and OBCL had entered into a Shareholders’ Agreement with regard to the companies of Osho Ventures FZE in Mozambique. SEL and Mr Vishnubhai Patel have transferred their respective shares in OBCL to SNRL. Disputes pertaining to the Shareholders Agreement arose and the same is proposed to be resolved by Arbitration.

and properties of the companies i.e Osho Minerals Limitada & Osho Cimentos Limitada in Mozambique or from removing the same from their present location. The said Order also restrains SEL & OBCL from exercising any right pursuant to the purported transfer of 9899 shares of OBCL to SNRL and SEL 4. Arbitral Tribunal Osho Ventures FZE Osho Ventures FZE *3233.29 Next Presided by against (1) Mr. (USD Meeting Justice G B Vishnubhai Patel(2) 7,185,080 fixed on Patnaik (Retd), Sadbhav Engineering along with September Justice U C Limited, (3) Ocean interest @ 4, 2010. Banerjee (Retd) Bright Corporation 18% p.a.) and Justice C K Limited inter-alia for Thakker (Retd) recovery of USD 7,185,080 along with interest @ 18 % p.a. Osho ventures are directed to file Statement of Claim by June 28, 2010.

* Clauculations based on conversion rate of 1USD = 45 INR

II. Cases under the Labour laws

Case No. / Forum Amount S Current / Court / Title of Filed By Particulars involved No. status the matter (Rs. lacs) 1. Case No. Mr. Ganshyam Pandya A labourer, Mr. 1.00 Our 634/2001, Labour Ganshyam Pandya, Company Court, working at the Orissa has Ahmedabad site submitted his decided to resignation to our proceed Company and thereafter further filed a case (No. 934/96- against the LC) in the Labour Court, verdict of Ahmedabad, alleging the Labour termination of services Court in and for reinstatement the High along with back wages. Court. The Labour Court, Ahmedabad has awarded re-instatement of services with 25% back wages.

2. Labour Court, Mr. Narendra Sinha A labourer, Mr. 1.00 Our Surat Narendra Sinha, Company working at the GIPCL is site at Surat as a store proposing keeper availed for leave to file an 291

without permission from appeal our Company due to against the which his services were order terminated. The before the labourer thereafter filed High a case (No. 65/2000) in Court. the Labour Court, Surat alleging termination of services by our Company and for reinstatement along with back wages. The Labour Court, Surat awarded re-instatement of services with 15% back wages.

3. WC Case No. Shri Madholal Dhobhi Madholal Dhobhi was 1.00 The matter 2/2005, of Labour working as a watchman The initial is pending Court, Udaipur at our Company’s liability in with the Udaipur site. He this matter Labour suffered a cardiac arrest is with the Court, during his employment insurance Udaipur. and expired on January company 22, 2004. The nominee and our of the deceased Company’s workman filed a claim in liability, if the Labour Court, any, is Udaipur, for restricted to compensation of Rs. a maximum 2.30 Lacs along with amount of interest at the rate of 12% p.a from our Company. Our Company has an insurance policy covering workman’s compensation claims. United India Insurance Company Limited, the insurance company has also been made a party to the proceedings.

4. Case No. Shri Ganesh Mohato Shri Ganesh Mohato, 0.2 The matter 5353/2000 Deputy was working as a The initial is pending Labour dumper driver at our liability in with the Commissioner Company’s Bachao site, this matter Labour Cum WC where he suffered is with Commissio Commissioner, serious injuries during United India n cum WC Hazari Bagh, his employment on Insurance Commissio Jharkhand September 19, 2000. Company ner, Hazari The driver filed a claim and if Bagh, (Case No. 2539/2000) required, Jharkhand. with the Deputy Labour our Commissioner cum WC Company’s Commissioner, Hazari liability shall Bagh, Jharkhand and be was paid a restricted to compensation of Rs. the 1.47 Lacs by the maximum 292

insurance company. amount of. The dispute regarding payment of interest is pending before the Commissioner.

III. Income Tax Cases

Case No. / Amount S Forum / Court / Current Filed Against Particulars involved No. Title of the status (Rs. lacs) matter 1. ITAT, Assistant The Income Tax Department ------The Appeal Ahmedabad Commissioner of has filed an appeal before is pending Appeal No Income Tax (OSD), the ITAT, Ahmedabad, for 2053/Ahd-2009, Circle 8, challenging the Order dated admission A.Y. 2006-07 Ahmedabad. April 13, 2009 passed by the before the Commissioner (Appeals). ITAT The Commissioner (Appeals) had partly allowed the Appeal filed by the Company.

Our Company has filed an appeal before the Commissioner Income Tax (Appeals) – XIV, Ahmedabad against the order passed by the Asst. Commissioner of Income Tax, Circle-8, Ahmedabad for the assessment year 2006-07 partially disallowing the deduction u/s 80IA, disallowing Employee’s Provident Fund Contribution, & disallowing Service Tax Expenses.

LITIGATIONS FILED BY THE DIRECTORS OF OUR COMPANY

Case No. / Amount Forum / Filed against Current S No. Particulars involved Court / Title (Respondent) status (Rs. Lacs) of the matter 1 High Court of Osho Ventures FZE (1) Mr Vishnubhai Patel; (2) N.A. The Appeal Gujarat, First Sadbhav Engineering is pending Appeal No Limited; and (3) Ocean Bright before the 4124 of 2009 Corporation Limited have High Court challenged the Order passed of Gujarat. by the City Civil Court in Civil Miscellaneous Application No. 317 of 2009, wherein the City Civil Court had restrained the Appellants herein from reducing their respective shareholding as provided for in the Shareholders Agreement 293

executed between the Appellants and the Respondent. The Appellants and the Respondent had entered into a Shareholders’ Agreement with regard to the companies of the Respondent in Mozambique. Disputes pertaining to the Shareholders Agreement arose and the same is proposed to be resolved by Arbitration. The Respondent had filed an Arbitration Petition before the City Civil Court, Ahmedabad, seeking injunctive reliefs against the Appellants.

LITIGATIONS AGAINST THE DIRECTORS OF OUR COMPANY

I. Mr. Vishnubhai M. Patel

Case No. / Forum Amount S Current / Court / Title of Filed By Particulars involved No. status the matter (Rs. Lacs) 1. Special Civil Suit M/s. Sarda Energy and Sarda Energy and 46.42 The matter No: 1054/08, Court Minerals Limited, Minerals Limited has is pending of Civil Judge (Formerly Raipur Alloys filed a suit for recovery before the Senior Division at Limited) Rs. 46.42 Lacs against Civil Court at Nagpur. our Company and its Nagpur. directors and officers, holding them jointly and severally liable. Our Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs.46.42 Lacs balance to be paid and filed the instant Suit. Our Company has challenged the jurisdiction of the Court.

2. City Civil Court Osho Ventures FZE Osho Ventures FZE The matter Ahmedabad has filed the aforesaid ------is pending Civil Miscellaneous civil application seeking before the Application No. injunctive reliefs Civil Court. 1167 of 2009 against our Company , SNRL and OBCL with respect to further allotment of 9899 shares of OBCL to SEL and SNRL till the 294

disputes between the parties are settled by Arbitration Proceedings.

The City Civil Court by its ad-interim order dated 7th October 2009 has restrained (1) Mr. Vishnubhai Patel, (2) SEL (3) OBCL and (4) SNRL, their agents or servants from selling or alienating any further assets or properties of OBCL including assets and properties of the companies i.e Osho Minerals Limitada & Osho Cimentos Limitada in Mozambique or from removing the same from their present location. The said Order also restrains SEL & OBCL from exercising any right pursuant to the purported transfer of 9899 shares of OBCL to SNRL and SEL 3 Arbitral Tribunal Osho Ventures FZE Osho Ventures FZE *3233.29 Next Presided by Justice against (1) Mr. (USD Meeting G B Patnaik (Retd), Vishnubhai Patel(2) 7,185,080 fixed on Justice U C Sadbhav Engineering along with September Banerjee (Retd) Limited, (3) Ocean interest @ 4, 2010. and Justice C K Bright Corporation 18% p.a.) Thakker (Retd) Limited inter-alia for recovery of USD 7,185,080 along with interest @ 18 % p.a. 295

Osho ventures are directed to file Statement of Claim by June 28, 2010.

* Calculations based on conversation rate of 1USD= 45 INR

II. Mr. Chetan N. Patel

Case No. / Forum / Amount S Current Court / Title of the Filed By Particulars involved No. status matter (Rs. Lacs) 1. Special Civil Suit M/s. Sarda Energy and Sarda Energy and 46.42 The matter is No: 1054/08, Court Minerals Limited, Minerals Limited has pending of Civil Judge (Formerly Raipur Alloys filed a suit for recovery before the Senior Division at Limited) Rs. 46.42 Lacs against Civil Court at Nagpur. our Company and its Nagpur. directors and officers, holding them jointly and severally liable. Our Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs.46.42 Lacs balance to be paid and filed the instant Suit. Our Company has challenged the jurisdiction of the Court.

III. Mr. Amarsingh Vaghela

Case No. / Forum / Amount S Current Court / Title of the Filed By Particulars involved No. status matter (Rs. lacs) 1. Special Civil Suit M/s. Sarda Energy and Sarda Energy and 46.42 The matter is No: 1054/08, Court Minerals Limited, Minerals Limited has pending of Civil Judge (Formerly Raipur Alloys filed a suit for recovery before the Senior Division at Limited) Rs. 46.42 Lacs against Civil Court at Nagpur. our Company and its Nagpur. directors and officers, holding them jointly and severally liable. Our Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs.46.42 Lacs balance to be paid and filed the instant Suit. Our Company has challenged the jurisdiction of the Court.

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IV. Mr. Pravinkumar M. Ganatra

V. Mr. Nitin R. Patel.

VI. Mr. Sashin V. Patel

Case No. / Forum / Amount S Current Court / Title of the Filed By Particulars involved No. status matter (Rs. lacs)

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1. Special Civil Suit M/s. Sarda Energy and Sarda Energy and 46.42 The matter is No: 1054/08, Court Minerals Limited, Minerals Limited has pending of Civil Judge (Formerly Raipur Alloys filed a suit for recovery before the Senior Division at Limited) Rs. 46.42 Lacs against Civil Court at Nagpur. our Company and its Nagpur. directors and officers, holding them jointly and severally liable. Our Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs.46.42 Lacs balance to be paid and filed the instant Suit. Our Company has challenged the jurisdiction of the Court.

Contingent Liabilities

As per our Consolidated Restated Financial Statements, our contingent liabilities as on March 31, 2010 are as follows: (Rs. lacs) Year Ended S. No Particulars 31-03-2010 1. Bank guarantee Outstanding 85,427.56 2. Liability on Contracts remaining to be executed on capital Accounts ( Net of 1,26,254.14 Advances) 3. Corporate guarantees 17,606.56 4. Civil Suit against the Company 46.42 5. Sales Tax & Entry Tax 5.30 6. Custom Duty 104.95 7. Income Tax Matters 887.02 8. Service Tax 67.29 Total 2,30,399.24

LITIGATIONS AGAINST THE PROMOTERS OF OUR COMPANY

For details pertaining to the litigations filed against the Promoters of our Company, please refer to the sub- section “Litigation against the Directors of our Company – Mr. Vishnubhai Patel” in this chapter.

LITIGATIONS BY THE PROMOTERS OF OUR COMPANY

For details pertaining to the litigations filed by the Promoters of our Company, please refer to the sub-section “Litigation by the Directors of our Company – Mr. Vishnubhai Patel” in this chapter.

LITIGATION BY OUR JVs

I. M/s. Amar Construction Co. (Joint Venture Consortium)

Case No. / Amount Forum / Court Current S. No Filed Against Particulars involved / Title of the status (Rs. lacs) matter 1. Arbitration SSNNL & anr. Our Company, by a 4829.02 The Arbitral 298

Reference No. joint venture reference 43 of 2004 consortium, executed pending is before the a project for before the Gujarat Public constructing a part of Arbitral Works the Narmada Main Tribunal. . Contracts Canal in kms Disputes 127.559 to 144 kms. Arbitration Our Company had to Tribunal, incur additional Ahmedabad expenses as the nature of work was altered from that represented at the time of awarding the contract. So our Company has referred the matter to arbitration.

II. M/s. Sadbhav Prakash Joint Venture

Case No. / Amount Forum / Court Current S. No Filed Against Particulars involved / Title of the status (Rs. lacs) matter 1. High Court of National Highways Our Company has 96.65 The appeal is Delhi Authority of India. filed an Appeal pending before the Delhi High hearing. OMP No 686 & Court challenging the 690 of 2009 award dated August 07, 2009 passed by the Arbitral Tribunal. The Tribunal had in the Award has granted following reliefs: Reference I – Rs.53,00,430/- For Reference II- Rs.9,47,082/-

Our Company executed a project for NHAI for rehabilitation and upgrading to 4/6 lane divided carriageway from Kishangarh to Nisarbad project in Rajasthan. Our Company completed this project ahead of schedule, and was entitled to a bonus of Rs.160 lacs. However during execution of the project certain disputes arose in relation to the additional costs of 299

the project amounting to Rs. 2369 lacs. Total claim has been made in two references i.e. Ref. I and Ref. II. Arbitration proceedings for Ref. I has been completed. It contained five (5) claims. Arbitration proceedings for Ref- II is in progress and likely to be completed shortly.

The Delhi High Court has by its Order dated January 12, 2010 issued notice only for Claim No.1 of Reference -1 and has dismissed other claims as challenged in the Appeal.

2. CMA No. Government of Our Company 293.00 The Appeal is 118/2007, Gujarat & ors. formed a joint pending before the venture with PBA before the District Judge, Infrastructure Limited District Court Gandhinagar. for strengthening and at paving of shoulders Gandhinagar. between Viramgam and Halvad for the State of Gujarat, Roads and Buildings Department. The joint venture requested that the payment towards the Project be made in Indian Rupees, which the State of Gujarat had verbally agreed to. However, at the time of making the payment, the State of Gujarat made payment in the ratio of 80:20 i.e. 80% in Indian Rupees and the balance 20% in US Dollars. Due to this, the joint venture suffered loss in revenue. The JV referred the matter to Arbitration and the Arbitral Tribunal ruled in favour of the Government of 300

Gujarat. Our Company (JV) has preferred an appeal against the award of the Arbitral Tribunal.

LITIGATION AGAINST OUR SUBSIDIARIES

1. Ahmedabad Ring Road Infrastructure Limited

Case No. / Forum Amount Current S No. / Court / Title of Filed By Particulars involved status the matter (Rs. lacs) 1. Special Civil Kanuji Gabhaji Thakor One Kanuji Gabhaji The amount The matter Application No. Thakor, has filed a an in dispute is is pending 26834/07, High application under the not in the Court of Gujarat Gujarat Town quantifiable. Gujarat at Ahmedabad. Planning and Urban High Court. Development Act, 1976 against 1) the State of Gujarat, 2) the Union of India, 3) Ahmedabad Urban Development Authority and 4) Ahmedabad Ring Road Infrastructure Limited. As per Concessionaire Agreement between Ahmedabad Urban Development Authority (AUDA) and ARRIL, the Ahmedabad Ring Road i.e. Sardar Patel Ring Road has been handed over to ARRIL by AUDA on BOT basis with effect from 1 January 2007. Our Company’s right to levy toll tax has been affected. So, our Company is added as a party to the Suit.

PENALTIES AND FINES

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List of Sundry Creditors for expenses and goods to whom our Company owes more than Rs. 1 lac for more than 30 days as on May 31, 2010 is enumerated below and the total outstanding amount is Rs. 2,839.01 lacs: Abhay Kumar Jain, Accent Engineering, Amar Transport Agency, Anil Niswade Engineers, Aravali Infrapower Limited, Asphalt Construction India Private Limited, Automark Industries Private Limited, Bhikhi Industrial Filter, Bishwajit Sadhuka, Case Cold Roll Forming Limited, D.Thakkar Construction Private Limited, Dhariya Infrastructure Development Private Limited, Dhiraj Engineering & Contractors, Dhruv Sales Corporation, East West Tradelink Private Limited, Gain Steel Mills Private Limited, Giren Mevada, GKC Projects Limited, Gmmco Limited, Gujarat Apollo Industries Limited, Gulf Oil Corporation Limited, Hindustan Colas Limited, Jadeja Road Lines, Kataline Infraproducts Private Limited, Kirloskar Elec. Corporation Limited, Krishna Corporation, KS Softnet Solutions Private Limited, Lalji Bhavanji Sathawara, Lalji Bhavanji Sathwara (HUF), Laxmi Chemicals, Macons Equipments, Madhusudan Bhaisa, Meridian Construction, Metalmeccanica Fracasso India, Montecarlo Construction Limited, Mukesh Engineers Private Limited, New Komal Electronics & Electricals, Niti Corporation, Parshva Steel Corporation, Pashupati Earth Movers, Patel Infrastructure Private Limited, PBA Infrastructure Limited, PNC Infratech Limited, Radhakrishna Stone Crushing Co., Raipur Alloys & Steel Limited, Rathi Rerollers (India) Limited, Salim Ismail Jat, Sargon Geosynthetics Limited, Saroj Buildcon Private Limited, Shaligram Engineers, Siddharth Infra .Project Private Limited, Sidharth Enterprises, SKP Management Services Private Limited, Spanco Limited, SRG Metalcrafts (India) Private Limited, Srinivasa Transport (Durga Craine), Subhashree Enterprises, Supreme Infrastructure India Limited, Svenska Technologies Private Limited, Thakkarsons Roll Forming Private Limited, Tiki Tar Industries, Tritech Engineering Projects, Unnati Motors, Vishnushiva Infra. Private Limited, Private Limited Private Limited.

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GOVERNMENT APPROVALS

In view of the approvals listed below, we can undertake this Issue and our current business activities and no further material approvals from any Governmental or regulatory authority or any other entity are required to undertake the issue or continue our business activities except as mentioned below.

A. Government approvals received

1. The Regional Officer, Madhya Pradesh Pollution Control Board, Gwalior has issued consent letter bearing No. 1041/TC/PCB/GWA/2009 dated April 28, 2009 its consent u/s. 21, Air (Prevention & Control of Pollution) Act, 1981, for production capacity of Stone Boulder Mining and Gitti – 60 Tonne per hour at Village Vardha, Zilla Shivpur at Survey No. 816/5, 827/1, (2.193 hectare). The license is valid for 12 months from 1st day of month of commissioning of industry.

2. The Regional Officer, Madhya Pradesh Pollution Control Board, Gwalior has issued consent letter bearing No. 1043/TC/PCB/GWA/2009 dated April 28, 2009 its consent u/s. 25/26 of the Water (Prevention & Control of Pollution) Act, 1974, for the production of Stone Boulder mining and Gitti for the production capacity of 60 Tonne per hour, at Village Vardha, Zilla Sheopur, Survey No. 816/5, 827/1, (2.193 hectare). The consent is valid for 12 months from 1st day of month of commissioning of industry.

3. The Joint Chief Controller of Explosives, Central Circle Office, Agra has issued license bearing No. P/CC/MP/14/5028(P201004) dated April 10, 2008 for License for storage of 20KL Petroleum Class B in tank/s at premises situate at Nagpur to Seoni, 6/1 PCNO 58/75, Batwani, The-Seoni, Seoni, Madhya Pradesh, as per the provisions of the Petroleum Act, 1934 and Rules there under. The Company has renewed the said license and the same is valid upto December 31, 2010.

4. The Gram Panchayat, Bahmodi, Dist: Seoni, Madhya Pradesh by its letter dated March 19, 2009 has issued its no objection for establishment of Batching Plant & G.S.B Mixing & Stocking of materials on land within jurisdiction of Panchayat.

5. The Federation of Indian Export Organisations, Ahmedabad has registered the Company as member under RCMC No. 9098 of Federation of Indian Export Organisations in the category of Associate Member-Service Provider. The Membership Certificate is valid upto March 31, 2010.

6. Membership Certificate dated March 26, 2010, File No. FIEO/Ahemadabad/9098/2010-2011/51 issued to Sadbhav Engineering Limited to certify that it has been admitted as Member of the Federation of Indian Export Organisation, Ahmedabad. This membership is valid up to March 31, 2011.

7. Project Authority Certificate No. ADB/MPRDC/MPSRSP-II/PKG-11/2009/36 for exemption from Excise Duty for 36 MT of M.S. Round Bar 32 mm Diameter Steel from Supplier/Manufacture – SRMB SRIJAN Ltd., 7, Khetra Das Lane, Kolkata – 700 012 for the project of rehabilitation, up- gradation and strengthening of Seoni-Chiraidongri Road (SH-11-A), issued by Managing Director, Madhya Pradesh Road Development Corporation Ltd. by its letter bearing No.222/ADB/MPRDC/MPSRSP-II/Pkg-11/Ex-Cus/09 Bhopal, dated April 09, 2009. This Exemption from Excise Duty is as per Notification No. 108/95 CE dt. 28.08.1995 & subsequent amendments may be considered if goods are purchased within six months of the date of issue of this Certificate.

8. Project Authority Certificate (No. ADB/MPRDC/MPSRSP-II/PKG-11/2009/37 for exemption from Excise Duty for 350 MT of Bituminous Emulsion from Supplier/manufacturer – Hindustan Colas Ltd., Plot No. 426-430, GIDC Industrial Estate, Village Manjusar, Tal: Salvi, Dist: Vadodara – Gujarat – 381770, for the project of rehabilitation, up-gradation and strengthening of Seoni-Chiraidongri Road (SH-11-A), issued by the Managing Director, Madhya Pradesh Road Development Corporation Ltd. by its letter bearing No. 221/ADB/MPRDC/MPSRSP-II/Pkg-11/Ex-Cus/09 Bhopal, dated April 09, 2009. This Exemption from Excise Duty is as per Notification No. 108/95 CE dt. 28.08.1995 & subsequent amendments may be considered if goods are purchased within six months of the date of issue of this Certificate.

9. Project Authority Certificate (No. ADB/MPRDC/MPSRSP-II/PKG-11/2009/35) for exemption from Excise Duty for 50,000 Litres of Lubricant Oil from Supplier/Manufacturer – Gulf Oil Corporation Ltd., 303

Survey No. 27/1/2, village Masat, Silvassa-Khanvel Road, Silvassa, Dadra Nagar, Haveli – 396230, for the project of rehabilitation, up-gradation and strengthening of Seoni-Chiraidongri Road (SH-11- A), issued by Managing Director, Madhya Pradesh Road Development Corporation Ltd. by its letter bearing No. 223/ADB/MPRDC/MPSRSP-II/Pkg-11/Ex-Cus/09 Bhopal, dated April 09, 2009. This Exemption from Excise Duty is as per Notification No. 108/95 CE dt. 28.08.1995 & subsequent amendments may be considered if goods are purchased within six months of the date of issue of this Certificate.

10. Project Authority certificate (No. ADB/MPRDC/MPSRSP-II/Pack-01/2009/32) for exemption from Excise Duty for 1,500 MT of Bitumen from Supplier – Indian Oil Corporation Ltd., Koyali, Baroda, for the Rehabilitation, up-gradation and strengthening Project of Shivpuri-Sheopur Rajasthan Border (SH-06), issued by Managing Director, Madhya Pradesh Road Development Corporation Ltd. by its letter bearing No. 250/MPRDC/ADB/MPSRSP-II/Pack-01/Ex_Cus./2009 Bhopal, dated April 09, 2009. This Exemption from Excise Duty is as per Notification No. 108/95 CE dt. 28.08.1995 & subsequent amendments may be considered if goods are purchased within six months of the date of issue of this Certificate.

11. Project Authority certificate (No. ADB/MPRDC/MPSRSP-II/Pack-01/2009/33) for exemption from Excise Duty for 200 MT of Furnace Oil from Supplier – Indian Oil Corporation Ltd., Koyali, Baroda, for the Rehabilitation, up-gradation and strengthening Project of Shivpuri-Sheopur Rajasthan Border (SH-06), issued by the Managing Director, Madhya Pradesh Road Development Corporation Ltd. by its letter bearing No. 251/MPRDC/ADB/MPSRSP-II/Pack-01/Ex_Cus./2009 Bhopal, dated April 09, 2009. This Exemption from Excise Duty is as per Notification No. 108/95 CE dt. 28.08.1995 & subsequent amendments may be considered if goods are purchased within six months of the date of issue of this Certificate.

12. Project Authority certificate (No. ADB/MPRDC/MPSRSP-II/Pack-01/2009/34) for exemption from Excise Duty for 250 MT from Supplier – Hindustan Colas Ltd., Jhansi (UP), for the Rehabilitation, up-gradation and strengthening Project of Shivpuri-Sheopur Rajasthan Border (SH-06) issued by the Managing Director, Madhya Pradesh Road Development Corporation Ltd. by its letter bearing No. 252/MPRDC/ADB/MPSRSP-II/Pack-01/Ex_Cus./2009 Bhopal, dated April 09, 2009. This Exemption from Excise Duty is as per Notification No. 108/95 CE dt. 28.08.1995 & subsequent amendments may be considered if goods are purchased within six months of the date of issue of this Certificate.

13. The Executive Engineer, Capital Project Division No. 2, Gandhinagar by his letter bearing No. AB/TC/505 of 2009 dated January 21, 2009 has issued Registration Renewal Certificate as approved contractor in “AA” Class with the Government of Gujarat. The registration is valid upto December 31, 2011.

14. The Executive Engineer, Capital Project Division No. 2, Gandhinagar, by his letter No. AB/TC/506 of 2009 dated January 21, 2009 has issued Registration Renewal Certificate as approved contractor in “Spl.Cat.I (Bridge)” Class with the Government of Gujarat. The registration is valid upto December 31, 2011.

15. The Office of Engineer-in-chief, R&B, Admn., & NH Errummanzil, Hyderabad, Government of Andhra Pradesh Roads and Building Department, has issued Registration No. COT/SP/522/2007 by its letter dated April 28, 2008 bearing No. 027548/DEE 1/RB2/2006, as Special Class (Civil) Contractors in Andhra Pradesh. The Registration is valid for 5 years from the date of Registration.

16. The Commercial Tax Officer, VAT Registering Authority, Sanathnagar Circle, Punjagutta Division, Andhra Pradesh, has under Value Added Tax Registration Certificate, Form VAT 105, u/s. 18(1)(a) and Rule 10(a) & 12 [APVAT Act, 2005] issued the VAT Registration No.(TIN) – 28053590195 to be effective from November 01, 2007 to M/s. Sadhbav Engineering Ltd., having its place of business situate at Plot No. 12, 7-1-636/12, Model Colony, ESI Erragada, Hyderabad and Branch situate at Plot No. 123/A, Journalist Colony-A, Jubilee Hills, Hyderabad.

17. Commercial Tax Officer, Value Added Tax Department, Raipur, Divi – 4, Raipur, Chattisgarh, Certificate of Registration Form 11 under Rule – 12(1) of Chattisgarh VAT Act, 2005, No. – 22221404809, Effective Date: December 19, 2007 to Sadbhav Engineering Ltd. for the

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business Of Works Contracts, having its place of business situate at 112, Mahalaxmi Cloth Market, Pandri, Raipur, Chattisgarh.

18. Central Sales Tax Department, Raipur, Divi – 4, Raipur, Chattisgarh, Certificate of Registration Form B unde Rule – 5(5) of Central Sales Tax Act, 1957, No. – 22221404809 from December 19, 2007.

19. The VAT Department, Division - 3, Jabalpur, Madhya Pradesh has issued Certificate of Registration under the Value Added Tax Act bearing TIN – 23376004838 effective from July 01, 2003.

20. The Central Sales Tax Department, Division -3, Jabalpur, Madhya Pradesh, has issued Certificate of Registration Form B under Rule – 5(1) of the Central Sales Tax Rules, 1957, bearing No. O7/03/35/3195-C on January 07, 2003.

21. The Asst. Commissioner, Commercial Tax Department, Jabalur, Divi. No. 1, Madhya Pradesh, has issued Certificate of Registration Form - 7 under Rule 12(1) of VAT Act, 2002, Madhya Pradesh bearing registration No. – 23845809755 for the Company’s business of Building Material, Road Material, Gitty, Sand, Bituman, and other material, Earth moving machine, Power Plants and other machine situate at C/0. Smt. Shanti Devi IG Banglow Road, Near Sai Baba Temple, Civil Line, Jabalpur, Madhya Pradesh. The registration is effective from October 24, 2007

22. The Asst. Commissioner, Central Registration, Commercial Tax Department, Jabalpur, Divi. No. 1, Madhya Pradesh, issued Certificate of Registration Form B under Rule – 5 (1) of the Central Sales Tax Rules, 1957, bearing No. 23845809755, dated October 26, 2007.

23. The Registration Officer, Sales Tax Department, Mumbai, Maharashtra has issued a Certificate of Registration Form - 102 under Rule 9 of the Maharashtra Value Added Tax Act, 2002, bearing registration No. – 27220265122 V for the Company’s business of Reseller, Works Contractor, having its principal place of business at NH 03 KM 454, National High way, Mumbai Agra Road, Ghoti, Igatpuri (Tq), - 422402. The registration is effective from April 01, 2006.

24. The Registration Officer, Sales Tax Department, Mumbai, Maharashtra has issued a Certificate of Registration Form B under Rule 5(1), the Central Sales Tax Act, 1957 bearing registration No. 27220265122 C with effect from April 01, 2006 for the Company’s principal place of business at NH 03 KM 454, Mumbai Agra Road, National High Way, Ghoti, Igatpuri (Tq), Nashik Dt. – 422402.

25. The Assistant Commissioner, Commercial Tax, Div – 2, Sonebhadra, Uttar Pradesh has issued a Certificate of Registration under Rule – 32 sub-rule (8) and (10) of the Uttar Pradesh VAT Rules, 2007 bearing No. – 09415204088 for the Company’s principal place of business is at Bina Sonebhadra, Commercial Tax Circle/Sector Mirzapur / A C Sector -2, Sonebhadra. The registration issued is with effect from October 18, 2007. (Certificate of Registration and allotment of TIN 09415204088 issued by the Department of Commercial Taxes, Government of Uttar Pradesh, dated July 07, 2008, under the provisions of Uttar Pradesh Value Added Tax Act, 2007, to Sadbhav Engineering Ltd., having its principal place of business at Bina Sonebhadra, Bina Sonebhadra, for its business of Importer, Wholesaler, Retailer, Work Contractor, Civil & Mining, Hiring in Mine. This Registration Certificate is in effect from October 18, 2007 and shall be valid till the business is discontinued.)

26. The Assistant Commissioner of Commercial Tax, Div – 2, Sonebhadra, Uttar Pradesh has issued a Certificate of Registration Form B under Rule 5 (1) of the Central Sales Tax Act, 1957 bearing No. – RG5031449 with effect from October 18, 2007.

27. The Sales Tax Officer (1) Class-I, Unit – 8, Ahmedabad, Gujarat has issued a Certificate of Registration Form 2 under Rule-9 of Gujarat Sales Tax Rules, 1969 bearing No. - 24073402528 effective from July 01, 2002.

28. The Central Sales Tax Department, Ahmedabad, Gujarat, has issued Certificate of Registration Form B under Rule – 5 (1) of the Central Sales Tax Rules, 1957, bearing No. – 24573402528 effective from July 10, 1991.

29. The Asst. Commissioner of Sales Tax, Jajpur Road, Jajpur, Orissa, has issued a Certificate of Registration Form VAT-103 under sub-rule (3) of rule 18, sub-rule (1) and (2) of rule 19, 305

(Registration under sub-section (2)/sub-section (5) of Section 25 or sub-section (2) of section 28) of the Orissa VAT Act, 2004. The Company, as Dealer liable to pay VAT, has been allotted TIN – 21381401003 with effect from April 01, 2005 for its principal place of business at Fatepur, Jaraka, JA-R, N.A.C: Dharmasala, Jaraka, Jajpur.

30. The Asst. Commissioner of Sales Tax, Jajpur Road, Jajpur, Orissa, has issued a Certificate of Registration Form B under Rule – 5 (1) of the Central Sales Tax Act, 1957, bearing No. – 21381401003, effective from April 01, 2005.

31. Authorized Officer, Value Added Tax Department, Udaipur, Rajasthan, has issued a Certificate of Registration VAT – 03 under Rule 14(1)(a) and 15(2) under Rajasthan Value Added Tax Act 2003 bearing No. – 08834001637 with effect from September 18, 2001 for the Company’s principal place of business at 10-N.B. Nagar Pratap Nagar, Opp. Transport Nagar, Udaipur Distt., and having branches at Village – Vana, Nr. Bhagwati Hotel, Mangalwar Road, Mangalwar, Chittorgarh, and Village – Prem Nagar, Nr. Shree Nagar, Nasirabad-Kishangarh Road, Kishangarh, Ajmer.

32. The Authorized Officer, Central Sales Tax Department Udaipur, Rajasthan, has issued a Certificate of Registration Form B under Rule – 5(1) of the Central Sales Tax Rules, 1957, bearing No. 08834001637, effective from September 21, 2001.

33. The Assistant Labour Commissioner, (Central), Licensing Officer, Chhindwara (MP) has issued Certificate No. CHA-36(31)/2007 dated November 30, 2007 for Rehabilitation & Upgrading to four lanes Ch. No. 596.750 to 653.225 (NH-7), MP-3 Project (Seoni),. This license is renewed up to November 29, 2010

34. By its letter dated November 30, 2007, the Licensing Officer and the Assistant Labour Commissioner (Central), Chhindwara, Madhya Pradesh, has granted permission for employing 250 contract labourers, with reference to License No. CHA-36(31)/2007.

