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DRAFT RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated [] (The Draft Red Herring Prospectus will be updated and become Red Herring Prospectus upon RoC filing) 100% Book Building Issue

JANKI CORP LIMITED

(Originally incorporated as Janki Processors Private Limited on 16th September 1993 under the Companies Act, 1956. Subsequently, on 6th July 2000, our Company was converted into a Public Limited Company and the name was changed to Janki Processors Limited. On 31st December 2003, the name of our Company was changed from Janki Processors Limited to Janki Corp Limited. Currently the registered office of our Company is at 39/C, 1st Floor, Raj Industrial Complex, Military Road, Marol, Andheri (E), Mumbai 400 059. For details of changes in name and registered office, please see the section titled History and Corporate Structure beginning on page [] of this Draft Red Herring Prospectus.) Registered Office: 39/C, 1st Floor, Raj Industrial Complex, Military Road, Marol, Andheri (E), Mumbai 400 059. Telefax: 91 22 2859 3721, Website: www.jankicorplimited.com, E-mail: ipo@jankicorplimited.com Contact Person: Mr. Paras Pangaria, Company Secretary ISSUE OF [ ] EQUITY SHARES OF RS. 10 EACH AT A PRICE OF RS. [ ] FOR CASH AGGREGATING TO RS. 5,570 LACS (REFERRED TO AS THE ISSUE) COMPRISING OF PROMOTERS CONTRIBUTION OF [ ] EQUITY SHARES OF RS. 10 EACH AT A PRICE OF RS. [] FOR CASH AGGREGATING TO RS. 570 LACS (REFERRED TO AS THE PROMOTERS CONTRIBUTION), RESERVATION FOR PERMANENT EMPLOYEES OF THE COMPANY OF [ ] EQUITY SHARES RS. 10 EACH AT A PRICE OF RS. [ ] FOR CASH AGGREGATING TO RS 250 LACS (REFFERED TO AS THE (EMPLOYEE RESERVATION PORTION) AND RESERVATION FOR SHAREHOLDERS OF GROUP COMPANY OF [ ] EQUITY SHARES OF RS. 10 EACH AT A PRICE OF RS. [ ] FOR CASH AGGREGATING TO RS 500 LACS (REFFERED TO AS THE SHAREHOLDERS OF GROUP COMPANY PORTION). THE NET OFFER TO THE PUBLIC IS OF [ ] EQUITY SHARES OF RS. 10 EACH AT A PRICE OF RS. [ ] FOR CASH AGGREGATING TO RS. 4,250 LACS (REFERRED TO AS THE NET ISSUE). The Issue would constitute [ ] % of the Post Issue Paidup Capital of our Company. Price Band: Rs. [ ] to Rs. [ ] Per Equity Share of Face Value of Rs. 10 Each The Issue Price is [ ] times of the Face Value at the Lower End of the Price Band and [ ] times of the Face Value at the Higher End of the Price Band In case of revision in the Price Band, the Bidding/Issue Period shall be extended for three working days after such revision, subject to the Bidding/ Issue Period not exceeding ten (10) working days. Any revision in the Price Band, and the revised Bidding/ Issue Period, if applicable, shall be widely disseminated by notification to Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), where the Equity Shares of our Company are proposed to be listed, by issuing a press release and by indicating the change on the websites of the Book Running Lead Manager and the terminals of the Syndicate Member(s). The Issue is being made through the 100% Book Building Process wherein upto 50% of the Net Issue to the Public (subject to mandatory allotment of minimum 10% of the Issue size to QIBs) shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (QIBs), out of which 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all Qualified Institutional Buyers, including Mutual Funds, subject to valid Bids being received at or above Issue price. Further, not less than 15% of the Net Issue to the public shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net 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. RISKS IN RELATION TO THE FIRST ISSUE This being the first issue of the Company, there has been no formal market for the Equity Shares of the Company. The Face Value of the Equity Shares is Rs. 10/- and the Issue Price is [] times of the Face Value at the Lower End of the Price Band and [] times of the Face Value at the Higher End of the Price Band. The Issue Price (as determined and justified by the Book Running Lead Manager in consultation with the Company in the paragraph titled Basis for Issue Price on Page [] of this Draft Red Herring Prospectus on the basis of the assessment of market demand for the Equity Shares issued by way of Book Building) 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 or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISK Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue including the risk involved. The Equity Shares issued 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 this document. Specific attention of the investors is invited to the statement of Risk Factors beginning on Page [] of this Draft Red Herring Prospectus. ISSUERS ABSOLUTE RESPONSIBILITY Janki Corp Limited, having made all reasonable enquiries, accepts responsibility for, and confirms that this 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 this 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 this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING ARRANGEMENTS The Equity Shares issued through this Draft Red Herring Prospectus are proposed to be listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE), Mumbai. The in-principle approval for listing from these stock exchanges has been received vide letter dated [] & [] respectively. Bombay Stock Exchange Limited (BSE) is proposed to be the Designated Stock Exchange.

BOOK BUILDING LEAD MANAGER TO THE ISSUE

UTI Securities Limited SEBI Regn. No.: INM000007458 MAPIN No. UIN 100000489 1st Floor, Dheeraj Arma, Anant Kanekar Marg Station Road, Bandra (East), Mumbai 400 051. Tel: +91-22-55515806 / 55515805; Fax: +91-22-55023194 Website: www.utisel.com; E-Mail: jankicorp@utisel.com Contact Person: Mr. Hitesh Mandot

REGISTRAR TO THE ISSUE

B S S

Bigshare Services Private Limited SEBI Regn. No.: INR0000001385 MAPIN No. UIN 100003467 E-2/3, Ansa Industrial Estate, Saki Vihar Road Saki Naka, Andheri (East), Mumbai 400 072. Tel: +91-22-28473747/ 3474/ 0652/ 0653, Fax: +91-22-28475207 Website: www.bigshareonline.com; E-Mail: bigshare@sify.com Contact Person: Mr. V. Kumareshan

ISSUE PROGRAMME BID / ISSUE OPENS ON : ______________ 2006 BID / ISSUE CLOSES ON : _________________ 2006
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DEFINITIONS AND ABBREVIATIONS ....................................................................................................................... PRESENTATION OF FINANCIAL AND MARKET DATA ........................................................................................... FORWARD-LOOKING STATEMENTS ....................................................................................................................... RISK FACTORS .......................................................................................................................................................... SUMMARY .................................................................................................................................................................. THE ISSUE .................................................................................................................................................................. SUMMARY FINANCIAL AND OPERATING INFORMATION .................................................................................... GENERAL INFORMATION ......................................................................................................................................... CAPITAL STRUCTURE .............................................................................................................................................. OBJECTS OF THE ISSUE .......................................................................................................................................... BASIC TERMS OF THE ISSUE .................................................................................................................................. ISSUE STRUCTURE .................................................................................................................................................. BASIS FOR ISSUE PRICE ......................................................................................................................................... STATEMENT OF TAX BENEFITS .............................................................................................................................. INDUSTRY OVERVIEW ............................................................................................................................................. OUR BUSINESS ......................................................................................................................................................... HISTORY AND CORPORATE STRUCTURE ............................................................................................................ OUR MANAGEMENT ................................................................................................................................................. OUR PROMOTERS AND THEIR BACKGROUND .................................................................................................... FINANCIAL STATEMENTS ........................................................................................................................................ OUR GROUP CONCERNS ........................................................................................................................................ MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL .......................................................................... CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE RESTATED FINANCIAL STATEMENTS OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS ........................................................................ GOVERNMENT AND OTHER APPROVALS ............................................................................................................. OTHER REGULATORY AND STATUTORY DISCLOSURES .................................................................................. TERMS OF THE ISSUE .............................................................................................................................................. ISSUE PROCEDURE ................................................................................................................................................. MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF OUR COMPANY ......................................................... MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ......................................................................... DECLARATION ...........................................................................................................................................................

1 8 9 10 21 24 25 27 33 42 50 51 55 59 68 90 117 122 134 138 159 161

181 186 193 201 205 232 257 259

DEFINITIONS AND ABBREVIATIONS Conventional / General Terms Act/ Companies Act Directors Equity Shares Indian GAAP Non Resident The Companies Act, 1956 The directors of our Company, unless the context otherwise requires The Equity Shares of Face Value of Rs. 10/- each of our Company Generally accepted accounting principles in India A person who is not an NRI, an FII and is not a person resident in India A person resident outside India, as defined under FEMA and who is a NRI/ Non-Resident citizen of India or a Person of Indian Origin as defined under FEMA Indian (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 Quarter A period of three continuous months RBI Act The Reserve Bank of India Act, 1934 Securities and Exchange Board of India Act, 1992 as amended from time SEBI Act to time. Means the extant Guidelines for Disclosure and Investor Protection issued by Securities and Exchange Board of India, constituted under the SEBI Guidelines Securities and Exchange Board of India Act, 1992 (as amended), called SEBI (DIP) Guidelines, 2000. Bombay Stock Exchange Limited (BSE) and National Stock Exchange of Stock Exchanges India Limited (NSE) Issue related terms Term Janki Corp or our Company or Janki Corp Limited or JCL or we or us and our Allotment/ Allotment of Equity Shares Banker(s) to the Issue Bid Description Janki Corp Limited, a public limited company incorporated under the Companies Act, 1956

Unless the context otherwise requires, Allotment of Equity Shares pursuant to this Issue []

An indication to make an offer made during the Bidding Period by a prospective investor to subscribe to the Equity Shares of our Company at a price within the Price Band, including all revisions and modifications thereto Bid Amount The highest value of the optional Bids indicated in the Bid-cum-Application Form and payable by the Bidder on submission of the Bid for this Issue Bid/ Issue Closing The date after which the Syndicate will not accept any Bids for the Issue, Date which shall be notified in a widely circulated English national newspaper and Hindi national newspaper. Bid-cumThe form in terms of which the Bidder shall make an offer to subscribe to Application Form the Equity Shares of our Company and which will be considered as the application for allotment in terms of this Draft Red Herring Prospectus Bid/ Issue Opening The date on which the Syndicate shall start accepting Bids for the Issue, Date which shall be the date notified in widely circulated English national newspaper and Hindi national newspaper. Bidder Any prospective investor who makes a Bid pursuant to the terms of this

Term

Description Draft Red Herring Prospectus Bid/ Issue Period The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date inclusive of both days and during which prospective Bidders can submit their Bids Book Building Book building route as provided under Chapter XI of the SEBI Guidelines, Process in terms of which this Issue is made Brokers to this Brokers registered with any recognized Stock Exchange, appointed by the Issue Members of the Syndicate BRLM Book Running Lead Manager to this Issue, in this case being UTI Securities Limited CAN/ Confirmation The note or advice or intimation of allocation of Equity Shares sent to the of Allocation Note Bidders who have been allocated Equity Shares in the Book Building Process 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 Cut-off The Issue Price finalized by our Company in consultation with the BRLM Depository A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time Depository A depository participant as defined under the Depositories Act Participant Designated Date The date on which funds are transferred from the Escrow Account of our Company to the Public Issue Account after the Prospectus is filed with the RoC, following which the Board of Directors shall transfer Equity Shares to successful bidders Designated Stock Bombay Stock Exchange Limited (BSE). Exchange Draft Red Herring Means this Draft Red Herring Prospectus issued in accordance with Prospectus Section 60B of the Companies Act, which does not have complete particulars on the price at which the Equity Shares are being issued and number of Equity shares being issued through this Issue. It carries the same obligations as are applicable in case of a Prospectus and will be filed with the RoC at least three days before the opening of this Issue. It will become a Prospectus after filing with the RoC after the pricing and allocation Eligible Employee Means Permanent Employees / Executive Director(s) of our Company who are Indian Nationals, are based in India and are physically present in India on the date of submission of the Bid- cum-Application Form. Eligible For the purpose of the Shareholders of Group Company Portion, Eligible Shareholders/ Shareholders of Group Company means shareholders of our Group Eligible Company i.e. JPL Industries Limited during the period commencing from Shareholders of the date of filing the Red Herring Prospectus with RoC and the Bid/Issue Group Company Closing Date who are Indian Nationals, are based in India and are physically present in India on the date of submission of the Bid- cumApplication Form. Equity Shares Equity shares of our Company of face value of Rs. 10/- each unless otherwise specified in the context thereof Escrow Account Account opened with an Escrow Collection Bank(s) and in whose favour the Bidder will issue cheques or drafts in respect of the Bid Amount when submitting a Bid Escrow Agreement Agreement entered into amongst our Company, the Registrar to this Issue, the Escrow Collection Banks, the BRLM and the Syndicate Member(s) in

Term

Escrow Collection Bank(s) First Bidder Floor Price Issue

Issue Management Team Issue Price

Issue Period Margin Amount Net Issue or Net Issue to the Public Non Institutional Bidders Non Institutional Portion Pay-in Date

Pay-in-Period

Price Band Pricing Date Promoters Prospectus

Public Issue Account Qualified Institutional Buyers or QIBs

Description relation to the collection of the Bid Amounts and dispatch of the refunds (if any) of the amounts collected, to the Bidders The banks which are clearing members and registered with SEBI as Banker to the Issue at which the Escrow Account for the Issue will be opened and in this case being [] The Bidder whose name appears first in the Bid-cum-Application Form or Revision Form The lower end of the Price Band, below which the Issue Price will not be finalized and below which no Bids will be accepted The fresh issue of [] Equity Shares of Rs. 10/- each fully paid up at the Issue Price determined by our Company in consultation with the BRLM in terms of this Draft Red Herring Prospectus. The team managing this Issue as set out in the section titled General Information in this Draft Red Herring Prospectus The final price at which Equity Shares will be issued and allotted in term of this Draft Red Herring Prospectus. The Issue Price will be decided by our Company in consultation with the BRLM on the Pricing Date The Issue period shall be [] being the Bid/Issue Opening date, to [], being the Bid/Issue Closing date The amount paid by the Bidder at the time of submission of his/her Bid, which may be 10% to 100% of the Bid Amount. The Issue of Equity Shares other than the Promoters Contribution and Employee Reservation Portion. All Bidders that are not Qualified Institutional Buyers or Retail Individual Bidders and who have Bid for Equity Shares for an amount more than Rs.1,00,000 The portion of this Issue being not less than 15% of the Net Issue i.e. [] Equity Shares of Rs.10 each available for allocation to Non Institutional Bidders Bid/Issue Closing Date or the last date specified in the CAN sent to Bidders receiving allocation who pay less than 100% Margin Amount at the time of bidding, as applicable This term means (i) with respect to Bidders whose Margin Amount is 100% of the Bid Amount, the period commencing on the Bid/ Issue Opening Date and extending until the Bid/Issue Closing Date, and (ii) with respect to Bidders whose Margin Amount is less than 100% of the Bid Amount, the period commencing on the Bid/Issue Opening Date and extending until the closure of the Pay-in Date Being the price band of a minimum price (Floor Price) of Rs. [] and the maximum price (Cap Price) of Rs. [] and includes revisions thereof The date on which our Company in consultation with the BRLM finalizes the Issue Price Mr. Raghunath Mittal, Managing Director, Mrs. Madhu Mittal, Mr. Rahul Mittal, Mr. Rohit Mittal and Raghunath Mittal (HUF). The Prospectus, filed with the RoC containing, inter alia, the Issue Price that is determined at the end of the Book Building Process, the number of Equity shares being issued through this Issue and certain other information Account opened with the Banker(s) to this Issue to receive monies from the Escrow Account for this Issue on the Designated Date Public financial institution as defined in section 4A of the Companies Act, 1956; scheduled commercial banks; mutual funds; foreign institutional investor registered with SEBI; multilateral and bilateral development financial institutions; venture capital funds registered with SEBI; foreign

Term

QIB Portion

Registrar/ Registrar to Issue Retail Individual Individual Bidders (including HUFs and NRIs) who have not Bid for an Bidders amount more than Rs. 1,00,000/- in any of the bidding options in this Issue Retail Portion The portion of this Issue being not less than 35% of the Net Issue i.e. [] Equity Shares of Rs. 10 each available for allocation to Retail Individual Bidder(s) Revision Form The form used by the 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) Syndicate The BRLM and the Syndicate Member(s) Syndicate The agreement to be entered into between our Company, BRLM and the Agreement Syndicate Member(s), in relation to the collection of Bids in this Issue Syndicate Intermediaries registered with SEBI and eligible to act as underwriters. Member(s) Syndicate Member(s) are appointed by the BRLM in this case being [] TRS or The slip or document issued by the Syndicate Member(s) to the Bidder as Transaction proof of registration of the Bid on the online system of BSE/NSE Registration Slip Underwriters The BRLM and the Syndicate Member(s) Underwriting The Agreement among the Underwriters and our Company to be entered Agreement into on or after the Pricing Date Company/ Industry-related Terms Term Description

Description venture capital investors registered with SEBI; state industrial development corporations; insurance companies registered with the Insurance Regulatory and Development Authority (IRDA); provident funds with minimum corpus of Rs. 2500 Lacs and pension funds with minimum corpus of Rs. 2500 Lacs. The portion of this Issue being up to 50% of the Net Issue (subject to mandatory allotment of minimum 10% of the Issue size to QIBs), i.e., [] Equity Shares of Rs.10 each available for allocation to QIBs Bigshare Services Private Limited as indicated on the cover page of this this Draft Red Herring Prospectus

1 Acre 4048.32 Square Meters Articles/ Articles of The Articles of Association of Janki Corp Limited Association Auditors The Statutory Auditors of our Company namely M/s. A. Bafna & Co., Chartered Accountants and M/s. O.P. Dad & Co. Chartered Accountants. 1 Bigha 2530.20 Square Meters or 20 Biswa 1 Biswa 126.51 Square Meters Board / Board of Board of Directors of Janki Corp Limited unless otherwise specified Directors Financial Year / The 12 months ended March 31, of a particular year unless otherwise Fiscal Year specified KSC Kilogram Per Square Centimeters Memorandum/ The Memorandum of Association of Janki Corp Limited Memorandum of Association MFA Multi-Fibre Arrangement MT Metric Tonne

MTA MW Ne Project

Metric Tonnes Per Annum Mega Watt English Cotton Count The proposed project of our Company for expansion of manufacturing facility for Sponge Iron by 1,20,000 MTPA, installation of an Induction Furnace & Continuous Casting Machine for production of Steel Billets with a capacity of 54,000 MTPA and installation of 10 MW Power Plant. Registered Office 39/C, 1st Floor, Raj Industrial Complex, Military Road, Marol, Andheri (E), of our Company Mumbai 400 059. RoC Registrar of Companies, Maharashtra at Mumbai unless otherwise specified MTPA Metric Tonnes Per Annum TPD Tonnes Per Day TPH Tonnes Per Hour

ABBREVIATIONS Term A.Y./ AY A/c ABC AGM AICTE AS ATC BSAL BSE CAGR CDSL CENVAT CESTAT CIL CLB CLCS COREX CPP CTD DCA DEPB DEPB DMT DP DRI EAF ECP EGM EIF/IF EOU EPCG EPS EU Description Assessment Year Account After Burning Chamber Annual General Meeting of our Company All India Council for Technical Education Accounting Standards Agreement on Textiles & Clothing Bellary Steel & Alloys Limited Bombay Stock Exchange Limited Compounded Annual Growth Rate Central Depository Services (India) Limited Central Value Added Tax Customs, Excise and Service Tax Appellate Tribunal Coal India Limited Company Law Board Credit Linked Capital Subsidy Core Edge Excitation Captive Power Plant Cold Twisted Deformed bars Department of Company Affairs Duty Exemption Pass Book Duty Entitlement Pass Book Scheme Di-methyl Terephthalate Depository Participant Direct Reduced Iron Electric Arc Furnace Electro Static Precipitator Extraordinary General Meeting of our Company Electric Induction Furnace Export Oriented Unit Export Promotion & Credit Guarantee Scheme Earnings Per Share European Union

F.Y. / FY / Fiscal / Period of Twelve Months ending on March 31 of the respective year Financial Year FEMA Foreign Exchange Management Act, 1999, as amended from time to time and the rules and regulations framed there under. FEMR Foreign Exchange Management Regulations, 2000 FI Financial Institution FIIs Foreign Institutional Investors as defined under SEBI (Foreign Institutional Investors) Regulations, 1995 and registered with SEBI as required under FEMA (Transfer or Issue of Security by a person resident outside India) Regulations, 2000 and under other applicable laws in India. FIPB Foreign Investment Promotion Board, Ministry of Finance, Government of India FVCI Foreign Venture Capital Investor registered with SEBI under the SEBI (Foreign Venture Capital Investor) Regulations, 2000 GAAP Generally Accepted Accounting Principles GAAT General Agreement on Tariff & Trade GCT Gas Conditioning Chamber GIR Number General Index Register Number GoI Government of India HUF Hindu Undivided Family IISI International Iron & Steel Institute I.T. Act The Income Tax Act, 1961 IPO Initial Public Offer ISO International Standards Organization KPTCL Karnataka Power Transmission Corporation Limited KV Kilo Volt KW Kilo Watt L/C Letter of Credit MAT Minimum Alternate Tax MEG Mono Ethylene Glycol MF Mutual Fund MOS Ministry of Steel MW Mega Watt NAV Net Asset Value NBFC Non Banking Finance Company NFY Nylon Filament Yarn NHAI National Highway Authority of India Limited NOF Net Owned Funds NRI Non Resident Indian NSDL National Securities Depository Limited. NSE National Stock Exchange of India Limited NSP National Steel Policy PAN Permanent Account Number PAT Profit After Tax PBDIT Profit Before Depreciation, Interest and Tax PBIT Profit Before Interest and Tax PBT Profit Before Tax PFY Polyester Filament Yarn P-X Paraxylene PTA Pure Terephthalic Acid QIB Qualified Institutional Buyer R&D Research & Development RBI Reserve Bank of India

RFC RIICO RINL Rs. RSEB SAIL SBBJ SBM SEBI SIA SSI TMT TNW TRS TUFS USD VAT WDV WHRB

Rajasthan Financial Corporation Rajasthan State Industrial Development & Investment Corporation Ltd. Rashtriya Ispat Nigam Limited Indian Rupees Rajasthan State Electricity Board Steel Authority of India Limited State Bank of Bikaner and Jaipur State Bank of Mysore The Securities and Exchange Board of India Secretariat for Industrial Assistance Small Scale Industry Thermo Mechanically Treated Total Net Worth Transaction Receipt Slip Technology Upgradation Funds Scheme United States Dollar Value Added Tax Written Down Value Waste Heat Recovery Boiler

PRESENTATION OF FINANCIAL AND MARKET DATA Financial Data Unless indicated otherwise, the financial data in this Draft Red Herring Prospectus is derived from our restated financial statements prepared in accordance with Indian GAAP and included in this Draft Red Herring Prospectus. Our fiscal year commences on April 1 and ends on March 31, so all references to a particular fiscal year are to the twelve-month period ended March 31 of that year. In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. There are significant differences between Indian GAAP and U.S. GAAP; accordingly, the degree to which the Indian GAAP financial statements included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with Indian accounting practice and Indian GAAP. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Draft Red Herring Prospectus should accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. Market data Unless stated otherwise, market data used throughout this Draft Red Herring Prospectus was obtained from internal Company reports, data, websites and industry publications. Industry publication data and website data generally state that the information contained therein has been obtained from sources believed to be reliable, but that their accuracy and completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Although, we believe market data used in this Draft Red Herring Prospectus is reliable, it has not been independently verified. Similarly, internal Company reports and data, while believed by us to be reliable, have not been verified by any independent source.

FORWARD-LOOKING STATEMENTS This Draft Red Herring Prospectus contains certain forward-looking statements. These forward-looking statements generally can be identified by words or phrases like will, aim, believe, expect, will continue, anticipate, estimate, intend, plan, contemplate, seek to, future, objective, project, should and similar expressions or variations of such expressions, that are forward looking statements. Similarly, the statements that describe our objectives, plans or goals are also forward-looking statements. 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 Textile Industry & Iron & Steel Industry in India 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 our overseas markets 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 and foreign laws, regulations and taxes and changes in competition in our industry in India or Internationally. For further discussion on factors that could cause our actual results to differ, see Risk Factors beginning on page [] of this Draft Red Herring Prospectus. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither our Company nor the BRLM, nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, our Company & the BRLM will ensure that investors in India are informed of material developments until such time as the grant of trading permission by the Stock Exchange for the Equity Shares allotted pursuant to the Issue.

RISK FACTORS

Investment in our Equity Shares involves a high degree of risk. You should carefully consider all of the information in this Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in our Equity Shares. If any of the following risks actually occur, our business, financial condition and results of operations could suffer, the trading price of our Equity Shares could decline, and you may lose all or a part of your investment.
Note: Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other implication of any risks mentioned herein under: INTERNAL RISK FACTORS

There are a number of outstanding litigations against our Company and our Directors. We are party to certain legal proceedings, incidental to our business and operations, which if not determined in our favour, could have material adverse impact on our business, operations and / or financial position. The summary of all these outstanding cases is as mentioned below:
Sr. Nature of Case No. 1. Textile Cess Cases 2. Income Tax Cases (Penalty) No. of Cases 7 1 Amount Involved (in Rs.)* Rs.38,86,424 Not quantifiable as determination of penalty is pending adjudication. Rs.1,37,17,872/- as Duty and Rs.15,63,011/- as penalty. Not Quantifiable

3. 4.

Excise cases Civil Court cases

2 3

*The amount involved is the amount expressly claimed, being the liability and financial impact, which our Company and/or our Directors may incur if it/they are unsuccessful in legal proceedings. However, it does not include those penalties, interests and costs, if any, which may be imposed on our Company and our Directors which may have been pleaded but not quantified in the course of legal proceedings, or which the Court/Tribunal otherwise has the discretion to impose upon our Company. The imposition and amount of such penalties/interest/costs are at the discretion of the Court/Tribunal where the case is pending. Such liability, if any, would crystallize only on the order of the Court / Tribunal where the case is pending. For further details, please refer to the Outstanding Litigations and Material Developments beginning on page [] of this Draft Red Herring Prospectus.

We have been subject to penalties by regulatory bodies. There is a pending case, wherein penalty has been imposed by regulatory body on our Managing Director Mr. Raghunath Mittal. The details of this case are as follows:
An appeal has been filed by our Company before the Commissioner (Appeal II) Central Excise, Jaipur against the order-in-original No. 31/CE/JP-II/04 dated 10.11.2004. The issue involved in the case is that there was difference in the weight of processed fabric and processing charges as shown in the price declaration filed by the company under Rule 173C of Central Excise Rules, 1944 and processing bills, to evade the Central Excise Duty. The Central Excise Department observed that the unit had paid duty, which was short by Rs. 15, 63,011/- for the period 1.8.1997 to 15.1.2002. Further, a penalty of Rs.1,00,000/- under Rule 10

26 of the Central Excise Rules, 2002 was also imposed on Mr. Raghunath Mittal, Managing Director of our Company vide order no. 31/CE/JP-II/04 dated 10.11.2004 passed by the Joint Commissioner. The appeal is still pending before the Commissioner (Appeal-II) Central Excise, Jaipur after grant of unconditional stay vide a stay order no. 43-44(RM)/CE/JPRII/2005 dated 7.2.2005. In the event of our Company losing the case, it will have to deposit Rs. 15, 63,011/- along with penalty of the same amount. No provision has been made in the financial books. Further, if the aforesaid penalty is finally imposed on Mr. Raghunath Mittal, Managing Director; pursuant to the provisions of Schedule XIII of the Companies Act, 1956, further appointment of Mr. Raghunath Mittal as Managing Director would require Central Governments approval.

Our success depends in large upon availability of one of our Promoter and our key managerial personnel and our ability to attract and retain them. Our Company has total five Promoters comprising of four individuals and one HUF. Out of total four individual Promoters, only one Promoter i.e. Mr. Raghunath Mittal is having experience of about 13 years in Textile Business and only about one year of experience in Iron & Steel Industry. Whereas, rest three individual Promoters i.e., Mrs. Madhu Mittal, Mr. Rahul Mittal and Mr. Rohit Mittal presently do not have any experience in business of our Company. Due to lack of experience of other three individual Promoters, our Company is highly dependent upon availability of Mr. Raghunath Mittal and other key managerial personnel. The business and operations of the Company may suffer on account of lack of availability or turnover of key managerial personnel. Our future performance will depend upon the continued services of these persons. Our Company has embarked upon a Rs. 107.30 crores project, which is fairly large in comparison to its current size of operations. The promoters may face the problem in managing the day to day affairs of the company after the completion of diversification and increased scale of operations. An equity investor is therefore faced with an uncertainty of performance by the management. Our IPO is proposed for the Iron & Steel Division, which is relatively new business segment for our Company. Our company has been primarily engaged in the textile and fabric processing business. We started the production of sponge iron in the previous year 2004-05. The Iron and Steel segment for which this Issue is proposed, has contributed only 12% (approximately) of the turnover of the Company for the year ended 31st March 2005 and 43.46% (approximately) for the five months ended 31.08.05. The proposed IPO is to part finance the funds requirement of Iron & Steel Division of our Company. The commercial production of this division has started in January 2005. It is relatively a new segment for our Company and since, our Promoters are not well experienced in this new line of business i.e. Iron & Steel; the investors will face the risk of absence of any proven track record in this segment of our Company. Our new Project is subject to a number of contingencies. Our new project is subject to a number of contingencies, including changes in laws and regulations, governmental actions, delays in obtaining permits or approvals, volatility in global prices of raw materials, accidents, natural calamities and other factors beyond our control. Contracts for construction and other activities relating to the projects including installation of Captive Power Plant and Induction Furnace are awarded to external contractors on turn key basis. In addition, most of our projects are dependent on external contractors, including for construction, delivery, commissioning, as well as the supply and testing of equipment. However, we cannot assure you that the performance of external contractors will meet the required specifications or performance parameters. If the performance of these contractors is inadequate in terms of the requirements, this could

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result in incremental cost and time overruns, which in turn could adversely affect our expansion plans.

We are yet to obtain certain approvals and licenses. We have applied for the following approvals and licenses for our Project, which we have not yet received:
Sr. No. 1 Concerned Authority Chief Engineer, Irrigation Central Zone, Munirabad, Karnataka Karnataka State Pollution Control Board Electrical Inspectorate, Bellary, Karnataka Approval/Consent Status

Grant of permission to Application made on August 18, 2005. draw water from the Verbal Clarifications sought by Irrigation Dept. regarding water survey report. river bed Hagari

Consent for Application made on September 17, 2005. establishment for the Some clarifications were asked by pollution control board vide their letter ref. No. 2x12 MW Power Plant KSPCN/EO (BLY)/DEO/ AEO2/CFE/F1172/ 2005-06/2060 Dt. 03.12.2005. Permission for the Drawing approval for installing 3x600 KVA installation of 3 x 600 DG set and 2500 KVA transformer Approval KVA DG set, 2500 KVA received. Commissioning transformer, DG set for pending. power plant and steel Billets Plant.

Further, we are required to apply for the following licenses, approvals and permissions pertaining to our Project: Sr. No. 1 Concerned Authority Approval/Consent Remarks applied in due

Inspector of For the establishment of 10 MW Will be Factories, course Power Plant Bellary, Karnataka Inspector of For the establishment of 15 MT Will be Factories Induction Furnace for Steel Billets course Bellary, Karnataka Plant Comprehensive Approval from the Ministry for the 10 Will be Clearance from MW Power Plant and 15 MT Induction course forest, environment Furnace for Steel Billets Plant and ecology deptt., Karnataka Karnataka Electricity Approval for the 10 MW Power Plant Will be Board. and 15 MT Induction Furnace for course Steel Billets Plant Gulbarga State Sanction of power to meet the Will be Electricity Board, requirement of 4 X 100 TPD Sponge course Iron Plant, 15 MT Induction Furnace Karnataka for Steel Billets Plant Karnataka Power Wheeling and Banking Agreement for Will be the purchase and sale of power Transmission course Corporation Ltd.

applied in due

applied in due

applied in due

applied in due

applied in due

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In addition to the above, we have applied for the following approvals and licenses for our Textile Division, which we have not yet received: Sr. Concerned Approval/Consent Status No. Authority 1 Rajasthan State Letter No. Renewal of NOC and the NOC is yet to Pollution Control JCL/ENG/2005be received. Board, Rajasthan 06/9497 Two Applications bearing No. 1191027 Registration of 2 The Registrar of and 1191028 dated 10th April 2003 Trade Marks Trademarks JPL Gwalior and JPL Sulz were made. Collection with Design Application No. 1191027 was accepted for advertisement subject to filing of TM-16 for deleting the expression Sulz Collection. We filed TM-16 on 21st February 2005; however, no official action has been received till date. Application No. 1191028 was advertised in Trade Marks Journal No. 1330 (1) dated May 15, 2005. Further, we have not received any opposition yet. If we fail to obtain any or all of these approvals or licenses thereof, in a timely manner, or at all, our business may be adversely affected.

We are yet to place orders for purchase of Plant & Machineries. We have placed orders for Plant & Machineries aggregating Rs. 2,900 Lacs; which is about 37.67% of the overall requirement as envisaged for the project i.e. Rs. 7,699 Lacs. We are yet to place orders for purchase of balance Plant & Machineries i.e. for Rs. 4,799 Lacs; which is about 62.33% of the overall requirement. Negotiations in respect of technical specifications with vendors have been commenced and orders will be placed in the due course, once the negotiations are completed. Any increase in prices of these equipments may adversely affect our estimates of Project cost resulting in increased funds requirement and which may delay our schedule of implementation for the Project. For further details please refer to the heading Plant & Machineries beginning on page [] of this Draft Red Herring Prospectus. Any delay in the commencement of operations as scheduled as per the proposed expansion plan may affect our profitability. We have embarked on new project with an investment of Rs. 107.30 Crores. Timely commencement of commercial operations in this project will have a critical bearing on our financial performance. Any delay in their completion or to the beginning of production may adversely impact the results of our operations. Steel industry being a raw material intensive industry, is constantly exposed to possible unpredictability in the supply of raw materials, particularly iron-ore, coke and coal. Disruption in the supply of any of the raw materials, particularly iron-ore, coke and coal may lead to hampering of the production process flow. Further, uncertainty of raw materials availability and other resources such as water, skilled manpower etc. may also affect the operations and in turn the profitability of Company.

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Risk associated with price fluctuation of raw materials and finished products In the recent past, there have been wide fluctuations in the prices of critical raw materials such as iron ore, coal, coke, etc. both at domestic and international levels. Such fluctuations in prices of raw material and companys inability to negotiate at optimum market rates may affect the profitability. Similarly, the prices of finished products have also shown price variations, which may impact the profitability. Our manufacturing activities are dependent upon availability of skilled and unskilled labour. Our manufacturing activities are relatively labour intensive and dependent on availability of skilled and unskilled labour in large numbers. Large labour intensive operations call for good monitoring and maintenance of cordial relations. Non-availability of labour and/or any disputes between the labour and the management may affect our business operations.
Our operations may be adversely affected in case of industrial accidents at any of our production facilities. Usage of heavy machinery, lifting of materials by cranes, heating processes of the furnace etc. may result in accidents, which could cause injury to our employees, other persons on the site and could also damage our properties thereby affecting our operations. Though our plants and machinery and personnel are covered under insurance, occurrence of accidents could hamper our production and consequently affect our profitability.

We are dependent on third-party transportation providers for the supply of raw materials and delivery of products. We normally use third-party transportation providers for the supply of most of our raw materials and for deliveries of our finished products to our customers. Transportation strikes by members of various Indian Truckers Unions happening in the future can have an adverse effect on our receipt of supplies and our ability to deliver our finished products. In addition, transportation costs have been steadily increasing. Continuing increases in transportation costs may have an adverse effect on our business and results of operations. We face substantial competition in the textile business, both from Indian and international companies, which may adversely affect our revenues. We face significant competition from existing players and potential entrants in the Indian textile industry specifically in the fabrics division. Internationally, we will face competition mainly from large vertically integrated and diversified companies as well as new companies. Most of our international competitors are larger than us and have greater financial resources. Increased competition could result in price reductions, decreased sales, lower profit margins or losses in market share, any of which could have an adverse effect on our business, results of operations and financial condition. We cannot be certain that we will continue to compete successfully against either current or potential competitors in the future. In textile business, since the demand for the type of fabric is regularly changing we face the risk of merchandise obsolescence. In our business of textile, we face the risk of changing demand of fabric. The management has to carefully plan the production process as well as selling and distribution keeping in view the continuous change in fashion and tastes & preferences of the consumer. Any failure to plan properly may adversely affect our profitability. Any failure to keep abreast with the latest trends in the technologies may adversely affect our cost competitiveness and ability to develop new products. We operate in a technologically intensive environment, where we compete on a global scale. Technology by its very nature is dynamic and ever changing, and we may not be able to keep pace with the rapidly changing technological environment. Any such failure on our part could adversely affect our ability to compete efficiently, our cost-competitiveness, ability

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to develop new products and the consequential quality of our products, and could also adversely affect our sales and profitability.

Members of our Promoters Group will continue to retain significant control in Our Company after the Issue, which will allow them to influence the outcome of matters submitted to shareholders for approval. After this Issue, members of our Promoter group will beneficially hold approximately [] % of our post-Issue Equity Share Capital. As a result, our Promoters Group will have the ability to exercise significant influence over all matters requiring shareholders approval, including the election of directors and approval of significant corporate transactions. The Promoters Group will also be in a position to influence any shareholder action or approval requiring a majority vote, except where they are required by applicable laws to abstain from voting. Such a concentration of ownership may also have the effect of delaying, preventing or deterring a change in control. Our Promoters are engaged in a venture, which is in same line of activity as that of our Company. Our promoters are associated with the promotion of JPL Industries Limited, which is engaged in the manufacturing of fabrics. The objects of this company are similar to that of our company. Such a conflict of interest may affect our profitability. We have, as on 31st August 2005, unsecured loans from the lenders, which are repayable on demand. As on 31st August 2005, we have an outstanding amount of Rs. 323.28 Lacs towards unsecured loans taken from various lenders, which are repayable on demand. Further, no agreement has been executed in respect of these unsecured loans. Since, all these unsecured loans have been taken to ensure proper liquidity in our business for smooth operations, any unexpected major demand from lenders for repayment of such unsecured loans, may adversely affect our business operations. For further details of these unsecured loans, please refer Annexure 7 of Auditors Report beginning on page [] of this Draft Red Herring Prospectus. Our current debt sanctions impose on us certain restrictive covenants Our current debt sanctions with the State Bank of Bikaner and Jaipur and State Bank of Mysore contain certain restrictive covenants which require us to obtain the prior consent of the Banks before undertaking certain action such as new project, expansion or diversification, effecting any scheme of amalgamation reconstitution or merger; raising any additional debt; changing or altering our capital structure; declaration of dividend; withdrawal of money brought in by promoters, principal share holders, directors, their friends and relatives; create any charge or lien or interest of whatsoever nature; dealing with other than members banks; drastic change in management ; extending any finance to associate concerns and other concerns; approval from various government authorities; financing of book debts older than 45 days, opening of letter of credit for purchase of capital goods, investment by way of shares in other concerns, fails to maintain minimum working capital and tangible net worth, events which substantially effects the profit, withdrawing the investment from subsidiaries, change in the remuneration and sitting fees of directors.
Further, these sanctions also provide for inspection charges for inspecting the books of account of the company and penal interest in case of default in payment of instalment/interest, delay / non-submission of stock and book debts statement. Moreover, advances under the credit facilities sanctioned at the discretion of the bank are repayable on demand and its terms and conditions are subject to change without any notice.

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Appraiser of our project, State Bank of Bikaner and Jaipur (SBBJ), has mentioned certain Risk Factors Appraiser of our project, State Bank of Bikaner and Jaipur (SBBJ), has mentioned certain Risk Factors, Weaknesses and their mitigation in their Appraisal Report:
Risk Factor Experience & Capability Proposed Mitigation Mechanism Management Risks The management has experience of more than 10 years for running the Industry including one year experience in steel industry. JCL has employed team of well experienced technical person to take care of any eventuality Pre-Completion Risks About 90% of the project cost has been estimated based on the budgetary quotation. The project cost also includes provision for contingency at 3% on the basis of all hard cost components of the project cost JCL has selected reputed suppliers for supplying equipments. JCL has appointed a technical consultants and engineers for the project implementation to complete the project in time. JCL is implementing the project ahead of implementation schedule and the technical team is capable for implementing the project in time. Post-Completion Risks JCL has appointed Popuri Engineering Co. Ltd., having rich experience in project development from concept to commissioning of sponge iron project. JCL has also appointed M.N. Dastur & Co. for implementing the power project which is one of the most reputed consultancy firm of the country in the power project field. JCL is already having Consent to operate for its existing plant conforming to all pollution control and safety norms as stipulated by State Pollution Control Board. JCL will also use the latest and currently available best technology to control the emission standards within acceptable norms at each stage of the production. The location of plant is ideal with regard to availability for iron ore. Promoters are confident that raw materials are easily available in the open market and can be sourced at competitive prices. Also they will secure linkages for all major raw materials to ensure steady supply of raw materials when the plant is in operation. JCL is setting a CPP of 10 MW for use in the induction furnace Plant and the balance requirement for the plant will be taken from (GESCO) i.e. state undertaking of Government of Karnataka. Market Risks The promoter of JCL has already tied up with Jindal Vijay Nagar Steel Ltd. for a period of six month initially and also establishing a wide and strong distribution network for distribution of its products. The lower cost of manufacturing for JCL due to setting up of the Captive Power Plant and established marketing. Technology Risks The technology that JCL intends to adopt for steel plant is a proven technology.

Cost Overrun

Time Overrun

Plant Operating Risks

Environmental / Safety Risks

Raw Material Availability

Power Availability

Off take Risk

Competitive Position Plant Performance Foreign Exchange Fluctuations

JCL does not envisage any foreign exchange risks as all the equipments are being bought locally. Also the raw materials will be sourced locally and finished products will be sold locally Other Risks Force Majeure Adequate insurance cover will be obtained for insurable Force Majeure risks.

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Weakness: The promoters running Fabric Processing and Marketing Companies have promoted the project and they are diversifying their operational activities in a relatively new line of operations. Promoters are having their existing units at Bhilwara, Rajasthan and the new unit is being set up at Bellary, Karnataka distance between the two places may create a problem for administration and control.

We have not provided for contingent liabilities. As at 31st August 2005, we have the following contingent liabilities, which have not been provided for: (Rs. in Lacs) Particular As on 31.08.05 Taxation matter in respect of which appeals are pending 152.80 Excise 38.86 Textile Cess 514.00 Corporate guarantee to State Bank of Bikaner and Jaipur for the credit facilities of Rs. 514 lacs sanctioned to JPL Industries Ltd. (formerly known as Sulzem Syncotex Pvt. Ltd.)
Crystallization of any of the above contingent liabilities may require us to honour the demands raised. This may adversely impact our liquidity and thereby may have adverse impact on our financial resources and Networth. EXTERNAL RISK FACTORS Certain factors beyond the control of our Company could have a negative impact on our Company's performance, such as:

Reduction or termination of policies instituted to promote growth of the textile sector. The Government of India has instituted several policies to promote the growth of the Indian textile sector. These include interest rate subsidies and duty / tax reimbursement schemes like duty drawback / DEPB. Termination of or variation in the terms of such policies can adversely impact the profitability of textile companies in the country, including us. Further, any change in regulatory environment in relation to manufacturing in India or for marketing our products within and outside India will significantly impact our business. Adverse change in the government policies relating to Iron & Steel Industry may affect our profitability and operating efficiencies. Changes in regulatory environment relating to manufacturing and marketing Sponge Iron, Billet Casting, captive Power Plant and TMT Bars in and outside the country will significantly impact the business of the company. However, the company keeps itself abreast of the various developments in the regulatory environment and gears itself to comply with the dynamics. Our Company shall be able to adapt to any change in the regulatory environment. Increasing employee compensation in India may erode some of our competitive advantage and may reduce our profit margins. Wage costs in India have historically been significantly lower than the wage costs in the developed countries for comparably skilled professionals, which has been one of our competitive strengths. However, wage increases in India may prevent us from sustaining this competitive advantage and may negatively affect our profit margins. The buoyancy in the Indian industry with the opening up of global trade may lead to an increase in wage

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costs which could result in increased cost for professionals. This can impact our performance and margins and may result in a material adverse effect on our business.

Global economic, political and social conditions may harm our ability to do business, increase our costs and negatively affect our stock price. External factors such as potential terrorist attacks, acts of war or geopolitical and social turmoil in many parts of the world could prevent or block our ability to do business, increase our costs and negatively affect our stock price. These geopolitical social and economic conditions could result in increased volatility in India and worldwide financial markets and economy, and such volatility could prevent or block our ability to do business, increase our costs and negatively affect our stock price. Regional conflicts in Asia and other export markets could adversely affect the Indian economy, which in turn may disrupt our operations and cause business to suffer. The Asian region has from time to time experienced instances of civil unrest and hostilities among neighboring countries, including between India and Pakistan. In recent years there have been military confrontations along the India-Pakistan border. Also, since early 2003, there have been military hostilities and civil unrest in Afghanistan and Iraq. Such political tensions could create a perception that investments in Indian companies involve a higher degree of risk. This, in turn, could have a material adverse effect on the market for securities of Indian companies, including our Equity Shares and on our business. Growing competition may adversely affect our operations. We operate in a globally competitive business environment. We face significant competition from countries such as Pakistan, Bangladesh, Indonesia, China, Korea, etc. which also have cheaper labour and significant production capacities. We may also face competition from other established companies and future entrants into the industry. The growing competition may force us to reduce prices of our products, which may reduce our revenues and margins and/or decrease our market share, either of which could adversely affect our business, financial condition and results of operations. If we fail to comply with environmental laws and regulations or face environmental litigation, our results of operation may be adversely affected. Environmental laws and regulations in India have been increasing in stringency and it is possible that they will become significantly more stringent in the future. If, as a result of compliance or non-compliance with any environmental regulations, any of our units or the operations of such units are suspended, we will continue to incur costs in complying with regulations, appealing any decision closing our facilities, maintaining production at our existing facilities and continuing to pay labour and other costs which continue even if the facility is closed. As a result, our overall operating expenses will increase and our profits will decrease. Our Company is subject to risk arising from changes in interest rates and banking policy. We are dependent on various banks and financial institutions for arranging our working capital requirements, term loans, etc. Accordingly, any change in the existing banking policy or increase in interest rates may have an adverse impact on our Companys profitability. Any disruption in supply of power, basic infrastructural facilities, and telecom lines could adversely affect the business and production process of our company or subject it to excess cost, which in turn will have an adverse impact on our profitability.

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The price of our Equity Shares may be highly volatile. The Equity Shares of our Company are currently not listed. The price of our Equity Shares on the Indian Stock Exchanges may fluctuate after this Issue as a result of several factors including: Volatility in Indian and global securities market; Our results of operations and performance; Performance of our competitors and perception in the Indian market about investment in the textile sector; Adverse media reports, if any, on our Company or the Indian textile industry or iron & steel industry; Changes in the estimates of our performance or recommendations by financial analysts; Significant development in Indias economic liberalization and de-regulation policies; and Significant development in Indias fiscal and environmental regulations. There can also be no assurance that the price at which our Equity Shares are initially traded will correspond to the prices at which our Equity Shares will trade in the market subsequent to this Issue. The Issue price of our Equity Shares may not be indicative of the market price of our Equity Shares after the Issue. The Book Building Process will determine the Issue Price of our Equity Shares. This price will be based on numerous factors (discussed in the section Basis of Issue Price on page [] of this Draft Red Herring Prospectus) and may not be indicative of the market price for our Equity Shares after the Issue.
The market price of our Equity Shares could be subject to significant fluctuations after the Issue, and may decline below the Issue Price. We cannot assure you that you will be able to resell your Equity Shares at or above the Issue Price. Among the factors that could affect our share price are: Quarterly and other variations in the rate of growth of our financial indicators, such as earnings per share, net income and revenues; Changes in revenue or earnings estimates or publication of research reports by analysts; Speculation in the press or investment community; General market conditions; and Domestic and international economic, legal and regulatory factors unrelated to our performance.

Notes to Risk Factors: 1. Issue of [] Equity Shares of Rs.10 each for cash at a Price of Rs. [] per Equity Share, aggregating to Rs. 5,570 Lacs. The Face Value of the Equity Shares is Rs. 10 and the Issue Price is [] times the Face Value. 2. The net cost of acquisition of Equity Shares of Rs. 10/- each by our Promoters, is as follows: Name of our Promoters Mr. Raghunath Mittal Mr. Raghunath Mittal (HUF) Mrs. Madhu Mittal Mr. Rahul Mittal Mr. Rohit Mittal Average Cost (Rs.) 11.54 8.55 13.99 14.95 13.89

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3. The Net Worth of our Company as on 31st March 2005 and 31st August 2005 was Rs. 2142.20 Lacs and Rs. 2,809.75 Lacs respectively. 4. Book Value per Equity Share of our Company as on 31st March 2005 and 31st August 2005 was Rs. 18.23 and Rs. 19.86 respectively. 5. For details on Related Party Transactions refer to the section titled Related Party Disclosures beginning on page no. [] of this Draft Red Herring Prospectus. 6. There are no loans and advances given to any person / company in which the directors of our Company are interested. 7. Investors are free to contact the BRLM, Syndicate Member(s) or Compliance Officer for any complaints / information / clarification pertaining to this Issue. 8. We and the BRLM shall make all information available 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. 9. Investors are advised to refer the paragraph on Basis of Issue Price on page no. [] of this Draft Red Herring Prospectus before making an investment in this Issue. 10. We have changed the name of our company on 31st Dec 2003, from Janki Processors Limited to Janki Corp Limited this is because the company was diversifying its business and was entering into Iron and Steel Industry, which was in addition to its existing business of textile processing. 11. Investors should note that in case of oversubscription in the Issue, allotment will be made on a proportionate basis in all the categories including QIBs, Retail Individual Bidders, Non-Institutional Bidders and also in Employee Reservation Portion and Shareholders of Group Company Portion. Please refer to the paragraph titled Basis of Allotment or Allocation on page [] of this Draft Red Herring Prospectus.

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SUMMARY Industry Overview You should read the following summary together with the risk factors included from page [] to [] and the more detailed information about us and our financial data included in this Draft Red Herring Prospectus. Note: Unless otherwise indicated, all financial and statistical data relating to the industry in the following discussion is derived from internal Company reports & data, industry publication and estimates. This data has been reclassified in certain respects for purposes of presentation. For more information, see Forward Looking Statements and Market Data beginning on page [] in this Draft Red Herring Prospectus.

Iron and Steel Industry India has one of the oldest iron and steel industries in the Developing World and currently is the 8th largest producer of steel globally. The industry in the past operated under a regulatory regime marked by controls on capacity, price and distribution and high levels of protection from international competition. After four decades of growth under centralized planning and regulation, the industry was de-regulated in the year 1992 to better serve the national objectives. The external business environment, however, is defined by elements of the overall macro-policy framed by the State and also by international developments.
In the first decade after de-regulation, the Indian steel industry recorded an impressive growth in capacity, production, exports and a significant strengthening of its competitive position. The Major areas of weakness for the Indian steel industry are high capital cost, lack of adequate physical infrastructure and relatively high user charges for such services, high cost of energy inputs, low productivity of capital and labour and inferior quality of some of the critical inputs such as coal, lack of investment in supporting facilities in the areas of mining and beneficiation of raw materials. The steel industry comprises two main types of producers Integrated steel plants (ISP) or primary producers, which manufacture steel mainly through the blast furnace route from Iron Ore; and, Mini steel plants (MSP) or secondary sector: Conventionally, EAF/IF based steel plants with/ without captive rolling mills were covered under this category. However, now all steel plants (based on any technology) of capacity upto 5 lakhs TRA are covered under this category.

The raw materials that are required for production of steel in integrated steel plants (ISPs) could be grouped as - (i) Ores (Iron and Manganese ores), (ii) Fuels and Reducing Agents (Coal, Coke and petro-fuels), (iii) Fluxes (Limestone, Dolomite and Quartzite), and (iv) Refractories (Silica, Magnesite and Alumina). Sponge iron is used as a raw material in EAF or Induction Furnaces. Iron Scrap is an alternative to sponge iron for this purpose. While Sponge Iron, Pig Iron and Ferro Alloys (Chrome/Silicon/Manganese) form the major chunk of Steel Intermediates, Flat Products (HR coils, CR coils, GP/GC coils, Stainless Steel) and Long Products (Billets/Blooms/Ingots/Wire Rods/Bars/Structural) are the Finished Steel Products. Construction is the largest end-use sector of steel, accounting for over 50% of steel consumption. Long products are used extensively in the construction sector.

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Textile Industry Textile Industry is one of Indias largest industries, after agriculture. It provides direct employment to about 350 Lacs people. Besides this, there are a large number of ancillary industries, which are dependent upon this sector, such as manufacturing various machines, accessories, stores, ancillary items and chemicals. Known globally for its skill and craftsmanship, the Indian textile industry is also one of the largest export earners and accounts for about 35% of the gross export earnings in trade. Trade restrictions have hitherto kept the Indian textile industry from soaring to the height it is capable of, but this is expected to change, as after January 2005 the quota and other trade restrictions are being removed.
Textiles cover the following sub-segments:1) Fibre intermediates; P-X, DMT, PTA, MEG, Caprolactum, Wood Pulp etc. 2) Fibres: ginning and pressing of cotton, manufacture of PFY, NFY, Rayon fibre etc. 3) Synthetic fibre/filament processing viz., drawing, texturising, twisting etc. 4) Yarn: spinning cotton & blends on rotors and ring frames 5) Weaving/Knitting 6) Processing and 7) Distribution. The industry has a complex structure marked by presence of large-scale and small scale production units. The industry is manufacturer driven with spinning having large scale operations and the retailing as the weakest link. From growing own raw material (cotton, jute, silk and wool) to providing value added products to consumers (fabrics and garments), the textile industry covers a wide range of economic activities, and results in employment generation in both organized and unorganized sectors. The Indian Textile Industry has recorded a significant growth during the last decade. The spindleage increased from 33.15 million as on 31.03.97 to 34.15 million as on 30.11.04 and Rotors from 2.76 Lacs as on 31.03.97 to 3.85 Lacs as on 30.11.04. Our Business Our Company is engaged in the processing and marketing of fabrics and manufacturing of Sponge Iron. Our company is having manufacturing facilities at Bhilwara (Rajasthan) for fabrics and Bellary (Karnataka) for sponge iron. Our company was originally incorporated in the name of Janki Processors Pvt. Limited on September 16, 1993 under the Companies Act 1956 with Registrar of Companies, Rajasthan. The constitution as well as the name of company was changed to Janki Processors Ltd. on July 06, 2000. Later the name of our Company was changed to Janki Corp Ltd. w.e.f. December 31, 2003. In order to broad base our activities at national spectrum, our Company has shifted its registered office to Mumbai w.e.f. 16th March, 2005. Our company is one of the large process houses at Bhilwara. The process house is having the state-of-art machinery for processing quality fabric at competitive price. Our company is presently having six stenters and 30 jet-dyeing machines, 68 Jiggers, 7 Drying Range, a KD Machine etc., which are considered to be the most sophisticated machinery for fabric processing. The process house has an installed capacity of processing 347.00 Lac meters of fabrics per annum. We also started marketing of fabrics in our own brand name JPL during the year 2003-04. Our company is operating through a network of agents spread throughout the country and the same has helped in placing the product of our Company at a national level.

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We have diversified into the Iron & Steel sector by setting up a Sponge Iron Manufacturing Unit at Bellary, Karnataka as a nucleus towards establishing an Integrated Steel Plant. The setting up of integrated steel plant will make our Company less dependent on outside markets for its inputs and will gain cost competitiveness, by carrying on production from the raw material to finished product stage. Iron & Steel Division of our Company is located in an area rich in iron-ore deposits. Most of the iron ore mines are located in Bellary-Hospet regions, which is about 100 Kms. from our factory premises. Skilled and unskilled labour is available in abundance. Our Iron & Steel unit is presently having a production capacity of 60,000 MTPA and we are under the process of expanding its production capacity to 180,000 MTPA which is the optimum capacity level for undertaking forward or backward integration by any company. We also propose to set up an Induction Furnace and Continuous Casting Machine for the production of Steel Billets with a capacity of 54,000 MTPA and a Power Plant of 10 MW capacity for the captive consumption of power.

