Betul Oil Limited

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DRAFT RED HERRING PROSPECTUS Dated: July 30, 2010 Please read Section 60B of the Companies Act, 1956 (The Draft Red Herring Prospectus will be updated upon filing with the RoC) Book Building Issue

BETUL OIL LIMITED Our Company was incorporated as “Betul Oils and Flours Private Limited” on February 3, 1981 as a private limited company under the Companies Act, 1956 (the “Companies Act”). On April 1, 1990, by virtue of section 43A of the Companies Act, our Company was converted into a public company and the name was changed to “Betul Oils and Flours Limited”. On November 20, 2003, our Company was reconverted into a private company and the name was changed to “Betul Oils and Flours Private Limited”. Our Company was converted into a public company and the name of our Company was changed to “Betul Oils and Flours Limited” pursuant to a fresh certificate of incorporation consequent to change of name dated February 28, 2006 issued by the RoC, Madhya Pradesh and Chhattisgarh. The name of our Company was changed to “Betul Oil Limited” pursuant to a fresh certificate of incorporation consequent to change of name dated June 9, 2010 issued by the RoC, Madhya Pradesh and Chhattisgarh. For further details of incorporation, changes of name and changes in registered office of our Company, please see section titled “History and Corporate Structure” beginning on page 143 of the Draft Red Herring Prospectus. Registered Office: Kosmi Industrial Area, Betul – 460001, Madhya Pradesh, India. Tel No: + 91 7141 239 071, 239 011; Fax No: + 91 7141 239 131 Corporate Office: 810 A, Maker Chambers V, Nariman Point, Mumbai – 400021, Maharashtra, India. Tel No: + 91 22 6630 1737; Fax No: + 91 22 2282 8935 Contact Person: Mr. Abhinaya Kulkarni, Company Secretary and Compliance Officer Website: www.betuloil.com; E-mail: [email protected] PROMOTERS OF OUR COMPANY MR. SHREANS DAGA, MR. VARUN DAGA, MRS. KANCHAN DAGA AND PRAMOD KUMAR DAGA HUF PUBLIC ISSUE OF 12,200,000* EQUITY SHARES OF RS. 10 EACH FOR CASH AT A PRICE OF RS. [] PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF RS. [] PER EQUITY SHARE) AGGREGATING UPTO RS. [] MILLION (THE “ISSUE”) BY BETUL OIL LIMITED (“OUR COMPANY” OR THE “ISSUER”). THE ISSUE WILL CONSTITUTE 29.99% OF THE FULLY DILUTED POST ISSUE PAID-UP CAPITAL OF OUR COMPANY. *Our Company is considering a Pre-IPO Placement of upto 1,827,875 Equity Shares and aggregating upto Rs. 150 million with certain investors (“Pre-IPO Placement”). The Pre-IPO Placement is at the discretion of our Company. If undertaken, our Company shall complete the Pre-IPO Placement prior to the filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the number of Equity Shares in the Issue will be reduced to the extent of the Equity Shares proposed to be allotted in the Pre-IPO Placement, subject to the Issue being atleast 25% of the fully diluted post-Issue paid-up capital of our Company. THE FACE VALUE OF THE EQUITY SHARES IS RS. 10 EACH. THE PRICE BAND AND THE MINIMUM BID LOT WILL BE DECIDED BY OUR COMPANY IN CONSULTATION WITH THE BOOK RUNNING LEAD MANAGER AND ADVERTISED AT LEAST TWO WORKING DAYS PRIOR TO THE BID/ISSUE OPENING DATE. In case of revision in the Price Band, the Bid/Issue Period shall be extended for three additional working days after such revision of the Price Band, subject to the Bid/Issue Period not exceeding ten working days. Any revision in the Price Band, and the revised Bid/Issue Period, if applicable, shall be widely disseminated by notification to the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”) and by issuing a press release and also by indicating the change on the website of the Book Running Lead Manager and at the terminals of the Syndicates. The Issue is being made through a Book Building Process in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended, wherein not more than 50% of the Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”), out of which 5% (excluding Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remaining QIB portion shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders subject to valid Bids being received from them at or above the Issue Price. Our Company may allocate upto 30% of the QIB Portion, to Anchor Investors, on a discretionary basis (the “Anchor Investor Portion”) out of which one-third portion shall be reserved for domestic Mutual Funds, subject to valid bids being received from domestic Mutual Funds at or above the Anchor Investor Issue Price. All Investors may participate in the Issue through the ASBA process by providing the details of their respective bank accounts in which the corresponding Bid Amounts will be blocked by the SCSBs. Specific attention of investors is invited to “Issue Procedure” on page 297 of the Draft Red Herring Prospectus. IPO GRADING The Issue has been graded by [] as [], indicating []. The rationale furnished by the grading agency for its grading, will be updated at the time of filing of the Red Herring Prospectus with the RoC. For more information on IPO Grading, please refer to the section titled “General Information” beginning on page 46 of the Draft Red Herring Prospectus. RISKS IN RELATION TO THE FIRST ISSUE This being the first issue of the Equity Shares of our Company, there has been no formal market for the Equity Shares of our Company. The face Value of the Equity Shares is Rs. 10 and the Floor Price is [] times of the face Value and the Cap Price is [] times of the face value. The Issue Price (as determined and justified by our Company and the Book Running Lead Manager (“BRLM”) as stated under the section titled “Basis of Issue Price” beginning on page 85 of the Draft Red Herring Prospectus) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares of our Company or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investment in equity and equity related securities involves a degree of risk and investors should not invest any funds in the 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 the Issue. For taking an investment decision, investors must rely on their own examination of our Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of the Draft Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page 13 of the Draft Red Herring Prospectus. ISSUER’S ABSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that the Draft Red Herring Prospectus contains all information with regard to our Company and the Issue, which is material in the context of the Issue; that the information contained in the Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect; that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes the Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The Equity Shares offered through the Draft Red Herring Prospectus are proposed to be listed on the NSE and the BSE. The in-principle approvals of the Stock Exchanges for listing the Equity Shares have been received pursuant to letter no. [] dated [] and letter no. [] dated [] respectively. For the purpose of the Issue, NSE shall be the Designated Stock Exchange. BOOK RUNNING LEAD MANAGER REGISTRAR TO THE ISSUE

ANAND RATHI ADVISORS LIMITED LINK INTIME INDIA PRIVATE LIMITED 11th Floor, Times Tower, C- 13, Pannalal Silk Mills Compound, Kamala Mills, Senapati Bapat Marg, LBS Marg, Bhandup (West), Lower Parel, Mumbai - 400 013 Mumbai - 400 078 Maharashtra, India Maharashtra, India Tel: +91 22 4047 7000 Tel: +91 22 2596 0320 Fax: +91 22 4047 7070 Fax: +91 22 2596 0329 Website: www.rathi.com Website: www.linkintime.co.in Email: [email protected] Investors Grievance: [email protected] Email: [email protected] Contact Persons: Mr. Rajesh Biyani / Mr. Mukesh Garg Contact Person: Mr. Sachin Achar SEBI Registration number: MB / INM000010478 SEBI Registration No: INR000004058 BID/ISSUE PROGRAMME BID/ISSUE OPENS ON**: [] BID/ISSUE CLOSES ON***: [] **Our Company may consider participation by Anchor Investors. The Anchor Investor Bid/Issue Period shall be one Working Day prior to the Bid/Issue Opening Date. *** Our Company may consider closing the Bidding by QIB Bidders one Working Day prior to the Bid/Issue Closing Date subject to the Bid/Issue Period being for a minimum of three Working Days.

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TABLE OF CONTENTS

DEFINITIONS AND ABBREVIATIONS ...... 2 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA ...... 10 FORWARD LOOKING STATEMENTS...... 11 SECTION II: RISK FACTORS...... 13 SECTION III: INTRODUCTION ...... 30 SUMMARY OF INDUSTRY OVERVIEW ...... 30 SUMMARY OF OUR BUSINESS, STRENGTHS AND STRATEGY...... 32 SUMMARY FINANCIAL INFORMATION...... 39 THE ISSUE...... 45 GENERAL INFORMATION...... 46 CAPITAL STRUCTURE...... 55 SECTION IV: PARTICULARS OF THE ISSUE ...... 69 OBJECTS OF THE ISSUE ...... 69 BASIS OF ISSUE PRICE ...... 85 STATEMENT OF TAX BENEFITS ...... 88 SECTION V: ABOUT THE COMPANY ...... 103 INDUSTRY OVERVIEW...... 103 BUSINESS OVERVIEW ...... 117 KEY INDUSTRY REGULATIONS AND POLICIES...... 139 HISTORY AND CORPORATE STRUCTURE ...... 143 OUR MANAGEMENT ...... 148 OUR PROMOTERS AND GROUP COMPANIES ...... 162 DIVIDEND POLICY...... 176 SECTION VI: FINANCIAL INFORMATION...... 177 FINANCIAL STATEMENTS ...... 177 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION ...... 229 FINANCIAL INDEBTEDNESS...... 250 SECTION VII: LEGAL AND OTHER INFORMATION ...... 255 OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ...... 255 LICENSES AND APPROVALS ...... 269 OTHER REGULATORY AND STATUTORY DISCLOSURES ...... 281 SECTION VIII: ISSUE INFORMATION...... 291 ISSUE STRUCTURE ...... 291 TERMS OF THE ISSUE...... 294 ISSUE PROCEDURE...... 297 SECTION IX: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION...... 326 SECTION X: OTHER INFORMATION ...... 343 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION...... 343 DECLARATION...... 345

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise requires, in the Draft Red Herring Prospectus, all references to “Betul Oil Limited”, “Issuer”, “we”, “us”, “our” and “our Company” are to Betul Oil Limited.

Company Related Terms

Term Description Articles/Articles of Association Articles of Association of our Company, unless the context otherwise specifies Auditors / Statutory Auditors The statutory auditors of our Company, Bhutoria Ganesan & Co., Chartered Accountants Betul Unit Our manufacturing unit at at Kosmi Industrial Area, Betul, Madhya Pradesh – 460001 Board/Board of Directors The board of directors of our Company or a committee constituted thereof, unless the context otherwise specifies Corporate Office The corporate office of our Company at 810 A, Maker Chambers V, Nariman Point, Mumbai – 400021, Maharashtra, India. Director(s) The director(s) of our Company, unless otherwise specified. Group Companies Companies, firms and ventures promoted by our Promoters, irrespective of whether such entities are covered under section 370(1)(B) of the Companies Act and disclosed in “Our Promoters and Group Companies” on page 162 of the Draft Red Herring Prospectus Memorandum/ Memorandum of The memorandum of association of our Company, unless the context otherwise Association specifies Shri Dharamchand Shrishrimal and Late Shri Shantilal Shrishrimal the original Original Promoters promoters of our Company The Proposed Projects, which we intend to part finance from the Issue proceeds, and includes setting up an integrated 180,000 TPA (600 TPD) solvent extraction unit with 30,000 TPA (100 TPD) refinery, 45,000 TPA (150 TPD) soya flour and 45,000 TPA (150 TPD) soya nuggets units at Satna, Madhya Pradesh, setting up of a new 180,000 TPA (600 TPD) solvent extraction unit with 45,000 TPA (150 Projects / Proposed Projects TPD) refinery at Tirupur, Tamil Nadu, expansion of existing edible oil refinery at Solapur, Maharashtra from 36,000 TPA (120 TPD) to 90,000 TPA (300 TPD), expansion of the cattle feed unit at Solapur, Maharashtra from 30,000 TPA (100 TPD) to 90,000 TPA (300 TPD), setting up of private mandis at Satna, Madhya Pradesh and Solapur, Maharashtra, for further details, please see “Objects of the Issue” on page 69 of the Draft Red Herring Prospectus The promoters of our Company, namely, Mr. Shreans Daga, Mr. Varun Daga, Promoters Mrs. Kanchan Daga and Pramod Kumar Daga HUF Includes such persons and entities constituting our promoter group in terms of Promoter Group Regulation 2(zb) of the SEBI ICDR Regulations The registered office of our Company at Kosmi Industrial Area, Betul, Madhya Registered Office Pradesh – 460001, India Our manufacturing unit at Village Kaima Unmulan Halka No. 101, Revenue Satna Unit Inspector Mandal, Taluka Raghurajnagar, District Satna, Madhya Pradesh Solapur Unit Our manufacturing unit at Plot No 12, MIDC, Village Kondi, Solapur, Maharashtra Subsidiary / BOFPL The subsidiary of our Company, namely Betul Oils and Feeds Private Limited Super Stockist / Dealer Dealers appointed by our Company for distribution and marketing of our products

Issue Related Terms

Term Description Allotment/Allot/Allotted Unless the context otherwise requires, means the allotment of Equity Shares pursuant to this Issue to successful Bidders

Term Description Allottee A successful Bidder to whom the Equity Shares are Allotted Anchor Investor A Qualified Institutional Buyer, applying under the Anchor Investor Portion, with a minimum Bid of Rs. 100 million Anchor Investor Bid/Issue Period The day, one working day prior to the Bid/Issue Opening Date, on which Bids by Anchor Investors shall be submitted and allocation to Anchor Investors shall be completed Anchor Investor Issue Price The final price at which Equity Shares will be issued and Allotted to Anchor Investors in terms of the Red Herring Prospectus and the Prospectus, which price will be equal to or higher than the Issue Price but not higher than the Cap Price. The Anchor Investor Issue Price will be decided by our Company in consultation with the BRLM Anchor Investor Portion Upto 30% of the QIB Portion which may be allocated by our Company to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to other Anchor Investors Application Supported by Blocked An application, whether physical or electronic, used by all Bidders to make a Bid Amount/ ASBA authorising a SCSB to block the Bid Amount in their specified bank account maintained with the SCSB ASBA Account Account maintained with a SCSB which will be blocked by such SCSB to the extent of the appropriate Bid Amount in relation to a Bid by an ASBA Bidder ASBA Bidder(s) Prospective investors in this Issue who intend to Bid/apply through the ASBA process ASBA Bid cum Application Form The form, whether physical or electronic, used by an ASBA Bidder to submit a Bid through a Self Certified Syndicate Bank which contains an authorization to block the Bid Amount in an ASBA Account and would be considered as an application for Allotment to ASBA Bidders in terms of the Red Herring Prospectus and the Prospectus

Pursuant to SEBI circular number CIR/CFD/DIL/7/2010 dated July 13, 2010, ASBA Bid cum Application Forms are available for download from the websites of the Stock Exchanges. ASBA Revision Form The form used by the ASBA Bidders to modify the quantity of Equity Shares or the Bid Amount in any of their ASBA Bid cum Application Forms or any previous ASBA Revision Form(s)

Pursuant to SEBI circular number CIR/CFD/DIL/7/2010 dated July 13, 2010, ASBA Revision Forms are available for download from the websites of the Stock Exchanges. Banker(s) to the Issue / Escrow The banks which are clearing members and registered with SEBI as Banker to the Collection Bank(s) Issue with whom the Escrow Account will be opened and in this case being [●] Basis of Allotment The basis on which Equity Shares will be Allotted to Bidders under the Issue and which is described under “Issue Procedure” on page 297 of the Draft Red Herring Prospectus Bid(s) An indication to make an offer during the Bid/Issue Period by a Bidder, or during the Anchor Investor Bid/Issue Period by the Anchor Investors, to subscribe to the Equity Shares of our Company at a price within the Price Band, including all revisions and modifications thereto

For the purpose of ASBA Bidders, it means an indication to make an offer during the Bidding/ Issue Period by an ASBA Bidder pursuant to the submission of ASBA Bid cum Application Form to subscribe to the Equity Shares Bid Amount The highest value of the optional Bids indicated in the Bid cum Application Form and payable by a Bidder on submission of a Bid in the Issue Bid/Issue Closing Date Except in relation to Anchor Investor, the date after which the members of the Syndicate shall not accept any Bids for the Issue, which shall be the date notified in an English national newspaper, a Hindi national newspaper and a regional

Term Description newspaper with wide circulation. Our Company may consider closing the Bidding by QIB Bidders one Working Day prior to the Bid/Issue Closing Date, which shall also be notified in the said advertisement in an English national newspaper, a Hindi national newspaper and a regional newspaper with wide circulation. Bid/Issue Opening Date Except in relation to Anchor Investor, the date on which the Syndicate and the SCSBs shall start accepting Bids for the Issue, which shall be notified in a English national daily newspaper, a Hindi national daily newspaper and a regional newspaper, where the Registered Office of our Company is situated, each with wide circulation Bid cum Application Form The form used by a Bidder to make a Bid and which will be considered as the application for Allotment for the purposes of the Draft Red Herring Prospectus and the Prospectus including the ASBA Bid cum Application Form (if applicable) Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus and the Bid cum Application Form including an ASBA Bidder who Bids through ASBA Bid cum Application Form Bid/Issue Period The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date, inclusive of both days, during which prospective Bidders (except Anchor Investors) and the ASBA Bidders can submit their Bids, including any revisions thereof Book Building Process/Method The book building route as provided under Schedule XI of the SEBI ICDR Regulations, in terms of which this Issue is being made BRLM/Book Running Lead Book Running Lead Manager to the Issue, in this case being Anand Rathi Advisors Manager Limited Business Day Any day on which commercial banks in Mumbai are open for business CAN/Confirmation of Allocation The note or advice or intimation of Allocation of Equity Shares sent to the Note successful Bidders who have been Allocated Equity Shares after discovery of the Issue Price in accordance with the Book Building Process, including any revisions thereof

In relation to Anchor Investors, the note or advice or intimation of allocation of Equity Shares sent to the successful Anchor Investors who have been allocated Equity Shares after discovery of the Anchor Investor Issue Price, including any revisions thereof Cap Price The higher end of the Price Band above which the Issue Price will not be finalized and above which no Bids will be accepted Controlling Branch Such branches of the SCSBs which coordinate under this Issue by the ASBA Bidders with the BRLM, the Registrar to the Issue and the Stock Exchanges, a list of which is available on http://www.sebi.gov.in Cut-off Price Any price within the Price Band finalised by our Company in consultation with the Book Running Lead Manager. A Bid submitted at Cut-Off Price is a valid price at all levels within the Price Band. Only Retail Individual Bidders are entitled to Bid at the Cut-off Price, for a Bid Amount not exceeding Rs. 1,00,000. No other category of Bidders are entitled to Bid at the Cut-off Price Designated Branch Such branches of the SCSBs which shall collect the ASBA Bid cum Application Form used by ASBA Bidders and a list of which is available on http://www.sebi.gov.in Designated Date The date on which funds are transferred from the Escrow Account to the Issue Account or the Refund Account, as appropriate, or the amount blocked by the SCSB is transferred from the bank account of the ASBA Bidder to the Public Issue Account, as the case may be, after the Prospectus is filed with the RoC, following which the Board of Directors shall Allot Equity Shares to successful Bidders Designated Stock Exchange National Stock Exchange of India Limited Draft Red Herring Prospectus or The draft red herring prospectus dated July 30, 2010 issued in accordance with DRHP Section 60B of the Companies Act and SEBI ICDR Regulations, filed with SEBI and which does not contain complete particulars of the price at which the Equity Shares would be issued and the size of the Issue Eligible NRIs NRIs from jurisdictions outside India where it is not unlawful to make an issue or invitation under the Issue and in relation to whom the Red Herring Prospectus

Term Description constitutes an invitation to subscribe to the Equity Shares offered herein Equity Shares Equity shares of our Company of Rs. 10 each, fully paid up, unless otherwise specified in the context thereof Escrow Account Account opened with the Escrow Collection Bank(s) for the Issue and in whose favour the Bidder (except ASBA Bidder) will issue cheques or drafts in respect of the Bid Amount when submitting a Bid Escrow Agreement Agreement to be entered into by our Company, the Registrar to the Issue, BRLM, the Syndicate Members and the Escrow Collection Bank(s) for collection of the Bid Amounts and where applicable, refunds of the amounts collected to the Bidders on the terms and conditions thereof First / Sole Bidder The Bidder whose name appears first in the Bid cum Application Form or Revision Form or the ASBA Bid cum Application Form or ASBA Revision Form Floor Price The lower end of the Price Band, at or above which the Issue Price will be finalized and below which no Bids will be accepted Issue This public issue of 12,200,000 Equity Shares at the Issue Price by our Company. Issue Agreement The agreement dated June 15, 2010 entered into among our Company and the BRLM, pursuant to which certain arrangements are agreed to in relation to the Issue Issue Price The final price at which the Equity Shares will be issued and allotted in terms of the Red Herring Prospectus. The Issue Price will be decided by our Company in consultation with the Book Running Lead Manager on the Pricing Date Issue Proceeds The gross proceeds of the Issue that would be available to our Company after the final listing and trading approvals are received Mutual Funds A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996 Mutual Fund Portion 5% of the Net QIB Portion or 213,500 Equity Shares available for allocation to Mutual Funds, out of the Net QIB Portion Net Proceeds The Issue Proceeds less the Issue related expenses. For further information about use of the Issue Proceeds and the Issue expenses, see “Objects of the Issue” on page 69 of the Draft Red Herring Prospectus Net QIB Portion The portion of the QIB Portion, less the number of the Equity Shares Allotted to the Anchor Investors Non-Institutional Bidders All Bidders including sub-accounts of FIIs registered with SEBI, which are foreign corporate or foreign individuals, that are not QIBs or Retail Individual Bidders and who have Bid for Equity Shares for an cumulative amount more than Rs. 1,00,000 Non-Institutional Portion The portion of the Issue being not less than 1,830,000 Equity Shares available for allocation to Non-Institutional Bidders Non-Resident A person resident outside India, as defined under FEMA and includes a Non Resident Indian Pay-in-Period With respect to Anchor Investors, it shall be the Anchor Investor Bid/ Issue Period and If the price fixed as a result of Book Building is higher than the price at which the allocation is made to Anchor Investor, the Anchor Investor shall bring in the additional amount. For Bidder other than Anchor Investors, the period commencing on the Bid Opening Date and continuing till the Bid Closing Date Pre-IPO Placement A Pre-IPO Placement of upto 1,827,875 Equity Shares and aggregating upto Rs. 150 million with certain investors is being considered by the Company and will be completed prior to the filing of Red Herring Prospectus with the RoC, if any. Price Band Price band of a minimum price (Floor Price) of Rs. [●] and the maximum price (Cap Price) of Rs. [●] and includes revisions thereof. The Price Band and the minimum Bid lot size for the Issue will be decided by our Company in consultation with the BRLM and advertised at least two working days prior to the Bid/ Issue Opening Date, in an English daily national newspaper, a Hindi daily national newspaper and a regional newspaper each, where the Registered Office of our Company is situated, with wide circulation Pricing Date The date on which our Company in consultation with the BRLM finalizes the Issue Price Prospectus The prospectus to be filed with the RoC in accordance with Section 60 of the Companies Act, containing, inter alia, the Issue Price that is determined at the end

Term Description of the Book Building process, the size of the Issue and certain other information Public Issue Account Account opened with the Bankers to the Issue to receive monies from the Escrow Account and the SCSBs from the bank accounts of the ASBA Bidders on the Designated Date Qualified Institutional Buyers or Public financial institutions as specified in Section 4A of the Companies Act, QIBs scheduled commercial banks, mutual fund registered with SEBI, FII and sub- account (other than a sub-account which is a foreign corporate or foreign individual) registered with SEBI, multilateral and bilateral development financial institution, venture capital fund registered with SEBI, foreign venture capital investor registered with SEBI, state industrial development corporation, insurance company registered with Insurance Regulatory and Development Authority, provident fund with minimum corpus of Rs. 250 million, pension fund with minimum corpus of Rs. 250 million, National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of the Government of India published in the Gazette of India and insurance funds set up and managed by army, navy or air force of the Union of India QIB Portion The portion of the Issue being not more than 6,100,000 Equity Shares required to be allocated to QIBs Red Herring Prospectus The red herring prospectus issued in accordance with Section 60B of the Companies Act, which does not have complete particulars of the price at which the Equity Shares are offered and the size of the Issue. The Red Herring Prospectus will be filed with the RoC at least three days before the Bid/Issue Opening Date and will become a Prospectus upon filing with the RoC after the Pricing Date Refund Account The account opened with Escrow Collection Bank(s), from which refunds (excluding to the ASBA Bidders), if any, of the whole or part of the Bid Amount shall be made Refund Bank [●] Refunds through electronic Refunds through electronic transfer of funds means refunds through ECS / NECS, transfer of funds Direct Credit, NEFT, RTGS or the ASBA process, as applicable Registrar to the Issue Registrar to this Issue, in this case being Link Intime India Private Limited Retail Individual Bidder(s) Individual Bidders who have Bid for Equity Shares for an amount not more than Rs. 1,00,000 in any of the bidding options in the Issue (including HUFs applying through their Karta and eligible NRIs and does not include NRIs other than Eligible NRIs) Retail Portion The portion of the Issue being not less than 4,270,000 Equity Shares available for allocation to Retail Individual Bidder(s) Revision Form The form used by the Bidders (excluding ASBA Bidders) to modify the quantity of Equity Shares or the Bid Price in any of their Bid cum Application Forms or any previous Revision Form(s) Sub Syndicate Member A SEBI Registered member of BSE and / or NSE appointed by the BRLM and / or Syndicate Member to act as a Sub Syndicate Member in the Issue SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended from time to time Self Certified Syndicate Bank or Self Certified Syndicate Bank is a Banker to an Issue registered with SEBI which SCSBs offers the facility of making a Applications Supported by Blocked Amount and recognized as such by SEBI, a list of which is available on http://www.sebi.gov.in Stock Exchanges The BSE and the NSE Syndicate Members An intermediary registered with the SEBI to act as a syndicate member and who is permitted to carry on the activity as an underwriter, in this case being [y]. Syndicate Agreement The agreement to be entered into between the BRLM, Co-Lead Manager, the Syndicate Members and our Company in relation to the collection of Bids (excluding Bids by ASBA Bidders) in this Issue Transaction Registration Slip/ The slip or document issued by member of the Syndicate or the SCSB (only on TRS demand), as the case may be, to the Bidder as proof of registration of the Bid Underwriters The Book Running Lead Manager and the Syndicate Members Underwriting Agreement The agreement among the Underwriters and our Company to be entered into on or after the Pricing Date

Term Description Working Day All days other than a Sunday or a public holiday (except during the Bid/Issue Period where a working day means all days other than a Saturday, Sunday or a public holiday), on which commercial banks in Mumbai are open for business

Technical/Industry Related Terms / Abbreviations

Term Description DOC De-Oiled Cake DG Sets Diesel Generator Sets EPCG Export Promotion Capital Goods Scheme ERP Enterprise Resource Planning FIPB Foreign Investment Promotion Board FMV Fair Market Value IPR Intellectual Property Rights MT Metric Tons MW Mega Watt TPD Tons Per Day TPA Tons Per Annum

Conventional and General Terms/ Abbreviations

Term Description Act or Companies Act The Companies Act, 1956, as amended from time to time AGM Annual General Meeting AS Accounting Standards issued by the Institute of Chartered Accountants of India ASBA Application Supported by Blocked Amounts AY Assessment Year BPLR Bank Prime Lending Rate BIFR Board for Industrial and Financial Reconstruction BSE Bombay Stock Exchange Limited CAGR Compounded Annual Growth Rate CIN Corporate Identification Number CDSL Central Depository Services (India) Limited Depositories NSDL and CDSL Depositories Act The Depositories Act, 1996 as amended from time to time DP/ Depository Participant A depository participant as defined under the Depositories Act, 1996 DP ID Depository Participant’s Identity EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation ECS Electronic Clearing Service EGM Extraordinary General Meeting EPS Earnings Per Share i.e., profit after tax for a financial year divided by the weighted average outstanding number of Equity Shares at the end of that financial year FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999 read with rules and regulations thereunder and amendments thereto FEMA Regulations FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations 2000 and amendments thereto FII(s) Foreign Institutional Investors as defined under SEBI (Foreign Institutional Investor) Regulations, 1995 and registered with SEBI under applicable laws in India Financial Year/ Fiscal/ FY Period of twelve months ended June 30 of that particular year, unless otherwise stated FIPB Foreign Investment Promotion Board FVCI Foreign Venture Capital Investor registered under the Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000 GDP Gross Domestic Product GoI/Government Government of India

Term Description HNI High Net worth Individual HUF Hindu Undivided Family IPO Initial Public Offering I.T. Act The Income Tax Act, 1961, as amended from time to time Indian GAAP Generally Accepted Accounting Principles in India Mn / mn Million MOU Memorandum of Understanding NA Not Applicable NAV Net Asset Value being paid up equity share capital plus free reserves (excluding reserves created out of revaluation) less deferred expenditure not written off (including miscellaneous expenses not written off) and debit balance of Profit and Loss account, divided by number of issued Equity Shares NCR National Capital Region NECS National Electronic Clearing Services NEFT National Electronic Fund Transfer NOC No Objection Certificate NR Non Resident NRE Account Non Resident External Account NRI Non Resident Indian, is a person resident outside India, who is a citizen of India or a person of Indian origin and shall have the same meaning as ascribed to such term in the Foreign Exchange Management (Deposit) Regulations, 2000, as amended from time to time. NRO Account Non Resident Ordinary Account NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited OCB A company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Transfer or Issue of Foreign Security by a Person resident outside India) Regulations, 2000. OCBs are not allowed to invest in this Issue p.a. Per annum P/E Ratio Price/Earnings Ratio PAN Permanent Account Number allotted under the Income Tax Act, 1961 PAT Profit after tax PBT Profit before tax PIO Persons of Indian Origin PLR Prime Lending Rate RBI The Reserve Bank of India RoC Registrar of Companies, Madhya Pradesh and Chattisgarh situated at 3rd Floor, 'A' Block, Sanjay Complex, Jayendra Ganj, Gwalior, Madhya Pradesh RONW Return on Net Worth Rs. Indian Rupees RTGS Real Time Gross Settlement SAARC South Asian Association for Regional Co-operation SCRA Securities Contracts (Regulation) Act, 1956, as amended from time to time SCRR Securities Contracts (Regulation) Rules, 1957, as amended from time to time SCSB Self Certified Syndicate Bank SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992, as amended from time to time SEBI Act Securities and Exchange Board of India Act 1992, as amended from time to time SEBI ESOP Guidelines SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 as amended from time to time SEBI Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 State Government The government of a state of the Union of India

Term Description Stock Exchange(s) BSE and/ or NSE as the context may refer to UIN Unique Identification Number US / USA United States of America US GAAP Generally Accepted Accounting Principles in the United States of America USD/ US$/U.S.$ United States Dollars VCFs Venture Capital Funds as defined and registered with SEBI under the SEBI (Venture Capital Fund) Regulations, 1996

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Certain Conventions

Unless otherwise specified or the context otherwise requires, all references to “India” in the Draft Red Herring Prospectus are to the Republic of India, together with its territories and possessions and all references to the “US”, the “USA”, the “United States” or the “U.S.” are to the United States of America, together with its territories and possessions.

Financial Data

Unless stated otherwise, the financial data in the Draft Red Herring Prospectus is derived from our audited standalone financial statements in accordance with Indian GAAP and the Companies Act, and restated in accordance with the SEBI ICDR Regulations and Indian GAAP which are included in the Draft Red Herring Prospectus, and set out in “Financial Information” on page 177. Our Financial Year commences on July 1 and ends on June 30 of the next year.

In the Draft Red Herring Prospectus, any discrepancies in any table between the total and the sum of the amounts listed are due to rounding off.

Industry and Market Data

Unless stated otherwise, industry and market data used throughout the Draft Red Herring Prospectus has been obtained from CARE, publications (including websites) available in public domain and our internal reports. These industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although our Company believes that industry data used in the Draft Red Herring Prospectus is reliable, it has not been independently verified. Similarly, internal company reports, while believed by us to be reliable, have not been verified by any independent sources.

The extent to which the market and industry data used in the Draft Red Herring Prospectus is meaningful depends on the reader’s familiarity with and understanding of the methodologies used in compiling such data.

FORWARD LOOKING STATEMENTS

All statements contained in the Draft Red Herring Prospectus that are not statements of historical fact constitute “forward- looking statements”. All statements regarding our expected financial condition and results of operations, business, plans and prospects are forward-looking statements. These forward-looking statements include statements as to our business strategy, our revenue and profitability, planned projects and other matters discussed in the Draft Red Herring Prospectus regarding matters that are not historical facts. These forward looking statements and any other projections contained in the Draft Red Herring Prospectus (whether made by us or any third party) are predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections.

These forward-looking statements generally can 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 strategies, objectives, plans or goals are also forward- looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results and property valuations to differ materially from those contemplated by the relevant statement.

Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to the industries in India in which we have our businesses and our ability to respond to them, our ability to successfully implement our strategy, our growth and expansion, technological changes, our exposure to market risks, general economic and political conditions in India and which have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in competition in our industry. Important factors that could cause actual results to differ materially from our expectations include, among others:

1. Disruptions in our manufacturing facilities 2. Disruption in raw material supply 3. Implementation risks involved in our Projects 4. Significant changes in the exchange rate 5. Increase in freight, interest rates, etc. 6. Increase in cost of power or other fuel 7. Variations in the selling price of Edible Oil due to over supply in the market or fall in demand 8. Competition from existing players 9. Capital expenditure, including capacity expansion 10. Working capital arrangements 11. Growth of unorganized sector and threat from national/regional players 12. General economic and business conditions 13. Our Company’s ability to successfully implement our growth strategy 14. Changes in laws and regulations relating to the industry in which we operate 15. Changes in political and social conditions in India 16. Loss or shutdown of operations of our Company at any time due to strike or labour unrest or any other reason 17. Withdrawal of any tax benefits available to our Company 18. Changes in buying habits and consumption pattern 19. Changes in prices of raw materials 20. Our ability to successfully implement our strategy, growth and expansion plans 21. The outcome of legal or regulatory proceedings that we are or might become involved in 22. Contingent liabilities, environmental problems and uninsured losses 23. Government approvals 24. Changes in government policies and regulatory actions that apply to or affect our business 25. Developments affecting the Indian economy 26. Uncertainty in global financial markets

For further discussion of factors that could cause our actual results to differ from our expectations, see “Risk Factors”, “Business Overview” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on pages 13, 117 and 229 of the Draft Red Herring Prospectus respectively.

By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Forward looking statements speak only as of the date of the Draft Red Herring Prospectus. Neither our Company, our Directors and officers, the Book Running Lead Manager nor any of the Members of the Syndicate nor any of their respective affiliates has any obligation to, and do not intend 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 and the Book Running Lead Manager will ensure that investors in India are informed of material developments until the time of the grant of listing and trading approvals by the Stock Exchanges.

SECTION II: RISK FACTORS

An investment in equity shares involves a high degree of risk. You should carefully consider all of the information in the Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in the Equity Shares. To obtain a complete understanding, you should read the section in conjunction with the sections titled “Business Overview” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 117 and 229 respectively of the Draft Red Herring Prospectus as well as the other financial and statistical information contained in the Draft Red Herring Prospectus. Occurrence of any one or a combination of the following risks, as well as the other risks and uncertainties discussed in the Draft Red Herring Prospectus, could have a material adverse effect on our business, financial condition and results of operations and could cause the trading price of the Equity Shares to decline, which could result in the loss of all or part of your investment. Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify or quantify the financial or other implications of any of the risks mentioned herein.

Internal Risk Factors

1. We are involved in certain litigation proceedings and we cannot assure you that we will be successful in all of these actions. In the event we are unsuccessful in litigating any or all of the disputes described below, our business and results of operations may be adversely affected

Our Company, two of our Directors and a few of our Group Companies are party to litigations and are subject to legal notices. No assurances can be given that these proceedings will be determined in our favour. If a claim is determined against us and we are required to pay all or a portion of the disputed amount, it could have an adverse effect on our results of operations and cash flows. A classification of the legal proceedings instituted against and by our Company, our Directors and our Group Companies and the monetary amount involved, wherever quantifiable, in these cases is mentioned in brief below: a. Proceedings initiated against our Company

Type of cases Number of Quantum Nature of disputes cases involved (Rs. in million) Civil Litigation 2 37.88 Alleged payment of dues due to a bank arising out of hedging transaction in a derivative contracts and disputes relating to payments allegedly due under the Employees' Provident Funds and Misc. Provisions Act, 1952 Sales Tax Litigation 4 1.99 Sales tax payable on packaging material, alleged non-disclosure of certain related party transactions and to attend proceedings for notices issued to ascertain the correctness and completeness of the returns furnished by our Company Show cause notices 5 NA Show cause notices under Sections 58A, 297, 629A, 147(1)(c), issued by Registrar of 147(3), 217 and 209 of the Companies Act Companies Total ascertainable amount 39.87 b. Proceedings initiated by our Company

Type of cases Number of Quantum Nature of dispute cases involved (Rs. in million) Civil 6 2.12 Recovery of amount and damages for breach of contract, claim for Litigation refund of excess freight charged by railways and refund of market fee paid to Krishi Upaj Mandi Samiti at Betul and Chindwara Income Tax 1 NA Assessment of return of income filed by our Company. Litigation Sales Tax 1 0.7 Dispute in evaluation of sales tax payable by our Company on its Litigation sales and purchases for the year 1993-1994

Criminal 6 111.44 Offences under Section 138 of the Negotiable Instrument Act, 1881 Litigation for non-payment of dues and dishonor of cheques Legal Notices 2 2.3 Rectification of fault in the cooling system bought from the receiver of the notice and non-payment of dues and dishonor of cheques Total ascertainable amount 116.56 c. Litigation against our Promoter

Type of cases Number of Quantum involved (Rs. Nature of dispute cases in million) Civil Litigation 1 NA Suit for eviction from disputed property

Total ascertainable amount NA d. Litigation against Directors

Type of cases Number of Quantum involved (Rs. Nature of dispute cases in million) Criminal Litigation 1 NA Complaint under Sections 354 and Section 509 of Indian Penal Code Total ascertainable amount NA e. Litigation against Group Companies

Type of cases Number of cases Quantum involved (Rs. Nature of dispute in million) Civil Litigation 2 0.35 Consumer complaint for defects in the products sold Total ascertainable amount 0.35

Note: The amounts indicated in the columns above are approximate amounts.

For further details, please see “Outstanding Litigations and Material Developments” beginning on page 255 of the Draft Red Herring Prospectus.

2. Our business is primarily dependant on the availability/supply and cost of raw materials which we source from domestic suppliers. Any significant increase in the prices of these raw materials or decrease in the availability of the raw materials, could adversely affect our results of operations.

Soya bean seed, sunflower and safflower seeds, rice bran, mustard seed, maize seed, bajra, mineral mixtures, molasses, etc., are the major raw materials for our business, and represent a significant portion of our expenses. Any significant increase in the prices of these raw materials or decrease in the availability of the raw materials, due to insufficient rainfall or for any other reason, could adversely affect our results of operations and consequently, our sales and profitability. Our failure to procure the raw materials in the necessary quantities at favorable prices, on schedule, of a specified quality and specification may adversely affect our production, loss of reputation and customer base which could adversely affect our business, financial condition and results of operation.

3. We primarly source our raw materials from farmers and we have not entered into formalized agreements with them. Any disruption in the supply chain might affect our production processes and consequently our results of operations.

We procure our raw materials from farmers. While we have long term relationships with many of them, we have not entered into any supply contracts with such parties to ensure regular and timely supplies of raw materials. In the event our suppliers default in the supply of the raw materials required by us, we may have limited legal recourse against them or we shall not be in a position to demand specific performance. We are unable to assure you, in case of such an event, we shall be able to identify alternative source of supply in time. Such disruption in the supply chain would delay our production process and consequently, our results of operations.

4. Our Company does not have any long-term contracts with our customers which may adversely affect our results of operations.

Our Company has not entered into long-term contracts with any of our dealers, retailers or distributors nor does it have any marketing tie up for its products with any of retail chain operators. Any change in the buying pattern of our end users can adversely affect the business of our Company. Our inability to sell our existing products as well as products to be produced after our proposed expansion, may adversely affect our business and profitability in future.

5. The loss of or shutdown of operations at our production facilities may have a material adverse effect on our business, financial condition and results of operations.

The breakdown or failure of our equipments and/ or civil structure can disrupt our production schedules, resulting in performance being below expected levels. In addition, the development or operation of our facilities may be disrupted for reasons that are beyond our control, including explosions, fires, earthquakes and other natural disasters, breakdown, failure or sub-standard performance of equipment, improper installation or operation of equipment, accidents, operational problems, transportation interruptions, other environmental risks, and labour disputes. There has been a shutdown of our Betul Unit for a period of approximately two months in 2008 due to an explosion caused by human error. Such inadvertent incidences in the future may adversely affect our business. Our production facilities are also subject to mechanical failure and equipment shutdowns. Our machineries may be susceptible to malfunction. If such events occur, the ability of our facilities to meet production targets may be adversely affected which may affect our business, financial condition and results of operations.

6. The capacity of the current plant is not fully utilized and the could impair our ability to fully absorb fixed costs.

The capacity of our Plants has not been fully utilised, over the last three financial years, the details of which are as follows: (in MTs) Process FY 2007 FY 2008 FY 2009 Cattle and poultry feed Annual Installed Capacity 12600.00 30000.00 30000.00 Capacity Utilized 5910.00 26290.00 25300.00 % Utilisation 46.90% 87.63% 84.33%

Solvent Extraction Plant Annual Installed Capacity 187500.00 187500.00 187500.00 Capacity Utilized 140746.83 145135.16 133654.84 % Utilisation 75.06% 77.41% 71.28%

Refinery Plant Annual Installed Capacity 42000.00 42000.00 66000.00 Capacity Utilized 24199.76 22090.04 13970.19 % Utilisation 57.62% 52.60% 21.17%

Soya Lecithin Annual Installed Capacity 900.00 900.00 900.00 Capacity Utilized 610.18 296.09 607.70 % Utilisation 67.80% 32.90% 67.52%

Failure of optimum utilization our capacities could impair our ability to fully absorb our fixed costs.

7. Any change in our consumer’s tastes, preferences or a change in their perception regarding the quality of our products may negatively affect the image and our reputation and in turn affect our revenues and profitability.

The industry in which we operate is highly competitive and where goodwill and reputation are of huge significance. Although we have been in the business of refining edible oils for more than two decades, any occurrence of negligence and/or oversight in the process of refining, may lead to impure oil being sold in the market which could be harmful for the consumers. Any change in consumer’s tastes, preferences or a change in their perception regarding the quality of our products, for reasons including those mentioned above, may 15

negatively affect the image and reputation of our products and consequently that our Company. Further, such incidences may expose our Company to liabilities and claims, adversely affect our reputation, growth and profitability.

8. Our Company faces stiff competition in our business from organized and unorganized players, which may adversely affect our business operation and financial condition.

The market for our products is highly competitive on account of both the organized and unorganized players. Players in this industry generally compete with each other on key attributes such as technical competence, quality of products, distribution network, pricing and timely delivery. Some of our competitors may have longer industry experience and greater financial, technical and other resources, which may enable them to react faster in changing market scenario and remain competitive. Moreover, the unorganized sector offers their products at highly competitive prices which may not be matched by us and consequently affect our volume of sales and growth prospects. Growing competition may result in a decline in our market share and may affect our margins which may adversely affect our business operations and our financial condition.

9. Our agreements with various banks for financial arrangements contain restrictive covenants for certain activities and if we are unable to get their approval, it might restrict our scope of activities and impede our growth plans.

We have entered into agreements for short term and long term borrowings with certain banks and financial institutions. These agreements include restrictive covenants which mandate certain restrictions in terms of our business operations such as change in capital structure, declaring dividends, further expansion of business, taking up new business activity or setting up/ investing in subsidiary except in the ordinary course of business and which require our Company to obtain prior approval of the lenders for any of the above activities. Although we have received approvals for this Issue, we are unable to assure you that our lenders will provide us with these approvals in the future. For details of these restrictive covenants, please see, “Financial Indebtedness” beginning on page 250 of the Draft Red Herring Prospectus.

10. Our unit at Satna enjoys certain benefits in terms of tax exemptions which may not be available to us in the future thereby affecting our profitability

Our unit at Satna, under the Madhya Pradesh Udyog Nivesh Samvardhan Sahayata Yojana 2004 (“Scheme”), is exempted from the payment of entry tax for a period of five years from the date of first purchase of raw material. Moreover, under the Scheme, industries with fixed capital investment of more than Rs.100 million are given industrial promotion assistance equivalent to 75% of amount of commercial tax and central sales tax (excluding the amount of commercial tax on purchase of raw materials) deposited by them. The prescribed limits under the eligibility criteria are for a period of assistance is five years. For further details, please see “Statements of Tax Benefits” on page 88 of the Draft Red Herring Prospectus. The aforesaid tax benefits may not be available to us in the future, which consequently would affect our profitability.

11. Our Company’s inability to maintain distribution network can adversely affect our revenues.

We sell our products with the help of distribution network of various dealers/retailers/distributors. The distribution network sells our products to end users. Our inability to maintain our existing distribution network or to expand it further as per the requirement of our proposed expansion plans, can adversely affect our growth and revenues. In case, if we are not able to market our manufactured products, it may affect our operations and profitability adversely.

12. The shortage or non-availability of power may adversely affect the manufacturing processes and our performance may be affected adversely.

The manufacturing processes of our Company requires substantial amount of power and fuel. Our manufacturing facilities may face power interruptions due to power cuts and as a result our operations or financial condition may be adversely affected. The shortage of electricity supply may increase our dependency on the usage of generators. The same can increase our cost of power and may have an adverse impact on our profitability.

13. Our success is dependent on the quality control processes and any failure to maintain the quality of our products may affect our reputation and business.

We believe that our success is dependent on our quality control processes. Our quality assurance department ensures quality controls at every stage of production, commencing from the time of sowing of the seeds in the farms to the packaging of the finished product. We believe we have built strong relationships with our customers due to the quality of our products which has translated into operational growth. In the event we are unable to maintain our quality control processes, for any reason whatsoever, our business, reputation and results of operations would be adversely affected.

14. The name of our Company appears on the website of the Credit Information Bureau (India) Limited as a willful defaulter, with respect to forex derivative transactions

Our Company entered into forex derivative transactions with HDFC Bank Limited (the “Bank”) on July 25, 2007 (“Derivative Contracts”). The Derivative Contracts involved hedging and mandated our Company to pay the sum calculated by the Bank on a notional basis. Consequent to execution of the Derivative Contracts, our Company was advised by its forex expert that the transactions were not in compliance with applicable laws and were void ab initio and unenforceable and accordingly, our Company repudiated the contract in July 2008. Consequently, the Bank has alleged that our Company is liable to pay a sum of Rs. 37.6 million which arises out of the Derivative Transactions and has filed a suit before the Debt Recovery Tribunal, Mumbai for recovery of the said amount. The Bank has also referred the matter to the Credit Information Bureau (India) Limited and consequently, the name of our Company appears on their website as a willful defaulter. The DRT has restrained our Company not to create any further third party interest in respect of machinery and plant at B-12, Chincholi, MIDC, Solapur, Maharashtra.

15. Our Company has filed compounding applications before the Company Law Board.

Our Company has filed petitions for compounding of non-compliances under Sections 147(1)(c), 217 and 209 of the Companies Act. Our Company has filed applications under Section 621A of the Companies Act with the Company Law Board, Western Region, for compounding of non-compliance by the Company under the said sections. The applications are pending for necessary orders. For further details, please see “Outstanding Litigations and Other Material Developments” on page 255 of the Draft Red Herring Prospectus.

16. We have an export obligation in terms of the import export license, issued by the Director General of Foreign Trade, and in the event we are unable to meet the obligation, we may have to pay export duty which may affect our profits

We have received an EPCG Concessional Duty waiver of 3% on the items detailed in the import-export license issued by the Director General of Foreign Trade, Government of India. The obligation is against capital goods imported by us within eight years of the date of issuance of the license. We have an obligation to export Soyabean Meal of the value of the concession received on imports. The said license was issued to us on September 11, 2009. For the date of grant of the license, we are yet to meet our obligation to export soybean meal of the value of the concession received on imports. If the export obligation is not complied with, we have to pay back the amount we have saved on account of custom duty alongwith interest, which may affect our profits.

17. Our inability to develop and promote our brands may impede our growth rate and our profitability.

We believe that brand building is an essential component of business growth particularly in the industry in which we operate. Our brands enable our customer to distinguish our products from competitors’ and other players in the unorganized sector. While we believe we have established our brands “Siddha Gold” “Saras” and “Poushtik” in certain regions, we intend to expand our operations which would require additional investment towards brand promotion. Our inability to successfully develop, promote and market our brands may adversely affect our business and results of operations.

18. Various trade marks pertaining to our name, logo and products are not registered and it may lead to the dilution of our trade marks and limits our ability to defend our trade marks in infringement or passing off proceedings.

We have filed applications for registering the name and logo of our Company and various other marks pertaining to our products under various classes under the Trade Marks Act, 1999 and these applications are currently pending. There can be no assurance that our trade mark applications will be accepted and the trade marks will be registered. Further, our applications for the registration of certain trade marks may be opposed by third parties, and we may have to incur significant cost and spend time in litigations in relation to these oppositions. In the event we are not able to obtain registrations or if any injunctive or other adverse order is issued against us in respect of any of our trademarks for which we have applied for registration, we may not be able to avail the legal protection and legal remedies (in case of infringement) or prohibit unauthorised use of such mark by third parties by means of statutory protection, available as a proprietor of registered trade marks.

19. We are dependant on our promoters and senior management team and the loss of team members may adversely affect our business or results of operations.

Our success and future performance is substantially dependent on the guidance and foresight of our Promoters and Directors. They are supported by a team of professionals to oversee the operations and management of our businesses. Our success and future performance is substantially dependent on the expertise and services of our management team, including our senior management team, our Directors and other key managerial personnel. The loss of the services of such management personnel or other key personnel could have an adverse effect on our business and results of operations. Further, our ability to maintain our leadership position in the edible oils business depends on our ability to attract, train, motivate and retain highly skilled personnel. If we are unable to recruit and retain professionals, our business and results of operations may be adversely affected.

20. Our results of operations could be adversely affected by strikes, work stoppages or increased wage demands by our employees or any other kind of disputes with our employees.

We employ significant number of employees at our units. We are unable to assure you that we will not experience disruptions to our operations due to disputes or other problems with our work force, which may lead to strikes, lock - outs or increased wage demands. Such issues could have an adverse effect on our business, and results of operations.

21. We have not provided for the following contingent liabilities which could adversely affect our financial condition, if these liabilities are crystallized.

As on January 31, 2010, we had contingent liabilities of the following amounts, as disclosed in our restated standalone financial statements: (Rs. in millions) Particulars As on As on As on As on As on As on January 31, June 30, June 30, June 30, June 30, June 30, 2010 2009 2008 2007 2006 2005 Capital Commitments - 76.51 13.24 - - - Letter Of Credit Outstanding - 2.40 18.07 48.18 2.45 - Bank Guarantees 31.85 31.60 21.60 10.00 - - Income Tax Appeal 0.27 0.27 - 3.03 - - Sales Tax Appeal 2.23 2.23 2.23 7.74 8.00 8.00 Provident Fund Appeal 0.40 0.40 0.40 0.40 0.40 0.40 Mandi Tax 0.79 0.79 0.79 0.79 0.79 - Entry Tax - - 0.10 - - - Customs duty demand - - - 10.00 10.00 10.00 Forex Derivative Transactions 132.99 132.99 - - - - Corporate Guarantee given to IDBI 200.00 - - - - - Bank in respect of short term loan (loan against crop receivables) Total 368.52 247.18 56.41 80.13 21.63 18.40

22. Our Company deals in hazardous chemicals and if we fail to comply with environmental laws and regulations, our operations might be affected.

Our Company uses certain chemicals in our manufacturing process. The use of such chemicals is subject to laws in India and abroad. Under these laws and regulations, our Company is required to control its use of raw materials under specified standards and discharge of effluents, which are hazardous to environment and biological lives. If we fail to comply with these laws and operational regulations, then we may be imposed with penalties, fines or imprisonment. As a result of the same, operations of our Company can be suspended and our manufacturing licenses/ permissions can be withdrawn or terminated which may adversely affect our operations and in turn our profitability. At present we have obtained the permission of the respective pollution control board for using hazardous chemicals but we are unable to assure the renewal of such licenses. Further in case, any new regulation is imposed in this regard, we may have to incur additional expenditure or be required to acquire additional equipment with such specification as may be prescribed by the concerned authorities, in order to comply with such new law or regulation.

23. Our business is subject to government regulations and requires periodic approvals and renewals and changes in these regulations or in their implementation, or our failure to obtain or renew certain approvals or licenses in the ordinary course of business in a timely manner or at all, may adversely affect our operations.

Our business is subject to regulation under the Prevention of Food Adulteration Act, 1954, the Edible Oils Packing (Regulation) Order, 1998, Vegetable Oil Products (Control) Order, 1947 etc., in the areas in which we operate, pollution control laws like the Environmental Protection Act, 1986, the Water (Prevention and Control of Pollution) Act, 1981, the Air (Prevention and Control of Pollution) Act, 1981 and the Hazardous Waste (Management and Handling) Rules, 1989. For more details on the regulations and the policies that regulate our industry, please see “Key Industry Regulations and Policies” on page 139 of the Draft Red Herring Prospectus. If we cannot comply with all applicable regulations, our business prospects and results of operations could be adversely affected. Further, some of our licenses for our existing operations have expired and we are in the process of renewing the same. We have not applied for licenses under the shops and establishments legislations of the respective states. Moreover, we are required to obtain a number of government licenses and statutory approvals for our Proposed Projects. We have applied for some of them but are yet to receive certain licenses. For further details, please see “Licenses and Approvals” on page 269 of the Draft Red Herring Prospectus. If we are unable to obtain the requisite licenses in a timely manner or at all, our business operations and results may be affected.

24. Any inability to manage our growth could disrupt our business and reduce our profitability.

We have experienced significant growth in our total income in recent years. We expect this growth to place significant demands on both our management and our resources. This will require us to evolve and improve our operational, financial and internal controls across our organization. In particular, continued expansion increases the challenges involved in recruiting, training and retaining sufficient skilled technical, sales and management personnel; adhering to our quality and process execution standards; maintaining high levels of customer satisfaction; and developing and improving our internal administrative infrastructure, particularly our financial, operational, communications and other internal systems. Any inability to manage growth may have an adverse effect on our business, results of operations and financial condition.

25. There were certain qualifications in the auditors’ report

The auditors report on the audited financial statements of the respective years contains the following qualifications:

Sr. Period Qualification No. 1. April 1, 2004 to May Non provision of gratuity and leave encashment. Amount could not be quantified 31, 2005 2. Financial year ended 1. Non provision of gratuity and leave encashment. Amount could not be quantified. May 31, 2006 2. Non provision of deferred tax liability for the current period. The net profit is overstated by Rs.85.64 lacs and the liability has been understated to the same extent. 19

3. Period from June 1, Non provision of gratuity and leave encashment. Amount could not be quantified. 2006 to June 30, 2007 4. Financial year ended Non provision of gratuity and leave encashment. Amount could not be quantified. June 30, 2008 5. Financial year ended 1. Short provision of gratuity. Amount could not be quantified. The number of employees June 30, 2009 and the monthly average salary as per Gratuity Policy is less than the actual number of employees and monthly average salary. 2. Non disclosure of information on Segmental Reporting.

For further details please refer the section titled “Financial Information” on page 177 of the Draft Red Herring Prospectus.

26. We may be subject to inspections under the Prevention of Food Adulteration Act, 1954 at local levels which may result in imposition of penalty on us.

Inspection proceedings are undertaken at local levels, under the Prevention of Food Adulteration Act, 1954, at regular intervals of edible samples manufactured by companies similar to ours, operating in the same industry. We may not receive timely communication regarding the food sample inspections etc., collected by the food inspectors from the various storage and distribution centres like shops, depots and godowns of our Company. Consequently, we may fail to adhere to the directions of the authorities in a timely manner which may attract penal sanctions.

27. Commodity price fluctuations may adversely affect our financial performance.

In our industry, the total processing cycle, starting from the purchase of raw materials to the sale of finished products, is about 90 –120 days. Although we hedge our position by transacting in commodity futures contracts from time to time to hedge a portion of our exposure to commodity price fluctuations, commodity price fluctuations beyond our anticipated levels may adversely affect our results of operations and financial condition. For further details of the hedging to check price fluctuation of raw materials, please see “Business Overview” on page 107 of the Draft Red Herring Prospectus.

28. Our business entails high working capital requirements and cash flows and our inability to arrange for the same, in a timely manner or at all, may adversely impact on the results of our operations.

Our business demands substantial fund and non-fund based working capital facilities. In case there is insufficient cash flows to meet our working capital requirement or our inability to arrange for the same from other sources or due to other factors including delay in disbursement of arranged funds, resulting in our inability to finance our working capital needs when needed or there is any increase in interest rate on our borrowings, it may adversely affect our performance.

29. Our exposure to interest rates may adversely affect our results of operations.

We have incurred substantial floating interest rate debt, we are exposed to interest rate risk. As of July 15, 2010 our Company had floating interest rate indebtedness of Rs. 1,442.60 million. Our current debt facilities carry interest at floating rates with the provision for periodic reset of interest rates. We do not currently enter into any swap or interest rate hedging transactions in connection with such loan agreements to mitigate our interest rate exposure. Although, we may enter into interest rate hedging contracts or other financial arrangements in the future to mitigate our exposure to interest rate fluctuations, we cannot assure you, however, that we will be able to do so on commercially reasonable terms or any of such agreements we enter into will protect us fully against our interest rate risk. Any increase in interest rates may have an adverse effect on our business prospects, financial condition and results of operations.

30. Some of our agreements have not been adequately stamped and/or signed making them inadmissible as evidence in the court of law and as a result of which our operations may be impaired.

Due to the vast expanse of our business involving interaction at various levels with various third parties, it is possible that some of the agreements which we have entered into might be inadequately stamped. As a result of this, these documents might be inadmissible as evidence before a court of law. 20

Moreover, our Company has been paying rent in respect of leave and license agreements entered into by it. The leave and license agreements may be inadequately stamped or un-registered, the effect which is that the document is not admissible as evidence in legal proceedings, and parties to that agreement may be unable to legally enforce the same, except after paying a penalty for inadequate stamping.

31. We have entered into a number of related party transactions, which may involve conflict of interest.

We have entered into a number of related party transactions. Such transactions or any future transactions with related parties may potentially involve conflicts of interest and impose certain liabilities on our Company. For further details, refer statement of related party transactions in “Annexure - XXIV” beginning on page 225 under the section “Financial Statements” of the Draft Red Herring Prospectus.

32. Some of our Group Companies have incurred losses or have had negative net worth during the last three years as per their audited financial statements, as set forth in the table below.

Two of our Group Companies has incurred losses as set forth in the table below: (Rs. in million) Name of the Group Company Financial Year Financial Year Financial Year 2007 2008 2009 Shreans Credit and Capital Private Limited (0.01) (0.01) (0.04) Sanovi Technologies (India) Private Limited (0.55) (12.01) (16.96)

The following Group Companies has a negative networth: (Rs. in million) Name of the Group Company Financial Year Financial Year Financial Year 2007 2008 2009 Betul Minerals and Construction Private Limited (0.33) (0.74) (1.13) Shreyans Credit and Capital Private Limited 0.02 0.01 (0.04) Indigo Kids Edutainment Private Limited NA (0.62) (1.01) Sanovi Technologies (India) Private Limited (1.86) (13.88) (30.84)

33. We have experienced negative cash flows.

For Fiscal 2007 and 2008, on a standalone basis, our Company had negative cash flows from operating activities of Rs. 286.48 million and Rs. 227.45 million respectively.

For Fiscal 2005, 2006, 2007, 2008, 2009 and for the seven months period ended January 31, 2010 on a standalone basis, our Company had negative cash flows from investment activities of Rs. 12.60 million, Rs. 211.57 million, Rs. 25.71 million, Rs. 60.79 million, Rs. 105.65 million and Rs. 147.73 million respectively.

For Fiscal 2005 and 2009, on a standalone basis, our Company had negative cash flows from financing activities of Rs. 36.44 million and Rs. 295.48 million respectively.

Any negative cash flows in the future could adversely affect our Company’s standalone results of operations and financial condition. For further details, see the section titled “Financial Statements” beginning on page 177 of the Draft Red Herring Prospectus.

34. Certain Equity Shares held by entities forming part of our Promoter Group are pledged in favour of our lenders, who may exercise their rights under the respective pledge agreements in events of default.

As on the date of the Draft Red Herring Prospectus, 9,263,300 Equity Shares comprising 32.53 % of our pre-Issue equity share capital, held by our Promoter Group entities, i.e., Mr. Vinod Daga, Mr. Nilay Daga, Mr. Kaushik Daga, Mr. Nirmala Daga and Mr. Niraj Daga are subject to pledge, on pari passu basis, as primary security towards loan facilities secured by our Company from our State Bank of India and IDBI Bank. In the event of non- compliance with certain terms of the lending agreements entered into by us with such lenders, such lenders may invoke their respective pledges, which may result in dilution of our Promoter Groups’ stake in our Company. Moreover, if the lenders sell the resulting Equity Shares in the market in bulk, it may lead to a decrease in the

price of our Equity Shares. For further details please refer to “Capital Structure” on page 55 of the Draft Red Herring Prospectus.

35. Three constitutients of our Group Companies are engaged in businesses similar to ours and a possible conflict of interest situation may arise which may affect our profitability

Hi-Gene Seeds India Private Limited, Honey Bee Crop Private Limited and BioBliss Beej Utpadak Swayat Sahakarita Maryadit, three of our Group Companies, are engaged in the business of development and marketing of hybrid seeds. For more details regarding our Promoters and Promoter Group members, see “Our Promoters and Group Companies” on page 162 of the Draft Red Herring Prospectus. We cannot assure you that our Promoters will not favour the interests of other Group Companies over our interests and such possible conflict situation could adversely affect our business, financial condition and results of operations. Moreover, commercial transactions in the future between us and related parties could result in conflicting interests.

36. We do not own the corporate office and certain other premises from which we operate. Any dispute in relation to the lease of our premises would have a material adverse effect on our business and results of operations.

Our Company and its Subsidiary do not own the premises on which our corporate office in Mumbai, the marketing offices and our warehouse at Jabalpur are located. Our Company operates from rented and leased premises. If any of the owners of these premises do not renew the agreements under which we occupy the premises or renew such agreements on terms and conditions that are unfavorable to our Company, it may suffer a disruption in our operations or have to pay increased rentals which could have a material adverse effect on our business, financial condition and results of operations. For more information, see “Business Overview” on page 117 of the Draft Red Herring Prospectus.

37. The insurance coverage taken by our Company may not be adequate to protect against certain business risks. This may adversely affect our financial condition and result of operations.

Operating and managing a business involves many risks that may adversely affect our Company’s operations, and the availability of insurance is therefore important to our operations. Our Company believes that our insurance coverage is generally consistent with industry practice. However, to the extent that any uninsured risks materialize or if it fails to effectively cover itself for any risks, we could be exposed to substantial costs and losses that would adversely affect financial condition. In addition, our Company cannot be certain that the coverage will be available in sufficient amounts to cover one or more large claims, or that our insurers will not disclaim coverage as to any claims. A successful assertion of one or more large claims against our Company that exceeds our available insurance coverage or that leads to adverse changes in our insurance policies, including premium increases or the imposition of a large deductible or coinsurance requirement, could adversely affect our financial condition and results of operations.

38. Our Promoters and members of the Promoter Group will continue jointly to retain majority control over our Company after the Issue, which will allow them to determine the outcome of matters submitted to shareholders for approval.

After completion of the Issue, our Promoters and Promoters Group will collectively own 70.01 % of the Equity Shares. As a result, our Promoters together with the members of the Promoter Group will be able to exercise a significant degree of influence over us and will be able to control the outcome of any proposal that can be approved by a majority shareholder vote, including, the election of members to our Board, in accordance with the Companies Act, 1956 and our Articles of Association. Such a concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of our Company.

In addition, our Promoters will continue to have the ability to cause us to take actions that are not in, or may conflict with, our interests or the interests of some or all of our creditors or minority shareholders, and we cannot assure you that such actions will not have an adverse effect on our future financial performance or the price of our Equity Shares.

39. Exchange rate fluctuations may adversely affect our financial performance.

We are exposed to exchange rate risk. We receive payments in various currencies from our export customers. From time to time, we enter into foreign currency derivative transactions in respect of our international imports

and exports. Further, we also engage in commodity futures contracts. Transactions for futures contract carry a high degree of risk and a relatively small market movement may have a proportionately larger impact on the funds that may have been deposited. It may result in total loss of initial margin funds and any additional funds deposited with the futures broker to maintain the company’s position, which may have an adverse impact on the financial conditions of the company. For further details, please see “Financial Statements” on page 177 of this Draft Red Herring Prospectus.

40. There is no existing market for our Equity Shares, and there can be no assurance that one will develop. Our stock price may be highly volatile after the Issue and, as a result, you could lose a significant portion or all of your investment.

Prior to this Issue, there has been no public market for our Equity Shares, and an active trading market on the Stock Exchanges may not develop or be sustained after the Issue. The Issue Price of the Equity Shares may bear no relationship with the market price of the Equity Shares after the Issue. The market price of the Equity Shares after the Issue may be subject to significant fluctuations in response to, among other factors, variations in our operating results, competitive conditions, general economic, social and political factors, volatility in Indian and global securities market or significant developments in India’s fiscal regime. There has been significant volatility in the Indian stock markets in the recent past, and our share price could fluctuate significantly as a result of market volatility. A decrease in the market price of our Equity Shares could cause you to lose some or all of your investment.

41. Any future issuance of Equity Shares by us may dilute your shareholding and adversely affect the trading price of the Equity Shares.

Any future issuance of Equity Shares by us may dilute your shareholding in our Company, adversely affect the trading price of our Equity Shares and our ability to raise capital through an issue of our securities. In addition, any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity Shares. Additionally the disposal, pledge or encumbrance of Equity Shares by any of our major shareholders, or the perception that such transactions may occur may affect the trading price of the Equity Shares. No assurance may be given that we will not issue Equity Shares or that such shareholders will not dispose of, pledge or encumber their Equity Shares in the future.

42. Our ability to pay dividends in the future will depend upon our future earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants in our financing arrangements.

Our revenues are dependent on various factors such as future earnings, financial condition, cash flows, working capital requirements, capital expenditures and restrictive covenants in our financing arrangements.

Our business is capital intensive and we may plan to make additional capital expenditures for our Proposed Projects or to undertake new projects. Our ability to pay dividends is also restricted under certain financing arrangements that we have entered into and expect to enter into.

The combination of these factors may result in significant variations in our revenues and profits and thereby may impact our ability to pay dividends. Therefore, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful and should not be relied upon as indicative of our future performance. If in the future our results of operations are below market expectations, the price of our Equity Shares could decline.

43. We may require further equity issuances to satisfy our capital needs, which we may not be able to procure. Further such issuances may lead to a dilution of equity and may affect the market price of our Equity Shares.

We may need to raise additional capital from time to time, dependent on business requirements. Some of the factors that may require us to raise additional capital include (i) business growth beyond what the current balance sheet can sustain, (ii) additional capital requirements imposed due to changes in regulatory regime or new guidelines, and (iii) significant depletion in our existing capital base due to unusual operating losses. We may not be able to raise such additional capital at the time it is needed or on terms and conditions favorable to us or to the existing shareholders. Further, fresh issue of shares or convertible securities would dilute existing shareholders.

44. You will not be able to sell immediately on an Indian stock exchange any of the Equity Shares you purchase in the Issue until the Issue receives appropriate trading approvals

The Equity Shares will be listed on NSE and BSE. Pursuant to Indian regulations, certain actions must be completed before the Equity Shares can be listed and trading may commence. Investors demat accounts with depository participants in India are expected to be credited within two working days of the date on which the basis of allotment is approved by NSE and BSE. Thereafter, upon receipt of final approval from the NSE and the BSE, trading in the Equity Shares is expected to commence within four working days of the date on which the basis of allotment is approved by the Designated Stock Exchange. We cannot assure you that the Equity Shares will be credited to investors’ demat accounts, or that trading in the Equity Shares will commence, within the time periods specified above. Any delay in obtaining the approvals would restrict your ability to dispose of the Equity Shares. Any failure or delay in obtaining the approval would restrict your ability to dispose of the Equity Shares. In accordance with section 73 of the Companies Act, in the event that the permission of listing the Equity Shares is denied by the Stock Exchanges, we are required to refund all monies collected to investors.

45. Outbreak of contagious diseases in India may have a material adverse impact on our business and results of operations.

Recently, there have been threats of epidemics, including the H1N1 virus that causes “swine flu” and which the World Health Organization has declared a pandemic, in the Asia Pacific region, including India, and in other parts of the world. If any of our personnel are suspected of having contracted any of these infectious diseases, we may be required to quarantine such persons or the affected areas of our facilities and temporarily suspend a part or all of our operations. Further, such contagious diseases could prevent our clients from travelling, which would have a material adverse effect on our business, prospects, financial condition and results of operations and could cause the price of our Equity Shares to decline.

Risks pertaining to the Objects of the Issue

46. The Objects of the Issue for which funds are being raised have not been appraised by any bank or financial institution. Any variation between the estimation and actual expenditure on the Proposed Projects could result in execution delays or influence our profitability adversely.

The deployment of funds as stated in the “Objects of the Issue” beginning on page 69 of the Draft Red Herring Prospectus is entirely at the discretion of our management and has not been appraised by any independent agency. The purposes for which the Net Proceeds are to be utilised have not been appraised by an independent entity and are based on our estimates and on third-party quotations.

47. We have not entered into any definitive agreements to monitor the utilization of the Issue proceeds.

As per the SEBI ICDR Regulation, appointment of monitoring agency is required only for Issue size above Rs. 5,000 million. Hence we have not appointed any monitoring agency and the deployment of funds as stated in the “Objects of the Issue” beginning on page 69 of the Draft Red Herring Prospectus is entirely at our discretion and is not subject to monitoring by any independent agency. We have not entered into any definitive agreements to utilise a portion of the Issue proceeds. In the event, for whatsoever reason, we are unable to execute our plans to set up the Project, we could have a significant amount of unallocated net proceeds. In such a situation, we would have broad discretion in allocating these net proceeds from the Issue without any action or approval of our shareholders. Due to the number and variability of factors that we will analyze before we determine how to use these un-utilised net proceeds, we presently cannot determine how we would reallocate such proceeds. Accordingly, investors will not have the opportunity to evaluate the economic, financial and other relevant information that will be considered by us in the determination on the application of any such net proceeds in these circumstances.

48. We have not identified alternate sources of financing the ‘Objects of the Issue’. If we fail to mobilize the resources as per our plans, our growth plans may be affected.

We have partly funded our proposed project at Satna for an amount of Rs. 283.05 million through internal accruals. We have not identified any alternate source of funding the balance requirement for this project and entire requirement for other projects. Therefore, any failure or delay on our part to mobilize the required resources or any

shortfall in the issue proceeds may delay the implementation schedule of our expansion projects and could adversely affect our growth plans.

49. We propose to supplement our facilities at Satna facilitating the manufacture of soya nuggets and soya flour. We do not have any prior experience in the manufacture and marketing of these products, we are unable to assure you that the venture shall be as successful as our existing line of businesses.

We propose to supplement our facilities at Satna facilitating the manufacture of soya nuggets and soya flour. Soya nuggets and soya flour manufacturing are new verticals in our product line and we have no prior experience in manufacturing the same. Consequently, we are unable to assure you that we shall be able to market the same successfully. Our failure to successfully develop and market the new line of products would fail to generate a positive return on investment and adversely affect our results of operations.

50. We are yet to enter into any definitive agreements for procurement of land on which we propose to establish our unit at Tirupur, Tamil Nadu and any delay in formalizing arrangements for use of land may delay our expansion plans and consequently affect our business

We propose to acquire approximately 25 acres of land at Palladiam, Tirupur, Tamil Nadu. We have not yet acquired the land or paid any consideration to purchase the land. The cost estimated for land procurement is approximately Rs. 18.75 million as per estimates received from Sree Velan Promoters, Tirupur. Any delay in formalizing arrangements for use of land may delay our expansion plans and consequently affect our business.

51. The completion of our Proposed Projects is dependent on performance of external agencies and any shortfall in the performance of these external agencies may adversely affect our expansion plans.

The completion of our Proposed Project is dependent on performance of external agencies, which are responsible for construction of buildings, installation and commissioning of plant and machinery and supply and testing of equipment. We cannot assure you that the performance of external agencies will meet the required specifications or performance parameters. If the performance of these agencies is inadequate in terms of the requirements, this may result in incremental cost and time overruns, which in turn may adversely affect our expansion plans.

52. We have not placed orders for some of the machinery and equipment that is required for our Projects and as a result, we may face time and cost overruns.

We are yet to enter into definitive agreements or are yet to place orders for all the machinery and equipment required for our Projects. The total cost of plant and machinery proposed to be installed at our Projects is estimated to be Rs. 667.30 million. As on date of the Draft Red Herring Prospectus, we are yet to place orders for machinery of an estimated cost of Rs. 458.47 million comprising of 67.66 % of the total estimated requirement of machinery at the Project. These factors may increase the overall cost of our Projects, and we may have to raise additional funds by way of additional debt or equity placement to complete our Projects, which may have an adverse effect on our business and results of operations.

53. We are yet to initiate the process of recruiting the manpower required for the Proposed Projects, other than at our Satna unit, and any delay in recruiting the suitable personnel or the required number of people to operate the plants effectively may result in time and cost overruns.

Other than at our Satna unit, we are yet to initiate the process of recruiting any of the manpower for undertaking and executing our operations at the Proposed Projects. In the event we are unable to recruit suitable personnel or the required number of people to operate the plants effectively, we may face time and cost overruns, which may have an adverse effect on our business and result of operations.

54. Under-utilisation of our proposed expanded capacities may adversely impact our financial performance

We propose to expand our production capacities based on our estimates of market demand and profitability. In the event of non-materialisation of our estimates and expected order flow for our products, due to factors including adverse economic scenario, change in demand or for any other reason, our capacities may not be fully utilised thereby adversely impacting our financial performance.

55. In the event there is any delay in the completion of the Issue, there would be a corresponding delay in the completion of our Projects which would inturn affect the revenues and results of operations of our Company

The funds that our Company receives would be utilized for the objects of the issue as has been stated in the section titled “Objects of the Issue” on page 69 of the Draft Red Herring Prospectus. The proposed schedule of implementation of our Project is based on our management’s estimates. If the schedule of implementation is delayed for any other reason whatsoever, including any delay in the completion of the Issue, we may face time and cost overruns and this may affect our revenues and results of operations.

External Risk Factors

56. We have not prepared, and currently do not intend to prepare, our financial statements in accordance with the International Financial Reporting Standards (“IFRS”) of the International Accounting Standards Board.

We have prepared our financial statements and the financial information contained in the Draft Red Herring Prospectus in accordance with the accounting standards applicable in India and SEBI ICDR Regulations. Indian Accounting Practices differ in certain respects from those of IFRS. We have not presented a reconciliation of our financial statements to IFRS in the Draft Red Herring Prospectus, and we do not intend to reconcile future financial statements to IFRS. Furthermore, we have not quantified or identified the impact of the differences between Indian Accounting Practices and IFRS as applied to our financial statements. As there are differences between Indian Accounting Practices and IFRS, there might be substantial differences in our results of operations, cash flows and financial position if we were to prepare our financial statements in accordance with IFRS. Prospective investors should consult their own professional advisers for an understanding of the differences between the professional standards applicable in India and IFRS and how they might affect the financial information contained in the Draft Red Herring Prospectus.

57. Instability of economic policies and the political situation in India could adversely affect the fortunes of the industry

There is no assurance that the liberalization policies of the government will continue in the future. Protests against privatization could slow down the pace of liberalization and deregulation. The Government of India plays an important role by regulating the policies and regulations that govern the private sector. The current economic policies of the government may change at a later date. The pace of economic liberalization could change and specific laws and policies affecting the industry and other policies affecting investments in our Company’s business could change as well. A significant change in India’s economic liberalization and deregulation policies could disrupt business and economic conditions in India and thereby affect our Company’s business.

Unstable domestic as well as international political environment could impact the economic performance in the short term as well as the long term. The Government of India has pursued the economic liberalization policies including relaxing restrictions on the private sector over the past several years. The present Government has also announced polices and taken initiatives that support continued economic liberalization.

The Government has traditionally exercised and continues to exercise a significant influence over many aspects of the Indian economy. Our Company’s business, and the market price and liquidity of the Equity Shares, may be affected not only by changes in interest rates, changes in Government policy, taxation, social and civil unrest but also by other political, economic or other developments in or affecting India.

58. If regional hostilities, terrorist attacks or social unrest in India increase, our business could be adversely affected and the trading price of the Equity Shares could decrease.

The Asian region has from time to time experienced instances of civil unrest, terrorist attacks and hostilities among neighbouring countries. Military activity or terrorist attacks in India in the future could influence the Indian economy by creating a greater perception that investments in Indian companies involve higher degrees of risk. These hostilities and tensions could lead to political or economic instability in India and a possible adverse effect on the Indian economy and our business and its future financial performance and the trading price of the Equity Shares.

Furthermore, India has also experienced social unrest in some parts of the country. If such tensions occur in other parts of the country, leading to overall political and economic instability, it could have an adverse effect on our business, future financial performance and the trading price of the Equity Shares.

59. Taxes and other levies imposed by the Government of India or other State Governments, as well as other financial policies and regulations, may have a material adverse effect on our business, financial condition and results of operations.

Taxes and other levies imposed by the Central or State Governments in India that affect our industry include customs duties, excise duties, sales tax, income tax and other taxes, duties or surcharges introduced on a permanent or temporary basis from time to time. Imposition of any other taxes by the Central and the State Governments may adversely affect our results of operations.

60. After this Issue, the price of the Equity Shares may be highly volatile, or an active trading market for the Equity Shares may not develop.

The price of the Equity Shares on the Stock Exchanges may fluctuate as a result of the factors, including:

a. Volatility in the Indian and global securities market;

b. Company’s results of operations and performance; c. Performance of Company’s competitors,

d. Adverse media reports on Company or pertaining to the industry in which we operate;

e. Changes in our estimates of performance or recommendations by financial analysts;

f. Significant developments in India’s economic liberalization and deregulation policies;

g. Significant developments in India’s fiscal and environmental regulations.

Current valuations may not be sustainable in the future and may also not be reflective of future valuations for the industry and the Company. There has been no public market for the Equity Shares and the prices of the Equity Shares may fluctuate after this Issue. There can be no assurance that an active trading market for the Equity Shares will develop or be sustained after this Issue or that the price at which the Equity Shares are initially traded will correspond to the price at which the Equity Shares will trade in the market subsequent to this Issue.

61. Any downgrading of India’s debt rating by an international rating agency could have a negative impact on our business.

Any adverse revisions to India’s credit ratings for domestic and international debt by international rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing is available. This could have a material adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures and the trading price of the Equity Shares.

62. Financial instability in other countries, particularly countries with emerging markets, could disrupt Indian markets and our business and cause the trading price of the Equity Shares to decrease.

The Indian financial markets and the Indian economy are influenced by economic and market conditions in other countries, particularly emerging market countries in Asia. Further the recent financial turmoil in the United States has had a significant impact on the Indian economy as well as the stability of the Indian Markets. Financial instability in other countries such as USA, Russia and elsewhere in the world in recent years have had limited impact on the Indian economy and India was relatively unaffected by financial and liquidity crises experienced elsewhere. Although economic conditions are different in each country, investors´ reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets may cause volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a

negative impact on the Indian economy. This in turn could negatively impact the movement of exchange rates and interest rates in India. In short, any significant financial disruption could have an adverse effect on our business, future financial performance and the trading price of the Equity Shares. Further, regulatory actions to rein inflation have led to increase in interest rates, and further increases cannot be ruled out, which again may affect our results of operations.

63. Investors may have difficulty in enforcing judgments against the Company or its management outside India

The Company is a limited liability company incorporated under the laws of India. All of the Directors and executive officers and some of its advisors and experts named in the Draft Red Herring Prospectus are residents of India. Further, a substantial portion of our assets and the assets of such persons are located in India. As a result, it may not be possible for investors to affect service of process upon the Company or such persons in jurisdictions outside India or to enforce judgments obtained against it or such persons outside India. India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments. Recognition and enforcement of foreign judgments is provided for under Section 13 of the Code of Civil Procedure, 1908 (the “Civil Procedure Code”). Section 13 of the Civil Code provides that a foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon except (i) where it has not been pronounced by a court of competent jurisdiction, (ii) where it has not been given on the merits of the case, (iii) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognise the laws of India in cases where such law is applicable, (iv) where the proceedings in which the judgment was obtained were opposed to natural justice, (v) where it has been obtained by fraud or (vi) where it sustains a claim founded on a breach of any law in force in India.

Section 44A of the Civil Procedure Code provides that where a foreign judgment has been rendered by a superior court in any country or territory outside India which the Government has by notification declared to be a reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in India. However, Section 44A of the Civil Procedure Code is applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty.

The United States has not been declared by the Government to be a reciprocating territory for the purposes of Section 44A of the Civil Procedure Code. However, the U.K. has been declared by the Government to be a reciprocating territory. Accordingly, a judgment of a court in the U.S. may be enforced only by a fresh suit upon the judgment and not by proceedings in execution. The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is brought in India. A party seeking to enforce a foreign judgment in India is required to obtain approval from the RBI to repatriate outside India any amount recovered.

Prominent Notes

1. We have not issued any Equity Share within the last twelve months from the date of the Draft Red Herring Prospectus at a price lower than the Issue Price. We have issued bonus shares in the last twelve months as disclosed in “Capital Structure” beginning on page 55 of the Draft Red Herring Prospectus.

2. This is a public Issue of 12,200,000 Equity Shares, for cash at a price of Rs. [●] per Equity Share, aggregating up to Rs. [●]. The Issue will constitute 29.99 % of the post-Issue paid-up capital of our Company. Our Company is considering a Pre-IPO Placement of upto 1,827,875 Equity Shares out of the Issue with certain investors Our Company may complete the issuance of such Equity Shares prior to the filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the number of Equity Shares in the Issue will be reduced to the extent of the Equity Shares proposed to be allotted in the Pre-IPO Placement, if any, subject to the Issue being atleast 25 % of the fully diluted post-Issue paid up capital of our Company.

3. The standalone net worth of our Company was Rs. 669.49 million and Rs. 806.24 million as of June 30, 2009 and January 31, 2010 respectively. The book value of each Equity Share was Rs. 99.92 and Rs. Rs. 120.33 as of June 30, 2009 and January 31, 2010 respectively as per the restated financial statements of our Company. For more information, see the section “Financial Statements” beginning on page 177 of the Draft Red Herring Prospectus.

4. The average cost of acquisition of per Equity Shares by our Promoters, which has been calculated by taking the

average amount paid by them to acquire our Equity Shares, is as follows:

Name of the Promoter Average cost of acquisition per equity share (Rs.) Mr. Shreans Daga 0.77 Mr. Varun Daga 0.71 Mrs. Kanchan Daga 0.80 Pramod Kumar Daga (HUF) 0.50

5. For related party transactions, see the section and “Related Party Transactions appearing in Annexure XXIV of Financial Statements” beginning on page 225 of the Draft Red Herring Prospectus.

6. Except as disclosed in “Capital Structure”, “Our Promoters and Group Companies” and “Our Management” beginning on pages 55, 162 and 148 respectively, of the Draft Red Herring Prospectus, none of the Promoters, Directors or key managerial personnel has any interest in the Company.

7. Except as stated in “Capital Structure” on page 55 of the Draft Red Herring Prospectus, we have not issued any shares for consideration other than cash.

8. The Issue is being made under Regulation 26(1) of the SEBI ICDR Regulations through a Book Building Process wherein not more than 50% of the Issue to the Public shall be available for allocation on a proportionate basis to QIBs, out of which 5% (excluding the Anchor Investor Portion) shall be available for allocation on a proportionate basis to Mutual Funds only, and the remaining QIB portion shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above Issue Price. Upto 30% of the QIB Portion shall be available for allocation to Anchor Investors at the Anchor Investor Issue Price on a discretionary basis and one-third of the Anchor Investor Portion shall be available for allocation to domestic Mutual Funds. Under- subscription, if any, in the Mutual Funds portion will be met by a spill over from the QIB portion and be allotted proportionately to the QIB Bidders. Further not less than 15% of the Issue to the Public shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue to the Public shall be available for allocation on a proportionate basis to Retail Individual Bidders subject to valid Bids being received at or above the Issue Price.

9. Investors may note that in case of over-subscription in the Issue, allotment to Qualified Institutional Investors, Non- Institutional Bidders and Retail Bidders shall be on a proportionate basis. For more information, please see “Terms of the Issue” beginning on page 294 of the Draft Red Herring Prospectus

10. Under-subscription in the Issue, if any, in any category will be met by spill over from other categories at the discretion of our Company in consultation with the BRLM.

11. Investors may contact the BRLM or the Compliance Officer for any clarification / complaint or information relating to the Issue, which shall be made available by the BRLM and the Company to the investors at large. No selective or additional information will be available for a section of investors in any manner whatsoever. For contact details of the BRLM and the Compliance Officer, please see “General Information” beginning on page 46 of the Draft Red Herring Prospectus.

12. Investors are advised to also see “Basis of Issue Price” beginning on page 85 of the Draft Red Herring Prospectus.

13. Trading in Equity Shares for all investors shall be in dematerialized form only.

14. There are no financing arrangements whereby the Promoter Group, the Directors of our Company who are the Promoters of our Company, the Directors of our Company and their relatives have financed the purchase by any other person of securities of our Company during the period of six months immediately preceding the date of filing of the Draft Red Herring Prospectus.

15. Our Company had changed its name from “Betul Oils and Flours Limited” to “Betul Oil Limited” on June 9, 2010. No new activity is suggested by the change in name of our Company. For further details please see “History and Corporate Structure” beginning on page 43 of the Draft Red Herring Prospectus.

SECTION III: INTRODUCTION

SUMMARY OF INDUSTRY OVERVIEW

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CARE Research is not responsible for any errors or omissions in analysis/inferences/views or for results obtained from the use of information contained in this report and especially states that CARE (including all divisions) has no financial liability whatsoever to the user of this product. This report is for the information of the intended recipients only and no part of this report may be published or reproduced in any form or manner without prior written permission of CARE Research.

Indian Edible Oil Industry

Vegetable oil and oil seeds are two of the essential commodities for the consumer’s daily needs. India is one of the largest producers of oilseeds in the world with an area of 26.54 million hectares under cultivation producing 23-28 million tonnes of oil seeds every year depending on the monsoons. It produces nine types of oil seeds namely, Groundnut, Soybean, Rape/Mustard seed, Sunflower seed, Sesame seed, Castor seed, Niger seed, Safflower seed, Linseed. It also enjoys the position of being the third largest consumer of edible oil in the world next only to US and China owing to its growing population, rising income levels and changing eating habits. India consumed approximately 14.26 million tonnes of vegetable oil domestically in 2007-08. The per capita consumption has grown by 8.1 per cent over the last five years. It stood at 12.5 kg/person per annum which is considerably low as compared to the world average of 17.5 kg/ annum. Developed countries like Japan, Brazil and USA consume around 20.8 kg/annum, 21.3 kg/annum and 48.0 kg/annum respectively. Approximately 40 per cent of the domestic demand for edible oil was met by the imports from other countries during 2007-08. The imports mainly comprise Palm oil, Soybean oil and Sunflower oil. Indonesia, Argentina and Malaysia are the key exporters of oil to India. Olive oil is mainly imported from European countries like Italy and Spain. Rapeseed oil is imported from UAE. (Source: CARE Research, Department of Food & Public Distribution, Business Beacon)

Indian oil cake industry

Faster income growth is also strengthening demand for animal products and the derived demand for coarse grain and oil meal for feeding the cattle and poultry. India has a large animal product sector and both supply and demand have responded to stronger income growth. The domestic consumption for oil meal grew at a CAGR of 3.06 per cent over the last five years from 9.83 million tonnes in 2005-06 to 11.09 million tonnes in 2009-10. The export of oil meals fell from 4.42 million tonnes in 2005-06 to 3.22 million tonnes in 2009-10. The sharp decline of 40.6 per cent was experienced in 2009-10 due to lower crushing and disparity in last few months. The fall can also be attributed to excessive speculation in the futures market, depreciation in the value of USD against rupee and withdrawal of Vishesh Krishi and Gram Udyog Yojana scheme on soybean meal last year. (Source: CARE)

Overview of certified seed business

The Indian seed programme largely adheres to the limited generations’ system for seed multiplication in a phased manner. The system recognizes three generations namely breeder, foundation and certified seeds and provides adequate safeguards for quality assurance in the seed multiplication chain to maintain the purity of the variety as it flows from the breeder to the farmer. Seed certification is a process designed to maintain and make available to the general public continuous supply of high quality seeds and propagating materials of notified kinds and varieties of crops, so grown and distributed to ensure the physical identity and genetic purity. Seed certification is a legally sanctioned system for quality control of seed multiplication and production. A well organized seed certification should help in accomplishing the following three primary objectives:- 1) The systematic increase of superior varieties 2) The identification of new varieties and their rapid increase under appropriate and generally accepted names Provision for continuous supply of comparable material by careful maintenance.

Overview of Soybean

Soybean is one of the world’s most produced oilseed. USA is the largest producer of soybean in the world. Soybean oil contains around 18 per cent oil and 45 per cent proteins. The primary use of whole soybeans and protein from the soybean meal is to provide a low cost, high protein feed ingredient for fish, poultry, swine, cattle and other animals. In addition, the protein is used in industrial products such as plastics, wood adhesives and textile fibres. Soybean oil is the leading vegetable oil in the world. Other uses of soybean oil range from margarine to salad dressing and mayonnaise. Examples of industrial applications include the use of the oil as a carrier in inks and paints. Soybean oil also provides an environmentally friendly fuel.

Soy Beans belong to the legume family and are native to East Asia. It is an important protein source for millions of people for over five thousand years. It can be grown on a variety of soils and a wide range of climates. In India Madhya Pradesh, Maharashtra, Rajasthan and Andhra Pradesh are the major producers of soybeans. Madhya Pradesh tops the list. Nearly 53% of soybean is produced in the state. During 2007 total soybean production in the state was 49.81 metric tonnes which was about 84.2% of the total produce. Maharashtra contributes around 34%, 8% comes from Rajasthan and the balance from rest of the States.

Overview of the poultry industry in India

As per industry reports India’s livestock population is among the highest in the world. It contributes approximately 4 per cent to GDP and 27 per cent to agricultural GDP. Despite being hampered by the avian influenza the poultry industry has grown at a robust rate and there lies a huge potential for further growth. The organized sector contributes nearly 70 per cent of the total output and the remaining 30 per cent in from the unorganized sector. The broiler industry is well dominated in southern states of our country with nearly 60-70 per cent total output coming from these states. The poultry industry once again is concentrated more in southern states especially, Andhra Pradesh, Tamil Nadu and Maharashtra producing nearly 70 per cent of the country's egg production. India's 75 per cent of egg produce is consumed by the 25 per cent population living in urban and semi-urban areas. Presently about 800 hatcheries are operating in the country. NABARD has committed to bring about rural prosperity through poultry.

Indian poultry industry has been growing at annual varying rates of 8-15 per cent and this growth in the past few decades made India fifth largest producer of eggs and ninth largest producer of poultry broiler. India produces 1,400 million chickens a year, which is close to 27 million a week, of which 95 per cent is traded, alive. According to a market report the poultry production and consumption in the domestic markets is slated to grow by 66 per cent to approximately 2.3 million tonnes by 2010. Poultry sector is one of the fastest growing industries of the Indian economy than any other sector contributing about $230 million to the Gross National Product. But in statistical terms the industry has reported a loss of over Rs 4,000 crore as an aftermath effect of the bird flu crisis.

Overview of the cattle feed industry

Cattle feed industry is quite traditional in nature. Farmers select their own ingredients and make their own mixtures to feed the cattle. The productivity of cattle is restricted because of their poor genetic makeup. This means that even if the cattle is offered high-quality compound feed (industry feed), productivity may not see an increase.

Oil cakes, maize and cereal by products are important ingredients of cattle feed. Coarse grains and cottonseed are usually added to make a balanced feed mixture. Other products like mango seed kernel, mahowa cake, neem cake, soya pulp, wheat bran, pollard, broken rice, wheat germ and whey powder may also be used for feeding livestock. Commercial cattle feed consists of raw material such as cornstarch, liquid glucose, dextrose, sorbitol, fabrilose, maltodextrin, corn gluten meal, soy meal and rape meal. Intake of cattle supplements improves the general health condition of cattle and leads to a high yield of good quality milk that is rich in fat, protein and sweetness.

SUMMARY OF OUR BUSINESS, STRENGTHS AND STRATEGY

We are engaged in the business of solvent extraction, refining of edible oils, manufacture and trading of de-oiled cakes, animal feeds, specialty ingredients and development of hybrid seeds. As part of our solvent extraction business, we extract oils from seeds such as soyabean seeds, sunflower, safflower, maize germ, sal seed, mango seed, cotton seed and mahua seed which are refined further into edible oils. We also procure crude oil from third parties and retail refined edible oil. The residue left after extraction of oil from seeds is referred to as “de-oiled cakes” or “meal”, which is the vital ingredient in manufacture of animal feeds. While we market de-oiled cakes directly, we also supply processed animal feed as part of forward integration of our operations. We also manufacture specialty ingredient products such as soya lecithin, mango oil, sal oil and stearine, which are also processed extracts of seeds. We develop high-yield hybrid certified seeds for soybean and other crops at our seed development division at Betul. Such certified seeds are used by farmers to develop soya bean crops which are utilized in oil extraction subsequently.

We have backward integrated our business by setting up a private mandi and a warehouse at Betul, Madhya Pradesh to provide a transparent market platform to procure raw material, provide storage and warehousing facilities to farmers. We also intend to set-up two additional mandis, one each at Satna, Madhya Pradesh and Solapur, Maharashtra. We believe that mandis provide access to raw materials in a systematic manner and allows us to build long term relationship with the farmers. We lease out our warehouse to farmers which indirectly facilitates assured source of raw material supply during non-peak seasons.

We set up our first solvent extraction unit at Betul, Madhya Pradesh in 1981 with a total solvent extraction capacity of 30,000 TPA (100 TPD) and over the years have set up two additional units at Satna, Madhya Pradesh and Solapur, Maharashtra. As on date of the Draft Red Herring Prospectus, our cumulative solvent extraction capacity is 367,500 TPA (1225 TPD), edible oil refining capacity is 96,000 TPA (320 TPD), cattle feed manufacturing capacity is 30,000 TPA (100 TPD), soya lecithin manufacturing capacity is 4,410 TPA (15 TPD) and grading capacity is 86,400 TPA (288 TPD). In order to capitalize on the opportunities in the sector, we propose to set up another solvent extraction unit and refinery at Tirupur, Tamil Nadu and expand our existing units. Subsequent to the execution of our proposed expansion plans, our solvent extraction capacity would be incremented to 547,500 TPA (1,825 TPD), our edible oil refining capacity would be 141,000 TPA (470 TPD) and our cattle feed manufacturing capacity would be 90,000 TPA (300 TPD).

We have a pan-India presence and market our products across seventeen states in India. Our edible oil distribution network comprises of seventeen dealers and two depots through whom we access more than 5,000 retailers across India. We market edible oil primarily under our brands “Saras” and “Siddha Gold”. We believe we are one of the largest suppliers of soybean meal to the domestic animal feed industry catering to more than 850 poultry farms directly. Our cattle feed distribution network comprises of sixty one distributors across Maharashtra and Karnataka.

We also export soybean meal, directly and indirectly, to Far East Asian countries such as Indonesia, Malaysia, Thailand, Vietnam, Korea, Japan and China and to countries which are members of the SAARC organisation. We also export, directly and indirectly, soya lecithin, mango oil, sal oil and stearine predominantly to the European Union and Japan.

We also operate two wind energy power generation units with an installed capacity of 1.25 MW each at Dhule, Maharashtra and Dewas, Madhya Pradesh. We supply electricity to the Maharashtra State Electricity Distribution Company Limited from the Dhule unit and we utilize the power generated at the Dewas unit for captive consumption.

Our plants at Betul have been awarded ISO 9001:2000 certification by the Bureau Veritas Certification (India) Private Limited in respect of manufacture and sale of edible oils and de-oiled cakes. BM Trada has certified that the quality management systems of our plant at Solapur meet the requirements of ISO 9001:2008. Our Company has also been awarded the “Bhartiya Udyog Ratan Award” by the Indian Economic Development and Research Association. The Soyabean Processors Association of India has presented our Company the “Highest Capacity Utilisation Award” consecutively for the years 2002 to 2005. We were awarded the “Indian Achievers Award for Industrial Excellence” by the Indian Economic Development and Research Association in 2010. Our Company had also been nominated among the top three companies in the “FMCG, Food and Agri-Business” category at the CNBC TV-18’s, rated by CRISIL “Emerging India Awards 2007”.

Our net sales have grown at a CAGR of 36.32 % from Rs. 1,559.19 million in FY 2005 to Rs. 5,384.77 million in FY 2009. Our PAT has grown at a CAGR of 47.55 % from Rs. 41.30 million in FY 2005 to Rs. 195.76 million in FY 2009.

Our Competitive Strengths:

We believe that following are our key competitive strengths:

Strategic location of manufacturing units

We believe that the strategic location of our manufacturing units allows us to cater to a larger consumer base, reduce logistic costs and achieve economies of scale. Our facility at Satna is located at the top of the soybean belt, the Betul unit is at the center of the soybean belt and the Solapur unit is at the bottom of the soybean belt of India. The locational advantage allows lower procurement costs.

The Satna Unit, situated at the border of Madhya Pradesh and Uttar Pradesh, is strategically located near the high consumption area as well as in close proximity of the raw material source (Source: Area & Production Estimates of Soybean in India Kharif (Monsoon) 2009: Crop survey conducted by the Soybean Processors Association of India – September 19 to 27, 2009). We believe that the location of this unit, which is adjacent to the high consumption regions such as Uttar Pradesh, Jharkhand Bihar, West Bengal, Assam, Nepal and Bangladesh, would reduce our distribution costs. The unit is also adjacent to the railway rake loading station, which reduces transportation cost, saves spillages and facilitates distribution of our products to such high consumption regions. The proximity to both raw material source and the finished product market (as discussed above) allows us to source raw materials effectively and flexibility to transport our products either by road or rail.

The Satna Unit is currently the only edible oil refinery unit in the north-eastern districts of Madhya Pradesh which greatly enhances our visibility, profitability and gives us a competitive edge over other players in this area.

We propose to set up an additional facility for the manufacture of soya flour and soya nuggets at the Satna Unit, thereby complimenting the existing distribution network across the same consumption area. For further details, please see “Objects of the Issue” on page 69 of the Draft Red Herring Prospectus.

The Satna Unit is also located in proximity to other alternative raw material sources such as rice bran and sal seed (Source:http://india.gov.in/citizen/agriculture/rice/php and report published by FGLG). Rice bran is used as a raw material for extraction of oil. Sal seeds, after extraction of oil, is utilized for manufacturing specialty ingredients.

Our unit at Betul, situated at the border of Madhya Pradesh and Maharashtra, is located at the centre of the soya belt. This allows us to greatly reduce procurement costs and ensures perennial supply of raw materials.

Our unit at Solapur, situated at the border of Maharashtra, Andhra Pradesh and Karnataka, is strategically located near the highly concentrated poultry belt and allows us to greatly reduce our distribution costs. Raw materials such as soybean, sunflower, safflower, cotton seed, maize germ, sal seed and kokam seed are easily available in the geographical vicinity. The close proximity to JNPT port at Mumbai allows transfer of imported soya degummed oil for refining and transfer of our products to the said port for export at lesser costs. We also have the flexibility to transport our products from the Solapur Unit either by road or rail which aids logistics.

The Solapur Unit has an animal feed manufacturing facility and we cater to the nearby dairy and poultry farms, located at Maharashtra, Karnataka and Andhra Pradesh.

Soya producing areas in India

(Source: http://www.spectrumcommodities.com/education/commodity/statistics/soybeans.html)

Edilble oil consumption pattern in India

(Source: http://www.fao.org/WAIRDOCS/LEAD/X6170E/x6170e2k.htm)

Early mover advantage for distribution of de-oiled cakes for pan-India

We believe that we have an early mover advantage in the domestic distribution of de-oiled cakes. Our customers are predominantly poultry farmers and our long relationship with our customers provides us with an advantage over a fresh entrant. With the years of experience we have developed a strong distribution network and we believe we have high brand equity in the poultry and cattle sector. This long association also has provided us with a first hand experience and understanding of the requirements of our customers. The quality of the de-oiled cake is a vital aspect in the animal feed segment and we ensure that the product quality is customized as per the needs and requirements of customers and that the same is delivered in a timely manner at the desired locations. The product quality is finalized as per the weighment and quality tests undertaken at the customers’ laboratory which enhances customer confidence. Timely delivery is also ensured through our own fleet of trucks and allows our customers to operate at minimal / optimal inventory. We believe that the quality of our products and services has ensured customer loyalty and repeated orders.

Integrated Operations

Our operations are fully integrated which starts from developing high yield hybrid seeds, seed procurement through private mandi, solvent extraction capabilities, refineries to refine the crude oil, import of crude oil for refining, processing the de- oiled cake to cater to the animal feed sector and manufacturing of specialty ingredients. Our products are marketed across seventeen states in India. We also have a fully integrated in-house packaging department to package our products in drums, tins, jars, pet bottles and pouches.