35. The Foreign Trade Development Officer, Office of Jt. Director General of Foreign Trade, Ahmedabad issued Certificate OF Importer-Exporter Code, dated January 23, 2001 bearing IEC No. – 0800008154.

36. The Joint Chief Controller of Explosives, Agra has issued a license bearing No. P/CC/MP/14/5056(P211209) dated July 28, 2008 for storage of 20KL Petroleum Class B in tank/s in premises on Sheopur Road, Plot No. 364, Jakhamaud, Shivpuri, Madhya Pradesh. This License has been extended up to December 31, 2010

37. Permanent Account Number – AADCS0852Q, Sadbhav Engineering Ltd. issued on October 03, 1988.

38. Tax Deduction Account Number – AHMS00707A, Sadbhav Engineering Ltd

39. The Regional provident Fund Commissioner, Gujarat State has by its letter dated March 30, 1991, by its letter bearing No. ENF IV/3035, allotted Sub Code No. GJ/16542-A to M/s. Sadbhav Engineering Pvt. Ltd. as a class of establishment/factory in Scheduled Industry viz. B & C Industry under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and Schemes framed thereunder.

40. The Gram Panchayat of Setwani by its letter dated May 07, 2007, has granted Sadbahv Engineering Ltd. No Objection for the excavation of Murrum at Village Kundagiri, Government Lake, No. 17/105 and area falling within Khasra No. 40.

41. The Grampalika, Ghoti, has issued a No Objection Certificate by its letter No. 676/2006. to Sadbhav Engineering Ltd. for the temporary use of land being Survey No. 477/1 to park vehicles, store machinery, Diesel, dated February 23, 2006.

42. The District Collector, Nahik, by letter dated November 13, 2007, bearing No. 15/Minor Minerals/717/2007, has granted Quarry Lease to the Company to extract Stone, Murrum, etc. for a period of five years at Village Khambale, Tal. Igatpuri, Survey No. 423.

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43. The Joint Secretary, (Finance), Narmada Valley Development Authority, Bhopal, has by its letter dated February 27, 2008, designated the Company as a recognized Contractor for a period of five years for development works to be undertaken as per the Madhya Pradesh Works Department Regulations, Part – I, para 2.097.

44. The Regional Officer, Madhya Pradesh Pollution Control Board, District Guna, by its letter dated August 1, 2008, bearing No. 1703/RO/MPPCB/2008/ granted consent under Water (Prevention & Control of Pollution) Act, 1974, and Air (Prevention & Control of Pollution) Act, 1981, for Crusher Unit at Village Pariksha Ahir, Teh-Pohari, Dist. Shivpuri.

45. The Collector, Dist. Sheopur, Madhya Pradesh, has vide letter, has granted permission to the Company to excavate Murrum from land at Village Karhaal, Survey No. 677/1, 4.000 hectare area for the purpose of construction at Shivpuri-sheopur-Rajasthan Border (SH -6).

46. The Office of Collector, (Mining Division) Dist. Shivpuri, Madhya Pradesh, has vide letter dated February 25, 2008 bearing No. 3-6/Mines/08/118, granted permission for establishing Crusher for extracting Stone Gitti from Tehsil Pohari, Village Pacchari Kirar, Survey No. 736/2, 4.00 hectare, for a period of 3 years for the construction work of two-line.

47. The Office of Collector, (Mining Division) Dist. Shivpuri, Madhya Pradesh, has vide letter dated February 25, 2008 bearing No. 3-6/Mines/08/122, granted permission for establishing Crusher for extracting Stone Gitti from Tehsil Pohari, Village Pacchari Ahir, Survey No. 1476/1, 4.00 hectare for a period of 3 years for the construction work of two-line.

48. The Collector, Dist. Sheopur, Madhya Pradesh, has vide letter dated November 2008 bearing No. 3- 6/QL/30/2008, has granted permission to the Company to excavate Stone, Sandstone and Boulder for a period of 3 years from land at Village Bardha Bujurg, Tehsil, Sheopur, Survey No. 816/5 and 817 m.1, 2.193 hectare for the purpose of construction of road at Shivpuri-Sheopur-Rajasthan Border.

49. The Office of Collector (Mining Division), Shivpuri, has vide letter dated May 03, 2008 bearing No. 3- 6/Mines/QL/59/07, granted permission to the Company for statritng its excavation activities for establishing Crusher and excavating Gitti from land at Tehsil Pohari, Village Pariccha Ahir, Survey No. 1476/1, 4.00 hectare area.

50. The Office of Collector (Mining Division), Shivpuri, has vide letter dated May 03, 2008 bearing No. 3- 6/Mines/QL/65/07, granted permission to the Company for statritng its excavation activities for establishing Crusher and excavating Gitti from land at Tehsil Pohari, Village Pariccha Ahir, Survey No. 736/2, 4.00 hectare area.

51. Ahmedabad Municipal Corporation has issued a certificate under Bombay Shops and Establishment Act 1948 as Commercial Establishment from July 19, 1998. The said license is renewed upto December 12, 2014.

52. The Assistant General of Forests, has by its letter dated November 27, 2006, granted its approval to the Principal Secretary (Forests), Government of Maharashtra, Mumbai, under Section 2 of the Forest (Conservation) Act, 1980, for diversion of 928553 ha of forest land for 4 laning of Vodpe Gonde Section of NH-3 in Thane district, Maharashtra.

53. The Authorised Officer has vide its Registration Certificate dated April 29, 2008, under Construction Labour (Regulation of Working conditions) Act, 1996, permitted the employment of 100 workers for the area of Work – Mandalehwar up to Kushi for “Canal” construction. This permission is vaild upto February 27, 2011.

54. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued consent letter bearing No. 2222/PCB/TS/JBP/2007 (NI/1029/2037/TS/Air/MPPCB/JBP) dated June 26, 2007 by its consent letter u/s. 21, Air (Prevention & Control of Pollution) Act, 1981, for the establishment & operation of industry at Khasra No. 05 & 07, P. H. No. 58/75, Village Batwani, Tehsil & Dist. Seoni (Madhya Pradesh) for production capacity of (1) Hot Mix Plant – 40,000 M.T. /yr; (2) Wet Mix Plant – 60,000 M.T./yr; (3) Batching Plant – 30,000 M.T./yr. This license has been renewed up to June 27, 2010 by the letter of the Regional Officer dated April 30, 2009 bearing No. 442. 307

55. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued consent letter bearing No. 1417/PCB/TS/JBP/2007 (NI/462/802/TS/Water/MPPCB/JBP) dated May 25, 2007, to discharge effluents into the natural water courses u/s. 25/26 of Water (Prevention & Control of Pollution) Act, 1974, for the establishment & operation of industry at Khasra No. 590, P.H. No.52, Village Phulora, Dist. Seoni (Madhya Pradesh) for the production capacity of Stone Gitti – 1,00,000M.T./yr. This license is renewed up to June 27, 2010 by the letter of the Regional Officer dated April 30, 2009 bearing No. 443.

56. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued consent letter bearing No. 1416/PCB/TS/JBP/2007 (NI/1020/2007/TS/Air/MPPCB/JBP) dated May 25, 2007 its consent u/s. 21 of the Air (Prevention & Control of Pollution) Act, 1981, for the establishment and operation of industry at Khasra No. 590, P.H. No. 52, Village – Phulora, dist: Seoni (M.P) for the production capacity of 1,00,000 M.T./Year of Stone Gitti. This license was renewed for a further period of one year up to June 27, 2010 by the letter of the Regional Officer dated April 30, 2009 bearing No. 444.

57. The District Labour Officer, Chhindwara (MP) has issued Certificate No. 131/CWA/L/08 dated June 28, 2008 for Seoni-Chiraidungari (SH-11A) Raipur Project, renewed upto December 31, 2010.

58. Registration Certificate issued by the Assessing Authority of District Sirsa dated March 17, 2010, under section 11 of the Haryana Value Added Tax Act, 2003, being Tax Identification Number (TIN) 06102917757, to Sadbhav Engineering Ltd., having principal place of business at Old Subzi Mandi, Band Gali, Sirsa, for goods to be used in manufacture of goods for sale.

59. Certificate of Registration dated March 17, 2010 under section 7(1) / 7(2) of the Central Sales Tax Act, 1956, for business of Trading-Work Contracts – Contracts relating to site work (EAC Code = 20201). This certificate is valid from March 03, 2010 until cancelled.

60. Certificate of Registration dated March 17, 2010 under section 7(1) / 7(2) of the Central Sales Tax Act, 1956, for business of Trading-Work Contracts – Contracts relating to site work (EAC Code = 20201). This certificate is valid from March 03, 2010 until cancelled.

61. Certificate of Registration and allotment of TIN 09415204088 issued by the Department of Commercial Taxes, Government of Uttar Pradesh, dated July 07, 2008, under the provisions of Uttar Pradesh Value Added Tax Act, 2007, to Sadbhav Engineering Ltd., having its principal place of business at Bina Sonebhadra, Bina Sonebhadra, for its business of Importer, Wholesaler, Retailer, Work Contractor, Civil & Mining, Hiring in Mine. This Registration Certificate is in effect from October 18, 2007 and shall be valid till the business is discontinued.

62. License issued by the Assistant Labour Commissioner and the Licensing Officer, Baroda, under section 12(1) of the Contract Labour (Regulation and Abolition) Act, 1970, dated December 22, 2008, bearing License No. BRC/ALC LIC 46(369)/2008, for work at Mangrol, Surat. This license has been renewed up to December 21, 2010.

63. Blasting permission granted under Rule 155 (8) (2) of the Explosive Rules, 1983, to M/s. Navyug Arth Movers, Aurangabad (on behalf of the SEL, Gorane Phata, Shindkheda) from the District Magistrate, Dhule, bearing No. 2009/D/Desk/3/POL/WS/702, dated March 20, 2010, with regard to the work of 4/6 lanning MP/Maharashtra Border – Dhule Section of NH-3 Dhule divided carriage way of Village Dahivad, Tal. Shirpur, Dist. Dhule, Out of Gat No. 629. This permission is valid up to December 31, 2010.

64. Blasting Permission was granted by the District Magistrate, Dhule, under Rule 155 (8) (2) of the Explosive Rules, 1983, to Lakshmi Ganapati Contractors, Hyderabad, Andhra Pradesh bearing No. 2009/D/Desk/3/POL/Ws/1434, which expired on December 31, 2009. An extension was applied for by letter dated 23rd December 2009. By letter dated December 29, 2009 bearing No. 2009/D/Desk/3/POL/Ws/2166, the said permission has been extended up to June 30, 2010.

65. License for Road Van bearing No.E/WC/MH/25/508(E21978) under the provisions of the Explosives Act, 1984, granted to Shri. Ramnarayan Laxminarayan G. Bahed, for transporting explosives by road van has, by letter of the Chief Controller of Explosives, West Circle, Mumbai, dated May 14, 2008, been renewed up to March 31, 2010. 308

66. Certificate of competency to carry out blasting of explosives in area not coming under the Mines Act, 1952, bearing No. E/WC/MH/30/3611(E50560) issued to Shri Om Prakash Kantadas Vaishnav by the Joint Chief Controller of Explosives, West Circle, Mumbai. This certificate is valid up to July 10, 2014.

67. Blasting permission granted by District Magistrate, Dhule, dated December 31,2009, bearing No.2009/D/Desk/3/POL/Ws/2123, to M/s. Salim Lsmail Dhule (on behalf of SEL, Gorane Phata, Shindkheda) to carry on work of 4/6 lanning M/P Maharashtra Border – Dhule Section pf NH-3 Dhule divided way of Village Babhulwadi, Tal. & Dist. Dhule Out of Gat No. 11/1, 11/2, 11/4, which was valid upto December 31, 2009, has been extended to June 30, 2010.

68. The Joint Chief Controller of Explosives, has on December 10, 2008, given Shotfirer’s Permit to Shri Rupchand Shankar Dhanwade for the purpose of blasting work in connection with well sinking/road construction/agricultural work, etc., which is valid upto March 31, 2013.

69. Letter dated May 06, 2008 by Joint Chief Controller of Explosives regarding License No. E/HQ/MH/22/286(E363) stating that renewal application made by SEL dated February 28, 2008 is received and that the process for renewal for the period ending March 31, 2010 is underway.

70. License for Road Van issued by Joint Chief Controller of Explosives dated September 05, 2008 bearing No. E/WC/MH/25/908(E47133) to Kalwar R. M. to transport explosives. This license (as renewed on May 29, 2008) is valid upto March 31, 2010.

71. The District Magistrate of Dhule has, by granted Blasting permission by letter dated December 17, 2009, bearing No. 2009/D/Desk/3/POL/Ws/2115, to Pratap Constructions Pune for work of 4/6 lanning Mumbai-Agra Road – Section Dhule divided carriage way of Village Hadakhed, Tal. Shirpur, Dist. Dhule. Out of Gat No. 33, which is extended upto December 31, 2010.

72. Letter dated May 15, 2008 by the Joint Chief Controller of Explosives regarding License No. E/11Q/MH/22/243(E308) addressed to M/s. Bheru Enterprises stating that renewal application dated February 29, 2008 is received and that the process for renewal for the period beyond March 31, 2010 is underway.

73. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated August 31, 2009, bearing No. MPCB/RONK/CED-248/3085/2009 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 13, At-Babhulwadi, Tal. & Dist. Dhule) for manufacture of Stone Metal (1000 MT/day) for a period upto the commissioning of the unit or five years, whichever is earlier.

74. No Objection Certificate granted to the Company by the Gram Panchayat of Babhulwadi, Tal. & Dist. Dhule, dated August 7, 2009, for excavating stones from Gat. No. 11/1, 11/2 and 11/4 and to be used in Gat No. 13 for manufacture of Stone Metal.

75. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated August 31, 2009, bearing No. MPCB/RONK/CED-247/3084/2009 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 34/5, At-Hadakhed, Tal. Shirpur, Dist. Dhule) for manufacture of Stone Metal (1000 MT/day) for a period upto the commissioning of the unit or five years, whichever is earlier.

76. No Objection Certificate granted to the Company by the Gram Panchayat Hadakheda, Tal. Shirpur, Dist. Dhule, dated January 28, 2010 for commissioning Stone Crusher Plant.

77. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated August 31, 2009, bearing No. MPCB/RONK/CED-251/3089/2009 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 411, At-Gorane, Tal. Shindkheda, Dist. Dhule) for 309

manufacture of Stone Metal (1000 MT/day) for a period upto the commissioning of the unit or five years, whichever is earlier.

78. No Objection Certificate granted to the Company by the Gram Panchayat of Gorane, Tal. Shindkheda, Dist. Dhule, dated August 14, 2009 for excavating Stone Metal from Gat. No. 411/1 and 411/2 to be used in manufacture of Stone Metal through Crushing machine and other machinery.

79. The Joint Chief Controller of Explosives, West Circle, Mumbai, has granted Approval to the Company bearing No. A/P/WC/MH/15/2813(P238158) dated November 12, 2009 for Storage of 23 KL of Petroleum Class ‘C’ (Furnace Oil/LDD) in the premises at NH-3, Nashik to Agra Gut No. 54/5, At Pimperkheda, Tal-Sindhkheda, Dhule, Maharashtra.

80. The Joint Chief Controller of Explosives, West Circle, Mumbai, has granted Approval to the Company bearing No. A/P/WC/MH/15/2822(P238756) dated November 12, 2009 for Storage of 23 KL of Petroleum Class ‘C’ (Furnace Oil/LDD) in the premises at Gut No. 63/2, At Hadakheda, Tal - Sirpur, Dhule, Maharashtra.

81. The Joint Chief Controller of Explosives, West Circle, Mumbai, has granted License bearing No. P/WC/MH/14/6095(P238374) to the Company, dated April 08, 2010, for the storage of 20 KL Petroleum Class B at Mumbai-Agra Road, N.H-3, Gat No. – 63/2(P), Village Hadakdaheda, Tal. – Shirpur, Dhule, Maharashtra. This license is valid upto December 31, 2011.

82. Inspector, Weights and Measures Enforcement Department, Shindkheda, has issued an Inspection Certificate bearing No. 0083747 dated April 29, 2010 certifying the correctness of 1 Diesel Pump manufactured by Nidco bearing Sl. No. 09K00029V Model No. 1112AHPI with capacity 999.99 litres. This certificate is valid upto April 20, 2011.

83. The Joint Chief Controller of Explosives, West Circle, Mumbai, has granted License bearing No. P/WC/MH/14/6093(P238379) to the Company, dated April 08, 2010, for the storage of 20 KL Petroleum Class B at Mumbia-Agra Road, N.H-3, Gat No. – 54/5(P), Village Pimple Kheda, Tal. – Sindkheda, Dhule, Maharashtra. This license is valid upto December 31, 2011.

84. Certificate of Tank Testing under Rule 126 of the Petroleum Rules, 2002, issued by Mr. Satish T. Bapat, on March 23, 2010 certifying that the tank at Mumbai-Agra Road, NH 3 Section, Gat No. 54/5(P), Pimple Kheda, Tal. Sindkheda, Dhule, Maharashtra is suitable for the storage of Petroleum.

85. Certificate of Safety under Rule 130 of the Petroleum Rules, 2002, issued by Mr. Satish T. Bapat, on March 23, 2010 certifying that the service station/installation at Mumbai-Agra Road, NH 3 Section, Gat No. 54/5(P), Pimple Kheda, Tal. Sindkheda, Dhule, Maharashtra, is safe for storage of Petroleum.

86. Certificate of Tank Testing under Rule 126 of the Petroleum Rules, 2002, issued by Mr. Satish T. Bapat, on March 23, 2010 certifying that the tank at Mumbai-Agra Road, NH 3 Section, Gat No. 63/2(P), Hadakdaheda, Tal. Shirpur, Dhule, Maharashtra is suitable for the storage of Petroleum.

87. Certificate of Safety under Rule 130 of the Petroleum Rules, 2002, issued by Mr. Satish T. Bapat, on March 23, 2010 certifying that the service station/installation at Mumbai-Agra Road, NH 3 Section, Gat No. 63/2(P), Hadakdaheda, Tal. Shirpur, Dhule, Maharashtra, is safe for storage of Petroleum.

88. No Objection Certificate issued by the District Magistrate, Dhule, dated March 18, 2010, bearing No. 2010/D/Desk-3/POL/WS/668 to the Company for retail outlet (Diesel Pump) at Gut No. 54/5, of Village Pimparkheda, Taluka Shindkheda, Dist. Dhule.

89. No Objection Certificate issued by the District Magistrate, Dhule, dated March 18, 2010, bearing No. 2010/D/Desk-3/POL/WS/669 to the Company for retail outlet (Diesel Pump) at Gut No. 63/2, of Village Hadakhed, Taluka Shirpur, Dist. Dhule.

90. The Additional Collector, Dhule, has issued License No. 1/2010 dated March 22, 2010 authorising the Company to acquire, store and consume solvent, raffinate and slop with a monthly capacity of

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Furnace Oil being 40 (fourteen) KL Per Month for the Gat No. 54/5, Pimparkheda, Tal. Shindkheda, Dist. Dhule. This license is valid upto December 31, 2011

91. The Additional Collector, Dhule, has issued License No. 2/2010 dated March 22, 2010 authorising the Company to acquire, store and consume solvent, raffinate and slop with a monthly capacity of Furnace Oil being 40 (fourteen) KL Per Month for the Gat No. 63/2, Hadakheda, Tal. Shirpur, Dist. Dhule. This license is valid upto December 31, 2011.

92. Letter from the Joint Chief Controller of Explosives, West Circle, Navi Mumbai, bearing No. A/P/WC/MH/14/6387(P238374) dated September 25, 2009 informing that the drawings have been approved and asking the Company to fulfill the conditions set out therein for the grant of license. (Proposed Petroleum Class A & B Retail Outlet/ Service Station/ Consumer Pump at Mumbai-Agra Road, N.H – 3 Gat No. 63/2(P), Village Hadakdaheda, Taluka – Shirpur, Dhule, Maharashtra).

93. Letter from the Joint Chief Controller of Explosives, West Circle, Mumbai, beaing No. A/P/WC/MH/14/6388(P238379) dated September 25, 2009 informing that the drawings have been approved and asking the Company to fulfill the conditions set out therein for the grant of license. (Proposed Petroleum Class A & B Retail Outlet/ Service Station/ Consumer Pump at Mumbai-Agra Road, N.H – 3 Gat No. 54/5(P), Village Pimple Kheda, Taluka – Sindkheda, Dhule, Maharashtra).

94. Letters from the Company seeking permission for drawing water from River Tapi.

95. The General Manager, District Industries Center, Dhule, has on January 27, 2010 allocated Enterprenuers’ Memorandum No. 27 002 12 00206 to the Company for the items being Betuminous Black 30 cum for Hadakhed, Taluka Shirpur, Gat No. 22.

96. The General Manager, District Industries Center, Dhule, has on January 27, 2010 allocated Enterprenuers’ Memorandum No. 27 002 12 00205 to the Company for the items being Betuminous Black 30 cum for Savalde, Taluka Shirpur, Gat No. 09.

97. The General Manager, District Industries Center, Dhule, has on January 27, 2010 allocated Enterprenuers’ Memorandum No. 27 002 12 00204 to the Company for the items being Betuminous Black 30 cum for Babhulwadi, Gat No. 27/4.

98. The General Manager, District Industries Center, Dhule, has on January 27, 2010 allocated Enterprenuers’ Memorandum No. 27 002 12 00203 to the Company for the items being Betuminous Black 30 cum for Dhandhane, Tal- Shindkheda, G. No. 68/2.

99. The General Manager, District Industries Center, Dhule, has on January 27, 2010 allocated Enterprenuers’ Memorandum No. 27 002 12 00202 to the Company for the items being Betuminous Black 30 cum for Singvi, Taluka – Shirpur, Gat No. 211.

100. The General Manager, District Industries Center, Dhule, has on December 07, 2009 allocated Enterprenuers’ Memorandum No. 27 002 12 00197 to the Company for the items being Betuminous Black 30 cum for G. No. PL/173.

101. The General Manager, District Industries Center, Dhule, has on December 07, 2009 allocated Enterprenuers’ Memorandum No. 27 002 12 00195 to the Company for the items being Betuminous Black 30 cum for G. No. 277 Nagaon.

102. The General Manager, District Industries Center, Dhule, has on December 07, 2009 allocated Enterprenuers’ Memorandum No. 27 002 12 00196 to the Company for the items being Betuminous Black 30 cum for G. No. 302 Gorane.

103. The General Manager, District Industries Center, Dhule, has on August 10, 2009 allocated Enterprenuers’ Memorandum to the Company for the items being Stone Crussing at the site.

104. The General Manager, District Industries Center, Dhule, has on August 10, 2009 allocated Enterprenuers’ Memorandum to the Company for the items being Stone Crussing 10 MT, Hot Mix 0.2 MT, Cement Coneret 0.05 cum.

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105. The General Manager, District Industries Center, Dhule, has on August 10, 2009 allocated Enterprenuers’ Memorandum to the Company for the items being Stone Crussing 10 MT, Hot Mix 0.2 MT, Cement Coneret 0.05 cum.

106. The General Manager, District Industries Center, Dhule, has on August 10, 2009 allocated Enterprenuers’ Memorandum to the Company for the items being Stone Crussing 10 MT at the site.

107. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated February 26, 2010, bearing No. MPCB/RONK/CED-71/708 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 56/5, At-Hadakhed, Tal. Shirpur, Dist. Dhule) for manufacture of Ready Mix Concrete Plant for 100 M3/Day for a period upto the commissioning of the unit or five years, whichever is earlier.

108. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated February 26, 2010, bearing No. MPCB/RONK/CED-73/710/2010 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 68/2, At-Dhandarne, Tal. Shindkheda, Dist. Dhule) for manufacture of Stone Crusher 100 Bras/M for a period upto the commissioning of the unit or five years, whichever is earlier.

109. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated February 26, 2010, bearing No. MPCB/RONK/CED-74/711/2010 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 34/4, At-Hadakhed, Tal. Shirpur, Dist. Dhule) for manufacture of Stone Crusher 500 Brass/M for a period upto the commissioning of the unit or five years, whichever is earlier.

110. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated February 26, 2010, bearing No. MPCB/RONK/CED-70/707 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 27/4, At-Babhulwadi, Tal. & Dist. Dhule) for manufacture of Wet Mix100 M3/Day for a period upto the commissioning of the unit or five years, whichever is earlier.

111. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated February 26, 2010, bearing No. MPCB/RONK/CED-72/709 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 9, At-Salwade, Tal. Shirpur, Dist. Dhule) for manufacture of Ready Mix Concrete Plant for 100 M3/Day for a period upto the commissioning of the unit or five years, whichever is earlier.

112. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated August 31, 2009, bearing No. MPCB/RONK/CED-249/3086/2009 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 33 to 37, 51 & 54, At-Pimparkheda, Tal. Shindkheda, Dist. Dhule) for manufacture of Hot Mix Plant 1200Mt/Day, Batching Plant (RMC) 160 M³/Day, WMM Plant 1000MT/Day for a period upto the commissioning of the unit or five years, whichever is earlier.

113. No Objection Certificate from the Gram Panchayat, Pimparkheda, Tal – Shindkheda, Dist. Dhule, for excavating stone from the land belonging to the Gram Panchayat and to be used for manufacturing of Stone Metal through Stone Crusher Machine for a period of five years.

114. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated August 31, 2009, bearing No. MPCB/RONK/CED-250/3087/2009 has under section 25 of the Water 312

(Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 63/1 & 63/2, At-Hadakhed, Tal. Shirpur, Dist. Dhule) for manufacture of Hot Mix Plant 1200Mt/Day, Batching Plant (RMC) 160 M³/Day, WMM Plant 1000MT/Day for a period upto the commissioning of the unit or five years, whichever is earlier.

115. No Objection Certificate from Gram Panchayat, Hadakhed, Tal. Shirpur, Dist. Dhule, for excavating stone from the land belonging to the Gram Panchayat and to be used for manufacturing of Stone Metal through Stone Crusher Machine.

116. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated February 08, 2010, bearing No. MPCB/RONK/C-44/384/2010 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 173/1, At-Sarvad, Tal. & Dist. Dhule) for manufacture of Batching Plant 100 M³/Day for a period upto the commissioning of the unit or five years, whichever is earlier.

117. No Objection Certificate of the Gram Panchayat, Songir, Tal & Dist. Dhule, permitting the Company to excavate Murrum from the land belonginh to the Gram Panchayat and to be utilized by the Company.

118. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated February 08, 2010, bearing No. MPCB/RONK/C-45/385/2010 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 302, At-Gorane, Tal. Shindkheda Dist. Dhule) for manufacture of Batching Plant 100 M³/Day, CRM Plant for a period upto the commissioning of the unit or five years, whichever is earlier.

119. No Objection Certificate dated August 14, 2009 of the Gram Panchayat Gorane, Tal. Shindkheda Dist. Dhule to excavate Stone from the land belonging to the Gram Panchayat and to be used by the Company for manufacturing Stone Metal through Crusher Machine and other machines.

120. The Regional Officer Maharashtra Pollution Control Board, Nashik, has by its Consent letter dated February 08, 2010, bearing No. MPCB/RONK/C-43/383/2010 has under section 25 of the Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of the Air (Prevention & Control of Pollution) Act, 1981 and under Rule 5 of the HW (M, H & Transboundry Movement) Rules, 2008, granted consent to the Company (Gat No. 277, At-Nagaon, Tal. & Dist. Dhule) for manufacture of Batching Plant 100 M³/Day for a period upto the commissioning of the unit or five years, whichever is earlier.

121. The Sub-divisional Officer, Shirpur, by his letter Sr/Land/KV/149/2010/Sub-divisional Officer, Dhule, dated March 22, 2010, has granted permission to National Highway Authority of India for cutting trees which fall within the limits of the expansion of the N.H.-3 in the area within the jurisdiction of the Sub-divisional Officer.

122. The Sub-divisional Officer, Shirpur, by his letter Sr/Land/KV/96/2010/Sub-divisional Officer, Shirpur, dated February 23, 2010, has granted permission to National Highway Authority of India for cutting trees which fall within the limits of the expansion of the N.H.-3 in the area within the jurisdiction of the Sub-divisional Officer.

123. The Deputy Commissioner, Dhule Mahanagapalika by its letter JK/DNP/BV/277/09-10, dated January 13, 2010, has issued its consent to National Highways Authority of India granting permission for cutting trees which fall within the limits of the expansion of the N.H.-3 in the area within the jurisdiction.

124. The Regional Forest Officer, Dhule, by its letter dated February 01, 2010 has granted consent to National Highway Authority of India for cutting trees which fall within the limits of the expansion of the N.H.-3 in the area within its jurisdiction.

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125. The Regional Forest Officer, Shindkheda, by its letter dated January 30, 2010 has granted consent to National Highway Authority of India for cutting trees which fall within the limits of the expansion of the N.H.-3 in the area within its jurisdiction.

126. The Sub-divisional Officer, Shirpur, by his letter Sr/Land/KV/736/2009/Sub-divisional Officer, Dhule, dated January 11, 2010, has granted permission to National Highway Authority of India for cutting trees which fall within the limits of the expansion of the N.H.-3 in the area within the jurisdiction of the Sub-divisional Officer.

127. The Sub-divisional Officer, Shirpur, by his letter Sr/Land/KV/375/2009/Sub-divisional Officer, Shirpur, dated December 14, 2009, has granted permission to National Highway Authority of India for cutting trees which fall within the limits of the expansion of the N.H.-3 in the area within the jurisdiction of the Sub-divisional Officer.

128. The Assistant Labour Commisioner, (Central), Mumbai, has granted a Certificate of Registration dated Decembe 12, 2009, bearing No. B.ALC(C)-II/43(32)/2009-BOCW, under sub-section (3) of section 7 of the Building and Other Construction Work (Regulation and Employment and Conditions of Service) Act, 1996.

129. License issued by Assistant Labour Commissioner (Central), Mumbai, under section 12(1) of the Contract Labour (Regulation and Abolition) Act, 1970, bearing No. B.ALC(C)-II/46(79)/2009-L dated August 28, 2009, for doing the work at Bod bending, Shuttering and Laying road in the establishment of National Highway Authority of India Ltd. at 4/6 Laning of MP/MAH Border – Design, Engg, Finance, Procurements, Construction, Operation and Maintenance / Dhule Section. This license is valid till August 27, 2010.

130. License issued by Assistant Labour Commissioner (Central), Mumbai, under sub-section (2) of Section 7 of the Contract Labour (Regulation and Abolition) Act 1970, bearing No. B-ALC(C)- II/43(32)/2009-BOCW dated December 02, 2009 for employing 400 labour in road work at Section of N.H. 3 in the state of Maharashtra at Dhule.

131. Letter dated January 12, 2009 sent by the Senior Assistant Inspector General of Forests to the Principal Secretary (Forests), Mumbai, seeking additional information / clarifications regarding diversion of 63.7618 ha of forest land for construction & expansion of existing NH-3, connecting Dhule-M.P., Border in Dhule District.

132. Letter dated March 13, 2007 from the Additional Director, Ministry of Environment and Forests to the Chairman, National Highways Authority of India, regarding the conditions of the Environmental Clearance.

133. Electrical Inspector, Industry, Energy and Labour Department, Dhule, has granted permission to the Company for installing 14, TEM D.G. sets at various locations within the area Babulgaon, Nagaon, Pimparkheda, Hadkheda.

134. The Electrical Inspector, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 500 KVA & 380 D.G. at Crusher Plant Hadkheda, at post-Hadkheda, Tal-Shirpur, Dist-Dhule. This permission is valid up to December 31, 2012.

135. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 500 KVA D.G. set at Hot-mix Hadkheda, at post-Hadkheda, Tal-Shirpur, Dist-Dhule. This permission is valid up to December 31, 2012.

136. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 82.5 KVA D.G. set at Batching Plant Hadkheda, at post-Hadkheda, Tal-Shirpur, Dist- Dhule. This permission is valid up to December 31, 2012.

137. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to 314

commission 125 KVA D.G. set at Hadkheda Camp (Lighting), at post-Hadkheda, Tal-Shirpur, Dist- Dhule. This permission is valid up to December 31, 2012.

138. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 500 KVA D.G. set at Vital GSB Crusher Plant, at post-Vital, Tal-Shindkheda, Dist- Dhule. This permission is valid up to December 31, 2012.

139. The Electrical Inspector, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 500 KVA 02 Nos. D.G. set at Vital GSB Crusher Plant, at post-Vital, Tal-Shindkheda, Dist-Dhule. This permission is valid up to December 31, 2012.

140. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 125 KVA D.G. set at WMM Plant-200 THP, at Main Camp, Shindkheda, at post- Pimparkheda, Tal – Shindkheda, Dist-Dhule. This permission is valid up to December 31, 2012.

141. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 125 KVA D.G. set at Batching plant, at Main Camp, Shindkheda, at post-Pimparkheda, Tal- Shindkheda, Dist-Dhule. This permission is valid up to December 31, 2012.

142. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 380 KVA D.G. set at Hot-mix plant, at Main Camp (Lighting), Shindkheda, at post- Pimparkheda, Tal- Shindkheda, Dist-Dhule. This permission is valid up to December 31, 2012.

143. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 125 KVA D.G. set at Main Camp (Lighting), Pimparkheda, at post-Pimparkheda, Tal- Shindkheda, Dist-Dhule. This permission is valid up to December 31, 2012.

144. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 125 KVA D.G. set at Batching plant, at post-Nagaon, Tal-Dist-Dhule. This permission is valid up to December 31, 2012.

145. The Electrical Inspector, Industry, Energy and Labour Department, Dhule, has by letter dated December 23, 2009 bearing No. EID/TS/59/of 2009, granted permission to the Company to commission 500 KVA D.G. set at Babulwadi Crusher Plant, Babulwadi, Tal-Dist-Dhule. This permission is valid up to December 31, 2012.

146. Certificate of registration issued to Maharashtra Border Check Post Network Ltd. as an employer under the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975, bearing P.T.R.C. No. 27225224053P.

147. Certificate issued to Maharashtra Border Check Post Network for being engaged in /employment with profession / trade / calling issued to Maharashtra Border Check Post Network Ltd. as an employer under the Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975, bearing P.T.E.C No.99871751411P

148. Letter dated April 01, 2010 issued by the Member Secretary of Dahanu Taluka Environment Protection Authority to the Chief Engineer, Maharashtra State Road Development Corporation Limited, Mumbai, requesting the deposit of Rs. 8,12,518/- with the Deputy Conservator of Forests, Dahanu towards pre-afforestation scheme to be implemented in respect of the Project of modernization and computeriszation of the Border Check Post at Village-Dapchari, Taluka-Dahanu, District – Thane.

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149. The Inspector has, under the Bombay Shops and Establishments Act, 1948, issued a Registration Certificate of Establishment to Maharashtra Border Check Post Network Limited bearing Registration No. 760139015 / Commercial II Ward L. This certificate is valid till December 31, 2010.

150. Registration Certificate dated November 10, 2009, issued by the Commercial Taxes Department of the Government of Jharkhand, Tax Identification Number (TIN) 20770106474 to Sadbhav Engineering Ltd., having its principal place of business at 308/C, road No. – 1A, Ashok Nagar, Ranchi, Ranchi for dealing in Principal commodities listed therein.

151. The Joint Chief Controller of Explosives, West Circle, Mumbai has issued license bearing no. P/WC/MH/14/5629(P182417) dated December 13, 2007 for storage of 22KL Petroleum Class B in tank/s for premises at Dhobipada (Mokhawane) Kasara, Gat No. 48 Old S. No. 134, Dobipada, Thane, Maharashtra, as per the provisions of the Petroleum Act, 1934 and Rules there under. The license is valid upto December 31, 2010.

B. Government approval applied for but not received

1. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued consent letter bearing No. 1419/PCB/TS/JBP/2007 (NM/17/64/TS/Air/MPPCB/JBP) dated May 25, 2007 its consent u/s. 21, Air (Prevention & Control of Pollution) Act, 1981, for the establishment & operation of the mines at Khasra No. 24, (Area 1.52 hectare), P.H. No. 53/88, Village – Yerpa, Dist. Seoni (Madhya Pradesh) for production capacity of Mining of Boulder – 40,000 M.T/Month only. The consent is valid for one year from the 1st day of the month of the commissioning of the mines. The license was valid upto June 27, 2009. The Company has, by its letter dated 3rd June 2009 bearing Reference No. SEL/Seoni-MP3, applied for an extension of the same for a period of one year.

2. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued consent letter bearing No. 1418/PCB/TS/JBP/2007 (NM/16/60/TS/Water/MPPCB/JBP) dated May 25, 2007 issued its Consent u/s. 25/26 of Water (Prevention & Control of Pollution) Act, 1974, for discharge of effluents into natural water courses for the establishment & operation of the mines at Khasra No. 24, (Area 1.52 hectare), P.H. No. 53/88, Village – Yerpa, Dist. Seoni (Madhya Pradesh) for production capacity of Mining of Boulder – 40,000 M.T/Month only. The consent is valid for one year only commencing from 1st day of month of commissioning of mines. The license was valid upto May 27, 2009. The Company has, by its letter dated 1st May 2009 bearing Reference No. SEL/Seoni-MP3, applied for an extension of the same for a period of one year.

3. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued a consent letter bearing No. EI/716/1301/TS/Water/MPPCB/Jabalpur dated October 20, 2008 authorising the Company’s office at Seoni, u/s. 25/26, Water (Prevention & Control of Pollution) Act, 1974, to discharge its industrial & other effluents arising out of their premises into the local stream/river/well for industry at Khasra No. 60/2, P. H. No. 44/78, Rakwa – 3.00 Hectare, Village Raghadehi, Tehsil & Dist. Seoni (Madhya Pradesh) for (1) Bolder mining & Crushing – 3,00,000 M.T./year; (2) D.G. Set – 320 KVA. The Company has, by its letter dated June 30, 2009 bearing Reference No. NSEL/NS-I- BOT-MP3/AB/1678, applied for an extension of the same for a period of one year.

4. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued letter bearing no. 4588/PCB/TS/JBP/2008 (NI/567/1129/TS/Water/MPPCB/JBP) dated August 02, 2008, giving consent to discharge effluent into the natural water courses u/s. 25/26 of the Water (Prevention & Control of Pollution) Act, 1974, for establishment & operation of plant at Khasra No. 221, Village Mohgaon Tehsil – Keolari, Dist: Seoni (Madhya Pradesh) for (1) Wet Mix Material – 40,000 M.T./yr; (2) Hot Mix Material (Bitumen) – 40,000 M.T/yr; (3) Batching Material (Mix concrete) – 30,000 M. T./yr. The said consent is valid for 1 year from the 1st day of the month of commissioning of plant.

5. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued letter bearing No. 4587/PCB/TS/JBP/2008 (No. NI/1179/2495/TS/Air/MPPCB/JBP) dated August 02, 2008 granting consent under Air (Prevention & Control of Pollution) Act, 1981, for establishment & operation of plant at Khasra No. 221, Village Mohgaon Tehsil – Keolari, Dist: Seoni (Madhya Pradesh) for (1) Wet Mix Material – 40,000 M.T./yr; (2) Hot Mix Material (Bitumen) – 40,000 M.T/yr; (3) Batching Material (Mix concrete) – 30,000 M. T./yr. The said consent is valid 1 year from the 1st day of the month of commissioning of the plant.

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C. Government Approvals renewals not applied for:

1. Sadbhav Engineering Ltd. has under the Standards of Weights and Measures (Enforcement) Act, 1985, Maharashtra Standards of Weights and Measures (Enforcement) Rules, 1987 and Amendment Rules, 2000, has taken for its business at Kasara on January 30, 2008 valid upto January 30, 2009.

2. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued consent letter bearing No.4586/PCB/TS/JBP/2008 [NI/1178/2494/TS/Air/MPPCB/JBP] dated August 02, 2008 granting permission u/s. 21 of the Air (Prevention & Control of Pollution) Act, 1981 for the establishment & operation of plant at Khasra No. 194, 196, Village Dongariya, Tehsil & Dist. Seoni, (Madhya Pradesh) for (1) Wet Mix Material – 40,000 M.T./yr; (2) Hot Mix Material (Bitumen) – 40,000 M.T/yr; (3) Batching Material (Mix concrete) – 30,000 M. T./yr. The license is valid for 1 year from 1st day of commissioning of the plant.

3. The Member Secretary, Maharashtra Pollution Control Board, Sion, Mumbai has by its letter bearing No. BO/P&L Divn.I/B-4907 dated September 12, 2007 issued its permission to restart Stone Crusher under Water (Prevention & Control of Pollution) Act, 1974. [M/s. G.S.B. Stone Crusher. Sr. No. 264, Mumbai Nashik Road, Village: Kambadi Pada, Kasara (Khurd), Tal: Shahapur, dist: Thane] subject to the Company providing irrevocable bank guarantee of Rs. 1,00,000/-. The permission is valid upto 2 years or the period for completion of the National Highway Project, whichever is earlier.

4. The Member Secretary, Maharashtra Pollution Control Board, Sion, Mumbai has by its letter bearing No. BO/P&L Divn.I/B-4906 dated September 12, 2007 issued its permission to restart Stone Crusher [M/s. Sadbhav Engineering Ltd., Sr. No. 128/44, Village: Kasara (Khurd), Tal: Shahapur, dist: Thane] subject to the Company providing irrevocable bank guarantee of Rs. 1,00,000/-. The permission is valid upto 2 years or the period for completion of the National Highway Project, whichever is earlier.

5. Sadbhav Engineering Ltd. has under the Standards of Weights and Measures (Enforcement) Act, 1985, Maharashtra Standards of Weights and Measures (Enforcement) Rules, 1987 and Amendment Rules, 2000, has taken 2 Diesel L & T Pacemakers for its Pump at Kasara on December 30, 2008. This is valid upto December 30, 2009.

6. Sadbhav Engineering Ltd. has under the Standards of Weights and Measures (Enforcement) Act, 1985, Maharashtra Standards of Weights and Measures (Enforcement) Rules, 1987 and Amendment Rules, 2000, has taken Swisser for its business at Kasara (Dhobipada) on October 31, 2008 valid upto October 31, 2009.

7. Sadbhav Engineering Ltd. has under the Standards of Weights and Measures (Enforcement) Act, 1985, Maharashtra Standards of Weights and Measures (Enforcement) Rules, 1987 and Amendment Rules, 2000, has taken 2 Electronic Weight Briged for its industry at Kanvind on December 31, 2008, valid upto December 31, 2009.

8. The Madhya Pradesh Labour Commissioner has, by its letter dated April 29, 2008, granted permission under Contract labour (Abolition & Registration) Act, 1970 and rules thereunder. This license was valid upto December 31, 2008 and is further extended for a period of one year upto December 31, 2009.

9. Sadbhav Engineering Ltd. has under the Standards of Weights and Measures (Enforcement) Act, 1985, Maharashtra Standards of Weights and Measures (Enforcement) Rules, 1987 and Amendment Rules, 2000, has taken 2 Electronic Weight Briged for its business at Kasara (Dhobipada) on February 17, 2009, valid upto February 19, 2010.

10. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued consent letter bearing No. 2510/PCB/TS/JBP/2007 (NM/17/61/TS/Water/MPPCB/JBP) dated July 7, 2007. Consent is given for discharge of effluents into the natural water course u/s. 25/26, Water (Prevention & Control of Pollution) Act, 1974, for the establishment & operation of mines at Khasra No. 26, (Area – 2.0 Hectare) P.H. No. 53/88, N.B. No. 35, Village – Yerpa, Dist: Seoni (Madhya

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Pradesh) for Mining of Boulder – 5,00,000M.T./yr. This license has been renewed up to May 27, 2010 vide the letter of the Regional Officer dated April 30, 2009, bearing No. 446.

11. The Regional Officer, Madhya Pradesh Pollution Control Board, Jabalpur has issued consent letter bearing No. 2509/PCB/TS/JBP/2007 (NM/18/65/TS/Air/MPPCB/JBP) dated July 7, 2007 consent u/s. 21, Air (Prevention & Control of Pollution) Act, 1981, for establishment & operation of mines at Khasra No. 26, (Area – 2.0 hectare), P.H. No. 53/88, N.B. No. 35, Village Yerpa, Dist: Seoni (Madhya Pradesh) for the production capacity of Mining of Boulder – 5,00,000M.T./yr. This license is renewed up to May 27, 2010 by the letter of the Regional Officer dated April 30, 2009 bearing No. 445.

D. Government Approvals not yet applied for:

The objects of the Issue, inter alia, include Investment in projects directly or through Subsidiaries/Joint Ventures/SPVs in the BOT Projects and Margin Money/Investment for purchase of Capital Equipment We would require certain licenses, approvals and permissions for undertaking these activities, and the details thereof are mentioned hereunder:

Our Company is yet to apply for any other license, approval or permission in relation to the work for its BOT projects as specified under the Objects of the Issue. An indicative list of the major licenses, approvals and permissions we may need in relation to our proposed unit state above are: a. Approvals from the Pollution Control Board under the respective legislations concerning prevention of water pollution and air pollution; discharge of hazardous waste b. If we import our plant and machinery under EPCG, Advance License or any other export promotion scheme, then we would require license(s) under such scheme(s) which would be adequate to cover the cost of imports; c. Sanction for supply of electrical power from the respective State Electricity Board; d. The Electrical Inspectors’ approval for diesel generator sets (for standby power) under the Electricity Act; e. Water connection approvals; f. Registration under the Contract Labour (Regulation & Abolition) Act for engaging contract labour, if any, employed by our Company. g. License for bulk storage of petroleum products (diesel/LPG) from the Department of Explosives; h. Permission from the Gram Panchayats i. Project Authority certificate for exemption of Excise Duty j. Registration under Sales Tax/VAT Laws k. Registration under Standards of Weights and Measures (Enforcement) Act 1985 and Rules framed there under; l. Other approvals and permissions relating to Provident Fund, Employees State Insurance etc. m. Permission under Forest (Conservation) Act 1980 n. Any other approval which may be applicable and deemed relevant for the said Project.

Our Company has received all the necessary approvals and licenses for conducting its present business.

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SECTION VII: STATUTORY AND OTHER INFORMATION

AUTHORITY FOR THE ISSUE

This Issue has been authorized by our Board of Directors at its meeting held on March 27, 2009 and approved by the members of our Company under section 81(1A) of the Act at the Extraordinary General Meeting held on April 29, 2009 for the issue of Equity Shares on a rights basis along with Detachable Warrants up to Rs. 12,500 lacs, to the existing Equity Shareholders on the Record Date, the details of which are as follows:

Issue of 6,25,000 Equity Shares of face value of Rs. 10/- each for cash at a premium of Rs. 715 per Equity Share on rights basis to the existing Equity Shareholders of Sadbhav Engineering Limited in the ratio of 1 Equity Share for every 20 Equity Shares held on the Record Date i.e. June 17, 2010.

In addition to the Rights Entitlement, for every 1 Equity Share allotted in the Issue, 3Detachable Warrants will be allotted. The total issue including conversion of Detachable Warrants into Equity Shares would not exceed Rs. 12,500 lacs. The Issue Price for the Equity Shares allotted on a rights basis is 72.5 times the face value of the Equity Share.

Pursuant to letter dated August 25, 2009 filed with the FIPB, our Company has requested the FIPB to grant approval for the issue and allotment of the Equity Shares with Detachable Warrants to Non Resident equity applicants. FIPB vide its Letter dated October 29, 2009 approved the proposal of the Company to issue rights shares with detachable warrants to Non Residents. Non Resident equity shareholders and other eligible Non Resident applicants should note that any allotment of the Detachable Warrants made in the Issue is subject to the terms and conditions of the approval of the FIPB. The Company has notified the FIPB vide its letter dated April 27, 2010 that for Equity Share allotted in the Issue, only Detachable Warrants will be issued and allotted, and separate series A warrants and series B warrants will not be issued.

Pursuant to letter dated April 28, 2010 filed with the RBI, our Company has requested the RBI to grant approval for the issue and allotment of the Equity Shares with Detachable Warrants to Non Resident equity applicants. The approval from RBI is pending as on the date of filing this Letter of Offer. Non Resident equity shareholders and other eligible Non Resident applicants should note that any allotment of the Detachable Warrants made in the Issue is subject to the terms and conditions of the approval of the RBI.

SEBI vide its Letter dated April 21, 2010 have granted relaxation from rule 19(2)(b) of Securities Contract (Regulations) Rules 1957 for listing of detachable warrants.

Compliance with Listing Agreement, SEBI (SAST) Regulations, 1997 and SEBI (Prohibition of Insider Trading) Regulations, 1992

Our Company has complied with the following during the financial year immediately preceding the date of Letter of Offer;

a. Provisions of the Listing Agreement with respect to reporting and compliance under Clauses 35, 40A, 41 and 49 b. Provisions of SEBI (SAST) Regulations, 1997 with respect to reporting in terms of Regulation 8(3) pertaining to disclosure of changes in shareholding and Regulation 8A pertaining to disclosure of pledged shares c. Provisions of SEBI (Prohibition of Insider Trading) Regulations, 1992 with respect to reporting in terms of Regulation 13

PROHIBITION BY SEBI

Our Company, our Promoter and Promoter group, our Subsidiaries, our Group Companies and other companies promoted by our Promoters, or companies with whom our Company’s Directors are associated with as directors or promoters, our Promoters or our Directors, have not been prohibited from accessing or operating in the capital markets under any order or direction passed by SEBI. Further, none of the above mentioned Individuals/ Entities has been declared as wilful defaulters by RBI/Government authorities.

Our Company has not received any notice from SEBI or Stock exchanges and no proceedings initiated by SEBI or stock exchanges on the Company and its promoters/Directors/ group companies for the preceding 319 five years. Except as disclosed in the LOF, the directors of our Company are not associated with the securities markets in any manner.

ELIGIBILITY FOR THE ISSUE

Our Company is an existing company registered under the Companies Act, Equity Shares of which are listed on the BSE and NSE. It is eligible to offer this issue in terms of Chapter IV of the SEBI ICDR Regulations.

DISCLAIMER CLAUSE OF SEBI

AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THE DRAFT 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 DRAFT LETTER OF OFFER. THE LEAD MANAGER, COLLINS STEWART INGA PRIVATE LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (DISCLOSURE AND INVESTOR PROTECTION) 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 DRAFT 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, COLLINS STEWART INGA PRIVATE LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED AUGUST 4, 2009 WHICH READS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE FINALISATION OF THE DRAFT 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, PROJECTED PROFITABILITY PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY;

WE CONFIRM THAT:

a) THE DRAFT LETTER OF OFFER FORWARDED TO THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE GUIDELINES, INSTRUCTIONS ETC., ISSUED BY THE BOARD, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

c) THE DISCLOSURES MADE IN THE DRAFT 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 SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

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3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT LETTER OF OFFER ARE REGISTERED WITH THE BOARD AND TILL DATE SUCH REGISTRATION IS VALID;

4. IF UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS. – NOT APPLICABLE

5. WE CERTIFY THAT WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR SECURITIES AS PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE SECURITIES PROPOSED TO FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN, WILL NOT BE DISPOSED/ SOLD/ TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT LETTER OF OFFER WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT LETTER OF OFFER – NOT APPLICABLE;

6. WE CERTIFY THAT CLAUSE 4.6 OF THE SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000, WHICH RELATES TO SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE CLAUSE HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER. – NOT APPLICABLE;

7. WE UNDERTAKE THAT CLAUSES 4.9.1, 4.9.2, 4.9.3 AND 4.9.4 OF THE SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION AND SUBSCRIPTION FROM ALL FIRM ALLOTTEES WOULD BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE .WE UNDERTAKE THAT AUDITORS’ CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. – NOT APPLICABLE;

8. WHERE THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION IS NOT APPLICABLE TO THE ISSUER, WE CERTIFY THAT THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION UNDER CLAUSE 4.10 {SUB-CLAUSE (C)} ARE APPLICABLE TO THE ISSUER.

9. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

10. WE CONFIRM THAT NECESSARY ARRANGEMENTS WILL BE MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE DRAFT LETTER OF OFFER 11. WE FURTHER CONFIRM THAT THE AGREEMENT TO BE ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION.

12. WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT, COMMISSION, ALLOWANCE OR OTHERWISE SHALL BE MADE BY THE ISSUER OR THE PROMOTERS, DIRECTLY OR INDIRECTLY, TO ANY PERSON WHO RECEIVES SECURITIES BY WAY OF FIRM ALLOTMENT IN THE ISSUE- NOT APPLICABLE.

13. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE .

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14. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER (a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE COMPANY (b) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.

The filing of the Draft Letter of Offer does not, however, absolve our Company from any liabilities under Section 63 or Section 68 of the Companies Act or from the requirements 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 any irregularities or lapses in this Letter of Offer.

Disclaimer of the Company and the Lead Manager

Our Company and the Lead Manager accept no responsibility for statements made otherwise than in this Letter of Offer or in any advertisement or other material issued by our Company or by any other persons at the instance of our Company and anyone placing reliance on any other source of information would be doing so at his own risk.

The Lead Manager and our 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.

DISCLAIMER WITH RESPECT TO JURISDICTION

This Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and regulations there under. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Ahmedabad, Gujarat, India only.

The Letter of Offer has been filed with SEBI, for its observations. After SEBI gives its observations, the final Letter of Offer will be filed with the Designated Stock Exchange as per the provisions of the Act.

DISCLAIMER CLAUSE OF THE BSE

Bombay Stock Exchange Limited (“the Exchange”) has, vide its letter dated August 19, 2009, given permission to this Company to use the Exchange’s name in this Letter of Offer as one of the Stock Exchanges 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 this Company, its Promoter, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed that theDraft Letter of Offer/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.

DISCLAIMER CLAUSE OF THE NSE

As required, a copy of this Letter of Offer has been submitted to National Stock Exchange of India Limited (hereinafter referred to as NSE). NSE has, vide its letter Ref. No. NSE/LIST/116396-C dated August 21, 2009, given permission to the Issuer to use the Exchange’s name in the Draft Letter of Offer as one of the Stock Exchanges on which the Issuer’s securities are proposed to be listed. The Exchange has scrutinized 322 this Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to the Issuer. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that the Letter of Offer has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of the Draft Letter of Offer; nor does it warrant that the Issuer’s securities will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the financial or other soundness of the Issuer, its Promoter, its management or any scheme or project of this Issuer.

Every person who desires to apply for or otherwise acquire any securities of the Issuer 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 any other reason whatsoever.

SELLING RESTRICTIONS

The distribution of this Letter of Offer and the issue of Equity Shares with Detachable Warrant (the “Securities”) on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession this Letter of Offer may come are required to inform themselves about the same and observe such restrictions. Our Company is making this Issue of Securities on a rights basis to the Shareholders of our Company and will dispatch the Letter of Offer and CAFs to shareholders who have provided an Indian address.

No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer has been filed with SEBI for observations. Accordingly, the Securities may not be offered or sold, directly or indirectly, and the Draft Letter of Offer/Letter of Offer may not be distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of this Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer and, those circumstances, this Letter of Offer must be treated as sent for information only and should not be copied or redistributed. Accordingly, persons receiving a copy of this Letter of Offer should not, in connection with the issue of the Securities or the rights entitlements, distribute or send the same in or into the United States or any other jurisdiction where to do so would or might contravene local securities laws or regulations. If this Letter of Offer is received by any person in any such territory, or by their agent or nominee, they must not seek to subscribe to the Securities or the rights entitlements referred to in this Letter of Offer.

Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in our Company’s affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date.

A copy of the Draft Letter of Offer dated August 4, 2009 was filed with SEBI, Plot No.C4-A, 'G' Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051, for its observations.

This Letter of Offer will be filed with the Designated Stock Exchange and a copy will be filed with SEBI, as per the requirement under Regulation 6(4) of the SEBI Regulations.

IMPERSONATION

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of sub-section (1) of section 68A of the Companies Act which is reproduced below:

“Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares therein, or otherwise induces a Company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”

DEMATERIALIZED DEALING

Our Company has entered into agreements dated November 12, 2005 and December 20, 2005, with National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) respectively, and its Equity Shares bear the ISIN No.: INE226H01018 323

DESIGNATED STOCK EXCHANGE

The Designated Stock Exchange for the purposes of this Issue will be BSE.

LISTING

The existing Equity Shares are listed on the BSE and NSE. Our Company has made applications to the BSE and NSE for permission to deal in and for an official quotation in respect of the Equity Shares and the Detachable Warrants being offered in terms of the Draft Letter of Offer. Our Company has received in- principle approvals from BSE and NSE by letters dated August 19, 2009 and August 21, 2009 respectively. Our Company will apply to the BSE and NSE for listing of the Equity Shares with Detachable Warrants to be issued pursuant to this Issue as well as the Detachable Warrants, all of whom will have separate ISIN no’s. The Equity Shares which will arise upon the exercise of the Detachable Warrants shall be listed for trading on the BSE and the NSE under the existing ISIN for the fully paid-up Equity Shares of our Company. The Equity Shares allotted pursuant to the exercise of the Detachable Warrants will be listed in approximately but not later than seven working days from the date of finalization of the basis of allotment of such Equity Shares.

If the permission to deal in and for an official quotation of the Equity Shares and the Detachable Warrants to be issued pursuant to the Issue is not granted by any of the Stock Exchanges mentioned above, our Company shall forthwith repay, without interest, all monies received from applicants in pursuance of this Letter of Offer. If such money is not paid within 8 days after our Company becomes liable to repay it, then our Company shall, on and from expiry of 8 days, be jointly and severally liable to repay the money with interest as per Section 73 of the Act.

CONSENTS

Consents in writing of the Directors, Auditors, Lead Manager, Legal Advisors, Registrar to the Issue, Banker to our Company, Bankers to the Issue. Lenders and experts to act in their respective capacities have been obtained and filed with Stock Exchanges along with a copy of the Letter of Offer and such consents have not been withdrawn up to the time of delivery of this Letter of Offer for registration with the stock exchanges. To the best of our knowledge there are no other consents required for making this Issue. However, should the need arise, necessary consents shall be obtained by us.

Shashikant Patel Associates, the Auditor of our Company have given their written consent for the inclusion of their report in the form and content appearing in this Letter of Offer as well as on the tax benefits accruing to our Company and our members. Such consents and reports have not been withdrawn up to the time of delivery of this Letter of Offer for registration with the stock exchanges.

EXPERT OPINION

Except in the chapter titled “Financial Statements” and “Statement of Tax Benefits” on page 157 and 69 of this Letter of Offer, no expert opinion has been obtained by our Company in relation to this Letter of Offer.

EXPENSES OF THE ISSUE

The expenses of the Issue payable by our Company including, fees and reimbursement of expenses to the Lead Manager, Auditors, Legal Advisors, Registrar to the Issue, printing and distribution expenses, publicity, listing fees, stamp duty and other expenses are estimated at Rs. 172.06 lacs (approximately 3.80 % of the total Issue size prior to conversion of Detachable Warrants) and will be met out of the proceeds of the Issue. The amounts mentioned herein are estimates of expenses and are subject to change.

% of total % of total Sr. Amount Particulars proceeds from expenses of No. (Rs. lacs) the Issue* the Issue 1 Fees to the Lead Manager, 138.00 3.05 80.20 2 Fees to the Registrar to the Issue 1.70 0.04 0.99 3 Fees to the Legal Advisors to the Issue 7.19 0.16 4.18 4 Fees to the Auditors 4.97 0.11 2.89 Printing and stationery, distribution, 5 4.00 0.09 2.32 postage, etc. 324

6 Advertisement and marketing expenses 3.20 0.07 1.86 Other Expenses (includes fees paid to 7 13.00 0.27 7.56 SEBI, BSE and NSE) Total 172.06 3.80 100.00 *Excluding conversion of Detachable Warrants

FEES PAYABLE TO THE LEAD MANAGER TO THE ISSUE

The fees payable to the Lead Manager to the Issue are set out in the Engagement Letter dated March 30, 2009 between our Company and Collins Stewart Inga Private Limited, the Lead Manager, a copy of which is available for inspection at the registered office of our Company.

UNDERWRITING COMMISSION, BROKERAGE AND SELLING COMMISSION

No underwriting commission, brokerage and selling commission will be paid for this Issue.

PREVIOUS ISSUES BY OUR COMPANY

1. Our Company made an Initial Public Offer (IPO) of 29,00,000 Equity Shares of Rs. 10/- each at a price of Rs. 185/- per share (including a premium of Rs. 175/- per share), aggregating to Rs. 5,365 lacs through the 100% Book Building route in fiscal 2006. The proceeds were primarily utilized for investment in the Mumbai Nasik Expressway Limited BOT project as disclosed in the objects of the issue in the Prospectus dated February 17, 2006. For further details on utilization of funds raised in the IPO, please refer to the sub-section titled “Promise vis-à-vis performance” on page 325 of this Letter of Offer.

The details of the Issue are:

Closing Date – February 8, 2006

Date of Allotment – February 22, 2006

Date of refunds – February 23, 2006

Date of listing on the stock exchanges:

BSE – March 1, 2006 NSE – March 1, 2006

2. Our Company issued 16,00,000 Equity Shares of Rs. 10/- each at a price of Rs. 575/- per share (including a premium of Rs 565/- per share) aggregating to Rs. 9,200 lacs through Qualified Institutional Placement pursuant to Chapter XIII-A of the SEBI (Disclosure and Investor Protection) Guidelines, 2000 on July 11, 2007. The main objects for raising funds as per the Placement Document dated July 6, 2007 was equity participation in BOT projects.

The details of the issue are:

Closing Date - July 5, 2007

Date of Allotment – July 11, 2007

Date of listing on the stock exchanges:

BSE – July 18, 2007 NSE – July 18, 2007

PROMISE VIS-À-VIS PERFORMANCE

1. Our Company raised Rs. 5,365 lacs through Public Issue of 29,00,000 Equity Shares of Rs. 10/- at a price of Rs. 185/- per share for investment in Mumbai - Nasik Expressway Limited; a Special Purpose Vehicle incorporated for the execution of the Vadape-Gonde four lane BOT project, to meet margin money for purchase of capital equipment and for working capital requirements. 325

(Rs. Lacs) Promise Actual Sr. Particulars 2005-06 2006-07 2005-06 2006-07 No. Oct 05 to April 06 to Total Oct 05 to April 06 to Total March 06 Sept 06 March 06 Sept 06 1. Investment in Mumbai Nasik 1750.00 1750.00 3500.00 1040.00 - 1040.00 Expressway Limited 2. Margin Money for Purchase of 275.00 125.00 400.00 207.00 - 207.00 Capital Equipment 3. Margin Money for working 1646.06 - 1646.06 1646.00 1934.50 3580.50 capital requirement 4. Issue Expenses 417.00 - 417.00 424.46 - 424.46 5. Repayment of - - - 113.00 - 113.00 Loans TOTAL 4088.06 1875.00 5963.06 3430.46 1934.50 5364.96

Note: Our Company had estimated the requirement of our share of equity (20%) for the then proposed project i.e. MNEL to be Rs. 3,500 lacs. Upon the financial closure of this project, our Company’s contribution towards 20% of the equity share capital of MNEL was crystallized at Rs. 1,040 lacs. Therefore, the excess proceeds of the issue in respect of this object were utilized towards other objects and repayment of loans.

2. Our company raised Rs. 9200 lacs through Qualified Institutional Placement pursuant to Chapter XIII-A of the erstwhile SEBI (Disclosure and Investment Protection) Guidelines, 2000 in July, 2007. The funds raisedfrom the issue have been utilized completely for the purpose for which it was rasied.

ISSUES FOR CONSIDERATION OTHER THAN CASH

Except as disclosed at point number 3 of “Notes to the Capital Structure” appearing on page 42, our Company has not issued Equity Shares for consideration other than cash

COMMISSION OR BROKERAGE ON PREVIOUS ISSUES

Commission/ Brokerage paid in respect of the previous issues:

Amount Issue Particulars (Rs. lacs) Underwriting Commission & Selling IPO 133.00 Commission

PARTICULARS IN REGARD TO THE ISSUER COMPANY AND OTHER LISTED COMPANIES UNDER THE SAME MANAGEMENT WITHIN THE MEANING SECTION 370 (1)(B) OF THE COMPANIES ACT, 1956, WHICH MADE ANY CAPITAL, ISSUE DURING THE LAST THREE YEARS

Our Company does not have any listed companies under the same management within the meaning of Section 370 (1B) of the Companies Act, 1956.

OUTSTANDING DEBENTURES OR BONDS AND PREFERENCE SHARES

Our Company issued 300 Secured Redeemable Non-Convertible Debentures of Rs 10,00,000 each on March 23, 2009 on a private placement basis to LIC of India pursuant to the resolution passed by the Board on November 8, 2008, IDBI Trusteeship Services Limited have been appointed as the Debenture Trustee. Other terms of the issue are as detailed below: 326

Particulars Terms Issue Size Rs. 3,000 lacs Secured Redeemable Non Convertible bonds in the nature of Debentures Nature of Instrument (NCDs) No. of Debentures 300 Face Value Rs. 10,00,000 each Tenor 5 years Coupon Rate 11.95% Interest payment Quarterly frequency Annualised Yield 12.50 % p.a. Redemption At par, at the end of 5 years Rating CARE AA- Our company has received approval from BSE for listing of the debentures with Listing effect from May 27, 2009 on the WDM segment vide letter dated June 9, 2009 Parri – Passu first charge on fixed assets of our Company having minimum Security asset cover of 1.25 times during the tenor of the NCD

• Bungalow – Manorama Retreat, Assets offered as • Flat- Abhimanyu at Shastri Nagar & security • Plant & machinery valued as on March 31, 2008

STOCK MARKET DATA FOR EQUITY SHARES

As our Company’s shares are actively traded on the BSE and NSE, our Company’s stock market data have been given separately for each of these Stock Exchanges.