23

THE ISSUE Equity Shares Issued: [] Equity Shares of face value of Rs.10/- each Initial Issue by our Company aggregating to Rs. 5,570 Lacs Out Of which: Promoters Contribution in the [] Equity Shares of face value of Rs.10/- each Issue: aggregating to Rs. 570 Lacs Employee Reservation Portion(1) [] Equity Shares of face value of Rs.10/- each aggregating to Rs. 250 Lacs Share Holders of Group Company [] Equity Shares of face value of Rs.10/- each Portion (2) aggregating to Rs. 500 Lacs Net Issue to the Public: [] Equity Shares of face value of Rs.10/- each aggregating to Rs. 4250 Lacs [] Equity Shares of face value of Rs. 10/- each A) Qualified Institutional Buyers constituting upto 50% of the Net Issue to the portion (QIBs) Public (subject to mandatory allotment of minimum 10% of the Issue size to QIBs) shall be allocated on a proportionate basis, out of which 5% will be allocated to Mutual Funds, which are registered with SEBI. In case of inadequate response from the Mutual Funds, the shares will be made available to QIBs other than Mutual Funds. [] Equity Shares of face value of Rs 10/- each B) Non-Institutional Portion constituting at least 15% of the Net Issue to the Public (Allocation on a proportionate basis) [] Equity Shares of face value of Rs 10/- each C) Retail Portion constituting at least 35% of the Net Issue to the Public (Allocation on a proportionate basis) Note: Under subscription if any in the reservation category shall be added back to the net offer to the public portion. Under subscription, if any, in the Non- institutional portion and Retail Portion shall be allowed to be met with spillover from the other categories, at the sole discretion of our Company and BRLM. In case of Under-subscription in the Qualified Institutional Buyers portion (i.e. subscription less than 10% mandatory of the Issue Size), the same shall not be available to other categories and full subscription monies shall be refunded. Equity Shares outstanding prior to 14,900,000 Equity Shares of face value of Rs.10/the Issue each Equity Shares outstanding after the [] Equity Shares of face value of Rs.10/- each Issue Use of Issue proceeds Please see section titled Objects of the Issue on page [] of this Draft Red Herring Prospectus for additional information. For the purpose of the Employee Reservation Portion, Eligible Employee means Permanent Employees (as existing in the rolls of our Company) / Executive Director(s) of our Company who are Indian Nationals, are based in India and are physically present in India on the date of submission of the Bid- cum-Application Form. For the purpose of the Shareholders of Group Company Portion, Eligible Shareholders means shareholders of our Group Company i.e. JPL Industries Limited who are Indian Nationals, are based in India and are physically present in India on the date of submission of Bid-cum-Application Form.
(2) (1)

24

SUMMARY FINANCIAL AND OPERATING INFORMATION The following summary financial data has been prepared in accordance with Indian GAAP, the Companies Act and the SEBI Guidelines and restated as described in the Auditors Report of M/s. A. Bafna & Co., Chartered Accountants and M/s. O.P Dad & Co., Chartered Accountants dated 31st October, 2005 in the section titled Financial Statements. You should read this financial data in conjunction with our financial statements for each of Fiscal 2001, 2002, 2003, 2004, 2005 and 5 months ended 31st August, 2005 including the Notes thereto and the Reports thereon, which appears on page [] under the paragraph on Auditors Report in this Draft Red Herring Prospectus, and Managements Discussion and Analysis of Financial Condition and Results of Operations as Reflected in the Restated Financial Statements on page [] of this Draft Red Herring Prospectus. Statement of Assets & Liabilities (As Restated) Sr. No. Particulars (Rs. in Lacs) 5 Months 31.3.01 31.3.02 31.3.03 31.3.04 31.3.05 Ended 31.8.05 1155.10 1306.56 1423.86 1671.12 4174.90 4198.67 591.49 724.58 857.18 950.35 1052.41 1144.12 563.61 581.98 566.68 720.77 3122.49 3054.55 11.00 10.18 15.32 41.19 143.60 1598.96 574.61 592.16 582.00 761.96 3266.09 4653.51 0.03 0.03 0.03 0.03 0.03 0.03

A Fixed Assets Gross Block Less : Depreciation Net Block Capital Work in Progress Total B Investment Current Assets, Loans & C Advances Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Total D Liabilities and Provisions Secured Loans Unsecured Loans Deferred Tax Liability (Net) Current Liabilities & Provisions Total E Net Worth (A+B+C-D) F Represented by Equity Share Capital Share Application Money Reserves & Surplus Less : Miscellaneous Expenses ( To the extent not written off) Net Worth

223.74 445.34 33.95 72.48 775.51 279.62 117.68 0.00 430.56 827.86 522.29 537.74 0.00 0.00 15.45 522.29

285.04 351.48 6.84 90.88 734.24 344.09 141.69 0.00 333.88 819.66 506.77 537.74 0.00 0.00 30.97 506.77

119.71 760.45 1259.91 1634.63 394.46 360.83 674.66 985.75 5.30 15.92 36.65 60.69 91.75 147.08 851.15 1379.66 611.22 1284.28 2822.37 4060.73 301.86 558.61 2556.46 4441.70 200.26 232.17 512.99 323.28 1.86 17.99 114.97 233.82 152.48 422.65 761.87 905.72 656.46 1231.42 3946.29 5904.52 536.79 814.85 2142.20 2809.75 537.74 27.73 0.00 28.68 536.79 600.00 1175.00 1415.00 142.75 132.28 45.95 72.39 840.40 1353.60 -0.29 -5.48 -4.80

814.85 2142.20 2809.75

25

Statement of Profit & Loss (As Restated) (Rs. in Lacs) 5 Months 31.3.01 31.3.02 31.3.03 31.3.04 31.3.05 Ended 31.8.05 2169.03 1457.70 1226.42 1762.84 2361.17 2776.04 0.00 0.00 0.00 2614.90 3071.27 1547.38 2169.03 1457.70 1226.42 4377.74 5432.44 4323.42 5.86 12.17 34.27 11.53 10.11 1.16 2.41 3.45 1.03 0.65 0.00 0.00 0.12 0.04 0.00 0.18 0.00 0.00 2.12 3.70 4.83 1.57 1.70 1.16 1.21 0.28 0.08 9.13 8.41 0.00 0.00 4.70 28.33 0.00 0.00 0.00 36.32 -0.39 -30.40 330.72 124.75 -22.04 2211.21 1469.48 1230.29 4719.99 5567.30 4302.54 0.00 0.00 0.00 1723.97 2618.33 2166.56

Sr. No.

Particulars

A Income a) Of Products manufactured by Company b) Of Products traded by Company Total Income Other Income Scrap Sale Sale of Coal Ash Interest Profit on sale of fixed assets Excise Duty / Commission Increase / Decrease in Stock Total B Expenditure Cost of Raw Material Consumed / Goods Sold Manufacturing Expenses including excise duty Personnel Expenses Administrative & Other Expenses Selling & Distribution Expenses Total C Net Profit before Interest, Depreciation, Tax and Extraordinary items Depreciation Interest & Financial Charges Profit / Loss before Tax Provision for Taxation - Current Tax - Deferred Tax D Profit / Loss after Tax but before Extra ordinary Items Extra-ordinary Items (Add)/Less taxation for earlier years Effect of change in accounting policy on account of deferred tax provisions E Profit/Loss after Extra-ordinary Items Less : Dividend on Preference Shares Less : Tax on Dividend Profit available for appropriation

1798.84 1032.96 786.19 2173.11 1865.19 1198.17 181.17 197.71 195.63 294.45 293.02 187.30 29.06 29.54 30.16 44.05 56.43 55.86 41.99 38.14 34.04 162.07 151.71 58.91 2051.06 1298.35 1046.02 4397.65 4984.68 3666.80 160.15 171.13 184.27 322.34 582.62 635.74

128.82 136.98 134.35 120.27 135.07 91.89 48.87 49.85 45.63 65.01 145.23 115.75 -17.54 -15.70 4.29 137.06 302.32 428.10 0.00 -17.54 0.00 -15.70 0.34 20.03 23.71 36.04 1.87 16.15 96.99 118.86 2.08 100.88 181.62 273.20 0.00 0.00 0.00 0.00 0.00 0.00

-17.54 0.00 0.00 -17.54

-15.70 0.00 0.00 -15.70

2.08 100.88 181.62 273.20 0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00 2.08 100.88 181.62 273.20

26

GENERAL INFORMATION JANKI CORP LIMITED (Originally incorporated as Janki Processors Private Limited on 16th September 1993 under the Companies Act, 1956. Subsequently, on 6th July 2000, our Company was converted into a Public Limited Company and the name was changed to Janki Processors Limited. On 31st December 2003, the name of our Company was changed from Janki Processors Limited to Janki Corp Limited. Currently the registered office of our Company is at 39/C, 1st Floor, Raj Industrial Complex, Military Road, Marol, Andheri (E), Mumbai 400 059. For details of changes in name and registered office, please see the section titled History and Corporate Structure beginning on page [] of this Draft Red Herring Prospectus.) Registered Office: 39/C, 1st Floor, Raj Industrial Complex, Military Road, Marol, Andheri (E), Mumbai 400 059. Telefax: +91-22-2859 3721 Website: www.jankicorplimited.com, E-Mail: ipo@jankicorplimited.com Contact person: Mr. Paras Pangaria, Company Secretary Company Registration No.: 154271 Registrar of Companies: Everest Building, 100, Marine Drive, Mumbai 400 002. Our Board of Directors Name of Director Mr. Raghunath Mittal Mr. Dinanath Mittal Mr. Shivnath Mittal Mr. M. P. Kedia Mr. Dwijendra Nath Ghorai Mr. Vijay Sharma Designation Managing Director Director Director Director Director Director

Brief Profile of Our Board of Directors Mr. Raghunath Mittal Mr. Raghunath Mittal aged 43 years, Managing Director, is a Commerce graduate. He is the core promoter of our Company and has been responsible for overall operations and growth of our Company since inception. He has more than 20 years of experience in various facets of business. He has been instrumental in the development of our Company. He has participated in the family business of trading of coal and hard coke upto 1980-81. He joined Akash Coke Industries Private Limited (a company engaged in the manufacture of hard coke) in 1980-81 and was a director of the company. He resigned in the year 2000, so as to focus his entire attention in the progress of our Company. His expertise in finance, administration and marketing has helped our Company. Mr. Dinanath Mittal Mr. Dinanath Mittal aged 42 years, Director, is a Commerce graduate. He has been associated with Janki Corp Limited since incorporation and has been overseeing the business of processing of fabrics. He is also associated with the family business of trading of coal and hard coke. He has also worked with Akash Coke Industries Private Limited. Mr. Shivnath Mittal Mr. Shivnath Mittal aged 37 years, Director, is also a Commerce Graduate engaged in the business of our Company. He has been associated with the operations of our Company since the year 2000-01 and has been overseeing the areas of administration, finance and also accounts of our Company. He is involved in the family business of trading of coal and hard coke. He has worked with Akash Coke Industries Private Limited.

27

Mr. M.P. Kedia Mr. M. P. Kedia aged 56 years, is a qualified chartered accountant and cost accountant. He is the founder partner of M/s. M. P. Kedia & Co., Chartered Accountants. He possesses experience of more than thirty-four year in the field of taxation, auditing and financial consultancy. He is also the promoter director of Pam Consultants Pvt. limited and Parmanand Finservices Limited Mr. Dwijendra Nath Ghorai Mr. Dwijendra Nath Ghorai aged 60 years, is graduate in Industrial Engineering. He is having vast experience of working in the steel industry and well versed with the technical aspects of the steel industry. He has worked with Bhilai Steel Plant for a period 30 years and has also worked with Jindal Vijaynagar Steel Ltd. as Vice President (Operations). He is presently working as Vice President (Technical) in Bhuwalka Steel Industries Pvt. Ltd. He is the recipient of National Metallurgist Award given by the Ministry of Steel and Mines and Indian Institute of Metals as recognition of his contribution in the field of Iron and Steel. He has also had training at steel plants in Germany, Austria and Bethlehem. Mr. Vijay Kumar Sharma Mr. Vijay Kumar Sharma aged 45 years, is a commerce graduate from Shri Ram College of Commerce, New Delhi. He has been associated with the textile industry for over a decade and is the promoter of Silvertone Synthetics Private Limited, at Bhilwara, a company engaged in the manufacture and marketing of textile fabrics. COMPLIANCE OFFICER Mr. Paras Pangaria aged 34 years, Company Secretary, has been designated as the Compliance Officer for this Issue. In case of any pre issue, post issue related problems such as non-receipt of letters of allotments/ share certificates/ demats credits/ refund orders etc., the investors are requested to contact the Compliance Officer at: Mr. Paras Pangaria Company Secretary, Janki Corp Limited, 39/C, 1st Floor, Raj Industrial Complex, Military Road, Marol, Andheri (E), Mumbai 400 059. Telefax: +91-22-2859 3721 E-mail: ipo@jankicorplimited.com LEGAL ADVISOR TO THE ISSUE M/s. Suman Khaitan & Co., W-13, West Wing, Greater Kailash II, New Delhi 110 048 Tel: +91-11-3096 4341 / 3096 6878 Fax: +91-11-2971 7108 Contact Person: Mr. Suman Jyoti Khaitan E-mail:suman@sumankhaitanco.com BANKERS TO OUR COMPANY State Bank of Bikaner and Jaipur, Bhopalganj, Bhilwara (Rajasthan), Tel: +91 -1482 -227096 Fax: +91 -1482-239201 Telex: 302-203SBBJIN E-mail:gmosectt@sbbjbank.com

28

State Bank of Mysore, Bellary Main Branch, Bellary 583 101. Tel: +91-8392-276444 Fax: 08392-272737 E-mail: bellary@sbm.co.in ISSUE MANAGEMENT TEAM BOOK RUNNING LEAD MANAGER TO THE ISSUE UTI Securities Limited. SEBI Registration No. INM000007458 MAPIN No. UIN 100000489 1st Floor, Dheeraj Arma, Anant Kanekar Marg, Station Road, Bandra (East), Mumbai 400 051. Tel: +91-22-5551 5806 / 5551 5805 Fax: +91-22-5502 3194 Website: www.utisel.com E-Mail: jankicorp@utisel.com Contact Person: Mr. Hitesh Mandot REGISTRAR TO THE ISSUE Bigshare Services Private Limited SEBI Regn. No.: INR0000001385 MAPIN No. UIN 100003467 E-2/3, Ansa Industrial Estate, Saki Vihar Road, Saki Naka, Andheri (East), Mumbai 400 072. Tel: +91-22-28473747/ 3474/ 0652/ 0653 Fax: +91-22-28475207 Website: www.bigshareonline.com E-Mail: bigshare@sify.com Contact Person: Mr. V. Kumareshan BANKERS TO THE ISSUE Bankers to the Issue will be appointed before filing of the Red Herring Prospectus with ROC. BROKERS TO THE ISSUE All members of the recognized Stock Exchanges would be eligible to act as Brokers to the Issue. SYNDICATE MEMBER(S) The Syndicate Member(s) to the Issue will be appointed before filing of the Red Herring Prospectus with ROC. AUDITORS TO OUR COMPANY O.P. Dad & Co. Chartered Accountants, Balaji Complex, Near Badal Talkies, Pur Road, Bhilwara 311 001 Tel: +91-1482-246011 / 246864 E-Mail: dad_op@sancharnet.in

A. Bafna & Co. Chartered Accountants, K-2, Raj Apartment, Keshav Path, Ahinsa Circle, C- Scheme, Jaipur 302 001 Tel: +91-141-237 5212 / 237 2572 Fax: +91-141-236 3426 E-Mail: bafna_anil@yahoo.com

29

CREDIT RATING This being an issue of Equity Shares, credit rating is not yet mandatory. TRUSTEES This being an issue of Equity Shares, appointment of trustees is not required. APPRAISING ENTITY The project of our Company has been appraised by State Bank of Bikaner and Jaipur. The relevant details of State Bank of Bikaner and Jaipur are mentioned hereunder: State Bank of Bikaner and Jaipur Bhopalganj, Bhilwara (Rajasthan). Tel: +91 -1482 -227096 Fax: +91 -1482-239201 Telex: 302-203SBBJIN E-mail: gmosectt@sbbjbank.com Website: www.sbbjbank.com BOOK BUILDING PROCESS Book Building refers to the process of collection of Bids, on the basis of the Red Herring Prospectus. The Issue Price is fixed after the Bid/Issue Closing Date. The principal parties involved in the Book Building Process are: Our Company; Book Running Lead Manager; Syndicate Member(s) who are intermediaries registered with SEBI or registered as brokers with BSE/NSE and eligible to act as underwriters; and Registrar to the Issue.

SEBI through its guidelines has permitted an issue of securities to the public through 100% Book Building Process, wherein: (i) maximum 50% of the Issue shall be allocated on a proportionate basis to QIBs, out of which 5% will be allocated to Mutual Funds registered with SEBI (ii) not less than 15% of the Issue shall be available for allocation on a proportionate basis to the Non-Institutional Bidders (iii) not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders including HUFs whose maximum bid amount is not mare than Rs. 100,000/-, subject to valid Bids being received at or above the Issue Price. Pursuant to amendments to the SEBI Guidelines, QIB Bidders are not allowed to withdraw their Bid(s) after the Bid/Issue Closing Date. For further details see the section titled Terms of the Issue on page [] of this Draft Red Herring Prospectus. Our Company shall comply with guidelines issued by SEBI for this Issue. In this regard, our Company has appointed UTI Securities Limited as the BRLM to procure subscription for the Issue. The process of book building under the SEBI Guidelines is relatively new and the investors are advised to make their own judgment about investment through this process of book building prior to making a Bid in the Issue. Illustration of Book Building and Price Discovery Process (Investors should note that this illustration is solely for the purpose of illustration and is not specific to the Issue) The Bidders can bid at any price within the Price Band. For instance, assume a Price Band of Rs.60 to Rs.72 per Equity Share, Issue size of 5,400 Equity Shares and receipt of five

30

Bids from the Bidders. A graphical representation of the consolidated demand and price would be made available at the bidding centres during the Bidding/Issue Period. The illustrative book as set forth below shows the demand for the Equity Shares of our Company at various prices and is collated from Bids from various investors. Bid Quantity 1,500 3,000 4,500 6,000 7,500 Bid Price (Rs.) Cumulative Quantity 72 1,500 69 4,500 66 9,000 63 15,000 60 22,500 Subscription 27.78% 83.33% 166.67% 277.78% 416.67%

The price discovery is a function of demand at various prices. The highest price at which our Company is able to issue the desired quantity of Equity Shares is the price at which the book cuts off, i.e., Rs.66 in the above example. Our Company, in consultation with the BRLM will finalize the Issue Price at or below such cut off price, i.e., at or below Rs.66. All Bids at or above this Issue Price and cut-off Bids are valid Bids and are considered for allocation in the respective category. Steps to be taken for bidding: 1. Check eligibility for bidding (see the section titled Issue Procedure - Who Can Bid on page [] of this Draft Red Herring Prospectus); 2. Ensure that the Bidder has a demat account and the demat account details are correctly mentioned in the Bid-cum-Application Form; 3. If your Bid is for Rs. 50,000 or more, ensure that you have mentioned your PAN and attach copies of your PAN card or PAN allotment letter to the Bid-cum-Application Form (see the section titled Issue Procedure on page [] of this Draft Red Herring Prospectus; 4. Ensure that the Bid-cum-Application Form is duly completed as per instructions given in this Draft Red Herring Prospectus and in the Bid-cum-Application Form. WITHDRAWAL OF THE ISSUE We, in consultation with the BRLM, reserve the right not to proceed with the Issue at any time after the Bid/Issue Opening Date but before Allotment, without assigning any reason therefor. BID/ISSUE PROGRAMME BID/ISSUE OPENS ON [] BID/ISSUE CLOSES ON [] Bids and any revision in Bids shall be accepted only between 10 a.m. and 3 p.m. (Indian Standard Time) during the Bidding Period as mentioned above at the bidding centres mentioned on the Bid-cum-Application Form except that on the Bid/Issue Closing Date, the Bids shall be accepted only between 10 a.m. and 1 p.m. (Indian Standard Time) and uploaded till such time as permitted by the BSE and the NSE on the Bid/Issue Closing Date. The Price Band will be decided by us in consultation with the BRLM. The announcement on the Price Band shall also be made available on the websites of the BRLM and at the terminals of the Syndicate. We reserve the right to revise the Price Band during the Bidding Period in accordance with SEBI Guidelines. The cap on the Price Band should not be more than 20% of the floor of the

31

Price Band. Subject to compliance with the immediately preceding sentence, the floor of the Price band can move up or down to the extent of 20%. In case of revision in the Price Band, the Bidding/Issue Period will be extended for three working days after revision of Price Band subject to the Bidding/Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to the BSE and the NSE, by issuing a press release, and also by indicating the change on the web sites of the BRLM and at the terminals of the Syndicate. UNDERWRITING AGREEMENT After the determination of the Issue Price and prior to filing of the Prospectus with RoC, we will enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be issued 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 Member(s) do not fulfill their underwriting obligations. The Underwriters have indicated their intention to underwrite the following number of Equity Shares: (This portion has been intentionally left blank and will be completed prior to filing of the Prospectus with RoC) Name and Address of the Underwriters Indicative Number Amount of Equity shares to Underwritten be Underwritten (Rupees In Lacs) [] [] [] []

[] []

The above-mentioned amount is indicative underwriting and would be finalized after pricing and actual allocation. The above underwriting is pursuant to the Underwriting Agreement dated []. In the opinion of our Board of Directors and the BRLM (based on a certificate given by the Underwriters), the resources of all the above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. All the abovementioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with stock exchange(s). Allocation among Underwriters may not necessarily be in proportion to their underwriting commitments. 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 laid down in the Underwriting Agreement, will also be required to procure/subscribe to the extent of the defaulted amount as specified in the Underwriting Agreement. Allotment to QIBs will be on proportionate basis as per the terms of this Draft Red Herring Prospectus.

32

CAPITAL STRUCTURE The Share Capital of our Company as on the date of filing of this Draft Red Herring Prospectus with SEBI is as set forth below: No. of Shares A. Authorised Capital 50,000,000 Equity Shares of Rs. 10/- each B. Issued, Subscribed and Paid-Up Capital Before the Issue 14,900,000 Equity Shares of Rs. 10/- each C. Present Issue to the Public in Terms of This Draft Red Herring Prospectus [] Equity Shares of Rs. 10/- each at a premium of Rs. []/- per share Out of Which Promoters Contribution Equity Shares of Rs. 10/- each at a premium of Rs. []/- per share Equity Shares of Rs. 10/- each at a premium of Rs. []/- per share are reserved for allotment to Permanent Employees (including Executive Director(s)) of our Company on a competitive basis. Equity Shares of Rs. 10/- each at a premium of Rs. []/- per share are reserved for allotment to Shareholders of Group Company* on a competitive basis. [] 557,000,000 Nominal Value Aggregate (Rs.) Value (Rs.) 500,000,000 500,000,000

149,000,000

238,000,000

[]

[]

57,000,000

[]

[]

25,000,000

[]

[]

50,000,000

D. Net Offer to the Public through this Draft Red Herring Prospectus [] Equity Shares of Rs. 10/- each at a premium of Rs. []/- per share E. Paid-Up Equity Share Capital after the Present Issue [] Equity Shares of Rs. 10/- each F. Share Premium Account Before the Issue After the issue * Group Company refers to JPL Industries Limited.

[]

425,000,000

[]

795,000,000

89,000,000 []

33

Notes to the Capital Structure: 1. Details of Increase / Modification in Authorized Share Capital Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Particulars of Increase/ Modification Rs 1 Lacs Rs.1 Lacs to Rs. 10 Lacs Rs 10 Lacs to Rs.50 Lacs Rs. 50 Lacs to Rs. 90 Lacs Rs. 90 Lacs to Rs. 95 Lacs Rs. 95 Lacs to Rs. 125 Lacs Rs. 125 Lacs to Rs.150 Lacs Rs. 150 Lacs to Rs. 500 Lacs Rs. 500 Lacs to Rs. 525 Lacs Rs. 525 Lacs to Rs. 550 Lacs Rs. 550 Lacs to Rs. 600 Lacs Rs. 600 Lacs to Rs. 900 Lacs Rs. 900 Lacs to Rs. 1400 Lacs Rs. 1400 Lacs to Rs.1800 Lacs Rs. 1800 Lacs to Rs.5000 Lacs (Rs. in Lacs) Total Authorised Date of Meeting AGM/EGM Equity Share Capital 1.00 10.00 50.00 90.00 95.00 125.00 150.00 500.00 525.00 550.00 600.00 900.00 1,400.00 1,800.00 5,000.00 Since Incorporation 20.09.93 22.11.93 07.04.94 08.04.94 27.12.95 09.02.96 09.03.97 24.12.98 22.01.99 17.03.04 25.05.04 03.03.05 30.03.05 23.08.05 EGM EGM EGM EGM EGM EGM EGM EGM EGM EGM EGM EGM EGM AGM

2. Equity Share Capital Build-up: Our existing Equity Share Capital has been subscribed and allotted as under: Date of Allotment / Fully Paid-up 16.09.93 No. of Equity Shares 20 Face Issue ConsidValue Price eration (Rs.) (Rs.) 10 10 Cash Remarks Cumulative Cumulative Paid-up Share Capital (Rs.) Premium (Rs) 200 Nil

26.03.94 24.04.94 08.06.94 25.04.96 07.07.97 11.07.97 05.01.98 14.01.98 31.03.98 10.10.98 04.12.98 27.01.99 23.12.99 03.03.00 02.09.02 08.03.04 19.03.04 09.08.04

489,480 182,500 228,800 100,000 40,000 110,000 800,100 350,000 28,500 430,000 410,000 325,000 85,000 1,798,000 2 122,598 500,000 2,012,500

10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10

10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 20

Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash

Allotment to subscribers to the Memorandum Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment

4,895,000

Nil

6,720,000 Nil 9,008,000 Nil 10,008,000 Nil 10,408,000 Nil 11,508,000 Nil 19,509,000 Nil 23,009,000 Nil 23,294,000 Nil 27,594,000 Nil 31,694,000 Nil 34,944,000 Nil 35,794,000 Nil 53,774,000 Nil 53,774,020 Nil 55,000,000 Nil 60,000,000 Nil 80,125,000 20,125,000

34

19.08.04 31.03.05 19.05.05 25.08.05 10.09.05

987,500 2,750,000 1,250,000 1,150,000 750,000

10 10 10 10 10

20 20 20 20 20

Cash Cash Cash Cash Cash

Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment

90,000,000 117,500,000 130,000,000 141,500,000 149,000,000

30,000,000 57,500,000 70,000,000 81,500,000 89,000,000

3. Promoters Contribution and Lock-in: We have the following five promoters, whose names figure in the Draft Red Herring Prospectus as Promoters in the paragraph on Our Promoters and their Background: Sr. Name of No. Promoter Date of Consid- No. of Face Issue / % of Lock in Allotment / eration Shares Value Transfer Post Period Transfer and (Rs.) Price (Rs) Issue (Years)* Made Fully Paid up Paid up Capital Mr. 16.09.1993 Cash 10 10.00 10.00 Raghunath 26.03.1994 Cash 159,990 10.00 10.00 Mittal 24.04.1994 Cash 40,000 10.00 10.00 08.06.1994 Cash 10,000 10.00 10.00 19.08.1995 Cash 500 10.00 10.00 05.01.1998 Cash 250,000 10.00 10.00 05.02.1998 Cash 1,000 10.00 10.00 12.02.1998 Cash 12,500 10.00 10.00 18.02.1998 Cash 10,000 10.00 10.00 31.03.1998 Cash 28,500 10.00 10.00 30.01.1999 Cash 150,500 10.00 10.00 10.03.2000 Cash 484,000 10.00 10.00 05.10.2000 Cash (400,010) 10.00 10.00 07.05.2001 Cash 185,000 10.00 2.00 20.08.2001 Cash 550,000 10.00 2.00 25.05.2002 Cash 515,000 10.00 2.10 06.02.2003 Cash 90,000 10.00 2.00 08.03.2004 Cash 122,598 10.00 10.00 19.03.2004 Cash 200,000 10.00 10.00 31.03.2005 Cash 800,000 10.00 20.00 19.05.2005 Cash 300,000 10.00 20.00 25.08.2005 Cash 220,000 10.00 20.00 10.09.2005 Cash 380,000 10.00 20.00 Sub-Total 4,109,588 Subscription Cash [] 10.00 [] in the Issue Total [] [] Raghunath 05.10.2000 Cash 10 10.00 10.00 Mittal (HUF) 29.01.2004 Cash 100,000 10.00 2.00 05.02.2004 Cash 100,000 10.00 2.00 17.02.2004 Cash 440,000 10.00 2.10 28.02.2004 Cash 364,800 10.00 2.10 12.03.2004 Cash 230,000 10.00 2.10 19.03.2004 Cash 150,000 10.00 10.00 31.03.2005 Cash 350,000 10.00 20.00 19.05.2005 Cash 105,000 10.00 20.00 25.08.2005 Cash 200,000 10.00 20.00

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10.09.2005 Cash Sub-Total Subscription Cash in the Issue Total Mrs. Madhu 26.03.1994 Cash Mittal 24.04.1994 Cash 08.06.1994 Cash 10.03.2000 Cash 12.03.2001 Cash 27.12.2003 Cash 19.03.2004 Cash 19.05.2005 Cash 31.03.2005 Cash 25.08.2005 Cash 10.09.2005 Cash Sub-Total Subscription Cash in the Issue Total Mr. Rahul 03.01.2004 Cash Mittal 29.01.2004 Cash 17.02.2004 Cash 31.03.2005 Cash 19.05.2005 Cash 25.08.2005 Cash 10.09.2005 Cash Sub-Total Subscription Cash in the Issue Total Mr. Rohit 29.01.2004 Cash Mittal 17.02.2004 Cash 12.03.2004 Cash 31.03.2005 Cash 19.05.2005 Cash 25.08.2005 Cash 10.09.2005 Cash Sub-Total Subscription Cash in the Issue Total Grand Total

25,000 10.00 2,064,810 [] 10.00 [] 5,000 10.00 5,000 10.00 10,000 10.00 746,000 10.00 60,000 10.00 165,000 10.00 150,000 10.00 105,000 10.00 700,000 10.00 180,000 10.00 70,000 10.00 2,196,000 [] 10.00 [] 130,000 10.00 100,000 10.00 350,000 10.00 600,000 10.00 270,000 10.00 300,000 10.00 150,000 10.00 1,900,000 [] 10.00 [] 100,000 10 251,000 10.00 50,000 10.00 300,000 10.00 45,000 10.00 175,000 10.00 125,000 10.00 1,046,000 [] 10.00 [] []

20.00 [] [] 10.00 10.00 10.00 10.00 2.00 2.10 10.00 20.00 20.00 20.00 20.00 [] [] 2.10 10.00 2.10 20.00 20.00 20.00 20.00 []

10.00 2.10 2.10 20.00 20.00 20.00 20.00 [] []

*20% of the Post-Issue Paid-up Equity Share Capital, as determined after the book-building process, would be locked-in for a period of three years from the date of allotment and the balance Pre-Issue Paid-up Equity Share Capital would be locked-in for a period of one year from the date of allotment. The lock-in period shall be reckoned from the date of allotment of Equity Shares in the present Issue.

36

4. The specific written consent has been obtained from the respective shareholders for inclusion of such number of their existing shares and further subscription in the Issue to ensure minimum Promoters contribution subject to lock-in to the extent of 20% of PostIssue Paid-up Equity Share Capital. 5. The Pre-Issue & Post-Issue shareholding pattern of our Promoters Group is as under: Sr. No. Particulars Pre-Issue Post-Issue*

Promoters Immediate Relatives of Promoters c. Companies in which 10% or more of the share capital is held by the Promoters / an immediate relative of the Promoters / a firm or HUF in [] [] which the Promoters or any one or more of their immediate relatives is a member d. Companies in which Company [] [] mentioned in c. above holds 10% or more of the share capital e. HUF or firm in which the [] [] aggregate share of the promoters and his immediate relatives is equal to or more than 10% of the total f. All persons whose 38,500 0.26% [] [] shareholding is aggregated for the purpose of disclosing in the prospectus as "Shareholding of the Promoter's Group". Total 11,379,899 76.38% [] [] *Post Issue Shareholding pattern will be determined after the Book-Building Process. 6. Shareholding Pattern of our Company before and after the Issue is as under: Pre-Issue Post-Issue* No. of Shares % Holding No. of Shares % Holding [] [] 11,316,398 75.95% Promoters [] [] Promoters Group 63,501 0.43% [] [] NRIs/FIIs [] [] Others 3,520,101 23.62% [] [] Total 14,900,000 100.00% * Post Issue Shareholding pattern will be determined after the Book-Building Process. Category

a. b.

% No. of Shares % No. of @ Rs. 10/- Holding Shares @ Holding Each Rs. 10/- Each 11,316,398 75.95% [] [] the 25,001 0.17% [] []

7. The entire pre-issue Equity Share Capital of our Company, other than the minimum promoters contribution, shall be locked-in for a period of one year from the date of allotment in the present Public Issue.

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8. The details regarding transactions in our Equity Shares during the past six months undertaken / financed directly or indirectly by our promoters, their relatives and associates and our directors are as under: Nature of Date of Face Issue / No. of Transaction Transaction Value Transfer Shares Price 1 Promoter & Mr. Raghunath Allotment 25.08.2005 10.00 20.00 220,000 Director Mittal 10.09.2005 10.00 20.00 380,000 2 Promoter Mrs. Madhu Mittal Allotment 25.08.2005 10.00 20.00 180,000 10.09.2005 10.00 20.00 70,000 3 Promoter Raghunath Mittal Allotment 25.08.2005 10.00 20.00 200,000 (HUF) 10.09.2005 10.00 20.00 25,000 4 Promoter Mr. Rahul Mittal Allotment 25.08.2005 10.00 20.00 300,000 10.09.2005 10.00 20.00 150,000 5 Promoter Mr. Rohit Mittal Allotment 25.08.2005 10.00 20.00 175,000 10.09.2005 10.00 20.00 125,000 6 Director Mr. M.P. Kedia* Transfer 13.08.2005 10.00 20.00 150,000 * Mr. M.P. Kedia is holding the said equity shares as Karta of M.P. Kedia (HUF). 9. The Promoters contribution is being brought-in in the specified minimum lot of Rs. 25,000/- per application from each individual and from the persons defined as Promoters as per SEBI (DIP) Guidelines, 2000. 10. The Equity Shares held by persons other than Promoters may be transferred to any other person holding shares prior to the Issue, subject to continuation of lock-in with transferees for the remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as applicable. The Equity Shares to be held by the Promoters under lock-in period shall not be sold/hypothecated/transferred during the lock-in period. However, the Equity Shares held by Promoters, which are locked in, may be transferred to and among Promoters / Promoters Group or to a new promoter(s) or persons in control of our Company, subject to the continuation of lock-in with the transferees for the remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as applicable. The Promoters may pledge their Equity Shares with banks or financial institutions as additional security for loans whenever availed by them from banks or financial institutions, provided the pledge of shares is one of the terms of sanction of loan. 11. Our Company, Promoters, Directors and the BRLM to this Issue have not entered into any buy-back, standby or similar arrangements for purchase of our Equity Shares issued by our Company through this Draft Red Herring Prospectus. 12. As on the date of filing of this Draft Red Herring Prospectus with SEBI, there are no outstanding warrants, options or rights to convert debentures, loans or other financial instruments into our Equity Shares. Further, our Company does not have any Employee Stock Option Plan. 13. Our Company has not capitalized any reserves since incorporation. Sr. Category No. Name of Person

38

14. An over-subscription to the extent of 10% of Net Offer to the Public can be retained for the purpose of rounding off to the nearer multiple of 1, while finalizing the Basis of Allotment. Consequently, the actual allotment may go up by a maximum of 10% of the Net Offer to Public, as a result of which, the post-issue paid up capital after the Issue would also increase by the excess amount of allotment 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. 15. In the case of over-subscription in all categories, upto 50% of the Net Issue to the public shall be available for Allocation on a proportionate basis to Qualified Institutional Buyers, of which 5% shall be available for Allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion would be available for Allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, atleast 15% of the Net Issue to the public shall be available for Allocation on a proportionate basis to NonInstitutional Bidders and atleast 35% of the Net 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. Under-subscription, if any, in any category, would be met with spill over from other categories at the sole discretion of our Company in consultation with the BRLM. 16. Only Eligible Employees of our Company who are Indian Nationals based in India and are physically present in India on the date of submission of the Bid-cum-Application Form would be eligible to apply in this Issue under the Employee Reservation Portion on competitive basis. Eligible Employees other than as mentioned hereinabove in this statement are not eligible to participate under the Employee Reservation Portion. Bid/ Application by Eligible Employees can also be made in the Net Issue to the Public and such Bids shall not be treated as multiple Bids. 17. Only Shareholders of our Group Company that is JPL Industries Limited who are Indian Nationals based in India and are physically present in India on the date of submission of the Bid- cum-Application Form would be eligible to apply in this Issue under the Shareholders of Group Company Portion on competitive basis. Bid/ Application by Shareholders of our Group Company can also be made in the Net Issue to the Public and such Bids shall not be treated as multiple Bids. 18. The unsubscribed portion, if any, out of the Equity Shares reserved for allotment to Eligible Employees and Shareholders of Group Company, will be added back to the categories of Non-Institutional Bidders and Retail Individual Bidders in the ratio of 50:50. In case of under subscription in the Net Issue spill over to the extent of under subscription shall be permitted from the Employee Reservation Portion and from the Shareholders of Group Company Portion, as per the discretion of our Company and the BRLM. 19. As on date of filing of this Draft Red Herring Prospectus with SEBI, the entire Issued Share Capital of our Company is fully paid-up. 20. Our top ten shareholders and the shares held by them two years prior to the date of filing the Draft Red Herring Prospectus with SEBI are as follows: Sr. No. 1 2 3 4 5 Name of the Shareholder Mr. Raghunath Mittal Mrs. Madhu Mittal Ram Doot Properties Private Limited Vishnu Priya Enterprises Pvt. Ltd. Mrs. Santosh Daima No. of Equity Shares 2,086,990 991,000 215,000 200,000 164,800

39

6 7 8 9 10

Mr. Rahul Mittal Felicity Finance & Leasing Pvt. Ltd. Homewell Distributors Pvt. Ltd. Akkal Paper Mills Pvt. Ltd. Mrs. Nirma Trafin Pvt. Ltd. Total

130,000 125,000 100,000 100,000 80,000 4,192,790

21. Our top ten shareholders and the shares held by them 10 days prior to the date of filing the Draft Red Herring Prospectus with SEBI are as follows: Sr. No. 1 2 3 4 5 6 7 8 9 10 Name of Share Holder Mr. Raghunath Mittal Mrs. Madhu Mittal Raghunath Mittal (HUF) Mr. Rahul Mittal Mr. Rohit Mittal Mr. Vishnu Prasad Bindal Mr. Prabhu Dayal Sharma Mrs. Meena Devi Sharma Mahesh Vishnu Trade & Credit Pvt. Ltd. Sugam Commercial (P) Ltd. Total No. of Equity Shares 4,109,588 2,196,000 2,064,810 1,900,000 1,046,000 845,000 705,000 300,000 200,000 150,000 13,516,398

22. Our top ten shareholders and the shares held by them as on the date of filing the Draft Red Herring Prospectus with SEBI are as follows: Sr. No 1 2 3 4 5 6 7 8 9 10 Name of Share Holder Mr. Raghunath Mittal Mrs. Madhu Mittal Raghunath Mittal (HUF) Mr. Rahul Mittal Mr. Rohit Mittal Mr. Vishnu Prasad Bindal Mr. Prabhu Dayal Sharma Mrs. Meena Devi Sharma Mahesh Vishnu Trade & Credit Pvt. Ltd. Sugam Commercial (P) Ltd. Total No. of Equity Shares 4,109,588 2,196,000 2,064,810 1,900,000 1,046,000 845,000 705,000 300,000 200,000 150,000 13,516,398

23. Our Company has not raised any bridge loan against the proceeds of this Issue. 24. There would be no further issue of capital whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner during the period commencing from submission of this Draft Red Herring Prospectus with SEBI until the Equity Shares issued through this Draft Red Herring Prospectus have been listed or application moneys refunded on account of failure of Issue. 25. We presently do not have any intention or proposal to alter our capital structure for a period of six months from the date of opening of this Issue, by way of split/ consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible into or exchangeable, directly or indirectly, for our Equity Shares) 40

whether preferential or otherwise. However, if we go in for acquisitions or joint ventures, we may consider raising additional capital to fund such activity or use Equity Shares as currency for acquisition or participation in such joint ventures. 26. Our Company undertakes that at any given time, there shall be only one denomination for the Equity shares of our Company and our Company shall comply with such disclosure and accounting norms as specified by SEBI from time to time. 27. The Equity Shares issued through this Issue shall be made fully paid up on allotment. 28. A Bidder cannot make a Bid for more than the number of Equity Shares being issued through this Issue, subject to the maximum limit of investment prescribed under relevant laws applicable to each category of investor. 29. Our Company has not revalued assets since inception and has not issued any shares out of the revaluation reserves or for consideration other than cash. 30. We had 47 members as on the date of filing of Draft Red Herring Prospectus with SEBI. 31. We confirm that the Promoters contribution, being brought in this Issue, shall be brought in atleast one day before the issue opens and if not deployed in the Project, shall be kept in an escrow account with a Scheduled Commercial Bank and shall be released to our Company along with the public issue proceeds. A copy of the Board Resolution stating that the equity shares towards the said Promoters contribution shall be allotted together with the Allotment in this Issue alongwith the Chartered Accountants certificate certifying that the Promoters contribution have been brought in atleast one day before the issue opens, will be filed with SEBI.

41

OBJECTS OF THE ISSUE The objects of the Issue are to raise capital for part financing the funds requirement for: Expansion of manufacturing capacity of Sponge Iron Plant from existing 60,000 MTPA to 1,80,000 MTPA Setting up of Induction Furnace of 15 MT and Continuous Casting Machine for production of 54,000 MTPA Steel Billets Setting up of captive power plant of 10 MW In addition to the above, we also require funds for working capital margin, preliminary & preoperative expenses and contingencies. The other objects of the issue also include creating a public trading market for the Equity Shares of our Company by listing them on the Stock Exchange. We believe that the listing of our Equity Shares will enhance our visibility and brand name and enable us to avail of future growth opportunities. The main objects clause of the Memorandum of Association of our Company enables us to undertake the existing activities and the activities for which the funds are being raised by us through the present issue. Further, we confirm that the activities we have been carrying out until now is in accordance with the objects clause of our Memorandum of Association. Cost of Project and Means of Finance Our Company is engaged in the processing and marketing of fabrics at Bhilwara (Rajasthan) and manufacturing of Sponge Iron at Bellary (Karnataka). Our Company initially planned for an expansion of manufacturing capacity of Sponge Iron Plant from existing 60,000 MTPA to 1,80,000 MTPA with a capital outlay of Rs. 5,230 Lacs. However, in the initial stage of implementation, considering the potential growth in the steel sector and to harness the opportunities, our Company further planned to set up a 15 MT Induction Furnace and Continuous Casting Machine for the manufacturing of 54,000 MTPA Steel Billets with a total capital outlay of Rs. 880 Lacs. The main raw material required for the proposed plant is sponge iron, MS Scrap and pig iron. A major share of the Sponge Iron produced by our Company would be captively consumed in the Induction Furnace. Further, to utilize the heat content of the waste gases generated from the production of sponge iron, we are also setting up a captive power plant of 10 MW with a capital outlay of Rs. 3,970 Lacs. The Power Plant would cater to the power requirements of Sponge Iron Plant and Induction Furnace. Thus, the total capital outlay for the entire expansion plan including working capital margin, preliminary & preoperative expenses and contingencies would be Rs. 10,730 Lacs, which would be partly funded by Issue of Rs. 5,000 Lacs (excluding Promoters Contribution in the Issue aggregating Rs. 570 Lacs). Our Company has received the No Objection from State Bank of Bikaner and Jaipur (SBBJ) and State Bank of Mysore (SBM) vide letter dated 5th October 2005 and 16th November 2005 respectively for the proposed public issue. Appraisal As per the requirements of clause 2.2.2 (a) (ii) & (b) (i) of SEBI (DIP) Guidelines, 2000, as amended from time to time, the Project has been appraised by State Bank of Bikaner and Jaipur (SBBJ) vide their appraisal report dated 7th January 2006. Further, subject to the following disclaimer, SBBJ vide letter dated 25th January 2006 has given its No Objection to incorporate the required details of the Appraisal Report in this Draft Red Herring Prospectus: This Information Memorandum ( the document) has been prepared by SBBJ and its contents are confidential and the property of SBBJ. Also, further use of the same shall be only with the prior approval of SBBJ. The document is not intended to provide a basis for any investment decision and should not be considered as a recommendation by SBBJ or the connected persons to any recipient (s) of the document. SBBJ does not guarantee the

42

accuracy, adequacy or completeness of any information contained in the document and is not responsible for any errors or omissions or for the statements, observations and conclusions drawn from the use of such information. Neither SBBJ nor any of the connected persons shall be liable for any direct or consequential loss arising from the use of the document or its contents. Each person, institution, bank or investor to whom the document is made available by SBBJ must make his/ her/ its/ their own assessment in respect of any investment and anyone placing reliance on the document shall be doing so at their own risk. In this notice, SBBJ means State Bank of Bikaner and Jaipur and connected person means, in relation to SBBJ, its shareholders, directors, officers and employees. There has been no revision in the Cost of Project and Means of Finance after the date of issue of Appraisal Report. Risk factors as mentioned in SBBJs Appraisal Report are specified in Risk Factors beginning on Page [] of this Draft Red Herring Prospectus. COST OF PROJECT AND MEANS OF FINANCE The cost of project and means of finance as appraised by SBBJ are given below: Cost of Project Sr. No. 1 2 3 4 5 6 Particulars Setting up of Sponge Iron Plant Setting up of Captive Power Plant Setting up of Induction Furnace & Continuous Casting Machine Preliminary & Preoperative Expenses Contingencies Working Capital Margin Total Amount (Rs. in Lacs) 4,400.00 3,970.00 880.00 655.00 300.00 525.00 10,730.00

Means of Finance Sr. No. 1 Particulars Equity Share Capital including Share Premium: Promoters Contribution Public Issue Internal Accruals Term Loan from Banks: State Bank of Bikaner and Jaipur State Bank of Mysore Total 1,750.00 5,000.00 6,750.00 580.00 1,900.00 1,500.00 Amount (Rs. in Lacs)

2 3

3,400.00 10,730.00

We hereby confirm that excluding the amount to be raised through the proposed Public Issue, firm arrangements of finance through verifiable means towards 91.27% of the stated means of finance have been made.

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The further details of Cost of Project and Means of Finance are mentioned hereunder: Cost of Project

1. Setting up of Sponge Iron Plant (Expansion from 60,000 MTPA to 1,80,000 MTPA):
Sr. No. i ii iii Particulars Buildings & Civil Works Plant & Machinery Misc. Fixed Assets Total Amount (Rs. in Lacs) 1,100.00 2,900.00 400.00 4,400.00

i) Buildings & Civil Works: Our Company has retained services of Mr. C.B. Srinivasa Reddy, Chartered Engineer, who has given the estimates; vide a letter Dated August 8, 2005, for the cost of construction of buildings and other civil works as under:
Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Description of the area Civil Foundation for Kiln & Cooler Civil Foundation for Structures Control Room Building Coal Shed Weigh Bridge Room Iron Ore Stock Yard Hot well & Pump House GCT Pump House DSS Pump House DG Set Room Sponge Iron Fines Shed Canteen Kiln Maintenance Platform Iron Ore Handling Plant Coal Handling Plant Stock House ABC Building Kiln - Cooler Transfer House Cooler Discharge Circuit Intermediate Bin Building Product House Pollution Control Systems Approach Road Architect Supervision Charges Sewerage & Water Piping Land Development Total Cost of Construction Amount (Rs. in Lacs) 250.00 110.00 20.00 55.00 4.00 30.00 20.00 20.00 4.00 10.00 50.00 7.00 10.00 40.00 40.00 100.00 65.00 10.00 15.00 5.00 40.00 90.00 60.00 15.00 20.00 10.00 1,100.00

ii) Plant & Machinery: Our Company proposes to purchase plant & machinery amounting to Rs.2900 Lacs comprising Indigenous plant & machinery amounting to Rs.2396.64 Lacs and Imported Machinery amounting to Rs. 503.36 Lacs for setting up of Sponge Iron Plant. The main plant and machinery required includes 4 Complete Kiln and Cooler Assembly, Refractories

44

including installation, Electro Static Precipitator & Gas Conditioning Tower, Wheel Loaders, Raw Material Preparation Plant, Weigh Feeder, Volumetric Feeder & Instrumentation Package, Conveyor equipment, Kiln and Cooler Gear Boxes and Accessories, Welding Machines, Rectifiers, Slings, De Shackles, MIG Machines, Hydraulic Jacks, Man coolers, Conveyor Skirt Rubbers, Chain Pulley Blocks, Kiln Feed Tube, Air Tubes, Wet Scrapper conveyor, Reverse Osmosis Plant for water softening, Chain Conveyors for ESP, Vibrating Feeder & Magnetic, Separators, Weigh Bridge, Fly Ash Brick Making Machine, Dumpers etc. For further details about the Plant & Machineries, please refer section titled Plant & Machinery beginning on page [] of this Draft Red Herring Prospectus.

iii) Miscellaneous Fixed Assets: Our company proposes to invest in the following Miscellaneous Fixed Assets for the purpose of setting up of Sponge Iron Plant: (Rs. in Lacs) Sr. No. Particulars Amount 1 Welding Machines, Rectifiers, Slings, De Shackles, MIG Machines, 40.00 Hydraulic Jacks, Man coolers, Conveyor Skirt Rubbers, Chain Pulley Blocks etc. 2 Mech. Misc. items Viz., Foundation Bolts, Grinding Machines, 50.00 Hardware, Metallic Gaskets, Packing Materials, Conveyor Couplings, Plummer Blocks, Sleeves etc. 3 Piping 39.00 4 Valves & Pipe fittings 17.13 5 Vehicles 25.00 6 Laboratory Equipment as per I.S.I. requirements 25.00 7 Furniture & Office Equipment 10.00 8 Electrical Panels 64.48 9 Variable Frequency Drives 91.56 10 PLC for Control Room 37.83 400.00 Total 2. Setting up of Captive Power Plant: Our company proposes to set up a Captive Power Plant for the generation of power. The contract for the erection, installation and commissioning of Captive Power Plant will be given to single supplier on turn-key basis. Our Company estimates capital outlay of Rs.3,970 Lacs on the commissioning and installation of the power plant on the basis of the quotation of Thermax Limited (a Company located at Pune), dated 30th September, 2005, order for which is yet to be placed. The price as estimated by Thermax Limited includes Customs Duty, CIF value of import, Erection & Commissioning, applicable Taxes and Duties, WCT on Civil Works.
We confirm that the promoters / directors / key management personnel of our Company do not have any connection whatsoever with Thermax Limited. 3. Setting up of Induction Furnace & Continuous Casting Machine: Sr. Amount Particulars No. (Rs. In Lacs) i Buildings & Civil Works 51.00 829.00 ii Induction Furnace and Continuous Casting Machine (Erection, installation and commissioning will be given to single supplier on Turn-key basis) Total 880.00

45

i) Buildings & Civil Works: Our Company has retained services of Mr. C.B. Srinivasa Reddy, Chartered Engineer, as per his estimates; vide a letter Dated August 8, 2005, the cost to be incurred o the Civil Foundation for Induction Furnace will be Rs. 51 Lacs. ii) Induction Furnace and Continuous Casting Machine (Erection, installation and commissioning will be given to single supplier on Turn-key basis): For the purpose of setting up of Steel Billet Plant, the contract for the erection, installation and commissioning of Induction Furnace & Continuous Casting Machine, will also be given to single supplier on turnkey basis. We estimate capital outlay of Rs. 829 Lacs on the commissioning and installation Induction Furnace and Continuous Casting Machine on the basis of the quotation of Electrotherm (India) Limited, Ahmedabad dated 18th August, 2005. The order for this is yet to be placed.
For further details about the Plant & Machinery involved, please refer section titled Plant & Machinery beginning on page [] of this Draft Red Herring Prospectus. We confirm that the promoters / directors / key management personnel of our Company do not have any connection whatsoever with Electrotherm (India) Limited.

4. Preliminary & Preoperative Expenses: Our management expects following expenses to be incurred till the completion of the project:
Sr. No. Particulars 1 Public Issue Expenses: Fees of BRLM, Registrar, Legal advisors, Auditors etc. Underwriting Commission, Brokerage and Selling Expenses Advertisement and Marketing Printing and Stationery Distribution, Postage, etc. Other Charges 2 Interest during construction period 3 Financial Expenses 4 Establishment Expenses 5 Travelling Expenses 6 ROC Charges 7 Miscellaneous Expenses Total Amount 85.00 125.00 80.00 125.00 10.00

425.00 170.00 15.00 15.00 10.00 15.00 5.00 655.00

5. Contingencies: Contingency at approximately 3% has been provided on total cost of project excluding the amount of contingencies. This includes contingencies arising due cost overruns and change in prices. 6. Working Capital Margin: Our company has estimated total working capital requirement of Rs. 925.00 lacs for the project, which comprises of our margin of Rs. 525.00 lacs, which would be financed through the Public Issue and remaining Rs. 400 lacs is proposed to be financed by way of Bank Borrowing, presently being enjoyed by our Company.

46

Means of Finance

1. Equity Share Capital including Share Premium: Promoters Contribution: The Total Promoters Contribution has been envisaged as Rs. 1,750.00 Lacs, out of which our Promoters have already contributed Rs. 1,180.00 Lacs by way of subscription towards Equity Share Capital comprising of Rs. 590.00 Lacs and Share Premium aggregating Rs. 590 Lacs.
Further, our Promoters will contribute to the extent of Rs. 570.00 Lacs in this Issue at a price, which will be determined through the Book Building Process, out of which; as certified by Chartered Accountant, as on 2nd January 2006, our Promoters have already brought in Rs. 420.00 Lacs in form of Share Application Money, which has been deployed in the Project accordingly.

Public Issue: Our Company proposes to raise Rs. 5,000 lacs through Issue of Equity Shares (excluding Promoters Contribution in the issue aggregating Rs. 570 Lacs), which are being issued in terms of this Draft Red Herring Prospectus. The Issue includes reservations of Rs. 250 Lacs for Eligible Employees of our Company and Rs. 500 Lacs for Shareholders of Group Company. 2. Internal Accruals: As per the estimates of our Company the project is to part financed by way of internal accruals to the extent of Rs. 580.00 lacs out of the cash accruals arising during the period April 2005 to March 2006. Our Company already has reserves to the extent of Rs. 519.99 Lacs as on 31.08.2005 and does not foresee any difficulty in achieving the internal accrual level of Rs.580 lacs by March 2006. 3. Term Loan: The project is proposed to be financed by way of Rupee Term Loan aggregating Rs. 3,400 Lacs, which has been sanctioned by a consortium of SBBJ and State Bank of Mysore (SBM) as under:
Sr. No. 1 2 Name of Lender State Bank of Bikaner and Jaipur State Bank of Mysore Total Date of Sanction Letter 15th March 2005 4th June 2005 Amount (Rs. in Lacs) 1,900.00 1,500.00 3,400.00

SCHEDULE OF IMPLEMENTATION Our Company has commenced the implementation of project from the month of January 2005. Our Company has already acquired land measuring 61.25 Acres converted for industrial use before the commencement of the project, which is sufficient for execution of the current project. The work is being carried out and all the activities are carried out as envisaged. The following table would highlight the progress made so far in the execution of the project:

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Activity Commencement Completion Acquisition of Land Already Acquired Already Acquired Building & Civil Works Sponge Iron Plant April 2005 January 2006 Induction Furnace & Continuous Casting Machine February 2006 February 2007 Placements of Order for Machinery Sponge Iron Plant January 2005 March 2006 Captive Power Plant May 2006 June 2006 Induction Furnace & Continuous Casting Machine May 2006 June 2006 Installation of Plant and Machinery Sponge Iron Plant March 2005 March 2006 Captive Power Plant September 2006 March 2007 Induction Furnace & Continuous Casting Machine September 2006 March 2007 Commencement of Commercial Production Sponge Iron Plant April 2006 Captive Power Plant April 2007 Induction Furnace & Continuous Casting Machine April 2007 Deployment of Funds in the Project We have already deployed Rs. 4621.85 Lacs as follows in the Project till 2nd January 2006, which has been certified by A. Bafna & Co., Chartered Accountants vide their certificate dated 4th January 2006: Sr. No. 1 Particulars Setting-up of Sponge Iron Plant Buildings & Civil Works Plant & Machinery Misc. Fixed Assets Preliminary & Preoperative Expenses Working Capital Margin Total 997.82 2,849.90 399.51 Amount (Rs. in Lacs)

2 3

4247.23 134.81 239.81 4621.85

The means of finance for the above-mentioned deployment of funds is as under: Sr. No. 1 Particulars Equity Share Capital including Share Premium Promoters Contribution (Including Share Application Money of Rs. 420.00 Lacs) Internal Accruals Term Loan from Banks: State Bank of Bikaner and Jaipur State Bank of Mysore Total Amount (Rs. in Lacs)

2 3

1,600.00 80.00 1697.43 1244.42 4621.85

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The overall cost of the proposed project and the proposed year wise break up of deployment of funds are as under: Sr. No. Particulars Already 2005Deployed 06 till 2nd IV Qtr. Jan, 2006 2006-07 I Qtr. II Qtr. III Qtr. Total Amount IV Qtr. (Rs. in Lacs) 0.00 0.00 0.00 1,100.00 2,900.00 400.00

1 Setting up of Sponge Iron Plant: 997.82 102.18 0.00 0.00 0.00 Building & Civil Works 2,849.90 50.10 0.00 0.00 0.00 Plant & Machinery 399.51 0.49 0.00 0.00 0.00 Misc. Fixed Assets 2 Setting up of Induction Furnace & Continuous Casting Machine 0.00 15.00 18.11 10.00 5.00 Building & Civil Works 0.00 150.00 394.28 200.00 Plant & Machinery 3 Setting up of Captive Power Plant Plant & Machinery 4 Preliminary & Pre Operative Expenses 5 Contingencies 6 Working Capital Margin Total 0.00 0.00 1,100.00 1,750.00 120.00 90.00

2.89 84.72

51.00 829.00

950.00 170.00 74.80 35.39

3,970.00 655.00

134.81 200.00

0.00

0.00

0.00 0.00

150.00 0.00

100.00 80.00

50.00 45.00

300.00 525.00

239.81 160.19

4,621.85 527.96 1,388.11 2,394.28 1,409.80 388.00 10,730.00

Interim Use of Funds Pending utilization in the project, the proceeds of the Issue will be utilized either for reducing the working capital limits utilization level to save interest cost or invested in Bank Deposits and/or Gilt Edged Government Securities, either directly or through Mutual funds. In case the Issue does not go as planned, we will make alternative arrangements like availing of fresh loans from banks and also internal accruals to meet the shortfall, if any.