The integrated process of our operations may be detailed as follows:

Modern and versatile manufacturing capabilities

Our manufacturing facilities at Betul, Satna and Solapur have the ability to manufacture a versatile range of products. Our facilities are versatile in nature wherein we can process seeds such as soyabean, sunflower, safflower, maize germ, sal seed, mango seed, cotton seed and mahua seeds. We also manufacture specialty ingredient products such as soya lecithin, mango oil, stearine, sal seed oil and high protein soyabean meal. We believe that the existing setup is such that we can switch over from processing of one type of oil to another type of oil with minimal down time. This gives us the flexibility to manufacture all types of oils depending on the market requirement and availability of raw materials at competitive rates. Our commitment to quality is strengthened by ISO certification of our manufacturing facilities at Betul and Solapur. These operational efficiencies enable us to optimize our costs and maximize the output and the same has been certified by the Soyabean Processors Association of India, the conferring of which was discontinuted in 2005, had presented our Company with the “Highest Capacity Utilisation Award” consecutively for the years 2002 to 2005. Using the capacities at optimum levels allows us to sustain the competition and enable us to achieve economies of scale.

Warehousing and logistics capabilities

We have a 48,000 square feet warehousing facility at Betul. The warehouse is strategically located on the route which leads to the nearby soya producing belt. The warehousing facility is independent of our private mandi activity and we also provide warehousing facility without purchasing the raw material from the farmers. This indirectly facilitates perennial supply of raw material. As the raw material is under our physical possession the quality, pilferage and damages are minimal.

As our plants are strategically located we have various logistic benefits. To further improve our operating efficiency we own a fleet of twenty four trucks which is used for delivery of the end products to the dealers/retailers at the desired location. Costs incurred due to transport of our products is reduced as we supply the diverse products, such as edible oils, de-oiled cakes and specialty products, to the same geographical area using the same railway rake. Given our extensive marketing network, we believe that we are better placed to service them efficiently and economically through our own fleet.

Wide consumer reach and strategic utilization of the distributor network

We market our products across seventeen states in India. Our edible oil distribution network comprises of seventeen dealers and two depots through whom we access more than 5000 retailers across India. Our wide distribution network and strong retail association have helped us to extend the reach of our consumer products across domestic. Our pan-India presence helps us in selling de-oiled cakes across India to more than 850 poultry farms directly. We export de-oiled cakes to Far East Asian countries such as Indonesia, Malaysia, Thailand, Vietnam, Korea, Japan and China and to countries which are members of the SAARC organisation. We also export soya lecithin, mango oil, sal oil and stearine predominantly to the European Union and Japan. We believe this wide network creates visibility for our brand thereby creating a recall value.

By the virtue of our wide distribution network, both domestically and internationally and our consistent interaction with the distributors, retailers and customers, we believe that we are better placed to understand the needs of our customers. We believe this wide network creates visibility for our brand thereby creating a recall value.

Our private mandi at Betul, Madhya Pradesh

We are one of the few players in the edible oil industry to have established our private mandi at Betul, Madhya Pradesh. Our private mandi license enables us to operate as a trader and warehouse-keeper. We believe that our private mandi is a critical link to our procurement channel for raw materials. Our private mandi helps us to procure farm produce directly from the farmers. Such procurement channel eliminates intermediaries and thereby ensures substantial cost reduction for us. It provides a transparent platform to the farmers with assured off take and proper pricing of their product. We also propose to set up two additional mandis at Satna and Solapur. For further details, please see “Object of the Issue” on page 69 of the Draft Red Herring Prospectus.

Experienced Board and executive management team

We believe that our qualified and experienced management has substantially contributed to the growth of our business operations. The family of our Promoters has been associated with the elible oil industry for almost three decades. Our executive directors have significant experience in the edible oil industry of over two decades. They, along with our senior management team, have helped us to leverage our existing in-house production skills, relationships with our customers and market visibility to further enhance our existing strength in the edible oil industry and to expand our product offerings and geographic presence, both within India and abroad. We believe that the experience of our senior management team has translated into our product quality, increased profitability and improved margins which give us a competitive edge.

Our Strategies

Increase in manufacturing capacities in line with demand

Our strategy includes establishment of plants at strategic locations and levels which enables us to procure raw material from the nearby areas and cater in the nearby regions, thereby ensuring perennial supply of raw material and having logistic benefits in distribution vis-à-vis other players.

In order to ensure that we are in a position to complement demand and to cater to the dynamics of the region, we are in the process of setting up a new solvent extraction plant of capacity 180,000 TPA (600 TPD) and refinery with a capacity of 45,000 TPA (150 TPD) at Tirupur, Tamil Nadu. Tirupur and its nearby areas are part of the largest poultry farming belt in India (Source: http://mofpi.nic.in). We believe that our presence in the local area will help us to help us to strengthen our relationship with the poultry farmers who are our customers in that area and also overcome any logistical challenges.

As a part of our forward integration strategy, we intend to setup a 45,000 TPA (150 TPD) soya flour and 45,000 TPA (150 TPD) soya nuggets unit at our existing unit at Satna.

We intend to increase our existing capacities at Solapur Unit by expanding our edible oil refinery from 36,000 TPA (120 TPD) to 90,000 TPA (300 TPD) and our cattle feed unit from 36,000 TPA (120 TPD) to 90,000 TPA (300 TPD). We intend to continue enhancement of our capacities to meet the increasing demand of our products.

Increasing retail sales

We intend to reduce our dependence on the bulk sales market by further expanding our share in the retail segment. Our retail sales increased from around 23.72 % in FY 2008 to and 40.83 % during the seven month period ended January 31, 2010 of our total sales in the respective periods. We intend to leverage our established and registered brands that include Saras and Siddha Gold (in edible oil), Siddha (hybrid seeds) and Poushtik (cattle feed). We intend to further penetrate further into rural areas by increasing our distribution channel. We believe that our distribution network and existing customer base would aid the distribution of soya flour and soya nuggets.

We propose to leverage our strong retailing network and spread our area of operations. We propose to engage more dealers by expanding our marketing and distribution network and supplement the effort by continuous brand building activities. This will be adequately backed by our brand building and promotional activities through various incentives and promotional schemes for our dealers and retailers.

The growth of retail sales in edible oil is as follows:

12 month period of Financial Year 2008 7 month period from July 2009 to January 2010

Brand building and promotion

In the retail segment we market our edible oil products primarily under our brand “Saras” and “Siddha Gold”. We also market our products under the brands “Siddha” (for seeds) and “Poushtik” (for animal feeds). In concord with our endeavor to promote and increase retail sales, we have registered these brands. The brand building exercise is a part of that initiative that we believe would enable greater visibility for our products on the retail shelf and will enhance the recall value in the minds of customers thereby leading to increased demand for our products.

Introducing speciality incredients and value added products to our products portfolio

We propose to strategically move along the production chain and diversify our product offerings beyond soybean meal and edible oils. We have varied oil and derivative products in our product basket allowing the customer to choose from them. We intend to further diversify our product base and include more value added products which yield better margins such as rice bran oil and safflower oil.

Considering the change in the lifestyle patterns and growing demand of high protein soya products, we are setting up soya flour and soya nuggets plant. This plant will be an extension of the soybean solvent extraction plant. De-hulled soybean seed would be used in soybean solvent extraction and the resultant de-oiled cake would be used to prepare soya flour. A further extension in the value chain would be soya nuggets which would be prepared from soya flour, which is proposed to be sold under brand extensions of our existing brands.

Buying railway rake to further strengthen our logistics

We intend to acquire a railway rake of wagons to ensure flexibility in distribution of our products. Our Company has received a quotation from Cimmco Limited for one railway rake comprising of forty three wagons. For further details, please see “Objects of the Issue” on page 69 of the Draft Red Herring Prospectus. The wagons would greatly assist us in transportation of our goods across the country at our convenience. It would, consequently, greatly decrease our dependence on availability of railway wagons at the disposal of the Indian Railways and ensure smooth and timely delivery of poultry feed.

SUMMARY FINANCIAL INFORMATION

The following tables set forth the summary financial information derived from the restated audited financial statements of our Company for the seven month period ended January 31, 2010 and for the year ended June 30, 2009, 2008, 2007, 2006 and 2005 and prepared in accordance with Indian GAAP and the Companies Act and restated in accordance with the SEBI ICDR Regulations. The restated summary financial information presented below should be read in conjunction with the restated financial information included in the Draft Red Herring Prospectus, the notes thereto and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 229 of the Draft Red Herring prospectus.

RESTATED STANDALONE SUMMARY STATEMENTS OF ASSETS & LIABILITIES

(Rs. in Millions) Particulars As on As on As on As on As on As on January 31, June 30, June 30, June 30, June 30, June 30, 2010 2009 2008 2007 2006 2005 A) Fixed Assets Gross Block 919.23 910.13 866.18 829.92 381.79 170.40 Less: Depreciation 215.25 189.77 146.17 106.05 85.98 75.10 Net Block 703.98 720.36 720.02 723.87 295.81 95.30 Capital Work in Progress 228.61 85.94 14.56 - - - Less: Revaluation Reserve 392.69 404.44 424.49 444.54 20.75 22.31 Net Block (after adjustments of Revaluation Reserves) 539.89 401.86 310.09 279.33 275.06 72.99

B) Investments 18.00 18.10 21.60 3.10 1.00 0.05

C) Current assets, loans and advances Inventory 967.06 796.35 785.89 509.69 407.73 151.73 Receivables 493.44 430.60 386.85 136.59 90.59 119.46 Cash and Bank Balances 51.70 34.96 27.11 31.14 22.08 9.47 Loans and advances 115.26 52.88 150.96 118.35 91.80 45.51 Total Current Assets, Loans & Advances 1,627.46 1,314.79 1,350.81 795.77 612.19 326.18

D) Deferred Tax Assets 0.50 0.50 0.42 0.05 0.05 0.04

Total Assets (A+B+C+D) 2,185.85 1,735.25 1,682.92 1,078.25 888.31 399.25

E) Liabilities, Provisions and Loan funds: Secured Loans 1,123.31 792.69 748.67 578.72 271.03 153.10 Unsecured Loans - 112.13 344.83 111.63 45.50 46.07 Deferred Tax Liabilities 87.89 64.34 63.02 57.69 22.40 15.84 Capital Reserve 2.34 - - - - -

Current liabilities & provisions Current Liabilities 120.19 89.67 42.98 44.71 365.29 58.17 Provisions 45.88 6.92 9.70 6.81 5.27 3.10 Total liabilities, provisions and loan funds 1,379.61 1,065.76 1,209.20 799.56 709.49 276.27

Net worth (A+B+C+D-E) 806.24 669.49 473.73 278.69 178.82 122.98

Net worth represented by Shareholder funds:-

Share Capital 67.00 67.00 67.00 62.00 62.00 62.00 Share application money - - - 50.00 50.00 - Reserves and Surplus 1,131.93 1,006.93 831.22 612.54 87.56 83.29 Less: Revaluation Reserves 392.69 404.44 424.49 444.54 20.75 22.31 Reserves (Net of Revaluation Reserves) 739.24 602.49 406.73 168.01 66.82 60.98 Less: Miscellaneous Expenditure (To the extent not written off) - - - 1.32 - - Net Worth 806.24 669.49 473.73 278.69 178.82 122.98

RESTATED STANDALONE SUMMARY STATEMENT OF PROFIT & LOSS

(Rs. in Millions) Particulars As on As on As on June As on As on As on January June 30, 30, 2008 June 30, June 30, June 30, 31, 2010 2009 2007 2006 2005 INCOME GROSS SALES a. Of Products Manufactured by the company 2,162.65 3,086.36 4,173.54 2,870.53 1,447.93 1,087.68 Domestic Sales ------Direct Exports - - 15.91 72.68 40.94 99.08 b. Of Products traded in by the company 1,787.85 2,299.04 635.59 1,097.11 993.30 379.42

TOTAL GROSS SALES 3,950.50 5,385.39 4,825.03 4,040.32 2,482.17 1,566.18 c. Excise Duty - 0.62 1.43 0.65 0.40 6.99

NET SALES 3,950.50 5,384.77 4,823.60 4,039.67 2,481.77 1,559.19

Other Operating Income 0.16 12.91 47.33 35.61 2.02 3.96 Profit/Loss On Commodity Hedging Transactions 15.24 1.42 (21.67) 2.18 2.75 - Income From Wind Mill Energy Project 4.85 9.47 8.06 21.04 3.39 - Other Income 5.44 9.12 8.77 2.04 1.11 0.88 Increase/Decrease In Inventory (60.85) 84.17 136.56 81.47 204.76 14.01

Total Income 3,915.34 5,501.86 5,002.66 4,182.02 2,695.80 1,578.04

EXPENDITURE Consumption Of Raw Materials 1,482.72 2,497.29 3,458.16 2,411.15 1,376.90 1,014.40 Purchase Of Trading Goods 1,914.26 2,259.43 476.68 1,239.54 982.41 376.84 Manufacturing Expenses 96.04 168.55 257.13 215.35 159.44 89.84 Employees Remuneration And Benefits 13.69 22.44 117.40 13.85 11.48 9.78 Administration Expenses 23.82 33.91 70.94 21.92 15.25 10.61 Selling And Distribution Expenses 94.69 217.80 279.21 69.63 93.35 43.34 Total expenditure 3,625.22 5,199.43 4,659.51 3,971.43 2,638.83 1,544.83

Profit before interest, tax, extraordinary items 290.12 302.43 343.15 210.59 56.98 33.21

Interest & Financial Charges 72.10 106.80 118.94 52.57 32.57 13.68 Depreciation and Amortisation 13.92 23.56 20.07 20.22 9.31 6.50 Miscellaneous Expenditure W/off - - 1.32 - - -

Net Profit before tax and extraordinary items 204.11 172.06 202.83 137.80 15.09 13.03

Provision for taxation Current Tax 43.80 7.61 2.98 5.18 2.20 0.22 Wealth Tax - 0.05 0.05 - - - Deferred Tax 23.55 1.25 4.96 35.29 6.55 0.80 Fringe Benefit Tax - 0.54 0.41 0.74 0.40 0.06

Net Profit after tax and before extraordinary items 136.76 162.62 194.43 96.59 5.95 11.96 41

Particulars As on As on As on June As on As on As on January June 30, 30, 2008 June 30, June 30, June 30, 31, 2010 2009 2007 2006 2005

Add: Extraordinary items - 33.50 - 4.60 0.42 29.17

Net Profit after extraordinary items and before prior period expenses 136.76 196.12 194.43 101.19 6.37 41.12

Less: Adjustment for previous year income tax - 0.37 0.71 - 0.53 (0.18)

Net Profit after prior period expenses 136.76 195.76 193.72 101.19 5.84 41.30 Add: Balance brought forward from last year 557.49 361.73 168.01 66.82 60.98 71.79 Less: Amount Apportioned for issue of bonus shares - - - - - 37.10 Less: Dividend ------Less: Transfer to Deferred Tax - - - - - 15.01

Balance carried over to balance sheet 694.24 557.49 361.73 168.01 66.82 60.98

RESTATED STANDALONE STATEMENTS OF CASH FLOW (Rs. in Millions) Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 30, 31, 2010 2009 2008 2007 2006 2005 A. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit After Tax as per P&L A/c 136.76 195.76 193.72 101.19 5.84 41.30 Adjustments for : Depreciation 13.92 23.56 20.07 20.22 9.31 6.50 Interest and financial charge 72.10 106.80 118.94 52.57 32.57 13.68 Bad Debts written off - 68.42 32.98 - - - DEFC Licences Claims Written off - 0.09 33.63 - - - Loss on sale of fixed assets 0.54 - - 0.08 - - Deferred Revenue Expenditure W/ off - - 1.32 - - - Deferred Tax 23.55 1.25 4.96 35.29 6.55 0.80 Provision for Retirement Benefits as per actuarial valuation 0.75 (0.31) 0.06 (0.99) (0.07) 2.33 Total 110.86 199.81 211.95 107.18 48.36 23.31

Less : Interest Income 0.97 5.86 1.74 0.61 0.29 0.13 Insurance Claims 3.60 0.17 6.52 0.15 0.36 0.35 Dividends 0.08 0.08 0.16 - 0.01 0.01 Profit on Sale of units in Mutual Fund - - - 0.09 - - Lease Rent 0.02 0.07 0.12 0.12 0.11 - Profit on sale of fixed asset - - - - - 0.09 Balances written off - 0.07 - - - - Total 4.67 6.24 8.54 0.96 0.77 0.58

Operating Profit Before changes in Working Capital 242.95 389.32 397.13 207.40 53.43 64.02

Increase/ Decrease in : Sundry Debtors (62.84) (112.17) (283.25) (46.00) 28.88 220.22 Inventory (170.71) (10.46) (276.20) (101.97) (255.99) (18.87) Loans, advances and other current assets (62.38) 97.99 (66.23) (26.55) (46.29) (20.13) Current liabilities 68.72 44.30 1.09 (318.05) 309.36 (187.83) Miscellaneous Expenditure – Pre Launching Expenses - - - (1.32) - - Total Adjustments (227.22) 19.66 (624.58) (493.88) 35.95 (6.61)

Cash Generated From Operating Activities (A) 15.73 408.98 (227.45) (286.48) 89.39 57.41

B. CASH FLOW FROM INVESTING ACTIVITIES

Investment in fixed assets (153.00) (115.33) (50.83) (24.72) (211.39) (13.54) Investments in Shares 0.10 3.50 (18.50) (2.10) (0.95) - Insurance claims received 3.60 0.17 6.52 0.15 0.36 0.35 Sale of fixed asset 0.50 - - 0.15 - 0.45 Lease Rent 0.02 0.07 0.12 0.12 0.11 - Dividends 0.08 0.08 0.16 - 0.01 0.01 Interest Received 0.97 5.86 1.74 0.61 0.29 0.13 Profit on sale of units in Mutual Funds - - - 0.09 - - 43

Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 30, 31, 2010 2009 2008 2007 2006 2005

Net Cash from/(used in) investing activities (B) (147.73) (105.65) (60.79) (25.71) (211.57) (12.60)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from secured borrowings 330.62 44.02 169.95 307.69 117.93 (13.74) Proceeds from Unsecured borrowings (112.13) (232.69) 233.20 66.13 (0.57) (9.02) Interest paid (72.10) (106.80) (118.94) (52.57) (32.57) (13.68) Receipt of Subsidy against Warehouse 2.34 - - - - - Advance against share application money - - - - 50.00 -

Net Cash from/(used in) financing activities (C) 148.73 (295.48) 284.22 321.25 134.79 (36.44)

Net increase in cash and cash equivalents (A+B+C) 16.73 7.85 (4.03) 9.06 12.61 8.37 Opening cash and cash equivalents 34.96 27.11 31.14 22.08 9.47 1.10 Closing cash and cash equivalents 51.70 34.96 27.11 31.14 22.08 9.47

THE ISSUE

Issue in terms of the Draft Red Herring Prospectus 12,200,000 Equity Shares* Of which: 1. Qualified Institutional Buyers Portion Not more than 6,100,000 Equity Shares. Of which Anchor Investor Portion** Upto 1,830,000 Equity Shares Net QIB Portion of which: Not more than 4,270,000 Equity Shares Available for Allocation to Mutual Funds only 213,500 Equity Shares Balance for all QIBs (including Mutual Funds) 4,056,500 Equity Shares 2. Non Institutional Portion Not less than 1,830,000 Equity Shares 3. Retail Portion Not less than 4,270,000 Equity Shares Equity Shares outstanding prior to the Issue 28,475,000 Equity Shares Equity Shares outstanding after the Issue 40,675,000 Equity Shares

For information on the use of the Issue proceeds, please see “Objects of the Issue” beginning on page 69 of the Draft Red Herring Prospectus.

*Our Company is considering a Pre-IPO Placement of upto 1,827,875 Equity Shares and aggregating upto Rs. 150 million with certain investors. The Pre-IPO Placement is at the discretion of our Company. If undertaken, our Company will complete the issuance of such Equity Shares prior to the filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the number of Equity Shares in the Issue will be reduced to the extent of the Equity Shares proposed to be allotted in the Pre-IPO Placement, subject to the Issue being atleast 25% of the fully diluted post-Issue paid up capital of our Company.

**Our Company may allocate upto 30% of the QIB Portion to Anchor Investors on a discretionary basis. One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to Anchor Investors. For further details, see “Issue Procedure” on page 297 of the Draft Red Herring Prospectus.

Allocation to all categories, except Anchor Investor Portion, if any, shall be made on a proportionate basis subject to valid Bids received at or above the Issue Price. Under subscription, if any, in any category, would be allowed to be met with spill over from any other category at the sole discretion of our Company, in consultation with the Book Running Lead Manager.

GENERAL INFORMATION

Registered Office of our Company Kosmi Industrial Area, Betul – 460001, Madhya Pradesh, India. Tel: +91-7141 239071, 239011 Fax: +91-7141-239131 E-mail: [email protected] Website: www.betuloil.com Registration Number: 10-01723 Corporate Identification Number: U15141MP1981PLC001723

Corporate Office of our Company 810 A, Maker Chambers V, Nariman Point, Mumbai – 400021, Maharashtra, India. Tel: +91-22 2282 8936 Fax: +91-22 2282 8935

For details in changes in our registered office, please refer to section titled ‘History and Corporate Structure’ on page 143 of the Draft Red Herring Prospectus.

Address of Registrar of Companies

Our Company is registered with the Registrar of Companies, Gwalior, Madhya Pradesh & Chhattisgarh, situated at the following address:

Registrar of Companies, 3rd Floor, 'A' Block, Sanjay Complex, Jayendra Ganj, Gwalior. Tel: +91 751 2321 907 Fax: +91 751 2331 853

Board of Directors

The Board of Directors comprises of: Sr. No. Name, Address and DIN Nationality Age (in Designation years) 1. Mr. Ganesh Kumar Gupta Indian 57 Non-Executive Chairman

Address: Flat-1, Block-1, Colaba Land CHS Limited, Sorab Bharucha Road, Colaba, Mumbai - 400005, Maharashtra, India

DIN: 00024567 2. Mr. Shreans Daga Indian 36 Managing Director

Address: Daga House, Kothi Bazar, Betul - 460001, Madhya Pradesh, India

DIN: 01669132 3. Mr. Paras Kumar Daga Indian 59 Whole Time Director

Address: Ward number 7, Kidwai Ward, Betul - 460001, Madhya Pradesh, India

Sr. No. Name, Address and DIN Nationality Age (in Designation years) DIN: 01958825 4. Mr. Niraj Daga Indian 34 Whole Time Director

Address: Daga House, Kothi Bazar, Betul - 460001, Madhya Pradesh, India

DIN: 01411335 5. Mr. Ramesh Kotecha British 56 Independent Director

Address: 801 Sangeet Sarita, Off Bhula Bhai Desai Road, Breach Candy, Mumbai - 400026, Maharashtra, India

DIN: 01983937 6. Mr. Suresh Jain Indian 50 Independent Director

Address: 402 Bhima, Sir Pochkhanwala Road Worli, Mumbai - 400025, Maharashtra, India

DIN: 01142300

For further details of our Chairman, Managing Director and Directors, please see “Our Management” on page 148 of the Draft Red Herring Prospectus.

Company Secretary and Compliance Officer

Mr. Abhinaya Kulkarni Betul Oil Limited 810 A, Maker Chambers V, Nariman Point, Mumbai – 400021, Maharshtra, India . Tel: +91 22 66301737 Fax: +91 22 2282 8935 E-mail: [email protected]

Investors can contact the Compliance Officer and /or the Registrar to the Issue and / or the Book Running Lead Manager, i.e, Anand Rathi Advisors Limited, in case of any pre-Issue or post-Issue related problems, such as non-receipt of letters of allocation, credit of allotted shares in the respective beneficiary account or refund orders, etc. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue with a copy to the relevant SCSB giving full details such as name, address of the applicant, number of Equity Shares applied for, Bid Amount blocked, ASBA Account number and the designated branch of the relevant SCSB where the ASBA Form was submitted by the ASBA Bidder.

Book Running Lead Manager

Anand Rathi Advisors Limited 11th Floor, Times Tower, Kamala Mills, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013, Maharshtra, India. Tel: +91 22 4047 7000 Fax: +91 22 4047 7070 Website: www.rathi.com Email: [email protected] Investor greivance email: [email protected] 47

SEBI Registration number: MB / INM000010478* Contact Person: Mr. Rajesh Biyani / Mr. Mukesh Garg * On May 13, 2010, the BRLM has applied for renewal of its certificate of registration under the category I of Securities and Exchange Board of India (Merchant Banking) Regulations, 1992.

Registrar to the Issue

Link Intime India Private Limited C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (West), Mumbai - 400 078, Maharshtra, India. Tel: +91 22 2596 0320 Toll Free no. 1-800-22-0320 Fax: +91 22 2596 0329 Website: www.linkintime.co.in E-mail: [email protected] SEBI Registration Number: INR000004058 Contact person: Mr. Sachin Achar

Legal Counsel to the Issue

Khaitan & Co One Indiabulls Centre 13th Floor 841 Senapati Bapat Marg Elphinstone Road Mumbai - 400 013 Maharshtra, India Tel: +91 22 6636 5000 Fax: +91 22 6636 5050 Email: [email protected]

Statutory Auditors

Bhutoria Ganesan & Co. Chartered Accountants Firm Registration Number: 004465C Membership Number: 026164 Post Box No. 1142 S-9, Thadaram Complex, 209-A, Zone-1 M.P. Nagar, Bhopal – 462011 Madhya Pradesh, India Tel: +91 755 257 2265 Fax: +91 755 257 4367 Email: [email protected]

Bankers to the Issue and Escrow Collection Banks

[●]

The Bankers to the Issue shall be appointed prior to filing of the Red Herring Prospectus with the RoC.

Refund Bank

[●]

The Refund Bank shall be appointed prior to filing of the Red Herring Prospectus with the RoC. Syndicate Members

[●]

The Syndicate Members will be appointed prior to filing the Red Herring Prospectus with the RoC.

Self Certified Syndicate Banks

The list of banks that have been notified by SEBI to act as SCSBs for the ASBA process are available at www.sebi.gov.in. Details relating to the Designated Branches of SCSBs collecting the ASBA Bid cum Application Forms are available at the abovementioned link.

Brokers to the Issue

All the members of the recognised stock exchanges would be eligible to act as brokers to the Issue.

Bankers to our Company

State Bank of India IDBI Bank Limited Industrial Finance Branch IDBI Tower "The Arcade", 2nd floor World Trade Centre Cuffe Parade, Colaba Cuffe Parade Mumbai 400 005 Mumbai 400 005 Maharashtra, India Maharashtra, India Tel: +91 22 2215 5231 Tel: +91 22 66553355 Fax: +91 22 2216 0918 Fax: +91 22 22181400 Email: [email protected] Email: [email protected] Website: www.sbi.co.in Website : www.idbi.co.in Contact Person: Mr. Bhushan Mahajan Contact Person: Mr. Ajay Choudhary Barclays Bank Plc The Greater Bombay Co-Op Bank Limited 601/603 Ceejay House ‘GBCB’ House Shivsagar Estate Bhuleshar Dr Annie Besant Road Mumbai 400 002 Worli, Mumbai 400 018 Maharashtra, India Maharashtra, India Tel: +91 22 2242 8733 Tel: +91 22 6719 6400 Fax: +91 22 2241 1213 Fax: +91 22 6719 6767 Email: [email protected] Email: [email protected] Website: www. greaterbank.com Website : www.barclays.in Contact Person: Mr. Geetanjali Tipnis Contact Person: Mr. Somit Bhandari Bank of Baroda Gokul Trade Centre Station Road Betul 460001 Madhya Pradesh, India Tel: +91 07141 231 456 Fax: +91 07141 231 456 Email: [email protected] Website: www.bankofbaroda.com Contact Person: Mr. Mani

Inter se allocation of responsibilities

Since Anand Rathi Advisors Limited is the sole Book Running Lead Manager to the Issue, all the responsibilities of the Issue will be managed by them.

Credit Rating

As this is an issue of Equity Shares, credit rating is not required.

IPO Grading

The Issue has been graded by [●], a SEBI registered credit rating agency, as [●] indicating [●] fundamentals. The IPO Grading is assigned on a five point scale from 1 to 5, with IPO grade 5/5 indicating strong fundamentals and IPO Grade 1/5 indicating poor fundamentals. A copy of the press release provided by [●], furnishing the rationale for its grading will be attached as Annexure I at the time of filing the Red Herring Prospectus with the RoC and will be made available for inspection at out Registered Office from 10.00 a.m. to 4.00 p.m. on Business Days during the Bidding / Issue Period.

Experts

Except as disclosed in the sections “General Information”, “Financial Statements” and “Other Regulatory and Statutory Disclosures” beginning on page 46, 177 and 281 respectively of the Draft Red Herring Prospectus, our Company has not obtained any other expert opinion.

Trustees

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

Monitoring Agency

There is no requirement to appoint a Monitoring Agency for the Issue in terms of Regulation 16 of the SEBI ICDR Regulations.

Appraising Agency

None of the objects of this Issue have been appraised by an independent agency.

Book Building Process

Book building, with reference to the Issue, refers to the process of collection of Bids on the basis of the Red Herring Prospectus within the Price Band.

The Issue Price will be finalized after the Bid / Issue Closing Date. The principal parties involved in the Book Building Process are:

• Our Company, • The Book Running Lead Manager in this case being Anand Rathi Advisors Limited, • The Syndicate Member(s) who are intermediaries registered with SEBI/ registered as brokers with BSE/NSE and eligible to act as Underwriters. The Syndicate Member will be appointed by the Book Running Lead Manager; • The Registrar to the Issue; • Self Certified Syndicate Banks through whom ASBA Bidders would subscribe in this Issue; and • Escrow Collection Bank(s).

The SEBI ICDR Regulations have permitted the Issue of securities to the public through the Book Building Process, wherein not more than 50% of the Issue shall be allotted on a proportionate basis to QIBs, of which 5% (excluding Anchor Investor Portion) shall be reserved for Mutual Funds. Upto 30% of the QIB Portion shall be available for allocation to Anchor Investors at the Anchor Investor Issue Price on a discretionary basis and one-third of the Anchor Investor Portion shall be available for allocation to domestic Mutual Funds. Further, not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue 50

Price. Under-subscription, if any, in any category, would be allowed to be met with spill-over from any other category or combination of categories at the discretion of our Company, in consultation with the BRLM and the Designated Stock Exchange. Our Company will comply with the SEBI ICDR Regulations for this Issue. In this regard, our Company has appointed the Book Running Lead Manager to procure subscriptions to the Issue.

In accordance with the SEBI ICDR Regulations, QIBs bidding in the QIBs portion are not allowed to withdraw their Bid(s) after the Bid/Issue Closing Date. Anchor Investors cannot withdraw their Bids after the Anchor Investor Bid/Issue Period. Allocation to the Anchor Investors will be on a discretionary basis. For further details, please refer “Terms of the Issue” on page 294 of the Draft Red Herring Prospectus.

All the Bidders have the option to submit their Bids under the “ASBA Process”, which would entail blocking of funds in the investor’s bank account rather than immediate transfer of funds to the respective Escrow Accounts.

We will comply with the SEBI ICDR Regulations and any other ancillary directions issued by SEBI for this Issue. In this regard, we have appointed Anand Rathi Advisors Limited as the Book Running Lead Manager to manage the Issue and procure subscriptions to the Issue.

The process of Book Building under the SEBI ICDR Regulations is subject to change from time to time and the investors are advised to make their own judgment about investment through this process prior to making a Bid or application in the Issue.

Investors are advised to make their own judgment about investment through the ASBA process prior to submitting a ASBA Bid cum Application Form to a SCSB.

Illustration of Book Building and Price Discovery Process (Investors should note that this example is solely for illustrative purposes and is not specific to the Issue)

Bidders can bid at any price within the price band. For instance, assume a price band of Rs. 20 to Rs. 24 per equity share, issue size of 3,000 equity shares and receipt of five bids from bidders, details of which are shown in the table below. A graphical representation of the consolidated demand and price would be made available at the bidding centres during the bidding period. The illustrative book below shows the demand for the equity shares of the issuer company at various prices and is collated from bids received from various investors.

Bid Quantity Bid Price (Rs.) Cumulative Quantity Subscription 500 24 500 16.67% 1,000 23 1,500 50.00% 1,500 22 3,000 100.00% 2,000 21 5,000 166.67% 2,500 20 7,500 250.00%

The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the desired number of equity shares is the price at which the book cuts off, i.e., Rs. 22 in the above example. The issuer, in consultation with the BRLM will finalise the Issue Price at or below such cut-off price, i.e., at or below Rs. 22. All bids at or above this Issue Price and cut-off bids are valid bids and are considered for allocation in the respective categories.

Steps to be taken by the Bidders for Bidding

1. Check eligibility for making a Bid (see “Issue Procedure – Who Can Bid?” on page 298 of the Draft Red Herring Prospectus);

2. Ensure that you have a demat account and the demat account details are correctly mentioned in the Bid cum Application Form and the ASBA Bid cum Application Form, as the case may be.

3. Except for Bids on behalf of the Central or State Government, residents of Sikkim and the officials appointed by the courts, for Bids of all values, ensure that you have mentioned your PAN allotted under the I.T. Act in the Bid

cum Application Form or the ASBA Bid cum Application Form (see “Issue Procedure – Other Instructions – PAN” on page 315 of the Draft Red Herring Prospectus):

4. Ensure that the Bid cum Application Form or ASBA Bid cum Application Form is duly completed as per instructions given in the Draft Red Herring Prospectus and in the Bid cum Application Form or ASBA Bid cum Application Form; and

5. Ensure the correctness of your demographic details (as defined in the “Issue Procedure-Bidders Depository Account and Bank Account Details” on page 311) given in the Bid cum Application Form or the ASBA Bid cum Application Form, as the case may be, with the details recorded with your Depository Participant.

6. Bids by QIBs (including Anchor Investors) will only have to be submitted to the BRLM and / or its affiliates or to the Syndicate Member(s), other than Bids by QIBs who Bid through the ASBA process who shall submit the Bids to the Designated Branch of the SCSBs; and

7. Bids by ASBA Bidders will have to be submitted to the Designated Branches of the SCSBs. ASBA Bidders should ensure that their bank accounts have adequate credit balance at the time of submission to the SCSB to ensure that the ASBA Bid cum Application Form is not rejected.

Withdrawal of the Issue

Our Company, in consultation with the Book Running Lead Manager, reserves the right not to proceed with the Issue at any time after the Bid Opening Date but before the Board meeting for Allotment, without assigning any reason therof. In such an event our Company would issue a public notice in the newspapers, in which the pre-issue advertisements were published, within two days of the closure of the Issue, providing reasons for not proceeding with the Issue. The BRLM, through the Registrar to the Issue, shall notify the SCSBs to unblock the bank accounts of the ASBA Bidders within one day of receipt of such notification. Our Company shall also promptly inform the Stock Exchanges on which the Equity Shares were proposed to be listed.

If our Company withdraws the Issue after the Bid Closing Date, our Company shall state the reasons thereof in a public notice within two days of the closure of the Issue. The public notice shall be issued in the same newspapers where the pre- issue advertisement had appeared. The Stock Exchanges shall also be informed of such withdrawal.

Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment, and (ii) the final RoC approval of the Prospectus after it is filed with the Stock Exchanges.

Bid/Issue Programme

BID / ISSUE OPENS ON [●]* BID / ISSUE CLOSES ON [●]

*Our Company may, in consultation with the Book Running Lead Manager, allocate upto 30% of the QIB Portion, to Anchor Investors on a discretionary basis, in accordance with the SEBI ICDR Regulations. Anchor Investors shall bid on the Anchor Investor Bidding Date, which shall be one Working Day prior to the Bid Opening Date. Our Company may consider closing the Bidding by QIB Bidders one Working Day prior to the Bid/Issue Closing Date subject to the Bid/Issue Period being for a minimum of three Working Days.

Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard Time) during the Bidding Period as mentioned above at the bidding centers mentioned in the Bid cum Application Form or, in case of Bids submitted through ASBA, the Designated Branches of the SCSBs, On the Bid/Issue Closing Date, Bids (excluding ASBA Bidders) shall be uploaded until until (i) 4.00 p.m. in case of Bids by QIB Bidders and Non-Institutional Bidders; and (ii) until 5.00 p.m or until such time as permitted by the BSE and NSE in case of Bids by Retail Individual Bidders. It is clarified that Bids not uploaded in the book, would be rejected. Bids by ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by the BSE and NSE.

In case of discrepancy of data between the Stock Exchanges and the Designated Branches of the SCSBs, the decision of the Registrar to the Issue, in consultation with the BRLM, our Company and the Designated Stock Exchange, based on the

physical / electronic records, as the case may be, of the ASBA Bid cum Application Forms shall be final and binding on all concerned. Further, the Registrar to the Issue may ask for rectified data from the SCSB.

Due to limitation of time available for uploading the Bids on the Bid/ Issue Closing Date, the Bidders are advised to submit their Bids one day prior to the Bid Closing Date and, in any case, no later than 1.00 p.m (Indian Standard Time) on the Bid Closing Date. Bidders are cautioned that in the event a large number of Bids are received on the Bid Closing Date, which may lead to some Bids not being uploaded due to lack of sufficient time to upload, such Bids that cannot be uploaded will not be considered for allocation in the Issue. If such Bids are not uploaded, our Company, the BRLM and the Syndicate Members shall not be responsible. Bids will be accepted only on working days, i.e. Monday to Friday (excluding any public holiday).

On the Bid/ Issue Closing Date, extension of time will be granted by the Stock Exchanges only for uploading the Bids received from Retail Individual Bidders, after taking into account the total number of Bids received upto the closure of timings for acceptance of Bid cum Application Forms and ASBA Bid cum Application Forms as stated herein and reported by the BRLM to the Stock Exchanges within half an hour of such closure.

Our Company, in consultation with the BRLM, reserves the right to revise the Price Band during the Bidding Period in accordance with the SEBI ICDR Regulations. The Cap Price shall be less than or equal to 120% of the Floor Price. Subject to compliance with the immediately preceding sentence, the Floor Price can be revised up or down to a maximum of 20% of the Floor Price as originally disclosed at least two working days prior to the the Bid /Issue Opening Date and the Cap Price will be revised accordingly.

In case of revision in the Price Band, the Bidding Period will be extended for three additional Working Days after revision of the Price Band subject to the Bidding Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bidding Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release, and also by indicating the change on the website of the BRLM and at the terminals of the members of the Syndicate. In the event of any revision in the Price Band, whether upwards or downwards, the minimum application size shall remain [•] Equity Shares subject to the Bid Amount payable on such minimum application being in the range of Rs. 5,000 to Rs. 7,000.

Underwriting Agreement

After the determination of the Issue Price and allocation of the Equity Shares, but prior to the filing of the Prospectus with the RoC, our Company will enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be offered through the Issue. It is proposed that pursuant to the terms of the Underwriting Agreement, the BRLM shall be responsible for bringing in the amount devolved in the event that the Syndicate Members do not fulfill their underwriting obligations. Pursuant to the terms of the Underwriting Agreement, the obligations of the Underwriters are several and are subject to certain conditions to closing, as specified therein. The Underwriting Agreement is dated [●], and has been approved by our Board of Directors / committee therof.

The Underwriters have indicated their intention to underwrite the following number of Equity Shares:

(This portion has been intentionally left blank and will be filled in before filing of the Prospectus with the RoC)

Name, Address, Telephone, Fax, and Email of the Indicated Number of Amount Underwriters Equity Shares to be Underwritten Underwritten (Rs. in Million) Anand Rathi Advisors Limited [●] [●] 11th Floor, Times Tower, Kamala Mills, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013, Maharshtra, India. [●] [●] [●]

The abovementioned would be finalized after the pricing and actual allocation of the Equity Shares is determined.

In the opinion of our Board of Directors (based on a certificate given by the Underwriters), the resources of the above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. The abovementioned Underwriters are registered with SEBI under Section 12 (1) of the SEBI Act or registered as brokers with the Stock Exchange(s).

Allocation among the Underwriters may not necessarily be in proportion to their underwriting commitments set forth in the table above. Notwithstanding the above table, the BRLM and the Syndicate Member(s) shall be responsible for ensuring payment with respect to Equity Shares allocated to investors procured by them. In the event of any default in payment, the respective Underwriter, in addition to other obligations defined in the underwriting agreement, will also be required to procure/subscribe to Equity Shares to the extent of the defaulted amount. If the Syndicate Member(s) fails to fulfill its underwriting obligations as set out in the Underwriting Agreement, the BRLM shall fulfill the underwriting obligations in accordance with the provisions of the Underwriting Agreement.

The underwriting arrangements mentioned above shall not apply to the subscriptions by the ASBA Bidders in this Issue. The underwriting agreement shall list out the role and obligations of each Syndicate Member.

CAPITAL STRUCTURE

Our share capital as of the date of the Draft Red Herring Prospectus is set forth below:

Sr. Particulars Nominal Value Aggregate value No. at Issue Price A Authorised Share Capital 50,000,000 Equity Shares of Rs. 10 each 500,000,000

B Issued, Subscribed and Paid Up Capital before the Issue 28,475,000 Equity Shares of Rs. 10 each 284,750,000

C Present Issue in terms of the Draft Red Herring Prospectus* 12,200,000 Equity Shares of Rs. 10 each 122,000,000 [●]

Which comprises: 1. Qualified Institutional Buyers portion – Not more than 6,100,000 Equity Shares of which the: Anchor Investor Portion is upto 1,830,000 Equity Shares** Net QIB Portion of not more than 4,270,000 Equity Shares, of which the: Mutual Fund Portion is 213,500 Equity Shares*** Other QIBs (including Mutual Funds) is 4,056,500 Equity Shares 2. Non-Institutional Portion – Not less than 1,830,000 Equity Shares 3. Retail Portion – Not less than 4,270,000 Equity Shares

D Paid Up Equity Capital after the Issue 40,675,000 Equity Shares of Rs 10 each 406,750,000 [●] E Share Premium Account Before the Issue Nil After the Issue [●]

*The Issue in terms of the Draft Red Herring Prospectus has been authorized by the Board of Directors pursuant to a resolution dated May 25, 2010 and by the shareholders pursuant to a resolution in an EGM held on June 1, 2010 under section 81(1A) of the Companies Act.

**Out of the QIB Portion, our Company may consider participation by Anchor Investors for upto 1,830,000 Equity Shares in accordance with the SEBI ICDR Regulations at the Anchor Investor Issue Price of Rs. [●] per Equity Share, out of which at least one third shall be allocated to domestic Mutual Funds.

*** The Mutual Fund Portion would be 5% of the Net QIB Portion.

For further details, please refer to the section titled “Issue Procedure” on page 297 of the Draft Red Herring Prospectus.

Our Company has no outstanding convertible instruments as on the date of the Draft Red Herring Prospectus

History of change in authorized Equity Share capital of our Company

Date of Shareholder’s Number of Face Value Cumulative Authorized Resolution Shares (in Rs.) number of share capital shares (in Rs.) Incorporation of our 3,500 1,000 3,500 3,500,000 Company on February 3, 1981 August 22, 1986 2,600 1,000 6,100 6,100,000 January 1, 1996 12,900 1,000 19,000 19,000,000 May 10, 2005 51,000 1,000 70,000 70,000,000 November 7, 2005 7,000,000 10 70,00,000 70,000,000 (subdivision of face value from Rs 1000 to Rs 10) February 10, 2006 6,000,000 10 13,000,000 130,000,000 June 1, 2010 37,000,000 10 50,000,000 500,000,000

Notes to Capital Structure

Share Capital History of our Company

1. Equity Share Capital history of our Company Date of No. of Face Issue Nature of Nature of Cumulative Cumulative Cumulative Allotment shares Value Price Consideration Allotment number of Paid up Share (Rs.) (Rs.) equity Capital Premium shares (Rs.) (Rs.) Incorporation 2 1,000 1,000 Cash Allotment to 22,000 - of our the initial Company on subscribers to February 3, the 1981 Memorandum March 20, 3,498 1,000 1,000 Cash Further 3,500 3,500,000 1981 allotment to - Original Promoters and others April 1, 1996 7,072 1,000 1,000 Cash Further 10,572 10,572,000 - allotment to Promoters and Promoter Group March 31, 2,428 1,000 1,000 Cash Further 13,000 13,000,000 1998 allotment to - Promoters and Promoter Group March 29, 2,500 1,000 1,000 Cash Further 15,500 15,500,000 - 2004 allotment to Promoters and Promoter Group May 10, 46,500 1,000 - Bonus Bonus issue in 62,000 62,000,000 - 2005* the ratio of 3:1

Date of No. of Face Issue Nature of Nature of Cumulative Cumulative Cumulative Allotment shares Value Price Consideration Allotment number of Paid up Share (Rs.) (Rs.) equity Capital Premium shares (Rs.) (Rs.) November 7, 6,200,000 10 - - Sub-division 6,200,000 62,000,000 - 2005 of face value from Rs. 1,000 per equity share to Rs. 10 per Equity Share December 10, 500,000 10 100 Cash Preferential 6,700,000 67,000,000 45,000,000 2007** allotment to Aventis Biofeeds Private Limited June 1, 21,775,000 10 - Bonus Bonus issue in 28,475,000 284,750,000 - 2010*** the ratio of 3.25:1 Total 28,475,000 284,750,000

* 46,500 equity shares were allotted as bonus shares by capitalizing Rs. 46,500,000 from general reserve and profit and loss account.

**Pursuant to certificate received from ASA & Associates, Company Secretaries, on December 10, 2007, preferential issue of Equity Shares have been made in accordance with the requirements of the Companies Act read with the Unlisted Public Companies (Preferential Allotment) Rules, 2003.

***21,775,000 Equity Shares were allotted as bonus shares by capitalizing Rs. 45,000,000 from share premium account and Rs. 172,750,000 from profit and loss account.

2. Equity shares issued for consideration other than cash

As on the date of the DRHP, we have not issued any equity shares for consideration other than cash except the following:

Date of No. ofshares Face Issue Reasons for of Allotment Whether any Allotment Value Price benefits have (Rs.) (Rs.) accrued May 10, 2005 46,500 1,000 Nil Bonus issue of equity shares to the existing Nil shareholders of our Company in the ratio of 3:1 June 1, 2010 21,775,000 10 Nil Bonus issue of Equity Shares to the Nil existing shareholders of our Company in the ratio of 3.25:1

3. Our Company has not issued or allotted any Equity Shares in terms of scheme approved under sections 391-394 of the Companies Act.

4. Since incorporation, our Company has revalued its fixed assets twice on March 31, 1995 and June 30, 2007. However, there have been no issuances of Equity Shares from the revaluation reserves.

5. Our Company has not issued any Equity Shares at a price less than the Issue Price in the last one year preceding the date of filing of the Draft Red Herring Prospectus. 57

6. Promoters Contribution and Lock-in

A. History of equity shares held by the Promoters

The equity shares held by the Promoters were acquired/ allotted in the following manner:

Mr. Shreans Daga Sr. Date of Allotment Number Face Issue/ Consideration % of % of Nature of the No. Allotment/ / Transfer of equity Value Acquisition pre- post transaction transfer shares (Rs.) Price per Issue Issue (Cash, Equity Capital Capital consideration Share (Rs.) other than cash) 1 April 1, Transfer 30 1,000 1,000 30,000 0.01 0.01 Cash 1992 2 September Transfer 58 1,000 2,645 153,410 0.02 0.01 Cash 24,1994 3 September Transfer 145 1,000 2,300 333,500 0.05 0.04 Cash 28, 1995 4 April 1, Allotment 575 1,000 1,000 575,000 0.20 0.14 Cash 1996 5 March 31, Allotment 202 1,000 1,000 202,000 0.07 0.05 Cash 1998 6 February Transfer 50 1,000 3,558 177,900 0.02 0.01 Cash 28, 1999 7 March 29, Allotment 300 1,000 1,000 300,000 0.11 0.07 Cash 2004 8 May 10, Bonus 4,080 1,000 - - 1.43 1.00 Bonus shares 2005 Issue 9 November Sub- 544,000 10 - - 1.91 1.34 Sub-division 7, 2005 division of face value from Rs. 1,000 per Equity Share to Rs. 10 per Equity Share 10 December Transfer 2,000 10 12.5 25,000 0.01 0.00 Cash 15, 2009

11 June 1, Bonus 1,774,500 10 - - 6.23 4.36 Bonus shares 2010 Issue

Total 2,320,500 8.15 5.70

Mr. Varun Daga Sr. Date of Allotment Number Face Issue/ Consideration % of % of Nature of the No. Allotment/ / Transfer of equity Value Acquisition pre- post transaction transfer shares (Rs.) Price per Issue Issue (Cash, Equity Capital Capital consideration Share (Rs.) other than cash) 1 April 1, Transfer 30 1,000 1,000 30,000 0.01 0.01 Cash 1992 2 September Transfer 145 1,000 2,300 333,500 0.05 0.04 Cash 28, 1995 3 April 1, Allotment 633 1,000 1,000 633,000 0.22 0.16 Cash 1996 4 March 31, Allotment 203 1,000 1,000 203,000 0.07 0.05 Cash 58

1998 5 February Transfer 33 1,000 3,558 117,414 0.01 0.01 Cash 28, 1999 6 March 29, Allotment 300 1,000 1,000 300,000 0.11 0.07 Cash 2004 7 May 10, Bonus 4,032 1,000 - - 1.42 0.99 Bonus shares 2005 Issue 8 November Sub- 537,600 10 - - 1.89 1.32 Sub-division 7, 2005 division of face value from Rs 1,000 per Equity Share to Rs 10 per Equity Share 9 June 1, Bonus 1,747,200 10 - - 6.14 4.30 Bonus shares 2010 Issue

Total 2,284,800 8.02 5.62

Mrs. Kanchan Daga Sr. Date of Allotment Number Face Issue/ Consideration % of % of Nature of the No. Allotment/ / Transfer of equity Value Acquisition pre- post transaction transfer shares (Rs.) Price per Issue Issue (Cash, Equity Capital Capital consideration Share (Rs.) other than cash) 1 April 1, Transfer 30 1,000 1,000 30,000 0.01 0.01 Cash 1992

2 September Transfer 145 1,000 2,300 333,500 0.05 0.04 Cash 28, 1995 3 April 1, Allotment 575 1,000 1,000 575,000 0.20 0.14 Cash 1996 4 March 31, Allotment 202 1,000 1,000 202,000 0.07 0.05 Cash 1998 5 February Transfer 105 1,000 3,558 373,590 0.04 0.03 Cash 28, 1999 6 March 29, Allotment 232 1,000 1,000 232,000 0.08 0.06 Cash 2004 7 May 10, Bonus 3,867 1,000 - - 1.36 0.95 Bonus shares 2005 Issue 8 November Sub - 515,600 10 - - 1.81 1.27 Sub-division 7, 2005 division of face value from Rs 1,000 per Equity Share to Rs 10 per Equity Share 9 June 1, Bonus 1,675,700 10 - - 5.88 4.12 Bonus shares 2010 Issue

Total 2,191,300 7.70 5.39

Pramod Kumar Daga HUF Sr. Date of Allotment Number Face Issue/ Consideration % of % of post Nature of the No. Allotment/ / Transfer of equity Value Acquisition pre- Issue transaction transfer shares (Rs.) Price per Issue Capital (Cash, Equity Capital consideration Share (Rs.) other than cash) 1 April 1, Transfer 174 1,000 1,000 174,000 0.06 0.04 Cash 1992 2 April 1, Transfer (90) 1,000 1,000 (90,000) (0.03) (0.02) Cash 1992 3 April 1, Allotment 574 1,000 1,000 574,000 0.20 0.14 Cash 1996 4 March 31, Allotment 202 1,000 1,000 202,000 0.07 0.05 Cash 1998 5 May 10, Bonus 3,045 1,000 - - 1.07 0.75 Bonus shares 2005 issue 6 November Sub – 406,000 10 - - 1.43 1.00 Sub-division 7, 2010 division of face value from Rs 1,000 per Equity Share to Rs 10 per Equity Share 7 June 1, Bonus 1,319,500 10 - - 4.63 3.24 Bonus shares 2010 issue

Total 1,725,500 6.06 4.24

B. Details of the Shareholding of the Promoter and the Promoter Group

The table below presents the current shareholding pattern of our Promoter and Promoter Group as per clause 35 of the Equity Listing Agreement.

(Face value of Equity Shares of Rs.10/- each) Sr. Category of Number Total Number Total Shareholding Shares Pledged or No. Share of Share Number of shares as a percentage otherwise encumbered holders holders of shares held in of total number demate- of shares rialized form As a As a Number of As a percenta percentage shares percentage ge of A+B+C A+B (I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)= (VIII)/ (IV)*100 (A) Shareholding of Promoter and Promoter Group

1 Indian a Individuals/Hind 15 26,350,000 Nil 92.54 92.54 92,63,300 32.53 u Undivided Family b Central Nil Nil Nil Nil Nil Nil Nil Government/Stat e Government c Bodies Corporate 1 2,125,000 Nil 7.46 7.46 Nil Nil

d Financial Nil Nil Nil Nil Nil Nil Nil Institutions/Bank s e Any Other Nil Nil Nil Nil Nil Nil Nil Sub-Total (A) 16 28,475,000 Nil 100.00 100.00 92,63,300 32.53 (1) 2 Foreign Nil Nil Nil Nil Nil Nil Nil Sub-Total (A) Nil Nil Nil Nil Nil Nil Nil (2) Total 16 28,475,000 Nil 100.00 100.00 92,63,300 32.53 Shareholding of Promoter and Promoter Group (A)(1)+(A)(2) (B) Public Shareholding 1 Institutions Sub-Total (B) Nil Nil Nil Nil Nil Nil Nil (1)

2. Non-Institutions Sub-Total (B) Nil Nil Nil Nil Nil Nil Nil (2)

Total Public Nil Nil Nil Nil Nil Nil Nil Shareholding (B)= (B)(1)+(B)(2) Total (A)+(B) 16 28,475,000 Nil 100.00 100.00 92,63,300 32.53

Grand Total 16 28,475,000 Nil 100.00 100.00 92,63,300 32.53 (A)+(B)+(C )

Shareholding of our Promoter and Promoter Group

Sr. Name of the shareholder Total shares held Shares pledged or otherwise encumbered No. Number As a % of Number As a percentage As a % of grand total grand total (A)+(B)+(C) (A)+(B)+(C) of sub-clause (I)(a) (I) (II) (III) (IV) (V) (VI)=(V)/(III)X 100 (VII) 1. Mr. Shreans Daga 2,320,500 8.15 Nil Nil Nil 2. Mr. Varun Daga 2,284,800 8.02 Nil Nil Nil 3. Mr. Kanchan Daga 2,191,300 7.70 Nil Nil Nil 4. Pramod Kumar Daga HUF 1,725,500 6.06 Nil Nil Nil 5. Mr. Vinod Kumar Daga 2,167,500 7.61 2,167,500 7.61 7.61 6. Mr. Paras Kumar Daga 2,060,350 7.24 Nil Nil Nil 7. Mr. Niraj Daga 2,046,800 7.19 8,99,300 3.16 3.16 8. Mr. Nilay Kumar Daga 2,046,800 7.19 2,046,800 7.19 7.19 9. Mrs. Sushila Daga 2,130,100 7.48 Nil Nil Nil 61

10. Mr. Kaushik Kumar Daga 2,184,500 7.67 2,184,500 7.67 7.67 11. Mrs. Nirmala Daga 1,965,200 6.90 1,965,200 6.90 6.90 12. Mrs. Kamla Daga 467,500 1.64 Nil Nil Nil 13. Mrs. Garishma Daga 285,600 1.00 Nil Nil Nil 14. Mrs. Aparna Daga 2,136,950 7.50 Nil Nil Nil 15. Kasturchand Harakchand Daga 336,600 1.18 Nil Nil Nil HUF 16. Shreyans Credit and Capital 2,125,000 7.46 Nil Nil Nil Private Limited

TOTAL 28,475,000 100.00 92,63,300 32.53 32.53

There are no shareholders belonging to the category ‘Public’ and holding more than 1% of our Equity Shares

C. Details of Promoters contribution locked in for three years

The Equity Shares which are being locked-in are eligible for computation of promoters’ contribution in accordance with the provisions of the SEBI ICDR Regulations.

Pursuant to the SEBI ICDR Regulations, an aggregate of 20% of the fully diluted post-Issue paid up capital of our Company held by the Promoters shall be locked in for a period of three years from the date of Allotment of Equity Shares in the Issue.

a) The details of such lock-in are set forth in the table below:

Mr. Shreans Daga Sr. Date of Allotment Number Face Issue/ Consideration % of Nature of the No. Allotment/ / of equity Value Acquisition post transaction transfer Transfer shares (Rs.) Price per Issue (Cash, Equity Capital consideration Share (Rs.) other than cash) 1 April 1, Transfer 30 1,000 1,000 30,000 0.01 Cash 1992 2 September Transfer 58 1,000 2,645 153,410 0.01 Cash 24,1994 3 September Transfer 145 1,000 2,300 333,500 0.04 Cash 28, 1995 4 April 1, Allotment 575 1,000 1,000 575,000 0.14 Cash 1996 5 March 31, Allotment 202 1,000 1,000 202,000 0.05 Cash 1998 6 February Transfer 50 1,000 3,558 177,900 0.01 Cash 28, 1999 7 March 29, Allotment 300 1,000 1,000 300,000 0.07 Cash 2004 8 May 10, Bonus 4,080 1,000 - - 1.43 Bonus shares 2005 Issue 9 November Sub- 544,000 10 - - 1.91 Sub-division 7, 2005 division of face value from Rs 1,000 per Equity Share to Rs 10 per Equity Share 11 June 1, Bonus 1,593,178 10 - - 3.92 Bonus shares 2010 Issue

Total 2,137,178 5.25 62

Mr. Varun Daga Sr. Date of Allotment Number Face Issue/ Consideration % of Nature of the No. Allotment/ / of equity Value Acquisition post transaction transfer Transfer shares (Rs.) Price per Issue (Cash, Equity Capital consideration Share (Rs.) other than cash) 1 April 1, Transfer 30 1,000 1,000 30,000 0.01 Cash 1992 2 September Transfer 145 1,000 2,300 333,500 0.04 Cash 28, 1995 3 April 1, Allotment 633 1,000 1,000 633,000 0.16 Cash 1996 4 March 31, Allotment 203 1,000 1,000 203,000 0.05 Cash 1998 5 February Transfer 33 1,000 3,558 117,414 0.01 Cash 28, 1999 6 March 29, Allotment 300 1,000 1,000 300,000 0.07 Cash 2004 7 May 10, Bonus 4,032 1,000 - - 0.99 Bonus shares 2005 Issue 8 November Sub- 537,600 10 - - 1.32 Sub-division 7, 2005 division of face value from Rs 1,000 per Equity Share to Rs 10 per Equity Share 9 June 1, Bonus 1,599,578 10 - - 3.93 Bonus shares 2010 Issue

Total 2,137,178 5.25

Mrs. Kanchan Daga Sr. Date of Allotment Number Face Issue/ Consideration % of Nature of the No. Allotment/ / of equity Value Acquisition post transaction transfer Transfer shares (Rs.) Price per Issue (Cash, Equity Capital consideration Share (Rs.) other than cash) 1 April 1, Transfer 30 1,000 1,000 30,000 0.01 Cash 1992

2 September Transfer 145 1,000 2,300 333,500 0.04 Cash 28, 1995 3 April 1, Allotment 575 1,000 1,000 575,000 0.14 Cash 1996 4 March 31, Allotment 202 1,000 1,000 202,000 0.05 Cash 1998 5 February Transfer 105 1,000 3,558 373,590 0.03 Cash 28, 1999 6 March 29, Allotment 232 1,000 1,000 232,000 0.06 Cash 2004 7 May 10, Bonus 3,867 1,000 - - 0.95 Bonus shares 2005 Issue 8 November Sub - 515,600 10 - - 1.27 Sub-division 7, 2005 division of face value from Rs 1,000 63

per Equity Share to Rs 10 per Equity Share 9 June 1, Bonus 1,621,578 10 - - 3.99 Bonus shares 2010 Issue

Total 2,137,178 5.25

Pramod Kumar Daga HUF Sr. Date of Allotment Number Face Issue/ Consideration % of post Nature of the No. Allotment/ / of equity Value Acquisition Issue transaction transfer Transfer shares (Rs.) Price per Capital (Cash, Equity consideration Share (Rs.) other than cash) 1 April 1, Transfer 84 1,000 1,000 84,000 0.02 Cash 1992 2 April 1, Allotment 574 1,000 1,000 574,000 0.14 Cash 1996 3 March 31, Allotment 202 1,000 1,000 202,000 0.05 Cash 1998 4 May 10, Bonus 3,045 1,000 - - 0.75 Bonus shares 2005 issue 5 November Sub – 406,000 10 - - 1.00 Sub-division 7, 2010 division of face value from Rs 1,000 per Equity Share to Rs 10 per Equity Share 6 June 1, Bonus 1,319,500 10 - - 3.24 Bonus shares 2010 issue

Total 1,725,500 4.24

b) The Equity Shares that are being locked-in are not ineligible for computation of Promoter‘s contribution under Regulation 33 of the SEBI ICDR Regulations. In this connection, we confirm the following: i. The Equity Shares offered for minimum 20% Promoter‘s contribution have not been acquired in the last three years for consideration other than cash and revaluation of assets or capitalization of intangible assets or bonus shares out of revaluation reserves, or unrealised profits of our Company or from a bonus issue against Equity Shares which are otherwise ineligible for computation of Promoter‘s contribution;

ii. The Equity Shares offered for minimum 20% Promoter‘s contribution do not include any Equity Shares acquired during the preceding one year at a price lower than the price at which the Equity Shares are being offered to the public in the Issue;

iii. The Equity shares offered for minimum 20% Promoters‘ contribution were not issued to the Promoters‘ upon conversion of a partnership firm;

iv. The Equity Shares offered for minimum 20% Promoter‘s contribution are not subject to any pledge; and

c) The minimum Promoter’s contribution has been brought to the extent of not less than the specified minimum lot and from persons defined as Promoter under the SEBI ICDR Regulations. Our Company has obtained a consent dated July 30, 2010 from our Promoters for the lock-in of the said 8,137,034 Equity Shares, held by them, for three years from the date of Allotment and for lock-in of the balance pre-Issue Equity Share capital of our Company, held by them, for a period of one year from the date of 64

Allotment. Equity Shares offered by the Promoter for the minimum Promoter’s contribution are not subject to pledge.

D. Details of share capital locked in for one year

In addition to 20% of the post-Issue shareholding of our Company held by the Promoters and locked in for three years as specified above, the entire pre-Issue share capital of our Company i.e. 20,337,966 Equity Shares, subject pre-IPO Placement, will be locked in for a period of one year from the date of Allotment in this Issue.

E. Lock in of Equity Shares Allotted to Anchor Investors

Equity Shares Allotted to Anchor Investors, in the Anchor Investor Portion shall be locked in for a period of 30 days from the date of Allotment of Equity Shares in the Issue.

F. Other Requirements in respect of lock-in

Locked-in Equity Shares of our Company held by the Promoters can be pledged only with scheduled commercial banks or public financial institutions as collateral security for loans granted by such banks or financial institutions provided that the pledge of the Equity Shares is one of the terms of the sanction of the loan. Further, the Equity Shares constituting 20% of the fully diluted post-Issue capital of our Company held by the Promoters that are locked in for a period of three years from the date of Allotment of Equity Shares in the Issue, may be pledged only if, in addition to complying with the aforesaid conditions, the loan has been granted by the banks or financial institutions for the purpose of financing one or more Objects of the Issue.

The Equity Shares held by persons other than the Promoter prior to the Issue may be transferred to any other person holding the Equity Shares which are locked-in subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI Takeover Regulations, as applicable. Further, Equity Shares held by the Promoter may be transferred to and among the Promoter Group or to a new promoter or persons in control of our Company subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI Takeover Regulations, as applicable.

In addition, the Equity Shares held by persons other than our Promoters and locked-in for a period of one year from the date of allotment in the Issue may be transferred to any other person holding Equity Shares which are locked-in, subject to the continuation of the lock-in in the hands of transferees for the remaining period and compliance with the SEBI Takeover Regulations, as amended from time to time.

The Promoter’s contribution has been brought in to the extent of not less than the specified minimum and from the persons defined as Promoters under the SEBI Takeover Regulations.

7. Equity Shares held by top ten shareholders

(a) On the date of the Draft Red Herring Prospectus are as follows:

Sr. No. Name of the Shareholder No. of Shares Percentage 1 Mr. Shreans Daga 2,320,500 8.15 2 Mr. Varun Daga 2,284,800 8.02 3 Mrs. Kanchan Daga 2,191,300 7.70 4 Mr. Kaushik Daga 2,184,500 7.67 5 Mr. Vinod Daga 2,167,500 7.61 6 Mrs. Aparna Daga 2,136,950 7.50 7 Mrs. Sushila Daga 2,130,100 7.48 8 Shreyans Credit and Capital Private Limited 2,125,000 7.46 9 Mr. Paras Kumar Daga 2,060,350 7.24 10 Mr. Niraj Daga 2,046,800 7.19 Total 21,647,800 76.02

(b) Ten days prior to, the date of the Draft Red Herring Prospectus, are as follows:

Sr No. Name of the Shareholder No. of Shares Percentage 1 Mr. Paras Kumar Daga 3,058,300 10.74 2 Mr. Shreans Daga 2,320,500 8.15 3 Mr. Varun Daga 2,284,800 8.02 4 Mrs. Kanchan Daga 2,191,300 7.70 5 Mr. Kaushik Daga 2,184,500 7.67 6 Mr. Vinod Daga 2,167,500 7.61 7 Mrs. Sushila Daga 2,130,100 7.48 8 Shreyans Credit and Capital Private Limited 2,125,000 7.46 9 Mr. Niraj Daga 2,046,800 7.19 10 Mr. Nilay Daga 2,046,800 7.19 Total 22,555,600 79.21

Sr No. Name of the Shareholder No. of Shares Percentage 1 Mr. Paras Kumar Daga 719,600 10.74 2 Mrs. Kaushik Daga 648,000 9.67 3 Mrs. Sushila Daga 635,200 9.48 4 Mr. Shreans Daga 544,000 8.12 5 Mr. Varun Daga 537,600 8.02 6 Mrs. Kanchan Daga 515,600 7.70 7 Mr. Vinod Daga 510,000 7.61 8 Aventis Biofeeds Private Limited 500,000 7.47 9 Mr. Niraj Daga 481,600 7.19 10 Mr. Nilay Daga 481,600 7.19 Total 5,573,200 83.19

8. The Equity Shares, which are subject to lock-in, shall carry the inscription “non-transferable” and the non transferability details shall be informed to the depository. The details of lock-in shall also be provided to the Stock Exchanges before the listing of the Equity Shares.

9. Neither, we nor our Directors or the Promoters, the BRLM have entered into any buyback and/or standby arrangements for the purchase of our Equity Shares other than the arrangements, if any, entered for safety net facility as permitted by the SEBI ICDR Regulations.

10. Our Company does not have any scheme of employee stock option or employee stock purchase as on the date of Draft Red Herring Prospectus.

11. An over-subscription to the extent of 10% of the Issue can be retained for the purpose of rounding off to the nearer multiple of minimum allotment lot while finalizing the allotment, subject to minimum allotment being equal to [●] Equity Shares, which is the minimum Bid size in this Issue. Consequently, the actual allotment may go up by a maximum of 10% of the Issue as a result of which the post-Issue paid up capital after the Issue would also increase by the excess amount of allotments so made. In such an event, the Equity Shares held by the Promoters and subject to lock-in shall be suitably increased so as to ensure that 20% of the post-Issue paid up capital is locked-in.

12. In the case of over-subscription in all categories, not more than 50% of the Issue shall be available for allocation on a proportionate basis to QIBs, 5% of the Net QIB Portion shall be reserved for Mutual Funds only. Mutual Funds participating in the Mutual Fund Portion of the Net QIB Portion will also be eligible for allocation in the remaining QIB Portion. Upto 30% of the QIB Portion shall be available for allocation to Anchor Investors and one-third of the Anchor Investor Portion shall be available for allocation to domestic Mutual Funds. Undersubscription, if any, in the Mutual Funds portion will be met by a spillover from the QIB Portion and be allotted proportionately to the QIB Bidders. Further, not less than 15% of Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 35% of Issue shall be available for allocation

on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.

13. Undersubscription, if any, in any category, would be met with spill over from any other categories or combination of categories at the discretion of our Company in consultation with the BRLM and Designated Stock Exchange. Such inter-se spill over, if any, would be effected in accordance with applicable laws, rules, regulations and guidelines.

14. During the past six months, there are no transactions in our Equity Shares, which have been purchased/(sold) by our Promoters, their relatives and associates, persons in promoter group (as defined under sub-clause (zb) sub- regulation (1) Regulation 2 of the SEBI ICDR Regulations) or the Directors of our Company, except as mentioned below:

Transferor Transferee No. of Date of transaction Price per share (Rs.) Equity Shares Mr.Paras Kumar Mrs. Aparna Daga 997,950 July 28, 2010 Gift Daga

15. Subject to the Pre-IPO Placement, we presently do not intend or propose any further issue of capital whether by way of issue of Equity Shares or by way of issue of bonus issue, preferential allotment, rights issue or in any other manner during the period commencing from submission of the Draft Red Herring Prospectus to SEBI until the Equity Shares issued/ to be issued pursuant to the Issue have been listed.

16. The Promoter Group, the Directors of our Company and their relatives have not financed the purchase by any other person of securities of the Issuer other than in the normal course of the business of any such entity / individual or otherwise during the period of six months immediately preceding the date of the Draft Red Herring Prospectus.

17. As on the date of the DRHP, neither the BRLM nor their associates hold any Equity Shares.

18. We have not raised any bridge loans against the proceeds of the Issue.

19. There are no outstanding warrants, financial instruments or any rights, which would entitle the Promoters or the Shareholders or any other person any option to acquire any of the Equity Shares after the Issue.

20. The Equity Shares are fully paid-up and there are no partly paid-up Equity Shares as on date of the DRHP.

21. The Equity Shares issued pursuant to this Issue shall be fully paid-up.

22. None of our key managerial personnel hold Equity Shares in our Company, other than as follows:

Sr. Name of the Key Managerial No. of Equity % of pre Issue Equity % of post Issue Equity No. Personnel Shares Share Capital Share Capital 1 Mr. Varun Daga 2,284,800 8.02 5.62 2 Mr. Nilay Daga 2,046,800 7.19 5.03 3 Mr. Kaushik Daga 2,184,500 7.67 5.37

23. Subject to the Pre-IPO Placement, we presently do not have any intention or proposal, neither have entered into negotiations nor are considering to alter our capital structure for a period of six months from the date of opening of the Issue, by way of split or consolidation of the denomination of Equity Shares or further issue of equity (including issue of securities convertible into or exchangeable for, directly or indirectly, for our Equity Shares) whether on a preferential basis or otherwise, except that if we acquire companies / business or enter into joint venture(s), we may consider additional capital to fund such activities or to use Equity Shares as a currency for acquisitions or participation in such joint ventures.

24. Our Promoters and members of the Promoter Group will not participate in the Issue.

25. Our Company, Directors, Promoters or Promoter Group shall not make any payments direct or indirect, discounts, commissions, allowances or otherwise under this Issue except as disclosed in the Draft Red Herring Prospectus.

26. As per the RBI regulations, OCBs are not allowed to participate in this Issue.

27. As on the date of the Draft Red Herring Prospectus, the total number of holders of Equity Shares are 16.

28. Our Company has not made any public issue or rights issue since its incorporation.

29. There shall be only one denomination of the Equity Shares, unless otherwise permitted by law. We shall comply with such disclosure and accounting norms as may be specified by SEBI from time to time.

30. There are restrictive covenants in the agreements entered into by our Company with certain lenders for short-term and long-term borrowing. For further details, please see “Financial Indebtedness” on page no. 250 of the Draft Red Herring Prospectus.

31. A Bidder cannot make a Bid for more than the number of Equity Shares offered through the Issue, subject to the maximum limit of investment prescribed under relevant laws applicable to each category of Bidder.

32. Our Company shall ensure that transactions in the Equity Shares by the Promoters and the Promoter Group between the date of registering the Red Herring Prospectus with the RoC and the Bid/Issue Closing Date shall be reported to the Stock Exchanges within twenty-four hours of such transaction.

SECTION IV: PARTICULARS OF THE ISSUE

OBJECTS OF THE ISSUE

The objects of the Issue are to finance our expansion plans and achieve the benefits of listing on the Stock Exchanges. We believe that listing will enhance our corporate image and brand name.

We intend to utilize the Issue Proceeds for the following objects:

1. Setting up an integrated 180,000 TPA (600 TPD) solvent extraction unit with 30,000 TPA (100 TPD) refinery, 45,000 TPA (150 TPD) soya flour and 45,000 TPA (150 TPD) soya nuggets units at Satna, Madhya Pradesh; 2. Setting up of a new 180,000 TPA (600 TPD) solvent extraction unit with 45,000 TPA (150 TPD) refinery at Tirupur, Tamil Nadu; 3. Expansion of existing edible oil refinery at Solapur, Maharashtra from 36,000 TPA (120 TPD) to 90,000 TPA (300 TPD); 4. Expansion of the cattle feed unit at Solapur, Maharashtra from 30,000 TPA (100 TPD) to 90,000 TPA (300 TPD); 5. Setting up of private mandis at Satna, Madhya Pradesh and Solapur, Maharashtra; 6. Purchase of a railway rake; 7. Brand promotion and expansion of marketing and distribution network; 8. General corporate purposes; and 9. To meet Issue expenses.

The main objects clause and objects incidental 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.

Issue Proceeds and Net Proceeds

The details of the proceeds of this Issue are summarized below: (Rs. in million) Particulars Estimated Amount Gross proceeds to be raised through this Issue (“Issue Proceeds”)* [●] Issue Related Expenses* [●] Net proceeds of the Issue after deducting the Issue related expenses from the Issue [●] Proceeds (“Net Proceeds”)* *Will be incorporated after finalization of the Issue Price

Our Company intends to utilize the Net Proceeds for financing the objects:

Utilisation of Net Proceeds

The fund requirements for each of the objects of the Issue are stated as follows: (Rs. in million) Sr. Particulars Total Fund Amount Estimated Amount Estimated Net No. Requirement deployed Amount to to be Proceeds Utilization till May be utilized deployed 31, 2010* from Net FY 2010 FY 2011 FY Proceeds 2012 1. Setting up an integrated 457.75 283.05 172.70 2.00 96.29 76.41 180,000 TPA (600 TPD) solvent extraction unit with 30,000 TPA (100 TPD) refinery, 45,000 TPA (150 TPD) soya flour and 45,000 TPA (150 TPD) soya nuggets unit at Satna, Madhya Pradesh 2. Setting up of a new 180,000 387.00 -- 387.00 -- 171.66 215.34 TPA (600 TPD) solvent extraction unit with 45,000 TPA (150 TPD) refinery at Tirupur, 69

Tamil Nadu 3. Expansion of existing edible oil 63.90 -- 63.90 -- 23.30 40.60 refinery at Solapur, Maharashtra from 36,000 TPA (120 TPD) to 90,000 TPA (300 TPD) 4. Expansion of the cattle feed unit 116.49 -- 116.49 -- 78.29 38.20 at Solapur, Maharashtra from 30,000 TPA (100 TPD) to 90,000 TPA (300 TPD) 5. Setting up of private mandis at 41.65 -- 41.65 -- 41.65 -- Satna, Madhya Pradesh and Solapur, Maharashtra 6. Purchase of a railway rake 135.46 -- 135.46 -- 135.46 -- 8. Brand promotion and expansion 94.50 -- 94.50 -- 60.25 34.25 of marketing and distribution network 9. General corporate purposes [●]** -- [●]** -- [●] [●] Total [●] 283.05 [●] 2.00 [●] [●] * Our Company has already deployed Rs. 283.05 million till May 31, 2010, as per the certificate dated June 29, 2010 from our Statutory Auditors M/s. Bhutoria Ganeshan & Co., Chartered Accountants.

** Will be incorporated after finalization of the Issue Price

The details of our fund requirement, as indicated above, and deployment of such funds are based on internal management estimates and have not been appraised by any bank or financial institution. These requirements are subject to change taking into consideration variations in costs and other external factors which may not be within our control or as a result of changes in our financial condition, business or strategy. Our management will have the discretion to revise our business plans from time to time and consequently our funding requirements and deployment of funds may also be change. This may result in rescheduling the proposed utilisation of the proceeds and increasing or decreasing expenditure for a particular object vis-a-vis the utilisation of the proceeds. For instance, we may also reallocate expenditure to the other activities, in the case of delays in our existing plans or proposed activities. Any such change in our plans may require rescheduling of our expenditure, programs, starting projects or capital expenditure programs which are not currently planned, discontinuing existing plans or proposed activities and an increase or decrease in the capital expenditure programs for the objects of the Issue, at the discretion of our Company.

However, any changes in “Objects of the Issue”, other than those specified herein, post-listing of the Equity Shares shall be subject to compliance with the Companies Act and such regulatory and other approvals and disclosures, as may be applicable.

Appraisal

None of the objects of the Issue have been appraised by any bank or financial institution or any other independent third party organization. The funding requirements of our Company and the deployment of the Net Proceeds are currently based on management estimates.

Shortfall of Net Proceeds

In case of any shortfall of Net Proceeds, we intend to meet the same through internal accruals. In the event that estimated utilization out of the Net Proceeds in a Financial Year is not completely met, the same shall be utilized in the next Financial Year.

Means of Finance (Rs. in million) Particulars Estimated Amount Net Proceeds* [●] Internal Accruals* [●] 70

Total* [●] *Will be incorporated after finalization of the Issue Price

The total fund requirement for the objects of the Issue as estimated by our Company is Rs. [●] million. The requirements of the objects detailed above are intended to be funded from the Net proceeds of the Issue and internal accruals. Accordingly, we confirm that there is no requirement for us to make firm arrangements of finance through verifiable means towards at least 75% of the stated means of finance, excluding the amount to be raised from the proposed Issue.

DETAILS OF THE OBJECTS

1. Setting up an integrated 180,000 TPA (600 TPD) solvent extraction unit with 30,000 TPA (100 TPD) refinery, 45,000 TPA (150 TPD) soya flour and 45,000 TPA (150 TPD) soya nuggets units at Satna, Madhya Pradesh unit (Rs. in million) Setting up of an integrated unit consisting of Estimated Amount A. 180,000 TPA (600 TPD) solvent extraction unit with 30,000 TPA (100 TPD) 350.01 refinery B. 45,000 TPA (150 TPD) soya flour and 45,000 TPA (150 TPD) soya nuggets units 107.74 Total 457.75

In addition to our units at Betul and Solapur, we are in the process of setting up a unit at Satna, Madhya Pradesh to cater to the demand of our products. The Satna unit is the only edible oil refinery unit in the north-eastern districts of Madhya Pradesh and there is only one other soya processing unit in the Satna district. This unit is at the top of the soybean belt and also adjacent to the high consumption regions such as Uttar Pradesh, Jharkhand, Bihar, West Bengal, Assam, Nepal and Bangladesh.

A. 180,000 TPA (600 TPD) solvent extraction unit with 30,000 TPA (150 TPD) refinery

We are in the process of setting up a new solvent extraction unit at Satna, Madhya Pradesh, with a crushing capacity of 180,000 TPA (600 TPD) and refining capacity of 30,000 (100 TPD).

The 180,000 TPA (600 TPD) solvent extraction unit and 30,000 TPA (100 TPD) refinery has been setup and we have received the commencement of production certificate dated May 18, 2010 from District Trade and Industry Centre, Satna, Madhya Pradesh certifying commencement of commercial production from March 28, 2010 of refined oil, de-oiled cake and soya lecithin. Our Company has acquired approximately 28.25 acres of land from private parties at Tehsil Raghuraj Nagar, District Satna in Madhya Pradesh. Civil works for the packing unit at the facility is yet to be completed. We have spent an amount of Rs. 283.05 million till May 31, 2010 as per the certificate issued by our statutory auditor, M/s. Bhutoria Ganeshan & Co., Chartered Accountants dated June 29, 2010.

The solvent extraction unit produces crude / de-gummed soya oil and de-oiled cake and we refine the crude / de-gummed soya oil in our refinery to produce refined soybean oil.

The cost for setting up this unit is as follows: (Rs. in million) Particulars Estimated Amount Land and other related expenses 15.23 Civil Works 85.35 Plant and Machinery 223.59 Miscellaneous Fixed Assets 12.38 Provision for pre-operative expenses and contingencies 13.46 Total 350.01 *Provision for pre-operative expenses and provision for contingencies have been assumed at the rate of 4% of the sum of all other estimated costs. Further we have allocated Rs. 12.44 million from the provision for pre-operative expenses towards land and site development, civil work and building, plant and machinery and miscellaneous fixed assets as per the certificate issued by our M/s. Bhutoria Ganeshan & Co., Chartered Accountants, statutory auditors dated June 29, 2010.

Land and site development

We have purchased 28.25 acres of land from private parties at Tehsil Raghuraj Nagar, District Satna in Madhya Pradesh. The total expenditure of Rs. 15.23 million (including Rs. 0.32 million incurred as pre-operative expenses) incurred till May 31, 2010 for acquiring land and site development has been certified by our statutory auditor, M/s. Bhutoria Ganeshan & Co., Chartered Accountants vide their certificate dated June 29, 2010.

Civil works

We have developed a building comprising of security room, time office, boiler house, electric room, meal finishing section, cooling tower section, chilling unit, water storage tank, acid oil plant and chimney.

The cost incurred till May 31, 2010 is Rs. 36.32 million (including Rs. 1.66 million incurred as pre-operative expenses) as certified by our statutory auditor M/s. Bhutoria Ganeshan & Co., Chartered Accountants pursuant to certificate dated June 29, 2010. The estimated cost for remaining civil work and building is Rs. 49.03 million as certified by M/s. Uttam K Banerjee & Associates, an independent Government-approved registered valuer and consulting chartered engineer, pursuant to certificate dated June 25, 2010.

Plant and machinery

We have erected the processing and refinery unit, and need to set up packing unit for the said unit. The unit will manufacture soya oil, de-oiled cake and soya lecithin.

We have already incurred Rs. 219.13 million (including Rs. 10.00 million incurred as pre-operative expenses) till May 31, 2010 for purchasing and installation of plant and machinery as certified by our Statutory Auditor M/s. Bhutoria Ganeshan & Co., Chartered Accountants pursuant to their certificate dated June 29, 2010.

List of plant and machinery already installed for the solvent extraction unit and refinery (Rs. in million) Sr. No. Supplier’s name Particulars Status Amount 1(a) Servotech India Limited Solvent Extraction Plant Installed 94.90 1(b) Manik Tech Engineering Solvent Extraction Plant Installed 4.07 1(c) Others Solvent Extraction Plant Installed 37.49 Sub-Total (1) 136.46 2(a) Muez Hest Refinery Installed 23.99 2(b) Thermax Limtied Refinery Installed 1.05 2(c) West Falia Seprators Private Limited Refinery Installed 8.45 2(d) Others Refinery Installed 21.46 Sub-Total (2) 54.95 3(a) Lal ion Exchange Private Limited Boiler Installed 3.92 3(b) Sterling Engineering Company Boiler Installed 1.46 3(c) Micro Dynamic Boiler Installed 8.11 3(d) Others Boiler Installed 2.80 Sub-Total (3) 16.29 4 Various suppliers Silos Installed 0.33 5(a) K.W.S. Weighbridge Installed 0.90 5(b) Others Weighbridge Installed 0.20 Sub-Total (4) 1.10 6 Pre-operative expenses already allocated -- -- 10.00 Total 219.13

We are yet to purchase plant and machinery for our packing unit, the list of remaining plant and machinery with their quotations are as set forth below:

List of plant and machinery for packing unit yet to be installed (Rs. in million) Sr. Equipment Quantity Supplier Date of Amount No. Quotation 1. Volufil 5000-6X-CDD 1 Spheretech Packaging India June 9, 2010 1.40 Private Limited 2. Automatic Screw Capping 1 Spheretech Packaging India June 9, 2010 0.68 Machine with parts Private Limited 3. Automatic induction sealing 1 Spheretech Packaging India June 9, 2010 0.29 machine with parts Private Limited 4. Volufil 15000-4X-CDD 1 Spheretech Packaging India June 9, 2010 1.36 Private Limited 5. Tailor made shrink heavy tunnel 1 Pack-well Engineers June 26, 2010 0.10 machine 6. Automatic form fill seal machine 1 Rama Reddy Packaging July 5, 2010 0.63 Innovations Total 4.46

The total cost of the equipments is estimated at Rs. 4.46 million excluding all taxes, packing, freight, insurance, loading/unloading etc. We have estimated the costs for taxes, packing, freight, insurance, loading/unloading etc. under provision for pre-operative expenses and contingencies.

Miscellaneous Fixed Assets

We have deployed Rs. 12.38 million (including Rs. 0.47 million incurred as pre-operative expenses) till May 31, 2010 on miscellaneous fixed assets which includes purchase of furniture and fixtures, computers, office equipment, electrical installaiton, etc. from local vendors as certified by our statutory auditor, M/s. Bhutoria Ganeshan & Co., Chartered Accountants vide their certificate dated June 29, 2010. All these fixed assets are already installed in our unit.

Provision for pre-operative expenses and contingencies

Our Company has provided for Rs. 13.46 million as provision for pre-operative expenses and contingencies, out of which we have already incurred Rs. 12.44 million, as certified by our Statutory Auditors M/s. Bhutoria Ganeshan & Co., Chartered Accountants pursuant to their certificate dated June 29, 2010, which includes expenses for administrative, insurance and professional fees, any increase in project cost, due to increase in raw material cost or any other cost, transportation charges, taxes, etc.

Schedule of Implementation of the packing unit

Activity Expected Commencement Expected Completion Land - Completed Civil works Commenced January 2011 Plant and machinery Commenced February 2011 Miscellaneous fixed assets Commenced February 2011 Trial production February 2011 March 2011 Commercial production March 2011 -

B. Setting up of 45,000 TPA (150 TPD) soya flour and 45,000 TPA (150 TPD) soya nuggets units at Satna, Madhya Pradesh

As part of our forward integration strategy, we intend to set up 45,000 TPA (150 TPD) soya flour and 45,000 TPA (150 TPD) soya nuggets units at Satna, Madhya Pradesh.

Details of cost of project are as follows: (Rs. in million) Sr. No. Particulars Amount 1. Land and site development Nil 2. Civil works 10.13

Sr. No. Particulars Amount 3. Plant and machinery 93.00 4. Miscellaneous fixed assets 2.50 5. Provision for pre-operative expenses and contingencies* 2.11 Total 107.74 *Provision for pre-operative expenses and contingencies have been assumed at the rate of 2% of the sum of all other estimated costs.

Land and site development

Our Company will use existing land that has been purchased to setup the new 180,000 TPA (600 TPD) solvent extraction unit with 45,000 TPA (150 TPD) refinery at Tehsil Raghurajnagar, Satna. It is close to National Highway 7 and is 6 kms from Satna.

Civil works

The total built-up area of about 2,025 square meters would be required for setting up of 45,000 TPA (150 TPD) soya flour and soya nuggets unit. Details as per certificate dated June 9, 2010 given by M/s. Uttam K Banerjee & Associates, an independent Government-approved registered valuer and consulting chartered engineer, are as under: (Rs. in million) Sr. No. Particulars Area Amount (sq. mts.) 1. Setting up of 45,000 TPA (150 TPD) Soya Flour and 45,000 TPA (150 2,025.00 10.13 TPD) Soya Nuggets unit- Total 10.13

Plant and machinery

We have obtained a quotation for complete turnkey project from M/s. Servotech India Ltd. vide their quotation no. SIL/600/R-1/10-11 dated July 1, 2010. The break up of the cost is as set forth below:

(Rs. in million) Sr. No. Particulars Amount 1. Edible Soya Flour plant 45,000 TPA (150 TPD) capacity 35.00 2. Soya Nuggets Plant 45,000 TPA (150 TPD) capacity 46.50 3. Auxiliaries (within battery limits) 9.00 4. Erection and Commissioning charges 2.50 Total 93.00

We are yet to place orders for the plant and machinery mentioned above.

Miscellaneous fixed assets (Rs. in million) Sr. No. Particulars Amount# 1. Furniture and Fixtures 1.00 2. Computers, Printers, etc. 1.50 Total 2.50 # These are internal management estimates and no quotations have been obtained for the same.

Provision for pre-operative expenses and contingencies

We have estimated amount of Rs. 2.11 million as provision for pre-operative expenses and contingencies which includes expenses for administrative, insurance and professional fees, transportation costs and any increase in project cost.

Schedule of Implementation

Activity Expected Commencement Expected Completion Land - Completed Civil works November 2010 April 2011 Plant and machinery March 2011 November 2011 Miscellaneous fixed assets November 2011 December 2011 Trial production December 2011 January 2012 Commercial production February 2012 -

2. Setting up of a new 180,000 TPA (600 TPD) solvent extraction unit with 45,000 TPA (150 TPD) refinery at Tirupur, Tamil Nadu

Tirupur and its nearby areas are part of the largest poultry farming belt in India (Source: http://mofpi.nic.in/). We believe that our presence in the local area will help us to help us to enhance our relationship with our customers in that area and also overcome any logistical challenges. The unit will have an installed solvent extraction capacity of 180,000 TPA (600 TPD) and refinery of 45,000 TPA (150 TPD).

The approximate cost for setting up this unit is as follows: (Rs. in million) Particulars Total Fund Requirement Land and site development 23.71 Civil works 81.20 Plant and machinery 264.50 Miscellaneous fixed assets 10.00 Provision for pre-operative expenses and contingencies* 7.60 Total 387.00 *Provision for pre-operative expenses and contingencies have been assumed at the rate of 2% of the sum of all other estimated costs.

Land and site development

We propose to acquire approximately 25 acres of land at in and around Palladiam, Tirupur, Tamil Nadu. We have not yet acquired the land or paid any advance to purchase the land. The average estimated cost of the required land would be approximately Rs. 18.75 million. The estimated cost for site development would be Rs. 4.96 million as certified by M/s. Uttam K Banerejee & Associates, an independent Government-approved registered valuer and consulting chartered engineer, vide certificate dated June 23, 2010.

Civil works

The building shall consist of the refinery, packaging units, civil works for workshop, godown, tank foundations, boiler house, stores, weigh-bridge, water pump house, laboratory, administrative building and canteen.

The cost of construction of civil works is approximately Rs. 81.20 million, as provided by M/s. Uttam K Banerjee & Associates, an independent Government-approved registered valuer and consulting chartered engineer, vide certificate dated June 23, 2010.

The break-up of the cost to be incurred for development and construction facility is as set forth below: (Rs. in million) Sr. No. Particulars Amount 1. Security room, time office, administrative building, parking stand, Weigh bridge -1 6.58 and 2 including room 2. Boiler house, electric room, raw material godown 19.98 3. Solvent extraction unit, hexane storage unit, refinery, oil storage tank 9.11 4. Meal finishing section, packing section, store, workshop 21.70 5. Store for oil packing material, pump house, cooling tower, E.T.P., underground 5.61 water tank, chilling unit, solvent trap 6. Toilet block, silos, gunny bags godown, D.G. shed, water storage tank, reject water 7.72

tank, 7. Blow down pet, recycling of S.E.P., hull separation unit, R.O. unit, acid oil unit, 1.23 settling tank, 8. Solvent extraction unit, preparatory, meal finishing section, boiler house, chimney. 3.71 Coal handling unit, R.O., transformer, Refinery (De gummning/lecithin), etc. 9. Chilling unit (sep), pump house, emergency water storage RCC tank, laboratory, 0.05 boundary wall Total 81.20

Plant and machinery

The total cost of purchasing and installation, commissioning and erection of plant and machinery is estimated at Rs. 264.50 million.

We have obtained a quotation for the complete unit on turnkey basis from M/s. Servotech India Limited vide their quotation no. SIL/599/R-2/10-11 dated July 7, 2010. The break up of the cost is as set forth below: (Rs. in million) Sr. No. Particulars Amount 1. Solvent extraction plant with a capacity of 180,000 TPA (600 TPD) 61.00 (i) Preparatory module (Rs. 17.50 million) (ii) Solvent extraction module (Rs. 37.50 million) (iii) Meal finishing section (Rs. 6.00 million) 2. Vegetable oil refinery plant with a capacity of 45,000 TPA (150 TPD) 27.50 3. Soya lecithin concentration plant with a capacity of 1,500 TPA (5 TPD) 9.00 4. Acid oil plant with a capacity of 1,800 TPA (6 TPD) 7.00 5. Auxiliaries (within battery limits) 15.00 6. Auxiliaries (outside battery limits) 75.00 (i) Electrical installation (Rs. 15.00 million) (ii) D.G. Set (Rs. 15.00 million) (iii) Oil Storage tanks (Rs. 45.00 million) 7. Weigh Bridge with load cell 5.00 8. Effluent Treatment Plant 2.50 9. Water Treatment Plant 3.00 10. Silo and Pre-Cleaning/Material handing system 30.00 11. Boiler 20.00 12. Erection and commissioning charges 9.50 Total 264.50

The total cost of the unit on turnkey basis is estimated at Rs. 264.50 million. As on the date of the DRHP we have not placed any orders for the plant and machinery.

Miscellaneous fixed assets (Rs. in million) Sr. No. Particulars Amount# 1. Fire fighting equipments 4.50 2. Motor vehicles 2.00 3. Furniture and fixtures 2.00 4. Computers, printers, etc. 1.50 Total 10.00 # Theses are internal management estimates and no quotations have been obtained for the same.

Provision for pre-operative expenses and contingencies

We have estimated amount of Rs. 7.60 million as provision pre-operative expenses and contingencies which includes expenses for administrative, insurance and professional fees, transportation costs and any increase in project cost.

Schedule of Implementation

Activity Expected Commencement Expected Completion Land and site development October 2010 December 2010 Civil works December 2010 July 2011 Plant and machinery June 2011 February 2012 Miscellaneous fixed assets February 2012 March 2012 Trial production March 2012 April 2012 Commercial production April 2012 -

3. Expansion of existing edible oil refinery at Solapur, Maharashtra from 36,000 TPA (120 TPD) to 90,000 TPA (300 TPD)

We intend to expand the manufacturing capacity of our Solapur Unit. We have an existing functional unit at Solapur with 36,000 TPA (120 TPD) oil refining capacity. We intend to expand this unit by adding another 54,000 TPA (180 TPD) refining capacity increasing the total capacity of the unit to 90,000 TPA (300 TPD).

Details of cost of project are as follows: (Rs. in million) Sr. No. Particulars Amount 1. Land Nil 2. Civil works 7.15 3. Plant and machinery 53.00 4. Miscellaneous fixed assets 2.50 5. Provision for pre-operative expenses and contingencies* 1.25 Total 63.90 *Provision for pre-operative expenses and provision for contingencies have been assumed at the rate of 2% of the sum of all other estimated costs.

Land

The existing unit of 36,000 TPA (120 TPD) is spread over 80,000 square meters of land at MIDC, Solapur, Maharastra, which is about 6 kms from Solapur. The existing land of our unit at Solapur is sufficient for the expansion.

Civil works

There is already an existing factory building and we will construct an additional factory building of 1200 square meters for the expansion plan.

The total cost for the expansion of building is Rs. 7.15 million as certified by M/s. Uttam K. Banerjee & Associates, an independent Government-approved registered valuer and consulting chartered engineer, vide their certificate dated June 25, 2010. The detail of the same is as set forth below: (Rs. in million) Sr. No. Particulars Area Amount (Sq. mts.) 1. Refinery Shed – 40 mtr x 15 mr x 14 mtr ht. 600.00 3.00 2. 8" thick R.C.C. mezzanine floor 40 mtr x 15 mtr 600.00 0.90 3. Steel structure 3.25 Total 7.15

Plant and machinery

The existing setup is such that we can switch over from processing of one type of oil to another type of oil with the minimum down time. This gives us the flexibility to manufacture all types of oils depending on the market requirement and availability of raw materials at competitive rates. We have ensured that the expanded unit shall be capable of refining soybean, sunflower, safflower, maize germ, sal seed, mango seed, cotton seed and mahua seed oils.

We have obtained a quotation for complete turnkey project from M/s. Servotech India Limited pursuant their quotation no. SIL/601/R-1/10-11 dated July 1, 2010. The break up of the cost is as set forth below:

(Rs. in million) Sr. No. Particulars Amount 1. Expansion of continuous vegetable oil refining unit, capacity 36,000 TPA (120 TPD) to 37.50 90,000 TPA (300 TPD) consisting of: (i) Continuous degumming, neutralization and water washing section (Rs. 11.00 mn) (ii) Continuous bleaching section (Rs. 6.50 mn) (iii) Dewaxing section (Rs. 8.00 mn) (iv) Continuous De-acidification cum De-odrization section (Rs. 12.00 mn) 2. Auxiliaries 13.00 (i) Water cooling and pumping installation (ii) Thermic fluid heating systems (iii) Structural material inside the civil building (iv) Refrigeration plant (v) Heat insulation (vi) Painting material 3. Erection and commissioning charges 2.50 Total 53.00

We are yet to place orders for the plant and machinery mentioned above.

Miscellaneous fixed assets

Miscellaneous fixed assets as required for the administrative offices will include furniture and fixtures, computers, printers, etc. totaling to approximately Rs. 2.50 million. Theses are internal management estimates and no quotations have been obtained for the same.

Provision for pre-operative expenses and contingencies

Our Company has provided Rs. 1.25 million as provision for pre-operative expenses and contingencies which includes expenses for administrative, insurance and professional fees and any increase in project cost.

Schedule of Implementation

Our existing 36,000 TPA (120 TPD) oil refinery is already in operation. The additional 54,000 TPA (180 TPD) oil refinery is expected to start commercial production by February 2012. The detailed schedule of implementation is set forth below:

Activity Expected Commencement Expected Completion Land - Completed Civil works November 2010 May 2011 Plant and machinery April 2011 November 2011 Miscellaneous fixed assets November 2011 December 2011 Trial production December 2011 January 2012 Commercial production February 2012 -

4. Expansion of the cattle feed unit at Solapur, Maharashtra from 30,000 TPA (100 TPD) to 90,000 TPA (300 TPD)

As we further forward integrate our operations the output of the seed processing unit, i.e. de-oiled cake ‘DOC’ is used as a key raw material in our cattle feed production unit. With the increasing demand for cattle feed, we intend to expand our cattle feed operations.

Currently we operate a 30,000 TPA (100 TPD) cattle feed unit. We have initiated an expansion plan of this unit and will be adding another 60,000 TPA (200 TPD) cattle feed capacity taking the total capacity of the unit to 90,000 TPA (300 TPD). Details of cost of project are as follows:

(Rs. in million) 78

Sr. No. Particulars Amount 1. Land Nil 2. Civil works 65.00 3. Plant and machinery 43.51 4. Miscellaneous fixed assets 5.70 5. Provision for pre-operative expenses and contingencies* 2.28 Total 116.49 *Provision for pre-operative expenses and provision for contingencies have been assumed at the rate of 2% of the sum of all other estimated costs.

Land

The existing unit of 36,000 TPA (120 TPD) is spread over 80,000 square meters of land at MIDC, Solapur, Maharastra, which is about 6 kms from Solapur city. The existing land is sufficient for the expansion plan.

Civil works

There is already an existing factory building and we will construct an additional factory building for the expansion plan. The total cost for the expansion of building is Rs. 65.00 million as certified by M/s. Uttam K. Banerjee & Associates, an independent Government-approved registered valuer and consulting chartered engineer, vide their certificate dated June 24, 2010. The detail of the same is as set forth below: (Rs. in million) Sr. No. Particulars Amount 1. Steel structure for expansion plan from 30,000 TPA (TPD) to 90,000 TPA (300 TPD) 43.80 2. Machine foundation for expansion plan 1.20 3. Godown for raw material and finished goods 20.00 Total 65.00

Plant and machinery

We have obtained a quotation for complete turnkey project from M/s. Hindustan Equipments Pvt. Ltd. vide their quotation no. JT/HEPL/QTN./10-11/33 dated July 1, 2010. The break up of the cost is as set forth below: (Rs. in million) Sr. No. Particulars Amount 1. Intake Section (including drag chain conveyor, geared motor, magnetic grill, 0.76 elevator, etc.) 2. Grinding Section (including bin for grindables, rotary feeder, geared motor, AC 1.46 dyno drive, hammer mill, induction motor, etc.) 3. Mixing Section (including elevator, geared motor, bin, batch mixer, gear box, 1.61 induction motor, surge bin, paddle conveyor, etc.) 4. Pelleting Section (including elevator, geared motor, bin, conditioners, induction 4.81 motor, pellet mill, AC dyno drive, etc.) 5. Cooling Section (including counter flow cooler, geared motor, air lock cum feeder, 1.34 blower, induction motor, etc.) 6. Crumbling Section (including feeder, induction motor, etc.) 0.85 7. Sieving Section (including pellet elevator, geared motor, multi deck gyro screen) 1.32 8. Bagging Section (including bagging bins, piping lot, etc.) 1.51 9. Electrical Section (including main unit control panel, etc.) 6.77 10. Pre-weighing section for cattle & poultry feed (including chain conveyor, elevator, 20.21 conveyor, storage bins, motor control panel, buffer hopper, supporting structure, etc.) 11. Others (includes packing and forwarding charges, erection charges, etc.) 2.88 Total 43.51

We are yet to place orders for the plant and machinery mentioned above.