The high and low closing prices recorded on the BSE and NSE for the preceding three years and the number of Equity Shares traded on the days the high and low prices were recorded are stated below:

BSE

High Low Average Calendar Volume Volume Price Year Date (Rs.) (no. of Date (Rs.) (No. of (Rs.) shares) shares) December 31, 2009 1226.4 4774 March 12, 2009 251.70 140 640.08 2009 December 5, 2008 January 15, 2008 1499.85 42305 221.80 562 859.13 2008 January 1, 2007 – July July 17, 2007 633.40 183155 April 5, 2007 385.15 1577 500.84 17, 2007* July 18, 2007 – December 31, 1427.15 25270 August 1, 2007 610.75 18689 835.17 December 2007 31, 2007 2006** April 27, 2006 623.70 779405 June 15, 2006 229.50 87099 386.58 (Source: BSE website- www.bseindia.com)

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Note: * The stock market data for the Calendar Year 2007 has been split in two parts to reflect the change in capital structure as a result of the QIP issue by our Company. The first period is from January 1, 2007 to July 17, 2007 and the second period commences from July 18, 2007 (when the Equity Shares issued pursuant to QIP became listed on BSE) up to December 31, 2007.

** Company was listed on BSE on March 1, 2006

NSE High Low Average Volume Volume Calendar Year Price Date (Rs.) Date (Rs.) (no. of (No. of (Rs.) shares) shares) December 31, 2009 1226.95 8267 March 6, 2009 250.15 1523 632.37 2009 January 17, December 5, 2008 1501.60 7505 223.35 11464 853.49 2008 2008 January 1, 2007 July 17, 2007 633.80 193819 April 5, 2007 384.90 1204 506.40 – July 17, 2007* July 18, 2007 – December 31, August 17, December 31, 1425.65 25804 610.85 9552 821.88 2007 2007 2007 2006** April 27, 2006 625.85 1109192 June 15, 2006 230.10 108273 389.31 (Source: NSE website- www.nseindia.com)

** Company was listed on NSE on March 1, 2006

The high and low prices and volume of shares traded on the respective dates during the last six months is as follows:

BSE

High Low Total Average Volume Volume Volume Month price Date (Rs.) (No. of Date (Rs.) (No. of of (Rs.) shares) shares) Shares February February February 1231.60 2392 1153.85 258 1192.07 26387 2010 22, 2010 16, 2010 March 2010 March 22, March 5, 1315.80 1724 1200.00 103 1261.47 95837 2010 2010 April 2010 April 7, April 19, 1328.75 1311 1261.05 134 1296.91 18403 2010 2010 May 2010 May 3, May 26, 1327.70 188 1203.90 2079 1280.64 83387 2010 2010 June 2010 June June 1322.00 7456 1167.55 2971 1245.48 87231 14,2010 18,2010 July 2010 July 28, July 1, 1347.65 1019 1260.00 62 1308.07 42790 2010 2010 (Source: BSE website- www.bseindia.com)

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NSE

High Low Total Average Volume Volume Volume Month price Date (Rs.) (No. Of Date (Rs.) (No. Of of (Rs.) shares) shares) Shares February February February 1225.30 2072 1154.55 1426 1192.28 142853 2010 5, 2010 17, 2010 March 2010 March 25, March 5, 1321.25 23462 1200.70 5165 1264.87 324175 2010 2010 April 2010 April 7, April 19, 1345.85 16648 1280.10 829 1299.21 156739 2010 2010 May 2010 May 3, May 28, 1327.95 9355 1209.50 3132 1282.85 160766 2010 2010 June 2010 June June 1320.85 18601 1166.15 6879 1246.87 176875 15,2010 18,2010 July 2010 July 28, July 1, 1346.85 998 1269.80 136 1309.48 65085 2010 2010 (Source: NSE website- www.nseindia.com)

The closing market price was Rs. 304.65 and Rs. 299.45 on BSE and NSE respectively on March 30, 2009, the next trading day immediately following the day on which Board meeting was held to approve the Issue.

REDRESSAL OF INVESTORS GRIEVANCES

Investor Grievances and Redressal System

Our Company has adequate arrangements for redressal of investor complaints. Well-arranged correspondence system has been developed for letters of routine nature. Share transfer and dematerialization is being handled by Link Intime India Private Limited, Registrars and Share Transfer Agents. Letters are filed category wise after having attended to. Redressal norm for response time for all correspondence including shareholders complaints is 7 days.

Status of complaints received from SEBI

As of the date of this Letter of Offer, NIL complaints received from SEBI were pending.

Status of Complaints

Financial Total number of complaints received Total number of complaints disposed off year during financial year during financial year 2009-10 2 2 2008-09 NIL NIL 2007-08 12 12

No. of shareholders complaints outstanding/pending as on the date of filing of the Letter of Offer: NIL

Time normally taken by it for disposal of various types of Investor grievances: 7 days

Compliance Officer

The Investors may note that Mr. Vijay Kalyani, has been appointed as Compliance Officer of our Company, who may be contacted for any pre-Issue / post-Issue related matter. The details relating to the Compliance Officer are as under:

Mr. Vijay Kalyani, Sadbhav House Opposite Law Garden Police Chowki Ellisbridge, Ahmedabad 380 006 Tel No: +91 79 26463384 329

Fax No: +91 79 26400210 Email: [email protected] Website: www.sadbhaveng.com

CHANGE IN AUDITORS DURING THE LAST THREE YEARS

There have been no changes of the auditors in the last three years except as detailed below:

Date of Name of Auditor Date of Cessation Reason for change in auditor Appointment M/s Rajesh B Shah & Co. - March 31, 2006 Resignation by the Auditor New appointment to fill up the M/s Shashikant Patel May 12, 2006 - casual vacancy caused by Associates resignation of previous auditor

CAPITALIZATION OF RESERVES OR PROFITS (DURING LAST FIVE YEARS)

Face Value No. of Total Amount Date of Allotment per share Particulars Shares (Rs. lacs) (Rs.) Bonus Shares issued in January 20, 2005 50,00,000 10 500 ratio 5:1

REVALUATION OF ASSETS

There was no revaluation of assets during last five years.

OPTION TO SUBSCRIBE

Other than the present rights Issue, we have not given any person any option to subscribe to the Equity Shares of our Company. Investors shall have an option either to receive the security certificates or to hold the securities with a depository.

Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the Issue, excluding the amount upon exercise of the Detachable Warrants, after the Issue Closing Date on account of cheques having being returned unpaid or withdrawal of applications, our Company shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is a delay in the refund of the subscription amount by more than eight days after our Company becomes liable to pay the subscription amount (i.e., 15 days after the Issue Closing Date), our Company shall be liable to repay the money with interest for the delayed period, as stipulated under Section 73 of the Companies Act.

Our Promoters and Promoter Group have confirmed that they intend to subscribe to the full extent of their entitlement in the Issue. Further, they have also confirmed that should there be renunciation by any of the members of the Promoter Group, the other members of the Promoter Group have undertaken to subscribe to the renounced portion of the entitlement of the said member of the Promoter Group. Our Promoters and Promoter Group undertake to subscribe to any unsubscribed portion of the Issue, including by subscribing for renunciation, if any, made by the Promoter Group or any other shareholder. Our Promoters and Promoter Group have provided an undertaking dated June 24, 2010, to our Company to apply for additional Equity Shares with Detachable Warrants in the Issue, to the extent of any unsubscribed portion of the Issue.

However, the said member of the Promoter Group who has renounced their entitlement to other Promoter or Promoter Group, shall not apply for the additional Equity Shares in the Issue.As a result of this subscription and consequent allotment including allotment of additional Equity Shares on conversion of additional Detachable Warrants, our Promoters and 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 our Promoters and Promoter Group, if any, will not result in change of control of the management of our Company and shall be exempt in terms of the proviso to Regulation 3(1)(b)(ii) of the 330

Takeover Code. As such, other than meeting the requirements indicated in the chapter titled “Objects of the Issue” on page 51 of this Letter of Offer, there is no other intention/purpose for this Issue, including any intention to delist our Company, even if, as a result of allotment to our Promoters and Promoter Group, in this Issue, our Promoter’s shareholding in our Company exceeds their current shareholding. Our Promoters and Promoter Group shall subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to our Promoters and 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.

ISSUE RELATED INFORMATION

The subscription list will open at the commencement of banking hours and will close at the closure of banking hours on the date mentioned below or such extended date (subject to maximum of 30 days) as may be determined by the Board of Directors of our Company.

Issue Opens on: Wednesday, August 18, 2010

Issue Closes on: Monday, September 6, 2010

Last date for receiving request for split application forms: Friday, August 27, 2010

Important:

• This Issue is pursuant to the resolution passed by the Board of Directors at its meetings held on March 27, 2009 and approved by the members of our Company at the Extraordinary General Meeting held on April 29, 2009.

• This Issue is applicable to those Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held in the electronic form and in the Register of Members of our Company at the close of business hours on the Record Date i.e. June 17, 2010, after giving effect to the valid share transfers lodged with our Company up to the Record Date i.e. June 17, 2010.

• Your attention is drawn to the chapter titled “Risk Factors" appearing on page 10 of this Letter of Offer.

• Please ensure that you have received the Composite Application Forms (“CAF”) with this Letter of Offer.

• Please read the Letter of Offer and the instructions contained therein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefully followed. An application is liable to be rejected for any non-compliance of the provisions contained in the Letter of Offer or the CAF.

• All enquiries in connection with the Letter of Offer or CAF should be addressed to Link Intime India Private Limited, the Registrar to the Issue, quoting the Registered Folio number/ DP and Client ID number and the CAFs’ number as mentioned in the CAF.

• All information shall be made available to the Investors by the Lead Manager and the Issuer, and no selective or additional information would be available by them for any section of the Investors in any manner whatsoever

• The Lead Manager and our Company shall update the Letter of Offer and keep the investorsinformed of any material changes till the listing and commencemt of trading of the Equity Shares and the Detachabale Warrants.

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SECTION VIII: TERMS AND PROCEDURE OF THE ISSUE

The Equity Shares with Detachable Warrants being issued pursuant to the Issue and the Equity Shares to be allotted pursuant to the exercise of the conversion option of the Detachable Warrants, are subject to the terms and conditions as contained in this Letter of Offer, the enclosed “Composite Application Form” (CAF), FEMA, the Memorandum and Articles of Association of our Company, approvals from the RBI and FIPB, the provisions of the Companies Act, Regulations issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India and / or other statutory authorities and bodies from time to time.

Authority for the Issue

Pursuant to letter dated August 25, 2009 filed with the FIPB, our Company has requested the FIPB to grant approval for the issue and allotment of the Equity Shares with Detachable Warrants to Non Resident equity applicants. FIPB vide its Letter dated October 29, 2009 approved the proposal of the Company for the issue and allotment of the series A warrants and the series B warrants together with the Equity Shares issued on rights basis inter alia to Non Resident Equity Shareholders and other eligible Non Resident applicants. Non Resident equity shareholders and other eligible Non Resident applicants should note that any allotment of the Detachable Warrants made in the Issue is subject to the terms and conditions of the approval of the FIPB. The Company has notified the FIPB vide its letter dated April 27, 2010 that for Equity Share allotted in the Issue, only one series of Detachable Warrants will be issued and allotted, and separate series A warrants and series B warrants will not be issued.

SEBI vide its Letter dated April 21, 2010 have granted relaxation from rule 19(2)(b) of Securities Contract (Regulations) Rules 1957 for listing of detachable warrants.

Basis for the Issue

The Equity Shares with Detachable Warrants 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 our Company in respect of Equity Shares held in the physical form at the close of business hours on the Record Date, i.e., June 17, 2010 fixed in consultation with the Designated Stock Exchange i.e. BSE.

Rights Entitlement

As your name appears as a beneficial owner in respect of the shares held in the electronic form or in the Register of Members as an Equity Shareholder of our Company as on the Record Date i.e. June 17, 2010, you are entitled to the number of Equity Shares with Detachable Warrants as detailed in Block I of Part A of the enclosed CAF.

The eligible Shareholders shall be entitled to the following:

• 1 Equity share for every 20 Equity Shares held on the Record Date. • For every 1 Equity Share allotted on a rights basis under this issue, the allottees will be allotted 3 Detachable Warrants.

Ranking of Equity Shares with Detachable Warrants

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The Equity Shares on rights basis being issued shall be subject to the provisions of our Memorandum and Articles of Association of our Company. The Equity Shares issued on rights basis shall rank pari passu, in all respects including dividend, with our existing Equity Shares once fully paid-up. For further details, please refer to the chapter titled “Main Provisions of the Articles of Association” on page 367 of this Letter of Offer.

I. GENERAL TERMS OF THE ISSUE

Market lot

The market lot for the Equity Shares and the Detachable Warrants in dematerialized mode is one. In case of holding of Equity Shares in physical form, our Company will issue to the allottees (a) one certificate for the Equity Shares allotted to each folio with a split performance (a “Share Certificate”) (b) one certificate for Detachable Warrants with a split performance (a “Warrant Certificate” and together with the Share Certificate, the “Consolidated Certificates”), Our Company will, upon receipt of a request from an Equity Shareholder/Warrant Holder, split such Consolidated Certificate into smaller denomination upon the request of the Equity Shareholder/Warrant Holder. Our Company shall not charge any fee for the splitting of the Certificate.

INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES AND THE DETACHABLE WARRANTS OF OUR COMPANY CAN BE TRADED ON THE STOCK EXCHANGES IN DEMATERIALIZED FORM ONLY

Nomination facility

In terms of section 109A of the Companies Act, the nomination facility is available for the Right Equity Shares. The Applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose.

A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint- holders, as the case may be, shall become entitled to the Equity Shares and the Detachable Warrants. A person, being a nominee, who becomes entitled to the Equity Shares and the Detachable Warrants by reason of the death of the original Equity Shareholder(s) shall be entitled to the same advantages to which he would have been entitled if he were the registered holder of the Equity Shares and the Detachable Warrants. 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)/ Warrant(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Shares and the Detachable Warrants are held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the joint-holders. Fresh nominations can be made only in the prescribed form available on request at the registered office of our Company or such other person at such addresses as may be notified by our Company. Only one nomination would be applicable for one folio. Hence, in case the Shareholder(s) has already registered the nomination with our Company, no further nomination needs to be made for Equity Shares and the Detachable Warrants to be allotted in this Issue under the same folio. However, new nominations, if any, by an Equity Shareholder shall operate in supersession of any previous nomination.

In case the allotment of the Equity Shares and the Detachable Warrants is in dematerialized form, there is no need to make a separate nomination for such Equity Shares and Detachable Warrants to be allotted in the Issue. Nominations registered with respective Depository Participant (DP) of the applicant would prevail. Any Investor desirous of changing the existing nomination is requested to inform its respective DP.

Joint-Holders

Where two or more persons are registered as the holders of any Equity Shares and/or Detachable Warrants, they shall be deemed to hold the same as joint-holders with benefits of survivorship, subject to the provisions contained in the Articles of Association of our Company.

Impersonation 333

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of sub- section (1) of section 68A of the Companies Act which is reproduced below:

Minimum Subscription

However, the said member of the Promoter Group who has renounced their entitlement to other Promoter or Promoter Group, shall not apply for the additional Equity Shares in the Issue.

As a result of this subscription and consequent allotment including allotment of additional Equity Shares on conversion of additional Detachable Warrants, our Promoters and 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 our Promoters and Promoter Group, if any, will not result in change of control of the management of our Company and shall be exempt in terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirements indicated in the chapter titled “Objects of the Issue” on page 51 of this Letter of Offer, there is no other intention/purpose for this Issue, including any intention to delist our Company, even if, as a result of allotment to our Promoters and Promoter Group, in this Issue, our Promoter’s shareholding in our Company exceeds their current shareholding. Our Promoters and Promoter Group shall subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to our Promoters and 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.

Notices

All notices to the Equity Shareholders and Warrant Holders by our Company shall be published in one English daily with nationwide circulation, one Hindi daily with nationwide circulation and one Gujarati daily newspaper with wide circulation and/or, will be sent by ordinary post / registered post / speed post to the registered holders of the Equity Share and Detachable Warrants at their addresses registered with Registrar to the Issue from time to time.

Listing and trading of the Equity Shares and the Detachable Warrants

Our Company’s existing Equity Shares are currently traded on BSE and NSE under the ISIN INE 226H01018. The fully paid-up Equity Shares proposed to be issued pursuant to the Issue shall be listed and admitted for trading on BSE and NSE under the existing ISIN. The Detachable Warrants proposed to be issued pursuant to the Issue shall be listed and admitted for trading on BSE and NSE under a separate ISIN. All steps for the completion of the necessary formalities for listing and commencement of trading of the 334

Equity Shares and the Detachable Warrants allotted pursuant to the Issue shall be taken within seven working days of the finalization of the basis of allotment.

Our Company has made applications to BSE and NSE seeking “in-principle” approval for the listing of the Equity Shares and the Detachable Warrants issued pursuant to the Issue in accordance with Clause 24(a) of the Listing Agreements and has received such approval from BSE pursuant to letter dated August 19, 2009 and from NSE pursuant to letter dated August 21, 2009. Our Company will apply to the Stock Exchanges for final approval for the listing and trading of the Equity Shares and the Detachable Warrants. The Equity Shares which will arise upon the exercise of the Detachable Warrants shall be listed for trading on BSE and NSE under the existing ISIN for the fully paid-up Equity Shares of our Company. No assurance can be given regarding the active or sustained trading in the Equity Shares or the price at which the Equity Shares offered under the Is sue will trade either after the listing or at the time of exercise of the Detachable Warrants. Similarly, no assurance can be given regarding the active or sustained trading in the Detachable Warrants or the price at which the Detachable Warrants being allotted under the Issue will trade after their listing.

Offer to Non-Resident Applicants

General permission has been granted to any person resident outside India to purchase Equity Shares offered on a rights basis, including additional equity shares, by an Indian company in terms of FEMA and Regulation 6 of Notification No. FEMA 20/2000-RB dated May 3, 2000, as amended. However, general permission referred above is subject to the restrictions described in “No Offer in the United States” and restrictions on investments by OCBs descried below.

Pursuant to letter dated August 25, 2009 filed with the FIPB, our Company has requested the FIPB to grant approval for the issue and allotment of the Equity Shares with Detachable Warrants to Non Resident equity applicants. FIPB vide its Letter dated October 29, 2009 approved the proposal of the Company for the issue and allotment of the series A warrants and the series B warrants together with the Equity Shares issued on rights basis inter alia to Non Resident Equity Shareholders and other eligible Non Resident applicants. Non Resident equity shareholders and other eligible Non Resident applicants should note that any allotment of the Detachable Warrants made in the Issue is subject to the terms and conditions of the approval of the FIPB. The Company has notified the FIPB vide its letter dated April 27, 2010 that for Equity Share allotted in the Issue, only Detachable Warrants will be issued and allotted, and separate series A warrants and series B warrants will not be issued.

The total holding by an individual FII or sub account of the FII should not exceed 10% of the total paid up equity capital of our Company and the aggregate holding of all FIIs and sub accounts of FIIs should not exceed 24% of the paid up equity capital of our Company. The maximum permissible limit of FII investment in our Company has been increased to 49% at the EGM dated August 6, 2007.

By virtue of Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, OCBs shall not be eligible to subscribe to the Equity Shares. The RBI has however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated non-resident entities. Thus, OCBs desiring to participate in this Issue must obtain prior approval from the RBI. Such approval shall be submitted along with the CAF.

In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened for the purpose. DETAILS OF SEPARATE COLLECTING CENTRES FOR NON-RESIDENT APPLICATIONS SHALL BE PRINTED ON THE CAF.

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The Letter of Offer and CAF shall only be dispatched to non-resident Equity Shareholders with registered addresses in India.

DETAILS OF SEPARATE COLLECTION CENTERS FOR THE APPLICATIONS OF NON RESIDENT APPLICANTS IN THE ISSUE SHALL BE PRINTED ON THE CAF.

The distribution of the Letter of Offer and the CAF and the issue of Equity Shares with Detachable Warrants on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Our Company is making the issue of Equity Shares with Detachable Warrants on a rights basis to the Equity Shareholders and the Letter of Offer and the CAFs will be dispatched to the Equity Shareholders at their registered address in India only.

No Offer in the United States

Neither the Rights Entitlements nor the Equity Shares with Detachable Warrants that may be purchased pursuant thereto have been, and will be, registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or any U.S. state securities laws, and may not be offered, sold, resold or otherwise transferred within the United States of America or the territories or possessions thereof or to, or for the account or benefit of, “U.S. Persons” (as defined in Regulation S under the Securities Act), except in a transaction exempt from, or in a transaction not subject to, the registration requirements of the Securities Act. The Equity Shares with Detachable Warrants referred to in this Letter of Offer are being offered in India but not in the United States of America. The offering to which this Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any shares or warrants or rights for sale in the United States of America, the territories or possessions thereof, or as a solicitation therein of an offer to buy any of the said shares or warrants or rights. Accordingly, this Letter of Offer and the CAF should not be forwarded to or transmitted in or to, and the Letter of Offer and the CAF shall not be dispatched to, the United States of America at any time, except in a transaction exempt from, or in a transaction not subject to, the registration requirements of the Securities Act. None of our Company, the Registrar, the Lead Manager or any other person acting on behalf of our Company will accept subscriptions from any person, or the agent of any person, who appears to be, or who our Company, the Registrar, the Lead Manager or any other person acting on behalf of our Company has reason to believe is, a resident of the United States of America and to whom an offer, if made, would result in requiring registration of this Letter of Offer with the United States Securities and Exchange Commission. Rights Entitlements or entitlements to apply for the issue of Equity Shares pursuant to an exercise of the Detachable Warrants may not be transferred or sold to any U.S. Persons.

Issue of duplicate Equity Share Certificate(s)/ Detachable Warrant(s)

If any Equity Share Certificate(s)/ Detachable Warrant Certificate(s) is mutilated or defaced or the pages for recording transfers of the Equity Shares are fully utilized, the Company against the surrender of such Share Certificate may replace the Share Certificate, provided that it shall be replaced as aforesaid only if the Share Certificate number and the distinctive numbers are legible.

If any Equity Share Certificate(s)/ Detachable Warrant Certificate(s) is/are destroyed, stolen or lost, then upon production of proof thereof to the satisfaction of our Company and upon furnishing such indemnity/ surety and/or documents as our Company may deem adequate, duplicate Equity Share Certificate(s)/ Detachable Warrant Certificate(s) shall be issued.

Utilization of Issue Proceeds

The Board of Directors declares that:

(a) The funds received in this Issue will be transferred to a separate bank account other than the bank account referred to sub-section (3) of Section 73 of the Companies Act.

(b) Details of all moneys utilized out of the Issue shall be disclosed under an appropriate separate head in the balance sheet of our Company indicating the purpose for which such moneys have been utilized.

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(c) Details of all such unutilized moneys out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet of our Company indicating the form in which such unutilized moneys have been invested.

The funds received against this Issue will be kept in a separate bank account and our Company will have access to such funds only after finalisation of the Basis of Allotment in consultation with the Designated Stock Exchange.

Interest in Case of Delay in Dispatch of Allotment Letters/ Refund Orders

Our Company will issue and dispatch letters of allotment/ share certificates and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period of 15 days from the date of closure of the Issue. If such money is not repaid within 8 days from the day our Company becomes liable to pay it, our Company shall pay that money with interest at the rate of 15% p.a as stipulated under Section 73 of the Companies Act, 1956.

Our Company agrees that the allotment of the Equity Shares shall be made within fifteen (15) days of the closure of Issue.

Undertakings by our Company

(a) The complaints received in respect of the Issue shall be attended to by our Company expeditiously and satisfactorily.

(b) All steps for completion of the necessary formalities for listing and commencement of trading at all Stock Exchanges where the Equity Shares and Detachable Warrants are to be listed will be taken within seven working days of finalization of basis of allotment.

(c) The funds required for dispatch of refund orders / allotment letters / certificates by registered post or any other mode disclosed in the Letter of Offer shall be made available to the Registrar to the Issue by our Company.

(d) The certificates of the Equity Shares and Detachable Warrants / refund orders to the NRI shall be dispatched within the specified time.

(e) No further issue of securities affecting equity capital of our Company shall be made till the securities issued / offered through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc.

(f) Our Company accepts full responsibility for the accuracy of information given in the Letter of Offer and confirms that to best of its knowledge and belief, there are no other facts the omission of which makes any statement made in the Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.

(g) All information shall be made available by the Lead Manager and the Issuer to the Investors at large and no selective or additional information would be available for a section of the Investors in any manner whatsoever including at road shows, presentations, etc.

(h) Our Company certifies that the Investors shall be given an option to get the Equity Shares issued on rights basis in demat or physical format.

(i) Our Company and Lead Manager shall update the Letter of Offer and keep the investors informed of any material changes till the listing and trading commences of the securities offered through this Letter of Offer.

II. PRINCIPAL TERMS AND CONDITIONS OF THE ISSUE OF EQUITY SHARES

Face Value

Each Equity Share shall have the face value of Rs. 10.

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Entitlement

An eligible Equity Shareholders shall be entitled to the following:

• 1 Equity share for every 20 Equity Shares held on the Record Date • For every 1 Equity Share allotted on a rights basis under this issue, the allottees will be allotted 3 Detachable Warrants

Fractional Entitlement

For Equity Shares with Detachable Warrants being offered on a rights basis under the Issue, if the shareholding of any of the Equity Shareholders is less than 20 Equity Shares or is not in multiples of 20 the fractional entitlement of such Equity Shareholders shall be ignored. Equity Shareholders whose fractional entitlements are being ignored will be given preference in the allotment of one additional Equity Share each, if such Equity Shareholders have applied for additional Equity Shares with Detachable Warrants. Those Equity Shareholders holding less than 20 Equity Shares and therefore entitled to zero Equity Shares with Detachable Warrants under the Issue shall be dispatched a CAF with zero entitlement. Such Equity Shareholders cannot renounce their entitlement to apply for additional Equity Shares with Detachable Warrants in favor of any other person. A CAF with zero entitlement will be non-negotiable/ non-renounciable.

Additional Equity Shares with Detachable Warrants

The Equity Shareholders are eligible to apply for additional Equity Shares with Detachable Warrants over and above their Rights Entitlement provided such Equity Shareholders have applied for all the Equity Shares with Detachable Warrants offered to them, without renouncing some or all of them.

The application for the additional Equity Shares with Detachable Warrants shall be considered and allotment shall be made at the sole discretion of the Board of Directors, in consultation, if necessary, with the Designated Stock Exchange. Where the number of additional Equity Shares with Detachable Warrants applied for exceeds the number of Equity Shares with Detachable Warrants available for allotment, the allotment of additional Equity Shares with Detachable Warrants shall be made on a fair and equitable basis, in consultation with the Designated Stock Exchange. Please refer to “Basis of Allotment” under this section titled “Terms and Procedure of the Issue” on page 332 of this Letter of Offer.

Renouncees who have subscribed for all the Equity Shares with Detachable Warrants renounced in their favour may also apply for additional Equity Shares with Detachable Warrants.

Issue Price

Each Equity Share with Detachable Warrant is being offered at a price of Rs 725/- (including a premium of Rs. 715/-) per Equity Share on a rights basis to the Equity Shareholders as on the Record Date i.e June 17, 2010 of our Company.

Terms of payment

The entire amount of Rs. 725 (Rs.10 towards Share Capital and the balance towards share premium) - per Equity Share shall be payable on application.

On application, the aggregate amount in respect of the Equity Shares applied for in the Issue at the rate of Rs. 725 per Equity Share with Detachable Warrant, shall be payable (“Application Money”). The Application Money will be applied as under:

Towards the Share Premium Particulars Towards the Equity Share Capital Account On application – full amount Rs. 10 per Equity Share Rs. 715 per Equity Share

A separate cheque/demand draft/pay order in respect of the Application Money must accompany each CAF.

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Payment should be made by cheque/bank demand draft drawn on any bank (including a cooperative bank) which is situated at and is a member or a sub-member of the bankers clearing house located at the center where the CAF is accepted. Outstation cheques /money orders/postal orders will not be accepted and CAFs accompanied by such cheque/money orders/postal orders are liable to be rejected.

Pursuant to the RBI Circular DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the Stock Invest Scheme has been withdrawn and accordingly, payment through Stock Invest will not be accepted in the Issue.

Where an applicant has applied for additional shares and is allotted lesser number of shares than applied for, the excess application money shall be refunded. The monies would be refunded within 15 days from the closure of the Issue, and if there is a delay beyond 8 days from the stipulated period, our Company will pay interest on the monies in terms of sub-sections (2) and (2A) of section 73 of the Companies Act, 1956.

Ranking of the Equity Shares

The Equity Shares allotted pursuant to the Issue and the Equity Shares allotted upon exercise of the Detachable Warrants shall be subject to the Memorandum of Association and the Articles of Association and the Companies Act and shall rank pari passu in all respects with the existing Equity Shares, including in relation to dividend payment.

Rights of the Equity Shareholder

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 for shares on a rights basis and be allotted bonus shares, if announced; • Right to receive surplus on liquidation; • Right of free transferability of shares; and • Such other rights, as may be available to an Equity Shareholder of a listed public company under the Companies Act and our Memorandum of Association and Articles of Association and the terms of the Listing Agreements with the Stock Exchanges.

For a detailed description of the main provisions of our Articles of Association dealing with voting rights, dividend, forfeiture and lien, transfer and transmission and / or consolidation / splitting, please refer to the chapter titled “Main Provisions of Articles of Association” on page 367 of this Letter of Offer.

III. PRINCIPAL TERMS AND CONDITIONS OF THE ISSUE OF DETACHABLE WARRANTS

Entitlement

An eligible Equity Shareholder is entitled to be allotted 3 Detachable Warrants for every 1 Equity Share allotted on a rights basis in the Issue. The Detachable Warrants so issued can be freely and separately traded until they are tendered for exercise. At any time during the Warrant Exercise Period or prior to the expiry of the Notice Period (30 days prior to the Call Option Date i.e the cut off date for making payment on conversion of Warrants), the holders of Detachable Warrants will be entitled to exercise their right to apply for 1 Equity Share at the Warrant Exercise Price for each Detachable Warrant held. Our Board has an option to call conversion of Detachable Warrant any time after 3 to 18 months from the date of allotment.

The face value of each Equity Share is Rs.10. In the event of any sub-division or consolidation of the face value of the Equity Shares, the Equity Share entitlement on each Detachable Warrant shall be proportionately increased or decreased such that the aggregate nominal value of the entitlement remains the same as the nominal value of the Equity Shares immediately prior to such sub-division or consolidation, e.g., in case our Company decides to reduce the face value of the Equity Shares to Rs. 5 each, then upon exercise of each Detachable Warrant by paying the Warrant Exercise Price, the holders of such Detachable Warrants will get two Equity Shares of Rs. 5 each instead of one Equity Share of Rs.10.

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However, in case our Company announces a rights issue prior to the exercise of the Detachable Warrants, neither would any adjustment be made to the Equity Share entitlement in respect of each Detachable Warrant nor would there be any reservations for the holders of such Detachable Warrants.

Face Value

Each Detachable Warrant is convertible into one (1) Equity Share of face value of Rs.10/- each.

Warrant Exercise Price

Warrant Exercise Price for each Detachable Warrant shall be fixed at a price of Rs. 425 per share for the Detachable Warrant.

Warrant Exercise Period

The Warrant Exercise Period for the Detachable Warrant shall commence after 3 months from the date of Allotment of the Equity Shares in the Issue and ends on completion of 18 months from the date of allotment of the Equity Shares in the Issue. .

Voluntary conversion option

Warrant holders can voluntarily exercise their right to apply for the Equity Shares at the Warrant Exercise Price any time during the Warrant Exercise Period. No record date would be fixed by our Company for this purpose. Upon voluntary exercise of the right to apply for Equity Shares by warrant holders, Shares allotted on exercise of valid warrants will be dispatched / credited to the applicant’s electronic account within 20 days from the last day of the calendar month in which the application was received. Board/ Committee of Directors also have to approve the allotment.

Application for issue of Equity Shares should be made on the prescribed Warrant Exercise Application Form. This application form would be available on request with our Registrar, Link Intime India Private Limited located at.C-13 Pannalal Silk Mills Compound, LBS Marg, Bhandup (West), Mumbai 400 078 and/or can be downloaded from our web-site (www.sadbhaveng.com) during the Warrant Exercise Period.

• In case of the Detachable Warrants held in Physical Mode:

During the Warrant Exercise Period (3 to 18 months form the date of allotment of the Equity Shares), the Warrant Holders will have the option to voluntarily apply for conversion of Detachable Warrants into Equity Shares. In case the voluntary option is exercised, the Warrant holder/s should send their applications for the issue of Equity Shares to the Registrar to the Issue, by completing the requisite particulars on the Warrant Exercise Application Form and by discharging on the reverse of Warrant Certificate. For resident Equity Shareholders/applicants and Non Resident Equity Shareholders/applicants applying on a non-repatriation basis, the Warrant Exercise Application Form should be accompanied by a cheque/demand draft/pay order favoring “SEL-Warrant Issue” payable at Mumbai for the requisite amount. For Non Resident Equity Shareholders/applicants applying on a repatriation basis, the application should be accompanied by a cheque/demand draft/pay order favoring “SEL-Warrant Issue-NR” payable at Mumbai for the requisite amount.