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BASIC TERMS OF THE ISSUE The Equity Shares being issued are subject to the provisions of the Companies Act, our Memorandum and Articles of Association, the terms of this Draft Red Herring Prospectus, Red Herring Prospectus, Prospectus, Bid-cum-Application Form, the Revision Form, the Confirmation of Allocation Note and other terms and conditions as may be incorporated in the Allotment Advices and other documents/certificates that may be executed in respect of the Issue. The Equity Shares shall also be subject to laws as may be applicable, guidelines, notifications and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, the Government of India, the Stock Exchanges, the 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 to be issued shall be subject to the provisions of our Memorandum and Articles of Association and rank pari passu with the existing Equity Shares of our Company in all respects including rights in respect of dividend. The allottees will be entitled to dividend, voting rights or any other corporate benefits, if any, declared by our Company after the date of allotment. Face Value and Issue Price The Equity Shares having a face value of Rs. 10/- each are being offered in terms of this Draft Red Herring Prospectus at a price of Rs. [] per Equity Share. At any given point of time there shall be only one denomination of the Equity Shares of our Company, subject to applicable laws. Rights of the Equity Shareholder Subject to applicable laws, rules, regulations and guidelines and the Articles of Association, the equity shareholders have, inter alia, the following rights: Right to receive dividend, if declared; Right to attend general meetings and exercise voting rights, unless prohibited by law; Right to vote on a poll either in person or by proxy; Right to receive offer for rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation; Right of free transferability; and Such other rights, as may be available to a shareholder of a listed public limited company under the Companies Act, Listing Agreement with the Stock Exchanges and the Memorandum and Articles of our Company. For a detailed description of the Articles of Association of our Company relating to voting rights, dividend, forfeiture and lien and/or consolidation/splitting, etc., see Main Provisions of Articles of Association beginning on page [] of this Draft Red Herring Prospectus. Market Lot and Trading Lot In terms of existing SEBI Guidelines, the trading in the Equity Shares shall only be in dematerialized form for all investors and hence, the tradable lot is one Equity Share. In terms of Section 68B of the Companies Act, the Equity Shares shall be allotted only in dematerialized form in multiples of one Equity Share subject to a minimum Allotment of [] Equity Shares. Minimum Subscription If we do not receive the minimum subscription of 90% of the Net Issue to the Public including devolvement of the members of the Syndicate within 60 days from the Bid Closing Date, we shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after we become liable to pay the amount, we shall pay interest prescribed under Section 73 of the Companies Act 1956.

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ISSUE STRUCTURE The present Issue comprises of [] Equity Shares of Rs. 10 each aggregating Rs. 5,000 Lacs (excluding Promoters Contribution aggregating Rs. 570 Lacs) is being made through the 100% Book Building process. Details of the Issue structure are tabulated below: Employees Shareholders of Group Companies QIBs NonInstitutional Bidders Retail Individual Bidders

[] Up to [] Net Issue to the Equity Shares Public less allocation to NonInstitutional Bidders and Retail Individual Bidders Percentage Up to 5% of Up to 10% of Upto 50% of of Issue the Issue the Issue Size the Net Issue to Size Size (excluding the Public* or available (excluding Promoters the Net Isssue for Promoters Contribution) to the Public allocation Contribution) less allocation to NonInstitutional Bidders and Retail Individual Bidders, subject to mandatory allotment of minimum 10% of the Issue size to QIBs. However, upto 5% of the QIB Portion shall be available for allocation to Mutual Funds on proportionate basis. Basis of Proportionate Proportionate Proportionate Allocation as follows: if (a) Equity respective Shares shall be category is allocated on a oversubscr proportionate -ibed basis to Mutual Funds in the Mutual Funds

Number of Up to Equity Equity Shares* Shares

Minimum of Minimum of [] [] Equity Equity Shares. Shares

Minimum 15% of Net Issue to the Public or Net Issue to the Public less allocation to QIB Bidders and Retail Individual Bidders.*

Minimum 35% of Net Issue to the Public or Net Issue to the Public less allocation to QIB Bidders and Non Institutional Bidders.*

Proportionate Proportionate

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Minimum Bid

[] Equity Shares and in multiples of [] Equity Shares thereafter.

[] Equity Shares and in multiples of [] Equity Shares thereafter.

Maximum Bid

Such number of Equity Shares so as to ensure that the bid amount does not exceed Rs. 25,000,000 Mode of Compulsorily Allotment in dematerialize d form Trading One Equity Lot Share Who can Indian Apply ** Nationals who are permanent employees or Executive Director(s) of our Company based in India and are present in India on the date of submission of Bid-cumApplication Form.

Such number of Equity Shares so as to ensure that the bid amount does not exceed Rs. 50,000,000

Such number of Equity Shares that the Bid Amount exceeds Rs 1,00,000 and in multiples of [] Equity Shares. Not exceeding Not exceeding the size of the the size of the Issue subject to Issue subject regulations as to regulations applicable to as applicable the Bidder to the Bidder

Portion; (b) Equity Shares shall be allocated on a proportionate basis to all QIBs including Mutual Funds Receiving allocation as per (a) above. Such number of Equity Shares that the Bid Amount exceeds Rs 1,00,000 and in multiples of [] Equity Shares.

[] Equity Shares and in multiples of [] Equity Shares.

Such number of Equity Shares so as to ensure that the Bid Amount does not exceed Rs. 1,00,000

Compulsorily in Compulsorily in Compulsorily in Compulsorily in dematerialized dematerialized dematerialized dematerialised form form form form One Equity Share Shareholders of our Group Company i.e. JPL Industries Ltd. who are Indian Nationals, are based in India and are physically present in India on the date of submission of bid cum Application form. One Equity Share Public financial institutions, as specified in Section 4A of the Companies Act, scheduled commercial banks, mutual funds, foreign institutional investor registered with SEBI, multilateral and bilateral development financial institutions, Venture Capital One Equity Share Resident Indian individuals, HUF (in the name of Karta), companies, corporate bodies, NRIs, societies and trusts One Equity Share Individuals (including NRIs and HUFs in the name of Karta) applying for Equity Shares such that the Bid Amount does not exceed Rs. 1,00,000 in value.

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Terms of Margin Payment Amount applicable to Eligible Employees at the time of submission of Bid-cumApplication Form to the Syndicate

Margin amount applicable to shareholders of Group Company i.e. JPL Industries Ltd. at the time of submission of Bid cum Application form to the syndicate.

Funds registered with SEBI, foreign Venture capital investors registered with SEBI, State Industrial Development Corporations, insurance companies registered with the Insurance Regulatory and Development Authority, provident funds with minimum corpus of Rs. 2500 Lacs and pension funds with minimum corpus of Rs. 2500 Lacs in accordance with applicable law. Margin Amount applicable to QIB Bidders at the time of submission of Bid-cumApplication Form to the syndicate

Margin Amount applicable to Non Institutional Bidders at the time of submission of Bid-cumApplication Form to the syndicate

Margin Amount applicable to Retail Individual Bidders at the time of submission of Bid-cumApplication Form to the syndicate

Margin Amount

Full Amount bidding

Bid Full on Amount bidding

Bid At least 10% of Full on the bid amount Amount on bidding. bidding

Bid Full on Amount bidding

Bid on

*Subject to valid Bids being received at or above the Issue Price. Under-subscription, if any, in 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 and BRLM subject to applicable provisions of SEBI Guidelines. **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.

53

Under subscription if any in the reservation category shall be added back to the net offer to the public portion. Under subscription, if any, in the Non-institutional Portion and Retail Portion shall be allowed to be met with spillover from the other categories, at the sole discretion of our Company and BRLM. In case of Under-subscription in the Qualified Institutional Buyers Portion (i.e. subscription less than 10% mandatory of the Issue size), the same shall not be available to other categories and full subscription monies shall be refunded. However, if the aggregate demand by Mutual Funds is less than 5% of QIB Portion, the balance share available for allocation in the Mutual Fund Portion will first be added to the QIB Portion and be allocated to proportionately to QIB Bidders. In the event that the aggregate demand in the QIB Portion has 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 BRLM and the Designated Stock Exchange. Withdrawal of the Issue Our Company in consultation with the BRLM reserves the right not to proceed with the issue any time after the Bid/Issue opening date but before allotment without assigning any reason thereof. Bid/Issue Programme BID/ISSUE OPENS ON BID/ISSUE CLOSES ON [] []

Bids and any revision in Bids shall be accepted only between 10 a.m. and 3 p.m. (Indian Standard Time) during the Bidding Period as mentioned above at the bidding centres mentioned on the Bid-cum-Application Form except that on the Bid/Issue Closing Date, the Bids shall be accepted only between 10 a.m. and 1 p.m. (Indian Standard Time) and uploaded till such time as permitted by the BSE and the NSE on the Bid/Issue Closing Date. The Price Band will be decided by us in consultation with the BRLM. The announcement on the Price Band shall also be made available on the websites of the BRLM and at the terminals of the Syndicate. We reserve the right to revise the Price Band during the Bidding Period in accordance with SEBI Guidelines. The cap on the Price Band should not be more than 20% of the floor of the Price Band. Subject to compliance with the immediately preceding sentence, the floor of the Price Band can move up or down to the extent of 20%. In case of revision in the Price Band, the Bidding/Issue Period will be extended for three working days after revision of Price Band subject to the Bidding/Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to the BSE and the NSE, by issuing a press release, and also by indicating the change on the web sites of the BRLM and at the terminals of the Syndicate.

54

BASIS FOR 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 offered by way of book building.

Investors should read the following summary with the Risk Factors included from page number [] to [] and the details about our Company and its financial statements included in the Red Herring Prospectus. The trading price of the equity shares of our Company could decline due to these risks and you may lose all or part of your investments. QUALITATIVE FACTORS Professional Management Our company is managed by the qualified management team with several years of relevant experience in their domain. Our managing director, Mr. Raghunath Mittal is having experience of over two decades inter alia in the business of textile, coke and iron and steel industry. The qualified Board of Directors, having a vast experience in the industry, supports the management team. Quality Standards Our Company has always believed in the quality in our processes and products. We adhere to quality standards as prescribed by our customers, which has given us a brand name among our customers. Strong Customer Relationship Our Company has strong customer base in the domestic market. Over a period of time, our Company has built-up a track record for quality products and timely delivery. The textile division of our Company is having an established network of the agents spread through out the country ensuring availability of the products at competitive prices to the end users. The marketing and R&D team of our Company closely interact with the customers and understand their requirements and develop the products as per their requirements. Our Company has been able to retain customers and further strengthen the relationship by providing them end-to-end solutions for their requirements. Capability to Manage Multiple and Large Orders Large orders require capabilities to manage large workforce, complex sourcing, production planning and ability to ensure timely delivery to the customer. Over the years, our Company has developed the skills to manage multiple large orders concurrently. Our Company has also developed a diversified product range, which has helped us to grow. Vertical Integration Captive Power Plant: Power is one of the major inputs for the manufacturing process in Iron and Steel Industry. Our Company will be meeting entire power requirements through this captive power plant, with a capacity of 10 MW.
The waste gases coming out of the Rotary Kilns of sponge iron plant would be diverted to Waste Heat Recovery Boiler (WHRB) by installing damper at Chimney Inlet. The temperature of waste gases would be dropped from around 10000C to 1750C in the WHRB and the heat recovered would be made available to the Turbo Generator. To help the gases to pass through the WHRB, induced draft fans are provided at the outlet of WHRB. The steam generated from one 100 TPD Sponge iron plant would be 10.3 Tonnes / hr. at 67 KSC (Kg. per Square Centimeters) pressure at 4850C temperature. 55

The steam generated as above from two nos. of WHRB boilers would be fed to 10 MW Turbo Generator for generating power.

Steel Billets: We are setting up a steel billet manufacturing plant. The main raw material required for the manufacture of the steel billets is sponge iron. We have already set up a 60,000 MTPA sponge iron manufacturing unit and are under the process of expanding our manufacturing capacity to 1,80,000 MTPA. Therefore, the raw material required for the manufacture of Steel Billets would be available in-house reducing our cost of input and thereby increasing profitability. Commercial Production Commenced The commercial production of the manufacturing facility with a capacity of 60,000 MMTPA for Sponge Iron has already been commenced and is operating successfully. Further, the implementation of expansion in manufacturing facility from existing 60,000 MMTPA to 1,80,000 MMTPA in under advance stages and as per the Schedule of Implementation, the commercial production is expected to be commenced from April 2006. Firm Loan Tie Ups The entire loan requirement for the proposed project amounting to Rs. 3400.00 Lacs has already been sanctioned to our Company. A consortium of State Bank of Bikaner and Jaipur (SBBJ) and State Bank of Mysore (SBM) vide letter dated 15th March 2005 and 4th June 2005 respectively sanctioned a term loan of Rs. 1,900 Lacs and Rs. 1,500 Lacs respectively for this expansion plan. Strategically located in a mineral-rich region Iron & Steel Division of our Company is located in an area rich in iron-ore deposits. Most of the iron ore mines are located in Bellary-Hospet regions, which is about 100 Kms. from our factory premises. Skilled and unskilled labour is available in abundance. Domestic demand augurs well for our Company We are manufacturing sponge iron which is an intermediate product and used in the steel re-rolling mills and induction furnace. We also propose to manufacture the steel billets, which are also an intermediate product use in the production of TMT bars, angles, rods, Channels, Girders, Light Structurals, etc. These products are used extensively in the housing and infrastructure sectors. India is in the midst of a construction boom in housing and infrastructure, which augurs well for our Company. QUANTITATIVE FACTORS
1. Adjusted Earning Per Share (EPS) (a) 2002-03 (b) 2003-04 (c) 2004-05 (d) 5 Months Ended 31st August 2005* (e) Weighted Average (EPS) *on annualised basis Amount (Rs.) 0.04 1.87 2.30 5.18 3.14 Weights 1.00 2.00 3.00 4.00

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2. Price/ Earning Ratio (P/E) in relation to Issue At the lower At the upper Price of Rs. []/- per share band of Rs. [] band of Rs. per share [] per share (a) Based on 2004-05 EPS of Rs. 2.30. [] [] (b) Industry P/E * (i) Highest 7.9 7.9 (ii) Lowest 0.3 0.3 (iii) Average 4.1 4.1 (* Based on Capital Market January 30 - February 12, 2006) 3. Return on Net Worth (a) 2002-03 (b) 2003-04 (c) 2004-05 (d) 5 Months Ended 31st August 2005 (e) Weighted Average % 0.39% 12.38% 8.48% 9.72% 8.95% Weights 1 2 3 4

4. Minimum Return on Increased Net Worth required to maintain Pre-Issue EPS i.e. Rs. 2.30 At the lower At the higher band of Rs. [] band of Rs. per share [] per share Total Net Worth After Issue (Rs. in Lacs) No. of Equity Shares after the Issue (Rs. in Lacs) Profits required to get required EPS (Rs. in Lacs) Min. Required RONW for maintaining above EPS 5. Net Asset Value (NAV) Per Share At the lower At the higher band of Rs. [] band of Rs. per share [] per share 18.23 18.23 19.86 19.86 [] [] []] [] 7,678.80 [] [] [] 7,678.80 [] [] []

a) As at 31st March 2005 b) As at 31st August 2005 c) After Issue d) Issue Price

Accounting Ratios of some of the Companies in the same Industry Group: Name of the Company EPS(Rs.) P/E Ratio RONW% Jai Balaji Sponge 3.30 6.10 22.70 Monnet Ispat 37.00 6.20 53.00 Orissa Sponge 9.00 5.90 36.80 MSP Steel 0.40 7.90 Shri Ramrupai 1.90 27.60 (* Based on Capital Market January 30 - February 12, 2006) NAV (Rs.) 16.30 95.40 28.80 10.70 16.00

Note: Currently, our Company is operating into two segments i.e. Textile and Iron & Steel. In textile, we dont have any identifiable listed peer group companies. Therefore, for the purpose of comparison we have taken the peer group companies in Steel Sponge Iron

57

Segment based on Capital Market January 30 - February 12, 2006, as the proceeds of this Issue would be utilised for the Iron & Steel segment only. The Face Value of our Equity Shares is Rs.10/- per share and the Issue Price is [] times of the Face Value (at the lower end of the Price Band) and [] times of the Face Value (at the higher end of the Price Band). The BRLM believes that the Issue Price of Rs. []/- per share is justified in view of the above qualitative and quantitative parameters. The investors may also want to peruse the risk factors beginning on Page [] of this Draft Red Herring Prospectus and our financials as set out in the Auditors Report beginning on page [] of this Draft Red Herring Prospectus to have a more informed view about the investment proposition. The final Issue Price shall be determined on basis of demand from investors. The Issue Price of Rs. [] has been determined by us in consultation with BRLM and on the basis of assessment of market demand for the Equity Shares from the investors by way of book building and is justified on the basis of the above factors. Broad Parameters on which Allocation is proposed to be made to QIBs We along with the BRLM would allocate to QIBs on proportionate basis. Proposed manner of Allocation among respective categories of Investors, in the event of under-subscription Under-subscription, if any, in 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 and BRLM subject to applicable provisions of SEBI Guidelines and stipulations / conditions contained in this Draft Red Herring Prospectus. The unsubscribed portion, if any, out of the Equity Shares in the Employee Reservation Portion and Shareholders of Group Company Portion will be added back to the categories of Non Institutional Bidders and Retail Individual Bidders in the ratio 50:50. In case of undersubscription in the Net Issue, spill-over to the extent of under-subscription shall be permitted from the Employee Reservation Portion.

58

STATEMENT OF TAX BENEFITS Our Auditors, M/s. O. P. Dad &Co., Chartered Accountants and M/s. A. Bafna & Co., Chartered Accountants have, vide their letter dated 19th January 2006 certified that under the current provisions of the Income Tax Act, 1961 and other existing laws for the time being in force, the following benefits, inter alia, will be available to us and the members. The said letter is reproduced hereunder: The Board of Directors Janki Corp Limited 39/C, 1st Floor, Raj Industrial Complex, Military Road, Andheri (E), Mumbai 400 059. Sub.: Initial Public Offering of Janki Corp Ltd. Possible tax benefits available to the company and its shareholders Dear Sirs, We hereby report that the enclosed Annexure states the possible tax benefits available to Janki Corp Ltd. (hereinafter referred to as the company) and its shareholders under the current tax laws presently in force. Several of the 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 tax benefits is dependent upon fulfilling conditions prescribed therein. The benefits discussed in the Annexure are not exhaustive. The statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for individual professional tax advice. In view of individual nature of tax consequences and the share offered by the company, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation on the issue. We do not express any opinion or provide any assurance as to whether: The company or its shareholders will continue to obtain these benefits in future; or The conditions prescribed for availing the benefits have been / would be met with. The contents of this Annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations currently carried on by the company. This report is intended solely for your information and for the inclusion in the Offer Document in connection with the proposed Initial Public Offer of the company and is not to be used, referred to or distributed for any other purpose without our prior written consent. For M/s. O. P. Dad & Co. Chartered Accountants For M/s. A. Bafna & Co. Chartered Accountants

O. P. Dad Partner Dated: 19th January 2006

M. K. Gupta Partner

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ANNEXURE As per the existing provisions of the Income Tax Act, 1961 (the Act) and other laws as applicable for the time being in force, the following tax benefits and deductions are and will, inter-alia be available to Janki Corp Limited and its shareholders. Benefits available to the Company under the Income Tax Act, 1961 1. Under Section 10(34) of the Act, dividend income (whether interim or final) in the hands of the company as distributed or paid by any other Company on or after April 1, 2003 is completely exempt from tax in the hands of the Company. 2. As per the provisions of Section 112(1) (b) of the Act, long-term capital gains would be subject to tax at the rate of 20% (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1) (b), the long term capital gains resulting on transfer of listed securities or units (not covered by section 10(36) and 10(38)), would be subject to tax at the rate of @ 20% with indexation benefits or 10% without indexation benefits (plus applicable surcharge and education cess) as per the option of the assessee. 3. Long term capital gain arising from transfer of an eligible Equity Share in a Company Purchased on or after the 1st day of March, 2003 and before the 1st day of March, 2004 (both days inclusive) and held for a period of 12 months or more is exempt from tax under section 10(36) of the Act. 4. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction tax. 5. As per the provisions of section 111 A, Short Term capital gains arising from the transfer of Equity Shares in any company through a recognised stock exchange or from the sale of units of equity-oriented mutual fund shall be subject to tax @ 10% provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax. 6. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the Company would be entitled to exemption from tax on gains arising from transfer of the long term capital asset (not covered by section 10(36) and section 10 (38)) if such capital gain is invested in any of the long-term specified assets in the manner prescribed in the said section. Where the long-term specified asset is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the long-term specified asset is transferred or converted into money. 7. As per the provisions of Section 54ED of the Act and subject to the conditions specified therein, capital gains arising from transfer of long term assets, being listed securities or units (not covered by section 10(36) and section 10(38)) shall not be chargeable to tax to the extent such gains are invested in acquiring Equity Shares forming part of an eligible issue of share capital in the manner prescribed in the said section.

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Benefits available to Resident Shareholders under the Income Tax Act, 1961 1. Under Section 10(34) of the Act, dividend (whether interim or final) declared, distributed or paid by the Company on or after April 1, 2003 is completely exempt from tax in the hands of the shareholders of the Company. 2. Under section 10(32) of the Act, any income of minor children clubbed with the total income of the parent under section 64(1A) of the Act, will be exempt from tax to the extent of Rs. 1500/- per minor child. 3. As per the provisions of Section 112(1) (b) of the Act, long-term capital gains would be subject to tax at the rate of 20% (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1) (b), the long term capital gains resulting on transfer of listed securities or units (not covered by sections 10(36) and 10(38), would be subject to tax at the rate of @ 20% with indexation benefits or 10% without indexation benefits (plus applicable surcharge and education cess) as per the option of the assessee. 4. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and the sale is subject to Securities Transaction tax. 5. As per the provisions of section 111 A, Short Term capital gains arising from the transfer of Equity Shares in any company through a recognised stock exchange or from the sale of units of equity-oriented mutual fund shall be subject to tax @ 10% provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax. 6. As per the provisions of section 88E, where the business income of a resident includes profits and gains from sale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities transaction tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applying the average rate of income tax on such business income. 7. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the Act, the shareholders would be entitled to exemption from long term capital gain tax on transfer of their eligible Equity Share in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) and held for a period of 12 months or more. 8. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the shareholders would be entitled to exemption from tax on gains arising on transfer of their shares in the Company (not covered by sections 10(36) and 10(38)), if such capital gain is invested in any of the long term specified assets in the manner prescribed in the said section. Where the long-term specified asset is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the long-term specified asset is transferred or converted into money. 9. In accordance with and subject to the conditions and to the extent specified the Section 54ED of the Act, the shareholders would be entitled to exemption from long term capital gain tax on transfer of their assets being listed securities or units (not

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covered by sections 10(36) and 10(38)), to the extent such capital gain is invested in acquiring Equity Shares forming part of an eligible issue of share capital in the manner prescribed in the said section. 10. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains on the sale of shares in the Company (not covered by sections 10 (36) and 10 (38)), upon investment of net consideration in purchase /construction of a residential house. If part of net consideration is invested within the prescribed period in a residential house, then such gains would not be chargeable to tax on a proportionate basis. 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 shall be charged to tax as long-term capital gains in the year in which such residential house is transferred. Benefits available to Non-Resident Indian Shareholders under the Income Tax Act, 1961 1. Under Section 10(34) of the Act, dividend (whether interim or final) declared, distributed or paid by the Company on or after April 1, 2003 is completely exempt from tax in the hands of the shareholders of the Company. 2. In accordance with the provisions of Section 10(32) of the Act, any income of minor children clubbed with the total income of the parent under Section 64(1A) of the Act will be exempt from tax to the extent of Rs. 1,500 per minor child per year. 3. In the case of shareholder being a non-resident Indian and subscribing to shares in convertible foreign exchange, in accordance with and subject to the conditions and to the extent specified in Section 115D read with Section 115E of the Act, long term capital gains arising from the transfer of an Indian companys shares (not covered by sections 10(36) and 10(38)), will be subject to tax at the rate of 10% as increased by a surcharge and education cess at an appropriate rate on the tax so computed, without any indexation benefit but with protection against foreign exchange fluctuation. 4. In case of a shareholder being a non-resident India, and subscribing to the share in convertible foreign exchange in accordance with and subject to the conditions and to the extent specified in Section 115F of the Act, the non resident Indian shareholder would be entitled to exemption from long term capital gains (not covered by sections 10(36) and 10(38)) on the transfer of shares in the Company upon investment of net consideration in modes as specified in sub-section (1) of Section 115F. 5. In accordance with the provisions of Section 115G of the Act, Non Resident Indians are not obliged to file a return of income under Section 139(1) of the Act, if their only source of income is income from investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act. 6. In accordance with the provisions of Section 115H of the Act, when a Non Resident Indian become 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 Chapter XII-A shall continue to apply to him in relation to such investment income derived from the specified

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assets for that year and subsequent assessment years until such assets are converted into money. 7. As per the provisions of section 115 I of the /Act, a Non-Resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of income for that year under Section 139 of the Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the Act. 8. In accordance with and subject to the conditions and to the extent specified in Section 112(1) (b) of the Act, tax on long term capital gains arising on sale on listed securities or units not covered by sections 10(36) and 10(38) will be, at the option of the concerned shareholder, 10% of capital gains (computed without indexation benefits) or 20% of capital gains (computed with indexation benefits) as increased by a surcharge and Education cess at an appropriate rate on the tax so computed in either case. 9. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction tax. 10. As per the provisions of section 111 A, Short Term capital gains arising from the transfer of Equity Shares in any company through a recognised stock exchange or from the sale of units of equity-oriented mutual fund shall be subject to tax @ 10% provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax. 11. As per the provisions of section 88E, where the business income of an assessee includes profits and gains from sale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities transaction tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applying the average rate of income tax on such business income. 12. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the Act, the shareholders would be entitled to exemption from long term capital gain tax on transfer of their eligible Equity Shares in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) and held for a period of 12 months or more. 13. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the shareholders would be entitled to exemption from tax on long term capital gains (not covered by sections 10(36) and 10(38)) arising on transfer of their shares in the Company if such capital gain is invested in any of the long term specified assets in the manner prescribed in the said section. Where the long-term specified asset is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the specified asset is transferred or converted into money. 14. In accordance with and subject to the conditions and to the extent specified in Section 54ED of the Act, the shareholder would be entitled to exemption from tax on long term capital gains (not covered by sections 10(36) and 10(38)) arising on

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transfer of their assets being listed securities or units to the extent such capital gain is invested in acquiring Equity Shares forming part of an eligible issue of share capital in the manner prescribed in the said section. 15. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains (not covered by sections 10(36) and 10(38)) on the sale of shares in the Company upon investment of net consideration in purchase / construction of a residential house. If part of net consideration is invested within the prescribed period in a residential house, then such gains would not be chargeable to tax on proportionate basis. 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. 16. As per the provisions of Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the Non-Resident. Benefits available to other Non-residents under the Income Tax Act, 1961 1. Under Section 10(34) of the Act, dividend (whether interim or final) declared, distributed or paid by the Company on or after April 1, 2003 is completely exempt from tax in the hands of the shareholders of the Company. 2. In accordance with the provisions of Section 10(32) of the Act, any income of minor children clubbed with the total income of the parent under Section 64(1A) of the Act will be exempt from tax to the extent of Rs.1500 per minor child per year. 3. In accordance with and subject to the conditions and to the extent specified in Section 112(1) (b) of the Act, tax on long term capital gains arising on sale on listed securities or units before 1st October 2004 will be, at the option of the concerned shareholder, 10% of capital gains (computed without indexation benefits) or 20% of capital gains (computed with indexation benefits) as increased by a surcharge and education cess at an appropriate rate on the tax so computed in either case. 4. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction tax. 5. As per the provisions of section 111 A, Short Term capital gains arising from the transfer of Equity Shares in any company through a recognised stock exchange or from the sale of units of equity-oriented mutual fund shall be subject to tax @ 10% provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax. 6. As per the provisions of section 88E, where the business income of an assessee includes profits and gains from sale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities transaction tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applying the average rate of income tax on such business income.

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7. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the Act, the shareholders would be entitled to exemption from long term capital gain tax on transfer of their eligible Equity Share in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) and held for a period of 12 months or more. 8. In accordance with and subject to the conditions and to the extent specified in Section 54EC of the Act, the shareholders would be entitled to exemption from tax on gains arising on transfer of their shares in the Company (not covered by sections 10(36) and 10(38) if such capital gain is invested in any of the long term specified asset is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the long-term specified asset is transferred or converted into money. 9. In accordance with and subject to the conditions and to the extent specified in Section 54ED of the Act, the shareholders would be entitled to exemption from long term capital gains (not covered by sections 10(36) and 10(38)) on transfer of their assets being listed securities or units to the extent such capital gain is invested in acquiring Equity Shares forming part of an eligible issue of share capital in the manner prescribed in the said section. 10. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance with and subject to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains (not covered by sections 10(36) and 10(38)) on the sale of shares in the Company upon investment of net consideration in purchase/construction of a residential house. If part of net consideration is invested within the prescribed period in a residential house, then such gains would not be chargeable to tax on a proportionate basis. 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. 11. As per the provisions of Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the Non Resident. Benefits available to Foreign Institutional Investors (FII) under the Income Tax Act, 1961 1. In case of a shareholder being a Foreign Institutional Investor (FII), in accordance with and subject to the conditions and to the extent specified in Section 115AD of the Act, tax on long term capital gain (not covered by sections 10(36) and 10(38)) will be 10% and on short term capital gain will be 30% as increased by a surcharge and education cess at an appropriate rate on the tax so computed in either case. However short term capital gains on sale of Equity Shares of a company through a recognised stock exchange or a unit of an equity oriented mutual fund effected on or after 1st October 2004 and subject to Securities transaction tax shall be taxed @ 10% as per the provisions of section 111A. It is to be noted that the benefits of Indexation and foreign currency fluctuation protection as provided by Section 48 of the Act are not available to FII.

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2. As per the provision of Section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the tax treaty to the extent they are more beneficial to the Non Resident. 3. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the Act, the shareholders would be entitled to exemption from long term capital gain tax on transfer of their eligible Equity Share in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) and held for a period of 12 months or more. 4. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction tax. 5. As per the provisions of section 88E, where the business income of an assessee includes profits and gains from sale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities transaction tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applying the average rate of income tax on such business income. 6. In accordance with and subject to the conditions and to the extent specified in /section 54EC of the Act, the shareholders would be entitled to exemption from tax on long term capital gains (not covered by sections 10 (36) and 10(38)) arising on transfer of their shares in the Company if such capital gain is invested in any of the long term specified assets in the manner prescribed in the said section. Where the long term specified assets is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the long term specified asset is transferred or converted into money. 7. In accordance with and subject to the conditions and to the extent specified in Section 54ED of the Act, the shareholders would be entitled to exemption from long term capital gain tax (not covered by sections 10 (36) and 10(38)) on transfer of their assets being listed securities or units to the extent such capital gain is invested in acquiring Equity Shares forming part of an eligible issue of share capital in the manner prescribed in the said section. Benefits available to Mutual Funds under the Income Tax Act, 1961 1. In case of a shareholder being a Mutual fund, 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 and Mutual Funds authorised by the Reserve Bank of India would be exempt from Income Tax, subject to the conditions as the Central Government may by notification in the Official Gazette specify in this behalf.

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Benefits available to Venture Capital Companies /Funds under the Income Tax Act, 1961 1. In case of a shareholder being a Venture Capital Company / Fund, as per the provisions of Section 10(23FB) of the Act, any income of Venture Capital Companies / Funds registered with the Securities and Exchange Board of India, would exempt from Income Tax, subject to the conditions specified.

Benefits available under the Wealth Tax Act, 1957 1. As per the prevailing provisions of the above Act, no Wealth Tax shall be levied on value of shares of the Company. Benefits available under the Gift Tax Act 1. Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore, any gift of shares will not attract gift tax. Notes: 1. All the above benefits are as per the current tax laws as amended by the Finance Act, 2005. 2. All the above benefits are as per the current tax law and will be available only to the sole / first named holder in case the shares are held by joint holders. 3. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject to any benefits available under the double taxation avoidance agreements, if any, between India and the country in which the nonresident has fiscal domicile. 4. In view of the individual nature of tax consequences, each investor is advised to consult his / her own tax advisor with respect to specific tax consequences of his / her participation in the scheme. However, a shareholder is advised to consider in his / her / its own case. The tax implications of an investment in the Equity Shares, particularly in view of the fact that certain recently enacted legislations may not have direct legal precedent or may have a different interpretation on the benefits which an investor can avail.

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INDUSTRY OVERVIEW IRON AND STEEL INDUSTRY (Source: www.steel.nic.in, National Steel Policy, 2004) India has one of the oldest iron and steel industries in the Developing World and currently is the 8th largest producer of steel globally. The industry in the past operated under a regulatory regime marked by controls on capacity, price and distribution and high levels of protection from international competition. After four decades of growth under centralized planning and regulation, the industry was de-regulated in the year 1992 to better serve the national objectives. The external business environment, however, is defined by elements of the overall macro-policy framed by the State and also by international developments. In the first decade after de-regulation, the Indian steel industry recorded an impressive growth in capacity, production, exports and a significant strengthening of its competitive position. The Major areas of weakness for the Indian steel industry are high capital cost, lack of adequate physical infrastructure and relatively high user charges for such services, high cost of energy inputs, low productivity of capital and labour and inferior quality of some of the critical inputs such as coal, lack of investment in supporting facilities in the areas of mining and beneficiation of raw materials. The threats to the industry arise largely from the disturbances in the global steel market and the associated problems of price volatility and unfair competition. Globalization of the Indian economy, on the other hand, has opened up new vistas for the Indian iron and steel industry. The future opportunities for the industry are derived basically from two sources. Firstly, the global steel industry is currently in a state of transition and the centres of growth both in terms of consumption and production appear to be shifting away from the traditional locales. This provides an opportunity to the Indian steel industry to emerge as a leading production centre and supplier of steel globally. Secondly, the domestic market for steel is also set for a substantial expansion with the added emphasis on building physical infrastructure and a growing manufacturing base. There is, therefore, an express need to accelerate the growth of this key industry in a competitive market situation and extract fully the dynamic advantages inherent in the changing global steel scenario. To that end, the National Steel Policy (NSP) has been formulated seeking to address the sector-specific special concerns of the deregulated Indian steel industry within the boundaries set by the overall macro-economic policy. The basic idea is to assist the industry to overcome various external constraints to its growth. As per the Appraisal Report of SBBJ, the Industry Overview of Steel & Sponge Iron has been mentioned as under: The steel industry comprises two main types of producers Integrated steel plants (ISP) or primary producers, which manufacture steel mainly through the blast furnace route from Iron Ore; and, Mini steel plants (MSP) or secondary sector: Conventionally, EAF/IF based steel plants with/ without captive rolling mills were covered under this category. However, now all steel plants (based on any technology) of capacity upto 5 lakhs TRA are covered under this category.

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The raw materials that are required for production of steel in integrated steel plants (ISPs) could be grouped as - (i) Ores (Iron and Manganese ores), (ii) Fuels and Reducing Agents (Coal, Coke and petro-fuels), (iii) Fluxes (Limestone, Dolomite and Quartzite), and (iv) Refractories (Silica, Magnesite and Alumina). Sponge iron is used as a raw material in EAF or Induction Furnaces. Iron Scrap is an alternative to sponge iron for this purpose. While Sponge Iron, Pig Iron and Ferro Alloys (Chrome/Silicon/Manganese) form the major chunk of Steel Intermediates, Flat Products (HR coils, CR coils, GP/GC coils, Stainless Steel) and Long Products (Billets/Blooms/Ingots/Wire Rods/Bars/Structural) are the Finished Steel Products. Construction is the largest end-use sector of steel, accounting for over 50% of steel consumption. Long products are used extensively in the construction sector. Global Outlook: Demand The demand for steel across the globe increased at a reasonable pace between 1994 and 2003. The CAGR of global demand was 3.68%, Chinese demand was 9.18% and rest of the world was 2.23%.

Source: IISI Steel Statistical Year Book 2004 The future outlook for global demand of steel is defined mainly by the following factors (expounded at the World Steel Dynamics Steel Success Strategies XIX in New York in June 04): GDP Growth USA has shown a recovery post 2001 and EU is strengthening. China and India are growing at a brisk pace. CIS countries have shown remarkable recovery after a long period of crisis.The GDP forecasts for the world (source: IISI) are 4.7% in 2004 and 3.4% in 2005 as against 3.3% in 80s and 2.7% in 90s (source: The World Bank, 2004 World Development Indicators). Globalization Economic integration through the flow of goods, services, trade, capital and ideas is a prime engine of global economic growth. This is reflected in the global trade of steel, which is both

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a precursor for globalization and a result. Crude steel trade as a % of global production has shot up from 30.9% (222.3 million MT) in 1985 to 45.4% (439.3 million MT) in 2003 (Source: IISI Steel Statistical Yearbook 2004). The steel demand is expected to pick up in the medium to long term due to higher than historical GDP growth, integration of economies and convergence in GDP of developing countries like China, India and Brazil with the developed economies. The growth projections for steel consumption from reputed agencies are higher than historical figures and are as follows:

Global Outlook: Supply Steel production has kept up with the demand with a few regional imbalances, which have been met by the growing cross border trade in steel. The trend for 1994-2001 shows a CAGR of 3.26% for global demand, 10.09% for Chinese demand and 1.88% for rest of the world.

The projections for future global production of steel are based on a multitude of factors and frame a complex equation. Major factors affecting the global production of steel are: Raw Material Supply Iron ore: 78% of global iron ore supplies are controlled by just 3 companies creating an oligopolistic situation in ore pricing and supplies. Given that good quality ore is scarce in major steel producing economies such as China, USA, Japan and EU, it is expected that

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countries owning quality ore reserves can be potentially bigger producers of steel in the future. Coke: China, one of the worlds largest sellers of coke is now consuming its own production. Exports from China will be limited in the future due to shortage of coking coal, transportation to ports and taxes on exports. This would result in higher prices of coke in the international market. Coking coal prices from Australia as a result have also shot up from $57/MT to $126/MT in 2004. The coke factor would limit creation of BF capacities in the world. Metallics: The primary metallic for the electric melting route is scrap which is prevailing at $260-280 (source: JPC article dated 16.11.04). The viability for electric steel making increasingly depends on development of alternative cheap high quality metallics such as DRI. Global DRI production as a result has grown to 46 million MT in 2003. Ocean Freight Ocean freight peaked in early 2004 primarily due to the Chinese demand, port congestion in China and Japans increased consumption of steam coal. The freight levels have since stabilized at a higher plateau and are expected to continue as such due to inability of global shipbuilding capacity to keep up with the demand. This will transfer volumes from global metallics trade to steel trade and promote steel making near the raw material source. Consolidation A recent phenomenon has been the spate of consolidation in the steel industry worldwide. Arcelor, JFE, Nippon Steel, TKS and Mittal Steel are products of consolidation. From 21% of global steel making capacity in 2003, Fitch Ratings Agency expects that 40% of global production will be controlled by the top five players. Increased consolidation will result in better control on capacities, production and pricing for the manufacturers. Steel-making in Developed Countries Expansion and survivability of steel making capacity in the developed countries will be constrained by limited access to quality raw materials within their own economies, high manpower costs and manpower legacy costs, costs such as carbon tax (greenhouse emissions tax). Limited liability of these steel plants will move capacities into developing economies such as China, Brazil and India where cost structure and access to raw materials are better. Technology Due to limited supply of quality coke and ore in the world market, the trend is increasingly towards DRI production from sub optimal inputs. Some of the promising technologies are the Finex process developed by VAI, which uses off gas from a Corex module to convert fine ore to DRI and the Mesabi Nugget process developed by Kobe Steel which produces small pure iron nuggets comparable to pig iron from iron ore fines and pulverized coal. Based on the above, capacity addition worldwide will be limited by scarcity of raw materials, high ocean freight and viability of existing capacities in developed countries. A result will be increased consolidation and a search for new technologies. The demand-supply equation thus would result in continuance of strong prices in the future.

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Indian Outlook: Demand The consumption of steel in India for the period 1994-2003 is given below. Crude steel consumption grew at 5.36% and finished steel at 5.58% (CAGR).

Demand for Steel in India will be defined by the following factors: GDP Growth Indian GDP grew at 5.7% in the 1980s and 5.8% in 1990s. The projections for GDP growth are between 6.0% (OECD) to 8.0% (IISI) for 2005. The economy is expected to stay on the current trajectory due to consensus on economic liberalization between the two main national political formations. Investment: Macro Economic Indicators Steel consumption is linked to the secondary sector (mining, manufacturing, construction, power, etc.) whose growth is indicated by Gross capital formation (GCF) which in turn is financed by domestic savings. The contribution of the primary sector (agriculture) to the Indian GDP dropped from 40% in 1980-81 to 22% in 2003-04. This was captured by the tertiary sector (services, trade, etc.) which burgeoned to 51% of GDP leaving a mere 27%for the secondary sector. The comparative figure for China is 42%. These ratios are changing fast with Industrial production clocking 8.4% growth in 2004. Gross capital formation has grown from 22.7% in 1980-81 to 26.3% in 2003-04. Domestic savings has increased from 21.16% in 1980-81 to 28.1% in 2003-04 Investment: Ground realities Successive Governments have emphasized on infrastructure development to sustain GDP growth. There is increased public / private investment in infrastructure. These are expected to sustain due to a stable currency, high forex reserves, low inflation, stable interest rate regime and increasing forex inflows. The main sectors that contribute to steel consumption are:

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Power: Investments in power sector has got a tremendous boost from the Electricity Act 2003. VS Jain of SAIL contends that 70% of these investments are towards steel. The Power ministry expects that capacity addition in power generation would be 100,000 MW between 2002 and 2012 with a commensurate increase in transmission / distribution capacity. The investment required would be USD 200bn. Planning Commission data shows that 18,659 MW is currently being added and 22,441 MW is in the pipeline. Additionally Power Grid Corporation is adding a 36,000 MW transmission grid. Roads: Roadway projects require steel extensively for use in bridges, flyovers, illumination poles, signage, guard rails, culverts, etc. The NHDP aims at creating a world class highway network (totally 14,279 km) for an outlay of 58,000 crores. Also, the Urban Renewal Mission (outlay: 5500 crores in 2005-06) will create a tremendous boost for steel consumption. Real Estate: The Indian mortgage market grew from Rs 150 bn in 1997 to Rs 600 bn in 2002, at a CAGR of 32 per cent. A recent report on the mortgage market predicts that it will grow to Rs 4,500 bn by 2011-2012 (source: Business Standard.com). This is due to low interest rates and higher FDI inflows. High levels of construction and usage of new technologies (steel/glass instead of concrete/brick) will lead to much higher consumption of steel in this sector. Oil and Gas: The NELP V and creation of the pan Indian gas pipeline network are issues, which will positively affect steel consumption in this sector. Rail: Budget 2005 allocated 25,000 crores for modernization and expansion of Indian Railways. Further, the Urban Renewal Mission considers creation of mass rapid transport systems which primarily comprise of under and over ground rail systems. Airports: Air traffic was 39.28 million passengers in 2003-04 and is expected to grow to 61.16 million by 2010-11 and 85.31 million in 2016-17 (source: Ministry of Civil Aviation). This would require extensive decongestion and modernization of existing airports. Sea ports: As of March 2002, traffic at ports was 289.10 million MT and capacity was 344.40 million MT. By March 2007, traffic is expected to be 565 million MT. To meet this traffic, the Governments plan outlay in 2002-07 is 5,418 crores apart from an expected private investment of 11,256 crores (source: Planning Commission, 10th Plan). Automobile: The auto sector consumes 21% of global steel production. In April- December 2004 automobiles production was 6.2 million units vs. 5.2 million units during the same period in 2003. Given the increasing per capita income and the increased competitiveness of Indian automobiles in the export segment, automobile production growth is expected to sustain. Projections of Finished Steel Consumption: The Per Capita Paradigm The economies of China and India can be compared given their population size, demographics and location. The per capita GDP comparisons and per capita steel consumption comparisons are given below:

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It is widely acknowledged that per capita steel consumption or the steel intensity of an economy depends on the following factors: The per capita GDP of the economy. Contribution of the secondary sector to the overall GDP. Gross capital formation ratio to the GDP.

Chinas per capita consumption at a level of USD 913 per capita GDP and its associated macroeconomic indicators such as GCF was 119.3 kgs. This per capita GDP level is expected to be achieved by India in 2011 given its historical growth rates. Though, IIP growth rate of India in 2004 was 8.4%, Indias GDP parameters in 2011 would still fall short of Chinas in 2001. Therefore Indias per capita consumption in 2011 would be much lower than that of Chinas in 2001. Considering Chinas per capita steel consumption of 119.3 kgs at a per capita GDP level of USD 913 (in 2001), Indias per capita steel consumption would be in the range of 50-100 kgs in 2011 at an expected per capita GDP level of USD 935. This converts into a finished steel consumption of 60-120 million MT at an expected population of around 1.2 billion. Internal indications however point at a steel consumption closer to the lower end of the estimates so arrived. Indian Outlook: Demand for Long Steel The following tables chart the most recent data for long versus flat steel production for major steel producing nation. The steel production is in million MT.

Developing Countries
Country Flat Steel Long Steel Total Flat Steel 40% 51% 57% 32% 64% 31% 29% 48% Long Steel 60% 49% 43% 68% 36% 69% 71% 52%

CHINA RUSSIA* INDIA UKRAINE* BRAZIL SPAIN TURKEY* MEXICO

90.871 134.529 22.7 21.45 20.005 15.299 6.53 14.119 12.98 7.399 4.856 10.879 3.5 8.67 5.659 6.218

225.4 44.15 35.304 20.649 20.379 15.735 12.17 11.877

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THAILAND POLAND CZECH REPUBLIC TOTAL

3.328 4.17 7.498 2.316 4.484 6.8 1.739 3.595 5.334 174.484 230.812 405.296

44% 34% 33% 43%

56% 66% 67% 57%

* Production figures for 2000, all else for 2003

Developed countries (Original G-7 nations)

Flat Long Total Steel Steel JAPAN 64.51 33.692 98.202 USA 63.677 26.832 90.509 GERMANY 24.566 12.608 37.174 ITALY 11.125 14.266 25.391 FRANCE 11.298 4.834 16.132 CANADA 10.543 3.747 14.29 UK 6.043 4.352 10.395 TOTAL 191.762 100.331 292.093 Source: IISI Steel Statistical Yearbook 2004 If we consider the production figures as a proxy for consumption figures, it is evident that developing countries consume steel in a ratio of 57:43 long to flat. Developed countries on the other hand consumed steel in the ratio of 66:34 flat to long. This is natural since long steel is used more for infrastructure development (more likely in developing countries) whereas flat steel is for consumer durables like automobiles, white goods, etc (more likely in developed countries. India and Brazil stand out as anamolies in the developing countries for two different reasons. Brazil has a higher production of flat steel due to its high exports of slabs and plates to the US. The reasoning for India could be two-fold: its historical negligence of infrastructure creation or the under-reporting of long steel production as indicated in a JPC article dated 20-09-2004. If we expect that India will boost its secondary sector through infrastructure investments, construction, etc. then it is projected that it will achieve the developing countries ratio of steel consumption. Based on the developing countries average flat steel to long steel production ratio of 43:57 and an estimated overall steel consumption figure of 60 million MT by 2011, the consumption of long steel can be conservatively projected at 30 million MT as against the present long steel production of 15 million MT. Country Flat Steel 66% 70% 66% 44% 70% 74% 58% 66% Long Steel 34% 30% 34% 56% 30% 26% 42% 34%

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Indian Outlook: Supply The production of crude steel in India for the period 1994-2003 is given below. Crude steel production grew at 5.71% (CAGR).

Source: IISI Statistical Yearbook, 2004 The growth rate for Indian Steel production has been bumpy not due to a lack of demand as evident from the unabridged growth of steel consumption. The primary reasons for drop in steel production in mid 90s were: The steel price death spiral in 1998 when the Russian rouble crashed and the South East Asian economies melted simultaneously killing demand in these markets and dumping from them into India. Steel plants in India turned cash negative with the unprecedented drop in prices combined with high interest costs (as high as 21%). Subsequent clampdown on financing disabled capacity addition. The steel demographics are expected to change as well in line with historical and global trends.

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Capital Outlays for Integrated Steel Plants

The capital outlays by major producers are aimed at meeting a significant portion of the shortfall till 2011. However, given a consumption projection of 60 million MT of finished steel, this will still be far short of the target. Integrated versus Merchant Producers India has manufactured much of its steel traditionally through the ingot route (employed mainly by merchant producers) as against the continuous cast route (employed by Integrated producers). The main reasons for this has been the fragmented nature of the steel industry, impaired access to capital by steel manufacturers, low capital cost of merchant units and low gestation of merchant plants. Today the incentive for setting up merchant units is increasingly reduced. Integrated producers are better placed with: Better cost structure due to multipoint value addition and economies of scale. Better technology resulting in lower costs and better quality. Better access to capital due to size. Better pricing control and access to markets. Long term access to raw materials thereby increasing immunity to the steel cycle.

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The ratio of integrated producers (proxy: concast production) to merchant producers (proxy: ingot production) is going to improve in line with global trends and Indias current trends. The illustration above substantiates the same. Production in Electric furnaces versus Oxygen Converters The Electric route uses a metallic like scrap or DRI as a charge into an electric furnace (IF/EAF) whereas the oxygen route produces hot metal from iron ore in a blast furnace which is refined in an oxygen furnace (BOF). The economic comparison of the processes is given below

: From the above, one can infer that the electric route will be preferred if electricity is cheap and captive DRI production is available. Otherwise, the oxygen route is preferred. However, with advent of new technologies and in the Indian context, a combination of the two will give the best economy, e.g. JSPL, Kalyani Steels, etc. The trends for electric and oxygen route are both equally positive as given below:

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Source: IISI Steel Statistical Yearbook, 2004 Raw Material Availability Availability of key raw materials will be a limiting factor for growth especially for small nonintegrated producers. Coke is a commodity, which will have to be imported or made from imported coking coal. Captive production of coke will enhance security from volatility in the coke market, the last of which was damaging for the global steel industry as a whole. Coking coal is relatively stable, yet equally scarce and the pricing for both is going to be strong. The only viable alternative is acquisition of mines abroad, which has been tried by Indian steel makers with limited success. Availability of iron ore is not a major concern since the proven reserves of iron ore in India are enough to sustain the projected production. Iron ore prices, however, are higher than historical levels but only reflect global prices and Indias increased openness to the global economy. Producers with long term contracts or captive mining will benefit at the cost of spot buyers. The current trend of allotting captive mining by State Governments of Orissa and Jharkhand to integrated producers or mega projects is an encouraging sign for new plants. Non coking coal which has gained prominence as a reductant for production of DRI is something that India has in abundance. The last estimates (01.01.04) of Indian non-coking coal reserves were 214 billion MT (source: Coal India Limited). The annual production of Coal India Limited is nudging 350 million MT and the Department of Coal and Mining has unveiled a policy of allotting coal blocks to end users. Beneficiation of lower quality coals has resulted in usage of locally available grades in the manufacture of DRI. These factors are a positive sign for the steel industry as a whole. Logistics and Infrastructure Steel raw materials overweigh steel by a ratio of approximately 3. This will be a major limiting factor for many producers who set up steel units at a distance from the raw material sources. Transportation costs will severely limit the viability of such steel units. Also, port

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connectivity will be key for producers dependent on imported inputs such as coal and good connectivity will provide cheap access to overseas steel markets. Access to Capital The very factor that impaired growth in mid 90s is a facilitator today. There is capital available from banks, who are keen on investing in quality projects. Moreover, there is foreign capital in the form of FCCBs, ECBs and FCNRBs. The cost of capital has also significantly reduced from 18-21% in mid 90s to 6-9% today. Barring a collapse of the Indian economy or the global economy to the scale of 1998-99, the demand-supply position of steel will be stable in India. Steel Billet Industry General Steel billets are manufactured either by ingot casting and rolling through blooming & billet mills or by forging or by continuous-casting of billets directly from liquid steel. Billets manufactured by forging are mostly alloy or special steels. Pencil ingots of smaller sizes, manufactured in mini steel plants are also used as substitute of billets. Due to better yield, less energy consumption and capital investment, continuous-casting is being practiced even for production levels of 25,000-30,000 TPA of billets. End-uses The billet being a semi-finished product is used for further processing for production of suitable products. It is used as a feedstock to rolling mills for production of long products like wire rods, bars/rods and light structural. Billet is also used extensively in forge shops and machine shops for production of engineering goods and also as feedstock for seamless tubes. Demand, Availability and Resultant Gaps/Surpluses While projecting all-India demand for steel billets, the requirement of the same for integrated steel plants (primary producers) has not been considered, since their captive requirement goes for finished steel production. In view of the above, demand for steel billets excluding the captive requirement of integrated steel plants is mainly dependent on production levels of bars and rods and structural by secondary producers. The anticipated production of mild steel bars and rods and structural from secondary producers during 2006-07 is of the order of 11.8 million tons. Billet requirement for producing the above products will be around 12.5 million tons. The production of pencil ingots/billets from secondary sector during 2006-07 is likely to be about 10 million tons, which includes mild steel, medium/high carbon steel, alloy steels etc. It is estimated that the share of mild steel will be of the order of 7.5 million tons. The quantity of mild steel billets available for sale from integrated steel plants (BSP, TISCO, DSP & RINL) is likely to be around 3.0 million tons (0.8 million tons from BSP, 0.76 million tons from TISCO, 0.85 million tons from DSP and 0.6 million tons from RINL). Thus total availability of mild steel billets would be around 10.5 MMTPA (7.5 MMTPA from secondary sector and 3 MMTPA from integrated steel plants) as against the requirement of the order of 12.5 MMTPA, creating a shortfall of around 2 MMTPA billets during 2006-07.

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Steel Billet Prices The movement in price variation in Steel billet is given below.

As can be seen from the graph the price has increased from Rs 15000 per ton in September 2003 to Rs 24000 per ton in May 2004 and April 2005 and again came down to about Rs 20000 in July 2005. Stainless Steel Flats General Stainless steel is essentially low carbon steel, which contains chromium at 10% or more by weight. It is this addition of chromium that gives the steel its unique stainless, corrosion resisting properties. Stainless steel is the generic name for a number of different steels used primarily for their resistance to corrosion. The one key element they all share is a certain minimum percentage (by mass) of chromium: 10.5%. Although other elements, particularly nickel and molybdenum, are added to improve corrosion resistance, chromium is always the deciding factor. The chromium content of the steel allows the formation of a rough, adherent, invisible, corrosion-resisting chromium oxide film on the steel surface. If damaged mechanically or chemically, this film is self-healing, providing that oxygen, even in very small amounts, is present. The corrosion resistance and other useful properties of the steel are enhanced by increased chromium content and the addition of other elements such as molybdenum, nickel and nitrogen. There are more than 60 grades of stainless steel. However, the entire group can be divided into five classes. Each is identified by the alloying elements which affect their microstructure and for which each is named. The vast majority of steel produced in the world is carbon and alloy steel, with the more expensive stainless steels representing a small, but valuable niche market. Applications of Stainless Steel The most everyday use of stainless steel is obviously in cutlery. Very cheap cutlery is made out of grades 409 and 430, with the finest Sheffield cutlery using specially produced 410 and 420 for the knives and grade 304 (18/8 stainless, 18% chromium 8% nickel) for the spoons and forks. The different grades are used as 410/420 can be hardened and tempered so that the knife blades will take a sharp edge, whereas the more ductile 18/8 stainless is easier to work and therefore more suitable for objects that have to undergo numerous shaping, buffing and grinding processes.