Miscellaneous fixed assets

Miscellaneous fixed assets as required for the administrative offices will include computers, printers, etc. totaling to approximately Rs. 5.70 million. The break up of the same is as set forth below: (Rs. in million) Sr. No. Particulars Amount# 1. Computer, printer, UPS, auto weighing machine, auto stitching machine and 0.85 miscellaneous 2. Other (includes transportation charges, air compressor, boiler, etc.) 4.85 Total 5.70 # These are internal management estimates and no quotations have been obtained for the same.

Provision for operative expenses and contingencies

Our Company has provided Rs. 2.28 million as for provision for pre-operative expenses and contingencies which includes expenses for administrative, insurance and professional fees, any increase in project cost, due to increase in raw material cost or any other cost, etc.

Schedule of Implementation

Our existing unit for cattle feed with a capacity 30,000 TPA (100 TPD) is already in operation. The additional 60,000 TPA (200 TPD) cattle feed production unit is expected to be start commercial production by February 2012.

5. Setting up of private mandis at Satna, Madhya Pradesh and Solapur, Maharashtra

We have a established procurement centre in Betul, Madhya Pradesh. We are one of the few players in the edible oil industry to have established our private mandi at Betul, Madhya Pradesh. Our private mandi licenses enable us to provide a platform to the farmers to sell their goods to us. We believe that our private mandi is a critical link to our procurement channel for raw materials. We would like to increase our reach directly to farmer, hence, we intend to setup a private mandi at Satna, Madhya Pradesh and Solapur, Maharashtra. We shall use our existing land at both places. This not only provides access to raw material in a very systematic manner but also allows us to build a long term relationship with the farmers. Further we also provide warehousing facilities in these mandis. Our private mandi license enables us to operate as a trader and warehouse-keeper. We lease out our warehouses to farmers which indirectly facilitates assured source of raw material supply during non-peak seasons.

Details of cost of project are as follows: (Rs. in million) Sr. No. Particulars Amount 1. Land Nil 2. Civil works 36.24 3. Miscellaneous fixed assets 5.00 4. Provision for contingencies* 0.41 Total 41.65 *Provision for contingencies have been assumed at the rate of 1% of the sum of all other estimated costs.

Land

We will use existing factory land at Satna and Solapur for setting up of private mandis and each mandi will be spread across 3,240 square meters.

Civil works

The total cost for civil work and building for setting up of private mandis is Rs. 36.24 million as certified by M/s. Uttam K. Banerjee & Associates, an independent Government-approved registered valuer and consulting chartered engineer, vide their certificate dated June 9, 2010 and June 23, 2010. The detail of the same is as set forth below:

(Rs. in million) Sr. No. Particulars Area Rate Amount (Sq. mts.) Satna, Madhya Pradesh 1. Setting up of private 3240.00 5000.00 16.20 mandis (80 mtr x 40.50 mtr) 2. Setting up of platform for 960.00 2000.00 1.92 private mandis Solapur, Maharastra 3. Setting up of private 3240.00 5000.00 16.20 mandis (80 mtr x 40.50 mtr) 4. Setting up of platform for 960.00 2000.00 1.92 private mandis Total 36.24

Miscellaneous fixed assets (Rs. in million) Sr. No. Particulars Amount# 1. Fire fighting equipments 1.00 2. Furniture and fixtures 2.00 3. Computers and printers, etc. 1.00 4. Others* 1.00 Total 5.00 # Theses are internal management estimates and no quotations have been obtained for the same.

Provision for contingencies

Our Company has provided Rs. 0.41 million provision for contingencies which includes expenses any increase in project cost, due to increase in raw material cost or any other cost, etc.

Schedule of implementation

Activity Expected Commencement Expected Completion Land - Completed Civil Works October 2010 March 2011 Miscellaneous fixed assets March 2011 March 2011 Start of operations April 2011 -

6. Purchase of a railway rake

We move our finished products i.e. de-oiled cakes and poultry feed through railway rakes owned and managed by the Indian Railways. Owning a rake will provide us the necessary flexibility and assurance of availability of rakes within the stipulated turn around time from the railway authorities.

We could increase our penetration into the remote and far off markets for supply of DOC and poultry feed and hence increase our reach. The wagons would greatly assist us in transportation of our goods across the country at our convenience. Consequently it would greatly reduce our dependence on availability of railway wagons at the disposal of the Indian Railways.

We have obtained quotation from Cimmco Ltd. vide their quotation no. CL/2010/PW dated June 18, 2010. We intend to purchase one railway rake comprising of 43 wagons. The total cost of the railway rake would be approximately Rs. 135.46 million including excise duty, education cess and secondary education cess but excluding other taxes like CST/ VAT, transportation charges and below mentioned provision for pre-operative expenses and contingencies of Rs. 2.66 million. We have estimated amount of Rs. 2.66 million as provision for pre-operative expense and contingencies (at the rate of 2% of the sum of all other estimated costs)which includes expenses for freight, insurance, transportation charges, any increase in project cost due to increase in raw material cost or any other cost, etc.

Activity Expected Commencement Expected Completion Placement of order November 2010 November 2010 Delivery of rake June 2011 June 2011 Start of operation July 2011 July 2011

7. Brand promotion and expansion of marketing and distribution network

Our Company is in the business of manufacturing and marketing of edible oil. We intend to increase our share in the retail market. We believe that the branding exercise will enhance the recall value in the minds of customers and will help in increasing demand for our product. The brand building exercise is a part of that initiative that we believe would enable greater visibility for our products on the retail shelf thereby leading to increased demand for our products.

In the last ten years, we believe, we have successfully introduced and marketed our brand in Madhya Pradesh. We intend to leverage our established brands that include Saras and Siddha Gold (in edible oil), Siddha (hybrid seeds) and Poushtik (animal feed).

We have budgeted a brand building exercise of Rs. 94.50 million. The budget includes brand ambassadors fee, television and online commercials,newspaper, magazine, advertisements and outdoor media like hoardings, etc. Going forward we propose to engage in expanding our branding and marketing initiatives by expending the following amounts: (Rs. in million) Proposed Deployment Sr. No. Particulars FY 2011 FY 2012 1. Brand ambassador 10.00 Nil 2. Online advertising 0.25 0.25 3. Television advertising 20.00 15.00 4. Print media 15.00 10.00 5. Outdoor media 5.00 4.00 6. Public relations 5.00 2.00 7. Expansion of marketing and distribution network 5.00 3.00 Total 60.25 34.25

We have planned to increase our distribution network in India from 17 to over 30 distributors by December 2011. We estimate to incur an expenditure of about Rs. 8.00 million on expansion of distribution network. We have also planned to develop in house training facilities for our marketing and sales team. We shall train our marketing and sales personnel by sending them to other professional centers for updating their skills and knowledge with their personality development and improving customer relationship. We plan to have regular conferences for our distributors, retailers and franchising to update them regarding our marketing strategy and new products range.

8. General Corporate Purposes

We, in accordance with the policies set up by our Board, will retain flexibility in applying the remaining Net Proceeds of this Issue, for general corporate purposes.

Our management, in response to the competitive and dynamic nature of the industry, will have the discretion to revise its business plan from time to time and consequently our funding requirement and deployment of funds may also change. In

case of a shortfall in the Net Proceeds of the Issue, our management may explore a range of options including utilizing our internal accruals or seeking debt from future lenders. Our management expects that such alternate arrangements would be available to fund any such shortfall. Our management, in accordance with the policies of our Board, will have flexibility in utilizing the proceeds earmarked for general corporate purposes.

Issue Related Expenses

The expenses of the Issue include fees of the BRLM, underwriting commission, selling commission, distribution expenses, statutory fees, fees to legal advisors, fees to advisors, auditors, IPO Grading fees, printing and stationary costs, registrar costs, advertisement expenses and listing fees payable to the Stock Exchanges among others. The estimated Issue expenses are as follows:

The total estimated expenses are Rs. [●] million, which is [●] % of the Issue size. (Rs. in million)

Particulars Amounts* As percentage As a percentage of total expenses of Issue size Lead management fees (including, underwriting [●] [●] [●] commission, brokerage and selling commission) Registrar to the Issue [●] [●] [●] Advisors [●] [●] [●] Bankers to the Issue [●] [●] [●] Others: [●] [●] [●] - Printing and stationery [●] [●] [●] - Listing fees [●] [●] [●] - Advertising and marketing expenses [●] [●] [●] - IPO Grading Fees [●] [●] [●] - Others [●] [●] [●] Total estimated Issue expenses [●] [●] [●] *Would be incorporated post finalization of Issue Price

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.

Bridge Financing Facilities

Our Company has not raised any bridge loans from any bank or financial institution as on the date of the Draft Red Herring Prospectus, which are proposed to be repaid from the Net Proceeds.

Working Capital Requirement

The Net Proceeds of this Issue will not be used to meet our working capital requirements as we expect sufficient internal accruals and already have bank limits for working capital to meet our existing and future working capital requirements. However, in the event that there is surplus of funds after deployment from the Net Proceeds of the Issue, the funds may be utilized towards reducing our reliance on working capital facilities.

Interim use of funds

We, in accordance with the policies established by our Board, will have flexibility in deploying the Proceeds received by us from the Issue. The particular composition, timing and schedule of deployment of the proceeds will be determined by us based upon the development of the projects. Pending utilization for the purposes described above, we intend to temporarily invest the funds from the Issue in high quality interest bearing liquid instruments including deposits with banks and investments in mutual funds and other financial products, such as principal protected funds, derivative linked debt instruments, other fixed and variable return instruments, listed debt instruments and rated debentures.

Monitoring of utilisation of Issue proceeds

In terms of Regulation 16(1) of the ICDR Regulations, we are not required to appoint a monitoring agency for the purposes of this Issue. As required under the listing agreements with the Stock Exchanges, the Audit Committee appointed by our Board will monitor the utilization of the Issue proceeds. We will disclose the utilization of the proceeds of the Issue, including interim use, under a separate head in our quarterly financial disclosures and annual audited financial statements until the Issue Proceeds remain unutilized, to the extent required under the applicable law and regulation. We will indicate investments, if any, of unutilized proceeds of the Issue in our Balance Sheet for the relevant Financial Years subsequent to our listing.

Pursuant to clause 49 of the Listing Agreement, our Company shall on a quarterly basis disclose to the Audit Committee the uses and applications of the proceeds of the Issue. On an annual basis, our Company shall prepare a statement of funds utilised for purposes other than those stated in the Draft Red Herring Prospectus and place it before the Audit Committee. Such disclosure shall be made only until such time that all the proceeds of the Issue have been utilised in full. The statement shall be certified by the statutory auditors of our Company.

Our Company shall be required to inform material deviations in the utilisation of the Net Proceeds of the Issue to the Stock Exchanges and shall also be required to simultaneously make the material deviations/adverse comments of the Audit committee/monitoring agency public through advertisement in newspapers.

No part of the Proceeds from the Issue will be paid by us as consideration to our Promoters, Promoter Group, our Directors, Group Companies or Key Managerial Personnels, except in the normal course of our business.

For risks associated with respect to the objects of this Issue, please see "Risk Factors" beginning on page 13 of the Draft Red Herring Prospectus.

BASIS OF ISSUE PRICE

The Issue Price will be determined by our Company, in consultation with the BRLM, on the basis of assessment of market demand for the Equity Shares by the Book Building Process. The face value of the equity shares is Rs. 10 each and the Floor Price is [●] times of the face value and the Cap Price is [●] times of the face value. Investors should review the entire Draft Red Herring Prospectus, including the sections “Risk Factors”, “Industry Overview”, “Our Business” and “Financial Information” on pages 13, 103 and 177 respectively, to get a more informed view before making any investment decision.

Qualitative Factors

The key competitive strengths of our Company include the following:

Quantitative Factors

The information presented in this section for the seven month period ended January 31, 2010 and the for the financial years ended June 30, 2009, June 30, 2008 and June 30, 2007 is derived from our standalone audited restated financial statements prepared in accordance with Indian GAAP. Investors should evaluate our Company taking into consideration its earnings and based on its consolidated growth strategy. Some of the quantitative factors which may form the basis for computing the price are as follows:

1. Adjusted Basic and Diluted Earnings per Share (EPS)

Basic and Diluted Year ended EPS (Rs.) Weight June 30, 2007 15.58 1 June 30, 2008 30.03 2 June 30, 2009 24.22 3 Weighted Average 24.72 Seven month period ended January 31, 2010, unannualised 20.41

Notes: • The basic and diluted EPS have been calculated in compliance with Accounting Standard - 20 issued by the Institute of Chartered Accountants of India.

• Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

• The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue.

• The face value of each equity share is Rs. 10. each

2. Price / Earning (P/E) Ratio in relation to Issue Price of Rs. [●]

Floor Price Rs. Cap Price Issue Price Particulars Rs. Rs. a) Based on EPS of June 30, 2009 [•] [•] [•] b) Based on EPS of January 31, 2010 [•] [•] [•]

c) Based on weighted average EPS [•] [•] [•] d) Industry P/E Multiple: Highest 38.4 Lowest 4.1 Average 15.9 (Source: Capital Market, Vol.XXV/10, Jul 12-25, 2010, category “Solvent Extraction”)

3. Average Return on Net Worth (RONW):

Return on Net Worth as per restated standalone financial statements

Particulars RONW % Weight Year ended June 30, 2007 34.66 1 Year ended June 30, 2008 40.89 2 Year ended June 30, 2009 24.24 3 Weighted Average 31.53 Seven month period ended January 31, 2010, unannualized 16.96

Note: The average return on net worth is arrived at by dividing restated net profit after tax by restated net worth as at the end of the year / period.

4. Minimum Return on increased net worth required for maintaining pre-issue EPS at January 31, 2010 is [●].

5. Net Asset Value per Equity Share

Particulars Amount (Rs.) Net Asset Value per Equity Share as of January 31, 2010 120.33 Net Asset Value per Equity Share after the Issue [●] Issue Price per equity share [●] Note: Net Asset Value per Equity Share represents Net Worth at the end of the year / period, as restated divided by the number of Equity Shares outstanding at the end of the period/ year.

6. Comparison of Accounting Ratios with Industry Peers

Name of the Face Value (Rs.) EPS RONW (%) Book Value per P/E Ratio company (Rs.) Equity Share (Rs.) Amrit Banaspati 10.00 11.0 11.8 48.7 11.5 Company Limited Gokul Refoils and 2.00 3.2 8.8 28.9 23.2 Solvent Limited K S Oils Limited 1.00 4.8 21.2 30.9 12.0 Ruchi Soya 2.00 5.8 5.6 56.1 18.6 Industries Limited Sanwaria Agro Oils 1.00 2.8 41.4 8.7 16.9 Limited Betul Oil Limited* 10.00 24.22 24.24 99.92 [●]** (Source: Capital Market, Vol.XXV/10, Jul 12-25, 2010, category “Solvent Extraction”) *Based on Restated standalone Summary Statements of the Company for the year ended June 30, 2009. **Based on the issue price to be determined on conclusion of book building process and the Basic/Diluted EPS of the Company

The Issue Price of Rs. [●] has been determined by our Company in consultation with the BRLM on the basis of the demand from investors for the Equity Shares through the Book Building Process. The BRLM believes that the Issue Price of Rs. [●] is justified in view of the above qualitative and quantitative parameters. Prospective investors should also review 86

the entire Draft Red Herring Prospectus, including, in particular “Risk Factors”, “Business Overview” and “Financial Information” on pages 13, 117 and 177 respectively to have a more informed view.

For the basic terms of the issue, see “Terms of the Issue” on page 294 of the Draft Red Herring Prospectus.

STATEMENT OF TAX BENEFITS

The Board of Directors BETUL OIL LTD., KOSMI INDUSTRIAL ESTATE, BETUL – M.P.

Dear Sirs,

Statement of Possible Tax Benefits Available to the Company and its shareholders

We hereby report that the enclosed statement states the possible tax benefits available to BETUL OIL LTD., (the Company) and to its shareholders under the provisions of Income Tax Act,1961 (Provisions of Finance Act 2010), Wealth Tax Act 1957 and the Gift Tax Act 1958, presently in force in India. The statement does not take into account the provisions of proposed Direct Tax Code. Statement of Sales/ Entry Tax benefits as offered by the Government of Madhya Pradesh in case of new units in the State under specified category is also given. Several of these benefits outlined in this statement are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the statute. Hence, the ability of the Company or its shareholders to derive the tax benefits will be dependent upon such conditions being fulfilled, which based on the business imperatives the Company faces in the future, the company may or may not choose to fulfill.

The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult their own tax consultant with respect to the specific tax implications arising out of their participation in the issue. While all reasonable care has been taken in the preparation of this statement, we accept no responsibility for any errors or omissions therein or for any loss sustained by any person who relies on it.

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

(i) the Company or its shareholders will continue to obtain these benefits in future; or (ii) the conditions prescribed for availing the benefits has been/ would be met with.

The contents of the enclosed statement are based on information, explanations and representations obtained from the Company and on the basis of the understanding of the business activities and operations of the Company.

This report is intended solely for informational purposes for the inclusion in the Offer Document in connection with the Proposed Issue of Equity Shares of the Company in accordance with SEBI ICDR Regulations and is not to be circulated or referred to for any other purpose without our prior written consent. We hereby give our consent to add this report in the Offer Document of the Company.

For BHUTORIA GANESAN & Co (Chartered Accountants) Firm Registration No.: 004465C

(CA R.GANESAN) Partner Membership No.: 26164 Place: Mumbai Date: July 28, 2010

STATEMENT OF TAX BENEFITS

I. SPECIAL TAX BENEFITS

SPECIAL TAX BENEFITS TO THE COMPANY

There are no special Income tax benefits available to the company.

The following Sales Tax / Entry Tax benefits will be available subject to statutory approvals for the Solvent Extraction Expansion of the Company’s plant in Betul M.P.

1. MP Trade & Investment Facilitation Corporation Ltd Bhopal has issued Certificate of Registration under Madhya Pradesh Udyog Nivesh Samvardhan Sahayata Yojana 2004 bearing registration No MPIIPAS- 04/365 dt 28-01- 2010 for Project Status Expansion at Betul District (C category District) for expansion of annual capacity of refined vegetable oil 7614 MT, Deoiled Cake 36900 MT, Soya flour/Nuggets 30000 MT and Lecithin 900 MT. 2. Under the Scheme if an existing SSI unit invests minimum 50% of existing fixed capital investment for capacity expansion/ diversification / technical upgradation such an industry will be provided subsidy/benefits similar to new units. 3. Under the Madhya Pradesh Udyog Nivesh Samvardhan Sahayata Yojana 2004 New industrial units will be exempted from the payment of entry tax for a period of 5 years from the date of first purchase of raw material. 4. Under the Madhya Pradesh Udyog Nivesh Samvardhan Sahayata Yojana 2004 Industries having fixed capital investment of more than Rs.10 crore would be given industrial promotion assistance equivalent to 75% of amount of commercial tax and central sales tax (excluding the amount of commercial tax on purchase of raw materials) deposited by them. The prescribed limits under this eligibility criteria for new units in back ward C category District is minimum investment Rs.10 crore and the period of assistance is 5 years. Also the amount of assistance would not exceed fixed capital investment. 5. All the above tax benefits are subject to compliance of various conditions by the Govt of MP and are not to be construed to be granted upon registration.

The following Sales Tax / Entry Tax benefits will be available subject to statutory approvals for the Solvent Extraction Unit (New Unit) of the Company in Satna M.P.

1. MP Trade & Investment Facilitation Corporation Ltd Bhopal has issued Certificate of Registration under Madhya Pradesh Udyog Nivesh Samvardhan Sahayata Yojana 2004 bearing registration No MPIIPAS- 04/298 dt 26-03- 2009 for New Unit at Satna District (A category District) for to be installed annual capacity of refined oil 33000 MT, Deoiled Cake / Lecithin 162000 MT, Soya flour 30000 MT and Soya Nugget 30000 MT. 2. Under the Madhya Pradesh Udyog Nivesh Samvardhan Sahayata Yojana 2004 New industrial units will be exempted from the payment of entry tax for a period of 5 years from the date of first purchase of raw material. 3. Under the Madhya Pradesh Udyog Nivesh Samvardhan Sahayata Yojana 2004 Industries having fixed capital investment of more than Rs.10 crore would be given industrial promotion assistance equivalent to 75% of amount of commercial tax and central sales tax (excluding the amount of commercial tax on purchase of raw materials) deposited by them. The prescribed limits under this eligibility criteria for new units in back ward A category District is minimum investment Rs.20 crore and the period of assistance is 5 years. Also the amount of assistance would not exceed fixed capital investment. 4. All the above tax benefits are subject to compliance of various conditions by the Govt of MP and are not to be construed to be granted upon registration.

SPECIAL TAX BENEFITS TO THE SHARE HOLDERS OF THE COMPANY

There are no special tax benefits available to the shareholders of the company.

II. GENERAL TAX BENEFITS

The following possible general tax benefits shall be available to the Company and the prospective shareholders under the Current Direct Tax Laws. Several of these benefits are dependent on the Company or its Shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon the fulfilling such conditions.

A. BENEFITS TO THE COMPANY UNDER THE INCOME TAX ACT 1961 (The Act)

The Company will be entitled to deductions under the sections mentioned hereunder from its total Income chargeable to Income Tax.

1. Dividend Exempt under section 10(34)

By virtue of Section 10(34) of the IT Act, income earned by way of dividend income from another domestic company referred to in Section 115-0 of the IT Act, are exempt from tax in the hands of the company, subject to provisions of section 14A and rules framed there under.

2. Income from units of Mutual Fund exempt under section 10(35)

By virtue of section 10(35) income earned by way of dividend from units of mutual funds specified under clause 10 (23D) is exempt from tax, subject to the provisions of Section 14A and Rules framed there under.

Also section 94(7) of the Act provides that losses arising from the sale/ transfer of shares or units purchased within a period of three months prior to the record date and sold / transferred within three months or nine months respectively after such date will be disallowed to the extent dividend income on such shares or units is claimed as tax exempt.

3. Computation of Capital Gains and tax thereon

Capital assets may be categorized into short term capital assets and long term capital assets based on the period of holding. Shares in a company, listed securities or units of Mutual Fund specified under section 10(23D) or zero coupon bonds will be considered as long term capital assets if they are held for period exceeding 12 months. Consequently capital gains arising on sale of these assets held for more than 12 months are considered as “Long Term Capital Gains”. Capital gains arising on sale of these assets held for 12 months or less are considered as “ Short Term Capital gains”.

Section 48 of the Act, which prescribes the mode of computation of capital gains, provide for deduction of costs of acquisition/ improvement and expenses incurred in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains. However in respect of long term capital gains, it offers a benefit by permitting substitution of cost of acquisition/ improvements with the indexed cost of acquisition/ improvement, which adjusts the cost of acquisition/ improvement by a cost inflation index as prescribed from time to time.

As per the provisions of Sec 112(1)(b) of the Act, long term gains as computed above that are not exempt under section 10(38) of the Act, would be subject to tax at the rate of 20% (plus applicable surcharge, education cess and secondary higher education cess).However as per the proviso to section 112 (1), if the tax of long term capital gains resulting on transfer of listed securities or units or zero coupon bonds, calculated at the rate of 20% with indexation benefit, exceed the tax on long term capital gains computed @ 10% without indexation benefit, then such gains are chargeable to tax at concessional rate of 10% (plus applicable surcharge, education cess and secondary higher education cess)

Gains arising on transfer of short term capital assets are currently chargeable to tax at the rate of 30% (plus applicable surcharge, education cess and secondary higher education cess). However as per the provisions of section 111 (A) of the Act, short term capital gains on sale of equity shares or units of an equity oriented fund on or after 1-10-2004, where the transaction of sale is subject to Securities Transaction Tax (STT) shall be chargeable to tax at a rate of 15% (plus applicable surcharge, education cess and secondary higher education cess)

Further the tax benefits related to capital gains are subjected to the CBDT Circular No. 4/2007 dated 15th June 2007, and on fulfillment of criteria laid down in the circular, the Company will be able to enjoy the consessional benefits of taxation on capital gains.

As per section 74 short term capital loss suffered during the year is allowed to be set-off against short-term as well as long term capital gains of the said year. Balance loss, if any, could be carry forward for eight years for claiming set-off against subsequent years’ short-term as well as long-term capital gains. Long term capital loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if any, could be carried forward for eight years for claiming set- off against subsequent years‘ long term capital gains

4. Exemption of Capital Gains from Income Tax

(a) Under section 10(38) of the Act, any long term capital gains arising out of sale of equity shares or units of an equity oriented fund on or after 1-10-2004 will be exempt from tax provided that the transaction of sale of such shares or units is chargeable to STT. However such income shall be taken into account in computing the book profits under section 115 JB.

(b) According to the provisions of section 54EC of the Act and subject to the conditions specified therein, long term capital gains not exempt under section 10 (38) shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six month from the date of transfer of shares. If only part of the capital gain is so reinvested, the exemption shall be allowed proportionately. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. Provided that investments made on or after 1st April 2007, in the said bonds should not exceed fifty lakh rupees. The cost of specified assets which is considered for the purpose of section 54EC shall not be eligible for deduction under section 80C of the Act.

5. Computation of Business Income

Subject to the fulfillment of conditions prescribed, the company will be eligible, inter-alia, for the following specified deductions in computing its business income:-

(a) Under Section 35 (1) (i) and (iv) of the Act, in respect of any revenue or capital expenditure incurred, other than expenditure on the acquisition of any land, on scientific research related to the business of the Company.

(b) Under Section 35 (1) (ii) of the Act, in respect of any sum paid to a scientific research association which has as its object the undertaking of scientific research, or to any approved university, College or other institution to be used for scientific research or for research in social sciences or statistical scientific research to the extent of a sum equal to one and three fourth times the sum so paid.

Under Section 35 (1) (ii)(a) of the Act, any sum paid to a company, which is registered in India and which has as its main object the conduct of scientific research and development, to be used by it for scientific research is approved by the prescribed authority and fulfills such conditions as may be prescribed shall also qualify for a deduction of one and one fourth times the amount so paid.

Under Section 35 (iii) an amount equal to one and one fourth times (125%) of any sum paid to a university or collage or other institution to be used for research in social science or statistical research provided they fulfill the conditions prescribed under the Act.

Similarly, payments to a National Laboratory, university or Indian Institute of Technology in respect of approved programmes of scientific research are also eligible for weighted deduction of 175% of the sum paid under section 35(2AA)..

(c) Under Section 36 (1) (xv) of the Act, the amount of Securities Transaction Tax paid by an assessee in respect of taxable securities transactions offered to tax as “Profits and gains of Business or profession” shall be allowable as a deduction against such Business Income.

(d) Subject to compliance with certain conditions laid down in section 32 of the 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 prescribed under the Income Tax Rules,1962. Unabsorbed depreciation allowance can be carried forward indefinitely and can be set off against the profit or gains of business or income chargeable under any other head in the subsequent years.

The company is entitled to an additional depreciation allowance of 20% of the cost of new machineries acquired and put to use during the year.

Under Section 72 of the Act, where the loss under the head profits and gains of business or profession‘ could not be set off in the same assessment year because either the company had no income under any other head or the income was less than the loss, such loss which could not be set off in the same assessment year,can be carried forward to the following assessment years and it shall be set off against the profit and gains of business or profession for eight successive assessment years subject to the conditions setout in the said section.

Under Section 80-GGB, in computing total income of a Company, any sum contributed by it to any political party or an electoral trust is deductible.

(e) Share of Income from an Association of persons

By virtue of section 86 of the IT Act, share of income of members of an Association of persons is exempt from tax provided the Association of person is chargeable to tax at Maximum Marginal Rate or any higher rate.

(f) Tax on distributed profits of domestic company

While calculating dividend distribution tax as per provision of Section 115-O, the reduction shall be allowed in respect of the dividend received by a domestic company from a subsidiary company during the financial year provided the subsidiary company has paid tax on such dividend and the domestic company, is not a subsidiary of any other company. It is further provided that same amount of dividend shall not be taken into the reduction more than once. For this purpose a company shall be subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of another company.

COMPUTATION OF TAX ON BOOK PROFIT

(g) As provided under section 115JB of the Act, the company is liable to pay income tax at the rate of 15% (plus applicable surcharge, education cess and secondary & higher education cess) on the Book Profit as computed in accordance with the provisions of section 115JB of the Act, if the total tax payable as computed under the Act is less than 15% of the Book Profit as computed under the said section.

Under section 115JAA (1A) of the Act, tax credit shall be allowed of any tax paid under section 115 JB of the Act (MAT) Credit eligible for carry forward is the difference between MAT paid and the tax computed as per the normal provisions of the Act. Such MAT credit shall not be available for set-off beyond 10 years succeeding the year in which the MAT becomes allowable. The company shall be eligible to set-off the MAT credit, thus carried forward, in the year in which it is required to pay the tax under the regular provisions of the Income-tax Act. The amount which can be set-off is restricted to the difference between the tax payable under the regular provisions of the Act and tax payable under the provisions of section 115JB in that year.

TAX REBATES (TAX CREDITS):

(h) As per the provisions of section 90, the Company is entitled to credit for taxes on income paid in Foreign Countries with which India has entered into Double Taxation Avoidance Agreements (Tax Treaties from projects/activities undertaken thereat) from the income earned in those countries, the Company will be entitled to the deduction from the Indian Income-tax of a sum calculated on such doubly taxed income to the extent of taxes paid in Foreign Countries. Further, the company as a tax resident of India would be entitled to the benefits of such Tax Treaties in respect of income derived by it in foreign countries. In such cases the provisions of the Income tax Act shall apply to the extent they are more beneficial to the company. Section 91 provides for unilateral relief in respect of taxes paid in foreign countries.

B. BENEFITS AVAILABLE TO RESIDENT SHARE HOLDERS

(a) Dividends exempt under section 10 (34)

Under section 10 (34) of the Act, income earned by way of dividend (Interim or final) from domestic Company referred to in section 115-O of the Act is exempt from income tax in the hands of the shareholders.

However, in view of the provisions of section 14A of the Act, no deduction is allowed in respect of any expenditure incurred in relation to earning such dividend income. The quantum of such expenditure liable for disallowance is to be computed in accordance with the provisions contained therein.

Also, section 94(7) of the Act provides that losses arising from the sale / transfer of shares or units purchased within a period of three months prior to the record date and sold / transferred within three months or nine months respectively after such date, will be disallowed to the extent dividend income on such shares or units is claimed as tax exempt.

(b) Income of a minor exempt up to certain limit

Under Section 10(32) of the Act, any income of minor children clubbed in the total income of the parent under section 64(1A) of the Act will be exempted from tax to the extent of Rs.1, 500/- per minor child.

Capital assets may be categorized into short term capital assets and long term capital assets based on the period of holding Shares in a Company, listed securities or units of UTI or units of Mutual Fund specified under section 10 (23D) or zero coupon bond will be considered as long term capital assets if they are held for period exceeding 12 months. Consequently, capital gains arising on sale of these as sets held for more than 12 months are considered as “Long Term Capital Gains”. Capital gains arising on sale of these assets held for 12 months or less are considered as “Short Term Capital Gains”.

Section 48 of the Act, which prescribes the mode of computation of Capital Gains, provides for deduction of cost of acquisition/improvement and expenses incurred in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of Capital Gains. However, in respect of long term capital gains, it offers a benefit by permitting substitution of cost of acquisition/improvement with the indexed cost of acquisition/improvement, which adjusts the cost of acquisition/ improvement by a cost inflation index as prescribed from time to time.

According to the provisions of section 112 (1) of the Act, long term gains as computed above that are not exempt under section 10 (38) of the Act, would be subject to tax at a rate of 20 percent (plus applicable surcharge, education cess and secondary higher education cess). However, as per the proviso to section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term capital gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at consessional rate of 10 percent (plus applicable education cess and secondary higher education cess).

Gains arising on transfer of short term capital assets are currently chargeable to tax at the rate of 30 percent (plus applicable surcharge, education cess and secondary higher education cess). However as per the provisions of section 111A of the Act, short-term capital gains on sale of equity shares or units of an equity oriented fund on or after 1st October, 2004, where the transaction of sale is subject to Securities Transaction Tax (“STT”) shall be chargeable to tax at a rate of 15 percent (plus applicable education cess and secondary higher education cess).

As per section 74 short term capital loss suffered during the year is allowed to be set-off against short-term as well as long term capital gains of the said year. Balance loss, if any, could be carry forward for eight years for claiming set-off against subsequent years‘ short-term as well as long-term capital gains. Long term capital loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if any, could be carried forward for eight years for claiming set- off against subsequent years‘ long term capital gains.

Exemption of capital gain from income tax

Under section 10 (38) of the Act, long term capital gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or unit is chargeable to Securities Transaction Tax (“STT”).

According to the provisions of section 54EC of the Act and subject to the conditions specified therein, long term capital gains not exempt under section 10 (38) shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six month from the date of transfer of shares. If only part of the capital gain is so reinvested, the exemption shall be allowed proportionately. However, if the said bonds are transferred

or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. Provided that investments made on or after 1st April 2007, in the said bonds should not exceed fifty lakh rupees. The cost of specified assets which is considered for the purpose of section 54EC shall not be eligible for deduction under section 80C of the Act.

In accordance with section 54ED capital gain arising on the transfer of a long –term capital assets being listed securities on which securities transaction tax is not payable, shall be exempt from tax provided the whole of the capital gain is invested within a period of six months in equity shares forming part of an eligible issue of capital. If only part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain so invested. If the specified equity shares are sold or otherwise transferred within a period of one year from the date of acquisition, the amount of capital gains on which tax was not charged earlier shall be deemed to be income chargeable under the head “ Capital Gain” of the year in which the specified equity shares are transferred. The cost of the specified equity shares will not be eligible for deduction under section 80C.

According to the provisions of section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a Hindu Undivided Family (‘HUF’), gains arising on transfer of a long term capital asset (not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately. For this purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. Further, if the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlier would become Chargeable to tax as long term capital gains in the year in which such residential house is transferred. Further thereto, if the individual purchases within a period of one year before or two years after the date on which the transfer took place or constructs within a period of three years after the date of transfer of the long term capital asset, any other residential house, other than the residential house referred to above, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such residential house is purchased or constructed.

(d) Deduction in respect of Securities Transaction Tax paid against Business Income

Under Section 36 (1) (xv) of the Act, the amount of Securities Transaction Tax paid by an assessee in respect of taxable securities transactions offered to tax as “Profits and gains of Business or profession” shall be allowable as a deduction against such Business Income.

(e) Deduction of dividend received from subsidiary company while computing Dividend Distribution Tax liability of the Ultimate Holding Company

Every domestic company is liable to pay Dividend Distribution Tax (DDT) on the amount of dividend distributed by it whether interim or final, @17% (including surcharge and education cess and higher education cess). However, while computing the DDT liability of a domestic company which is the ultimate holding company, the dividend so paid or distributed amount shall be reduced by the dividend received from its subsidiary company where the subsidiary company has paid DDT on such dividend. Thus, ultimate holding company is eligible to take credit for the dividend distributed by its subsidiary company while computing the amount of Dividend Distribution Tax payable by itself on the dividend distributed.

C. BENEFITS AVAILABLE TO INDIAN SHAREHOLDERS (OTHER THAN FIIs AND FOREIGN VENTURE CAPITAL INVESTORS)

(a) Dividends exempt under section 10 (34)

(b) Income of a minor exempt up to certain limit

Under Section 10 (32) of the Act, any income of minor children clubbed in the total income of the parent under section 64 (1A) of the Act will be exempted from tax to the extent of Rs.1, 500/- per minor child.

Capital assets may be categorized into short term capital asset and long term capital assets based on the period of holding. Shares in a Company, listed securities or units of UTI or units of mutual fund specified under section 10 (23D) of the Act or zero coupon bonds will be considered as long term capital assets if they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of these assets held for more than 12 months are considered as “long term capital gains”. Capital gains arising on sale of assets held for 12 months or less are considered as “short term capital gains”.

Section 48 of the Act contains provisions in relation to computation of capital gains on transfer of shares of an Indian Company by a non-resident where the investment in such shares was made in foreign currency Computation of capital gains arising on transfer of shares in case of non-residents has to be done in the original foreign currency, which was used to acquire the shares. The capital gain (i.e. sale proceeds less cost of acquisition/ improvement) computed in the original foreign currency is then converted into Indian Rupees at the prevailing rate of exchange. Benefit of indexation of costs is not available in above case.

According to the provisions of section 112(1)(c) of the Act, long term capital gains as computed above that are not exempt under section 10 (38) of the Act would be subject to tax at a rate of 20 percent (plus applicable education cess and secondary higher education cess). In case investment is made in Indian Rupees, the long-term capital gains that are not exempt u/s 10(38) of the Act are to be computed after indexing the cost.

However, as per the proviso to section 112(1), if the tax on long term gains resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a consessional rate of 10 percent (plus applicable education cess and secondary higher education cess).

Gains arising on transfer of short term capital assets are currently chargeable to tax at the rate of 30 percent (plus applicable surcharge, education cess and secondary higher education cess) at discretion of assessee. However as per the provisions of section 111A of the Act, short-term capital gains of equity shares on or after 1st October, 2004, where the transaction of sale is chargeable to STT shall be subject to tax at a rate of 15 percent (plus applicable education cess and secondary higher education cess)

(d) Capital gains tax - Options available under the Act

Where shares have been subscribed in convertible foreign exchange

Option of Taxation under chapter XII-A of the Act:

A non resident Indian (i.e. an individual being a citizen of India or person of Indian Origin) has an option to be governed by the provisions of Chapter XIIA of the Income Tax Act, 1961 viz. "Special Provisions Relating to certain Incomes of Non-Residents".

Under Section 115E of the Income Tax Act, 1961, where shares in the Company are subscribed for in convertible Foreign Exchange by a Non Resident Indian, capital gains arising to the non resident on transfer of shares held for a period exceeding 12 months shall (in cases not covered under Section 10(38) of the Act) be concessionally taxed

at the flat rate of 10%( plus applicable surcharge education cess and secondary higher education cess) without indexation benefit but with protection against foreign exchange fluctuation under the first proviso to section 48 of the Income Tax Act, 1961. Capital gain on transfer of Foreign Exchange Assets, not to be charged in certain cases.

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

Capital gain on transfer of Foreign Exchange Assets, not to be charged in certain cases

Under provisions of Section 115F of the Income Tax Act, 1961, long term capital gains (not covered under Section 10(38) of the Act) arising to a non resident Indian from the transfer of shares of the Company subscribed to in convertible Foreign Exchange shall be exempt from Income Tax if the net consideration is reinvested in specified assets within six months of the date of transfer. If only part of the net consideration is so reinvested, the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted within three years from the date of their acquisition.

Return of Income not to be filed in certain cases

Under provisions of Section 115G of the Income Tax Act, 1961, it shall not be necessary for a Non-Resident Indian to furnish his return of Income if his only source of income is investment income or long term capital gains or both arising out of assets acquired, purchased or subscribed in convertible foreign exchange and tax deductible at source has been deducted there from such income as per the provisions of Chapter XVII- B of the Act.

Under section 115H of the Act, where the non-resident Indian becomes assessable as a resident in India, he may furnish a declaration in writing to the assessing officer, along with his return of income for that year under section 139 of the Act to the effect that the provisions of the chapter XII-A shall continue to apply to him in relation to such investment income derived from any foreign exchange asset being asset of the nature referred to in sub clause (ii), (iii), (iv) and (v) of section 115C(f) for that year and subsequent assessment years until such assets are converted into money.

Under Section 115-I of the Income Tax Act, 1961, a Non-Resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of income for that assessment year under Section 139 of the Income Tax Act declaring therein that the provisions of the Chapter XII - A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the Act.

Where the shares have been subscribed in Indian Rupees:

Section 48 of the Act, which prescribes the mode of computation of capital gains, provides for deduction of cost of acquisition/improvement and expenses incurred wholly and exclusively in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains. However, in respect of long term capital gains, it offers a benefit by permitting substitution of cost of acquisition/ improvement with the indexed cost of acquisition/improvement, which adjusts the cost of acquisition/improvement by a cost inflation index, as prescribed time to time.

As per the provisions of section 112(1) (c) of the Act, long term capital gains that are not exempt u/s. 10(38) of the Act as computed above would be subject to tax at a rate of 20 percent (plus applicable surcharge, education cess and secondary higher education cess). However, as per the proviso to Section 112(1) of the Act, if the tax payable in respect of long term capital gains resulting on transfer of listed securities or units, calculated at the rate of 20 percent with indexation benefit exceeds the tax payable on gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at the rate of 10 percent without indexation benefit (plus applicable surcharge, education cess and secondary higher education cess).

Exemption of capital gain from income tax

Under section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or unit is chargeable to STT.

Under the first proviso to Section 48 of the Income Tax Act, 1961, in case of a non-resident, in computing the capital gains arising from transfer of shares of the Company acquired in convertible foreign exchange (as per exchange control regulations) protection is provided from fluctuations in the value of rupee in terms of foreign currency in which the original investment was made. Cost indexation benefits will not be available in such a case.

Under Section 54EC of the Income Tax Act, 1961 and subject to the conditions and to the extent specified therein, long term capital gains (not covered under section 10(38) of the Act) arising on the transfer of shares of the Company will be exempt from capital gains tax if the capital gain upto Rs.50 lacs are invested in certain notified bonds within a period of six months from the date of transfer in “Long Term specified assets”. If only part of the capital gain is so reinvested, the exemption shall be allowed proportionately. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted within three years from the date of their acquisition.

Under Section 54F of the Income Tax Act, 1961 and subject to the conditions and to the extent specified therein, long term capital gains (in cases not covered under section 10(38) of the Act) arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the Company will be exempt from capital gain tax subject to other conditions, if the net sales consideration from such shares are used for purchase of residential house property within a period of one year before and two year 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. If any part of the Capital gain is reinvested the exemption will be reduced proportionately. The amount so exempted shall be chargeable to tax subsequently, if residential property is transferred within a period of three years from the date of purchase/construction. Similarly, if the shareholder purchases within a period of two years or constructs within a period of three years after the date of transfer of capital asset, another residential house, the original exemption will be taxed as capital gains in the year in which the additional residential house is acquired.

As per section 74 Short term capital loss suffered during the year is allowed to be set-off against short-term as well as long term capital gain of the said year. Balance loss, if any, could be carry forward for eight years for claiming set-off against subsequent years‘ short-term as well as long-term capital gains. Long term capital loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if any, could be carried forward for eight years for claiming -off against subsequent years‘ long term capital gains.

(e) Deduction in respect of Securities Transaction Tax paid against Business Income

Under Section 36 (1) (xv) of the Act, the amount of Securities Transaction Tax paid by an assessee in respect of taxable securities transactions offered to tax as ―Profits and gains of Business or profession shall be allowable as a deduction against such Business Income.

(f) Provisions of the Act vis-à-vis provisions of the tax treaty

As per Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the relevant tax treaty to the extent they are more beneficial to the nonresident.

D. BENEFITS AVAILABLE TO OTHER NON-RESIDENT SHAREHOLDERS (OTHER THAN FIIS AND FOREIGN VENTURE CAPITAL INVESTORS):

(a) Dividends exempt under section 10 (34)

However, in view of the provisions of Section 14A of Act, no deduction is allowed in respect of any expenditure incurred in relation to earning such dividend income. The quantum of such expenditure liable for disallowance is to be computed in accordance with the provisions contained therein.

Also, Section 94(7) of the Act provides that losses arising from the sale/transfer of shares or units purchased within a period of three months prior to the record date and sold/transferred within three months or nine months respectively after such date, will be disallowed to the extent dividend income on such shares or units is claimed as tax exempt.

(b) Income of a minor exempt up to certain limit

Capital assets may be categorized into short term capital asset and long term capital assets based on the period of holding Shares in a Company, listed securities or units of UTI or unit of mutual fund specified under section 10 (23D) of the Act or zero coupon bond will be considered as long term capital assets if they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of these assets held for more than 12 months are considered as “long term capital gains”. Capital gains arising on sale of assets held for 12 months or less are considered as “short term capital gains”.

Section 48 of the Act contains provisions in relation to computation of capital gains on transfer of shares of an Indian Company by a non-resident. Computation of capital gains arising on transfer of shares in case of non-residents has to be done in the original foreign currency, which was used to acquire the shares. The capital gain (i.e., sale proceeds less cost of acquisition/improvement) computed in the original foreign currency is then converted into Indian Rupees at the prevailing rate of exchange.

According to the provisions of section 112 of the Act, long term gain as computed above that are not exempt under section 10 (38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge, education cess and secondary higher education cess). In case investment is made in Indian Rupees, the long-term capital gain is to be computed after indexing the cost.

However, as per the proviso to section 112 (1) ( c) , if the tax on long term gains resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus applicable surcharge, education cess and secondary higher education cess).

Gains arising on transfer of short term capital assets are currently chargeable to tax at the rate of 30 percent (plus applicable education cess and secondary higher education cess). However as per the provisions of section 111A of the Act, short term capital gains of equity shares where the transaction of sale is chargeable to STT shall be subject to tax at a rate of 15 percent (plus applicable education cess and secondary higher education cess).

Further the tax benefits related to capital gains are subjected to the CBDT Circular No. 4/2007 dated 15th June 2007, and on fulfillment of criteria laid down in the circular, the individual will be able to enjoy the consessional benefits of taxation on capital gains.

As per section 74 Short term capital loss suffered during the year is allowed to be set-off against short-term as well as long term capital gain of the said year. Balance loss, if any, could be carry forward for eight years for claiming set-off against subsequent years‘ short-term as well as long-term capital gains. Long term capital loss suffered during the year is allowed to be set-off against long term capital gains. Balance loss, if any, could be carried forward for eight years for claiming set- off against subsequent years‘ long term capital gains.

(d) Exemption of capital gain from income tax

Under section 10(38) of the Act, long term capital gains arising out of sale of equity shares or units of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or units is chargeable to STT.

or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money. Provided that investments made on or after 1st April 2007, in the said bonds should not exceed fifty lakh rupees. In such case the cost of specified assets which is considered for the purpose of section 54EC shall not be eligible for deduction under section 80C of the Act.

According to the provisions of section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a Hindu Undivided Family (‘HUF’), gains arising on transfer of a long term capital asset (not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately. For this purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. Further, if the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such residential house is transferred. Further thereto, if the individual purchases within a period of one year before or two years after the date on which the transfer took place or constructs within a period of three years after the date of transfer of the long term capital asset, any other residential house, other than the residential house referred to above, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such residential house is purchased or constructed.

(e) Deduction in respect of Securities Transaction Tax paid against Business Income

(f) Provisions of the Act vis-à-vis provisions of the tax treaty

As per Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the relevant tax treaty to the extent they are more beneficial to the non-resident. E. BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (FIIs)

(a) Dividends exempt under section 10(34)

Under Section 10(34) of the IT Act, income earned by way of dividend income from another domestic company as referred to in Section 115-0 of the IT Act, are exempt from tax in the hands of the institutional investor, subject to provisions of section 14A and rules framed there under wherever applicable.

(b) Taxability of capital gains

Under section 10 (38) of the Act, long term capital gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or units is chargeable to STT. However, such income shall be taken into account in computing the book profits under section 115JB.

The income by way of short term capital gains or long term capital gains (not covered under Section 10(38) of the Act) realized by FIIs on sale of shares in the Company would be taxed at the following rates" as per Section 115AD of the Income Tax Act, 1961.

Short term capital gains, other than those referred to under section 111A of the Act shall be taxed @ 30% (plus applicable surcharge, education cess and secondary higher education cess).

Short term capital gains, referred to under section 111A of the Act shall be taxed @ 15% (plus applicable surcharge, education cess and higher secondary education cess).

Long term capital gains - 10% (without cost indexation plus applicable surcharge and education cess) and 20% (plus applicable surcharge and education cess and higher secondary education cess) with indexation benefit (shares held in a company would be considered as a long term capital asset provided they are held for a period exceeding 12 months).

It may be noted that the benefits of indexation and foreign currency fluctuation protection as provided by section 48 of the Act are not applicable

According to provisions of section 54EC of the Act and subject to the conditions specified therein, long term capital gains which are not exempt under section 10(38), shall not be chargeable to tax to the extent such capital gains are invested in notified bonds within six months from the date of transfer. If only a part of the capital gain is reinvested, the exemption shall be allowed proportionately. The investment in the said specified assets should not exceed Rupees fifty lakh. However, if the assessee transfers or converts the notified bonds into money within three years from the date of their acquisition, the amount of capital gain arising from the transfer of the original asset which was not charged to tax, will be deemed to be income by way of capital gain in the year in which the notified bonds are transferred or converted into money

Accordingly to the provisions of section 54EC of the Act and subject to the conditions specified therein, capital gains not exempt under section 10(38) 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 the capital gain is so reinvested, the exemption shall be allowed proportionately. Provided that investments made on or after 1st April 2007, in the said bonds should not exceed fifty lakh rupees. In such a case, the cost of such long term specified asset will not qualify for deduction under section 80C of the Act.

However, if the assessee transfers or converts the notified bonds into money within a period of three years from the date of their acquisition, the amount of capital gains exempt earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money.

According to the provisions of section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a HUF, gains arising on transfer of a long term capital asset (not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested the prescribed period in a residential house, the exemption shall be allowed proportionately. For this purpose, net consideration means full value of the consideration received or accrued as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. Further, if the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such residential house is transferred.

(d) Deduction in respect of Securities Transaction Tax paid against Business Income

(e) Provisions of the Act vis-à-vis provisions of the tax treaty

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F. BENEFITS AVAILABLE TO MUTUAL FUNDS

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 or regulations made there under, Mutual Funds set up by public sector banks or public financial institutions or authorized by the Reserve Bank of India, would be exempt from income tax subject to the conditions as the Central Government may notify. However, the mutual funds shall be liable to pay tax on distributed income to unit holders under section 115R of the Act.

G. BENEFITS AVAILABLE TO VENTURE CAPITAL COMPANIES / FUNDS.

In terms of Section 10 (23FB) of the Income Tax Act, 1961, all Venture Capital Companies / Funds registered with Securities and Exchange Board- of India, subject to the conditions specified, are eligible for exemption from income tax on all their income, including income from dividend. However, the exemption is restricted to the Venture Capital Company and Venture Capital Fund set up to raise funds for investment in a Venture Capital Undertaking, which is engaged in the business as specified under section 10(23FB)(c). However, the income distributed by the Venture Capital Companies/ Funds to its investors would be taxable in the hands of the recipients.

H. BENEFITS AVAILABLE UNDER THE WEALTH-TAX ACT, 1957

The company shall be charged wealth-tax @ 1% on amount of which its net wealth determined on the basis of nationality and residential status, on the corresponding valuation date relevant to the assessment year exceeds thirty lakhs subject to section 2(ea) of the Wealth Tax Act, 1957.

Shares of the company held by the shareholder will not be treated as an asset within the meaning of section 2(ea) of Wealth Tax Act, 1957. Hence, no wealth tax will be payable on the market value of shares of the company held by the shareholder of the company.

I. BENEFITS AVAILABLE UNDER THE GIFT-TAX ACT, 1958

Gift of shares of the Company made on or after 1st October, 1998, are not liable to Gift tax. Therefore, any gift of shares will not attract gift tax. However, if the aggregate fair market value of the shares exceeds fifty thousand rupees then, in the hands of the Donee, the same will be treated as income under the provisions of the IT Act unless the gift is from a relative as defined under Explanation to Section 56(vi) of Income-tax Act, 1961 or under circumstances mentioned in the second proviso to Section 56(vii) of the IT Act.

Notes: 1. The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequence of the purchase, ownership and disposal of equity shares;

2. The above Statement of Possible Direct Tax Benefits sets out the possible tax benefits available to the company and its shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the company or its shareholders fulfilling the conditions prescribed under the relevant tax laws, including as laid down by the circular 4/2007 dated 15th June 2007 issued by CBDT concerning capital gain, for availing concessions in relation to capital gain tax;

3. This statement is only intended to provide general information to the investors and 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 their participation in the issue;

4. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which the non-resident has fiscal domicile; and

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

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For BHUTORIA GANESAN & CO., (Chartered Accountants)

(R.GANESAN) Partner, Membership Number: 026164, Firm Registration No. 004465C

Place: Mumbai Dated: July 28, 2010

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SECTION V: ABOUT THE COMPANY

INDUSTRY OVERVIEW

Indian Edible Oil Industry

16 14 12.5 11.6 14 11.4 10.8 10.3 12 12 10 10 14.26 8 8 12.60 12.43 11.59 11.79 6 6 4 4

2 2

0 0 2003-04 2004-05 2005-06 2006-07 2007-08

Edible Oil Consumption (Mn Tonnes) - LHS Per Capita Consumption (Per Person/annum - kgs) - RHS

(Source: CARE Research, Department of Food & Public Distribution, Business Beacon)

Approximately 40 per cent of the domestic demand for edible oil was met by the imports from other countries during 2007- 08. The imports mainly comprise Palm oil, Soybean oil and Sunflower oil. Indonesia, Argentina and Malaysia are the key exporters of oil to India. Olive oil is mainly imported from European countries like Italy and Spain. Rapeseed oil is imported from UAE. (Source: CARE Research, Department of Food & Public Distribution, Business Beacon)

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Oil imports and key exporting countries

Oil Type Imports (Mn. Rs.) - 2008-09 Key Exporters Palm oil 118,654 Indonesia - 80 %, Malaysia - 18% Soybean oil 18,719 Argentina - 70 %, Brazil-24% Sunflower oil 12,535 Argentina - 44%, Ukraine - 43 % Coconut oil 7,940 Indonesia - 80 % Olive oil 492 Spain -58% , Italy - 34% Rapeseed oil 405 United Arab Emirates - 99% (Source: CARE Research, Export-Import data bank)

Indian oil cake industry Faster income growth is also strengthening demand for animal products and the derived demand for coarse grain and oil meal for feeding the cattle and poultry. India has a large animal product sector and both supply and demand have responded to stronger income growth. The domestic consumption for oil meal grew at a CAGR of 3.06 per cent over the last five years from 9.83 million tonnes in 2005-06 to 11.09 million tonnes in 2009-10. The export of oil meals fell from 4.42 million tonnes in 2005-06 to 3.22 million tonnes in 2009-10. The sharp decline of 40.6 per cent was experienced in 2009-10 due to lower crushing and disparity in last few months. The fall can also be attributed to excessive speculation in the futures market, depreciation in the value of USD against rupee and withdrawal of Vishesh Krishi and Gram Udyog Yojana scheme on soybean meal last year.

Domestic consumption and export of oil meals

11.20 5.44 5.42 6.00 5.17 11.00 11.09 5.00 10.80 4.42 10.81 10.60 4.00 10.40 10.20 3.22 3.00 10.00 10.12 10.02 9.80 2.00 9.83 9.60 1.00 9.40 9.20 0.00 2005-06 2006-07 2007-08 2008-09 2009-10

Domestic Consumption (Mn tonnes) - LHS Exports (Mn Tonnes) - RHS

(Source: CARE Research, USDA)

The key oil cakes consumed in India are cotton seed, peanut, rapeseed and soybean. Cottonseed is the biggest segment in the oil cake industry enjoying approximately 31 per cent of the market share.

Oil meal domestic consumption - segment-wise breakup (2009-10) - Percentage 104

Sunflow er, 3.1 Other, 2.7

Cotton Seed, 30.9 Soybean, 25.7

Peanut, 12.6 Rapeseed, 25.0

Cotton Seed Peanut Rapeseed Soybean Sunflow er Other

(Source: USDA)

Overview of certified seed business

3) The systematic increase of superior varieties 4) The identification of new varieties and their rapid increase under appropriate and generally accepted names 5) Provision for continuous supply of comparable material by careful maintenance.

Seed Certification is carried out in six broad phases listed as under:

1) Verification of seed source, class and other requirements of the seed used for raising the seed crop. 2) Receipt and scrutiny of application. 3) Inspection of the seed crop in the field to verify its conformity to the prescribed field standards 4) Supervision at post-harvest stages including processing and packing 5) Drawing of samples and arranging for analysis to verify conformity to the seed standards; and 6) Grant of certificate, issue of certification tags, labelling, sealing etc.

CROP 2006-07 2007-08 2008-09 Groundnut 1,11,400 1,76,200 3,18,700 Rapeseed 19,700 19,600 20,700 Til 2100 2000 2800 Sunflower 10200 11100 5900 Soybean 1,34,800 1,69,100 1,80,100 Linseed 200 300 300 Castor 6300 5600 5600 Safflower 800 900 700 Nigerseed 600 200 100 (Source: CARE Research, Industry source)

Overview of Soybean

vegetable oil in the world. Other uses of soybean oil range from margarine to salad dressing and mayonnaise. Examples of industrial applications include the use of the oil as a carrier in inks and paints. Soybean oil also provides an environmentally friendly fuel.

India has turned into one of the major exporters of soymeal to the Asian countries. South Korea, Thailand, Philippines, Japan are some of the major importers of soymeal from the country. India typically exports around 3.9 million metric tones. India, does not import soymeal to meet the requirements of the domestic feed industry, as the price equation inclusive of transports does not work in favour of imports. Indian soymeal is non-GMO (Genetically Modified Organism) soymeal and is preferred by the animal feed manufacturers in Asia and Europe as a result India soymeal is priced at a premium over soymeal from US and South American countries. Still, importing from India works out to be cheaper for Southeast Asian countries due to lesser transportation charges.

Overview of Value added products

Soya Lecithin - Lecithin is obtained by dehydrating and cooling of Gums from Soybean Oil. It is made using the state of art of German Technology. The addition of water in Crude Soya Oil Hydrates the phosphotides making them insoluble. These are dried with Soybean Oil and fatty acids to produce good Lecithin.

1) It acts as a superior emulsifying and release agents. 2) It stabilizes the products and extends shelf life of the product. 3) It modifies the viscosity in the product and act as dispersant. 4) It is a taste and odour free product. 5) It promotes consistent blending and thorough mixing. 6) It forms an excellent emulsion in oil in water formulations. 7) It plays an important role in cardiovascular health, liver & cell function, pregnancy and child development.

Soya Nuggets - Soya nuggets/chunks or "Bari" is commonly referred to as vegetarian meat. It is prepared from defatted (DOC) soya flour by the process of extrusion cooking. During the process, the protein in the flour undergoes structural changes and forms a fibre like network. When soaked in water, the texturized nuggets absorb the water and develop meat like and chewy characteristics (hence the reference to “vegetarian meat”). They are a rich source of protein. Among the vegetable proteins they contribute a maximum level of 50% protein. As they are free from cholesterol they are also commonly used as meat substitutes.

Soya Flour - Soy flour is made from roasted soybeans grounded into a fine powder. There are three kinds of soy flour available – firstly, natural or full-fat, which contains the natural oils found in the soybean and is 50% protein; secondly, defatted which has the oils removed during processing and is an even more concentrated source of protein than full-fat soy flour; and lastly, lecithinated which has lecithin added to it. All soy flour gives a protein boost to recipes.

Overview of the poultry industry in India

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chickens a year, which is close to 27 million a week, of which 95 per cent is traded, alive. According to a market report the poultry production and consumption in the domestic markets is slated to grow by 66 per cent to approximately 2.3 million tonnes by 2010. Poultry sector is one of the fastest growing industries of the Indian economy than any other sector contributing about $230 million to the Gross National Product. But in statistical terms the industry has reported a loss of over Rs 4,000 crore as an aftermath effect of the bird flu crisis.

Overview of the cattle feed industry

Steps taken by the Government to scale-up the animal husbandry sector

Central Cattle Development Organizations: These organizations include seven Central Cattle Breeding Farms, one Central Frozen Semen Production and Training Institute and four Central Herd Registration Units established in different regions of the country to produce genetically superior breeds of bull calves, good quality frozen semen and for identification of superior germplasm of cattle and buffaloes, so as to meet the requirement of bull and frozen semen in the country.

National Project for Cattle & Buffalo Breeding: Genetic improvement in bovines is a long term activity and Government initiated a major programme ‘National Project for Cattle and Buffalo Breeding’ (NPCBB) in October 2000 for a period of ten years, to be implemented in two phases, with an allocation of Rs.402 crore for Phase-I. The Project envisages genetic up-gradation on priority basis. The project also has its focus on the development and conservation of important indigenous breeds. The project provides 100% grant-in-aid to the State Implementing Agencies (SIAs). The objectives of the scheme are:

• To arrange delivery of vastly improved artificial insemination (AI) service at the farmers’ doorstep;

• Bring all breedable females among cattle and buffalo under organized breeding through artificial insemination or natural service by high quality bulls within a period of 10 years;

• Undertake breed improvement programme for indigenous cattle and buffaloes so as to improve the genetic makeup as well as their availability.

National Project for Cattle and Buffalo Breeding: Phase-II of the National Project for Cattle and Buffalo Breeding has been initiated from December, 2006 for a period of five years (2006- 07 to 2010-11) with an allocation of Rs.775.87 crore. The Phase-II will provide self-employment to about 20,000 AI practitioners in delivery of AI at the farmer’s doorstep. To improve productivity of bovine population, the proposal aims to bring 80% breedable females among cattle and buffalo under organized breeding through artificial insemination or natural service by high quality bulls. It also envisages undertaking breed improvement programme for indigenous cattle and buffaloes so as to improve the genetic make-up as well as their availability.

Feed and Fodder Development: The nutritive value of feed and fodder has a significant bearing on productivity of livestock. Due to increasing pressure on land for growing food grains, oil seeds and pulses, adequate attention has not been given to the production of fodder crops. Further, on account of diversified use of agriculture residues, the gap between the demand and supply of fodder is increasing. According to the report of working Group on Animal Husbandry and Dairying for 10th Five year Plan of Planning Commission, the available fodder can meet the demand of only 46.7 percent of livestock. Eleventh Plan Working Group, NABARD and National Institute of Animal Nutrition & Physiology have also estimate shortage of feed & fodder in the country. The Department has two schemes namely

• Central Fodder Development Organization and 107

• Centrally Sponsored Scheme for Assistance to States for Feed and Fodder Development.

(A) Centrally Sponsored Fodder Development Scheme is being implemented since 1-4-2005, with four components.

• Assistance to Fodder Block Making Units: The livestock feed is presently based mainly on dry roughage from crops. The bulk density of fodder, hay and straws after thrashing is very low and hence requires large storage space. For this purpose, farmers neither have sufficient space nor time between harvesting of mature crop and sowing of next seasonal crop. As a result, crop residues, which are otherwise suitable for feeding, are quite often burnt in the fields. India produces approximately 393.9 million tons of crop residues annually, which could be useful for feeding the country’s livestock population. Densification of roughage and waste crop residues in compact blocks is an effective solution for livestock feed management. It is also possible to formulate complete animal feed blocks using straw and diet supplements such as molasses, concentrates, minerals and salt. The activity could thus play an important role in productive utilization of crop residues. This will also enable efficient and cost effective transport of fodder upon its densification into fodder blocks. Upto 10 tons of feed blocks can be easily transported in a truck against 4 tons of loose fodder. The main emphasis here is on the prevention of wastage of crop residue and its concurrent utilization for livestock feeding by conversion into fodder blocks and bales.

• Grassland Development including grass reserves: The scheme envisages improvement of degraded grasslands and rehabilitation of problematic soils like saline, acidic and heavy soils through vegetation cover. Under this programme, planting of specific grasses and legumes suitable for particular type of soil is promoted so that a vegetation cover may be provided to give fodder as well as to rehabilitate the degraded areas. The fertility status of land will also be improved by introducing suitable legumes. Grasslands requiring regeneration through the process of natural recovery by closure/exclusion of biotic interference are also eligible for funding under the scheme. This would involve fencing of the area, establishment of soil and moisture conservation structures to support natural regeneration such as contour bunding, furrowing, ploughing, fertilization, etc.

• Fodder Seed Production and Distribution Programme: The area under fodder cultivation has remained static on account of preference for more remunerative grains, oil seeds and other cash crops. It is, therefore, necessary to produce high yielding varieties of fodder seed to make fodder production more remunerative. In order to encourage the fodder seed production in states, it is proposed to assure procurement of fodder seeds by making arrangement for buy-back of fodder seeds from the farmers. Under this component, 75% of the procurement price is provided for purchase of fodder seeds from the farmers. The State Government furnishes a firm commitment for purchase of fodder seeds from such farmers. The buy-back arrangement ensures interest of the farmers in taking up fodder seed production activity. The State Government furnishes, in its proposal, the details of fodder seeds, the extent of area, details of farmer with whom buyback has been entered into along with the modalities of this arrangement.

• Biotechnology Research Projects: Research projects/special studies in collaboration with research institutes/agricultural universities etc. in the field of feed and fodder can be undertaken under the component. Research projects on feed and fodder involving bio-technology can be initiated for which 100% Central grant is provided

(B) Under this Central Sector Scheme, 7 Regional Stations for Forage Production & Demonstration located in different agro-climatic zones of the country and one Central Fodder Seed Production Farm, Hessarghata, Bangalore are being operated. Besides this, a Central Minikit Testing Programme on Fodder Crops is being funded under this scheme.

Structure of the vegetable oil industry in India

The Indian oilseed processing industry is highly fragmented in nature with a large number of small-scale producers and a few solvent-extraction plants and refineries. Low level of capacity utilization also plagues the Indian oilseed processing industry. The Indian oilseed processing industry can be divided into three segments based on the technology used:

108

1) Traditional mechanical crushing or expelling: This process is generally followed by the Ghanis and small-scale expellers which usually belong to the SSI segment and usually serve the rural markets. Ghanis use the traditional and mechanical method of expelling oil from seeds by pressing. They largely rely on animals or electric power for the operation of Ghanis. Whereas, the small scale expellers use the metal screws to press or expel oil from seeds. This method is generally used for oilseeds with relatively high level of oil content.

2) Solvent Extractors: Players in this category generally belong to the organized segment as it involves huge capital outlay. They use modern technology to process low oil & high meal seeds like soybean and cottonseed into edible oil and de-oiled cake. They are also the fastest growing segment of the domestic edible oil industry.

3) Expander solvent extractors: It is a hybrid market used for the extraction of oil from oil seeds with relatively higher level of oil content.

Key Characteristics

1) Highly fragmented – The Indian edible oil and oil meal industry is highly fragmented in nature with a large number of small unorganized players and a very few large organized players. As per the industry reports approximately 40 per cent of the demand is met by the large organized players offering packaged and branded oil and oil cake in the market.

2) Price sensitive – Edible oil industry is characterized by a high degree of fluctuation in prices due to its dependence on the prices of its key raw material oilseeds. Oilseeds being an agricultural commodity is largely dependent on the South-Westerly monsoons hence its production is vulnerable.

3) Seasonal - The edible oil industry can be called seasonal in nature due to its direct relation with the oilseeds which is an agricultural product. The manufacturers need to diversify among the oilseeds based on the Rabi and Kharif crop so as to keep their manufacturing units going all round the year. Though the production is seasonal in nature its demand remains throughout the year.

Localization: Oilseeds area and output is concentrated in central and southern parts of India, mainly in MP, Gujarat, Rajasthan, AP, and Karnataka. From the demand side, consumer preferences also vary from region to region. Mustard and Rape oil are preferred in Northern and Eastern parts of India whereas Groundnut oil is preferred in Western and Southern parts of India. Coconut oil is consumed mainly in southern part of India. Per unit consumption also varies depending on climatic conditions. North is the largest market, followed by South, West and East zones.

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Demand Drivers for the Edible oil industry

1) GDP growth and rising income (and importantly, contribution of agricultural GDP) - India is the fourth- largest economy in the world and the fastest-growing significant economy with an average GDP of 6%. It has a population of 1.06 billion, which is growing at a rate of 1.65% per annum. According to the NCAER, there are five classes of consumer households, ranging from the destitute to highly affluent, which differ considerably in their consumption behaviour and ownership patterns across various categories of goods. These classes exist in urban as well as rural households and consumption trends may differ significantly between similar income households in urban and rural areas.

2) Movement to cheaper oils / Pricing power - Edible oil prices are a sensitive issue for Indian households. Edible oil being an essential ingredient of food, it forms an important part of households monthly expenditure. Sharp rise in product prices in recent years had led to moderation in consumption growth. Rise in price of one product also results in shifting of consumption to a cheaper alternative. Almost all edible oil consumed in India in the early 1970s was groundnut oil (almost 50% of consumption) and rapeseed oil (25%). Palm, soybean and sunflower oil together accounted for less than 4% of the total. However, over the last 2 decades, palm and soybean oils have gradually increased their share of consumption. The increased share of palm and soybean oil in consumption largely reflects the high sensitivity of Indian consumers to price changes. Small price changes for essential commodities such as edible oil can have a significant effect on both total consumption and the share allocated to each type of oil. Another factor behind the increased consumption of palm and soybean oils is the nature of vegetable oil sales and marketing in India. Producers and merchants face strong incentives to supply blends that include lower cost oils, both to compete for price-sensitive consumers and to seek higher margins by marketing unlabeled blends as pure traditional oils, such as peanut or rapeseed-mustard oil, which usually sell at a premium.

3) Population growth - With the population increasing from 541 million in 1971 to 1.02 billion in 2001 to around 1.16 billion at present, consumption growth is likely to remain uninterrupted.

4) India is the 3rd largest importer of Edible oil – There lies a huge scope for the players in the edible oil industry due to the huge domestic demand which is met by the imports. Participants in the industry can improve there capacity utilization and meet the market demand.

Status of the Vegetable oil industry in India

The Vegetable oil industry comprise approximately 1,50,000 crushing units. The crushing units comprise both the small scale crushing units (capacity utilization – 10 per cent) and the large crushing units (capacity utilization – 30 per cent) which belong to the organized segment of the industry. Solvent extractors belong to the organized segment and are also the second largest after the unorganised segment, in the domestic edible oil industry. There are 795 solvent extraction plants with a installed capacity of 31.3 million tonnes and a capacity utilization of 34 per cent. Oil refineries segment belongs to the organized sector and has recorded rapid growth in recent times. Refiners generally refine both expeller oils and solvent extracted oils. There are approximately 943 refineries in India. The installed capacity stood at 12.3 million tonnes with an installed capacity utilization of 37 per cent as on January, 2009.

Capacity & Capacity Utilization (January, 2009)

Type of Vegetable oil industry No. of Units Annual Capacity Average Capacity (Mn tonnes) Utilization Oilseed Crushing Units 1,50,000 42.5 (in terms of seeds) 10-30% 31.3 (in terms of oil bearing Solvent Extraction Units 795 material) 34% Refineries Attached with Vanaspati Units 127 5.1 45% Refineries Attached with Solvent Extraction Plant 226 3.7 29% Independent Refineries 590 3.5 36% Total Refineries 943 12.3 37% Vanaspati Units 268 5.8 19% (Source: Department of Food & Public Distribution)

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Total estimated production of oilseeds in India

Nine types of edible oilseed are produced are groundnut, rapeseed, soybean, sunflower, safflower, sesame, castor, Nigerseed and linseed. The total production of edible oilseed in India stood at 23.1 million tonnes during 2009-10. The kharif crop contributed 59 per cent to the total oilseed production. Groundnut, Soybean and Rapeseed are the major oilseeds produced in India. Groundnut and Soybean are majorly Kharif crop whereas rapeseed is majorly a Rabi crop. These three oilseeds make 86.5 per cent of the total oilseed production. Soybean is majorly grown in north and central India, groundnut in western India, rapeseed in central, north and east India. Sunflower is largely consumed in urban India in relatively smaller quantities.

Production of Oilseeds in India (MTs)

20.0

15.0 16.5 15.0 13.7 13.5 13.7 10.0 10.3 9.5 9.2 9.5 8.1 5.0

0.0 2005-06 2006-07 2007-08 2008-09 2009-10

Kharif Rabi

(Source: India Stats, Solvent Extractors Association of India)

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Oilseed-wise breakup of production in (Mn Tonnes -2009-10)

100 85 80 64.2 60 51.2

20 9.9 7.6 9.3 3.9 0 Groundnut Soybean Rapeseed Sunflower Seasame Castor Others

Production (Mn Tonnes)

(Source: India Stats, Solvent Extractors Association of India)

Production of Minor seeds (Tonnes) Oilseed Type 2006-07 2007-08 2008-09 Salseed 2,999 8,263 2,747 Mango Kernel 62 105 30 Mahuaseed oilcake 1,253 2,328 1,180 Neemseed Oilcake 2,186 2,323 2,463 Kusumseed 16 42 NA Karanjaseed 32 72 60 (Source: Solvent Extractors Association of India)

Total Estimated production of vegetable oil in India

Total estimated production of vegetable oil in India grew at a CAGR of 2 per cent from 7.58 million tonnes in 2004-05 to 8.2 million tonnes in 2008-09. Edible oil contributes approximately 76 per cent to the Indian vegetable oil industry. The key edible oils produced in India are groundnut, mustard and soybean which contributed 10 per cent, 26 per cent and 16 per cent, respectively to the overall vegetable oil production in India. The major non edible oils produced in India are castor seed and rice bran.

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Total Estimated production of vegetable oil in India (MT)

6.6 7.0 6.3 6.3 14.0 6.0 6.0 6.0 10.0 9.4 9.0 5.0

4.0 5.9 4.0 3.0 1.8 1.9 2.0 2.0 1.6 1.7 -1.0 1.0 -3.4 -3.4

0.0 -6.0 2004-05 2005-06 2006-07 2007-08 2008-09

Edible Oil - LHS Non-Edible Oil - LHS Growth Rate - RHS

(Source: CARE Research, India stats)

Demand in different types of edible oil segments

The total domestic demand for edible oil stood at around 16.21 million tonnes during 2009-10. The major oils being palm, soybean and rapeseed. Palm oil accounts for approximately 45 per cent of the total edible oil demand in India.

Demand in different types of edible oil segments (in Mn tonnes)

(Source: CARE Research, USDA)

Domestic availability of vegetable oil by season in India

The total oil availability stood at 8.21 million tonnes in 2008-09. The largest chunk was held by rapeseed, soybean and cottonseed each contributing 2.03 Mn tonnes, 1.33 Mn tonnes and 1.05 Mn tonnes to the total oil availability. The total production of all types of oilseed in India stood at 33.84 million tonnes in 2008-09. Out of the 33.84 million produced 27.9 was marketable surplus. Marketable surplus is the amount of oilseeds available for crushing to extract oil. Each oilseed has a different oil recovery ratio. The marketable surplus is multiplied by the oil recovery percentage to get the oil availability.

Domestic availability of vegetable oil by season in India – (in Million tonnes)

Oilseed Oil Recovery (%) 2008-09 Season Total Oil Availability 113

Production Marketable Surplus Kharif Rabi Total Kharif Rabi Total Groundnut 40 4.22 1.7 5.92 1.05 0.99 2.04 0.82 Soya 17 8.9 8.9 7.8 7.8 1.33 Rapeseed 33 0.15 6.2 6.35 0.15 6 6.15 2.03 Sunflower 35 0.4 0.75 1.15 0.39 0.75 1.14 0.4 Sesame 45 0.3 0.28 0.58 0.15 0.23 0.38 0.17 Castor 45 0.98 0.98 0.98 0.98 0.44 Niger 30 0.08 0.17 0.25 0.04 0.04 0.01 Safflower 30 0.13 0.13 0.16 0.16 0.05 Linseed 43 0 0.13 0.13 0.06 Cottonseed 12.5 8.93 8.93 8.43 8.43 1.05 Copra 65 0.65 0.65 0.65 0.65 0.42 Others 1.43 Total 24.61 9.23 33.84 19.64 8.26 27.9 8.21 (Source: SEA)

Imports

Import Policy - In pursuance with the countries liberalization policy of the Government, there have been progressive alterations in the import policy in respect of edible oils during the last few years. Edible Oil, which was in the negative list of imports was first de-canalised partially in April, 1994 and import of edible vegetable Palmolein was placed under Open General License (OGL) subject to 65% of basic Custom Duty. Subsequently import of other edible oils was also placed under OGL, except Coconut Oil. In order to harmonise the interests of farmers, processors and consumers and at the same time, regulate large import of edible oils to the extent possible, import duty structure on edible oils is reviewed from time to time.

Import Duty Structure

Current Rates of duty on Current rates of duty on Item Description WTO Binding crude edible oils refined edible oil Soybean Oil 45% Nil 7.50% Palmolein 300% Nil 7.50% Palm Oil 300% Nil 7.50% Groundnut Oil 300% Nil 7.50% Sunflower Oil 300% Nil 7.50% Safflower Oil 300% Nil 7.50% Coconut Oil 300% Nil 7.50% Rapeseed/Mustard Oil 75% Nil 7.50% (Source: Department of food processing and distribution)

Imports in India

Import of oil in the crude form grew by a whopping 46 per cent from 5.61 million tonnes in 2007-08 to 8.18 million tonnes in 2008-09. The rise in imports can be attributed to the increase in per capita consumption due to the rise in income. High degree of price elasticity and lower prices has given the boost to the demand of oils like Palmolein. Zero import duty on crude edible oil and very nominal duty on refined Palmolein oil have favored the import over domestic oils at the expenses of Indian oilseed producers and crushers. Another booster for the oil imports was the depreciation of 5 per cent in the value of USD as against the rupee. The value of imports stood at Rs.102.98 billion for the year 2007-08.

Imports (in million tonnes) Oil Type 2005-06 2006-07 2007-08 2008-09 Palm oil 2.37 2.99 4.04 5.19 Sunflower Oil 0.10 0.20 0.03 0.59 Rapeseed Oil 0.00 0.00 0.00 0.05 Soybean Oil 1.70 1.32 0.76 0.99 Others 0.24 0.20 0.78 1.37 Total 4.42 4.71 5.61 8.18 114

(Source: SEA)

Imports Edible oil (Quantity-Mn tonnes, Value – Rs. Mn)

(Source: Department of food processing & distribution)

Measures for export promotion

1) Export of all oilseeds such as groundnut, sesame seeds, sunflower seeds, mustard seeds, etc. when exported for consumption, have been streamlined and made free without any quantitative or licensing restrictions.

2) DGFT has banned export of all edible oils for one year further extended for two year upto 16.3.2010. However, export restrictions have been lifted in respect of castor oil, coconut oil (through Kochi Port) and certain oils (namely, Morwah oil/fat, Kokum oil/fat, sal oil/fat/stearine, Dhupa oil, neemseed oil, Nigerseed oil, Mango Kernel fat/oil/stearine/olein, processed or refined sal fat) produced from minor forest origin.

Oilseed, Oil and Oilcake Exports

(Value-wise – Rs. Mn, Volume-wise – Mn tonnes) Oilseeds Minor Oils and Fats Oilcake/extraction Total Year (Apr-Mar) Qty. Value Qty. Value Qty. Value Qty. Value 2003-2004 0.39 12873 0.26 10966 3.37 30651 4.02 54495 2004-2005 0.37 12612 0.26 10277 2.73 23239 3.36 46128 2005-2006 0.42 13145 0.18 6360 4.46 35636 5.06 55136 2006-2007 0.52 18253 0.19 6690 6.59 55030 7.30 79972 2007-2008 0.60 27560 0.20 9140 5.46 71254 6.26 107954 (Source: www.fcamin.nic.in)

Prices

The domestic oil prices move in tandem with the international markets, but the prospect of a good crop, higher imports and low oil meal exports may affect the prices. Crude palm oil and soyoil prices are likely to rise in the first quarter of 2010 due to the low supply and stable-to-firm demand.

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International Prices (Rs. per Tonne)

(Source: CARE Research, Industry Analysis Services)

Domestic Prices (Rs. per kg)

(Source: CARE Research, Industry Analysis Services)

Outlook

The outlook on the India’s edible oil industry remains stable owing to the rise in demand emanating from the increase in per capita consumption, population growth and rising income levels. With the ongoing shortage in domestic production coupled with the strong demand growth, the oilseed production deficit is likely to continue in the Indian markets. To fulfill the rising demand through imports, the government has done away with the duties on import of crude edible oils in India. This exemption has affected the crushing and processing units badly. As per industry sources many units have been shut down in the state of Karnataka. Government has also reduced the import duties on refined edible oil. Higher duties on refined oil as compared to its crude counterpart are in favor of the domestic refiners as it would offer them better margins. A shift in consumption pattern is being experienced in India. People are moving to relatively cheaper avenues like palm oil, thereby shifting the focus of the large operators.

As per industry reports India is expected to export about a million tonne of soy meal between June and September 2010, as soybean arrivals in the markets have picked up due to the bumper soybean crop this season. The increase in arrivals is likely to lower the prices of soybean and make it viable for the processing units to produce soymeal. The fall in prices will make the Indian soymeal prices more competitive in the international markets as compared to Brazil and Argentina.

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BUSINESS OVERVIEW

Unless stated otherwise, the financial data in this section is as per our restated standalone financial statements prepared in accordance with Indian GAAP set forth in the Draft Red Herring Prospectus.

Overview

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Our Competitive Strengths:

We believe that following are our key competitive strengths:

Strategic location of manufacturing units

The Solapur Unit has an animal feed manufacturing facility and we cater to the nearby dairy and poultry farms, located at Maharashtra, Karnataka and Andhra Pradesh.

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Soya producing areas in India

(Source: http://www.spectrumcommodities.com/education/commodity/statistics/soybeans.html)

Edilble oil consumption pattern in India

(Source: http://www.fao.org/WAIRDOCS/LEAD/X6170E/x6170e2k.htm)

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Early mover advantage for distribution of de-oiled cakes for pan-India

Integrated Operations

The integrated process of our operations may be detailed as follows:

Modern and versatile manufacturing capabilities

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Warehousing and logistics capabilities

Wide consumer reach and strategic utilization of the distributor network

Our private mandi at Betul, Madhya Pradesh

Experienced Board and executive management team

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Our Strategies

Increase in manufacturing capacities in line with demand

As a part of our forward integration strategy, we intend to setup a 45,000 TPA (150 TPD) soya flour and 45,000 TPA (150 TPD) soya nuggets unit at our existing unit at Satna.

Increasing retail sales

The growth of retail sales in edible oil is as follows:

12 month period of Financial Year 2008 7 month period from July 2009 to January 2010

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Brand building and promotion

Introducing speciality incredients and value added products to our products portfolio

Buying railway rake to further strengthen our logistics

Our corporate history and manufacturing facilities

Betul, Madhya Pradesh 1. Solvent extraction capacity of 90,000 TPA (300 TPD). 2. Refining capacity of 30,000 TPA (100 TPD). 3. Soya lecithin capacity of 900 TPA (3 TPD). 4. Two units of seeds grading of capacities 72,000 TPA (240 TPD) and 14,400 TPA (48 TPD). 5. Oil seeds warehousing facility of 14,000 MTs. 6. 1,200 MTs oil tank farm 7. Private mandi with further warehousing facility of 14,000 MTs

In December 2005, our Company acquired a solvent extraction plant at Solapur with a capacity of 97,500 TPA (325 TPD) and cattle feed plant with capacity of 12,600 TPA (42 TPD) per day from the Asset Reconstruction Company (India) Limited. As on date of the Draft Red Herring Prospectus, the capacity of our Solapur Unit is as follows:

Solapur, Maharashtra 1. Solvent extraction capacity of 97,500 TPA (325 TPD). 2. Refining capacity of 36,000 TPA (120 TPD). 3. Soya lecithin capacity 1,500 TPA (5 TPD). 4. Expellers capacity of 30,000 TPA (100 TPD). 5. Cattle feed unit with a capacity of 30,000 TPA (100 TPD). 6. Hybrid seed and research and development centre 7. Oil seeds warehousing facility of 25,000 MTs 123

8. 2,000 MTs oil tank farm

In 2005, our Company established its first wind mill in Dhule, Maharashtra with a total power generation capacity of 1.25 MW. In 2006, our Company established a captive power wind mill in Dewas, Madhya Pradesh with a total capacity of 1.25 MW. In the year March 2010, our Company established a solvent extraction plant and oil refinery at Satna, Madhya Pradesh. As on date of the Draft Red Herring Prospectus, the capacity of our Satna Unit is as follows:

Satna, Madhya Pradesh 1. Solvent extraction capacity of 180,000 TPA (600 TPD). 2. Refining capacity of 30,000 TPA (150 TPD). 3. Soya lecithin capacity of 2,010 TPA (7 TPD). 4. Oil seeds warehousing facility of 14,000 MTs 5. 1,200 MTs oil tank farm

Product portfolio and Business Activities

The details of our product portfolio and business activities are as follows:

Sr. Activity Description No. 1. Seed processing and Our seed processing and solvent extraction activities produce: solvent extraction units 1. Crude oil 2. De-oiled cake 2. Edible Oil Refining We refine crude edible oil to produce refined: 1. Soybean oil 2. Sunflower oil 3. Safflower oil 4. Maize germ oil 5. Sal seed oil/stearine 6. Mango seed oil/stearine 7. Cotton seed oil 8. Mahua seed oil 3. Certified Seeds Division Developing certified seeds under the brand name “Siddha Seeds” 4. Animal Feed Manufacture & supply of animal feed to the domestic cattle and poultry industry under the brand name “Poushtik Feeds” 5. Specialty Ingredient We manufacture soya lecithin, mango seed stearine, sal seed stearine, high protein Products soymeal 6. Warehousing Facilities We have a 48,000 sq. feet warehousing facility, having a storage capacity of 14,000 MTs in Betul, Madhya Pradesh, which we lease out to farmers for storing agricultural items 7. Private Mandi Procurement centre in Betul, Madhya Pradesh for procuring raw material directly from farmers 8. Power Generation Operating two wind energy plants of 1.25 MW each

1. Solvent Extraction Units

Our solvent extraction business encompasses seed processing and solvent extraction. As on date of the Draft Red Herring Prospectus, our consolidated solvent extraction capacity for all our units is 367,500 TPA (1,225 TPD). The seeds are crushed and processed to extract crude oil leaving behind de-oiled cakes as the residue. Our solvent extraction facilities are located at Betul, Solapur and Satna.

2. Refining of crude oil

As on date of the Draft Red Herring Prospectus, our consolidated refining capacity for all our units is 96,000 TPA (320 TPD). Our facilities are versatile in nature as we can process various types of oils including soyabean, sunflower, safflower, maize germ, sal seed, mango seed, cotton seed and mahua seed oils. We also manufacture specialty ingredient products such as soya lecithin, mango seed stearin, sal seed stearin, high protein soyabean meal. The crude oil produced from the solvent extraction plant is used as an input to the refinery. We also procure crude oil from third parties for the purposes of refining.

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3. Certified Seeds Division

We have recently established a seed development division in Betul in 2010, which is engaged in the business of developing high-yield hybrid certified seeds for sunflower and soybean crops. Certified seeds are the progeny of foundation seeds and their production is so handled as to maintain specific genetic identity and purity according to prescribed standards. Such high yield seeds are certified by the Madhya Pradesh State Seed Certification Agency and are sold to farmers for cultivation. This business division helps us maintain the quality of seeds procured by us from the farmers to whom such high yield seeds were sold to.

4. Animal Feeds

We are a leading supplier of soybean meal to the poultry industry, supplying to more than 850 poultry farms directly. We also have a cattle feed unit at Solapur with a capacity of 30,000 TPA (100 TPD) as a part of forward integration. The said plant caters to the states of Karnataka and Maharashtra. Being in close proximity to the source of raw material and end users of our products, this plant has helped us control our costs, including the transportation costs, marketing costs and enable us penetrate further in the market. Besides, our manufacturing facilities have been designed to undertake manufacture of poultry feed, horse feed and rat feed which addresses the requirement of our diversified customer base.

5. Specialty Ingredient Units – Soya Lecithin, Mango Oil / Stearine and Sal Oil / Stearine

We manufacture and supply soya lecithin which is a mixture of phoshatides extracted from vegetable oil and meets international food standards of high quality. Soya lecithin is a natural emulsifier that has been specifically processed keeping in mind its end uses. It is being used by food industries, pharmaceuticals and in the manufacture of candy products, bakery products, margarine, chocolates and other food products. It functions as a viscosity reducing agent, emulsifying agent, as an enhancer of taste and nutritive quality, as an antioxidant, as an emollient etc.

We also manufacture and supply mango oil stearin and sal oil stearin, which is a cocoa butter equivalent and used in the confectionery industry.

6. Warehousing

We have a 48,000 sq. feet warehousing facility, having a storage capacity of 14,000 MTs in Betul, Madhya Pradesh. The warehouse is adjacent to our mandi. We lease it out to farmers which indirectly facilitates assured source of raw material supply during non-peak seasons.

7. Private Mandi

We have a procurement centre in Betul, Madhya Pradesh. We are one of the few players in the edible oil industry to have established our private mandi at Betul, Madhya Pradesh. Our private mandi licenses enable us to operate as a trader and warehouse-keeper. We provide value added services to the farmer by stocking fertilizers at our mandi which the farmers are able to purchase while dealing at the mandi. We believe that our private mandi is a critical link to our procurement channel for raw materials. Our private mandi helps us to procure farm produce directly from the farmers. Such procurement channel eliminates intermediaries and thereby ensures cost efficiency.

8. Power Generation

We operate two wind energy power plants with an installed capacity of 1.25 MW each.

In 2005, we established our first wind farm in Dhule, Maharashtra with a total capacity of 1.25 MW. In terms of a wind energy purchase agreement dated February 6, 2006, we are supplying the power generated at this facility to the Maharashtra State Electricity Distribution Company Limited. The term of this agreement is for a period of 13 years from the commercial operations date with a renewal option.

In 2006, we established a captive power wind farm in Dewas, Madhya Pradesh with a total capacity of 1.25 MW. In terms of a bulk power wheeling agreement dated January 31, 2007 we received permission for open

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access for wheeling of power for captive use. The open access permission has been granted to us by Madhya Pradesh Paschim KVV Company Limited. The term of this agreement is for a period of 5 years from the date of the agreement with a renewal option.

Our Brands

Our products are sold under the following brands:

Sr. No. Brands Products 1. Saras Soya Refined Oil Sunflower Refined Oil Mustard Oil 2. Super Saras Soya Refined Oil 3. Siddha Gold Soya Refined Oil Sunflower Refined Oil Groundnut Oil 4. Siddha Supreme Cotton Refined Oil 5. Arraht Shakti Blended Oil 6. Amrut Dhara Cattle Feeds Jeevan Dhara Horse Feeds 3 Poushtik Gold Pellet Poushtik H.G Pellet Poushtik H.M.R Poushtik H.P.P Poushtik S.P.P Sarvouttam Ultimate Pellet Uttam Dhara

We supply our edible oil products in bulk quantities and consumer retail packs of 15 litre, 10 litre, 5 litre, 1 litre and 500 ml. We believe that penetration in the rural areas is greater with smaller packs.

Refined edible oil marketed under our brand Refined edible oil marketed under our brand “Saras” “Siddha Gold”

Cattle feed distributed under our brand Certified soybean seeds marketed under our brand “Poushtik” “Siddha”

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Processes involved in manufacture:

1. Oil Seed Development

Oil seed development is a highly technical process and the usual time taken for production of commercial seeds is approximately four years.

Seeds are classified as either “Notified”, which implies that the Central Seed Committee has certified the seed variety to be suitable for all agro-climatic conditions, or “Research variety”, which implies that private agricultural research institutes have developed the seeds using in-house research and development. Notified or Research variety seeds are produced in the following categories: a. Certified Seeds: Certified seeds are produced under the supervision of State Seeds Certification Agency (“Agency”). The Agency is an autonomous statutory body and certifies the quality of seeds. Only Notified seeds can be “certified” by the Agency but the certification is optional. b. Truthfully Labeled Seeds: Notified or Research variety of seeds, when produced under the supervision of a seed producer and packed with their own quality declaration on a label is known as “truthfully labeled seeds” (“TL Seeds”).

Seed production commences from obtaining “Breeder Seeds” from government agriculture institutions or Universities. Breeder Seeds are the first in the progeny chain of seeds. Breeder Seeds are the purest form of seeds, bearing the true representation of its variety, containing multi-genetic characteristics and is free from mutation and cross varietal mixing. Breeder seeds are multiplied by the farmers to produce “Foundation Seeds” which are further given for multiplication as Certified Seeds or TL Seeds. The records of pedigree are kept by allotment of unique code lot number. The produce of parent seeds carries the same lot number.

The produce of the seed, depending on the seeds’ parent, is procured from the farmer, who is registered with a seed certification agency, and then processed for further marketing or use in production program. In the year 2010, we started with a separate division called Siddha Seeds for cultivation and marketing of hybrid seeds. The seed production process at our Siddha Seeds division is largely self-controlled and centralized which enables us to focus on quality control. Farmers registered for producing TL Seeds are identified as “Direct Farmers”, and for certified seed production, the farmers are identified as “Agency Farmer”. For Direct Farmers, our Quality Assurance Department (“QAD”) is responsible for carrying out all quality inspections and preparing the inspection reports. This production program is followed for TL Seeds. However, for Agency Farmers, we apply to the State Seed Certification Agency for registration, which after conducting field inspections, certifies the seeds. As of date of the Draft Red Herring Prospectus, we have sold over 17,000 quintals of hybrid seeds through Siddha Seeds at Madhya Pradesh, Maharashtra, Chattisgarh and Karnataka.

Grading of seeds at our Seed Grading Plant at Betul

We have established a seed grading plant at village Parsoda, District Betul, Madhya Pradesh. The plant comprises of two units of capacity 72,000 TPA (240 TPD) and 14,400 TPA (48 TPD). The seed grading plant differenciates high-grade soya seeds. This facility is used by local farmers to grade their seeds and seeds considered unsuitable for cultivation are bought by us for use in our solvent extraction plants. The high-grade seeds are used for further cultivation of crops by the farmers as well as the buyers.

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2. Seed processing and solvent extraction

Seeds, once procured, are cleaned to remove impurities such as stones and husks and broken seeds are separated. Cleaned seeds are then charged into hoppers through a chain conveyor. Thereafter, seeds are poured into the kettle of the machine and steam is directly passed over them. The steam softens the seeds and the centrally revolving clamped shaft pushes the seed to the screw press chamber of the machine. The seeds are compressed to form cakes which are again cleaned to remove impurities and are fed to the cracker breaker to make smaller pieces. The cakes are fed to the solvent extractor where the cakes are sprayed with food grade hexane which is followed by oil extraction out of the flakes. This mix is further fed to the de-solventiser toaster to evaporate the hexane particles and oil particles. The output of the toaster accumulated at bottom is the de-oiled cake, which is separately collected. Evaporated particles are fed to the distillation and recuperation section to segregate oil and hexane. This recovered hexane is reused in the process. The produced raw grade oil undergoes refining to produce refined oil.

Process flow chart for solvent extraction

Preparatory Pre-cleaning of Cracking Cooking section seeds

Solvent extraction Drier Cooler Expander Flaking plant

Extractor Miscella tank

Desolventising toaster Distillation Unit

Meal finishing section

Crude oil Hexane recovery Cooler

Cooling Hexane

De-oiled cakes

Cool oil tank

Continuous refining process of edible oil

Oil has two types of impurities (a) oil soluble as colouring matter, odiferous compound, free fatty acid, gummy materials etc. (b) other type of impurities are oil insoluble such as sand, seed fragment, dust, straw etc. Our refineries incorporate continuous refining process.

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Our oil refining process comprises of the chemical and the physical process.

Most of the oils contain impurities, such as fatty acids, phosphatides, pigments, metals, etc., which have to be removed so as to obtain an edible product. The different steps of the process depend upon the type and quality of the oil to be treated.

Chemical Process

Chemical Process comprises of removal of impurities from the oil by reaction of some chemicals. The chemical refining comprises of:

a. Acid conditioning cum neutralization b. Separation of gums and soap in centrifuge c. Washing with water with separation of soaps with centrifuge d. Bleaching e. Deodorizing

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Process flow chart for refining

Crude Oil

Water Gums Lecithin section Lecithin storage Degumming tanks

Neutralising Soap Stock Acid oil section Storage tank

Bleaching

Deodorizer Soya fatty oil

Refined edible oil

Storage tank

Filling station

Distribution

Hedging against raw material price fluctuation

Depending on the raw material, for example soya seed, position and actual sales of the finished goods (soya oil and de- oiled cakes), we will either buy or sell futures of the finished goods. For instance, if we are long position with respect of the raw material (actual stock of raw material less stock required for existing order), we sell equivalent position of the finished goods. If we are short position in raw material, then our step is to buy equivalent long position of the finished goods.

Our raw material and support requirements

Raw Materials

The raw material for animal/poultry feed entails various oil seeds cakes i.e. soybean, sunflower, safflower, rice bran, mustard, maize, bajra, mineral mixtures and molasses as raw material. Our solvent extraction units are located at multiple 130

locations that are close to the source of raw materials to ensure cost savings. We source the raw materials for solvent extraction from various vendors predominently from farmers, either directly or through our associates. We believe that our private mandi is a critical link to our procurement channel for raw materials. Our private mandi helps us to procure farm produce directly from the farmers. We have obtained licenses to establish private mandis in Betul districts of Madhya Pradesh which serve as our procurement centres for oil seeds. Such procurement channel eliminates intermediaries and thereby ensures cost efficiency.

The availability of raw materials is seasonal in nature. We have made adequate arrangement for warehousing to store raw material. Before the beginning of each season, an assessment of performance for the year is done which involves inputs from our key managerial personnel. Inputs from sales/field staff are also taken and sales target for the next financial year is noted. Based on this, monthly production targets and raw materials procurement target are finalized. Sales, production and raw material procurement targets are reviewed on a regular basis depending upon market conditions. We normally keep sufficient stock of raw materials for build up of enough stock of finished goods for the ensuing season.

We source power, required at our units from the local electricity boards. We also source power for our Betul and Satna Unit from our captive wind energy generator. We arrange for the supply of fuel and chemicals from various organizations, on a need basis. We source water from the local corporation for the Solapur Units and from our own tube wells for the Betul and the Satna Unit.

Effluent Treatment

For treating effluent we have installed an effluent treatment plant to treat effluents generated from the solvent extraction plant and the refinery. We have the consent of the concerned Pollution Control Boards for our existing manufacturing facilities.

Fleet of Trucks

We own a fleet of twenty four trucks which is used for delivery of the end products to the dealers/retailers at the desired location. Given our extensive dealer network with some of them located in remote villages we believe that we are better placed to service them efficiently and economically through our own fleet. We have an in-house maintenance workshop wherein we carry out preventive maintenance work. We also have set up storage tanks for storing the diesel required for plying this fleet of trucks.

Our Marketing and Sales Network

Edible oil distribution network

We market our products across seventeen states in India. Our edible oil distribution network comprises of seventeen dealers and two depots through whom we access to more than 5,000 retailers across India. Our depots are located at Jabalpur and Bhopal. The products are sold directly to our dealers who then market the products through the retailers or the products are transferred directly to our depots, which sells the products to the retailers. Going forward we intend to spread our reach to areas untapped by us. We intend to increase the product visibility by our continuous brand building activities through various incentives and promotional schemes for our distributors and retailers to have pan India presence. We are constantly in touch with the market intermediaries who provide us an important feedback about consumer preferences. This helps us to indentify the preferences of the consumers and developing marketing strategies.

The detail of our edible oil distribution network is as below:

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De-oiled cake distribution network

We market de-oiled cakes across seventeen states in India. As part of our marketing strategy, we marketed de-oiled cakes through Vision Millennium Exports Private Limited, our erstwhile Group Company. We believed that this structure aided our business operations. From July 2010, we have commenced marketing of our products directly and through our wholly owned subsidiary, Betul Oils and Feeds Private Limited, as the same allows greater control over the operations and consolidation of numbers.

The details of our domestic de-oiled cake distribution network is as below:

Cattle feed distribution network

We distribute cattle feed across Maharashtra and Karnataka. Our cattle feed distribution network comprises of more than 60 dealers who market cattle feed to cattle farms. Our marketing personnel visit the villages to educate the farmers on the importance of wellness of the cattle and the various benefits of a balanced diet. This has helped us to establish a close connectivity with the farmers and helped increase our customer base. The marketing set up for animal feed is used for to cater to the poultry feed market.

Hybrid and certified seed distribution network

We have recently commenced development of certified soybean seeds at our Siddha Seeds division at Betul. We distribute such certified seeds across Madhya Pradesh, Maharashtra, Karnataka and Chattisgarh.

International Markets

We also export soybean meal to Far East Asian countries such as Indonesia, Malaysia, Thailand, Vietnam, Korea, Japan and China and to countries which are members of the SAARC organisation. We also export soya lecithin, mango, sal and stearine predominantly to the European Union and Japan.

The current reach of our consumer products in the international markets are as depicted in the map below:

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Domestic Markets

Our domestic sales mainly comprise sale of refined edible oils, soya lecithin and de-oiled cakes. Our domestic reach extends predominantly to Maharashtra, Orissa, Madhya Pradesh, Assam, Chhattisgarh, Karnataka, Tamil Nadu, Uttar Pradesh, West Bengal, Bihar Andhra Pradesh and Kerala.

The current reach of our consumer products in the domestic markets are as depicted in the map below:

We intend to invest in brand building exercises as part of our marketing strategy and we intend to finance this investment from part of the Net Issue Proceeds. For further details, please see “Objects of the Issue” on page 69 of the Draft Red Herring Prospectus. We believe that the branding exercise will enhance the visibility and the recall value of our products in the minds of customers.

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Quality Control and Research and Development

Our quality assurance department ensures quality controls at every stage of production, commencing from the time of sowing of the seeds in the farms to the packaging of the finished product. We have initiated processes in-house and at the field level through our seed production programme. Our representatives regularly visit the farms which are part of the programme and observe the processes from sowing to the harvesting of seed crops. A field report is prepared on each visit and the farmers are advised regarding the methods which ensure the genetic purity of the seeds. Inspections are carried out at the time of sowing of the seeds, flowering stage, fruiting stage and at harvesting.

After we receive the seeds at our unit, our quality assurance department carries out checks for deficiencies. At the time of weighing the seeds, quality checks are again carried out. During the processing stage, physical quality checks are conducted. After grading of the seeds, a final analysis is done for moisture, physical and genetic purity of the seeds.