• In case of the Detachable Warrants held in Demat Mode

During the Warrant Exercise Period (3 to 18 months form the date of allotment of the Equity Shares), the Warrant Holders will have the option to voluntarily apply for conversion of Detachable Warrants into Equity Shares. In case the voluntary option is exercised, beneficial owners (Warrant Holders in dematerialized form) who wish to exercise their Detachable Warrants, will be required to send their Warrant Exercise Application Forms, accompanied by a cheque/demand draft/pay order payable at Mumbai along with a photocopy of the delivery instruction in “off market” mode or counterfoil of the delivery instruction in “off market” mode, duly acknowledged by the Depository Participant in favor of the Special Depository Account, to the Registrar to the Issue. Cheques/demand drafts/pay orders for lesser amounts shall be rejected and returned.

Activity Indicative time period* On or before 20th calendar day of each calendar Receipt of valid applications during the Warrant month during the warrant exercise period. Exercise Period, whether received in physical form or through transfer to the Escrow Account (If the 20th calendar day is a holiday, then the opened for the purpose succeeding calendar working day will be considered) Board/ Committee of Directors thereof meeting On or around 5th calendar day of the succeeding to approve the allotment of equity shares. calendar month On or around 20th calendar day of the succeeding Receipt of Listing & Trading approvals calendar month. *In this regard, the Company shall disregard applications which are liable for rejections, due to such factors including incidence of dishonour of payment instrument or short payment.

FURTHER THE DETACHABLE WARRANTS NOT EXERCISED DURING THE WARRANT EXERCISE PERIOD SHALL LAPSE.

Call Option

Our Board/ Committee of Directors will have a one time call option on the Warrant Holders between 3 to 18 months for compulsory conversion of Warrants during the Warrant Exercise Period into Equity Shares by giving a public notice in the newspapers at the Warrant Exercise Price as mentioned above.

Procedure for exercise of Call Option

If our Board chooses to exercise the Call Option, we shall give a Notice of the same to the Warrant holders as identified on the Warrant Record Date as fixed by our Board, at least 30 days prior to the Call Option Date. On receipt of the aforesaid intimation, the sole Warrant holder / all the joint holders should duly discharge the Warrant Certificate(s) by signing on its reverse and duly enclosed with the Warrant Exercise Application Form, send the same by Registered Post / Speed Post with acknowledgment due or by hand delivery to our Registrar, Link Intime India Private Limited located at.C-13 Pannalal Silk Mills Compound, LBS Marg, Bhandup (West), Mumbai 400 078,

Payment on exercise of Call Option

In case our Board exercises the Call Option, it will send the notice to the Warrant Holder to compulsorily convert their Detachable Warrants into Equity Shares of our Company. Upon such notice being sent, the Warrant Holder shall be obliged to pay the call money within the date indicated therein, which shall not be later than 30 days of the date of such notice, by forwarding a cheque/demand draft favoring “SEL-Warrant Issue” payable at Mumbai/Ahmedabad for the requisite amount. For Non Resident Equity Shareholders/applicants applying on a repatriation basis, the application should be accompanied by a cheque/demand draft/pay order favoring “SEL-Warrant Issue-NR” payable at Mumbai for the requisite amount.

The exercise of the Detachable Warrants during the Notice Period(s) will be carried out without the need for our Company to take any further approvals.

The Notice Period(s) will be notified in one English national daily newspaper with wide circulation, one Hindi national daily newspaper with wide circulation and one Gujarati language newspaper with wide circulation at the place where the Registered Office is situated. The Notice Period will also be specified, along with the Warrant Exercise Price and other details, on the Warrant Exercise Application Forms to be dispatched by registered post to each of the Warrant Holders at their address in India registered with the Registrar to the Issue from time to time.

The application for exercise of any Detachable Warrants should be made on the prescribed warrant exercise application form (“Warrant Exercise Application Form”). The Warrant Exercise Application Forms will be sent by registered post to all the Warrant Holders, as identified on the Warrant Record Date, at their address in 341

India registered with the Registrar to the Issue from time to time. The Warrant Exercise Application Forms will also be available on request by the Warrant Holders with the Registrar to the Issue during the Notice Period and can be downloaded from our Company’s website www.sadbhaveng.com. The exercise of the Detachable Warrants will be subject to the terms and conditions set out in the Warrant Exercise Application Form. Our Company shall disregard applications which are liable for rejection, due to factors such as dishonor of the payment instrument or short payment.

• In case of the Detachable Warrants held in Physical Mode:

During the Notice Period, the Warrant Holders should send their applications for the issue of Equity Shares to the Registrar to the Issue, by completing the requisite particulars on the Warrant Exercise Application Form and by discharging on the reverse of Warrant Certificate. For resident Equity Shareholders/applicants and Non Resident Equity Shareholders/applicants applying on a non-repatriation basis, the Warrant Exercise Application Form should be accompanied by a cheque/demand draft/pay order favoring “SEL- Warrant Issue” payable at Mumbai for the requisite amount. For Non Resident Equity Shareholders/applicants applying on a repatriation basis, the application should be accompanied by a cheque/demand draft/pay order favoring “SEL-Warrant Issue-NR” payable at Mumbai for the requisite amount.

• In case of the Detachable Warrants held in Demat Mode

Our Company will, through the Registrar to the Issue, at least two days prior to the commencement of the Warrant Exercise Period, open a special depository account with the NSDL “SEL- Warrant Escrow Account” with a Depository Participant (the “Special Depository Account”). Equity Shareholders/applicants that have depository accounts with the CDSL must use inter depository delivery instruction slips for the purpose of crediting their Detachable Warrants in favor of the Special Depository Account(s) with the NSDL. Beneficial owners (Warrant Holders in dematerialized form) who wish to exercise their Detachable Warrants, will be required to send their Warrant Exercise Application Forms, accompanied by a cheque/demand draft/pay order payable at Mumbai along with a photocopy of the delivery instruction in “off market” mode or counterfoil of the delivery instruction in “off market” mode, duly acknowledged by the Depository Participant in favor of the Special Depository Account, to the Registrar to the Issue prior to the expiry of the Notice Period

In case the Warrant Exercise Application Forms along with the cheques/demand drafts/pay orders towards full payment of the Warrant Exercise Price do not reach the Registrar prior to the expiry of the Notice Period, the relevant Detachable Warrants shall lapse. Cheques/demand drafts/pay orders for lesser amounts shall be rejected and returned.

Modification to the Terms of the Detachable Warrants

ANY MODIFICATION TO THE TERMS OF ISSUE AND EXERCISE OF THE DETACHABLE WARRANTS WOULD BE CARRIED OUT ONLY WITH THE PRIOR APPROVAL OF THE WARRANT HOLDERS. THIS WOULD BE DONE BY CONVENING THEIR SPECIAL CLASS MEETING IN ACCORDANCE WITH THE PROVISIONS OF THE COMPANIES ACT, 1956 AND TAKING THEIR APPROVAL BY MEANS OF A SPECIAL RESOLUTION TO THE TERMS OF MODIFICATION SOUGHT, FROM THE WARRANT HOLDERS PRESENT AND VOTING.

Allotment of Equity Shares upon Exercise of the Detachable Warrants

Pursuant to the exercise of any Detachable Warrants allotted to our Promoters and/or members of our Promoter Group in the Issue, the percentage shareholding of our Promoters and members of our Promoter Group may increase. Any such increase in the percentage shareholding of the Promoters and members of the Promoter Group will be pursuant to the exercise of the Detachable Warrants allotted in the Issue and will be exempt from the applicability of Regulations 11 and 12 of the Takeover Code in terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. Further, any such increase in their shareholding will not result in a change of control of the management of our Company. In the event that the public shareholding falls below the minimum prescribed in the Listing Agreements, our Company will take such steps as may be necessary to restore the minimum public shareholding in accordance with the SEBI regulations and undertakes to comply with such directions as may be issued by the Stock Exchanges. As such, other than meeting the requirements indicated in the chapter titled “Objects of the Issue” on page 51 of this Letter of Offer, there is no other intention or purpose for the Issue, including any intention to delist our Company, 342 even if, as a result of any allotment in the Issue to our Promoters and/or members of our Promoter Group, the shareholding of the Promoters and/or Promoter Group in our Company exceeds the current shareholding.

Issue of Duplicate Warrant Certificates

If the Warrant Certificate is destroyed, stolen, lost or misplaced, then upon production or proof thereof to the satisfaction of our Company and upon furnishing such indemnity/surety and/or such other documents as our Company may deem adequate, a duplicate certificate shall be issued.

Rights of Warrant Holders:

Subject to the above, the Detachable Warrants shall be transferable and transmittable in the same manner and to the same extent and be subject to the same restrictions and limitations and other related matters as in the case of Equity Shares of our Company.

• The Detachable Warrants shall not confer upon the holders thereof any right to receive any notice of the meeting of the shareholders of our Company or Annual report of our Company and or to attend/vote at any of the General Meetings of the Shareholders of our Company held, if any.

• Save and except the right of subscription to our Company’s Equity Shares as per the terms of the Issue of Detachable Warrants, the holders of the Detachable Warrants in their capacity as Detachable Warrant holders shall have no other rights or privileges.

• The Equity Shares arising from the conversion of Detachable Warrants shall be subject to the Memorandum and Articles of Association of our Company and shall rank pari passu in all respects with existing Equity Shares of our Company including dividends. Except that the shares arising from conversion of Detachable Warrants shall be eligible for dividends only after payment of Exercise conversion price and allotment of the Equity Shares.

• The Warrant holders’ inter-se shall rank pari passu without any preference or priority of one over the other or others.

• The Warrant Holders are entitled to vote for any modification, if any, in the terms of the Detachable Warrants.

All the above rights of the Warrant holders shall lapse automatically if the Detachable Warrants are not converted within the Warrant Exercise Period or at the expiry of the Notice period. The unexercised Detachable Warrants shall automatically be treated as cancelled. A separate register of warrant holders would be maintained by our Company up to the expiry of the Warrant Exercise Period.

Caution:

• Each warrant application form shall be accompanied by a single instrument of payment. Clubbing of folios/ securities for the purpose of making a consolidated payment is not permitted.

• Cheques/ DD should be payable at Mumbai for full amount and payments for less amount will be rejected.

• Investors are advised not to close or transfer their demat account between the period of application for exercise of Detachable Warrants till the time of allotment/ receipt of credit in their account so as to avoid rejection of credit from the Depositories and resultant delay in receiving the intimation of allotment.

Separate ISIN for Detachable Warrants and their listing and trading

The Detachable Warrants proposed to be issued along with Equity Shares on rights basis shall be listed and admitted for trading on NSE and BSE for which our Company will make an application to NSDL and CDSL for allotment of new ISIN for the Detachable Warrants. The formalities for listing and trading of Detachable Warrants will be completed within 7 working days from date of finalization of basis of allotment. Our

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Company has received in-principal approval from the NSE through letter no. NSE/LIST/116396-C dated August 21, 2010 and from BSE through letter no. DCS/PREF/JA/IP-RT/810/09-10 dated August 19, 2010.

The Equity Shares issued pursuant to the allotment made to warrant holders would also be listed on NSE and BSE within reasonable time from the date of expiry of the warrant exercise period.

HOW TO APPLY

Procedure for Application for Equity Shares and the Detachable Warrants

The enclosed CAF for the Equity Shares should be completed in all respects in its entirety before submission to the Bankers to the Issue or their designated branches as they appear in the CAF. The forms of the CAF should not be detached under any circumstances otherwise the application is liable to be rejected.

The CAF consists of four parts:

Part A: Form for accepting the Equity Shares with Detachable Warrants offered and for applying for additional Equity Shares with Detachable Warrants Part B: Form for renunciation of Equity Shares with Detachable Warrants Part C: Form for application for renouncees of Equity Shares with Detachable Warrants Part D: Form for request for split application forms (SAF)

The Warrant Exercise Application Forms will be sent separately to the holders of the Detachable Warrants as identified on the Warrant Record Date.

Option available to the Equity Shareholders

The CAF clearly indicates the number of Equity Shares with Detachable Warrants that the Equity Shareholder is entitled to.

Entitlement is defined as the entitlement for any shareholder as on June 17, 2010, the Record Date which shall comprise of Equity Shares with Detachable Warrants as detailed on the front cover page of this Letter of Offer.

Investors please note that they shall not be able to apply for the Right Equity Shares and renounce Detachable Warrants to any other person, in a different ratio.

If the Equity Shareholder applies for an investment in Equity Shares with Detachable Warrants, then he will have the following five options:

• Apply for his entitlement in part • Apply for his entitlement in part and renounce the other part • Renounce his entire entitlement • Apply for his entitlement in full • Apply for his entitlement in full and apply for additional Equity Shares with Detachable Warrants

Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional Equity Shares. If you renounce your Rights Entitlement, in whole or in part, you shall not be entitled to apply for additional Equity Shares with Detachable Warrants in this Issue.

Also note, application by HUF shall be treated as Application by individual and the same procedure shall apply.

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 Option Available Action Required A. Accept whole or part of your Fill in and sign Part A (All joint entitlement without renouncing holders must sign) the balance. 344

B. Accept your entitlement in full Fill in and sign Part A including and apply for additional Equity Block III relating to the Shares acceptance of Rights Entitlement and Block IV relating to additional Equity Shares issued on rights basis (All joint holders must sign) C. Renounce your entitlement in Fill in and sign Part B (all joint full to one person (Joint holders must sign) indicating the renouncees are considered as number of Equity Shares one). renounced and hand it over to the renouncee. The renouncees must fill in and sign Part C (All joint renouncees must sign) D. Accept a part of your entitlement Fill in and sign Part D (all joint and renounce the balance to holders must sign) requesting one or more renouncee(s) for SAF(s). Send the CAF to the Registrar to the Issue so as to OR reach them on or before the last date for receiving requests for Renounce your entitlement to all SAF(s). Splitting will be the Equity Shares offered to you permitted only once. to more than one renouncee On receipt of the SAF(s) 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 renouncees. Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them. E. Introduce a joint holder or This will be treated as a change the sequence of joint renunciation. Fill in and sign holders Part B and the renouncees must fill in and sign Part C.

Option A: Acceptance of the Issue

You may accept the Issue and apply for the Equity Shares with Detachable Warrants offered, either in full or in part (the ratio of part-application of Equity Shares as well as Detachable Warrants shall be similar) by filling Part A of the enclosed CAF and submit the same along with the application money payable to the Banker to the Issue at 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 Mumbai or demand draft / pay order payable at Mumbai to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected.

Option B: Additional Equity Shares with Detachable Warrants

You are eligible to apply for additional Equity Shares with Detachable Warrants 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 favor 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 and in consultation if 345 necessary with the Designated Stock Exchange. Allotment shall be made in the manner prescribed under “Basis of Allotment” below. This allotment of additional Equity Shares with Detachable Warrants will be made on an equitable basis with reference to number of Equity Shares held by you on the Record Date.

If you desire to apply for additional Equity Shares with Detachable Warrants, please indicate your requirement in the place provided for additional shares in Part A of the CAF. Applications for additional Equity Shares shall be considered and allotment shall be in the manner prescribed under the sub-section titled “Basis of Allotment” on page 350 of this Letter of Offer. The renouncees applying for all the Equity Shares with Detachable Warrants renounced in their favour may also apply for additional Equity Shares with Detachable Warrants.

In case of application for additional Equity Shares by Non-Resident Equity Shareholders, the allotment of additional securities will be as per the relevant provisions of FEMA.

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.

In case of change of status of holders i.e. from Resident to Non-Resident, a new demat account shall be opened for the purpose.

Option C and D: Renunciation

As an Equity Shareholder, you have the right to renounce your entitlement for the Equity Shares with Detachable Warrants either in full or in part in favour of one or more person(s) subject to the approval of the Board. The right of renunciation is attached to the Equity Shares, along with Detachable Warrants. The Detachable Warrant cannot be renounced separately.

Renunciation in favour of Non Residents / FIIs

Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s) / renouncee(s) obtaining the approval of the FIPB and / or necessary permission of the RBI, if and to the extent required, under the Foreign Exchange Management Act, 1999 (FEMA) as amended and other applicable laws and such permissions should be attached to the CAF. Applications not accompanied by the aforesaid approval(s), wherever the same are liable to be rejected.

By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs) Regulations, 2003. Accordingly, the existing Equity shareholders of our Company who wish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s) except with the prior permission of RBI.

Your attention is drawn to the fact that our 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, unless through their natural / legal guardian • 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.

Procedure for renunciation 346

• To renounce all the Equity Shares with Detachable Warrants offered to a shareholder in favour of one renouncee

Shareholders who wish to renounce the offer indicated in Part A, in whole, should 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 Part C of the CAF.

Renouncee shall not be entitled to further renounce the entitlement in favour of any other person.

• To renounce a part of the entitlement / or renounce the entire entitlement to more than one person(s)

Shareholders who 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. For this purpose you shall have to apply to the Registrar to the Issue.

Shareholders should indicate their 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 application forms. On receipt of the required number of split application forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed.

PLEASE NOTE THAT IN CASE THE SIGNATURE OF THE EQUITY SHAREHOLDER(S), WHO HAS RENOUNCED THE EQUITY SHARES, DOES NOT MATCH WITH THE SPECIMEN REGISTERED WITH OUR COMPANY; THE APPLICATION IS LIABLE TO BE REJECTED.

• Renouncee(s)

The person(s) in whose favour the Equity Shares with Detachable Warrants are renounced should fill in and sign Part C of the CAF and submit the completed CAF to the Banker to the Issue on or before the Issue Closing Date along with the application money in full.

Option E: Change and / or introduction of additional holders

If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is / are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed.

However, this right of renunciation is subject to the express condition that the Board of Directors of our Company shall be entitled in its absolute discretion to reject the request for allotment from the renouncee(s) without assigning any reason thereof.

Instructions for Options

Please note that: • 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.

• Request for split form should be made for a minimum of one Equity Shares or in multiples thereof and one SAF for the balance Equity Shares, if any.

• Request by the Equity Shareholder(s) for the SAF should reach to the Registar to the Issue on or before August 27, 2010.

• Only the person to whom the Letter of Offer has been addressed to and not the renouncee(s) shall be entitled to renounce and to apply for SAF. Forms once split cannot be split further.

• Split Application Forms will be sent to the applicant(s) by post at the applicant’s risk. 347

Applications by Resident Equity Shareholders

Applications should be made only on the enclosed CAF provided by our 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 our Company at any offices except in the case of postal applications as per instructions given in this Letter of Offer.

Applications by Non-Resident Equity Shareholders

Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the matter of refund of application moneys, allotment of Equity Shares, issue of letters of allotment / certificates / payment of dividends etc.

For Applicants residing at places other than designated bank collecting branches

Applicants residing at places other than the cities where the bank collection centres are located should send their completed CAF by registered post / speed post to the Registrar to the Issue, Link Intime India Private Limited along with Account Payee Cheques /Demand Drafts, net of bank and postal charges, payable at Mumbai, in favour of “Sadbhav Engineering Limited -Rights Issue” so that the same are received on or before the Issue Closing Date i.e.September 6, 2010.

Non-Resident investors applying on a repatriation basis should send their completed CAF by registered post / speed post to the Registrar to the Issue, Link Intime India Private Limited with Account Payee Cheques /Demand Drafts, net of bank and postal charges, payable at Mumbai, in favour of “Sadbhav Engineering Limited -Rights Issue- NR” so that the same are received on or before Issue Closing Date i.e.September 6, 2010.

Our Company will not be liable for any postal delays and applications received through mail after the Issue Closing Date are liable to be rejected and returned to the Applicants. Applications by mail should not be sent in any other manner except as mentioned above.

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 number and his / her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received / found subsequently. If the Applicant violates any of these requirements, he / she shall face the risk of rejection of both the applications. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of duplicate CAF in transit, if any.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with an Account Payee Cheque drawn on a local bank / demand draft payable at Mumbai which should be drawn in favour of "Sadbhav Engineering Limited-Rights Issue" (in case of resident shareholders and non-resident shareholders applying on non-repatriable basis) and in favour of " "Sadbhav Engineering Limited-Rights Issue-NR" in case of non-resident shareholders applying on repatriation basis and send the same by registered post directly to the Registrar to the Issue so as to reach them on or before the Issue Closing Date.

The envelope should be super scribed "Sadbhav Engineering Limited-Rights Issue" in case of resident shareholders and non-resident shareholders applying on non-repatriation basis, and "Sadbhav Engineering Limited-Rights Issue-NR" in case of non-resident shareholders applying on repatriation basis.

The application on plain paper, duly signed by the Applicants including joint holders, in the same order as per specimen recorded with our Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars: 348

• Name of Issuer, being Sadbhav Engineering Limited;

• Name and address of the Equity Shareholder including joint holders;

• Registered Folio Number / DP ID number and Client ID number;

• Number of shares held as on Record Date i.e. June 17, 2010;

• Number of Rights Equity Shares with Detachable Warrants entitled to;

• Number of entitled Equity Shares issued on rights basis with Detachable Warrants applied for;

• Number of additional Equity Shares with Detachable Warrants applied for, if any;

• Total number of Equity Shares with Detachable Warrants applied for;

• Total application money paid at the rate of Rs. 725 per Equity Share;

• Certificate numbers and distinctive numbers, if held in physical form

• Allotment option either in physical or demat mode

• Client Id Number, DP name and DP ID number if demat mode of allotment is preferred;

• Particulars of Cheque / Demand Draft

• A representation that the Equity Shareholder is not a “U.S. Person” (as defined in Regulations under the Securities Act)

• Savings / current account number and name and address of the bank where the Equity Shareholder will be depositing the refund order;

In case of Equity Shares with Detachable Warrants allotted in Demat mode, the bank account details shall be obtained from the information available with the depositories.

• In case of Non Resident Shareholders, NRE/ FCNR/ NRO A/c No. Name and Address of the Bank and Branch;

• If payment is made by a draft purchased from NRE/ FCNR/ NRO A/c No., as the case may be, an Account debit certificate from the bank issuing the draft, confirming that the draft has been issued by debiting NRE/ FCNR/ NRO Account.

• Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of our Company.

The Equity Shareholders are requested to strictly adhere to these instructions. Failure to do so could result in the application being rejected, with our Company, the Lead Manager and the Registrar not having any liability to such Equity Shareholders.

INVESTORS MAY PLEASE NOTE TO DISCLOSE PERMANENT ACCOUNT NUMBER IN THE APPLICATION FORM IRRESPECTIVE OF THE AMOUNT FOR WHICH APPLICATION IS MADE, IF NOT DISCLOSED APPLICATION WOULD BE REJECTED.

Please note that those who are making the application otherwise than on CAF (i.e. on a plain paper as stated above) shall not be entitled to renounce their rights and should not utilize the CAF for any purpose including renunciation even if it is received subsequently. If the Applicant violates any of these requirements, our Company will have the absolute right to reject any one or both of his/her/their application and refund the application money received. However, our Company is not liable to pay any interest whatsoever on money so refunded. 349

Acceptance of the Issue

You may accept the Issue and apply for the Equity Shares with Detachable Warrants 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 in Mumbai / Demand Draft, net of bank and postal charges, payable at Mumbai to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected.

In case no corresponding record is available with the Depositories that match 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.

Last date of Application

The last date for submission of the duly filled in CAF is Sepetember 6, 2010. 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 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, as the case may be, 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 the 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 sub section titled “Basis of Allotment” as described below.

INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY CAN BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM.

Basis of Allotment

Subject to the provisions contained in the Letter of Offer, the Articles of Association of our Company and the approval of the Designated Stock Exchange, the Board will proceed to allot the Equity Shares with Detachable Warrants 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 with Detachable Warrants renounced in their favour, in full or in part.

(b) If the equity shareholding of any of the Equity Shareholders is less than 20 or not in multiple of 20, then the fractional entitlement of such holders for Equity Shares with Detachable Warrants shall be ignored. Shareholders whose fractional entitlements are being ignored would be considered for allotment of ONE additional Equity Share each if they apply for additional Equity Share(s). Allotment under this head shall be considered if there are any un-subscribed equity shares after allotment under (a) above. If number of Equity Shares required for allotment under for this head are more than number of shares available after allotment under (a) above, the allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange. (For further details please refer to the sub section titled “Fractional Entitlements” on page 338 of this Letter of Offer)

SHAREHOLDERS HOLDING LESS THAN 20 EQUITY SHARES AND THEREFORE ENTITLED FOR ZERO EQUITY SHARES UNDER THIS ISSUE WILL NOT HAVE A RIGHT TO RENOUNCE. SUCH EQUITY SHAREHOLDERS ARE ENTITLED TO APPLY FOR ONE ADDITIONAL EQUITY SHARE. HOWEVER THEY CAN NOT RENOUNCE THE SAME TO THIRD PARTIES. CAF WITH ZERO ENTITLEMENT SHALL BE NON-NEGOTIABLE / NON-TRANSFERABLE.

(c) Allotment to the Equity Shareholders who having applied for all the Equity Shares with Detachable Warrants offered to them as part of the Issue and have also applied for additional Equity Shares with Detachable Warrants. The allotment of such additional Equity Shares with Detachable Warrants will be made as far as possible on an equitable basis having due regard to the number of Equity Shares held by 350

them on the Record Date, provided there is an under-subscribed portion after making full allotment in (a) and (b) above. The allotment of such Equity Shares with Detachable Warrants will be at the sole discretion of the Board /committee of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and not as a preferential allotment.

(d) Allotment to the Renouncees who having applied for the Equity Shares with Detachable Warrants renounced in their favour have also applied for additional Equity Shares with Detachable Warrants, provided there is an under-subscribed portion after making full allotment in (a), (b) and (c) above. The allotment of such additional Equity Shares with Detachable Warrants will be made on a proportionate basis at the sole discretion of the Board / Committee of Directors but in consultation with the Designated Stock Exchange, as a part of the Issue and not as a preferential allotment.

(e) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is a surplus available after making full allotment under (a), (b), (c) and (d) above.

After taking into account allotment to be made under (a), (b) and (c) above, if there is any unsubscribed portion, the same shall be deemed to be ‘unsubscribed’ for the purpose of regulation 3(1)(b) of the Takeover Code which would be available for allocation under (b) above. Our Promoters have provided an undertaking dated June 24, 2010 to our Company to apply for additional Equity Shares with Detachable Warrants in the Issue, to the extent of the unsubscribed portion of the Issue. However, the said member of the Promoter Group who has renounced their entitlement to other Promoter or Promoter Group, shall not apply for the additional Equity Shares in the Issue. Further, they have also confirmed that should there be renunciation by any of the members of the Promoter Group, the other members of the Promoter Group have undertaken to subscribe to the renounced portion of the entitlement of the said member of the Promoter Group.

As a result of this subscription and consequent allotment, our Promoters may acquire shares over and above their entitlement in the Issue including allotment of Equity Shares on conversion of additional Warrants, 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 our Promoters, if any, will not result in change of control of the management of our 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 chapter titled “Objects of the Issue” on page 51 of this Letter of Offer, there is no other intention/purpose for this Issue, including any intention to delist our Company, even if, as a result of allotments to our Promoters, in this Issue, the Promoter’s shareholding in our Company exceeds their current shareholding. In the event of oversubscription, allotment will be made within the overall size of the Issue.

Allotment to our Promoters of any unsubscribed portion, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement and the other applicable laws prevailing at that time.

In accordance with the current regulations, the following restrictions are applicable for investment by FII’s:

“In accordance with Foreign Institutional Investment limits, including their sub-accounts, in the shares of our Company, by purchase or acquisition from the market under the Portfolio investment Scheme under FEMA, applicable to our Company, the total FII investment cannot exceed 49% of the total paid up Equity Share capital or paid up value of the respective series of securities of our Company, as may be applicable,.”

Our Company expects to complete the allotment of Equity Shares within a period of 15 days from the Issue Closing Date in accordance with the Listing Agreement with the BSE and NSE. Our Company shall not retain any oversubscription.

Printing of Bank Particulars on Refund Orders

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant’s bank account are mandatorily required to be given for printing on the refund orders. Bank account particulars will be printed on the refund orders which can then be deposited only in the account specified. Our Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud.

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Underwriting

The present Issue is not underwritten.

Allotment/Refund

Our Company will issue and dispatch share certificates / demat credit and / or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of 15 days from the date of closure of the Issue. If such money is not repaid within eight days from the day our Company becomes liable to pay it, our Company shall pay that money with interest as stipulated under Section 73 of the Companies Act.

Applicants residing at locations where clearing houses are managed by the RBI will get refunds through NECS only except where Applicants are otherwise disclosed as applicable / eligible to get refunds through direct credit and RTGS / NEFT.

In case of those Applicants who have opted to receive their Rights Entitlement in dematerialized form using electronic credit under the depository system, and advice regarding their credit of the Equity Shares with Detachable Warrants shall be given separately. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within 15 working days of the Issue Closing Date.

In case of those Applicants who have opted to receive their Rights Entitlement in physical form, our Company will issue the corresponding share certificate under section 113 of the Companies Act or other applicable provisions if any. For more information, see ‘Letters of Allotment / Share Certificates / Demat Credit’ below.

Any refund order exceeding Rs.1,500 will be dispatched by registered post / speed post to the sole / first Applicant's registered address. Refund orders up to the value of Rs.1,500 would be sent under certificate of posting. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole / first Applicant. Adequate funds would be made available to the Registrar to the Issue for this purpose.

Mode of payment for resident Equity Shareholders / Applicants

• Applicants who are resident in centers with the bank collection centres shall draw Account Payee cheques / demand drafts accompanying the CAF, in favour of “Sadbhav Engineering Limited – Rights Issue”.

• Applicants residing at places other than the cities where the bank collection centres are located should send their completed CAF by registered post / speed post to the Registrar to the Issue, Link Intime India Private Limited along with Account Payee Cheques /Demand Drafts, net of bank and postal charges, payable at Mumbai, in favour of “Sadbhav Engineering Limited -Rights Issue” so that the same are received on or before the Issue Closing Date i.e. September 6, 2010. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

Mode of payment for Non-Resident Equity Shareholders / Applicants

As regards the application by Non-Resident Equity Shareholders, the following further conditions shall apply:

Payment by non-residents must be made by demand draft payable at Mumbai / cheque payable drawn on a bank account maintained at Mumbai or funds remitted from abroad in any of the following ways:

Application with repatriation benefits

• By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad (submitted along with foreign inward remittance certificate); or • By cheque / draft on a Non-Resident External Account (NRE) or Foreign Currency Non Resident (FCNR) Account maintained in Mumbai; or

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• By Rupee draft purchased by debit to NRE / FCNR Account maintained elsewhere in India and payable in Mumbai; or FIIs registered with SEBI must remit funds from special non-resident rupee deposit account. • Non-resident investors applying with repatriation benefits should draw Account Payee cheques / demand drafts in favour “Sadbhav Engineering Limited – Rights Issue - NR” payable at Mumbai and for the full application amount.

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 Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the allotment of Equity Shares will be on non-repatriation basis.

All cheques / drafts submitted by non-residents applying on a non-repatriation basis should be drawn in favour of the Banker to the Issue and marked “Sadbhav Engineering Limited – Rights Issue” payable at Mumbai and must be crossed ‘account payee only’ for the full application amount. The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

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. New demat account shall be opened for holders who have had a change in status from resident Indian to NRI.

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 or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF. • In case of an application received from Non-Residents, allotment, refunds and other distribution, if any, will be made in accordance with the guidelines / rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals.

Payment of Refund

Mode of making refunds

Applicants should note that on the basis of name of the applicants, Depository Participant’s name, Depository Participant-Identification number and Beneficiary Account Number provided by them in the Composite Application Form, the Registrar to the Issue will obtain from the Depositories, the applicant’s bank account details including nine digit MICR code. Hence, applicants 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 applicants at the applicants sole risk and neither the Lead Managers nor our Company shall have any responsibility and undertake any liability for the same.

The payment of refund, if any, would be done through various modes in the following order of preference:

1. NECS – Payment of refund would be done through NECS for applicants having an account at any of the centres where such facility has been made available. This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories. The payment of refunds is mandatory for applicants having a bank account at any of the centres where such facility has been made available, except where the applicant, being eligible, opts to receive refund through direct credit, NEFT or RTGS. 353

2. NEFT (National Electronic and Fund Transfer)– Payment of refund shall be undertaken through NEFT wherever the Applicants’ bank has been assigned the Indian Financial System Code (IFSC). ). Applicants whose refund amount is below Rs. 1.0 Lac, have the option to receive refund through NEFT. Such eligible Applicants who indicate their preference to receive refund through NEFT are required to provide the IFSC code in the CAF (Provision to be made in CAF obtain IFSC code) The process flow in respect of refunds by way of NEFT is at an evolving stage, hence use of NEFT is subject to operational feasibility, cost and process efficiency. In the event that NEFT is not operationally feasible, the payment of refunds would be made through any one of the other modes as discussed in this section – “Mode of making refund.”

3. Direct Credit – Applicants having bank accounts with the Refund Bank, in this case being, [•] shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank(s) for the same would be borne by our Company.

4. RTGS – Payment of refund shall be undertaken through IFSC wherever the Applicants’ bank has been assigned the Indian Financial System Code (IFSC), Applicants whose refund amount exceeds Rs. 1.0 Lac, have the option to receive refund through RTGS. Such eligible Applicants who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the CAF. In the event the same is not provided, refund shall be made through NECS. Charges, if any, levied by the Refund Bank(s) for the same would be borne by our Company. Charges, if any, levied by the Applicant’s bank receiving the credit would be borne by the Applicant.