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Very large amounts of stainless steel are used in food production and storage. The most commonly used grades are 304 and 316. Typical uses would be dairies, milk storage, ham curing, frozen and salted fish storage. Whereas 304 is used for normal temperatures and acid concentrations, 316 is used for harsher environments. For example 304 is used in cheese production, but where salted ham is being prepared 316 is used. For low concentrations of phosphoric acid (one of the constituents of cola) 304 is used, but at higher temperatures and concentrations 316 is used. Food slicers are made out of 420 and 440. Very often in food production stainless is used not because the food itself is corrosive but the use of stainless allows for faster and more efficient cleaning. For example in ice cream production 316 is specified so that strong anti-bacteriological cleaning and rinsing systems can be used. One of the great advantages of stainless steel is that imparts no taste to the food that it comes into contact with. This has created one interesting anomaly. Traditional wine making uses barrels of oak. The newer wine- producing nations use very large vats and storage containers of stainless steel as this gives them far greater economies of scale. However in conventional wine making the acid of the wine dissolves some of the wood to give an "oak" body taste. Using stainless steel vats oak chips deliberately have to be put into the vats to create the same effect and satisfy traditional wine drinkers. The pumping and containment of oils, gases and acids has created a large market for stainless tanks, pipes, pumps and valves. The storage of dilute nitric acid was one of the first major success stories for 18/8 stainless steel as it could be used in thinner sections and was more robust than other materials. Special grades of stainless have been developed to have greater corrosion resistance. These are used in desalination plants, sewage plants, off shore oil rigs, harbour supports and ships propellers. Architecture is a growing market. Many modern buildings use stainless for cladding. When reinforced concrete first started to be used it was considered that the carbon steel used would not rust, as cement, obviously derived from limestone, is alkaline. However, constantly using grit salt on bridges can change the pH to acidic thereby rusting the steel, which expands and cracks the concrete. Stainless steel reinforcing bar, although initially expensive, is proving to have very good life cycle costing. The low maintenance cost and anti-vandal characteristics of stainless provides a growing market in public transport, ticket machines and street furniture. The nuclear power industry uses large quantities of stainless, often specified with a low cobalt content, for both power generation and radiation containment. Special louvered ventilation shafts are made, which are designed to be used in emergencies to seal off plants for years if necessary. Steam and gas turbines use stainless because of its corrosion resisting and heat resisting qualities. Especially clean melted stainless is used for medical implants and artificial hips. A great deal of medical equipment - such as orthopaedic beds, cabinets and examination machines - is made as standard from stainless because of its hygienic and easy-clean qualities. Pharmaceutical companies use stainless for pill funnels and hoppers and for piping creams and solutions. Cars are making increasing use of stainless steel, primarily for exhaust systems (grade 409) and catalytic converters, but also for structural purposes. With greater attention being made to achieving low long term maintenance costs, less environmental impact and greater concern with life cycle costs, the market for stainless steel continues to improve.

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Demand Supply Worldwide (a) China: China is presently the worlds largest consumer of stainless steel. It consumed 2.25 Mt in 2001. Chinas production declined to 220,0000 tones in 1998 from 33,80000 tones in 1995 and 343,0000 tones in 1996. However, due to special thrust by the Chinese government, the production rose to 750,000 tones in 2001. According to Wang Keqiam, DGM, Taiyum Stainless Steel Co., Chinas steel production capacity will jump by 238 percent in 2010 to 2.1 Mtpa from the 2002 level. The Chinese government has adopted safeguard measures to restrict imports. The annual tariff free Quota for stainless cold rolled coils up to May 2003 was about 600,000 tones. This will be expanded to 650,000 tones over the following 12 months and increased by an additional 65,000 tones up to 2005. (b) Japan: Japans production of Stainless Steel in 2001 was 3.82 Mt and an estimated 3.78 Mt in 2002. The Japanese producers have gone for restructuring the industry. Nippon Steel is in the forefront of the restructuring programme. They have entered into Strategic alliances with two other companies Sumitomo Metal Industries and Nissin Steel. The arrangements will lead to a decline in Japans Stainless capacity to 3.6 Mtpa from 4.0 Mtpa - a reduction of 10 percent. From July 2001, the Japanese producers have curtailed the domestic shipment of Stainless Steel by 20 percent or more to prevent the domestic prices falling. (c) The USA: Production of Stainless Steel in the US declined to 1.8 MT in 2001 and then grew by 23.9 percent to 2.23 Mt in 2002. It is expected that imports to the US will be lower and its exports to China will decline substantially. (d) South Korea: The country produced 1.55 Mt of Stainless Steel in 2001 and about 1.58 Mt in 2002. It reached 1.68 Mt in 2002 and is expected to reach 1.76 Mt in 2005. POSCO is meeting about 86 percent of Koreas hot rolled stainless steel demand. Its production capacity is expected to reach 1.66 Mtpa after the completion of its expansion project now being implemented at a cost of US $518 million. POSCO will also expand its No. 1 H S Mill at Pohang to handle more stainless steel coils. (e) Taiwan (ROC): Taiwans stainless steel production in 2001 was about 1.23 Mt. In 2002, it increased by 15 percent to reach 1.41 Mt. It is expected that the countrys exports to China will decline sharply due to the safeguards measures adopted by that country. (f) Europe: In 2002, there was a consolidation of stainless steel industry in Europe Acerinox of Spain made a major acquisition of 64 percent stake in Columbus Stainless of South Africa. The deal made Acerinox the worlds third largest producer with a melt shop capacity of 2.5 Mtpa. It has planned to increase the slab capacity at Columbus by 200,000 tones to 750,000 tpa. Acerinox has also opened a new melt shop at its North American Stainless plant. The major expansion of 2002 was evident in Avesta Polarit of Finland commissioning its new melting, casting and rolling capacity at its Tarnio plant that took potential output from 1 Mtpa to 1.70 Mtpa. Avesta also brought on stream a new Euro 22 million-billet caster at its Sheffield Plant in the UK. Arcelors ALZ subsidiary brought on stream an expanded meltshop at its Ghent Plant in Belgium. Finlands Outokumpu acquired Corys Stake in Avesta Polarit and then moved to take full control of the Swedish producer. The stainless steel production in the E U countries in 2001 was 7.69 Mt. It increased to 7.92 Mt in 2002 but is expected to go down to 7.85 Mt in 2003. (g) India: At present there are about 19 producers of stainless steel in India with EAF/IF melting and AOD/VOD facilities having an annual capacity ranging from 10,000 to 400,000 TPA each. These units contribute about 80 percent of the countrys production. Besides, these about 17 IF units that melt stainless steel scrap and produce pencil ingots without any refining facilities. Their average per unit production ranges from 5,000 to 8,000 tones and they contribute about 20 percent of Indias Stainless Steel production.

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TEXTILE INDUSTRY Textile Industry is one of Indias largest industries, after agriculture. It provides direct employment to about 350 Lacs people. Besides this, there are a large number of ancillary industries, which are dependent upon this sector, such as manufacturing various machines, accessories, stores, ancillary items and chemicals. Known globally for its skill and craftsmanship, the Indian textile industry is also one of the largest export earners and accounts for about 35% of the gross export earnings in trade. Trade restrictions have hitherto kept the Indian textile industry from soaring to the height it is capable of, but this is expected to change, as after January 2005 the quota and other trade restrictions are being removed. Textiles cover the following sub-segments:1) Fibre intermediates; P-X, DMT, PTA, MEG, Caprolactum, Wood Pulp etc. 2) Fibres: ginning and pressing of cotton, manufacture of PFY, NFY, Rayon fibre etc. 3) Synthetic fibre/filament processing viz., drawing, texturising, twisting etc. 4) Yarn: spinning cotton & blends on rotors and ring frames 5) Weaving/Knitting 6) Processing and 7) Distribution. Structure of the Textile Industry The industry has a complex structure marked by presence of large-scale and small scale production units. The industry is manufacturer driven with spinning having large scale operations and the retailing as the weakest link. From growing own raw material (cotton, jute, silk and wool) to providing value added products to consumers (fabrics and garments), the textile industry covers a wide range of economic activities, and results in employment generation in both organized and unorganized sectors. Capacity The Indian Textile Industry has recorded a significant growth during the last decade. The spindleage increased from 33.15 million as on 31.03.97 to 34.15 million as on 30.11.04 and Rotors from 2.76 Lacs as on 31.03.97 to 3.85 Lacs as on 30.11.04. The loomage has however, declined from 1.24 Lacs in March 1997 to 0.86 Lacs in November 2004 in the organized sector. The growth of capacity in spinning and weaving sectors of the industry since 1997-98 is below: Growth in Capacity in the Organized Mill Sector

Source: Ministry of Textiles, annual report 2004-05

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Cotton Cotton is one of the major crops cultivated in India. It accounts for more than 75 % of the total fibre consumption in the spinning mills and 56 % of the total fibre consumption in the textile sector. The twin objectives of assuring off-take of the farmers produce at remunerative prices and making available adequate quantity of cotton at reasonable prices to the domestic textile industry are sought to be achieved through timely announcement of the Minimum Support Price (MSP) to the farmers and through appropriate export import intervention as and when necessary. It is the endeavour of the Government to improve the quality of cotton to that of international standards through effective implementation of the Technology Mission on Cotton (TMC). Cotton/ Man-made Fibre Textile Mill Industry is the single largest organized industry in the country employing nearly 10 Lacs workers. Besides this, there are a large number of ancillary industries dependent on this sector such as those manufacturing various machineries, accessories, stores, ancillary and chemicals. Even on a modest assumption that a workers family comprises five people, the direct dependents on the organized textiles mill industry itself work out to about 50 Lacs. Production of Spun Yarn The production of spun yarn increased from 3160 million kgs. during 2000-01 to 3221.37 million kgs. during 2004-05. A statement showing the production of spun yarn (including SSI units) is given below: In Mn. Kg

(A) - Anticipated Source: Ministry of Textiles Annual Report 2004-05 Production of Cloth The data on production of cloth in the mill sector, the handloom sector, hosiery sector and the power loom sector during the last two years and anticipated production for the current year are as follows: Production of Fabrics in Different Sectors (Mn. Sq. Mtrs.)

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Production of Fabrics in All Sectors (Mn. Sq. Mtrs.)

Textile Exports The growth of the textile industry has a bearing on the development of the economy, especially exports. Textile products continue to play an important role in the total export basket of the country. For 2004-05 the target for the export of textiles has been fixed at USD 15,160 million, against USD13,500 million set during 2003-04. (Value: USD in Million/Rs. In Crores)

Textile exports recorded a growth of 15.3% in 2002-2003 and 6.0% in 2003- 2004. During the period April-November 2004, textile exports were USD 8348.5 million, recording a growth of 4.6% as compared to the corresponding period of previous year. Cost comparisons of various countries Our main competitors in the textile sector include countries like China, Bangladesh, Indonesia, Sri Lanka and Pakistan. Like India, these countries too are cost-effective producers due to the advantage of lower labour costs, which account for a significant portion of the cost of converting fabrics into garments. The major markets for India have been the U.S. and the E.U.

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(% of total cost) Brazil China India Italy Korea Turkey USA Packing Labour Power Auxiliary Capital Raw Material Total Index Source: Ministry of Textiles The biggest advantage that India has over western countries is labour, while in comparison with China, the biggest advantage India has is the capital cost. From the last row of the above table, it can be seen that the total production cost of Indian textile product is about 56% of that of Italy (i.e. 56 upon 100) and about 64% (56 upon 87) of that of the US. Post MFA Global Environment Till 31st December, 1994, the exports of textiles to certain developed countries (e.g. United States of America (USA); Member countries of European Union (EU), Canada) were governed by bilateral textile arrangement entered into between India and these countries under the aegis of the Multi-Fibre Arrangement (MFA), outside the rules of the General Agreement on Tariffs and Trade (GATT). With effect from 1st January, 1995, the quantitative restrictions (import quotas) in the bilateral agreements under the MFA, were taken over by the Agreement on Textiles and Clothing (ATC) contained in the Final Act of the Uruguay Round negotiations of the GATT. As per ATC, the textile quotas were to be phased out and textile sector fully integrated into WTO by 1st January, 2005. The liberalized trading regime would result in increased international trade in textiles thus providing greater export opportunities; and at the same time expose the domestic industry to import penetration therein. The textile industry will have to improve its efficiency and productivity to meet the emerging global competition, on the export and the domestic fronts. Implication on Indian Textile Industry India has a very strong and diverse raw material base for manufacturing fibres/yarn from natural (i.e., cotton, wool, silk, jute) to artificial (i.e., synthetic, cellulosic and multiple blend of such fibres/yarn) raw materials. India has competitive advantage in terms of labour cost also. International Textile Manufacturers Federation (ITMF) conducted a comparative manufacturing cost study of 7 countries including India. This study has indicated that Indian industry has competitive advantage in terms of raw material cost and labour cost in manufacture of yarn and fabric. Therefore MFA phase out may not have much adverse impact on domestic textile industry. Top textile importing countries like USA and the EU are looking towards India for meeting their import requirements. India, according to several recent studies, is going to emerge as alternative source of supply to China. Indias growth in exports will be driven by value added made ups and apparel as India has comparative advantages over its competitors in relation to (i) availability of relatively inexpensive and skilled workforce; (ii) design expertise; (iii) large production base of basic raw material like home grown cotton, yarns and fabrics; and (iv) availability of wide range of textiles. 1% 5% 6% 13% 49% 26% 52 1% 4% 14% 12% 49% 20% 48 1% 6% 0% 1% 1% 7% 12% 10% 37% 33% 60 0% 25% 27% 7% 23% 18% 100% 87 30% 20% 14%

15% 28% 10% 14% 7% 36% 21% 33% 28% 14% 22% 56 100 52

100% 100% 100% 100% 100% 100%

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According to a recent study by CRISIL (commissioned by ICMF), the Indian textiles and apparel industry can achieve a potential size of USD 85 billion by 2010, of which, the domestic market potential would be USD 45 billion and export potential would be USD 40 billion. Nearly 60% of exports would comprise garments. This would create 12 million job opportunities, comprising of 5 million direct jobs in textile industry, and 7 million jobs in allied sectors. Initiatives in the Recent Past to Grant Impetus to the Textile Industry (i) Announcements in the Union Budget 2005-06: To strengthen domestic textile industry for meeting the growing global competition, the following important announcements have been made in the Union Budget 2005-06: The allocation to TUFS has been enhanced to Rs. 43500 Lacs, along with an additional capital subsidy of 10% for the processing sector; 30 items of textiles products and hosiery have been identified for de-reservation from items reserved for Small Scale Industry; Creation of a Special Purpose Vehicle (SPV) for improving infrastructure in manufacturing with an investment of Rs. 10,000 Crores; Excise Duty on Polyester Filament Yarn (PFY) and Polyester Texturised Yarn (PTY) reduced from 24% to 16%; Optional CENVAT Scheme has been extended to stand alone Texturising Units at 8% excise duty with CENVAT credit or at nil duty without CENVAT credit; Peak customs duty rates reduced from 20% to 15%; and Duties on specified textile machinery items, raw materials and spare parts for manufacture of such machinery brought down from 20% to 10%. The existing concessional duty of 5% on some other machinery is being continued.

(ii) Announcement of National Textile Policy: One of the main objectives of the National Textile Policy (NTxP-2000) announced in November 2000 is to facilitate the textile industry to attain and sustain a pre-eminent global standing in the manufacture and export of clothing. The policy endeavours to achieve the target of textile and apparel exports from the present level to USD 50 billion by 2010 of which the share of garments will be USD 25 billion. (iii) Technology Upgradation Fund Scheme: In view of the urgent need for stepping up the process of modernization and technology upgradation of the textile industry in India, Ministry of Textiles launched a Technology Upgradation Fund Scheme (TUFS) for the textile and jute industry for a five year time frame from 01.04.1999 to 31.03.2004. The scheme has since been extended till 31.03.2007. The scheme provides 5% interest reimbursement in respect of loans availed there under from the concerned financial institutions for investments in benchmarked technology for the sectors of the Indian textile industry specified there under. An additional option has been given to powerloom units for 20% capital subsidy under Credit Linked Capital Subsidy (CLCS-TUFS) upto a cost of Rs. 100 Lacs in eligible machinery with facility to obtain credit from a credit network that includes all co-operative banks and other genuine non banking financial companies (NBFC) recognized by the Reserve Bank of India. (iv) Liberalization of FDI Policy: Government of India has allowed foreign equity participation upto 100%, through automatic route, in the textile sector with the only exception in knitwear/knitting sector.

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(v) Export Promotion Capital Goods (EPCG) Scheme: The scheme facilitates import of capital goods at 5% concessional rate of duty with appropriate export obligation. Import of second hand capital goods without any restriction on age is also allowed under the new Foreign Trade Policy as announced on August 31, 2004. (vi) Advance Licensing Scheme: With a view to facilitating exports and to access duty free inputs under the scheme, standard input-output norms for about 300 textile and clothing export products have been prescribed and this scheme remains operation. (vii) Duty Exemption Pass Book (DEPB) Scheme: DEPB credit rates have been prescribed for 83 textile and clothing products. The nomenclature and rates for DEPB entries pertaining to certain textile products have been rationalized. The DEPB credit rates were reduced by 45% across the board on all textile items on 23.09.2004. While addressing the concerns of certain segments of the trade, the DEPB credit rates were again revised on 30.12.2004 by announcing changes to the extent of 60% reduction in respect of cotton textile items, 30% reduction in blended textile and woollen items and 22.5% reduction in man-made textile and silk items in place of the 45% reduction effected earlier. (viii) Duty Drawback Scheme: The exporters are allowed refund of the excise and import duty suffered on inputs of the export products under this Scheme. The Department of Revenue announced revision in All Industry Rates of Duty Drawback (AIR of DBK) on 18.01.2005 and the changes made effective from 19.01.2005. There has been substantial reduction in AIR of DBK in almost all textile export products except certain items of silk and wool sectors. In the revised Drawback Schedule, 165 new entries of textile products have been created in addition to earlier 101 entries. The revised rates have been prescribed on the basis of weight of the export product instead of earlier system based on FOB value of the product. Besides, in respect of apparel items, the drawback rates have also been given on the basis of composition of textiles.

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OUR BUSINESS Our Company is engaged in the processing and marketing of fabrics and manufacturing of Sponge Iron. Our company is having manufacturing facilities at Bhilwara (Rajasthan) for fabrics and Bellary (Karnataka) for sponge iron. The individual promoters of our Company are Mr. Raghunath Mittal, Mrs. Madhu Mittal, Mr. Rahul Mittal and Mr. Rohit Mittal. Our Company was promoted with an object to establish itself as a premier brand in the fabric manufacturing and processing by encouraging innovation and continuous improvement in products, processes and services. Our company was originally incorporated in the name of Janki Processors Pvt. Limited on September 16, 1993 under the Companies Act 1956 with Registrar of Companies, Rajasthan. The constitution as well as the name of company was changed to Janki Processors Ltd. on July 06, 2000. Later the name of our Company was changed to Janki Corp Ltd. w.e.f. December 31, 2003. In order to broad base our activities at national spectrum our Company has shifted its registered office to Mumbai w.e.f. 16th March, 2005. Our company is one of the large process houses at Bhilwara. The process house is having the state-of-art machinery for processing quality fabric at competitive price. Our company is presently having six stenters and 30 jet-dyeing machines, 68 Jiggers, 7 Drying Range, a KD Machine etc., which are considered to be the most sophisticated machinery for fabric processing. The process house has an installed capacity of processing 347.00 Lac meters of fabrics per annum. We also started marketing of fabrics in our own brand name JPL during the year 2003-04. Our company is operating through a network of agents spread throughout the country and the same has helped in placing the product of our Company at a national level. The country is currently sustaining a GDP growth of around 8%. With this unprecedented growth the economy is witnessing a boom in various sectors with emphasis on infrastructural sectors. The development of infrastructure in the country will play a complementary role in sustaining the current pace of development. With attractive returns and promising growth in the iron & steel industry, our Company has decided to take a plunge into this sector with a vision to set up an integrated steel plant. Moreover, the easy accessibility of raw materials at the decided location will facilitate operational economies to our Company. The vast experience gained by the promoters as industrialists will be an additional advantage. The setting up of integrated steel plant will make our Company less dependent on outside markets for its inputs and will gain cost competitiveness, by carrying on production from the raw material to finished product stage. We have diversified into the Iron & Steel sector by setting up a Sponge Iron Manufacturing Unit at Bellary, Karnataka as a nucleus towards establishing an Integrated Steel Plant. Iron & Steel Division of our Company is located in an area rich in iron-ore deposits. Most of the iron ore mines are located in Bellary-Hospet regions, which is about 100 Kms. from our factory premises. Skilled and unskilled labour is available in abundance. Our Iron & Steel unit is presently having a production capacity of 60,000 MTPA and we are under the process of expanding its production capacity to 180,000 MTPA which is the optimum capacity level for undertaking forward or backward integration by any company. We also propose to set up an Induction Furnace and Continuous Casting Machine for the production of Steel Billets with a capacity of 54,000 MTPA and a Power Plant of 10 MW capacity for the captive consumption of power.

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BRIEF DETAILS ABOUT THE PROJECT: Location The Project is located at Sidiginamola village, District Bellary, Karnataka. The land, bearing survey no. 95 A/B/C/D, 96 A/1, 96 A/2, 97A, 97B, 97C, 97 D/1 & 97 D/2 measuring 61.25 acres, converted for non-agricultural use, has already been purchased by our Company. Our Company has received approval from the Gram Panchayat, Bellary vide Licence No. 2/2005/2006 for the establishment of Iron & Steel Division at Sidiginamola Village, Bellary, Karnataka. Our Company has received all necessary approvals for the setting of the factory at the above mentioned address. Our Company has already established a sponge iron plant with the capacity of 60,000 MTPA on this land and the installation of 120,000 MTPA sponge iron plant is on an advanced stage. Our Company has chosen this site mainly due to its proximity to raw material sources and also better access to market. The rail and road transport is readily available at the site. Adequate ground water is available in the area. The annual rainfall, temperature, relative humidity and other climatic conditions are normal. Plant & Machinery The overall requirement of the Plant & Machinery for the entire Project is envisaged at Rs. 7699.00 Lacs, the details of which are mentioned hereunder:

For Setting up of Sponge Iron Plant: Plant and Machinery for which orders have been placed:
Particulars Sr. of Plant & No. Machinery 1 Complete Kiln and Cooler Assembly 2 Refractories including installation Date of Estimated Placement Total Cost of order 4.00 1,024.09 24.09.2004 Expected Date of Supply Gradually Entire received supplies will during April- be completed December by March 2005 2006 Orders were Gradually Entire placed to received supplies will various during April- be completed suppliers on December by Feb 2006 different 2005 dates 02.11.2005 Gradually Entire received supplies will during May- be completed December by Feb.2006 2005 23.04.2005 Partially Entire 26.07.2005 received in supplies will Nov. 2005 be completed by Feb.2006 Date of Supply

Supplier Promac Engineering Company Limited

Nos.

M/s. Thermotech, Navrang, Vesuvius. R.V., Vishwakarma, Sai Maruthi 3 Electro Static Thermax 4.00 Precipitator & Limited Gas Conditioning Tower 4 Weigh M/s. A.R. Feeder, Engineers Volumetric Feeder & Instrumentati on Package 5 Conveyor S.V.E. equipment Engineers Private Limited

303.04

198.89

95.34

95.13

23.04.2005

Gradually received during AprilDecember 2005

Completed

91

Kiln and M/s. Elecon 4.00 Cooler Gear Engg. Company Boxes and Accessories Kiln Feed Tube, Air Tubes M/s. Dwarkesh 4.00

75.94

27.12.2004

64.31

15.03.2005

Fully Completed received in June and December 2005 Partially Entire received in supplies will Nov. 2005 be completed by Feb.2006 Completed

8 Wet Scrapper conveyor & Chain Conveyor for ESP 9 Bag Filters

M/s. Enviro Abrassion

101.83

02.11.2004

Thermax Limited

36.24

Gradually received during AprilDecember 2005 17.01.2005 Gradually received during AugustJanuary 2006 21.03.2005

Entire supplies will be completed by Feb.2006

10

Conveyor belt

M/s. Hindustan Rubbers

19.84

11

Bi Metallic Lohman 6.00 Sliprings for Castings Pvt. Kiln & Cooler Ltd

20.46

01.11.2004

Fully Completed received in Nov. 2005 Partially Entire received supplies will during be completed December by Feb.2006 2005 Oct-05 Completed

12 Fly Ash Brick M/s. Engineers Making Enterprises Machine 13 Electrical BEMCI 4.00 Sliprings for Kiln & Cooler

11.00

05.01.2005

25.94

04.08.2005

Partially received during December 2005 Yet to be recd.

Entire supplies will be completed by Feb.2006 Entire supplies will be completed by March.2006

14 Weigh Bridge

Avery India Limited

14.66

18.01.2006

15

Conveyor Gear boxes and couplings 16 ID Fans & Accessories

17

Bearings

Premium Energy Transmission Ltd. Wesman Thermal Engineering Pvt. Ltd. M/s. Riddhi Siddhi Enterprises

22.21

08.06.2005 December 05 Completed

17.12

21.04.2005

Fully received in Nov. 2005 Fully received in Dec. 2005

Completed

7.56

10.09.2005

Completed

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18

Workshop Machinery

M/s. Reedip Technik

2.85

19 Hydraulic and Riddhi 4.00 Pneumatic Technologies System Limited 20 Vibrating Feeder & Magnetic Separators 21 Pumps Electromag Devices Pvt. Ltd. Mather & Platt Pvt. Ltd.

23.96

Fully received in Dec. 2005 18.03.2005 Partially received during October 2005 10.05.2005 Fully received in Jan. 2006

07.06.2005

Completed

Entire supplies will be completed by Feb.2006 Completed

19.63

12.85

11.02.2005

22

Air M/s. Inger Soll Compressor Rand

13.21

23.04.2005

23 Transformer M/s. Southern Power 24 DG Sets Uni Power (Two) of Engineers Pvt. 1000 KVA, Ltd., M/s. SBEE Cables etc. Cables

14.30

23.04.2005

176.24

10.06.2005 13.06.2005

Fully Completed received in Nov. 2005 Fully Completed received in Oct. 2005 Fully Completed received in Nov. 2005 Partially Entire received supplies will during be completed October to by Feb.2006 December 2005

Total (A) IMPORTED 1 Wheel Loaders

2,396.64 102.55 16.09.2005 Yet to be received Fully received in Jan. 2006 Fully received in Nov. 05 & Jan. 2006 Fully received in Oct. 2005 Yet to be received Completed

EC CAP Resources Limited 2 Raw Material EC CAP Preparation Resources Plant Limited 3 Sand Shanghai Washers Jianshe Co. Ltd.

319.47

01.04.05 & 18.08.2005 27.07.2005

33.38

Completed

Motors for Shanghai Equipments Jiansheluqiao and Machinery Co. conveyors Ltd., EC CAP Resources Pvt. Ltd. Total (B) Total (A+B)

47.96

26.02.2005

Completed

503.36 2900.00

Setting up of Captive Power plant: Our company proposes to set up a Captive Power Plant for the generation of power. The contract for the erection, installation and commissioning of Captive Power Plant will be given to single supplier on turn-key basis. Our Company estimate capital outlay of Rs.3,970 Lacs on the commissioning and installation of the power plant on the basis of the quotation of Thermax Limited (a Company located at Pune), dated 30th September, 2005, order for which is yet to be placed. The price as estimated by Thermax Limited includes Customs Duty, CIF

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value of import, Erection & Commissioning, applicable Taxes and Duties, WCT on Civil Works. We confirm that the promoters / directors / key management personnel of our Company do not have any connection whatsoever with Thermax Limited.

Setting up of Induction Furnace & Continuous Casting Machine: For the purpose of setting up of Steel Billet Plant, the contract for the erection, installation and commissioning of Induction Furnace & Continuous Casting Machine, will also be given to single supplier on turnkey basis. We estimate capital outlay of Rs. 829 Lacs on the commissioning and installation Induction Furnace and Continuous Casting Machine on the basis of the quotation of Electrotherm (India) Limited, Ahmedabad dated 18th August, 2005. The order of for this is yet to be placed.
Amount (Rs. in Lacs) Induction Furnace of 15 MT Capacity 150.00 Electricals based on 11 KV Line 71.50 Closed Loop Water Cooling System 18.70 Material Handling and Scrap Processing Equipment 134.15 Continuous Billet Casting Machine and Related Electrical and Cooling System 250.00 Miscellaneous 102.60 Taxes (Sales Tax , Excise and Others) 102.05 Total 829.00 Particulars We confirm that the promoters / directors / key management personnel of our Company do not have any connection whatsoever with Electrotherm (India) Limited. Further, Our Company has not bought or does not propose to buy any second hand Plant & Machineries for the existing Project. Technology

Textile Processing Our textile process house is working on automated technological process. We have installed the state-of-art machinery for processing quality fabric. We presently operate through six stenters, 30 jet-dyeing machines, 68 Jiggers, 7 Drying Range, a KD Machine etc. which are considered to be the most sophisticated machinery for fabric processing. Sponge Iron, Steel Billets and Captive Power Plant Our Company will be using proven technology for manufacturing of Sponge Iron, Steel Billets and power. The details of the technology used or proposed to be used are as given below: Sponge Iron There are two methods for the manufacture of Direct Reduced Iron (DRI) i.e. sponge iron. First is Gas Based Rotary Kilns and second is Coal Based Rotary Kilns. In India there are few gas based sponge iron manufacturing mainly on account of scarcity of natural gas. Majority of the plants in India are Coal Based Rotary Kilns manufacturing sponge iron. The technology adopted is sophisticated and adopted by majority of sponge iron manufacturing plants in India. Moreover, our Company has retained the services of Popuri Engineering & Consultancy Services (PECS), Hyderabad as the Technical Consultants, who are responsible for detailed design, engineering and execution of the project. PECS is a highly renowned consultancy firm engaged in providing consultancy for the sponge iron plants. It has provided consultancy to number of companies to set up sponge iron plants and their working / operation is reported to be satisfactory.

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Steel Billets Our Company would be manufacturing steel billets through the induction furnace and continuous casting machine, which is proven technology. Our Company has retained the services of Electrotherm (India) Ltd. on turn-key-basis. Captive Power Plant In contrast to majority of other industries, which are only consumers of energy, the Steel Industry by its inherent nature can generate surplus energy from its by-products, which can be used as fuels, and also waste heat recovery from the sponge iron making process. The utilization of these sources of energy favours in-house power generation and help in energy conservation.
During the process of reduction of iron ore in the sponge iron kiln, substantial quantities of hot gases are generated. This hot and dust laden exhaust gas from the kilns has to be cooled and then cleaned before discharging into the atmosphere through a stack, to comply with the stipulations of Pollution Control Board. The temperature of the kiln exhaust gas at the exit of the After Burning Chamber will be around 10000 C. Recovering substantial heat contained in the waste gas by generation of steam at an optimum pressure and temperature and then utilizing the steam for electric power generation is a desirable economic proposition. M.N. Dastur & Co. (P) Ltd., Chennai have been retained as the Technical Consultants, who are responsible for detailed design, engineering and execution of the Captive Power Plant. The consultancy firm has been selected due to their previous experience in handling similar Captive Power Projects. Our Company propose to retain the services of Thermax India Ltd. on turn-key basis for the execution of the project.

Process Our Company is into fabric processing and under the proposed project will produce Sponge Iron, Steel Billets and would also generate Power. Manufacturing processes of these are as described hereunder: Textile Division A brief description about the process and steps involved in the textile division for the processing of synthetic fabrics is as follows:
1. Grey Cloth Checking: The processing of fabric starts with the checking of Grey fabric for verification of length, width, oil stains, weaving defects etc. This is carried out manually on the checking tables. 2. Heat Setting: It is carried out for dimensional stability, increasing resistance and fettling preventions. This process is carried out on stenters. During this process, the fabric is passed through various chambers of the stenter, where it is tempered at about 150-200 degree centigrade temperature for 30-40 seconds. 3. Dyeing / Scouring: It is carried out to impart the desired colours according to the specifications from customers. The process is carried out on jet dyeing machine for dyeing of polyester and on jiggers for viscous dyeing. The fibre dyed synthetic is subjected to scouring to remove the stains, colours and other undesirable particles on it. This is carried out oil dyeing Jiggers in caustic soda/liquid detergent and hot water. 4. Stretching: In order to dimensionally set the fabric, it is passed through the stenter/drying range.

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5. Singeing: The fabric is passed through the carbonless blue flame on the singeing machine for burning the tuffs, which fuzz up during the weaving operation. The fabric is passed through this flame at a predetermined speed. 6. Finishing and Decatising: The dyed and processed fabric is treated with resins to give finish and usual appeal. The finished fabric is then passed with the thick wrapper cloth and steam is injected on the fabric in open Decatising machine to remove excessive shining and improve the luster of the fabric. 7. Folding and Packing- The Finished fabric is finally folded in meter Unit on folding machines in lump condition. The lump of the finished fabric is then finally packed in the polythene bag with an identification tag for dispatch.

Process Flow Chart for Textile Division

Grey Cloth Checking

Heat Setting

Dyeing / Scouring

Stretching

Singeing

Finishing and Decatising

Folding and Packing

Process for production of Sponge Iron The production process for the sponge iron is as given below:
Coal Raw Material Handling Yard: Coal received from Coal mines/Port is stored in a Coal Shed. From the Coal shed the coal is fed into the day bins for feeding to the crushing & screening Plant. Iron Ore Yard: Iron Ore received from the mines is stored in the yard. From the storage yard material is fed into the day bins for feeding the crushing & screening plant.

96

Coal Crushing & Screening plant: Coal is crushed & Screened to require fractions below 10mm size and conveyed to the stock house bins. The over size is recycled back and crushed to the required size. Iron Ore Crushing & Screening Plant: Iron Ore is crushed & Screened to required fractions i.e. -18mm to +4mm. The required sizes are fed into the stock house bins. The rejected size i.e. -4mm is conveyed to the reject bin from where it is disposed off. The oversize of +18mm is recycled back and crushed to the required size. Lime Stone: Lime Stone of size 0-8mm are conveyed from the storage yard to the stock house bins. Stock House: Stock House consists of 8 bins of which 3 are Injection Coal, 3 are Feed Coal, 1 is Iron Ore and balance is Lime stone bin. From the Stock House Two Conveyors are installed for conveying Injection Coal and other conveyor conveys Iron Ore, Feed Coal and Lime Stone. Below the stock house weigh feeders are installed from which the raw materials are fed into the kiln in required quantities. Kiln: From the Stock House from one end of the Kiln Injection Coal is fed into the Kiln and from the other end Iron Ore, Feed Coal and Lime stone is fed. The Kiln is fired with the injection coal from the discharge end and an appropriate temperature profile is maintained inside the kiln. The Kiln is continuously rotated to facilitate movement of charge at the required speed. The Iron Ore in the Kiln is reduced to Sponge Iron. The Sponge Iron comes out through discharge end through a discharge chute and enters the cooler. After Burning Chamber: The combustibles in the waste gases generated from the Sponge Iron Process are subjected to total combustion in the After Burning Chamber. From the ABC the gases are sent to the Gas Conditioning Tower. Gas Conditioning Tower (GCT): The Gases from the ABC are sent to the GCT. The gases at 900 to 1000 Deg. C are fed to the Gas Conditioning Tower. In the GCT the gases are cooled by spraying water. The gases are cooled to about 200 Deg. C. The gases are then sent to Electro Static Precipitator. Electro Static Precipitator (ESP): The gases sent to the ESP contain dust particles and gases. In the ESP the gases are made free of dust particles and sent to a chimney for letting it into the open air. The dust particles in the gases are collected in the ESP and this fly ash is collected by a chain conveyor below the ESP which is inturn transmits it in to a Surge Bin. Cooler: The Sponge Iron received from the Kiln is cooled in the cooler. Water is sprayed on the cooler for cooling the sponge iron. The Sponge Iron is then conveyed to an Intermediate Bin or Product Separation System.

97

Intermediate Bin: The Sponge Iron discharged from the cooler can be either stored in the Intermediate Bin or directly conveyed to Product Separation House. During any shutdown in the Product Separation House the material is stored in the Intermediate Bin for reconveying the same to Product Separation System when it is ready. Product Separation House: The Product separation house contains a Vibrating Screen and two Magnetic Separator. The Sponge Iron is screened to size fractions of +4mm to 25 mm (Sponge Iron Lumps) and -4mm (Sponge Iron Fines) and is sent to the Magnetic Separators. In the Magnetic Separators the Sponge iron lumps & Fines is separated from the Non Magnetic material i.e. Char. The Sponge Iron Lumps and fines are then stored in the Product Storage Bin and the non magnetic material, char, is collected in char storage bin. Product Storage Bins: The product i.e. Sponge Iron Lumps and fines are stored in these bins from where they are dispatched to the customers. Char Storage Bin: The non magnetic material, char, is collected in the char bin and then loaded in to the dispatch trucks.

98

Process Flowchart for Sponge Iron

Coal Raw Material Handling Yard

Iron Ore Yard

Coal Crushing & Screening Plant

Iron Ore Crushing & Screening Plant

Lime Stone Stock House

Iron Ore Feed Coal & Lime Stone

Injection Coal

KILN

ABC

GCT

ESP

Cooler

Intermediate Bin
Sponge Iron & Charcoal

Product Separation House

Sponge Iron Lumps & Fines Storage Bin

Char Storage Bin

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Process for production of Steel Billets The production process for the Steel Billets is as given below:
Raw Material Yard: The raw material used in Steel making process are Sponge Iron, Scrap, Pig Iron & other alloys depending upon the steel to be produced. All the above raw materials are stored in the storage yard. Raw Material Testing: Before the material is taken for production the material is tested for its quality and grade. If the material is as per the specified norms it is taken for production or the materials are rejected. Platform for Charge Mix of Raw Materials: On this platform the raw materials are mixed in required proportion and then fed into the Induction furnace to get the required grade of Steel. Raw Material Weighment: The raw material is weighed and then fed into the Induction Furnace so that we can have the input data to be able to compute the consumption pattern of raw materials and the production economics. Induction Furnace: The Induction Furnace facilitates electrical heating by creating eddy currents in the metallic charge which offers resistance to the current and which in turn increases the temperature of the charge. The temperature, hence, can be maintained precisely at the required level so that the solid charge is liquefied. The Hot metal thus formed is tapped through a opening called tap hole and is fed to a Continuous Casting Machine. Continuous Casting Machine: The Continuous Casting Machine consists of high heat conducting Moulds through which the hot metal is passed. The moulds could be of different cross-sections, as per which, Billet/Ingots/Blooms are casted and cut to required length. The product is then stored in finished goods Storage Yard from where it can be dispatched or converted to final product through a rolling mill.

100

Process Flowchart for Steel Billets

Raw Material Yard Sponge Iron + Scrap + Pig Iron + Other Alloys

Testing of Raw Material

Plat Form for Charge Mix of Raw Material

Raw Material Weighment

Induction Furnace

Continuous Casting Machine

Billets Storage Yard

101

Process for production of Captive Power Plant

ABC of Sponge Iron Kiln: The Waste Gases generated from the Sponge Iron process will be at a temperature of about 900 Deg C and they contain combustible dust and also gases in them. These combustibles are fully burnt in the After Burning Chamber (ABC) and then utilized for generating steam in the Waste Heat Recovery Boilers. Waste Heat Recovery Boilers: The Waste Heat Recovery Boiler utilizes the heat content of the waste gases from the Sponge Iron process for generating steam. Treated water is fed into the Boiler where the water is converted to steam. The high pressure steam generated from the Boilers is fed into the turbine. Electro Static Precipitator: The waste gases after firing the boiler is sent to the ESP where the dust particles are settled in to the hoppers placed below the ESP. The fly ash thus generated is collected by a chain conveyor and then conveyed to a Fly Ash brick making plant or to Fly ash pond. Turbine: The high pressure steam generated in the boiler is sent in to the turbine which causes rotation of the turbine rotor. Output shaft of the turbine is coupled to a generator. Generator: The generator, which is coupled with the turbine, on rotation of its rotor converts this mechanical energy into electrical energy. The power thus generated is utilised as required through a Substation. Power Supply Line / Substation: The electrical energy generated from the generator is supplied to power line which is connected to the substation from where the power is distributed. Demineralization Plant: The raw water sourced from the Borewells/any other source is treated in demineralization plant and by removing the dissolved solids, salty contents and all the biological matter, the water is softened. Cooling Tower: The water used for cooling the condensate formed after the steam gets cooled in the turbine is sent to a cooling tower where the hot water is cooled and then it is recycled into the condenser.

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Process Flowchart for Captive Power Plant

De-Mineralisation Plant

ABC of Sponge Iron Kiln

Boiler Feed Water

Waste Gases

Cooling Tower

Waste Heat Recovery Boiler

Steam

ESP

Dump Condensor for Condensing Steam to Water

Turbine

Fly Ash Collected in Chain Conveyor

Generator

Fly Ash Bricks making Plant/Ash Pond

Feeder Line

Power Line or Substation

Collaborations Our Company has not entered into any technical or financial collaboration with any other entity. INFRASTRUCTURE FACILITIES: Raw Materials: Textile Processing The key raw materials used for textile processing are dyes and chemicals. We purchase these from various suppliers as per our requirements.

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Sponge Iron We have selected the site at Bellary (Karnataka) due to its proximity to raw material at competitive prices. The principal mineral required for the project is Iron Ore, which is available in abundance in Bellary-Hospet region. Steel Billets The major raw material required for the manufacturing of mild steel billets is Sponge Iron, which is proposed to be produced in house. Our Company will be having a total installed capacity of 180,000 MTPA (after expansion) for the manufacturing of sponge iron; therefore entire requirement would be met from in house production. Other raw materials required for manufacturing of Steel Billets are Pig Iron, Melting Steel Scrap (M.S. Scrap), and Cast Iron Skull from integrated steel plants, ferro alloys and aluminium shots, which will be purchased from domestic market only. Hence, no difficulty is anticipated as regards the regular procurement of the same. As there are no restrictions on the import of scrap bulk quantities can be imported to balance any fluctuations in the domestic market. The composition of raw material is as under: Raw Material Mixing Ratio Yield Sponge Iron 70% 88% Pig Iron 20% 95% Heavy Melting scrap 10% 98% Total 100% 90.40% Captive Power Plant The major raw material required for the generation of the power is water. Water requirement will be met from Hagari River, which is about 4 kms away from plant site. Intake well and pumping system are being set-up for this purpose. Moreover, the company is also building a reservoir for rainwater harvesting and to cater to the requirements of the power plant. Utilities: Power

For Textile Division We purchase electricity from Rajasthan State Electricity Board. We also have stand-by generators which can be used in case of power failure. For Iron & Steel Division Our Company has obtained assurance for power supply from Karnataka Udyog Mitra (KUM), a State Level Single Window Agency of Government of Karnataka vide their letters dated March 29, 2004 and January 17, 2005 and February 01, 2005. Further the Gulbarga Electricity Supply Company Limited has vide their letter dated June 15, 2004 sanctioned power to the extent of 125 KVA. The power supply for the Sponge Iron Plant is planned from 110 KV substation of Karnataka Power Transmission Corporation Ltd (KPTCL) grid at Moka. Our Company will draw power from the KPTCL grid till the execution of Captive Power Plant (CPP), through the 110 KV transmission line. This is sufficient to meet the power requirements of the project. After installation of CPP, our Company will install a dedicated 110 KV overhead transmission line between plant site and substation at Moka for interconnecting the power plant with KPTCL grid. We have also installed two 500 KVA DG Sets as stand by arrangements.

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Water

For Textile Division Water is used for the purpose of Dying and Washing of the fabric. Water requirement of Textile Division at Bhilwara is being met from Banas River. We have set up intake well and pumping system for the purpose of water supply. For Iron & Steel Division Water is used as a cooling medium in the heat exchanger equipment in power plant such as condensers, oil coolers, generator air coolers etc. of turbo generator. In addition, it is used as make up water for boiler after demineralization, dust conditioning in dry ash handling system and fire fighting system. A small quantity of water will be required for drinking and sanitation for plant personnel.
Water requirement will be met from Hagari River, which is about 4 kms. away from plant site. Our Company is in the process of taking approval for the use of water from the river. Intake well and pumping system are being set-up for this purpose. Moreover, the company is also building a reservoir as a step towards rain water harvesting to tap the rain water and to cater the requirements of the power plant. Compressed Air

For Textile Division No compressed air is required for Textile Division. For Iron & Steel Division Compressed air is required, in Captive Power Plant, for the operation of pneumatic devices, instruments and controls and for general-purpose use in the plant. The Captive Power Plant will have 2 compressors (1 working + 1 standby) of 300 N cu m / hr capacity and at 7 KSCA pressure.
Manpower

For Textile Division Our Textile Processing Division requires an appropriate mix of skilled, semi-skilled and unskilled labour, which is available in abundance in Bhilwara, being the textile hub of Rajasthan. At present, we have about 270 employees, which includes managerial & supervisory staff and skilled, semi-skilled & unskilled employees. For Iron & Steel Division In our Iron & Steel Division, presently we have about 130 employees, which include managerial & supervisory staff and skilled, semi-skilled & unskilled employees. The total manpower requirement for the project has been estimated at 150, inclusive of managerial, supervisory, administrative, skilled/unskilled workers and security staff. We will be recruiting the additional manpower as listed above in due course for which we do not envisage any difficulty as the same is available in and around our plant location, being a developed iron and steel hub.
OUR PRODUCTS Our Company is engaged into dying, processing and marketing of synthetic fabric and production of sponge iron and billets. These are used by various manufacturers for the following end uses:

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Synthetic Fabrics Dyed and Processed synthetic fabrics are used by various manufacturers in Apparel and Garment Industry. Further, we also market the synthetic fabric in our own brand name i.e. JPL. Sponge Iron Sponge iron is used in steel melting. It is an iron bearing material, which is a substitute for MS Scrap in secondary steel making. The primary iron making plants like Blast Furnaces and Basic Oxygen Furnaces have also started using sponge iron as their basic raw materials in place of iron ore and scrap, respectively to save on the cost and also to improve on quality as sponge iron is produced from virgin mineral and hence, its quality will be highly consistent, uniform and predictable. Steel Billets Steel Billets are used to make rolled products which are used in every Building & Civil Construction work. These Billets are made of size 125 x 125 mm. Rolled products are mainly the Cold Twisted Deformed Bars normally called as CTD Bars, TMT Bars, Round Bars & Light Structural such as Channels & Girders up to 150 mm size, angles up to 75 mm etc. PAST PRODUCTION FIGURES FOR THE INDUSTRY The Textile Industry and Iron and Steel Industry are highly fragmented and are dominated by large number of unorganized players. There are no published data available to our Company for past production figures, existing installed capacity, past trends and future prospects regarding exports, demand & supply forecasts. COMPETITION Our Company is into processing and marketing of fabrics and also undertakes the manufacturing of sponge iron and proposes to manufacture steel billets. Both the Textile and Iron & Steel industry is an unorganized segment. Iron & Steel and Textile being global industries, we face competition from various domestic and international manufacturers. However, after being equipped with captive power plant and due to economies of scale after increase in capacity, we have edge over other small & medium size manufacturers in the country. Globally, we face stiff competition from large size manufacturers in China, Indonesia, Korea, Pakistan, Bangladesh etc. APPROACH TO MARKETING & PROPOSED MARKETING SETUP We are engaged in the processing of fabrics for the past thirteen years, we have set up a full-fledged marketing network of dealer and agents all round the country to distribute our product. The marketing function is under direct supervision of Managing Director, Mr. Raghunath Mittal and is supported by various subordinates. Our company has also started the marketing of fabrics since year 2003-04. Our marketing strategy is based on the products type and the end use segment. We adopt hybrid-marketing module comprising of direct customers approach and existing agents network. We have appointed various agents in domestic market to obtain regular orders. Iron and Steel Division of our Company has started commercial production of sponge iron from January 27, 2005.The marketing team of the division is headed by Mr. G. N. Reddy (General Manager) and is under direct supervision of Managing Director, Mr. Raghunath Mittal. Marketing Team of our Company is exploring the local and national markets for placing its product. We are under the process of entering long-term contracts for the supply of sponge iron to various users. Our company is also selling its product through the dealers and consignment agents.

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As we also propose to manufacture Steel Billets and would be marketing the billets in the local markets. There is a huge demand of the product in the local market, evidenced by the recent trend of infrastructure development and industrialisation in the State as well as in the country. The demand of the product is expected to increase at a very fast pace as iron is one of the basic and most essential inputs in the construction as well as in engineering and manufacturing industries. Billets produced through Continuous Casting Machine are a better raw material in comparison to Ingots due to their better quality and also due to the fact that the cost of rolling through ingot is more. Hence billets are preferred as raw material by the rolling mills. Since, our Company is going for the manufacturing of steel billets for the first time it proposes to sell the production in the local and national markets. We are under the process of negotiations with some customers and users of steel billets. We are hopeful of entering into a Memorandum of Understanding / long term agreement with these parties in due course of time. After the project, our Company proposes to increase depth of our marketing network and explore new markets for the increased production. EXPORT POSSIBILITIES AND EXPORT OBLIGATIONS, IF ANY Currently, our entire existing production of Textile Division and Iron & Steel Division is sold locally, as on date; we dont have any export obligations. In future also we propose to sell our products (both from textile division & Iron & Steel Division) in domestic markets. BUSINESS STRATEGY Earlier our Company was engaged into processing and marketing of textile but later we have diversified into the manufacturing of sponge iron by setting up Iron & Steel Division at Bellary as a nucleus towards building a Wholly Integrated Steel Plant. We are under the process of increasing the production capacity of manufacturing sponge iron from the level of 60,000 MTPA to 180,000 MTPA. It would be the ideal capacity to undertake any forward or backward integration. We are also proposing to install a 10 MW Power Plant to meet the power requirement of the Sponge Iron Plant. Power is an important factor of production and we are mainly dependent on the state electricity board for the supply of power. The power plant would be utilizing the waste gases emanating from the production of Sponge Iron, thereby generating the power for the in-house consumption at much lower rate in comparison to the charges paid by our Company to State Electricity Board. Power generated would be utilized by sponge iron plant and further in order to utilize the surplus power generated we also propose to install Induction Furnace & Continuous Casting Machine with a capacity of 54,000 MTPA for the production of Steel Billets. The main raw material of the production of the steel billets is sponge iron, which would also be available in-house. Thus, there would be a proper synchronization between the activities in Iron & Steel Division Sponge Iron Manufactured would be consumed in the Steel Billets Plant and the power generated by the power plant would be utilized by the Sponge Iron Plant and Steel Billets Plant. Our Company proposes the following strategies for future growth:

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New facility and expansion of the existing facilities Our Company proposes to install an Induction Furnace and Continuous Casting Machine for the production of Steel Billets with a capacity of 54,000 MTPA and increase the existing production capacity of sponge iron plant by 120,000 MTPA. Reduction of Operational costs Setting up a Power Plant for captive consumption to gain cost competitiveness.

Continue to build-up a professional organization We have a team of professionals and technocrats to look after various stages of production, commercial and marketing divisions of our Company. We believe in transparency, flow of information, commitment to the work among our work force and with our valuable customers, suppliers, investors, government authorities, banks, financial institutions etc. Over a period of time, we have been able to build an image that can be matched with our peers. The philosophy of professionalism is foundation stone of our business strategy and we wish to make it more sound and strong in times to come. Enhancing Customer Base Our Company intends to grow business continuously by adding new customers. We aim to do this by effective leveraging of our marketing skills & relationship and further enhancing customer satisfaction. Quality Products Our Company intends to produce the quality products which are acceptable worldwide. For that, our Company shall be deploying better technologies in Production as well as R&D Departments. Captive Demand of the product Around one-fourth of the production of the sponge iron would be consumed in-house for the manufacture of Steel Billets. This will also lower our cost of production.
In summary our business strategy is as follows: To continue to leverage our knowledge and skills in specialized solutions to the fabric division To expand our customer base and thereby grow revenues To upgrade the existing manufacturing facilities To set up a 10 MW Captive Power Plant by utilizing the heat content of the waste gases generated from the production of sponge iron to cater to the power requirements of Induction Furnace and the Sponge Iron Plant. To set up Induction Furnace and Continuous Casting Machine for the manufacturing of Billets. To minimise the cost of production by harnessing the power so generated and manufacturing of steel billets from the in-house consumption of sponge iron.

FUTURE PROSPECTS The global scarcity of substitutes, leading to increase pricing power coupled with favourable demand outlook makes sponge iron industry prospects bright. Sponge iron is basically a substitute for scrap. Government is also encouraging this sector so as to reduce the dependency of steel mills on imported scrap, which globally is facing a severe scarcity situation. Currently, we have the capacity of 60,000 MTPA and owing to growing demand and consumption, attributed to high infrastructure growth plans of the government and entering

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of new big and small capacity players and increase in capacities by existing big players such as Tata Sponge and Jindal Vijaynagar Steel, we are also planning to increase our capacity to 180,000 MTPA and build a captive power plant of 10 MW capacity to gain cost efficiency and sustainable competitive advantage. The development of successful business encourages us to believe that we can replicate the revenue generation and improve our margins. Such a vision can only be enhanced through the adoption of the diversification scheme which provides countries such as India that have a high iron & steel- skill base and relatively low labour costs with a competitive advantage in international textile trade going forward. Our company now proposes to utilize the heat emanating from the production process to generate power for captive consumption. The cost of power procured from SEB is Rs. 4.50 per unit while that produced internally is Rs. 2.50 per unit. We will also set up induction furnace to utilize power. Thus, it would lead to savings in the power cost for the unit, which is an important cost component. Thus, it will provide additional benefits to our Company and provide it a competitive advantage over the non-integrated units. LICENSED & INSTALLED CAPACITY AND CAPACITY UTILISATION Licensed Capacity No license is required under the Industries (Development & Regulation) Act, 1951, for textile processing, manufacturing and marketing of fabrics, therefore the details of licensed and installed capacity are not applicable to us. However, we have filed the required Industrial Entrepreneurs Memorandum (IEM) to the Government of India, Ministry of Industry, Secretariat for Industrial Assistance and obtained the acknowledgement dated December 9, 1993 bearing no. 4150/SIA/IMO/93 for processing of Woven Synthetic Fabrics Bleaches of Manufacture Unbleached and others for the Textile Division at Bhilwara. Further, we have filed the required Industrial Entrepreneurs Memorandum (IEM) to the Government of India, Ministry of Industry, Secretariat for Industrial Assistance for our Iron & Steel Division at Bellary as under: i) Acknowledgement receipt bearing no. 843/SIA/IMO/2004 dated March 12, 2004 for the manufacture of Direct Reduced Iron (Sponge Iron), annual production capacity being 60,000 Tonnes located at Village Sidiginamola, District Bellary, Karnataka. Acknowledgement receipt bearing no.3851/SIA/IMO/2005 dated August 11, 2005 for the increase in the annual production capacity from 60,000 Tonnes to 1,80,000 Tonnes of Direct Reduced Iron (Sponge Iron) and manufacture of steel billets with proposed annual capacity of 1,20,000 Tonnes located at Village Sidiginamola, District Bellary, Karnataka. Acknowledgement receipt bearing no.4096/SIA/IMO/2005 dated August 26, 2005 for generation and transmission of electric energy with proposed annual capacity of 24 MW, located at Village Sidiginamola, District Bellary, Karnataka. Acknowledgement receipt No. 5310/SIA/IMO/205 dated November 17, 2005 to manufacture steel billets with capacity of 150,000 MTA be located at village Sidiginamola, Distt. Bellary, Karnataka.

ii)

iii)

iv)

Installed Capacity and Capacity Utilization Sponge Iron: Our Company presently has installed 2 X 100 TPD capacity Rotary Kilns for manufacturing 60,000 MTPA of Sponge Iron. Our Company is going in expansion to increase the total

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capacity to 1,80,000 MTPA by installing 4 more such Rotary Kilns. The current and projected capacity utilization of Sponge Iron Plant is as under: Year Installed Capacity (MTPA) Capacity Utilization Production (MTPA) 2004-05 (Actual) 60,000* 10.05%* 6,028 2005-06 60,000** 70%** 42,000 2006-07 1,80,000 80% 1,44,000 2007-08 1,80,000 85% 1,53,000

* The first Kiln of our Company started production from January 27, 2005 and the second Kiln started production from March 30, 2005, therefore the level of production is low. ** Our Company is under the process of implementation of the expansion project for installing 4 additional Kilns to increase the capacity to 1,80,000 MTPA. The kilns are expected to become operational from April 2006. Therefore, the total capacity has been considered at 1,80,000 MTPA.