De-oiled cakes procured from third parties for the purposes of trading undergo quality control tests before they are supplied to our customers.

In addition to the above, we perform quality control tests on blended oil at the research institutes approved by the Ministry of Food and Consumer Affairs, Department of Sugar and Edible Oil, Government of India to confirm adherence to the prescribed quality parameters.

Sensing the need of continuous improvement to keep pace with the market place of we have constantly endeavored to improve on our existing products and develop new products that meet the changing needs of the end users. We have an in- house research and development team comprising of qualified and experienced professionals.

Our marketing network of agents enable us to receive first hand information about customer preferences, update ourselves with the changing needs of the consumers and they also update us with the changing pattern of consumer demands. As per the demand pattern we improve our existing products and develop new products that meet the changing needs of the end users.

Enterprise Resource Planning (“ERP”)

We have installed ERP in all the three plants. Integration of the system is under implementation. We have an inventory tracking system tracking the stock position, seed position and order position and link all the three positions. We generate delivery status report and the receivables statement.

Capacity and capacity utilization

The following table gives the consolidated capacity for the last 3 financial years and also projected capacities for the next three Financial Years.

In terms of the Industrial Policy, 1991, our industry was delicenced. Details of our installed capacities and capacity utilization over the last three financial years and our projected capacities and their respective utilisation over the next three years are as follows:

For the last three Financial Years (in MTs) Process FY 2007 FY 2008 FY 2009 Cattle and poultry feed Annual Installed Capacity 12600.00 30000.00 30000.00 Capacity Utilized 5910.00 26290.00 25300.00 % Utilisation 46.90% 87.63% 84.33%

Solvent Extraction Plant Annual Installed Capacity 187500.00 187500.00 187500.00 Capacity Utilized 140746.83 145135.16 133654.84 % Utilisation 75.06% 77.41% 71.28%

Refinery Plant

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Annual Installed Capacity 42000.00 42000.00 66000.00 Capacity Utilized 24199.76 22090.04 13970.19 % Utilisation 57.62% 52.60% 21.17%

Soya Lecithin Annual Installed Capacity 900.00 900.00 900.00 Capacity Utilized 610.18 296.09 607.70 % Utilisation 67.80% 32.90% 67.52%

For the next three Financial Years (in MT) Process FY 2010 FY 2011 FY 2012 Cattle and poultry feed Annual Installed Capacity 30,000.00 30,000.00 90,000.00 Capacity Utilization 24,000.00 25,500.00 72,000.00 % Utilisation 80.00% 85.00% 80.00%

Solvent Extraction Plant Annual Installed Capacity 367,500.00 367,500.00 547,500.00 Capacity Utilization 190,000.00 231,000.00 285,000.00 % Utilisation 52.00% 63.00% 52.00%

Refinery Plant Annual Installed Capacity 96,000.00 96,000.00 195,000.00 Capacity Utilization 37,440.00 44,000.00 76,050.00 % Utilisation 39.00% 46.00% 39.00%

Soya Lecithin Annual Installed Capacity 2,400.00 4,410.00 4,410.00 Capacity Utilized 1,028.51 1,984.50 2,116.80 % Utilisation 42.85% 45.00% 48.00%

Our optimum scale plants at multiple locations, versatile operations allow us to develop efficient and cost-effective processes for different products at short notice and to maintain capacity to take on new opportunities as they arise.

Export Obligations

We have received an EPCG Concessional Duty waiver of 3% on the items imported by us as detailed in the import-export license issued by the Director General of Foreign Trade, Government of India. The obligation is against the capital goods imported by us within eight years from the date of issuance of the license. We have an obligation to export soybean meal of the value of the concession received on imports. The said license was issued to us on September 11, 2009. For the date of grant of the license, we are yet to meet our obligation to export soybean meal of the value of the concession received on imports.

Intellectual Property Rights

We have two registered trademarks relating to our brands “Saras” and “Siddha Gold”. We have applied for registration of trademarks “Poushtik Feeds” for our cattle feeds division and “Siddha” for the hybrid seeds division. We also have applied for registration of the “BOL” logo. For further details of our intellectual properties, please refer to the chapter titled “Licenses and Approvals” on page 269 of the Draft Red Herring Prospectus. We believe that we are not dependent on any of our intellectual property rights individually, although collectively, they are of material significance to our business.

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Properties

The following table sets forth the location and other details of our leasehold commercial properties in India.

Sr Place Address Type of Agreement Type of office No 1. Betul Kosmi Industrial Area, Betul – 460001, Madhya Lease for 99 years Factory and Pradesh Registered Office 2. Satna Village Kaima Unmulan Halka No. 101, Revenue Sale Deed Factory Inspector Mandal, Taluka Raghurajnagar, District Satna, Madhya Pradesh 3. Solapur Plot No 12, MIDC, Village Kondi, Solapur, Lease Factory Maharashtra 4. Mumbai Office No. 810, 8th Floor, Maker Chambers V, Leave and License Corporate Office Nariman Point, Mumbai-21 5. Bhopal Mezzanine floor at 131/13, Zone-II, Maharana Pratap Lease Marketing Office Nagar, Bhopal 6. Hooghly 75, BBD Raod, Hindmotor, Hooghly, West Bengal Leave and License Marketing Office 7. Coimbatore 405, Ground Flour, Rama Subbuillam, Lease Marketing Office Ramanathapuram, Pankaja Mill Road, Coimbatore, 641045 8. Indore Vijay Nagar, A G-266, Scheme No. 74-C, Indore-10, Lease Marketing Office Madhya Pradesh 9. Raipur C-74, Ground Floor, Sector – I, Raipur, Chattisgarh Lease Marketing Office 10. Medak 10-02/2, Asulampally Road, Mulug Village and Leave and License Marketing Office Mandal, District Medak, Andhra Pradesh 11. Bangalore 186/2, Tapswiji Arcade, 1st stage, 1st Phase, BTM Leave and License Marketing Office Layout, Hosur Road, Bangalore 12. Delhi Ground Floor, 12, Sant Nagar, East of Kailash, New Lease Marketing Office Delhi – 110065 13. Bhopal Plot No.80-81, Sector-A, Industrial Area, Mandideep, Leave and License Godown/ Depot Bhopal 14. Jabalpur 324, Gandhiganj, Jabalpur, Madhya Pradesh Letter of Acceptance Godown/ Depot (Ikraarnama) 15. Betul Patel Ward, Tikari, Betul 460001, Madhya Pradesh Sale Deed Staff quarters 16. Betul Parsoda, District Betul, Madhya Pradesh Sale Deed Warehouse 17. Sivakasi Lakshmipuram Village, Sivakasi Taluk, Sale Deed Company land Viruduhunagar District

Insurance

We maintain insurance against various risks inherent in our business activities, including property damage caused by fire, earthquake, flood, explosion and similar catastrophic events that may result in physical damage to or destruction of our equipment or stocks. Although we consider our insurance coverage to be of a type and level that is economically prudent, we cannot assure you that we will be able to maintain insurance at rate which we consider commercially reasonable or that such coverage will be adequate to cover any claims that may arise. The insurance policies in respect of certain of our plant and machinery, stocks and book debts have been endorsed in favour of the lending banks that have provided us finance.

Overall, we generally maintain insurance covering our assets and operations at levels that we believe to be appropriate for our business.

We have also taken an insurance policy for unforeseen contigencies resulting in loss of services of a few of our directors and key managerial personnel. Competition

Our competition depends on the products being offered by various companies in the organized segment besides several other factors like quality, price, timely delivery. Competition emerges not only from organized sector but also from the unorganized sector and from both small and big players. In an organized segment we face competition from Ruchi Soya

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Industries Limited, Cargill India Private Limited, K. S. Oils Limited, Sanwaria Agro Oils Limited, Adani Wilmar Limited, Bhaskar Industries Limited and Gokul Refoils and Solvents Limited.

Health and Safety of Workmen

We have policy in place for health and safety for our workmen which has following salient features:

• Compliance with relevant Safety and Statutory Regulations and Rules both in letter and in spirit. • Maintenance of safe, healthy and congenial working atmosphere by constant monitoring of working environment. • Ensuring cleanliness of work place in compliance with the relevant regulations. • Providing work force with ongoing knowledge/instructions on work procedures and safety precautions. • Conducting classes on safety, first aid training, fire fighting, mock drills, safety audit, risk analysis studies, etc. • Ongoing assessment on the status of safety, health and environment at the work place and take appropriate measures to improve the same. • Obligation and responsibility on every employee to perform the tasks ensuring complete safety.

Corporate Social Responsibility

We believe that our corporate social responsibility (“CSR”) achieves an integration of economic, environmental and social imperatives while simultaneously addressing shareholder expectations. We use CSR as an integral business process in order to support sustainable development and we constantly endeavor to be a better corporate citizen and enhance our performance in the triple bottom line.

As part of our CSR, we provide:

a. Free ambulance services for the local population of Betul, b. Training and education of farmers as regards seed production. c. Education, through the Satpura Valley Public School, at Betul d. We conduct free meditation and spiritual classes e. We organize eye check up camps, blood donation camps, etc. f. We have set up a sports academy at Betul

Human Resource Management

We have experienced Directors and management on whom we rely to anticipate industry trends and capitalise on new business opportunities that may emerge. We believe that a combination of our reputation in the market, our working environment and competitive compensation programs allow us to attract and retain these talented people. Our senior management team consists of experienced individuals with diverse skills in manufacturing, marketing and finance, production, quality control, logistics, international trade, marketing of edible oil, marketing of meal, HRD, systems, business development and research and development.

We believe that our employees are key contributors to our business success. To achieve this, we focus on hiring and retaining the best talent in the industry. We have formulated certain programmes to groom them like on-job training so as to absorb them as regular and effective employees.

The break up of employee strength as on June 30, 2010 is given below:

Category Number of Employees Managerial and technical 222 Commercial and non-technical 144 Total 366

We also employ personnel on temporary basis as and when required.

Unions

We do not have any trade unions at our manufacturing units.

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Indebtedness

For details of our indebtedness, please see “Financial Indebtedness” on page 250 of the Draft Red Herring Prospectus.

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KEY INDUSTRY REGULATIONS AND POLICIES

The following description is a summary of certain laws and regulations in India, which are applicable to us. The information detailed in this chapter has been obtained from publications available in the public domain. The regulations set below are not exhaustive, and are only intended to provide general information to the investors and are neither designated nor intended to be a substitute to professional legal advice.

We are engaged in the business of solvent extraction, refining of edible oils, development of hybrid seeds and animal feeds and trading of de-oiled cake. For the purpose of the business undertaken by our Company, we may be required to obtain licenses and approvals depending upon prevailing laws and regulations. For details of such approvals, please see “Licenses and Approvals” on page 269 of the Draft Red Herring Prospectus.

Industrial Laws

The Industries (Development and Regulation) Act, 1951 and New Industrial Policy, 1991

The Industrial (Development and Regulation) Act, 1951 (“IDRA”) regulates all industrial activities in the country. The IDRA confers on the Government of India, the power to make rules for regulation and development of various industries. The Government of India has been notifying policy statements from time to time to regulate industrial activity. A number of industries have been de-licensed under the New Industrial Policy, 1991 (“Policy”). In the Policy, entry No. 5 of Annex II concerns animal fats and oils. This industry has been deleted and is now de-licensed pursuant to Press Note No. 11 of 1997 Series dated July 17, 1997.

The Prevention of Food Adulteration Act, 1954 & Rules, 1955

This act is the basic statute intended to protect the common consumer against supply of adulterated food and specifies different standards on various articles of food. The standards are of minimum quality level intended for ensuring safety in the consumption of these food items and for safeguarding against harmful impurities, adulteration etc. Provisions of the Act are mandatory and contravention of the Rules can lead to both fine and imprisonment. The standards of quality of various food articles have been specified in Appendix B to the Prevention of Food Adulteration Rules, 1955. Manufacture, sale, stocking, distribution or exhibition for sale of any article of food, including prepared food or ready to serve food, cannot be done by any person except under a license.

Edible Oils Packing (Regulation) Order, 1998

In the context of the incidence of adulteration of oil with argemone oil and consequent dropsy cases and dropsy deaths, this Order derives its powers from the Essential Commodities Act. The basic objective of the Order is to ensure availability of safe and quality edible oils in packed form to the consumers.

Vegetable Oil Products (Control) Order, 1947

This order puts the responsibility for implementation of the standards of quality of the vegetable oil product particularly at the manufacturing stage with the Directorate of Vanaspati, Vegetable Oils and Fats.

Solvent Extracted Oil, De-oiled Meal and Edible Flour (Control) Order, 1967

This order controls the production and distribution of solvent extracted oils, deoiled meal, edible flours and hydrogenated vegetable oils (Vanaspati). This order is operated by the Directorate of Vanaspati, Vegetable Oils and Fats under the Department of Civil Supplies in the Ministry of Food and Civil Supplies.

Solvent Reffinate and Slop (Acquisition, Sale, Storage and Prevention of Use in Automobiles) Order, 2000

This order puts restriction on sale and use of solvents, reffinates, slops and other products. This order lays down detailed provisions and procedure for obtaining license, for acquire, store or sell solvent, raffinate, slops or their equivalent and other products issued by the State Govt. or the District Magistrate or any other officer authorized by the Central/State Govt. According to this order no person shall either use or help in any manner the user of solvents, raffinated, slops or their equivalent or other products except Motor Spirit and High Speed Diesel in any automobile.

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Standards of Weights and Measures Act, 1976

This legislation and the rules made there under apply to any packaged commodity that is sold or distributed. It provides for standardization of packages in specified quantities or numbers in which the manufacturer, packer or distributor shall sell, distribute or deliver some specified commodity to avoid undue proliferation of weights, measures or number in which such commodities may be packed. Any person intending to pre-pack or import any commodity for sale, distribution or delivery has to make an application to the Director of Legal Metrology for registration.

Standards of Weights and Measures Enforcement Act, 1985

The Standards of Weights and Measures Enforcement Act, 1985 regulates the classes of weights and measures manufactured, sold, distributed, marketed, transferred, repaired or used and the classes of users of weights and measures. The Act was passed with a view to regulating and modernizing the standards used in India based on the metric system. The units of weight which are sought to be used in day to day trade are required to be periodically inspected and certified by the designated authorities under this act for their accuracy

The Seeds Act, 1966

The overall policy with regard to seed quality maintenance is determined within the legislative framework of the Seeds Act. The Seeds Act provides for the constitution of a Central Seeds Committee for the purposes of advising the Central and State Governments on matters arising out of the administration of the Seeds Act. The Seeds Act provides for notification of certain kinds or varieties of seeds for the purposes of regulating the quality of any kind or variety of seed to be sold for purposes of agriculture.

The Seeds Rules, 1968

The Seeds Rules provides for the implementation of the provisions of the Seeds Act. The Seeds Rules defines the term “certified seed” as a seed that fulfills all requirements for certification provided by the Seeds Act and the Seeds Rules and to the container of which the certification tag is attached. Also, the term “certified seed producer” has been defined as a person who grows or distributes certified seed in accordance with the procedure and standards of the certification agency. The Seeds Rules also classifies certified seed into foundation seed, registered seed and certified seed and prescribes standards to be met with by each class of certified seed.

The Seeds (Control) Order, 1983

The Seed (Control) Order issued under the Essential Commodities Act, 1955 enumerates the procedure for registration for every person carrying on the business of selling, exporting or importing seeds, including but not limited to, those of a notified kind or variety. It prescribes that every person carrying on the business of selling, exporting or importing seeds at any place shall do so under the terms and conditions of the license granted under this Seeds (Control) Order.

The Indian Boilers Act, 1923

This act contains law relating to steam boilers. The Act applies to all boilers used for generating steam under pressure, exceeding 22.75 ltrs. Capacity and to the steam-pipe, feed pipe, economizer and any mounting or other fitting attached to the boiler. The owner is required to get registered for using a boiler under the provisions of the Indian Boilers Regulations, 1950.

The Petroleum Act, 1934

This act provides for provisions relating to the import, transport, storage, production, refining and blending of petroleum.

The Agricultural Produce (Grading & Marking) Act, 1937

This act provides for the grading and marking of agricultural and other produce.

Agricultural Produce Marketing (Regulation) Act 1963

The Act provides for establishment of Market Committees in the State. These Market Committees are engaged in development of market yards for the benefit of agriculturists and the buyers. Various agricultural produce commodities are

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regulated under the Act. The APMCs are established by the State Government for regulating the marketing of different kinds of agriculture and pisciculture produce for the same market area or any part thereof.

The Explosives Act, 1884 and the rules framed thereunder

This Act extends to the whole of India and regulates the manufacture, possession, use, sale, transport, import and export of explosives. It stipulates that no person shall import, export, transport, manufacture, possess, use or sell any explosive which is not an authorised explosive. The Act also prescribes safety standards and qualifications required in order to obtain a license for the manufacture, use, possession, sale etc., of explosives.

Environmental Laws

Manufacturing projects must also ensure compliance with environmental legislation such as the Water (Prevention and Control of Pollution) Act 1974 (“WPA”), the Air (Prevention and Control of Pollution) Act, 1981 (“APA”) and the Environment Protection Act, 1986.

The WPA 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.

The Central and State Pollution Control Boards constituted under the WPA are also to perform functions as per the APA for the prevention and control of air pollution. The APA 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. No person operating any industrial plant, in any air pollution control area shall discharge or cause emission of any air pollutant in excess of the standards prescribed by the State Board in this regard.

Environment (Protection) Act, 1986

The Environment (Protection) Act, 1986 was enacted as a general legislation to safeguard the environment from all sources of pollution by enabling coordination of the activities of the various regulatory agencies concerned, to enable creation of an authority with powers for environmental protection, regulation of discharge of environmental pollutants etc. The purpose of the Act is to act as an "umbrella" legislation designed to provide a frame work for Central government co-ordination of the activities of various central and state authorities established under previous laws, such as Water Act & Air Act. It includes water, air and land and the interrelationships which exist among water, air and land, and human beings and other living creatures, plants, micro-organisms and property.

Consent for operation of the plant under the APA

The Air (Prevention and Control of Pollution) Act 1981 has been enacted to provide for the prevention, control and abatement of air pollution. The statute was enacted with a view to protect the environment and surroundings from any adverse effects of the pollutants that may emanate from any factory or manufacturing operation or activity. It lays down the limits with regard to emissions and pollutants that are a direct result of any operation or activity. Periodic checks on the factories are mandated in the form of yearly approvals and consents from the corresponding Pollution Control Boards in the state. Consent for operation of the plant under the WPA

The Water Act was enacted in 1974 in order to provide for the prevention and control of water pollution by factories and manufacturing industries and for maintaining or restoring the wholesomeness of water. In respect to an Industrial Undertaking it applies to the (i) Occupier (the owner and management of the undertaking) (ii) Outlet (iii) Pollution and (iv) Trade effluents. The Act requires that approvals be obtained from the corresponding Pollution Control Boards in the state.

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Water (Prevention and Control of Pollution) Cess Act, 1977

The Water Cess Act is a legislation providing for the levy and collection of a cess on local authorities and industries based on the consumption of water by such local authorities and industries so as to enable implementation of the Water Act by the regulatory agencies concerned.

The Hazardous Wastes (Management and Handling) Rules, 1989

The Hazardous Wastes (Management and Handling) Rules, 1989 provides for control and regulation of hazardous wastes as defined under the Rules discharged by the operations of undertakings and imposes an obligation on every occupier generating hazardous waste to dispose of such hazardous wastes properly including proper collection, treatment, storage and disposal. Every occupier generating hazardous waste is required to obtain an approval from the Pollution Control Board for collecting, storing and treating the hazardous waste.

Intellectual Property

Intellectual Property in India enjoys protection under both common law and statute. Under statute, India provides for the protection of patent protection under the Patents Act, 1970, copyright protection under the Copyright Act, 1957 and trademark protection under the Trade Marks Act, 1999. The above enactments provide for protection of intellectual property by imposing civil and criminal liability for infringement.

Labour Laws

India has stringent labour related legislation. The following is an indicative list of legislations which are applicable to our operations and workmen:

1. Minimum Wages Act, 1948 2. Contract Labour (Regulation and Abolition) Act, 1970 3. Payment of Bonus Act, 1945 4. Payment of Gratuity Act, 1972 5. Employee State Insurance Act, 1948 6. Employees Provident Fund and Miscellaneous Provisions Act, 1952 7. Workmen‘s Compensation Act, 1923 8. Industrial Disputes Act, 1947 9. Industrial Employment (Standing Orders) Act, 1946

Regulation of Foreign Investment in India and Foreign Ownership

Foreign investment in India is primarily governed by the provisions of the Foreign Exchange Management Act, 1999 (“FEMA”) and the rules and regulations promulgated there under. The RBI, in exercise of its powers under FEMA, has notified the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (“FEMA Regulations”) which prohibit, restrict and regulate, transfer or issue of securities, to a person resident outside India. Pursuant to the FEMA Regulations, no prior consent or approval is required from the RBI for foreign direct investment under the “automatic route” within the specified sectoral caps prescribed for various industrial sectors. In respect of all industries not specified under the automatic route, and in respect of investments in excess of the specified sectoral limits under the automatic route, approval for such investment may be required from the FIPB and/or the RBI. Further, FIIs may purchase shares and convertible debentures of an Indian company under the portfolio investment scheme through registered brokers on recognized stock exchanges in India. Regulation 1 (4) of Schedule II of the FEMA Regulations provides that the total holding by each FII or SEBI approved sub-account of an FII shall not exceed 10% of the total paid-up equity capital of an Indian company or 10% of the paid-up value of each series of convertible debentures issued by an Indian company and the total holdings of all FIIs and sub accounts of FIIs added together shall not exceed 24% of the paid-up equity capital or paid-up value of each series of convertible debentures. However, this limit of 24% may be increased upto the statutory ceiling as applicable, by the Indian company concerned passing a resolution by its board of directors followed by the passing of a special resolution to the same effect by its shareholders. Under the Industrial Policy and FEMA, 100% FDI is permitted in our industry.

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HISTORY AND CORPORATE STRUCTURE

Our Company was incorporated as “Betul Oils and Flours Private Limited” on February 3, 1981 as a private limited company under the Companies Act, 1956 (the “Companies Act”). On April 1, 1990, by virtue of section 43A of the Companies Act, our Company was converted into a public company and the name was changed to “Betul Oils and Flours Limited”. On November 20, 2003, our Company was reconverted into a private company and the name was changed to “Betul Oils and Flours Private Limited”. Our Company was converted into a public company and the name of our Company was changed to “Betul Oils and Flours Limited” pursuant to a fresh certificate of incorporation consequent to change of name dated February 28, 2006 issued by the RoC, Madhya Pradesh and Chhattisgarh at Gwalior. The name of our Company was changed to “Betul Oil Limited” pursuant to a fresh certificate of incorporation consequent to change of name dated June 9, 2010 issued by the RoC, Madhya Pradesh and Chhattisgarh at Gwalior. The name was changed to accentuate our focus on edible oil extraction business.

Our Company was incorporated on February 3, 1981 as “Betul Oils and Flours Private Limited” and was promoted by Shri Dharamchand Shrishrimal and Late Shri Shantilal Shrishrimal (“Original Promoters”). On incorporation, our Company set up its maiden solvent extraction unit at Betul, Madhya Pradesh with a total crushing capacity of 30,000 TPA (100 TPD). In 1995, the Daga family took over the business from the Original Promoters and assumed responsibility for conducting our Company’s businesses. In December 2005, our Company acquired a solvent extraction plant at Solapur with a capacity of 97,500 TPA (325 TPD) and cattle feed plant with capacity of 12,600 TPA (42 TPD) per day from the Asset Reconstruction Company (India) Limited. In 2005, our Company established its first wind farm in Dhule, Maharashtra with a total power generation capacity of 1.25 MW. In 2006, our Company established a captive power wind farm in Dewas, Madhya Pradesh with a total capacity of 1.25 MW. In the year March 2010, our Company established a solvent extraction plant and oil refinery at Satna, Madhya Pradesh with solvent extraction capacity of 180,000 TPA (600 TPD), refining capacity of 30,000 TPA (100 TPD) and soya lecithin manufacturing capacity of 2,010 TPA (7 TPD). In 2010, our Company started with a separate division called Siddha Seeds for cultivation and marketing of hybrid seeds.

The registered office of our Company at incorporation was situated at K. N. Building, Subhash Road, Raipur. In the July 24, 1995, the registered office was shifted from K. N. Building, Subhash Nagar, Raipur to Kosmi Industrial Area, Betul – 460001, Madhya Pradesh. The registered office was shifted with a view to achieve administrative convenience.

Our Corporate Office is at 810, Maker Chambers V, Nariman Point, Mumbai 400021, Maharashtra, India.

Injunction or Restraining Order

Our company is not operating under any injunction or restraining order.

Our Shareholders

As on the date of the Draft Red Herring Prospectus, the total number of holders of Equity Shares, including nominees is 16. For further details of our shareholding pattern, please refer to the chapter titled “Capital Structure” on page 55 of the Draft Red Herring Prospectus.

Revaluation of Assets

Our Company has revalued its fixed assets twice since incorporation in 1994-95 and 2006-07. However, there have been no issuances of Equity Shares from the revaluation reserves.

1. Revaluation of assets on March 31, 1995:

On March 31, 1995, our Company revalued its fixed assets. The land, factory buildings, other buildings and plant and machinery were revalued and stated at revised values. The addition on account of revaluation was included in the gross block as on March 31, 1995 as under: (Rs. in million) Nature of Asset Betul Unit Land 0.79 Factory buildings 4.42 Other buildings 7.28 Plant and machinery 27.31 Total 39.82 143

As a result of the revaluation, the revaluation reserve was created of Rs. 39.82 million.

2. Revaluation of assets on June 30, 2007:

On June 30, 2007, our Company did the second revaluation of fixed assets. The land, buildings and plant and machinery were revalued and stated at revised values. The addition on account of revaluation was included in the gross block as on June 30, 2007 as under: (Rs. in million) Nature of Asset Betul Unit Solapur Unit Total

Factory land 0.49 13.22 13.71 Factory and other buildings 28.44 62.38 90.82 Plant and machinery 144.94 174.32 319.26 Total 173.87 249.92 423.79

As a result of the revaluation, the revaluation reserve was restated to Rs. 444.53 million. As the assets were stated on revaluation as on June 30, 2007, depreciation effect on account of enhanced value of assets was considered from the financial year 2007-08 onwards.

Major Events

Year Major Events Setup of Betul Unit with solvent extraction capacity of 30,000 MT per annum capacity and oil refinery 1981 capacity of 7500 MT per annum. 1993 Expansion of capacity of the Betul Unit to solvent extraction of 90,000 MT per annum and oil refinery of 15,000 MT per annum. 1995 Takeover of our Company by our Promoters Launch of Saras and Siddha Gold in consumer pack Setup of 1.25 MW wind farm at Dhule, Maharashtra 2005 Launch of cattle-feed under the brand name of Poushtik Feeds Acquired a solvent extraction plant at Solapur with a capacity of 97,500 TPA (325 TPD) and cattle feed plant with capacity of 12,600 TPA (42 TPD) from the Asset Reconstruction Company (India) Limited Setup of 1.25MW captive power wind farm at Dewas, Madhya Pradesh 2006 Manufacture of Non-Gmo Soya lecithin 2006-07 Achievement of export turnover of de-oiled cake of Rs 1,000 millions 2007 CERT ID certification for manufacture of non-gmo soya lecithin 2008-09 Achievement of turnover of Rs 5,000 millions Setup Satna Unit with a solvent extraction capacity of 180,000 TPA (600 TPD), refining capacity of 2010 30,000 TPA (100 TPD) and soya lecithin manufacturing capacity of 2,010 TPA (7 TPD)

For details of our competitors, please see “Business Overview” on page 117 of the Draft Red Herring Prospectus.

Awards and achievements

Year Awards and achievements 2000 Bhartiya Udyog Ratan Award by Indian Economic Development & Research Association 3rd Highest Capacity Utilisation Award by the Soybean Processors Association of India for the year 2002 2000-2001 Highest Capacity Utilisation Award by the Soybean Processors Association of India) for the year 2002- 2003 2003 Highest Capacity Utilisation Award by the Soybean Processors Association of India) for the year 2003- 2004 2004 Highest Capacity Utilisation Award by the Soybean Processors Association of India for the year 2004- 2005 2005 2007 Business award for being among the top three companies in fast moving consumer goods industry, food and agri-business category of CNBC TV-18’s emerging India awards 2007 rated by CRISIL and given by Honourable Prime Minister Dr. Manmohan Singh. 144

Award of ISO 9001:2000 certification by Bureau Veritas Certification (India) Private Limited for 2008 manufacture and sale of vegetable oils and de-oiled cake for Betul Unit Award of ISO Certification 9001:2000 certification by BM Trada Certification Limited for manufacture 2009 of vegetable oils and de-oiled cake for Solapur Unit Award of the ‘Indian Achievers Award for Industrial Excellence’ by Indian Economic Development and 2010 Research Association

Other than as disclosed in “Capital Structure” on page 55 of the Draft Red Herring Prospectus, our Company has not issued any capital in the form of equity or debt.

For details on the description of our Company’s activities, products, the growth of our Company and exports, please refer to “Business Overview”, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and “Basis of Issue Price” on pages 117, 229 and 85 of the Draft Red Herring Prospectus.

Changes in the activities of our Company during the last five years

We have discontinued the business of hybrid seeds in the year 2008. However there has not been a material effect on our profits or loss, due to discontinuance of our aforementioned business.

Defaults or Rescheduling of borrowings with financial institutions/ banks

Other than as disclosed in the “Risk Factors” on page 143 and “Outstanding Litigation and Material Developments” on page 255 of the Draft Red Herring Prospectus, there have been no defaults or rescheduling of borrowings with the financial institutions / banks.

Lock-out or strikes

There have been no lock-outs or strikes in our Company since inception.

Main Objects as set out in the Memorandum of Association of our Company

The main objects of our Company as contained in its Memorandum of Association are:

1. To carry on the business of extracting, manufacturing, producing, refining, processing whether on its own account or as commission agents or otherwise all kinds of oils including synthetic, edible, non-edible, refined oils, deodorized and hydrogenated oils, vegetable oils, vegetable ghee, butter substitutes, margarine, salad oils, cooking mediums, glycerine lubricating oils, greases, boiled oils, varnishes fatty acids, polish fatty alcohol and all kinds of fats, oleaginous emulsions, oil preparations and oil products either by crushing or by chemical or solvent extraction process or any other process from copra, coconut, cotton sees, linseed, castor seed, sal seed, ground nuts, till seed, rape seed, safflower, tobacco seed, kamla seed, soyabean, rice, rice bran, peanut, mustard, toria, rai jambrataramira, sarson, banarasi rai, sunflower, niger seed, neem vepa, mahua, illupai, ippe, karanja, pongam, honga, kusum, punna, undi, kakum, tung, red palm, or any other seed, cereals, nuts, oil cake, fat or substances from which oil can be derived, extracted or produced.

2. To carry on the business of purchasing, selling, importing, exporting of all or any of the oils or oil products hereinabove mentioned and all substances from which oil can be derived including those referred to above and of cultivating and growing and marketing oleaginous seeds, nuts and plants of every description.

3. To carry on business of millers and grinders and dealers of corn, nuts, seeds, all kinds of agricultural produce and minerals, makers and manufacturers and dealers of flours of every description, manufacturers and dealers of meal, confectionery, bread, biscuits, baby foods, and all kinds of edible commodities, makers and dealers of cattle food and feeding and fattening preparations of every description.

3(a) To manufacture, sell, purchase, process, produce, import, export, and deal in whether on its own account or as commission agent or otherwise all kinds of soaps, soap powder, detergents, toilet and laundry requisites, soda, watersofteners, all kinds of saponaceous substances all kinds of unguents and ingredients, starch, wood, timber, candles, tallow, perfumes flowers and perfume producing vegetation and substances, fats, pharmaceuticals, chemical and medicinal and other preparations or compounds and proprietary articles of every description.

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Amendments to our Memorandum of Association

Since our incorporation, the following changes have been made to our Memorandum of Association:

EGM Date Nature of amendment August 22, 1986 The authorised capital of our Company was enhanced from Rs. 3,500,000 comprising of 3,500 equity shares of Rs. 1,000 each to Rs. 6,100,000 comprising 6,100 equity shares of Rs. 1,000 each April 1, 1990 Change of name of our Company from Betul Oils and Flours Private Limited to Betul Oils and Flours Limited, consequent upon conversion of our Company into a public company by the virture of section 43A of the Companies Act. January 1, 1996 The authorised capital of our Company was enhanced from Rs. 6,100,000 comprising of 6,100 equity shares of Rs. 1,000 each to Rs. 19,000,000 comprising 19,000 equity shares of Rs. 1,000 each November 20, 2003 Change of name of our Company from Betul Oils and Flours Limited to Betul Oils and Flours Private Limited, consequent upon re-conversion of our Company from public company by the virture of section 43A of the Companies Act to private company. May 10, 2005 The authorised capital of our Company was enhanced from Rs. 19,000,000 comprising of 19,000 equity shares of Rs. 1,000 each to Rs. 70,000,000 comprising 70,000 equity shares of Rs. 1,000 each November 7, 2005 Sub-division of face value of Equity Shares from Rs. 1,000 to Rs. 10 per share. Consequent upon sub-division, the authorised capital of our Company is Rs. 70,000,000 comprising of 7,000,000 Equity shares of Rs. 10 each. February 10, 2006 The authorised capital of our Company was enhanced from Rs. 70,000,000 to Rs. 130,000,000 comprising 130,00,000 Equity shares of Rs. 10 each

Change of name of our Company from Betul Oils and Flours Private Limited to Betul Oils and Flours Limited, consequent upon conversion of our Company from private to public company. June 1, 2010 The authorised capital of our Company was enhanced from Rs. 130,000,000 to Rs. 500,000,000 comprising 50,000,000 Equity shares of Rs. 10 each June 7, 2010 Change of name of our Company from Betul Oils and Flours Limited to Betul Oil Limited.

Business Acquisitions

Other than as disclosed under “Major Events” in this section, our Company has not acquired any business or undertakings.

Subsidiary

Our Company has one subsidiary, Betul Oils and Feeds Private Limited. The equity shares of our Subsidiary are not listed on any stock exchange and it has not raised capital by way of a public issue of securities since inception.

Our Subsidiary has not become a sick company under the SICA and is not under winding up.

Betul Oils and Feeds Private Limited

Betul Oils and Feeds Private Limited (‘BOFPL’) was incorporated on January 12, 2006 under the Companies Act. BOFPL is engaged in the business of dealing in all kinds of feeds for animals, birds, poultries. BOFPL become our Subsidiary on June 1, 2010.

The authorised share capital of BOFPL is Rs 1 million divided into 100,000 equity shares of Rs 10 each. The issued and paid up share capital of BOFPL is Rs 0.1 millions divided into 10,000 equity shares of Rs 10 each. Our Company, along with its nominees, holds 10,000 equity shares in BOFPL i.e. 100% of the issued and paid up capital of BOFPL. Amount of accumulated profits and losses of the subsidiary not accounted by the issuer is nil.

The following table sets forth the summary audited financial data of BOFPL: (Rs.in million, except Share data) Particulars For the years ended March 31, 2007 March 31, 2008 March 31, 2009

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Particulars For the years ended March 31, 2007 March 31, 2008 March 31, 2009 Equity Capital 0.10 0.10 0.10 Reserves and Surplus Nil (5.39) (5.43) Income (including Other Income) Nil (3.66) Nil Profit / (Loss) after Tax Nil (5.39) (0.04) Earnings per Share (Rs.) Nil (538.63) (4.42) Net Asset value per share (Rs.) 6.28 (531.60) (535.28) No. of Shares 10,000 10,000 10,000 Note: Face value of each Equity Share is Rs. 10 each.

Capital raising through equity and debt

For details in relation to our capital raising activities through equity and debt, see the section titled “Financial Indebtedness” and “Capital Structure” on page 250 and 55 respectively of the Draft Red Herring Prospectus.

Time and Cost Overrun

There have been no time and cost overruns with respect to any projects undertaken by our Company.

Shareholders Agreements

As on the date of the Draft Red Herring Prospectus, there are no shareholders agreements among our shareholders in relation to our Company.

Strategic Partners

As on the date of the Draft Red Herring Prospectus, our Company does not have any strategic partners.

Financial Partners

As on the date of the Draft Red Herring Prospectus, apart from the various arrangements with bankers and lenders which our Company undertakes in the ordinary course of business, our Company does not have any other financial partners.

Joint Ventures

Our Company has not entered into any joint venture with any entity as on the date of filing of the Draft Red Herring Prospectus.

Material Agreements

Except as disclosed below, there are no material agreements, apart from those entered into in the ordinary course of business carried on or intended to be carried on by us.

1. On February 6, 2006, we entered into a wind energy purchase agreement with Maharashtra State Electricity Distribution Company Limited (“MSEDCL”). The agreement is entered into for supplying the power generated at the wind farm in Dhule, Maharashtra with a total capacity of 1.25 MW to MSEDCL. The term of this agreement is for a period of 13 years from the commercial operations date with a renewal option. The contracted rate is Rs. 3.50/Kwh with yearly escalations.

2. On January 31, 2007, we entered into a bulk power wheeling agreement with Madhya Pradesh Paschim KVV Company Limited (“MPPKCL”). In terms of the agreement we received permission for open access for wheeling of power for captive use generated at captive power wind farm in Dewas, Madhya Pradesh with a total capacity of 1.25 MW. The term of this agreement is for a period of 5 years from the date of the agreement with a renewal option.

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OUR MANAGEMENT

Board of Directors

Our Articles of Association requires our Company to appoint not less than 3 but not more than 12 directors. We currently have 6 Directors.

The following table sets forth details regarding our Board as on the date of the DRHP:

Sr. Name, Father's Name, Nationality Age (in Designation Other Directorships No. Address, Occupation and years) Term, and DIN 1. Mr. Ganesh Kumar Gupta Indian 57 Non-Executive 1. Apple Tree Ideatainment S/o Mr. Satish Kumar Gupta Chairman* Private Limited 2. Bharat Tiles and Marble Address: Flat-1, Block-1, Private Limited Colaba Land CHS Limited, 3. Neil Investments Private Sorab Bharucha Road, Limited Colaba, Mumbai, 400005, 4. Osian’s Real Estate Maharashtra, India Private Limited 5. Osian’s Dwellings Occupation: Business Private Limited 6. Osian’s Farms private Date of Appointment: Limited April 20, 2010 7. Osian’s Nirman Private Limited Term: Liable to retire by 8. Osian’s Shelters Private rotation Limited Silk Land Furnishings Private DIN: 00024567 Limited 9. Sunbeam Property Developers Private Limited 10. Springfield Estate Developers Private Limited 11. Technocraft Industries (India) Limited 12. Vijay Silk House Private Limited 13. Vijay Silk House Mumbai Limited 14. Vijay Silk House Surat Limited 15. Vijay Silk House Bangalore Limited 16. VSH Silk Mills Private Limited 17. Vinayak Nirman Private Limited 18. Veema Land Developers Private Limited 19. Vandit Developers Private Limited 20. Veema Property and Land Developers Private Limited 21. Vinayak Power Limited 148

Sr. Name, Father's Name, Nationality Age (in Designation Other Directorships No. Address, Occupation and years) Term, and DIN 22. White Pearls Hotels and Investment Private Limited 2. Mr. Shreans Daga Indian 36 Managing Director 1. Betul Oils and Feeds S/o Late Mr. Pramod Kumar Private Limited Daga 2. Hi-Gene Seeds (India) Private Limited Address: Daga House, Kothi 3. Honey Bee Crop Care Bazar, Betul 460001, Madhya Private Limited Pradesh, India 4. Indigo Kids Edutainment Private Limited Occupation: Business 5. Navinya Multitrade Private Limited Date of appointment: June 1, 2010

Term: 5 years

DIN: 01669132 3. Mr. Paras Kumar Daga Indian 59 Whole Time Nil S/o Late Mr. Harakchand Director Daga

Address: Ward number 7, Kidwai Ward, Betul, 460001, Madhya Pradesh, India

Occupation: Business

Date of Appointment: June 1, 2010

Term: 5 years

DIN: 01958825 4. Mr. Niraj Daga Indian 34 Whole Time 1. Betul Oils and Feeds S/o Mr. Vinod Kumar Daga Director Private Limited

Address: Daga House, Kothi Bazar, Betul 460001, Madhya Pradesh, India

Occupation: Business

Date of Appointment: June 1, 2010

Term: 5 years

DIN: 01411335 5. Mr. Ramesh Kotecha British 56 Independent 1. Betul Oils and Feeds S/o Mr. Govind Jinabhai Director Private Limited Kotecha

Address: 801 Sangeet Sarita, Off Bhula Bhai Desai Road, 149

Sr. Name, Father's Name, Nationality Age (in Designation Other Directorships No. Address, Occupation and years) Term, and DIN Breach Candy, Mumbai, 400026, Maharashtra, India

Occupation: Business

Date of Appointment: October 10, 2007

Term: Liable to retire by rotation

DIN: 01983937 6. Mr. Suresh Jain Indian 50 Independent 1. CNI Research Limited S/o Mr. Tarachand Jain Director** 2. Hi-Klass Trading and Investment Limited Address: 402 Bhima, Sir Pochkhanwala Road Worli, Mumbai, 400025, Maharashtra, India

Occupation: Business

Date of Appointment: May 25, 2010

Term: Liable to retire by rotation

DIN: 01142300

*Mr. Ganesh Kumar Gupta has been appointed as an additional Director vide board resolution dated April 20, 2010. **Mr. Suresh Jain has been appointed as an additional Director vide board resolution dated May 25, 2010.

Brief Biographies of our Directors

Mr. Ganesh Kumar Gupta, aged 57, is our Chairman, Non-Executive and Non-Independent Director. He has done inter science from Uttar Pradesh Board in the year 1970. He is Chairman of Vijay Silk House group of companies and Synthetic and Rayon Textile Export Promotion Council set up by Union Textiles Ministry. He was the ex-chairman and ex-president of the Federation of Indian Export Organizations. He was the ex-chairman of the Textile Committee of Synthetic and Rayon Textile Export Promotion Council, The Indian Silk Export Promotion Council. He was a former member of Governing Committee of Sardar Vallabhbhai Patel Institute of Textile Management, National Institute of Fashion Technology, Central Silk Board, Power loom Development and Export Promotion Council, National Productivity Council, Union Ministry of Commerce and Industry, MSME Core Committee of RBI.

Mr. Shreans Daga, aged 36, is our Managing Director. He holds bachelor’s degree in commerce from University of Mumbai. He has more than 16 years of experience in the field of managing solvent extraction industries and export business. He has vast knowledge of banking and accountancy. He was instrumental in setting up of retail distribution network for the products of our Company. His current responsiblities include liasioning, planning, marketing and providing strategic vision to our Company. He is member of managing committee Solvent Extractors Association of India and vice- chairman and trustee of Pyramid Spiritual Trust, Banglore. Mr. Paras Kumar Daga, aged 59, is our Whole Time Director. He holds a bachelor’s degree in science with a specialisation in Chemistry from J.H College., Betul, Sagar University, Madhya Pradesh. He has 23 years of experience in managing of solvent extraction plant and oil refinery. His current responsilibities include cattle feed business, human resource related matters, administrative affairs for Betul Unit and policy matters in our Company. He is a founder member of Betul Oils – Satpuda Valley Sports Academy.

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Mr. Niraj Daga, aged 34, is our Whole Time Director. He holds masters in business administration from Cardiff Business School, Cardiff, United States of America and has done a course on Business Policy and Financial Management from the London School of Economics and Political Science. He has about 15 years of experience mainly in the field of managing the solvent extraction plant and oil refinery. He oversees the entire operations of the solvent extraction plant and oil refinery at the Solapur Unit. He is the chairman of Betul Oils – Satpuda Valley Sports Academy and secretary of District Football Association, Betul.

Mr. Ramesh Kotecha, aged 56, is our Independent Director. He holds a higher national certificate in Chemistry from London Polytechnic, United Kingdom. He started his career in the year 1974 with Beecham Products, Brentford London. Thereafter, he joined Producin Private Limited as a Director heading the team and acting as buying agents for agricultural products from India till 2000. He played an important role in establishing Concordia Agritrading Pte Limited, India office of Nidera Group. He has vast experience in the business of soyabean meal, wheat, corn, rice, castor oil, groundnut oil, rapeseed meal and import of edible oils, raw cashew nuts and copra expeller. In 2006, he started his own business of commodities servicing i.e. exports and imports for agricultural commodities, international brokerage business with special focus on feed stuffs.

Mr. Suresh Jain, aged 50, is our Independent Director. He is a practicing member of the Institute of Chartered Accountants of India. He has more than 20 years experience in representating before the income tax authorities, tax advice, tax planning, finalization of accounts and advice on company law matters. He is proprietor of M/s. Suresh T Jain, Chartered Accountants, where he is involved in managing statutory audits and direct taxation matters.

Relationship between Directors

None of our Directors have any family relationships, save and except Mr. Shreans Daga and Mr. Niraj Daga who are first cousins and Mr. Paras Kumar Daga is paternal uncle of both Mr. Shreans Daga and Mr. Niraj Daga.

There are no arrangements or any understanding with major shareholders, customers, suppliers or others pursuant to which any of the Directors were selected as a Director or member of a senior management.

Remuneration of our Directors for Financial Year 2009 (Rs. in million) Sr. No. Name of the Director Sitting Fees Salaries / Perquisites Total 1 Mr. Shreans Daga Nil 0.12 0.12 2 Mr. Paras Kumar Daga Nil 0.12 0.12 3 Mr. Niraj Daga Nil 0.12 0.12

In addition, our Company will, subject to the provisions of the Companies Act and other applicable laws and regulations, pay each non-executive Director sitting fees to attend meetings of the Board and any committee of the Board. Our Company will also reimburse such Directors for out-of-pocket expenses to attend such meetings and perform their role as a Director. These Directors may also be paid commissions and any other amounts as may be decided by our Board in accordance with the provisions of the Articles of Association, the Companies Act and other applicable laws and regulations.

Details of Service Contracts

1. Agreement with Mr Shreans Daga, Managing Director

Our Company has entered into an agreement dated June 1, 2010 with Mr. Shreans Daga enumerating the terms of his appointment as the Managing Director of our Company. The Managing Director shall have and exercise all the powers and authorities provided in the Articles of Association of our Company, the Companies Act and subject to supervision, control and direction of the Board of Directors. The remuneration payable to the Managing Director is Rs. 2,400,000 million per annum plus perquisites. The Managing Director shall not be entitled to receive sitting fees for attending the board meetings.

2. Agreement with Mr Niraj Daga, Whole Time Director

Our Company has entered into an agreement dated June 1, 2010 with Mr. Niraj Daga for appointing him as the Whole Time Director of our Company. The remuneration payable to the Whole Time Director is Rs. 2,100,000

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million per annum plus perquisites. The Whole Time Director shall not be entitled to receive sitting fees for attending the board meetings.

3. Agreement with Mr Paras Kumar Daga, Whole Time Director

Our Company has entered into an agreement dated June 1, 2010 with Mr. Paras Kumar Daga for appointing him as the Whole Time Director of our Company. The remuneration payable to the Whole Time Director is Rs. 2,100,000 million per annum plus perquisites. The Whole Time Director shall not be entitled to receive sitting fees for attending the board meetings.

Shareholding of our Directors in our Company

Save and except as disclosed below, none of our Directors have any shareholding in our Company as on the date of the Draft Red Herring Prospectus.

Director No. of Equity Shares % of Pre Issue % of Post Issue Equity Share Capital Equity Share Capital Mr. Shreans Daga 2,320,500 8.15 5.70 Mr. Paras Kumar Daga 2,060,350 7.24 5.07 Mr. Niraj Daga 2,046,800 7.19 5.03

Our Articles of Association do not require our Directors to hold any qualification Equity Shares in our Company.

Payment or benefit to directors / officers of our Company

Except as disclosed in the “Related Party Transactions in Annexure XXIV of Financial Statements” on page 225 of the Draft Red Herring Prospectus, no amount or benefit has been paid or given within the two preceding years or is intended to be paid or given to any of our officers except the nomal remuneration for services rendered as Directors, officers or employees.

Interests of Directors

All of our Directors may be deemed to be interested to the extent of fees payable to them for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration and reimbursement of expenses payable to them under our Articles of Association, and to the extent of remuneration paid to them for services rendered as an officer or employee of our Company. Some of the Directors may be deemed to be interested to the extent of consideration received/paid or any loan or advances provided to any body corporate including companies and firms and trusts, in which they are interested as directors, members, partners or trustees.

Our Directors may also be regarded as interested in the Equity Shares, if any, held by them or that may be subscribed by and allotted to the companies, firms, and trusts, if any, in which they are interested as directors, members, promoters, and /or trustees pursuant to this Issue. All of our Directors may also be deemed to be interested to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares.

Certain of our Directors also hold directorships in our Group Companies which are authorized under their respective incorporation documents. None of our Directors have been appointed on our Board pursuant to any arrangement with our major shareholders, customers, suppliers or others.

Except as stated in this section “Our Management” or the chapter titled “Related Party Transactions in Annexure XXIV of Financial Statements” on page 148 and 225 of the Draft Red Herring Prospectus and described herein to the extent of shareholding in our Company, if any, our Directors do not have any other interest in our business.

Our Directors have no interest in any property acquired by our Company within two years of the date of the Draft Red Herring Prospectus.

Our Directors are not interested in the appointment of or acting as Underwriters, Registrar and Bankers to the Issue or any such intermediaries registered with SEBI.

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Changes in our Board of Directors during the last three years

Name Date of Appointment Date of Cessation Reason Mr. Ramesh Kotecha October 10, 2007 - Appointment as Independent Director Mr. Niraj Daga March 3, 2008 June 1, 2010 Re-appointment and cessation as Joint Managing Director June 1, 2010 - Change in designation from Joint Managing Director to Whole Time Director Mr. Shreans Daga March 23, 2010 - Renewal of appointment as Managing Director June 1, 2010 - Renewal with revised terms of appointment Mr. Ganesh Kumar Gupta April 20, 2010 - Appointment of as Non- Executive Director Mr. Suresh Jain May 25, 2010 - Appointment as Independent Director Mr. Paras Kumar Daga June 1, 2010 - Change in designation from Director to Whole Time Director

Borrowing powers of the Board

Our Articles, subject to the provisions of the Act, authorise our Board, at its discretion, to generally raise or borrow or secure the payment of any sum or sums of money for the purposes of our Company. Pursuant to a resolution passed by our shareholders at the EGM held on June 1, 2010, our Board has been authorised to borrow any sum or sums of monies in excess of our aggregate paid-up capital and free reserves, provided that the total amount which may be so borrowed and outstanding shall not exceed the aggregate of the paid-up capital and free reserves of our Company by more than a sum of Rs. 5,000 million.

Corporate Governance

The provisions of the listing agreement to be entered into with the Stock Exchanges (“Listing Agreement”) with respect to corporate governance will be applicable to us immediately upon the listing of our Equity Shares with the Stock Exchanges. As of the date of the Draft Red Herring Prospectus, our Company has taken steps to comply with the provisions of Clause 49 of the Listing Agreement, including with respect to the appointment of independent directors, the constitution of the Audit, Shareholders/Investors Grievance, Remuneration committees and IPO Committee. The Board functions either on its own or through various committees constituted to oversee specific operational areas.

The Chairman of the Board is a non-executive and non-independent director. The Board of Directors comprises six directors, of which three are executive Directors, two are independent Directors and one is non-executive Director on the Board.

In accordance with Clause 49 of the Listing Agreement, our Company has constituted the following committees:

Audit Committee

The Audit Committee was re-constituted at our Board meeting held on May 25, 2010. The purpose of the Audit Committee is to ensure the objectivity, credibility and correctness of our financial reporting and disclosure processes, internal controls, risk management policies and processes, tax policies, compliance and legal requirements and associated matters. The Audit Committee comprises:

Name of Directors Status Mr. Suresh Jain Chairman Mr. Ramesh Kotecha Member Mr. Shreans Daga Member

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Our Company Secretary shall act as the secretary of the Audit Committee.

The terms of reference of the Audit Committee include the following:

1. Overview of our Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements reflect a true and fair position and that sufficient and credible information disclosed. 2. Recommending to the Board, the appointment, re-appointment and removal of statutory auditors, fixation of audit fee and also approval for payment for any other services; 3. Discussion with statutory auditors before the audit commences, of the nature and scope of audit as well as post- audit discussion to ascertain any area of concern; 4. Reviewing the financial statements and draft audit report, including quarterly / half yearly financial information; 5. Reviewing with management the quarterly, half yearly and annual financial statements before submission to the Board, focusing primarily on: (a) Matters required to be included in the Director‘s Responsibility Statement to be included in the report of the Board in terms of clause (2AA) of Section 217 of the Companies Act; (b) Any changes in accounting policies and practices; (c) Major accounting entries based on exercise of judgment by management; (d) Qualifications in draft audit report; (e) Compliance with listing and other legal requirements relating to financial statements; (f) Disclosure of any related party transactions; (g) Significant adjustments arising out of audit; (h) The going concern assumption; and (i) Compliance with the Indian GAAP and IFRS.

6. Reviewing with the management, external and internal auditors, and the adequacy of internal control systems; 7. Reviewing and monitoring, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter; 8. Reviewing the adequacy of internal audit function, including the audit charter, the structure of the internal audit department, approval of the audit plan and its execution, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit; discussion with internal auditors of any significant findings and follow-up thereon; 9. Reviewing management letters / letters of internal control weaknesses issued by the statutory auditors; 10. 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; 11. Looking into the reasons for substantial defaults in payments to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors; and 12. Reviewing compliances as regards our Company’s whistle blower policy. 13. Reviewing the financial statements, in particular, the investments made by the unlisted subsidiary companies of our Company; 14. To seek information from any employee; 15. To obtain outside legal or other professional advice; 16. To secure the attendance of outsiders with relevant expertise, if it considers necessary; 17. To investigate into any matter in relation to the items specified in section 292A of the Companies Act, 1956 or in the reference made to it by the board and for this purpose the committee shall have full access to information contained in the records of the company; 18. Carrying out any other function as may be referred to by the Board of Directors of our Company or prescribed by the Listing Agreement, as amended, from time to time. 19. Approval of appointment of chief financial officer (i.e., the whole-time finance director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate.

The Audit Committee shall mandatorily review the following information:

1. Management discussion and analysis of financial condition and results of operations; 2. Statement of significant related party transactions (as defined by the audit committee), submitted by management;

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3. Management letters / letters of internal control weaknesses issued by the statutory auditors; 4. Internal audit reports relating to internal control weaknesses; 5. The appointment, removal and terms of remuneration of the chief internal auditor shall be subject to review by the Audit Committee and 6. Financial statements, in particular, the investments made by the unlisted subsidiary company.

The recommendations of the Audit Committee on any matter relating to financial management, including the audit report, are binding on the Board. If the Board is not in agreement with the recommendations of the Committee, reasons for disagreement shall have to be minuted in the Board Meeting and the same has to be communicated to the shareholders. The Chairman of the committee has to attend the Annual General Meetings of our Company to provide clarifications on matters relating to the audit. The audit Committee is required to meet at least four times in a year under Clause 49 of the Listing Agreement.

Shareholder/Investors Grievance Committee

The Shareholder/Investors Grievance Committee was constituted at our Board meeting held on May 25, 2010. This Committee is responsible for the redressal of shareholder grievances. The Investor Grievances Committee comprises:

Name of Directors Status Mr. Ganesh Kumar Gupta Chairman Mr. Suresh Jain Member Mr. Shreans Daga Member

Our Company Secretary shall act as the secretary of the Shareholders/Investors Grievance Committee.

The Shareholder/Investors Grievance Committee shall specifically look into the redressal of all shareholders and investor complaints and shall have the powers to seek all information from, and inspect all records of our Company relating to shareholders and investor complaints. The Investor Grievance Committee shall look into matters listed below and for this purpose shall have access to information contained in the records of our Company and external professional advice, if necessary. The terms of reference of the Investor Grievance Committee include the following:

1. To approve the request for transfer, transmission, etc. of shares; 2. To approve the dematerialization of shares and rematerialisation of shares, splitting and consolidation of Equity Shares and other securities issued by our Company, including review of cases for refusal of transfer/ transmission of shares and debentures, if any; 3. To consider and approve, split, consolidation and issuance of duplicate shares; 4. Issue of duplicate certificates and new certificates on split/consolidation/renewal etc.; 5. To review from time to time overall working of the secretarial department of our Company relating to the shares of our Company and functioning of the share transfer agent and other related matters. 6. Reference to statutory and regulatory authorities regarding investor grievances; 7. Ensure proper and timely attendance and redressal of investor queries and grievances. 8. To do all such acts, things or deeds as may be necessary or incidental to the exercise of the above powers. 9. Investor relations and redressal of shareholders grievances in general and relating to non receipt of dividends, interest, non- receipt of balance sheet etc.; 10. Oversee the performance of Registrar and Transfer Agent; and 11. Such other matters as may from time to time be required by any statutory, contractual or other regulatory requirements to be attended to by such committee.

Remuneration Committee

The Remuneration Committee was constituted at our Board meeting held on May 25, 2010. The Remuneration Committee comprises:

Name of Directors Status Mr. Ramesh Kotecha Chairman Mr. Ganesh Kumar Gupta Member Mr. Niraj Daga Member

Our Company Secretary shall act as the secretary of the Remuneration Committee. 155

The Remuneration Committee has been empowered with the role and function as per the provisions as specified under Annexure I D(2) of the Corporate Governance Code under Clause 49 of the Listing Agreement including the appointment and finalizing the remuneration of senior level employees of our Company.

The terms of reference of the Remuneration Committee include the following:

1. To fix and finalise remuneration including salary, perquisites, benefits, bonuses, allowances, etc.; 2. Fixed and performance linked incentives along with the performance criteria; 3. Increments and Promotions; 4. Service Contracts, notice period, severance fees; 5. Ex-gratia payments; 6. Framing suitable policies and systems to ensure that there is no violation, by an employee of any applicable laws in India, including: i. The Securities and Exchange Board of India (Insider Trading) Regulations, 1992; or ii. The Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995. 7. Reviewing, assessing and recommending the appointment, terms of appointment and reappointment including remuneration etc of Executive and/or Non-Executive Directors and Senior Employees; 8. To recommend, approve and evaluate the Whole Time Director, Managing Director and Executive Director‘s compensation plans, policies and programmes of our Company; 9. Recommending payment of compensation / remuneration in accordance with the provisions of the Companies Act; 10. To be authorized at its duly constituted meeting to determine on behalf of the Board of Directors and on behalf of the shareholders with agreed terms of reference, our Company’s policy on specific remuneration packages for Company’s Managing/Joint Managing/ Deputy Managing/ Whole Time/ Executive Directors, including pension rights and any compensation payment; 11. To review and approve any disclosures in the annual report or elsewhere in respect of compensation policies or directors’ compensation; 12. To obtain such outside or professional advice as it may consider necessary to carry out its duties; 13. To invite any employee or such document as it may deem fit for exercising of its functions; and 14. Carrying out any other function as may be referred to by the Board of Directors of our Company or prescribed by the Listing Agreement, as amended, from time to time.

IPO Committee

This Committee is responsible for dealing with all matters in relation to the initial public offering of our Company. Pursuant to this, the Committee has been authorized by the Board pursuant to a resolution dated May 25, 2010, to carry out and decide upon all activities in connection with the Issue. The IPO Committee comprises:

Name of Members Status Mr. Shreans Daga Chairman Mr. Paras Kumar Daga Member Mr. Niraj Daga Member

Our Company Secretary shall act as the secretary of the IPO Committee.

The functions of the committee in connection with the Issue include but are not limited to:

1. Amendments to the memorandum of association and the articles of association of our Company; 2. Approving all actions required to dematerialize the Equity Shares of our Company; 3. Deciding on the actual size of the public offer, including any offer for sale by promoters/shareholders, and/or reservation on a firm or competitive basis, timing, pricing and all the terms and conditions of the issue of the shares, including the objects of such public offer, price and to accept any amendments, modifications, variations or alterations thereto; 4. To obtain outside legal or other professional advice; 5. To secure the attendance of outsiders with relevant expertise, if it considers necessary; 6. Approving the Draft Red Herring Prospectus, the Red Herring Prospectus, the Prospectus, the preliminary and final international wrap, and any amendments, supplements, notices or corrigenda thereto, together with any summaries thereto; 156

7. Finalizing and arranging for the submission of the DRHP, the RHP, the Prospectus and the preliminary and final international wrap and any amendments, supplements, notices or corrigenda thereto, to appropriate government and regulatory authorities, institutions or bodies; 8. Approving a code of conduct as may be considered necessary by the Board or the IPO Committee or as required under applicable laws, regulations or guidelines for the Board, officers of our Company and other employees of our Company; 9. Approving a suitable policy on insider trading as required under applicable laws, regulations and guidelines; 10. Approving any corporate governance requirement that may be considered necessary by the Board or the IPO Committee or as may be required under applicable laws, regulations or guidelines in connection with the Issue; 11. Deciding on the number of Equity Shares to be offered or issued and allotted in the Issue, including any Pre-IPO placement, reservation, green shoe option and any rounding off in the event of any oversubscription as permitted under the SEBI ICDR Regulations; 12. Appointing book running lead managers, lead managers, syndicate members, placement agents, bankers to the Issue, registrar to the Issue, bankers to our Company, managers, underwriters, guarantors, escrow agents, accountants, auditors, legal counsel, depositories, trustees, custodians, credit rating agencies, monitoring agencies, advertising agencies and all such persons or agencies as may be involved in or concerned with the Issue, including any successors or replacements thereof; 13. Opening bank accounts, share/securities accounts, escrow or custodian accounts, in India or abroad, in rupees or in any other currency, in accordance with applicable laws, rules, regulations, approvals and guidelines; 14. Entering into arrangements and remunerating all such book running lead managers, lead managers, syndicate members, placement agents, bankers to the Issue, the registrar to the Issue, bankers of our Company, managers, underwriters, guarantors, escrow agents, accountants, auditors, legal counsel, depositories, trustees, custodians, credit rating agencies, monitoring agencies, advertising agencies, and all other agencies or persons as may be involved in or concerned with the Issue, if any, by way of commission, brokerage, fees or the like; 15. Seeking the listing of the Equity Shares on the Stock Exchanges, submitting listing applications to the Stock Exchanges and taking all such actions as may be necessary in connection with obtaining such listing, including, without limitation, entering into the Listing Agreements; 16. Seeking the admission of our Company’s Equity Shares into the Central Depository Services (India) Limited and the National Securities Depository Limited and taking any further action as may be necessary or required for the dematerialization of our Company’s Equity Shares; 17. Seeking, if required, the consent of our Company’s lenders, parties with whom our Company has entered into various commercial and other agreements, all concerned government and regulatory authorities in India or outside India, and any other consents that may be required in connection with the Issue, if any; 18. Determining the price at which the Equity Shares are offered or issued/allotted to investors in the Issue; 19. Determining the price band for the purpose of bidding, any revision to the price band and the final Issue price after bid closure; 20. Determining the bid opening and closing dates; 21. Finalizing the allotment of Equity Shares to retail investors/non-institutional investors/qualified institutional buyers in consultation with the book running lead managers, the Stock Exchanges concerned, SEBI and/or any other entity; 22. Allotment/transfer of the Equity Shares; 23. Opening with the bankers to the Issue, escrow collection banks and other entities such accounts as are required under the SEBI ICDR Regulations and any other applicable laws, regulations, policies and guidelines. 24. Settling all questions, difficulties or doubts that may arise in relation to the IPO as it may in its absolute discretion deem fit; and 25. Submitting undertakings/certificates or providing clarifications to the SEBI and the relevant stock exchanges where the equity shares of our Company are to be listed.

Policy on Disclosures and Internal Procedure for Prevention of Insider Trading

We will comply with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992 after listing of our Company’s shares on the Stock Exchanges.

Mr. Abhinaya Kulkarni, Company Secretary and Compliance Officer, is responsible for setting forth policies, procedures, monitoring and adhering to the rules for the prevention of dissemination of price sensitive information and the implementation of the code of conduct under the overall supervision of the Board.

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Management Organization Structure GM - GM - Seeds Mr. Kaushik DagaMr. Kaushik Mr. Pradeep Acharya AGM - Marketing (Seed) Marketing - AGM Company SecretaryCompany Mr. Abhinaya Kulkarni Trade Mr.Shetty Sujith GM - International GM - Marketing Mr. Tripathi Ashok (Refinery) Mr. R.K. Verma GM - Production Production - GM GM - ProductionGM - Mr. S.L. PacholiS.L. Mr. (Solvent Extraction) Planning GM - Business Business - GM Mr. Varun Daga Mr. Shreans Daga Board of Directors Managing Director Development & Strategic GM -Commercial Mr. Akshaya Shah Mr. Akshaya Mr. H.K. Khandelwal Chief Financial Officer GM - Finance Mr. M.L. Luniya Dr. Bosh Ganesh GM - Cattle Feed Taxiation Mr. Ravi Daga GM - Banking & Mr. V.S. Chauhan GM - H.R & Admin & H.R - GM WTD WTD Betul Unit Betul Mr. Paras Daga Paras Mr. Unit Head Mr. Nilay Daga Nilay Mr. WTD WTD Solapur unit Satna Unit Mr. NirajDaga

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Key Managerial Personnel

Provided below are the details of our key managerial personnel, as on the date of the DRHP:

Dr. Ganesh Bosh, 48 years, is the General Manager – Cattle Feed. He has done Bachelor of Veterinary Science and Animal Husbandry from Marthwada Agricultural University, Parbhani in the year 1988. He has 23 years of experience in the field of production, marketing of cattle feed and poultry feed. Prior to our Company, he worked with Pranav Agro Industries Limited. During the Financial Year 2008-09, he was paid an aggregate remuneration of Rs. 7,50,000.

Mr. Nilay Daga, 32 years, is the Head of Satna Unit. He joined our Company in the year 2001. He has done Bachelors of Commerce from Elphinstone College, Mumbai, Masters of Commerce from J.H. College, Betul, Sagar University, Madhya Pradesh in the year 2003 and masters of business administration from Oklahama State University, United States of America in the year 2005. He has 5 years experience in solvent extraction industry. He was instrumental in installing and commissioning of Satna Unit. During the Financial Year 2008-09, he was paid an aggregate remuneration of Rs.1,20,000.

Mr. Varun Daga, 25 years, is the General Manager – Business Development and Strategic Planning. He has done Bachelors of Management Studies from Narsee Monjee College, Mumbai in the year 2006 and has done certificate program in capital markets from the Jamnalal Bajaj Institute of Management Studies, Mumbai. Prior to joining our Company he worked in Bank of Punjab. He has more than 4 years of experience in strategizing, financial planning and fund management. During the Financial Year 2008-09, he was paid an aggregate remuneration of Rs.1,20,000.

Mr. Akshaya Shah, 54 years, is the Chief Financial Officer. He joined our Company on January 18, 2008. He is commerce and law graduate from Mumbai University. He is a qualified Chartered Accountant from the Institute of Chartered Accountants of India, qualified Company Secretary from the Institute of Company Secretaries of India and Cost Accountant from the Institute of Costs and Works Accountant of India. Prior to joining our Company, he has worked as GM-Finance at Sanghi Industries Ltd, Ahmedabad and Consultant – Tax planning at K.C. Mehta & Co., Chartered Accountants, Baroda. During the financial year 2008-09, he was paid an aggregate remuneration of Rs. 7,00,000.

Mr. Shanker Lal Pacholi, 66 years, is the General Manager-Production (Solvent Extraction). He joined our Company in the year 1981. He has done Diploma in Mechanical Engineering from Government Polytechnic College, Harda, Madhya Pradesh in 1968 and is also a member of the Institution of Engineers (India), Calcutta. Prior to joining our Company, he worked at Malwa Vanaspati and Chemical Company Limited, Indore and Maheshwari Proteins Limited, Ratlam. During the financial year 2008-09, he was paid an aggregate remuneration of Rs. 3,35,260.

Mr. Raj Kumar Verma, 60 years, is the General Manager- Production (Refinery). He joined our Company in the year 1989. He has done Bachelors of Science from Kanpur University and B.Tech from HBTI, Kanpur. Prior to joining our Company, he worked at Amrit Banaspati Company Limited, Ghaziabad and RCS Vanaspati Limited, Jaipur. He has also worked as refinery in charge at Vippy Solvex Limited, Dewas and Production Manager at Ashwin Vanaspati Industries Limited, Baroda. During the financial year 2008-09, he was paid an aggregate remuneration of Rs. 2,65,060.

Mr. Ashok Tripathi, 39 years, is the General Manager - Marketing. He joined our Company in the year 2003. He has done Bachelors of Commerce from Utkal University, Orissa. He has 17 years of experience in Edible Oil Industry as Marketing Professional. Prior to joining our Company, he has worked at Vindhya Soya Limited as Management Trainee, Nagpur Engineering Company Limited as Deputy Manager and Madhur Agro Proteins Limited as Marketing Manager. During the financial year 2008-09, he was paid an aggregate remuneration of Rs. 5,61,600.

Mr. Kaushik Daga, 28 Years, is the General Manager- Seeds Division. He joined our Company in 2003. He has done his Bachelors of Commerce from Mumbai University and Masters in Commerce and Business from Barkatulla University, Betul, Madhya Pradesh in the year 2004. He has 7 years of experience in production and marketing the certified and graded seed all over India. During the Financial Year 2008-09, he was paid an aggregate remuneration of Rs.1,20,000.

Mr. Madanlal Luniya, 62 years, is the General Manager – Finance. He joined our Company in the year 1982. He has 40 years of experience in the field of finance and planning. He looks after accounts and administration. During the financial year 2008-09, he was paid an aggregate remuneration of Rs. 3,18,400.

Mr. Ravi Daga, 30 years, is the General Manager- Banking and Taxation. He joined our Company in May, 2010. He has done Bachelors of Commerce from Jai Narayan Vyas University, Jodhpur in 2000 and he is a qualified Chartered

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Accountant. Prior to joining our Company, he worked at Dena Bank, GlobeOp Financial Services (India) Limited and at Almondz Global Securities Limited .

Mr. Sujith Shetty, 43 years, is the General Manager – International Trade. He joined our Company on July 14, 2008. He has done Bachelors of Commerce from Mangalore University and Diploma in Computer Science with Datamatic Corporation, Mumbai. Prior to joining our Company, he worked at Geeta Services, K. Mohan and Company (Exports) Private Limited. During the financial year 2008-09, he was paid an aggregate remuneration of Rs. 3,12,000.

Mr. Harikishan Khandelwal, 65 years, is the General Manager – Commercial. He has done Masters of Commerce in 1968 and LL.B from Ravi Shankar University, Raipur in 1967. During the financial year 2008-09, he was paid an aggregate remuneration of Rs. 3,00,000.

Mr. Pradeep Acharya, 48 years, is the Assistant General Manager- Marketing (Seed). He joined our Company in September 2009. He has done his Bachelors of Science from Ravi Shankar University, Raipur in 1980 and Diploma in Business Management from National College of Management Study, Kota in 1983. Prior to joining our Company, he worked at Mangalam Cement Limited, Senitex Chemical Limited, Baroda, M/s Gayatri Pharma, Ujjain, De- Paks and Company, M. P. Petrochem Limited, as General Manager, Disha Suchak Publications as Deputy Editor and Eagle Seeds and Biotech Limited, Indore as Manager- Business Operations. During the financial year 2008-09, he was paid an aggregate remuneration of Rs. 3,80,000.

Mr. Virendra Singh Chauhan, 56 years, is the General Manager – Human Resources and Administration. He joined our Company in the year 1987. He is a law graduate with specialization in labour and administrative laws from Lucknow University in 1979. He has practiced as an advocate at the District Court of Fatehgarh, Uttar Pradesh. Prior to joining our Company, he has worked as a personnel manager with M.P. Veneers and Ply Limited. During the financial year 2008-09, he was paid an aggregate remuneration of Rs. 1,63,421.

Mr. Abhinaya Kulkarni, 24 years, is the Company Secretary and Compliance Officer. He joined our Company in the year May 2010. He has done his Bachelors of Commerce from Rani Durgavati Vishwavidyalaya, Jabalpur in the year 2008 and a qualified Company Secretary from The Institute of Company Secretaries of India, New Delhi in the year 2008. He has around 2 years experience in corporate laws.

All our key managerial personnel as disclosed above are our permanent employees. The key managerial personnel as disclosed above are not key managerial personnel as defined under Accounting Standard 18.

Family relationships of Directors with Key Managerial Personnel

1. Relationship of Mr. Shreans Daga with Key Managerial Personnel

Mr. Shreans Daga and Mr Varun Daga are brothers. Mr. Shreans Daga, Mr. Nilay Daga and Mr. Kaushik Daga are first cousins.

2. Relationship of Mr. Niraj Daga with Key Managerial Personnel

Mr. Niraj Daga and Mr Nilay Daga are brothers. Mr. Niraj Daga, Mr. Varun Daga and Mr. Kaushik Daga are first cousins.

3. Relationship of Mr. Paras Kumar Daga with Key Managerial Personnel

Mr. Kaushik Daga is son of Mr. Paras Daga. Mr Nilay Daga and Mr. Varun Daga are nephews of Mr. Paras Daga.

Relationship between Key Managerial Personnel

Mr. Nilay Daga, Mr, Kaushik Daga and Mr. Varun Daga are first cousins.

Shareholding of the Key Managerial Personnel

Save and except, as disclosed below, none of our Key Managerial Personnel have any shareholding in our Company as on the date of the DRHP.

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Bonus or profit sharing plan of the Key Managerial Personnel

Our Company does not have a performance linked bonus or a profit sharing plan for the Key Managerial Personnel.

Interest of Key Managerial Personnel

The Key Managerial Personnel of our Company do not have any interest in our Company other than to the extent of the remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business.

Arrangements and Understanding with Major Shareholders

None of our key management personnel have been selected pursuant to any arrangement or understanding with any major shareholders, customers or suppliers of our Company, or others.

Payment of Benefits to Officers of our Company

Except as disclosed in the Draft Red Herring Prospectus, and other than statutory payments and remuneration, in the last two years our Company has not paid or has intended to pay any sum to its employees in connection with superannuation payments and ex-gratia/rewards and has not paid or has intended to pay any non-salary amount or benefit to any of its officers. None of the beneficiaries of loans and advances and sundry debtors are related to the Directors.

Changes in the Key Managerial Personnel

The changes in the Key Managerial Personnel of our Company in the last three years are as follows:

Name of the Key Managerial Designation Date of change Reason Person Mr. Akshaya Shah Chief Financial Officer January 18, 2008 Appointment

Mr. Sujith Shetty General Manager – July 14, 2008 Appointment International Trade Mr. Pradeep Acharya Assistanct General Manager - September 1, 2009 Appointment Marketing (Seed)

Mr. Ravi Daga General Manager- Banking May 12, 2010 Appointment and Taxation Mr. Abhinaya Kulkarni Company Secretary May 18, 2010 Appointment

Employee Stock Option Plan / Employee Stock Purchase Scheme

Our Company does not have any scheme of employee stock option or employee stock purchase.

Loans taken by Directors / Key Management Personnel

Mr. Virendra Singh Chauhan, General Manager – Human Resources and Administration has taken an interest free advance from our Company. The amount outstanding as on June 30, 2010 is Rs. 1,54,000.

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OUR PROMOTERS AND GROUP COMPANIES

Our Promoters

The Promoters of our Company are Mr. Shreans Daga, Mr. Varun Daga, Mrs. Kanchan Daga and Pramod Kumar Daga HUF. The details of our Promoters are as follows:

A. Mr. Shreans Daga

Mr. Shreans Daga, 36, is our Promoter and Managing Director of our Company. He is a resident Indian national. He holds bachelor’s degree in commerce from University of Mumbai. He has more than 16 years of experience in the field of managing solvent extraction industries and export business. He has vast knowledge of banking and accountancy. He was instrumental in setting up of retail distribution network for the products of our Company. His current responsiblities include liasioning, planning, marketing and providing strategic vision to our Company. He is member of managing committee Solvent Extractors Association of India and vice-chairman and trustee of Pyramid Spiritual Trust, Banglore. His driving license number is MP48/000526/02. His voter id number is NRA0253104.

Address: Daga House, Kothi Bazar, Betul 460001, Madhya Pradesh, India.

For further details of Mr. Shreans Daga, please see “Our Management” on page number 148 of the Draft Red Herring Prospectus.

B. Mr. Varun Daga

Mr Varun Daga, 25 years, is our Promoter and is key managerial personnel of our Company. He is a resident Indian national. He has done Bachelors of Management Studies from Narsee Monjee College, Mumbai in the year 2006 and has done certificate program in capital markets from the Jamnalal Bajaj Institute of Management Studies, Mumbai. Prior to joining our Company he worked in Bank of Punjab. He has more than 4 years of experience in strategizing, financial planning and fund management. His driving license number is MP48/001918/05.

Address: Daga House, Kothi Bazar, Betul 460001, Madhya Pradesh, India.

For further details of Mr. Varun Daga, please refer to the section titled “Our Management” on page number 148 of the Draft Red Herring Prospectus.

C. Mrs. Kanchan Daga

Mrs Kanchan Daga, 59 years, is our Promoter. She is a resident Indian national. She passed her eleventh standard exams from Board of Secondary Education, Madhya Pradesh in the year 1967. Her voter id number is MP/28/231/222543

Address: Daga House, Kothi Bazar, Betul 460001, Madhya Pradesh, India.

Our Company undertakes that the details of the Permanent Account Number, bank account number and passport number of all of our individual promoters will be submitted to the stock exchanges at the time of filing the Draft Red Herring Prospectus with the Stock Exchanges.

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D. Pramod Kumar Daga HUF

Pramod Kumar Daga HUF is a Hindu Undivided Family. Shreans Daga is the Karta of Pramod Kumar Daga HUF. The coparceners of Pramod Kumar Daga HUF are Mr. Varun Daga and Mrs. Kanchan Daga

Financial Performance

(Rs. in million) For the years ended Particulars March 31, 2007 March 31, 2008 March 31, 2009 Income 0.36 0.41 0.36 Networth (capital account) 2.61 2.95 3.24

Our Company undertakes that the details of the Permanent Account Number and Bank Account Numbers of Pramod Kumar Daga HUF will be submitted to the stock exchanges at the time of filing the Draft Red Herring Prospectus with the Stock Exchanges.

Interests of Promoters and Common Pursuits

Our Promoters are interested in our Company to the extent that they have promoted our Company, their shareholding in our Company, dividend payable, other distributions in respect of the Equity Shares and to the extent of them being director and/ or key managerial personnel of our Company.

Further, Mr. Shreans Daga is the Managing Director of our Company and may additionally be deemed to be interested to the extent of fees, if any, payable to him for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration payable or reimbursement of expenses to him, as per the terms of appointment.

Our Promoters are also directors on the boards of our Group Companies and may be deemed to be interested to the extent of the payments made by our Company, if any, to these Group Companies.

Except as stated in the “Related Party Transactions in Annexure XXIV of Financial Statements” as stated on page 225 in the Draft Red Herring Prospectus, we have not entered into any contract, agreements or arrangements in which our Promoters are directly or indirectly interested and no payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be made with them including the properties purchased by our Company other than in the normal course of business.

Further, except as disclosed in this section, our Promoters do not have any interest in any venture that is involved in any activities similar to those conducted by our Company.

Payment or benefits to our Promoters in the last two years

Except as stated in the section titled “Our Management” and “Related Party Transactions in Annexure XXIV of Financial Statements” on page 148 and on page 225 of the Draft Red Herring Prospectus, no benefits have been paid or given to the Promoters within the two years preceding the date of the Draft Red Herring Prospectus.

There is no bonus or profit sharing plans for our Promoters.

Other confirmations

The Directors of our Company were named on the website Credit Information Bureau of India Limited in respect of forex derivative transaction disputed by our Company. For further details, please see “Outstanding Litigations and Material Developments” on page 255 of the Draft Red Herring Prospectus.

There are no violations of securities laws committed by our Promoters in the past or are pending against them.

None of our Promoters are interested in any property acquired by our Company in the two years immediately preceding the date of the Draft Red Herring Prospectus, or proposed to be acquired by our Company.

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None of our Promoters are interested in acquisition of the land on which the Project is proposed to be developed, in the civil construction and/or supply of machinery etc for the Project.

None of our Promoters, Promoter Group entities or persons in control of our Promoters or bodies corporate forming part of the Promoter Group has been (i) prohibited from accessing the capital markets under any order or direction passed by SEBI or any other authority or (ii) refused listing of any of the securities issued by such entity by any stock exchange, in India or abroad.

Promoter Group

Our Promoter Group includes such persons and entities constituting our promoter group in terms of Regulation 2(zb) of the SEBI ICDR Regulations.

Our Group Companies

Companies, firms and ventures promoted by our Promoters, irrespective of whether such entities are covered under section 370(1) (B) of the Companies Act and disclosed in “Our Promoters and Group Companies”are:

Sr. No. Our Group Companies 1. Betul Minerals and Construction Private Limited 2. Shreyans Credit and Capital Private Limited 3. Navinya Multitrade Private Limited 4. Indigo Kids Edutainment Private Limited 5. Hi-Gene Seeds India Private Limited 6. Honey Bee Crop Private Limited 7. Sanovi Technologies (India) Private Limited 8. BioBliss Beej Utpadak Swayat Sahakarita Maryadit 9. Seth Kasturchand Harakchand Pramod Daga Memorial Society 10. Bhook Relief Foundation 11. VSH Infotech

1. Betul Minerals and Construction Private Limited

Corporate Information

Betul Minerals and Construction Private Limited (Betul Minerals) was incorporated on July 26, 1996 under the Companies Act, as a private limited company with CIN U14102MP1996PTC011055. Betul Minerals is registered with the registrar of companies located at Gwalior, Madhya Pradesh. The registered office of Betul Minerals is situated at Kothi Bazar, Betul – 460001, Madhya Pradesh, India.

Betul Minerals is currently engaged in the business of exploration of ores minerals, metals, etc.

Nature and interest of the Promoters in Betul Minerals

(a) Shareholding Pattern

The shareholding pattern of Betul Minerals as on the date of the Draft Red Herring Prospectus is as below: Name of the shareholders Number of equity shares of Rs. 10 each % Mr. Niraj Daga 3,400 34.00 Mr. Shreans Daga 3,200 32.00 Mr. Kaushik Daga 3,200 32.00 Mr. Vinod Daga 100 1.00 Mr. Paras Kumar Daga 100 1.00 Total 10,000 100.00

(b) Board of Directors

The board of directors of Betul Minerals comprises:

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Mr. Nilay Daga Mr. Kaushik Daga Mr. Varun Daga

There have been no changes in control or management of Betul Minerals in the last three years preceding the date of the Draft Red Herring Prospectus

The following table sets forth the summary audited financial data of Betul Minerals: (Rs. in million, except Share data) Particulars For the years ended March 31, 2007 March 31, 2008 March 31, 2009 Equity Capital 0.10 0.10 0.10 Reserves (excluding revaluation reserves) and Nil Nil Nil Surplus Net Asset value per share (Rs.) (32.93) (74.18) (112.93) No. of Shares 10,000 10,000 10,000 Note: Face value of each Equity Share is Rs. 10.

Betul Minerals is a private limited company and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and has negative net worth.

2. Shreyans Credit and Capital Private Limited

Corporate Information

Shreyans Credit and Capital Private Limited (Shreyans Credit) was incorporated on July 12, 1995 under the Companies Act, as a private limited company with CIN U67120MP1995PTC009696. Shreyans Credit is registered with the registrar of companies located at Gwalior, Madhya Pradesh. The registered office of Shreyans Credit is situated at Kothi Bazar, Betul – 460001, Madhya Pradesh.

As per its memorandum of association, Shreyans Credit is currently engaged in the business of making investments.

Nature and interest of the Promoters in Shreyans Credit

(a) Shareholding Pattern

The shareholding pattern of Shreyans Credit as on the date of the Draft Red Herring Prospectus is as below:

Name of the shareholders Number of equity shares of Rs. 10 each % Mr. Shreans Daga 3,500 34.32 Mr. Kaushik Daga 3,300 32.35 Mr. Neeraj Daga 3,300 32.35 Mr. Vinod Daga 100 0.98 Total 10,200 100.00

(b) Board of Directors

The board of directors of Shreyans Credit comprises:

Mr. Nilay Daga Mr. Vinod Daga

Except as disclosed below, there have been no changes in control or management of Shreyans Credit in the last three years preceding the date of the Draft Red Herring Prospectus:

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Mr. Varun Daga and Mr. Kaushik Daga resigned from directorship on February 20, 2010 and Mr Vinod Daga was appointed as additional Director with effect from February 20, 2010.

(c) Financial Performance The following table sets forth the summary audited financial data of Shreyans Credit: (Rs. in million, except Share data) Particulars For the years ended March 31, 2007 March 31, 2008 March 31, 2009 Equity Capital 0.10 0.10 0.10 Reserves and Surplus (0.07) (0.08) (0.12) Net Asset value per share (Rs.) 1.84 0.80 (3.44) No. of Shares 10,200 10,200 10,200 Note: Face value of each Equity Share is Rs. 10

Shreyans Credit is a private limited company and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and has negative net worth.

3. Navinya Multitrade Private Limited

Corporate Information

Navinya Multitrade Private Limited (Navinya Multitrade) was incorporated on August 28, 2008 under the Companies Act, as a private limited company with CIN U51900MH2008PTC186284. Navinya Multitrade is registered with the registrar of companies located at Mumbai, Maharashtra. The registered office of Navinya Multitrade is situated at 207/208, 2nd Floor, Tower C, Ashok Towers, Dr. S S Rao Road, Parel, Mumbai – 400012.

Navinya Multitrade is currently engaged in the trading of agricultural and agro based products.

Nature and interest of the Promoters in Navinya Multitrade

(a) Shareholding Pattern

The shareholding pattern of Navinya Multitrade as on the date of the Draft Red Herring Prospectus is as below:

Name of the shareholders Number of equity shares of Rs. 10 each % Mr. Kaushik Daga 5,000 50.00 Mr. Shreans Daga 5,000 50.00 Total 10,000 100.00

(b) Board of Directors

The board of directors of Navinya Multitrade comprises:

Mr. Kaushik Daga Mr. Shreans Daga

There have been no changes in control or management of Navinya Multitrade in the last three years preceding the date of the Draft Red Herring Prospectus

The following table sets forth the summary audited financial data of Navinya Multitrade:

(Rs. in million, except Share data) Particulars For the years ended March 31, 2009 Equity Capital 0.10 Reserves and Surplus Nil

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Particulars For the years ended March 31, 2009 Net Asset value per share (Rs.) 8.50 No. of Shares 10,000 Note: Face value of each Equity Share is Rs. 10.

Navinya Multitrade is a private limited company and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and does not have negative net worth.

4. Indigo Kids Edutainment Private Limited

Corporate Information

Indigo Kids Edutainment Private Limited (Indigo Kids) was incorporated on August 28, 2007 under the Companies Act, as a private limited company with CIN U80101MH2007PTC173542. Indigo Kids is registered with the registrar of companies located at Mumbai, Maharashtra. The registered office of Indigo Kids is situated at 6/18, 2nd Floor, Grants Building, Arthur Bunder Road, Colaba, Mumbai – 400005, Maharashtra.

Indigo Kids is currently engaged in the business of conducting enrichment programs and events for children.

Nature and interest of the Promoters in Indigo Kids

(a) Shareholding Pattern

The shareholding pattern of Indigo Kids as on the date of the Draft Red Herring Prospectus is as below:

Name of the shareholders Number of equity shares of Rs. 10 each % Mrs. Ekta Shah 5,000 50.00 Mr. Shreans Daga 5,000 50.00 Total 10,000 100.00

(b) Board of Directors

The board of directors of Indigo Kids comprises:

Mrs. Ekta Shah Mr. Shreans Daga

There have been no changes in control or management of Indigo Kids in the last three years preceding the date of the Draft Red Herring Prospectus.

The following table sets forth the summary audited financial data of Indigo Kids: (Rs. in million, except Share data) Particulars For the years ended March 31, 2008 March 31, 2009 Equity Capital 0.10 0.10 Reserves and Surplus (0.70) (1.09) Net Asset value per share (Rs.) (62.35) (100.65) No. of Shares 10,000 10,000 Note: Face value of each Equity Share is Rs. 10.

Indigo Kids is a private limited company and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and has negative net worth.

5. Hi-Gene Seeds (India) Private Limited

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Corporate Information

Hi-Gene Seeds (India) Private Limited (Hi-Gene Seeds) was incorporated on October 22, 2007 under the Companies Act, as a private limited company with CIN U01119AP2007PTC056033. Hi-Gene Seeds is registered with the registrar of companies located at Hyderabad, Andhra Pradesh. The registered office of Hi-Gene Seeds is situated at Plot number 68, Jaya Nagar, New Bowenpally, Secunderabad, Andhra Pradesh, India.

Hi-Gene Seeds is currently engaged in the business of research and development, marketing and production all types of seeds and seed technology.

Nature and interest of the Promoters in Hi-Gene Seeds

(a) Shareholding Pattern

The shareholding pattern of Hi-Gene Seeds as on the date of the Draft Red Herring Prospectus is as below:

Name of the shareholders Number of equity shares of Rs. 10 each % Gottipati Visweswara Choudary 318,223 21.21 Vesangi Sandhya Rani 187,500 12.50 Vesangi Srinivasa Rao 187,500 12.50 Varun Daga 83,120 5.54 Shreans Daga 83,122 5.54 Kanchan Daga 83,222 5.55 Gottipati Seethamahalakshmamma 56,777 3.79 Aparna Daga 62,566 4.17 Kaushik Daga 62,566 4.17 Sushila Daga 62,566 4.17 Paras kumar daga 62,566 4.17 Deepali Daga 41,712 2.78 Nilay kumar Daga 41,712 2.78 Garishma Daga 41,712 2.78 Niraj Kumar Daga 41,712 2.78 Nirmala Daga 41,712 2.78 Vinod Kumar Daga 41,712 2.78 Total 1,500,000 100.00

(b) Board of Directors

The board of directors of Hi-Gene Seeds comprises:

Mr. Kaushik Daga Mr. Visheswara Choudary Gottipati Mr. Srinivas Rao Vesangi Mr. Shreans Daga

There have been no changes in control or management of Hi-Gene Seeds in the last three years preceding the date of the Draft Red Herring Prospectus.

The following table sets forth the summary audited financial data of Hi-Gene Seeds: (Rs. in million, except Share data) For the years ended Particulars March 31, 2008 March 31, 2009 Equity Capital 13.00 13.00 Reserves and Surplus 0.12 3.26 Net Asset value per share (Rs.) 5.71 4.51 No. of Shares 1,300,000 1,300,000 Note: Face value of each Equity Share is Rs. 10. 168

Hi-Gene Seeds is a private limited company and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and does not have negative net worth.

6. Honey Bee Crop Care Private Limited

Corporate Information

Honey Bee Crop Care Private Limited (Honey Bee) was incorporated on May 25, 2008 under the Companies Act, as a private limited company with CIN U01403AP2008PTC059377. Honey Bee is registered with the registrar of companies located at Registrar of Companies, Hyderabad. The registered office of Honey Bee is situated at Plot number 69, Jayanagar, New Bowenpally, Secunderabad Andhra Pradesh.

As per its memorandum of association, Honey Bee is currently engaged in the business of processing and production of bio products for all crops, bio pesticides and bio fertilizers for crop care.

Nature and interest of the Promoters in Honey Bee

(a) Shareholding Pattern

The shareholding pattern of Honey Bee as on the date of the Draft Red Herring Prospectus is as below:

Name of the shareholders Number of equity shares of Rs. 10 each % Mr. Shreans Daga 2,500 25.00 Mr. Visheswara Choudary Gottipati 2,500 25.00 Mr. Srinivas Rao Vesangi 2,500 25.00 Mr. Kaushik Daga 2,500 25.00 Total 10,000 100.00

(b) Board of Directors

The board of directors of Honey Bee comprises:

Mr. Kaushik Daga Mr. Visheswara Choudary Gottipati Mr. Srinivas Rao Vesangi Mr. Shreans Daga

There have been no changes in control or management of Honey Bee in the last three years preceding the date of the Draft Red Herring Prospectus.

The following table sets forth the summary audited financial data of Honey Bee: (Rs. in million, except Share data) For the years ended Particulars March 31, 2009 Equity Capital 0.10 Reserves and Surplus 0.06 Net Asset value per share (Rs.) 15.38 No. of Shares 10,000 Note: Face value of each Equity Share is Rs. 10.

Honey Bee is a private limited company and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and does not have negative net worth.

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7. Sanovi Technologies (India) Private Limited

Corporate Information

Sanovi Technologies (India) Private Limited (Sanovi Tech) was incorporated on July 15, 1999 under the Companies Act, as a private limited company with CIN U64203KA1999PTC040905. Sanovi Tech is registered with the registrar of companies located at Registrar of Companies, Bangalore. The registered office of Sanovi Tech is situated at 186/2, 2nd Floor, Tapaswiji Arcade, 1st Phase, 1st Stage, BTM layout, Hosur Road, Bangalore.

Sanovi Tech is currently engaged in the business of trading in computer hardware.

Nature and interest of the Promoters in Sanovi Tech

(a) Shareholding Pattern

The shareholding pattern of Sanovi Tech as on the date of the Draft Red Herring Prospectus is as below:

Name of the shareholders Number of equity shares of Rs. 10 each % Mr. Niraj Daga 330,000 33.00 Mr. Kaushik Daga 330,000 33.00 Mr. Shreans Daga 330,000 33.00 Mr. Pothapragada Srinivas 9,800 0.98 Mr. V. Rajasekhar 100 0.01 Mr. P. Chandrasekhar 100 0.01 Total 1,000,000 100.00

(b) Board of Directors

The board of directors of Sanovi Tech comprises:

Mr. Narayan Ramakrishnan Mr. Ramakrishna Reddy Suddireddy

There have been no changes in control or management of Sanovi Tech in the last three years preceding the date of the Draft Red Herring Prospectus:

The following table sets forth the summary audited financial data of Sanovi Tech: (Rs. in million, except Share data) For the years ended Particulars March 31, 2007 March 31, 2008 March 31, 2009

Equity Capital 10 10 10 Reserves and Surplus (11.86) (23.88) (40.84) Net Asset value per share (Rs.) (1.86) (13.88) (30.84) No. of Shares 1,000,000 1,000,000 1,000,000 Note: Face value of each Equity Share is Rs. 10.

Sanovi Tech is a private limited company and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and has negative net worth.

8. Bio Bliss Beej Utpadak Swayat Sahakarita Maryadit

Corporate Information

Bio Bliss Beej Utpadak Swayat Sahakarita Maryadit (Bio Bliss), was founded on August 2, 2003 under the Madhya Pradesh Co-operative Society Act, 1973 as a co-operative farming society with registration number swagat/2003/14.

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Bio Bliss is currently engaged in the business of seed programming, seed grading and seed marketing.

Nature and interest of the Promoters in Bio Bliss

(a) Shareholding Pattern

The shareholding pattern of Bio Bliss as on the date of the Draft Red Herring Prospectus is as below:

Name of the shareholders Number of equity shares of Rs. 500 each % Mrs. Nirmala Daga 958 20.15 Mr. Varun Daga 858 18.05 Mr. Niraj Daga 767 16.13 Mrs. Garishma Daga 754 15.86 Mrs. Sushila Daga 458 9.63 Mr. Kaushik Daga 434 9.13 Mrs. Kanchan Daga 322 6.77 Mrs. Neelima Chopra 128 2.69 Mr. Arihant Gothi 30 0.63 Mrs. Neha Baid 30 0.63 Mrs. Harshila Bhandari 15 0.32 Total 4,754 100.00

(b) Managing Committee

The Managing Committee of Bio Bliss comprises:

Mrs. Nirmala Daga Mr. Varun Daga Mr. Niraj Daga Mrs. Garishma Daga Mrs. Sushila Daga Mr. Kaushik Daga Mrs. Kanchan Daga Mrs. Neelima Chopra Mr. Arihant Gothi Mrs. Neha Baid Mrs. Harshila Bhandari

Except as disclosed below, there have been no changes in control or management of Bio Bliss in the last three years preceding the date of the Draft Red Herring Prospectus:

On February 15, 2010 Mr. Arihant Gothi become a member of the managing committee. On March 16, 2010 Mrs. Laveena Baldota has resigned from the managing committee of Bio Bliss.

The following table sets forth the summary audited financial data of Bio Bliss: (Rs. in million, except Share data) For the years ended Particulars March 31, 2007 March 31, 2008 March 31, 2009 Equity Capital 2.38 2.38 2.38 Reserves and Surplus 1.33 0.73 0.22 No. of Shares 2,377,000 2,377,000 2,377,000 Note: Face value of each Equity Share is Rs. 500.

Bio Bliss is a co-operative society and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and does not have negative net worth.

9. Seth Kasturchand Harakchand Pramod Daga Memorial Society 171

Corporate Information

Seth Kasturchand Harakchand Pramod Daga Memorial Society (SKHPDMS), was founded on February 18, 2005 under the Madhya Pradesh Co-operative Society Act, 1973 as a co-operative society with registration number 01/06/01/14747/05.

SKHPDMS is currently engaged in the business of running Satpuda Valley Public School in Betul, Madhya Pradesh.

Nature and interest of the Promoters in SKHPDMS

(a) Shareholding Pattern

The shareholding pattern of SKHPDMS as on the date of the Draft Red Herring Prospectus is as below:

Name of the shareholders Amount Paid towards Life Membership Fund (Rs.) % Mr. Kaushik Daga 1,000 0.09 Mrs. Garishma Daga 1,000 0.09 Mr. Niraj Daga 1,000 0.09 Mr. Varun Daga 1,000 0.09 Mrs. Harshila Bhandari 1,000 0.09 Mrs. Priyanka Bhandari 1,000 0.09 Mrs. Aparna Daga 1,000 0.09 Mrs. Neha Baid 1,000 0.09 Mr. Dhiraj Bothara 1,000 0.09 Mr. Sumit Marothi 1,000 0.09 Mr. Nitin Tatod 1,000 0.09 Total 11,000 100.00

(b) Managing Committee

The Managing Committee of SKHPDMS comprises:

Mr. Kaushik Daga Mrs. Garishma Daga Mr. Niraj Daga Mr. Varun Daga Mrs. Harshila Bhandari Mrs. Priyanka Bhandari Mrs. Aparna Daga Mrs. Neha Baid Mr. Dhiraj Bothara Mr. Sumit Marothi Mr. Nitin Tatod

Except as disclosed below, there have been no changes in control or management of SKHPDMS in the last three years preceding the date of the Draft Red Herring Prospectus:

On June 26, 2010 Mrs. Laveena Baldota has resigned from the managing committee of SKHPDMS.

The following table sets forth the summary audited financial data of SKHPDMS: (Rs. in million, except Share data) For the years ended Particulars March 31, 2007 March 31, 2008 March 31, 2009 Life Membership Fund 0.01 0.01 0.01 School Corpus Fund 0 4.00 4.00 Reserves and Surplus 0 0 0

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SKHPDMS is a co-operative society and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and does not have negative net worth.

10. Bhook Relief Foundation

Corporate Information

Bhook Relief Foundation (BRF), was founded on April 24, 2009 under section 25 of the Companies Act as a licensed company not for profit with CIN U85100MH2009NPL192019.

BRF is formed to promote, organise or conduct the activities and programs directed towards social, economic, health and ecological upliftment of the people.

Nature and interest of the Promoters in BRF

(a) Shareholding Pattern

The shareholding pattern of BRF as on the date of the Draft Red Herring Prospectus is as below:

Name of the shareholders Number of equity shares of Rs. 10 each % Mr. Vikas Sataria 740 74.00 Mr. Varun Daga 130 13.00 Mr. Dhananjay Arora 130 13.00 Total 1,000 100.00

(b) Board of Directors

The Board of Directors of BRF comprises:

Mr. Vikas Sutaria Mr. Varun Daga Mr. Dhananjay Arora

There have been no changes in control or management of BRF in the last three years preceding the date of the Draft Red Herring Prospectus:

As the BRF was incorporated on April 24, 2009 the annual accounts are not prepared as yet.

BRF is a licensed company not for profit and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and does not have negative net worth.

11. VSH Infotech

Corporate Information

VSH Infotech (VSH Infotech) is a registered partnership firm bearing number BA77818.

Nature and interest of the Promoters in VSH Infotech

(a) Profit Sharing Ratio

The profit sharing ratio of VSH Infotech as on the date of the Draft Red Herring Prospectus is as below:

Name of the partner % Mr. Dilkhush Doshi 25.00 Mr. Ganesh Kumar Gupta 25.00 Mr. Shreans Daga 16.67 173

Name of the partner % Mr. Niraj Daga 16.67 Mr. Kaushik Daga 16.66 Total 100.00

(b) Partners

The partners of VSH Infotech comprises:

Mr. Dilkhush Doshi Mr. Ganesh Kumar Gupta Mr. Shreans Daga Mr. Niraj Daga Mr. Kaushik Daga

There have been no changes in control or management of VSH Infotech in the last three years preceding the date of the Draft Red Herring Prospectus:

The following table sets forth the summary audited financial data of VSH Infotech: (Rs. in million, except Share data) Particulars For the years ended March 31, 2007 March 31, 2008 March 31, 2009 Capital account 1.16 1.16 1.16 Reserves and Surplus Nil Nil Nil

VSH Infotech is a partnership firm and has not made any public or rights issue since its incorporation. It has not become a sick company, is not under winding up and does not have negative net worth.