5. For all other Applicants, including those who have not updated their bank particulars with the MICR code, the refund orders will be dispatched under certificate of posting for value up to Rs. 1,500 and through speed post / registered post for refund orders of Rs. 1,500 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn on the HDFC Bank Limited and payable at par.

Letters of Allotment / Share Certificates / Demat Credit

Letter(s) of allotment / share certificates / demat credit or letters of regret along with refund orders will be dispatched to the registered address of the first named Applicant or respective beneficiary accounts will be credited within 15 days, from the date of closure of the Issue. In case our Company issues letters of allotment, the relative share certificates will be dispatched within three months from the date of allotment. Allottees are requested to preserve such letters of allotment to be exchanged later for share certificates. Export of letters of allotment / share certificates / demat credit to non-resident Allottees will be subject to the approval of RBI.

Option to receive Equity Shares with Detachable Warrants in Dematerialized Form

Applicants to the Equity Shares of our Company issued through this Issue shall be allotted the securities in dematerialised (electronic) form at the option of the Applicant. Our Company signed a tripartite agreement with NSDL on November 12, 2005 and with CDSL on December 20, 2005, which enables the Investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates.

In this Issue, the Allottees who have opted for Equity Shares with Detachable Warrants in dematerialized form will receive their Equity Shares with Detachable Warrants in the form of an electronic credit to their beneficiary account with a DP. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No separate applications for securities in physical and /or dematerialized form should be made. If such applications are made, the application for physical securities will be treated as multiple applications and is liable to be rejected. In case of partial allotment, allotment will be done in demat option/phyical mode for the shares sought as the case may be.

The Equity Shares with Detachable Warrants of our Company will be listed on BSE and NSE.

Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is as under:

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1. Open a beneficiary account with any DP (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 our Company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with our Company). In case of investors having various folios in our 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 our Company in dematerialized form as on the Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Equity Shares pursuant to this Issue by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of securities arising out of this Issue may be made in dematerialized form even if the original Equity Shares of our 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 our Company.

3. Responsibility for correctness of information (including Applicant’s age and other details) filled in the CAF vis-à-vis such information with the Applicant’s DP, would rest with the Applicant. Applicants should ensure that the names of the Applicants and the order in which they appear in CAF should be the same as registered with the Applicant’s DP.

4. Applicants must necessarily fill in the details (including the beneficiary account number or client ID number) appearing in the CAF under the heading ‘Request for Shares in Electronic Form’.

5. Equity Share with Detachable Warrants allotted to an Applicant in the electronic account form will be credited directly to the Applicant’s respective beneficiary account(s) with the DP.

6. Applicants should ensure that the names of the Applicants and the order in which they appear in the CAF should be the same as registered with the Applicant’s DP.

7. Non-transferable allotment advice / refund orders will be directly sent to the Applicant by the Registrar to this Issue.

8. If incomplete / incorrect details are given under the heading ‘Request for Shares in Electronic Form’ in the CAF, the Applicant will get Equity Shares in physical form.

9. Renouncees can also exercise the option to receive Equity Shares in the demat form by indicating in the relevant section and providing the necessary details about their beneficiary account.

10. It may be noted that Equity Share arising out of this Issue can be received in demat form even if the existing Equity Shares are held in physical form. Nonetheless, it should be ensured that the DP account is in the name of the Applicant(s) in the same order as per specimen signatures appearing in the records of the DP / Company.

11. It may be noted that shares in electronic form can be traded only on the Stock Exchanges having electronic connectivity with NSDL or CDSL.

12. Dividend or other benefits with respect to the shares held in dematerialised form would be paid to those Equity Shareholders whose names appear in the list of beneficial owners given by the DP to our Company as on the Record date.

13. The Equity Shares with Detachable Warrants pursuant to this Issue allotted to investors opting for dematerialized form would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the Applicant by the Registrar to the Issue but the Applicant’s DP will provide to him the confirmation of the credit of such Equity Shares to the Applicant’s depository account.

14. 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 Renouncees will get Equity Shares in physical form.

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General instructions for Applicants a) Please read the instructions printed on the enclosed CAF carefully. b) Application should be made on the printed CAF, provided by our Company except as mentioned under the head Application on Plain Paper and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and / or which are not completed in conformity with the terms of the Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the applicants, details of occupation, address, father’s /husband’s name must be filled in block letters. c) The CAF together with cheque / demand draft should be sent to the Banker to the Issue / collecting bank or to the Registrar to the Issue, as the case may be, and not to our Company and the Lead Manager to the Issue. Applicants residing at places other than cities where the branches of the Banker to the Issue have been authorized by our Company for collecting applications, will have to make payment by account payee cheque drawn on a local bank at Mumbai or demand draft / pay order payable at Mumbai in favour of the Banker to the Issue, crossed account payee only and marked “Sadbhav Engineering Limited – Rights Issue” 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) Except for applications on behalf of the Central and State Government and the officials appointed by the courts, 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, nine digit MICR number and the name of the bank, branch with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. f) The payment against the application should not be effected in cash. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Banker to the Issue. g) Signatures should be either in English, Hindi or Gujarati or in any other language specified in the VIIIth 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 our 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 the signatory to make the relevant investment under this Offer and to sign the application and a copy of the Memorandum of Association and Articles of Association and / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable to be rejected. 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 our 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-Resident / NRIs, or persons of Indian origin residing abroad for allotment of Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a non-resident or NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF. 356

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 Company 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 our Company - Link Intime India Private Limited 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) SAF(s) 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 SAF(s). 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 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. Postdated 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 (g) above) q) No receipt will be issued for application money received. The Banker to the Issue / collecting bank / Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.

Grounds for Technical Rejections

Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:

• Amount paid does not tally with the amount payable for; • Bank account details (for refund) are not given; • Age of first Applicant not given; • PAN not mentioned for application of any value. • In case of application under power of attorney or by limited companies, corporate, trust, etc., relevant documents are not submitted; • If the signature of the existing shareholder does not match with the one given on the CAF and for renouncees if the signature does not match with the records available with their depositories; • If the Applicant desires to have shares in electronic form, but the CAF does not have the Applicant’s depository account details; • CAFs are not submitted by the Applicants within the time prescribed as per the CAF and the Letter of Offer; • Applications not duly signed by the sole / joint Applicants; • Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to invest in the Issue; • Applications accompanied by stock invest; • 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; • Applications by persons in the United States of America; • Applications which have evidence of being dispatched from the United States of America; • Applications by ineligible non-residents (including on account of restriction or prohibition under applicable local laws) and where registered address in India has not been provided. • Applications where our Company believes that the CAF is incomplete or acceptance of such CAFs may infringe applicable legal or regulatory requirements; 357

• Applications by renouncees who are persons not competent to contract under the Indian Contract Act, 1872, including minors; and • Duplicate Applications, including cases where an applicant submits CAFs along with a plain paper application.

Procedure for application through the Applications Supported by Blocked Amount ("ASBA") Process

SEBI, by its circular dated December 30, 2009, extended ASBA process facility to all the shareholders of the issuer company. Since this is a new mode of payment in Rights Issues, set forth below is the procedure for applying under the ASBA procedure, for the benefit of the shareholders.

This section is only to facilitate better understanding of aspects of the procedure which is specific to ASBA Investors. ASBA Investors should nonetheless read this document in entirety.

Our Company and the Lead Manager are 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 and CAF is correctly filled up.

The list of banks who have been notified by SEBI to act as SCSB for the ASBA Process are provided on . For details on designated branches of SCSB collecting the CAF, please refer the above mentioned SEBI link.

ASBA Process

An ASBA Investor can submit his application through CAF/plain paper, either in physical or electronic mode, to the SCSB with whom the bank account of the ASBA Investor or bank account utilized by the ASBA Investor is maintained. The SCSB shall block an amount equal to the application amount in the ASBA Account specified in the CAF, physical or electronic, on the basis of an authorization to this effect given by the account holder at the time of submitting the CAF. The application data shall thereafter be uploaded by the SCSB in the web enabled interface of the Stock Exchanges as prescribed under circular issued by SEBI -SEBI/CFD/DIL/DIP/38/2009/08/20 dated August 20, 2009 read with SEBI circular no. SEBI/CFD/DIL/ASBA/1/2009/30/12 dated December 30, 2009 or in such manner as may be decided in consultation with the Stock Exchanges. The amount payable on application shall remain blocked in the ASBA Account until finalization of the Basis of Allotment and consequent transfer of the amount against the allocated Equity Shares to the separate account opened by our Company for Rights Issue or until failure of the Is sue or until rejection of the ASBA application, as the case may be. Once the basis of Allotment is finalized, the Registrar to the Issue shall send an appropriate request to the Controlling Branch for unblocking the relevant ASBA Accounts and for transferring the amount allocable to the successful ASBA Investors to the separate account opened by our Company for Rights Issue. In case of withdrawal/failure of the Issue, the blocked amount shall be unblocked on receipt of such information from the Registrar to the Issue

The Lead Manager, our Company, its directors, affiliates, associates and their respective directors and officers and the Registrar to the Issue shall not take any responsibility for acts, mistakes, errors, omissions and commissions etc. in relation to applications accepted by SCSBs, Applications uploaded by SCSBs, applications accepted but not uploaded by SCSBs or applications accepted and uploaded without blocking funds in the ASBA Accounts. It shall be presumed that for applications uploaded by SCSBs, the amount payable on application has been blocked in the relevant ASBA Account.

Equity Shareholders who are eligible to apply under the ASBA Process

The option of applying for Equity Shares in this Issue through the ASBA Process is only available to the following Equity Shareholders of our Company on the Record Date, i.e., June 17, 2010. Equity Shareholders who:- 358

• Holds the shares of our Company in dematerialized form as on the Record Date, i.e., June 17, 2010 and has applied for entitlements and / or additional shares in dematerialized form; • Has not renounced his/her entitlements in full or in part; • Is not a renouncee; • Is applying through a bank account maintained with SCSBs.

CAF

The Registrar will despatch 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 or in plain paper application and indicate that they wish to apply through ASBA payment mechanism. Application in electronic mode will only be available with such SCSB who provides such facility. The Equity Shareholder shall submit the CAF/plain paper application 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.

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.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain a duplicate CAF and wanting to apply under ASBA process may make an application to subscribe for the Issue on plain paper. The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with our Company, must be submitted at a designated branch of a SCSB on or before the Issue Closing Date and should contain the following particulars:-

• Name of the issuer, being “Sadbhav Engineering Limited” • Name and address of the Equity Shareholder, including any joint holders • Registered folio number/DP ID number and client ID number • Number of Equity Shares held as on the Record Date, i.e., June 17, 2010 • Rights Entitlement • Number of Equity Shares with Detachable Warrants applied for • Number of additional Equity Shares with Detachable Warrant applied for, if any • Total number of Equity Shares with Detachable Warrant applied for • Savings/Current Account Number along with name and address of the SCSB and Branch from which the money will be blocked • The permanent account number (PAN) of the Equity Shareholder and where relevant, for each joint holder, except in respect of Central and State Government officials and officials appointed by the court (e.g., official liquidators and court receivers) who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for transacting in the securities market, subject to submitting sufficient documentary evidence in support of their claim for exemption, provided that such transactions are undertaken on behalf of the Central and State Government and not in their personal capacity • A representation that the Equity Shareholder is not a “U.S. Person” (as defined in Regulations under the Securities Act) • Signature of the Equity Shareholders to appear in the same sequence and order as they appear in the records of our Company • In case of Non Resident Shareholders, NRE/FCNR/NRO A/c no. Name and address of the SCSB and Branch • In the application, the ASBA Investor shall, inter alia, give the following confirmations/declarations:- • That he/she is an ASBA Investor as per the SEBI ICDR. • That he/she has authorized the SCSBs to do all acts as are necessary to make an application in the Issue, upload his/her application data, block or unblock the funds in the ASBA Account and transfer the funds from the ASBA Account to the separate account maintained by our Company for Rights Issue after finalization of the basis of Allotment entitling the ASBA Investor to receive Equity Shares in the Issue etc. • The Equity Shareholder shall submit the plain paper application to the SCSB for authorising such

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SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB If an applicant makes an application in more than one mode i.e both in the Composite ApplicationForm and on plain paper, then both the applications may be liable for rejection. The list of banks who have been notified by SEBI to act as SCSB for the ASBA Process are provided on . For details on designated branches of SCSB collecting the CAF, please refer the above mentioned SEBI link

Acceptance of the Issue

The Equity Shareholder may accept the Issue and apply for the Equity Shares offered, either in full or in part, by filling Part A of the CAF 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 our 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 Shares, 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 Registrars. 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 ICDR, into the separate bank account maintained by our Company as per the provisions of section 73(3) of the Companies Act. 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 Manager 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, our 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. The Equity Shareholder may exercise any of the following options with regard to the Equity Shares offered, using the respective CAFs received from Registrar:-

S. No. Options available Requirement 1 Accept whole or part of your entitlement Fill in and sign Part A of the CAF (All joint holders without renouncing the balance. must sign). 2 Accept your entitlement in full and apply for Fill in and sign Part A including Block III relating to additional Equity Shares. the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

The Equity Shareholder(s) 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 releva

360 nt 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

The Equity Shareholder is eligible to apply for additional Equity Shares over and above the number of Equity Shares that he is entitled to, provided that he has 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 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 350 of this Letter of Offer.

The allotment of additional equity shares will be made on an equitable basis with reference to number of shares held by you on the Record Date, i.e., June 17, 2010. If a Shareholder desires to apply for additional Equity Shares, he should indicate his 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.

Last date of Application

The last date for submission of the duly filled in CAF/plain paper application is September 6, 2010. The Issue will be kept open for a minimum of 15 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/plain paper application 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 OUR 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, i.e., JUNE 17, 2010.

Issuance of Intimation Letters

Upon approval of the basis of Allotment by the Designated Stock Exchange, the Registrar to the Issue shall send the Controlling Branches, a list of the ASBA Investors who have been allocated Equity Shares in the Issue, along with:-

• The number of Equity Shares to be allotted against each successful ASBA.

• The amount to be transferred from the ASBA Account to the separate account opened by our Company for Rights Issue, for each successful ASBA.

• The date by which the funds referred to in para above, shall be transferred to separate account opened by our Company for Rights Issue.

• The details of rejected ASBAs, if any, along with reasons for rejection to enable SCSBs to unblock the respective ASBA Accounts.

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General instructions for Equity Shareholders applying under the ASBA Process a) Please read the instructions printed on the CAF carefully. b) Application made in CAF 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 is liable to be rejected. The CAF/plain paper application must be filled in English. c) The CAF/plain paper application 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 our Company or Registrar or Lead Manager to the Issue. Alternatively the shareholders can submit the form electronically through the internet banking facility offered by SCSB. d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her PAN allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAFs/plain paper applications 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/plain paper application as per the specimen signature recorded with our Company/or Depositories. g) In case of joint holders, all joint holders must sign the relevant part of the CAF/plain paper application in the same order and as per the specimen signature(s) recorded with our 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

Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in.

In case of non-receipt of the CAF, the Application can be made on a Plain Paper with all the necessary details as required under para ‘Application on Plain Paper’ appearing under procedure for application under ASBA.

• 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.

• 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.

• Ensure that the CAFs/plain paper applications are submitted at the SCSBs whose details of bank account have been provided in the CAF.

• Ensure that you have mentioned the correct bank account number in the CAF plain paper application. 362

• 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/plain paper application before submitting the CAF/ plain paper application to the respective Designated Branch of the SCSB.

• Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on application mentioned in the CAF/ plain paper application, in the bank account maintained with the respective SCSB, of which details are provided in the CAF/ plain paper application and have signed the same.

• Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF/ plain paper application in physical form.

• Each applicant should mention their Permanent Account Number (“PAN”) allotted under the Income Tax Act, 1961.

• Ensure that the name(s) given in the CAF/plain paper application is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the CAF/plain paper application 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/plain paper application.

• Ensure that the Demographic details are updated, true and correct, in all respects.

Don’ts:

• Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB.

• Do not send your physical CAFs/ plain paper applications 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.

• Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground.

• 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 357 of this Letter of Offer, applications under the ASBA Process are liable to be rejected on the following grounds:

1. Application for entitlements or additional shares in physical form. 2. DP ID and Client ID mentioned in CAF/plain paper application not matching with the DP ID and Client ID records available with the Registrar. 3. Sending CAF/plain paper application 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. 4. Renouncee applying under the ASBA Process. 5. Insufficient funds are available with the SCSB for blocking the amount. 6. Funds in the bank account with the SCSB whose details are mentioned in the CAF/ plain paper application having been frozen pursuant to regulatory orders. 7. Account holder not signing the CAF/plain paper application or declaration mentioned therein. 8. PAN not stated. 9. Signature of sole/joint shareholder missing in the CAF 10. CAF not submitted within the prescribed time

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COMMUNICATIONS

All future communication in connection with ASBA applications made in this Issue should be addressed to the Registrar to the Issue quoting the full name of the sole or First ASBA Investor, CAF number, details of Depository Participant, number of Equity Shares applied for, date of CAF, name and address of the Designated Branch where the application was submitted and bank account number of the ASBA Account, with a copy to the relevant SCSB. The Registrar to the Issue shall obtain the required information from the SCSBs for addressing any clarifications or grievances. The SCSB shall be responsible for any damage or liability resulting froFm any errors, fraud or willful negligence on the part of any employee of the concerned SCSB, including its Designated Branches and the branches where the ASBA Accounts are held. ASBA Investors can contact the Compliance Officer, the Designated Branch where the application was submitted, or the Registrar to the Issue in case of any pre or post-issue related problems such as non-receipt of credit of allotted Equity Shares in the respective beneficiary accounts, blocking of excess Amount, etc.

Disposal of Investor Grievances

All grievances relating to the ASBA may be addressed to the Registrar to the Issue, with a copy to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, Amount blocked on application, bank account number of the ASBA Account number and the Designated Branch or the collection centre of the SCSB where the CAF was submitted by the ASBA Investors.

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 THE 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/PLAIN PAPER APPLICATION. EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF/PLAIN PAPER APPLICATION 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/PLAIN PAPER APPLICATION.

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/plain paper application, 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. Hence, Equity Shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF/Plain paper application.

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/plain paper application 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. By signing the CAF s/plain paper application, 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/plain paper application 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/plain paper application would be used only to ensure dispatch of letters intimating unblocking of bank account. 364

Note that any such delay shall be at the sole risk of the Equity Shareholders applying under the ASBA Process and none of our Company, the SCSBs, the Lead Manager or the Registrar to the Issue 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.

Applications through ASBA under Power of Attorney

In case of applications made under the ASBA process pursuant to a power of attorney, a certified copy of the power of attorney must be submitted along with the CAF/plain paper application.

Failing this, our Company reserves the right to accept or reject any CAF, without assigning any reason therefor.

Our Company, in its absolute discretion, reserves the right to relax the above condition of simultaneous lodging of the power of attorney along with the CAF, subject to such terms and conditions that the Company and the Lead Manager may deem fit.

Utilisation of Issue Proceeds

The Board of Directors declares that:

(i) All monies received out of this Issue shall be transferred to a separate bank account other than the bank account referred to sub-section (3) of Section 73 of the Companies Act; (ii) Details of all monies utilized out of the Issue shall be disclosed under an appropriate separate head in the balance sheet of our Company indicating the purpose for which such monies have been utilized; and (iii) Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet of our Company indicating the form in which such unutilized monies have been invested. (iv) Our Company may utilize the funds collected in the Issue only after the basis of allotment is finalized.

Undertakings by our Company

1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously and satisfactorily. 2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock exchanges where the securities are to be listed will be taken within seven working days of finalization of basis of allotment. 3. The funds required for making refunds to unsuccessful applicants as per the modes disclosed shall be made available to the Registrar to the Issue by our Company. 4. Our Company undertakes that where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the Investor within 15 days of the Is sue Closing Date, giving details of the banks where refunds shall be credited along with amount and expected date of electronic credit of refund. 5. Adequate arrangements shall be made to collect all ASBA applications and to consider then similar to non-ASBA applications while finalizing the Basis of Allotment. 6. At any given time there shall be only one denomination for the shares of our Company. 7. We shall comply with such disclosure and accounting norms specified by SEBI from time to time.

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Payment by Stockinvest

In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the stockinvest scheme has been withdrawn with immediate effect. Hence, payment through stockinvest would not be accepted in this Issue.

Disposal of application and application money

No acknowledgment will be issued for the application moneys received by our Company. However, the Banker to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF.

The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case without assigning any reason thereto in case the application concerned is not made in terms of the Letter of Offer.

In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the Applicant within 15 days from the close of the Issue. For further instruction, please read the CAF carefully.

Important

• Please read the Letter of Offer carefully before taking any action. The instructions contained in the accompanying CAF are an integral part of the conditions of the Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.

• All enquiries in connection with the Letter of Offer or accompanying CAF and requests for SAF(s) must be addressed (quoting the Registered Folio Number / DP and Client ID number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and super scribed ‘Sadbhav Engineering Limited – Rights Issue’ on the envelope to the Registrar to the Issue at the following address:

Link Intime India Private Limited C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (West) Mumbai- 400 078, India Tel: + 91 22 2596 0320 Fax: + 91 22 2596 0329 Toll Free No: 1-800-22-0320 Email: [email protected] Website: www.linkintime.co.in Contact Person: Mr. Pravin Kasare

• It is to be specifically noted that this Issue of Equity Shares with Detachable Warrants is subject to the chapter titled “Risk Factors” beginning on page 10 of this Letter of Offer.

• The Issue will be kept open for atleast 15 days unless extended, in which case it will be kept open for a maximum of 30 days.

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SECTION IX: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

Pursuant to Schedule II of the Companies Act and the SEBI (ICDR) Regulations, the main provisions of the Articles of Association of our Company relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and transmission of Equity Shares/debentures and/or on their consolidation/splitting are detailed below:

TABLE 'A' EXCLUDED

Table "A" not to apply 1. [a] The regulations contained in the Table marked "A" in Schedule I of the Companies Act, 1956 (hereinafter called the Act or the said Act) shall not apply to the Company, except in so far as the same are repeated, contained or expressly made applicable in these Articles or by the said Act.

Company to be governed by these Articles [b] The regulations for the management of the Company and for the observance of the members thereto and their representatives, shall, subject to any exercise of the statutory powers of the Company with reference to the repeal or alteration of or addition to its regulations by Special Resolution as prescribed or permitted by Section 31 of the Act, be such as are contained in these Articles.

SHARE CAPITAL AND VARIATION OF RIGHTS

5. (a) The Authorised Share Capital of the Company shall be as per paragraph V of the Memorandum of Association of the Company with rights to alter the same in whatever way as deemed fit by the Company. The Company may increase the Authorised Capital which may consist of Equity and/or Preference Shares as the Company in General Meeting may determine in accordance with the law for the time being in force relating to Companies with power to increase or reduce such capital from time to time in accordance with the Regulations of the Company and the legislative provisions for the time being in force in this behalf and with power to divide the shares in the Capital for the time being into Equity Share Capital or Preference Share Capital and to attach thereto respectively any preferential, qualified or special rights, privileges or conditions and to vary, modify and abrogate the same in such manner as may be determined by or in accordance with these presents.

(b) Subject to the rights of the holders of any other shares entitled by the terms of issue to preferential repayment over the equity shares in the event of winding up of the Company, the holders of the equity shares shall be entitled to be repaid the amounts of capital paid up or credited as paid up on such equity shares and all surplus assets thereafter shall belong to the holders of the equity shares in proportion to the amount paid up or credited as paid up on such equity shares respectively at the commencement of the winding up.

INCREASE REDUCTION AND ALTERATION OF CAPITAL

6. The Company may from time to time in general meeting increase its share capital by the issue of new shares of such amounts as it thinks expedient.

On what conditions the new shares may be issued (a) Subject to the provisions of sections 80, 81 and 85 to 90 of the Act, the new shares shall be issued upon such terms and conditions and with such rights and privileges annexed thereto by the general meeting creating the same as shall be directed and if no direction be given as the Directors shall determine and in particular such shares may be issued subject to the provisions of the said sections with a preferential or qualified right to dividends and in distribution of assets of the Company and subject to the provisions of the said sections with special or without any right of voting and subject to the provisions of Section 80 of the Act any preference shares may be issued on the terms that they are or at the option of the Company are liable to be redeemed.

Further Issue of Shares (b) 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 367

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 unissued capital or out of the increased share capital then:

(i) 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.

(ii) 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.

(iii) 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 referred 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 is whose favour any member may renounce the shares offered to him.

(iv) 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.

(c) 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.

(i) If a special resolution to that effect is passed by the Company in General Meeting, or

(ii) Where no such special resolutions is passed, if the votes cast (whether on a show of hands or on a poll as the case my 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, exceed 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.

(d) Noting is sub-clause (c) of (1) hereof shall be deemed:

(i) To extend the time within which the offer should be accepted; or

(ii) To authorize any person to exercise the right of renunciation for a second time on the aground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.

(e) 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:

(i) 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 that Government in this behalf; and 368

(ii) 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 also been approved by a special resolution passed by the company in General Meeting before the issue of the debentures or raising of the loans.

Directors may allot shares as fully paid up (f) Subject to the provisions of the Act and these Articles, the Directors may issue and allot shares in the capital of the Company on payment or part payment for any property or assets of any kind whatsoever sold or transferred, goods or machinery supplied or for services rendered to the Company in the conduct of its business and any shares which may be so allotted may be issued as fully paid up or partially paid up otherwise than in cash, and if so issued, shall be deemed to be fully paid up or partly paid up shares as the case may be.

Same as original capital (g) Except so far as otherwise provided by the conditions of issue or by these presents, any capital raised by the creation of new shares shall be considered as part of the original capital and shall be subject to the provisions herein contained with reference to the payment of calls, installments, transfers, transmission, forfeiture, lien, surrender, voting and otherwise.

Reduction of capital 9. The Company may from time to time by special resolution, subject to confirmation by the court and subject to the provisions of Sections 78, 80 and 100 to 104 of the Act, reduce its share capital and any Capital Redemption Reserve Account or premium account in any manner for the time being authorised by law and in particular without prejudice to the generality of the foregoing power may be :

(a) extinguishing or reducing the liability on any of its shares in respect of Share Capital not paid up;

(b) either with or without extinguishing or reducing liability on any of its shares, cancel paid up share capital which is lost or is unrepresented by available assets; or

(c) either with or without extinguishing or reducing liability on any of its shares, pay off any paid up share capital which is in excess of the wants of the Company;

and may, if and so far as is necessary, alter its Memorandum, by reducing the amount of its share capital and of its shares accordingly.

Division, Sub-Division, Consolidation, Conversion and Cancellation of Shares 10. Subject to the provisions of Section 94 of the Act, the Company in general meeting may by an ordinary resolution alter the conditions of its Memorandum as follows, that is to say, it may:

(a) consolidate and divide all or any of its Share Capital into shares of larger amount than its existing shares;

(b) sub-divide its shares or any of them into shares of smaller amount than originally fixed by the Memorandum subject nevertheless to the provisions of the Act in that behalf and so however that in the sub-division the proportion between the amount paid and the amount if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived and so that as between the holders of the shares resulting from such sub- division one or more of such shares may, subject to the provisions of the Act, be given any preference or advantage over the others or any other such shares.

(c) convert, all or any of its fully paid up shares into stock, and re-convert that stock into fully paid up shares of any denomination.

(d) cancel, shares which at the date of such general meeting have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.

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Modifications of rights 12. If at any time the share capital, by reason of the issue of Preference Shares or otherwise, is divided into different classes of shares, all or any of the rights and privileges attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to the provisions of Sections 106 and 107 of the Act and whether or not the Company is being wound up, be varied, modified, commuted, affected or abrogated with the consent in writing of the holders of three-fourths in nominal value of the issued shares of that class or with the sanction of a Special Resolution passed at a separate general meeting of the holders of the shares of that class. This Article shall not derogate from any power which the Company would have if this Article were omitted. The provisions of these Articles relating to general meetings shall mutatis mutandis apply to every such separate meeting but so that if at any adjourned meeting of such holders a quorum as defined in Article 102 is not present, those persons who are present shall be quorum.

SHARES AND CERTIFICATES

Issue of further shares not to affect right of existing share holders 13. The rights or privileges conferred upon the holders of the shares of any class issued with preference or other rights, shall not unless otherwise be deemed to be varied or modified or affected by the creation or issue of further shares ranking pari passu therewith.

Register of Members and Debenture holders 15. (a) The Company shall cause to be kept a Register of Members and an Index of Members in accordance with Sections 150 and 151 of the Act and Register and Index of Debenture holders in accordance with Section 152 of the Act. The Company may also keep a foreign Register of Members and Debenture holders in accordance with Section 157 of the Act.

(b) The Company shall also comply with the provisions of Sections 159 and 161 of the Act as to filling of Annual Returns.

(c) The Company shall duly comply with the provisions of Section 163 of the Act in regard to keeping of the Registers, Indexes, copies of Annual Returns and giving inspection thereof and furnishing copies thereof.

Restriction on allotment 17. The Board shall observe the restriction as to allotment of shares to the public contained in Sections 69 and 70 of the Act and shall cause to be made the return as to allotment provided for in Section 75 of the Act.

Shares to be numbered progressively and no shares to be subdivided 18. The shares in the Capital shall be numbered progressively according to the several denominations and except in the manner hereinbefore mentioned no share shall be subdivided. Every forfeited or surrendered share shall continue to bear the number by which the same was originally distinguished.

Shares at the disposal of the Directors 19. 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 either as right or bonus 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 and other related provisions 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 any 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.

Sale of fractional shares 22. If and whenever, as the result of issue of new or further shares or any consolidation or sub-division of shares, any shares are held by members in fractions, the Directors shall, subject to the provisions of 370

the Act and these Articles and to the directions of the Company in general meeting, if any, sell those shares, which members hold in fractions, for the best price reasonably obtainable and shall pay and distribute to and amongst the members entitled to such shares in due proportion, the net proceeds of the sale thereof. For the purpose of giving effect to any such sale the Directors may authorise any person to transfer the shares sold to the purchaser thereof, comprised in any such transfer and he shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

Acceptance of Shares 23. [A] An application signed by or on behalf of an applicant for shares in the Company, followed by an allotment of any shares therein shall be an acceptance of shares within the meaning of these Articles and every person who thus or otherwise accepts any shares and whose name is on the Register of Members shall for the purpose of these Articles be a member. The Director shall comply with the provisions of Sections 69, 70, 71, 72 and 73 of the Act in so far as they are applicable.

Power of Company to purchase its own Securities [B] Notwithstanding anything contained in the Act, but subject to the provision of Sub-section (2) and Section 77 B of the Act, the Company shall have power to purchase its own shares or other specified securities (Referred to as Buy-Back) from.

(A) Out of free Reserve or,

(B) Out of Share Premium Account or,

(C) Out of proceeds of an earlier Issue other than fresh Issue of share made specifically for the purpose of Buy-Back Shares.

Deposits and calls etc. to be a debt payable immediately 24. The money (if any) which the Board shall, on the allotment of any shares being made by them, require or direct to be paid by way of deposit, call or otherwise in respect of any shares allotted by them, immediately, on the insertion of the name of the allottee in the Register of Members as the name of the holder of such shares, become a debt, due to and recoverable by the Company from the allottee thereof, and shall be paid by him accordingly.

Issue of Certificates of Shares to be governed by Section 84 of the Act etc. 26. (a) The issue of certificates of shares or of duplicate or renewal of certificates of Shares shall be governed by the provisions of Section 84 and other provisions of the Act, as may be applicable and by the Rules or notifications or orders, if any, which may be prescribed or made by competent authority under the Act or Rules or any other law.The Directors may also comply with the provisions of such rules or regulations of any stock exchange where the shares of the Company may be listed for the time being.

Certificate of Shares (b) The certificate of title to shares shall be issued under the Seal of the Company and shall be signed by such Directors or Officers or other authorized persons as may be prescribed by the Rules made under the Act from time to time and subject thereto shall be signed in such manner and by such persons as the Directors may determine from time to time.

(c) The Company shall comply with all rules and regulations and other directions which may be made by any competent authority under Section 84 of the Act.

Limitation of time for issue of certificate 27. (a) 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 maybe. Every Certificate of shares shall be under the seal of the company and shall 371

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 from 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.

(b) The Company shall not entertain any application for split of share/debenture certificate for less than 10 (Ten) Equity shares / 10 (Ten) debentures (all relating to the same series) in market lots as the case may be.

Provided however this restriction shall not apply to an application made by the existing member or debenture holder for split of share/debenture certificates with a view to make an odd lot holding into a marketable lot subject to verification by the Company.

(c) Notwithstanding anything contained in Clause (a) above the Directors shall, however, comply with such requirements of the Stock Exchange where Shares of the Company may be listed or such requirements of any rules made under the Act or such requirements of the Securities Contracts (Regulation) Act, 1956 as may be applicable.

Issue of new certificate in place, lost or destroyed 28. 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, an a new Certificate in Lieu thereof shall be given to the party entitled to such lost or destroyed Certificate. Every Certificates 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 notwithstanding 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 Article shall mutatis mutandis apply to debentures of the company.