Captive Power Plant: Our Company proposes to install two Waste Heat Recovery Boilers for Kiln exhaust gas, one fluidized bed combustion boiler and one 10 MW capacity turbo generator. The estimated potential for power generation based on the waste gas from two kilns and the FBC is of the order of 10 MW. The Captive power plant shall become operational from April 2007. Induction Furnace & Continuous Casting Machine: Our Company proposes to install a 15 MT Induction Furnace and a Continuous Casting Machine for the manufacture of Steel Billets of size 125 x 125 mm. Based on 300 working days per year, annual installed capacity after expansion works out to 54,000 MTPA. The selection of the installed capacity has been considered keeping in view the economy and efficiency of the plant. The Steel Billet Plant shall become operational from April 2007. The Plant is expected to be working at 85% capacity utilization from 1st year i.e. 2007-08 onwards.
COMPETITIVE STRENGTHS

Experienced and Qualified Management All our management personnel and specially our key management personnel are well qualified and experienced in their respective fields. Our Company works under the supervision of experienced Board of Directors and is also supported by experienced and technically qualified execution team. Optimum Utilization of Manufacturing Facilities Our Company is able to utilize manufacturing facilities at an optimum level by balancing production and marketing efforts. Further, our Company has the capability to utilize the gases generated in the production of sponge iron to produce electricity. This help to reduce the Raw Material costs and maintaining the cost competitiveness. Captive Power Plant In the current Project, our Company also proposes to set-up a Power Plant of 1X10 MW in our existing unit located at Bellary, which is estimated to be sufficient for our captive power requirements in relation to our Project.

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Professional Management Our company is managed by the qualified management team with several years of relevant experience in their domain. Our managing director Mr. Raghunath Mittal is having experience of over two decades in the line of textile, coke and iron and steel industry. Board of Directors who are qualified and having a vast experience in the industry supports our management team. Quality Standards Our Company has always believed in the quality in our processes and products. We adhere to quality standards as prescribed by our customers, which has given us a brand name among our customers. Strong Customer Relationship Our Company has strong customer base in the domestic market. Over a period of time, our Company has built-up a track record for quality products and timely delivery. Our Company had signed a MOU with JSW Steel Ltd. for sale of our entire production of sponge iron for a period of 6 months from 28th January 2005. The textile division of our Company is having an established network of the agents spread through out the country ensuring availability of the products at competitive prices to the end users.
The marketing and R&D team of our Company closely interact with the customers and understand their requirements and develop the products as per their requirements. Our Company has been able to retain customers and further strengthen the relationship by providing them end-to-end solutions for their requirements.

Capability to Manage Multiple and Large Orders Large orders require capabilities to manage large workforce, complex sourcing, production planning and ability to ensure timely delivery to the customer. Over the years, our Company has developed the skills to manage multiple large orders concurrently. Vertical Integration Captive Power Plant: Power is one of the major inputs for the manufacturing process in Iron and Steel Industry. Our Company will be meeting entire power requirements through this captive power plant, with a capacity of 10 MW.
The waste gases coming out of the Rotary Kilns of sponge iron plant would be diverted to Waste Heat Recovery Boiler (WHRB) by installing damper at Chimney Inlet. The temperature of waste gases would be dropped from around 10000C to 1750C in the WHRB and the heat recovered would be made available to the Turbo Generator. To help the gases to pass through the WHRB, induced draft fans are provided at the outlet of WHRB. The steam generated from one 100 TPD Sponge iron plant would be 10.3 Tonnes / hr. at 67 KSC (Kg per Square Centimeters) pressure at 4850C temperature. The steam generated as above from two nos. of WHRB boilers would be fed to 10 MW Turbo Generator for generating power.

Steel Billets: We are setting up a steel billet manufacturing plant. The main raw material required for the manufacture of the steel billets is sponge iron. We have already set up a 60,000 MTPA sponge iron plant and are under the process of expanding our manufacturing capacity to 1,80,000 MTPA. Therefore, the raw material required for the manufacture of Steel Billets would be available in-house reducing our cost of input and thereby increasing profitability.

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Commercial Production Commenced We have already successfully set up a 60,000 MTPA Sponge Iron Plant, for which commercial production has already been commenced. Firm Loan Tie Ups The entire loan requirement for the proposed project amounting to Rs. 3400.00 Lacs has already been sanctioned to us through State Bank of Bikaner and Jaipur and State Bank of Mysore. Strategically located in a mineral-rich region Iron & Steel Division of our Company is located in an area rich in iron-ore deposits. Most of the iron ore mines are located in Bellary-Hospet regions, which is about 100 Kms. from our factory premises. Skilled and unskilled labour is available in abundance. Domestic demand augurs well for our Company We are manufacturing sponge iron which is an intermediate product and used in the steel re-rolling mills and induction furnace. We also propose to manufacture the steel billets, which are also an intermediate product use in the production of TMT bars, angles, rods, Channels, Girders, and Light Structurals etc. These products are used extensively in the housing and infrastructure sectors. India is in the midst of a construction boom in housing and infrastructure, which augurs well for our Company.
Insurance Our Company keeps all immovable and movable properties duly insured with various insurance companies under the following nature of insurance policies: Standard Fire and Special Perils Policy, Bellary Machinery Breakdown Insurance Policy Electronic Equipment Insurance Policy Cash insurance Policy Package Policy for miscellaneous type of vehicles Package Policy for goods carrying Comm./ vehicle Group Personal Accident Policy Group Mediclaim Policy Workmens Compensation Policy Package Insurance for Various Vehicles Standard Fire and Special perils Policy, Bhilwara Marine cum Erection Insurance Policy Boiler Explosion Insurance Policy PROPERTY There is no land, which is forming part of cost of project. Further, we do not propose to purchase any land / property out of the proceeds of this Issue. However, our Company has purchased total land admeasuring 61.25 acres from various parties, on which our existing expansion project is being carried out. The relevant details of the land purchased for the project are mentioned hereunder: Sr. Date of Vendor No. Purchase 1 25th Mr. B. P. January Suresh, 2005 Bellary Location Area Amount Nature (Rs.) of Title 1,13,850/- Freehold

Registration and Sub- 2.53 registration Districts of Acres Bellary in the village of Sidiginamola, converted to N.A industrial purpose bearing Sy. Nos. 96A/1

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25th January 2005

Mr. B. R. Thippeswamy Bellary

22nd December 2004

Mr. B. R. Thippeswamy, Bellary

22nd December 2004

Mr. M. Pedda Ranga Reddy, Bellary

11th 2004

May Mr. B R Thippeswamy, Bellary

Registration and Subregistration Districts of Bellary in the village of Sidiginamola, converted to N.A industrial purpose bearing Sy. Nos. 96A/2 to the extent of 8.88 acres and 97D/2 to the extent of 3.02 acres Registration and Subregistration Districts of Bellary in the village of Sidiginamola, converted to N.A industrial purpose bearing Sy. Nos. 97C to the extent of 6.88 acres and 97D/1 to the extent of 1.53 acres Registration and Subregistration Districts of Bellary in the village of Sidiginamola, converted to N.A industrial purpose bearing Sy. Nos. 95A to the extent of 2.78 acres, 97B to the extent of 3.67 acres, 95C to the extent of 2.36 acres and 95D to the extent of 3.83 acres 97A, 97B, Sidiginamola Village, Bellary, Karnataka.

11.90 Acres

5,35,500/- Freehold

8.41 Acres

3,78,450/- Freehold

12.64 Acres

5,68,800/- Freehold

25.77 11,59,650/- Freehold Acres

We confirm that the land acquired by our Company is registered in our name and is free from all encumbrances. We also confirm that the entities from whom our Company has acquired the land are not related to any of the promoters/ directors of our Company. We further confirm that we have already received all the Government Approvals pertaining to land. KEY INDUSTRY REGULATIONS

IRON & STEEL DIVISION

Duties & Levies on Iron & Steel

Customs Duty
The customs duty on items falling under Chapter 72 has been reduced sharply during the last five years. The customs duty on non-alloy steel and alloy steel was brought down to the level of 5% and 15% respectively in 2004-05. In the Union Budget 2005-06 customs duty on alloy steel has been further brought down to 10%. Currently the customs duty on prime non-alloy steel and prime alloy steel is 5% and 10% respectively. The peak rate of customs duty on Chapter 72 items was brought down from 40% to 20% w.e.f. 1.1.2005, as a result the customs duty on seconds and defectives also stands reduced from 40% to 20%. In the Union Budget 2003-04 customs duty on refractory and refractory making raw materials have also been reduced to 10%. Some of the other changes made during the last one year in the structure of customs duty on items falling under Chapter 72 are as follows:

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i. Customs duty on melting scrap reduced from 5% to Zero. ii. Customs duty on ships for breaking reduced from 15% to 5%. iii. Customs duty on steel making raw materials like non coking coal, metcoke and charged nickel has been reduced to 5%.

Excise Duty:

The excise duty on all iron and steel items falling under Chapter 72 has been increased from 12% to 16% in the Union Budget 2005-06.

Levies on Iron & Steel SDF LEVY- This was a levy started for funding modernisation, expansion and development of steel sector. The Fund, inter-alia, supports: 1) Capital expenditure for modernisation, rehabilitation, diversification, renewal & replacement of Integrated Steel Plants. 2) Research & Development 3) Rebates to SSI Corporations 4) Expenditure on ERU of JPC

SDF levy was abolished on 21.4.94 Cabinet decided that corpus could be recycled for loans to Main producers Interest on loans to Main Producers be set aside for promotion of R&D on steel etc. An Empowered Committee has been set up to guide the R&D effort in this sector. EGEAF Was a levy started for reimbursing the price differential cost of inputs used for engineering exporters. Fund was discontinued on 19.2.96.

The New Industrial Policy Regime The New Industrial policy has opened up the iron and steel sector for private investment by (a) removing it from the list of industries reserved for public sector and (b) exempting it from compulsory licensing. Imports of foreign technology as well as foreign direct investment are freely permitted up to certain limits under an automatic route. Ministry of Steel plays the role of facilitator, providing broad directions and assistance to new and existing steel plants, in the liberalized scenario.

TEXTILE DIVISION Over the past five years, the Indian government has removed many of the barriers hindering the sectors growth. But to fulfill the potential of the countrys textile industry, the government needs to eliminate the remaining restrictions that perpetuate the lack of scale and poor operational and organisational performance of local manufacturers and that discourage investment, particularly foreign direct investment. Regulations still protect small-scale in a number of ways. While the production of ready-made garments is no longer reserved for small-scale manufacturers, a few product markets, such as hosiery, still are. In addition, Indian manufacturers often choose to set up several small plants, instead of a single big one, to take advantage of labour laws. As a result, Indian textile units typically have less

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number of machines than its counterparts in other countries. In order to encourage upgradation of textile sector and textile products, some of the important initiatives taken by the Government of India are as follows: Announcement of New Textile Policy: One of the main objectives of the New Textile Policy announced in November 2000 (National Textile Policy, 2000) is to facilitate the textile industry to attain and sustain a preeminent global standing in the manufacture and export of clothing. The policy endeavors to achieve the target of textile from the present level to US$ 50 billion by 2010, of which the share of garments will be US$ 25 billion. Subsequent to the announcement of NTxP 2000, woven segment of readymade garment sector has been de-reserved from SSI and the announcement has been made for de-reservation of knitwear from SSI. Technology Up-gradation Fund Scheme: In view of the urgent need for stepping up the process of modernisation and technology upgradation of the textile industry in India, Ministry of Textiles launched a Technology Upgradation Fund Scheme (TUFS) for the textile and jute industry for a five years time frame w.e.f. 01-04-1999 to 31-03-2004, providing for 5% interest reimbursement in respect of loans availed there under from the concerned financial institutions for investmentbenchmarked technology for the sectors of the Indian textile industries specified there under. Liberalization of FDI Policy: Government has allowed foreign equity participation upto 100%, through automatic route, in the textile sector with the only exception in knitwear/knitting sector, which is still reserved for SSI. SSI investment limit for the knitwear/knitting sector has been increased from Rs.1 Crore to Rs. 5 Crore. Export Promotion Capital Goods (EPCG) Scheme: The scheme facilitates import of capital goods at 5% concessional rate of duty with appropriate export obligation. Import of second hand capital goods is allowed under the EXIM Policy as announced on 31.03.2003. Advance Licensing Scheme: With a view to facilitating exports and to access duty-free inputs under the scheme, standard input-output norms for about 300 textiles and clothing export products have been prescribed and this scheme remained under operation. Duty Exemption Pass Book (DEPB) Scheme: DEPB credit rates have been prescribed for textiles and clothing products. Duty Drawback Scheme: The exporters are allowed refund of the excise and import duty suffered on raw materials under the scheme so as to make the products more competitive in the international market. Human Resource Development: Attention has also been paid to Human Resource Development in the textile sector. National Institute of Fashion Technology (NIFT) which is imparting training to Fashion Designers and Fashion Technologists to cater to the human resource requirements of garment industry has 7 branches at Delhi, Mumbai, Calcutta, Hyderabad, Bangalore, Chennai and Gandhinagar. Ministry of Textiles has established a Nodal Centre for Upgradation of Textile Education at the Indian Institute of Technology, Delhi with funding from the Ministry of Textiles.

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Construction of Apparel International Mart: Apparel Export Promotion Council is constructing an Apparel International Mart at Gurgaon with assistance from Government. Setting up of modern laboratories: The Ministry of Textiles has assisted the Textile Committee in setting up of modern textile laboratories to ensure that the textiles produced in the country meet all environmental standards. Apparel Park for Exports Scheme: A centrally sponsored scheme titled Apparel Parks for Exports Scheme has been launched. The scheme is intended to impart focussed thrust to setting up of apparel manufacturing units of international standards at potential growth centres and to give fillip to exports. Since the inception of scheme in March 2002, eleven Project Proposals has been sanctioned for setting up Apparel Parks at Tronica City & Kanpur (U.P.), Surat (Gujarat), Thiruvananthapuram (Kerala), Vishakhapatnam (Andhra Pradesh), Ludhiana (Punjab), Bangalore (Karnataka), Tirupur & Kanchipuram (Tamil Nadu), SEZ, Indore (Madhya Pradesh) and Mahal (Jaipur, Rajasthan). Textile Centres Infrastructure Development Scheme (TCIDS): Development of infrastructure facilities at pre-dominantly textile sector areas is one of the thrust areas of National Textile Policy, 2000. For attaining this objective, a new scheme (TCIDS) has been launched for upgrading infrastructure facilities at important textile centres. The WTO 2005 Initiative Protection of the textile and clothing sector has a long history in United States and Europe. In the 1950s, Japan; Hong Kong, China; India and Pakistan agreed to voluntary export restrains for cotton textile products to the United States. In 1962 a Long Term Agreement regarding International Trade in Cotton Textiles (LTA) was signed under the auspices of the GATT (replacing a 1-year short-term agreement). The LTA was renegotiated several times until it was replaced by the MFA, which extended restrictions on trade to wool and manmade fibres in addition to cotton. Since 1947, when the General Agreements on Tariff and Trade (GATT) was first signed, an increasing proportion of international trade was regulated by the international agreements, designed to ensure countries could erect or maintain barriers to international trade only under mutually agreed terms. Apparel / readymade garments were not included in GATT provisions. In 1947, the Multi-Fibre Agreement (MFA) was signed, without reference to GATT, essentially ratifying countries right to impose quotas on textiles and apparel / readymade garment imports from each other. This was intended to be a temporary measure allowing developed countries time to restructure their apparel / ready-made garments and textile industries before opening them up to competition from developed countries. In practice the MFA was frequently renewed. In 1994, GATT signatories signed the Agreement on Textiles and Clothing (ATC), committing to phasing out MFA and replacing it by the general systems for agreeing trade barriers and disputes that the GATT has laid down. Almost simultaneously, the World Trade Organisation (WTO) replaced the GATT. The most important underlying principles of the ATC are: The quotas would be phased out to an agreed timetable (16% of imports quota-free by 1/1/95, a further 17% by 1/1/98, a further 18% by 1/1/02 and the remaining 49% by 1/1/05) There would be no extension date The ATC would be binding only on trade between WTO member states. There would be no temporary provisions while the ATC was in force for monitoring progress and managing duties. Accordingly, quota restrictions have been removed with effect from January 1, 2005. This removal of world trade quota restrictions is expected to bring a change in the global apparel trade. Productivity, labour costs, quality and creativity will determine which countries will eventually emerge as winners.

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HISTORY AND CORPORATE STRUCTURE OUR HISTORY & BACKGROUND Our company was originally incorporated in the name of Janki Processors Pvt. Limited on 16th September, 1993 under the Companies Act 1956 with Registrar of companies, Rajasthan. Initially our Company was promoted by Mr. Raghunath Mittal. Currently the individual promoters of our Company are Mr. Raghunath Mittal, Mrs. Madhu Mittal, Mr. Rahul Mittal and Mr. Rohit Mittal. Our company is having manufacturing facilities at Bhilwara (Rajasthan) for the processing and marketing of fabrics and at Bellary (Karnataka) for the manufacture of sponge iron. In the year 1994-95 our Company set up a process house at Mandpiya Chouraha, Bhilwara with 2 stenters and 2 jet-dyeing machines by availing credit facilities from Rajasthan Financial Corporation (RFC). Our company has gone for the modernisation and expansion of its production capacity by availing credit facilities from the banks and financial institutions time to time. On 6th July, 2000 our Company was converted into public limited company and the name was changed to Janki Processors Ltd. We also undertook a massive expansion programme for installation of new stenters and replacement of old stenters by availing credit facilities from Rajasthan State Industrial Development & Investment Corporation Ltd. (RIICO). After the said expansion our capacity increased as under: Year 2000 300.00 180.00 120.00 Year 2001 347.00 210.00 137.00

Total Capacity (in Lac mtrs.) Piece Dying (in Lac mtrs.) Fabric Dying (in Lac mtrs.)

Our Company has also gone for the swapping of the existing credit facilities with State Bank of Bikaner and Jaipur in order to avail the benefit of reduction in rate of interest and fresh term loan for the purpose of expansion in the present production capacity. We have availed credit facilities to the tune of Rs. 251.45 Lacs for the purpose of swapping of existing term loan from RIICO to avail the benefit of reduced rate of interest and a fresh term loan of Rs. 300.00 Lacs for expansion cum modernization project, which has been successfully implemented. At present we are having six stenters, 30 jet-dyeing machines, 68 Jiggers, 7 Drying range, a KD Machine etc. which are considered to be most sophisticated and advance machinery for the processing of quality fabrics at competitive prices. As a step towards forward integration we have also established a fabric division and started the marketing of fabrics in the brand name JPL. Company is engaged in the manufacturing of man made synthetic fabric, which is used for making of different design of cloths. It is marketing the fabrics by way of dealer network, which is spread through out the country. On 31st December 2003, the name of our Company was changed from Janki Processors Limited to Janki Corp Limited, as we decided to diversify our business from textile processing to Iron and Steel Industry, which was in addition to our then existing business. During the year 2004-05 our Company has diversified into the steel sector by setting up a Sponge Iron Manufacturing Unit at Sidiginamola village, Bellary, Karnataka as a nucleus towards establishing an Integrated Steel Plant having a production capacity of 60,000 MTPA. The total cost of the project was Rs. 2,370.00 Lacs and our Company availed financial assistance of Rs. 1,300.00 Lacs from SBBJ. The project was implemented ahead of time schedule envisaged in the project report.

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The Iron & Steel division has started commercial production from January 2005. Iron & Steel Division of our Company is located in an area rich in iron-ore deposits. Most of the iron ore mines are located in Bellary-Hospet regions, which is about 100 Kms. from our factory premises. Skilled and unskilled labour is available in abundance. In order to harness the vast potential available in the local and nearby market our Company has gone for the further expansion by way of expanding its production capacity to 180,000 MTPA which is the optimum capacity level for undertaking forward or backward integration. Our company is also setting up a Captive Power Plant of 10MW capacity and an Induction Furnace and Continuous Casting Machine for the production of steel billets with a capacity of 54,000 MTPA. In order to broad base its activities at national spectrum we have shifted our registered office to Mumbai w.e.f 16th March, 2005. Our Milestones Year 1993-94 1994-95 Description of Activity Mr. Raghunath Mittal promoted our Company. Company started a process house in Bhilwara with 2 stenters and 2 jetdyeing machines by availing credit facilities from Rajasthan Financial Corporation (RFC). Company undertook a substantial expansion plan for installation of new stenters and replacement of old stenters by availing credit facilities from Rajasthan State Industrial Development & Investment Corporation Ltd. (RIICO). The constitution and name of our Company was changed to Janki Corp Limited. Execution of substantial expansion-cum-modernisation plan by availing credit facilities from State Bank of Bikaner and Jaipur. Our company started manufacturing and marketing of fabric in its own brand name JPL. Our company undertook and successfully implemented the diversification programme by setting-up a sponge iron manufacturing unit at Sidiginamola Village, District Bellary, Karnataka with an installed capacity of 60,000 MTPA. Our company undertook the expansion of Iron & Steel Division to increase its production capacity to 180,000 MTPA. In order to broad base the activities of our Company at national spectrum the registered office of our Company was shifted to Mumbai.

2000-01

2003-04 2003-04

2003-04

2004-05

2004-05

2004-05

Registered Office of our Company At the time of our incorporation, the registered office of our Company was situated at A 1/19 Bapunagar, Opposite P&T Colony, Bhilwara-311 001, Rajasthan. On 4th October 1993 the registered office was shifted to 276- A, R. K. Colony, Bhilwara-311 001. On 24th December 1999 it was shifted to Mandpiya Chouraha, Chittor Road, Bhilwara-311 001. Our Company is having its textile division in Rajasthan and Iron and Steel Division in Karnataka. Hence we decided to shift the office of our Company to Mumbai for better control and coordination of

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our activities. The prospects and opportunities of present line of businesses of our Company are very bright and suitable in Mumbai. Thus for better administrative control, coordination, conveniences and to avail opportunities, on January 10, 2005, vide a resolution passed in an Extraordinary General Meeting of our members, it was decided to shift the registered office of our Company from Bhilwara in Rajasthan to Mumbai in Maharashtra. On March 16, 2005 the office was shifted to 1213, Lok Sarita, E- Marol, Andheri (E), Mumbai 400 059. Our Company shifted its registered office to 39/C, I Floor, Raj Industrial Complex, Marol, Andheri (E) 400059 w.e.f. September 1, 2005. Changes in the Memorandum of Association of our Company Since Incorporation, the following changes have been incorporated in Memorandum of Association of our Company, after approval of the Members: Sr. No. Particulars The Authorised Capital of our Company was increased from Rs.18,00,00,000 comprising of 1,80,00,000 Equity Shares of Rs. 10/- each to Rs. 50,00,00,000 comprising of 5,00,00,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs.14,00,00,000 comprising of 1,40,00,000 Equity Shares of Rs. 10/- each to Rs. 18,00,00,000 comprising of 1,80,00,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs.9,00,00,000 comprising of 90,00,000 Equity Shares of Rs. 10/- each to Rs. 14,00,00,000 comprising of 1,40,00,000 Equity Shares of Rs. 10/- each. Our Company shifted registered office from the State of Rajasthan to the State of Maharashtra The Authorised Capital of our Company was increased from Rs.6,00,00,000 comprising of 60,00,000 Equity Shares of Rs. 10/- each to Rs. 9,00,00,000 comprising of 90,00,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs.5,50,00,000 comprising of 55,00,000 Equity Shares of Rs. 10/- each to Rs. 6,00,00,000 comprising of 60,00,000 Equity Shares of Rs. 10/- each. The name of our Company was changed from Janki Processors Limited to Janki Corp Limited The object clause of the Memorandum of Association was altered to insert enabling clauses of setting up of an Iron & Steel Division and other matters related thereto. The Authorised Capital of our Company was increased from Rs. 5,25,00,000 comprising of 52,50,000 Equity Shares of Rs. 10/- each to Rs. 5,50,00,000 comprising of 55,00,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs.5,00,00,000 comprising of 50,00,000 Equity Shares of Rs. 10/- each to Rs. 5,25,00,000 comprising of 52,50,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs. 1,50,00,000 comprising of 15,00,000 Equity Date Type of Meeting

23-Aug-05 AGM

30-Mar-05

EGM

3-Mar-05

EGM

10-Jan-05

EGM

25-May-04

EGM

17-Mar-04

EGM

7 8

30-Dec-03 30-Dec-03

EGM EGM

22-Jan-99

EGM

10

24-Dec-98

EGM

11

9-Mar-97

EGM

119

12

13

14

15

16

17

Shares of Rs. 10/- each to Rs. 5,00,00,000 comprising of 50,00,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs. 1,25,00,000 comprising of 12,50,000 Equity Shares of Rs. 10/- each to Rs. 1,50,00,000 comprising of 15,00,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs.95,00,000 comprising of 9,50,000 Equity Shares of Rs. 10/- each to Rs. 1,25,00,000 comprising of 12,50,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs.90,00,000 comprising of 9,00,000 Equity Shares of Rs. 10/- each to Rs. 95,00,000 comprising of 9,50,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs.50,00,000 comprising of 5,00,000 Equity Shares of Rs. 10/- each to Rs. 90,00,000 comprising of 9,00,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs.10,00,000 comprising of 1,00,000 Equity Shares of Rs. 10/- each to Rs. 50,00,000 comprising of 5,00,000 Equity Shares of Rs. 10/- each. The Authorised Capital of our Company was increased from Rs.1,00,000 comprising of10,000 Equity Shares of Rs. 10/- each to Rs. 10,00,000 comprising of 1,00,000 Equity Shares of Rs. 10/- each.

9-Feb-96

EGM

27-Dec-95

EGM

8-Apr-94

EGM

7-Apr-94

EGM

22-Nov-93

EGM

20-Sep-93

EGM

Our Main Objects: The main objects set out in our Memorandum of Association are as under: The main objects of our Company as stated in the Memorandum of Association are: 1. To carry on business of spinners, weavers, manufacturers, producers, ginners, pressers, packers, balers, liners, cleaners, processors, doublers, combers, wool combers, worsted spinners, woollen spinners, knitters, printers, dyers, bleachers, calenderers, sellers, buyers, traders, brokers, stockists, importer, exporters, mercerisers, distributors, barteres, shippers and dealer in all kinds of threads, fabric/ cloth, yarn, fibres, jeans, suitings, shirtings, sarees, dress materials, ready-made garments of all fabrics including waste cotton, linen, hemp, jute, wool, polyster, acrylics, silk, artificial silk, rayon, manmade synthetic fibres, fibres, staple synthetic yarn and any other fibrous material, allied products, by-products and to treat and utilise any waste arising from any such manufacturing, production or process. 2. To carry on the business of manufacturers, processors, producers, jobbers including doing the job work for others and getting the job work done from others, designers, distributors, stockists, importers and exporters, buyers, sellers and dealers of all or any of the products of fabrics and textiles, industrial fabrics, non-woven fabrics, sheets, tapes, ropes, cords, twines, canvas, territowels, durries, newar, parachutes, carpets, rugs, blankets, namdas, tarpaulins, linens, worsted stuff and other products as are prepared or manufactured from nylon, polysters, acrylics, rayon, silk, artificial silk, linen, cotton, wool, and any other synthetic, artificial and natural fibres and intermediates of all types, grades and formulations and including specifically plastics, polyster fibres, polyacryloni-trile, polyvinylacetate, polypropelene, nylon and rayon.

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3. To carry on the business of manufacturers, producers, processors, importer, exporters, buyers, sellers and dealers in and as brokers, agents, stockists, distributors and suppliers of all kinds of water proof fabrics, pavliners, floorclothes, carpets, tent clothes, tweed, patto, pashminas blazers, gabardine, drill, tapestry, georgette, linen, velvet, tarpaulins, khaddar, lace and linning, surgical cotton, surgical bandages, lints, gauge, sanitary goods necessary for medical aids, hospital needs, as are made from or with cotton, nylon, silk, polyster acrylics , jute , wool and other kinds of fibre, by whatever name called or named any process, whether natural or artificial and by mechanical or other means. 4. To carry on the business of manufacturing trading, producing, crushing, acquiring, importing, exporting, buying, selling, treating, processing, developing, retreating, storing, distributing, transporting and otherwise dealing in all kinds and classes of pig iron, sponge iron and steels of all kinds, ferrous and non-ferrous metals and alloys, iron and metal scrap, ferro-alloys, cast iron and steel and metal goods, tools and implements of all kinds, billets, pre-reduced billets, ingots etc. 5. To set up any mineral based industry to manufacture or process minerals, purchase, take on lease or otherwise acquire any mines, mining rights and metalligerrous land anywhere and any interest therein and to explore, work, exercise, develop and turn to the account the same. 6. To act as consultant, construction advisor to any plant whether in India or abroad for manufacturing producing, treating, processing, developing in all kinds of ferrous and non ferrous, metals, pig iron, sponge iron, steel and metal goods. To co generate, genmerate electricity through conventional and non conventional means from raw material or waste heat or from any other material for selling to the outside buyers or for its own consumption to continuously invest in research activities for diversifying or improving production, maintenance and growth of our Company. 7. To search for, get, work, raise, make merchantable, sell and deal in iron, coal, ironstone, brick earth, fireclay, limestone, dolomite, quartz quartzite, manganese asbestos and other metals, minerals and substances and to manufacture and sell fuel and other products. Subsidiaries of Our Company Our Company doesnt have any subsidiary. Shareholders Agreement There is no Shareholders Agreement existing as on date. Other Agreements Except as stated otherwise in this Draft Red Herring Prospectus and the contracts which have been entered in regular course of business, there are no other material contracts which have been entered into within a period of two years prior to the date of this Draft Red Herring Prospectus, which are subsisting as on date. Strategic Partners Presently, our Company does not have any strategic partners. Financial Partners Presently, our Company does not have any financial partners.

121

OUR MANAGEMENT BOARD OF DIRECTORS A Board of Directors comprising of 6 directors currently manage our Company. Mr. Raghunath Mittal is our Managing Director. The following table sets forth the details regarding our Board of Directors as on the date of filing of this Draft Red Herring Prospectus with SEBI: Sr. Name, Age, Designation, Address & No. Occupation of Director 1 Mr. Raghunath Mittal (Aged 43 Years) Managing Director 229/2, Mohan Lal Sukhadia Nagar, Ajmer Road, Bhilwara-311001. Businessman 2 Mr. Shivnath Mittal (Aged 37 Years) Director 229/2, Mohan Lal Sukhadia Nagar, Ajmer Road, Bhilwara-311001. Businessman 3 Mr. Dinanath Mittal (Aged 42 Years) Director 229/2, Mohan Lal Sukhadia Nagar, Ajmer Road, Bhilwara-311001. Businessman 4 Mr. M. P. Kedia (Aged 56 Years) Director DA-150, Sector I, Salt Lake, Kolkata. Chartered Accountant 5 Mr. Dwijendra Nath Ghorai (Aged 60 Years) Director Flat No. 5253, Block V Jana Priya Heights, Malasandra, Hesarghatta Road, Bangalore. Executive 6 Mr. Vijay Sharma (Aged 45 Years) Director 5-I-8, R.C. Vyas Colony, Bhilwara-311 001. Businessman Other Directorships JPL Industries Limited

1. Pam Consultants Pvt. Limited 2. Parmanand Finservices Limited

Silvertone Synthetics Private Limited.

The Brief Profile of our Board of Directors is appearing on page [] of this Draft Red Herring Prospectus. BORROWING POWERS OF OUR BOARD: The extract of the latest resolution of our Company authorizing our Boards borrowing powers in excess of our paid-up share capital and free reserves passed in the Annual General Meeting held on 23rd August, 2005 is as follows: To Borrow any sum of money (ies) under section 293(1) (d) of the Companies Act, 1956 not exceeding Rs. 500 Crores from Banks / Financial Institutions RESOLVED THAT the consent of the company be and is hereby accorded under the provisions of Section 293 (1)(d) of the Companies Act, 1956, to the Board of Directors of the Company for borrowing moneys from time to time even though the moneys to be borrowed

122

together with moneys already borrowed by Company (apart from temporary loans obtained from Companys bankers in ordinary course of Business) exceeds the aggregate of paid up capital of the company and its free reserves that is to say, reserves not set apart for any Specific purpose, provided however the total amount of such borrowing shall not exceed the sum of Rs. 500,00,00,000/-(Rupees Five Hundred Crores only) and the Board be and is hereby empowered and authorised to arrange or fix the terms and conditions of all such monies to be borrowed from time to time as to interest, repayment, security or otherwise howsoever as it may think fit. COMPENSATION TO MANAGING DIRECTORS / WHOLETIME DIRECTORS Mr. Raghunath Mittal. Managing Director Mr. Raghunath Mittal was re-appointed as Managing Director of our Company on 25.09.02 vide a resolution passed at an Extraordinary General Meeting. The Board of Directors of our Company were authorised in the aforesaid meeting to alter and vary the terms and conditions of said re-appointment and /or remuneration subject to the condition that the same will be within Schedule XIII to the Act. In exercise of the power conferred on the Board, the remuneration of the Managing Director has been revised as per the resolution passed on 10th August, 2005 in Meeting of Board of Directors, which is detailed hereunder: 1. Remuneration a) Salary Rs. 50,000/- per month b) Bonus as per rules of the Company c) Perquisites - Medical reimbursement: Reimbursement of medical expenses incurred for self and family in accordance with the rules of the company. Leave travel concession: Leave travel concession for self and family, once in a year incurred in accordance with the rules of the Company. Club fees: Fees of clubs subject to a maximum of two clubs. No admission and life membership fee will be paid.

2. Provident Fund Companys contribution towards Provident Fund as per rules of the Company. 3. Gratuity Gratuity as per rules of the Company, but shall not exceed one half months salary for each completed year of service. 4. Earned Leave Earned leave on full pay and allowances as per the rules of the Company, but not exceeding one months leave for every eleven months of service and leave accumulated shall be encashable at the end of the tenure. 5. Car and Telephone facility Provision of car for use for Companys business and telephone at residence will not be considered perquisites. Personal long distance calls and use of car for private purpose shall be billed by the Company to the Managing Director. 6. Reimbursement of entertainment, travelling and all other expenses incurred for business of the Company. The aggregate of the salary and all perquisites as enumerated above shall at no time exceed the limits as may be prescribed from time to time under the provisions of the Companies Act, 1956, Schedules thereto and rules there under, as well as any other statutory provisions as may be applicable.

123

CORPORATE GOVERNANCE Our Company has already taken necessary steps to implement the provisions of the Corporate Governance in accordance with the provisions of the Companies Act and the Listing Agreement to be entered into by our Company with Stock Exchange for the purposes of listing of our Equity Shares. The constitution of our Board of Directors is in compliance with the said provisions and it has the necessary committees in place in compliance with the said provisions: a. b. c. d. Audit Committee Remuneration Committee Investors Grievance Committee Share Transfer Committee

Composition of Board of Directors: Board Structure: Sr. No. Name of the Director Designation Managing Director Director Director Director NathDirector Director Nature of Directorship Date of Expiry of Terms Executive Non-Executive Non-Executive Non-Executive and Independent Director Non-Executive and Independent Director Non-Executive and Independent Director 24.09.2007 N.A. N.A. N.A. N.A. N.A.

1 Mr. Raghunath Mittal 2 Mr. Shivnath Mittal 3 Mr. Dinanath Mittal 4 Mr. M.P. Kedia 5 Mr. Dwijendra Ghorai 6 Mr. Vijay Sharma

Audit Committee The Audit Committee was constituted at a Board Meeting held on 10th August, 2005. The Audit Committee provides directions to and reviews functions of the Audit department. The Committee evaluates internal audit policies, plans, procedures and performance and reviews the other functions through various internal audit reports and other year-end certificates issued by the statutory auditors. Quarterly and annual accounts are placed before the Audit Committee, prior to being presented to our Board along with the recommendations of the Audit Committee. The terms of reference of Audit Committee complies with the requirements of Clause 49 of the listing agreement, which will be entered into with the Stock Exchange in due course. The committee consists of three non-executive as well as Independent Directors. The Chairman of Committee, who shall be independent Director, be elected by the Members of the committee from amongst themselves. Composition of Audit Committee: Sr. No. Name of the Director Designation Nature of Directorship 1 Mr Vijay Sharma Chairman Non-Executive and Independent Director 2 Mr Dwijendra Nath Ghorai Member Non-Executive and Independent Director 3 Mr M. P. Kedia Member Non-Executive and Independent Director

124

The Audit Committee shall comply with the following:1. The Audit Committee shall have meetings periodically as it may deem fit with at least four meetings in a year. 2. The Audit Committee shall invite such of the executives (and particularly the head of the Finance function), to be present at the meeting of the committee whenever required by it. 3. The finance Director, Head of Internal auditor and Auditors of the Company shall attend participate at the meetings of the Committee without right to vote. 4. The Audit Committee shall have the following powers: It shall have authority to investigate into any matter in relation to the items specified in Section 292A of the Companies Act, 1956 or referred to it by the Board and for this purpose, shall have full access to information contained in the records of the Company and external professional advice, if necessary. To investigate any activity within its terms of reference. To seek information from any employee. To obtain outside legal or other professional advice. To secure attendance of outsiders with relevant expertise, if it considers necessary. Oversight of companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending the appointment and removal of external auditors, fixation of audit fee and also approval for payment for any other services. Reviewing with management the annual financial statements before submissions to the Board, focussing primarily on: Any changes in accounting policies and practices. Major accounting entries based on exercise of judgment by management. Qualifications in draft audit report. Significant adjustments arising out of audit. The going concern assumption. Compliance with accounting standards. Compliance with stock exchange and legal requirements concerning financial statements. Any related party transactions i.e., transactions of the Company of material Nature, with promoters or the management, their subsidiaries or relatives, etc., that may have potential conflict with the interest of Company at large. Reviewing with the management, external and internal auditors, the adequacy of internal control system. Reviewing the adequacy of internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Discussions with internal auditors any significant findings and follow up thereon. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. Discussions with external auditors before the audit commences, nature and scope of audit as well as to have post-audit discussion to ascertain any area of concern. Reviewing the Companys financial and risk management policies. To look into reasons for substantial defaults in the payment to the depositors, debenture holders, share holders (in case of non payment of declared dividends) and creditors. It shall have discussions with the auditors periodically about internal control systems, the scope of audit including the observations of the auditors and review the quarterly, half-yearly, and annual financial statements before submissions to the Board. It shall ensure compliance of internal control systems. The Chairman of the Audit Committee shall attend the Annual General Meetings of the Company to provide any clarification on matters relating to audit sought by the members of the Company.

125

Remuneration Committee The Remuneration Committee was constituted at a Board Meeting held on 10th August, 2005. The function of Remuneration Committee is to recommend the remuneration of all executive director(s) of our Company after reviewing their performance. Composition of the Remuneration Committee: Sr. Name of the Director No. 1 Mr M. P. Kedia 2 Mr Dwijendra Nath Ghorai 3 Mr Vijay Sharma Designation Chairman Member Member Nature of Directorship Non-Executive and Independent Director Non-Executive and Independent Director Non-Executive and Independent Director

Investors Grievance Committee We have designated personnel to solve investors problems along with our Share Transfer Agents, Bigshare Services Private Limited. The Investors Grievance Committee was constituted at a Board Meeting held on 10th August, 2005 The Investors Grievances Committee looks into redressal of shareholder and investor complaints, issue of duplicate/split/consolidated share certificates, allotment and listing of shares and review of cases for refusal of transfer/transmission of shares and debentures and reference to statutory and regulatory authorities. Composition of the Investors Grievance Committee: Sr. No. 1 2 3 Name of the Director Mr. Dinanath Mittal Mr. Raghunath Mittal Mr. Vijay Sharma Designation Nature of Directorship Chairman Non-Executive Director Member Managing Director Member Non-Executive and Independent Director

Share Transfer Committee The Share Transfer Committee was constituted at a Board Meeting held on 10th August 2005. The terms of reference of the Share Transfer /Investors Grievance Committee are given below: (1) To scrutinise the share transfer application forms received by the Company and if found in order in all respects, to register transfers of shares in the Register of Members of the Company; (2) To scrutinise the various documents received by the Company, namely Death Certificates, Marriage Certificates, Succession Certificates, Letters of Indemnity in favour of the company, Probates of Wills of the shareholders and if found in order, to register transmission of shares in the Register of Members of the Company; (3) To register the various documents as mentioned above in the Register of Documents maintained by the Company; (4) To approve the issue of split share certificates and new share certificates in place of defaced, torn, damaged and soiled share certificates on receipt of proper applications and other required papers and documents from the shareholders; (5) To sign the share certificates and to affix the Companys Common Seal on them in accordance with the provisions of the Companies Act, the Companies (Issue of Share Certificates) Rules, 1960 and those of the Articles of Association of the Company; and (6) To take all other consequential and incidental actions and measures.

126

Composition of Share Transfer Committee: Sr. No. 1 2 3 Name of the Director Mr. Dinanath Mittal Mr. Raghunath Mittal Mr. Vijay Sharma Designation Nature of Directorship Chairman Non-Executive Director Member Managing Director Member Non-Executive and Independent Director

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 companys shares on the Stock Exchange. Mr. Paras Pangaria, our Company Secretary is responsible for setting forth policies, procedures, monitoring and adherence to the rules for the preservation of price sensitive information and the implementation of the code of conduct under the overall supervision of our Board. Shareholding of the Directors in our Company Number of Shares 1 Mr. Raghunath Mittal 4,109,588 2 Mr. Shivnath Mittal 1 3 Mr. Dinanath Mittal 25,000 4 Mr. M.P. Kedia* 150,000 5 Mr. Dwijendra Nath Ghorai 6 Mr. Vijay Kumar Sharma * Mr. M.P. Kedia is holding the said equity shares as Karta of M.P. Kedia (HUF). INTEREST OF DIRECTORS` Except as stated in the Related Party Disclosures beginning on page [] of this Draft Red Herring Prospectus, all our Directors may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of our Board or committees thereof as well as to the extent of remuneration and/or reimbursement of expenses payable to them in accordance with the provisions of the Companies Act and in terms of the Articles. The Directors may also be regarded as interested in the shares, if any, held by them or that may be subscribed by and allotted/transferred to the companies, firms and trusts and other entities in which they are interested as Directors, members, partners, and trustees or otherwise. All Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered into by our Company with any Company in which they hold Directorships or any partnership firm in which they are partners as declared in their respective declarations. Sr. No. Name of the Director

Interest as to Property: Our Company has not taken any property on rent, from our Promoters, our Chairman and Managing Director and other directors.
Except as stated otherwise in this Draft Red Herring Prospectus, we have not entered into any contract, agreements or arrangements during the preceding two years from the date of the draft red herring prospectus in which the directors are directly or indirectly interested and no payments have been made to them in respect of these contracts, agreements or arrangements which are proposed to be made to them.

127

Directors Remuneration (including sitting fees) for the year ended March 31, 2005 For details of payments or benefits paid to Mr. Raghunath Mittal please refer to paragraph Compensation to Managing Directors / Wholetime Directors in the section titled Our Management on page [] of this Draft Red Herring Prospectus. No remuneration or sitting fees what so ever, is payable to any other director or any benefit is received in any form.
Changes in our Board of Directors during the last three years The following changes have taken place in the Board of Directors of our Company during the last three years. Sr. No. 1. 2. 3. Name of the Director Mr. M. P. Kedia Mr. Vijay Kumar Sharma Mr. Dwijendra Nath Ghorai Date of appointment 10.08.2005 10.08.2005 10.08.2005 Date of Resignation Reason for change Appointment Appointment Appointment

128

MANAGEMENT ORGANISATION STRUCTURE

Board of Directors

Managing Director Textile Division (Bhilwara) Iron & Steel Division (Bellary)

Company Secretary

General Manager (Commercial)

Genaral Manager

Manager Finance & Accounts Manager Technical

Accounts Executive

Accounts Executive

Manager Finance & Accounts Manager Technical

Engineers

Engineers

Manager Marketing

Marketing Executive

Marketing Executive

Manager Marketing

Manager Quality & Assurance

Lab Assistants

Lab Assistants

Manager Quality & Assurance

ManagerStores & Purchase

Store Keeper

Store Keeper

ManagerStores & Purchase

Manager Personnel

Personnel Executive

Personnel Executive

Manager Personnel

129

KEY MANAGEMENT PERSONNEL

Sr. No.

Name

Designation Age Qualific(yrs.) ation

1 Mr. Managing Raghunath Director Mittal

43 B. Com

Gross Previously Date of Experi Functional Joining -ence Responsibility Annual Employed Remunein with ration for years 2004-05 (Rs.) 600,000 Akash 16.09.93 24 Overall Coke Management & Industries Supervision of (P) Ltd. the affairs of our Company. 10.08.05 10 Looking after ROC and Secretarial compliances Looking after general administration and commercial matters. Incharge of F&A Deptt. At Bhilwara Handles process house and also looks after the marketing function Handles the technical department and looks after the quality & assurance Handles the overall procurement of materials and other items Handles the overall labour related matters Head of operations and administration. Maintaining proper relations with outside agencies 72,000 Nutech Global Ltd.

2 Mr. Paras Company Pangaria Secretary

34 Company Secretary

39 Chartered 05.09.05 3 Mr. C.P. General Accountant Mantri Manager (Commercial) (Textile Division) 4 Mr. Mahesh Mishra Manager Finance (Textile Division) 45 B. Com 09.04.94

15

282,000 SPBL Limited, Bhilwara.

23

201,600 Ravi Auto Limited

5 Mr. Puneet Manager K. Singh Technical (Textile Division)

45 B.Tech

16.04.94

18

282,000 Sangam Processors , Bhilwara

42 B.Tech 6 Mr. N.K. Manager Magoon (Quality & Assurance) (Textile Division) 48 M.Com 7 Mr. R.K. Manager Zaveri (Stores & Purchases)

16.04.94

15

250,000 Sangam Processors , Bhilwara

09.04.94

22

170,000 Shree Rajasthan Syntex

8 Mr. M.P. Manager Kothari (Personnel) 9 Mr. G. Narahari Reddy 10

40 B.Com.

15.04.94

11

47 B. Tech 20.02.04 General Metallurgy Manager Engineerin (Iron & Steel g Division) 01.03.04 37 B.E. Mr. B P Manager Electronics Suresh Liaison (Iron & & Steel Communic Division) ation

23

150,000 Sangam Processors , Bhilwara 431,000 Bellary Steels & Alloys Ltd. 230,000 Super Earthmover s

14

130

11 Mr. Bharat Kumar

33 B.E. M Manager Technical (Iron & Steel Division)

03.03.04

26 Chartered 01.07.04 Manager Accountant Finance & Accounts (Iron & Steel Division) 13 Mr. A Manager Q.A 52 Polytechnic 19.08.04 Narendra (Iron & Steel Diploma Kumar Division) Reddy 12 Mr. Prakash Mussaddi

Incharge of Technical Deptt. and procurement of plant & machinery Head Finance and Accounts

150,000 ICOMM Tele Limited

240,000 R.S. Pharma

29

In-charge of raw material procurement and quality assurance

230,000 Sponge Iron Industries Ltd.

Brief Profile of our Key Managerial Personnel Mr. Raghunath Mittal, the brief profile of our managing director is mentioned on page [] under Brief profile of our Board of Directors. Mr. Paras Pangaria, aged 34 years, Company Secretary, is also the compliance officer for the issue. He has experience over a decade of working with listed companies. He was previously working with Nutech Global Limited and also has worked with Global Finance Corporation Ltd., Sona Processors (India) Ltd. and He is responsible for the overall secretarial work including liasoning with Registrar of Companies, Stock Exchanges, etc. His gross annual remuneration is Rs. 72000. TEXTILE DIVISION Mr. C.P. Mantri, aged 39 years, General Manager (Commercial) is a Commerce Graduate and Chartered Accountant. He has experience of fifteen years of working with listed companies. He was previously working with SPBL Ltd., Bhilwara as a General Manager (Commercial) and also has worked for more than ten years with Rajasthan Spinning and Weaving Ltd. Kharigram, Gulabpura. He is responsible for the overall Commercial, Financial work including General Administration etc. His gross annual remuneration is Rs. 282,000. Mr. Mahesh Mishra, aged 45 years, Manager Finance is a Commerce Graduate. He has been working with our Company for more than 11 years and has exhibited immense potential in the field of finance and accounts. He has also worked in the capacity of Finance Manager at Ravi Auto Limited and has served the company for a period of 11 years from 1982 to 1993. His gross annual remuneration is Rs. 201,600. Mr. Puneet K Singh, aged 45 years, Manager Technical is a B. Tech. He handles the process house of our Company and has worked as a Processing Superintendent at Sangam Processors, Bhilwara. His gross annual remuneration is Rs. 282000. Mr. N. K. Magoon, aged 42 years, Manager Technical is responsible for handling the technical department of our Company and looks after the quality and assurance department of our Company. He has a long experience in the technical section and his able guidance goes a long way in the growth of the Textile Division. His gross annual remuneration is about Rs. 2,50,000.

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Mr. R. K. Zaveri, aged 48 years, Manager Store & Purchase is Master of Commerce. He has been serving our Company for more than 11 years. His knowledge of stores and purchase has helped our Company. He has worked as a purchase officer at Shree Rajasthan Syntex, Dungarpur upto 1994. His gross annual remuneration is Rs. 1,70,000.

Mr. M. P. Kothari, aged 40 years, Manager Personnel is a Commerce Graduate. He handles the personnel and labour department of our Company. He has a long experience in handling the human capital of the companies. He has worked as a Labour Officer in Sangam Processors Limited, Bhilwara upto 1994. Since then he has been associated with our Company. His gross annual remuneration is about Rs. 1,50,000. IRON & STEEL DIVISION The details of the key managerial personnel of our Company are as follows: Mr. G. Narahari Reddy, aged 47 years, GM Operation & Administration, is B. Tech in Metallurgy Engineering from the Regional Engineering College, Warrangal. He has immense work experience of 22 years in the field of operations and administration. He was previously employed with Sponge Iron India Ltd., Paloncha where he worked as Senior Metal Operations for a period of 10years. Seeking for better job prospects, later on he joined Bellary Steels & Alloys Limited, Bellary as Assistant General Manager Operations and served the company for a period of 12 years. He joined our Company on 20th February, 2004 and looks after operations and administration of our Company. The gross salary payable to him is Rs. 4,31,000 p.a. Mr. B. P. Suresh, aged 37 years, Manager Liaison, is an Electronics and Communication Engineer from PEA Polytechnic passing out in the year 1990. He has about 13 years work experience in the field of Polytechnic and earth moving. He was previously employed at Pea Polytechnic for a period of 1year and worked as Sales Engineer in Pace Earthmovers for 4 years, as Managing Partner in Delta Earthmovers and Super Earthmovers for 4 years each. In search for better prospects he joined our Company on 1st March, 2004 and is responsible for maintaining constant relations and proper communication within our Company and with the outside agencies. The gross salary payable to him is Rs. 2,30,000 p.a. Mr. M. Bharat Kumar, aged 33 years, Manager Technical, is a B.E from Vijaynagar Engineering College, Bellary. He has experience of more than two years in the field of business development. He has worked as an Assistant Manager, Business Development in ICOMM Tele Limited. He is in the Technical Department and is in charge of all the factory related activities, pre and post production activities. He joined our Company on 3rd March, 2004 drawing a gross salary of Rs. 1,50,000 p.a. Mr. Prakash Musaddi, aged 26 years, Manager Finance & Accounts, is a Commerce graduate from the Ramdas College, Delhi University. He has 1 year work experience in the field of finance and accounts and has also served as an Auditor in S. N. Dhawan & Co. He is also a member of the Institute of Chartered Accountants of India. He has worked in M/s. R.S. Pharma, Choice Clothing Company Private Limited and M/s. S. N. Dhawan & Co. He joined our Company on 1st July, 2004 and looks after all activities relating to daily accounting and financing. The gross salary payable to him is Rs. 240,000 p.a. Mr. A. Narendra Kumar Reddy, aged 52 years, Manager Q A, has studied Polytechnic and has 28 years work experience in the field of polytechnic. He has worked at Sponge Iron Industries Limited, Wilson Company Ltd., Bellary Steels & Alloys ltd. etc. as Assistant Manager and Works Assistant etc. He joined our Company on 19th August, 2004 and looks after all activities related to operations, sales etc. The gross salary payable to him is Rs. 2,30,000 p.a.

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Shareholding of Key Managerial Personnel Except for Mr. Raghunath Mittal, our Managing Director, none of the Key Management Personnel in our Company hold any shares of our Company as on the date of filing of this Draft Red Herring Prospectus. Bonus or Profit Sharing Plan There is no fixed or certain bonus or profit sharing plan for the Key Managerial Personnel. Changes in the Key Managerial Personnel during last 3 years Following have been the changes in the key managerial personnel during the last one-year: Sr. Name No. 1. Mr. G. N. Reddy 2. Reason Date of Date of Joining Resignation 20.02.04 -Appointed as General Manager Mr. B. P. Suresh 01.03.04 -Appointed as Manager Liaison and Personnel Manager Mr. M. Bharat Kumar 03.03.04 -Appointed as Manager Technical Mr. Prakash Musaddi 01.07.04 -Appointed as Manager Finance & Accounts Mr. A. Narendra Kumar Reddy 19.08.04 -Appointed as Manager QA Mr. Paras Pangaria 10.08.05 -Appointed as Company Secretary & Compliance Officer. Mr. C.P. Mantri 05.09.05 -Appointed as General Manager (Commercial)

3. 4. 5. 6.

Notes: 1. All the Key Managerial Personnel mentioned above are permanent employees of our Company. 2. There is no understanding with major shareholders, customers, suppliers or any others pursuant to which any of the above mentioned personnel have been recruited. Employees The details about our employees are appearing under section entitled Manpower beginning on page [] of this Draft Red Herring Prospectus. ESOP/ESPS Scheme to Employees Presently, we do not have ESOP/ESPS scheme for employees. Payment or Benefit to Our Officers Except for payment of monetary and non-monetary benefits in accordance with the terms of employment or engagement, and dividend, if any declared on the Equity Shares, if any held by our officers, we have not paid any amount or given any benefit to any officer of our Company, nor is such amount or benefit intended to be paid or given to any officer as on the date of filing this Draft Red Herring Prospectus with SEBI.

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OUR PROMOTERS AND THEIR BACKGROUND Individual Promoters

Mr. Raghunath Mittal Voter ID No.: RJ/20/153/333057 Driving License No.: 037839 PAN: ADKPM2917P Mr. Raghunath Mittal, aged 43 years, Managing Director, is a Commerce graduate. He is the founder member of our Company and has been responsible for its overall operations and growth since inception in September 1993. He has more than 20 years of experience in various facet of business. He has been instrumental in the development of our Company. He has participated in the family business of trading of coal and hard coke upto 1980-81. He joined Akash Coke Industries Private Limited in 1980-81. He worked there as a director of the company before resigning in the year 2000 so as to focus his entire attention in the progress of our Company. His experience in finance, administration and marketing has helped our Company to reach to this height. He is also a director in JPL Industries Limited.

Mrs. Madhu Mittal Voter ID No.: RJ/20/153/333058 Driving License No.: N.A. PAN: ACXPM1466B Mrs. Madhu Mittal aged 37 years, is one of our individual promoters. She is graduate by qualification. She has also been on the Board of Directors of our Company till October 2001.

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Mr. Rahul Mittal Voter ID No.: N.A. Driving License No.: RJ-06/DLC/03/3123 PAN: AIMPM1347G Mr. Rahul Mittal aged 21 Years, is one of our individual promoters. He is studying in B.com final year from Sri Ram College of Commerce, New Delhi. He is the elder son of Mr. Raghunath Mittal. He doesnt have any experience in the line of business of our Company.

Mr. Rohit Mittal Voter ID No.: N.A. Driving License No.: RJ-06/DLC/O5/18247 PAN: ALWPM7312C Mr. Rohit Mittal aged 18 Years, is one of our individual promoters. He is pursuing BBA from Bangalore. He is the younger son of Mr. Raghunath Mittal. He doesnt have any experience in the line of business of our Company. We hereby confirm that the Permanent Account Numbers, Bank Account Numbers and Passport Numbers of our Promoters have been submitted to the Stock Exchanges, on which we propose to list our Equity Shares at the time of filing of this Red Herring Prospectus. Other Promoters: Raghunath Mittal (HUF) PAN: AABHM8075Q Raghunath Mittal HUF is a Hindu Undivided Family recognized under Indian Law. Mr. Raghunath Mittal is the karta of this HUF and is authorized to take all decisions in relation to the assets and properties of the HUF.

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COMMON PURSUITS JPL Industries Limited is into the manufacturing, marketing and processing of fabrics. The business is similar to that of our Company. JPL Industries Limited is primarily engaged into the processing of fabrics on job basis for our Company apart from its own marketing network. Our Company under the brand name JPL markets the fabrics processed by JPL Industries Limited. Since there is a huge demand of the fabrics in the national market and with the abolition of quota regime there are no restrictions for Indian manufacturing concerns from January 1, 2005 to export the product in international market. All the major players in the market are going for the capacity expansion and hence there seems to be very few chances of conflict of interest. INTEREST OF PROMOTERS Except as stated in the Related Party Disclosures beginning on page [] of this Draft Red Herring Prospectus, all our individual Promoters, being Directors, may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of our Board or Committees thereof as well as to the extent of remuneration and/or reimbursement of expenses payable to them for services rendered to us in accordance with the provisions of the Companies Act and in terms of the Articles. Further, the Promoters are interested to the extent of equity shares that they are holding and or allotted to them out of the present Issue, if any, in terms of the Draft Red Herring Prospectus and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. Our individual Promoters hold shares or other stake in our corporate Promoters and group companies in addition to other entities, and may be deemed to be additionally interested in any agreement or arrangement entered or to be entered into or to be entered into by our Company with our corporate promoters or group companies or such other entities, and if dividend, if any, is payable to our corporate promoters or group companies or other entities by virtue of their shareholding in our Company.