Sale and purchase between Group Companies/ associate companies

There are no sales or purchase between Group Companies/associate companies exceeding an aggregate value of 10% of the total sales or purchases of our Company during the last three years except as disclosed in the section titled “Related Party Transactions in Annexure XXIV of Financial Statements” and “Financial Statements” on page 225 and 177 of the Draft Red Herring Prospectus.

Business interest of the Group Companies/ associate companies in our Company

Except as disclosed in the section titled “Related Party Transactions in Annexure XXIV of Financial Statements” and “Financial Statements” on page 225 and 177 of the Draft Red Herring Prospectus, none of our Group Companies/ associate companies have business interests in our Company.

Previous public or rights issues by the Group Companies

None of our Group companies are presently listed on any stock exchanges, nor have made any public or rights issues in the preceding three years.

Companies with which our Promoters have disassociated in the last three years

Our Promoters have disassociated with Vision Millennium Exports Private Limited on May 3, 2010 and with Aventis Bio Feeds Private Limited on June 1, 2010. Both Vision Millennium Exports Private Limited and Aventis Bio Feeds Private Limited were our group companies. The reason for disassociation was with a view to consolidate the sales through our Subsidiary. For further details, see “Business Overview” on page 117 of the Draft Red Herring Prospectus.

Other Confirmations

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No application has been made, in respect of any of the Group Companies, to the Registrar of Companies for striking off their names.

Additionally, none of our Group Companies have become defunct in the five years preceding the filing of the Draft Red Herring Prospectus, nor has any Group Company been declared as a sick industrial company under the provisions of the SICA.

Further, our Group Companies have confirmed that they have not been identified as wilful defaulters by the RBI 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.

Additionally, none of the Group Companies have been restrained from accessing the capital markets for any reasons by the SEBI or any other authorities.

Litigation

For details of relating to the legal proceeding involving our Group Companies, refer chapter titled “Outstanding Litigation and Material Developments” beginning on page 255 of the Draft Red Herring Prospectus.

Amount of commercial business that a Group Company have or may have with our Company

For Further details, see section titled “Related Party Transactions in Annexure XXIV of Financial Statements” on page 225 of the Draft Red Herring Prospectus.

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DIVIDEND POLICY

The declaration and payment of dividends will be recommended by our Board of Directors and approved by our shareholders, in their discretion, and will depend on a number of factors, including but not limited to our earnings, general financial conditions, capital requirements, results of operations, contractual obligations and overall financial position, applicable Indian legal restrictions, our Articles of Association and other factors considered relevant by the Board of Directors. The Company has not paid any dividends in the past and it has no stated dividend policy.

In addition, our ability to pay dividends may be impacted by a number of factors, including restrictive covenants under the loan or financing arrangements we may enter into to finance our various projects and also the fund requirements for our projects.

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SECTION VI: FINANCIAL INFORMATION

FINANCIAL STATEMENTS

AUDITORS REPORT AND FINANCIAL INFORMATION

To, The Board of Directors Betul Oil Limited Kosmi Industrial Estate, Betul, Madhya Pradesh – 460 001

Dear Sirs,

Sub: Proposed Initial Public Offer (“IPO”) of Betul Oil Limited

We have examined the attached financial information of BETUL OIL LIMITED ("the Company") described below in A and B and annexed to this report and initialed by us for identification, which has been prepared by the management and approved by the Board of Directors of the Company for the purpose of disclosure in the Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus (Referred as “Offer Document”) being issued by the Company in connection with the IPO. This financial information has been prepared in accordance with the requirements of:

1. Para B (1) of Part II of Schedule II to the Companies Act, 1956 ("the Act") and the amendment thereof;

2. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 (the "SEBI ICDR Regulations") and the related amendments thereto issued by the Securities and Exchange Board of India (‘SEBI’) pursuant to section 11 of the Securities and Exchange Board of India Act, 1992, as amended to date.

3. The revised Guidance Note on reports in Company Prospectuses issued by the Institute of Chartered Accountants of India (‘ICAI’); and

4. The terms of our letter of engagement requesting us to carry out work in connection with the terms of the Offer Document as aforesaid.

A. Restated Standalone Financial Information of the company as per Audited Standalone Financial Statements

We have examined

1. The attached ‘Restated Standalone Summary Statements of Assets & Liabilities’ of the Company as at 31st January, 2010, 30th June 2009, 30th June 2008, 30th June 2007, 30th June 2006 and 30th June 2005 (Annexure I);

2. The attached ‘Restated Standalone Summary Statement of Profit & Loss’ of the Company for the seven months period ended on 31st January, 2010 and for financial years ended on 30th June 2009, 30th June 2008, 30th June 2007, 30th June 2006 and 30th June 2005 (Annexure II);

3. The attached ‘Restated Standalone Statements of Cash Flow’ for the seven months period ended on 31st January, 2010 and for financial years ended on 30th June 2009, 30th June 2008, 30th June 2007, 30th June 2006 and 30th June 2005 (Annexure III);

4. The significant accounting policies adopted by the Company as at and for the period ended January 31, 2010 and notes to the Restated Standalone Summary Statement (Annexure IV);

5. The Restated Summary Statements have been extracted by the management from the audited financial statements after making such adjustments and regroupings as considered appropriate. We have performed such tests and procedures which in our opinion were necessary for the purpose of our examination. These procedures mainly

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involved comparison of the attached financial information with the Company’s audited financial statements for the respective financial years and restatement, reclassification as per SEBI Regulations.

6. The restated standalone financial information of the Company has been extracted from the audited financial statements for the years ended on 30th June 2009, 30th June 2008, period 1st June, 2006 to 30th June, 2007, period 1st June, 2005 to 31st May, 2006, period 1st April, 2004 to 31st May, 2005 which have been approved by the Board of Directors and adopted by the Members of the Company at the respective Annual General Meetings.

7. Audit of the financial statements for the years ended on 30th June 2009, 30th June 2008, period 1st June, 2006 to 30th June, 2007, period 1st June, 2005 to 31st May, 2006, period 1st April, 2004 to 31st May, 2005was conducted by us.

8. We have also examined the financial information of the Company for the seven months period ended 31 January 2010, approved by the Board of Directors for the purpose of disclosure in the offer document of the Company mentioned in Paragraph (1) to (4) above (the broken period ending not before six months from the date of prospectus). The financial information for the above period was examined to the extent practicable, for the purpose of audit of financial information in accordance with the Auditing and Assurance Standards issued by the Institute of Chartered Accountants of India. Those Standards require that we plan and perform our audit to obtain reasonable assurance, whether the financial information under examination is free of material misstatement. Based on the above, we report that in our opinion and according to the information and explanations given to us, we have found the same to be correct and the same have accordingly been used in the financial information appropriately.

9. Based on our examination of the above financial statements and in accordance with the requirements of the Act, SEBI ICDR Regulations and terms of engagement agreed by us with the Company we state that:

(i) The Company has not prepared any accounts on a date ending three months before the issue of the Draft Red Hearing Prospectus.

(ii) The restated assets and liabilities of the Company as at 31st January 2010, 30th June 2009, 30th June 2008, 30th June 2007, 30th June 2006 and 30th June 2005 which are after making such material adjustments and regroupings as, in our opinion are appropriate and are to be read with the significant accounting policies and notes thereon in Annexure IV.

(iii) The restated profits of the Company for the seven months period ended 31st January 2010 and financial years ended on 30th June 2009, 30th June 2008, 30th June 2007, 30th June 2006 and 30th June 2005 which have been arrived at after making such material adjustments and regroupings as, in our opinion are appropriate and are to be read with the significant accounting policies and notes thereon in Annexure IV.

(iv) The restated cash flows of the Company for the seven months period ended on 31st January 2010 and for financial years ended on 30th June 2009, 30th June 2008, 30th June 2007, 30th June 2006 and 30th June 2005 which have been arrived at after making such material adjustments and regroupings as, in our opinion are appropriate and are to be read with the significant accounting policies and notes thereon in Annexure IV.

(v) The Restated Summary Statements have been restated with retrospective effect to reflect the significant accounting policies adopted by the Company as at 31st January 2010.

(vi) The impact arising on account of changes in significant accounting policies, if any, (as disclosed in Annexure IV to this report) adopted by the company has been adjusted with retrospective effect in the attached statements.

(vii) There were no qualification relating to prior period that need to be disclosed or adjusted separately in the summary statement

(viii) The impact of extra ordinary items has been disclosed separately in the financial statements.

(ix) There are revaluation reserves outstanding as at 31st January 2010, 30th June 2009, 30th June 2008, 30th June 2007, 30th June 2006 and 30th June 2005 has been disclosed separately and appropriate

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adjustments have been made in the statement of assets and liabilities for revaluation reserves outstanding as at 31st January 2010, 30th June 2009, 30th June 2008, 30th June 2007, 30th June 2006 and 30th June 2005.

B. Other Financial Information as per audited financial statements:

We have also examined the following financial information as of and for the seven months period ended on January 31, 2010 and for financial years ended on 30th June 2009, 30th June 2008, 30th June 2007, 30th June 2006 and 30th June 2005 of the Company, proposed to be included in the Offer Document, as approved by the Board of Directors and annexed to this report:

1. Statement of Changes in Share Capital, as restated, enclosed as Annexure V;

2. Statement of Changes in Reserves and Surplus, as restated, enclosed as Annexure VI ;

3. Statement of Secured Loans, as restated, enclosed as Annexure VII;

4. Statement of Unsecured Loans, as restated, enclosed as Annexure VIII;

5. Statement of Fixed Assets and Capital WIP, as restated, enclosed as Annexure IX;

6. Statement of Investments, as restated, enclosed as Annexure X;

7. Statement of Sundry Debtors, Loans and Advances, as restated, enclosed as Annexure XI;

8. Statement of Current Liabilities and Provisions, as restated, enclosed as Annexure XII;

9. Statement of Sales and Other Income, as restated, enclosed as Annexure XIII;

10. Statement of Expenditure, as restates, enclosed as Annexure XIV;

11. Statement of Dividend Paid/Proposed, enclosed as Annexure XV;

12. Statement of Quantitative details of Finished Goods, as restated, enclosed as Annexure XVI;

13. Statement of CIF value of Imports, Expenditure in foreign currency and earning in Foreign currency, as restated, enclosed as Annexure XVII;

14. Statement of Accounting Ratios, as restated, enclosed as Annexure XVIII;

15. Statement of Reconciliation of Net Profit, as restated, enclosed as Annexure XIX;

16. Capitalisation Statement as at 31st January 2009, as restated, enclosed as Annexure XX;

17. Commitments and Contingent Liabilities, as restated, enclosed as Annexure XXI;

18. Statement of Segment Information, as restated, enclosed as Annexure XXII;

19. Tax Shelter Statement, enclosed as Annexure XXIII;

20. Statement of Related Party Transactions, as restated, enclosed as Annexure XXIV;

21. Statement of effect of changes in Accounting policies, as restated, enclosed as Annexure XXV.

In our opinion the above financial information of the Company, read with Significant Accounting Policies and notes on accounts given in Annexure IV to this report, after making adjustments and reporting as considered appropriate, has been prepared in accordance with Part II (B) of Schedule II of the Act and the SEBI ICDR Regulations as amended from time to time. Our work has been carried out in accordance with the auditing standards generally accepted in India and as per the revised guidance note on reports in Company Prospectus issued by Institute of Chartered Accountants of India.

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This report should not in any way be construed as a reissuance or redating of any of the previous audit reports issued by us nor should this report be construed as a new opinion on any of the financial statements referred therein.

We did not perform audit tests for the purpose of expressing an opinion on individual balances of account or summaries of selected transactions, and accordingly, we express no such opinion thereon.

We have no responsibility to update our report for events and circumstances occurring after the date of the report.

This report is intended solely for use of the management and for inclusion in Offer Document in connection with the Proposed IPO of Equity Shares of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent. We hereby give our consent to include this report in the Draft Red Herring Prospectus of the Company.

Yours Faithfully

For BHUTORIA GANESAN & Co (Chartered Accountants) Firm Registration No.: 004465C

(CA R.GANESAN) Partner Membership No.: 26164 Place: Mumbai Date: July 28, 2010

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ANNEXURE - I RESTATED STANDALONE SUMMARY STATEMENTS OF ASSETS & LIABILITIES

B) Investments 18.00 18.10 21.60 3.10 1.00 0.05

D) Deferred Tax Assets 0.50 0.50 0.42 0.05 0.05 0.04

Total Assets (A+B+C+D) 2,185.85 1,735.25 1,682.92 1,078.25 888.31 399.25

Net worth (A+B+C+D-E) 806.24 669.49 473.73 278.69 178.82 122.98

Net worth represented by Shareholder funds:- Share Capital 67.00 67.00 67.00 62.00 62.00 62.00 Share application money - - - 50.00 50.00 - Reserves and Surplus 1,131.93 1,006.93 831.22 612.54 87.56 83.29 Less: Revaluation Reserves 392.69 404.44 424.49 444.54 20.75 22.31 Reserves (Net of Revaluation Reserves) 739.24 602.49 406.73 168.01 66.82 60.98 Less: Miscellaneous Expenditure (To the extent not written off) - - - 1.32 - - Net Worth 806.24 669.49 473.73 278.69 178.82 122.98

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ANNEXURE - II RESTATED STANDALONE SUMMARY STATEMENT OF PROFIT & LOSS

TOTAL GROSS SALES 3,950.50 5,385.39 4,825.03 4,040.32 2,482.17 1,566.18 c. Excise Duty - 0.62 1.43 0.65 0.40 6.99

NET SALES 3,950.50 5,384.77 4,823.60 4,039.67 2,481.77 1,559.19

Total Income 3,915.34 5,501.86 5,002.66 4,182.02 2,695.80 1,578.04

Profit before interest, tax, extraordinary items 290.12 302.43 343.15 210.59 56.98 33.21

Interest & Financial Charges 72.10 106.80 118.94 52.57 32.57 13.68 Depreciation and Amortisation 13.92 23.56 20.07 20.22 9.31 6.50 Miscellaneous Expenditure W/off - - 1.32 - - -

Net Profit before tax and extraordinary items 204.11 172.06 202.83 137.80 15.09 13.03

Provision for taxation Current Tax 43.80 7.61 2.98 5.18 2.20 0.22 Wealth Tax - 0.05 0.05 - - - Deferred Tax 23.55 1.25 4.96 35.29 6.55 0.80 Fringe Benefit Tax - 0.54 0.41 0.74 0.40 0.06

Net Profit after tax and before extraordinary items 136.76 162.62 194.43 96.59 5.95 11.96 182

Particulars As on As on As on June As on As on As on January June 30, 30, 2008 June 30, June 30, June 30, 31, 2010 2009 2007 2006 2005

Add: Extraordinary items - 33.50 - 4.60 0.42 29.17

Net Profit after extraordinary items and before prior period expenses 136.76 196.12 194.43 101.19 6.37 41.12

Less: Adjustment for previous year income tax - 0.37 0.71 - 0.53 (0.18)

Balance carried over to balance sheet 694.24 557.49 361.73 168.01 66.82 60.98

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ANNEXURE-III RESTATED STANDALONE STATEMENTS OF CASH FLOW (Rs. in Millions) Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 30, 31, 2010 2009 2008 2007 2006 2005 A. CASH FLOW FROM OPERATING ACTIVITIES

Operating Profit Before changes in Working Capital 242.95 389.32 397.13 207.40 53.43 64.02

Cash Generated From Operating Activities (A) 15.73 408.98 (227.45) (286.48) 89.39 57.41

B. CASH FLOW FROM INVESTING ACTIVITIES

Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 30, 31, 2010 2009 2008 2007 2006 2005

Net Cash from/(used in) investing activities (B) (147.73) (105.65) (60.79) (25.71) (211.57) (12.60)

C. CASH FLOW FROM FINANCING ACTIVITIES

Net Cash from/(used in) financing activities (C) 148.73 (295.48) 284.22 321.25 134.79 (36.44)

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ANNEXURE IV SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention on the accrual basis of accounting and in accordance with generally accepted accounting principles.

2. Fixed Assets

Fixed Assets comprising of factory land, factory and other buildings and Plant and Machinery acquired till 30-6- 2007 are stated at revalued amount less cumulative depreciation and all other fixed assets are stated at historical cost less accumulated depreciation. Impairment loss, if any is reduced from the cost /revalue. Cost of acquisition is inclusive of direct cost, incidental expenses and borrowing cost related to acquisition.

3. Depreciation

Depreciation on fixed assets is charged on straight line basis at rate specified in schedule XIV to the Companies Act, 1956 from the day on which concerned asset has been put into use, except in case of civil construction – windmill the rate of depreciation has been considered based on the life period of the civil construction and will be depreciated equally over the period of 20 years. Depreciation in respect of increase in value to fixed assets as a result of revaluation is debited to revaluation reserve account.

Assets costing less than Rs.5,000 are capitalized and have been depreciated.

4. Impairment loss

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amounts. Recoverable amount is the higher of an asset’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal. During the year there is no impairment loss of any asset.

5. Investments

Long term Investments are stated at cost of acquisition. Provision for permanent diminution in value, if any, is provided fro in the books of accounts.

6. Inventories

Inventories have been valued as under:

(i) Raw Materials, Store & Spares: At Cost or net realisable value whichever is less. Cost is determined on FIFO basis.

(ii) Consumables, fuel, packing materials: At Cost. Cost is determined on FIFO basis.

(iii) Finished Goods/WIP: Cost of production or net realisable value whichever is less. Cost has been arrived at standard cost basis

(iv) Traded goods: At cost or market value whichever is lower. Cost is determined on FIFO basis.

7. Retirement and other employee benefits

186

(i) Provident fund

The Company contributes towards Provident Fund which is defined contribution plan, liability in respect of which is determined on the basis of contribution as required under the statute / rules.

(ii) Gratuity

Gratuity, a defined benefit scheme is accrued and provided for on the basis of actuarial valuation made at the year end.

(iii) Leave Encashment

Leave Encashment is accounted for on cash basis as and when it is paid. The company does not have leave encashment policy.

8. Taxes on Income

Tax expenses comprise both current tax, Fringe Benefit Tax and deferred tax at the applicable enacted/ substantively enacted rates. Current tax has been provided based on the amount of income tax payable in respect of the taxable income for the previous year under the Income Tax Act, which is uniform being year ending 31st March and this practice is consistently followed by the company. Deferred tax represents the effect of timing differences between taxable income and accounting income for reporting period that originate in one period and are capable of reversal in one or more subsequent periods. Current taxes and Fringe Benefit Tax are measured at the current rate of tax in accordance with provisions of the Income-tax Act, 1961. Deferred tax Assets and Liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date. Deferred tax as on 30-6-2005 relating to previous year has been transferred from Surplus of Profit and Loss Account and not debited to Profit and Loss Account.

9. Provisions and Contingencies

Provisions are recognized when the Company has a legal and constructive obligation as a result of past events, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are disclosed when the Company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nor disclosed. Contingent liabilities are determined on the basis of available information and are disclosed by way of a note to the accounts.

10. Recognition of Income and Expenditure

Items of income and expenditure are recognized on accrual basis except for the following which are being accounted for on Cash basis since it is not possible to ascertain the exact quantum with reasonable accuracy.

(i) Capital Subsidy

(ii) Insurance claims

(iii) Dividend

(iv) Income in respect of power generation of Wind Mill project is accounted for as income based on accepted bill and units generated to the respective power grids.

187

11. Foreign Currency Transactions

The Foreign currency transactions covered by forward contracts are accounted for, at the contract rates. In respect of foreign currency loans, wherever hedging is not available, the outstanding payable on balance sheet date is restated at the exchange rate prevailing on balance sheet date. Where the loan is hedged, the transactions are stated at the hedged rates. The exchange rate gain or loss arising on revenue transactions are charged to Profit and Loss Account. Income on export receivable in foreign currency is accounted on the basis of actual remittance as per advice of the bank. The amount outstanding at the year end receivable in foreign currency, if any is accounted at the prevailing exchange rate. Any exchange difference is dealt in the Profit and Loss Account. In respect of forward contracts, the premium or discount arising at the inception of such a contract is amortized as expense or income over the period of the contract.

12. Borrowing Costs

Borrowing cost directly attributable to the acquisition or construction of fixed assets is capitalized as part of the cost of the asset, up to the date the asset is put to use. All other borrowing costs are charged to the Profit and Loss Account in the year in which they are incurred.

13. Commodity hedging Transactions

The Company is mainly engaged in buying of Soya bean seeds and manufacturing of Soya bean Oils and Soya De Oiled Cakes and also in other agriculture merchandise on ready or forward basis. The Company deals on National Commodity and Derivatives Exchange Ltd (NCDEX) through broker. The net gain or loss is accounted for in the books after the transaction is squared up. Gain or loss is recognised in case of completed transaction till the year end.

B. NOTES ON ACCOUNTS

1. Land, Buildings and plant and machinery have been revalued as on 30-06-07 and are stated at their revalued values. The assets of Betul Plant were revalued earlier on 31-3-1995. This is the second revaluation of fixed assets as on 30-06-2007. The addition on account of revaluation included in the Gross Block as on 30-06-07 is as under: (Rs .in millions) Nature of Asset Total Factory Land 13.71 Factory & other Buildings 90.82 Plant and Machinery 319.26 Total 423.7.9

2. Forex Derivative Transactions with Banks:

The company has contracted a series of forex derivative transactions during the period 29-12-2006 to 13-3-2008 with banks. The banks have made certain claim and then moved an application in Debt Recovery Tribunal Mumbai for recovery of Rs.122.58 million as on 30-6-2009. The company has repudiated the contract in July 2008 and filed a suit before the District Court Betul. One of the bank has foreclosed FDR of Rs.10.10 million of the company against their claim. For this act of the bank the Company has filed suit at the District Court, Betul. The amount of FDR foreclosed by the bank is shown as recoverable under current assets The company has relied on opinion of the expert that the transactions by the banks are in violation of FEMA and therefore void and has not provided for Rs.122.58 million. This amount has been shown as contingent liability. Further reference may be made to point no 10 – events occurring after balance sheet date in respect of settling of dispute with ICICI Bank.

3. As per policy of MP Power Distribution Co., credit is given in the power bills on power consumed by the Betul Plant in respect of power generated at the windmill unit at Dewas (MP) after adjusting for wheeling charges. Hence the power consumption accounted for is net of power generated and adjustment for wheeling charges. The figures are not comparable.

4. DEFERRED REVENUE EXPENDITURE:

188

Deferred Revenue Expenditure: Since the seed business has been discontinued in the 2007-08, deferred revenue expenditure incurred for the Seed Division as pre launch marketing expenses has been totally written off in Profit & Loss Account in the l year 2007-08.

5. EXTRA ORDINARY TRANSACTIONS:

In the year 2008-09 the company has disclosed extra ordinary income of Rs.33.5 million. The company has made gain from a transaction with a Financial Institution (Indian) in the adventure of trade by way of assignment of debts, rights and obligations and sale of share of a Company

In the year 2006-07 the company made revenue loss insurance claim of Rs.4.6 million on account of fire accident in the factory.

In the year 2005-06 the company has shown an income of Rs.0.42 million on account of surrender of Keyman insurance policy taken by the company.

In the year 2004-05 the company has shown an income of Rs.29.17 million on account of surrender of Keyman insurance policy taken by the company.

6. The MIDC Solapur unit commenced commercial production on 01-06-2006. The preoperative expenditure capitalized was Rs 9.52 million net of insurance claim. Preoperative expenditure capitalized did not include any interest as the Term Loan sanctioned by State Bank of India was disbursed after the date of commercial production.

7. The Windmill at Dhulia commenced generation on 18-2-2006 and the wind mill at Dewas commenced generation on 20-5-2006. No preoperative expenditure was capitalized.

8. The Satna unit of the company is under implementation as on 31-01-2010. Pre operative expenditure including trial run expenses (net off trial run proceeds) is shown as Pre Operative Expenditure under capital work in progress.

9. Trading turnover: The company is not having separate series of invoices to record and account for trading sales. The products of trade like vegetable crude or refined oil and de oiled cake are similar to the products being manufactured by the company and as such they can not be physically identifiable on all occasions. In deriving out the trading sales the company has adopted the following method ;

(i) In case rake to rake or consignment to consignment purchase and sale the sale value.

(ii) In case where the trading goods are purchased in smaller lots and sold along with own products, proportionate sale value of quantity.

(iii) In case where trading goods are purchased in bigger lots and sold in smaller quantities along with own manufactured goods, then proportionate sale on monthly average basis.

10. The company has received Capital subsidy of Rs.2.34 million towards setting up Warehousing facility in Betul. The amount is shown under Capital Reserves. The company has to comply with the conditions of subsidy and till that time this is not a free reserve. Accordingly the same is not considered in calculating net worth of the company as on 31-01-2010.

11. Issue of bonus shares: The company issued bonus shares in the year 2004-05 on 10-5-2005 in the ratio 3:1. Bonus shares issued 46500 shares of Rs.1000/ each and the same has been included in the share capital as on 30-6-2005.

12. The company allotted additional shares of Rs.5 million on 10-12-2007 and this has been considered while calculating weighted average EPS in that year.

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13. Changes in Accounting Policy

(i) The company changed its accounting policy in case of valuation of inventory of closing stock of finished goods in the year 2004-05. The company changed its method from valuation of finished goods from net realizable value to cost of production or net realizable value whichever is less. We have considered the impact of change in valuation of opening stock of finished goods as on 1-7-2004 and the reserves has been reduced to the extent of Rs.0.24 million as on 1-7-2004.

(ii) The company changed its method of accounting as income of export incentives like DFCE license in the year 2006-07. Earlier to this these types of export incentives were recognized as income as and when the export licenses were sold/ disposed. However from the year 2006-07 onwards the company has recognized export incentives as income at the time of issue of such license by the authorities. All export incentive licenses on hand which have been accounted for as income in the year 2006-07 were relating to the year 2006-07.

14. Disclosure pursuant to the AS 15 on Employees benefits ; (As certified by actuarial valuer in respect of funded obligation only) (Rs .in millions) Table 1: CHANGES IN PRESENT VALUE OF OBLIGATIONS January 31, June 30, 2010 June 30, 2009 2008 Present Value of Obligation as at the beginning of the year 1.02 1.33 1.27 Interest Cost 0.08 0.11 0.10 Current Service Cost 0.03 0.07 0.08 Benefits paid - (0.17) (0.33) Actuarial (gain)/ loss on obligations 0.64 (0.32) 0.22 Present Value of Obligation as at the end of the year 1.77 1.02 1.33

Table 2: CHANGES IN FAIR VALUE OF PLAN ASSETS January 31, June 30, 2010 June 30, 2009 2008 Fair Value of Plan Assets at the beginning of the year 1.17 0.81 0.17 Expected Return on Plan Assets 0.09 0.08 0.04 Contributions - 0.31 0.63 Benefits Paid - Actuarial Gain /( loss) on Plan Assets (0.02) (0.02) (0.03) Fair Value of Plan Assets at the end of the year 1.24 1.17 0.81

Table 3: FAIR VALUE OF PLAN ASSETS January 31, June 30, 2010 June 30, 2009 2008 Fair value of plan asset at the beginning of year 1.17 0.81 0.17 Actual return on plan assets 0.07 0.05 0.01 Contributions - 0.31 0.63 Benefits Paid - - - Fair value of plan assets at the end of year 1.24 1.17 0.81 Funded Status (0.53) 0.14 (0.53) Excess of actual over estimated return on plan assets (0.02) (0.02) (0.03)

Table 4: ACTUARIAL GAIN / LOSS RECOGNIZED January 31, June 30, 2010 June 30, 2009 2008 Actuarial (gain)/loss for the year - Obligation 0.64 (0.32) 0.22 Actuarial (gain)/loss for the year - Plan Assets 0.02 0.02 0.03 Total Actuarial (gain) / loss recognized in the year 0.66 (0.29) 0.25

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Table 5: AMOUNT TO BE RECOGNIZED IN BALANCE SHEET January 31, June 30, 2010 June 30, 2009 2008 Present Value of Obligation as at the end of the year 1.77 1.02 1.33 Fair Value of Plan Assets as at the end of the year 1.24 1.17 0.81 Funded Status (0.53) 0.14 (0.53) Net Asset / (Liability) Recognized in Balance Sheet (0.53) 0.14 (0.53)

Table 6: EXPENSE RECOGNIZED IN THE STATEMENT OF PROFIT AND LOSS January 31, June 30, 2010 June 30, 2009 2008 Current Service Cost 0.03 0.07 0.08 Interest Cost 0.08 0.11 0.10 Expected Return on Plan Assets (0.09) (0.08) (0.04) Total actuarial (gain)/ loss recognized in the year 0.66 (0.29) 0.25 Expenses Recognized in the statement of Profit & Loss 0.68 (0.19) 0.39

Table 7: RECONCILIATION OF NET ASSET/ (LIABILITY) RECOGNISED IN BALANCE SHEET January 31, June 30, 2010 June 30, 2009 2008 Net Asset /( Liability) recognised in the Balance sheet as at the beginning of the year 0.14 (0.53) (1.10) Expenses Recognized in the statement of Profit & Loss (0.68) 0.19 (0.39) Benefits paid - 0.17 0.33 Contributions - 0.31 0.63 Net Asset /( Liability) recognised in the Balance sheet as at the end of the year (0.54) 0.14 (0.53)

Note: Provident fund obligations have been funded by the company by means of a Gratuity Policy from SBI Life Insurance Company Ltd since 2007-08. Gratuity has been paid by the company in the previous years and the same has been debited to P&L account and also the premium paid. Gratuity liability as per actuarial valuation as on 30- 6-2005 has been accounted as liability. Hence the amount as certified by the actuarial valuer to be recognized in Profit and Loss account and in Balance sheet will not match with the accounts.

15. Deferred Tax Asset and Liability:

Deferred Tax on account of timing difference of depreciation Deferred Tax asset on account of timing difference consequent to disallowance u/s 43(b) Details given under :

(Rs. in Millions) Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 30, 31, 2010 2009 2008 2007 2006 2005 Deferred Tax Liability Opening Balance 64.34 63.02 57.69 22.40 15.84 - Add Deferred Tax During The Year Debited To P&L 23.55 1.32 5.33 35.29 6.56 0.83 Add Deferred Tax Transfer. from Surplus - - - - - 15.01 Closing Balance 87.89 64.34 63.02 57.69 22.40 15.84

Deferred Tax Asset Opening Balance 0.50 0.42 0.05 0.05 0.04 - Add Deferred Tax Asset Cr. To - 0.08 0.37 - 0.01 0.04 191

P&l A/c Closing Balance 0.50 0.50 0.42 0.05 0.05 0.04

Net Debit of Deferred Tax in P&L A/c 23.55 1.25 4.96 35.29 6.55 0.80

16. Particulars of unhedged foreign currency exposure as at balance sheet date is given below:

AS ON In Foreign Exchange Rs. in millions 30-6-2005 US$ 1750000.00 75.97 30-6-2006 NIL NIL 30-6-2007 NIL NIL 30-6-2008 US$ 492379.75 109.70 30-6-2009 NIL NIL 31-01-2010 US$ 1069061.36 50.00

17. Computation Of Directors Remuneration And Commission

(Rs. in Millions) Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 31, 2010 2009 2008 2007 2006 30, 2005 Profit Before Tax as per Profit and Loss Account 204.11 205.56 202.83 142.40 15.51 42.20

Add: Directors Remuneration 0.35 0.36 0.42 0.99 0.61 0.38 Add: Loss on fixed assets sold 0.54 - - 0.08 - - Less: Amortization of intangible assets - - 1.32 - - - Less: profit on sale of fixed assets - - - - - 0.09

Net profit for the purpose of directors commission 205.00 205.92 201.93 143.47 16.12 42.49

Maximum remuneration payable upto 10% of above 20.50 20.59 20.19 14.35 1.61 4.25

18. Computation Of Extraordinary Items

(Rs. in Millions) Particulars As on As on As on As on As on As on January June 30, June June 30, June 30, June 30, 31, 2010 2009 30, 2008 2007 2006 2005 Assignment of Debt from IFCI (Company was assigned certain debt by IFCI for particular amount and subsequently the company disposed off the debt at higher value) - 33.50 - - - - Insurance revenue loss claim (There was major fire accident in one of the plant. The company lodged revenue loss claim consequent to closure of plant and got the claim) - - 4.60 - - - Surrender value of Key Man Insurance Policy - - - - 0.42 29.17

Total - 33.50 4.60 - 0.42 29.17

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19. CONSOLIDATION OF FINANCIAL STATEMENTS OF ASSOCIATE CONCERN:

The company holds more than 20% shares in M/s Khushali Developers (P) Ltd, the threshold limit of shareholding to be considered for significant influence under Accounting Standard 23 as on 29-12-2008.

The value of investments in books as on date of investment is at face value of shares being 17,50,000 no of shares of Rs.10/ each amounting to Rs. 17.5 million. These shares have been disposed off by the company on 25- 5-2010 by the company at face value resulting in neither profits nor loss. As the investment was held exclusively with a view to its subsequent disposal inclusion of accounts of Khushali Developers (P) Ltd for consolidation under AS 23 is not considered.

20. EVENTS OCCURING AFTER BALANCE SHEET

(i) The company has issued bonus shares in the ratio of 3.25:1 on 1-6-2010. Bonus shares issued 21775000 shares of Rs.10/ each.

(ii) The company has settled the dispute with ICICI Bank in respect of derivative transaction. The bank has filed an application before Debt Recovery Tribunal, Mumbai and the suit was proceeding. As per settlement terms the company has paid Rs.37.0 million in addition to canceling claim of the company on its FDR with interest amounting to Rs.10.41 million. This amount has not been provided as on 31-01- 2010. The claim is shown under Loans and advances. The disputed amount is shown under contingent liability.

(iii) The Satna unit of the company consisting of Solvent Extraction Plant of capacity TPD and vegetable oil refinery of capacity TPD commenced commercial production partially on 28-3-2010.

21. In respect of charity and donation debited to accounts, none of them are to any Political Party nor for any political purpose to any person.

22. Amount due to suppliers under The Micro, Small and Medium Enterprises Developments Act, 2006: There are no such enterprises to whom the Company owes a sum exceeding Rs. one lakh which is outstanding for more than thirty days.

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ANNEXURE - V STATEMENT OF CHANGES IN SHARE CAPITAL, AS RESTATED

(Rs. in Millions) Particulars As on As on As on June As on As on As on January June 30, 30, 2008 June 30, June 30, June 30, 31, 2010 2009 2007 2006 2005 Authorised 13,000,000 equity share capital of Rs. 10 each (As on 30-6-2005, 70,000 Equity Shares of Rs.1000 each) 130.00 130.00 130.00 130.00 130.00 70.00 Issued, subscribed and paid up No. of Equity Shares 6,700,000 6,700,000 6,700,000 6,200,000 6,200,000 62,000 Face Value of each Share (Rs.) 10.00 10.00 10.00 10.00 10.00 1,000.00 Total paid up equity shares 67.00 67.00 67.00 62.00 62.00 62.00

Share Application Money - - - 50.0 50.00 -

RECONCILIATION OF SHARE CAPITAL Opening Balance 67.00 67.00 62.00 62.00 62.00 15.50 Additions During The Year: Fresh - - 5.00 - - - Additions By Way Of Bonus Shares - - - - - 46.50 Closing Balance 67.00 67.00 67.00 62.00 62.00 62.00

194

ANNEXURE - VI STATEMENT OF CHANGES IN RESERVES AND SURPLUS, AS RESTATED

(Rs. in Millions) Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 30, 31, 2010 2009 2008 2007 2006 2005 SHARE PREMIUM ACCOUNT Opening Balance 45.00 45.00 - - - - Additions Premium on shares allotted at Rs.90/ share - - 45.00 - - - Closing Balance 45.00 45.00 45.00 - - -

SURPLUS IN PROFIT & LOSS A/C Opening Balance 557.49 361.73 168.01 66.82 60.98 71.79 Add: Surplus in Profit & Loss A/c during the year 136.76 195.76 193.72 101.19 5.84 41.30 Less: Utilized for issue of Bonus shares - - - - - 37.10 Less: Transfer to Deferred Tax - - - - - 15.01 Closing Balance 694.24 557.49 361.73 168.01 66.82 60.98

REVALUATION RESERVE Opening Balance 404.44 424.49 444.54 20.75 22.31 24.02 Add: Revaluation Reserve created during the year - - - 423.79 - - Less: Deduction Depreciation w/off 11.75 20.05 20.05 - 1.57 1.71 Closing Balance 392.69 404.44 424.49 444.54 20.75 22.31

Total Reserves & Surplus 1,131.93 1,006.93 831.22 612.54 87.56 83.29 Less: Revaluation Reserves 392.69 404.44 424.49 444.54 20.75 22.31 Reserves & Surplus (Net of Revaluation Reserves) 739.24 602.49 406.73 168.01 66.82 60.98

195

ANNEXURE - VII STATEMENTS OF SECURED LOANS, AS RESTATED

(Rs. in Millions) Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 30, 31, 2010 2009 2008 2007 2006 2005 A) RUPEE - TERM LOANS S.B.I. Term Loan A/C MIDC Solapur & Others 30.75 36.60 46.00 53.17 10.52 0.61 S.B.I.(Windmill) T/L 44.80 57.16 71.28 48.85 1.00 - Bank Of Baroda, Warehouse Loan 13.63 13.76 - - - - F.C.N.R.B Term Loan A/C - - - - 0.14 3.60 F.C.N.R. (B) - Dl A/C - - - - - 76.27 89.18 107.52 117.27 102.02 11.67 80.47

B) RUPEE LOANS AGAINST WORKING CAPITAL S.B.I.P.C.C. A/C, Betul 8.18 0.27 0.03 0.48 7.76 7.33 SBI-IFB –LC A/C 143.68 139.83 - - 27.99 - SBI-IFB –CC A/C - Bhopal - - - - - 9.96 S.B.I.P.C.C. A/C, Chhindwara 0.04 1.49 - - - - SBI-IFB-EPC A/C Mumbai 554.49 526.18 624.17 460.34 157.70 52.52 SBI-IFB –CC A/C Mumbai 23.40 13.34 - 8.92 64.31 1.60 IDBI Bank Ltd., CC A/C 6.30 - - - - - IDBI -EPC A/C 195.00 - - - - -

Barclays Bank Plc Fcnr Loan A/C 100.00 - - - - - 1,031.09 681.11 624.20 469.74 257.76 71.40

FROM BANKS/NBFC - AGAINST VEHICLES ICICI Lorryloan 1.35 2.23 3.64 4.89 - - HDFC Lorry Loan 0.61 1.12 1.91 - - - HDFC Lorry Loan - 0.19 - 0.44 0.70 - HDFC Car Loan 0.81 - - - - - ICICI Car Loan Mumbai - - 0.32 0.10 0.64 1.23 ICICI Car Loan Bhopal 0.09 0.26 0.80 1.28 - - Kotak Mahindra Prime Ltd. - Car Loan 0.17 0.27 0.46 - - - MM Finance Car Loan - - 0.03 0.10 - - Sundram Finance Ltd. - - 0.04 0.16 0.27 - 3.03 4.07 7.20 6.96 1.61 1.23

TOTAL SECURED LOANS 1,123.31 792.69 748.67 578.72 271.03 153.10

On SBI

Working capital facilities from SBI are secured by Ist hypothecation charge on the entire current assets of the company consisting of raw materials, semi finished goods, finished goods, stores and spares, other consumables and book debts situated at Betul

Collaterally secured by way of:

1. EM of free hold property at Khasra No 192/2 PC No 54, Settlement no 287, Village Tikari dist Betul (Area 1 acre held in the name of Ms.. Kanchan Daga)

2. Pledge of 30% shares of equity of BOFL @ Rs.10/share

3. Pledge of 6 lac shares of Poly Medicure Ltd. 196

4. First charge on all the fixed assets of BOFL at Betul

5. Extension of charge on land, building, plant and machinery and other assets created out of bank finance situated at NIL, Plot No B-12, Chincholi Industrial Estate, village Konddi, district Solapur

6. Personal guarantees of Mr. Vinod Daga, Mr. Shreans Daga, Mr. Paras kumar Daga, Mr. Niraj Daga and Ms. Kanchan Daga.

7. Corporate Guarantee of M/s Arihant Tournesol Ltd and M/s Vision Millennium Exports (P) Ltd. Company has applied for the waiver of the corporate guarantee of the same.

On Term Loans from SBI:

TL I: Ist charge on fixed assets of wind power project at both the units i.e. Dewas, MP and Solapur Maharashtra

TL II: Ist charge on land building, plant and machinery and other assets created out of bank finance situated NIL, Plot No B-12, Chincholi Industrial Estate, village Konddi, dist Solapur

Collateral as above

Borrowings from IDBI Bank for working capital:

Working capital facilities from IDBI Bank are secured by Ist hypothecation charge on the entire current assets of the company consisting of raw materials, SIP, finished goods, stores and spares, other consumable and book debts at all the units of the company situated at Betul, Chindwarra, Solapur and Satna on paripassu basis with other working capital bankers.

Collateral: As given to SBI ranking paripassu as given below:

1. EM of free hold property at Khasra No 192/2 PC No 54, Settlement no 287, Village Tikari dist Betul (Area 1 acre held in the name of Ms. Kanchan Daga)

2. Pledge of 30% shares of equity of BOFL @ Rs.10/share

3. Pledge of 2.88 lac shares of Poly Medicure Ltd

4. First paripassu charge on all land, building and machineries and other assets of BOFL at Betul, Satna and Solapur

5. Extension of hypothecation charge on all the current assets held at Betul, Chhindwarah and Satna on pari passu basis

6. Personal guarantees of Mr. Vinod Daga, Mr. Shreans Daga, Mr. Paras kumar Daga, Mr. Niraj Daga and Ms. Kanchan Daga

7. Corporate Guarantee of M/s Arihant Tournesol Ltd and M/s Vision Millennium Exports (P) Ltd. Company has applied for the waiver of the corporate guarantee of the same.

Borrowings from Barclays Bank PLC:

First charge on the current assets of the borrower, both present and future, ranking paripassu basis with the charge created in favour of other bankers.

Second charge on the entire moveable and immoveable fixed assets of the company both present and future ranking pari passu basis with the charge created in favour of other bankers of the borrowers.

Personal guarantee of Mr. Vinod Daga, Mr. Shreans Daga, Mr. Paras Daga and Mr. Niraj Daga

Borrowings from Bank of Baroda:

197

Term loan: EM of land admeasuring 2 acres at village Parsoda, Dist Betul and hypothecation of plant and machinery and other assets.

Collateral: Personal guarantee of all the directors of the company.

Vehicle finance from Bank/ NBFC:

Hypothecation of vehicles financed by them respectively

Bill Discounting facility from Greater Bombay Cooperative Bank Ltd Rs.1000 lacs:

Rate of interest @13%

Secured instruments submitted by the borrower like cheques, bills, hundies, sight drafts and other instruments with or without Government securities, share certificates, lorry receipts, railway receipts

Collaterally secured by way of: Equitable Mortgage of open land located at Plot No 1/24, 1/16 admeasuring 54896 sq.mt Ganesh Ward, dist Betul in the name of Mr. Paras Kumar Daga.

Equitable Mortgage of house at Nazul Street, No2, Plot No 46/3 & 47 Betul in the name of Ms. Kamala Daga.

The above collateral securities are offered on parri passu basis in respect of credit facilities sanctioned by the bank to other companies by way of Bill discounting facilities Rs.80 millions.

Personal guarantees of Mr. Niraj Daga, Mr. Paras Kumar Daga, Mr. Shreans Daga and Ms. Kamala Daga.

198

ANNEXURE - VIII STATEMENTS OF UNSECURED LOANS, AS RESTATED

(Rs. in Millions) Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 30, 31, 2010 2009 2008 2007 2006 2005 From Related Parties Vision Millennium Exports (P) Ltd (Interest Free Inter Corporate Deposit) - 110.00 110.00 110.00 45.50 45.50 M/S Kasturchand Harak Chand Daga Huf (Interest Free Unsecured Loan) - 2.13 1.46 1.63 - 0.57

From Banks HSBC EPC Account - - 19.14 - - - ICICI Current A/C Book Overdraft - - 1.97 - - - Barclays PLC - - 100.00 - - - Total - - 121.11 - - -

From Others (PEC Ltd) - - 112.26 - - -

Total - 112.13 344.83 111.63 45.50 46.07

199

ANNEXURE - IX STATEMENT OF FIXED ASSETS AND CAPITAL WIP, AS RESTATED

A. STATEMENT OF FIXED ASSETS

(Rs. in Millions) Description Gross Block Depreciation Net Block of Assets As at Addition Sold As at Up To For the Adjust Up To As at As at July during durin January July period ment January, January June 1, the year g the 31, 2010 1, ending in 31, 2010 , 31, 30, 2009 year 2009 January depreci 2010 2009 , 31, ation 2010 Factory Land 23.75 1.69 - 25.44 - - - - 25.44 23.75 Agricultural Land 0.61 - - 0.61 - - - - 0.61 0.61 Warehouse Land 0.81 - - 0.81 - - - - 0.81 0.81 Factory Building 6.39 - - 6.39 3.87 0.13 - 3.99 2.40 2.52 Warehouse 8.75 0.72 - 9.47 0.24 0.11 - 0.35 9.12 8.51 Other 128.9 121.1 Building 2 0.22 - 129.13 7.74 1.23 - 8.97 120.16 8 Staff Quarters 4.74 - - 4.74 0.13 0.05 - 0.18 4.57 4.62 Plant & 572.9 140.8 432.0 Machinery 1 2.80 - 575.71 7 17.79 - 158.66 417.06 5 Office Equipment 2.68 0.14 - 2.82 0.81 0.08 - 0.89 1.93 1.87 Furniture and fixtures 1.54 - - 1.54 0.52 0.06 - 0.57 0.97 1.03 Vehicles 19.11 2.42 1.24 20.30 8.26 1.14 0.19 9.21 11.08 10.85 Tractor/Lorry/ Trucks 12.22 - - 12.22 2.41 0.79 - 3.20 9.02 9.80 Computer 4.47 0.03 - 4.51 2.61 0.47 - 3.08 1.43 1.86 Software Development 0.43 - - 0.43 0.04 - - 0.04 0.39 0.39 Seed Grading Plant - 2.32 - 2.32 - 0.06 - 0.06 2.26 - Wind Energy 122.8 100.5 Power Project 0 - - 122.80 22.29 3.78 - 26.07 96.74 1 Total 910.1 189.7 720.3 3 10.33 1.24 919.23 8 25.67 0.19 215.26 703.97 6 Less: Transfer From Revaluation Reserve 11.75 Total 13.92

(Rs. in Millions) Gross Block Depreciation Net Block Description of Assets As at Additions As at Up to For the Up to As at As at July 1, during June 30, July 1, Year Ended June 30, June 30, June 30, 2008 the year 2009 2008 June 30, 2009 2009 2008 2009 Factory Land 21.67 0.10 21.77 - - - 21.77 21.67 Factory land Satna - 1.98 1.98 - - - 1.98 - Agricultural Land - 0.61 0.61 - - - 0.61 - Warehouse Land 0.81 - 0.81 - - - 0.81 0.81 200

Gross Block Depreciation Net Block Description of Assets As at Additions As at Up to For the Up to As at As at July 1, during June 30, July 1, Year Ended June 30, June 30, June 30, 2008 the year 2009 2008 June 30, 2009 2009 2008 2009 Factory Building 6.39 - 6.39 3.65 0.21 3.87 2.52 2.74 Warehouse 8.63 0.12 8.75 0.10 0.14 0.24 8.51 8.53 Other Building 124.91 4.01 128.92 5.67 2.07 7.74 121.18 119.24 Staff Quarters 4.54 0.20 4.74 0.05 0.08 0.13 4.62 4.49 Plant & Machinery 545.41 27.51 572.91 111.50 29.37 140.86 432.05 433.91 Office Equipment 2.38 0.30 2.68 0.68 0.13 0.81 1.87 1.70 Furniture and fixtures 1.12 0.42 1.54 0.44 0.08 0.52 1.03 0.68 Vehicles 14.73 4.38 19.11 6.66 1.61 8.26 10.85 8.07 Tractor/Lorry/Trucks 9.23 2.98 12.22 1.23 1.18 2.41 9.80 8.00 Computer 3.57 0.90 4.47 1.92 0.69 2.61 1.86 1.65 Software Development - 0.43 0.43 - 0.04 0.04 0.39 - Wind Energy Power Project 122.80 - 122.80 14.27 8.01 22.29 100.51 108.53

Total 866.18 43.95 910.13 146.17 43.61 189.77 720.36 720.01 Less: Transfer From Revaluation Reserve (1st Revaluation) 1.71 Less: Transfer From Revaluation Reserve (2nd Revaluation) 18.34 Depreciation Debited To Profit & Loss A/C 23.56

(Rs. in Millions) Gross Block Depreciation Net Block Description of As at July Additions As at Up to For the Up to As at As at Assets 1, 2007 during the June 30, July 1, Year June June 30, June 30, year 2008 2007 Ended 30, 2008 2007 June 30, 2008 2008 Factory Land 17.30 4.37 21.67 - - - 21.67 17.30 Factory land Satna ------Agricultural Land ------Warehouse Land - 0.81 0.81 - - - 0.81 - Factory Building 6.39 - 6.39 3.44 0.21 3.65 2.74 2.95 Warehouse - 8.63 8.63 - 0.10 0.10 8.53 - Other Building 124.39 0.52 124.91 3.63 2.03 5.67 119.24 120.76 Staff Quarters - 4.54 4.54 - 0.05 0.05 4.49 - Plant & Machinery 536.13 9.28 545.41 82.96 28.53 111.50 433.90 453.16 Office Equipment 1.82 0.56 2.38 0.59 0.10 0.68 1.70 1.23 Furniture and fixtures 1.07 0.06 1.12 0.37 0.07 0.44 0.68 0.70 Vehicles 11.94 2.80 14.73 5.48 1.18 6.66 8.07 6.46 Tractor/Lorry/ Trucks 5.58 3.65 9.23 0.31 0.92 1.23 8.00 5.27 Computer 2.51 1.06 3.57 1.44 0.48 1.92 1.65 1.08 Software Development ------Wind Energy Power Project 122.80 - 122.80 7.84 6.43 14.27 108.53 114.96

201

Gross Block Depreciation Net Block Description of As at July Additions As at Up to For the Up to As at As at Assets 1, 2007 during the June 30, July 1, Year June June 30, June 30, year 2008 2007 Ended 30, 2008 2007 June 30, 2008 2008 Total 829.92 36.27 866.18 106.06 40.12 146.17 720.02 723.86 Less: Depreciation On Ist Revaluation 1.71 Less: Depreciation On Ist Revaluation 18.34 Depreciation Debited To Profit & Loss A/C 20.07

(Rs. in Millions) Description Gross Block Depreciation Net Block of Assets As at Revalu Addit Sold As at Up For the Adjust Up To As at As at July ation ion durin June To period ment June June June 1, (As on durin g the 30, July ending in 30, 30, 30, 2006 June g the year 2007 1, June deprec 2007 2007 2006 30, year 2006 30, iation 2007) 2007 Factory Land 3.59 13.71 - - 17.30 - - - - 17.30 3.59 Factory land Satna ------Agricultural Land ------Warehouse Land ------Factory Building 6.39 - - - 6.39 3.23 0.21 - 3.44 2.95 3.16 Warehouse ------Other Building 31.75 90.82 1.82 - 124.39 3.09 0.55 - 3.63 120.76 28.66 Staff Quarters ------Plant & Machinery 202.66 319.26 14.21 - 536.13 71.85 11.12 - 82.96 453.17 130.80 Office Equipment 1.51 - 0.31 - 1.82 0.50 0.08 - 0.59 1.23 1.00 Furniture and fixtures 1.04 - 0.03 - 1.07 0.30 0.07 - 0.37 0.70 0.74 Vehicles 10.21 - 2.10 0.38 11.94 4.44 1.20 0.16 5.48 6.46 5.78 Tractor/Lorry / Trucks - - 5.58 - 5.58 - 0.31 - 0.31 5.27 - Computer 1.86 - 0.66 - 2.51 1.07 0.37 - 1.44 1.08 0.78 Software Development ------Wind Energy Power Project 122.80 - - - 122.80 1.52 6.33 - 7.84 114.96 121.29

Total 381.79 423.79 24.72 0.38 829.92 85.99 20.22 0.16 106.05 723.87 295.80

202

(Rs. in Millions) Gross Block Depreciation Net Block Particular of assets As at July Additions As at Up to For the Up to As at As at 1, 2005 during the June 30, July 1, Year June 30, June 30, June 30, year 2006 2005 Ended 2006 2006 2005 June 30, 2006 Factory Land 0.81 2.78 3.59 - - - 3.59 0.81 Factory land Satna ------Agricultural Land ------Warehouse Land ------Factory Building 6.39 - 6.39 3.01 0.21 3.23 3.16 3.38 Warehouse ------Other Building 17.15 14.60 31.75 2.79 0.30 3.09 28.66 14.35 Staff Quarters ------Plant & Machinery 134.73 67.92 202.66 64.35 7.50 71.85 130.81 70.39 Office Equipment 1.18 0.33 1.51 0.44 0.06 0.50 1.00 0.73 Furniture and fixtures 0.30 0.74 1.04 0.25 0.05 0.30 0.74 0.05 Vehicles 8.66 1.55 10.21 3.43 1.01 4.44 5.78 5.23 Tractor/Lorry/Trucks ------Computer 1.19 0.67 1.86 0.84 0.24 1.07 0.78 0.36 Software Development ------Wind Energy Power Project - 122.80 122.80 - 1.52 1.52 121.29 -

Total 170.40 211.39 381.79 75.11 10.88 85.98 295.81 95.30 Less: Transfer From Revaluation Reserve 1.57 Depreciation Debited To Profit & Loss A/C 9.31

(Rs. in Millions) Description of Gross Block Depreciation Net Block Assets As at Addition Sold As at Up For Adjustment Up To As at As at July during during June To the in June June June 1, the year the 30, July period depreciation 30, 30, 30, 2004 year 2005 1, ending 2005 2005 2004 2004 June 30, 2005 Factory Land 0.81 - - 0.81 - - - - 0.81 0.81 Factory land Satna ------Agricultural Land ------Warehouse Land ------Factory Building 6.39 - - 6.39 2.80 0.21 - 3.01 3.38 3.59 Warehouse ------Other Building 16.19 0.96 - 17.15 2.53 0.26 - 2.79 14.35 13.66 Staff Quarters ------Plant & Machinery 125.40 9.34 - 134.73 57.51 6.83 - 64.34 70.39 67.89 Office Equipment 1.09 0.08 - 1.18 0.39 0.06 - 0.44 0.73 0.70 Furniture and fixtures 0.30 - - 0.30 0.23 0.02 - 0.25 0.05 0.07 Vehicles 6.24 3.01 0.59 8.66 3.01 0.64 0.22 3.43 5.23 3.24

203

Tractor/Lorry/Trucks ------Computer 1.03 0.16 - 1.19 0.65 0.18 - 0.84 0.36 0.38 Software Development ------Wind Energy Power Project ------

Total 157.44 13.54 0.59 170.40 67.12 8.21 0.22 75.10 95.30 90.33 Less: Transfer From Revaluation Reserve 1.71 Depreciation Debited To Profit & Loss A/C 6.50

B. STATEMENT OF CAPITAL WIP

(Rs. in Millions) Particulars As on As on As on June As on As on As on January June 30, 30, 2008 June 30, June 30, June 30, 31, 2010 2009 2007 2006 2005 Solvent Extraction Plant At Satna MP Under Implementation Capital And Other Advances - 14.06 14.56 - - - Civil Works Under Progress 30.78 - - - - - Land And Site Development Under Progress - 0.78 - - - - Mis. Fixed Assets Under Installation 1.81 16.38 - - - - Plant And Machinery Under Installation 169.90 36.74 - - - - Pre Operative Expenses - 5.44 - - - - Trial Run Expenses (Net of trial run proceeds) 13.62 - - - - - Total Satna Plant (a) 216.10 73.40 14.56 - - -

Warehouse Under Construction Warehouse Under Construction 12.51 10.22 - - - - Grading Plant And Boiler Under Installation 2.32 - - - - Total Warehouse (b) 12.51 12.54 - - - -

Total Capital WIP 228.61 85.94 14.56 - - -

204

ANNEXURE - X STATEMENTS OF INVESTMENTS, AS RESTATED

(Rs. in Millions) Particulars As on As on As on June As on June As on June As on June January 31, June 30, 30, 2008 30, 2007 30, 2006 30, 2005 2010 2009 Quoted Investments Units In SBI Mutual Fund - - 2.50 2.50 0.50 -

Unquoted Investments Fully Paid Equity Shares Greater Bombay Coop Bank 0.50 0.50 0.50 0.50 0.50 0.05 Khushali Developers (P) Ltd 17.50 17.50 - - - - Purvanchal Sez & Textile Park Ltd - 0.10 0.10 - - -

Share Application Money Khushali Developers (P) Ltd - - 17.50 - - - Longmangal Hospital (P) Ltd - - 1.00 - - - Purvanchal Sez & Textile Park Ltd - - - 0.10 - -

Total Investments 18.00 18.10 21.60 3.10 1.00 0.05

Quoted investments

(Rs. in millions) For the year January June 30, June 30, June 30, June 30, June 30,

ended 31, 2010 2009 2008 2007 2006 2005 SBI Blue Chip Book Value NIL NIL 0.50 0.50 0.50 NIL Fund Market value - - 0.45 0.61 0.48 - SBI Book Value NIL NIL 2.00 2.00 NIL NIL Infrastructure Fund Series I Market value - - 1.72 2.00 - -

205

ANNEXURE - XI STATEMENT OF SUNDRY DEBTORS, AS RESTATED

(Rs. in Millions) Particulars As on As on As on June As on June As on June As on January June 30, 30, 2008 30, 2007 30, 2006 June 30, 31, 2010 2009 2005 Debts outstanding for the period exceeding than 6 months Considered good 2.39 24.67 2.82 - 0.04 0.04 Other debts - considered good 171.07 85.18 102.81 136.59 16.37 11.64 Receivables from related parties 319.98 320.76 281.22 - 74.17 107.78

Total 493.44 430.60 386.85 136.59 90.59 119.46

Details of receivables from related parties as included in above annexure:

(Rs. in Millions) Name of the Entity As on As on As on June As on June As on June As on January June 30, 30, 2008 30, 2007 30, 2006 June 30, 31, 2010 2009 2005 Vision Milliniem Exports P Ltd 319.98 313.62 281.22 - 69.15 107.58 Aventis Bio Feeds P Ltd - 7.14 - - 0.28 0.20 Kasturchand Harak Chand Daga - - - - 4.75 -

Total 319.98 320.76 281.22 - 74.17 107.78

Except as provided above, there are no other sundry debtors who are related to the directors, promoters, group companies or the company for the aforementioned years.

206

ANNEXURE – XI STATEMENT OF LOAN AND ADVANCES, AS RESTATED

(Rs. in Millions) Particulars As on As on June As on June As on June As on June As on June January 30, 2009 30, 2008 30, 2007 30, 2006 30, 2005 31, 2010 Unsecured, considered good Advances recoverable in cash or in kind or for value to be received Advance For Raw Material And Stores 76.31 18.69 65.49 52.03 65.46 25.67 Prepaid Expenses 2.08 0.88 0.51 1.11 1.13 0.84 Security Deposits 9.94 7.58 19.23 18.28 16.98 15.39 Advance Payment Of Income Tax And TDS 4.91 5.75 4.93 5.23 1.91 1.35 VAT Receivable 3.71 0.06 4.66 3.15 - - MAT Credit Entitlement - - 4.69 - - - Other Claims & recoverable 14.85 17.23 4.97 38.55 5.32 1.19 DEPB Claim And Other Export Benefits - - 46.48 - - - Advances to related parties 3.45 2.70 - - 0.99 1.08 Total 115.26 52.88 150.96 118.35 91.80 45.51

Details of amounts given to related parties as included in above annexure:

(Rs. in Millions) Name of Entity As on As on June As on June As on June As on June As on June January 30, 2009 30, 2008 30, 2007 30, 2006 30, 2005 31, 2010 Aventis Bio Feeds (P) Ltd ------Betul Minerals And - - Construction (P) Ltd - 2.70 - 0.05 Kasturchand Harak Chand - - Daga - - - - Bio Bliss Coop Society 3.45 - - - 0.26 0.13 Satpura Valley Public School - - - - 0.68 0.85 Niraj Daga - - - - 0.05 0.02 Shreans Daga - - - - - 0.02

Total 3.45 2.70 - - 0.99 1.08

Except as provided above, there are no loans and advances due from directors, promoters, group companies or the company for the aforementioned years

207

ANNEXURE - XII STATEMENT OF CURRENT LIABILITIES AND PROVISIONS, AS RESTATED

(Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 A. Current Liabilities: Sundry Creditors For Raw Materials, Goods, Services & Others 24.57 55.78 19.21 21.11 80.77 56.02 Liability for wind energy from Suzlon - - - 15.00 - - Sundry Creditor for Capital – Satna 34.45 - - - - - Capital Expenditure Payable - - - - 93.00 - Advance from customers 48.29 13.26 6.39 5.15 189.95 1.98 Loan Instalment Due 0.79 0.65 - 0.65 - - VAT Payable 5.26 7.72 0.09 0.57 1.11 - Term Loan Interest Due 0.33 0.85 - 0.53 - - Statutory Liabilities 6.49 11.41 17.28 1.71 0.46 0.18 Total (A) 120.19 89.67 42.98 44.71 365.29 58.17

B. Provisions: Provision for Income Tax 43.80 5.06 8.07 4.94 2.82 0.71 Provision for F.B.T. 0.26 0.79 0.25 0.60 0.19 0.06 Provision for Wealth Tax 0.05 0.05 0.05 - - - Provision for retirement benefits (Actuarial valuation) 1.77 1.02 1.33 1.28 2.26 2.33 Total (B) 45.88 6.92 9.70 6.81 5.27 3.10

Total (A+B) 166.06 96.60 52.68 51.52 370.56 61.27

208

ANNEXURE - XIII STATEMENTS OF SALES AND OTHER INCOME, AS RESTATED

A. STATEMENT OF SALES

(Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 Vegetable crude and Refined oils 499.70 991.83 1,643.26 1,507.40 731.36 525.15 Oil Cakes and DOC 3,329.47 4,172.15 2,943.85 2,434.31 1,747.07 1,040.75 Lecithin, sludge, soap stock 14.73 22.48 17.19 20.47 3.75 0.29 Others 106.61 198.93 220.73 78.14 - -

Total 3,950.50 5,385.39 4,825.03 4,040.32 2,482.17 1,566.18

B. STATEMENT OF OTHER INCOME

(Rs. in Millions) Particulars As on As on As on As on As on As on Nature of Related January June 30, June 30, June 30, June 30, June 30, Income or Not 31, 2010 2009 2008 2007 2006 2005 Recurring/ Related Non to Recurring business activity Interest On Fixed Deposits and Security Deposit 0.97 5.86 1.74 0.61 0.29 0.13 Recurring Related Non Not Dividends 0.08 0.08 0.16 - 0.01 0.01 recurring Related Non Excise duty Refund - 0.08 - - - - recurring Related Non Commission - - 0.06 - - - recurring Related Insurance Claim Non Received 3.60 0.17 6.52 0.15 0.36 0.35 recurring Related Profit on sale of Units in Mutual Non Not Funds - - - 0.09 - - recurring Related Profit on Sale of Non Not Vehicle - - - - - 0.09 recurring Related Miscellaneous Non Not Income 0.56 0.14 - 0.36 - - recurring Related Weigh Bridge Income 0.13 0.27 0.17 0.24 0.10 0.12 Recurring Related Lease Rent - Not Building 0.02 0.07 0.12 0.12 0.11 - Recurring Related Warehouse Rent Received account 0.09 - - - - - Recurring Related Windmill Generation Shortfall Non Not claim Refund - 2.39 - - - - recurring Related Non Not Income tax Refund - - - - - 0.18 recurring Related Interest on Income Non Not Tax Refund - - - - - 0.01 recurring Related Non Not Balance written off - 0.07 - - - - recurring Related Input Inventory - - - 0.48 0.24 - Non Related 209

Particulars As on As on As on As on As on As on Nature of Related January June 30, June 30, June 30, June 30, June 30, Income or Not 31, 2010 2009 2008 2007 2006 2005 Recurring/ Related Non to Recurring business activity Refund a/c recurring

Total 5.44 9.12 8.77 2.04 1.11 0.88

C. ACCRETION/ DECRETION OF STOCKS

(Rs. in Millions) Particulars As on As on As on As on As on As on January June 30, June 30, June 30, June 30, June 30, 31, 2010 2009 2008 2007 2006 2005 Accretion/ Decretion of Stocks

Vegetable Crude And Refined Oils Closing Stock 100.57 66.79 146.09 71.48 59.52 19.03 Less Opening Stock 66.79 146.09 71.48 59.52 19.03 6.90 Accretion/decretion 33.77 (79.30) 74.61 11.96 40.49 12.13

Oil Cakes And Doc Closing Stock 463.59 560.20 397.49 336.02 268.62 104.40 Less Opening Stock 560.20 397.49 336.02 268.62 104.40 102.59 Accretion/ Decretion (96.62) 162.71 61.47 67.40 164.21 1.81

Lecithin, Sludge and Soap Stock, Closing Stock 0.67 0.52 - 1.67 0.20 0.13 Less Opening Stock 0.52 - 1.67 0.20 0.13 0.07 Accretion/ Decretion 0.15 0.52 (1.67) 1.47 0.06 0.07

Other Products Closing Stock 4.87 3.03 2.79 0.64 - - Less Opening Stock 3.03 2.79 0.64 - - - Accretion/ Decretion 1.84 0.24 2.15 0.64 - -

Total (60.85) 84.17 136.56 81.47 204.76 14.01

210

ANNEXURE - XIV STATEMENT OF EXPENDITURE, AS RESTATED

(Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 Material Consumption Consumption of Raw Materials: Oil Seeds 1,372.11 2,363.37 3,130.85 2,255.38 1,307.15 1,002.89 Vegetable Crude Oil for processing 29.51 13.08 206.59 127.13 64.73 7.80 Hybrid Seeds - - 1.76 - - - Agro chemicals and packing materials - - 0.47 - - - Cattle Feed Ingredients 75.85 115.62 109.15 25.29 - - Other ingredients 5.26 5.22 9.33 3.35 5.02 3.72 Total 1,482.72 2,497.29 3,458.16 2,411.15 1,376.90 1,014.40

Purchase of Trading Goods Soya Seed (NCDEX) - 11.31 - - - Vegetable Crude and Refined Oils 63.06 60.31 70.90 169.46 13.12 10.45 Oil Cakes and DOC 1,840.58 2,137.35 326.73 1,032.80 969.29 366.40 Mahua Seed - - 0.64 - - - Others 10.63 61.77 67.09 37.28 - - Total 1,914.26 2,259.43 476.68 1,239.54 982.41 376.85

Manufacturing Expenses Consumption of coal, husk, Wood & Baggesse 14.01 33.22 45.99 40.53 21.45 13.77 Consumption of Hexane 14.54 20.85 33.31 30.09 28.49 13.95 Consumption of Refinery and other Chemicals 6.29 7.76 12.36 11.26 3.84 3.94 Consumption of DRB & Poha Husk - 1.47 0.48 5.36 4.24 - Consumption of packing materials - Gunny, PP Bags 6.73 18.00 38.85 24.57 13.02 11.56 Consumption of packing materials - Tins, jars etc 8.12 16.69 18.33 20.69 16.66 11.86 Power 23.77 36.96 53.92 53.44 41.65 22.62 Repairs to Machinery 14.34 23.75 40.68 27.21 18.73 12.04 Processing Charges - - 3.82 0.39 - - Weigh Bridge Maintanance - - 0.24 - - - Entry Tax/ Purchase Tax 6.20 8.23 9.15 1.81 11.35 0.12 Contract/Processing Charges - 1.62 - - - - Administration charges for wind energy project 2.04 0.01 0.01 0.01 0.02 - Total 96.04 168.55 257.13 215.35 159.44 89.85

Employees Remuneration And Benefits Salary, Wages & Bonus 8.89 14.58 11.60 8.23 7.44 5.65 Gratuity Paid & Premium for Gratuity 0.01 0.48 0.97 1.39 0.49 0.28 Workmen & Staff Welfare Expenses & Allowances 3.15 6.53 3.71 3.82 2.55 0.80 Contribution to Provident Fund 0.53 0.80 0.65 0.41 0.45 0.34 Withdrawal of retirement 0.75 (0.31) 0.06 (0.99) (0.07) 2.33

211

Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 provision as per actuarial Managerial Remuneration: Salary 0.35 0.36 0.36 0.36 0.36 0.24 Leave Travel Concession - - 0.06 0.63 0.25 0.14 Premium for Employer Employee Insurance - - 100.00 - - - Total 13.69 22.44 117.40 13.85 11.48 9.78

Administration Expenses Office And General Expenses 0.42 2.87 1.78 1.49 0.57 0.15 Travelling Expenses Including Directors 2.68 2.01 3.08 1.63 1.36 3.33 Electricity Exps. - - 0.00 0.00 - - Vehicle Maintenance 0.86 1.41 1.22 1.47 0.99 0.50 Printing & Stationery 0.43 0.60 0.90 0.72 0.53 0.30 Membership & Subscription Fees 0.16 0.13 - - - - Computer Exps 0.23 0.22 0.14 0.19 0.19 0.27 License, Legal And Professional Fees 2.08 3.28 2.94 2.01 3.50 0.78 Rates & Taxes 1.44 0.40 4.04 2.78 0.09 0.01 Interest on Service Tax - - 0.02 - - - Postage And Telephone 1.35 2.55 2.52 2.18 2.05 1.18 Insurance 1.49 1.91 4.02 1.48 2.36 0.87 Advertisement 0.21 0.28 0.18 0.15 0.07 0.40 Charity & Donation 0.11 0.11 0.25 0.08 0.21 0.18 DEFC Licenses Claim W/Off - 0.09 33.63 - - - Repairs to Building 1.62 2.09 2.44 5.47 3.01 2.53 Guset House Rent & Maintenance - - 4.50 - - - Weigh Bridge Maintenance - 0.14 - 0.10 0.04 - Hire Charges - - - - 0.01 - Transport Expenses 8.01 13.51 8.06 - - - Live Stock Expenses 0.05 0.04 0.09 - - - Lease Rent (Vehicle & Office) 1.82 1.88 0.72 0.10 0.11 0.00 Godown Rent Exps - - - - 0.02 - Loss on sale of Fixed Assets 0.54 - - 0.08 - - Fire Loss of Gunny Bags - - - 1.71 - - Railway Indent forfiet - - - 0.02 - - Internal Audit Fees 0.04 0.04 0.04 - - - Remuneration to Auditors: Statutory Audit Fees 0.22 0.25 0.24 0.21 0.10 0.06 Tax Audit Fees - 0.06 0.06 - - - Expenses Reimbursed 0.06 0.06 0.09 0.06 0.03 0.05 Total 23.82 33.91 70.94 21.92 15.25 10.61

Selling And Distribution Expenses Selling & Distribution Expenses 94.69 149.16 2,45.59 69.63 93.35 43.34 Godown Expenses - 0.01 0.08 - - - Sales Tax - - 0.05 - - - Sales Promotion Expenses - 0.20 0.37 - - - Trade Discount on sale of seeds - 0.01 0.14 - - - Pre Launch Expenses Seed Division Written Off ------Bad Debts Written Off - 68.42 32.98 - - - 212

Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 Total 94.69 217.80 279.21 69.63 93.35 43.34

Interest & Financial Charges Interest to Banks on Term Loans 6.89 13.40 23.96 10.75 6.20 - Interest to Banks on Working Capital Borrowings 43.49 73.21 65.64 38.24 19.53 12.05 Interest/Finance charges against Vehicle finance 0.19 0.86 0.79 - - - Interest Others - 1.74 0.72 - - - Bank Commission and Charges 21.53 13.67 14.44 11.18 5.59 2.96 Difference on exchange difference -Forward cover-FCNRB DL - 3.93 13.40 (7.60) 1.26 (1.32) Total 72.10 106.80 118.94 52.57 32.57 13.68

Managerial Remuneration Paras Daga 0.07 0.12 0.12 0.12 0.12 0.08 Neeraj Daga 0.14 0.12 0.12 0.12 0.12 0.08 Shreans Daga 0.14 0.12 0.12 0.12 0.12 0.08 Leave Travel Concession - - 0.06 0.63 0.25 0.14 Total 0.35 0.36 0.42 0.99 0.61 0.38

Payment To Auditors As Auditors(Including service tax) 0.22 0.25 0.24 0.21 0.10 0.06 As Advisor or in any other capacity in respect of: a) Company law matter a) Taxation Matter - 0.06 0.06 0.06 0.03 0.05 b) Others - 0.06 - - - - Expenses Reimbursed 0.06 - 0.09 - - - Total 0.28 0.38 0.39 0.27 0.13 0.11

213

ANNEXURE - XV STATEMENT OF DIVIDEND PAID/PROPOSED, AS RESTATED

(Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 Equity Share Capital 67 67 67 62 62 62 No. of Equity Shares of Rs. 10 each 6700000 6700000 6700000 6200000 6200000 62000 Rate of Dividend NIL NIL NIL NIL NIL NIL Amount of Dividend NIL NIL NIL NIL NIL NIL Tax on Dividend NIL NIL NIL NIL NIL NIL Note: As on June 30, 2005 face value of share is Rs.1000/share

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ANNEXURE - XVI STATEMENT OF QUANTITATIVE DETAILS OF FINISHED GOODS, AS RESTATED

(MT) Particulars As on As on June As on June As on June As on June As on June January 31, 30, 2009 30, 2008 30, 2007 30, 2006 30, 2005 2010 Soya Bean Crude Oil Opening Stock 562.38 659.53 375.81 690.77 142.88 77.27 Production 13,174.57 17,393.84 27,079.80 27,170.18 18,996.48 12,922.85 Purchases 1,313.26 304.20 4,144.25 3,612.52 2,253.20 222.21 Issued for Refinery Process 11,147.98 15,691.51 30,185.11 30,186.73 15,571.05 13,079.45 Sales 3,014.86 2,103.69 755.23 910.94 5,130.73 - Closing Stock 887.37 562.38 659.53 375.81 690.77 142.88

Soya Bean Refined Oil Opening Stock 291.92 701.78 295.36 788.69 402.74 88.74 Production 10,902.44 14,478.57 28,245.23 28,351.03 14,228.83 12,346.78 Purchases 31.96 435.60 1,019.05 1,094.82 - - Sales 10,724.01 15,324.03 28,857.87 29,939.18 13,842.88 12,032.78 Closing Stock 502.31 291.92 701.78 295.36 788.69 402.74

Soya DOC Opening Stock 22,280.38 18,259.60 28,558.98 27,592.33 10,857.15 9,203.45 Production with other ingredients 73,891.55 100,483.86 197,579.77 144,110.11 98,523.53 68,281.97 Purchases 93,325.13 115,701.89 25,733.90 81,557.20 38,282.37 36,294.67 Sales 161,798.59 212,164.96 233,613.04 224,700.67 120,070.71 102,922.94 Closing Stock 27,698.47 22,280.38 18,259.60 28,558.98 27,592.33 10,857.15

Degummed Crude Oil Opening Stock - - 413.96 - - - Purchases 750.00 - - 1,328.10 - 249.37 Issued for Processing 607.75 - 413.96 522.75 - 98.97 Sales 142.25 - - 391.39 - 150.40 Closing Stock - - - 413.96 - -

Mahua Crude Oil Opening Stock ------Production - 211.91 - - - 375.94 Purchases ------Issued for Processing ------Sales - 211.91 - - - 375.94 Closing Stock ------

Sun Flower Crude Oil Opening Stock 68.98 171.15 163.50 54.58 - - Production - 539.63 216.52 442.76 54.58 - Purchases - - 50.07 - - - Issued for Processing - - 213.57 333.85 - - Sales - 641.80 45.38 - - - Closing Stock 68.98 68.98 171.15 163.50 54.58 -

Sun Flower DOC Opening Stock 180.76 326.19 75.43 480.14 - - Production - 1,106.04 326.18 720.64 480.14 - Purchases - 321.84 - - - - Sales 174.13 1,573.31 75.42 1,125.35 - - 215

Particulars As on As on June As on June As on June As on June As on June January 31, 30, 2009 30, 2008 30, 2007 30, 2006 30, 2005 2010 Closing Stock 6.63 180.76 326.19 75.43 480.14 -

Cotton Wash Oil Opening Stock ------Production - - - 472.78 - - Purchases - 81.72 - - - - Issued for Processing - 81.72 - 472.78 - - Sales ------Closing Stock ------

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ANNEXURE – XVII STATEMENT OF CIF VALUE OF IMPORTS, EXPENDITURE IN FOREIGN CURRENCY AND EARNING IN FOREIGN CURRENCY, AS RESTATED

(Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 CIF Value Of Imports Trading Goods 0.00 39.51 0.00 0.00 0.00 0.00 Capital Goods 7.85 8.15 0.00 0.00 0.00 0.00 Total 7.85 47.66 0.00 0.00 0.00 0.00

Expenditure In Foreign Currency Travelling Expenses 0.00 0.09 0.00 0.00 0.00 0.00 Total 0.00 0.09 0.00 0.00 0.00 0.00

Earnings In Foreign Currency FOB Value of Exports 0.00 0.00 15.71 72.68 40.94 99.08 Total 0.00 0.00 15.71 72.68 40.94 99.08

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ANNEXURE -XVIII STATEMENT OF ACCOUNTING RATIOS, AS RESTATED

(Rs. in Millions, except per share data) Particulars As on As on As on June As on As on As on January June 30, 30, 2008 June 30, June 30, June 30, 31, 2010 2009 2007 2006 2005 Weighted average number of equity shares of Rs. 10/- each (As on 30-6- Rs.10/ Rs.10/ Rs.10/ Rs.10/ Rs.10/ Rs.1000/ 2005 the face value is Rs.1000) share share share share share share i) Number of shares at the beginning of the year 6,700,000 6,700,000 6,200,000 6,200,000 6,200,000 62,000 ii) Number of shares at the end of the year 6,700,000 6,700,000 6,700,000 6,200,000 6,200,000 62,000 iii) Weighted average number of outstanding equity shares (Additional shares Rs.50 lacs issued on 10-12-2007) 6,700,000 6,700,000 6,450,000 6,200,000 6,200,000 62,000 iv) Weighted average number of outstanding equity shares (diluted) 6,700,000 6,700,000 6,450,000 6,200,000 6,200,000 62,000 v) Net Worth 806.24 669.49 473.73 278.69 178.82 122.98

Net Profit after tax available for equity shareholders excluding extraordinary items 136.76 162.26 193.72 96.59 5.42 12.13

1. Basic and diluted earning per share (EPS) (Rs) 20.41 24.22 30.03 15.58 0.87 195.71 2. Return on net worth (%) 16.96 24.24 40.89 34.66 3.03 9.87 3. Net asset value per share (Rs) 120.33 99.92 70.71 44.95 28.84 1,983.50

Net Profit after tax available for equity shareholders including extraordinary items 136.76 195.76 193.72 101.19 5.84 41.30

1. Basic and diluted earning per share (EPS) (Rs) 20.41 29.22 30.03 16.32 0.94 666.13 2. Return on net worth (%) 16.96 29.24 40.89 36.31 3.27 33.58 3. Net asset value per share (Rs) 120.33 99.92 70.71 44.95 28.84 1,983.50

Earning per share = Net Profit attributable to equity (Basic and Diluted) Weighted average number of equity shares during the year

Return on net worth (%) = Net Profit After Tax Net Worth at the end of the year

Net asset value = Net Worth at the end of the year Equity shares outstanding during the year

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ANNEXURE - XIX STATEMENT OF RECONCILIATION OF NET PROFIT, AS RESTATED

(Rs. in Millions) Particulars As on As on As on June As on June As on June As on June January June 30, 30, 2008 30, 2007 30, 2006 30, 2005 31, 2010 2009 Net Profit after tax as per audited financials 136.63 198.49 191.30 113.66 45.27 33.68 Before changes Restatement adjustments Less : Provision for Retirement benefits as per Actuarial Valuation - (0.31) 0.06 (0.99) (0.07) 2.33 Less: Change in Previous Year Tax - (0.03) 0.71 (0.53) 0.47 (0.26) Less :: Changes in FBT - - 0.14 0.10 0.01 Less :: Changes in Deferred Tax - - 14.37 6.55 0.29 Less :: Entry Tax/VAT effect (0.13) 3.07 (3.19) Adj due to change in accounting period - - - (0.53) 32.39 (9.99) Net Profit after tax as restated 136.76 195.76 193.72 101.19 5.84 41.30

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ANNEXURE - XX CAPITALISATION STATEMENT AS ON 31st JANUARY, 2009, AS RESTATED

(Rs. in Millions) Particulars As on January 31, 2010 Post Issue

Short term Debt 1,031.09 [•] Long term Debt 92.22 [•] Total Debts 1,123.31 [•]

Shareholder's fund i) Equity Share Capital 67.00 [•] ii) Reserves and Surplus 1,134.27 [•] Less: Revaluation Reserves 392.69 [•] 806.24 [•] iii) Less: Miscellaneous Expenditure '(To the extent not written off) - [•] iv) Less: Capital Subsidy 2.34 Total shareholder's fund 806.24 [•]

Long-term debt/equity ratio 0.11 [•] Total debt to equity ratio 1.39 [•]

1. Short term debts represent debts which are due within twelve months from as on date of balance sheet 2. Long term debts represent debts other than short term debts, as defined above. 3. The figures disclosed above are based on the Restated Unconsolidated Summary Statement of Assets and Liabilities of the Company as at March 31, 2009. 4. Long Term debt to Equity = Long Term Debts / Shareholders’ Funds 5. Total debt to equity ratio = Total Debt / Shareholders’ Funds

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ANNEXURE - XXI COMMITMENTS AND CONTINGENT LIABILITIES, AS RESTATED

(Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 Capital Commitments - 76.51 13.24 - - - Letter Of Credit Outstanding - 2.40 18.07 48.18 2.45 - Bank Guarantees 31.85 31.60 21.60 10.00 - - Income Tax Appeal 0.27 0.27 - 3.03 - - Sales Tax Appeal 2.23 2.23 2.23 7.74 8.00 8.00 Provident Fund Appeal 0.40 0.40 0.40 0.40 0.40 0.40 Mandi Tax 0.79 0.79 0.79 0.79 0.79 - Entry Tax - - 0.10 - - - Customs duty demand - - - 10.00 10.00 10.00 Forex Derivative Transactions 132.99 132.99 - - - - Corporate Guarantee given to IDBI Bank in respect of short term loan (loan against crop receivables) 200.00 - - - - -

Total 368.52 247.18 56.41 80.13 21.63 18.40

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ANNEXURE - XXII STATEMENT OF SEGMENT INFORMATION, AS RESTATED

(Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 I. Segment Revenue

Solvent Extraction, Trading Of Commodities 3,784.96 5,274.36 4,784.62 4,078.12 2,688.91 1,577.51 Others 108.45 199.16 222.88 78.78 - - Wind Energy Generation 4.85 11.86 8.06 21.04 3.39 - Commodity Hedging Transactions 15.24 1.42 (21.67) 2.18 2.75 -

Total Segment Revenue 3,913.50 5,486.80 4,993.88 4,180.13 2,695.05 1,577.51 Add: Other Unallocable Income (including extra ordinary) 1.84 48.56 8.77 6.49 1.17 29.70

Total Income 3,915.34 5,535.36 5,002.66 4,186.62 2,696.22 1,607.20

II. Segment Result Solvent Extraction, Trading Of Commodities 269.03 305.03 530.74 208.79 43.04 26.71 Others 28.37 24.95 16.24 0.44 - - Wind Energy Generation 1.07 3.83 1.62 14.72 1.88 - Commodity Hedging Transactions 15.24 1.42 (21.67) 2.18 2.75 - Extra Ordinary Transactions - 33.50 - 4.60 0.42 29.17

Total Segment Result 313.71 368.72 526.93 230.73 48.08 55.88 Less Interest paid 72.10 106.80 118.94 52.57 32.57 13.68 Less Other un - allocable expenditure net of un allocated income 37.51 56.35 205.17 35.77 - -

Total Profit Before Tax 204.10 205.56 202.83 142.39 15.51 42.20 Less: Provisiom for Tax 43.80 7.61 2.98 5.18 2.20 0.22 Short Provision for Income Tax - 0.37 0.71 - 0.53 (0.18) Provision for Wealth Tax - 0.05 0.05 - - - Fringe Benefit Tax - 0.54 0.41 0.74 0.40 0.06 Deferred Tax Liability 23.55 1.25 4.96 35.29 6.55 0.80

Net Profit After Tax 136.76 195.76 193.72 101.19 5.84 41.30

III. Other Information A. Segment Assets

Solvent Extraction, Trading Of Commodities 2,314.10 1,942.24 1,876.02 1,335.12 739.93 421.48 Others 8.16 4.63 43.12 28.84 - - Wind Energy Generation 99.49 102.51 114.82 114.96 121.29 - Commodity Hedging Transactions 51.67 - 6.70 - 24.70 -

Total Segment Assets 2,473.42 2,049.38 2,040.66 1,478.91 885.92 421.48 Add: Unallocable Corporate Assets 104.63 89.81 66.33 43.82 23.08 0.05 Total Assets 2,578.05 2,139.20 2,106.99 1,522.74 909.00 421.53

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Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 B. Segment Liabilities Solvent Extraction, Trading Of Commodities 1,165.86 805.97 676.39 563.01 635.32 260.44 Others 0.93 0.64 2.22 6.69 - - Wind Energy Generation 45.93 58.65 90.49 48.85 1.00 - Commodity Hedging Transactions 0.27 - - - - -

Total Segment Liabilities 1,212.98 865.26 769.10 618.54 636.32 260.44 Add: Unallocable Corporate Liabilities 76.40 136.17 377.08 123.33 50.77 - Total Liabilities 1,289.38 1,001.42 1,146.18 741.87 687.09 260.44

C. Capital Expenditure Solvent Extraction, Trading Of Commodities 152.28 111.74 38.55 19.13 88.59 13.54 Others ------Wind Energy Generation - - - - 122.80 - Commodity Hedging Transactions ------

Total Segment Capital Expenditure 152.28 111.74 38.55 19.13 211.39 13.54 Add: Unallocable Capital Expenditure 0.72 3.59 12.28 7.68 0.95 - Total Capital Expenditure 153.00 115.33 50.83 26.82 212.34 13.54

D. Depreciation Solvent Extraction, Trading Of Commodities 9.08 14.11 12.50 13.48 7.79 6.50 Others 0.17 0.11 0.11 0.11 - - Wind Energy Generation 3.78 8.01 6.43 6.33 1.52 - Commodity Hedging Transactions ------Un allocated 0.89 1.32 1.02 0.31 - -

Total 13.92 23.56 20.07 20.22 9.31 6.50

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ANNEXURE - XXIII: TAX SHELTER STATEMENT, AS RESTATED

(Rs. in Millions) Particulars As on As on As on June As on As on As on January June 30, 30, 2008 June 30, June 30, June 30, 31, 2010 2009 2007 2006 2005 Net Profit before tax 204.10 25.62 67.72 46.54 28.25 0.76 Tax rate (%) 33 30 30 33 33 35 Tax as per Net Profit before tax (A) 67.35 7.69 20.32 15.36 9.32 0.26

Adjustments: Permanent differences Prior period expenses disallowed - - - - - 0.01 Disallowance for Donation - 0.13 0.25 0.17 0.19 0.10 Loss/ profit on Sale of Fixed Assets - - - - - (0.09)

Total permanent difference (B) - 0.13 0.25 0.17 0.19 0.02

Timing difference Difference between Tax Depreciation & Book depreciation (71.36) (3.79) (14.58) (46.71) (21.54) (0.62) Unpaid Gratuity / Leave Encashment 0.75 0.31 0.63 - - - Disallowances u/s 43 (b) - 0.25 1.24 - 0.05 0.34 Allowances u/s 43(b) disallowed in earlier year - - - - - (0.24) Business Losses / Unabsorbed Allowances Carried Forward / (Adjusted) - - (26.64) - - - Dividend Income 0.08 - (0.16) - - - Others (0.84) 0.16 0.05 - - (0.18)

Total timing difference (C ) (71.38) (3.07) (39.46) (46.71) (21.50) (0.69)

Total adjustments (B+C) (71.38) (2.94) (39.21) (46.54) (21.31) (0.67)

Tax Expense / (Saving) thereon (D) (23.55) (0.88) (11.76) (15.36) (7.03) (0.23) Tax liability after considering the effect of adjustments (A) - (D) 43.80 6.80 8.55 - 2.29 0.03 Less MAT Credit - 2.91 1.78 - - - Regular tax less MAT Credit 43.80 3.89 6.77 - 2.29 0.03 Tax liability under MAT on book profits 4.41 7.67 5.22 2.38 0.15 Interest liability under Section 234 (b) & ( c) under the Income Tax Act, 1961 - 0.29 0.44 0.27 0.25 0.00 Total tax Liability 43.80 4.70 8.11 5.49 2.62 0.15 Taxation on Extraordinary Items - 10.05 - 1.52 9.76 - Tax on profits before Extraordinary Items 43.80 (5.36) 8.11 3.97 (7.14) 0.15

Note: The above statement has been prepared as per the income tax computation filed with Income tax authorities for the year ended June 30, 2005, June 30, 2006, June 30, 2007, June 30, 2008 and June 30, 2009 and the figures for the January 31, 2010 are based on the provisional computation of income tax made by the management of the Company.

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ANNEXURE - XXIV: STATEMENT OF RELATED PARTY TRANSACTIONS

In accordance with the requirements of Accounting Standard 18, “Related Party Disclosures” as notified under the Companies Act, 1956:

List of Related Parties for the period ended January 31, 2010, June 30, 2009, June 30, 2008, June 30, 2007, June 30, 2006 and June 30, 2005

DIRECTORS Shreans Daga Niraj Daga Paras Kumar Daga

RELATIVES OF DIRECTORS Vinod Kumar Daga Varun Daga Nilay Daga Kaushik Daga Sushila Daga Nirmala Daga Garishma Daga Kamla Daga

OTHER CONCERNS Kasturchand Harakchand Daga HUF Promod Kumar Daga HUF Vision Millennium Exports (P) Ltd Aventis Bio Feeds (P) Ltd Bio Bliss Beej Utpadak Swayat Sah. Maryadit Satpuda Valley Public School Betul Minerals And Construciton (P) Ltd Shreyans Credit And Capital (P) Ltd Hi Gene Seed(P) Ltd Betul Feeds (P) Ltd

Summary of Transactions with related parties

(Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 A. Where Control Exists Key Management Personnel Directors

1. Managerial Remuneration To Directors 0.35 0.36 0.42 0.99 0.61 0.12 2. Truck Lease Rent /freight Paid To Directors 0.24 0.25 0.95 - - - 3. Seed Purchase from Directors - 0.11 0.28 0.34 0.27 0.04 4. Shares Allotted to Directors ------5. Sale of Fertilizer to Directors 0.07 - - - - - Total 0.66 0.73 1.64 1.33 0.88 0.16

A. Where Control Exists Key Management Personnel Relatives Of Directors

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1. Salary To Relatives of Directors 0.30 0.36 0.12 - - - 2. Truck Lease Rent/ Freight Paid to Relatives of Directors 0.70 0.94 0.92 - - - 3. Seed Purchase From Relatives of Directors - 0.78 0.47 0.86 0.56 0.47 4. Shares Allotted to Relatives off Directors 5. Sale of Fertilizer to Relatives of Directors 0.17 - - - - - Total 1.17 2.08 1.51 0.86 0.56 0.47

Associate Concerns

A) Vision Millennium Exports (P) Ltd Sale Of Soya Doc 2,491.20 3,179.99 1,246.95 1,285.74 883.29 939.06 Sale Soya Refined Oil 12.30 - - 6.35 - - Purchase Of S.f.doc - 1.93 - - - - Sale Of S.f.doc - - - 5.23 - - Sale Of Sal Oil - - - 69.14 - - Sale Return Of Sal Oil - - 69.14 - - - Purchase Mauha Seed - - 1.73 - - - Unsecured Loan Taken - - - 64.50 - -

B) Aventis Bio Feeds (p) Ltd Sale Of Soya Doc - - - - 15.83 9.58 Purchase Of Soys Doc 1,674.69 1,939.73 31.04 221.24 317.63 261.32 Sale Of Refined Oil - - 33.15 17.27 - - Purchase Soya Crude Oil - - - - 7.67 - Purchase - Others - - - - 3.83 - C) Bio Bliss Beej Utpadak Swayat Sah. Maryadit

Receipt Of Lease Rent 0.01 0.10 0.12 0.12 - - Advances Given - 16.55 34.65 45.95 0.57 - Advances Received 59.90 16.67 30.47 46.33 0.28 0.36

D) Kasturchand Harak Chand Daga Seed Purchase Truck Lease Rent - 0.13 - - - - Advance Given - - - - 10.41 - Advances Received Back - - - - 10.51 - Total

E) Satpuda Valley Public School Advances Given - - 1.29 6.82 1.35 - Advances Received Back - - 1.29 7.94 2.24 -

F) Betul Minerals And Construciton (P) Ltd Advance Given 16.63 - - - - - Advances Received Back 4.15 - - - - -

G) Advance To Shreyans Daga - - - - - 0.02 226

H) Advance To Niraj Daga - - - - 0.05 -

OPENING AND CLOSING BALANCES OF RELATED PARTIES

(Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 Closing Balance Vision Millennium Exports (P) Ltd 319.98 313.62 281.22 - 69.15 107.58 Aventis Bio Feeds P Ltd - 7.14 - - 0.28 0.20 Kasturchand Harak Chand Daga - - - - 4.75 - Betul Minerals And Construction (p) Ltd - 2.70 - - - 0.05 Kasturchand Harak Chand Daga ------Bio Bliss Coop Society 3.45 - - - 0.26 0.13 Satpura Valley Public School - - - - 0.68 0.85 Niraj Daga - - - - 0.05 0.02 Shreans Daga - - - - - 0.02

Opening Balance Vision Millennium Exports (P) Ltd 313.62 281.22 - 69.15 107.58 - Aventis Bio Feeds P Ltd 7.14 - - 0.28 0.20 - Kasturchand Harak Chand Daga - - - 4.75 - - Betul Minerals And Construction (p) Ltd 2.70 - - - 0.05 - Kasturchand Harak Chand Daga ------Bio Bliss Coop Society - - - 0.26 0.13 - Satpura Valley Public School - - - 0.68 0.85 - Niraj Daga - - - 0.05 0.02 - Shreans Daga - - - - 0.02 -

Credit Balances Closing Balances Vision Millennium Exports (P) Ltd ( Interest Free Inter Corporate Deposit) - 110.00 110.00 45.50 45.50 M/s Kasturchand Harak Chand Daga HUF (Interest Free Unsecured Loan) - 1.46 1.63 - 0.57

Opening Balances Vision Millennium Exports (P) Ltd (Interest Free Inter Corporate Deposit) 110.00 110.00 45.50 45.50 45.50 M/s Kasturchand Harak Chand Daga HUF (Interest Free Unsecured Loan) 1.46 1.63 - 0.57 9.59

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ANNEXURE XXV: STATEMENT OF EFFECT OF CHANGES IN ACCOUNTING POLICIES, AS RESTATED

Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 1. Change In Method Of Valuation Of Inventory No No No No No Yes (Method changed from net realizable value to cost of production or net realizable valuewhichever is less). Changes done on closing stock as on 30-6- 2005.Changes made in respect of opening stockof finished goods as on 1-7-2004 and the impact given on Surplus profit and loss by reduction Rs.235880/ as on 30-6- 2004

2. Change in Revenue Recognition of Export Incentives No No No Yes No No The company was earlier accounting as income of export incentives like DFCE licence when they are sold/ realized. The company changed this method to recognize as income at the time of issue of relevant export incentive licenses. During 2006-07 there was addition to income Rs.336.30 lacs. However the licenses on which income was recognised in 2006- 07 relate to the year 2006-07 only.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements included in the Draft Red Herring Prospectus. You should also read the section titled "Risk Factors" beginning on page 13 of the Draft Red Herring Prospectus, 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 Audited 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 June 30, so all references to a particular financial year are to the twelve-month period ended June 30.

Certain industry, technical and financial terms used in this discussion shall have the meanings ascribed to them in the section titled "Definitions and Abbreviations" beginning on page 2 of the Draft Red Herring Prospectus.

Overview

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Significant developments after period ended January 31, 2010 that affect our future results of operations

In the opinion of our Directors, except as mentioned below there have not arisen any circumstances since the date of the last financial statement as disclosed in the Draft Red Herring Prospectus which materially and adversely affect or is likely to affect the trading or profitability of our Company, or the value of our assets, or our ability to pay its liability within the next twelve months.

1. Equity Shares issued pursuant to bonus issue: Our Company has issued and allotted 21,775,000 Equity Shares of Rs. 10/- each on June 1, 2010 as bonus shares in the ratio of 3.25 Equity Shares for every one Equity Share held. 2. Acquisition of Subsidiary Company: Our Company has acquired a wholly owned subsidiary Company in the name of Betul Oils and Feeds Private Limited on June 1, 2010 with a paid-up capital of Rs. 0.1 million. 3. Commencement of our Satna unit: We have setup a 180,000 TPA (600 TPD) solvent extraction unit with 30,000 TPA (100 TPD) refinery solvent extraction plant at Satna. 4. Settlement of derivative transaction with ICICI bank: Our Company has settled the dispute with ICICI Bank in respect of derivative transaction. As per the settlement terms our Company has paid Rs.37.00 million in addition to cancelling our claim on FDR with interest amounting to Rs.10.41 million.

Factors that may affect the results of operations

The main factors affecting our operations are as follows:

• Variations in the selling price of edible oil due to over supply in the market or fall in demand; • Changes in buying habits and consumption pattern; and • Changes in prices of raw materials. • Increase in freight, interest rates, etc.; • Increase in cost of power or other fuel; • Competition from existing players; • Capital expenditure, including capacity expansion; • Working capital arrangements; • Growth of unorganized sector and threat from national/regional players; • General economic and business conditions; • Our Company’s ability to successfully implement our growth strategy; • Changes in laws and regulations relating to the industry in which we operate; • Changes in political and social conditions in India; • Loss or shutdown of operations of our Company at any time due to strike or labour unrest or any other reason; • Withdrawal of any tax benefits available to our Company;

A. SIGNIFICANT ACCOUNTING POLICIES

1. Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention on the accrual basis of accounting and in accordance with generally accepted accounting principles.

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2. Fixed Assets

3. Depreciation

Assets costing less than Rs.5,000 are capitalized and have been depreciated.

4. Impairment loss

5. Investments

Long term Investments are stated at cost of acquisition . Provision for permanent diminution in value, if any, is provided for in the books of accounts.

6. Inventories

Inventories have been valued as under:

i) Raw Materials, Store & Spares: At Cost or net realisable value whichever is less. Cost is determined on FIFO basis.

ii) Consumables, fuel, packing materials: At Cost. Cost is determined on FIFO basis.

iii) Finished Goods/WIP: Cost of production or net realisable value whichever is less. Cost has been arrived at standard cost basis

iv) Traded goods: At cost or market value whichever is lower. Cost is determined on FIFO basis.

7. Retirement and other employee benefits

Provident fund

The Company contributes towards Provident Fund which is defined contribution plan, liability in respect of which is determined on the basis of contribution as required under the statute / rules.

Gratuity

Gratuity, a defined benefit scheme is accrued and provided for on the basis of actuarial valuation made at the year end.

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Leave Encashment

Leave Encashment is accounted for on cash basis as and when it is paid. The company does not have leave encashment policy.

8. Taxes on Income

9. Provisions and Contingencies

10. Recognition of Income and Expenditure

a) Capital Subsidy b) Insurance claims c) Dividend d) Income in respect of power generation of Wind Mill project is accounted for as income based on accepted bill and units generated to the respective power grids.