INTEREST OUT OF CAPITAL

Interest out of Capital 29. Where any shares are issued for the purposes of raising money to defray the expenses of the construction of any works or building or the provisions of any plant, which cannot be made profitable for lengthy period, the Company may pay interest on so much of that share capital as is for the time being paid up, for the period, at the rate and subject to the conditions and restrictions provided by Section 208 of the Act and may charge the same to capital as part of cost of construction of the work or building or the provision of the plant.

UNDERWRITING COMMISSION AND BROKERAGE

Power to pay certain commission and prohibition of payment of all other commissions discounts etc. 30. (A) The Company may pay a commission to any person in consideration of :

(i) his subscribing or agreeing to subscribe whether absolutely or conditionally, for any shares in or debentures of the Company, subject to the restrictions specified in sub-section (4A) of Section 76 of the Act, or

(ii) his procuring or agreeing to procure subscriptions, whether absolute or conditional for any shares in or debentures of the Company, if the following conditions are fulfilled, namely :

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(a) the commission paid or agreed to be paid does not exceed in the case of shares, five percent of the price at which the shares are issued and in the case of debentures, two and half percent of the price at which the debentures are issued;

(b) the amount or rate percent of the commission paid or agreed to be paid on shares or debentures offered to the public for subscription, is disclosed in the Prospectus, and in the case of shares or debentures not offered to the public for subscription, is disclosed in the Statement in lieu of Prospectus and filed before the payment of the commission with the Registrar, and where a circular or notice, not being a Prospectus inviting subscription for the shares or debentures is issued is also disclosed in that circular or notice;

(c) the number of shares or debentures which such persons have agreed for a commission to subscribe, absolutely or conditionally is disclosed in the manner aforesaid and

(d) a copy of the contract for the payment of commission is delivered to the Registrar at the time of delivery of the prospectus or the statement in lieu of prospectus for registration.

(B) Save as aforesaid and save as provided in Section 75 of the Act, the Company shall not allot any of its shares or debentures or apply any of its moneys, either directly or indirectly, in payment of any commission, discount or allowance, to any person in consideration of :

(i) his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in, or debentures of the Company or;

(ii) his procuring or agreeing to procure subscriptions, whether absolutely or conditionally, for any shares in, or debentures of the Company whether the shares, debentures or money be so allotted or applied by, being added to the purchase money of any property acquired by the Company or to the contract price of any work to be executed for the Company or the money be paid out of the nominal purchase money or contract price, or otherwise.

(C) Nothing in this Article shall affect the power of the Company to pay such brokerage as it has hereto before been lawful for the Company to pay.

(D) A vendor to, promoter of, or other person who receives payment in shares, debentures or money from the Company shall have and shall be deemed always to have had power to apply any part of the shares, debentures or money so received for payment of any commission, the payment of which, if made directly by the Company would have been legal under Section 76 of the Act.

(E) The commission may be paid or satisfied (subject to the provisions of the Act and these Articles) in cash, or in shares, debentures or debenture-stocks of the Company.

CALLS

Directors may make calls 31. The Directors may from time to time and subject to Section 91 of the Act and subject to the terms on which any shares/debentures may have been issued and subject to the conditions of allotment, by a resolution passed at a meeting of the Board (and not by circular resolution) make such calls as they think fit upon the members/debenture holders in respect of all moneys unpaid on the shares/debentures held by them respectively and such member/debenture holders shall pay the amount of every call so made on him, to the person(s) who has/have been given the option or right to call of shares with the sanction of the company in general meeting, at times and places appointed by the Directors. A call may be postponed or revoked as the Board may determine.

Calls to date from resolution 32. A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed and may be made payable by members/debenture holders on a subsequent date to be specified by the Directors.

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Notice of call 33. Thirty days notice in writing shall be given by the Company of every calls made payable otherwise than on allotment specifying the time and place of payment provided that before the time of payment of such call, the Directors may by notice in writing to the members/debenture holders revoke the same.

Sums deemed to be calls 35. Any sum, which by the terms of issue of a share/debenture becomes payable on allotment or at any fixed date whether on account of the nominal value of the share/debenture or by way of premium, shall for the purposes of these Articles be deemed to be a call duly made and payable on the date on which by the terms of issue the same becomes payable, and in case of non-payment, all the relevant provisions of these Articles as to payment of interest and expenses, forfeiture or otherwise, shall apply as if such sum had become payable by virtue of a call duly made and notified.

Instalments on shares to be duly paid 36. If by the condition of allotment of any shares the whole or part of the amount of issue price thereof shall be payable by instalments, every such instalment shall, when due, be paid to the Company by the person who, for the time being and from time to time, shall be the registered holder of the share or his legal representative.

Calls on shares of the same class to be made on uniform basis 37. Where any calls for further Share Capital are made on shares, such calls shall be made on a uniform basis on all shares falling under the same class.

Explanation : For the purpose of this provision, shares of the same nominal value on which different amounts have been paid up shall not be deemed to fall under the same class.

Liability of joint holders of shares 38. The joint holders of a share shall be severally as well as jointly liable for the payment of all instalment and calls due in respect of such shares.

When interest on call or Instalment payable 39. If the sum payable in respect of any call or instalment be not paid on or before the day appointed for payment thereof or any such extension thereof, the holder for the time being or allottee of the share in respect of which a call shall have been made or the instalment shall be due, shall pay interest as shall be fixed by the Board from the day appointed for the payment thereof or any such extension thereof to time of actual payment but the Directors may waive payment of such interest wholly or in part.

Partial payment not to preclude forfeiture 40. Neither a judgement nor a decree in favour of the Company for calls or other moneys due in respect of any shares nor any part payment or satisfaction thereof nor the receipt by the Company of a portion of any money which shall from time to time be due from any member in respect of any shares either by way of principal or interest nor any indulgence granted by the Company in respect of payment of any such money shall preclude the forfeiture of such shares as herein provided.

Term of issue of Debenture 43. Any debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise and may be issued on condition that they shall be convertible into shares of any denomination and with any privileges and conditions as to redemption. surrender, drawing, allotment of shares, attending (but not voting) at the General Meeting, appointment of Directors and otherwise Debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in the General Meeting by a Special Resolution.

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LIEN

Company’s lien on Shares/Debentures 44. The Company shall have first and paramount lien upon all the shares/debenture (other than fully paid up shares/debentures) registered in the name of each member/debenture holder (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 shares/debenture shall be created except upon the footing and condition that Article 25 hereof will have full effect. And such lien shall extend to all dividends and bonuses from time to time declared in respect of such shares/debentures. Unless otherwise agreed the registration of a 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.

As to enforcing lien by sale 45. For the purpose of enforcing such lien, the Board may sell the shares/debentures subject thereto in such manner as they shall think fit, and for that purpose may cause to be issued a duplicate certificate in respect of such shares and/or debentures and may authorise one of their member or appoint any officer or agent to execute a transfer thereof on behalf of and in the name of such member/debenture holder. No sale shall be made until such period, as may be stipulated by the Board from time to time, and until notice in writing of the intention to sell shall have been served on such member and/or debenture holder or his legal representatives and default shall have been made by him or them in payment, fulfilment, or discharge of such debts, liabilities or engagements for fourteen days after such notice.

Application of proceeds of sale 46. (a) The net proceeds of any such sale shall be received by the Company and applied in or towards payment of such part of the amount in respect of which the lien exists as is presently payable and the residue if any, shall (subject to a like lien for sums not presently payable as existed upon the shares before the sale) be paid to the persons entitled to the shares and/or debentures at the date of the sale.

Outsiders lien not to affect Company's lien (b) The Company shall be entitled to treat the registered holder of any share or debenture as the absolute owner thereof and accordingly shall not (except as ordered by a court of competent jurisdiction or by statute required) be bound to recognize equitable or other claim to, or interest in, such shares or debentures on the part of any other person. The Company’s lien shall prevail notwithstanding that it has received notice of any such claims.

FORFEITURE

If call or instalment not paid notice must be given 47. (a) If any member or debenture holder fails to pay the whole or any part of any call or installment or any money due in respect of any share or debentures either by way of principal or interest on or before the day appointed for the payment of the same or any such extension thereof as aforesaid, the Directors may at any time thereafter, during such time as the call or any installment or any part thereof or other moneys remain unpaid or a judgment or decree in respect thereof remains unsatisfied in whole or in part, serve a notice on such member or debenture holder or on the person (if any) entitled to the share by transmission requiring him to pay such call or installment or such part thereof or other moneys as remain unpaid 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.

Form of Notice (b) The notice shall name a day not being less than One Month from the date of the notice and a place or places, on and at which such call, or installment or such part or other moneys as aforesaid and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the event of non payment of call amount with interest at or before the time and at the place appointed, the shares or debentures in respect of which the call was made or installment or such part or other moneys is or are payable will be liable to be forfeited.

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In default of payment shares or debentures to be forfeited 48. If the requirements of any such notice as aforesaid are not complied with any share/debenture in respect of which such notice has been given, may at any time thereafter before payment of all calls or instalments, interest and expenses or other moneys due in respect thereof, be forfeited by a resolution of the Directors to that effect. 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. Such forfeiture shall include all dividends declared or interest paid or any other moneys payable in respect of the forfeited shares or debentures and not actually paid before the forfeiture.

Entry of forfeiture in Register of members/debenture holders 49. When any shares/debenture shall have been so forfeited, notice of the forfeiture shall be given to the member or debenture holder in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture with the date thereof, shall forthwith be made in the Register of members or debenture holders but no forfeiture shall be invalidated by any omission or neglect or any failure to give such notice or make such entry as aforesaid.

Forfeited share/debenture to be property of Company and may be sold 50. Any share or debenture so forfeited shall be deemed to be the property of the Company, and may be sold, re-allotted or otherwise disposed of either to the original holder or to any other person upon such terms and in such manner as the Directors shall think fit.

Power to annul forfeiture 51. The Directors may, at any time, before any share or debenture so forfeited shall have been sold, re- allotted or otherwise disposed of, annul forfeiture thereof upon such conditions as they think fit.

Shareholders or Debenture holders still liable to pay money owing at time of forfeiture and interest 52. Any member or debenture holder whose shares or debentures have been forfeited shall, notwithstanding the forfeiture, be liable to pay and shall forthwith pay to the Company, all calls, instalments, interest expenses and other money owing upon or in respect of such shares or debentures at the time of the forfeiture together with interest thereon from the time of the forfeiture until payment at such rate as the Directors may determine, and the Directors may enforce the payment of the whole or a portion thereof, if they think fit, but shall not be under any obligation to do so.

Effect of forfeiture 53. The forfeiture of a share or debenture shall involve extinction at the time of forfeiture, of all interest in and all claims and demands against the Company, in respect of the share or debenture and all other rights incidental to the share or debenture, except only such of those rights as by these Articles are expressly saved.

Certificate of forfeiture 54. A Certificate in writing under the hand of one Director and counter signed by the Secretary or any other officer authorised by the Directors for the purpose, that the call in respect of a Share or debenture was made and notice thereof given and that default in payment of the call was made and that the forfeiture of the share or debenture was made by the resolution of Directors to that effect shall be conclusive evidence of the facts stated therein as against all persons entitled to such share or debenture.

Validity of sales under Articles 45 and 50 55. Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers hereinabove given, the Directors may, if necessary, appoint some person to execute an instrument of transfer of the shares or debentures sold and cause the purchaser’s name to be entered in the Register of members or Register of debenture holders in respect of the shares or debentures sold, and the purchaser shall not be bound to see to the regularity of the proceedings, or to the application of the purchase money and after his name has been entered in the Register of members or debenture holders in respect of such shares or debenture the validity of the sale shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall be for damages only and against the Company exclusively.

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Cancellation of share/debenture Certificate in respect of forfeited shares/debentures 56. Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the certificate/s originally issued in respect of the relative shares or debentures shall (unless the same shall on demand by the Company has been previously surrendered to it by the defaulting member or debenture holder) stand cancelled and become null and void and be of no effect, and the directors shall be entitled to issue a duplicate certificate/s in respect of the said share or debentures to the person/s entitled thereto.

Title of purchaser and allottee of forfeited shares/debentures 57. The Company may receive the consideration, if any, given for the share or debenture on any sale, re- allotment or other disposition thereof, and the person to whom such share or debenture is sold, re- allotted or disposed of may be registered as the holder of the share or debenture and shall not be bound to see to the application of the consideration, if any, nor shall his title to the share or debenture be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale, re- allotment or other disposal of the share or debenture.

Surrender of Shares or Debentures 58. The Directors may, subject to the provisions of the Act, accept a surrender of any share or debenture from or by any member or debenture holder desirous of surrendering them on such terms as they think fit.

TRANSFER AND TRANSMISSION OF SHARES AND DEBENTURES

Register of transfers 59. The Company shall keep a book to be called the “Register of transfers” and therein shall be fairly and distinctly entered the particulars of every transfer or transmission of any share.

Instrument of transfer 60. The instrument of transfer shall be in writing and all provisions of Section 108 of the Companies ACT, 1956 and statutory modification thereof for the time being shall be duly compiled with in respect of all transfer of shares and registration thereof.

Instrument of transfer to be executed by transferor and transferee 61. Every such instrument of transfer shall be signed both by the transferor and 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 of members in respect thereof.

Directors may refuse to register transfer 62. (a) Subject to the provisions of Section 111 of the Act and Section 22A of the Securities Contracts (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.

(b) Nothing in Sections 108, 109 and 110 of the Act shall prejudice this power to refuse to register the transfer of, or the transmission on legal documents by operation of law of the rights to, any shares or interest of a member in, any shares or debentures of the Company.

Transfer of shares 63. (a) An application of registration of the transfer of shares may be made either by the transferor or the transferee provided that where such application is made by the transferor, no registration shall in the case of partly paid shares be effected unless the Company gives notice of the application to the transferee and subject to the provisions of Clause (d) of this Article, the Company shall unless objection is made by the transferee within two weeks from the date of receipt of the

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notice, enter in the Register of members the name of the transferee in the same manner and subject to the same conditions as if the application for registration was made by the transferee.

(b) For the purpose of clause (a) above notice to the transferee shall be deemed to have been duly given if sent by prepaid registered post to the transferee at the address given in the instrument of transfer and shall be deemed to have been duly delivered at the time at which it would have been delivered to him in the ordinary course of post.

(c) It shall not be lawful for the Company to register a transfer of any shares unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation if any, of the transferee has been delivered to the Company along with the Certificate relating to the shares and if no such Certificate is in existence, along with the letter of allotment of shares. The Directors may also call for such other evidence as may reasonably be required to show the right of the transferor to make the transfer provided that where it is proved to the satisfaction of the Directors of the Company that an instrument of transfer register the transfer on such terms as to indemnity as the Directors may think fit.

(d) Nothing in clause (c) above shall prejudice any power of the company to register as share holder any person to whom the right to any share has been transmitted by operation of law.

(e) The company shall accept all applications for transfer of shares/debentures, however, this condition shall not apply to requests received by the company;

(A) for splitting of a share or debenture certificate into several scripts of very small denominations;

(B) proposals for transfer of shares/debentures comprised in a share/debenture certificate to several parties involving, splitting of a share/debenture certificate into small denominations and that such split/transfer appears to be unreasonable or without any genuine need.

(i) transfer of Equity shares/debentures made in pursuance of any statutory provision or an order of a competent court of law;

(ii) the transfer of the entire Equity shares/debentures by an existing shareholder/debenture holder of the Company holding under one folio less than 10 (ten) Equity Shares or 10 (ten) debentures (all relating to the same series) less than in market lots by a single transfer to a single or joint transferee.

(iii) the transfer of not less than 10 (ten) Equity shares or 10 (ten) debentures (all relating to the same series) in favour of the same transferee(s) under two or more transfer deeds, out of which one or more relate(s) to the transfer of less than 10 (ten) Equity Shares/10 (ten) debentures.

(iv) the transfer of less than 10 (ten) Equity shares or 10 (ten) debentures (all relating to the same series) to the existing share holder/debenture holder subject to verification by the Company.

Provided that the Board may in its absolute discretion waive the aforesaid conditions in a fit and proper case(s) and the decision of the Board shall be final in such case(s).

(f) Nothing in this Article shall prejudice any power of the Company to refuse to register the transfer of any share.

Dematerialization/ Rematerialisation [B] Nothwithstanding anything contained in these Articles the company shall be entitled to dematerialize its securities and to offer securities in a dematerialised form pursuant to the Depository Act, 1996.

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Option for Investors [C] Every holder of or subscriber to securities of the Company shall have the option to receive security certificates or to hold the securities with a depository. Such a person who is the beneficial owner of the Securities can at any time option out of a Depository, if permitted, by the law, in respect of any security in the manner provided by the Depositories Act, 1996 and the Company shall in the manner and within the time prescribed, issued to the beneficial owner the required Certificates for the Securities.

If a person options to hold its Security with a Depository, the Company shall intimate such depository the details of allotment of the Security.

Securities in Depository to be in fungible form [D] All securities of the Company held by the Depository shall be dematerialised and be in fungible form.

Nothing contained in Sections 153, 153A, 153B, 187C and 372A of the Act shall apply to a Depository in respect of the Securities of the Company held by it on behalf of the beneficial owners.

Rights of Depositories and Beneficial Owners [E] (i) Nothwithstanding anything to the contrary contained in the Act a Depository shall be deemed to be the registered owner for the purpose of effecting transfer of ownership of Security of the Company on behalf of the beneficial owner.

(ii) Save as otherwise provided in (i) above, the depository as the registered owner of the Securities shall not have any voting rights or any other rights in respect of the Securities held by it.

(iii) Every person holding Securities of the Company and whose name is entered as the beneficial owner in the record of the depository shall be deemed to be a member of the Company. The beneficial owner of Securities shall be entitled to all the rights and benefits and be subject to all the liabilities in respect of his Securities which are held by a depository.

Service of Documents [F] Nothwithstanding anything contained in the Act to the contrary, where Securities of the Company are held in depository, the records of the beneficial ownership may be served by such depository to the Company by means of electronic mode or by delivery of floppies or discs.

Transfer or Securities [G] Nothing contained in Section 108 of the Act, shall apply to a transfer of Securities effect by a transferor and transferee both of whom are entered as beneficial owners in the record of a depository.

Allotment of Securities dealt with in a depository [H] Nothwithstanding anything contained in the Act, where Securities are dealt with by a depository, the Company shall intimate the details thereof to the depository immediately on allotment of such securities.

Register and Index of Members [I] The company shall cause to be kept at its Registered Office or at such other place as may be decided, Register and Index of Members in accordance with Sections 150 and 151 and other applicable provisions of the Act and the Depositories Act, 1996 with the details of Shares held in physical and dematerialised forms in any media as my be permitted by law including in any form of electronic media.

The Register and Index of beneficial owners maintained by a depository under Section 11 of the Depositories Act, 1996 shall be deemed to be the Register and Index of Members for the purpose of this Act. The Company shall have the power to keep in any state or country outside India, a Register of Members for the residents in that state or Country. 379

Applicability of the depositories Act [J] In case of transfer of shares, debentures and other marketable securities, where the Company has not issued any certificate and where such shares, debentures or securities are being held in an electronic and fungible form with a Depository, the provisions of the Depositories Act, 1996 shall apply.

Transfer books and Register of members when closed 65. The Board shall have power on giving not less than seven days’ previous notice by advertisement in some newspaper circulating in the district in which the office of the Company is situate, to close the Transfer books, the Register of members or Register of debenture holders at such time or times and for such period or periods, not exceeding thirty days at a time and not exceeding in the aggregate forty five days in each year.

Transfer to Minors etc. 66. Only fully paid shares or debentures shall be transferred to a minor acting through his/her legal or natural guardian. Under no circumstances, shares or debentures be transferred to any insolvent or a person of unsound mind.

Title to shares of deceased holder 67. The executors or administrators of a deceased member (not being one or two or more joint holders) or the holder of a deceased member (not being one or two or more joint holders) shall be the only persons whom the Company will be bound to recognise as having any title to the shares registered in the name of such member, and the Company shall not be bound to recognise such executors or administrators or the legal representatives unless they shall have first obtained probate or Letters of Administration or a Succession Certificate, as the case may be, from a duly constituted competent court in India, provided that in any case where the Directors in their absolute discretion think fit, the Directors may dispense with the production of probate or Letters of Administration or a Succession Certificate upon such terms as to indemnity or otherwise as the Directors in their absolute discretion may think necessary and under Article 70 register the name of any person who claims to be absolutely entitled to the shares standing in the name of a deceased member, as a member.

Registration of persons entitled to share otherwise than by transfer 68. (a) Subject to the provisions of Articles 67 and 77(d), any person becoming entitled to any share in consequence of the death, lunacy, bankruptcy or insolvency of any member or by any lawful means other than by a transfer in accordance with these presents, may with the consent of the Directors (which they shall not be under any obligation to give) upon producing such evidence that he sustains the character in respect of which he proposes to act under this Article or of such titles as the Directors shall think sufficient, either be registered himself as a member in respect of such shares or elect to have some person nominated by him and approved by the Directors registered as a member in respect of such shares. Provided nevertheless that if such person shall elect to have his nominee registered he shall testify his election by executing in favour of his nominee an instrument of transfer in accordance with the provisions herein contained and until he does so, he shall not be free from any liability in respect of such shares.

(b) A transfer of the shares or other interest in the Company of a deceased member thereof made by his legal representative shall, although the legal representative is not himself a member be as valid as if he had been a member at the time of the execution of the instrument of transfer.

Nominations (c) [i] Every Shareholder or Debenture holder or deposit holder of the Company, may at any time, nominate a person to whom his Shares or Debentures or Deposit shall vest in the event of his death in such manner as may be prescribed under the Act, and shall have all powers vested under Section 109B of the Depository Act, 1996.

[ii] Where the Shares of Debentures or deposits of the Company are held by more than one person jointly, joint holders may together nominate a person to whom all the rights in the Shares or Debentures or Deposits as the case may be shall vest in the event of death of all the joint holders.

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[iii] Nothwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, where a nomination made in the manner aforesaid purpose to confer on any person the right to vest the Shares or Debentures or Deposits, the nominee shall, on the death of the Shareholder or Debenture holder or deposit holder, as the case may be on the death of the joint holders become entitled to all the rights in such Shares or Debentures or Deposits as the case may be, all the joint holders, in relation to such Shares or Debentures or Deposits, to the exclusion of all other persons, unless the nomination is varied or cancelled in the manner as may prescribed under the Act.

[iv] Where the nominee is a minor, it shall be lawful for the holder of the Shares or Debentures or Deposits, to make the nomination to appoint any person to become entitled to Share in, or Debentures or deposits of, the Company, in the manner prescribed under the Act, in the event of his death, during the minority.

Claimant to be entitled to same advantage 69. The person becoming entitled to a share by reason of the death, lunacy, bankruptcy or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled as if he were registered holder of the shares except that he shall not before being registered as a member in respect of the share, be entitled in respect of it, to exercise any right conferred by membership in relation to the meeting of the Company provided that the Board may at any time give notice requiring any such persons to elect either to be registered himself or to transfer shares and if the notice is not complied within sixty days, the Board may thereafter withhold payment of all dividends, interests, bonuses or other moneys payable in respect of the share until the requirements of the notice have been complied with.

Persons entitled may receive dividend without being registered as member 70. A person entitled to a share by transmission shall, subject to the right of the Directors to retain such dividends, bonuses or moneys as hereinafter provided be entitled to receive, and may give a discharge for any dividends, bonuses or other moneys payable in respect of the share/debenture.

71. Article 70 shall not prejudice the provisions of Articles 44 and 55.

Refusal to register nominee 72. The Directors shall have the same right to refuse on legal ground to register a person entitled by transmission to any shares or his nominee as if he were the transferee named in an ordinary transfer presented for registration.

Directors may require evidence of transmission 73. Every transmission of a share shall be verified in such manner as the Directors may require, and the Company may refuse to register any such transmission until the same be so verified or until or unless an indemnity be given to the Company with regard to such registration which the Directors at their discretion shall consider sufficient, provided nevertheless that there shall not be any obligation on the Company or the Directors to accept any indemnity.

No fee on transfer or transmission 74. No fee shall be charged for registration of transfer, transmission, Probate, Succession Certificate and Letters of administration, Certificate of Death or Marriage, Power of Attorney or similar other document.

JOINT HOLDERS

Joint-holders 77. Where two or more persons are registered as the holders of any share/debentures, they shall be deemed (so far as the Company is concerned) to hold the same as joint tenants with benefits of survivorship, subject to the following and other provisions contained in these Articles.

No transfer to more than four persons as joint holders (a) The joint holders of any share/debenture shall be liable severally four persons as the holders of any share/debenture.

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Transfer by joint holders (b) In the case of a transfer of shares/debentures held by joint holders, the transfer will be effective only if it is made by all the joint holders.

Liability of joint holders (c) The joint holders of any share/debenture shall be liable severally as well as jointly for and in respect of all calls or installments and other payments which ought to be made in respect of such share/debenture.

Death of one or more joint holders (d) On the death of any one or more of such joint holders the survivor/survivors shall be the only person or persons recognized by the Company as having any title to the share/debenture, but the Directors may require such evidence of death as they may deem fit, and nothing herein contained shall be taken to release the estate of a deceased joint holder from any liability on shares/debentures held by him jointly with any other person.

Receipt of one sufficient (e) Any one of such joint holders may give effectual receipts of any dividends, interests or other moneys payable in respect of such share/debenture.

Delivery of certificate and giving of notices to first named holder (f) Only the person whose name stands first in the Register of Members/debenture holders as one of the joint holder of any shares/debentures shall be entitled to the delivery of the certificate relating to such share/debenture or to receive notice (which expression shall be deemed to include all documents as defined in Article (2)(a) hereof and any document served on or sent to such person shall be deemed service on all the joint holders.

Vote of joint holders (g) (i) Any one of two or more joint holders may vote at any meeting either personally or by attorney or by proxy in respect of such shares as if he were solely entitled thereto and if more than one of such joint holders be present at any meeting personally or by proxy or by attorney then that one of such persons so present whose name stands first or higher (as the case may be) on the Register in respect of such share shall alone be entitled to vote in respect thereof but the other or others of the joint holders shall be entitled to be present at the meeting provided always that a joint holder present at any meeting personally shall be entitled to vote in preference to a joint holder present by Attorney or by proxy although the name of such joint holder present by an Attorney or proxy stands first or higher (as the case may be) in the Register in respect of such shares.

(ii) Several executors or administrators of a deceased member in whose (deceased member) sole name any share stands shall for the purpose of this clause be deemed joint holders.

BORROWING POWERS

Restriction on powers of the Board 78. The Board of Directors shall not, except with the consent of the Company in general meeting and subject to Article 172 of the Articles of Association of the Company:

(a) sell, lease or otherwise dispose of the whole or substantially the whole, of the undertaking of the Company, or where the Company owns more than one undertaking of the whole, or substantially the whole, of any such undertaking.

(b) remit, or give time for the repayment of any debt due by a Director.

(c) invest, otherwise than in trust securities the amount of compensation received by the Company in respect of the compulsory acquisition alter the commencement of this Act, of any such undertaking as is referred to in clause (a) or of any premises or properties used for any such undertaking and without which it can not be carried on or can be carried on only with difficulty or only after a considerable time.

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(d) borrow monies where 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 its free reserves, that is to say, reserves not set apart for any specific purpose.

(e) contribute, to charitable and other funds not directly relating to the business of the Company or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed fifty thousand rupees or five percent, of its average net profits as determined in accordance with the provisions of Sections 349 and 350 of the Act during the three financial years immediately preceding, whichever is greater.

Explanation : Every resolution passed by the Company in general meeting in relation to the exercise of the power referred to in clause (d) or in clause (e) shall specify the total amount up to which money may be borrowed by the Board of Directors under clause (d) or as the case may be, the total amount which may be contributed to charitable and other funds in any financial year under clause (e).

Issue at discount etc. or with special privileges 82. Any bonds, debenture stocks, or other securities may be issued, subject to the provisions of the Act, at a discount premium or otherwise and with any special privileges as to redemption, surrender, drawings, appointment of Directors and otherwise and subject to the following:

Debentures with voting rights not to be issued (a) The Company shall not issue any debentures carrying voting rights at any meeting of the Company whether generally or in respect of particular classes of business.

(b) The Company shall have power to reissue redeemed debentures in certain cases in accordance with Section 121 of the Act.

(c) Payments of certain debts out of assets subject to floating charge in priority to claims under the charge may be made in accordance with the provisions of Section 123 of the Act.

(d) Certain charges mentioned in Section 125 of the Act shall be void against the liquidators or creditors unless registered as provided in section 125 of the Act.

(e) The term ‘charge’ shall include mortgage in these Articles.

(f) A contract with the Company to take up and pay for any debentures of the Company may be enforced by a decree for specific performance.

Limitation of time for issue of certificate (g) The Company shall, within three months after the allotment of any of its debentures or debenture stock, and within one month after the application for the registration of the transfer of any such debentures or debenture stocks have complete and have ready for delivery the Certificate of all the debentures and the Certificates of all debenture stocks allotted or transferred unless the conditions of issue of the debentures or debenture stocks otherwise provide.

The expression ‘transfer’ for the purpose of this clause means a transfer duly stamped and otherwise valid and does not include any transfer which the Company is for any reason entitled to refuse to register and does not register.

Right to obtain copies of and inspect Trust Deed (h) (i) A copy of any Trust Deed for securing any issue of debentures shall be forwarded to the holder of any such debentures or any member of the Company at his request and within seven days of the making thereof on payment.

(1) In the case of a printed Trust Deed of the sum of Rupee One and

(2) in the case of a Trust Deed which has not been printed of thirty seven paise for every one hundred words or fractional part thereof required to be copied.

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(ii) The Trust Deed referred to in item (i) above shall also be open to inspection by any member or debenture holder of the Company in the same manner, to the same extent, and on payment of the same fees, as if it were the Register of members of the Company.

SHARE WARRANTS

Powers to issue share warrants 87. The Company may issue share warrants subject to and in accordance with the provisions of Sections 114 and 115 of the Act and accordingly, the Board may, in its discretion, with respect to any share which is fully paid upon application in writing signed by the persons registered as holder of the share and authenticated by such evidence (if any) as the Board may, from time to time require as to the identity of the person signing the application, and on receiving the certificate (if any) of the share, and the amount of the stamp duty on the warrant and such fee as the Board may, from time to time, require, issue a share warrant.

Deposit of share warrants 88. (a) The bearer of a share warrant may at any time deposit the warrant at the office of the Company and so long as the warrant remains so deposited, the depositor shall have the same right of signing a requisition for calling a meeting of the Company, and of attending, and voting, and exercising the other privileges of a Member at any meeting held after the expiry of two clear days from the time of deposit, as if his name were inserted in the Register of members as the holder of the share included in the deposited warrant.

(b) Not more than one person shall be recognized as depositor of the Share Warrant.

Privileges and disabilities of the holders of share warrant. 89. (a) Subject as herein otherwise expressly provided, no person shall, as bearer of a share warrant, sign a requisition for calling a meeting of the Company, or attend, or vote or exercise any of the privileges of a member at a meeting of the Company, or be entitled to receive any notice from the Company.

(b) The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages as if he were named in the Register of members as the holder of the shares included in the warrant and he shall be a member of the Company.

Issue of new share warrant or coupon 90. The Board may, from time to time, make rules as to the terms on which (if it shall think fit) a new share warrant or coupon may be issued by way of renewal in case of defacement, loss or destruction.

GENERAL MEETINGS

Annual General Meeting 93. Subject to the provisions contained in Sections 166 and 210 of the Act, as far as applicable, the Company shall in each year hold, in addition to any other meetings, a general meeting as its annual general meeting, and shall specify, the meeting as such in the Notice calling it; and not more than fifteen months shall elapse between the date of one annual general meeting of the Company and that of the next.

Provided that if the Registrar for any special reason, extends the time within which any annual general meeting shall be held, then such annual general meeting may be held within such extended period.

Summary of Annual General Meeting The Company may in any one general meeting fix the place for its any annual general meetings. Every member of the Company shall be entitled to attend either in person or by proxy and the Auditor of the Company shall have the right to attend and to be heard at any general meeting which he attends on any part of the business which concerns him as Auditor. At every annual general meeting of the Company, there shall be laid on the table, the Director’s report, the audited statements of accounts and auditor’s report (if any, not already incorporated in the audited statements of accounts). The proxy 384

registered with the Company and Register of Director’s Share holdings of which latter register shall remain open and accessible during the continuance of the meeting. The Board shall cause to prepare the Annual list of members, summary of Share Capital, Balance Sheet and Profit and Loss Account and forward the same to the Registrar in accordance with Sections 159, 161 and 220 of the Act.

Time and place of Annual General Meeting 94. Every annual general meeting shall be called at any time during business hours, on a day that is not a public holiday, and shall be held either at the registered office of the Company or at some other place within the city, town or village in which the registered office of the Company is situate, and the notice calling the meeting shall specify it as the annual general meeting.

Powers of Director’s to call Extraordinary General Meeting 96. The Directors may call an extraordinary general meeting of the Company whenever they think fit.

Contents and manner of service of notice and persons on whom it is to be served 99. (a) Every notice of a meeting of the Company shall specify the place and the day and hour of the meeting and shall contain a statement of the business to be transacted thereat.