Interest as to Property: Our Company has not taken any property or premises on rent from its Promoters.
Except as stated otherwise in this Draft Red Herring Prospectus, we have not entered into any contract, agreements or arrangements during the preceding two years from the date of this Draft Red Herring Prospectus in which the Promoters are directly or indirectly interested and no payments have been made or benefits provided to them in respect of these contracts, agreements or arrangements. Further, there are no such payments or benefits which are intended to be made or provided to them. PAYMENT OR BENEFIT TO OUR PROMOTERS Mr. Raghunath Mittal For details of payments or benefits paid to Mr. Raghunath Mittal please refer to paragraph Compensation to Managing Directors / Wholetime Directors in the section titled Our Management beginning on page [] of this Draft Red Herring Prospectus. Mrs. Madhu Mittal No payment is made or any benefit is given to Mrs. Madhu Mittal other than entitled as a shareholder.

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Raghunath Mittal (HUF) No payment is made or any benefit is given to Mr. Raghunath Mittal (HUF) other than entitled as a shareholder. Mr. Rahul Mittal No payment is made or any benefit is given to Mr. Rahul Mittal other than entitled as a shareholder. Mr. Rohit Mittal No payment is made or any benefit is given to Mr. Rohit Mittal other than entitled as a shareholder. RELATED PARTY TRANSACTIONS For details on Related Party Transactions refer to the section titled Related Party Disclosures beginning on page [] of this Draft Red Herring Prospectus. CURRENCY OF PRESENTATION In this Draft Red Herring Prospectus, unless the context otherwise requires, all references to the word Lakh or Lac, means One hundred thousand and the word million means Ten Lacs and the word Crore means ten million and the word billion means One thousand million and the word trillion means One thousand billion. In this Draft Red Herring Prospectus, any discrepancies in any table between total and the sum of the amounts listed are due to rounding off. Throughout this Draft Red Herring Prospectus, all the figures have been expressed in Lacs of Rupees, except when stated otherwise. All references to Rupees and Rs. in this Draft Red Herring Prospectus are to the legal currency of India. DIVIDEND POLICY Dividends may be declared at the Annual General Meeting of the Shareholders based on a recommendation by our Board of Directors. Our Board of Directors may recommend dividends, at their discretion, to be paid to the members. Generally the factors that may be considered by our Board, but not limited to, before making any recommendations for the dividend include future expansion plans and capital requirements, profits earned during the financial year, cost of raising funds from alternate sources, liquidity, applicable taxes including tax on dividend, as well as exemptions under tax laws available to various categories of investors from time to time and money market conditions.

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FINANCIAL STATEMENTS Auditors Report The Board of Directors, Janki Corp Limited, 39/C, 1st Floor, Raj. Industrial Complex, Military Road, Marol, Andheri (E), Mumbai-400059 A. a) We have examined the annexed financial information of Janki Corp Limited (the Company) for the five financial years ended 31st March, 2001, 31st March, 2002, 31st March, 2003, 31st March, 2004, 31st March, 2005 and for the five months period ended as on 31st August 2005 being the last date to which the accounts of the Company have been made up and audited by us. The financial statements for the five month period ended 31st August, 2005 is approved by the Board of Directors of the Company for the purpose of disclosure in the Offer Document being issued by the Company in connection with the Public Issue of Equity Shares in the Company (referred to as the Issue). b) In accordance with the requirements of (i) Paragraph B(1) of Part II of Schedule II to the Companies Act, 1956 (the Act); (ii) The Securities and Exchange Board of India (Disclosure and investor Protection) Guidelines, 2000 (the SEBI Guidelines) issued by Securities and Exchange Board of India (SEBI) on January, 19, 2000 in pursuance to Section 11 of the Securities and Exchange Board of India Act, 1992 and related amendments and (iii) Our terms of reference with the Company dated May 30, 2005 requesting us to carry out work in connection with the Offer Document as aforesaid. We report that the restated assets and liabilities of the Company as at 31st March, 2001, 31st March, 2002, 31st March, 2003, 31st March, 2004, 31st March, 2005 and five month period ended August 31st 2005 are as set out in Annexure 1 to this report after making such adjustments/restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies as appearing in Annexure 3 and Notes to the statements of Assets & Liabilities and Profit & Loss Account appearing in Annexure 4 to this report. We report that the restated profits of the Company for the financial years ended 31st March, 2001, 31st March, 2002, 31st March, 2003, 31st March, 2004, 31st March, 2005 and five month period ended August 31st 2005 are as set out in Annexure 2 to this report. These profits have been arrived at after charging all expenses including depreciation and after making such adjustments/restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies as appearing in Annexure 3 and Notes to the Statements of Assets & Liabilities and Profit & Loss Account appearing in Annexure 4 to this report. B. We have examined the following financial information relating to the Company proposed to be included in the Offer Document, as approved by you and annexed to this report. i. Statement of Cash Flow as appearing in Annexure 5 to this report; ii. Accounting Ratios as appearing in Annexure 6 to this report;

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iii. iv. v. vi. vii. viii. ix. x. xi. xii. xiii. xiv. xv.

Statement of Unsecured Loans taken including that from related parties enclosed as Annexure 7 to this report. Statement of Debtors including the related party debtors enclosed as Annexure 8 to this report. Details of loans and advances showing the same with the Related Parties as appearing in Annexure 9 to this report; Statement of Dividends as appearing in Annexure 10 to this report; Capitalisation Statement as appearing in Annexure 11 to this report; Statement of Secured Loans as appearing in Annexure 12 to this report. Details of Contingent Liabilities as appearing in Annexure 13 to this report; Statement of Related Parties transactions as appearing in Annexure 14 to this report. Statement of Tax Shelter as appearing in Annexure 15 to this report. Details of qualifications appearing in the audit report as given in Annexure 16 to this report. Details of changes in Significant Accounting Policies as given in Annexure 17 to this report. Details of loans and advances as given in Annexure 18 to this report. Details of Companys other income exceeding 20% of its total income for the period ended March 31, 2001 and March 31, 2002. as given in Annexure 19 to this report.

C. a) In our opinion the financial information of the Company as stated in Para A and above read with Significant Accounting Policies enclosed in Annexure 3 to this report, after making adjustments/restatements and regroupings as considered appropriate and subject to certain matters as stated in Notes to the Statements, has been prepared in accordance with Part II of Schedule II of the Act and the SEBI Guidelines. b) This report is intended solely for your information and for inclusion in the Offer Document in connection with the specific Public Offer of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent. For O. P. Dad & Co. Chartered Accountants For A. Bafna & Co. Chartered Accountants

(O. P. Dad) Partner Place: Jaipur Date: 31-10-2005

(M. K. Gupta) Partner

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Annexure 1 STATEMENT OF ASSETS & LIABILITIES (AS RESTATED) (Rs. in Lacs) S. Particulars No. A Fixed Assets Gross Block Less : Depreciation Net Block Capital Work in Progress Total B Investment Current Assets, Loans & C Advances Inventories Sundry Debtors Cash and Bank Balances Loans and Advances Total D Liabilities and Provisions Secured Loans Unsecured Loans Deferred Tax Liability (Net) Current Liabilities & Provisions Total E Net Worth (A+B+C-D) F Represented by Equity Share Capital Share Application Money Reserves & Surplus Less : Miscellaneous Expenses ( To the extent not written off) Net Worth 537.74 0.00 0.00 15.45 522.29 537.74 0.00 0.00 30.97 506.77 537.74 27.73 0.00 28.68 536.79 600.00 142.75 72.39 -0.29 814.85 1175.00 132.28 840.40 -5.48 2142.20 1415.00 45.95 1353.60 -4.80 2809.75

31.3.2001 31.3.2002 31.3.2003 31.3.2004

31.3.2005 31.8.2005

1155.10 591.49 563.61 11.00 574.61 0.03

1306.56 724.58 581.98 10.18 592.16 0.03

1423.86 857.18 566.68 15.32 582.00 0.03

1671.12 950.35 720.77 41.19 761.96 0.03

4174.90 1052.41 3122.49 143.60 3266.09 0.03

4198.67 1144.12 3054.55 1598.96 4653.51 0.03

223.74 445.34 33.95 72.48 775.51 279.62 117.68 0.00 430.56 827.86 522.29

285.04 351.48 6.84 90.88 734.24 344.09 141.69 0.00 333.88 819.66 506.77

119.71 394.46 5.30 91.75 611.22 301.86 200.26 1.86 152.48 656.46 536.79

760.45 360.83 15.92 147.08 1284.28 558.61 232.17 17.99 422.65 1231.42 814.85

1259.91 674.66 36.65 851.15 2822.37 2556.46 512.99 114.97 761.87 3946.29 2142.20

1634.63 985.75 60.69 1379.66 4060.73 4441.70 323.28 233.82 905.72 5904.52 2809.75

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STATEMENT OF PROFIT & LOSS (AS RESTATED) S.No. Particulars A Income a) Of Products manufactured by Company b) Of Products traded by Company Total Income Other Income Scrap Sale Sale of Coal Ash Interest Profit on sale of fixed assets Excise Duty / Commission Increase / Decrease in Stock Total B Expenditure Cost of Raw Material Consumed / Goods Sold Manufacturing Expenses including excise duty Personnel Expenses Administrative & Other Expenses Selling & Distribution Expenses Total C Net Profit before Interest, Depreciation, Tax and Extraordinary items Depreciation Interest & Financial Charges Profit / Loss before Tax Provision for Taxation - Current Tax - Deferred Tax D Profit / Loss after Tax but before Extra ordinary Items Extra-ordinary Items (Add)/Less taxation for earlier years Effect of change in accounting policy on account of deferred tax provisions E Profit/Loss after Extraordinary Items Less : Dividend on Preference Shares Less : Tax on Dividend (Rs. in Lacs) 31.3.2001 31.3.2002 31.3.2003 31.3.2004 31.3.2005 31.08.2005 2169.03 1457.70 1226 .42 1762.84 2361.17 0.00 0.00 0.00 2614.90 3071.27 2776.04 1547.38 4323.42 1.16 0.00 0.00 1.16 0.00 0.00 -22.04 4302.54 2166.56 1198.17 187.30 55.86 58.91 3666.80 635.74

2169.03 1457.70 1226.42 4377.74 5432.44 5.86 12.17 34.27 11.53 10.11 2.41 3.45 1.03 0.65 0.00 0.12 0.04 0.00 0.18 0.00 2.12 3.70 4.83 1.57 1.70 1.21 0.28 0.08 9.13 8.41 0.00 4.70 28.33 0.00 0.00 36.32 -0.39 -30.40 330.72 124.75 2211.21 1469.48 1230.29 4719.99 5567.30 0.00 0.00 0.00 1723.97 2618.33 786.19 2173.11 1865.19 195.63 30.16 34.04 294.45 44.05 162.07 293.02 56.43 151.71

1798.84 1032.96 181.17 29.06 41.99 197.71 29.54 38.14

2051.06 1298.35 1046.02 4397.65 4984.68 160.15 171.13 184.27 322.34 582.62

128.82 48.87 -17.54 0.00 -17.54

136.98 49.85 -15.70 0.00 -15.70

134.35 45.63 4.29 0.34 1.87 2.08

120.27 65.01 137.06 20.03 16.15 100.88

135.07 145.23 302.32 23.71 96.99 181.62

91.89 115.75 428.10 36.04 118.86 273.20

0.00 0.00 0.00

0.00

0.00

0.00

-17.54 0.00 0.00

-15.70 0.00 0.00

2.08 0.00 0.00

100.88 0.00 0.00

181.62 0.00 0.00

273.20 0.00 0.00

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Profit available for appropriation

-17.54

-15.70

2.08

100.88

181.62

273.20

Note: The company was engaged in the processing of fabrics since 1993. It started marketing of fabrics in our own brand name JPL during the year 2003-04 which resulted increase of turnover from Rs. 1230.29 Lacs in FY: 2003 to Rs. 4719.99 Lacs in FY: 2004.consisting of turnover of Rs. 2614.90 lacs of fabric. In the year 2004-05 the company diversified into the steel sector by setting up a Sponge Iron Manufacturing Unit at Bellary having a production capacity of 60,000 MT per annum. The unit has achieved a turnover of Rs. 655.52 Lacs from steel division for the two months period of operation during the financial year ended March 31, 2005 and turnover of Rs. 1878.99 Lacs for the five month period ended August 31, 2005. Annexure 3 SIGNIFICANT ACCOUNTING POLICIES a) Basis for Preparation Of Financial Statements (a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of Co. Act, 1956, subject to what is stated herein below, as adopted consistently by the company. (b) The company generally follows mercantile system of accounting and recognises significant items of income specifically mentioned otherwise. b) Fixed Assets (a) Fixed Assets are stated at their cost of acquisition/construction less accumulated Depreciation inclusive of freight, duties, taxes and other incidental expenses incurred till the commencement of commercial production, Incidental expenses include establishment expenses, interest on borrowed funds used for capital expenditure and other administrative expenses. Cenvat / Modvat available in respect of eligible capital goods is reduced from the cost of assets. (b) Capital work in progress is stated at cost. c) Depreciation (a) Depreciation on fixed Assets which acquired before 31.03.2003, was calculated on written down value & pro-rata basis at the rates specified in schedule XIV of the Companies Act, 1956, as amended vide notification No. GSR 756 (s) dated 16.12.1993. (b) Depreciation on Fixed Assets which acquired on & after 01.04.2003 and during the year has been calculated on straight line basis at the rates specified in schedule XIV of the Companies Act, 1956, as amended vide notification No. GSR 756 (s) dated 16.12.1993. (c) Assets costing less than Rs. 5,000/- have been fully depreciated in the year of acquisition. (d) Depreciation on fixed assets acquired during the year has been calculated on prorata basis with reference to the date on which the assets are put to use.

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d) Investments Investments are stated at cost. e) Revenue Recognisation/ Basis of Accounting The Company follows the accrual system of accounting except certain items like rebates and discount and claims and claims on sales and Insurance claims etc., where there is no reasonable certainty regarding the amount and/or its collectability, recognition or revenue postponed. f) Inventory Inventory valuation has been made on following basis: S.No Particulars (i) (ii) (iii) (iv) (v) (vi) (vii) Stores & Spares Dyes & Chemicals Work in Process (Job) Job in hand (Finished) Raw Material WIP of fabrics Finished goods of fabrics Basis of valuation At Cost At Cost At cost inclusive of allocable overhead. At cost or net realisable value whichever is less At Cost At cost inclusive of allocable overhead. At cost or net realisable value whichever is less

g) Sales/ Job Processing Income Job processing incomes is stated at net of discount and inter division transactions. Sales are recognised when goods are supplied and are recorded at net of return, trade discount etc. h) Excise Duty Excise duty has been accounted for on the basis of both payments made in respect of goods cleared as also provision made for stock of finished goods lying in the units at the year end excepts that Finished goods lying in processing unit on job basis which has been valued without excise duty as the process income includes only job charges. However this do not have any impact on Profit & Loss a/c. Cenvat credit if any available in respect of input or capital goods is reduced from the cost of respective items at the time of consumption/ issue. i) Borrowing Costs Interest and other cost in connection with of the fund to the extent related/attributable to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing cost are charged to profit and loss account. Preliminary Expenses The preliminary expenses are written off over a period of 10/5 years in accordance with Section 35-D of the Income Tax Act, 1961.

j)

k) Lease Lease rentals are expensed with reference to lease terms and other considerations have been charged to profit & loss a/c.

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l)

Accounting For Taxes On Income (a) Current Tax has been provided as per the provision of Income Tax Act. (b) Deferred tax resulting from timing difference between book and taxable profit has been provided at the tax rates and lows that have been enacted or subsequently enacted/ announced as on the balance sheet date. The Deferred tax asset is recognised and carried forward only to the extent that there is a reasonable/ virtual certainty that the assets will be realisable in future.

m) Impairment Of Assets (AS-28) Factor giving rise to any indication of any impairment of the carrying amount of the Companys assets are appraised at each Balance Sheet date to determine and provide/revert an impairment loss following accounting standard AS28 for impairment of assets. n) Contingent Liabilities Contingent Liabilities not provided for, are disclosed by way of notes to the accounts. o) Retirement Benefits (a) Under Provident Fund and E.S.I. Scheme, Companys contribution accruing during the year has been charged to Profit & Loss account. (b) Encashment of leave lying to the credit of employees is not provided for on actuarial basis. It is accounted on cash basis. Therefore, it is not possible to ascertain the liability at the end of the accounting year. (c) Liabilities in respect of gratuity of employees are funded under the employees group gratuity Scheme with the LIC. Annexure 4 Notes On Accounts 1. A sum of Rs. 48.24 Lacs paid by the company under protest as excise duty on galleries of chamber of stenter machine. In this case the Hble CESTAT had already given the decision in favour of assessee but the excise department had preferred an appeal before the Hble Supreme Court, which also decided against the department in similar case. The department has adjusted the said refund in consumer welfare fund but having regards to the decided case by Hble Supreme Court, the company has further filed an appeal against it, which stands pending, and consequently, effect of the same will be accounted for as and when the case will be decided. 2. The Textile Cess Committee has raised a demand of Rs. 38.86 Lac against the company. The Company has filed an appeal against it before the Textile Cess Committee Appellate Tribunal, Mumbai, which stands pending, and consequently, liability, if any arises will be accounted for as and when the case will be decided. 3. The excise department has seized some records on dated 18.01.2002 on account of differential duty. The company has received a show cause notice No. V (55) 15 / OFF / Adj-II / 234 / 02 / 4355 from Central Excise department, Jaipur raising a demand of Rs. 15.63 Lacs and penalty of equal amount. The company has preferred an appeal against it, which stands pending and consequently, liability, if any arises will be accounted for as and when the case will be decided.

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4. Rebate, claims & discount etc. on purchases & sale are accounted for and being provided for as and when settled with the parties as per consistent policy adopted by the Company every year. 5. The balance outstanding with sundry debtors & creditors including loans and advances either debit or credit are subject to confirmation and reconciliation. 6. Figures for the previous year has been regrouped, reclassified and rearranged wherever necessary to make them comparable with the current year. 7. Auditor's Remuneration as follows: Particulars Statutory & Tax Audit Fees Return Filing & Consultancy Reimbursement of expenses TOTAL 31.08.05 33,100 0 9,011 42,111 (Amount In Rupees) 31.03.05 40,000 10,000 17,825 67,825

8. The company does not posses information as to which of its suppliers and small-scale industries undertaking holding permanent registration certificate. Consequently the liability if any of interest which would be payable on delayed payment under small scale. Ancillary Industrial Undertaking Act 1993 cannot be ascertained. However the company has not received any claim of such interest so far. 9. In the opinion of the Management and to best of their knowledge and belief, the value of loans, advances and other current assets whether debit or credit in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet and provision for all known liabilities has been made. 10. The CENVAT credit shown as receivable under the head Loans & Advances includes Rs. 146.65 Lac representing to Additional Excise Duty under Additional Duties of Excise (Textile &Textile Articles) Act, 1978 availed on yarn purchases which even though not adjustable against the final product i.e. fabrics under the existing law have been retained under the apprehension that necessary amendment to extend its utilization against payment of duty payable on final product is likely to be brought in/introduced by the Government. 11. Gratuity fund is administered by a trust through its group gratuity scheme of the LIC of India. 12. There is no expenditure incurred on employees who were in receipt of remuneration in the aggregate of not less than Rs.24, 00,000/- p.a. if employed through out the year and Rs.2, 00,000 per month, if employed for a part of the year. 13. Earnings per share:( Basic & Diluted) Particulars Net profit for the period attributable to equity shareholders Weighted average number of equity shares outstanding (Amount In Rupees) 31.03.05 5 Months Ended 31.08.05 2,73,19,906/1,26,52,941 1,81,63,788/79,11,986

145

Basic and diluted earnings per share (Face value of Rs.10 each)

*5.18

2.30

* In accordance with the AS 20 , EPS has been calculated on annualized basis to make the figure comparable 14. The provision for Deferred Tax Liabilities as on 31st August 2005 is as under: Difference in Books and Tax WDV of Fixed Assets Total (A) Unabsorbed Depreciation Total (B) Net timing Difference (A-B) Deferred Tax liability @ 33.66% Deferred Tax Assets( MAT Credit) Net Deferred Tax Liability for the period ending 31.08.2005 8,89,11,882 87,36,696 8,01,75,186 2,69,86,969 36,04,413 2,33,82,356

Consequent to Accounting Standard (22) on Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India,. The tax liabilities has arisen principally on account of timing difference in respect of depreciation admissible as per Income Tax Laws and accounting depreciation, having reference to the expansion plans of the company, the timing difference is not expected to be reversed. 15. Related party disclosure: As per Accounting Standard (AS-18) on Related Party Disclosure issued by the ICAI, the disclosure of transaction with the related parties as defined in the Accounting Standard are given below; i) List of Related Parties with whom transactions have taken place and relationship: Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Name of Related Party Mr. Raghunath Mittal Mr. Shivnath Mittal Ms.Madhu Mittal Mr.Rahul Mittal Mr.Rohit Mittal Ms.Sunita Mittal Ms.Seema Mittal Ms Arti Mittal Ms. Shakhi Mittal Mr. Kedar Nath Mittal Mr. Raghunath Mittal ( HUF ) JPL Industries Ltd. (Formerly known as Sulzem Syncotex Pvt. Limited) Relaionship Key Management Personnel

Relative of Personnel

Key

Management

Others Associate concern

146

II

a) Transaction during the year with related parties Nature of transactions Key Management Personnel Relatives of Key Management Personnel Other Associate Concern Total Interest on Director loans Remuneration 2005 Aug 05 2005 Aug05 4.00 1.96 0.96 2.50 Job charges 2005 Aug05 (Rs. In Lacs) Total 2005 Aug05 4.96 4.46

4.23

1.60

4.23

1.60

2.62 10.85

0.14 3.70

0.96

2.62

0.14

- 166.14 2.50 166.14

203.6 166.14 203.60 203.6 177.95 209.80

II b) Transaction during the year with related parties in respect of loans and advances obtained and repaid during the last five years: DURING THE PERIOD FROM 1.04.2005 TO 31.08.2005 OPENING RECEIVED BALANCE 6.30 83.85 1.65 0.00 2.18 8.75 7.44 0.00 5.82 0.00 2.27 3.00 4.65 30.65 4.63 8.95 CLOSIG PAID BALANCE 38.27 51.88 0.00 1.65 10.15 0.78 0.00 7.44 0.00 5.82 5.00 0.27 33.60 1.70 11.30 2.28

SHRI RAGHUNATH MITTAL SHRI SHIVNATH MITTAL SMT. MADHU MITTAL SMT. SEEMA MITTAL SMT SUNITA MITTAL SHRI RAGHUNATH MITTAL (HUF) SHRI ROHIT MITTAL SHRI RAHUL MITTAL

DURING THE YEAR 2004-2005 SHRI RAGHUNATH MITTAL 42.61 118.41 SHRI SHIVNATH MITTAL 1.53 0.14 SMT. MADHU MITTAL 4.36 57.68 SMT. SEEMA MITTAL 6.88 0.62 SMT SUNITA MITTAL 5.39 0.48 SHRI RAGHUNATH MITTAL (HUF) 59.08 53.13 SHRI ROHIT MITTAL 7.58 13.75 SHRI RAHUL MITTAL 24.65 58.81 DURING THE YEAR 2003-2004 SHRI RAGHUNATH MITTAL 47.15 4.13 SHRI SHIVNATH MITTAL 1.42 0.13 SMT. MADHU MITTAL 5.64 0.46 SMT. SEEMA MITTAL 6.36 0.57 SMT SUNITA MITTAL 4.98 0.45 SHRI RAGHUNATH MITTAL (HUF) 97.11 8.12 SHRI ROHIT MITTAL 7.01 0.63

154.73 0.01 59.86 0.06 0.05 109.94 16.67 78.83 8.66 0.01 1.75 0.06 0.04 46.15 0.06

6.30 1.65 2.18 7.44 5.82 2.27 4.65 4.63 42.61 1.53 4.36 6.88 5.39 59.08 7.58

147

SHRI RAHUL MITTAL

26.87 DURING THE YEAR 2002-03

7.27

9.49

24.65

SHRI RAGHUNATH MITTAL 23.30 105.56 SHRI SHIVNATH MITTAL 1.31 0.12 SMT. MADHU MITTAL 5.60 31.82 SMT. SEEMA MITTAL 5.89 0.53 SMT SUNITA MITTAL 4.61 0.42 SHRI RAGHUNATH MITTAL (HUF) 48.66 134.34 SHRI ROHIT MITTAL 0.00 7.02 SHRI RAHUL MITTAL 0.00 29.52 DURING THE YEAR 2001-02 SHRI RAGHUNATH MITTAL 61.92 40.14 SHRI SHIVNATH MITTAL 0.00 1.31 SMT. MADHU MITTAL 13.24 0.85 SMT. SEEMA MITTAL 5.38 0.57 SMT SUNITA MITTAL 4.21 0.44 SHRI RAGHUNATH MITTAL (HUF) 20.11 31.08 SHRI KEDAR NATH MITTAL 0.00 0.00 SMT ARTI MITTAL 5.77 0.21 SMT SHAKSHI MITTAL 6.63 0.36 DURING THE YEAR 2000-2001 SHRI RAGHUNATH MITTAL 5.56 118.74 SHRI SHIVNATH MITTAL 0.00 0.00 SMT. MADHU MITTAL 0.07 29.14 SMT. SEEMA MITTAL 4.86 0.58 SMT SUNITA MITTAL 3.81 0.46 SHRI RAGHUNATH MITTAL (HUF) 0.00 84.97 SHRI KEDAR NATH MITTAL 1.15 0.07 SMT ARTI MITTAL 8.19 0.93 SMT SHAKSHI MITTAL 5.99 0.72 16. Segment Reporting:

81.72 0.01 31.78 0.06 0.04 85.88 0.00 2.65

47.15 1.42 5.64 6.36 4.98 97.11 7.01 26.87

78.75 0.00 8.48 0.06 0.05 2.53 0.00 5.97 6.99 62.37 0.00 15.98 0.07 0.05 64.86 1.22 3.35 0.08

23.30 1.31 5.60 5.89 4.61 48.66 0.00 0.00 0.00 61.92 0.00 13.24 5.38 4.21 20.11 0.00 5.77 6.63

As per AS 17 (Accounting Standard on segment Reporting) issued by ICAI, the Segment wise Primary information as under ; 31.03.2005 Sponge Iron Division 655.52 171.34 31-08-2005 Sponge Iron Division 1879.00 292.00

Particulars

Textile Division

Total

Textile Division

Total

Revenue External Sales Segment results before Interest and Tax Less: Interest Profit before

4776.92 276.20

5432.44 447.54

2444.42 251.85

4323.42 543.85

120.65 155.55

24.57 146.77

145.22 302.32

62.34 201.48

50.37 226.62

115.75 428.10

148

Tax Less: Tax Profit after Tax Segment Assets Segment Liabilities Capital Expenditure Segment Depreciation

2254.97 1882.18 205.08 121.82

3833.52 1949.14 2335.42 13.25

120.69 181.63 6088.49 3831.32 2540.50 135.07

201.48 2266.92 1724.41 23.91 46.16

226.62 6447.35 3910.23 1598.95 45.73

154.90 273.20 8714.27 5634.64 1622.86 91.89

The reporting segment are further described below: a) Textile division is situated at Bhilwara (Rajasthan) and Sponge Iron Division is situated at Bellary (Karnataka). b) Each Segment of the business in the company is running as an Independent Division of the Company. c) The Company has two main segments i.e textile and sponge iron hence allocation of revenue & expenditure is on actual basis. d) Segment of Sponge Iron has commenced in current year w.e.f. Jan.05. Annexure 5 , Statement of Cash Flow from the Restated Financial Statement (Rs. in Lacs) (A) CASH FLOW STATEMENT 31.3.2001 31.3.2002 31.3.2003 31.3.2004 31.3.2005 31.08.200 FROM OPERATING 5 ACTIVITIES Net Profit Before Tax -17.54 -15.70 4.29 137.06 302.32 428.10 Adjustments for :Depreciation 128.82 136.98 134.35 120.27 135.07 91.89 Interest Expenditure 48.87 49.85 45.63 65.01 145.23 115.75 Interest Income -2.12 -3.70 -4.83 -1.57 -1.70 -1.16 Loss / profit (+/-) on sale of -1.21 -0.28 -0.08 -8.68 -8.41 0.00 Fixed Assets Deferred Revenue Expenditure 0.19 0.18 0.19 0.28 1.62 0.68 Excess provision for earlier 0 0 0 0 0 0 year written back Operating Profit Before Working Capital Changes Adjustments for :Inventories -69.33 -61.30 165.33 -640.74 -499.46 -374.72 Sundry Debtors -59.70 93.86 -42.98 33.63 -313.83 -311.09 Loans and Advances -15.38 -18.40 -0.87 -55.33 -704.07 -528.51 Sundry Creditors 1.26 -96.68 -181.40 270.17 339.22 143.85 Less : Taxes Paid 0.00 -0.34 -20.03 -12.33 -36.04

149

Cash Generated from Operations (A) CASH FLOW FROM (B) INVESTING ACTIVITIES Purchase of Fixed Assets Increase in Misc. Expenditure Sale of Fixed Assets Interest Received Net Cash Used in Investing Activities (B) (C) CASH FLOW FROM FINANCING ACTIVITIES Proceeds from /(Repayment) of short term borrowing (Net) Proceeds from long term borrowing Repayment of long term borrowing Increase in bank borrowing for Working Capital Increase /(Repayment) of Unsecured loan increase in share capital increase in share premium Interest Paid Dividend Paid Dividend Tax Net Cash From Financing Activities (C) (D) Net Increase / Decrease in Cash & Cash Equivalent (A-B+C) Closing Balance of Cash & Cash Equivalent Opening Balance of Cash & Cash Equivalent

13.86

84.81

119.29

-99.93

-616.34

-471.26

173.06

158.10

124.70

302.07 0.36 10.48 1.57 290.38

2641.23 6.81 10.44 1.70 2635.90

1479.30 0.00 0.00 1.16 1478.13

4.15 2.12 166.79

3.85 3.70 150.55

0.60 4.83 119.27

183.39

7.87 0

52.00 -49.51 -44.72 58.57 27.73 -45.63

97.00 -46.79 206.54 31.91 177.28 -65.01

1749.25 -81.66 330.26 280.82 564.53 575.00 -145.23

1753.49 -65.67 197.40 -189.71 153.67 240.00 -115.75

-42.29 87.66

56.60 24.01 0.00 -49.85

-48.87

179.89 26.96

38.63 -27.11

-1.56 -1.54

400.93 10.62

3272.97 20.73

1973.43 24.04

33.95 6.99

6.84 33.95

5.30 6.84

15.92 5.30

36.65 15.92 Annexure 6

60.69 36.65

Mandatory Accounting Ratios Particulars 31.3.2001 31.3.2002 31.3.2003 31.3.2004 31.3.2005 31.08.2005 Earning Per Share 0.04 1.87 2.30 *5.18 (EPS) (Rs.) Return Of Net Worth (%) 0.39% 12.38% 8.48% 9.72% Net Assets Value Per 9.71 9.42 9.98 13.58 18.23 19.86 Share (Rs.) 1. EPS=a/b Return on Net worth = a/c % Net Asset Value Per Share = d/b

150

a. Net Profit after Tax b. No. of Equity Shares c. Net Worth = Share Capital plus Reserves & Surplus less Miscellaneous Expenditure to the extent not written off. d. Net Assets value = Equity Share capital plus reserve and surplus less miscellaneous expenses to the extent not written off 2. The ratios are on annualized basis. Annexure 7 Statement of Unsecured Loans: (Rs. In Lacs) Particulars 31.3.2001 31.3.2002 31.3.2003 31.3.2004 31.3.2005 31.08.2005 From group / 117.68 89.84 200.26 226.17 267.81 323.28 associate companies/directors/ promoters b) Inter Corporate 0.00 51.85 0.00 6.00 245.18 0.00 Loans Total 117.68 141.69 200.26 232.17 512.99 323.28 DETAILS OF UNSECURED LOAN AS ON 31.08.2005 A. PROMOTERS Particulars Rate of interest Amount SHRI RAGHUNATH MITTAL 9.00 5187797.00 SHRI RAGHUNATH MITTAL (HUF) 9.00 26997.00 SHRI RAHUL MITTAL 9.00 227927.00 SHRI ROHIT MITTAL 9.00 170440.00 SMT. MADHU MITTAL 9.00 78104.00 TOTAL (A) 5691265.00 B. GROUP COMPANIES C. ASSOCIATE CONCERN D. OTHERS PARTICULARS RATE OF INTEREST (%) 9.00 9.00 9.00 9.00 15.00 15.00 12.00 15.00 AMOUNT NIL NIL

SHRI CHANDULAL GUTUTIA SMT. SEEMA MITTAL SMT. SUNITA MITTAL USHA AGARWAL AJAY KUMAR NANAWATI ARPIT FABRICS BABEL SYNTHETICS ASHISH JALAN

374709.00 743527.00 582228.00 59025.00 500000.00 500000.00 300000.00 200000.00

151

ASHITA PODDAR BASANTI CHANDAK D.D. TRADERS DHANPAT SINGH SOM SINGH DINESH NUWAL DINESH NUWAL (HUF) DURGESH BANGER G.R. GARG JAYESH BANGER LAXMAN SINGH CHOUDHARY MADAN LAL NUWAL KABRA FINANCE COMPANY KUSUM AGARWAL MADHU SUDAN MALANI (HUF) NARESH MUNDRA NATWAR LAL SUSHIL KUMAR (HUF) PARTICULARS

9.00 15.00 12.00 15.00 15.00 15.00 15.00 12.00 15.00 15.00 15.00 15.00 15.60 15.60 15.60 15.00 RATE OF INTEREST (%)

501110.00 300000.00 400000.00 500000.00 250000.00 250000.00 300000.00 500000.00 200000.00 202434.00 175000.00 300000.00 500000.00 150000.00 204670.00 400000.00 AMOUNT 500000.00 200000.00 150000.00 102694.00 600000.00 200000.00 160506.00 300000.00 150000.00 250000.00 200000.00 275000.00 635206.00 151886.00 900000.00 900000.00 900000.00 900000.00 1100000.00 900000.00 253144.00 4800000.00 500000.00 2050000.00 1000000.00 165338.00

P.K.TEXTILE 12.00 PUSHPA MUNDRA 15.00 RADHA BHANDARI 15.00 SHRI DEO KRISHNA BAJAJ (HUF) 12.00 SMT. SHANTI DEVI BIHANI 15.00 SMT. HULASH DEVI CHAPLOT 15.00 SUMITRA BANG 15.60 SUSHIL KUMAR AND SONS (HUF) 15.00 SUSHIL KUMAR MADHUSUDAN (HUF) 15.00 UNIK TEXTILES 15.00 SMT SEEMA MAHESHWARI 15.00 SURAJMAL BIHARI LAL 15.60 PANKAJ KUMAR AGARWAL 9.00 PARMOD KUMAR AGARWAL 9.00 SHRI CHANDRA PRAKASH BABEL INTEREST FREE SHRI CHANDRA PRAKASH BABEL (HUF) INTEREST FREE SHRI LALIT KUMAR BABEL INTEREST FREE SHRI LALIT KUMAR BABEL (HUF) INTEREST FREE SHRI MAHESH MISHRA 9.00 SMT. CHANDA BABEL INTEREST FREE SUNIL KUMAR AGARWAL 9.00 SHREE MAHAVEER KUMAR BABEL 10.75 RAGHAV SULZEM [P] LTD 15.00 ROTOMAC SYNTHETICS [P] LTD 15.00 SANGAM BUSINESS CREDIT LTD 15.00 SHRI SHIVNATH MITTAL 9.00

152

TOTAL (D) GRAND TOTAL (A+B+C+D) Remarks : All unsecured loans are repayable on demand

26636477.00 32327742.00

Annexure 8 Statement of Sundry Debtors Age-wise Break-up 31.3.2001 31.3.2002 31.3.2003 31.3.2004 31.3.2005 31.08.2005 More than Six Months 12.44 25.24 15.18 20.15 40.21 40.21 Less than Six Months 432.9 326.24 379.28 340.68 634.45 945.54 Total 445.34 351.48 394.46 360.83 674.66 985.75 Annexure 9 Related Party Disclosures Transaction with related party as identified by the management in accordance with Accounting Standard 18 Related party disclosures issued by The Institute of Chartered Accountants of India, is as follows: (I) List of Related Parties Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Name of Related Party Mr. Raghunath Mittal Mr. Shivnath Mittal Ms.Madhu Mittal Mr.Rahul Mittal Mr.Rohit Mittal Ms.Sunita Mittal Ms.Seema Mittal Ms Arti Mittal Ms. Shakhi Mittal Mr. Kedar Nath Mittal Mr. Raghunath Mittal ( HUF ) JPL Industries Ltd. (Formerly known as Sulzem Syncotex Pvt. Limited) Relaionship Key Management Personnel

Relative of Personnel

Key

Management

Others Associate concern

Annexure 10 Statement of Dividends The company has not declared any dividend for the preceding five financial years i.e. 200001, 2001-02, 2002-03, 2003-04 and 2004-05.

153

Annexure 11 Capitalisation Statement Pre-Issue 31.03.05 31.08.05 (Rs. in Lacs) Post-Issue

S.No. Particular 1 Borrowings Secured Short Term Debts Long Term Debts Unsecured Debts Total Borrowings 2 Shareholder's Fund Equity Share Capital Reserve & Surplus Less: Miscellaneous Expenditure to the extent not written off Total Shareholder's Fund 3 Debt Equity Ratio

644.91 1911.55 512.99 3069.44 1175.00 840.40 5.48 2009.92 1.53

842.31 3599.39 323.28 4764.98 1415.00 1353.60 4.80 2918.70 1.63

[] [] [] [] [] [] [] [] []

1. Issue price will be decided in consultation with the Merchant Bankers to the Issue. Therefore these figures will be worked out later on. 2. The Company has fully tied up term loan of Rs. 3400.00 Lacs as envisaged for the expansion project of the company with SBBJ and SBM. The disbursement will be availed after the proposed public issue. 3. Post issue figure represent status assumed as on September 19, 2005. 4. The company has issued further equity share capital of Rs.75.00 lacs on 10.09.2005 at apremium of Rs. 75.00 lacs Annexure 12 DETAIL OF SECURED LOAN S. Particulars of Loan No . 1 Term Loan Rajasthan State Industrial Development & Investment Corporation Ltd. 183.39 191.26 193.75 0 0 0 State Bank of Bikaner and Jaipur 0.00 0 0 243.96 1769.08 2654.42 State Bank of Mysore 735.91 Sub Total 183.39 191.26 193.75 243.96 1769.08 3390.33 2 Cash Credit Account State Bank of Bikaner and Jaipur 96.23 152.83 108.11 314.65 644.91 674.15 State Bank of Mysore 168.16 Sub Total 96.23 152.83 108.11 314.65 644.91 842.31 3 Vehicle Loan Sub Total 0 0 0 0 142.46 209.05 Total Secured Loan (1+2+3) 279.62 344.09 301.86 558.61 2556.45 4441.69 (Rs. in Lacs) 31.3.01 31.3.02 31.3.03 31.3.04 31.3.05 31.08.05

154

DETAIL OF SECURED LOANS OUTSTANDING AS ON 31 MARCH 2005 (Rs. in Lacs) Particular of Bank Nature of Loan Sanctioned Outstandi Rate of Repayment Loans Amount ng As on Interest of Terms 31.08.2005 1. Term State Bank Term Loan -I under 97.00 76.54 10.25% 24 Quarterly Loan of Bikaner Technology installment Facilities and Jaipur Upgradation Fund w.e.f. Scheme 01/06/04 Term Loan -II 154.45 72.76 10.25% 21 Quarterly (Take over of loan installment from RIICO) w.e.f. 01/02/04 Term Loan -III 300.00 274.30 10.25% 24 quarterly Expansion-Cum installments Diversification at commencing Bhilwara Division from 01/04/2005 Term Loan - IV 1300.00 1299.98 10.25% 24 Quarterly Setting up of installment 60,000 MTPA w.e.f. Sponge Iron Plant 01/01/06 at Bellary Term Loan - V 1900.00 930.83 9.00% 24 Quarterly Expansion Plant at installment Bellary Steel w.e.f. Division 01/04/07 State Bank Term Loan - VI 1500.00 735.91 9.00% 24 Quarterly of Mysore Expansion Plant at installment Bellary Steel w.e.f. Division 01/04/07 Total 3751.45 3390.34 2. Working State Bank CC 900.00 553.79 9.00% Capital of Bikaner Facilities and Jaipur State Bank CC 200.00 91.12 9.00% of Mysore Sub Total 900.00 644.91 3. Vehicle 209.04 Loans Total 4651.45 4441.70 i. Term Loan are secured by way of first charge on pari passu basis on all immovable properties (both present and future) together with second charge on all movable assets (both present and future) of the Company. The term loans are also secured by personal guarantee of three directors, namely Mr. Raghunath Mittal, Mr. Dinanath Mittal and Mr. Shivnath Mittal. The working capital loans are secured by way of hypothecation (both present and future) of stock of raw material / component, spares, stock in process, finished goods and book debts and a second charge on all immovable properties (both present and future) of the Company. The working capital loans are also secured by personal guarantee of three directors, namely Mr. Raghunath Mittal, Mr. Dinanath Mittal and Mr. Shivnath Mittal.

ii.

155

Annexure 13 DETAIL OF CONTINGENT LIABILITIES S.No. Particular (Rs. in Lacs) 2000-01 2001-02 2002-03 2003-04 2004-05 Up to 31st Aug.05 6.00 Nil Nil Nil Nil Nil

4 A B C D 4

Guarantee given to RSEB by Bank on behalf of company inclusive of margin money Guarantee given to SECL by bank on behalf of company inclusive of margin Corporate guarantee to State Bank of Bikaner and Jaipur for the credit facilities of Rs. 514 lacs sanctioned to JPL Industries Ltd. (formerly known as Sulzem Syncotex Pvt. Ltd.) Taxation matter in respect of which appeals are pending Sales Tax Excise Income Tax Textile Cess Letter of Credit Outstanding

15.00

15.00

Nil

Nil

Nil

Nil

514.00

8.03 30.40 Nil Nil

5.80 0.45 Nil Nil

5.80 0.45 Nil Nil

Nil 16.98 Nil 34.62 Nil

Nil 152.80 Nil 38.86 Nil

Nil 152.80 Nil 38.86 Nil

Annexure 14 DETAILS OF TRANSACTIONS WITH RELATED PARTIES 313131Nature of Nature of Mar- Mar- MarName of the Party Relationship Transaction 01 02 03 Managing Remuneration 0.84 0.84 0.84 Mr. Raghunath Mittal Director Interest 2.88 4.13 2.95 Mr. Shivnath Mittal Director Interest 0.00 0.02 0.12 Ms. Madhu Mittal Wife of MD Interest 1.14 0.85 1.18 Mr. Rahul Mittal Son of MD Interest 0.00 0.00 0.42 Mr. Rohit Mittal Son of MD Interest 0.00 0.00 0.05 Wife of Ms. Seema Mittal Interest 0.58 0.57 0.53 Director Wife of Ms. Sunita Mittal Interest 0.46 0.44 0.42 Director Raghnath Mittal Director(HUF) Karta Interest 0.57 3.73 3.44 Brother of Mr.Kedar Nath Mittal Director Interest 0.08 0.00 0.00 wife of Directors Ms. Arti Mittal brother Interest 0.93 0.20 0.00 Niece of Ms. Shakshi Mittal Interest 0.42 0.36 0.00 director (Rs. in Lacs) 31Mar- 31- 31-Aug05 04 Mar-05 0.84 0.96 2.50 4.13 4.00 1.96 0.13 0.14 0.09 0.46 1.57 0.16 2.44 1.67 0.33 0.63 0.99 0.34 0.57 0.45 8.12 0.00 0.62 0.48 2.62 0.00 0.36 0.32 0.14 0.00

0.00 0.00

0.00 0.00

0.00 0.00

156

JPL Industries Ltd/ ( Formerly known as Associate Sulzem Syncotex Job charges 0.00 0.00 0.00 0.00 166.14 203.60 Pvt. Ltd.) Concern Note: No significance of these transaction on the financial performances of the company Annexure 15 STATEMENT OF TAX SHELTERS Particulars Tax Rate Net Profit before Tax & Extra Ordinary items Tax at Notional Rate Adjustment Temporary Differences Difference between Depreciation as per I. T. Act and Book Depreciation Others Unabsorbed depreciation Total (A) Permanent Differences Deduction U/Sec. 10 B Total (B) Net Adjustment (A+B) Tax Saving thereon Total taxation (C) Taxation on extra ordinary items Taxable income as per provisions of MAT Tax Payable as per provisions of MAT (D) Net Tax payable as per I. T. Returns (higher of C or D above) (Rs. In Lacs) 31.3.2001 31.3.2002 31.3.2003 31.3.2004 31.3.2005 31.8.2005 39.55% 35.70% 36.75% 35.88% 36.59% 33.66% -17.54 -15.70 4.29 137.06 302.32 428.10 0 1.72 1.11 0 3.71 2.92 1.58 0.75 4.24 49.17 1.02 -75.10 110.63 1.55 -654.63 144.09 0.03 -122.62

-1.21 1.62 NIL 0 1.62 0 NIL NIL NIL NIL

-0.28 6.35 NIL 0 6.35 0 NIL NIL NIL NIL

-0.08 -9.20 -4.29 NIL 0 -4.29 -1.58 0.00 4.29 0.34 0.34

-9.64 -20.87 -104.59 0 0 -104.59 -37.52 11.65 137.06 10.53 11.65

-8.40 0 -661.48 0 0 -661.48 -242.05 0 302.32 23.70 23.70

0.00 -87.37 -209.92 0 0 -209.92 -70.65 0

428.10 36.04 36.04

Notes: *Due to Loss as per Books no tax was paid for Financial year 2000-01 and 2001-02 **For Financial year 2002-03 and 2003-04 tax paid under MAT as unabsorbed depreciation adjusted against taxable income as per normal computation. ***For F.Y.2004-05 tax paid under MAT due to higher depreciation claim as per I T, taxable income was NIL under normal computation. Annexure - 16 There have been no disqualifications in the Audit Report for the preceding five financial years i.e. 2000-01, 2001-02, 2002-03, 2003-04 and 2004-05.

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Annexure - 17 Effect of change in Accounting Policy There has been no change in the accounting policy of the company during the preceding five financial years i.e. 2000-01, 2001-02, 2002-03, 2003-04 and 2004-05. Annexure - 18 Statement of Loans & Advances Particulars Advance (Recoverable in cash or in kind or for value to be received) Deposits with Govt. Authorities Subsidy under TUF Receivable TDS/Excise/Cenvat Total (Rs. In Lacs) 31.3.01 31.3.02 31.3.03 31.3.04 31.3.05 31.08.05 12.87 25.28 24.47 41.98 618.83 1129.6

18.23

21.53 7.55

29.42 12.75 25.11 91.75

25.07 0.14 79.89 147.08

58.95 2.52 170.85 851.15

93.89 2.52 153.66 1379.67

41.37 72.47

36.53 90.89

Annexure - 19 Details of other income The following table shows the details of the other income of the company exceeding 20% of the net profit before tax: (Rs. in Lacs) Particulars 31.3.2001 31.3.2002 Scrap Sale 2.41 3.45 Sale of Coal Ash 0.12 0.04 Interest 2.12 3.70 Profit on sale of fixed assets 1.21 0.28 The company suffered loss during the financial year 2000-01 and 2001-02 as a result of which the other income exceeded 20% of net profit before tax. The other income mainly constitutes scrap sale and sale of coal ash which are by-product of fabric processing. Interest income is received on account of margin money deposits with various govt. and statutory bodies. Except as stated hereinabove, there are no other material notes to the auditors report, which have bearing on the financial status of the Company. Further, all notes to the accounts, significant accounting policies as well as the auditors qualifications, if any, have been incorporated in the Red Herring Prospectus. FINANCIAL INFORMATION OF SUBSIDIARY COMPANIES Our Company does not have any subsidiary company.

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OUR GROUP CONCERNS JPL Industries Limited JPL Industries Limited was originally incorporated as Sulzem Syncotex Pvt. Ltd. on 5th May 2000. The company was originally promoted by Mr. Mahavir Khandelwal and Mr. Champalal Nahata. Later on, the management of the company were taken over by Mr. Lalit Agarwal and Mr. Gopal Chandra Agarwal, who were inducted on board w.e.f. 6th June 2002. Further, again in October 2003; there was a change in the management of the company and Mr. Gopal Chandra Agarwal & Mr. Lalit Agarwal resigned from the directorship; and the company was taken over by Mr. Raghunath Mittal and Mr. Lalit Babel. On 28th November 2003, Mr. Chandra Prakash Babel and Mr. Rahul Mittal were also appointed as directors. On 29th August 2005, the name of the company was changed from Sulzem Syncotex Pvt. Ltd. to JPL Industries Private Limited Limited. On 22nd September 2005 the company was converted to a public limited company with the name JPL Industries Limited. The company is currently engaged into manufacturing and marketing of synthetic fabrics. It also carries out job work of manufacturing fabrics for our Company. Share Holding Pattern: Sr. No. Particulars 1 Promoters Mr. Raghunath Mittal Mr. Lalit Kumar Babel Mr. Chandra Prakash Babel Mr. Rahul Mittal Sub-total 2 Promoters Group 3 Others Total No. of Equity Shares % of Holding 40,000 115,000 105,000 110,000 370,000 675,000 255,020 1,300,020

28.46% 51.92% 19.62% 100.00%

Board of Directors: The board of directors of company comprises of the following directors: i) Mr. Raghunath Mittal ii) Mr. Chandra Prakash Babel iii) Mr. Lalit Kumar Babel iv) Mr. Rahul Mittal Financial Performance: (Rs. in Lacs) Year Ended March 31st, 2005 2003 2004 235.09 92.32 111.29 11.47 2.99 9.79 11.20 83.00 130.00 3.64 8.22 62.86 1.61 1.21 0.8 13.23 90.01 192.06 11.81 10.84 14.77 2.66 1.17 .88

Particulars Total Income Profit After Taxation Share Capital: Reserves (excluding Revaluation Reserves) Less: Miscellaneous Expenditure Net Worth Net Asset Value / Book Value Per Share (Rs.) Earning Per Share (Rs.)

There are no defaults in meeting any statutory/bank/institutional dues. No proceedings have been initiated for economic offences against this company, or its promoters and directors.

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This company has not been declared as a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up. Other relevant details about Group Companies / Firms: a) The three Promoters of our Company namely Mr. Raghunath Mittal, Mr. Rahul Mittal and Mrs. Madhu Mittal have disassociated themselves from JPL Textile (India) Ltd. w.e.f. 25th September 2005. This company was originally promoted by Mittal Family and Babel Family in June 2003, but as no activities were carried out in that company, Mittal Family decided to disassociate themselves from this company. b) The material items of income or expenditure arising out of transactions in the Promoters group are disclosed under Related Party Disclosures as mentioned under Annexure 14 of the Auditors Report given in this Draft Red Herring Prospectus. CHANGES IN ACCOUNTING POLICIES DURING PRECEDING THREE YEARS There has been no change in the accounting policy of our Company during the preceding three financial years i.e. 2002-03, 2003-04 and 2004-05.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE RESTATED FINANCIAL STATEMENTS You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements included in this Draft Red Herring Prospectus. You should also read the section titled Risk Factors beginning on page [] of this Draft Red Herring Prospectus, which discusses a number of factors and contingencies that could impact our financial condition and results of operations. The following discussion relates to our Company on a standalone basis, and, unless otherwise stated, is based on our restated unconsolidated financial statements, which have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act, 1956, and the SEBI guidelines. Our fiscal year ends on March 31 of each year so all references to a particular fiscal year are to the twelve months ended March 31 of that year. Overview Our Company was incorporated as a Private Limited Company in the name of Janki Processors Pvt. Ltd. on 16th September 1993 under the Companies Act, 1956; in the state of Rajasthan. Subsequently, our Company was converted into a Public Limited Company on 06th July 2000 and the name was changed to Janki Processors Limited. The name of our Company was again changed to Janki Corp Ltd. from 31st December 2003. The key promoter of our Company is Mr. Raghunath Mittal. Our Company is presently engaged in the processing and marketing of fabric. The dyed fabrics produced by our Company are also used in garment industry. We have grown by undertaking expansions at regular intervals to reach at our present capacity of six stenters and 30 jet-dyeing machines. Our Company is operating as one of the large process houses at Bhilwara. The process house is having the state-of-art machinery for processing quality fabric at competitive price. Our Company is presently having six stenters and 30 jet-dyeing machines, 68 Jiggers, 7 Drying Range, a KD Machine etc., which are considered to be the most sophisticated machinery for fabric processing. We have continuously expanded and modernized our facilities in line with the industry trend, which has also been supported by term loans from Financial Institutions and Banks under Technology Up gradation Funds Scheme introduced by government. At present, our supplies are restricted to domestic market only, which leaves more scope for our Company to develop export markets and to increase our presence accordingly. Further, with the phasing out of quota restrictions, our Company is expecting to achieve high growth rate in the highly opportunistic global markets in the coming years. Our company has diversified into the steel sector by setting up a Sponge Iron Manufacturing Unit at Bellary, Karnataka as a nucleus towards establishing an Integrated Steel Plant. The unit is presently having a production capacity of 60,000 MTPA. The unit has achieved a turnover of Rs. 655.52 Lacs for the two months period of operation during the financial year ended March 31, 2005 and turnover of Rs. 1879.00 Lacs for the five month period ended August 31, 2005. The Sponge Iron Unit of our Company has established a reputation in the local market with in a short span of time. It is evident from the fact that our Company had signed a MoU with Jindal Vijaynagar Steel Ltd., one of the premier business houses on January 28, 2005 for

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the supply of its entire production for a period of six months from the commencement of commercial production. To cope with the continuous growing demand in the overseas and domestic markets and to attain economies of scale, our Company is undertaking a massive expansion plan of Rs. 10,730.00 Lacs consisting of increase in Sponge Iron Production Capacity to 1,80,000 MTPA by installing 4 new Rotary Kilns, setting up a Captive Power Plant of 10 MW capacity and installing an Induction furnace with Continuous Casting Machine for manufacturing billets. The process of expanding its sponge iron production capacity to 1,80,000 MTPA, which is the optimum capacity level for undertaking forward or backward integration by our Company, is under progress. Factors Affecting Our Results of Operations Our financial condition and results of operations are affected by numerous factors including the following:

General economic and business conditions: The demand for our products is dependent on general economic conditions in the country. Our manufacturing operations would be affected by any adverse change in the Government Policies, Rules & Regulations. Moreover we are in the commodity market which suffers from vagaries of trade cycle. Demand: The demand for our fabric products is from the manufacturers of apparels & garments and the general masses. We have expanded our customer base in national market. The prospects and earnings growth of the customers and industries, we serve will have an impact on our ability to generate sales.
The demand for our steel product is mainly from capital goods manufacturing industries and infrastructure development industry. The prospects of higher investment in infrastructure projects by Government and development of core sector industries will have an impact on our ability to generate sales.

Competition: Selling prices of our products may be affected if competition intensifies. Further, as a result of increased capacity of production, adoption of aggressive pricing strategies by our competitors in order to gain market share or new competitors entering the markets, may adversely affect our operations and financial results. Capacity: We are currently expanding our capacity for production of Sponge Iron. Our ability to fulfill larger orders will depend upon our ability to complete our expansion plans as scheduled. We believe that the scale of our production, and lower per unit operating costs due to economies of scale, will give us an edge over our competitors. Raw Materials Prices: Raw materials constitute a major portion of our total expenses. Our key raw material for fabric processing is raw fabric, prices of which is dependent upon the market conditions, the monsoon in the country and the demand-supply scenario in the economy. With the use of effective raw material procurement policy, we should be able to mitigate price fluctuations.
Our key raw material for sponge iron production is iron ore, which is abundantly available in the area of our operation. The price of the same is also dependent upon the market conditions and the demand-supply scenario in the economy. With the use of effective raw material procurement policy, we should be able to mitigate price fluctuations.

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Our Significant Accounting Policies Preparation of financial statements in accordance with Indian Generally Accepted Accounting Principles, the applicable accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956, require our management to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of our assets and liabilities, disclosures of contingent liabilities and the reported amounts of revenues and expenses. These judgments, assumptions and estimates are reflected in our accounting policies, which are described in Financial Statements Significant Accounting Policies Section of the Auditors Report appearing on page [] of this Draft Red Herring Prospectus. Certain of our accounting policies are particularly important to the portrayal of our financial position and results of operations and require the application of significant assumptions and estimates of our management. While we believe that all aspects of our financial statements should be studied and understood in assessing our current and expected financial condition and results, we believe that the following significant accounting policies warrant additional attention: 1. Basis for Preparation of Financial Statements (a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of Co. Act, 1956, subject to what is stated herein below, as adopted consistently by our Company. (b) Our Company generally follows mercantile system of accounting and recognises significant items of income specifically mentioned otherwise. 2. Fixed Assets (a) Fixed Assets are stated at their cost of acquisition/construction less accumulated Depreciation inclusive of freight, duties, taxes and other incidental expenses incurred till the commencement of commercial production, Incidental expenses include establishment expenses, interest on borrowed funds used for capital expenditure and other administrative expenses. Cenvat/Modvat available in respect of eligible capital goods is reduced from the cost of assets. (b) Capital work in progress is stated at cost. 3. Depreciation (a) Depreciation on fixed Assets which acquired before 31.03.2003 was calculated on written down value & pro-rata basis at the rates specified in schedule XIV of the Companies Act, 1956, as amended vide notification No. GSR 756 (s) dated 16.12.1993. (b) Depreciation on Fixed Assets which acquired on & after 01.04.2003 and during the year has been calculated on straight line basis at the rates specified in schedule XIV of the Companies Act, 1956, as amended vide notification No. GSR 756 (s) dated 16.12.1993. (c) Assets costing less than Rs. 5,000/- have been fully depreciated in the year of acquisition. (d) Depreciation on fixed assets acquired during the year has been calculated on prorata basis with reference to the date on which the assets are put to use.