11. Foreign Currency Transactions

12. Borrowing Costs

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13. Commodity hedging Transactions

RESULTS OF OPERATIONS

The following table sets forth selected financial data from our restated statements of profit and loss, the components of which are also expressed as a percentage of total income for the seven months period ended on January 31, 2010 and for financial years 2009, 2008, 2007 and 2006. (Rs. in Millions) For seven months % of % of % of % of % of Particulars period total FY 2009 total FY 2008 total FY 2007 total FY 2006 total ended income income income income income January 31, 2010 Income a. Products manufactured by 2,162.65 55.24% 3,086.36 56.10% 4189.44 83.74% 2943.21 70.38% 1488.87 55.23% our Company b. Products traded in by the 1,787.85 45.66% 2,299.04 41.79% 635.59 12.70% 1,097.11 26.23% 993.30 36.85% company Total Gross 3,950.50 100.90% 5,385.39 97.88% 4,825.03 96.45% 4,040.32 96.61% 2,482.17 92.08% Sales c. Excise duty - - 0.62 0.01% 1.43 0.03% 0.65 0.02% 0.40 0.01% Net sales 3,950.50 100.90% 5,384.77 97.87% 4,823.60 96.42% 4,039.67 96.60% 2,481.77 92.06% Other operating 0.16 0.00% 12.91 0.23% 47.33 0.95% 35.61 0.85% 2.02 0.07% income Profit / loss on commodity 15.24 0.39% 1.42 0.03% (21.67) (0.43%) 2.18 0.05% 2.75 0.10% hedging transactions Income from wind mill energy 4.85 0.12% 9.47 0.17% 8.06 0.16% 21.04 0.50% 3.39 0.13% project Other income 5.44 0.14% 9.12 0.17% 8.77 0.18% 2.04 0.05% 1.11 0.04% Increase/decrease (60.85) (1.55%) 84.17 1.53% 136.56 2.73% 81.47 1.95% 204.76 7.60% in inventory Total income 3,915.34 100.00% 5,501.86 100.00% 5,002.66 100.00% 4,182.02 100.00% 2,695.80 100.00% Expenditure Consumption of 1,482.72 37.87% 2,497.29 45.39% 3,458.16 69.13% 2,411.15 57.66% 1,376.90 51.08% raw materials Purchase of 1,914.26 48.89% 2,259.43 41.07% 476.68 9.53% 1,239.54 29.64% 982.41 36.44% trading goods Manufacturing 96.04 2.45% 168.55 3.06% 257.13 5.14% 215.35 5.15% 159.44 5.91% expenses Employees remuneration and 13.69 0.35% 22.44 0.41% 117.40 2.35% 13.85 0.33% 11.48 0.43% benefits Administration 23.82 0.61% 33.91 0.62% 70.94 1.42% 21.92 0.52% 15.25 0.57% expenses Selling and distribution 94.69 2.42% 217.80 3.96% 279.21 5.58% 69.63 1.66% 93.35 3.46% expenses Total 3,625.22 92.59% 5,199.43 94.50% 4,659.51 93.14% 3,971.43 94.96% 2,638.83 97.89% Expenditure Profit before interest, depreciation, 290.12 7.41% 302.43 5.50% 343.15 6.86% 210.59 5.04% 56.98 2.11% income tax and extraordinary items Interest & 72.10 1.84% 106.80 1.94% 118.94 2.38% 52.57 1.26% 32.57 1.21%

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financial charges Depreciation and 13.92 0.36% 23.56 0.43% 20.07 0.40% 20.22 0.48% 9.31 0.35% amortisation Miscellaneous expenditure - 0.00% - 0.00% 1.32 0.03% - 0.00% - 0.00% w/off Net profit before tax and 204.11 5.21% 172.06 3.13% 202.83 4.05% 137.80 3.29% 15.09 0.56% extra ordinary items Provision for

Taxation Current tax 43.80 1.12% 7.61 0.14% 2.98 0.06% 5.18 0.12% 2.20 0.08% Wealth tax - 0.00% 0.05 0.00% 0.05 0.00% - 0.00% - 0.00% Deferred Tax 23.55 0.60% 1.25 0.02% 4.96 0.10% 35.29 0.84% 6.55 0.24% Fringe benefit - 0.00% 0.54 0.01% 0.41 0.01% 0.74 0.02% 0.40 0.01% tax Provision for 67.35 1.72% 9.44 0.17% 8.39 0.17% 41.21 0.99% 9.15 0.34% taxation Net profit after tax and before 136.76 3.49% 162.62 2.96% 194.43 3.89% 96.59 2.31% 5.95 0.22% extra ordinary items Extra ordinary - 0.00% 33.50 0.61% - 0.00% 4.60 0.11% 0.42 0.02% items Net profit after extra ordinary items and 136.76 3.49% 196.12 3.56% 194.43 3.89% 101.19 2.42% 6.37 0.24% before prior period expenses Less: Adjustment of - 0.00% 0.37 0.01% 0.71 0.01% - 0.00% 0.53 0.02% previous year income tax Net Profit after prior period 136.76 3.49% 195.76 3.56% 193.72 3.87% 101.19 2.42% 5.84 0.22% expenses

MAJOR ITEMS OF INCOME AND EXPENDITURE

Income

Our total income comprises of income from products manufactured by our Company, income from products traded, and profit/ loss from commodity hedging transactions, income from wind mill, other income and increase / decrease in inventory. Break-up of our total gross sales is set forth below: (Rs. in Millions) For seven months For financial year ending on Income period ended June 30, 2009 June 30, 2008 June 30, 2007 January 31, 2010 A. Products manufactured by our 2,162.65 3,086.36 4,189.44 2,943.21 Company B. Products traded by our Company 1,787.85 2,299.04 635.59 1,097.11

Total Gross Sales 3,950.50 5,385.39 4,825.03 4,040.32

Our other income primarily comprises of income from interest on bank deposits and security deposits, weigh bridge income, insurance claims, etc. (Rs. in Millions) Particulars As on As on As on As on As on As on Nature of Related January June 30, June 30, June 30, June 30, June 30, Income or Not 31, 2010 2009 2008 2007 2006 2005 Recurring/ Related Non to Recurring business activity Interest On Fixed 0.97 5.86 1.74 0.61 0.29 0.13 Recurring Related

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Deposits and Security Deposit Non Not Dividends 0.08 0.08 0.16 - 0.01 0.01 recurring Related Non Excise duty Refund - 0.08 - - - - recurring Related Non Commission - - 0.06 - - - recurring Related Insurance Claim Non Received 3.60 0.17 6.52 0.15 0.36 0.35 recurring Related Profit on sale of Units in Mutual Non Not Funds - - - 0.09 - - recurring Related Profit on Sale of Non Not Vehicle - - - - - 0.09 recurring Related Miscellaneous Non Not Income 0.56 0.14 - 0.36 - - recurring Related Weigh Bridge Income 0.13 0.27 0.17 0.24 0.10 0.12 Recurring Related Lease Rent - Not Building 0.02 0.07 0.12 0.12 0.11 - Recurring Related Warehouse Rent Received account 0.09 - - - - - Recurring Related Windmill Generation Shortfall Non Not claim Refund - 2.39 - - - - recurring Related Non Not Income tax Refund - - - - - 0.18 recurring Related Interest on Income Non Not Tax Refund - - - - - 0.01 recurring Related Non Not Balance written off - 0.07 - - - - recurring Related Input Inventory Non Refund a/c - - - 0.48 0.24 - recurring Related

Total 5.44 9.12 8.77 2.04 1.11 0.88

Increase/ Decrease in inventory

Adjustments due to increase or decrease in stock are incorporated towards our total income and reflect the difference in inventory levels between two accounting periods.

Expenditure

Our total expenditure consists principally of expenditure on consumption of raw materials, expenditure on purchasing of trading goods, manufacturing expenses, Employee cost, administration expenses, selling and distribution expenses, depreciation, etc.

Consumption of raw material

The consumption of raw material includes cost of procuring raw materials. The raw materials for edible oil are soybean, sunflower, safflower, etc. The raw material for animal/poultry feed entails various oil seeds cakes i.e. soybean, sunflower, safflower, rice bran, mustard, maize, bajra, mineral mixtures and molasses as raw material. We source our raw materials majorly from domestic market for extraction units and for cattle unit, for our refinery unit we even procure oil from domestic as well as also from international market.

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Expenditure on purchasing of trading goods

Our expenditure on trading goods includes purchase of de-oiled cakes, vegetable oils, maize, etc. and other related expenditure.

Manufacturing expenses

It includes expenses incurred on power, procuring of coal, husk, wood and bagesse, hexane, refinery chemicals, packing materials like gunny bags, PP bags, tins, jars, etc. and also includes expenditure incurred on labour, repairs, etc.

Employee cost

It includes expenses such as directors remuneration, salary, bonus, gratuity, employer employee insurance policy, workmen and staff welfare expenses allowances and welfare expenses.

Administration expenses

Administrative expenses includes expenses such as travelling expenses, electricity expenses, expenses on maintenance of vehicles, legal and professional fees, insurance premium, rates and taxes, advertisement, audit fees, repairs to building, transport expenses, etc.

Selling and distribution expenses

Selling and distribution expenses include expenses incurred for freight outwards, brand building expenses, godown expenses and other sales and distribution expenses.

Interest and financial charges

Interest and financial charges includes interest on term loans, working capital, vehicle loans, other bank borrowings, bank charges and commission which includes bill discount charges, etc.

Depreciation and Amortisation

Provision for Taxes

Provision for taxes comprise current, deferred, wealth and fringe benefit tax.

INCOME AND SALES ON ACCOUNT OF VARIOUS SEGMENTS

Our revenue contribution from various segments in which we operate in terms of value and as a percentage to our total income is mentioned below:

For seven months FY 2009 FY 2008 FY 2007 period ended Segment January 31, 2010 (Rs. in (%) (Rs. in (%) (Rs. in (%) (Rs. in (%) Millions) Millions) Millions) Millions) Solvent extraction, trading 3,784.96 96.67 5,274.36 95.28 4,784.62 95.64 4,078.12 97.41 of commodities Others 108.45 2.77 199.16 3.60 222.88 4.46 78.78 1.88 Wind energy generation 4.85 0.12 11.86 0.21 8.06 0.16 21.04 0.50 Commodity hedging 15.24 0.39 1.42 0.03 (21.67) (0.43) 2.18 0.05 transactions Other unallocable income 1.84 0.05 48.56 0.88 8.77 0.18 6.49 0.16 236

(including extraordinary) Total income 3,915.34 100.00 5,535.36 100.00 5,002.66 100.00 4,186.62 100.00

DISCUSSION ON RESULTS OF OPERATIONS

Analysis for the restated summary statements for the seven months ended on January 31, 2010

Income

In the seven months period ended January 31, 2010, our revenue was derived predominantly from products manufactured and traded by our Company for Rs. 2,162.65 million and Rs. 1,787.85 million respectively. Our total income for seven months period ended January 31, 2010 was Rs. 3,915.34 million.

Products manufactured by our Company

Our income from products manufactured for the seven months period ended was Rs.2,162.65 million. These primarily consists of edible oil, de-oiled cakes and cattle feeds.

Products traded by our Company

Income under this head for seven months period ended January 31, 2010 was Rs. 1,787.85 million.

Profit / Loss from commodity hedging transactions

Our income from profit from commodity hedging transactions for the seven months period ended was Rs.15.24 million. These primarily consist of profit from hedging of soybean seeds and soybean oil.

Income from wind mill energy project

Income under this head for seven months period ended January 31, 2010 was Rs.4.85 million.

Other Income

Other income for seven months period ended January 31, 2010 was Rs.5.44 million. This primarily consists of insurance claim received for Rs. 3.60 million and income from interest received on fixed and security deposits 0.97 million.

Increase/ Decrease in inventory

Decrease in inventory for the seven months period ended January 31, 2010 was of Rs. 60.85 million.

Expenditure

Our total expenditure for the seven months ended on January 31, 2010 was Rs.3,625.22 million. This primarily comprises of expenditure on consumption of raw material and expenditure on purchasing of goods for trading.

Consumption of raw material

Our cost on consumption of raw material for the seven months ended on January 31, 2010 was Rs.1,482.72 million. This primarily consisted of purchase of oil seeds, ingredients for manufacturing of cattle feed and also purchase of vegetable oil.

Expenditure on purchasing of trading goods

Our expenditure on purchasing of trading goods for the seven months ended on January 31, 2010 was Rs.1,914.26 million. This primarily comprises of purchase of de-oiled cakes and DOC.

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Manufacturing expenses

Our manufacturing expenses were Rs.96.04 million for the seven months ended on January 31, 2010. This primarily comprises of expenditure on consumption of power, repairs to machineries and purchase of coal, husk, wood and baggesse and hexane.

Employee Cost

Our employee cost was Rs.13.69 million for the seven months ended on January 31, 2010.

Administration expenses

Our administration expenses were Rs.23.82 million for the seven months ended on January 31, 2010. This primarily comprises of expenses of transport expenses, traveling expenses, legal expenses and payment made for licenses and professional fees.

Selling and Distribution Expenses

Our expenses for selling and distribution were Rs.94.69 million for the seven months ended on January 31, 2010.

Interest and financial charges

Our interest and financial charges were Rs.72.10 million for the seven months ended on January 31, 2010. This primarily consists of interest on working capital borrowings, term loans and bank commission & other bank charges.

Depreciation and Amortisation

Our depreciation expenses for the seven months period ended on January 31, 2010 were Rs.13.92 million.

Profit before tax and extra ordinary items

Our profit before tax and extra ordinary items was Rs.204.11 million for the seven months period ended on January 31, 2010.

Provison for Taxation

The provision for taxes was Rs.67.35 million for the seven months period ended on January 31, 2010.

Net profit after taxes and before extra ordinary items

Our net profit after taxes and before extra ordinary items was Rs.136.76 million for the seven months period ended on January 31, 2010.

Extra ordinary items

Our Company did not have any extra ordinary items for the seven months period ended on January 31, 2010.

Net profit after prior period expenses

Our net profit after prior period expenses was Rs.136.76 million

Comparison of FY 2009 vis-à-vis FY 2008

Income

For FY 2009, our revenue was derived predominantly from products manufactured and traded by our Company. Our total income for FY 2009 was Rs.5,501.86 million which was Rs. 5,002.66 million in FY 2008. The increase in income was effective cost management and planned approach.

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Products manufactured by our Company

Our income from products manufactured decreased by 26.33% from Rs. 4,189.44 million in FY 2008 to Rs. 3086.36 million in FY 2009. This was primarily due to shutdown of our plant for approximately 3 months due to explosion in our plant at Betul and our plants at Betul and Solapur were also shutdown due to the expansion activities being carried out in our plants for increase in various production capacities.

Products traded by our Company

In FY 2009 our income from products traded increased by 261.72% from Rs. 635.59 million in FY 2008 to Rs. 2,299.04 million in FY 2009. In FY 2009, as our production was not sufficient due to shutdown of our plant, so to cater to the demand of our customers we sourced more of finished goods and supplied it to our customers.

Profit / Loss from commodity hedging transactions

Our income from Profit from commodity hedging transactions in FY 2009 was Rs. 1.42 million. In FY 2008 there was a loss of Rs.21.67 millions from commodity transactions.

Income from wind mill energy project

Our income from wind mill energy was increased by 17.52% from Rs.8.06 million in FY 2008 to Rs.9.47 million in FY 2009. This was due to better wind availability and increase in rate of power.

Other Income

In FY 2009 our other income was Rs.9.12 million showing an increase of 3.97% as compared to Rs.8.77 millions in FY 2008. This was primarily due to interest received on fixed deposits and refund of shortfall on windmill generation.

Increase/ Decrease in inventory

In FY 2009 our inventory decreased by 38.37% from Rs.136.56 million in FY 2008 to Rs. 84.17 million in FY 2009.

Expenditure

Our total expenditure in FY 2009 was Rs.5199.43 million and was Rs. 4659.51 million in FY 2008. This primarily comprises of consumption of raw material, purchases of traded goods, manufacturing expenses, employees cost, administration expenses and selling & distribution expenses.

Consumption of raw material

Our expenditure on consumption of raw material for FY 2009 represented 45.39% of our total income as against 69.13% in FY 2008. Our expenditure on raw material decreased by 27.79% from Rs.3458.16 million in FY 2008 to Rs.2497.29 million in FY 2009 mainly due to reduction in prices of raw material, even as our plant was shutdown due to explosion and due to capacity expansion of our refinery unit in solapur, we procured less raw material.

Expenditure on purchasing of trading goods

Our expenditure on purchasing of trading goods increased to Rs.476.68 million in FY 2008 to Rs.2259.43 million in FY 2009 mainly due to increase in purchase of trading goods.

Manufacturing expenses

Manufacturing expenses were lowered by 34.45% in FY 2009 vis-à-vis FY 2008. This was primarily due to shutdown of our plant Betul plant due to blast and due to expansion activities being carried out at Betul and Solapur.

Employee Cost

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Employee cost decreased by 80.88% in FY 2009 to Rs. 22.44 million from Rs. 117.40 million in FY 2008 because in FY 2008 we bought an employer employee insurance policy valid for five years for a one time single premium payment of Rs. 100.00 million.

Administration expenses

Our administration expenses decreased by 52.20% in FY 2009 from Rs.70.94 million in FY 2008 to Rs.33.91 million in FY 2009. The decrease was due to writing off claim of DEFC licenses in FY 2008.

Selling and Distribution Expenses

Our selling and distribution expenses were decreased by 21.99% in FY 2009 to Rs.217.80 million from Rs.279.21 million in FY 2008. The decrease was due to lower sales by 26.33% in FY 2009 as compared to FY 2008, due to this selling and distribution expenses got reduced in FY 2009. We had also written off bad debts amounting to Rs. 68.42 million in FY 2009.

Interest and financial charges

Financial charges represented 1.94% of our total income in FY 2009 as against 2.38% in FY 2008 and have decrease by 10.20% in FY 2009 vis-à-vis in FY 2008.

Depreciation and Amortisation

Depreciation increased by 17.39% in FY 2009 vis-à-vis FY 2008. The increase was on account of additions of Fixed Assets due to on-going expansion of our refinery at Betul and Solapur units, during FY 2009.

Profit before tax and extra ordinary items

Due to factors discussed above our profit before tax decreased by 15.17% to Rs.172.06 million in FY 2009 from Rs. 202.83 million in FY 2008.

Provison for Taxation

The Provision for taxation for FY 2009 was Rs.9.44 million showing an increase of 12.53% as compared to FY 2008. The above increase was due to less availability of MAT Credit in FY 2009 than in FY 2008.

Net profit after taxes and before extra ordinary items

The net profit after taxes decreased by 16.36% in FY 2009 from Rs.194.43 million in FY 2008 to Rs. 162.62 million in FY 2009. The decreased was due to lower sales in FY 2009 as compare to FY 2008.

Extra ordinary items

Our Company had an extraordinary profit of Rs.33.50 million in FY 2009. This was primarily resulted from Income on business transaction of assignment of debt from IFCI.

Net profit after extra ordinary items and before prior period expenses

Our net profit after extra ordinary items for FY 2009 amounted to Rs.196.12 million as against Rs.194.43 million in FY 2008. As a percentage of total income, net profit after adjustments was decreased to 3.56% in FY 2009 as compared to 3.89% in FY 2008.

Adjustments for previous year income tax

In FY 2009 we made adjustment of Rs. 0.37 million towards previous year income tax.

Net profit after prior period expenses

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Our restated net profit for FY 2009 amounted to Rs.195.76 million as against Rs.193.72 million in FY 2008. As a percentage of total income, net profit after prior period expenses was decreased to 3.56% in FY 2009 as compared to 3.87% in FY 2008.

Comparison of FY 2008 vis-à-vis FY 2007

Income

For FY 2008, our revenue was derived predominantly from products manufactured and traded by our Company. Our total income for FY 2008 was Rs.5,002.66 million. Our revenue from products manufactured by our Company increase substantially by 42.34% in FY 2008 as compared with FY 2007 due to better capacity utilization and improved sales realisation.

Products manufactured by our Company

In FY 2008 our income from products manufactured increased by Rs. 1,246.23 million from Rs. 2943.21 million in FY 2007 mainly on account of increase in sales of DOC and Cattle Feed, the demand of cattle feed was being met by our own production which in turn resulted in good margins.

Products traded by our Company

In FY 2008 our income from products traded decreased to Rs. 635.59 million from Rs. 1,097.11 million in FY 2007. This was primarily due to better capacity utilization leading to adequate production from our units and as a result we were able to meet the customers demand through our own production.

Profit / Loss from commodity hedging transactions

Our Company made a loss of Rs. 21.67 million from commodity hedging transactions in FY 2008.

Income from wind mill energy project

Our income from wind mill energy decreased to Rs.8.06 million in FY 2008 from Rs.21.04 million in FY 2007. This was due to unfavorable climatic conditions which lead to a decrease in power generation.

Other Income

In FY 2008 our other income was Rs.8.77 million showing an increase of 329.26% as compared to FY 2007. This was primarily due to insurance claim received in FY 2008 of Rs.6.52 million.

Increase/ Decrease in inventory

In FY 2008 our inventory increased by 67.62% to Rs.136.56 million from Rs. 81.47 million in FY 2007. This was primarily due to increase in production.

Expenditure

Our total expenditure in FY 2008 was Rs.4,659.51 million. This primarily comprises of consumption of raw material, purchases of traded goods, manufacturing expenses, employees cost, administration expenses and selling & distribution expenses.

Consumption of raw material

Our expenditure on consumption of raw material for FY 2008 represented 69.13% of our total income as against 57.66% in FY 2007. Our expenditure on raw material increased by 43.42% from Rs.2,411.15 million in FY 2007 to Rs.3,458.16 million in FY 2008 mainly on account of increase in prices of raw material and increase in purchases of raw material.

Expenditure on purchasing of trading goods

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Our expenditure on purchasing of trading goods decreased by 61.54% from Rs.1,239.54 million in FY 2007 to Rs.476.68 million in FY 2008. This was primarily due to better capacity utilization leading to adequate production from our units and as a result we were able to meet the customers demand through our own production and thus our expenditure on purchasing of trading goods decreased.

Manufacturing expenses

Manufacturing expenses were increased by 19.40% in FY 2008 vis-à-vis FY 2007. This was primarily on account of increase in production as a result of which we procured more raw materials and also due to increase in repairs to machineries and consumption of packing material.

Employee Cost

Employee cost increased by 747.65% in FY 2008 to Rs.117.40 million from Rs.13.85 million in FY 2007 because in FY 2008 we bought an employer employee insurance policy valid for five years for a one time single premium payment of Rs. 100.00 million.

Administration expenses

Our administration expenses increased by 223.71% in FY 2008 from Rs.21.92 million in FY 2007 to Rs.70.94 million in FY 2008. The increase was due to writing off claim of DEFC licenses and transport expenses with regard to expenses made on trucks.

Selling and Distribution Expenses

Our selling and distribution expenses increased by 301.00% in FY 2008 from Rs.69.63 million in FY 2007 to Rs.279.21 million in FY 2008. The increase was due to substantial growth in sales, increase in freight outward of soya meal & soya refined , brand building of edible oils and also on account of bad debts written off in FY 2008.

Interest and financial charges

Financial charges represented 2.38% of our total income in FY 2008 as against 1.26% in FY 2007 and have increased by 126.25% in FY 2008 vis-à-vis in FY 2007. The increase was due to increased working capital loans and loss on account of commodity exchange fluctuations.

Depreciation and Amortisation

Depreciation decreased by 0.77% in FY 2008 vis-à-vis FY 2007 from Rs. 20.22 million in FY 2007 to Rs. 20.07 million in FY 2008.

Miscellaneous Expenditure

Miscellaneous expenditure written off during FY 2008 comprised of deferred revenue expenditure incurred for the Seed Division as pre launch marketing expenses. However, the seed division was discontinued in FY 2008 and the pre launch marketing expenses have been totally written off in Profit & Loss Account in the FY 2008.

Profit before tax and extra ordinary items

Due to factors discussed above our profit before tax increased by 47.19% to Rs.202.83 million in FY 2008 from Rs.137.80 million in FY 2007.

Provision for Taxation

The Provision for taxation for FY 2008 was Rs.8.39 million showing a decrease of 79.64% as compared to FY 2007. The above decrease was due to the availability of MAT credit and decrease in Deferred tax in FY 2008.

Net profit after taxes and before extra ordinary items

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The net profit after taxes increased by 101.30% in FY 2008 from Rs.96.59 million in FY 2007 to Rs.194.43 million in FY 2008. The increased was due to increase in sales, better capacity utilization and other factors as mentioned above.

Extra ordinary items

Our Company did not have any extra ordinary items for FY 2008.

Net profit after prior period expenses

Our net profit for FY 2008 amounted to Rs.194.43 million as against Rs.101.19 million in FY 2007. As a percentage of total income, net profit after prior period expenses was 3.89% in FY 2008 as compared to 2.42% in FY 2007.

Adjustments for previous year income tax

In FY 2008 we made adjustment of Rs. 0.71 million towards previous year income tax.

Net profit after prior period expenses

Our restated net profit for FY 2008 amounted to Rs.193.72 million as against Rs.101.19 million in FY 2007. As a percentage of total income, net profit after extra ordinary items and after prior period expenses was 3.87% in FY 2008 as compared to 2.42% in FY 2007.

Comparison of FY 2007 vis-à-vis FY 2006

Income

For FY 2007, our revenue was derived predominantly from products manufactured and traded by our Company. Our total income for FY 2007 was Rs.4,182.02 million.

Products manufactured by our Company

In FY 2007 our income from products manufactured increased to Rs.2,943.21 million from Rs.1,488.87 million in FY 2006. This was due to commencement of production from the Solapur unit acquired by our Company in 2006 which increased our production and resulting in increase in sales of oil & DOC.

Products traded by our Company

In FY 2007 our income from products traded decreased by 10.45% from Rs.993.30 million in FY 2006 to Rs.1,097.11 million in FY 2007. This was primarily due to adequate production of own goods by commencement of production at our new unit at Solapur.

Profit / Loss from commodity hedging transactions

Our profit from commodity hedging transactions in FY 2007 was Rs.2.18 million.

Income from wind mill energy project

Our income from wind mill energy was increased to Rs.21.04 million in FY 2007 from Rs.3.39 million in FY 2006. This was primarily because in FY 2006 the wind mill income was generated for just 4 months by only 1 wind mill, installed in Dhule, Maharashtra. However in FY 2007, both the wind mills, at Dhule and Dewas, were operational and generated income for the full year.

Other Income

In FY 2007 our other income was Rs.2.04 million showing an increase of 84.48% as compared to FY 2006. This was primarily due to increase in interest on fixed deposits and weigh bridge income.

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Increase/ Decrease in inventory

In FY 2007 our inventory decreased by 60.21% from Rs.204.76 million in FY 2006 to Rs. 81.47 million. This was primarily because of unsold stock of trading goods in FY 2007.

Expenditure

Our total expenditure in FY 2007 was Rs.3,971.43 million. This primarily comprises of consumption of raw material, purchases of traded goods, manufacturing expenses, employees cost, administration expenses and selling & distribution expenses.

Consumption of raw material

Our expenditure on consumption of raw material for FY 2007 represented 57.66% of our total income as against 51.08% in FY 2006. Our expenditure on raw material increased by 75.11% from Rs.1,376.90 million in FY 2006 to Rs.2,411.15 million in FY 2007 mainly on account of increase in prices of raw material and increase in purchases of raw material.

Expenditure on purchasing of trading goods

Our expenditure on purchasing of trading goods increased by 26.17% from Rs.982.41 million in FY 2006 to Rs.1,239.54 million in FY 2007 mainly on account of increase in purchase of traded goods.

Manufacturing expenses

Manufacturing expenses increased by 35.07% in FY 2007 vis-à-vis FY 2006. This was primarily due to increase in power & coal consumption and increase in packing material & chemical consumption.

Employee Cost

Employee cost increased by 20.61% in FY 2007 to Rs.13.85 million from Rs.11.48 million in FY 2006 mainly on account of increments in salary, wages and increase in staff welfare expenses.

Administration expenses

Our administration expenses increased by 43.71% in FY 2007 from Rs.15.25 million in FY 2006 to Rs.21.92 million in FY 2007. The increase was due to increase in repairs to building, rates & taxes, and due to loss of gunny bags by fire.

Selling and Distribution Expenses

Our selling and distribution expenses decreased by 25.41% in FY 2007 from Rs.93.35 million in FY 2006 to Rs.69.63 million in FY 2007. The decrease was due to decrease in DOC expenses.

Interest and financial charges

Financial charges represented 1.26% of our total income in FY 2007 as against 1.21% in FY 2006 and have increased by 61.39% in FY 2007 vis-à-vis in FY 2006. The increase was due to increase in Bank commission & charges as well as increase in loans taken from Banks.

Depreciation and Amortisation

Depreciation increased by 117.25% in FY 2007 vis-à-vis FY 2006. The increase was on account of increase in depreciation on wind mill and depreciation on our newly acquired plant in Solapur, Maharashtra.

Profit before tax and extra ordinary items

Due to factors discussed above our profit before tax increased by 812.98% to Rs.137.80 million in FY 2007 from Rs.15.09 million in FY 2006.

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Provision for Taxation

The Provision for taxation for FY 2007 was Rs.41.21 million showing an increase of 350.61% as compared to FY 2006. The above increase was driven by increase in deferred tax.

Net profit after taxes and before extra ordinary items

The net profit after taxes increased by 1,523.87% in FY 2007 from Rs.5.95 million in FY 2006 to Rs.96.59 million in FY 2007. The decreased was due to all the above factors.

Extra ordinary items

Our Company had an extraordinary profit of Rs.4.60 million in FY 2007. This was primarily resulted from revenue loss claim by the company.

Net profit after extra ordinary items and after prior period expenses

Our restated net profit for FY 2007 amounted to Rs.101.19 million as against Rs.6.37 million in FY 2006. As a percentage of total income, net profit after prior period expenses was 2.42% in FY 2007 as compared to 0.24% in FY 2006. Adjustments for previous year income tax

There was no such adjustment in FY 2007.

Net profit after prior period expenses

Our restated net profit for FY 2007 amounted to Rs.101.19 million as against Rs.5.84 million in FY 2006. As a percentage of total income, net profit after adjustments was 2.42% in FY 2007 as compared to 0.22% in FY 2006.

LIQUIDITY AND CAPITAL RESOURCES

Our liquidity requirements relate to servicing our debt, funding our working capital requirements and funding towards purchase of capital expenditure. We operate in a capital-intensive industry and have historically financed capital expenditures through short-term and long term borrowings, working capital financing, equity and cash flow from operating activities. We currently hold our cash and cash equivalents in Indian Rupees.

Our business requires a significant amount of working capital. We believe that we will have sufficient capital resources from our operations, net proceeds of this Issue and other loans and borrowings to meet our capital requirements for at least the next twelve months.

As on January 31, 2010, we had cash and cash equivalents of Rs.51.70 million, secured loan of Rs.1,123.31 million. Till date we have funded our growth principally from proceeds from equity and bank borrowings. Our principal uses of cash have been, and are expected to continue to be debt servicing, capital expenditure towards purchase of our equipment and funding of our working capital requirements.

Cash Flows

The table below summarizes our cash flow for the periods indicated: (Rs. in Millions) For seven months For financial year ending on Particulars period ended June 30, June 30, June 30, June 30, 2008 January 31, 2010 2009 2007 2006 Opening cash and cash equivalents 34.96 27.11 31.14 22.08 9.47 Net cash from/ (used in) operating 15.73 408.98 (227.45) (286.48) 89.39 activities (A) Net cash from/ (used in) investing (147.73) (105.65) (60.79) (25.71) (211.57) activities (B) Net cash from/ (used in) financing 148.73 (295.48) 284.22 321.25 134.79 activities (C) Net increase (decrease) in cash and 16.73 7.85 (4.03) 9.06 12.61 245

cash equivalents (A+B+C) Closing cash and cash equivalents 51.70 34.96 27.11 31.14 22.08

Net cash from/ (used in) operating activities

During the seven months ended January 31, 2010, net cash generated from operating activities was Rs.15.73 million. Our net cash from operating activities mainly reflects non-cash/non-operating items of depreciation of Rs.13.92 million, interest and financial charges of Rs.72.10 million. Changes in current assets and current liabilities that has a current cash flow impact comprised mainly of increase in sundry debtors of Rs.62.84 million

In FY 2009, our net cash generated from operating activities was Rs.408.98 million. Our net cash from operating activities mainly reflects non-cash/non-operating items of depreciation of Rs.23.56 million, interest and financial charges of Rs.106.80 million and bad debts of Rs.68.42 million. Changes in current assets and current liabilities that has a current cash flow impact comprised mainly of an increase in sundry debtors of Rs.112.17 million, increase in inventory of Rs.10.46 million, decrease in loans & advances of Rs.97.99 million.

In FY 2008, our net cash used in operating activities was Rs.(227.45) million. Our net cash from operating activities mainly reflects non-cash/non-operating items of depreciation of Rs.20.07 million, interest and financial charges of Rs.118.94 million and bad debts of Rs.32.98 million. Changes in current assets and current liabilities that has a current cash flow impact comprised mainly of an increase in sundry debtors of Rs.283.25 million, increase in inventory of Rs.276.20 million, increase in loans & advances of Rs.66.23 million.

In FY 2007, our net cash used in operating activities was Rs.(286.48) million. Our net cash from operating activities mainly reflects non-cash/non-operating items of depreciation of Rs. 20.22 million, interest and financial charges of Rs. 52.57 million. Changes in current assets and current liabilities that has a current cash flow impact comprised mainly of an increase in sundry debtors of Rs. 46.00 million, increase in inventory of Rs. 101.97 million, increase in loans & advances of Rs. 26.55 million.

In FY 2006, our net cash generated from operating activities was Rs.89.39 million. Our net cash from operating activities mainly reflects non-cash/non-operating items of depreciation of Rs.9.31 million, interest and financial charges of Rs.32.57 million. Changes in current assets and current liabilities that has a current cash flow impact comprised mainly of an decrease in sundry debtors of Rs. 28.88 million, increase in inventory of Rs. 255.99 million, increase in loans & advances of Rs.46.29 million.

Net cash from / (used in) investing activities

During the seven months ended January 31, 2010, our net cash used in investing activities was Rs. 147.73 million. This mainly reflected expenditure towards purchase of fixed assets of Rs. 153.00 million, sales of investment of Rs. 0.10 million, receipt of insurance claims of Rs. 3.60 million, disposal of fixed assets of Rs. 0.50 million, income received from dividend and interest of Rs. 0.08 million and Rs. 0.97 million, respectively.

In FY 2009, our net cash used in investing activities was Rs. 105.65 million. This mainly reflected expenditure towards purchase of fixed assets of Rs. 115.33 million, sales of investment of Rs. 3.50 million, receipt of insurance claims of Rs. 0.17 million, receipt of rent of Rs. 0.07, income received from dividend and interest of Rs. 0.08 million and Rs. 5.86 million, respectively.

In FY 2008, our net cash used in investing activities was Rs. 60.79 million. This mainly reflected expenditure towards purchase of fixed assets of Rs. 50.83 million, fresh investment of Rs. 18.50 million, receipt of insurance claims of Rs. 6.52 million, receipt of rent of Rs. 0.12, income received from dividend and interest of Rs. 0.16 million and Rs. 1.74 million, respectively.

In FY 2007, our net cash used in investing activities was Rs. 25.71 million. This mainly reflected expenditure towards purchase of fixed assets of Rs. 24.72 million, fresh investment of Rs. 2.10 million, receipt of insurance claims of Rs. 0.15 million, sale of fixed assets of Rs. 0.15 million, receipt of rent of Rs. 0.12 million, interest income received of Rs.0.61 million

In FY 2006, our net cash used in investing activities was Rs. 211.57 million. This mainly reflected expenditure towards purchase of fixed assets of Rs. 211.39 million, fresh investment of Rs. 0.95 million, receipt of insurance claims of Rs. 0.36 million, receipt of rent of Rs. 0.11, interest income received of Rs. 0.29 million. 246

Net cash from/ (used in) financing activities

During the seven months ended January 31, 2010, our net cash generated from financing activities was Rs. 148.73 million which is mainly attributable to increase in secured borrowings of Rs. 330.62 million and interest payments of Rs. 72.10 million. We had also repayed our unsecured borrowings of Rs. 112.13 million. We had also received subsidy of Rs. 2.34 million against our warehouse.

In FY 2009, our net cash used in financing activities was Rs. 295.48 million which is mainly attributable to increase in secured borrowings of Rs. 44.02 million and interest payments of Rs. 106.80 million. We had also repayed our unsecured borrowings of Rs. 232.69 million.

In FY 2008, our net cash generated from financing activities was Rs. 284.22 million which is mainly attributable to increase in secured and unsecured borrowings of Rs. 169.95 million and Rs. 233.20 million respectively, and interest payments of Rs. 118.94 million.

In FY 2007, our net cash genereated from financing activities was Rs. 321.25 million which is mainly attributable to increase in secured and unsecured borrowings of Rs. 307.69 million and Rs. 66.13 million respectively, and interest payments of Rs. 52.57 million.

In FY 2006, our net cash generated from financing activities was Rs. 134.79 million which is mainly attributable to increase in secured borrowings of Rs.117.93 million and interest payments of Rs. 32.57 million. We also received share application money of Rs. 50.00 million. We had also repaid our unsecured borrowing of Rs. 0.57 million.

Certain Balance Sheet items

The below is the table showing selected items of our Balance Sheet as on dates indicated: (Rs. in Millions) As on Particulars January 31, June 30, June 30, June 30, June 30, 2008 2010 2009 2007 2006 Fixed Assets (net) 703.98 720.36 720.02 723.87 295.81 Investments 18.00 18.10 21.60 3.10 1.00 Current Assets, Loans and advances 1,627.46 1,314.79 1,350.81 795.77 612.19 Total Liabilities and Provisions 1,379.61 1,065.76 1,209.20 799.56 709.49 Net Worth 806.24 669.49 473.73 278.69 178.82

Fixed Assets

Our fixed assets consist of factory land, warehouse, factory buildings, wind mills, office equipments, furniture’s and fixtures. As on January 31, 2010 our net fixed assets were of Rs. 703.98 million.

Investments

Generally, our investments are primarily in the equity share capital of other companies. As on January 31, 2010 our investments were of Rs. 18.00 million. On May 25, 2010 we have sold our shareholding of 17,50,000 equity shares of Rs.10/- each amounting to Rs. 17.50 million in Khushali Developers Private Limited.

Current Assets, Loans and advances

Our current assets, loans and advances as on January 31, 2010 were Rs. 1627.46 million. This primarily constitutes inventory, sundry debtors, cash and bank balances, other current assets, loans and advances.

Liabilities and Provisions

Our liabilities and provisions as on January 31, 2010 were Rs. 1,379.61 million. This primarily constitutes inventory, sundry debtors, cash and bank balances, other current assets, loans and advances.

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Net worth

Our net worth as on January 31, 2010 was of Rs. 806.24 million represented our equity capital of Rs. 67.00 million and our reserves and surplus (net of revaluation reserves) of Rs. 739.24 million. Our reserves and surplus comprised of share premium and accumulated profits of Rs. 45.00 million and 694.24 million.

Indebtedness

As of January 31, 2010, we had total borrowings of Rs. 1123.31 million. The following table shows our borrowings as of the dates indicated: (Rs. in Millions) As on Particulars January 31, June 30, June 30, June 30, June 30, 2008 2010 2009 2007 2006 Secured Loans 1,123.31 792.69 748.67 578.72 271.03 Unsecured loans - 112.13 344.83 111.63 45.50

Total 904.82 1,093.50 690.35 316.53

For further details, please refer to section titled “Financial Indebtedness” beginning on page 250 of the Draft Red Herring Prospectus.

Contingent Liabilities

The following table provides our contingent liabilities as of January 31, 2010, June 30, 2009, June 30, 2008, June 30, 2007 and as of June 30, 2006: (Rs. in Millions) Particulars As on As on June As on June As on As on As on January 30, 2009 30, 2008 June 30, June 30, June 30, 31, 2010 2007 2006 2005 Capital Commitments - 76.51 13.24 - - - Letter Of Credit Outstanding - 2.40 18.07 48.18 2.45 - Bank Guarantees 31.85 31.60 21.60 10.00 - - Income Tax Appeal 0.27 0.27 - 3.03 - - Sales Tax Appeal 2.23 2.23 2.23 7.74 8.00 8.00 Provident Fund Appeal 0.40 0.40 0.40 0.40 0.40 0.40 Mandi Tax 0.79 0.79 0.79 0.79 0.79 - Entry Tax - - 0.10 - - - Customs duty demand - - - 10.00 10.00 10.00 Forex Derivative Transactions 132.99 132.99 - - - - Corporate Guarantee given to IDBI Bank in respect of short term loan (loan against crop receivables) 200.00 - - - - -

Total 368.52 247.18 56.41 80.13 21.63 18.40

Off balance sheet arrangements

We do not have any material off balance sheet arrangements.

OTHER INDUSTRY AND COMPANY SPECIFIC INFORMATION

(i) Unusual or infrequent events or transactions

There have been no unusual or infrequent events or transaction that would have any material impact on the operations or the performance of our Company.

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(ii) Significant economic changes/ regulatory changes

There have been no significant economic or regulatory changes which would have any material impact on our operations. For details of Regulations & Policies please refer to the section titled "Key Industry Regulations and Policies" beginning on page 139 of the Draft Red Herring Prospectus.

(iii) Known trends or uncertainties

Except as described in the section titled "Risk Factors" beginning on page 13 of the Draft Red Herring Prospectus and the section titled "Management’s Discussion and Analysis of Financial Conditions and Results of Operations" beginning on page 229 of the Draft Red Herring Prospectus, to our knowledge, there are no known trends or uncertainties that have or had or expected to have any material adverse impact on revenues or income of our Company from continuing operations.

(iv) Future Changes in relationship between cost and revenues

Other than as described in the section titled "Risk Factors" and "Management’s Discussion & Analysis of Financial Conditions and Results of Operations" beginning on pages 13 and 229 of the Draft Red Herring Prospectus to our knowledge there are no future relationship between cost and income that have or had or are expected to have a material adverse impact on our operation and finances.

(v) Reason for material increase in net sales

We have witnessed major increase in our net sales during FY 2008 which was due to better capacity utilization and better availability of raw materials.

(vi) Total turnover of each major industry segment

(Rs. in Millions) For seven months FY 2009 FY 2008 FY 2007 period ended Segment January 31, 2010

Solvent extraction, trading of commodities 3,784.96 5,274.36 4,784.62 4,078.12 Others 108.45 199.16 222.88 78.78 Wind energy generation 4.85 11.86 8.06 21.04 Commodity hedging transactions 15.24 1.42 (21.67) 2.18 Other unallocable income (including extraordinary) 1.84 48.56 8.77 6.49

Total income 3,915.34 5,535.36 5,002.66 4,186.62

(vii) New products or business segment

We do not intend to manufacture new products or enter into new business segment.

(viii) Seasonality of business

Our business is not seasonal. But the availability of raw material we consume is seasonal in nature. For more details please refer to the section titled "Business Overview" beginning on page 117 of the Draft Red Herring Prospectus.

(ix) Dependence on a few clients

The Company is procuring the raw material from a number of suppliers and hence dependence on few suppliers is not likely to occur. The customer base of our Company is well diversified and it sells its product through various dealers located all across the country and dependence on single or few customers is not significant.

(x) Competitive conditions

For details on competition, please refer to the section titled "Business Overview" beginning on page 117 of the Draft Red Herring Prospectus. 249

FINANCIAL INDEBTEDNESS

Our aggregate borrowings as of July 15, 2010 are as follows: (Rs. In millions) S. No. Nature of Borrowing Amount

1. Secured Borrowings 1442.60 2. Unsecured Borrowings Nil

I. Secured Loans

Facility Amount outstanding as Repayment Schedule and Security Created on July 15, 2010 Interest (Rs. in million) IDBI Bank: 199.84 Repayment: i. First hypothecation charge Working Capital Facility on the entire current assets in the form of Cash On demand or on due date. of our Company both Credit/EPC/EBD present and future consisting (EPC/EBD fully Interest: of raw materials, semi- interchangeable with CC) finished goods, finished aggregating to Rs. 200 Cash Credit: BPLR - 0.25% goods, stores and spares, million pursuant to p.a. other consumables and book sanction letter dated 2 July debts at all the 2009 and facility manufacturing units of our agreement dated Company on pari passu September 15, 2009 with other working capital banker. ii. Mortgage charge over free hold property khasra number 192/2, P.C. number 54, settlement number 287, village Tikari, Tehsil and district Betul on pari passu basis. iii. First pari passu charge on all land, building, plant and machineries and other assets of our Company at Betul Unit, Satna Unit as and when the status quo on land, building, plant and machineries of the Solapur Unit property is lifeted, our Company would extend first pari passu charge on Solapur Unit; iv. Pledge of 30% shares of the equity of our Company on pari passu basis; v. First pari passu charge inter alia pledge of 288,357 shares of Poly Medicure Limited vi. Extension of hypothecation charge on all the current assets held at manufacturing units on pari passu basis. vii. Personal Guarantee of Mr. 250

Facility Amount outstanding as Repayment Schedule and Security Created on July 15, 2010 Interest (Rs. in million) Shreans Daga, Mr. Niraj Daga, Mr. Paras Kumar Daga, Mr. Vinod Daga and Mrs. Kanchan Daga viii. Corporate Guarantee of Arihant Tournesol Limited and Vision Millennium Exports Private Limited*

*Our Company has on July 27, 2010 applied for waiver of corporate gurantee taken from Arihant Tournesol Limited and Vision Millenium Exports Private Limited Barclays Bank PLC: 171.40 Repayment: i. First charge on the current Working Capital Facilities assets of the Borrower, both with an overall limit of Rs. To be mutually agreed at present and future, ranking 200 million or its foreign the time of drawdown. pari passu basis with the currency equivalent charge created in favour of pursuant to sanction letter Tenure: other bankers of the dated August 20, 2009 and Borrower. multi facility loan Short Term agreement dated Loan/WCDL/Overdraft: 12 ii. Second charge on entire September 7, 2009 for the months movables and immovable following facilities: Pre-shipment/Post- fixed assets, both present shipment: 180 days and future, ranking pari Short Term Loan with a passu basis with the charge sub-limit of Rs. 100 Expiry: created in favour of other million or its foreign bankers of the Borrower. currency equivalent Short Term Loan/WCDL/Overdraft: iii. Personal Guarantee of Mr. Indian Rupee overdraft August 31, 2010 Shreyans Daga, Mr. Niraj facility with a sub-limit of Pre-shipment/Post- Daga, Mr. Paras Kumar Rs. 100 million shipment: August 31, 2010 Daga and Mr. Vinod Daga

Packing credit facility with Interest: a sub-limit of Rs. 200 million or its foreign To be mutually agreed at currency equivalent the time of drawdown.

Post-shipment facility with a sub-limit of Rs. 200 million or its foreign currency equivalent Greater Bombay Co- 99.58 Repayment: i. Secured instruments operative Bank Limited: submitted by borrower like Bill Discounting Limit Repayable on demand cheques, bills, hundies, sight Facilities aggregating to subject to annual review on drafts and other instruments Rs. 100 million pursuant or before 30 September with or without government to sanction letter dated 2010. securities, share certifictes, September 24, 2009 and lorry receiots, railway facility agreement dated Interest: receipts. December 3, 2009 13.00% p.a. ii. Personal Guarantee of Mr. Shreans Daga, Mr. Niraj 251

Facility Amount outstanding as Repayment Schedule and Security Created on July 15, 2010 Interest (Rs. in million) Daga, Mr. Paras Kumar Daga, Mrs. Kamala Daga

iii. Equitable Mortgage of open land located at Plot No. 1/24, 1/16, Admg. 54896 sq. mts., Ganesh Ward, Dist. Betul, Madhya Pradesh on pari passu basis with another company

iv. Equitable Mortgage of house at Nazul Street No. 2, Plot No. 46/3 & 47, Betul in the name of Mrs. Kamla Daga on pari passu basis with another company Bank of Baroda: 13.00 Repayment: Primary: Term Loan Facility aggregating to Rs. 16.13 11 years i. Equitable Mortgage of land million (including situated at Village Parsoda, subsidy) pursuant to Interest: Betul; sanction letter dated ii. Hypothecation of Plant & March 31, 2008 and 2.75% below BPLR, i.e. Machinery and other assets. Composite Hypothecation @10% p.a. Agreement dated June 21, Collateral: 2008. Personal Guarantee of all the directors of our Company. State Bank of India: 858.78 Cash Credit Facility: Cash Credit, EPC, EBD, EBN, Credit Facility aggregating Letter of Credit and Bank to Rs. 898.6 million dated Repayment: Guarantee Facility: May 25, 2009 for the following facilities: 12 months Primary:

Cash Credit with a limit of Interest: First hypothecation charge on Rs. 600 million the entire current assets of our 1% over State Bank Company consisting of raw EPC/EBD/EBN with a advance rate materials, semi finished goods, sub-limit of Rs. 600 finished goods, stores and million EPC Facility: spares, other consumables and book debts situated at Term loan I of Rs. 60.1 Repayment: manufacturing units. million 12 months or as per SBI Term Loan I: Term loan II of Rs. 60.1 exporters gold card scheme million Primary: Interest: Letter of Credit with a First charge on fixed assets of limit of Rs. 150 million As per RBI guidelines wind power project at both the units at Dewas, Madhya Pradesh Bank guarantee with a EBD/EBN Facility: and Solapur, Maharashtra limit of Rs. 30 million Repayment: Term Loan II:

As per SBI Exporters Gold Primary: 252

Facility Amount outstanding as Repayment Schedule and Security Created on July 15, 2010 Interest (Rs. in million) Card Scheme First charge on land, building, plant and machineries and other Interest: assets created out of bank finance situated at B 12, As applicable Chincholi Industrial Estate, Village Kondi, District Solapur. Letter of Credit Facility: Common security for all the Repayment: facilities:

12 months Collateral:

Rate of commission: i. Freehold property at Khasra number 192/2, P. C. number As per standard rates 54, settlement number 287, village Tikari, Tehsil and Bank guarantee Facility: district Betul area 1 acre held in name of Mrs. Repayment: Kanchan Daga. ii. Pledge of 30% shares of the 12 months equity of our Company (@ Rs 10 per share) Rate of commission: iii. Pledge of 600,000 shares of Poly Medicure Limited As per standard rates iv. First charge on all the fixed assets of our Company at Term Loan I: Betul Unit v. Extension of charge on land, Repayment: building, plant and machineries and other assets As per existing terms created out of bank finance situated at B 12, Chincholi Interest: Industrial Estatem Village Kondi, District Solapur. At State Bank advance rate vi. Personal guarantee of Mr. Vinod Daga, Mr. Shreans Term Loan II: Daga, Mr. Paras Kumar Daga, Mr. Niraj Daga and Repayment: Ms. Kanchan Daga.

As per existing terms Corporate Guarantee of Arihant Tournesol Limited and Vision Interest: Millennium Exports Private Limited.* 0.50% above State Bank advance rate *Our Company has on June 12, 2010 applied for waiver of corporate gurantee taken from Arihant Tournesol Limited and Vision Millenium Exports Private Limited L & T Finance: 100.00 Repayment: i. Hypothecation of unit linked Working Capital Term life insurance policies of Loan of Rs. 100 million Repayment shall be made in Metlife – Fund Value as on pursuant to sanction letter accordance with the May 13, 2010 of Rs. 121.1 253

Facility Amount outstanding as Repayment Schedule and Security Created on July 15, 2010 Interest (Rs. in million) dated June 29, 2010 and repayment schedule. million Loan Agreement dated July 1, 2010 Interest: ii. Lien on fixed deposit maintained with any bank of 11.00% p.a. atleast of Rs. 0.08 million

iii. Personal Guarantee of Mr. Sreans Daga, Mr. Paras Kumar Daga, Mr. Niraj Daga, Mr. Varun Daga and Mr. Kaushik Daga

iv. Post dated cheques

v. Demand promissory note

Negative Covenants:

Certain corporate actions for which our Company is required to take lenders consent are as follows:

1. to undertake or permit any merger, de merger, pledge, lien, consolidation, reorganization, dissolution, scheme or arrangement or compromise or other security interest with the creditors or share holders or effect any scheme of amalgamation or reconstruction or merger; 2. to amend or modify the constitutional documents; 3. to pass a resolution of voluntary winding up; 4. to mortgage, sale, assign, lease, hypothecate, exchange or create any charge, lien or encumbrance of any kind on those properties or assets secured with the lenders; 5. approach capital market for mobilizing additional resources either in the form of debts or equity; 6. change or any way alter the capital structure of our Company; 7. to make any drastic change(s) in its management set up; 8. declare dividend or distribute profits except where the installments of principal and interest payable to the Bank in respect of the facilities are being paid regularly and there are no irregularities whatsoever in respect of the Facilities; 9. withdraw or allow to be withdrawn any monies brought in by the promoters and directors or relatives of the promoters or directors of our Company; 10. invest by way of share capital in or lend or advance funds to or place deposits with any other concerns except in normal course of business or as advances to employees; 11. create any subsidiary or permit any company to become its subsidiary; 12. undertake guarantee obligations on behalf of any other borrower or any third party; 13. enter into any contractual obligations of a long term nature, affecting our Company financially to a significant extent; 14. undertake any new expansion/modernisation/diversification scheme; 15. the lender has the right to convert the debt into equity in case of default in payment by our Company 16. to enter into borrowing arrangements either secured or unsecured with any other bank, financial institution, company or otherwise 17. change the practice with regard to remuneration of directors 18. undertaking any trading activity other than the sale of products arising out of its own manufacturing operations 19. permit any transfer of the controlling interest or make any drastic change in the management operations. 20. appoint sole selling agents

The repayment schedules of the above loans undergo changes from the schedules stipulated in the respective loan agreements due to change in interest rate since the interest rates are floating rates.

Further, several of the loan agreements executed provide for the rescheduling of loans by the lenders, contain pre-payment penalties and delayed payment penalties, and permit the lender to disclose the name of our Company as a defaulter to the RBI and debar our Company from borrowing monies for certain periods of time. 254

SECTION VII: LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS

Except as stated below there are no outstanding litigations, suits, criminal or civil prosecutions, proceedings or tax liabilities against our Company, our Subsidiary, our Directors, our Promoter and Group Companies and 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 of any debenture, bonds and fixed deposits and arrears of preference shares issued by our Company and our Subsidiary, default in creation of full security as per terms of issue/other liabilities, no amounts owed to small scale undertakings exceeding Rs 0.10 million, which is outstanding for more than 30 days, no proceedings initiated for economic/civil/any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of Part 1 of Schedule XIII of the Companies Act, 1956) other than unclaimed liabilities of our Company and our Subsidiary and no disciplinary action has been taken by SEBI or any stock exchanges against our Company, our Subsidiary, our Promoters, our Directors and Group Companies.

Proceedings involving our Company

Proceedings against our Company

Civil Litigation

1. Appeal filed against Regional Provident Fund Commissioner, Bhopal before the Employee Provident Fund Appellate Tribunal, New Delhi

The Regional Provident Fund Commissioner (“RPFC”) initiated proceedings against our Company for determination of dues in respect of casual, temporary and daily wages employees for the period November, 1990 to April, 1999 on account of amended provision of para 26(2) of the Employees' Provident Fund Scheme, 1952 (“Scheme”). The amended Scheme empowered the RPFC to ensure enrolment of all employees of a company under the Scheme and determination of dues payable for the same. The RPFC issued a show cause notice bearing No. EPFO/SRO/BPL/DAMAGES CELL/5185/472 dated August 14, 2003 to our Company for levying of damages under Section 14(B) of the Employees' Provident Funds and Misc. Provisions Act, 1952 (the “Act”) and subsequently passed an order dated December 24, 2003 for the period October 1985 to November, 1985 and November, 1990 to April, 1999 amounting to Rs. 0.32 million under Section 14-B and Rs. 0.03 million under Section 7Q of the Act (“RPFC Order 1”).

Our Company filed an appeal bearing No ATA-38(8)2004 before the Employee Provident Fund Appellate Tribunal, New Delhi (“Tribunal”) against RPFC Order 1 (“Appeal 1”) praying that the RPFC Order 1 be stayed as our Company had complied with the provisions of the Act, the amendment to the Act was in dispute before the Supreme Court of India and that the department had issued circulars for keeping in abeyance the amendment till the disposal of the case before the Supreme Court. While the appeal was pending before the Tribunal, RPFC initiated recovery proceedings against our Company. Our Company filed a writ petition bearing no 2834/2004 before the Jabalpur High Court. The Jabalpur High Court interalia directed our Company to deposit Rs. 0.10 million within 3 weeks and held that the recovery of the remaining amount shall remain stayed till the time the Appeal 1 is decided by the Tribunal. The Tribunal, pursuant to its order dated May 24, 2005 dismissed the Appeal 1 (“Tribunal Order 1”).

Aggrieved by the Tribunal Order 1, our Company filed a writ petition bearing No.5883/2005 before the Jabalpur High Court. The Jabalpur High Court took cognizance of the fact that there had been no presiding officer in the Tribunal since 2005 and quashed Tribunal Order 1 and interalia remanded back the matter to RPFC for fresh adjudication. Our Company appeared before the RPFC on September 12, 2005 and submitted a detailed reply vide its letter dated September 12, 2005. The RPFC, vide its order dated December 12, 2005, upheld RPFC Order 1 and directed our Company to comply with same (“RPFC Order 2”).

Aggrieved by the RPFC Order 2, our Company filed an appeal bearing No. ATA 25(8)2006 before the Tribunal praying that it be given an opportunity of hearing, quash RPFC Order 2 and pass an order to refund Rs. 0.18 million and Rs. 0.10 million deposited by our Company to the RPFC (“Appeal 2”).

During the pendency of Appeal 2, the RPFC imposed damages and pursuant to an attachment order dated March 13, 2006 attached the bank account of our Company for payment of the disputed amounts (“Attachment Order”).

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Aggrieved by the same, our Company approached the High Court of Delhi vide writ petitions Nos 5281/2006 and 4282/2006 praying that the High Court stay the attaching of our Company’s bank account as till the time the Appeal 2 is decided. The High Court vide its order dated April 3, 2006, granted stay on RPFC Order 2 and the Attachment Order till the time Appeal 2 is taken for hearing by the Tribunal.

The matter is currently pending before the Tribunal.

2. Appeals filed by the Commissioner of Sales Tax before the High Court of Bilaspur

Our Company was granted an “eligibility certificate” for exemption from paying sales tax, central tax and entry tax on goods produced by us which was valid from July 21, 1982 to July 20, 1989 (“Certificate”). The Certificate did not specifically mention packing material. On an application made by our Company, the same was included in the original Certificate. After the expiry of the Certificate, it was amended on September 25, 1989 giving the amendment a retrospective effect. Since the amended Certificate did not specifically mention ‘Packing Material’, the Sales Tax Authorities opened the returns filed by our Company for reassessment and levied tax amounting to Rs. 0.19 million on the packing material.

On appeal by our Company, the Board of Revenue, Madhya Pradesh (“Board”), vide the order dated December 7, 1992, held that the Certificate could not be amended retrospectively and reopening of cases was illegal. The Board further held that packing material is included in ‘goods’ for the purpose of determining payment of taxes and since our Company was granted the Certificate, it is exempted from paying the said taxes.

The Commissioner of Sales Tax, Madhya Pradesh (“CST”) filed an application for reference bearing number 179/AC/91 before the Board against the order praying that packaging material used by the Company in production of goods should be held taxable with a retrospective effect from July 21, 1982. The Board, vide its order dated July 30, 1996 referred the matter to the High Court of Bilaspur (“Order”).

The CST filed appeals, bearing Nos STR 194/97, 195, 195/97, 196/97, 197/97 198/97 (“Appeals”) before the High Court of Bilaspur pursuant to the Order. The CST prayed that the packaging material used by our Company in production should be held taxable with retrospective effect. The High Court, pursuant to its order dated June 30, 2010 dismissed the Appeals and held that reassessment on the basis of retrospective amendment of the Certificate is impermissible and that our Company is exempted from paying the tax on packing material.

3. Show Cause Notice served by the Deputy Commissioner of Sales Tax, Solapur

The Deputy Commissioner of Sales Tax (“Authority”), on scrutiny of the books of accounts, records and sales registers of our Company on April 10, 2008, alleged that certain transactions between our Company and Aventis Bio Feeds Private Limited (“Aventis”) were not recorded in the sale register but were recorded in the books of accounts. The total tax payable from the said transactions aggregated to Rs. 1.8 million.

The Authority treated the alleged non-disclosure in the sale register as an act of tax evasion and vide show cause notice dated August 10, 2009 (“SCN”), held the same to be punishable under Section 74(2) of Maharashtra Value Added Tax Act, 2002, with rigorous imprisonment and fine.

The Authority served the SCN to our Company interalia to explain why prosecution should not be initiated against our Company for the said non-disclosure and further stating that failure to do the same shall attract immediate prosecution. The matter is currently pending.

4. Notices served by the Deputy Commissioner of Sales Tax, Solapur

The Deputy Commissioner of Sales Tax (“Authority”) issued notices bearing nos 9102, 9103 and 9104 to our Company for the period 2005-06, 2006-07 and 2007-08 respectively under Rule 9-A of the Central Sales Tax (Bombay) Rules, 1957 to ascertain whether the returns furnished by our Company were correct and complete (“Notices”).

The Authority, vide letter dated November 20, 2008, instructed our Company to attend proceedings on December 5, 2008, December 6, 2008 and December 10, 2008 for the returns filed for the period 2005-06, 2006-07 and 2007-08 respectively (“Assessment Proceedings”).

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The Authority sent reminder notices on May 23, 2009 to our Company informing us that we had had failed to attend the Assessment Proceedings under the Notices and issued new dates for hearing in the Assessment Proceedings. The new dates for the hearing for notices bearing Nos 9102, 9103 and 9104 were August 28, 2009, September 1, 2009 and September 2, 2009 wherein we submitted the requisite documents/clarifications.

The Authority has not finalized the assessment and the matter is currently pending.

5. Notice served by the Joint Commissioner of Income Tax, Range-1, Raipur

The Joint Commissioner of Income Tax, Range-1, Raipur (“JCIT”) issued a notice bearing No. JCIT/R- 1/RPR/Scrutiny/10-11 dated June 10, 2010 under Section 143(3) of the Income Tax Act, 1961, requesting our Company to furnish certain documents/clarifications with respect to the income tax return filed for the assessment year 2008-09 (“Notice”).

Our Company was instructed to attend proceedings on June 28, 2010 alongwith the documents/accounts or any other evidence that our Company may rely in support of the returns filed by us for the assessment year 2008-09 (“Assessment Proceedings”). Pursuant to the letter for postponement submitted by our Company, the Assessment Proceedings were postponed to July 15, 2010.

Our Company filed a reply dated July 15, 2010, providing clarifications to the Notice and also sent the documents for the perusal of the JCIT. The JCIT sent certain further queries on July 16, 2010. Our Company has filed a reply vide letter dated July 22, 2010 to the queries raised by the JCIT.

The next hearing date is not fixed and the matter is currently pending.

6. Application filed by HDFC Bank Limited before the Debt Recovery Tribunal, Mumbai

Our Company entered into derivative transactions with HDFC Bank Limited (the “Bank”) on July 25, 2007 for hedging, cost reduction strategies and risk management of the forex dealings and other financial operations of our Company (“Derivative Contracts”). The Derivative Contracts involved hedging risks and mandated our Company to pay the sum calculated by the Bank on a notional basis. Consequent to execution of the Derivative Contracts, our Company was advised by our forex expert, that the transactions were not in compliance with applicable laws, were void ab initio and hence unenforceable. Accordingly, our Company repudiated the contract on July 17, 2008.

The Bank alleged that our Company was liable to pay a sum of Rs 37.6 million which arose out of the Derivative Contracts (“Amount”). Subsequently, our Company filed a suit (Original Suit no RCS/66A of 2008) against the Bank before the District Court, Betul on July 18, 2008 submitting that on account of various misrepresentations made by the Bank, our Company repudiated the Derivate Contracts on July 17, 2008 and that the Bank be directed not proceed with the Derivative Contracts. The suit is pending adjudication.

The Bank filed an Original Application (OA no 206/2008) (“Application”) before the Debt Recovery Tribunal, Mumbai (“DRT”) against our Company on July 30, 2008. The Application was filed under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 praying that our Company be directed to pay the Amount arising out of Derivative Contracts together with interest at the rate of 17% per annum. The Bank has referred the matter to the Credit Information Bureau (India) Limited and the name of our Company appears on their website as a willful defaulter. The DRT, pursuant to its order dated September 22, 2008, restrained our Company from creating any additional third party interest in respect of machinery and plant at B-12, Chincholi, MIDC, Solapur, Maharashtra other than the subsisting charges on the said assets. Our Company has filed its written submissions before the DRT on March 19, 2010 praying that the Banks’s application be dismissed on grounds that the consent of our Company to enter into Derivative Contracts was induced by misrepresentation by the Bank and that the Derivative Contracts were not in compliance with applicable laws, were void ab initio and hence unenforceable. The matter is currently pending.

7. Notices issued by Registrar of Companies, Madhya Pradesh and Chattisgarh

1. The Registrar of Companies, Madhya Pradesh and Chattisgarh (“RoC”) had issued a show cause notice bearing No RoC-G/JTA(N)/T.S-1723/2009/3654 dated October 30, 2009 to our Company. Our Company was asked to show cause as to why legal action under Section 58A of the Companies Act should not be initiated against it for availing an

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unsecured loan of Rs. 16.27 lacs from M/s Kasturchand Harakchand Daga HUF at nil interest in the financial year 2006-2007 (“Loan”).

Our Company filed a reply dated December 15, 2009 stating that it was advised by its statutory auditors that the Loan was not covered under Section 58A of the Companies Act. The same forms part of the audit report dated September 7, 2007. It was further stated that the karta and members of M/s Kasturchand Harakchand Daga HUF are Directors of our Company, the Loan was interest free and taken for business of our company and was duly approved by the bankers of our Company while granting various credit facilities. The Board of Directors of our Company took the same on record and approved the Loan vide Board Resolution dated June 30, 2006. The matter is currently pending.

2. The RoC had issued a show cause notice bearing No RoC-G/JTA(N)/T.S-1723/2009/3655 dated October 30, 2009 to our Company. Our Company was asked to show cause as to why legal action under Section 297 and Section 629A of the Companies Act should not be initiated as our Company had allegedly failed to obtain prior approval of the Central Government for entering into transactions with the directors or the relatives of directors of our Company (“Parties”) and for not disclosing the interests of the directors in the financial year 2006-2007 (“Transactions”). The matter is currently pending.

Our Company filed a reply dated December 15, 2009 stating that it that had entered into transactions with the Parties for purchase of soya seed, truck freight charges, sale of soya deoiled cakes and crude oil at the then prevailing market rates on cash basis. It was further stated that the statutory auditors of our Company examined all the Transactions gave their comments under Companies Audit Report Order vide their report dated September 7, 2007. On the above grounds, our Company has requested the RoC to withdraw the notice. The matter is currently pending.

3. The RoC had issued a show cause notice bearing No RoC-G/JTA(N)/T.S-1723/2009/3656 dated October 30, 2009 to our Company. Our Company was asked to show cause as to why legal action under Section 147(1)(c) and Section 147(3) of the Companies Act should not be initiated as our Company had allegedly failed to disclose its name and registered office address in the notice issued on December 1, 2007 for convening the annual general meeting held on December 31, 2007.

Our Company filed a reply dated December 15, 2009 requesting the RoC to drop the proceedings. The reply further stated that our Company destroyed all the stationery in which the registered office of the company was not mentioned and filed an application for compounding of offence under Section 629A of the Companies Act in this regard on May 5, 2010 to the Company Law Board, Western Region Bench. The matter is currently pending.

4. The RoC had issued a show cause notice bearing No RoC-G/JTA(N)/T.S-1723/2009/3657 dated October 30, 2009 to our Company. Our Company was asked to show cause as to why legal action under Section 217 of the Companies Act should not be initiated as allegedly no directors’ report was attached to the balance sheet as on June 30, 2007.

Our Company filed a reply dated December 15, 2009 requesting the RoC to drop the proceedings and has filed an application for compounding of offence under Section 629A of the Companies Act in this regard on May 5, 2010 to the Company Law Board, Western Region Bench. The matter is currently pending.

5. The RoC had issued a show cause notice bearing No RoC-G/JTA(N)/T.S-1723/2009/3658 dated October 30, 2009 to our Company. Our Company was asked to show cause as to why legal action under Section 209 of the Companies Act should not be initiated as our Company has allegedly accounted gratuity and leave encashment on cash basis in contravention of Accounting Standard 15 in the financial year 2006-2007.

Our Company filed a reply dated December 15, 2009 requesting the RoC to drop the proceedings. Our Company stated that post 2006-07, it took a Gratuity Policy from SBI Life Insurance Company Group Gratuity Scheme wherein the total sum assured was Rs. 1.46 million. . It was further stated in the reply that under the terms of employment of the employees with our Company, the employees are not entitled to any Leave Encashment Scheme and it is our Company’s prerogative to pay leave encashment on a year to year basis. Our Company has also filed an application for compounding of offence under Section 629A of the Companies Act in this regard on May 5, 2010 to the Company Law Board, Western Region Bench. The matter is currently pending.

6. The RoC had issued a notice bearing No RoC-G/STA(S)/643 dated July 4, 2008 under Section 234(1) of the Companies Act (“Notice”) to our Company calling for the following information/clarification with respect to the balance sheet as on June 30, 2007 (“Balance Sheet”) filed by our Company and non-compliance with miscellaneous

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provisions of the Companies Act. Our Company has replied to the Notice on July 26, 2008 (“Reply”), the details of which are as follows:

Violation of Section 383A – The RoC alleged that our Company failed to appoint a whole time company secretary even though the paid up capital of our Company as on June 30, 2007 was Rs. 62 million and also ordered that Company furnish details with regard to appointment and tenure of company secretaries from the date when the paid up capital of our Company exceeded Rs. 20 million. Our Company, pursuant to the Reply, stated that its registered office is in Betul where it has not been able to appoint a proper candidate and that it has engaged a practicing company secretary at Bhopal.

Violation of Section 209(3)(B) read with Accounting Standard 15 issued by ICAI – The RoC alleged that our Company has accounted gratuity and leave encashment in the Balance Sheet on cash basis and not on accrual basis. Our Company, pursuant to the Reply, stated that it has accounted gratuity and leave encashment on cash basis till date and also engaged services of an approved actuarial valuer to work out the liability regarding the same.

Violation of Section 217(1) – The RoC alleged that our Company failed to attach the directors report to the Balance Sheet and was called upon to show cause as to why penal action under Section 217(5) should not be initiated against our Company. Our Company, pursuant to the Reply, stated that the same was on account of a mistake on its part and also attached a copy of the same with the reply.

Violation of Section 147(1)(c) – The RoC alleged that our Company failed to mention its name and address on its letterhead in the notice for convening the annual general meeting to be held on December 31, 2007, issued on December 1, 2007 and our Company was called upon to show cause as to why penal action under Section 147(2) should not be initiated against our Company and its directors. Our Company, pursuant to the Reply, accepting the mistake, stated that the same is regretted.

Violation of Section 211(1) - The RoC alleged that the true and fair view of the state of affairs of our Company were not reflected in the Balance Sheet as on June 30, 2007, as the Balance Sheet entries with respect to sundry debtors, creditors, loans and advances were mentioned as ‘subject to confirmation’ and no provision of entry tax and sales tax was made in the Balance Sheet due to certain pending documents to be collected from customers. Our Company, pursuant to the Reply, stated that some confirmations were received from its debtors and creditors after the date of signing of the accounts by auditors. Copies of certificate for availing exemption of sales tax and entry tax post the finalization of accounts obtained from the statutory auditors were also enclosed with the Reply.

Contravention of Section 58A - The RoC asked our Company to furnish a list of people from whom share application money has been raised, maximum amounts received from each of the applicants, amount refunded to the applicants, if any, and date of receipt as the Company had accepted share application money amounting to Rs. 50 million and Rs. 5 million on May 31, 2006 and June 30, 2007 respectively. It was alleged that this head is being used by the Company as a method of raising deposits without any intention to allot the shares and thus, in contravention of the provisions of Section 58A (1) read with Companies (Acceptance of Deposit) Rules, 1975. Our Company, pursuant to the Reply, stated that the amount of Rs. 50 million was share application money received from Aventis Biofeeds Private Limited on March 12, 2006 and enclosed the auditors report with the reply.

Contravention of Section 297/299/301 - The RoC asked our Company to show cause as to why legal action under Section 297 should not be initiated against our Company as it had allegedly failed to obtain prior approval of the Central Government for entering into related party transactions and for not disclosing the interests of the directors for the financial year 2006-2007. Our Company, pursuant to the Reply, stated that transactions under Section 297 for purchase of soya seed from their relatives were at the then prevailing market rates and that no Central Government approval was required in this regard. With respect to alleged contravention of Section 299, our Company enclosed the interest of Directors in Form 24AA. With respect to Section 301, our Company stated that all transactions mentioned under Section 301 were entered in the register.

In addition to the above, the RoC interalia alleged contravention/explanation with respect to compliance with Sections 125, Section 143, Section 154 and Section 58A of the Companies Act and also asked for certain additional loan, assets and investments made in our Company. Our Company, pursuant to the Reply, stated that provisions of

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Section 125 have been complied with and enclosed the auditors’ certificate with the Reply and stated that no deposits were accepted under Section 58A. Our Company also stated that as the Company is not listed, there is no requirement for quarterly publication of unaudited results and notice under Section 154 through publication in the news paper.

The matter is currently pending. Proceedings by our Company

Civil Litigation

1. Civil Suit filed against Focus Line Software Services Private Limited in the Court of Additional District Judge, Betul

Our Company and Focus Line Software Services Private Limited (“FSS”) entered into a contract on July 5, 2004 whereby FSS was required to manufacture and install software at our Company’s premises within a prescribed time. As per the contract, our Company paid Rs. 0.08 million as advance on September 20, 2004 and paid Rs. 0.11 million on November 11, 2004 to FSS. The non-completion of the work by FSS led to an alleged breach of contract and our Company filed a suit bearing No 1-B/2009 before the District Consumer Forum, Betul on January 16, 2007 which was rejected vide order dated January 21, 2009 on the ground that our Company did not come under the definition of ‘Consumer’ under the Consumer Protection Act, 1986.

Our Company filed a Civil Suit bearing No 1/B/09 against FSS before the Additional District Judge, Betul for recovery of damages and amount paid for manufacturing of software to FSS amounting to Rs. 0.19 million. The matter is currently pending for disposal before the Additional District Judge, Betul.

2. Claim for refund of excess freight charged by the South Eastern Railways

Our Company filed a claim for refund of excess freight charged by the Commissioner, South Eastern Central Railways amounting to Rs 0.03 million before the Chief Commercial Manager, South Eastern Central Railway, Bilaspur.

As per the claim, the Railway Authorities assessed the freight charge on the basis of an incorrect distance of 1725 kms from Chindwara to New Jalpaigudi where as the actual distance was 1675 kms as per the railway website. The evaluation on the basis of the incorrect distance put the freight in a higher PMT slab resulting in charging of excess freight by the Railways. The claim was submitted vide letter dated January 3, 2008 to the Chief Commercial Manager (Refunds), Head Quarters, South Eastern Central Railway, Bilaspur. The claim was interalia rejected by the Dy. Chief Commercial Manager, Bilaspur vide letter dated July 21, 2009. Our Company has resubmitted the claim for consideration on March 4, 2010. The matter is currently pending.

3. Claim filed against Union of India, Ministry of Railway before the Railway Claims Tribunal, Bhopal

Our Company had dispatched certain rakes which were used to transfer certain products to Tadepalligudam and Eluru. Our Company had contended that that the Railway Authorities at Tadepalligudam and Eluru (“Authorities”) had charged excess freight by alleging that full payment towards freight charges was not made at the booking stations by our Company. Our Company had contended that Rs 0.61 million (“Amount”) was paid as excess, which was accepted by the Authorities and it was agreed that the Amount would be refunded to our Company. However, Rs 0.20 million out of the total Amount was refunded to our Company.

Our Company filed a Petition for the recovery of Rs 0.41 million alongwith interest from the date of deduction till realization along with cost of claim petition against the Union of India, Ministry of Railways before the Railway Claims Tribunal, Bhopal. Our Company provided details of the excess freight paid by it including the details of the Authorities wrongly adjusting Rs 0.31 million against alleged outstanding demurrage charges and Rs 0.10 million under incorrect train load and wagon load classification. The Petition is pending before the Railway Claims Tribunal, Bhopal.

4. Claim for refund of excess freight charged by the Eastern Central Railways

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Our Company filed a claim for refund, on March 4, 2010, of excess freight charged by the Chief Commercial Manager (Refund), Hazipur, Eastern Central Railways amounting to Rs 0.32 million before the Chief Commercial Manager (Refund), Hazipur, Eastern Central Railways (“Claim for Refund”).

As per the Claim for Refund, the Railway Authorities assessed the freight charge on the basis of an incorrect distance of 560 kms from Sarai to Rangapani where as the distance, as per the railway website, was 454 kms. The evaluation on the basis of the incorrect distance put the freight in a higher PMT slab resulting in excess freight charged by the Railways.

The Claim for Refund is pending before the Chief Commercial Manager (Refund), Hazipur, Eastern Central Railways

5. Writ Petition against the Order passed by Secretary, Krishi Upaj Mandi Samiti, Chindwara in the Jabalpur High Court

Our Company had purchased maize from Multai Mandi on March 26, 2007 (“Maize”) and had paid a sum of Rs 0.15 million as mandi fee in advance before the actual removal/lifting of goods. Out of the said amount of Rs. 0.15 million, Rs 0.08 million was paid towards mandi tax. The Maize was dispatched to Chindwara railway shed by truck for onward dispatch to other places by railway wagon with valid permission from Krishi Upaj Mandi Samiti, Multai (“KUMS Multai”).

Krishi Upaj Mandi Samiti, Chindwara (“KUMS Chindwara”) demanded mandi tax amounting to Rs 0.39 million on the same as the truck carrying the Maize crossed the territory of Chindwara.

Our Company filed a Writ Petition (W.P No 4728/2007) against the order dated March 26, 2007 passed by Secretary, KUMS Chindwara before the Jabalpur High Court in the matter involving KUMS Chindwara and KUMS Multai wherein it was held that our Company was required to pay the additional mandi tax as demanded by KUMS Chindwara. The High Court of Jabalpur has granted stay in the matter vide its order dated April 19, 2007 and the matter is currently pending.

6. Writ Petition against State of Madhya Pradesh and others before the Jabalpur High Court

Our Company purchased Mahua Seed Gulli (“Product”) from the State of Chattisgarh for extraction of oil and paid market fee payable on the Product in Chattisgarh. The Product was used by our Company for extraction of oil. Krishi Upaj Mandi Samiti, Betul demanded market fee of Rs. 0.78 million which implied compulsory levy of tax on our Company.

Our Company filed a Writ Petition bearing number 4024/2006 (“Petition”) against State of Madhya Pradesh, Krishi Vypnan Board and Krishi Upaj Mandi Samiti (“Respondents”) before the High Court of Madhya Pradesh at Jabalpur. The Petition challenged the constitutionality of Section 19 of the Madhya Pradesh Krishi Upaj Mandi Adhiniyam Act, 1972 (“the Act”).

The amended Clause (ii) of Section 19 of the Act empowers the Krishi Upaj Mandi Samiti to levy market fee on notified agricultural products whether bought from within the state or from outside the state into market areas and used for processing. Thus, pursuant to the amendment, the agriculture product bought from outside the state even for own consumption or processing was made liable for payment of market fee.

Our Company had challenged the constitutionality of Section 19 of the Act on the ground that the state lacks legislative competence due to extra territorial jurisdiction. The said Section allows the state to impose tax on transactions which are taking place beyond its territorial limits. Our Company further contended that Section 19 of the Act is violative of Article 14 of the Constitution as it imposes arbitrary, unjustified restrictions and multiple levying of taxes leading to double taxation.

Our Company had contended that it has not benefited from any direct or indirect services provided by the Krishi Upaj Mandi Samiti in using the Product. Our Company also contended that the Product is a forest produce and that the Act is not applicable to it.

Our Company also contended that Section 19 of the Act provides that market fee can be charged even on the agricultural products bought from outside the state disregarding the fact that tax on the same has already been paid.

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Even if the manufacturer who brings in products from other states does not use services offered by the market committee, still he is required to pay the tax in form of fee.

The matter is currently pending.

Income Tax Litigation

1. Appeal filed before the Commissioner of Income Tax (Appeals), Raipur against the order passed by the Assistant Commissioner of Income Tax, Bhilai

Our Company filed its income tax return for the assessment year 2006-07 declaring a total income of Rs. 6.9 million for the assessment year 2006-2007. The Assistant Commissioner of Income Tax, Bhilai (“ACIT”) in the assessment order dated December 22, 2008 (“Order”) added Rs. 0.5 million to the total income of our Company on account of variation in electricity consumption and disallowed leave travel assistance amounting to Rs. 0.38 million paid to the directors of our Company (“Amounts”). The total income assessed by the ACIT was Rs. 7.8 million.

Our Company filed an appeal before the Commissioner of Income Tax (Appeals), Raipur (“CIT”) against the Order on January 21, 2009 interalia on the grounds that the Order was unjustified, unwarranted and was at any rate excessive. The appeal is currently pending for disposal.

Our Company, pursuant to its letter dated January 30, 2009, requested the ACIT for stay of demand on account of the pending appeal before the CIT. The ACIT, pursuant to its letter dated February 5, 2009, had accepted our Company’s request with the condition that 50% of the demand to be paid by February 20, 2009 and the rest of the demand to be paid in 6 equal monthly installments. The ACIT had also determined that in case the appeal is decided by the CIT against our Company, the whole of demand would become due.

The appeal before the CIT is currently pending.

Service Tax/Central Excise Litigation

1. Appeal filed against the order of the Assistant Commissioner, Commercial Tax, Raipur before the Appellate Deputy Commissioner, Commercial Tax, Raipur

Our Company filed appeals bearing Nos. 30-SaAa/2004 (Regional), 03-SaAa/2004 (Central), 30-SaAa (Preliminary) (“Appeals”), before the Appellate Deputy Commissioner, Commercial Tax, Raipur (“Appellate Authority”), against the order dated January 19, 2004, passed by the Assistant Commissioner, Commercial Tax, Raipur (“Order”). The grounds of the Appeals are that the Assessing Officer (“AO”) had erroneously evaluated the tax and penalty accruing from our Company’s purchases and sales, for period April 1, 1993 to March 31, 1994 (“Period”).

Our Company has contended that the AO had, in the evaluation of the sales tax to be paid by our Company for the Period, erroneously calculated the tax payable on sale of soyabean as a result of which the aggregate of the tax and penalty calculated by the AO was in exess of the tax and penalty payable by Rs. 0.7 million.

Our Company has contended that a) the AO erroneously levied tax at the rate of 3% on soyamill, whereas the rate of tax levied on the same ought to be 1% as soyamill is akin to soyabean, which is subjected to tax at the rate of 1%; b) the AO had levied tax aggregating to Rs. 4 million on the charuke goods manufactured by our Company which is a tax-free item; c) entry tax of 1% was levied by the AO on purchase of machine parts, which are capital goods and are hence exempt from such taxation and d) the AO erroneously levied tax at the rate of 8% aggregating to Rs. 0.08 million on the sale of coal-dust (kolchura), as tax on the same had already been paid. An application was made against the said evaluations before the Assistant Commissioner, who ruled in favour of the AO pursuant to the Order.

The Appeals were partially allowed and the Appellant Authority in its order dated May 27, 2005, held that the aggregate reduction of tax and penalty payable from purchase of soyabeans amounted to Rs. 0.51 million. Further, the contention with respect to soyamill was also partially accepted and the tax payable on the same was reduced by Rs.0.17 million. With respect to the tax levied on charuke goods, the Appellate Authority held that only goods amounting to Rs. 0.66 million were charuke goods and hence the tax exemption was allowed to the extent of Rs. 0.06 million. However, our Company’s contention with respect to exemption of entry tax on machine parts was

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rejected by the Appellant Authority. The rationale given for the same was that machine parts cannot be classified under the head of plants and machinery and hence, do not qualify for the said exemption.

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Criminal Litigation

1. Criminal Complaint filed against Manushree Ingredients Private Limited before the Chief Judicial Magistrate, Betul

Our Company and Manushree Ingredients Private Limited (“MIPL”) had entered into a joint venture for manufacture of sal stearine. On the termination of the joint venture, Rs 0.20 million was to be paid by MIPL to our Company. MIPL issued cheques worth Rs. 0.20 million to our Company which were returned with the note ‘insufficient funds’.

Our Company filed an application against MIPL for dishonour of cheque and non-payment of dues before the Chief Judicial Magistrate, Betul. The Chief Judicial Magistrate passed an order on January 18, 2008 wherein he took cognizance against MIPL for the offence under Section 138 of the Negotiable Instrument Act for non-payment of dues and prosecuted MIPL under Section 138, Section 141 and Section 142 of the Negotiable Instruments Act (“Order”).

A revision petition (Criminal Revision no 16/2008) was preferred by MIPL against the Order, interalia paying that the Order be quashed on grounds of incorrectness and illegality. The revision petition was dismissed pursuant to an order dated September 30, 2008 by the Additional Session Judge-II, Betul. MIPL has further preferred an application bearing No Misc. Criminal/case no/916/2008 on November 17, 2008 against the Order before the Jabalpur High Court, which is currently pending for disposal.

2. Criminal Application filed against Dynavox Electronic Limited before the Bombay High Court

Our Company had entered into a Memorandum of Understanding (“MoU”) with Dynavox Electronic Limited (”Dynavox”) and its two directors (“Accused”) on January 14, 1997. As per the MoU, our Company was required to arrange for export orders (extraction of soyabean and oil cakes) for Dynavox. In consideration of the same, Dynavox was required to pay performance premium of 4.25% of the exports turnover to our Company.

On June 26, 1997, Dynavox sent two pay orders amounting to Rs. 3.07 million towards payment to our Company and issued cheques for the rest of the amount of Rs. 5.42 million. Out of Rs 8.5 million payable to our Company, a sum of Rs 5.42 million was due from Dynavox which they paid by cheques. Our Company issued a legal notice to Dynavox, for non-payment of dues with interest thereon and dishonour of cheque, for the payment of Rs 5.55 million on October 21, 1997. Dynavox inter alia denied its liability vide letter dated November 3, 1997.

Our Company filed a Criminal Complaint bearing no. 2556/S/2005 1170/S before the Court of Metropolitan Magistrate at Bellard Pier, Mumbai (“Court”) against Dynavox and the Accused interalia for non-payment of dues and dishonour of cheque (“Complaint”). On account of non-appearance by representatives of our Company, the Complaint was dismissed by the Court vide its order dated November 29, 2008 (“Order”).

Our Company filed a Criminal Appeal dated December 10, 2009 before the Bombay High Court against the Order praying that High Court call for records and proceedings from the Court and that it examine the legality/validity of the Order and set it aside. Our Company further prayed that on account of mix up of dates, the advocates representing our Company and/or their representatives could not remain present in the Court on September 20, 2009 and November 29, 2008.

The matter is currently pending.

3. Criminal Complaint against Chandulal Rameshwardas Exports Limited filed before the Court of Ld. Metropolitan Magistrate at Esplanade, Mumbai

Our Company and M/s Chandulal Rameshwardas Exports Limited and others (“CRE”) entered into an agreement whereby our Company was required to export soyabean meal to M/s Peter Cremer, Singapore on behalf of CRE. Our Company filed a Criminal Complaint with the Court of the Metropolitan Magistrate, Esplanade, Mumbai, bearing No. 191/5/ of 1999 (“Complaint”) against CRE interalia for non-payment of dues amounting to Rs. 7.6 million and dishonour of cheque under Section 138 and Section 141 of the Negotiable Instruments Act. During the hearing, the Magistrate rejected our Company’s prayer to recall a defense witness, did not allow few documents to be submitted as evidence in the Court and rejected our Company’s application which was challenged by our Company before the Bombay High Court in the Writ Petition No. 2331 of 2005. The High Court interalia quashed 264

the order of the Magistrate vide its order dated October 14, 2005 and directed the Magistrate to allow our Company to produce additional evidence and to recall the said witness.

During the trial, our Company interalia requested to recall prosecution witness by filing an application with the Small Causes Judge and Special Metropolitan Magistrate’s Court bearing No C.C. No. 618/SS/2005 dated September 14, 2005. Our Company filed a Transfer Application bearing No. 310/2005 before the Court of Chief Metropolitan Magistrate on December 2, 2005 and prayed that the case be transferred to another judicial officer and records and proceedings of the case be called from the Court of Special Metropolitan Magistrate and Small Causes Court at Mumbai.

Further, on account of continued grievance at the Trial Magistrate level, our Company filed Writ Petition bearing No. 794 of 2006 on June 23, 2006 to allow admission of various documents to be admitted as evidence. The High Court dismissed the Writ Petition and imposed costs of Rs. 10,000 on our Company. The matter is currently pending for adjudication with the Chief Metropolitan Magistrate.

4. Criminal Complaint against Pujan Trading Company before the Court of Chief Judicial Magistrate, Betul

Pujan Trading Company (“PTC”) had purchased certain items from our Company and had issued cheques worth Rs. 3.49 million which were returned with the note ‘insufficient funds’.

Our Company filed Criminal Complaints bearing Nos 233 of 2008, 234 of 2008 and 2043 of 2008 against PTC under Sections 138, Section 141 of the Negotiable Instruments Act and Section 420 of the Indian Penal Code (“Sections”) before the Court of the Chief Judicial Magistrate, Betul (“Complaints”) interalia praying for adequate compensation and prosecution of PTC under the Sections for non-payment of dues.

Our Company has claimed a total of Rs 3.49 million (Rs 1.14 million pursuant to the complaint bearing No 233 of 2008, Rs 1.58 million pursuant to the complaint No 234 of 2008 and Rs 7.60 million pursuant to the complaint No 2043 of 2008) along with interest at the rate of 12% for 233 of 2008 and 234 of 2008 and 18% for 2043 of 2008 for the financial losses suffered by it.

The Complaints are currently pending before the Court of the Chief Judicial Magistrate, Betul.

5. Criminal Complaint against Pioneer Feeds & Poultry Products Private Limited before the Court of Chief Judicial Magistrate, Betul

Pioneer Feeds & Poultry Products Private Limited (“PFP”) had purchased certain items from our Company, the payment for which was made vide various cheques of SBI Coimbatore. The cheques were returned owing to insufficient funds.

Our Company filed Criminal Complaints bearing Nos 759/09/2008, 760/09/2008, 1553/2008 and 771/2008 before the Chief Judicial Magistrate, Betul (“CJM Court”) against PFP under Section 138, 141 of the Negotiable Instruments Act and Section 420 of the Indian Penal Code (“Sections”) before the CJM Court (“Complaints”) interalia praying for adequate compensation and prosecution of PFP under the Sections for non-payment of dues.

Our Company has interalia claimed a total of Rs 93.6 million (Rs. 11.7 million pursuant to the complaint no 759/08, Rs. 25.8 million pursuant to the complaint no 771/08, Rs. 33.1 million pursuant to the complaint no 1553/08 and Rs. 23.01 million pursuant to the complaint no 760/09) along with interest at the rate of 18% for the financial losses suffered by it. The Complaints are currently pending before the CJM Court.

6. Criminal Complaint filed by our Company against In Time before the Court of Chief Judicial Magistrate, Betul

In Time, dealers in edible oils, purchased certain items from our Company and issued cheques worth Rs. 0.59 million which were returned with the note ‘insufficient funds’.

Our Company had filed a complaint bearing No 350/2002 against In Time under Section 138 and Section 141 of the Negotiable Instruments Act before the Court of the Chief Judicial Magistrate, Betul interalia praying for adequate compensation and prosecution of In Time for non-payment of dues. Our Company has claimed Rs 0.59 million with interest at the rate of 15% for the financial losses suffered by it.

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The complaint is currently pending before the Court of Chief Judicial Magistrate.

7. Criminal Complaint filed by our Company against Vijay Poultry Farms before the Court of Judicial Magistrate, Betul

Vijay Poultry Farms (“VPF”) purchased Soya de-oiled cakes from our Company and issued a cheque of Rs. 0.41 million towards payment. The cheque was returned to our Company with a note stating ‘insufficient funds’.

Our Company filed a Criminal Complaint, bearing no 827 of 2010, against VPF and its partners before the Court of Judicial Magistrate, Betul for dishonour of cheque and non-payment of dues (“Complaint”) inter alia praying for adequate compensation and prosecution of VPF under Section 138 and Section 141 of the Negotiable Instruments Act for non-payment of dues. Our Company has claimed a total of Rs. 0.41 million along with interest at the rate of 18% for the financial losses suffered by it. The Complaint is currently pending before the Court of the Chief Judicial Magistrate, Betul.

Legal Notices

1. Legal Notice served by our Company to M/s Jet Cooling & Engineering System for rectification of problem in Cooling System (Tower)

Our Company purchased a Cooling System (Tower) (“System”) from M/s Jet Cooling & Engineering Systems (“JCES”). The System specifications stated that the difference between the specified wet bulb temperature and the specified cold water temperature should be 4 degrees centigrade. This aspect was a determining factor in our Company buying the System. However, the System failed in maintaining the required difference resulting in excess consumption of hexane amounting to a loss of Rs 0.48 million per month.

A legal notice dated December 17, 2009 was sent to JCES interalia stating that our Company is incurring losses of Rs. 0.48 million on a monthly basis because of the fault in the cooling system and in case of continuance of inadequacy of services, our Company shall initiate legal proceedings against it for claiming the losses suffered.

2. Legal Notice sent by our Company to Banwarilal and Co. for dishonour of cheque and non-payment of dues

Our Company has sent a legal notice dated March 30, 2009 to Banwarilal and Co. (“BNC”) for non-payment of dues and dishonor of cheque amounting to Rs. 2.3 million issued by BNC on March 30, 2009 (“Notice”).

Our Company sold cashew kernels worth Rs 7.1 million to BNC, the payment for which was made vide cheques. The cheque dated September 24, 2008 for the sum of Rs 2.3 million, issued by BNC was returned owing to insufficient funds.

Our Company has served the Notice on BNC for payment of Rs 2.3 million within 15 days from receipt of the Notice failing which our Company would initiate legal action under Section 138 and Section 141 of the Negotiable Instruments Act.

Litigation against our Directors/our Promoters

1. Civil Suit filed by Abubkar Patel and Shahid Patel against Paras Kumar Daga and Vinod Kumar Daga before the Court of Civil Judge, Betul

Abubaker Patel and Shahid Patel (“Plaintiffs”) filed a Civil Suit bearing No 48A/2009 against Mr. Vinod Kumar Daga and Mr. Paras Kumar Daga (“Defendants”) before the Court of Civil Judge Class 2, Betul (“Court”) to restrain the Defendants from forcefully evicting the Plaintiff from the disputed property (“Property”).

The Plaintiffs filed the suit to restrain the Defendants from forcefully evicting them from the Property. A show cause notice dated March 28, 2009 was issued by the Court of Civil Judge, Class 2, Betul to the Defendants stating that personal attendance of the Defendants is required in the matter.

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The Defendants filed an application dated August 10, 2009 before the Court to get their names removed from the title of the suit on the ground that they were not the real owners of the property which was rejected by the Court vide order dated November 17, 2009.

The Plaintiff filed an application to include Mr. Shreans Daga as a party on the ground of him being the real owner of the Property. This application was also rejected by the Court vide order dated December 12, 2009. The Defendants also filed a written statement interalia praying that on account of Mr. Shreans Daga being the owner of the party, he should be added as Defendant No 3 in the present suit.

The matter is currently pending.

2. Complaint filed by Ms. Leena Francis Soaz against Mr. Ramesh Kotecha, Independent Director of our Company, before the Court of Chief Metropolitan Magistrate at Esplanade, Mumbai

Ms. Leena Francis Soaz (“Complainant”) filed a Criminal Complaint bearing No 12/09 before the Court of Chief Metropolitan Magistrate at Esplande, Mumbai against Mr. Ramesh Kotecha (“Accused”), under Section 354 and Section 509 of the Indian Penal Code (“Complaint”).

The Complainant visited the offices of the Accused for getting some contracts signed and it was during this visit, she alleged that she faced offences under Sections 354 of the Indian Penal Code from the Accused. The Complainant complained to her employer company and the matter was being inquired into by them. In the mean time, the Complainant lodged an FIR, bearing FIR No. 289/05, against the Accused in the Cuffe Parade police station alleging offences under Sections 354 and Section 509 of the Indian Penal Code.

Litigations against our Group Companies

Hi-Gene Seeds India Private Limited

1. Complaint filed by Chandrahar Sopan Bhosale against Hi-Gene Seeds (India) Private Limited before the District Consumer Disputes Redressal Forum, Betul

Chandrahar Sopan Bhosale (“Complainant”) filed a consumer complaint bearing 151/2010 against Hi-Gene Seeds (India) Private Limited (“Hi-Gene”), Bhagyashree Agro Agency (“BAA”) and others before the District Consumer Disputes Redressal Forum, Betul (“Forum”) interalia for compensation on account of losses suffered due to deficiency in the seeds manufactures by Hi-Gene.

The Complainant purchased seeds of hybrid sunflower Swarna (“Seeds”) produced by Hi-Gene which were sold by BAA. BAA assured the Complainant that the Seeds would give production of minimum 7 quintals per acre. However, the Seeds failed to meet the expected standards. The Complainant demanded compensation from BAA for non-eruption of seeds and filed a complaint dated July 22, 2009 before the Agriculture Development Officer, Agriculture Dept. District Council, Usmanabad and Block Development Officer Panchayat Committee, Usmanabad (“Authorities”). The Authorities on inspection found that seeds were deficient and would lead to lower production.

The Complainant prayed for payment of Rs. 0.1 million on the grounds of expenses occurred in cultivation, loss of income and mental, physical and financial agony. The Collector, District Consumer Disputes Redressal Forum, Usmanabad issued a notice to Hi-Gene and BAA instructing them to appear before the Forum on June 25, 2010. The matter is currently pending for disposal before the Forum.

Bio Bliss Seed Producers Co-op. Society Limited

1. Complaint filed by Bhagwan Singh against Bio Bliss Seed Producers Co-op. Society Limited before the District Consumer Disputes Redressal Forum, Betul

Bhagwan Singh (“Complainant”) filed a consumer complaint bearing number CC67/10 against Bio Bliss Seed Producers Co-op. Society Limited (“Biobliss”) and others before the District Consumer Disputes Redressal Forum, Betul (“Forum”) for compensation on account of alleged losses suffered due to deficiency in the seeds manufactures by Biobliss (“Complaint”).

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The Complainant purchased wheat seeds manufactured by Biobliss out of which 25% of the seeds did not grow on sowing. The Complainant informed the Gramsevak, Betul who on inspection found the seeds to be contaminated. The Complainant also filed a complaint dated December 26, 2009 to the Senior Agricultural Department Officer, Agriculture Farmer Welfare of Betul and Agriculture Development Officer, Betul (“Officer”). On inspection of the seeds, the Officer observed that the seeds contained a mixture of 40% of another variety of wheat seed.

The Complainant prayed for compensation of Rs 0.25 million in the Complaint. A show cause notice was issued by the Forum instructing Biobliss to appear before the Forum on August 18, 2010 on account of the alleged gross negligence and false assurance on the part of Biobliss.

Shreyans Credit and Capital Private Limited

1. Notice served by the Income Tax Officer, Indore

The Income Tax Authorities issued a notice bearing No 8432 dated April 6, 2010 to Shreyans Credit and Capital Private Limited (“Shreyans Credit”), our group company, for the assessment year 2008-09 under Section 142(1) of the Income Tax Act, 1961 to ascertain that the returns furnished by Shreyans Credit were correct and complete (“Notice”).

Shreyans Credit was instructed to attend proceedings on July 05, 2010 alongwith the list of accounts and documents mentioned in the annexure to the Notice with regard to the returns filed for the assessment year 2008- 09 (“Assessment Proceedings”). Shreyans Credit filed a reply dated July 15, 2010, providing clarifications to the Notice and also sent the documents for the perusal of the Income Tax Authorities.

The Income Tax Authorities issued an additional notice bearing No 9258 dated July 16, 2010 instructing Shreyans Credit to attend proceedings on July 28, 2010 alongwith the list of additional accounts and documents. The date to attend proceedings has been postponed to August 2, 2010.

The matter is currently pending.

Material Developments

In the opinion of the Board, other than as disclosed in the Notes to our Financial Statements in the section “Financial Statements” on page 177 and in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 229 of the Draft Red Herring Prospectus, there has not arisen, since the date of the last financial statements set out herein, any circumstance that materially or adversely affects our profitability taken as a whole or the value of our consolidated assets or our ability to pay our material liabilities over the next 12 months.

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LICENSES AND APPROVALS

We have received the necessary consents, licenses, permissions and approvals from the Government and various governmental agencies required for our present business and except as mentioned below, no further approvals are required for carrying on our present business.

In view of the approvals listed below, we can undertake this Issue and our current business activities and no further major approvals from any governmental or regulatory authority or any other entity are required to undertake the Issue or continue our business activities. Unless otherwise stated, these approvals are all valid as of the date of the Draft Red Herring Prospectus.

Pursuant to change of name of our Company on June 9, 2010 from Betul Oils and Flours Limited to Betul Oil Limited, our Company is the process of making applications for change of name on the licenses and approvals.

I. APPROVALS FOR THE ISSUE

Corporate Approvals

1. Our Board has, pursuant to resolutions passed at its meeting held on May 25, 2010 authorised the Issue.

2. Our shareholders have pursuant to a resolution dated June 1, 2010 under Section 81(1A) of the Companies Act, authorised the Issue.

Approvals from Stock Exchanges

1. Our Company has received an in-principle approval from the NSE dated [●] for listing of Equity Shares issued pursuant to the Issue.

2. Our Company has received an in-principle approval from the BSE dated [●] for listing of Equity Shares issued pursuant to the Issue.

Approvals from Lenders

1. All approvals required from the lenders in relation to the Issue have been obtained.

II. COMPANY RELATED

Incorporation Details

1. Company Registration Number: 10-01723

2. Corporate Identity Number: U15141MP1981PLC001723

3. Certificate of Incorporation bearing Registration Number 10-01723, dated February 3, 1981 issued by the Registrar of Companies, Madhya Pradesh, Gwalior.

4. Certificate of change of name of our Company from “Betul Oils and Flours Private Limited” to “Betul Oils and Flour Limited” dated February 28, 2006, issued by the Registrar of Companies, Madhya Pradesh and Chattisgarh.

5. Certificate of change of name of our Company from “Betul Oils and Flours Limited” to “Betul Oil Limited” dated June 9, 2010, issued by the Registrar of Companies, Madhya Pradesh and Chattisgarh.

6. PAN Card bearing number AAACB9273B dated July 20, 2010 in the name of Betul Oil Limited issued by the Income Tax Department.

7. TIN 059350755 changed to 23864003507, dated July 1, 2003, issued by Commissioner, Commercial Taxes, Madhya Pradesh.

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Import-Export

1. Certificate of Importer-Exporter Code bearing number 1188003542, dated December 1, 2004 issued by the Foreign Trade Development Officer, Ministry of Commerce.