(b) Notice of every meeting of the Company shall be given:

(i) to every member of the Company, in any manner authorized by sub-sections (1) to (4) of Section 53 of the Act;

(ii) to the persons entitled to a share in consequence of the death or insolvency of a member, by sending it through the post in a prepaid letter addressed to them by name, or by the title or representatives of the deceased or assignees of the insolvent, or by any like description, at the address, if any, in India supplied for the purpose by the persons claiming to be so entitled, or until such an address has been so supplied, by giving the notice in any manner in which it might have been given if the death or insolvency had not occurred;

(iii) to the Auditor or Auditors for the time being of the Company in any manner authorized by Section 53 of the Act in the case of any member of members of the Company and

(iv) to all the Directors of the Company

Provided that where the notice of a meeting is given by advertising the same in a newspaper circulating in the neighborhood of the registered office of the Company under sub-section (3) of Section 53 of the Act, the statement of material facts referred to in Section 173 of the Act need not be annexed to the notice as required by that Section but it shall be mentioned in the advertisement that the statement has been forwarded to the members of the Company.

(c) The accidental omission to give notice to, or the non-receipt of notice by any member or other person to whom it should be given shall not invalidate the proceedings at the meeting.

Quorum for meeting 101. (a) Five members personally present shall be the quorum for a general meeting of the company.

If quorum not present meeting to be dissolved or adjourned (b) (i) If within half an hour from the time appointed for holding a meeting of the Company, a quorum is not present, the meeting, if called upon by requisition of members, shall stand dissolved.

(ii) In any other case, the meeting shall stand adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place, as the Board may determine.

Adjourned meeting to transact business (c) If at the adjourned meeting also, a quorum is not present within half an hour from the time appointed for holding the meeting, the members present shall be the quorum.

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Presence of quorum 102. (a) No business shall be transacted at any general meeting unless the requisite quorum be present at the commencement of the business.

Business confined to election of chairman whilst chair vacant (b) No business shall be discussed or transacted at any general meeting except the election of a Chairman whilst the Chair is vacant.

Chairman of general meeting (c) (i) The Chairman of the Board of Directors shall be entitled to take the chair at every general meeting. If there be no Chairman or if at any meeting he shall not be present within 15 (fifteen) minutes after the time appointed for holding such meeting or is unwilling to act, the Directors present may choose one of themselves to be the Chairman and in default of their doing so, the members present shall choose one of the Directors to be Chairman and if no Directors present be willing to take the chair, the members present shall choose one of themselves to be the Chairman.

(ii) If at any meeting a quorum of members shall be present, and the Chair shall not be taken by the Chairman or Vice Chairman of the Board or by a Director at the expiration of 15 (fifteen) minutes from the time appointed for holding the meeting or if before the expiration of that time all the Directors shall decline to take the Chair, the members present shall choose one of their members to be the Chairman of the meeting.

Chairman with consent may adjourn the meeting (d) The Chairman with the consent of the meeting may adjourn any meeting from time to time and from place to place in the city, town or village where the registered office of the Company is situate.

Business at adjourned meeting (e) No business shall be transacted at any adjourned meeting other than the business which might have been transacted at the meeting from which the adjournment took place.

Notice of adjourned meeting (f) When a meeting is adjourned only for thirty days or more, notice of the adjourned meeting shall be given as in the case of original meeting.

In what cases poll taken with or without adjournment (g) Any poll duly demanded on the election of a Chairman of a meeting or any question of adjournment shall be taken at the meeting forthwith, save as aforesaid, any business other than that upon which a poll has been demanded may be proceeded with pending the taking of the poll.

Proxies 103. (a) Any member of the Company entitled to attend and vote at a meeting of the Company shall be entitled to appoint any other person (whether a member or not) as his proxy to attend and vote instead of himself. A member (and in the case of joint holders all holders) shall not appoint more than one person as proxy. A proxy so appointed shall not have any right to speak at the meeting.

Provided that unless where the proxy is appointed by a body corporate a proxy shall not be entitled to vote except on a poll.

(b) In every notice calling a meeting of the Company there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself, and that a proxy need not be a member.

(c) The instrument appointing a proxy or any other document necessary to show the validity or otherwise relating to the appointment of a proxy shall be lodged with the Company not less than 48 (forty eight) hours before the meeting in order that the appointment may be effective thereat.

(d) The instrument appointing a proxy shall :

(i) be in writing, and 386

(ii) be signed by the appointer or his attorney duly authorized in writing or, if the appointer is a body corporate, be under its seal or be signed by an officer or an attorney duly authorized by it.

Form of proxy (e) Every instrument of proxy whether for a specified meeting or otherwise shall, as nearly as circumstances will admit, be in usual common form.

(f) An instrument appointing a proxy, if in any of the forms set out in Schedule IX to the Act shall not be questioned on the ground that it fails to comply with any special requirements specified for such instrument by these Articles.

(g) Every member entitled to vote at a meeting of the Company, or on any resolution to be moved thereat, shall be entitled during the period beginning 24 (twenty four) hours before the time fixed for the commencement of the meeting and ending with the conclusion of the meeting, to inspect the proxies lodged at any time during the business hours of the Company, provided not less than 3 (three) days’ notice in writing of the intention so to inspect is given to the Company.

VOTES OF MEMBERS

Restrictions on exercise of voting rights of members who have not paid calls 104. (a) No member shall exercise any voting right in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the Company has and has exercised any right of lien.

(b) Where the shares of the Company are held in trust, the voting power in respect of such shares shall be regulated by the provisions of Section 187 B of the Act.

Restriction on exercise of voting right in other cases to be void 105. A member is not prohibited from exercising his voting right on the ground that he has not held his share or other interest in the Company for any specified period preceding the date on which the vote is taken, or on any other ground not being a ground set out in Article 104.

Equal rights of share holders 106. Any shareholder whose name is entered in the Register of members of the Company shall enjoy the same rights and be subject to the same liabilities as all other shareholders of the same class.

Voting to be by show of hands in first instance 107. At any general meeting a resolution put to vote at the meeting shall unless a poll is demanded under Section 179 of the Act be decided on a show of hands.

Chairman's declaration of result of voting by show of hands to be conclusive 109. A declaration by the Chairman in pursuance of Section 177 of the Act that on a show of hands, a resolution has or has not been carried, either unanimously or by a particular majority, and an entry to that effect in the books containing the minutes of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes cast in favour of or against such resolution.

Demand for poll 110. (a) Before or on the declaration of the result of the voting on any resolution of a show of hands, a poll may be ordered to be taken by the Chairman of the meeting of his own motion and 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 fifty thousand rupees has been paid up.

(b) The demand for a poll may be withdrawn at any time by the person or persons who made the demand.

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Time of taking poll 111. (a) A poll demanded on a question of adjournment shall be taken forthwith.

(b) A poll demanded on any other question (not being a question relating to the election of a Chairman which is provided for in Section 175 of the Act) shall be taken at such time not being later than 48 (forty eight) hours from the time when the demand was made, as the Chairman may direct.

Right of a member to use his votes differently 112. On a poll taken at a meeting of the Company a member or other person entitled to vote for him as the case may be, need not, if he votes, use, all his votes or cast in the same way all the votes he uses.

Inspection of Minutes Books of General Meetings 124. (a) The books containing the minutes of the proceedings of any general meeting of the Company shall;

(i) be kept at the registered office of the Company, and

(ii) be open, during the business hours to the inspection of any member without charge subject such reasonable restrictions as the Company may, in general meeting impose so however that not less than two hours in each day are allowed for inspection.

(b) Any member shall be entitled to be furnished, within seven days after he has made a request in that behalf of the Company, with a copy of any minutes referred to in Clause (a) above, on payment of thirty seven paise for every one hundred words or fractional part thereof required to be copied.

Publication of reports of proceeding of general meetings 125. No document purporting to be a report of the proceedings of any general meeting of the Company shall be circulated or advertised at the expenses of the Company unless it includes the matters required by Section 193 of the Act to be contained in the Minutes of the proceedings of such meeting.

BOARD OF DIRECTORS

Appointment of Senior Executives as Whole time Directors 128. (a) Subject to the provisions of the Act and within the overall limit prescribed under these Articles for the number of Directors on the Board, the Board may appoint any Senior Executive of the Company as a Whole time Director of the Company for such period and upon such terms and conditions as the Board may decide. The Senior Executive so appointed shall be governed by the following provisions:

(i) He shall be liable to retire by rotation as provided in the Act but shall be eligible for reappointment. His reappointment as a Director shall not constitute a break in his appointment as Whole time Director.

(ii) He shall be reckoned as Director for the purpose of determining and fixing the number of Directors to retire by rotation.

(iii) He shall cease to be a Director of the Company on the happening of any event specified in Sections 283 and 314(2C) of the Act. He shall cease to be a Director of the Company, if for any reason whatsoever, he ceases to hold the position of Senior Executive in the Company or ceases to be in the employment of the Company.

(iv) Subject to what is stated hereinabove he shall carry out and perform all such duties and responsibilities as may, from time to time, be conferred upon or entrusted to him by the Managing Director/s and/or the Board, shall exercise such powers and authorities subject to such restrictions and conditions and/or stipulations as the Managing Director/s and/or the Board may, from time to time determine.

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(b) Nothing contained in this Article shall be deemed to restrict or prevent the right of the Board to revoke, withdraw, alter, vary or modify all or any of such powers, authorities, duties and responsibilities conferred upon or vested in or entrusted to such whole time directors.

Debenture Director 129. Any Trust Deed for securing debentures or debenture stocks, may, if so arranged, provide for the appointment, from time to time by the Trustees thereof or by the holders of debentures or debenture stocks, of some person or persons to be a Director or Directors of the Company and may empower such Trustees or holders of debentures or debenture stocks from time to time, to remove and reappoint any Director/s so appointed. The Director/s so appointed under this Article is herein referred to as “Debenture Director” and the term “Debenture Director” means the Director for the time being in office under this Article. The Debenture Director(s) shall not be bound to hold any qualification shares and shall not be liable to retire by rotation or be removed by the Company. The Trust Deed may contain such ancillary provisions as may be arranged between the Company and the Trustees and all such provisions shall have effect notwithstanding any of the other provisions herein contained.

Nominee Director 130. Notwithstanding anything to the contrary contained in these Articles, so long as any moneys remain owing by the Company to the Industrial Development Bank of India (IDBI), The Industrial Credit and Investment Corporation of India Ltd. (ICICI), Industrial Finance Corporation of India (IFCI) and Life Insurance Corporation of India (LIC) or to any other Finance Corporation or Credit Corporation or to any other Finance Company or Body out of any loans granted by them to the Company or so long as IDBI, IFCI, ICICI, LIC and Unit Trust of India (UTI) or any other Financing Corporation or Credit Corporation or any other Financing Company or Body (each of which IDBI, IFCI, ICICI, LIC and UTI or any other Finance Corporation or Credit Corporation or any other Financing Company or Body is hereinafter in this Article referred to as “the Corporation”) continue to hold debentures in the Company as a result of underwriting or by direct subscription or private placement, or so long as the Corporation holds shares in the Company as a result of underwriting or direct subscription or so long as any liability of the Company arising out of any guarantee furnished by the Corporation on behalf of the Company remains outstanding, the Corporation shall have a right to appoint from time to time any person or persons as a Director or Directors wholetime or non-wholetime (which Director or Directors is/are hereinafter referred to as “Nominee Director/s”) on the Board of the Company and to remove from such office any person or persons so appointed and to appoint any person or persons in his or their place/s.

The Board of Directors of the Company shall have no power to remove from office the Nominee Director/s. At the option of the Corporation such Nominee Director/s shall not be required to hold any share qualification in the Company. Also at the option of the Corporation such Nominee Director/s shall not be liable to retirement by rotation of Directors. Subject as aforesaid, the Nominee Director/s shall be entitled to the same rights and privileges and be subject to the same obligations as any other Director of the Company.

The Nominee Director/s so appointed shall hold the said office only so long as any money remain owing by the Company to the Corporation or so long as the Corporation holds debentures in the Company as a result of direct subscription or private placement or so long as the Corporation holds shares in the Company as a result of underwriting or direct subscription or the liability of the Company arising out of any guarantee is outstanding and the Nominee Director/s so appointed in exercise of the said power shall ipso facto vacate such office immediately the moneys owing by the Company to the Corporation is paid off or on the Corporation ceasing to hold debentures/shares in the Company or on the satisfaction of the liability of the Company arising out of any guarantee furnished by the Corporation.

The Nominee Director/s appointed under this Article shall be entitled to receive all notices of and attend all General Meetings, Board Meetings and of the Meetings of the Committee of which the Nominee Director's is/are member/s as also the minutes of such meetings. The Corporation shall also be entitled to receive all such notices and minutes. The Company shall pay to the Nominee Director/s sitting fees and expenses which the other Directors of the Company are entitled but if any other fees, commission, monies or remuneration in any form is payable to the Directors of the Company, the fees, commission, monies and remuneration in relation to such Nominee Director/s shall accrue to the Corporation and same shall accordingly be paid by the Company directly to the Corporation. Any expenses that may be incurred by the Corporation or by such Nominee Director/s in connection with

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their appointment or Directorship, shall also be paid or reimbursed by the Company to the Corporation or as the case may be to such Nominee Director/s.

Provided that if any such Nominee Director/s is an officer of the Corporation the sitting fee in relation to such Nominee Director/s shall also accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation.

Provided further that if such Nominee Director/s is an officer of the Reserve Bank of India the sitting fees in relation to such Nominee Director/s shall also accrue to IDBI and the same shall accordingly be paid by the Company directly to IDBI.

Provided also that in the event of the Nominee Director/s being appointed as Wholetime Director/s such Nominee Director/s shall exercise such powers and duties as may be approved by the Lenders and have such rights as are usually exercised or available to a wholetime Director in the management of the affairs of the Borrower. Such Nominee Director/s shall be entitled to receive such remuneration, fees, commission and monies as may be approved by the Lenders.

Appointment of Alternate Director 133. (a) The Board of Directors of the Company may appoint an alternate Director to act for a Director (hereinafter in this Article called “the Original Director”) during his absence for a period of not less than three months from the State in which meetings of the Board are ordinarily held.

(b) An alternate Director appointed under this Article shall not hold office as such for a period longer than that permissible to the Original Director in whose place he has been appointed and shall vacate office if and when the Original Director returns to the State in which meeting of the Board are ordinarily held.

(c) If the term of office of the Original Director is determined before he returns to the State aforesaid any provision for the automatic reappointment of retiring directors in default of another appointment shall apply to the original and not to the alternate director.

Appointment of Additional Directors 134. Subject to the provisions of Section 260 of the Act, the Board of Directors shall have power at any time to appoint any person as an additional Director to the Board, but so that the total number of Directors shall not exceed the maximum number fixed by these Articles. Any Director so appointed shall hold the office only upto the next annual general meeting of the Company and shall then be eligible for reappointment.

Appointment of Director to fill the casual vacancy 135. (a) Subject to the provisions of Section 262 of the Act, if the office of any Director appointed by the Company in general meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may in default of and subject to any regulation in the Articles of the Company be filled by the Board of Directors at the meeting of the Board and the Director so appointed shall hold office only up to the date up to which the Director in whose place he is appointed would have held office if it had not been vacated as aforesaid but he shall then be eligible for re-election.

Individual Resolution for Directors appointment (b) At a general meeting of the Company a motion shall not be made for the appointment of two or more persons as Director of the Company by a single resolution unless a resolution that it shall be so made has first been agreed to by the meeting without any vote being given against it. Resolution moved in contravention of this Article shall be void whether or not objection was taken at the time of its being so moved. Provided that where a resolution so moved is passed no provision for the automatic reappointment of retiring director by virtue of these Articles and the Act in default of another appointment shall apply.

Qualification of Director 137. A Director need not hold any shares in the Company to qualify him for the office of a Director of the Company.

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Remuneration of Directors 138. (a) Subject to the provisions of the Act, a Managing Director or a Director who is in the wholetime employment of the Company may be paid remuneration either by way of a monthly payment or at a specified percentage of the net profits of the Company or partly by one way and partly by the other.

(b) Subject to the provisions of the Act, a Director, who is neither in the wholetime employment nor a Managing Director may be paid remuneration either :

(i) by way of monthly, quarterly or annual payment with the approval of the Central Government, or

(ii) by way of commission if the Company by a special resolution has authorized such payment.

(c) The fee payable to Directors (other than Managing or Wholetime Director, if any) for attending each meeting of the Board or Committee thereof shall be such sum as may be prescribed by the Act or the Central Government from time to time.

Increase in remuneration of Directors 141. (a) Any provision relating to the remuneration of any Director including a Managing or Joint Managing or Wholetime Director or any amendment thereof, which purports to increase or has the effect of increasing, whether directly or indirectly, the amount thereof, whether that provision is contained in the Company’s Memorandum or its Articles, or in an agreement entered into by it, or any resolution, passed by the Company in general meeting or by the Board of Directors, shall require the approval of the Central Government unless it is in accordance with Sections 198, 269, 309, 310, 311 Schedule XIII and other applicable provisions of the Companies Act, 1956, and their amendment from time to time.

Increase in remuneration of Managing Director on re-appointment or appointment (b) If the terms of any re-appointment of a Managing or Joint Managing or Wholetime Director, purport to increase or have the effect of increasing, whether directly or indirectly, the remuneration which the Managing or Joint Managing or Wholetime Director, as the case may be was receiving immediately before such reappointment or appointment shall require the approval of the Central Government unless they are in accordance with Sections 198, 269, 309, 310, 311 Schedule XIII and other applicable provisions of the Companies Act, 1956, and their amendment from time to time.

ROTATION OF DIRECTORS

Rotation of Directors 153. Not less than two thirds of the total number of Directors shall

(a) be persons whose period of office is liable to determination by retirement of Directors by rotation, and

(b) save as otherwise expressly provided in the Act, be appointed by the Company in general meeting.

The remaining Directors shall, in default of and subject to any regulations in the Articles of the Company, also be appointed by the Company, in general meeting.

Right of persons other than retiring Directors to stand for Directorship 155. (a) A person who is not a retiring Director shall, in accordance with Section 257 of the Act and subject to the provisions of the Act, be eligible for appointment to the office of Director at any general meeting if he or some member or members intending to propose him has, not less than fourteen days before the meeting, left at the registered office of the Company a notice in writing under his hand signifying his candidature for the office of director or the intention of such member or members to propose him as a candidate for that office, as the case may be along with a deposit of such sum as may be prescribed by the Act, or the central government from time to time which shall be refunded to such person or, as the case may be, to such member, if the person succeeds in getting elected as a Director. 391

(b) The Company shall inform its members of the candidature of a person for the office of director or the intention of a member(s) to propose a person as a candidate for that office by serving individual notices on the members not less than seven days before the meeting in the manner provided under Section 257 of the Act.

PROCEEDINGS OF DIRECTORS

Meeting of Directors 157. The Directors may meet together as a Board for the despatch of business from time to time and shall so meet at least once in every three months and at least four such meetings shall be held in every year and they may adjourn and otherwise regulate their meetings and proceedings as they deem fit. The provisions of this Article shall not be deemed to be contravened merely by reason of the fact that meetings of the Board, which had been called in compliance with the terms herein mentioned could not be held for want of quorum.

Who to preside at meetings of the Board 161. (a) The Directors may elect a Chairman of their meetings and determine the period for which he is to hold office. The Directors may also appoint a Vice Chairman of the Board of Directors to preside at the meetings of the Board of Directors at which the Chairman shall not be present and determine the period for which he is to hold office.

(b) All the meetings of the Directors shall be presided over by the Chairman, if present, but if at any meeting of Directors the Chairman be not present at the time appointed for holding the same, the Vice Chairman, if present, shall preside and if he be not present at such time then and in that case the Directors shall choose one of the Directors then present to preside at the meeting.

Quorum at Board Meeting 162. (a) The quorum at a meeting of the Directors shall be as prescribed by Section 287 of the Act. x Quorum competent to exercise power (b) A meeting of the Directors for the time being at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions by or under the regulations or the Articles of the Company for the time being vested in or exercisable by the Directors generally.

Procedure in case of want of quorum (c) If a meeting of the Board could not be held for want of quorum, then the meeting shall automatically stand adjourned till the same day in the next week, at the same time and place, or if that day is a Public Holiday, till the next succeeding day which is not a public holiday, at the same time and place.

Directors may appoint committee 163. Subject to the provisions of Section 292 and other provisions of the Act and Article 165 the Directors may delegate all or any of their powers to committees consisting of such member or members of their body as they think fit, and they may, from time to time revoke and discharge any such Committee either wholly or in part, and either as to persons or purposes, but every 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. All acts done by any such Committee in conformity with such regulations and in fulfilment of the purposes of their appointments but not otherwise, shall have the like force and effect as if done by the Board. Subject to the provisions of the Act the Board may from time to time fix the remuneration to be paid to any member or members of that body constituting a Committee appointed by the Board in terms of these Articles, and may pay the same.

POWERS OF DIRECTORS

General powers of the Company vested in Directors 172. Subject to the provisions of the Act, the management of the business of the Company shall be vested in the Directors and the Directors may exercise all such powers and do all such acts and things as the Company is by the Memorandum of Association or otherwise authorised to exercise and do and not hereby or by the statute or otherwise directed or required to be exercised or done by the Company in General Meeting, but subject nevertheless to the provisions of the Act and other Act and of the 392

Memorandum of Association and these Articles and to any regulations, not being inconsistent with the Memorandum of Association and these Articles or the Act, from time to time made by the company in general meeting provided that no such regulation shall invalidate any prior act of the Directors which would have been valid if such regulation had not been made.

DIVIDENDS

Division of Profits 178. The profits of the Company subject to any special rights relating thereto created or authorised to be created by these presents shall be divisible among the members in proportion to the amount of Capital paid up or credited as paid up on the shares held by them respectively.

Dividend payable to registered holder 179. No dividend shall be paid by the Company in respect of any share except to the registered holder of such share or to his order or to his banker.

Time for payment of dividend 180. Where a dividend has been declared by the Company it shall be paid within the period provided in Section 207 of the Act.

Capital paid up in advance and interest not to earn dividend 181. Where the 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 dividend or to participate in profits.

Dividends in proportion to amount paid up 182. (a) The Company shall pay dividends in proportion to the amounts paid up or credited as paid up on each share, when a larger amount is paid up or credited as paid up on some shares than on others. Nothing in this Article shall be deemed to affect in any manner the operation of Section 208 of the Act.

(b) Provided always that any Capital paid up on a share during the period in respect of which a dividend is declared, shall unless the terms of issue otherwise provide, only entitle the holder of such share to an apportioned amount of such dividend proportionate to the capital from time to time paid during such period on such share, but if any share is issued on terms providing that it shall rank for dividends as from a particular date, such share shall rank for dividend accordingly.

Unpaid Dividend or Dividend Warrant posted 192. (a) 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 shareholder entitled to the payment of the 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 scheduled bank, as per Section 205 A of the Act, 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.

(b) Any money transferred to the unpaid dividend account of the Company which remains unpaid or unclaimed for a period of three 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.

AUDIT Accounts to be audited 208. Every Balance Sheet and Profit and Loss Account shall be audited by one or more Auditors to be appointed as hereinafter mentioned.

Appointment and qualifications of auditors 209. (a) The Company at the annual general meeting each year shall appoint an Auditor or Auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general 393

meeting, and shall, within seven days of the appointment, give intimation thereof to every auditor so appointed.

(b) At any annual general meeting, a retiring Auditor, by whatever authority appointed, shall be reappointed unless:

(i) he is not qualified for reappointment;

(ii) he has given the Company notice in writing of his unwillingness to be reappointed;

(iii) a resolution has been passed at that meeting appointing somebody instead of him or providing expressly that he shall not be reappointed, or

(iv) where notice has been given of an intended resolution to appoint some person or persons in the place of retiring Auditor, and by reason of the death, incapacity or disqualification of that person or of all those persons, as the case may be, the resolution cannot be proceeded with.

(c) Where at an annual general meeting no auditors are appointed or re-appointed, the Central Government may appoint a person to fill the vacancy.

(d) The Company shall, within seven days of the Central Government’s power under sub-clause (c) becoming exercisable give notice of that fact to the Government.

(e) The Directors may fill any casual vacancy in the office of Auditor, but while any such vacancy continues the surviving or continuing Auditor or Auditors (if any) may act, but where such vacancy be caused by the resignation of an auditor, the vacancy shall only be filled by the Company in general meeting.

(f) A person, other than a retiring Auditor, shall not be capable of being appointed at an annual general meeting unless special notice of the Resolution for appointment of that person to the office of Auditor has been given by a member to the Company not less than fourteen days before the meeting in accordance with Section 190 of the Act, and the Company shall send a copy of any such notice to the retiring Auditor and shall give notice thereof to the members in accordance with Section 190 of the Act, and the provisions of Section 225 of the Act shall apply in the matter. The provision of this sub-clause shall also apply to a Resolution that a retiring Auditor shall not be re-appointed.

(g) The persons qualified for appointment as Auditors shall be only those referred to in Section 226 of the Act.

(h) None of the persons mentioned in Section 226 of the Act as being not qualified for appointment as Auditors shall be appointed as Auditors of the Company.

INDEMNITY AND RESPONSIBILITY

Directors and others rights to indemnity 223. (a) Subject to the provisions of Section 201 of the Act, every Director, Managing Director, Wholetime Director, Manager, Secretary and other Officer or employee of the Company shall be indemnified by the Company against and it shall be the duty of the Directors, out of the funds of the Company to pay all costs, losses and expenses (including travelling expense) which such Director, Manager, Secretary and Officer or employee may incur or become liable to by reason of any contract entered into or act or deed done by him as such Director, Manager, Secretary, Officer or Servant or in any way in the discharge of his duties including expenses and the amount for which such indemnity is provided, shall immediately attach as a lien on the property of the Company and have priority between the members over all other claims.

(b) Subject as aforesaid, every Director, Managing Director, Manager, Secretary or other officer and employee of the Company shall be indemnified against any liability incurred by him in defending any proceedings, whether civil or criminal in which judgement is given in his favour or in which he is acquitted or discharged or in connection with any application under Section 633 of the Act in 394

which relief is given to him by the Court and the amount for which such indemnity is provided shall immediately attach as a lien on the property of the Company.

Directors and other officers not responsible for the acts of others 224. Subject to the provisions of Section 201 of the Act, no Director, Managing Director, Wholetime Director or other Officer of the Company shall be liable for the acts, receipts, neglects or defaults of any other Director or Officer or for joining in any receipt or other act for conformity or for any loss or expense happening to the Company through insufficiency or deficiency of title to any property acquired by order of the Directors for or on behalf of the Company or for the insufficiency or deficiency of any security in or upon which any of the monies of the Company shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortuous act of any person, company or corporation, with whom any moneys, securities or effects shall be entrusted or deposited or for any loss occasioned by any error of judgement or oversight on his part or for any other loss or damage or misfortune whatever which shall happen in the execution of the duties of the office or in relation thereto, unless the same happens through his own dishonesty.

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SECTION X : OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by our Company or contracts entered into more than two years before the date of this Letter of Offer) which are or may be deemed material have been entered or to be entered into by our Company. These contracts, copies of which have been attached to the copy of the Letter of Offer, have been delivered to SEBI and the Stock Exchanges for registration and also the documents for inspection referred to hereunder, may be inspected at the Registered office of our Company at Sadbhav House, Opposite Law Garden Police Chowki, Ellisbridge, Ahmedabad 380 006 between 11:00 am. to 5:00 p.m, on working days, from the date of the Letter of Offer until the date of closure of the Rights Issue.

MATERIAL CONTRACTS TO THE ISSUE

1. Memorandum of Understanding dated June 20, 2009 between our Company and Link Intime India Private Limited to act as the Registrars to the Issue

2. Memorandum of Understanding dated August 3, 2009 between our Company and Collins Stewart Inga Private Limited to act as Lead Manager to the Issue

DOCUMENTS FOR INSPECTION

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

2. Certificate of incorporation of our Company dated October 3, 1988

3. Fresh Certificate of Incorporation consequent to change of name dated May 17, 2001

4. Resolution of our Company passed at the Board Meeting held on June 8, 2009, re-appointing Mr. Vishnubhai Patel as Managing Director and CEO for a period of 5 years with effect from July 1, 2009 and approving the remuneration payable to him

5. Resolution of our Company passed at the Board Meeting held on June 8, 2009, re-appointing Mr. Shashin Patel as a Joint Managing Director for a period of 5 years with effect from July 1, 2009 and approving the remuneration payable to him

6. Resolution of our Company passed at the Board Meeting held on June 8, 2009 for re-appointing of the Whole Time Directors viz. Mr. Girish N Patel and Mr Nitin Patel and for a period of 5 years with effect from July 1, 2009 and approving the remuneration payable to them

7. Copy of the resolution passed at the Extra-ordinary General Meeting of Shareholders held on April 29, 2009 approving the Rights Issue

8. Copy of the resolution passed at the meeting of the Board of Directors held on March 27, 2009 approving the Rights Issue

9. Copy of the resolution passed at the meeting of the Rights Issue Committee of Directors held on August 4, 2009 approving the Letter of Offer

10. Consent of the Directors, Company Secretary & Compliance Officer, Statutory Auditors, Lead Manager to the Issue, Legal Advisors to Issue, Bankers/ Lenders to the Company, Bankers to the Issue, Registrars to the Issue, to include their names in the Letter of Offer and to act in their respective capacities

11. Consolidated Reports of the Statutory Auditors, M/s. Shashikant Patel Associates, Chartered Accountants dated June 8, 2010 prepared as per Indian GAAP and SEBI (ICDR) Regulations for fiscal 2010, 2009, 2008 & 2007

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12. Standalone Reports of the Statutory Auditors, M/s. Shashikant Patel Associates, Chartered Accountants dated June 8, 2010 prepared as per Indian GAAP and SEBI (ICDR) Regulations for fiscal 2010, 2009, 2008, 2007 & 2006

13. Tax Benefits Certificate dated June 8, 2010 from the Statutory Auditors, M/s. Shashikant Patel Associates, Chartered Accountants

14. Undertaking dated June 24, 2010 given by our Promoters & Promoter Group to subscribe more than their entitlement, in case required, to ensure minimum subscription in the Rights Issue and in the event of any unsubscribed portion of the Issue

15. Auditors Report and Annual reports of our Company and our Subsidiaries for fiscal 2010, 2009, 2008, 2007, 2006 & 2005 (wherever applicable)

16. Joint Venture Agreements/ MOU:

• Joint Venture agreement dated August 27, 2008 with GKC Projects Limited • Joint Venture Agreement dated August 9, 2008 with GKC Projects Limited • Joint Venture agreement dated November 12, 2007 with Gokulkrishna Constructions Private Limited • Joint Venture agreement dated March 27, 2007 with JMC Projects (India) Limited • Joint Venture agreement dated March 23, 2006 with PBA Infrastructure Limited • MOU dated March 11, 2004 between Gammon India Limited, Sadbhav Engineering Limited and B.E. Billimoria & Company

17. Sanction Letters from, Standard Chartered Bank (2 sanction letters), Oriental Bank of Commerce, IndusInd Bank Limited, Kotak Mahindra Bank dated April 15, 2009, April 15, 2009 May 11, 2009, July 17, 2009 and February 16, 2009 respectively

18. Due Diligence Certificate dated August 4, 2009 from the Lead Manager, Collins Stewart Inga Private Limited

19. Tripartite agreement dated November 12, 2005 between our Company, Link Intime India Private Limited (Formerly known as Intime Spectrum Registry Limited) and NSDL for offering depository services

20. Tripartite agreement dated December 20, 2005, between our Company, Link Intime India Private Limited (Formerly known as Intime Spectrum Registry Limited) and CDSL for offering depository services

21. In-principle approvals dated August 21, 2009 and August 19, 2009 from NSE and BSE respectively.

22. Observation Letter No. CFD/DIL/ISSUES/SK/MS/OW/2008/2010dated April 21, 2010 issued by the Securities and Exchange Board of India for the Issue.

23. Letter No. 225(2009)/179(2009) dated October 29, 2009 from FIPB in relation to the issue and allotment of the Detachable Warrants to Non Resident Equity Shareholders/applicants.Any of the contracts or documents mentioned in this Letter of Offer may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the shareholders, subject to compliance with applicable law.

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DECLARATION

No statement made in the Letter of Offer contravenes any of the provisions of the Companies Act, 1956 and the rules made there under. All the legal requirements connected with the said Issue as also the regulations, guidelines, instructions, etc. issued by SEBI, Government and any other competent authority in this behalf have been duly complied with. Further, all the disclosures made in the Letter of Offer are true and correct.

SIGNED BY THE DIRECTORS OF SADBHAV ENGINEERING LIMITED

Sd/- Mr. Vishnubhai M Patel (Managing Director and CEO)

Sd/- Mr. Shashin V Patel (Joint Managing Director)

Sd/- Mr. Girish N Patel (Whole Time Director)

Sd/- Mr. Nitin R Patel (Whole Time Director)

Sd/- Mr. Pravinkumar M Ganatra (Independent Non Executive Director)

Sd/- Mr. Amarsinh J Vaghela (Independent Non Executive Director)

Sd/- Mr. Sandip V Patel (Independent Non Executive Director)

Sd/- Mr. Atul N Ruparel (Independent Non Executive Director)

Sd/- Sd/- Mr. Vijay Kalyani Mr. Ajay Kadia (Company Secretary & Compliance Officer) (Chief Financial Officer)

Date : August 4, 2010 Place : Ahmedabad

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