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4. Investments Investments are stated at cost. 5. Revenue Recognisation/ Basis Of Accounting Our Company follows the accrual system of accounting except certain items like rebates and discount and claims and claims on sales and Insurance claims etc., where there is no reasonable certainty regarding the amount and/or its collectability, recognition or revenue postponed. 6. Inventory Inventory valuation has been made on following basis: Sr. No. (i) (ii) (iii) (iv) (v) (vi) (vii) Particulars Stores & Spares Dyes & Chemicals Work in Process (Job) Job in hand (Finished) Raw Material WIP of fabrics Finished goods of fabrics Basis of valuation At Cost At Cost At cost inclusive of allocable overhead. At cost or net realisable value whichever is less At Cost At cost inclusive of allocable overhead. At cost or net realisable value whichever is less

7. Sales/ Job Processing Income Job Processing income is stated at net of discount and inter division transactions. Sales are recognised when goods are supplied and are recorded at net of return, trade discount etc. 8. Excise Duty Excise duty has been accounted for on the basis of both payments made in respect of goods cleared as also provision made for stock of finished goods lying in the units at the year end excepts that Finished goods lying in processing unit on job basis which has been valued without excise duty as the process income includes only job charges. However this do not have any impact on Profit & Loss a/c. Cenvat credit if any available in respect of input or capital goods is reduced from the cost of respective items at the time of consumption/ issue. 9. Borrowing Costs Interest and other cost in connection with of the fund to the extent related/attributable to the acquisition/ construction of qualifying fixed assets are capitalised up to the date when such assets are ready for its intended use and other borrowing cost are charged to profit and loss account. 10. Preliminary Expenses The preliminary expenses are written off over a period of 10/5 years in accordance with Section 35-D of the Income Tax Act, 1961.

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11. Lease Lease rentals are expensed with reference to lease terms and other considerations have been charged to profit & loss a/c. 12. Accounting For Taxes On Income (c) Current Tax has been provided as per the provision of Income Tax Act. (d) Deferred tax resulting from timing difference between book and taxable profit has been provided at the tax rates and lows that have been enacted or subsequently enacted/ announced as on the balance sheet date. The Deferred tax asset is recognised and carried forward only to the extent that there is a reasonable/ virtual certainty that the assets will be realisable in future. 13. Impairment Of Assets (AS-28) Factor giving rise to any indication of any impairment of the carrying amount of our Companys assets are appraised at each Balance Sheet date to determine and provide/revert an impairment loss following accounting standard AS28 for impairment of assets. 14. Contingent Liabilities Contingent Liabilities not provided for, are disclosed by way of notes to the accounts. 15. Retirement Benefits (d) Under Provident Fund and E.S.I. Scheme, Companys contribution accruing during the year has been charged to Profit & Loss account. (e) Encashment of leave lying to the credit of employees is not provided for on actuarial basis. It is accounted on cash basis. Therefore, it is not possible to ascertain the liability at the end of the accounting year. (f) Liabilities in respect of gratuity of employees are funded under the employees group gratuity Scheme with the LIC. BUSINESS PERFORMANCE Our Results of Operations Income:

Textile Division The increasing demand for fabric in the Indian and international markets and increase in capacity are the key reason for our increased sales in recent years. Our textile division has achieved a turnover of Rs. 2444.42 Lacs upto August 31st, 2005. It comprises of fabric sales of Rs. 1547.38 Lacs and fabric processing income of Rs. 897.04 Lacs.
The total income from textile division has increased from Rs. 2169.03 Lacs in FY: 2001 to Rs. 4776.92 Lacs in FY: 2005. The increase in sales is attributable to higher sales realization and gradual capacity expansion in fabric processing, we are presently having 6 stenters and 30 Jet dying machines, 68 Jiggers, 7 Drying Range, a KD Machine. The other factor increase in the sales is the marketing of fabric under companys own brand name JPL from year 2004 and onwards.

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Steel Division Our company has set up this division during FY: 2005 only. Our steel division has achieved turnover of Rs. 1879.00 Lacs upto August 31st, 2005 showing an increase of Rs. 1223.48 Lacs as compared to the FY ended 2005. This is mainly due to the fact that during the FY 2005 the steel division has worked with one kiln for a period of two months only but from April 1st, 2005 onwards our steel division is working with two kilns. There is increasing demand for steel and other related products in the national and international market. The full working of the existing plant will be reflected in the financial statements from the FY: 200506 & onwards. We have also gone in for expansion in our steel division in the current year. The expansion in Sponge Iron Plant will become operational from FY: 2006-07 onwards and Power Plant and Induction Furnace will become operational from FY: 2007-08 onwards.
The following tables set forth our revenues and other income constituting towards total income during each of financial years 2001, 2002, 2003, 2004, and 2005 are as under : (Rs. in Lacs)
Income a) Income from TextileProcessing TextileTrading Steel Sponge sale Total Income Other Income Increase / Decrease in Stock Total 2169.03 98.09 1457.70 99.20 1226.42 99.69 1762.84 37.35 1705.65 30.64 897.04 20.85 0.00 0.00 0.00 0.00 0.00 2614.90 55.40 3071.27 55.17 1547.38 35.96 0.00 0.00 655.52 11.77 1879.00 43.67 31.03.01 Amt. % 31.03.02 Amt. % 31.03.03 Amt. % 31.02.04 Amt. % 31.03.05 Amt. % 31.08.05 Amt. %

2169.03 98.09 1457.70 99.20 1226.42 99.69 4377.74 92.75 5432.44 97.58 4323.42 100.49 5.86 0.27 12.17 0.83 34.27 2.79 11.53 0.24 10.11 0.18 1.16 0.03 36.32 1.64 -0.39 -0.03 -30.40 -2.47 330.72 7.01 124.75 2.24 -22.04 -0.51

2211.21 100.00 1469.48 100.00 1230.29 100.00 4719.99 100.00 5567.30 100.00 4302.54 100.00

Break-up of Sales Product wise: (Rs. in Lacs)

Particulars Income Fabric Processing Income Fabric Sales Sponge Iron Sales Total 31.03.01 Amt. % 31.03.02 Amt. % 31.03.03 Amt. % 31.02.04 Amt. % 31.03.05 Amt. % 31.08.05 Amt. 897.04 % 20.75

2169.03 100.00

1457.7 100.00 1226.42 100.00 1762.84 40.27 1705.65 31.40

0 0

0 0

0 0

0 0

0 0

0 0

2614.9 59.73 3071.27 56.53 1547.38 0 0 655.52 12.07 1879.00

35.79 43.46

2169.03 100.00

1457.7 100.00 1226.42 100.00

4377.7 100.00 5432.44 100.00 4323.42 100.00

We started selling fabric under our own brand name in year 2004 with a turnover of Rs. 2614.90 lacs in FY: 2004, which has increased to Rs.3071.27 lacs in FY: 2005 entailing an increase of 17.45%. During the five month period ended august 31, 2005 the fabric division has achieved a turnover of Rs. 2444.42 lacs. We have set up our Iron & Steel division during the year 2004-05, the same has contributed sales of Rs. 655.52 lacs during the previous year ended 2004-05 and turnover of Rs 1879.00 lacs for the five month period ended august 31, 2005.

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Expenditure Our expenses mainly consist of the cost of raw material consumed, manufacturing expenses, depreciation, administrative selling and distribution expenses, interest and . financial charges and personnel expenses. The following table shows our various expenses for financial years 2001 to 2005: Expenses as % of Total Expenses: Rs. in Lacs
Particulars 31.03.01 31.03.02 % of Total Amt. % Amt. % Exp. Raw-material 0.00 0.00 0.00 0.00 Consumption** Manufacturing 1798.84 80.71 1032.96 69.55 Exp. (including Excise Duty) Personnel Exp. 181.17 8.13 197.71 13.31 Administrative 29.06 1.30 29.54 1.99 & Other Exp.*** Selling & 41.99 1.88 38.14 2.57 Distribution Exp. Interest & 48.87 2.19 49.85 3.36 Financial Ch. Depreciation 128.82 5.78 136.98 9.22 Total 2228.75 100.00 1485.18 100.00 31.03.03 Amt. % 0.00 786.19 31.02.04 Amt. % 37.62 47.42 31.03.05 Amt. % 2618.33 1865.19 31.08.05 Amt. % 55.92 30.92

0.00 1723.97 64.13 2173.11

49.73 2166.56 35.43 1198.17

195.63 30.16

15.96 294.45 2.46 44.05

6.42 0.96

293.02 56.43

5.57 187.30 1.07 55.86

4.83 1.44

34.04

2.78 162.07

3.54

151.71

2.88

58.91

1.52

45.63

3.72

65.01

1.42

145.23

2.76 115.75

2.99

134.35 10.96 120.27 2.62 135.07 2.57 91.89 2.37 1226 100.00 4582.93 100.00 5,264.98 100.00 3874.44 100.00

** Raw material consumption includes purchases of finished goods for sale. *** Administrative Expenses include Miscellaneous Expenses written off during the year. Expenses as % of Total Income: Rs. in Lacs
Particulars 31.03.01 31.03.02 % of Total Amt. % Amt. % Income Raw-material 0.00 0.00 0.00 0.00 Consumption** Manufacturing 1798.84 81.35 1032.96 70.29 Expenses (including Excise Duty) Personnel 181.17 8.19 197.71 13.45 Expenses Administrative 29.06 1.31 29.54 2.01 & Other Expenses*** Selling & 41.99 1.90 38.14 2.60 Distribution Expenses Interest & 48.87 2.21 49.85 3.39 Financial Charges Depreciation 128.82 5.83 136.98 9.32 Total 2228.75 100.79 1485.18 101.07 Expenses Profit Before -17.54 -0.79 -15.7 -1.07 Tax Total 2211.21 100.00 1469.48 100.00 31.03.03 Amt. % 0.00 31.02.04 Amt. % 31.03.05 Amt. % 31.08.05 Amt. %

0.00 1723.97 36.52 2618.33 47.03 2166.56 50.36

786.19 63.90 2173.11 46.04 1865.19 33.50 1198.17 27.85

195.63 15.90 294.45 30.16 2.45 44.05

6.24 293.02 0.93 56.43

5.26 1.01

187.30 55.86

4.35 1.30

34.04

2.77 162.07

3.43 151.71

2.73

58.91

1.37

45.63

3.71

65.01

1.38 145.23

2.61

115.75

2.69

134.35 10.92 120.27 1226 99.65 4582.93 4.29 0.35 137.06

2.55 135.07 2.43 91.89 2.14 97.1 5264.98 94.57 3874.44 90.05 2.9 302.32 5.43 428.10 9.95

1230.29 100.00 4719.99 100.00 5567.3 100.00 4302.54 100.00

** Raw material consumption includes purchases of finished goods for sale. *** Administrative Expenses include Miscellaneous Expenses Written Off during the year.

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The profit before tax was negative to the extent of Rs. 17.54 lacs in FY: 2001, however we have revived our Company and it has posted a profit before tax of Rs. 302.32 lacs in the FY: 2005 our Company is on progressive path and made profit before tax of Rs. 428.10 lacs for the five month ended august 31, 2005. This has been as a result of marketing of fabric by us under our own brand name JPL and the manufacturing and marketing of the sponge iron. Also now the outlook for the textile industry has changed after the end of quota regime in January 2005, which will further have a positive impact on our profit before tax. Raw Material Our Company was only engaged in processing of Fabric till year 2002-03 and therefore raw material consumption was nil. From year 2003-04, it has started purchase & sale of Fabric also. The Raw Material consumption to total expenses has increased from 37.62% in FY: 2004 to 49.73% in FY: 2005. At the same time Raw Material consumption to total income increased from 36.52% in FY: 2001 to 47.03% in FY: 2005. For the current financial year raw material consumption to total income is 50.36% The raw material consumption ratio has almost remained constant during the years 2001 to 2003 however there is a high increase in raw material consumption ratio to total expenses as well as to total sales in year 2004 because we have started marketing of fabric from year 2004 and therefore the cost of fabric purchased is also included in cost of raw material which has resulted in the said increase. Also from year 2005, we have also set up steel division at Bellary for manufacturing of sponge iron. This has also increased the cost of raw material as a part of total expenses. Manufacturing Expenses Our manufacturing expenses form the second largest component of total expenses. The costs are mainly Power & Fuel, Excise Duty, Stores & Spares consumed, Packing expenses and repairs & maintenance of the plant and machineries. Rs. in Lacs
Particulars % of Manu. Expenses Dyes & Chemicals Power, Fuel & Water Charges** Stores & Spares Consumed Other mfg. Exp. Repairs & Maintenance Excise Duty Job work Charges Total 31.03.01 Amt. 478.09 % 26.58 31.03.02 Amt. 345.12 % 31.03.03 Amt. % 33.23 31.02.04 Amt. 634.52 % 29.20 31.03.05 Amt. 579.81 % 31.09 31.08.05 Amt. 320.48 % 26.75

33.41 261.24

584.05

32.47

554.14

53.65 423.59

53.88

796.28

36.64

756.45

40.56

405.26

33.82

128.96 1.04 16.06 590.64

7.17 0.06 0.89 32.83

123.02 0.88 9.8 0.00

11.91 0.09 0.95 0.00

90.1 0.6 10.66 0.00

11.46 0.08 1.36 0.00

170.76 1 12.47 243.88

7.86 0.05 0.57 11.22

154.36 1.28 18.6 85.40

8.28 0.07 1.00 4.58

63.23 9.28 14.04 239.80

5.28 0.77 1.17 20.01

0.00 0.00 1798.84 100.00

0 0.00 0.00 0.00 314.2 14.46 1032.96 100.00 786.19 100.00 2173.11 100.00

269.29 14.44 1865.19 100.00

146.08 12.19 1198.17 100.00

**Power, Fuel & Water Charges include expenditure for Power & Fuel, Coal & Gas. Water Consumption and Fire Wood expense. The decrease in manufacturing expenses to sales is mainly due to proportionately higher increase in sales and decrease in Excise Duty. The sales have increased from Rs. 2169.03 Lacs in FY: 2001 to Rs. 5432.44 Lacs in FY: 2005 i.e. an increase of more than 150%.

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The Excise Duty has decreased significantly from 32.83% of total manufacturing expenses in FY: 2001 to 4.58% of total manufacturing expenses in FY: 2005 due to liberal government policy towards the textile industry and benefits of excise duty concession / exemption given. The excise duty paid is 20.01% for the five month period ended August 31, 2005 since excise duty is levy on the manufacture and sale of sponge iron. There has been an increase in the other components of manufacturing expenses. The Dyes and Chemicals have increased from 26.58% in FY: 2001 to 31.09% in FY: 2005. The power, fuel and water charges have increased from 32.47% in FY: 2001 to 40.56% in FY: 2005. The power cost has increased due to the fluctuating prices of the crude oil in the global markets and establishment of Steel division by our Company wherein the consumption of power is higher. The Power, fuel and Water Charges for the five month period ended August 31, 2005 is 33.82% of manufacturing expenses. The stores & spares cost has increased from 7.17% of total manufacturing expenses in FY: 2001 to 8.28% of total manufacturing expenses in FY: 2005. It is 5.28% for the five month period ended August 31, 2005. Manufacturing expenses as a percentage of total expenses have decreased from 80.71% in FY: 2001 to 35.43% in FY: 2005 and 30.92% for the five month period ended August 31, 2005 due to the reasons stated above. With increase in our capacities and high capacity utilization, we expect manufacturing expenses as a proportion of total expenses to decrease further with course of time. This is due to the fact that, once production reaches a certain minimum level, the power and labour requirements necessary to produce additional output do not increase proportionately with increases in output. Therefore, the cost per ton of output declines as capacity increases. The use of wider and faster high capacity production lines has enabled us to decrease the per rupee cost of output. Removing bottlenecks in the production process and installing balancing equipment have led to further production efficiencies. Personnel Expenses Our personnel expenses consist of salaries, wages and bonus, contribution to employee benefit schemes, employee welfare charges and staff recruitment and training. The expenses decreased from 8.13% of total expenses in FY: 2001 to 5.57% of total expenses in FY: 2005and the same is 4.83% for the five month period ended August 31, 2005. Also, it decreased from 8.19% of total income in FY: 2001 to 5.26% of total income in FY: 2005. Our Company has been growing in size by increase in production capacity through installation of new machines. However at the same time it has been continuously upgrading itself with the modern day most sophisticated machines, which are more mechanized and less labour intensive. This has resulted in a decrease in the no. of employees and in turn in the personnel expenses of our Company. Also due to regular training of permanent employees their efficiency has increased and therefore the cost as a part of total expenditure has decreased. With growth in the sales, volume and capacity, the top management of our Company has employed more professionally experienced and qualified managers to look after the day to day operational activities, marketing, plant operations and sales & distribution, however at the same time there has been a decrease in the lower level management and supervisory staff and therefore the increase in the managerial staff is not reflected in the % composition of total expenses. The managements prudent policy in this aspect will help our Company to manage the increase in sales and volume more efficiently.

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Administration and Others Expenses Our administration expenses include all the expenses related to the office, printing & stationary, rent, rates & taxes and other expenses. The % of costs marginally declined from 1.30% of total expenses in FY: 2001 to 1.07% of total expenses in FY: 2005. Also, it marginally declined from 1.31% of total income in FY: 2001 to 1.01% of total income in FY: 2005 and has slightly increased to 1.44% of total expenses for the five month period ended August 31, 2005. Selling and Distribution Expenses Our selling expenses include the advertisement & sales promotion expenses and Sales commission. The distribution cost includes freight and forwarding expenses. The expenses increased from 1.88% of total expenses in FY: 2001 to 2.88% of total expenses in FY: 2005, the same is 1.52% for the five month period ended August 31, 2005. It has increased from 1.90% of total income in FY: 2001 to 2.73% of total income in FY: 2005. There has been an increase in Sales commission and Freight & Forwarding due to increase in sales. Interest & Financial Charges Our interest and finance charges represent expenses incurred in respect of our short-term and long-term loans and other finance charges in respect of letters of credit and other banking transactions. The reason for the increase in the interest & financial charges to total income from 2.21% in FY: 2001 to 2.61% in FY: 2005 which further increased to 2.69% for the five month period ended August 31, 2005. It is due to the regular expansion of our Company for which it had availed term loans from banks and financial institutions. Our Company had taken a new loan in July 2004 for diversification in the steel sector by setting up sponge iron manufacturing unit and further loan for expansion in March 2005 for the expansion project, the benefits of which will be reflected in the current financial year. However, the cost of debt of our Company decreased over a period of time due to continuous rationalization of the interest rate, overall decline in the interest rates in the market, our Company has availed loan for its textile division under TUF Scheme wherein company gets interest subsidy of interest cost and on account of retirement of high cost debt. Depreciation We depreciate our tangible assets acquired before 31.03.2003 on written down value & prorata basis at the rates specified in Schedule-XIV of the companies act, 1956. All tangible assets acquired after 31.03.2003 are depreciated under straight-line method at the rates prescribed under Schedule-XIV of the Companies Act, 1956. Also the assets acquired for less than Rs. 5000/- are completely written off in the year of purchase. Our depreciation expense when expressed as a percentage of total expenses for FY: 2001 and FY: 2005 were 5.78% and 2.57% respectively and it is 2.37% for the five month period ended August 31, 2005. Also the depreciation to total income is 5.83% in FY: 2001 increased to 2.43% in FY: 2005. Our recent and continuing capital expenditure on new production facilities being created in Steel division have been proportionately depreciated during FY: 2005 on pro-rata basis on No. of days it was put to use. Therefore, the depreciation expenditure has increased marginally even in absolute terms. Earning before Interest, Depreciation and Tax (EBIDTA) The EBIDTA of our Company increased by 263.79% i.e. Rs. 422.47 Lacs from Rs. 160.15 Lacs in FY: 2001 to Rs. 582.62 Lacs in FY: 2005. The increase is due to better realization from sales, higher sales volumes due to capacity increase and control over operational costs. Our Companys EBIDTA for the five month period ended August 31, 2005 is Rs. 635.74 Lacs. However the Profit before Tax (PBT) has increased by 319.86 Lacs from negative PBT of Rs. 17.54 Lacs in FY: 2001 to Rs. 302.32 Lacs in FY: 2005 and PBT for the period upto August 31, 2005 is Rs. 428.10 Lacs due to increase in the production

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capacity of our Company and marketing of fabric under its own brand name and further due to the establishment of sponge iron manufacturing unit.

COMPARISON OF FIVE MONTHS PERFORMANCE FOR FINANCIAL YEAR 2006 WITH FINANCIAL YEAR 2005
Total Income During the five month period ended August 31, 2005 our Company has achieved turnover of Rs. 4323.42 Lacs, the same is not comparable with previous financial years Expenditure During the five month period ended August 31, 2005 our Company has incurred expenditure of Rs. 3874.44 Lacs. Profit Before Tax During the five month period ended August 31, 2005 is Rs. 428.10 Lacs.

COMPARISON OF PERFORMANCE OF YEAR 2004

FINANCIAL YEAR 2005 WITH FINANCIAL

Total Income Total income of our Company has registered a growth of 17.95% i.e. Rs. 847.31 Lacs from Rs. 4,719.99 Lacs in FY 2004 to Rs. 5,567.30 Lacs in FY: 2005. Sales in textile division grew by 9.12% i.e. Rs. 399.18 Lacs from Rs. 4,377.74 Lacs to Rs. 4,776.92 Lacs during the same period. We have achieved a turnover of Rs. 655.52 Lacs in two months of operation in our Steel division. Raw Material Cost Our raw material cost increased from Rs. 1723.97 Lacs in FY 2004 to Rs. 2618.33 Lacs in FY 2005 recording an increase of 51.88% i.e. Rs. 894.36 Lacs. The increase in raw material cost is due to corresponding increase in production as well as sales and marketing of fabric and setting up of sponge iron unit having higher raw material cost. Manufacturing Cost (including Excise Duty) The manufacturing cost decreased from Rs. 2173.11 Lacs in FY 2004 to Rs. 1865.19 Lacs in FY 2005 recording a decrease of 14.17% i.e. Rs. 307.92 Lacs. The decrease was mainly due to concession / elimination of Excise Duty, which was one of the major components of manufacturing cost. Employee Cost Employee cost decreased marginally from Rs. 294.45 Lacs in FY: 2004 to Rs. 293.02 Lacs in FY 2005 recording a decrease of 0.49% i.e. Rs. 1.43 Lacs due to installation of most modern highly mechanized machines and corresponding decrease in manpower. Administrative and Selling expenses These expenses increased marginally from Rs. 206.12 Lacs in FY 2004 to Rs. 208.14 Lacs in FY 2005 registering an increase of 0.98% i.e. Rs. 2.02 Lacs, due to expansion of capacities and increase in sales. Interest & Financial Charges These expenses have increased by more than twice (123.26%) i.e. 80.13 Lacs from Rs.65.01 Lacs in FY: 2004 to Rs.145.23 Lacs to FY: 2005. Increase is due to availment of loan for expansion project.

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Depreciation Depreciation cost increased from Rs. 120.27 Lacs in FY: 2004 to Rs. 135.07 Lacs in FY: 2005 registering an increase of 12.31% i.e. 14.80 Lacs mainly due to increase in the fixed assets as a result of the expansion project. However increase is not corresponding to increase in block of assets as assets of steel division have become operational from Jan. 2005 onwards. Earnings before Interest, Depreciation, Tax and Amortization (EBIDTA) Our EBIDTA increased in FY: 2005 to Rs. 582.62 Lacs, which was a significant growth of 80.74% i.e. Rs. 260.28 Lacs when compared to the operating profit of Rs. 322.34 Lacs in FY: 2004. This was primarily due to increase in revenues and various cost control measures. Income Tax During the FY: 05, the provision for Current & Deferred tax has been made Rs.120.68 Lacs. Profit/ (Loss) after tax Profit after tax increased by 80.04% i.e. Rs. 80.75 Lacs from Rs. 100.89 Lacs in FY: 2004 to Rs. 181.64 Lacs in FY: 2005, mainly on account of diversification in steel sector and expanded turnover and cost control.

COMPARISON OF PERFORMANCE OF FINANCIAL YEAR 2004 WITH FINANCIAL YEAR 2003

Total Income Total income of our Company registered a growth of 283.65% i.e. Rs. 3489.70 Lacs from Rs. 1230.29 Lacs in FY: 2003 to Rs. 4719.99 Lacs in FY: 2004.During the year 2004,we have also started Fabric division along with Processing division and started marketing of fabric in own brand name JPL and achieved turnover of Rs. 2614.90 lacs of fabric. It has resulted in substantial rise in income. Raw-material Cost We have incurred raw material cost of Rs. 1723.97 lacs in the FY 2004 comparing to nil consumption in FY 2003 as our Company has started new textile division for trading of fabric Manufacturing Cost (including Excise Duty) Our manufacturing cost has increased from Rs.786.19 Lacs in FY: 2003 to Rs. 2173.11 Lacs in FY: 2004 recording an increase of 176.41% i.e. Rs. 1386.92 Lacs. There was higher increase in cost mainly due to increase in cost of inputs and excise duty Rs. 243.88 ( nil in previous year) . Employee cost Our employee cost marginally increased from Rs. 195.63 in FY: 2003 to Rs. 294.45 Lacs in FY 2004 recording an increase of 50.51% i.e. Rs. 98.82 Lacs, which is on account of start of fabric division. Administrative and Selling expenses These expenses increased from Rs. 64.20 Lacs in FY: 2003 to Rs. 206.12 Lacs in FY: 2004 registering an increase of 221.06% i.e. Rs. 141.92 Lacs, due to start of fabric marketing activity and inflationary trends. Interest & Financial charges Our interest and financial charges increased from Rs.45.63 Lacs in FY: 2003 to Rs.65.01 Lacs in FY: 2004 recording a increase of 42.47% i.e. Rs. 19.38 Lacs. This was mainly on account of availment of term loans for expansions.

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Depreciation Our depreciation cost had decreased marginally from Rs. 134.35 Lacs in FY: 2003 to Rs. 120.27 Lacs in FY 2004. Earnings before Interest, Depreciation, Tax (EBIDTA) Our EBIDTA for the FY: 2004 was Rs. 322.34 Lacs, which was increased to 74.92% i.e. Rs. 138.07 Lacs as compared to Rs. 184.27 Lacs in FY: 2003. The increase is mainly on account of marketing of fabric division. Profit/(Loss) after Tax Our profit after tax increased 4704.28% i.e. Rs. 98.79 Lacs from Rs. 2.10 Lacs in FY: 2003 to Rs. 100.89 Lacs in FY: 2004. Our Company was running in losses till year 2002 and earned a marginal profit of Rs. 2.09 lacs in the year 2003. However, the profit has been shot up on account of starting of fabric division in 2004.

COMPARISON OF PERFORMANCE OF FY 2003 WITH FINANCIAL YEAR 2002

Total Income The total income of our Company registered a decline of 16.27% i.e. Rs. 239.19 Lacs from Rs. 1469.48 Lacs in FY: 2002 to Rs. 1230.29 Lacs in FY: 2003. The decline trend was due to recessionary trend in the industry as whole. Raw-material Cost Our Company was engaged in processing of fabric requiring no expenditure on raw material hence no cost was incurred towards consumption of raw material. Manufacturing Cost (including Excise Duty) Our manufacturing cost decreased from Rs1032.96 Lacs in FY: 2002 to Rs. 786.19 Lacs in FY: 2003 recording an decrease of 23.89 % i.e. Rs. 246.77 Lacs mainly due to decrease in production capacities and total revenues. Employee cost Our employee cost decreased marginally from Rs. 197.71 Lacs in FY: 2002 to Rs. 195.63 Lacs in FY: 2003 recording decrease of 1.05% i.e. Rs. 2.08 Lacs. Administrative and Selling expenses Our administration and selling expenses decreased marginally from Rs. 67.68 Lacs in FY: 2002 to Rs. 64.20 Lacs in FY: 2003 representing an decrease of 5.14% i.e. Rs. 3.48 Lacs. Interest & Financial expenses Our interest & financial expenses decreased by 8.46% i.e. Rs. 4.22 Lacs from Rs.49.85 Lacs in FY: 2002 to Rs. 45.63 in FY: 2003 mainly on account of repayment of term loan availed by our Company. Depreciation Our depreciation cost decreased from Rs. 136.98 Lacs in FY: 2002 to Rs. 134.35 Lacs in FY: 2003, an increase of 1.92% i.e. Rs. 2.63 Lacs. EBIDTA Our EBIDTA for the FY: 2003 was Rs.184.27 Lacs, which was increased by 7.68% i.e. Rs. 13.14 Lacs as compared to Rs. 171.13 Lacs in FY: 2002. The increase is mainly on account of cost saving and control measures.

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Profit/(Loss) after Tax Our company incurred loss of Rs. 15.70 lacs in the year 2002 on account of general recessionary trend in the industry. However, it posted net profit of Rs. 2.10 lacs in the year 2003 on account of cost saving and control measures .

COMPARISON OF PERFORMANCE OF FINANCIAL YEAR 2002 WITH FINANCIAL YEAR 2001

Total Income Our total income registered a decline of 32.79% i.e.711.33 Lacs from Rs. 2169.03 Lacs in FY: 2001 to Rs. 1457.70 Lacs in FY: 2002. This was recessionary trend in entire textile industry and particularly for Bhilwara market. Raw Material Cost Our Company was engaged in processing of fabric requiring no expenditure on raw material hence no cost was incurred towards consumption of raw material. Manufacturing Cost (including Excise Duty) Our manufacturing cost decreased from Rs. 1798.84 Lacs in FY: 2001 to Rs.1032.96 Lacs in FY: 2002 recording an decrease of 42.58% i.e. Rs. 765.88 Lacs mainly due to decrease in processing charges of fabrics. Employee cost Our employee cost increased from Rs. 181.17 Lacs in FY: 2001 to Rs. 197.71 Lacs in FY: 2002 recording an increase of 9.13% i.e. of Rs. 16.54 Lacs normal increments of the employees. Administrative and Selling expenses Our administrative and selling expenses increased from Rs. 29.06 Lacs in FY: 2001 to Rs. 29.54 Lacs in FY: 2002 registering an increase of 1.65% i.e. Rs. 0.48 Lacs which is normal increase. Interest and financial charges Our interest and financial charges increased from Rs.48.87 lacs in 2001 to Rs. 49.85 lacs in 2002 mainly on account of better utilization of working capital limits. Depreciation Our depreciation cost increased marginally from Rs. 128.82 Lacs in 2001 to Rs. 136.98 Lacs in FY: 2002. EBIDTA Our operating profit increased by 6.85% i.e. Rs. 10.98 Lacs from 160.15 Lacs in FY: 2001 to Rs.171.13 Lacs in FY: 2002. There was a marginal increase. Profit/(Loss) after tax There were loss of Rs. 15.70 lacs in 2002 comparing to loss of Rs. 17.54 lacs in 2001 This was possible mainly on account of saving in costs. REVIEW OF FINANCIAL POSITION Fixed Assets Fixed assets are comprised mainly of land and buildings, plant and machinery, furniture and fixtures, office equipment, computers, vehicles and capital work in progress (in respect of the factory premises of our new production lines)

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Particulars Fixed Assets Gross Block Less : Depreciation Net Block Capital Work in Progress Total

31.3.2001 31.3.2002 31.3.2003 31.3.2004 31.3.2005 31.08.2005

1155.10 591.49 563.61 11.00 574.61

1306.56 724.58 581.98 10.18 592.16

1423.86 857.18 566.68 15.32 582.00

1671.12 950.35 720.77 41.19 761.96

4174.90 1052.41 3122.49 143.60 3266.09

4198.67 1144.12 3054.55 1598.95 4653.50

Our company is making regular investment in fixed assets for modernization of plant. However there were significant amounts during the year 2005 on account of start of steel division in which our Company made investment of Rs 2540.50 for the FY ended March 31, 2005 and for the five month period ended August 31, 2005 we have made an investment of Rs. 187.41 Lacs. Our asset base increased from Rs.574.61 Lacs in FY: 2001 to Rs. 3266.77 Lacs in FY: 2005. Investments Our Company is having negligible investments. Current Assets Current assets consist of inventories, trade and other debtors, cash and bank balances, loans and advances and other receivables. Current assets have generally increased in line with the growth of our business activities. Overall current assets for the five month period ended August 31, 2005 are Rs. 4060.73 Lacs comprising of inventory of Rs. 1634.63 Lacs, debtors of Rs. 985.75 Lacs cash and bank balance of Rs. 60.69 Lacs and loans and advances of Rs. 1379.66 Lacs. Current assets increased by Rs. 673.04 Lacs, or 110.11%, from Rs. 611.22 Lacs as at March 31, 2003 to Rs. 1284.28 Lacs as at March 31, 2004 due to increases in inventories of Rs. 640.74 Lacs, cash and bank balances of Rs. 10.62 Lacs and loans and advances of Rs. 55.33 Lacs. However the sundry debtors decreased from Rs. 394.46 Lacs to Rs. 360.83 Lacs because of better debtor management. Inventories are 59.21% of total current assets as at March 31, 2004. The increase in inventories from Rs. 119.71 Lacs as at March 31, 2003 to Rs. 760.45 Lacs as at March 31, 2004 was on account of start of marketing of fabric so our Company keeps the inventory of fabric Debtors accounted for 28.10% of total current assets as at March 31, 2004. Debtors decreased from Rs. 394.46 Lacs as at March 31, 2003 to Rs. 360.83 Lacs as at March 31, 2004. The decrease is due to better debtor management by our Company. Cash and bank balances accounted for 1.24% of total current assets as at March 31, 2004. Cash and bank balances increased from Rs. 5.30 Lacs as at March 31, 2003 to Rs. 15.92 Lacs as at March 31, 2004. Loans and advances accounted for 11.45% of total current assets as at March 31, 2004. Loans and advances increased from Rs. 91.75 Lacs as at March 31, 2003 to Rs.147.08 Lacs as at March 31, 2004 due to an increase in advances to suppliers and other prepayments associated with increased sales.

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Current assets increased by Rs. 1,538.09 Lacs, or 119.76%, from Rs. 1284.28 Lacs as at March 31, 2004 to Rs.2822.37 Lacs as at March 31, 2005 due to increases in inventories of Rs. 499.46 Lacs, sundry debtors of Rs. 313.83 Lacs, loans and advances of Rs. 704.07 Lacs and cash and bank balances of Rs. 20.74 Lacs. Inventories made up 44.64% of total current assets as at March 31, 2005. The increase in inventories from Rs. 760.45 Lacs as at March 31, 2004 to Rs. 1259.91 Lacs as at March 31, 2005 was attributable to the start of steel division. Debtors accounted for 23.90% of total current assets as at March 31, 2005. Debtors increased from Rs. 360.83 Lacs as at March 31, 2004 to Rs. 674.66 Lacs as at March 31, 2005 due to increase in sales. Cash and bank balances accounted for 1.30% of total current assets as at March 31, 2005. Cash and bank balances increased from Rs. 15.92 Lacs as at March 31, 2004 to Rs. 36.65 Lacs as at March 31, 2005. Loans and advances accounted for 27.44% of total current assets as at March 31, 2005. Loans and advances increased substantially from Rs. 147.08 Lacs as at March 31, 2004 to Rs. 851.15 Lacs as at March 31, 2005 due to an increase in advances to plant suppliers ( capital advance for expansion projects) and other prepayments associated with increased sales. Current Liabilities and Provisions Current liabilities comprise accounts payable, security deposits, deposits received and accrued liabilities and tax payable. Current Liabilities for the five month period ended August 31, 2005 are Rs. 905.72 Lacs. Current Liabilities and Provisions increased by Rs. 339.23 Lacs, or 80.26%, from Rs. 422.65 Lacs as at March 31, 2004 to Rs. 761.87 Lacs as at March 31, 2005 due to increase in sundry creditors and other liabilities and provision for tax. Current liabilities and provisions increased by Rs. 270.17 Lacs, or 177.18%, from Rs. 152.48 Lacs as at March 31, 2003 to Rs. 422.65 Lacs as at March 31, 2004 due to increase in sundry creditors and other liabilities and provision for tax. Non-Current Liabilities Non-current liabilities consist of long-term secured loans, long-term unsecured loans and deferred tax liabilities. Non-current liabilities comprising of term loans increased by Rs. 1687.83 Lacs for the five months period ended August 31, 2005 in comparison to FY 2005, the same increased by Rs. 1667.58 Lacs from Rs. 243.95 Lacs as at March 31, 2004 to Rs. 1911.55 Lacs as at March 31, 2005, deferred tax liabilities increased by Rs. 96.97 Lacs and unsecured loans during the same period increased by Rs. 280.81 Lacs. There was an overall increase of Rs. 2375.64 Lacs in the non current liabilities during the FY ended March 31, 2005. Non-current liabilities increased by Rs.304.78 Lacs, or 60.47%, from Rs. 503.98 Lacs as at March 31, 2003 to Rs. 808.76 Lacs as at March 31, 2004. Net Worth Net Worth as on August 31, 2005 is Rs. 2809.75 Lacs. Net worth increased by Rs. 1327.35 Lacs, or 162.90%, from Rs. 814.85 Lacs as at March 31, 2004 to Rs. 2142.20 Lacs as at

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March 31, 2005 due to raising share capital of Rs. 575.00 lacs share capital and increase in net profit during the financial year, 2005. Net worth increased by Rs. 278.06Lacs, or 51.80%, from Rs. 536.79 Lacs as at March 31, 2003 to Rs. 814.85 lacs as at March 31, 2004 mainly due to increase in share capital by Rs. 177.28 and the net profit. Capital Expenditure and Capital Commitments Our capital expenditures for the fiscal years ended March 31, 2001, 2002, 2003, 2004 and 2005 are as follows: Upto 31st For the financial year ended 31st March august 2005# 2001 2002 2003 2004 2005 Freehold Land 0.03 0.11 2.00 5.15 49.16 0.00 Buildings 8.25 22.89 6.28 45.88 474.06 6.26 Plant & Machinery 136.62 106.02 91.50 209.33 1783.63 16.21 Misc. Fixed Assets* 16.66 21.90 12.46 9.55 162.10 0.80 Others 14.79 8.00 7.32 6.29 71.55 0.64 Total 176.35 158.92 119.56 276.20 2540.50 23.91 * Includes electrical and water installation # Steel project is under implementation and expenditure under CWIP Note : Increase after giving effect of deduction Liquidity & Capital Resources Particulars 31.03.01 31.03.02 31.03.03 31.03.04 31.03.05 31.08.05 Cash at Open 6.99 33.95 6.84 5.30 15.92 36.65 Net Cash From Operating Activities 13.86 84.81 119.29 -99.93 -616.34 -471.26 Net Cash from Investing Activities 166.79 150.55 119.27 290.38 2635.90 1478.13 Net Cash used in Financing Activities 179.89 38.63 -1.56 400.93 3272.97 1973.43 Cash at the year end 33.95 6.84 5.30 15.92 36.65 60.69 Net Cash from Operating Activities:For the five month period ended August 31, 2005 the net cash from operating activities is Rs. (471.26) Lacs it is mainly on account of increase in the level of inventory by Rs. 374.72 Lacs, an increase in the level of debtors by Rs. 311.09 Lacs and increase in the level of Loans and advances Rs. 528.51 Lacs. For the FY 2005 the net cash from operating activities is Rs. (616.34) compared to (99.93) Lacs in the FY 2004.There has been an increase in the level of inventory of 499.46 Lacs, an increase of Rs. 313.83 Lacs in the level of debtors, an increase of 704.07 Lacs in the level of Loans and Advances and increase of Rs. 339.22 Lacs in level of creditors. Rs. Rs. Rs. the

There has been a substantial increase in the level of operation of our Company as we have started operation at our Bellary Unit also. Taking in to account all the changes the cash from operating activities has grown negative by Rs. 516.41 Lacs. For the FY 2004 the cash operating activities was Rs. (99.93) Lacs compared to Rs. 119.29 Lacs in the FY 2003. We have started marketing of fabrics in our own brand name that has resulted in the increase in the level of inventory of Rs. 640.74 Lacs, increase in the loan and

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advances of Rs. 55.33 Lacs, decrease in the level of sundry debtors of Rs. 33.63 Lacs and increase in the sundry creditors of Rs. 270.17 Lacs. Net Cash Used in Investing Activities Net Cash deployed in the investing activities during the five month period ended August 31, 2005 is Rs. 1478.13 Lacs which is on account of the implementation of the expansion programme by our Company. Net Cash deployed from the investing activities has increased by Rs. 2345.52 Lacs for the FY 2005 in comparison to the FY 2004. We have invested net cash of Rs. 2635.90 Lacs for the FY 2005 and Rs. 290.38 Lacs for the FY 2004. Our capital expenditures for the last five years from FY 2001 to FY 2005 was mainly on account of the expansion and diversification programme undertaken by our Company for its existing textile division situated at Bhilwara and for the Iron & Steel Division established at Bellary during the year 2005. For the FY 2005 the net cash from the investing activities increased by Rs. 2345.52 Lacs which is mainly due to the fact that our Company has undertaken the expansion programme at Bhilwara Unit and also gone for the diversification programme by setting up a Sponge Iron Manufacturing Unit at Bellary. Our Company has commissioned a 60,000 MTPA Sponge Iron Plant and has commenced commercial operation during FY 2005. We have made regular expansions at our Bhilwara Division which has resulted in net cash used for investing activities at Rs. 166.79 Lacs, Rs. 150.55 Lacs and Rs. 119.27 Lacs for the FY 2001, 2002 and 2003 respectively. Net Cash from Financing Activities Net Cash generated from the financial activities for the five month period ended August 31, 2005 is Rs. 1973.43 Lacs. Net Cash generated from the financial activities increased by Rs. 2872.04 Lacs during the FY 2005 in comparison to FY 2004. The net cash from financial activities was Rs. 3272.97 Lacs in the FY 2005 and Rs. 400.93 for the FY 2004. The proceeds from term loans increased by Rs. 1652.25 Lacs i.e. from Rs. 97 Lacs in the FY 2004 to Rs. 1749.25 Lacs in the FY 2005. We have availed a term loan of Rs. 1300 Lacs during the FY 2005 for setting up of the Sponge Iron Manufacturing Plant at Bellary and also availed a term loan of Rs. 300 Lacs for the expansion-cum-diversification programme at Bhilwara. Our Company has also made repayment of term loan of Rs. 81.66 Lacs. In order to meet working capital requirements, our Company has gone for the enhancement of its working capital limits and availed credit facilities to the tune of Rs. 644.91 Lacs for the FY 2005 in comparison to Rs. 314.65 Lacs for the FY 2004. Our Company has also raised funds during the FY 2005 by way of allotment of equity shares amounting to Rs. 575.00 Lacs at a share premium of Rs. 575.00 Lacs. For the FY 2004 the net cash generated from the financial activities increased by Rs. 402.49 Lacs. The net cash from investing activities was Rs. 400.93 Lacs for the FY 2004 in comparison to Rs. (1.56) Lacs for the FY 2003. We availed a term loan of Rs. 97.00 Lacs during the FY 2004 and also made repayment of term loan of Rs. 46.79 Lacs. In order to meet our working capital requirement we have also availed credit facilities from the banks to the tune of Rs. 314.65 for the FY 2004 in comparison to Rs. 108.11 Lacs for the FY 2003. We have also raised funds by way of increase in the share capital/application money of Rs. 177.28 Lacs during the FY 2004.

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Indebtedness Our Company as on 31ST August, 2005 is having the following borrowings: Bank/FI SBBJ SBM Others Nature of Loan Term Loan Term Loan Vehicle Loan Sanctioned 3751.45 1500.00 (Rs. in Lacs) O/S 2654.41 735.91 209.05

For details of loans sanctioned, repayments and other key terms of our outstanding indebtedness etc., please refer to the section entitled financial information on page of this draft red herring prospectus. Related Party Transactions For details of related party transactions, please refer to the section entitled Related Party Transactions on page [] of this Draft Red Herring Prospectus. FINANCIAL MARKET RISKS

Quantitative and Qualitative Disclosures about Market Risk We are exposed to financial market risks from changes in interest rates, inflation & exchange fluctuation Interest Rate Risk Our interest rate risk results from changes in interest rates, which may affect our financial expenses. We bear interest rate risk with respect to the loans as on March 31, 2005 as the interest rate could vary in the near future. Though loans are currently linked to respective institutions PLR any rise in interest rates could have our lenders push higher rates of interest on the loans (as applicable to our Company). Effect of Inflation We are affected by inflation as it may have an impact on the increment in cost of raw material, employee costs, fuel and power costs.
An analysis of reasons for the changes in significant items of income and expenditure is given hereunder: a. Unusual or infrequent events or transactions: There have been no unusual or infrequent transactions that have taken place during the last three years. b. Significant Economic changes that materially affected or are likely to affect income from continuing operations: Government's focus on Textile Industry will have major bearing on the companies involved in Textile sector. Any major change in policies of the Government would have the significant impact on the profitability of our Company. Except the above, there are no significant economic changes that may materially affect or likely to affect income from continuing operations. c. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations: Apart from the risks as disclosed on page [] under heading Risk Factors in this Draft Red Herring Prospectus, there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

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d. Future changes in relationship between costs and revenues, in case of events such as future increase in Labour or material costs or prices that will cause a material change are known: We started selling Fabric under our own brand name in year 2004 with a turnover of Rs. 2614.90 Lacs in FY: 2004, which has increased to Rs.3071.27 Lacs in FY: 2005 entailing an increase of 17.45%. We have set up our Iron & Steel Division during the year 2004-05, the same has contributed sales of Rs. 655.52 Lacs. Our Raw Material consumption to total expenses has increased from 21.45% in FY: 2001 to 60.74% in FY: 2005. Further, the cost of materials and operating expenses would decline due to substantial expansion of capacity under the proposed project. We also believe that manufacturing sponge iron in-house and consuming it in the production of steel billets would increase our profitability as proportionate raw material and labour cost to total income would decline. e. The extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices: The increase in turnover is mainly on account of expansion projects and corresponding increase in Production Capacity beside better realization per unit. f. Total turnover of each major industry segment in which our Company operates: Our Company is operating only in the two diversified segments namely Textiles and Steel. The Steel division has started operation from the FY 2005, total turnover for both of the segments have been reported by our Company is from this one segment only. g. Status of any publicly announced new products or business segment: Our Company has not announced any new segment. h. The extent to which business is seasonal: The business of our Company is not seasonal in nature. i. Any significant dependence on a single or few suppliers or customers: Our Company sources raw materials from a number of suppliers and is not under threat from excessive dependence on any single or few suppliers. Similarly, our Company has customers base spread all over the country hence there is no dependence on any single customer. j. Competitive conditions Our company faces competition from large and integrated players. However, after completing the proposed expansion, our Company will be able to achieve economies of scale of operations.

180

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS Except as stated herein, there is no outstanding or pending litigation, suit, criminal or civil prosecution, proceeding initiated for offence (irrespective of whether specified in paragraph (I) of Part I of Schedule XIII of the Companies Act) or litigation for tax liabilities against our Company, our Directors or our Promoters or companies promoted by our Promoters and there are no defaults to banks/financial institutions, non-payment of or overdue statutory dues, or dues towards holders of any debentures, bonds and fixed deposits and arrears of preference shares, other unclaimed liabilities of our Company and no disciplinary action has been taken by SEBI or any stock exchanges against our Company, our Promoters or Directors. Further, except as stated herein, there are no past cases in which penalties have been imposed on our Company or our Promoters, Directors or companies promoted by the Promoters by concerned authorities, and there is no outstanding litigation against any other company whose outcome could have a material adverse effect on the position of our Company. Further, except as stated herein, there are no cases of litigations, defaults, etc. in respect of companies/firms/ventures with which the Promoters were associated in the past but are no longer associated, in respect of which the name(s) of the Promoters continues to be associated with those litigation(s). Outstanding litigations, defaults, etc. involving our Company, our Directors and past cases in which penalties imposed: Cases filed by our Company A. Sales Tax Cases Nil

B. Excise and Service Tax Cases Nil C. Cases under Negotiable Instruments Act C1. Our Company has filed five complaints on 9.8.2004 vide complaints no. 280/2004, 281/2004, 282/2004, 283/2004, 284/2004 u/s 138 of Negotiable Instrument Act, 1881, before the Honble Additional Chief Judicial Magistrate, Bhilwara against M/s Sumit Synthetics for dishonour of five cheque for total amount of Rs. 4,00,000/-. Summons have been issued to M/s Sumit Synthetics (Accused) for appearance, however the summons have not been served on the Accused yet. In the event, the case is compounded, then our Company may get payment of Rs. 4, 00,000/- from the Accused depending upon the terms of Compounding. C2. Oure Company has filed a complaint u/s 138 of Negotiable Instrument Act, 1881, before the Honble Additional Chief Judicial Magistrate, Bhilwara, on 13.3.2003 against M/s Pratic Synth, Indore, for dishonour of a cheque for Rs. 1,50,000/-. Summons have been issued to M/s. Pratic Synth (Accused) for appearance, however the summons have not been served on the Accused yet. In the event, the case is compounded, then our Company may get payment of Rs. 1,50,000/- from the Accused depending upon the terms of Compounding. Cases against our Company D. Income Tax Cases Income Tax Department has initiated penalty proceedings under section 271 (1) (C) pertaining to Assessment Year 2000-2001 with respect to certain disallowances. Company

181

has filed an appeal before the Commissioner Appeals, Udaipur against the said proceedings which is pending adjudication. E. Cases under the Workmens Compensation Act, 1923 Nil F. Sales Tax Cases Nil G. Customs Cases Nil H. Cases under the Essential Commodities Act, 1955 Nil I. Excise and Service Tax Cases I1. The Assessing Officer Textile Committee, New Delhi had issued a Show Cause Notice no. TC/NZD/JAP/6510/04/223 dated 3.2.2005 to the Bhilwara Unit of our Company to make the payment of Textile Cess (TC) of Rs. 38,476/- leviable on processed fabrics under the provisions of Clause 5A of the Textile Cess Act, 1963 for the period January 2005 to June 2005. The matter is still pending before the Assessing Officer and in the event of our Company losing the case it will have to deposit Rs. 38,476/-. No provision has been made in the financial books. The Assessing Officer Textile Committee, New Delhi had issued a Show Cause Notice no. TC/NZD/6510/04 dated 28.10.2004 to the Bhilwara Unit of our Company to make the payment of Textile Cess (TC) of Rs. 51,336/- leviable on processed fabrics under the provisions of Clause 5A of Textile Cess Act, 1963 for the period July 2004 to September 2004. The matter is still pending before the Assessing Officer and in the event of our Company losing the case we will have to deposit Rs. 51,336/-. No provision has been made in the financial books. The Assessing Officer Textile Committee, New Delhi had issued a Show Cause Notice no. TC/NZD/JAP/6510/2002-03/1806 dated 04.02.2003 to the Bhilwara Unit of our Company to make the payment of Textile Cess (TC) of Rs. 2,99,949/- leviable on processed fabrics under the provisions of Clause 5A of Textile Cess Act, 1963 for the period November 2000 to March 2001. The matter is still pending before the Assessing Officer and in the event of our Company loosing the case it will have to deposit Rs. 2,99,949/-. No provision has been made in the financial books. The Joint Director, Textile Committee, New Delhi had issued a Show Cause Notice no. TC/NZD/JAP/6510/02/1927 dated 28.01.2003 to the Bhilwara Unit of our Company to make the payment of Textile Cess (TC) of Rs. 3,90,152/- leviable on processed fabrics under the provisions of Clause 5A of Textile Cess Act, 1963 for the period November 2001 to August 2002. The matter is still pending before the Joint Director and in the event of our Company loosing the case it will have to deposit Rs. 3,90,152/-. No provision has been made in the financial books. The Commissioner, Central Excise, Jaipur-II issued a show cause notice no. V(55)off/Adj.II/167/03/742 dated 27.1.2004 to the Bhilwara Unit of our Company demanding Rs. 1,21,54,861/- as duty short paid during the period January, 2003 to March, 2003. The demand is based on the allegation that the unit had wrongly availed deemed cenvat credit on the grey fabrics which were not specified as an input under the provisions of notification no. 16/2002-CE(NT) dated 1.3.2002 and the

I2.

I3.

I4.

I5.

182

amendment thereof. The reply to the said show cause notice has been filed on 10.5.2004. The matter is still pending before the Commissioner, Central Excise. In the event of our Company losing the case, we will have to deposit Rs. 1,21,54,861/-. No provision has been made in the financial books. I6. An appeal has been filed by our Company before Custom, Excise & Service Tax Appellate Tribunal, New Delhi on 3.2.2005 against order in appeal passed by the Commissioner (Appeals-II) Central Excise, Jaipur for refund of duty paid on length of galleries attached to the Hot Air Stenter under section 3A of the Central Excise Act, 1944. In the event of our Company winning the appeal, there will be a refund of Rs. 48,24,325/- by the department to us. No provision has been made in the financial books. An appeal has been filed by our Company before the Commissioner (Appeal II) Central Excise, Jaipur against the order-in-original No. 31/CE/JP-II/04 dated 10.11.2004. The issue involved in the case is that there was difference in the weight of processed fabric and processing charges as shown in the price declaration filed by our Company under Rule 173C of Central Excise Rules, 1944 and processing bills, to evade the Central Excise Duty. The Central Excise Department observed that the unit had paid duty which was short by Rs. 15, 63,011/- for the period 1.8.1997 to 15.1.2002. The penalty of Rs. 1,00,000/- under Rule 26 of the Central Excise Rules, 2002 was also imposed on Shri Raghunath Mittal, Managing Director of our Company vide order no. 31/CE/JP-II/04 dated 10.11.2004 passed by the Joint Commissioner. The appeal is still pending before the Commissioner (Appeal-II) Central Excise, Jaipur after grant of unconditional stay vide a stay order no. 4344(RM)/CE/JPR-II/2005 dated 7.2.2005. In the event of our Company losing the case, it will have to deposit Rs. 15, 63,011/- along with penalty of the same amount. No provision has been made in the financial books. If the aforesaid penalty is finally imposed on Mr. Raghunath Mittal, Managing Director; pursuant to the provisions of Schedule XIII of the Companies Act, 1956, further appointment of Mr. Raghunath Mittal as Managing Director would require Central Governments approval. Our Company has filed an appeal before the Honble Textile Committee Appellate Tribunal, Mumbai on 26.04.2002, against notice of demand no. TC/NZD/JAP/6510/2004 dated 3.04.2002 issued by the Assessing Officer, Textile Committee, New Delhi under Rule 4 of Textile Committee (Cess) Rules, 1972 for the period March 2003 to September 2003. In the event of our Company losing the case, it will have to deposit Rs. 4, 54,976/-. The Appeal is still pending. No provision has been made in the financial books. Our Company has filed an appeal before the Honble Textile Committee Appellate Tribunal, Mumbai on 26.04.2002, against notice of demand no. TC/NZD/JAP/6510/35/4934 dated 3.04.2002 issued by the Assessing Officer, Textile Committee, New Delhi under Rule 4 of Textile Committee (Cess) Rules, 1972 for the year 1997-98 to 2000-01. In the event of our Company losing the case, it will have to deposit Rs. 19, 31,657/-. The Appeal is still pending. No provision has been made in the financial books. Our Company has filed an appeal before the Honble Textiles Committee Appellate Tribunal, Mumbai on 26.4.2002 against a notice of demand no. TC/NZD/JAP/6510 (35)/2002/4934 dated 3.4.2002 issued by the Assessing Officer, Textile Committee, New Delhi under Rule 4 of Textile Committee (Cess) Rules, 1972 for the November, 2000 to October 2001. In the event of our Company losing the case, it will have to deposit Rs. 7, 19,878/-. The Appeal is still pending. No provision has been made in the financial books.

I7.

I8.

I9.

I10.