BETUL UNIT

1. Excise and Tax Related

1. Central excise registration certificate number AAACB9273BXM001 dated November 10, 2009 issued by the Deputy Commissioner of Central Excise under rule 9 of the Central Excise Rules, 2002 for manufacturing of excisable goods.

2. Service tax registration certificate number AAACB9273BST001 dated January 27, 2009 under section 69 of the Finance Act, 1994 under the category of transport of goods by road and renting of immovable property.

3. Certificate of Registration, registration number changed to 05/05/3507/515 with effect from October 1, 2000 under Central Sales Tax Act, 1956 and M.P General Sales Act, 1956 and M.P General Sales Tax Act, 1958.

2. Environment

1. Member Secretary of Madhya Pradesh Pollution Control Board has issued consent order dated December 29, 2008, bearing number 10685/TS/MPPCB/2008 for renewal of consent under the Water (Prevention and Control of Pollution) Act, 1974 to operate a solvent extraction plant with a production capacity of 90,000 T/year, refinery with a production capacity of 15,000 T/year and generation of electricity by D.G. Set at Betul, valid upto September 30, 2011.

2. Member Secretary, Madhya Pradesh Pollution Control Board has issued consent order dated December 29, 2008, bearing number 10687/TS/MPPCB/2008 for renewal of consent under the Air (Prevention and Control of Pollution) Act, 1981 to operate a solvent extraction plant with a production capacity of 90,000 T/year, refinery with a production capacity of 15,000 T/year and generation of electricity by D.G Set at Betul, valid upto September 30, 2011.

3. Import-Export

1. Registration cum Membership Certificate bearing number 602/2009-2010 dated June 14, 2010, issued by Director WR, Federation of Indian Export Organisations, as associate member for multi-product group. This certificate is valid till March 31, 2011.

2. EPCG License bearing number 0330020268/2/11/00 dated June 9, 2008, issued by Foreign Trade Development Officer under the Foreign Trade Regulation for import of capital goods at concessional rate of duty, with period of shipment of 36 months.

3. EPCG License bearing number 0330024269/2/11/00 dated November 12, 2009, issued by Foreign Trade Development Officer under the Foreign Trade Regulation for import of capital goods at concessional rate of duty, with period of shipment of 36 months.

4. Importing and storing of petroleum

1. Chief Controller of Explosives, Petroleum and Explosives Safety Organization (PESO), Ministry of Commerce and Industry, issued license dated August 26, 1999, bearing License number. P/HQ/MP/15/720(P14527) for importing and storing 24 KL petroleum class ‘B’ in bulk for the period from August 26, 1999 to December 31, 2010.

5. Electricity

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1. Sanction letter bearing number T/5433/992 dated October 10, 1995 issued by Madhya Pradesh Electricity Board for high tension power supply of 1000 KVa for the period from October 7, 1995.

2. Permission vide letter dated October 8, 2009, bearing number T/1323 issued by Superintending Engineer (Electric Security) and Deputy Chief Electrical Inspector, Madhya Pradesh Government, Jabalpur for 1500 KVA 033/0.433 KV High Power Transformer under India Electricity Regulations, 2003.

6. Weights and Measures

1. Registration certificate number 25 dated September 30, 2008 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for Vertical Edible oil storage tank number 5 and 6 for storage of soya edible oil under rule 16 (3) under Weights and Measures. This certificate is valid till September 29, 2013.

2. Registration certificate number 49 dated March 31, 2009 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for storage tank number 1 and 2 for storage of hexane under rule 16 (3) under Weights and Measures. This certificate is valid till March 30, 2014.

3. Registration certificate number 50 dated September 19, 2009 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for physical weights under rule 16 (3) under Weights and Measures. This certificate is valid till July 18, 2012.

4. Registration certificate number 20 dated September 30, 2009 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one electronic weighing scale model number NAF serial number 26483 class 3, under rule 16 (3) under Weights and Measures. This certificate is valid till September 29, 2010.

5. Registration certificate number 72 dated December 31, 2009 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for One Dormant Platform, one dormant platform machine, one portable loose weight platform model number 980900, one loose weight portable platform model number 82463, under rule 16 (3) under Weights and Measures. This certificate is valid till December 30, 2010.

6. Registration certificate number 29 dated March 4, 2010 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one electronic weighing scale under rule 16 (3) under Weights and Measures. This certificate is valid till March 30, 2011.

7. Registration certificate number 30 dated March 4, 2010 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one automatic filling machine under rule 16 (3) under Weights and Measures. This certificate is valid till March 30, 2011.

8. Registration certificate number 31 dated March 4, 2010 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one electronic weighing scale under rule 16 (3) under Weights and Measures. This certificate is valid till March 30, 2011.

9. Registration certificate number 71 dated December 31, 2009 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one physical balance and one electronic weighing scale under rule 16 (3) under Weights and Measures. This certificate is valid till December 30, 2010.

10. Registration certificate number 96 dated March 25, 2010 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one electronic weigh bridge under rule 16 (3) under Weights and Measures. This certificate is valid till March 24, 2011.

11. Registration certificate number 98 dated June 25, 2010 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one digital electronic weighing scale under rule 16 (3) under Weights and Measures. This certificate is valid till June 24, 2011.

12. Registration certificate number 97 dated March 25, 2010 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one electronic weigh bridge under rule 16 (3) under Weights and Measures. This certificate is valid till March 24, 2011.

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8. Intellectual Property

1. Registration certificate number 678257 and trademark number 1427516 valid from March 13, 2006, issued by Registrar of Trade Marks, Trade Mark Registry, Mumbai for registration of Trademark “Saras” under Trade Marks Act, 1999. This certificate is valid upto 10 years and renewable thereafter.

2. Registration certificate number 683154 and trademark number 1431150 valid from March 20, 2006, issued by Trade Marks, Trade Mark Registry, Mumbai for registration of Trademark “Siddha Gold” under Trade Marks Act, 1999. This certificate is valid upto 10 years and renewable thereafter.

9. Boiler Registration

1. Boiler Registration certificate number MP/4551 dated October 20, 2009, issued by the Director of Boilers, Madhya Pradesh for the use of a boiler. This certificate is valid till October 13, 2010. Subject to terms and condition mentioned therein.

2. Boiler Registration certificate number MP/3737 dated May 1, 2010, issued by the Director of Boilers, Madhya Pradesh for the use of a boiler. This certificate is valid till December 26, 2010.

3. Boiler Registration certificate number MP/3485 dated May 1, 2010, issued by the Director of Boilers, Madhya Pradesh for the use of a boiler. This certificate is valid till September 7, 2010.

4. Boiler Registration certificate number MP/3524 dated May 1, 2010 issued by the Director of Boilers, Madhya Pradesh for the use of a boiler. This certificate is valid till September 18, 2010.

10. Product related

1. Certificate of Registration number DGTD/MQ/B/S-20/R-6976/C-(26-II) dated February 19, 1981 issued by the Development Officer, Directorate General of Technical Development, Government of India, for manufacturing of vegetable oil and refined oil with production capacity of 30000 MT. The license is valid till revocation.

2. License bearing number 605-B dated January 6, 2010 issued by the Deputy Director, Directorate of Vanaspati, Veg Oils and Fats, Department of Food and Public Distribution issued in category “B” for production of the oils under the Solvent Extracted Oil, De-Oiled Meal and Edible Flour (Control) Order, 1967. This license is valid for the period upto from August 1, 2009 to July 11, 2012. License subject to terms and conditions mentioned therein.

3. License bearing number 62/93 dated March 29, 2010, issued by the Health Department, Municipal Corporation, Betul issued to manufacture of soyabean oil and rapeseed feed, under the Prevention of Food Adulteration, Act 1954. This license is valid for the period from March 31, 2009 to March 31, 2011.

4. Certificate of Registration as user of solvent extracted oil, bearing number RU/Edible/214 dated March 23, 1984 issued by the Deputy Director, Directorate of Vanaspati, Veg Oils and Fats, Department of Food and Public. License is subject to terms and conditions mentioned therein.

5. License dated March 15, 2009, the Health Department, Municipal Corporation, Betul issued a license bearing License number 62/57 for vitamin B-1 and B-2 food and drug purchase and sale. This license is valid for the period from March 15, 2009 to March 31, 2011.

6. The Licensing Authority, Food and Drug Administration, Betul has issued a license bearing license numbers M.P 15/2000 and 16/2000 dated July 10, 2000, to sell stock or exhibit (or offer) for sale or distribute drugs. This license is valid for the period from January 1, 2007 to December 31, 2011. This license was renewed on March 6 2007.

7. ISO 9001: 2000 certificate bearing number IND86063 dated August 25, 2008 issued by Director, Bureau Veritas Certification (India) Private Limited for manufacture and sale of vegetable oils and de-oiled cake. This certificate is valid till June 30, 2011.

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8. Acknowledgement dated March 27, 2009, issued by Government of India, Ministry of Commerce and Industry, Secretariat for Industrial Assistance, Public Relations and Complaints Section, New Delhi for Soya Lecithin, proposed item of manufacture with proposed capacity of 900 MT and Blended Edible Vegetable Oil, proposed item of manufacture with proposed capacity of 15,000 MT.

9. License dated February 10, 2010 issued by the District Excise Officer, Betul renewed the license for possession 600 BL p.a. of rectified spirit under rule 3A of Rectified Spirit Rules upto March 31, 2011.

10. License number 460/2010 dated January 7, 2010 issued by the Licensing Authority, Kisan Kalyan Tatha Krishi Vikas Vibhag, Betul to carry on the business of a dealer in seeds. This license is valid upto March 31, 2012.

11. License number 465/2010 dated April 30, 2010 issued by Deputy Director, Kisan Kalyan Tatha Krishi Vikas Vibhag, District Betul under Seeds (Control) Order, 1983 to Siddha Seeds division to carry on the business as dealer in seeds at Betul. The license is valid upto March 31, 2012.

12. License number QCC/Seed/Sco/295 dated April 27, 2007 issued by Licensing Authority, Commisionerate of Agriculture, Maharashtra State, Pune Director, under Seeds (Control) Order, 1983 to Siddha Seeds division to carry on the business as dealer in seeds at Solapur. The license is valid upto April 25, 2013.

13. License number 329 dated October 30, 2009 issed by the Deputy Director Agriculture, Betul, Government of Madhya Pradesh under the Insecticides Act, 1968 to sell, stock or exhibit for sale or distribution of insecticides. The license in valid upto December 31, 2010.

14. Certificate of registration bearing number PR-284 dated October 30, 2009 issued by the Registering Authority of State of Madhya Pradesh under the provision of the Fertilizer (Control) Order, 1985 to carry on the business of selling fertilizers in retail.

15. Certificate of registration bearing number HP-29 dated November 11, 2009 issued by the Registering Authority of State of Madhya Pradesh under the provision of the Fertilizer (Control) Order, 1985 to carry on the business of selling fertilizers in wholesale.

16. Certificate bearing number DIC/BTL/BF/82/4018 dated January 25, 1982, issued by the General Manager, District Industries Centre to commence production by the industrial unit on July 21, 1982 and increase on October 12, 1993: - Solvent Extraction Plant - capacity 90,000 MT pa - Oil Refinery - capacity 15,000 MT pa

11. Mandi License

1. License number 150 dated May 16, 2007 issued by the Secretary, Office of Krishi Upaj Mandi Samiti, District, Betul, giving permission to operate as trader with working capacity of 300,000.00. This license is valid for the period from May 16, 2007 to May 15, 2012.

2. License dated March 22, 2007 bearing number 222 issued by the Office of Krishi Upaj Mandi Samiti, Siwani permitting a buying capacity of 175,000 per day. The license is valid from March 21, 2007 to March 21, 2012.

3. License dated November 23, 2006 bearing number 1474 issued by the Secretary of Krishi Upaj Mandi Samiti, Hoshangabad for registration as trader. The license is valid upto November 20, 2011.

4. License dated September 9, 2007 bearing number 1046 issued by the Chairman of Krishi Upaj Mandi Samiti, Sagar for registration as trader. The license is valid upto March 31, 2012.

5. License dated May 5, 2006 bearing number 200 issued by the Chairman of Krishi Upaj Mandi Samiti, Pandhurana, Chindwara for registration as trader. The license is valid upto March 31, 2011.

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6. License dated March 3, 2007 bearing number A-129 issued by the Chairman of Krishi Upaj Mandi Samiti, Chindwara for registration. The license is valid upto March 31, 2012.

7. License dated March 13, 2007 bearing number 97 issued by the Chairman of Krishi Upaj Mandi Samiti, Chorai, Chindwara for registration as trader. The license is valid upto March 31, 2012.

8. License dated April 1, 2005 bearing number 88, issued by the Chairman, Office of Krishi Upaj Mandi Samiti Chapara giving permission to operate. This license is valid for the period from March 23, 2007 to March 31, 2012.

12. Factories License

1. License number 143/7323/BTL/2mi dated November 4, 2008, by the Additional Chief Inspector of Factories, Bhopal, Madhya Pradesh issued to work a factory. This license is valid from January 1, 2010 to December 31, 2011. Number of employees not to exceed 250. Installed motive power not to exceed 2000 HP.

13. Contract Labour License

1. License number 13/BTL/1981 dated September 28, 1991 by the Registering Officer, Governement of Madhya Pradesh under section 7 (2) of the Contract Labour (Regulation and Abolition) Act, 1970 permitting maximum 250 contract labourer to be employed on any day through each contractor.

SATNA UNIT

1. Excise and Tax related

1. Certificate of Registration dated May 14, 2010 bearing number AAACB9273BEM004 issued under rule 9 of Central Excise Rules, 2002 by Assistant Commissioner, Central Excise and Service Tax Division, Satna for operating as a manufacturer of excisable goods.

2. Certificate of registration under service tax dated March 25, 2009 issued by the Superintendent Central Excise, Satna under Section 69 of the Finance Act, 1994. The Service Tax Code is AAACB9273BST004 for registration as transport of goods by road.

3. Madhya Pradesh Value Added Tax Registration certificate number 23854008023 dated February 10, 2009 issued under Rule 12 (1) of the Madhya Pradesh Value Added Tax Regulations, 2002 for trading and manufacturing vegetable oil.

4. Central Sales Tax Registration certificate number 23854008023 dated February 10, 2009 issued under Rule 5(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957 for trading and manufacturing vegetable oil.

2. Environment

1. Permission vide letter bearing number 5631/TS/MPPCB/2009 dated July 8, 2009 issued by the Member Secretary, Madhya Pradesh Pollution Control Board to establish a solvent extraction plant at Satna with a production capacity of 400 TPD under the Water (Prevention and Control of Pollution) Act, 1974 and the Air (Prevention and Control of Pollution) Act, 1981.

2. Permission vide letter bearing number 11044/TS/MPPCB/2009 dated December 22, 2009 issued by the Member Secretary, Madhya Pradesh Pollution Control Board to operate a solvent extraction plant at Satna for a period of one year from the first day of the month of commissioning of the plant under the Water (Prevention and Control of Pollution) Act, 1974.

3. Permission vide letter number EI/Satna/2009/MPPCB/122/214 dated December 18, 2009 issued by the Member Secretary, Madhya Pradesh Pollution Control Board giving consent for discharge of effluent into the natural water courses for a period of one year from the first day of the month of commissioning of the plant under Water (Prevention and Control of Pollution) Act, 1974.

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4. Permission vide letter bearing number 11046/TS/MPPCB/2009 dated December 22, 2009 issued by the Member Secretary, Madhya Pradesh Pollution Control Board to operate a solvent extraction plant at Satna with a production capacity of 400 TPD under the Air (Prevention and Control of Pollution) Act, 1981.

3. Importing and Storing petroleum

1. License bearing number P/HQ/MP/15/2800(P232214) dated October 14, 2009 issued by the Chief Controller of Explosives, Petroleum and Explosives Safety Organization (PESO), Ministry of Commerce and Industry issued for importing and storing 93 KL petroleum class ‘A’ in bulk. The license is valid upto December 31, 2011.

4. Weights and Measures

1. Registration certificate number 29 dated October 31, 2009 issued by Inspector, Weights and Measure, Madhya Pradesh for one electronic weighbridge capacity 100,000 kg under rule 16 (3) under Weights and Measures. This certificate is valid till October 30, 2010.

5. Boiler registration

1. Boiler registration certificate number P/CS/22/10 dated February 5, 2009 issued by the Director of Boilers, Indore, Madhya Pradesh for the use of boiler. This certificate is valid from August 4, 2009 till August 3, 2010.

6. Product related

1. Calibration Certificate dated November 2, 2009, certifying capacity of Hexane and Oil Tank of 282.6 MT, issued by the Inspector, Legal Metrology Storage Tank, Satna. This certificate is valid till November 1, 2010.

2. License bearing number 2012-C, in category “C” dated November 27, 2009, by the Deputy Director, Directorate of Vanaspati, Veg Oils and Fats, Department of Food and Public Distribution issued a for production of the said oils, under the Solvent Extracted Oil, De-Oiled Meal and Edible Flour (Control) Order, 1967. This license is valid for the period from November 27, 2009 to October 31, 2012.

3. Certificate of registration bearing number MPIIPAS-04/298, dated March 26, 2009 issued by the Managing Director, M.P Trade and Investment Facilitation Corporation Limited, Bhopal, was granted on April 2, 2009 under Madhya Pradesh Udyog Nivesh Samvardhan Sahayata Yojana 2005. Annual capacity covered under the certificate Refined Oil – 33000 MT; Deoiled Cake/Lecithin – 162000 MT; Soya Flour – 30000 MT; Soya Nugget – 30000 MT.

4. Certificate bearing number jivyauke-sat/msme/2010/631 dated May 18, 2010, issued by the General Manager, District Trade and Industries Centre to commence production by the industrial unit on March 28, 2010: - Soybean Refined Oil - production capacity 30,000 MT pa - Soybean De-oiled Cake - production capacity 148,000 MT pa - Lecithin - production capacity 2,000 MT pa

7. Factories

1. License bearing number 19/13821/STN/2mi dated November 21, 2009, by the Additional Chief Inspector of Factories, Bhopal, Madhya Pradesh issued to work a factory. This license is valid from January 1, 2010 to December 31, 2012. Number of employees not to exceed 250. Installed motive power not to exceed 2000 HP.

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8. Labour

1. Certificate of Registration bearing number 105/STN/2009 dated March 6, 2009, issued by the Registering Officer, Madhya Pradesh for having labour on contract at the Unit at Satna, under the Contract Labour (Regulation & Abolition) Act, 1970

9. Mandi

1. License dated October 12, 2007 bearing number mandi/anu/2007-08/4478, issued by the Secretary, Krishi Upaj Mandi Samiti, Satna issued to operate as trader. The license is valid till revocation.

2. License dated October 12, 2009 bearing number 137, issued by the Secretary, Krishi Upaj Mandi Samiti, Satna issued to operate as warehouse keeper. The license is valid till March 31, 2014.

10. Electricity

1. Sanction bearing number 053-46/02/01 from Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited dated April 3, 2010 issued by the Authorised Signatory, Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited for 1600 KVa high tension supply.

SOLAPUR UNIT

1. Excise and Tax related

1. Central Excise registration certificate bearing number AAACB9273BXM003 dated October 14, 2008, issued by issued by the Assistant Commissioner, Central Excise and Customs, Solapur Division for manufacture of excisable goods.

2. Sales Tax

1. Bombay Sales Tax registration number 27360305979V and Central Sales Tax Registration number 27360305979C.

3. Importing and storing petroleum

1. License number P/HQ/MP/15/1316(P6633) dated November 6, 2006, by the Chief Controller of Explosives, Petroleum and Explosives Safety Organization (PESO), Ministry of Commerce and Industry, for importing and storing 114 KL petroleum class ‘A’ in bulk.

4. Product Related

1. License number 1859-B dated July 26, 2006, by the Directorate of Vanaspati, Veg Oils and Fats, Department of Food and Public Distribution, in category “B” for production of the said oils, under the Solvent Extracted Oil, De-Oiled Meal and Edible Flour (Control) Order, 1967. This license is valid for the period from July 1, 2009 to June 30, 2012.

2. Certificate of Registration, bearing number VOP/MAH/R-37/2009, dated April 28, 2009, issued by the Director, Department of Food and Public Distribution for production of Refined Vegetable Oils and Blended Edible Vegetable Oil, under Vegetable Oil Products (Regulation) Order, 1998. Annual installed capacity: 30, 000 MT

3. License number 23/2007-08 dated August 29, 2007, was granted to possess molasses Quantity- 2000 MT at the premises of our Company. This license is valid for the period from April 1, 2010 to March 31, 2011.

4. Registration as user of solvent extracted oil bearing number 2/22/2006/SEO dated July 26, 2006 issued by the Director, Vegetable Oils and Vegetable Oils Products Controller of India, under the Solvent Extracted Oil, De-oiled Meal and Edible Flour (Control) Order, 1967.

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5. License number 178269 dated September 26, 2009 issued by Licensing Officer under rule 5 (3) of the Prohibition of Food Adulteration Regulations, 1954 and Food Adulteration Rules, 1955 valid from September 26, 2006 to December 31, 2010.

6. ISO 9001: 2000 certificate bearing number 7074 dated July 7, 2009 issued by BM Trada Certification Limited for manufacture of vegetable oils and de-oiled cake. This certificate is valid till July 6, 2012.

7. Certificate bearing number 88 dated September 29, 2008, issued by the General Manager, District Industries Centre to commence production by the industrial unit on May 1, 2006: - Cattle and Poultry Feed - production capacity 68,000 MT pa - Vegetable Oil (Blended Oil) - production capacity 36,000 MT pa - Edible Oil (Solvent Extracted) - production capacity 68,000 MT pa

8. License number 5/2009 dated September 14, 2009 to the Additional Collector, Solapur to acquire, store and sale solvent raffinate and slop upto 90 KL and Hexane with monthly capacity of 114 KL valid upto December 31, 2010.

5. Factories

1. License bearing number 072694 dated December 31, 2006, by the director, Industiral Health and Safety, Maharashtra State, Mumbai issued to work a factory. This license is valid from December 31, 2006 to December 31, 2012. Number of employees not to exceed 150. Installed motive power not to exceed 1000 HP.

6. Electricity

1. Sanction bearing number 6985 from Maharashtra State Electricity Distribution Company Limited dated September 30, 2009 issued by the Superintending Engineer (SURC), Solapur for fresh supply of power supply on 33KV express feeder.

7. Weights and Measures

1. License number 029132 dated March 30, 2007 bearing registration number Maharashtra/Solapur/2007/30 issued by Assistant Controller, Food, Civil Supply and Consumer Protection Department under clause 33 of Standards of Weights and Measures Regulation, 1985 and rule 35 of Standards of Weights and Measures Rules, 1977.

8. Boiler Registration

1. Boiler registration certificate number 142 dated January 29, 2010, issued by the Director of Steam Boilers, Maharashtra for the use of a boiler. This certificate is valid till August 27, 2010.

9. Mandi License

1. License dated August 31, 2006 issued by the Chairman, Krishi Utpanna Bazar Samiti, Latur giving permission to operate as trader under class A. This license is valid for the period from February 25, 2010 to March 31, 2011.

2. Certificate number 110 dated June 21, 2010 issued by the, Krishi Utpanna Bazar Samiti, Ambejogai giving permission to operate as trader. This license is valid for the period from March 1, 2010 to April 31, 2011.

CORPORATE OFFICE AT NARIMAN POINT, MUMBAI

1. Registration Certificate of Establishment bearing number A021371/Commercial II dated July 21, 1998 issued by the Inspector under Bombay Shops and Establishment Act, 1948. This certificate is valid till December 31, 2012.

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LICENSES FOR MARKETING OFFICES

1. Registration Certificate of Establishment bearing number 29790/RPR/S/2009 dated September 10, 2009 issued by the Inspector under Chattisgarh Shops and Establishment Regulations, 1958 . This certificate is valid till December 31, 2013.

APPLICATIONS MADE BY OUR COMPANY

1. The Company has vide its letter dated October 5, 2009 made an application to the Collector, Betul for renewal of license for Solvent (Food Grade Hexane) upto December 31, 2010. This license is valid for the period from March 18, 1982 to December 31, 2009.

2. Memorandum dated November 5, 2008 was submitted under Micro, Small and Medium Enterprises Development Act 2006 to set up set up manufacturing enterprise (for setting up micro/small/medium enterprise). Power load – 1000 K.W; Installed capacity per annum – 120000 MT; Items of Manufacture: Soya Crude Oil, Soya D.O.C and Soya Refined Oil at Satna.

3. The Company has vide application dated January 28, 2009 applied for renewal of license number BO/WPAE/PN-1710-07/R/CCHWA-351 dated May 17, 2007 to the Sub-Regional Officer Maharashtra Pollution Control Board, Solapur to renew the consent to operate under Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981 and Hazardous Waste (Management and Handling) Amendment Rules, 2003.

4. The Company has made an application on May 14, 2010 for renewal of registration certificate number 44 dated March 31, 2009 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one lorry weighbridge model number 1001 serial number 111 under rule 16 (3) under Weights and Measures. This certificate was valid till March 30, 2010.

5. The Company has made an application on May 14, 2010 for renewal of registration certificate number 48 dated March 31, 2009 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one lorry weighbridge model number KWS-ek serial number 10608 under rule 16 (3) under Weights and Measures. This certificate was valid till March 30, 2010.

6. The Company has made an application on June 14, 2010 for renewal of registration certificate number 95 dated June 26, 2009 issued by Inspector, Weights and Measure, Betul, Madhya Pradesh for one digital electronic weighing scale under rule 16 (3) under Weights and Measures. This certificate was valid till June 25, 2010.

7. The Company has made an application on March 23, 2010 for renewal of license number 22 dated April 1, 2005 issued by the Secretary, Office of Krishi Upaj Mandi Samiti, District, Betul, giving permission to operate as warehouse keeper with working capacity of 1,000,000.00. This license was valid for the period from April 1, 2005 to March 31, 2010.

8. The Company has made an application on March 23, 2010 for renewal of license number 21 dated April 1, 2005 issued by the Secretary, Office of Krishi Upaj Mandi Samiti, District, Betul, giving permission to operate as trader with working capacity of 1,000,000.00. This license is valid for the period from April 1, 2005 to March 31, 2010.

9. The Company has made an application on March 23, 2010 for renewal of license number 661 dated March 31, 2007 issued by the Secretary, Office of Krishi Upaj Mandi Samiti, District, Betul, giving permission to work with increased working capacity of 13,000,000.00. This license was valid for the period from March 31, 2007 to March 31, 2010.

10. The Company has made an application on July 1, 2010 for registration of “Poushtik” as trade mark for seeds, grains, cattle feed and food stuff for animals under class 31 to Trade Mark Registry, Mumbai.

11. The Company has made an application on June 28, 2010 for registration of “Siddha” as trade mark for seeds, grains, cattle feed and food stuff for animals, products and grains (not included in other classes) under class 31 to Trade Mark Registry, Mumbai.

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12. The Company has made an application dated June 28, 2010 to the Chief Scientific Officer, Madhya Pradesh Pollution Control Board, for the renewal of the membership of Emergency Response Centre at Betul Unit.

13. The Company has made an application to Inspector, Weights and Measures Department on June 24, 2010 for renewal of registration certificate number 54 dated November 18, 2008 issued by Inspector, Weights and Measures, Betul, Madhya Pradesh for one physical balance and one electronic weighing scale under rule 16 (3) under Weights and Measures. This certificate was valid till December 28, 2009.

14. The Company has made an application to Health Department, Municipal Corporation, Satna for renewal of license bearing number 13/16 dated June 16, 2009 by the Health Department, Municipal Corporation, Satna issued to manufacture oil under the Prevention of Food Adulteration, Act 1954. This license was valid for the period from June 16, 2009 to March 31, 2010.

15. The Company has made an application on October 24, 2009 to the Chief Scientific Officer, Madhya Pradesh Pollution Control Board, for the renewal of the membership of Emergency Response Centre at Satna Unit.

16. The Company has made an application dated May 15, 2010 to Member Secretary, Madhya Pradesh Pollution Control Board for renewal of consent order dated September 18, 2006, with effect from March 11, 2006 bearing number 2682/HOPCB/HSMD/2006 under the Hazardous Wastes (Management & Handling) Rules and Hazardous Waste (Management and Handling) Amendment Rules, 2003 to operate a facility or collect, receive, treat, transport, store and dispose hazardous wastes viz. used oil, chemical ETP sludge, oil emulsion, valid upto March 10, 2008.

17. The Company has made an application dated April 22, 2010 to Chief Chemist, Madhya Pradesh Pollution Control Board for consent under the Hazardous Wastes (Management & Handling) Rules 2008 for the Satna Unit.

18. The Company has made an application dated June 28, 2010 to the Municipal Corporation, Bhopal for renewal of shops and establishment license number 29.

19. The Company has made an application dated June 30, 2010 for renewal of sanction letter bearing number DS/MPERC/2003/411 dated February 28, 2003 issued by Deputy Secretary, Madhya Pradesh Electricity Regulatory Commission granting consent to run 1x750 and 1x380 KVa D.G. set valid upto February 27, 2008.

20. The Company has made an application on July 12, 2010 for registration of its logo as trade mark under class 31 to Trade Mark Registry, Mumbai.

21. The Company has made an application dated July 22, 2010 for renewal of certificate number A/1 009229 of authorization ‘Saras’ brand mustard oil issued by Deputy Agricultural Marketing Adviser, Director of Marketing and Inspection, Government of India, Bhopal for a period of 5 years.

22. The Company has made an application dated March 25, 2009 for setting up a private mandi at Satna.

SUBSIDIARY COMPANY - BETUL OILS AND FEEDS PRIVATE LTD

1. Incorporation Certificates

Certificate of Incorporation bearing Corporate Identity Number U51215MH2006PTC159142 dated January 20, 2006 issued by the Assistant Registrar of Companies, Maharashtra, Mumbai.

2. Income Tax

PAN Card bearing Number AACCB8638E dated January 20, 2008 in the name of Betul Oils and Feeds Private Limited issued by the Income Tax Department. 279

3. Sales Tax

Registration certificate bearing number 23304705707 dated July 4, 2009 under rule 12 (1) of Madhya Pradesh VAT Regulations, 2002.

Registration certificate bearing number 23304705707 dated July 4, 2009 under regulation 7(1) / 7 (2) of Central Sales Tax Regulations, 1956.

APPLICATIONS MADE BY OUR SUBSIDIARY

1. Application number 760147827 dated June 28, 2010 to the Brihan Mumbai Mahanagarpalika Ward for registration under Bombay Shops and Establishment Act, 1948.

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OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

The Issue of Equity Shares has been authorized by the resolution of the Board of Directors at their meeting held on May 25, 2010. The shareholders have, at the Extraordinary General Meeting of our Company held on June 1, 2010, approved the Issue. NSE is the Designated Stock Exchange.

The Bombay Stock Exchange Limited and the National Stock Exchange of India Limited has given in-principle approval for the Issue on [●] and [●] respectively.

Prohibition by SEBI, RBI or Governmental authority

Our Company, our Directors, our Promoters, the Promoter Group, or the person (s) in control of our Company have not been prohibited from accessing or operating in the capital markets or restrained from buying, selling or dealing in securities under any order or direction passed by SEBI or the RBI or any other regulatory or governmental authority. The listing of any securities of our Company has never been refused at anytime by any of the stock exchanges in India.

The companies, with which any of the Promoters, Directors or persons in control of our Company are or were associated as promoters, directors or persons in control, have not been prohibited from accessing or operating in capital markets under any order or direction passed by SEBI or the RBI or any other regulatory or governmental authority.

None of the Directors are associated in any manner with any entities, which are engaged in securities market related business and are registered with the SEBI for the same. Other than as disclosed in the “Risk Factors” on page 13, “History and Corporate Structure” on page 143 and “Outstanding Litigation and Material Developments” on page 155 of this Draft Red Herring Prospectus, our Promoters and the relatives of the Promoters (as defined under the Companies Act), have not been identified as willful defaulters by RBI / government authorities and there are no violations of securities laws committed by them in the past or pending against them.

Eligibility for this Issue

Our Company is eligible for the Issue in accordance with Regulation 26(1) of the SEBI ICDR Regulations as explained under, with the eligibility criteria calculated in accordance with unconsolidated financial statements under Indian GAAP:

Our Company has net tangible assets of at least Rs. 30 millions in each of the preceding three full years of which not more than 50% is held in monetary assets;

Our Company has a track record of distributable profits in accordance with Section 205 of Companies Act, for at least three of the immediately preceding five years;

Our Company has a net worth of at least Rs. 10 millions in each of the three preceding full years;

The aggregate of the proposed Issue size and all previous issues made in the same financial year in terms of size (i.e. offer through the offer document + firm allotment + promoter’s contribution through the offer document) is not expected to exceed five times the pre-Issue net worth of our Company as per the audited balance sheet of the last financial year;

Our Company had changed its name to Betul Oil Limited on June 9, 2010. No new activity is suggested by the change in name of our Company.

Further, we undertake that the number of Allottees in the Issue shall be least 1,000. Otherwise the entire application money shall be refunded forthwith. In case of delay, if any, in refund, our Company shall pay interest on the application money at the rate of 15% p.a. for the period of delay.

Our Company’s net tangible assets, monetary assets, net profit and net worth derived from our Standalone Restated Financial Statements for the last five years are set forth below:

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(Rs. in Millions) Particulars June 30, 2009 June 30, 2008 June 30, 2007 June 30, June 30, 2006 2005 Net Tangible Assets* 1,638.15 1,629.83 1,026.68 517.70 337.95 Monetary Assets ** 34.96 27.11 31.14 22.08 9.47 Monetary Assets as a % of Net 2.13% 1.66% 3.03% 4.27% 2.80% Tangible Assets Net Worth*** 669.49 473.73 278.69 178.82 122.98 Distributable Profits **** 176.18 174.35 91.07 5.26 37.17

*“Net Tangible Assets” are defined as the sum of fixed assets (including capital work in-progress and excluding revaluation reserve) investments, current assets (excluding deferred tax assets) less current liabilities (excluding deferred tax liabilities and secured as well as unsecured long term liabilities) excluding intangible assets as defined in Accounting Standard 26 (AS 26) issued by the Institute of Chartered Accountants of India. **Monetary Assets are defined as the sum of cash in hand, non trade Investments, balance with scheduled bank in current accounts, fixed deposits and public deposit account with the Government, if any. ***Net Worth has been computed as the aggregate of equity shares capital and reserves (excluding revaluation reserves) and after deducting miscellaneous expenditure not written off, if any. ****Distributable profits have been computed in terms section 205 of the Companies Act, 1956.

DISCLAIMER CLAUSE OF SEBI

IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT RED HERRING PROSPECTUS TO SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING PROSPECTUS. THE BOOK RUNNING LEAD MANAGER, ANAND RATHI ADVISORS LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 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 COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS, THE BOOK RUNNING 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 BOOK RUNNING LEAD MANAGER, ANAND RATHI ADVISORS LIMITED HAS FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED JULY 30, 2010 WHICH READS AS FOLLOWS:

“WE, THE BOOK RUNNING LEAD MANAGER TO THE ABOVE MENTIONED FORTHCOMING ISSUE, STATE AND CONFIRM AS FOLLOWS:

A. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, CIVIL LITIGATION, TAX DISPUTES AND CRIMINAL LITIGATION AND OTHER MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT RED HERRING PROSPECTUS PERTAINING TO THE ISSUE.

B. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS, AND OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:

a. THE DRAFT RED HERRING PROSPECTUS FILED WITH THE SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

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b. ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE REGULATIONS, GUIDELINES, INSTRUCTIONS, ETC., FRAMED/ISSUED BY SEBI, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

c. THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

C. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATIONS ARE VALID.

D. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS. – NOTED FOR COMPLIANCE

E. WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR EQUITY SHARES AS PART OF PROMOTER’S CONTRIBUTION SUBJECT TO LOCK-IN AND THE EQUITY SHARES PROPOSED TO FORM PART OF PROMOTER’S 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 RED HERRING PROSPECTUS WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING PROSPECTUS.

F. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO EQUITY SHARES 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 RED HERRING PROSPECTUS.

G. WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION 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 ISSUE. – NOT APPLICABLE

H. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE COMPANY FOR WHICH THE FUNDS ARE BEING RAISED IN THE ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION 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.

I. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS 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 PROSPECTUS. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO

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THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. – NOTED FOR COMPLIANCE

J. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE EQUITY SHARES IN DEMAT OR PHYSICAL MODE. – NOT APPLICABLE, AS THE ISSUE SIZE IS MORE THAN 100 MILLIONS. THE ALLOTMENT OF EQUITY SHARES IS TO BE MADE COMPULSORILY IN DEMATERIALIZED FORM ONLY, PURSUANT TO SECTION 68B OF THE COMPANIES ACT, 1956.

K. WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS AMENDED HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION.

L. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS:

a. AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE COMPANY, AND

b. AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE SEBI FROM TIME TO TIME.

M. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE MAKING THE ISSUE.

N. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTER’S EXPERIENCE, ETC.

O. WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT RED HERRING PROSPECTUS WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.”

The filing of the Draft Red Herring Prospectus does not, however, absolve our Company from any liabilities under section 63 or section 68 of the Companies Act, 1956 or from the requirement of obtaining such statutory or other clearances 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 Book Running Lead Manager any irregularities or lapses in the Draft Red Herring Prospectus.

All legal requirements pertaining to the issue will be complied with at the time of filing of the Red Herring Prospectus with the Registrar of Companies, Madhya Pradesh and Chattisgarh, in terms of Section 56, Section 60 and Section 60B of the Companies Act.

All legal requirements pertaining to the Issue will be complied with at the time of registration of the Prospectus with the RoC in terms of Sections 56, 60 and 60B of the Companies Act.

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DISCLAIMER STATEMENT OF OUR COMPANY AND THE BOOK RUNNING LEAD MANAGER

Our Company, the Directors and the Book Running Lead Manager accepts no responsibility for statements made otherwise than in the Draft Red Herring Prospectus or in the advertisement or any other material issued by or at the instance of our Company and that anyone placing reliance on any other source of information, including our Company’s website www.betuloil.com would be doing so at his or her own risk.

The BRLM accepts no responsibility, save to the limited extent as provided in the Issue Agreement entered into between the BRLM, our Company and the Underwriting Agreement to be entered into between the Underwriters and our Company.

All information shall be made available by our Company and the BRLM to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road show presentations, in research or sales reports, at bidding centers or elsewhere.

Neither our Company, its Directors and officers, nor any member of the Syndicate are liable for any failure in downloading the Bids due to faults in any software/hardware system or otherwise.

The BRLM and their respective associates and affiliates may engage in transactions with, and perform services for, our Company, affiliates or associates or third parties in the ordinary course of business and have engaged, or may in future engage, in investment banking transactions with our Company, affiliates or associates or third parties, for which they have received, and may in future receive, compensation.

Caution

Investors that bid in this Issue will be required to confirm and will be deemed to have represented to our Company and the BRLM and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares and will not offer, sell, pledge or transfer the Equity Shares to any person who is not eligible under applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares. Our Company, the BRLM and their respective directors, officers, agents, affiliates and representatives accept no responsibility or liability for advising any investor on whether such investor is eligible to acquire Equity Shares in the Issue.

Jurisdiction

Exclusive jurisdiction for the purpose of this Issue is with competent courts / authorities in Betul, Madhya Pradesh, India.

Disclaimer in respect of jurisdiction

This Issue is made in India to persons resident in India (including Indian nationals resident in India who are majors, HUFs, companies, corporate bodies and societies registered under the applicable laws in India and authorized to invest in equity shares, Indian Mutual Funds registered with the SEBI, Indian financial institutions, commercial banks and regional rural banks, co-operative banks (subject to RBI permission), trusts (registered under Societies Registration Act, 1860, or any other trust law and are authorized under their constitution to hold and invest in equity shares) and to eligible NRIs and FIIs as defined under the Indian Laws and other eligible foreign investors (i.e., FVCIs, multilateral and bilateral development financial institutions). The Draft Red Herring Prospectus does not, however, constitute an offer to sell or an invitation to subscribe to equity shares issued hereby in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession the Draft Red Herring Prospectus comes is required to inform himself or herself about and to observe any such restrictions.

Any disputes arising out of this Issue will be subject to the jurisdiction of courts in Mumbai, India only. No action has been or will be taken to permit a public offering in any jurisdiction where action would be required for that purpose, except that the Draft Red Herring Prospectus has been submitted to the SEBI for its observations. Accordingly, the Equity Shares, represented thereby may not be offered or sold, directly or indirectly, and the Draft Red Herring Prospectus may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of the Draft Red Herring Prospectus nor any sale hereunder shall, under any circumstances create any implication that there has been no change in the affairs of our Company since the date hereof or that the information contained herein is correct as of any time subsequent to this date.

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The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, (the “Securities Act”) or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the Securities Act). Accordingly, the Equity Shares will be offered and sold only outside the United States in compliance with Regulation S of the Securities Act and the applicable laws of the jurisdiction where those offers and sales occur.

Disclaimer Clause of the BSE

As required, a copy of the Draft Red Herring Prospectus had been submitted to BSE. BSE has given vide its letter dated [●], permission to the Company to use BSE’s name in the offer document as one of the stock exchanges on which the Company’s further securities are proposed to be listed. BSE has scrutinized the offer document for its limited internal purpose of deciding on the matter of granting the aforesaid permission to the Company. BSE does not in any manner:

• Warrant, certify or endorse the correctness or completeness of any of the contents of the offer document; or • Warrant that the Company’s securities will be listed or will continue to be listed on BSE; or • Take any responsibility for the financial or other soundness of this Company, our promoters, our management or any scheme or project of this Company; and it should not for any reason be deemed or construed to mean that the Draft Red Herring Prospectus has been cleared or approved by BSE. 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 BSE 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 National Stock Exchange of India Limited (NSE)

As required, a copy of the Draft Red Herring Prospectus had been submitted to NSE. NSE has given vide its letter dated [●] permission to the Company to use the Exchange’s name in the offer document as one of the stock exchanges on which the Company’s securities are proposed to be listed. The Exchange has scrutinised the offer document for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that the offer document 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 this offer document, nor does it warrant that the Company’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 Company, its promoters, its management or any scheme or project of this Company.

Every person who desires to apply for or otherwise acquires any of the Company’s securities may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against NSE 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.

Filing

A copy of the Draft Red Herring Prospectus has been filed with SEBI at Corporation Finance Department, SEBI Bhavan, Plot No. C4-A, G Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051.

A copy of the Red Herring Prospectus, along with documents to be filed under Section 60B of the Act, and a copy of the Prospectus to be filed under Section 60 of the Companies Act would be delivered for registration to the Registrar of Companies at Registrar of Companies, Madhya Pradesh and Chattisgarh, 3rd Floor, ‘A’ Block, Sanjay Complex, Jayendra Ganj, Gwalior, Madhya Pradesh.

Listing

The Equity Shares issued through the Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. Initial listing applications have been made to the BSE and the NSE for permission to list the Equity Shares and for an official quotation of the Equity Shares of our Company. NSE shall be the Designated Stock Exchange. In case the permission for listing of the Equity Shares is not granted by any of the above mentioned Stock Exchanges, our Company shall forthwith repay, without interest, all moneys received from the applicants in pursuance of the Red Herring Prospectus. If such money is not repaid within 8 days after the day from which the Issuer becomes liable to repay it (i.e. 286

from the date of refusal or within ten working days from the Bid/Issue Closing Date, whichever is earlier) then our Company and every director of our Company who is an officer in default shall, on and from expiry of 8 days, be jointly and severally liable to repay that money with interest, at 15% per annum on the application monies as prescribed under Section 73 of the Companies Act.

Our Company with the assistance of the Book Running Lead Manager shall ensure that all steps for the completion of the necessary formalities for listing and commencement of trading at the Stock Exchanges mentioned above are taken within twelve Working Days of Bid/Issue Closing Date.

Impersonation

Attention of the Bidders is specifically drawn to the provisions of Sub-Section (1) of Section 68A of the

Companies Act which is reproduced below:

“Any person who-

(a) makes in a fictitious name an application to a company for acquiring, or subscribing for, any shares therein, or

(b) otherwise induces a company to allot or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.”

Consents

Consents in writing of our Directors, our Company Secretary and Compliance Officer, the auditors, the legal advisors, the Bankers to our Company, the Book Running Lead Manager, the Syndicate Members*, the Escrow Collection Banks*, Refunds Bank(s)*, the IPO Grading Agency* and the Registrar to the Issueto act in their respective capacities, have been obtained and will be filed along with a copy of the Red Herring Prospectus with RoC and have agreed that such consents have not been withdrawn upto the time of delivery of the Prospectus for registration, is as required under Section 60 and 60B of the Companies Act.

*The aforesaid will be appointed prior to filing of the Red Herring Prospectus with RoC and their consents as above would be obtained prior to the filing of the Red Herring Prospectus with RoC.

Bhutoria Ganesan & Co., Chartered Accountants, our statutory Auditors have given their written consent to the inclusion of their report in the form and context in which it appears in the Draft Red Herring Prospectus and such consent and report will not be withdrawn upto the time of delivery of the Prospectus for registration to the Registrar of Companies.

Bhutoria Ganesan & Co., Chartered Accountants have given their written consent to the statement of tax benefits accruing to our Company and its members in the form and context in which it appears in the Draft Red Herring Prospectus and will not withdraw such consent upto the time of delivery of the Prospectus for registration with the Registrar of Companies.

[●], the IPO Grading Agency engaged by us for the purpose of IPO Grading have given their consent as experts, pursuant to their letter dated [●] for inclusion of their report in the form and content in which it will appear in the Red Herring Prospectus, and such consent will not be withdrawn up to the time of delivery of the Prospectus for registration with the Registrar of Companies.

Expert Opinion

Except the statement of tax benefits, report of our Auditors dated July 28, 2010 and the report issued in respect of the IPO grading of this Issue annexed herewith, and except as stated elsewhere in the Draft Red Herring Prospectus, our Company has not obtained any expert opinions.

Expenses of the Issue

The total expenses of the Issue are estimated to be approximately Rs. [●] millions. The expenses of the Issue payable by our Company includes, among others, brokerage, fees payable to the Book Running Lead Manager to the Issue and

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Registrar to the Issue, legal fees, stamp duty, printing and distribution expenses and listing fees and other miscellaneous expenses estimated as follows: (Rs. in million) Particulars Amounts* As percentage of As a percentage total expenses of Issue size Lead management fees (including, underwriting [●] [●] [●] commission, brokerage and selling commission) Registrar to the Issue [●] [●] [●] Advisors [●] [●] [●] Bankers to the Issue [●] [●] [●] Others: [●] [●] [●] - Printing and stationery [●] [●] [●] - Listing fees [●] [●] [●] - Advertising and marketing expenses [●] [●] [●] - IPO Grading Fees [●] [●] [●] - Others [●] [●] [●] Total estimated Issue expenses [●] [●] [●] *Would be incorporated post finalization of Issue Price

Fees payable to the Book Running Lead Manager

The total fees payable to the Book Running Lead Manager will be as per the Issue Agreement signed between our Company and the Book Running Lead Manager, a copy of which is available for inspection at our Registered Office.

Fees payable to the Registrar to the Issue

The total fees payable to the Registrar to the Issue for processing of application, data entry, printing of CAN/refund order, preparation of refund data on magnetic tape, printing of bulk mailing register will be as per the Agreement signed with between our Company and the Registrar to the Issue, a copy of which is available for inspection at our Registered Office.

The Registrar to the Issue will also be reimbursed with all relevant out-of-pocket expenses such as cost of stationery, postage, stamp duty, communication expenses. Adequate funds will be provided to the Registrar to the Issue to enable them to make refunds to unsuccessful applicants.

Previous public or rights issues

Our Company has not made any public or rights issue since its inception.

Previous issue of shares otherwise than for cash

Our Company has not issued any Equity Shares for consideration otherwise than for cash, except Bonus Issue, for further details please refer to the section titled ‘Capital Structure’ beginning on page 55 respective of the Draft Red Herring Prospectus.

Commission or brokerage on previous issues

No sum has been paid or payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of our Equity Shares since our inception.

Particulars in regard to our Company and other listed companies under the same management within the meaning of Section 370 (1B) of the Companies Act which made any capital issue since inception

Neither our Company nor any other Company under the same management within the meaning of Section 370(1B) of the Companies Act is listed on any of the Stock Exchanges and has not made any capital issue since inception.

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Promise vs Performance – Previous Issues of our Company and our Group / Subsidiary / Associate Companies

Our Company has not made any public issue of Equity Shares since its incorporation. None of our Group / Subsidiary / Associate Companies have made any public issues in the past.

Outstanding debentures or bond issues

As on the date of filing the Draft Red Herring Prospectus, our Company does not have any outstanding debentures or has made any bond issue.

Outstanding Preference Shares

As on the date of filing the Draft Red Herring Prospectus, our Company does not have any outstanding preference shares.

Stock Market Data

This being the first public issue by our Company, no stock market data is available.

Disclosure on Investor Grievances and Redressal System

The Agreement between the Registrar to the Issue and our Company entered on June 15, 2010 provides for retention of records with the Registrar to this Issue for a period of at least three years from the last date of dispatch of the letters of allotment, demat credit and making refunds as per the modes disclosed to enable the investors to approach the Registrar to this Issue for redressal of their grievances.

All grievances relating to this Issue may be addressed to the Registrar to the Issue, giving full details such as name, address of the applicant, application number, number of Equity Shares applied for, amount paid on application, Depository Participant and the bank branch or collection center where the application was submitted.

All grievances relating to the ASBA process may be addressed to the SCSB, giving full details such as name, address of the applicant, application number, number of Equity Shares applied for, amount paid on application and the Designated Branch or the collection centre of the SCSB where the ASBA Bid cum Application Form was submitted by the ASBA Bidders.

We estimate that the average time required by us or the Registrar to the Issue for the redressal of routine investor grievances will be ten business days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, we will seek to redress these complaints as expeditiously as possible. Our Company has also constituted an Investors’ Grievance Committee to review and redress the shareholders and investor grievances such as transfer of Equity Shares, non-recovery of balance payments, declared dividends, approve subdivision, consolidation, transfer and issue of duplicate shares.

Our Company has appointed Mr. Abhinaya Kulkarni, Company Secretary as the Compliance Officer and he may be contacted at 810, Maker Chamber 5, Nariman Point, Mumbai – 400021, India, Tel: +91- 22-22828936 Fax: +91-22- 22828935 Email: [email protected] for redressal of any complaints.

Changes in the Auditors during last three years and reasons thereof

There have been no changes in our auditors in the last three years.

Capitalisation of reserves or profits during the last five years

On May 10, 2005, our Company has issued 46,500 equity shares of Rs. 1000 each as bonus shares to the existing shareholders of our Company in the ratio of 3:1. On June 1, 2010 our Company has issued 21,775,000 Equity Shares as bonus shares to the existing shareholders of our Company in the ratio of 3.25:1. For details of the same, please refer to the section titled “Capital Structure” beginning on page 55 of the Draft Red Herring Prospectus.

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Revaluation of assets during the last five years

During last five years, our Company has revalued its fixed assets on June 30, 2007. The land, buildings and plant and machinery had been revalued and stated at revised values. The addition on account of revaluation was included in the Gross Block as on June 30, 2007 as under: (Rs. in million) Nature of Asset Betul Unit Solapur Unit Total

Factory land 0.49 13.22 13.71 Factory and other buildings 28.44 62.38 90.82 Plant and machinery 144.94 174.32 319.26 Total 173.87 249.92 423.79

As a result of revaluation, the revaluation reserve was restated to Rs. 444.54 million. As the assets were stated on revaluation as on June 30, 2007, depreciation effect on account of enhanced value of assets was considered from the financial year 2007-08 onwards.

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SECTION VIII: ISSUE INFORMATION

ISSUE STRUCTURE

Public Issue of 12,200,000 Equity Shares of face value of Rs. 10 each for cash at a price of Rs. [●] per Equity Share (including share premium of Rs. [●] per Equity Share) aggregating Rs. [●] million, (hereinafter referred to as the “Issue”).

Our Company is considering a Pre-IPO Placement of upto 1,827,875 Equity Shares and aggregating upto Rs. 150 million with certain investors. The Pre-IPO Placement is at the discretion of our Company. If undertaken, our Company will complete the issuance of such Equity Shares prior to the filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the number of Equity Shares in the Issue will be reduced to the extent of the Equity Shares proposed to be allotted in the Pre-IPO Placement, subject to the Issue being atleast 25% of the fully diluted post-Issue paid up capital of our Company.

The Issue will constitute 29.99% of the total post issue paid-up equity capital of our Company. The Issue is being made through the Book Building Process:

Particulars Qualified Institutional Non-Institutional Retail Individual Bidders Bidders Bidders Number of Equity Shares* Not more than 6,100,000 Not less than 1,830,000 Not less than 4,270,000 Equity Shares or Issue less Equity Shares shall be Equity Shares shall be allocation to Non- available for allocation available for allocation Institutional Bidders and Retail Individual Bidders Percentage of the Issue Size Not more than 50% of Issue Not less than 15% of the Not less than 35% of the available for allocation Size shall be allocated to Issue shall be available for Issue shall be available for QIBs. allocation allocation

However, not less than 5% of the Net QIB Portion shall be available for allocation proportionately to Mutual Funds only.

Upto 30% of the QIB Portion may be available for allocation to Anchor Investors and one-third of the Anchor Investor Portion shall be available for allocation to domestic Mutual Funds. Basis of Allocation, if Proportionate as follows: Proportionate Proportionate respective category is oversubscribed (a) 213,500 Equity Shares, constituting 5% of the Net QIB portion, shall be available for allocation on a proportionate basis to Mutual Funds;

(b) 4,056,500 Equity Shares shall be allotted on a proportionate basis to all QIBs including Mutual Funds receiving allocation as per (a) above Minimum Bid Such number of Equity Such number of Equity [●] Equity Shares and in Shares that the Bid Amount Shares that the Bid Amount multiples of [y] Equity 291

Particulars Qualified Institutional Non-Institutional Retail Individual Bidders Bidders Bidders exceeds Rs. 1,00,000 and in exceeds Rs. 1,00,000 and in Shares thereafter multiples of [●] Equity multiples of [●] Equity Shares thereafter Shares thereafter Maximum Bid Not exceeding the size of Not exceeding the size of Such number of Equity the Issue subject to the Issue Shares so as to ensure that regulations as applicable to the Bid Amount does not the Bidder exceed Rs. 100,000 Mode of Allotment Compulsorily in Compulsorily in Compulsorily in dematerialized form dematerialized form dematerialized form Bid Lot [●] Equity Shares in [●] Equity Shares in [●] Equity Shares in multiples of [●] Equity multiples of [●] Equity multiples of [●] Equity Shares. Shares. Shares. Allotment Lot [●] Equity Shares in [●] Equity Shares in [●] Equity Shares in multiples of one Equity multiples of one Equity multiples of one Equity Shares. Shares. Shares. Trading Lot One Equity Share One Equity Share One Equity Share Who can Apply ** Public financial institutions, Resident Indian individuals, Resident Indian individuals, as specified in Section 4A of Eligible NRIs, HUF Eligible NRIs, HUF the Companies Act: (applying through the (applying through the scheduled commercial Karta), companies, Karta), applying for Equity banks, mutual funds, foreign corporate bodies, scientific Shares such that the Bid institutional investor institutions, societies trusts, Amount does not exceed Rs. registered with SEBI, sub accounts of FIIs 100,000 in value. multilateral and bilateral registered with SEBI, which development financial are foreign corporate or institutions, venture capital foreign individuals. funds registered with SEBI, foreign venture capital investors registered with SEBI, state industrial development corporations, permitted insurance companies registered with the Insurance Regulatory and Development Authority, provident funds, (subject to applicable laws) with minimum corpus of Rs. 250 millions and pension funds with minimum corpus of Rs. 250 millions in accordance with applicable law, National Investment Fund set up by Government of India and insurance funds set up and managed by the army, navy and air force of the Union of India. Terms of Payment Full Bid Amount on bidding Full Bid Amount on bidding Full Bid Amount on bidding

* Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in QIBs, Non- Institutional and Retail Individual categories would be allowed to be met with spill over inter-se from any other categories, at the sole discretion of our Company, the BRLM, the Designated Stock Exchange and subject to applicable provisions of SEBI ICDR Regulations. If the Pre-IPO Placement is completed, the number of Equity Shares to be allotted to QIBs, Retail Individual Bidders and Non-Institutional Bidders will be reduced to the extent 292

of the Equity Shares proposed to be allotted in the Pre-IPO Placement, subject to the Issue being atleast 25% of the fully diluted post-Issue paid up capital of our Company.

** In case the Bid Cum Application Form is submitted in joint names, the investors should ensure that the demat account is also held in the same joint names and in the same sequence in which they appear in the Bid Cum Application Form.

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TERMS OF THE ISSUE

The Equity Shares being offered are subject to the provisions of the Companies Act, the Memorandum and Articles of Association of our Company, conditions of RBI approval, if any, the terms of this Draft Red Herring Prospectus, Red Herring Prospectus and Prospectus, Bid-cum-Application Form, the Revision Form, the Confirmation of Allocation Note (“CAN”) and other terms and conditions as may be incorporated in the Allotment Advice, and other documents/certificates that may be executed in respect of the Issue. The Equity Shares shall also be subject 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, Stock Exchanges, RBI, ROC and / or other authorities, as in force on the date of the Issue and to the extent applicable.

Ranking of Equity Shares

The Equity Shares being offered shall be subject to the provisions of the Memorandum and Articles of Association and shall rank pari passu in all respects with the other existing shares of our Company including in respect of the rights to receive dividends. The Allottees of the Equity Shares in this Issue shall be entitled to dividends and other corporate benefits, if any, declared by our Company after the date of Allotment. For further details, see the section “Main Provisions of the Articles of Association” beginning on page 326 of this Draft Red Herring Prospectus.

Mode of payment of dividend

We shall pay dividend to our shareholders as per the provisions of the Companies Act, the Articles and the Listing Agreements.

Face Value and Issue Price

The face value of each Equity Share is Rs. 10. The Floor Price of Equity Shares is Rs. [●] per Equity Share and the Cap Price is Rs. [●] per Equity Share. At any given point of time there shall be only one denomination of Equity Shares, subject to applicable law.

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 rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation subject to any statutory and other preferential claims being satisfied; Right of free transferability; and Such other rights, as may be available to a shareholder of a listed public company under the Companies Act the terms of the listing agreements executed with the Stock Exchanges, and the Memorandum and Articles of Association of our Company.

For a detailed description of the main provisions of the Articles of Association such as those dealing with voting rights, dividend, forfeiture and lien, transfer and transmission and / or consolidation / splitting, please refer to the section titled “Main provision of the Articles of Association of our Company” beginning on page 326 of this Draft Red Herring Prospectus.

Market Lot

Under Section 68B of the Companies Act, the Equity Shares shall be allotted only in dematerialized form. In terms of existing SEBI ICDR Regulations, the trading in the Equity Shares shall only be in dematerialized form for all investors. Since trading of the Equity Shares is in dematerialized mode, the tradable lot is one Equity Share. Allocation and allotment of Equity Shares through this Issue will be done only in electronic form, in multiple of one Equity Share, subject to a minimum allotment of [●] Equity Shares. For details of allocation and allotment, please refer to the section titled “Issue Procedure” beginning on page 297 of this Draft Red Herring Prospectus.

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Nomination Facility to the Investor

In accordance with Section 109A of the Companies Act, the sole or first bidder, along with other joint bidder, may nominate any one person in whom, in the event of the death of sole bidder or in case of joint bidders, death of all the bidders, as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to equity share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale/ transfer/ alienation of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at our Company’s Registered / Corporate Office or to our Registrar and Transfer Agents.

In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of the provisions of Section 109A of the Companies Act, shall upon the production of such evidence as may be required by the Board, elect either:

1. to register himself or herself as the holder of the Equity Shares; or 2. to make such allotment of the Equity Shares, as the deceased holder could have made.

Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to allot the Equity Shares, and if the notice is not complied with within a period of ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Equity Shares, until the requirements of the notice have been complied with.

Since the allotment of Equity Shares in the Issue will be made only in dematerialized mode, there is no need to make a separate nomination with us. Nominations registered with respective depository participant of the applicant would prevail. If the investors require changing the nomination, they are requested to inform their respective depository participant.

Minimum Subscription

If we do not receive the minimum subscription of 90% of the Issue through this Draft Herring Prospectus including devolvement of Underwriters within 60 days from the date of closure of the Issue, our Company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after our Company becomes liable to pay the amount, our Company shall pay interest as prescribed under Section 73 of the Companies Act.

Further, in accordance with Clause 26(4) of the SEBI ICDR Regulations, our Company shall ensure that the number of prospective allottees to whom the Equity Shares will be Allotted will be not less than 1,000.

Arrangement for disposal of odd lot

The Equity Shares will be traded in dematerialized form only and therefore the marketable lot is one (1) Equity Share. Hence, there is no possibility of any odd lots.

Application by Eligible NRIs, FIIs and Foreign Venture Capital Funds registered with SEBI

As per the extant policy of the Government of India, OCBs cannot participate in this Issue. The current provisions of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, there exists a general permission for the NRIs, FIIs and foreign venture capital investors registered with SEBI to invest in shares of Indian companies by way of subscription in an IPO. However, such investments would be subject to other investment restrictions under the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, RBI and/or SEBI regulations as may be applicable to such investors. It is to be distinctly understood that there is no reservation for NRIs, FIIs or FCVIs registered with SEBI, applicants will be treated on the same basis with other categories for the purpose of allocation.

The allotment of the Equity Shares to Non-Residents shall be subject to the conditions, if any, as may be prescribed by the Government of India/RBI while granting such approvals.

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The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, (the “Securities Act”) or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the Securities Act). The Equity Shares shall be sold only outside the United States in compliance with Regulation S and the applicable laws of the jurisdiction where those offers and sales occur.

The above information is given for the benefit of the Bidders. The Bidders are advised to make their own enquiries about the limits applicable to them. The Company and the BRLM do not accept any responsibility for the completeness and accuracy of the information stated hereinabove. The Company and the BRLM are not liable to inform the investors of any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure that the number of Equity Shares Bid for do not exceed the applicable limits under laws or regulations.

Restriction on transfer of Equity Shares

Except for lock-in as detailed in “Capital Structure” beginning on page 55 of this Draft Red Herring Prospectus, and except as provided in the Articles of Association, there are no restrictions on transfers of Equity Shares. There are no restrictions on transfers of debentures except as provided in the Articles of Association. There are no restrictions on transmission of Equity Shares and on their consolidation/ splitting except as provided in the Articles of Association. Please see “Main Provisions of the Articles of Association” beginning on page 326 of this Draft Red Herring Prospectus.

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ISSUE PROCEDURE

This section applies to all Bidders. Please note that all Bidders can participate in the Issue through the ASBA process. ASBA Bidders should note that the ASBA process involves application procedures that are different from the procedure applicable to Bidders other than the ASBA Bidders. Bidders applying through the ASBA process should carefully read the provisions applicable to such applications before making their application through the ASBA process. Please note that all Bidders are required to make the full Bid Amount or instruct the relevant SCSB to block the full Bid Amount along with the application.

Book Building Procedure

The Issue is being made through the Book Building Process wherein not more than 50% of the Issue shall be available for allocation to Qualified Institutional Buyers on a proportionate basis. Out of the Net QIB Portion 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for Allotment on a proportionate basis to QIBs and Mutual Funds, subject to valid bids being received from them at or above the Issue Price. Upto 30% of the QIB Portion shall be available for allocation to Anchor Investors and one-third of the Anchor Investor Portion shall be available for allocation to domestic Mutual Funds. Further, not less than 15% of the Issue would be available for allocation to Non-Institutional Bidders and not less than 35% of the Issue would be available for allocation to Retail Individual Bidders on a proportionate basis, subject to valid bids being received from them at or above the Issue Price. Allocation to Anchor Investors shall be on a discretionary basis and not on a proportionate basis.

All Bidders other than ASBA Bidders are required to submit their Bids through the Syndicate. ASBA Bidders are required to submit their Bids to the SCSBs. Bids by QIBs will only have to be submitted through the BRLM or its affiliates or the Syndicate Members. The QIBs who bid through the ASBA process shall submit their Bids to the designated branch of the SCSBs and should intimate the BRLM.

Investors should note that the Equity Shares will be Allotted to all successful Bidders only in dematerialised form. The Bid cum Application Forms which do not have the details of the Bidders’ depository account, including the DP ID Numbers and the beneficiary account number, shall be treated as incomplete and rejected. Bid cum Application Forms which do not have the details of the Bidders’ PAN, (other than Bids made on behalf of the Central and the State Governments, residents of the state of Sikkim and official appointed by the courts) shall be treated as incomplete and are liable to be rejected. Bidders will not have the option of being Allotted Equity Shares in physical form. The Equity Shares on Allotment shall be traded only in the dematerialised segment of the Stock Exchanges.

Bid-cum-Application Form

Bidders (other than the ASBA Bidders) are required to submit their Bids through the. Bids by QIBs will only have to be submitted through the BRLM or its affiliates or the Syndicate Members. Such Bidders shall only use the Bid cum Application Form bearing the stamp of a BRLM or Syndicate Member for making a Bid in terms of this Draft Red Herring Prospectus.

ASBA Bidders shall submit an ASBA Bid cum Application Form either in physical or electronic form to the SCSB authorising blocking of funds that are available in the bank account specified in the ASBA Bid cum Application Form used by the ASBA Bidders. The QIBs who bid through the ASBA process shall submit their Bids to the designated branch of the SCSBs and should intimate the BRLM.

The Bidder shall have the option to make a maximum of three Bids in the Bid cum Application Form and such options shall not be considered as multiple Bids. Upon the allocation of Equity Shares, dispatch of the CAN and filing of the Prospectus with the RoC, the Bid cum Application Form shall be considered as the Application Form. Upon completion and submission the Bid cum Application Form to the Syndicate (and in the case of an ASBA Bid cum Application form, to the SCSB) the Bidder is deemed to have authorized us to make the necessary changes in the Red Herring Prospectus and the Bid-cum-Application Form as would be required for filing the Prospectus with the RoC and as would be required by SEBI and / or the RoC after such filing, without prior or subsequent notice of such changes to the Bidder.

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The prescribed colour of the Bid cum Application Form for the various categories is as follows:

Category Colour of Bid cum Application Form Resident Indians and Eligible NRIs applying on a non-repatriation basis [●] Eligible NRIs, FIIs or Foreign Venture Capital Funds, registered Multilateral and Bilateral [●] Development Financial Institutions applying on a repatriation basis ASBA Bidders Residential ASBA Bidders [●] Non-resident ASBA Bidders [●] Anchor Investors* [●] * Bid cum Application forms for Anchor Investors shall be made available at the office of the BRLM and at the Syndicate Members.

Who can Bid?

1. Indian nationals resident in India who are majors, in single or joint names (not more than three); 2. HUFs, in the individual name of the Karta. The Bidder should specify that the Bid is being made in the name of the HUF in the Bid cum Application Form as follows: Name of Sole or First Bidder: “XYZ Hindu Undivided Family applying through the Karta XYZ”, where XYZ is the name of the Karta. Bids by HUFs would be considered at par with those from individuals; 3. Companies, corporate bodies and societies registered under the applicable laws in India and authorized to invest in equity shares; 4. Mutual Funds registered with SEBI; 5. Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI regulations and SEBI regulations, as applicable); 6. Multilateral and bilateral development financial institution; 7. Venture capital funds registered with SEBI; 8. Foreign venture capital investors registered with SEBI subject to compliance with applicable laws, rules, regulations, guidelines and approvals in the Issue; 9. FIIs and sub-accounts registered with SEBI other than a sub-account which is a foreign corporate or foreign individual subject to compliance with applicable laws, rules, regulations, guidelines and approvals in the Issue; 10. Sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals only under the Non-Institutional Bidders category; 11. State Industrial Development Corporations; 12. Insurance companies registered with the Insurance Regulatory and Development Authority; 13. Provident funds with a minimum corpus of Rs. 250 millions and who are authorized under their constitution to hold and invest in equity shares; 14. Pension funds a with minimum corpus of Rs. 250 millions and who are authorized under their constitution to hold and invest in equity shares; 15. National Investment Fund set up by resolution F. No. 2/3/2005-DDII dated November 23, 2005 of Government of India published in the Gazette of India; 16. Trusts/societies registered under the Societies Registration Act, 1860, as amended, or under any other law relating to trusts and who are authorized under their respective constitutions to hold and invest in equity shares; 17. Eligible NRIs on a repatriation basis or on a non-repatriation basis subject to applicable local laws. NRIs other than Eligible NRIs are not eligible to participate in this Issue; 18. Scientific and/or industrial research organizations authorized under their constitution to invest in equity shares; 19. Insurance funds set up and managed by army, navy or air force of the Union of India; and 20. Any other QIBs permitted to invest, subject to compliance with applicable laws, rules, regulations, guidelines and approvals in the Issue.

As per the existing regulations, OCBs are not eligible to participate in this Issue.

Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law.

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Participation by associates and affiliates of BRLM and Syndicate Member

The BRLM and the Syndicate Member shall not be entitled to subscribe to this Issue in any manner except towards fulfilling their underwriting obligations. Associates and affiliates of the BRLM and the Syndicate Member may subscribe for Equity Shares in the Issue, including in the Net QIB Portion and Non-Institutional Portion as may be applicable to such Bidder, where the allocation is on a proportionate basis. Such bidding and subscription may be on their own account or their clients.

The BRLM and any persons related to the BRLM, the Promoter and the Promoter Group cannot apply in the Issue under the Anchor Investor Portion.

Bids by Mutual Funds

As per the current regulations, the following restrictions are applicable for investments by Mutual Funds:

An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual Fund Portion. In the event that the demand is greater than [●] Equity Shares, allocation shall be made to Mutual Funds proportionately, to the extent of the Mutual Fund Portion. The remaining demand by the Mutual Funds shall, as part of the aggregate demand by QIBs, be available for allocation proportionately out of the remainder of the Net QIB Portion, after excluding the allocation in the Mutual Fund Portion.

One-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to other Anchor Investors.

No mutual fund scheme shall invest more than 10% of its net asset value in the equity shares or equity related instruments of any company provided that the limit of 10% shall not be applicable for investments in index funds or sector or industry specific funds. No mutual fund under all its schemes should own more than 10% of any company’s paid-up share capital carrying voting rights. These limits would have to be adhered to by the mutual funds for investment in this Issue. In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made.

Bids by Eligible NRIs

Bid cum Application forms ([y] in colour) have been made available for Eligible NRIs at the Registered Office of our Company, Corporate Office of our Company, BRLM with SyndicateMembers and with select Members of the Syndicate. .

Eligible NRIs may please note that only such applications as are accompanied by payment in free foreign exchange or by debit to their Non Resident External (NRE) / Foreign Currency Non Resident (FCNR) accounts shall be considered for Allotment under the Eligible NRI category on repatriable basis. The NRIs who intend to make payment through Non- Resident Ordinary (NRO) i.e. on non repatriation basis accounts shall use the Bid cum Application Form meant for Resident Indians ([y] in colour) and shall not use the forms meant for Eligible NRIs ([y] in colour).

Bids by FIIs

As per the current regulations, the following restrictions are applicable for investments by FIIs:

The Issue of Equity Shares to a single FII should not exceed 10% of the post-Issue paid-up capital of our Company. In respect of a FII investing in Equity Shares of our Company on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of the total issued capital of our Company or 5% of our total issued capital in case such sub-account is a foreign corporate or foreign individual.

As of now, in accordance with the foreign investment limits applicable to us and pursuant to the resolution passed by our Shareholders in the Extraordinary General Meeting held on June 1, 2010, the total foreign investment including FII investment cannot exceed the sectoral cap applicable to us (being 100% of our total post Issue paid-up capital).

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A sub account of a FII which is a foreign corporate or foreign individual shall not be considered to be a Qualified Institutional Buyer, as defined under the SEBI Regulations, for this Issue.

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of Regulation 15A(1) of the Securities Exchange Board of India (Foreign Institutional Investors) Regulations, 1995, as amended (the “SEBI FII Regulations”), an FII or its sub-account may issue, deal or hold, offshore derivative instruments (defined under the SEBI FII Regulations as any instrument, by whatever name called, which is issued overseas by an FII against securities held by it that are listed or proposed to be listed on any recognised stock exchange in India, as its underlying) directly or indirectly, only in the event (i) such offshore derivative instruments are issued only to persons who are regulated by an appropriate regulatory authority; and (ii) such offshore derivative instruments are issued after compliance with ‘know your client’ norms. The FII or sub-account is also required to ensure that no further issue or transfer of any offshore derivative instrument is made by or on behalf of it to any persons that are not regulated by an appropriate foreign regulatory authority as defined under the SEBI FII Regulations. Associates and affiliates of the underwriters including the BRLM and the Syndicate Member that are FIIs may issue offshore derivative instruments against Equity Shares Allotted to them in the Issue. Any such offshore derivative instrument does not constitute any obligation of, claim on or an interest in our Company.

Bids by SEBI registered Venture Capital Funds and Foreign Venture Capital Investors

The SEBI (Venture Capital) Regulations, 1996 and the SEBI (Foreign Venture Capital Investor) Regulations, 2000 inter alia prescribe investment restrictions on venture capital funds and foreign venture capital investors registered with SEBI. Accordingly, the holding by any individual venture capital fund registered with SEBI should not exceed 25% of its corpus. However, venture capital funds or foreign venture capital investors may invest not more than 33.33% of their respective investible funds in various prescribed instruments, including in initial public offers.

Bids under the Anchor Investor Portion

Our Company may, in consultation with the BRLM, consider participation by Anchor Investors in the Issue for upto 1,830,000 Equity Shares in accordance with the applicable SEBI ICDR Regulations. The QIB Portion shall be reduced in proportion to the allocation under the Anchor Investor category. In the event of under-subscription or non-Allotment in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion. The key terms for participation in the Anchor Investor Portion are as follows: a. Anchor Investors shall be QIBs; b. A Bid by an Anchor Investor must be for a minimum of such number of Equity Shares that the Bid Amount exceeds Rs. 100 million and in multiples of [●] Equity Shares thereafter. Anchor Investors cannot submit a Bid for more than 30% of the QIB Portion. c. One-third of the Anchor Investor Portion (i.e., [●] Equity Shares) shall be reserved for allocation to domestic Mutual Funds. d. The minimum number of allotees in the Anchor Investor Portion shall not be less than: • two, where the allocation under Anchor Investor Portion is upto Rs. 2,500 million; and • five, where the allocation under Anchor Investor Portion is more than Rs. 2,500 million. e. Anchor Investors shall be allowed to Bid under the Anchor Investor only on the Anchor Investor Bidding Date (i.e., one day prior to the Bid / Issue Opening Date). f. Our Company shall, in consultation with the BRLM, finalise allocation to the Anchor Investors on a discretionary basis, subject to compliance with requirements regarding minimum number of Allottees under the Anchor Investor Portion. g. Allocation to Anchor Investors shall be completed on the day of bidding by Anchor Investors h. The number of Equity Shares allocated to successful Anchor Investors and the price at which the allocation is made, shall be made available in public domain by the BRLM before opening of Bidding on the Bid/Issue Opening Date. i. Anchor Investors shall pay the entire Bid Amount at the time of submission of their Bid. In case the Issue Price is greater than the Anchor Investor Price, any additional amount being the difference between the Issue Price and Anchor Investor Price shall be payable by the Anchor Investors. In the event the Issue Price is lower than the Anchor Investor Price, the allotment to Anchor Investors shall be at Anchor Investor Price. j. The Equity Shares allotted in the Anchor Investor Portion shall be locked-in for a period of 30 days from the date of Allotment in the Issue. k. Neither the BRLM, nor any person related to the BRLM, our Promoters, members of our Promoter Group or Group Companies, shall participate in the Anchor Investor Portion.

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l. Bids made by QIBs under both the Anchor Investor Portion and the Net QIB Portion shall not be considered as multiple Bids. m. The instruments for payment into the Escrow Account should be drawn in favour of: • In case of Resident Anchor Investors: “Betul Oil Public Issue – Escrow Account – Anchor Investor - R”; • In case of Non-Resident Anchor Investor: “Betul Oil Public Issue – Escrow Account – Anchor Investor - NR” Additional details, if any, regarding participation in the Issue under the Anchor Investor Portion shall be disclosed in the advertisement for the Price Band published by our Company, in one English national daily newspaper, one Hindi national daily newspaper and one regional daily newspaper with wide circulation, where the Registered Office of our Company is situated, at least two Working Days prior to the Bid / Issue Opening Date.

The above information is given for the benefit of the Bidders. Our Company and the Book Running Lead Manager are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of the Draft Red Herring Prospectus. Bidders are advised to make their own independent investigations and are advised to ensure that any single Bid from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation or as specified in the Draft Red Herring Prospectus.

Maximum and Minimum Bid Size

For Retail Individual Bidders: The Bid must be for a minimum of [●] Equity Shares and in multiples of [●] Equity Shares thereafter, so as to ensure that the Bid Amount payable by the Bidder does not exceed Rs.100,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid Amount does not exceed Rs.100,000. Where the Bid Amount is over Rs.100,000 due to a revision in the Bid or a revision in the Price Band or upon exercise of the option to bid at Cut-off Price, the Bid would be considered for allocation under the Non-Institutional Portion. The Cut-off Price option is given only to Retail Individual Bidders indicating their agreement to the Bid and to acquire the Equity Shares at the Issue Price as determined at the end of the Book Building Process.

For Non-Institutional Bidders and QIBs Bidders: The Bid must be for a minimum of such Equity Shares such that the Bid Amount exceeds Rs. 100,000 and in multiples of [●] Equity Shares thereafter. A Bid cannot be submitted for more than the size of the Issue. However, the maximum Bid by a QIB should not exceed the investment limits prescribed for them by the regulatory or statutory authorities governing them. Under SEBI ICDR Regulations, a QIB Bidder cannot withdraw its Bid after the Bid/Issue Closing Date, as applicable and is required to pay the entire Bid Amount upon submission of Bid.

In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the Bid Amount is greater than Rs. 100,000 to be considered for allocation in the Non-Institutional Portion. In case the Bid Amount reduces to Rs. 100,000 or less due to a revision in the Bids or a revision in the Price Band, Bids by Non-Institutional Bidders who are eligible for allocation in the Non-Institutional Portion would be considered for allocation under the Retail Portion. Non- Institutional Bidders and QIB Bidders are not allowed to Bid at Cut-off Price.

For Bidders in the Anchor Investor Portion: Only QIBs can participate in the Anchor Investor Portion. The Bid must be for a minimum of such number of Equity Shares such that the Bid Amount is for Rs. 100 millions or more and in multiples of [y] Equity Shares thereafter. Bids by Anchor Investors under the Anchor Investor Portion and in the Net QIB Portion shall not be considered as multiple Bids. A Bid cannot be submitted for more than 30% of the QIB Portion. Anchor Investors cannot withdraw their Bids after the Anchor Investor Bid/ Issue Period and are required to pay the entire Bid amount at the time of submission of the Bid.

Information for Bidders

1. Our Company and the BRLM shall declare the Bid/Issue Opening Date and the Bid/Issue Closing Date in the Red Herring Prospectus to be registered with the RoC and also publish the same in two national daily newspapers (one each in English and Hindi) and in one regional daily newspaper with vide circulation, where the Registered Office of our Company is situated. This advertisement shall be in the prescribed format.

2. Our Company will file the Red Herring Prospectus with the ROC at least three days prior to the Bid/ Issue Opening Date.

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3. The Syndicate and the SCSBs, as applicable, will circulate copies of the the Bid cum Application Form to potential investors and at the request of potential investors, copies of the Red Herring Prospectus. The SCSB shall ensure that the abridged prospectus is made available on its website.

4. Any Bidder (who is eligible to invest in our Equity Shares) who would like to obtain the Red Herring Prospectus and / or the Bid cum Application Form can obtain the same from our Registered Office or Corporate Office or from the members of the Syndicate or the SCSBs.

5. Eligible Bidders who are interested in subscribing the Equity Shares should approach the members of the Syndicate or the SCSBs (as applicable) to register their Bid. Bidders can also approach the Designated Branch of the SCSBs to register their Bids under the ASBA process.

6. The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum Application Forms (other than the ASBA Bid cum Application Form) should bear the stamp of the BRLM or Syndicate Member otherwise they will be rejected. Bids by ASBA Bidders shall be accepted by the Designated Branches of SCSBs in accordance with the SEBI ICDR Regulations and any circulars issued by SEBI in this regard.

Method and Process of Bidding a. Our Company in consultation with the BRLM shall decide the Price Band and the minimum Bid lot size for the Issue and the same shall be advertised in one English national daily newspaper, one Hindi national daily newspaper and one regional daily newspaper with wide circulation, where the Registered Office of our Company is situated, at least two Working Days prior to the Bid/ Issue Opening Date. This advertisement, subject to the provisions of Section 66 of the Companies Act, shall be in the format prescribed in Schedule XIII of the SEBI ICDR Regulations. The Price Band and the minimum Bid Lot for the Issue will be decided by our Company in consultation with the BRLM including the relevant financial ratios computed for both the Cap Price and Floor Price. The Syndicate and the SCSBs shall accept Bids from the Bidders during the Bid/Issue Period. b. The Bid/Issue Period shall be a minimum of three Working Days and not exceeding ten Working Days (including the days for which the Issue is open in case of revision in Price Band). In case the Price Band is revised, the revised Price Band and Bidding Period will be published in one English national daily, one Hindi national daily and one regional daily newspaper with wide circulation, where the Registered Office of our Company is situated and the Bid/Issue Period may be extended, if required, by an additional three Working Days, subject to the total Bid/Issue Period not exceeding ten Working Days. Any revision in the Price Band and the revised Bid/ Issue Period, if applicable, will be published in two national newspapers (one each in English and Hindi) and one regional daily newspaper with wide circulation, where the Registered Office of our Company is situated, and also by indicating the change on the website of the BRLM and at the terminals of the members of the Syndicate. c. Each Bid cum Application Form will give the Bidder the choice to bid for upto three optional prices (for details refer to the paragraph entitled “Bids at Different Price Levels” below) and specify the demand (i.e. the number of Equity Shares bid for) in each option. The price and demand options submitted by the Bidder in the Bid cum Application Form will be treated as optional demands from the Bidder and will not be cumulated. After determination of the Issue Price, the maximum number of Equity Shares bid for by a Bidder at or above the Issue Price will be considered for allocation and the rest of the Bid(s), irrespective of the Bid Price, will become automatically invalid. d. The Bidder cannot Bid on another Bid cum Application Form after his or her Bids on one Bid cum Application Form have been submitted to any member of the Syndicate or the SCSBs. Submission of a second Bid cum Application Form to either the same or to another member of the Syndicate or SCSBs will be treated as multiple Bids and is liable to be rejected either before entering the Bid into the electronic bidding system, or at any point of time prior to the allocation or Allotment of Equity Shares in this Issue. However, the Bidder can revise the Bid through the Revision Form, the procedure for which is detailed under the paragraph titled “Build up of the Book and Revision of Bids”. Provided that Bids submitted by a QIB in the Anchor Investor Portion and in the Net QIB Portion will not be considered as Multiple Bids. e. Except in relation to Bids received from the Anchor Investors, the members of the Syndicate/SCSBs will enter each Bid option into the electronic bidding system as a separate Bid and generate a Transaction registration Slip, (TRS), for each price and demand option and give the same to the Bidder. Therefore, a Bidder can receive upto three TRSs for each Bid cum Application Form.

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f. The BRLM shall accept Bids from the Anchor Investors during the Anchor Investor Bid/Issue Period i.e. one Working Day prior to the Bid/ Issue Opening Date. Bids by QIBs under the Anchor Investor Portion and in the Net QIB Portion shall not be considered as multiple Bids. g. During the Bid/Issue Period, Bidders (other than QIBs) may approach any of the member of the Syndicate to submit their Bid. The member of the Syndicate shall accept Bids from all the Bidders and shall have the right to vet the Bids in accordance with the terms of the Syndicate Agreement and the Draft Red Herring Prospectus. Bidders who wish to use the ASBA process should approach the Designated Branches of the SCSBs to register their Bids. h. Along with the Bid cum Application Form, all Bidders (other than ASBA Bidders) will make payment in the manner described under the paragraph titled ‘Payment Instructions’ beginning on page 312 of the Draft Red Herring Prospectus. i. Upon receipt of the ASBA Bid cum Application Form, submitted whether in physical or electronic mode, the Designated Branch of the SCSB shall verify if sufficient funds equal to the Bid Amount are available in the ASBA Account, as mentioned in the ASBA Bid cum Application Form, prior to uploading such Bids with the Stock Exchanges. j. If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB shall reject such Bids and shall not upload such Bids with the Stock Exchanges. k. If sufficient funds are available in the ASBA Account, the SCSB shall block an amount equivalent to the Bid Amount mentioned in the ASBA Bid cum Application Form and will enter each Bid option into the electronic bidding system as a separate Bid and generate a TRS for each price and demand option. The TRS shall be furnished to the ASBA Bidder on request.

Bids at Different Price Levels and Revision of Bids

The Bidders can Bid at any price within the Price Band, in multiples of Re. 1. The Price Band and the minimum Bid Lot Size for the Issue shall be decided by our Company, in consultation with the BRLM, and advertised in three daily newspapers (one in English, one in Hindi, and in one regional daily newspaper, with wide circulation, where the Registered Office of our Company is situated,) at least two Working Days prior to the Bid/Issue Opening Date.

1. In accordance with SEBI ICDR Regulations, our Company, in consultation with the BRLM, reserves the right to revise the Price Band during the Bid/Issue Period, provided the Cap Price shall be less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price Band shall not exceed 20% on the either side i.e. the Floor Price can move up or down to the extent of 20% of the Floor Price disclosed at least two Working Days prior to the Bid/ Issue Opening Date and the Cap Price will be revised accordingly.

2. Our Company in consultation with the BRLM can finalise the Issue Price within the Price Band in accordance with this clause, without the prior approval of, or intimation, to the Bidders.

3. Our Company, in consultation with the BRLM, can finalise the Anchor Investor Issue Price within the Price Band in accordance with this clause, without the prior approval of, or intimation, to the Anchor Investors.

4. Bidders can bid at any price within the Price Band. Bidders have to Bid for the desired number of Equity Shares at a specific price. Retail Individual Bidders applying for a maximum Bid in any of the bidding options not exceeding Rs. 100,000 may bid at Cut-off Price. However, bidding at Cut-off Price is prohibited for QIBs and Non- Institutional Bidders and such Bids from QIBs and Non-Institutional Bidders shall be rejected.

5. Retail Individual Bidders who Bid at the Cut-off Price agree that they shall acquire the Equity Shares at any price within the Price Band. Retail Individual Bidders bidding at Cut-off Price shall deposit the Bid Amount based on the Cap Price. In the event the Bid Amount is higher than the subscription amount payable by the Retail Individual Bidders who Bid at Cut-off Price (i.e. the total number of Equity Shares allocated in the Issue multiplied by the Issue Price), the Retail Individual Bidders, who Bid at Cut-off Price, shall receive the refund of the excess amounts from the Refund Account(s). In case of ASBA Bidder bidding at Cut-off Price, the ASBA Bidders shall instruct the SCSBs to block amount based on the Cap Price.

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6. In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had bid at Cut- Off Price could either (i) revise their Bid or (ii) make additional payment based on the cap of the revised Price Band, with the members of the Syndicate or the SCSBs to whom the original Bid was submitted. In case the total amount (i.e. original Bid Amount plus additional payment) exceeds Rs. 100,000, the Bid will be considered for allocation under the Non Institutional Bidders category in terms of the Draft Red Herring Prospectus. If, however, the Bidder does not either revise the Bid or make additional payment and the Issue Price is higher than the cap of the Price Band prior to revision, the number of Equity Shares Bid for shall be adjusted for the purpose of allocation, such that no additional payment would be required from the Bidder and the Bidder is deemed to have approved such revised Bid at Cut-off.

7. In case of a downward revision in the Price Band, Retail Individual Bidders who have bid at Cut-off Price could either revise their Bid or the excess amount paid at the time of bidding would be refunded from the Refund Account(s) or unblocked by the SCSBs, as applicable. 8. Our Company, in consultation with the BRLM, shall decide the minimum number of Equity Shares for each Bid to ensure that the minimum application value is within the range of Rs. 5,000 to Rs. 7,000.

IN ACCORDANCE WITH THE SEBI ICDR REGULATIONS, EQUITY SHARES WILL BE ISSUED, TRANSFERRED AND ALLOTMENT SHALL BE MADE ONLY IN THE DEMATERIALISED FORM TO THE ALLOTTEES. ALLOTTEES WILL HAVE THE OPTION TO RE-MATERIALISE THE EQUITY SHARES, IF THEY SO DESIRE, AS PER THE PROVISIONS OF THE COMPANIES ACT AND THE DEPOSITORIES ACT IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS MUST ENSURE THAT THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE BID CUM APPLICATION FORM 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 BID CUM APPLICATION FORM.

The trading of the Equity Shares of our Company would be in dematerialised form only for all investors in the demat segment of the respective Stock Exchanges. Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under the relevant laws, rules, regulations, guidelines and approvals.

Escrow Mechanism, terms of payment and payment into the Escrow Accounts

For details of the escrow mechanism and payment instructions, please refer to “Issue Procedure – Payment Instructions” on page 312 of this Draft Red Herring Prospectus.

Electronic Registration of Bids

(a) The members of the Syndicate and the SCSBs will register the Bids using the on-line facilities of the Stock Exchanges. There will be at least one on-line connectivity to each city where a stock exchange is located in India and where the Bids are being accepted. The BRLM, our Company and the Registrar to the Issue are not responsible for any acts, mistakes or errors or omission and commissions in relation to, (i) the Bids accepted by the members of the Syndicate and the SCSBs, (ii) the Bids uploaded by the members of the Syndicate and the SCSBs, (iii) the Bids accepted but not uploaded by the members of the Syndicate and the SCSBs or (iv) with respect to ASBA Bids, Bids accepted and uploaded without blocking funds in the ASBA Accounts. However, the respective member of the Syndicate and / or the SCSBs shall be responsible for any errors in the Bid details uploaded by them. It shall be presumed that for the Bids uploaded by the SCSBs, the Bid Amount has been blocked in the relevant ASBA Account.

(b) The Stock Exchanges will offer a screen-based facility for registering Bids for the Issue. This facility will be available on the terminals of the members of the Syndicate, their authorized agents and the SCSBs during the Bid/Issue Period. The Syndicate Member and the Designated Branches can also set up facilities for off-line electronic registration of Bids subject to the condition that they will subsequently download the off-line data file into the on-line facilities for book building on a regular basis. On the Bid/Issue Closing Date, the members of the Syndicate and the Designated Branches of the SCSBs shall upload the Bids till such time as may be permitted by the Stock Exchanges. This information will be available with the BRLMs on a regular basis. Bidders are cautioned that a high inflow of bids

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typically experienced on the last day of the bidding may lead to some Bids received on the last day not being uploaded due to lack of sufficient uploading time, and such bids that could not uploaded will not be considered for allocation. Bids will only be accepted on working days, i.e., Monday to Friday (excluding any public holiday).

(c) The aggregate demand and price for Bids registered on the electronic facilities of NSE and BSE will be downloaded on a regular basis, consolidated and displayed on-line at all bidding centers. A graphical representation of the consolidated demand and price would be made available at the bidding centers and the websites of the Stock Exchanges during the Bid/Issue Period along with category wise details.

(d) At the time of registering each Bid (other than ASBA Bidder), the member of the Syndicate shall enter the following details of the Bidder in the on-line system:

• Name of the Bidder(s): Bidders should ensure that the name given in the Bid-cum-Application Form is exactly the same as the name in which the Depository Account is held. In case the Bid-cum-Application Form is submitted in joint names, Bidders should ensure that the Depository Account is also held in the same joint names and are in the same sequence in which they appear in the Bid-cum-Application Form; • Investor Category such as Individual, Corporate, NRI, FII or Mutual Fund, etc.; • Numbers of Equity Shares Bid for; • Bid Amount; • Price option; • Cheque Amount; • Cheque Number; • Bid-cum-Application Form number; • Depository Participant Identification Number and Client Identification Number of the Demat Account of the Bidder; and • PAN, except for Bids on behalf of the Central and State Governments, residents of the state of Sikkim and officials appointed by the courts

With respect to ASBA Bids, at the time of registering each Bid, the Designated Branches of the SCSBs shall enter the following information pertaining to the Bidder into the electronic bidding system:

• Name of the Bidder(s). • ASBA Bid cum Application Form Number. • PAN (of First Bidder if more than one Bidder) • Investor Category and Sub-Category:

Retail Non-institutional QIBs (No sub category) -Individual - Mutual Funds - Corporate - Financial Institutions - Other - Insurance companies - Foreign Institutional Investors other than corporate and individual - Sub- accounts

• DP ID and client identification number • Quantity • Price • Bank Account Number • Cheque Number • Cheque Amount

(e) A system generated TRS will be given to the Bidder as a proof of the registration of each of the bidding options. It is the Bidder’s responsibility to request and obtain the TRS from the member of the Syndicate or the Designated Branches of the SCSBs. The registration of the Bid by the member of the Syndicate or the Designated Braches of the SCSBs does not guarantee that the Equity Shares shall be allocated either by the BRLM or the Syndicate Member or our Company. 305

(f) Such TRS will be non-negotiable and by itself will not create any obligation of any kind.

(g) In case of QIB Bidders, bidding in the Net QIB Portion, the BRLM or Syndicate Members can reject the Bids at the time of accepting the Bid provided that the reason for such rejection is provided in writing. Bids under the Non- Institutional Portion and Bids under the Retail Individual Portion would not be rejected except on the technical grounds listed in the Draft Red Herring Prospectus. The members of the Syndicate may also reject Bids if all the information required is not provided and the Bid cum Application Form is incomplete in any respect. The SCSB shall have no right to reject Bids except on technical grounds.

(h) It is to be distinctly understood that the permission given by the Stock Exchanges to use their network and software of the Online IPO system should not in any way be deemed or construed to mean that the compliance with various statutory and other requirements by our Company and the BRLM are cleared or approved by the Stock Exchanges; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance with the statutory and other requirements nor does it take any responsibility for the financial or other soundness of our Company, our Promoters, our management or any scheme or project of our Company; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of the Draft Red Herring Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges.

(i) Only Bids that are uploaded on the online IPO system of the Stock Exchanges shall be considered for allocation/ Allotment. The members of the Syndicate will be given upto one day after the Bid/Issue Closing Date to verify DP ID and Client ID uploaded in the online IPO system during the Bid/Issue Period after which the data will be sent to the Registrar to the Issue for reconciliation and Allotment of Equity Shares. In case of discrepancy of data between BSE or NSE and the members of the Syndicate or the Designated Branches of the SCSBs, the decision of our Company, in consultation with the BRLM and the Registrar to the Issue, shall be final and binding on all concerned.

(j) Details of Bids in the Anchor Investor Portion will not be registered on the on-line facilities of electronic facilities of BSE and NSE. In the event such Bid Amount has not been blocked, the Anchor Investor’s Bid shall be rejected.

Build Up of the Book and Revision of Bids

(a) Bids registered by various Bidders through the members of the Syndicate and SCSBs shall be electronically transmitted to the BSE or NSE mainframe on a regular basis.

(b) The book gets built up at various price levels. This information will be available with the BRLM on a regular basis at the end of the Bid/Issue Period.

(c) During the Bidding Period, any Bidder who has registered his or her interest in the Equity Shares at a particular price level is free to revise his or her Bid within the price band using the printed Revision Form, which is a part of the Bid cum Application Form.

(d) Revisions can be made in both the desired number of Equity Shares and the Bid Amount by using the Revision Form. Apart from mentioning the revised options in the Revision Form, the Bidder must also mention the details of all the options in his or her Bid cum Application Form or earlier Revision Form. For example, if a Bidder has bid for three options in the Bid cum Application Form and he is changing only one of the options in the Revision Form, he must still fill the details of the other two options that are not being changed, in the Revision Form. Incomplete or inaccurate Revision Forms will not be accepted by the members of the Syndicate and the Designated Branches of the SCSBs.

(e) The Bidder can make this revision any number of times during the Bidding Period. However, for any revision(s) of the Bid, the Bidders will have to use the services of the same members of the Syndicate or the SCSB through whom the Bidder had placed the original Bid. Bidders are advised to retain copies of the blank Revision Form and the revised Bid must be made only in such Revision Form or copies thereof.

(f) In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had Bid at Cut-off Price could either (i) revise their Bid or (ii) shall make additional payment based on the cap of the revised Price Band (such that the total amount i.e., original Bid Amount plus additional payment does not exceed Rs. 1,00,000 if the Bidder wants to continue to Bid at Cut-off Price), with the members of the Syndicate to whom the original Bid was submitted. In case the total amount (i.e., original Bid Amount plus additional payment) exceeds Rs. 1,00,000, the Bid will be considered for allocation under the Non-Institutional Portion in terms of the Draft Red Herring Prospectus. If,

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however, the Bidder does not either revise the Bid or make additional payment and the Issue Price is higher than the cap of the Price Band prior to revision, the number of Equity Shares Bid for shall be adjusted downwards for the purpose of allocation, such that no additional payment would be required from the Bidder and the Bidder is deemed to have approved such revised Bid at Cut-off Price.

(g) In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders, who have bid at Cut-off Price could either revise their Bid or the excess amount paid at the time of bidding would be refunded from the Refund Account.

(h) Our Company in consultation with the BRLM, shall decide the minimum number of Equity Shares for each Bid to ensure that the minimum application value is within the range of Rs. 5,000 to Rs. 7,000.

(i) Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft for the incremental amount, if any, to be paid on account of the upward revision of the Bid. The excess amount, if any, resulting from downward revision of the Bid would be returned to the Bidder at the time of refund in accordance with the terms of the Red Herring Prospectus. With respect to the ASBA Bids, if revision of the Bids results in an incremental amount, the relevant SCSB shall block the additional Bid amount. In case of Bids, other than ASBA Bids, the members of the Syndicate shall collect the payment in the form of cheque or demand draft if any, to be paid on account of upward revision of the Bid at the time of one or more revisions. In such cases, the members of the Syndicate will revise the earlier Bid details with the revised Bid and provide the cheque or demand draft number of the new payment instrument in the electronic book. The Registrar to the Issue will reconcile the Bid data and consider the revised Bid data for preparing the Basis of Allotment.

(j) When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and get a revised TRS from the member of the Syndicate or SCSBs, as applicable. It is the responsibility of the Bidder to request for and obtain the revised TRS, which will act as proof of his or her having revised the previous Bid.

(i) The Syndicate Members may modify selected fields (viz. DP ID and Client ID) in the Bid details already uploaded upto one day post the Bid/Issue Closing Period.

Price Discovery and Allocation

After the Bid/Issue Closing Date, the BRLM will analyze the demand generated at various price levels and discuss pricing strategy with our Company. Our Company, in consultation with BRLM, shall finalise the Issue Price, the number of Equity Shares to be allotted and the allocation to successful Bidders.

(a) Not more than 50% of the Issue (including 5% of Net QIB Portion specifically reserved for Mutual Funds) would be available for allocation on a proportionate basis to QIBs after consultation with Designated Stock Exchange, subject to valid Bids being received at or above the Issue Price. Upto 30% of the QIB Portion shall be available for allocation to Anchor Investors and one-third of the Anchor Investor Portion shall be available for allocation to domestic Mutual Funds.

(b) Not less than 15% and not less than 35% of the Issue, would be available for allocation on a proportionate basis to Non-Institutional Bidders and Retail Individual Bidders, respectively, in consultation with Designated Stock Exchange, subject to valid Bids being received at or above the Issue Price.

(c) Undersubscription, if any, in any category would be allowed to be met with spill over from any of the other categories at the discretion of our Company in consultation with the BRLM. However, if the aggregate demand by Mutual Funds is less than [y] Equity Shares, the balance Equity Shares available for allocation in the Mutual Fund Portion will first be added to the Net QIB Portion and be allocated proportionately to the QIB Bidders. In the event that the aggregate demand in the Net QIB Portion has not been met, under-subscription, if any, would be allowed to be met with spill over from any other category or combination of categories at the discretion of our Company, in consultation with the BRLM.

(d) Allocation to Anchor Investors shall be at the discretion of our Company in consultation with the BRLM, subject to compliance with the SEBI ICDR Regulations. In the event of undersubscription in the Anchor Investor Portion, the balance Equity Shares shall be added to the Net QIB Portion.

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(e) Allocation to Eligible NRIs or FIIs or Foreign Venture Capital Investor registered with SEBI, Multilateral and Bilateral Development Financial Institutions applying on repatriation basis will be subject to applicable laws, rules, regulations, guidelines and approvals.

(f) Our Company reserves the right to cancel the Issue any time after the Bid/Issue Closing Date but before Allotment and the reasons thereof shall be given as a public notice within two days of the cancellation of the Bid/Issue Closing Date. The public notice will be issued in the same newspapers where the statutory pre-Issue advertisements had appeared. Further the Stock Exchanges will also be informed promptly.

(g) In terms of SEBI ICDR Regulations, QIB Bidders bidding in the Net QIB Portion shall not be allowed to withdraw their Bid after the Bid/ Issue Closing Date.

(h) If the Issue Price is higher than the Anchor Investor Allocation Price, the additional amount shall be paid by the Anchor Investors. However, if the Issue Price is lower than the Anchor Investor Allocation Price, the difference shall not be payable to the Anchor Investors.

(i) The Basis of Allotment details shall be put up on the website of the Registrar to the Issue.

Signing of Underwriting Agreement and RoC Filing

(a) Our Company, the BRLM and the Syndicate Members shall enter into an Underwriting Agreement on finalization of the Issue Price and allocation(s) to the Bidders.

(b) After signing the Underwriting Agreement, our Company and the Book Running Lead Manager would update and file the updated Red Herring Prospectus with RoC, which then would be termed the ‘Prospectus’. The Prospectus will contain details of the Issue Price, Issue Size, underwriting arrangements and will be complete in all material respects.

Filing with the ROC

We will file a copy of the Red Herring Prospectus and Prospectus with the RoC in terms of Section 56, Section 60 and Section 60B of the Companies Act.

Pre-Issue Advertisement

Subject to Section 66 of the Companies Act, our Company shall, after registering the Red Herring Prospectus with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI Regulations, in one English language national daily newspaper, one Hindi language national daily newspaper and one regional language newspaper with wide circulation, where the Registered Office of our Company is situated.

Advertisement regarding Issue Price and Prospectus

A statutory advertisement will be issued by our Company after the filing of the Prospectus with the RoC in an English national daily newspaper, a Hindi national daily newspaper and a regional daily newspaper, each with wide circulation, where the Registered Office of our Company is situated. This advertisement, in addition to the information that has to be set out in the statutory advertisement, shall indicate the Issue Price. Any material updates between the Red Herring Prospectus and the Prospectus will be included in such statutory advertisement.

Issuance of Confirmation of Allocation Note (“CAN”)

(a) Upon approval of Basis of Allotment by the Designated Stock Exchange, the Registrar to the Issue shall send to the BRLM and Syndicate Members a list of their Bidders who have been allocated Equity Shares in the Issue. The approval of the Basis of Allocation by the Designated Stock Exchange for QIB Bidders (including Anchor Investors) may be done simultaneously with or prior to the approval of the Basis of Allocation for the Retail and Non-Institutional Bidders. However, Bidders should note that our Company shall ensure that (i) the Allotment of the Equity Shares and (ii) the instructions by our Company for the demat credit of the Equity Shares, to all Bidders in this Issue shall be done on the same date.

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(b) The Registrar to the Issue will then dispatch the CAN to the Bidders who have been allocated Equity Shares in the Issue. The dispatch of CAN shall be deemed a valid, binding and irrevocable contract for the Bidder to pay the entire Issue Price for the Allotment to such Bidder.

(c) The Issuance of CAN shall be deemed a valid, binding and irrevocable contract for the Allotment of Equity Shares to such Bidder.

(d) Bidders who have been allocated Equity Shares and who have already paid the Bid Amount into the Escrow Account(s) at the time of bidding shall directly receive the CAN from the Registrar to the Issue subject, however, to realisation of his or her cheque or demand draft paid into the Escrow Account(s). The dispatch of a CAN shall be deemed a valid, binding and irrevocable contract for the Bidder.

The Issuance of CAN is subject to “Notice to Anchor Investors - Allotment Reconciliation and Revised CANs” as set forth below.

Notice to Anchor Investors: Allotment Reconciliation and Revised CANs

A physical book will be prepared by the Registrar to the Issue on the basis of the Bid cum Application Forms received from Anchor Investors. Based on the physical book and at the discretion of our Company and the BRLM, select Anchor Investors may be sent a CAN, within two Working Days of the Anchor Investor Bid/ Issue Period, indicating the number of Equity Shares that may be allocated to them. This provisional CAN and the final allocation is subject to the physical application being valid in all respect along with receipt of stipulated documents, the Issue Price being finalised at a price not higher than the Anchor Investor Issue Price and Allotment by the Board of Directors. In the event that the Issue Price is higher than the Anchor Investor Issue Price, a revised CAN will be sent to Anchor Investors. The price of Equity Shares in such revised CAN may be different from that specified in the earlier CAN. Anchor Investors should note that they shall be required to pay additional amounts, being the difference between the Issue Price and the Anchor Investor Issue Price, as indicated in the revised CAN within two Working Days after the Bid/ Issue Closing Date. Any revised CAN, if issued, will supersede in entirety the earlier CAN.

Notice to QIBs bidding in the Net QIB Portion: Allotment Reconciliation and Revised CANs

QIBs bidding in the Net QIB Portion will be sent a CAN, indicating the number of Equity Shares that may be allocated to them after the final Basis of Allotment, as approved by the Designated Stock Exchange and reflected in the reconciled physical book prepared by the Registrar to the Issue. The CAN will constitute the valid, binding and irrevocable contract (subject only to the issue of a revised CAN, if any) for the QIB to pay the entire Issue Price for all the Equity Shares allocated to such QIB. Any revised CAN, if issued, will supersede in its entirety the earlier CAN.

Designated Date and Allotment of Equity Shares

1. Our Company will ensure that (i) Allotment of Equity Shares; and (ii) credit to the successful Bidder’s depository account will be completed within ten Working Days of the Bid/Issue Closing Date.

2. As per SEBI ICDR Regulations, Equity Shares will be issued and Allotment shall be made only in the dematerialised form to the Allottees. Allottees will have the option to re-materialise the Equity Shares, if they so desire, in the manner stated in the Depositories Act.

Investors are advised to instruct their Depository Participant to accept the Equity Shares that may be Allotted to them pursuant to this Issue.

General Instructions

Do’s: a) Check if you are eligible to apply; b) Read all the instructions carefully and complete the Bid cum Application Form; c) Ensure that the details about Depository Participant and Beneficiary Account are correct as Allotment of Equity Shares will be in the dematerialized form only; d) Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a the BRLM or Syndicate Member or with respect to ASBA Bidders ensure that your Bid is submitted at a Designated Branch of the SCSB

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where the ASBA Bidders or the person whose bank account will be utilised by the ASBA Bidder for bidding has a bank account; e) With respect to ASBA Bids ensure that the ASBA Bid cum Application Form is signed by the account holder in case the applicant is not the account holder. Ensure that you have mentioned the correct bank account number in the ASBA Bid cum Application Form; f) Ensure that you have requested for and receive a TRS for all your Bid options; g) Ensure that you have funds equal to the Bid Amount in your bank account maintained with the SCSB before submitting the ASBA Bid cum Application Form to the respective Designated Branch of the SCSB; h) Instruct your respective banks to not release the funds blocked in the bank account under the ASBA process; i) Ensure that the full Bid Amount is paid for the Bids submitted to the members of the Syndicate and funds equivalent to the Bid Amount are blocked in case of any Bids submitted though the SCSBs; j) Submit revised Bids to the same member of the Syndicate through whom the original Bid was placed and obtain a revised TRS; k) Ensure that the Bid is within the Price Band; l) Ensure that you mention your PAN allotted under the I.T. Act with the Bid cum Application Form, except for Bids on behalf of the Central and State Governments, residents of the state of Sikkim and officials appointed by the courts; m) Ensure that the Demographic Details (as defined hereinbelow) are updated, true and correct in all respects. n) Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the Bid cum Application Form 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 Bid cum Application Form.

Don’ts: a) Do not Bid for lower than the minimum Bid size; b) Do not Bid/ revise Bid price to less than the Floor Price or higher than the Cap Price; c) Do not Bid on another Bid cum Application Form after you have submitted a Bid to the member of the Syndicate or the SCSB, as applicable; d) Do not pay the Bid amount in cash, by money order or by postal order; e) Do not provide your GIR number instead of your PAN number. f) Do not send Bid cum Application Forms by post; instead submit the same to members of the Syndicate or the SCSBs, as applicable; g) Do not Bid at Cut-off price (for QIBs and Non-Institutional Bidders); h) Do not Bid for a Bid Amount exceeding Rs. 1,00,000 (for Bids by Retail Individual Bidders); i) Do not fill up the Bid cum Application Form such that the Equity Shares bid for exceeds the Issue size and/ or investment limit or maximum number of Equity Shares that can be held under the applicable laws or regulations or maximum amount permissible under the applicable regulations; and j) Do not submit Bid accompanied with Stock invest.

Instructions for completing the Bid cum Application Form

Bidders can obtain Bid cum Application Forms and / or Revision Forms from the any of the member of the Syndicate or from our Registered Office or our Corporate Office. ASBA Bid cum Application Forms can be obtained from the Designated Branches of the SCSBs. ASBA Bid cum Application Forms shall also be available at the website of the respective stock exchanges at www.bseindia.com and www.nseindia.com.

Bids and Revisions of Bids

Bids and revisions of Bids must be:

(a) Made only in the prescribed Bid cum Application Form or Revision Form, as applicable. (b) Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions contained herein, in the Bid cum Application Form or in the Revision Form. Incomplete Bid cum Application Forms or Revision Forms are liable to be rejected. Bidders should note that the members of the Syndicate and / or the SCSBs (as appropriate) will not be liable for errors in data entry due to incomplete or illegible Bid cum Application Forms or Revision Forms. (c) Information provided by the Bidders will be uploaded in the online IPO system by the members of the Syndicate and SCSBs, as the case may be, and the electronic data will be used to make allocation/Allotment. Please ensure that the details are correct are legible.

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(d) The Bids from the Retail Individual Bidders must be for a minimum of [●] Equity Shares and in multiples of [●] thereafter subject to a maximum Bid amount of Rs. 100,000. (e) For Non-institutional and QIB Bidders, bidding under the Net QIB Portion, Bids must be for a minimum of such number of Equity Shares such that the Bid Amount exceeds Rs. 100,000 and in multiples of [●] Equity Shares thereafter. All Individual Bidders whose maximum bid amount exceeds Rs. 100,000 would be considered under this category. Bids cannot be made for more than the Issue Size. Bidders are advised to ensure that a single Bid from them should not exceed the investment limits or maximum number of Equity Shares that can be held by them under the applicable laws or regulations. (f) For Anchor Investors, Bids must be for a minimum of such number of Equity Shares that the Bid Amount exceeds or equal to Rs. 100 millions and in multiples of [y] Equity Shares thereafter. (g) In single name or in joint names (not more than three and in the same order as their Depository Participant details). (h) Thumb impressions and signatures other than in the languages specified in the Eighth Schedule in the Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under official seal.

Bidder’s Depository Account and Bank Account Details

Bidders should note that on the basis of the Permanent Account Number of the Sole/First Bidder, Depository Participant’s name, Depository Participant-Identification number and Beneficiary Account Number provided by them in the Bid cum Application Form, the Registrar to the Issue will obtain from the Depository the demographic details including category, age, address, Bidders bank account details, MICR code and occupation (hereinafter referred to as ‘Demographic Details’). These Bank Account details would be used for giving refunds (including through physical refund warrants, direct credit, ECS/NECS, NEFT and RTGS) to the Bidders or unblocking the ASBA account. Hence, Bidders 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 despatch/ credit of refunds to Bidders at the Bidders sole risk and neither the BRLM or our Company shall have any responsibility and undertake any liability for the same. Hence, Bidders should carefully fill in their Depository Account details in the Bid cum Application Form.

IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS MUST ENSURE THAT THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE BID CUM APPLICATION FORM 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 BID CUM APPLICATION FORM.

These Demographic Details would be used for all correspondence with the Bidders including mailing of the CANs/Allocation Advice and making refunds as per the modes disclosed and the Demographic Details given by Bidders in the Bid cum Application Form would not be used for any other purposes by the Registrar to the Issue. Hence, Bidders are advised to update their Demographic Details as provided to their Depository Participants and ensure that they are true and correct. By signing the Bid cum Application Form, Bidder would have deemed to authorize the depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records.

Refund orders (where refunds are not being made electronically)/Allocation Advice/CANs would be mailed at the address of the Bidder as per the Demographic Details received from the Depositories. Such communication 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 Bidder (other than ASBA Bidders) in the Bid cum Application Form would be used only to ensure dispatch of refund orders. Please note that any such delay shall be at the Bidders sole risk and neither our Company, the Registrar to the Issue, Escrow Collection Bank(s) nor the BRLM shall be liable to compensate the Bidder for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay.

In case no corresponding record is available with the Depositories that matches three parameters, namely, PAN of the sole/first Bidder, the Depository Participant’s identity (DP ID) and the beneficiary’s identity, then such Bids are liable to be rejected.

Bids under Power of Attorney

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In case of Bids (including ASBA Bids) made pursuant to a power of attorney or by limited companies, corporate bodies, registered societies, FIIs, Mutual Funds, insurance companies and provident funds and pension funds, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of the memorandum and articles of association and/or bye laws must be lodged along with the Bid cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason.

In addition to the above, certain additional documents are required to be submitted by the following entities:

(a) With respect to Bids by FIIs and Mutual Funds, a certified copy of their SEBI registration certificate must be lodged along with the Bid cum Application Form. (b) With respect to Bids by insurance companies registered with the Insurance Regulatory and Development Authority, in addition to the above, a certified copy of the certificate of registration issued by the Insurance Regulatory and Development Authority must be lodged along with the Bid cum Application Form. (c) With respect to Bids made by provident funds with a minimum corpus of Rs. 250 millions (subject to applicable law) and pension funds with a minimum corpus of Rs. 250 millions, a certified copy of a certificate from a chartered accountant certifying the corpus of the provident fund/pension fund must be lodged along with the Bid cum Application Form. 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 Bid cum Application Form, subject to such terms and conditions that our Company and the BRLM may deem fit. Our Company in our absolute discretion, reserve the right to permit the holder of the power of attorney to request the Registrar to the Issue that for the purpose of printing particulars on the refund order and mailing of the refund order/CANs/allocation advice, the Demographic Details given on the Bid cum Application Form should be used (and not those obtained from the Depository of the Bidder). In such cases, the Registrar to the Issue shall use Demographic Details as given in the Bid cum Application Form instead of those obtained from the depositories.

Bids by Non-Residents, NRIs, FIIs and Foreign Venture Capital Investors registered with SEBI on a repatriation basis.

Bids and revision to Bids must be made in the following manner:

1. On the Bid cum Application Form or the Revision Form, as applicable ([y] in colour), and completed in full in BLOCK LETTERS in ENGLISH in accordance with the instructions contained therein. 2. In a single name or joint names (not more than three and in the same order as their Depository Participant Details). 3. Bids on a repatriation basis shall be in the names of individuals, or in the name of FIIs but not in the names of minors, OCBs, firms or partnerships, foreign nationals (excluding NRIs) or their nominees. Bids by Eligible NRIs for a Bid Amount of upto Rs. 100,000 would be considered under the Retail Portion for the purposes of allocation and Bids for a Bid Amount of more than Rs. 100,000 would be considered under Non-Institutional Portion for the purposes of allocation.

Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only and net of bank charges and / or commission. In case of Bidders who remit money through Indian Rupee drafts purchased abroad, such payments in Indian Rupees will be converted into US Dollars or any other freely convertible currency as may be permitted by the RBI at the rate of exchange prevailing at the time of remittance and will be dispatched by registered post or if the Bidders so desire, will be credited to their NRE accounts, details of which should be furnished in the space provided for this purpose in the Bid cum Application Form. Our Company will not be responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency.

As per the existing policy of the Government of India, OCBs are not permitted to participate in the Issue.

There is no reservation for Eligible NRIs and FIIs and all Bidders will be treated on the same basis with other categories for the purpose of allocation.

Payment Instructions

Escrow Mechanism for Bidders other than ASBA Bidders

Our Company and the BRLM shall open Escrow Accounts with one or more Escrow Collection Bank(s) in whose favor the Bidders shall make out the cheque or demand draft in respect of their Bid and/or revision of the Bid. Cheques or demand

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drafts received for the full Bid Amount from Bidders in a certain category would be deposited in the Escrow Account. The Escrow Collection Bank(s) will act in terms of the Red Herring Prospectus and an Escrow Agreement to be entered into amongst our Company, the BRLM, Escrow Collection Bank(s) and Registrar to the Issue. The monies in the Escrow Account shall be maintained by the Escrow Collection Bank(s) for and on behalf of the Bidders. The Escrow Collection Bank(s) shall not exercise any lien whatsoever over the monies deposited therein and shall hold the monies therein in trust for the Bidders. On the Designated Date, the Escrow Collection Bank(s) shall transfer the monies from the Escrow Account to the Public Issue Account with the Bankers to the Issue as per the terms of the Escrow Agreement. The balance amount after transfer to the Public Issue account shall be transferred to the Refund Account. Payments of refunds to the Bidders shall also be made from the Refund Account as per the terms of the Escrow Agreement and the Red Herring Prospectus.

The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as an arrangement between the Escrow Collection Bank(s), our Company, Registrar to the Issue and BRLM to facilitate collection from the Bidders.

Payment mechanism for ASBA Bidders

The ASBA Bidders shall specify the bank account number in the ASBA Bid cum Application Form and the SCSB shall block an amount equivalent to the Bid Amount in the bank account specified in the ASBA Bid cum Application Form. The SCSB shall keep the Bid Amount in the relevant bank account blocked until receipt of instructions from the Registrar to the Issue to unblock the Bid Amount. The Bid Amount shall remain blocked in the ASBA Account until finalisation of the Basis of Allotment in the Issue and consequent transfer of the Bid Amount to the Public Issue Account.

Payment into Escrow Account for Bidders other than ASBA Bidders:

Each Bidder shall draw a cheque or demand draft or remit the funds electronically through the RTGS mechanism for the amount payable on the Bid and/or on allocation/Allotment as per the following terms:

All Bidders would be required to pay the full Bid Amount at the time of the submission of the Bid cum Application Form.

1. QIB, Non-Institutional Bidders and Retail Individual Bidders shall, with the submission of the Bid cum Application Form, draw a payment instrument for the Bid Amount in favour of the Escrow Account and submit the same to the members of the Syndicate, as applicable. If the payment is not made favouring the Escrow Account along with the Bid cum Application Form, the Bid of the Bidder shall be liable to be rejected.

2. Anchor Investors would be required to pay the Bid Amount at the time of submission of the application form through RTGS mechanism. In the event of Issue Price being higher than the price at which allocation is made to Anchor Investors, the Anchor Investors shall be required to pay such additional amount to the extent of shortfall between the price at which allocation is made to them and the Issue Price. If the Issue Price is lower than the price at which allocation is made to Anchor Investors, the amount in excess of the Issue Price paid by Anchor Investors shall not be refunded to them.

3. The payment instruments for payment into the Escrow Account should be drawn in favor of:

a. In case of Resident QIB Bidders: "Escrow Account – Betul Oil Public Issue - QIB - R"; b. In case of Non-Resident QIB Bidders: “Escrow Account – Betul Oil Public Issue - QIB - NR”; c. In case of Resident Retail and Non Institutional Bidders: “Escrow Account – Betul Oil - Public Issue - R”; d. In case of Non Resident Retail and Non Institutional Bidders: “Escrow Account – Betul Oil - Public Issue - NR”;

4. In case of bids by NRIs applying on a repatriation basis, the payments must be made through Indian Rupee drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in the Non-Resident External (NRE) Accounts or the Foreign Currency Non-Resident Accounts (FCNR), maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance. Payment will not be accepted out of Non-Resident Ordinary (NRO) account of Non Resident Bidder bidding on a repatriation basis. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to the NRE Account or the Foreign Currency Non- Resident Account.

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5. In case of Bids by NRIs applying on non-repatriation basis, the payments must be made through Indian Rupee Drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance or out of a Non-Resident Ordinary (NRO) Account of a Non-Resident Bidder bidding on a non-repatriation basis. Payment by drafts should be accompanied by a bank certificate confirming that the draft has been issued by debiting an NRE or FCNR or NRO Account.

6. In case of Bids by FIIs, the payment should be made out of funds held in Special Non Resident Rupee Account ‘SPNR’ along with documentary evidence in support of the remittance. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to Special Non Resident Rupee Account ‘SPNR’.

7. Where a Bidder has been allocated a lesser number of Equity Shares than the Bidder has Bid for, the excess amount, if any, paid on bidding, after adjustment towards the balance amount payable on the Equity Shares allocated, will be refunded to the Bidder from the Refund Accounts.

8. The monies deposited in the Escrow Account will be held for the benefit of the Bidders (other thea ASBA Bidders) till the Designated Date.

9. On the Designated Date, the Escrow Collection Bank(s) shall transfer the funds from the Escrow Account as per the terms of the Escrow Agreement into the Public Issue Account with the Banker to the Issue.

10. No later than ten working days from the Bid/Issue Closing Date, the Refund Bank shall refund all amounts payable to unsuccessful Bidders (other than ASBA Bidders) and also the excess amount paid on Bidding, if any, after adjusting for allocation to the successful Bidders payments should be made by cheque, or a demand draft drawn on any bank (including a Co-operative bank), which is situated at, and is a member of or sub-member of the bankers’ clearing house located at the center where the Bid cum Application Form is submitted. Outstation cheques/bank drafts drawn on banks not participating in the clearing process will not be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected. Cash/ stock invest/money orders/ postal orders will not be accepted.

11. Bidders are advised to mention the number of application form on the reverse of the cheque / demand draft to avoid misuse of instruments submitted along with the Bid cum Application Form.

12. In case clear funds are not available in the Escrow Accounts as per final certificates from the Escrow Collection Bank(s), such Bids are liable to be rejected.

Payment by Stock invest

In terms of Reserve Bank of India Circular No. DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the option to use the stock invest instrument in lieu of cheques or bank drafts for payment of bid money has been withdrawn. Hence, payment through stockinvest would not be accepted in this Issue.

Payment by cash / money order

Payment through cash/ money order shall not be accepted in this Issue.

Submission of Bid cum Application Form

All Bid cum Application Forms or Revision Forms duly completed and accompanied by account payee cheques or drafts shall be submitted to the members of the Syndicate at the time of submission of the Bid. With respect to ASBA Bidders, the ASBA Bid cum Application Form or the ASBA Revision Form shall be submitted to the Designated Branches of the SCSBs.

No separate receipts shall be issued for the money payable on the submission of Bid cum Application Form or Revision Form. However, the collection centre of the members of the Syndicate will acknowledge the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid cum Application Form for the records of the Bidder.

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Other Instructions

Joint Bids in the case of Individuals

Bids may be made in single or joint names (not more than three). In the case of joint Bids, all payments / refunds will be made out in favor of the Bidder whose name appears first in the Bid cum Application Form or Revision Form (‘First Bidder’). All communications will be addressed to the First Bidder and will be dispatched to his or her address as per the Demographic Details received from the Depository.

Multiple Bids

A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares required. Two or more Bids will be deemed to be multiple Bids if the sole or First Bidder is one and the same. Our Company reserves the right to reject, in its absolute discretion, all or any multiple Bids in any or all categories. It is clarified, however, that Bidders shall have the option to make a maximum of three Bids in the Bid cum Application Form and such options shall not be considered multiple Bids.

In this regard, the procedures which would be followed by the Registrar to the Issue to detect multiple applications are given below:

• All Bids will be checked for common PAN and Bids with common PAN will be accumulated and taken to a separate process file which would serve as a multiple master In this master, a check will be carried out for the same PAN. In cases where the PAN is different, the same will be deleted from this master. • The Bids will be scrutinized for DP ID and Beneficiary Account Numbers. In case applications bear the same DP ID and Beneficiary Account Numbers, these will be treated as multiple applications.

In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Funds registered with SEBI and such Bids in respect of more than one scheme will not be treated as multiple Bids provided that the Bids clearly indicates the scheme for which the Bid has been made. Bids by QIBs under the Anchor Investor Portion and in Net QIB Portion will not be considered as multiple Bids.

ASBA Bids made by duplicate copies of the same ASBA Bid cum Application Form (i.e. two ASBA Bid cum Application Forms bearing the same unique identification number) shall be treated as multiple Bids and shall be rejected.

Permanent Account Number (“PAN”)

The Bidder or in the case of a Bid in joint names, each of the Bidders, should mention his/her PAN allotted under the I.T. Act. Applications without this information and documents will be considered incomplete and are liable to be rejected. It is to be specifically noted that Bidders should not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground.

This requirement is not applicable to Bids received on behalf of the Central and State Governments, from residents of the state of Sikkim and from officials appointed by the courts

Right to Reject Bids

In case of QIB Bidders, bidding under the Net QIB Portion, our Company, in consultation with the BRLM may reject Bids provided that the reasons for rejecting the same shall be provided to such Bidder in writing. In case of Non-Institutional Bidders and Retail Individual Bidders our Company has a right to reject Bids on technical grounds. Consequent refunds shall be made by RTGS/NEFT/ECS/NECS/Direct Credit / cheque or pay order or draft and will be sent to the Bidder’s address at the Bidder’s risk. With respect to ASBA Bids, the Designated Branches of the SCSBs shall have the right to reject ASBA Bids if at the time of blocking the Bid Amount in the Bidder’s bank account, the respective Designated Branch ascertains that sufficient funds are not available in the Bidder’s bank account maintained with the SCSB. Subsequent to the acceptance of the ASBA Bid by the SCSB, our Company would have a right to reject the ASBA Bids only on technical grounds.

Grounds for Technical Rejections

Bidders are advised to note that Bids are liable to be rejected among others on the following technical grounds: 315

1) Amount paid does not tally with the highest number of Equity Shares Bid for. With respect to ASBA Bids, the amounts mentioned in the ASBA Bid cum Application Form does not tally with the amount payable for the value of the Equity Shares Bid for;

2) In case of partnership firms, Equity Shares may be registered in the names of the individual partners and no firm as such shall be entitled to apply;

3) Bids by Persons not competent to contract under the Indian Contract Act, 1872, including minors, insane persons;

4) Age of the First Bidder

5) PAN number not stated and GIR number given instead of PAN number, except for Bids on behalf of the Central and State Governments, residents of the state of Sikkim and officials appointed by the courts;

6) Bids for lower number of Equity Shares than specified for that category of investors;

7) Bids at a price less than the Floor Price;

8) Bids at a price more than the Cap Price;

9) Submission of more than five ASBA Bid cum Application forms per bank account;

10) Bids at cut-off price by Non-Institutional and QIB Bidders;

11) Bids for number of Equity Shares which are not in multiples of [●];

12) Category not ticked;

13) Multiple bids as defined in this Draft Red Herring Prospectus;

14) In case of Bid under power of attorney or by limited companies, corporate, trust etc., relevant documents are not submitted;

15) Bids accompanied by Stock invest/ money order/postal order/cash;

16) Signature of sole and / or joint bidders missing. With respect to ASBA Bids, the Bid cum Application form not being signed by the account holders, if the account holder is different from the Bidder;

17) Bid cum Application Form does not have the stamp of the BRLM or Syndicate Member;

18) ASBA Bid cum Application Form does not have the stamp of the SCSB, except for ASBA Bid cum Application Forms downloaded from the websites of the Stock Exchanges, in which case the ASBA Bid Cum Application Forms shall bear an unique application number;

19) Bids by QIBs not submitted through the BRLM / Syndicate Members or in case of ASBA Bids for QIBs, not intimated to the BRLM / Syndicate Members;

20) Bid cum Application Form does not have Bidder’s depository account details;

21) In case no corresponding record is available with the Depository that matches three parameters: PAN of the sole name of the Bidder, Depository Participant’s identity (DP ID) and beneficiary’s account number;

22) Bid cum Application Forms are not delivered by the Bidders within the time prescribed as per the Bid cum Application Form, Bid/Issue Opening Date advertisement and the Red Herring Prospectus and as per the instructions in the Red Herring Prospectus and the Bid cum Application Form;

23) With respect to ASBA Bids, inadequate funds in the bank account to block the Bid Amount specified in the ASBA Bid cum Application Form at the time of blocking such Bid Amount in the bank account;

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24) Bids for amounts greater than the maximum permissible amounts prescribed by the regulations. For further details, please refer to the paragraph titled ‘Issue Procedure - Maximum and Minimum Bid Size’ beginning on page 301 of the Draft Red Herring Prospectus;

25) Bids where clear funds are not available in Escrow Accounts as per final certificate from the Escrow Collection Bank(s);

26) Bids by persons in the United States;

27) Bids by any person outside India if not in compliance with applicable foreign and Indian Laws;

28) Bids not uploaded on the terminals of the Stock Exchanges;

29) Bids by persons prohibited from buying, selling or dealing in the shares directly or indirectly by SEBI or any other regulatory authority;

30) Bids by OCBs;

31) In case the DP ID, client ID and PAN mentioned in the Bid Cum Application Form and entered into the electronic bidding system of the Stock Exchanges by the members of the Syndicate do not match with the DP ID, client ID and PAN available in the records with the depositories. Non-submissions of bank account details in the space provided in the application form; and

32) ASBA Applications made by using duplicate copy of ASBA Bid cum Application Form downloaded from the website of the Stock Exchanges (i.e. two ASBA Bid cum Application Forms bearing the same unique identification number).

33) Bids or revision thereof by QIB Bidders and Non-Institutional Bidders where the Bid amount is in excess of Rs. 1,00,000 uploaded after 4.00 p.m. on the Bid/ Issue Closing Date.

34) Bids by NRIs not disclosing their residential status

Basis of Allotment or Allocation

For Retail Individual Bidders

1. Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all the successful Retail Individual Bidders will be made at the Issue Price.

2. The Issue less Allotment to Non-Institutional and QIB Bidders shall be available for Allotment to Retail Individual Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price.

3. If the aggregate demand in this category is less than or equal to [y] Equity Shares at or above the Issue Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their valid Bids.

4. If the aggregate demand in this category is greater than [y] Equity Shares at or above the Issue Price, the Allotment shall be made on a proportionate basis not less than [y] Equity Shares and in multiples of [●] Equity Shares thereafter. For the method of proportionate Basis of Allotment, refer below.

For Non-Institutional Bidders

1. Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all successful Non-Institutional Bidders will be made at the Issue Price.

2. The Issue Size less Allotment to QIBs and Retail Portion shall be available for Allotment to Non-Institutional Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price.

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3. If the aggregate demand in this category is less than or equal to [y] Equity Shares at or above the Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand.

4. In case the aggregate demand in this category is greater than [y] Equity Shares at or above the Issue Price, Allotment shall be made on a proportionate basis not less than [y] Equity Shares and in multiples of [●] Equity Shares thereafter. For the method of proportionate Basis of Allotment refer below.

For Qualified Institutional Bidders in the Net QIB Portion

1. Bids received from the QIB Bidders bidding in the Net QIB Portion at or above the Issue Price shall be grouped together to determine the total demand under this portion. The Allotment to all the QIB Bidders will be made at the Issue Price.

2. The Net QIB Portion shall be available for Allotment to QIB Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price.

3. Allotment shall be undertaken in the following manner:

(a) In the first instance allocation to Mutual Funds for upto 5% of the Net QIB Portion shall be determined as follows:

(i) In the event that Mutual Fund Bids exceeds 5% of the Net QIB Portion, allocation to Mutual Funds shall be done on a proportionate basis for upto 5% of the Net QIB Portion.

(ii) In the event that the aggregate demand from Mutual Funds is less than 5% of the Net QIB Portion then all Mutual Funds shall get full Allotment to the extent of valid bids received above the Issue Price.

(iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds shall be available for Allotment to all QIB Bidders as set out in (b) below; (b) In the second instance Allotment to all QIBs bidding in the Net QIB portion shall be determined as follows:

i. Under-subscription below 5% of the Net QIB Portion, if any, from Mutual Funds, would be included for allocation to the remaining QIB Bidders on a proportionate basis.

ii. In the event that the oversubscription in the Net QIB Portion, all QIB Bidders who have submitted Bids above the Issue Price shall be allotted Equity Shares on a proportionate basis for upto 95% of the Net QIB Portion.

iii. Mutual Funds, who have received allocation as per (a) above, for less than the number of Equity Shares Bid for by them, are eligible to receive Equity Shares on a proportionate basis along with other QIB Bidders.

The aggregate Allotment available for allocation to QIB Bidders bidding in the Net QIB Portion shall not be more than [y] Equity Shares.

For Anchor Investor Portion

• Allocation of Equity Shares to Anchor Investors at the Anchor Investor Issue Price will be at the discretion of our Company, in consultation with the BRLM, subject to compliance with the following requirements:

not more than 30% of the QIB Portion will be allocated to Anchor Investors; one-third of the Anchor Investor Portion shall be reserved for domestic Mutual Funds, subject to valid Bids being received from domestic Mutual Funds at or above the price at which allocation is being done to other Anchor Investors; allocation to Anchor Investors shall be on a discretionary basis and subject to a minimum number of two Anchor Investors for allocation upto Rs. 2,500 millions and minimum number of five Anchor Investors for allocation more than Rs. 2,500 millions.

• The number of Equity Shares Allotted to Anchor Investors and the Anchor Investor Issue Price, shall be made available in the public domain by the BRLM before the Bid/ Issue Opening Date by intimating the Stock Exchanges.

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Method of proportionate Basis of Allotment in the Issue

In the event of the Issue being over-subscribed, we shall finalise the Basis of Allotment in consultation with the Designated Stock Exchange. The Executive Director (or any other senior official nominated by them) of the Designated Stock Exchange along with the BRLM and the Registrar to the Issue shall be responsible for ensuring that the Basis of Allotment is finalised in a fair and proper manner.

The Allotment shall be made in marketable lots, on a proportionate basis as explained below:

a. Bidders will be categorised according to the number of Equity Shares applied for;

b. The total number of Equity Shares to be allotted to each category as a whole shall be arrived at on a proportionate basis, which is the total number of Equity Shares applied for in that category (number of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse of the over-subscription ratio;

c. Number of Equity Shares to be Allotted to the successful Bidders will be arrived at on a proportionate basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied by the inverse of the over-subscription ratio.

d. In all Bids where the proportionate Allotment is less than [●] Equity Shares per Bidder, the Allotment shall be made as follows:

i. Each successful Bidder shall be allotted a minimum of [●] Equity Shares; and

ii. The successful Bidders out of the total Bidders for a category shall be determined by draw of lots in a manner such that the total number of Equity Shares allotted in that category is equal to the number of Equity Shares calculated in accordance with (b) above.

e. If the proportionate Allotment to a Bidder is a number that is more than [●] but is not a multiple of one (which is the marketable lot), the number in excess of the multiple of one would be rounded off to the higher multiple of one if that number is 0.5 or higher. If that number is lower than 0.5, it would be rounded off to the lower multiple of one. All Bidders in such categories would be Allotted Equity Shares arrived at after such rounding off.

f. If the Equity Shares allocated on a proportionate basis to any category are more than the Equity Shares allotted to the Bidders in that category, the remaining Equity Shares available for Allotment shall be first adjusted against any other category, where the allotted shares are not sufficient for proportionate Allotment to the successful Bidders in that category. The balance Equity Shares, if any, remaining after such adjustment will be added to the category comprising Bidders applying for minimum number of Equity Shares.

g. Subject to valid Bids being received, allocation of Equity Shares to Anchor Investors shall be at the sole discretion of our Company, in consultation with the BRLM.

Illustration of Allotment to QIBs and Mutual Funds (“MF”) in the Net QIB Portion

A. Issue Details

Sr. No. Particulars Issue details 1. Issue size 2,000 million Equity Shares 2. Allocation to QIB (50%) 1,000 million Equity Shares 3. Anchor Investor Portion 300 million Equity Shares 4. Portion available to QIBs other than Anchor Investors [(2) minus (3)] 700 million Equity Shares Of which: a. Allocation to MF (5%) 35 million Equity Shares b. Balance for all QIBs including MFs 665 million Equity Shares 3 No. of QIB applicants 10 4 No. of shares applied for 5,000 million Equity Shares

B. Details of QIB Bids in the Net QIB Portion 319

Sr. No. Type of QIB bidders# No. of Equity Shares bid for (in millions) 1 A1 500 2 A2 200 3 A3 1,300 4 A4 500 5 A5 500 6 MF1 400 7 MF2 400 8 MF3 800 9 MF4 200 10 MF5 200 Total 5,000 # A1-A5: (QIB bidders other than MFs), MF1-MF5 (QIB bidders which are Mutual Funds)

C. Details of Allotment to QIB Bidders/ Applicants (Number of Equity Shares in millions) Type of Equity Allocation of 35 millions Allocation of balance 665 Aggregate QIB Shares bid Equity Shares to MF millions Equity Shares to QIBs allocation to bidders for (in proportionately (please see proportionately (please see note MFs million) note 2 below) 4 below) (I) (II) (III) (IV) (V) A1 500 0 67.0 0 A2 200 0 26.8 0 A3 1,300 0 174.1 0 A4 500 0 67.0 0 A5 500 0 67.0 0 MF1 400 7 52.6 59.6 MF2 400 7 52.6 59.6 MF3 800 14 105.3 119.3 MF4 200 3.5 26.3 29.8 MF5 200 3.5 26.3 29.8 5,000 35 665.0 298.2

Please note:

1. The illustration presumes compliance with the requirements specified in this Draft Red Herring Prospectus in the section titled “Issue Structure” beginning on page 291 of this Draft Red Herring Prospectus.

2. Out of 700 millions Equity Shares allocated to QIBs, 35 millions (i.e. 5%) will be allocated on proportionate basis among five Mutual Fund applicants who applied for 2,000 millions Equity Shares in QIB category.

3. The balance 665 millions Equity Shares (i.e. 700-35 (available for MFs)) will be allocated on proportionate basis among 10 QIB applicants who have applied for 5,000 million Equity Shares (including five MF applicants who applied for 2,000 million Equity Shares).

4. The figures in the fourth column entitled “Allocation of balance 665 million Equity Shares to QIBs proportionately” in the above illustration are arrived as under:

• For QIBs other than Mutual Funds (A1 to A5)= No. of shares bid for (i.e. in column II) X 665 / 4965.

• For Mutual Funds (MF1 to MF5)= [(No. of shares bid for (i.e. in column II of the table above) less Equity Shares allotted ( i.e., column III of the table above)] X 665 / 4965.

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The numerator and denominator for arriving at allocation of 700 millions Equity Shares to the 10 QIBs are reduced by 35 millions Equity Shares, which have already been allotted to Mutual Funds in the manner specified in column III of the table above.

Equity Shares in Dematerialized Form with NSDL or CDSL

As per the provisions of Section 68B of the Companies Act, the Equity Shares in this Issue shall be allotted only in a dematerialized form, (i.e. not in the form of physical certificates but be fungible and be represented by the statement issued through the electronic mode). In this context, two agreements have been signed among us, the respective Depositories and the Registrar to the Issue:

a. a tripartite agreement dated July 27, 2010 with NSDL, our Company and Registrar to the Issue;

b. a tripartite agreement dated [●] with CDSL, our Company and Registrar to the Issue.

All bidders can seek Allotment only in dematerialized mode. Bids from any Bidder without relevant details of his or her depository account are liable to be rejected. (a) A Bidder applying for Equity Shares must have at least one beneficiary account with either of the Depository Participants of either NSDL or CDSL prior to making the Bid.

(b) The Bidder must necessarily fill in the details (including the Beneficiary Account Number and Depository Participant’s Identification number) appearing in the Bid cum Application Form or Revision Form.

(c) Equity Shares allotted to a successful Bidder will be credited in electronic form directly to the beneficiary account (with the Depository Participant) of the Bidder.

(d) Names in the Bid cum Application Form or Revision Form should be identical to those appearing in the account details in the Depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the Depository.

(e) If incomplete or incorrect details are given under the heading ‘Bidders Depository Account Details’ in the Bid cum Application Form or Revision Form, it is liable to be rejected.

(f) The Bidder is responsible for the correctness of his or her demographic details given in the Bid cum Application Form vis-à-vis those with their Depository Participant.

(g) It may be noted that Equity Shares in electronic form can be traded only on the stock exchanges having electronic connectivity with NSDL and CDSL. All the Stock Exchanges where our Equity Shares are proposed to be listed have electronic connectivity with CDSL and NSDL.

(h) The trading of the Equity Shares of our Company would be only be in dematerialized form only for all investors.

Communications

All future communications in connection with Bids made in this Issue should be addressed to the Registrar to the Issue quoting the full name of the sole or First Bidder, Bid cum Application Form number, Bidders Depository Account Details, number of Equity Shares applied for, date of Bid form, name and address of the member of the Syndicate or the Designated Branch of the SCSBs where the Bid was submitted and cheque or draft number and issuing bank thereof or with respect to ASBA Bids, bank account number in which the amount equivalent to the Bid Amount was blocked.

Bidders can contact the Compliance Officer or the Registrar to the Issue in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of Allotment, credit of allotted Equity Shares in the respective beneficiary accounts, refund orders etc. In case of ASBA Bids submitted to the Designated Branches of the SCSBs, the Bidders can contact the Designated Branches of the SCSBs.

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the Companies Act, which is reproduced below:

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“Any person who:

(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein; or

(b) otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”.

PAYMENT OF REFUND

Bidders other than ASBA Bidders must note that on the basis of the names of the Bidders, Depository Participant’s name, DP ID, Beneficiary Account number provided by them in the Bid cum Application Form, the Registrar to the Issue will obtain, from the Depositories, the Bidders’ bank account details, including the nine digit Magnetic Ink Character Recognition (“MICR”) code as appearing on a cheque leaf. Hence Bidders 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 dispatch of refund order or refunds through electronic transfer of funds, as applicable, and any such delay shall be at the Bidders’ sole risk and neither our Company, the Registrar to the Issue, Escrow Collection Bank(s), Bankers to the Issue nor the BRLM shall be liable to compensate the Bidders for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay.

Mode of making refunds

The payment of refund, if any, for Bidders other than ASBA Bidders would be done through various modes in the following order of preference:

1. Direct Credit – Applicants having bank accounts with the Refund Bank (s), as mentioned in the Bid cum Application Form, 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.

2. ECS / NECS – Payment of refund would be done through ECS / 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 is made available, except where the applicant, being eligible, opts to receive refund through direct credit or RTGS.

3. RTGS – Applicants having a bank account at any of the centres where such facility is available and whose refund amount exceeds Rs. 0.1 millions, has 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 Bid cum Application Form. In the event the same is not provided, refund shall be made through ECS / 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.

4. NEFT – Payment of refund shall be undertaken through NEFT wherever the applicants’ bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the applicants have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the applicants through this method. The process flow in respect of refunds by way of NEFT is at an evolving stage and 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 the sections.

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 upto 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

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Escrow Collection Bank(s) and payable at par at places where Bids are received. Bank charges, if any, for cashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

Mode of making refunds for ASBA Bidders

In case of ASBA Bidders, the Registrar to the Issue shall instruct the relevant SCSB to unblock the funds in the relevant ASBA Account to the extent of the Bid Amount specified in the ASBA Bid cum Application Forms for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within nine days of the Bid/Issue Closing Date.

Disposal of Applications and Application Moneys

With respect to Bidders other than ASBA Bidders, our Company shall ensure dispatch of Allotment advice, refund orders (except for Bidders who receive refunds through electronic transfer of funds) and give benefit to the beneficiary account with Depository Participants and submit the documents pertaining to the Allotment to the Stock Exchanges within ten days of the Bid/Issue Closing Date.

In case of applicants who receive refunds through NECS, direct credit or RTGS, the refund instructions will be given to the clearing system within ten days from the Bid/ Issue Closing Date. A suitable communication shall be sent to the Bidders receiving refunds through this mode within ten days of Bid/ Issue Closing Date, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund.

Our Company shall use best efforts to ensure that all steps for completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to be listed, are taken within twelve Working Days of the Bid/Issue Closing Date.

In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI Regulations, our Company further undertakes that:

• Allotment of Equity Shares shall be made only in dematerialised form, including the credit of Allotted Equity Shares to the beneficiary accounts of the Depository Participants, within ten Working Days of the Bid / Issue Closing Date;

• With respect to Bidders other than ASBA Bidders, dispatch of refund orders or in a case where the refund or portion thereof is made in electronic manner, the refund instructions are given to the clearing system within ten days of the Bid/Issue Closing Date would be ensured. With respect to the ASBA Bidders, instructions for unblocking of the ASBA Bidder‘s Bank Account shall be made within eight days from the Bid/Issue Closing Date.

Our Company shall pay interest at 15% p.a. for any delay beyond the ten working days from the Bid/Issue Closing Date as mentioned above, if Allotment is not made and refund orders are not dispatched or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner and/or demat credits are not made to investors within eight days from the day our Company becomes liable to repay (i.e. ten Working Days after the Bid / Issue Closing Date or the date of refusal by the Stock Exchange(s), whichever is earlier). If such money is not repaid within eight days from the day our Company becomes liable to repay it, our Company and every officer in default shall, on and from expiry of eight days, be liable to repay the money with interest at the rate of 15% as prescribed under Section 73 of the Companies Act.

Letters of Allotment or Refund Orders or instructions to the SCSBs

We shall give credit to the beneficiary account with Depository Participants within ten Working Days from the Bid/Issue Closing Date. Applicants residing at the centres where clearing houses are managed by the RBI, will get refunds through ECS / NECS only except where applicant is otherwise disclosed as eligible to get refunds through direct credit and / or RTGS. Our Company shall ensure dispatch of refund orders, if any, of value upto Rs. 1,500, by ― "Under Certificate of Posting", and shall dispatch refund orders above Rs. 1,500, if any, by registered post or speed post at the sole or First Bidder’s sole risk within ten days of the Bid/Issue Closing Date. Bidders 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 ten days of the Bid/ Issue Closing Date. In case of ASBA Bidders, the Registrar to the Issue shall instruct the relevant SCSBs to unblock the funds in the relevant ASBA Account to the extent of the Bid Amount specified in the ASBA Bid cum Application Forms for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within eight Working days 323

of the Bid/Issue Closing Date, which shall be completed within one Working Day after the receipt of such instruction from the Registrar to the Issue.

Interest in case of delay in dispatch of Allotment Letters or Refund Orders/ instruction to SCSBs by the Registrar to the Issue

Our Company agrees that the Allotment of Equity Shares in the Issue shall be made not later than ten Working Days of the Bid / Issue Closing Date. Our Company further agrees that it shall pay interest at the rate of 15% p.a. if the Allotment letters or refund orders have not been dispatched to the applicants or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given in the disclosed manner within ten Working days from the Bid / Issue Closing Date or instructions to SCSBs to unblock funds in the ASBA Accounts shall be given within eight Working Days of the Bid/Issue Closing Date, as the case may be.

Our Company will provide adequate funds required for dispatch of refund orders or Allotment advice to the Registrar to the Issue.

Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by our Company as a Refund Bank and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

Undertaking by our Company

We undertake as follows:

1. that the complaints received in respect of this Issue shall be attended to expeditiously and satisfactorily;

2. that all steps will be taken for the completion of the necessary formalities for listing and commencement of trading at all the stock exchanges where the Equity Shares are proposed to be listed within twelve Working days of the Bid/Issue Closing Date;

3. that the funds required for making refunds as per the modes disclosed or dispatch of Allotment advice by registered post or speed post shall be made available to the Registrar to the Issue by us;

4. That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within ten Working days of the Bid/ Issue Closing Date, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund;

5. Instructions to SCSBs to unblock funds in the ASBA Accounts shall be given within nine working days of the Bid/Issue Closing Date.

6. That the instruction for electronic credit of Equity Shares / refund orders / intimation about the refund to non- resident Indians shall be completed within the specified time;

7. That no further Issue of Equity Shares shall be made till the Equity Shares offered through the Red Herring Prospectus are listed or until the Bid monies are refunded on account of non-listing, under-subscription etc.; and

8. That adequate arrangements shall be made to collect all Applications Supported by Blocked Amount and to consider them similar to non-ASBA applications while finalizing the Basis of Allotment.

Withdrawal of the Issue

Our Company, in consultation with the BRLM, reserves the right not to proceed with the Issue anytime after the Bid/Issue Opening Date but before the Allotment of Equity Shares. In such an event our Company would issue a public notice in the newspapers, in which the pre-Issue advertisements were published, within two days of the Bid/ Issue Closing Date, providing reasons for not proceeding with the Issue. Our Company shall also inform the same to Stock Exchanges on which the Equity Shares are proposed to be listed.

Any further issue of Equity Shares by our Company shall be in compliance with applicable laws.

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If our Company withdraws the Issue after the closure of bidding, our Company shall be required to file a fresh draft red herring prospectus with SEBI.

Utilization of the Issue proceeds

The Board of Directors of our Company certifies that:

(a) all monies received out of the Issue shall be transferred to a separate Bank Account other than the bank account referred to in sub-section (3) of Section 73 of the Companies Act;

(b) details of all monies utilized out of this Issue referred above shall be disclosed and continue to be disclosed till the time any part of the Issue proceeds remains unutilized under an appropriate separate head in the balance sheet of our Company indicating the purpose for which such monies have been utilised; and

(c) Details of all unutilized monies out of this 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.

Our Company shall not have recourse to the Issue Proceeds until the approval for listing and Trading of the Equity Shares from all the Stock Exchanges where listing is sought has been received.

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SECTION IX: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

Pursuant to Schedule II of the Companies Act and the SEBI Guidelines, the main provisions of the Articles of Association relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below. Please note that the each provision herein below is numbered as per the corresponding article number in the Articles of Association and defined terms herein have the meaning given to them in the Articles of Association.

Amount of Capital

Article 3 provides that the Authorised Share Capital of our Company shall be such as given in Clause V of the Memorandum of Association of our Company as altered from time to time.

Alteration of Capital

Article 62-67 deals with the provision relating to the alteration of capital as:

62. The Company may, from time to time, by ordinary resolution increase its share capital by such sum, to be divided into shares of such amount, as the resolution shall specify.

63. The Company may, by ordinary resolution in general meeting:- (a) consolidate and divide all or any of its capital into shares of larger amounts than its existing shares; (b) sub-divide its shares or any of them, into shares of smaller amounts than is fixed by the Memorandum of Association, so however, than 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; (c) cancel any share which, at the date of the passing of the resolution in that behalf, 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.

64. The Company may from time to time, by special resolution and on compliance with the provisions of Section 100 to 105 of the Act, reduce its share capital and any capital reserve fund or share premium account.

65. The Company shall have power to establish Branch Offices, subject to the provisions of Section 8 of the Act or any statutory modifications thereof.

66. The Company shall have power to pay interest out of its capital on so much of shares which were issued for the purpose of raising money to defray the expenses of the construction of any work or building or the provisions of any plant for our Company in accordance with the provisions of Section 208 of the Act.

67. The Company, if authorised by a special resolution passed at a General Meeting may amalgamate or cause itself to be amalgamated with any other person, or body corporate, subject however, to the provisions of Section 391 to 394 of the Act.

Further Issue of Shares

Article 4-6 provides that:

4. (1) Where at any time after the expiry of two years from the formation of our Company or at any time after the expiry of one year from the allotment of shares in our Company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of our Company by allotment of further shares then: (a) Such further shares shall be offered to the persons who, at the date of the offer, are holders of the equity shares of our Company, in proportion, as nearly as circumstances admit, to the capital paid-up on those shares at that date; (b) The offer aforesaid shall be made by a notice specifying the number of shares offered and limiting a time not being less than fifteen days from the date of the offer within which the offer, if not accepted, will be deemed to have been declined; (c) The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any of them in favour of any other person and the notice referred to in sub-clause (b) hereof shall contain a statement of this right; (d) After the expiry of the time specified in the notice aforesaid, 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 as they think most beneficial to our Company.

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(2) Notwithstanding anything contained in sub clause (1) the further shares aforesaid may be offered to any persons (whether or not those persons include the persons referred to in clause (a) of sub-clause (1) hereof) in any manner whatsoever: (a) If a special resolution to that effect is passed by our Company in general meeting, or (b) Where no such resolution is passed, if the votes cast (whether on a show of hands or on a poll as the case may be) in favour of the proposal contained in the resolution moved in that general meeting (including the casting vote, if any, of the Chairman) by members who, being entitled so to do, 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 our Company.

(3) Nothing in sub-clause (c) of (1) hereof shall be deemed: (a) To extend the time within which the offer should be accepted; or (b) To authorize any person to exercise the right of renunciation for a second time, on the ground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.

(4) Nothing in this Article shall apply to the increase of the subscribed capital of our Company caused by the exercise of an option attached to the debentures issued or loans raised by our Company; (a) To convert such debentures or loans into shares in our Company; or (b) To subscribe for shares in our Company. 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; (a) Either has been approved by the Central Government before the issue of the debentures or the raising of the loans or is in conformity with the rules, if any, made by the Central Government in this behalf; and (b) In the case of debentures or loans or other than debentures issued to or loans obtained from Government or any institution specified by the Central Government in this behalf, has also been approved by a special resolution passed by our Company in general meeting before the issue of the debentures or raising of the loans.

5. Subject to the provisions of these Articles and of the Act, the shares shall be under the control of the Board of Directors, who may issue, allot or otherwise dispose off the same or any of them to such persons, in such proportion and on such terms and conditions and either at a premium or at par or (subject to compliance with section 79 of the Act) at a discount and at such time as they may from time to time think fit and with sanction of our Company in a general meeting to give to any person or persons the option or right to call for any shares of our Company, either at a premium or at par during such time and for such consideration as the Board of Directors may think fit, and may issue and allot shares in the capital of our Company on payment in full or part of any property sold and transferred or for any services rendered to our 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 except with the sanction of our Company in General Meeting. The Board shall cause to be made the returns as to allotment provided for in Section 75 of the Act.

6. Any application signed by or on behalf of an applicant for shares in our 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 shall, for the purposes of these Articles, be a member.

Division of Shares

Article 7-8 provides that:

7. (1) If at any time the share capital is divided into different classes of shares, the rights 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 with the consent in writing of the holders of three fourths of the issued shares of that class, or with a sanction of a resolution passed at a separate meeting of the holders of the shares of that class. (2) Subject to the provisions of Section 170 (2) (a) and (b) of the Act, to every such separate meeting, the provisions of these regulations relating to meetings shall mutatis mutandis apply, but so that the necessary quorum shall be five persons at least holding or representing by proxy or one-third of the issued shares of the class in question.

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8. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not unless otherwise provided by the terms of issue of the shares of that class be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

Commissions on Shares

Article 9-10 provides that:

10. (1) The company may exercise the powers of paying commissions conferred by Section 76 of the Act, provided that the rate per cent or the amount of the commission paid or agreed to be paid shall be disclosed in the manner required by the Section. (2) The rate of commission shall not exceed the rate of 5% (five percent) of the price at which the shares in respect whereof the same is paid are issued or an amount equal to 5% (five percent) of such price, as the case may be and in the case of debentures 2 % (two and a half percent) of the price at which the debentures in respect whereof the same is paid are issued or an amount equal to 2 % (two and a half percent) of such price, as the case may be. (3) The commission may be satisfied by payment in cash or by allotment of fully or partly paid shares or partly in one way and partly in the other. (4) The Company may also, on any issue of shares, pay such brokerage as may be lawful. 10. Subject to section 187-C of the Act, no person shall be recognised by our Company as holding any share upon any trust and our Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent future or partial interest in any share or any interest in any fractional part of a share or any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder.

Share Certificates and Register of Members

Article 11-14 provides that:

11. (1) Every person, whose name is entered as a member in the register of members, shall be entitled to receive within three months after allotment (or within such other period as the conditions of issue shall provide) or within two month of the receipt of the application for registration of transfer, transmission, sub-division, consolidation or renewal of any of its shares (as the case may be), is received by our Company. (a) one or more certificates in marketable lots, for all his shares of each class or denomination registered in his name, without payment, or (b) if the Board of Directors so approve (upon paying such fee as the Board of Directors may so determine) to several certificates, each for one or more of his shares. Provided that any sub-division, consolidation or splitting of certificates required in marketable lots shall be done by our Company free of any charges. (2) Every certificate shall be under the seal and shall specify the shares to which it relates and the amount paid up thereon. (3) In respect of any share or shares held jointly by several persons, our Company shall not be bound to issue more than one certificate, and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders. The Board may, from time to time, subject to the provisions of the Act and these Articles sub-divide/consolidate Share Certificates. 12. If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the back thereof, then upon production and surrender thereof to our Company, a new Certificate may be issued in lieu thereof, and if any certificate is lost and destroyed then upon proof thereof to the satisfaction of our Company and on execution of such indemnity as our Company may deem adequate, being given, a new Certificate shall be given to the party entitled to such lost or destroyed Certificate. Every Certificate shall be issued without payment of fees if the Directors so decide, or the 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, defaced 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 regulations or requirements of any Stock Exchange or the rules made under the Act or rules made under the Securities Contracts (Regulation) Act, 1956 or any other Act, or rules applicable thereof in this behalf. The provision of this Article shall mutatis mutandis apply to the debentures of our Company. 13. The Company may issue such fractional certificates as the Board may approve in respect of any of the shares of our Company on such terms as the Board thinks fit as to the period within which the fractional certificates are to converted into share certificates. 14. If any share stands in the names of two or more persons, the person first named in the register members shall, as regards receipt of dividends, the service of notices and subject to the provisions of these Articles, all or any other matter

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connected with our Company except the issue of share certificates, voting at meeting and the transfer of the share, be deemed the sole holder thereof.

Dematerialisation of Securities

Article 15 provides that:

(1) Definitions: For the purpose of this Article:- ‘Beneficial Owner’ means a person or persons whose name(s) is recorded as such with a depository; ‘SEBI’ means the Securities & Exchange Board of India. ‘Depository’ means a Company formed and registered under the Companies Act, 1956, or any other body which has been granted registration to act as a depository under the Securities & Exchange Board of India Act, 1992; and ‘Security’ means such security or Securities of our Company as may be specified by SEBI from time to time. (2) Dematerialisation of Securities: Notwithstanding anything contained in these Articles, our Company shall be entitled to dematerialise its securities and to offer securities in a dematerialised form pursuant to the Depositories Act, 1996. (3) Options for Investors: Every person subscribing to securities offered by our Company shall have the option to receive security certificates or to hold the securities with a depository. Such a person who is the beneficial owner of the securities can at any time opt out of a depository, if permitted by the law, in respect of any security in the manner provided by the Depositories Act, 1996 and our Company shall, in the manner and within the time prescribed, issue to the beneficial owner the required certificates of Securities. If a person opts to hold his security with a depository, our Company shall intimate such depository the details of allotment of the security, and on receipt of the information, the depository shall enter in its record the name of the allottee as the beneficial owner of the security. (4) Securities in depositories to be in fungible form: All securities held by a 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 held by it on behalf of the beneficial owners. (5) Rights of depositories and beneficial owners: (a) Notwithstanding anything to the contrary contained in the Act or these Articles, a depository shall be deemed to be the registered owner for the purposes of effecting transfer of ownership of security on behalf of the beneficial owner. (b) Save as otherwise provided in (a) above, the depository as the registered owner of the securities shall not have any voting rights or any other rights in respect of the securities held by it. (c) Every person holding securities of our Company and whose name is entered as the beneficial owner in the records of the depository shall be deemed to be a member of our Company. The beneficial owner of securities shall be deemed to be a member of our 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 / her securities which are held by a depository. (6) Service of documents: Notwithstanding anything in the Act or these Articles to the contrary, where securities are held in a depository, the records of the beneficial ownership may be served by such depository on our Company by means of electronic mode or by delivery of floppies or discs. (7) Transfer of securities: Nothing contained in Section 108 of the Act or these Articles shall apply to a transfer of securities effected by a transferor and transferee both of whom are entered as beneficial owners in the records of a depository. (8) Allotment of securities dealt with in a depository: Notwithstanding anything in the Act or these Articles, where securities are dealt with by a depository, our Company shall intimate the details thereof to the depository immediately on allotment of such securities. (9) Distinctive numbers of securities held in a depository: Nothing contained in the Act or these Articles regarding the necessity of having distinctive numbers for securities issued by our Company shall apply to securities held with a depository. (10) Register and Index of beneficial owners: The Register and Index of beneficial owners maintained by a depository under the Depositories Act, 1996 shall be deemed to be the Register and Index of Members and Security holders for the purpose of these Articles.

Calls on Shares

Article 20-27 deal with the provisions relating to the power of Board to call the shares as: 20. (1) The Board of Directors may, from time to time, make calls upon the members in respect of money unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotment thereof made payable at fixed times. (2) Each member shall, subject to receiving at least thirty days notice specifying the time or times and place of payment of the call money pay to our Company at the time or times and place so specified, the amount called on his shares.

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(3) A call may be revoked or postponed at the discretion of the Board.

21. A call shall be deemed to have been made at the time when the resoluteion of the Board authorising the call was passed. Call money may be required to be paid by instalments.

22. The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

23. (1) If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest thereon from the day appointed for payment thereof to the time of actual payment at such rate of interest as the Board may determine. (2) The Board shall be at liberty to waive payment of any such interest wholly or in part.

24. (1) Any sum which by the terms of issue of a share become payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall for purposes of these regulations, be deemed to be a call duly made and payable on the date on which by the terms of issue such sum becomes payable. (2) In case of non-payment of such sum, all the relevant provisions of these regulations 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.

25. Subject to the provisions of Section 92 and 292 of the Act, the Board:- (a) may, if it thinks fit, receive from any member willing to advance all or any part of the money uncalled and unpaid upon any shares held by him; and (b) if it thinks fit, may pay interest upon all or any of the moneys so advanced on uncalled and unpaid shares (until the same would but for such advance become presently payable) at such rate not exceeding, unless our Company in general meeting shall otherwise direct, 9% (nine percent) per annum as may be agreed upon between the Board and the members paying the sums or advances. Money so paid in advance shall not confer a right to dividend or to participate in profits. The Directors may at any time repay the amount so advanced. The members shall not be entitled to any voting rights in respect of the moneys so paid by him until the same would but for such payment, become presently payable. The provisions of this Article shall mutatis mutandis apply to calls of debentures of our Company.

26. On the trial or hearing of any suit or proceedings brought by our Company against any member or his representative to recover any debt or money claimed to be due to our Company in respect of his share, it shall be sufficient to prove that the name of the defendant is or was, when the claim arose, on the Register of members of our Company as a holder or one of the holders of the number of shares in respect of which such claim is made and that the amount claimed is not entered as paid in the books of our Company, and it shall not be necessary to prove the appointment of the Directors who resolved to make any call, nor that a quorum of Directors was present at the Board Meeting at which any call was resolved to be made, nor that the meeting at which any call was resolved to be made was duly convened or constituted nor any other matter, but the proof of the matters aforesaid shall be conclusive evidence of the debt.

27. Neither the receipt by our Company of a portion of any money which shall, from time to time, be due from any member to our Company in respect of his shares, either by way of principal or interest, nor any indulgence granted by our Company in respect of the payment of any such money, shall, preclude our Company from thereafter proceeding to enforce a forfeiture of such shares as hereinafter provided.

Transfer and Transmission of Shares

Article 28-42 deals with the transfer and transmission of Shares as:

28. The Company shall keep a “Register of Transfers”, and therein shall be fairly and distinctly enter particulars of every transfer or transmission of any share. Provided that 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.

29. (1) The instrument of transfer of any share in our Company shall executed by or on behalf of both the transferor and the transferee. (2) The transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect thereof.

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30. The instrument of transfer shall be in writing and all the provisions of Section 108 of the Companies Act, 1956 and of any modification thereof for the time being shall be complied with in respect of all transfers of shares and registration thereof.

31. Unless the Directors decide otherwise, when an instrument of transfer is tendered by the transferee, before registering any such transfer, the Directors shall give notice by letter sent by registered acknowledgment due post to the registered holder that such transfer has been lodged and that unless objection is taken the transfer will be registered. If such registered holder fails to lodge an objection in writing at the office within ten days from the posting of such notice to him, he shall be deemed to have admitted the validity of the said transfer. Where no notice is received by the registered holder, the Directors shall be deemed to have decided not to give notice and in any event the no-receipt by the registered holder of any notice shall not entitle him to make any claim of any kind against our Company or the Directors in respect of such non- receipt.

32. A common form of transfer of shares or debentures, as the case may be, shall be used by our Company.

33. The Board of Directors may, subject to the right of appeal conferred by Section 111A of the Companies Act, 1956, decline to register: (a) the transfer of or the transmission by operation of law of the right to, any shares or interest of a member in or debentures of our Company; or (b) any transfer of the share on which our Company has a lien, provided that the registration of transfer shall not be refused on the ground of transferor being either alone or jointly with any person or persons indebted to our Company on any account whatsoever except where our Company has a lien on shares. (c) Notice of refusal to transfer shares to transferor and transferee or the person giving intimation of such transmission shall be sent within one month from the date on which the instrument of transfer or the intimation of such transmission, as the case may be, was delivered to our Company, giving reasons for such refusal.

34. The Board may also decline to recognise any instrument of transfer unless- (a) the instrument of transfer is accompanied by the certificate of the shares to which it relates, and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; and (b) the instrument is in respect of only one class of shares.

35. All instruments of transfer which shall be registered shall be retained by our Company, but may be destroyed upon the expiration of such period as the Board may from time to time determine. Any instrument of transfer which the Board declines to register shall (except in any case of fraud) be returned to the person depositing the same.

36. (a) The registration of transfers may be suspended at such times and for such periods as the Board may, from time to time, determine: provided that such registration shall not be suspended for more than forty-five days in the aggregate in any year or for more than thirty days at any one time. (b) There shall be no charge for: (a) registration of shares or debentures; (b) sub-division and/or consolidation of shares and debenture certificates and sub-division of Letters of Allotment and split consolidation, renewal and pucca transfer receipts into denominations corresponding to the market unit of trading; (c) sub-division of renouncible Letters of Right; (d) registration of transfer, transmission, probate, succession certificate, certificate of death and marriage, Powers of Attorney, Letter of Administration and similar other documents.

37. (1) On the death of a member, the survivor or survivors where the member was a joint holder and his legal representative where he was a sole holder shall be the only person recognised by our Company as having any title to his interest in the shares. (2) Nothing in clause (1) shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him with other persons.

38. (1) Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time properly be required by the Board and subject as hereinafter provided elect, either :- (a) to be registered himself as holder of the share; or (b) to make such transfer of the shares as the deceased or insolvent member could have made.

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(2) The Board shall, in either case, have the same right to decline or suspend registration as it would have had, if the deceased or insolvent member had himself transferred the share before his death or insolvency.

39. (1) If the person so becoming entitled, shall elect to be registered as holder of the share himself, he shall deliver or send to our Company a notice in writing signed by him stating that he so elects. (2) If the person aforesaid shall elect to transfer the share, he shall testify his election by executing a transfer of the share. (3) All the limitations, restrictions and provisions of these regulations relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death or insolvency of the member had not occurred and the notice of transfer were a transfer signed by that member.

40. On the transfer of the share being registered in his name a person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he was the registered holder of the share and 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 meetings of our Company; Provided that the Board may, at any time, give notice requiring any such person to elect either to be registered himself or to transfer the share and if the notice is not complied with within 90 (ninety) days, the Board may thereafter withhold payment of all dividends, bonus or other moneys payable in respect of the share, until the requirements of the notice have been complied with.

41. Where our Company has knowledge through any of its principal officers within the meaning of Section 2 of the Estate Duty Act, 1953 of the death of any member or of debenture holder in our Company, it shall furnish to the Controller within the meaning of such section, the prescribed particulars in accordance with that Act and the rules made thereunder, and it shall not be lawful for our Company to register the transfer of any shares or debentures standing in the name of the deceased, unless the transferor has acquired such shares for valuable consideration or a certificate from the Controller is produced before our Company to the effect that the Estate Duty in respect of such shares or debentures has been paid or will be paid or that none is due, as the case may be.

42. The Company shall incur liability whatever in consequence of its registering or giving effect, to any transfer of share made or purporting to be made by any apparent legal owner thereof (as shown or appearing in the register of members) to the prejudice of persons having or claiming any equitable right, title or interest to or in the said shares, notwithstanding that our Company may have had notice of such equitable right, title or interest or notice prohibiting registration of such transfer and may have entered such notice or referred thereto, in any book of our Company, and our Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right, title or interest or be under any liability for refusing or neglecting so to do, though it may have been entered or referred to in some book of our Company but our Company though not bound so to do, shall be at liberty to regard and attend to any such notice and give effect thereto if the Board shall so think fit.

Forfeiture of Shares

Article 43-53 deals with the provisions relating to the forfeiture of shares as:

43. If a member fails to pay any call or instalment of a call, on the day appointed for payment thereof, the Board may, at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid together with any interest which may have accrued and all expenses that may have been incurred by our Company by reason of such non-payment. 44. The notice aforesaid shall:-

(a) name a further day (not earlier than the expiry of 30 (thirty) days from the date of service of notice) on or before which the payment required by the notice is to be made; and (b) state that, in the event of non-payment on or before the day so named, the shares in respect of which the call was made, will be liable to be forfeited.

45. If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may, at any time, thereafter before the payment required by the notice has been made, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the date of forfeiture, which shall be the date on which the resolution of the Board is passed forfeiting the shares.

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46. (1) A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Board thinks fit. (2) At any time before a sale or disposal, as aforesaid, the Board may annul the forfeiture on such terms as it thinks fit.

47. (1) A person whose shares have been forfeited shall cease to be a member in respect of the forfeited shares, but shall, notwithstanding the forfeiture, remain liable to pay to our Company all moneys which, at date of forfeiture, were presently payable by him to our Company is respect of the shares together with interest thereon from the time of forfeiture until payment at the rate of 9% (nine percent) per annum. (2) The liability of such person shall cease if and when our Company shall have received payments in full of all such moneys in respect of the shares.

48. (1) A duly verified declaration in writing that the declarant is a director or the secretary of our Company and that a share in the company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts stated therein stated as against all persons claiming to be entitled to the share. (2) The Company may receive the consideration, if any, given for the share on any sale or disposal thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of. (3) The transferee shall thereupon be registered as the holder of the share. (4) The transferee shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share.

49. The provisions of these regulations as to forfeiture shall apply, in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the share or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

50. The forfeiture of a share shall involve the extinction of all interest in and also of all claims and demands against our Company in respect of the share, and all other rights incidental thereto except only such of those rights as by these Articles are expressly saved.

51. Upon any sale, after forfeiture or for enforcing a lien in purported exercise of powers hereinbefore given, the Board may appoint some person to execute an instrument of transfer of the shares sold and cause the purchaser’s name to be entered in the Register in respect of the shares sold and the purchaser shall not be bound to see to the regularity of the proceedings or to the application of the purchase money, and after his name has been entered in the Register in respect of such shares, the validity, of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damaged only and against our Company exclusively.

52. Upon any sale, re-allotment or other disposal under the provisions of these Articles relating to lien or to forfeiture, the certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand by our Company have been previously surrendered to it by the defaulting member) stand cancelled and become null and void and of no effect. When any shares, under the powers in that behalf herein contained are sold by the Board and the certificate in respect thereof has not been delivered upto our Company by the former holder of such shares, the Board may issue a new certificate for such shares distinguishing it in such manner as it may think fit, from the certificate not so delivered.

53. The directors may, subject to the provisions of the Act, accept from any member on such terms and conditions as shall be agreed, a surrender of his shares or stock or any part thereof.

Conversion of Shares into Stock

Article 54-57 provides the option to Company to convert the shares into stock as:

54. The Company may, by an ordinary resolution:-

(a) convert any paid-up shares into stock; and (b) reconvert any stock into paid-up shares of any denomination authorised by these regulations.

55. The holders of stock may transfer the same or any part thereof in the same manner as, and subject to the same regulations under which, the shares from which the stock arose might before the conversion have been transferred or as near thereto as circumstances admit: Provided the Board may, from time to time, fix the minimum amount of Stock transferable, so however, that such minimum shall not exceed the nominal amount of the shares from which the stock arose.

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56. The holders of stock shall, according to the amount of stock held by them, have the same rights, privileges and advantages as regard dividends voting and meeting of our Company, and other matters, as if they held the shares from which the stock arose; but no such privilege or advantage (except participation in the dividends and profits of our Company and in the assets on winding up) shall be conferred by an amount of stock which would not, if existing in shares, have conferred that privilege or advantage.

57. Such of the regulations of our Company (other than those relating to share warrants), as are applicable to paid-up shares shall apply to stock and the words “share” and “shareholders” in those regulations shall include “stock” and “stockholders” respectively.

Share Warrants

Article 58-61 provides that:

58. The Company may issue share warrant, 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 up, on application in writing signed by the person 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.

59. (1) The bearer of a share warrant may at any time deposit the warrant at the office of our 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 our 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 shares included in the deposited warrant. (2) Not more than one person shall be recognised as depositor of the share warrant. (3) The company shall, on two days written notice, return the deposited share warrant to the depositor.

60. (1) Subject as herein otherwise expressly provided, no person shall, as bearer of a share warrant, sign a requisition for calling meeting of our Company or attend or vote or exercise any other privilege of a member at a meeting of our Company or be entitled to receive any notice from our Company. (2) The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages as if he was named in the register of member as the holder of the shares included in the warrant and he shall be deemed to be a member of our Company in respect thereof.

61. 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 defacement, loss or destruction of the original.

Lien on Shares

Article 16-19 deals with the provisions relating to the lien on shares as:

16. (1) The fully paid shares shall be free from all lien and that in the case of partly paid shares our Company’s lien shall be restricted to moneys called or payable at a fixed time in respect of such shares. The Company shall have a first and paramount lien upon every share/debenture (not being a fully paid up share/debenture) registered in the name of every member (whether solely or jointly with others), and upon the proceeds of sale thereof for all money (whether presently payable or not) called or payable at a fixed time in respect of that share/debenture and no equitable interest in any share shall be created except upon the footing and condition that this Article 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 a share/debenture shall operate as a waiver of our Company’s lien if any, on such shares/debentures. The Board of Directors may at any time declare any shares/debentures to be wholly or in part to be exempt from the provisions of this Article. (2) The Company’s lien, if any, on a share shall extend to all dividends payable thereon, subject to section 205A of the Act.

17. The Company may sell, in such manner as the Board thinks fit, any share on which our Company has a lien provided that no sale shall be made :- (a) unless a sum in respect of which the lien exists is presently payable: or

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(b) until the expiration of thirty days after a notice in writing demanding payment of such part of the amount, in respect of which the lien exists as is presently payable, have been given to the registered holder for the time being of the share or the person entitled thereto by reason of his death or insolvency and stating that amount so demanded if not paid within the period specified at the Registered Office of our Company, the said shares shall be sold.

18. (1) To give effect to any such sale, the Board may authorise some person to transfer the shares sold to the purchaser thereof. (2) The purchaser shall be registered as the shareholder of the shares comprised in any such transfer. (3) The purchaser shall not be bound to see to the application of the purchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale.

19. (1) The proceeds of the sale shall be received by our Company and applied in payment of the whole or a part of the amount in respect of which the lien exist as is presently payable. (2) The residue, if any, shall, subject to a like lien for sums not presently payable as existed upon the shares at the date of sale, be paid to the person entitled to the shares at the date of the sale.

General Meetings

Article 68-69 deals with the provisions relating to General Meetings as:

68. All General Meetings other than the Annual General Meetings of our Company shall be called Extra-ordinary General Meetings.

69. (1) The Board may, whenever it thinks fit, call an Extraordinary General Meeting. (2) If at any time there are not within India Directors capable of acting who are sufficient in number to form a quorum, any Director or any two members of our Company may call an extraordinary general meeting in the same manners, as nearly as possible, to that in which such a meeting may be called by the Board.

Conduct of General Meetings

Article 70-78 deals with the conduct of general meetings as:

70. No general meeting, annual or extraordinary, shall be competent to enter upon, discuss or transact any business which has not been stated in the notice by which it was convened or called.

71. (1) No business shall be transacted at any general meeting, unless a quorum of members is present at the time when the meeting proceeds to business. (2) Save as otherwise provided in Section 174 of the Act, a minimum of five members present in person shall be the quorum. A body corporate, being a member, shall be deemed to be personally present if it is represented in accordance with Section 187 of the Act. (3) General Meeting of the Company may be called by not less than twenty one days’ notice in writing but may be called by giving shorter than that specified above as per the section 171 of the Act, and the applicable provisions, if any, for the time being in force.

72. The Chairman, if any, of the Board shall preside as Chairman at every general meeting of our Company.

73. If there is no such Chairman or if he is not present within fifteen minutes of the time appointed for holding the meeting, or is unwilling to act as Chairman of the meeting, the Directors present shall elect one of their members to be the Chairman of the meeting.

74. If at any meeting no Director is willing to act as Chairman or if no Director is present within 15 (fifteen) minutes of the time appointed for holding the meeting, the members present shall choose one of their members to be the Chairman of the meeting.

75. No business shall be discussed at any general meeting except the election of a Chairman, whilst the chair is vacant. 76. (1) The Chairman may with the consent of any meeting at which a quorum is present and shall, if so directed by the meeting, adjourn the meeting, from time to time and place to place. (2) No business shall be transacted at any adjourned meeting, other than the business left unfinished at the meeting from which the adjournment took place.

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(3) When a meeting is adjourned for thirty days or more, fresh notice of the adjourned meeting shall be given as in the case of an original meeting. (4) Save as aforesaid, it shall not be necessary to give any notice of any adjournment or of the business to be transacted at an adjourned meeting.

77. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place, or at which the poll is demanded, shall be entitled to a second or casting vote.

78. Any business other than that upon which a poll has been demanded, may be proceeded with, pending the taking of the poll.

Votes of Members

Article 79-86 deals with the voting powers of the members as:

79. Subject to any rights or restrictions for the time being attached to any class or classes of shares :- (a) on a show of hands, every member present in person shall have one vote; and (b) on a poll, the voting rights of members shall be as laid down in Section 87 of the Act.

80. In the case of joint holders, the vote of the senior who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which the names of joint holders stand in the Register of members.

81. A member of unsound mind or in respect of whom an order has been made by any Court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll by his committee or other legal guardian, and any such committee or guardian may on a poll, vote by proxy, provided that such evidence as the Board may require of the authority of the person claiming to vote shall have been deposited at the office not less than 24 hours before the time of holding the meeting or adjourned meeting at which such person claims to vote on poll.

82. No member shall be entitled to vote at any general meeting unless all calls, and other sums presently payable by him in respect of shares in our Company or in respect of shares on which our Company has exercised any right of lien, have been paid.

83. (1) No objection shall be raised to the qualification of any voter, except at the meeting or adjourned meeting at which the vote objected to is given or tendered, and every vote not disallowed at such meeting shall be valid for all purposes. (2) Any such objection made in due time shall be referred to the Chairman of the meeting, whose decision thereon shall be final and conclusive.

84. The instrument appointing a proxy and the power of attorney or other authority, if any under which it is signed or a notarially certified copy of that power or authority, shall be deposited at the registered office of our Company, not less than 48 hours before the time for holding the meeting of adjourned meeting at which the person named in the instrument proposes to vote, or in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll; and in default the instrument of proxy shall not be treated valid.

85. An instrument appointing a proxy shall be in either of the forms in Schedule IX to the Act or in a form as near thereto as circumstances admit.

86. A vote given in accordance with the terms of an instrument of proxy shall be valid, notwithstanding the previous death or insanity of the principal or the revocation of the proxy or of the authority under which the proxy was executed or the transfer of the shares in respect of which the proxy is given, if no intimation in writing of such death, insanity, revocation or transfer shall have been received by our Company at its office before the commencement of the meeting or adjourned meeting at which the proxy is used.

Composition of the Board of Directors

Article 87-99 deal with the composition of the Board of Directors of our Company as:

87. The number of Directors of our Company shall not be less than three and not more than twelve.

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89. At every Annual General Meeting of our Company one-third of such of the Directors for the time being as are liable to retire by rotation in accordance with the provisions of Section 255 of the Act or if their number is not three or a multiple of three, than the number nearest to one third shall retire from office in accordance with the provisions of Section 256 of the Act.

90. (1) The fee payable to the Directors for attending meetings of the Board or committee(s) thereof shall, from time to time, be determined by the Board of the Directors of our Company. (2) Subject to the provisions of Sections 309, 310 and 314 of the Act, the Directors shall be paid such further remuneration, whether in the form of monthly payment or by a percentage of profit or otherwise, as our Company in General Meeting may, from time to time, determine and such further remuneration shall be divided among the Directors in such proportion and in such manner as the Board may, from time to time, determine and in default of such determination, shall be divided among the Directors equally or if so determined paid on a monthly basis. (3) The remuneration of the Directors shall, in so far as it consists or a monthly payment, be deemed to accrue from day to day. (4) Subject to the provisions of Sections 198, 309, 310 and 314 of the Act, if any Director be called upon to perform any extra services or make special exertions or efforts (which expression shall include work done by a Director as a member of any committee formed by the Directors) the Board may pay such Director special remuneration for such extra services or special exertions or efforts either by way of a fixed sum or by percentage of profit or otherwise and may allow such Director at the cost and expense of our Company such facilities or amenities (such as rent free house, free medical aid and free conveyance) as the Board may determine from time to time. (5) In addition to the remuneration payable to them in pursuance of the Act, the Directors may be paid in accordance with Company’s rules to be made by the Board all travelling, hotel and other expenses properly incurred by them:- (a) In attending and returning from meetings or adjourned meeting of the Board of Directors of any committee thereof; or (b) In connection with the business of our Company.

91. The Directors shall not be required to hold any qualification shares in the company.

92. The Board of Directors shall have power to appoint additional Directors in accordance with the provisions of Section 260 of the Act.

93. If it is provided by any trust deed securing or otherwise in connection with any issue of debentures of our Company that any person or persons shall have power to nominate a Director of our Company then in the case of any and every such issue of debentures, the persons having such power may exercise such power, from time to time and appoint a Director accordingly. Any Director so appointed is herein referred to as a Debenture Director. A Debenture Director may be removed from office at any time by the person or persons in whom for the time being is vested the power under which he was appointed and another Director may be appointed in his place. A Debenture Director shall not be liable to retire by rotation, but he shall be counted in determining the number of retiring Directors.

94. In the course of its business and for its benefit our Company shall, subject to the provisions of the Act, be entitled to agree with any person, firm, corporation, government, financing institution or other authority that he or it shall have the right to appoint his or its nominee on the Board of Directors of our Company upon such terms and conditions as the Directors may deem fit. Such nominees and their successors in office appointed under this Article shall be called Special Directors. Special Directors shall be entitled to hold office until requested to retire by the government, authority, person, firm, institution or corporation who may have appointed them and will not be bound to retire by rotation. As and whenever a Special Director vacates office whether upon request as aforesaid or by death, resignation or otherwise the government, authority, person, firm, institution or corporation who appointed such Special Director may if the agreement so provide, appoint another Director in his place. But he shall be counted in determining the number of retiring Directors.

95. Subject to the provisions of Section 313 of the Act, the Board of Directors shall have power to appoint an alternate Director to act for a 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.

96. A Director may be or become a director of any company promoted by the company or in which it may be interested as a vendor, shareholder, or otherwise, and no such Director shall be accountable for any benefits received as director or shareholder of such company. Such Director before receiving or enjoying such benefits in cases in which the provisions of Section 314 of the Act are attracted will ensure that the same have been complied with.

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97. Every nomination, appointment or removal of a Special Director shall be in writing and accordance with the rules and regulations of the government, corporation or any other institution. A Special Director shall be entitled to the same rights and privileges and be subject to same obligations as any other Director of our Company.

98. The office of a Director shall become vacant:- (i) on the happening of any of the events provided for in Section 283 of the Act; (ii) on contravention of the provisions of Section 314 of the Act, or any statutory modifications thereof; (iii) if a person is a Director of more than twenty Companies at a time; (iv) in the case of alternate Director on return of the original Director to the State, in terms of Section 313 of the Act; or (v) on resignation of his office by notice in writing and is accepted by the Board.

99. Every Director present at any meeting of the Board or a committee thereof shall sign his name in a book to be kept for that purpose, to show his attendance thereat.

Proceedings of the Board

Article 108-118 summarize the provisions relating to proceedings of the Board:

108. Subject to Section 287 of the Act, the quorum for a meeting of the Board of Directors shall be one third of its total strength (any fraction contained in that one third being rounded off as one) or two Directors, whichever is higher; provided that where at any time the number of interested Directors exceeds or is equal to two thirds of the total strength, the number of the remaining Directors, that is to say, the number of Directors, who are not interested, present at the meeting, being not less than two, shall be the quorum during such time.

109. If a meeting of the Board could not be held for want of quorum, whatever number of Directors, not being less than two, shall be present at the adjourned meeting, notice whereof shall be given to all the Directors, shall form a quorum.

110. (1) Save as otherwise expressly provided in the Act, questions arising at any meeting of the Board shall be decided by a majority of vote. (2) In case of an equality of votes, the Chairman of the meeting shall have a second or casting vote.

111. The continuing Directors may act notwithstanding any vacancy in the Board, but if and so long as their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing Directors or Director may act for the purpose of increasing the number of Directors to that fixed for the quorum or for summoning a General Meeting of our Company, but for no other purpose.

112. (1) Save as provided in Article 96, the Board may elect one of its members as Chairman of its meetings and determine the period for which he is to hold office as such. (2) If no such Chairman is elected or if at any meeting the Chairman is not present within fifteen minutes after the time appointed for holding the meeting, the Directors present may choose one of their members to be Chairman of the meeting.

113. Subject to the restrictions contained in Section 292 and 293 of the Act, the Board may delegate any of its powers to committees of the Board consisting of such member or members of its body as it thinks fit and it may, from time to time, revoke such delegation and discharge any such committee of the Board either wholly or in part, and either as to persons or purposes, but every committee of the Board 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 Board. All acts done by any such Committee of the Board in conformity with such regulations and in fulfilment of the purposes of their appointment but not otherwise, shall have the like force and effect as if done by the Board.

114. The meetings and proceedings of any such committee of the Board, consisting of two or more members shall be governed by the provisions herein contained for regulating the meetings and proceedings of the Directors so for as the same are applicable thereto and are not superseded by any regulations made by the Directors under the last preceeding Article.

115. (1) A committee may elect a chairman of its meetings. (2) If no such chairman is elected, or if at any meeting the chairman is not present within five minutes of the time appointed for holding the meeting, the members present may choose one of their members to be chairman of the meeting.

116. (1) A committee may meet and adjourn as it thinks proper.

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(2) Questions arising at any meeting of a committee shall be determined by a majority of votes of the members present and in case of an equality of votes, the Chairman shall have a second or casting vote.

117. All acts done by any meeting of the Board or by a committee thereof or by any person acting as a Director shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment or continuance in office of any such Director or persons acting as aforesaid: or that they or any of them were disqualified or had vacated office or were not entitled to act as such, or that the appointment of any of them had been terminated by virtue of any provisions contained in the Act or in these Articles, be as valid as if every such person had been duly appointed, had duly continued in office, was qualified, had continued to be a Director, his appointment had not been terminated and he had been entitled to be a Director provided that nothing in this Article shall be deemed to give validity to any act done by a Director after his appointment has been shown to our Company to be invalid or to have terminated.

118. Subject to Section 289 of the Act and except a resolution which the Act requires specifically to be passed in any board meeting, a resolution in writing, signed by the majority members of the Board or of a committee thereof, for the time being entitled to receive notice of a meeting of the Board or committee, shall be as valid and effectual as if it had been passed at a meeting of the Board or committee, duly convened and held.

Powers of Board of Directors

Article 100-103 deal with the general power of the Board of Directors as:

100. The Board of directors may pay all expenses incurred in the formation, promotion and registration of our Company.

101. The Company may exercise the powers conferred by Section 50 of the Act, with regard to having an official seal for use abroad and such powers shall be vested in the Board.

102. The Company may exercise the powers conferred on it by Section 157 and 158 of the Act with regard to the keeping of a foreign register; and the Board may (subject to the provisions of those Sections) make and vary such regulations as it may think fit with respect to the keeping of any such register.

103. The Directors may enter into contracts or arrangements on behalf of our Company subject to the necessary disclosures required by the Act being made wherever any Director is in any way, whether directly or indirectly concerned or interested in the contract or arrangement.

Borrowing Power of the Board of Directors

Article 104-107 deals with the borrowing power of the Board of Directors:

104. Subject to the provisions of sections 58A, 292 and 293 of the Act, and Regulations made thereunder and directions issued by the Reserve Bank of India the Directors may exercise all the powers of our Company to borrow money and to mortgage or charge its undertaking, property (both present and future) and uncalled capital, or any part thereof and to issue debentures, debenture-stock and other securities whether outright or as security for any debt, liability or obligation of our Company or of any third party.

105. The payment or repayment of moneys borrowed as aforesaid may be secured in such manner and upon such terms and conditions in all respects as the Board may think fit and in particular by a resolution passed at a meeting of the Board (and not by circulation) by the issue of debenture or debenture stock of our Company, charged upon all or any of the property of our Company (both present and future), including its uncalled capital for the time being.

106. Any debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise and may be issued on the condition that they shall be convertible into shares of any authorised denomination, and with privileges and conditions as to redemption, surrender, drawings, allotment of shares, attending (but not voting) at general meetings, appointment of Directors and otherwise, provided that debentures with the right to allotment of or conversion into shares shall not be issued except with the sanction of our Company in General Meeting by a special resolution.

107. All cheques, promissory notes, drafts, hundies, bills of exchange and other negotiable instruments and all receipts for moneys paid to our Company, shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, by such person and in such manner as the Board may, from time to time, by resolution determine.

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Managing Director(s), Whole-time Director(s) and Secretary of our Company

Article 119-122 provides the procedure relating to the appointment of Managing Director(s), Whole-time Director(s) and Secretary of our Company and the remuneration thereof as:

119. Subject to provisions of Sections 197A, 269, 198 and 309 of the Act, the Board of Directors may, from time to time, appoint one or more of their body to the office of Managing Director/s or whole time Director/s for a period not exceeding 5 (five) years at a time and on such terms and conditions as the Board may think fit and subject to the terms of any agreement entered into with him, may revoke such appointment and in making such appointments the Board shall ensure compliance with the requirements of the Companies Act, 1956 and shall seek and obtain such approvals as are prescribed by the Act, provided that a Director so appointed, shall be whilst holding such office, be subject to retirement by rotation but his appointment shall be automatically determined if he ceases to be a Director. However, he shall be counted in determining the number of retiring Directors.

120. The Board may entrust and confer upon Managing Director/s or Whole time Director/s any of the powers of management which would not otherwise be exercisable by him upon such terms and conditions and with such restrictions as the Board, may think fit, subject always to the superintendence, control and direction of the Board and the Board may, from time to time, revoke, withdraw, alter or vary all or any of such powers.

121. (1) Subject to section 383A of the Act, a Secretary of our Company may be appointed by the Board on such terms, at such remuneration and upon such conditions as it may think fit, and any Secretary so appointed may be removed by the Board. (2) A Director may be appointed as a Secretary.

122. Any provision in the Act or these regulations requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in place of the Secretary.

Dividends and Reserves

Article 124-132 deals with our Company’s power to declare dividends and reserves as:

124. The Company in General Meeting may declare dividends but no dividend shall exceed the amount recommended by the Board.

125. The Board may, from time to time, pay to the members such interim dividends as appear it to be justified by the profits earned by our Company.

126. (1) The Board may, before recommending any dividend, set aside out of the profits of our Company, such sums, as it may think proper, as reserve or reserves which shall at the discretion of the Board, be applicable for any of the purposes to which the profits of our Company may be properly applied, including provision for meeting contingencies or for equalising dividends and pending such applications may at the like discretion either be employed in the business of our Company or be invested in such investments (other than shares of our Company) as the Board may, from time to time, think fit. (2) The Board may also carry forward any profits which it may think prudent not to divide, without setting them aside as a reserve.

127. (1) Subject to the rights of the persons, if any, holding shares with special rights as to dividends, all dividends shall be declared and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividend is paid. (2) No amount paid or credited as paid on a share in advance of calls shall be treated for the purposes of this regulation as having been paid on the share. (3) All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividend is paid, but if any share is issued on terms providing that it shall rank for dividend as from a particular date such share shall rank for dividend accordingly.

128. The Board may deduct from any dividend payable to any member all sums of money, if any, presently payable by him to our Company on account of calls or otherwise in relation to the shares of our Company subject to section 205A of the Act.

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129. (1) Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or warrant sent through the post direct to the registered address of the holder or, in case of joint holders, to the registered address of that one of the joint holders who is first named on the register of members, or to such person and to such address as the first named holder or joint holders may in writing direct. (2) Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. (3) Where our Company has declared a dividend but which has not been paid or claimed within 30 days from the date of declaration, transfer the total amount of dividend which remains unpaid or unclaimed within the said period of 30 days, to a special account opened by our Company in that behalf in any scheduled bank, to be called “Betul Oil Limited ______(year) Unpaid Dividend Account”. The Company shall transfer any money transferred to the unpaid dividend account that remains unpaid or unclaimed for a period of seven years from the date of such transfer, to Investor and Education and Protection Fund or any such other fund established under section 205C of the Companies Act. The Board shall not forfeit unclaimed or unpaid dividend.

130. Any one of two or more joint holders of a share may give effectual receipts for any dividends, bonus or other moneys payable in respect of such share.

131. Notice of any dividend that may have been declared shall be given to the persons entitled to share therein in the manner mentioned in the Act.

132. No dividend shall bear interest against our Company, irrespective of the reason for which it have remained unpaid. No unclaimed or unpaid dividends shall be forfeited by the Board before the claim becomes barred by law and our Company shall comply with the provisions of Section 205(A) of the Companies Act in respect of such dividends.

Capitalisation of Profits

Article 136-137 frames out the provision relating to the capitalization of profits as:

136. (1) The Company in Board Meeting may resolve:- (a) that it is desirable to capitalise any part of the amount for the time being standing to the credit of any of our Company’s reserve accounts or to the credit of the Profit and Loss Account, or otherwise available for distribution; and (b) that such sum be accordingly set free for distribution in the manner specified in clause (2) among the members who would have been entitled thereto, if distributed by way of dividend and in the same proportions. (2) The sum aforesaid shall not be paid in cash, but shall be applied, subject to the provisions contained in clause (3), either in or towards :- (i) paying up any amounts for the time being unpaid on any shares held by such members respectively; (ii) paying up in full, unissued shares of our Company to be allotted and distributed, credited as fully paid up, to and amongst such members in the proportions aforesaid: or (iii) partly in the way specified in sub-clause (i) and partly in that is specified in sub-clause (ii). (3) Any share premium account and any capital redemption reserve fund may, for the purpose of this regulation, only be applied in the paying up of unissued share to be issued to members of our Company as fully paid bonus shares. (4) The Board shall give effect to the resolution passed by it in pursuance of this regulation.

137. (1) Whenever such a resolution as aforesaid shall have been passed, the Board shall:- (a) make all appropriations and applications of the undivided profits resolved to be capitalised thereby and allotment and issue of fully paid shares, if any; and (b) do all acts and things required to give effect thereto. (2) The Board shall have full power:- (a) to make such provision, by the issue of fractional certificates or by payment in cash or otherwise as it thinks fit in the case of shares becoming distributable in fractions; and also (b) to authorise any person to enter, on behalf of all the members entitled thereto, into an agreement with our Company providing for the allotment to him respectively, credited as fully paid up, of any further shares to which that may be entitled upon such capitalisation or (as the case may require) for the payment by the company on their behalf, by the application thereto of their respective proportions of the profit resolved to be capitalised, of the amounts or any part of the amounts remaining unpaid on their existing shares. (3) Any agreement made under such authority shall be effective and binding on all such members.

Secrecy

Article 138 deals with the provision relating to secrecy as:

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138. Subject to the provisions of law of land and the Act, no member or other person (not being a Director) shall be entitled to visit or inspect our Company’s works without the permission of the Board of Directors or the Managing Director to require discovery of any information respecting any details of our Company’s business, trading or customers of any matter which is or may be in the nature of a trade secret, mystery of trade or secret process or any other matter which may relate to the conduct of the business of our Company or which in the opinion of the Directors, it will be inexpedient in the interest of our Company to disclose.

Winding Up

Article 139 deals with the winding up procedure as: 139. (1) If the company shall be wound up, the liquidator may, with the sanction of a special resolution of our Company and any other sanction required by the Act, divide amongst the members, in specie or kind, the whole or any part of the assets of our Company, whether they shall consist of property of the same kind or not. (2) For the purpose aforesaid, the liquidator may set such values as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members. (3) The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall think fit but so that no member shall be compelled to accept any shares or other securities whereon there is any liability.

Indemnity

Article 140 deals with the indemnity clause as: 140. Subject to the provisions of Section 201 of the Act, every Director, auditor, secretary and other officer or servant of our Company (all of whom are hereinafter referred to as officer or servant) shall be indemnified by our Company, and it shall be the duty of the Directors out of the funds of our Company to pay, all bonafide costs, losses and expenses which any such officer or servant may incur or become liable to by reason of any contract entered into or act or thing done or omitted by him as such officer or servant or in any way in the discharge of his duties; and in particular, and so as not to limit the generality of the foregoing provisions, against any liability incurred by such officer or servant in defending any bonafide proceedings whether civil or criminal in which a 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 which relief is granted to him by the Court. The amount for which such indemnity is provided shall immediately attach as a charge on the property of our Company.

General Power

Article 141 frames out the general power of our Company as: 141. Wherever in the Companies Act 1956, it has been provided that our Company shall have right, privilege or authority or that our Company could carry out any transaction only if our Company is so authorised by its articles, then and in that case this regulation hereto authorises and empowers our Company to have such rights, privilege or authority and to carry such transactions as have been permitted by the Act, without there being any specific regulation in that behalf herein provided.

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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 the Draft Red Herring Prospectus) which are or may be deemed material have been entered or to be entered into by our Company. These Contracts, copies of which will be attached to the copy of the Red Herring Prospectus, will be delivered to the Registrar of Companies, Madhya Pradesh and Chattisgarh, Gwalior for registration and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of our Company from 10.00 am to 4.00 pm on working days (Monday to Friday) from the date of the Draft Red Herring Prospectus until the Bid/Issue Closing Date.

Material Contracts to the Issue

1. Issue Agreement entered into between our Company and the Book Running Lead Manager dated June 15, 2010.

2. Agreement entered into between our Company and the Registrar to the Issue dated June 15, 2010.

3. Escrow Agreement dated [●] between our Company, the Book Running Lead Manager, the Syndicate Members, the Escrow Collection Bank(s) and the Registrar to the Issue.

4. Syndicate Agreement dated [●] between our Company, the Book Running Lead Manager, and the Syndicate Members.

5. Underwriting Agreement dated [●] between our Company, the Book Running Lead Manager, and the Syndicate Members.

Material Documents

1. Our Memorandum and Articles of Association, as amended from time to time.

2. Our certificate of incorporation dated February 3, 1981.

3. Board resolutions authorising the Issue dated May 25, 2010.

4. Shareholders’ resolution authorizing the Issue dated June 1, 2010.

5. Shareholders’ resolution for appointment of, Mr. Shreans Daga as Managing Director, Mr. Paras Daga as Whole Time Director and Mr. Niraj Daga as Whole Time Director dated June 1, 2010.

6. Shareholders’ resolutions for determination of the remuneration of Mr. Shreans Daga, Managing Director, Mr. Paras Daga, Whole Time Director and Mr. Niraj Daga, Whole Time Director dated June 1, 2010.

7. Agreement dated June 1, 2010 between our Company and Mr. Shreans Daga for appointment of Mr. Shreans Daga as Managing Director.

8. Agreement dated June 1, 2010 between our Company and Mr. Niraj Daga for appointment of Mr. Niraj Daga as Whole Time Director.

9. Agreement dated June 1, 2010 between our Company and Mr. Paras Kumar Daga for appointment of Mr. Paras Kumar Daga as Whole Time Director.

10. Report of our Statutory Auditors Bhutoria Ganeshan & Co., Chartered Accountants, on our Company’s Restated Standalone Financial Statements as of and for the Financial Years ended June 30, 2005, 2006, 2007, 2008 , 2009 and for the seven months period ended January 31, 2010 dated July 28, 2010 including their consent.

11. Statement of Tax Benefits from, M/s Bhutoria Ganesan & Co., Chartered Accountants dated July 28, 2010 including their consent.

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12. Power purchase purchase agreement dated February 6, 2006 between our Company and Maharashtra State Electricity Distribution Company Limited.

13. Bulk power wheeling agreement dated January 31, 2007 between our Company and Madhya Pradesh Paschim KVV Company Limited.

14. Consents of Bankers to our Company, Book Running Lead Manager, Syndicate Member(s), Registrar to the Issue, Escrow Collection Banks, Refund Bank(s), IPO Grading Agency, the Statutory Auditors, Legal Counsel to the Issue, Directors of our Company, Company Secretary and Compliance Officer as referred to, in their respective capacities.

15. Due diligence certificate dated July 30, 2010 issued to SEBI by the Book Running Lead Manager.

16. Initial listing applications dated [●] and [●] filed with BSE and NSE respectively.

17. In-principle listing approval dated [●] and [●] from BSE and NSE respectively.

18. SEBI observation letter (Ref. No. [●]) dated [●].

19. Tripartite Agreement between NSDL, our Company and the Registrar to the Issue dated July 27, 2010.

20. Tripartite Agreement between CDSL, our Company and the Registrar to the Issue dated [●].

21. The IPO Grading Report by [●] dated [●].

Any of the contracts or documents mentioned in the Draft Red Herring Prospectus may be amended or modified at any time if so required in the interest of our Company or if required by the other parties, without reference to the shareholders subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION

We, the Directors, hereby certify and declare that, all relevant provisions of the Companies Act, 1956, and the guidelines issued by the Government of India or the regulations / guidelines issued by Securities and Exchange Board of India, established under Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in the Draft Red Herring Prospectus is contrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or rules made thereunder or regulations / guidelines issued, as the case may be. We further certify that all the disclosures and statements made in the Draft Red Herring Prospectus are true and correct.

Signed by the Directors of our Company

Name Designation Signature

Mr. Ganesh Kumar Gupta Non-Executive Chairman

Mr. Shreans Daga Managing Director

Mr. Paras Kumar Daga Whole Time Director

Mr. Niraj Daga Whole Time Director

Mr. Ramesh Kotecha Independent Director

Mr. Suresh Jain Independent Director

Signed by the Chief Financial Officer

Mr. Akshaya Shah

Date: July 30, 2010

Place: Mumbai

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