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J. Civil Court Cases J1. The legal heir of Late Mr. Kalu Gadri had filed a suit vide case no. 21/2004 dated 7.7.2004 before the Labour Court, Mandsor (MP) demanding the compensation. In fact, Mr. Kalu Gadri died as a result of falling from the train two Kilometer away from the factory and subsequently his legal heirs filed this present case. The petitioner claims that at the time of his death he was under the employment of our Company. Our Company is contending that Mr. Kalu Gadri was not an employee of our Company as his name is not in the attendance register. The petitioner has also failed to produce the attendance card before the court which is essentially issued to every employee. The case is pending for the argument and the court has not ascertained any liability till date. J2. Mr. Ganga Ram (petitioner) filed a suit on 09.04.2004 claiming ownership over the land admeasuring 5 feet, at Araji No. 48, before the Civil Court, Bhilwara. The petitioners land is adjoining to the said disputed land. The registered lease for this part of land is in favour of our Company and the piece of said land is also in possession of our Company. Mr. Ganga Ram has lost the case in Lower trial court and the first Appellate Court has also rejected the appeal filed by the legal heirs of late Mr. Ganga Ram vide its order no.271/03 dated 22.08.2003.No notice of any further appeal has been received by our Company. No liability has been ascertained by any of the courts till date. J3. Mr. Manohar Singh an ex-employee of our Company filed a suit for illegal termination of his service vide case no.181/2000 dated 9.8.2000, before the labour Court Bhilwara. Our Company contended that the plaintiff Mr. Manohar Singh has voluntarily left our Company and he has also received the full and final payment. The said case has been settled between the parties on January 27, 2006 whereby Mr. Manohar Singh has taken a sum of Rs. 11,000 (Rupees Eleven Thousand Only) from our Company and agreed to waive all his claim against us. The said settlement was filed in the Labour Court and the decision of the Court is pending. K. Criminal Cases Nil L. Cases against the Directors M1. As defined in J7 above. N. Past cases in which penalties were imposed on our Company and our Directors. Nil Outstanding litigations, defaults etc. against Promoters and group companies: Litigations, Defaults etc. against the directors and / or promoters have already been stated above. As regards to our group company, there are no outstanding litigations. AMOUNTS OWED TO SMALL SCALE UNDERTAKINGS AND OTHER CREDITORS The name of Small Scale Undertakings and Other Creditors to whom our Company owes a sum exceeding Rs. 1 Lacs which is outstanding more than 30 days, as on August 31, 2005 are as follows: Sr. No. 1 2 3 Name of the Supplier Ginni Industries Limited Raghav Trade Link Transmetal India Amount (Rs. in Lacs) 1.03 1.12 1.12

184

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

Global Enterprises Electro Zavod India Pvt. Limited Thermax Limited Sahara Associates Siddhi Sales All Well Engineering Corporation Pragati Agencies Sidhi Corporation (C) Shree Charbhuja Processors Ltd Shree Chemicals Pioneer Tubes General Hardware & Industrial Suppliers Shree Ganesh Auxi Chem United Process Technologies Vishal Syndicate Chemoux Prachi Chemicals Swastik Coal Corporation India Limited Ge Fanuc Systems Pvt.Limited Dharamjeet Roadlines Sulzem Syncotex (P) Limited Chemical Point Today Synthetics Limited Total

1.21 1.22 1.26 1.28 1.53 1.56 1.60 1.62 1.80 2.05 2.12 2.28 2.29 2.40 2.50 2.75 3.40 4.23 4.73 8.23 10.28 23.79 77.00 164.41

Material Developments since the Last Balance Sheet Date Except as otherwise stated in this Draft Red Herring Prospectus, after the date of last balance sheet i.e. 31st August 2005, our Company has further issued equity share capital including premium aggregating Rs. 150 Lacs and also made progress in the implementation schedule of the project.

185

GOVERNMENT AND OTHER APPROVALS Except for pending approvals mentioned under this heading, our Company has received the necessary consents, licenses, permissions and approvals from the Government/RBI and various Government agencies required for our present business. Further, except for pending approvals as detailed herein, our Company can undertake all the present and proposed activities in view of the present approvals and no further approvals from any statutory body are required by our Company to undertake the present and proposed activities. INVESTMENT APPROVALS As per Notification No. FEMA/20/2000-RB dated May 3, 2000, as amended from time to time, under automatic route of the Reserve Bank our Company is not required to make an application for Issue of Equity Shares to NRIs / FIIs with repatriation benefits. However, the allotment/transfer of the Equity shares to NRIs / FIIs shall be subject to the prevailing RBI Guidelines. Sale proceeds of such investments in equity shares will be allowed to be repatriated along with the income thereon subject to the permission of the RBI and subject to the Indian tax laws and regulations and any other applicable laws. GOVERNMENT APPROVALS / LICENSES / PERMISSIONS As certified by the Legal Advisor to the Issue, we have received all the necessary licenses, permissions and approvals from the Central and State Governments and other government agencies/certification bodies and we can undertake this Issue and our current and proposed 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 except as mentioned herein. It must, however, be distinctly understood that in granting the above approvals, the Government and other authorities do not take any responsibility for the financial soundness of our Company or for the correctness of any of the statements or any commitments made or opinions expressed. Our Company has received the following Government approvals / licenses / permissions: Sr. No. Issuing Authority Registration / Licence Number Nature of Registration/ licence

CERTIFICATE OF INCORPORATION 1 2 Registrar of Companies, 17-007690 Jaipur (Rajasthan) Registrar of Companies, 17-007690 Jaipur (Rajasthan) Registrar of Companies, 17-007690 Jaipur (Rajasthan) Certificate of Incorporation dated 16/09/1993 Fresh Certificate of Incorporation dated 06/07/2000 consequent on change of Name Fresh Certificate of Incorporation dated 31/12/2003 consequent on change of Name

EXCISE AND SERVICE TAX REGISTRATION 4A. Asst. Commissioner of Central Excise, Bellary, Karnataka AAACJ3638AXM002 Central Excise Registration Certificate - Bellary

186

4B

Asst. Commissioner of 3202011977 Central Excise, Bellary, Karnataka Deputy Commissioner of Central Excise, Bhilwara (Rajasthan) Deputy Commissioner of Central Excise, Bhilwara (Rajasthan) AAACJ3638AXM001

Service Tax Registration Certificate

5A

Central Excise Registration Certificate - Bhilwara Service Tax Registration Certificate

5B

AAACJ3638AST001

IMPORTER EXPORTER CODE 6 Director General of 1304000281 Foreign Trade, Jaipur (Rajasthan) Import Export Code No.

SALES TAX REGISTRATION 7 8 9 Commercial Tax Officer, Bhilwara (Rajasthan) Commercial Tax Officer, Bhilwara (Rajasthan) Commissioner of Commercial Taxes, Bellary, Karnataka Asst. Commissioner of Commercial Taxes, Bellary (Karnataka) RST/0610/00175 CST/ 0610/ 00175 KST82715129 RST Registration Certificate Rajasthan CST Registration Certificate, Rajasthan Karnataka Sales Tax registration Certificate Central Sales Tax Registration Certificate, Karnataka

10

CST82765121

VAT REGISTRATION 11 Asst. Commissioner of TIN- 29060263916 Commercial Taxes, Bellary (Karnataka) Provisional VAT Registration

E-TDS RETURN 12 13 Income Tax Department, BLRJ01693G Bellary (Karnataka) Commissioner of Income JDHJ01584C Tax, Bhilwara, Rajasthan E- TDS Intermediary - Bellary E-TDS Intermediary- Bhilwara

PERMANENT ACCOUNT NO. 13 Income Tax Department, AAACJ3638A Govt. of India Permanent Account Number

EXEMPTION FOR ENTRY TAX 14 Joint Director, District BLR/ETE/DD/1/IPO/ Industrial Centre, Bellary 2004-05 (Karnataka) Exemption for entry tax on Machinery & Equipments

187

PROVIDENT FUND/ESI REGISTRATION 15 Asstt. Provident Fund Commissioner, Bellary Karnataka Regional Provident Fund Commissioner Jaipur (Rajasthan) Regional Director, Jaipur (Rajasthan) KN/PF/SRO/BLR/EN F/28269/1360/2004 Allotment of separate P F Code Number

16

RJ/ 8651/ Enf III/ Allotment of separate P F Code Cov./ 4310 Number 15/12981/19 Employees State Insurance Fund

17

FACTORY APPROVALS/LICENSES 18 Inspector of Factories, Gulbarga (Karnataka) Letter No. K-EFM:- Approval for the building plant SR/14/04-05/132 and machinery. and K.EPN-SR dated 26.04.2005 State 22/31857 Factory Licence Registration & Licence to work a factory

19 20

Karnataka Government Chief Inspector, RJ-21058 Factories and Boilers, Jaipur (Rajasthan)

ENVIRONMENTAL CLEARANCES/APPROVALS/LICENSES 21 Rajasthan State Pollution Control Board, Jaipur (Rajasthan) Rajasthan State Pollution Control Board, Jaipur (Rajasthan) Karnataka State Pollution Control Board Grant of consent to operate under Water (Prevention & Control of Pollution) Act, 1974. F.12 (8-53) RPCB/ Grant of consent to operate Gr. III/ 5926 under Air (Prevention & Control of Pollution) Act, 1981. KSPCB/APC/DEOConsent of Karnataka State TC/AEO-1/2005Pollution Control Board for 06/43 operation of plant u/s 21 of the Air (Prevention and control of Pollution) Act, 1981. Karnataka State Pollution KSPCB/WPC/DEOConsent of Karnataka State Control Board TC/AEO-1/2005Pollution Control Board for 06/40 discharge of sewage effluents u/s 25/26 of the Water (Prevention and control of Pollution) Act, 1974. Karnataka State Pollution CFE-CELL/JCL/EIA- Consent of Karnataka State Control Board 182/2004-2005/09 Pollution Control Board for establishment of sponge iron plant Karnataka State Pollution CFE-CELL/JCL/EIA- Consent of Karnataka State Control Board 262/2004-2005/102 Pollution Control Board for expansion of sponge iron plant to 1,80,000 MMTPA Deptt of Environment Letter No.:167/2004 Environment Clearance for and Ecology Clearance, 60,000 MTPA Bangalore 188 F.12 (8-53) RPCB/ Gr. III/ 5930

22

23

24

25

26

27

Bangalore 28 Department of forest, JCL/ECC/2005 ecology and environment 27.02.2005 Dt. Environment Clearance for 1,20,000 MTPA

INDUSTRIAL AND RELATED APPROVALS 29 Secretariat for Industrial Assistance, Ministry of Commerce and Industry, New Delhi. Secretariat for Industrial Assistance, Ministry of Commerce and Industry, New Delhi. Secretariat for Industrial Assistance, Ministry of Commerce and Industry 4150/ SIA/ IMO/ 93 Industrial approval from Deptt. Of Industrial Development for setting up of textile processing unit at Bhilwara Industrial Approval for manufacture of sponge iron and other related items. Industrial Approval for manufacture of Steel Billets with proposed annual capacity of 1,50,000 MTPA at Sidiginamola, District Bellary, Karnataka. Industrial approval from Deptt. Of Industrial Development for setting up expansion in the capacity by 1,20,000 MTPA of sponge iron and setting up of 1,20,000 MTPA Steel Billet manufacturing unit Industrial approval from Deptt. Of Industrial Development for setting up of 24 MW Captive Power Plant at Bellary State Level Single Window Clearance Committee for setting 2X12 MW Captive Power Plant State Level Single Window Clearance Committee for setting 400TPD Sponge Iron Plant State Level Single Window Clearance Committee for setting 2X30,000 MTPA Sponge iron Installment of an independent 11KV breaker for arranging Power Supply Consent for Establishment of 4 X 100 TPD Sponge Iron Plant Permission to extend the spread over upto 12 hours under the Factories Act, 1948

30

843/SIA/IMO/2004

31

5310/SIA/IMO/2005 dated 17th Nov. 2005

32

Secretariat for Industrial 3851/SIA/IMO/2005 Assistance, Ministry of Commerce and Industry

33

Secretariat for Industrial 4096/SIA/IMO/2005 Assistance, Ministry of Commerce and Industry State Level Single Window Clearance Committee, Karnataka Udyog Mitra, Bangalore State Level Single Window Clearance Committee, Karnataka Udyog Mitra, Bangalore State Level Single Window Clearance Committee, Karnataka Udyog Mitra, Bangalore Superintending Engineer El., KPTCL, Munirabad KUM/ SLSWC-5/ AD/ 199/2004-05

34

35

KUM/ SLSWC-5/ AD/ 160/2004-05

36

KUM/ SWA/239/E7/224/03 -04 LC-503/SEE/Tr (W&M)C/ MRB/T10/2616-17

37

38

39

Secretary, Department of Forest, Environment and Ecology, Bangalore Deputy Director of DDF/GD/EXM/SRFactories, Department of 01/05-06 Factories and Boilers.

189

40

41 42 43 44 45

Chief Controller of Explosives, Jaipur (Rajasthan) Controller of Explosives, Chennai Electrical Inspector, Govt. of Karnataka Electrical Inspector, Govt. of Karnataka Electrical Inspector Govt. of Karnataka Chief Electrical Inspector, Bangalore Electrical Inspector Bellary (Karnataka) Engineer, Public Works Department Bellary (Karnataka) Executive Engineer, LLC Division Bellary (Karnataka) Gram Panchayat Bellary (Karnataka) Karnataka Udyog Mitra

P-12(20)1302

P/SC/KA/14/2621/(P 147315) EI/BLY/DG/415/0405 B-372 EI/BLY/DG/41921/04-05 B-373 BEI/BLY/971/200405 CEIG/DCEI/EI (T)/DEI-2/2402024/04-05 BEI/BLY/415/200405 JCL/OHL/122/200405/983 EE/LLC/BLY/TW/AT O/NO. 83

Permission for the approval for storage of petroleum at Bhilwara unit Permission for storage of petroleum Approval to commission 1 X 500 KVA Generator Approval to commission 1 X 500 KVA Generator Approval of drawings for installation of 11 KV Line Approval for commissioning of 1 X 1250 KVA, 11 KV/433V Transformer Approval of drawings for installation of 2 x 500 KVA Permission for laying 11 KV overhead line.

46 47

48

49

50

Permission for laying 11 KV overhead line adjacent to the boundary of LLC. License No. Approval for the establishment 2/2005/2006 of iron and steel division at Sidiginamola Village Letter No. Approval for the establishment KUM/SLSWCCof 150,000 MTPA Steel Billets 13/AD/184/2005-06 Plant Dt. 7th Oct. 2005

LABOUR AND EMPLOYEE RELATED REGISTRATION/APPROVALS 51 Joint Labour Commissioner (Admn.), Jaipur (Rajasthan) Licencing Officer Govt. of Karnataka Bellary (Karnataka) Licencing Officer Govt. of Karnataka Bellary (Karnataka) F7/28/SO/Labour/95 Approval of labour welfare scheme for Bhilwara Unit Approval for the employment of contract labour at Bellary Unit dated 23-4-2005 Approval for the employment of contract labour at Bellary Unit dated 23-4-2005 Registration under Shops and Commercial Establishment Act, 1961.

52

1034/2005-06

53

1033/2005-06

54

Inspector, Karnataka XVIII/0156/04 Shops and Commercial Establishments Act, 1961

OTHER APPROVAL 55 The Registrar of Copyrights, New Delhi. Karnataka Industrial Area Development Board, Bangalore A-74668/2005 Certificate for the Registration of Logo of our Company dated 25-10-2005 Gazette notification for acquisition of land issued by State Govt. on 25.11.2005

56

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regarding Land conversion of 210.76 acres for industrial purpose. We have applied for the following approvals and licenses for our Project, which we have not yet received: Sr. No. 1 Concerned Authority Chief Engineer, Irrigation Central Zone, Munirabad, Karnataka Karnataka State Pollution Control Board Electrical Inspectorate, Bellary, Karnataka Approval/Consent Status

Grant of permission to Application made on August 18, 2005. draw water from the Verbal Clarifications sought by Irrigation Dept. regarding water survey report. river bed Hagari

Consent for Application made on September 17, 2005. establishment for the Some clarifications were asked by pollution control board vide their letter ref. No. 2x12 MW Power Plant KSPCN/EO (BLY)/DEO/ AEO2/CFE/F1172/ 2005-06/2060 Dt. 03.12.2005. Permission for the Drawing approval for installing 3x600 KVA installation of 3 x 600 DG set and 2500 KVA transformer received. KVA DG set, 2500 KVA Commissioning Approval pending. transformer, DG set for power plant and steel Billets Plant.

Further, we are required to apply for the following licenses, approvals and permissions pertaining to our Project: Sr. No. 1 Concerned Authority Inspector of Factories, Bellary, Karnataka Inspector of Factories Bellary, Karnataka Comprehensive Clearance from forest, environment and ecology deptt., Karnataka Karnataka Electricity Board. Gulbarga State Electricity Board, Karnataka Karnataka Power Transmission Corporation Ltd. Approval/Consent Remarks

For the establishment of 10 MW Will be applied in due Power Plant course For the establishment of 15 MT Induction Furnace for Steel Billets Plant Approval from the Ministry for the 10 MW Power Plant and 15 MT Induction Furnace for Steel Billets Plant Will be applied in due course Will be applied in due course

Approval for the 10 MW Power Plant and 15 MT Induction Furnace for Steel Billets Plant Sanction of power to meet the requirement of 4 X 100 TPD Sponge Iron Plant, 15 MT Induction Furnace for Steel Billets Plant Wheeling and Banking Agreement for the purchase and sale of power

Will be applied in due course Will be applied in due course

Will be applied in due course

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In addition to the above, we have applied for the following approvals and licenses for our Textile Division, which we have not yet received: Sr. Concerned Approval/Consent Status No. Authority 1 Rajasthan State Letter No. Renewal of NOC and the NOC is yet to be Pollution Control JCL/ENG/2005received. Board, Rajasthan 06/9497 2 The Registrar of Registration of Two Applications bearing No. 1191027 and Trade Marks Trademarks JPL 1191028 dated 10th April 2003 were made. Gwalior and JPL Sulz Application No. 1191027 was accepted for Collection with Design advertisement subject to filing of TM-16 for deleting the expression Sulz Collection. We filed TM-16 on 21st February 2005; however, no official action has been received till date. Application No. 1191028 was advertised in Trade Marks Journal No. 1330 (1) dated May 15, 2005. Further, we have not received any opposition yet.

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OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the Issue Our Board of Directors have pursuant to a resolution dated 10th August, 2005 authorized this Issue subject to approval by the shareholders of our Company. The shareholders of our Company have approved this Issue under section 81(1A) of the Act by a Special Resolution at our Extra Ordinary General Meeting held on 23rd August, 2005. Prohibition by SEBI Our Company, our Directors, our Promoters, the group company, companies promoted by or Promoters and companies or entities with which our Companys Directors are associated as directors 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. The listing of any securities of our Company has never been refused at anytime by any of the stock exchanges in India. Further, our Company, our Promoters, their relatives, group companies and associate companies has not been detained 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 the Issue As per Clause 2.2.1 of SEBI (DIP) Guidelines, being an unlisted company, a company may make an initial public offering of equity shares, if it meets the following conditions: a. The Company has net tangible assets of at least Rs.300 Lacs in each of the preceding three full years (of 12 months each) of which not more than 50% are held in monetary assets; b. The Company has a track record of distributable profits as per Section 205 of Companies Act, for at least three out of immediately preceding five years; c. The Company has a net worth of at least Rs.100 Lacs in each of the preceding three full years of 12 months each; d. In case the company has changed its name within the last one year, atleast 50% of the revenue for the preceding 1 full year is earned by the company from the activity suggested by the new name; and e. The aggregate of the proposed Issue and all previous issues made in the same financial year in terms of size (i.e. public issue by way of offer document + firm allotment + promoters contribution through the offer document) does not exceed five (5) times our pre-issue net worth as per the audited balance sheet of the last financial year. In view of the aforesaid, we meet the following conditions only: Our Company has net tangible assets of at least Rs.300 Lacs in each of the preceding three full years (of 12 months each) of which not more than 50% are held in monetary assets; Our Company has net worth of at least Rs.100 Lacs in each of the preceding three full years of 12 months each; Our Company has not changed name within the last one year; and The aggregate of the proposed Issue and all previous issues made in the same financial year in terms of size (i.e. public issue by way of offer document + firm allotment + promoters contribution through the offer document) does not exceed five

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(5) times our pre-issue net worth as per the audited balance sheet of the last financial year. However, since our Company do not have a track record of distributable profits as per Section 205 of Companies Act, for at least three out of immediately preceding five years; we are not meeting the condition (b) mentioned as above, therefore, we are offering Equity Shares in accordance with clause 2.2.2 (a) (ii) and 2.2.2 (b) (i) of the SEBI guidelines through the Book Building Process, wherein: a). The project has at least 15% participation by Financial Institutions/Scheduled Commercial Banks, of which at least 10% comes from the appraiser(s). In addition to this, at least 10% of the issue size shall be allotted to QIBs, failing which the full subscription monies shall be refunded. b). The minimum post-issue face value capital of our Company shall be Rs. 10 Crores. Our project has been appraised by State Bank of Bikaner and Jaipur and the project is having about 31.69% participation by Scheduled Commercial Banks, of which about 17.71% participation is from the appraiser i.e. State Bank of Bikaner and Jaipur. Further, our post-issue face value capital shall be Rs. [ ] Lacs. Our Company undertakes that the number of allottees in the proposed Issue shall be atleast 1,000; otherwise, we shall forthwith refund the entire subscription amount received. In case of delay, if any, in refund, we shall pay interest on the application money at the rate of 15% per annum for the period of delay. DISCLAIMER CLAUSE AS REQUIRED, A COPY OF THIS DRAFT RED HERRING PROSPECTUS HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE 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. THE 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 LEAD MANAGER, UTI SECURITIES LIMITED, HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SEBI (DISCLOSURES AND INVESTOR PROTECTION) GUIDELINES IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, UTI SECURITIES LIMITED HAS FURNISHED TO THE SEBI, A DUE DILIGENCE CERTIFICATE DATED 30TH JANUARY 2006 IN ACCORDANCE WITH THE SEBI (MERCHANT BANKERS) REGULATIONS, 1992, WHICH READS AS FOLLOWS:

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I. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC., AND OTHER MATERIALS IN CONNECTION WITH THE FINALIZATION OF THE DRAFT RED HERRING PROSPECTUS PERTAINING TO THE SAID ISSUE. II. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT: A. THE DRAFT RED HERRING PROSPECTUS FORWARDED TO THE SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; B. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE, AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE SEBI, THE 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 WELLINFORMED DECISION AS TO INVESTMENT IN THE PROPOSED ISSUE. D. BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH SEBI AND THAT SUCH REGISTRATIONS ARE VALID TILL DATE. E. WE SHALL SATISFY OURSELVES ABOUT THE NET WORTH OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS. THE FILING OF THE DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR 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 LEAD MANAGER ANY IRREGULARITIES OR LAPSES IN THE DRAFT RED HERRING PROSPECTUS. Disclaimer from Our Company & the BRLM. Our Company, our Directors, and the BRLM accept no responsibility for statements made otherwise than in this Draft Red Herring Prospectus or in the advertisements or any other material issued by or at instance of the above mentioned entities and anyone placing reliance on any other source of information, including our website, www.jankicorpltd.com, would be doing so at his or her own risk. Caution The BRLM accept no responsibility, save to the limited extent as provided in the Memorandum of Understanding dated 23rd August, 2005 entered into between the BRLM and our Company and the Underwriting Agreement to be entered into between the Underwriters and our Company.

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All information shall be made available by us, the BRLM and the Underwriters 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 centres or elsewhere. Disclaimer in Respect of Jurisdiction This Issue is being 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 authorised to invest in shares, Indian mutual funds registered with SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), Trusts registered under the Societies Registration Act, 1860, as amended from time to time, or any other Trust law and who are authorised under their constitution to hold and invest in shares) and to NRIs, FIIs, Venture Capital Funds and Foreign Venture Capital Investors Registered with SEBI. This Draft Red Herring Prospectus does not, however, constitute an invitation to subscribe to shares issued hereby in any other jurisdiction to any person to whom it is unlawful to make an Issue or invitation in such jurisdiction. Any person into whose possession this Draft Red Herring Prospectus comes is required to inform himself or herself about and to observe any such restrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Mumbai, Maharashtra 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 this Draft Red Herring Prospectus has been submitted for approval and has been filed with SEBI. Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this 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 this 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. Disclaimer Clause of BSE As required, a copy of this Draft Red Herring Prospectus has been submitted to the BSE (the Designated Stock Exchange). BSE vide its letter dated [], has given permission to our Company to use the Exchange's name in this Draft Red Herring Prospectus. BSE has scrutinised this Draft Red Herring Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. BSE does not in any manner: i. warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Red Herring Prospectus; or warrant that this Companys 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, its promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed to mean that this 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

ii.

iii.

iv.

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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 NSE: As required, a copy of this Draft Red Herring Prospectus has been submitted to the NSE (the Designated Stock Exchange). NSE vide its letter dated [], has given permission to our Company to use the Exchange's name in this Draft Red Herring Prospectus. NSE has scrutinised this Draft Red Herring Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. NSE does not in any manner: i. warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Red Herring Prospectus; or warrant that this Companys securities will be listed or will continue to be listed on NSE; or take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company; and it should not for any reason be deemed or construed to mean that this Draft Red Herring Prospectus has been cleared or approved by NSE. 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 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 for any other reason whatsoever.

ii.

iii.

iv.

Filing A copy of this Draft Red Herring Prospectus has been filed with Corporation Finance Department of SEBI at Ground Floor, Mittal Court, A Wing, Nariman Point, Mumbai - 400 021. A copy of the Red Herring Prospectus, along with the documents required to be filed under Section 60B of the Companies Act, will be delivered for registration to the RoC, Mumbai at Maharashtra. A copy of the Prospectus required to be filed under Section 60 of the Companies Act would be delivered for registration with RoC, Maharashtra at Mumbai, which is situated at 100, Everest, Marine Lines, Mumbai-400 002. Listing Applications will be made to BSE and NSE for permission to deal in and for an official quotation of the Equity Shares. If the permissions to deal in and for an official quotation of the Equity Shares are not granted by any of the Stock Exchanges mentioned above, our Company shall forthwith repay, without interest, all monies received from the applicants in pursuance of the Prospectus. If such money is not repaid within eight days after our Company becomes liable to repay it (i.e. from the date of refusal or within 70 days from the date of Offer Closing Date, whichever is earlier), then our Company and every director of our Company, who is an officer in default shall, on and from the expiry of eight days, will be jointly and severally liable to repay the money, with interest at the rate of 15% per annum on application money, as prescribed under Section 73 of the Companies Act.

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Our Company together with the assistance of the BRLM shall ensure that all steps for the completion of the necessary requirements for listing and commencement of trading at both the Stock Exchanges mentioned above are taken within seven working days of finalisation and adoption of the basis of allotment for the offer. Impersonation As a matter of abundant caution attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68(A) of the Companies Act, 1956, which is reproduced below: "Any person who: a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or b) otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name shall be punishable with imprisonment for a term which may extend to five years." Consents Consents in writing of: (a) the Directors, our Company Secretary and Compliance Officer, the Auditors, Legal Advisors, Bankers to our Company; and (b) Book Running Lead Manager, Syndicate Member(s), Escrow Collection Bankers and Registrar to the Issue, to act in their respective capacities, have been obtained and would be filed along with a copy of this Draft Red Herring Prospectus with the RoC, Maharashtra at Mumbai as required under Sections 60 and 60B of the Companies Act and such consents have not been withdrawn up to the time of delivery of this Draft Red Herring Prospectus for registration with the RoC, Maharashtra at Mumbai. Expert Opinion Except as stated otherwise in this Draft Red Herring Prospectus, we have not obtained any expert opinions. Expenses of the Issue The expenses of this Issue include, among others, underwriting and management fees, selling commission, printing and distribution expenses, legal fees, statutory advertising expenses and listing fees. The estimated Issue expenses are as follows: Sr. No. Particulars Amount (Rs. in Lacs) 1 Fees of BRLM, Registrar, Legal Advisor, Auditors etc. 85.00 2 Underwriting Commission, Brokerage and Selling Expenses 125.00 3 Advertisement and Marketing 80.00 4 Printing and Stationery Distribution, Postage, etc. 125.00 5 Other Charges 10.00 Total 425.00 Fees Payable to the BRLM The total fees payable to the BRLM, including underwriting commission for the Issue will be as per the engagement letter from our Company to the BRLM and the Memorandum of Understanding dated 23rd August, 2005 executed between our Company and the BRLM, copies of which are available for inspection at our registered office.

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Fees Payable to Registrar to the Issue The fees payable to the Registrar to the Issue will be as per the Memorandum of Understanding between Registrar to the Issue and our Company dated 24th September, 2005, a copy of which is available for inspection at our registered office. Adequate funds will be provided to the Registrar to the Issue by our Company to enable them to send refund orders or Allotment advice by registered post. Fees Payable to the Escrow Bankers No fees are payable to the Escrow Bankers. Underwriting Commission, Brokerage and Selling Commission The Underwriting Commission will be paid not more than 2.5% of the Public Issue Size (excluding Promoters Contribution in the Issue). Brokerage for the Issue will be paid not more than @ 1.5% of the Issue Price of the Equity Shares by our Company on the basis of the allotments made against the applications bearing the stamp of a member of any recognized Stock Exchange in India in the Broker column. Brokerage at the same rate will also be payable to the Bankers to the Issue in respect of the allotments made against applications procured by them provided the respective forms of application bear their respective stamp in the Broker column. In case of tampering or over-stamping of Brokers/ Agents codes on the application form, our decision to pay brokerage in this respect will be final and no further correspondence will be entertained in this matter. Our Company, at our sole discretion, may consider payment of additional incentive in the form of kitty or otherwise to the performing brokers on such terms and mode as may be decided by our Company. Previous Public or Rights Issues Our Company has not made any public or rights issue of Equity Shares/Debentures since incorporation. Issue of Shares otherwise than for Cash Our Company has not issued any Equity Shares for consideration other than cash since incorporation. Commission and Brokerage on Previous Issues Since this is the initial public offer of our Company, no sum has been paid or has been payable as commission and brokerage for subscribing to or procuring or agreeing to procure subscription for any of our Equity Shares since our incorporation. Companies under the Same Management There are no companies under the same management within the meaning of erstwhile Section 370 (1B) of the Companies Act, other than JPL Industries Limited, details of which are provided in the sections titled Our Group Concerns beginning on page [] of this Draft Red Herring Prospectus. The above-mentioned company is a private limited company, and has not made any public/rights issues in the last three years. Promise Vis--Vis Performance Since, our Company has not made any public issue in past, Promise vis--vis Performance is not applicable to us.

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Listed Ventures of Promoters Our promoters do not have any listed ventures. Outstanding Debenture or Bond Issues As on the date of filing of this Draft Red Herring Prospectus with SEBI, our Company does not have any outstanding Debentures or Bonds. Outstanding Preference Shares Our company has not issued any preference shares till date whether redeemable or otherwise. Stock Market Data for Our Equity Shares This being an initial public offering of our Company, the Equity Shares are not listed on any. Mechanism for Redressal of Investor Grievances The Memorandum of Understanding between the Registrar to the Issue and us provides for retention of records with the Registrar to the Issue for a period of at least one year from the date of closing of this Issue. All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as name, address of the applicant, application number, number of shares applied for, amount paid on application, depository participant, and the bank branch or collection centre where the application was submitted. Disposal of Investor Grievances We estimate that the average time required by us or the Registrar to the Issue for the redressal of routine investor grievances shall be 15 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. We have appointed Mr. Paras Pangaria, Company Secretary, as the Compliance Officer and he may be contacted in case of any pre-Issue or post-Issue-related problems. He can be contacted at the following address: Mr. Paras Pangaria Company Secretary, Janki Corp Limited, 39/C, 1st Floor, Raj Industrial Complex, Military Road, Marol, Andheri (E), Mumbai 400 059. Telefax: 91-22-2859 3721 E-Mail: ipo@jankicorplimited.com Change in Auditors There has been no change in our Auditors in the last 3 years, except appointment of M/s. A. Bafna & Company, Chartered Accountants, as our Joint Statutory Auditors in the AGM held on 30th September 2003. They were appointed since our Company was diversifying and undertaking the new Iron & Steel Project at Bellary. Capitalisation of Reserves or Profits There has not been any capitalisation of reserves or profits during the last five years. Revaluation of Assets There has not been any revaluation of Assets during the last five years.

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TERMS OF THE ISSUE The Equity Shares being issued are subject to the provisions of the Companies Act, our Memorandum and Articles of Association, the terms of this Draft Red Herring Prospectus, Red Herring Prospectus, Prospectus, Bid-cum-Application Form, the Revision Form, the Confirmation of Allocation Note and other terms and conditions as may be incorporated in the Allotment Advices and other documents/certificates that may be executed in respect of the Issue. The Equity Shares shall also be subject to laws as may be applicable, guidelines, notifications and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, the Government of India, the Stock Exchanges, the RBI, RoC and/or other authorities, as in force on the date of the Issue and to the extent applicable. Authority for the issue and details of the resolution passed for the issue Pursuant to Section 81(1A) of the Companies Act, 1956, the present issue of equity shares has been authorized vide a Special Resolution passed at the Annual General Meeting of our Company held on 23rd August, 2005. Ranking of Equity Shares The Equity Shares to be issued shall be subject to the provisions of our Memorandum and Articles of Association and rank pari passu with the existing Equity Shares of our Company in all respects including rights in respect of dividend. The Allottees will be entitled to dividend, voting rights or any other corporate benefits, if any, declared by our Company after the date of Allotment. Mode of Payment of Dividend Our Company shall pay dividend in cash in accordance with the provisions of the Companies Act whenever declared and approved by shareholders. Face Value and Issue Price The Equity Shares having a face value of Rs. 10/- each are being offered in terms of this Draft Red Herring Prospectus at a price of Rs. [] per Equity Share. At any given point of time there shall be only one denomination of the Equity Shares of our Company, subject to applicable laws. Compliance with SEBI Guidelines Our Company shall comply with all disclosure and accounting norms as specified by SEBI from time to time. Rights of the Equity Shareholder Subject to applicable laws, rules, regulations and guidelines and the Articles of Association, the equity shareholders have, inter alia, the following rights: Right to receive dividend, if declared; Right to attend general meetings and exercise voting rights, unless prohibited by law; Right to vote on a poll either in person or by proxy; Right to receive offer for rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation; Right of free transferability; and Such other rights, as may be available to a shareholder of a listed public limited company under the Companies Act, Listing Agreement with the Stock Exchanges and the Memorandum and Articles of our Company. For a detailed description of the Articles of Association of our Company relating to voting rights, dividend, forfeiture and lien etc., see Main Provisions of Articles of Association beginning on page [] of this Draft Red Herring Prospectus.

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Market Lot and Trading Lot In terms of existing SEBI Guidelines, the trading in the Equity Shares shall only be in dematerialized form for all investors and hence, the tradable lot is one Equity Share. In terms of Section 68B of the Companies Act, the Equity Shares shall be allotted only in dematerialized form in multiples of one Equity Share subject to a minimum Allotment of [] Equity Shares. Jurisdiction The jurisdiction for the purpose of this Issue is vested in competent courts/authorities in Mumbai (Maharashtra). Nomination Facility to Investor In accordance with Section 109A of the Companies Act, the sole or first Bidder, along with other joint Bidders, 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 the Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale 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 Registered Office or to the Registrar and Transfer Agents of our Company. 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: a. to register himself or herself as the holder of the Equity Shares; or b. to make such transfer of the equity shares, as the deceased holder could have made. Further, our Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer 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 moneys 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 our Company. Nominations registered with respective depository participant of the applicant would prevail. If the investor wants to change 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 Net Issue to Public including devolvement of the members of the Syndicate within 60 days from the Bid Closing Date, we shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after we become liable to pay the amount, we shall pay interest prescribed under Section 73 of the Companies Act, 1956.

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Withdrawal of the Issue Our Company in consultation with the BRLM reserves the right not to proceed with the issue any time after the Bid/Issue Opening Date but before allotment without assigning any reason therefor. Arrangements for Disposal of Odd Lots Since our Equity Shares will be traded in dematerialized form only, the marketable lot is one (1) Equity Share. Therefore, there is no possibility of any odd lots. Letters of Allotment or Refund Orders We shall give credit to the beneficiary account with Depository Participants within two working days from the date of the finalisation of basis of allocation. We shall ensure dispatch of refund orders, if any, of value up to Rs. 1,500 by Under Certificate of Posting, and shall despatch refund orders above Rs. 1,500, if any, by registered post or speed post at the sole or First Bidders sole risk within 15 days of the Bid/Issue Closing Date. In accordance with the Companies Act, the requirements of the Stock Exchanges and SEBI Guidelines, we undertake that: Allotment shall be made only in dematerialised form within 15 days from the Bid/Issue Closing Date; Despatch of refund orders shall be done within 15 days from the Bid/Issue Closing Date; and We shall pay interest at 15% per annum (for any delay beyond the 15 day time period as mentioned above), if Allotment is not made, refund orders are not despatched and/or demat credits are not made to investors within the 15 day time prescribed above.

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 us, as an Escrow Collection 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. Subscription by Non Residents/ NRIs/ FIIs/ Foreign Venture Capital Fund registered with SEBI /Multilateral and Bilateral Development Financial Institutions As per 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/ Foreign Venture Capital Funds registered with SEBI/ Multilateral and Bilateral Development Financial Institutions to invest in shares of an Indian company by way of subscription in a public issue. However, such investments would be subject to other investment restrictions under RBI and/or SEBI regulations as may be applicable to such investors. Based on the above provisions, it will not be necessary for the investors to seek separate permission from the FIPB/ RBI for this specific purpose. However, it is to be distinctly understood that there is no reservation for non-residents, NRIs, FIIs and Foreign Venture Capital Funds registered with SEBI and Multilateral and Bilateral Development Financial Institutions and all applicants will be treated on the same basis with other categories for the purpose of allocation. As per the policy of RBI, Overseas Corporate Bodies cannot participate in this Issue. The Equity Shares have not been and will not be registered under the U.S. Securities Act 1933, as amended 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 of the U.S. Securities Act, 1933), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Equity Shares will be offered and

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sold only (i) in the United States to qualified institutional buyers, as defined in Rule 144A of the Securities Act, and (ii) 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. We and the BRLM are not liable for any amendments or modification or changes in applicable laws or regulations, which may happen 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 applicable laws or regulations. Restrictions, if any on Transfer and Transmission of Equity Shares Except as stated otherwise in this Draft Red Herring Prospectus, there are no restrictions on transfer / transmission on our Equity Shares.

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ISSUE PROCEDURE Book Building Procedure The Issue is being made through the 100% Book Building Process wherein upto 50% (subject to mandatory allotment of minimum 10% of the Issue size to QIBs) of the Net Issue to the Public shall be available for allocation on a proportionate basis to QIBs (of which 5% shall be allocated for Mutual Funds). Further, not less than 35% of the Net Issue shall be available for allocation on a proportionate basis to the Retail Individual Bidders and not less than 15% of the Net Issue shall be available for allocation on a proportionate basis to NonInstitutional Bidders, subject to valid Bids being received at or above the Issue Price. It may be noted that the Bids received in the Employees Reservation Portion and Shareholders of Group Company Portion shall not be considered for the purposes of determining the Issue Price through the Book Building Process. Bidders are required to submit their Bids through the members of the Syndicate. We, in consultation with the BRLM, reserve the right to reject any Bid procured by any or all members of the Syndicate without assigning any reasons therefor in case of QIBs. In case of Non-Institutional Bidders and Retail Individual Bidders, our Company would have a right to reject the Bids only on technical grounds. We, in consultation with the BRLM would have discretion to allocate to QIBs based on a number of criteria, which will typically include, but would not be limited to, the following: prior commitment, investor quality, price, earliness of bid, etc. Investors should note that Equity Shares would be allotted to all successful Bidders only in dematerialized form. Bidders will not have the option of getting Allotment of the Equity Shares in physical form. The Equity Shares on Allotment shall be traded only in the dematerialized segment of BSE and NSE. Illustration of Book Building and Price Discovery Process (Investors should note that this illustration is solely for the purpose of illustration and is not specific to the Issue) The Bidders can bid at any price within the Price Band. For instance, assume a Price Band of Rs.60 to Rs.72 per Equity Share, Issue size of 5,400 Equity Shares and receipt of five Bids from the Bidders. A graphical representation of the consolidated demand and price would be made available at the bidding centres during the Bidding/Issue Period. The illustrative book as set forth below shows the demand for the Equity Shares of our Company at various prices and is collated from Bids from various investors. Bid Quantity 1,500 3,000 4,500 6,000 7,500 Bid Price (Rs.) 72 69 66 63 60 Cumulative Quantity 1,500 4,500 9,000 15,000 22,500 Subscription 27.78% 83.33% 166.67% 277.78% 416.67%

The price discovery is a function of demand at various prices. The highest price at which our Company is able to issue the desired quantity of Equity Shares is the price at which the book cuts off, i.e., Rs.66 in the above example. Our Company, in consultation with the BRLM will finalize the Issue Price at or below such cut off price, i.e., at or below Rs.66. All Bids at or above this Issue Price and cut-off Bids are valid Bids and are considered for allocation in the respective category.

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Bid-cum-Application Form Bidders shall use only the specified Bid-cum-Application Form bearing the stamp of a member of the Syndicate for the purpose of making a Bid in terms of this Draft Red Herring Prospectus. The Bidder shall have the option to make a maximum of three Bids in the Bidcum-Application Form and such options shall not be considered as multiple Bids. Upon the allotment 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 completing and submitting the Bid-cum-Application Form to a member of the Syndicate, the Bidder is deemed to have authorized us to make the necessary changes in this Draft 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 the RoC after such filing, without prior or subsequent notice of such changes to the Bidder. The prescribed colour of the Bid-cum-Application Form for various categories is as follows: Colour of Bid-cumApplication Form Permanent Employees (including Executive Directors) of our Company Green Indian public including eligible NRIs applying on a non-repatriation White basis Non-residents, NRIs or FIIs applying on a repatriation basis Blue Shareholders of Group Company Pink 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 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) Indian mutual funds registered with SEBI; 5) Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI regulations and SEBI Guidelines and Regulations, as applicable); 6) Venture capital funds registered with SEBI; 7) Foreign venture capital investors registered with SEBI; 8) State Industrial Development Corporations; 9) Insurance companies registered with the Insurance Regulatory and Development Authority; 10) Provident funds with minimum corpus of Rs. 2,500 Lacs and who are authorized under their constitution to invest in Equity Shares; 11) Pension funds with minimum corpus of Rs. 2,500 Lacs and who are authorized under their constitution to invest in Equity Shares; 12) Multilateral and bilateral development financial institutions; 13) Trusts/Societies registered under the Societies Registration Act, 1860, as amended, or under any other law relating to Trusts/Societies and who are authorized under their constitution to hold and invest in equity shares; 14) Eligible Non-residents including NRIs and FIIs on a repatriation basis or a nonrepatriation basis subject to applicable local laws; and 15) Scientific and/or industrial research organizations authorized under their constitution to invest in equity shares. Category

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Note: The members of the Syndicate and any associate of the members of the Syndicate (except asset management companies on behalf of mutual funds, Indian financial institutions and public sector banks) cannot participate in that portion of the Issue where allocation is discretionary and will not be eligible as a QIB in this Issue. Further, the BRLM and the Syndicate Member(s) shall not be entitled to subscribe to this Issue in any manner except towards fulfilling their underwriting obligation.
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. As per the current regulations, OCBs are not eligible to participate in the Issue. As per the current regulations, the following restrictions are applicable for investments by mutual funds: 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 by index funds or sector or industry specific funds. No mutual fund under all its schemes should own more than 10% of any companys paid-up capital carrying voting rights. Further, bidders may bid as per the limits prescribed above. 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 (i.e. 10% of [] Equity Shares). In respect of an 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 our total issued capital or 5% of our total issued capital in case such sub-account is a foreign corporate or an individual. As of now, the aggregate FII holding in our Company cannot exceed 24% of the total issued capital of our Company. With the approval of the Board of Directors and the shareholders by way of a special resolution, the aggregate FII holding can go up to 100%. However, as of this date, no such resolution has been recommended for adoption. As per the current regulations, the following restrictions are applicable for investments by SEBI registered Venture Capital Funds and Foreign Venture Capital Investors The SEBI (Venture Capital Funds) Regulations, 1996 and the SEBI (Foreign Venture Capital Investors) Regulations, 2000 prescribe investment restrictions on venture capital funds and foreign venture capital investors registered with SEBI. Accordingly, the holding by any individual venture capital fund or foreign venture capital investor registered with SEBI should not exceed 25% of our Companys paid-up capital. The aggregate holdings of venture capital funds and foreign venture capital investors registered with SEBI could, however, go up to 100% of our Companys paid-up equity capital. The above information is given for the benefit of the Bidders. Our Company and the BRLM are not liable for any amendments or modification or changes in applicable laws or regulations, which may happen 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, and our Company and the BRLM shall on no grounds whatsoever be liable for or responsible for any breach of applicable regulations by any investor or category of investors. Maximum and Minimum Bid size For Employees: The Bid must be for minimum [] Equity Shares and in multiples of [] Equity Shares thereafter.

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For Shareholders of Group Company: The Bid must be for minimum [] Equity Shares and in multiples of [] Equity Shares thereafter. For Retail Individual Bidders: The Bid must be for minimum [] Equity Shares and in multiples of [] Equity Shares thereafter subject to maximum bid amount of Rs. 1,00,000 In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid Amount does not exceed Rs. 1,00,000. In case the Bid Amount is over Rs. 1,00,000 due to revision or revision of the Price Band or on exercise of Cut-off option, the Bid would be considered for allotment under the Non-Institutional Bidders category. The Cut-off option is an option given only to the Retail Individual Bidders indicating their agreement to bid and purchase at the final Issue Price as determined at the end of the Book Building Process. For Other Bidders (i.e. Non-Institutional Bidders and QIB Bidders): The Bid must be for a minimum of such number of Equity Shares such that the Bid Amount payable by the Bidder exceeds Rs. 1,00,000 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 applicable laws. Under existing SEBI guidelines, a QIB Bidder cannot withdraw its Bid after the Bid/Issue Closing Date. In case of revision in Bids, the Non-Institutional Bidders who are individuals have to ensure that the Bid Amount is greater than Rs. 1,00,000, for being considered for allocation in the Non Institutional Portion. In case the Bid Amount reduces to Rs. 1,00,000 or less due to a revision in Bids or revision of Price Band, the same would be considered for allocation under the Retail Portion. Non Institutional Bidders and QIBs are not allowed to Bid at Cut-off. Information for the Bidders 1. We will file the Red Herring Prospectus with the RoC/Designated Stock Exchange at least 3 (three) days before the Bid/Issue Opening Date. 2. The members of the Syndicate will circulate copies of this Draft Red Herring Prospectus along with the Bid-cum-Application Form to their potential investors. 3. Any investor (who is eligible to invest in the Equity Shares) desirous of obtaining a copy of this Draft Red Herring Prospectus along with the Bid-cum- Application Form can obtain the same from our registered office or from the BRLM, or from a member of the Syndicate. 4. The Bids should be compulsorily submitted on the prescribed Bid-cum-Application Form only. Bid-cum-Application Forms should bear the stamp of a member of the Syndicate. The Bid-cum-Application Forms, which do not bear the stamp of a member of the Syndicate, will be rejected. Method and Process of bidding 1. Our Company and the BRLM shall declare the Bid/Issue Opening Date and the Bid/Issue Closing Date at the time of filing the Red Herring Prospectus with RoC and also publish the same in two widely circulated newspapers (one each in English and Hindi). This advertisement shall contain the salient features of the Red Herring Prospectus as specified under Form 2A of the Companies Act and shall contain the minimum disclosures as specified under Schedule XX-A of the SEBI Guidelines. The Syndicate Member(s) shall accept Bids from the Bidders during the Issue Period in accordance with the terms of the Syndicate Agreement.

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2. Investors who are interested in subscribing for our Equity Shares should approach any of the members of the Syndicate or their authorized agent(s) to register their Bid. 3. The Bidding Period shall be a minimum of 3 (three) working days and not exceed 7 (seven) working days. In case the Price Band is revised, the revised Price Band and the Bidding Period will be informed to the Stock Exchanges and published in two national newspapers (one each in English and Hindi) and the Bidding Period may be extended, if required, by an additional 3 (three) working days, subject to the total Bidding Period not exceeding 10 (ten) working days. 4. During the Bidding Period, the Bidders may approach the Syndicate to submit their Bid. Every member of the Syndicate shall accept Bids from all clients/investors who place orders through them and shall have the right to vet the Bids. 5. Each Bid-cum-Application Form will give the Bidder the choice to bid for up to three optional prices (for details refer to the paragraph entitled Bids at Different Price Levels on page [] of this Draft Red Herring Prospectus) within the Price Band 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. 6. The Bidder cannot bid on another Bid-cum-Application Form after Bids on one Bid-cumApplication Form have been submitted to any member of the Syndicate. Submission of a second Bid-cum-Application Form to either the same or to another member of the Syndicate will be treated as multiple bidding 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 allotment of Equity Shares in this Issue. However, the Bidder can revise the Bid through the Revision Form, the procedure for which is detailed in the paragraph Build up of the Book and Revision of Bids on page [] of this Draft Red Herring Prospectus. 7. The members of the Syndicate will enter each 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 up to three TRSs for each Bid-cum-Application Form. 8. Along with the Bid-cum-Application Form, all Bidders will make payment in the manner described under the paragraph Terms of Payment and Payment into the Escrow Account on page [] of the Draft Red Herring Prospectus. Bids at Different Price Levels 1. The Price Band has been fixed at Rs. [] to Rs. [] per Equity Share, Rs. [] being the floor of the Price Band and Rs. [] being the cap of the Price Band. The Bidders can bid at any price within the Price Band, in multiples of Re. 1/-. 2. We, in consultation with the BRLM, can revise the Price Band during the Bidding Period, in which case the Bidding Period shall be extended further for a period of three working days, subject to the total Bidding Period not exceeding ten working days. The cap on the Price Band should not be more than 20% of the Floor of the Price Band. Subject to compliance with the immediately preceding sentence, the floor of Price Band can move up or down to the extent of 20% of the Floor Price disclosed in this Draft Red Herring Prospectus.

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3. Any revision in the Price Band and the revised Bidding Period/Issue Period, if applicable, will be widely disseminated by informing the stock exchanges, by issuing a public notice in two national newspapers (one each in English and Hindi), and also indicating the change on the relevant websites of the BRLM and the terminals of the members of the Syndicate. 4. We, in consultation with the BRLM, can finalize the Issue Price within the Price Band without the prior approval of, or intimation to, the Bidders. 5. The Bidder can bid at any price within the Price Band. The Bidder has to bid for the desired number of Equity Shares at a specific price. Retail Individual Bidders and Bidders in the Employee Reservation Portion and Shareholders of Group Company Portion applying for a maximum Bid in any of Bidding Options upto Rs. 100,000/- may bid at Cut-off. However, bidding at Cut-off is prohibited for QIBs or Non-Institutional Bidders and such Bids from QIBs and Non-Institutional Bidders or Bidders in the Employee Reservation Portion or Shareholders of Group Company Portion whos Bid Amount exceeds Rs. 100,000/- will be rejected. 6. Retail Individual Bidders and Eligible Employees bidding under Employee Reservation Portion and persons bidding under Shareholders of Group Company who bid at the Cutoff agree that they shall purchase the Equity Shares at any price within the Price Band. Retail Individual Bidders bidding at Cut-off shall deposit the Bid Amount based on the Cap Price in the Escrow Account. In the event the Bid Amount is higher than the subscription amount payable by the Retail Individual Bidders (i.e. the total number of Equity Shares allocated in the Issue multiplied by the Issue Price), Retail Individual Bidders or Employees, who bid at Cut off Price, shall receive the refund of the excess amounts from the Escrow Account. 7. In case of an upward revision in the Price Band announced as above, Retail Individual Bidders, who had bid at Cut-off could either (i) revise their Bid or (ii) 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 of the bidder wants to continue to bid at Cut-off Price), with the member 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 category in terms of this 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 downward for the purpose of allocation, such that no additional payment would be required from the Bidder and the Bidders shall be deemed to have approved such revised Bid at Cut-off Price. 8. In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders who have bid at Cut-off could either revise their Bid or the excess amount paid at the time of bidding would be refunded from the Escrow Account. 9. In the event of any revision in the Price Band, whether upwards or downwards, the Minimum Application Size shall be suitably revised.

Option to Subscribe Equity Shares being offered through this Draft Red Herring Prospectus can be applied for in dematerialized form only.

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Escrow Mechanism 1. Our Company and members of the Syndicate shall open Escrow Accounts with one or more Escrow Collection Banks in whose favour the Bidders shall make out the cheque or demand draft in respect of his or her Bid and/or revision of the Bid. Cheques or demand drafts received for the full Bid amount from Bidders in a certain category would be deposited in the Escrow Account for the Issue. The Escrow Collection Banks will act in terms of the Draft Red Herring Prospectus and an Escrow Agreement. The monies in the Escrow Account of our Company 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 Banks 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 with our Company. Payment of refund to the Bidders shall also be made in terms of the Escrow Agreement and the Red Herring Prospectus. 2. The Bidders may note that the Escrow Mechanism is not prescribed by SEBI and the same has been established as an arrangement between our Company, the Syndicate, Escrow Collection Bank(s) and the Registrars to the Issue to facilitate collections from the Bidders. Terms of Payment and Payment into the Escrow Collection Account Each Bidder, who is required to pay Margin Amount greater than 0%, shall, with the submission of the Bid-cum-Application Form draw a cheque/ demand draft for the maximum amount of his/ her Bid in favour of the Escrow Account of the Escrow Collection Bank(s) (for details refer to the paragraph Payment Instructions in this Draft Red Herring Prospectus) and submit the same to the member of the Syndicate to whom the Bid is being submitted. Bid-cum-Application Forms accompanied by cash shall not be accepted. The maximum Bid Price has to be paid at the time of submission of the Bid-cum-Application Form based on the highest bidding option of the Bidder. The members of the Syndicate shall deposit the cheque or demand draft with the Escrow Collection Bank(s), which will hold the monies for the benefit of the Bidders till such time as the Designated Date. On the Designated Date, the Escrow Collection Bank(s) shall transfer the funds whose Bids have been accepted from the Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account with the Banker(s) to the Issue. The balance amount after transfer to the Public Issue Account, lying credited with Escrow Collection Banks shall be held for the benefit of the Bidders who are entitled to refunds. On the Designated Date, and not later than 15 days from the Bid / Issue Closing Date, the Escrow Collection Bank(s) shall refund all amount payable to unsuccessful Bidders and also the excess amount paid on bidding, if any, after adjustment for allocation to the Bidders. Each category of Bidders (i.e. Employees, QIBs, Non Institutional Bidders, shareholder of Group Company, and Retail Individual Bidders) would be required to pay their applicable Margin Amount at the time of the submission of the Bid-cum-Application Form. The Margin Amount payable by each category of Bidders is mentioned under the heading Issue Structure in this Draft Red Herring Prospectus. Where the Margin Amount applicable to the Bidder is less than 100% of the Bid Amount, any difference between the amount payable by the Bidder for Equity Shares allocated at the Issue Price and the Margin Amount paid at the time of Bidding, shall be payable by the Bidder no later than the Pay-in-Date, which shall be a minimum period of 2 (two) days from the date of communication of the allocation list to the members of the Syndicate by the BRLM. If the payment is not made favouring the Escrow Account within the time stipulated above, the Bid of the Bidder is liable to be cancelled. However, if the members of the Syndicate do not waive such payment, the full amount of payment has to be made at the time of submission of the Bid Form.

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Where the Bidder has been allocated lesser number of Equity Shares than he or she had bid for, the excess amount paid on bidding, if any, after adjustment for allocation, will be refunded to such Bidder within 15 days from the Bid/Issue Closing Date, failing which our Company shall pay interest @15% per annum for any delay beyond the periods mentioned above. Electronic Registration of Bids (a) The members of the Syndicate will register the Bids using the on-line facilities of BSE and NSE. There will be at least one NSE/BSE on-line connectivity to each city where a Stock Exchange is located in India and the Bids are accepted. (b) BSE and NSE 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 and their authorised agents during the Bidding Period. Members of the Syndicate 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 an half hourly basis. On the Bid Closing Date, the Syndicate Member(s) shall upload the Bids till such time as may be permitted by the Stock Exchanges. (c) The aggregate demand and price for Bids registered on the electronic facilities of BSE and NSE will be downloaded on an half hourly basis, consolidated and displayed on-line at all bidding centres. A graphical representation of consolidated demand and price would be made available at the bidding centres during the bidding period. (d) At the time of registering each Bid, the members of the Syndicate shall enter the following details of the investor in the on-line system: Name of the investor; Investor Category Individual, Corporate, NRI, FII, Mutual Fund, etc.; Numbers of Equity Shares bid for; Bid price; Bid-cum-Application Form number; Whether payment is made upon submission of Bid-cum-Application Form; Depository Participant Identification No. and Client Identification No. of the Demat Account of the Bidder. (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 Bidders responsibility to obtain the TRS from the members of the Syndicate. The registration of the Bid by the members of the Syndicate does not guarantee that the Equity Shares shall be allocated either by the members of the Syndicate or our Company. (f) Such TRS will be non-negotiable and by itself will not create any obligation of any kind. (g) Consequently, the BRLM/ member of the Syndicate also have the right to accept the Bid or reject it without assigning any reason, in case of QIBs. In case of Non-Institutional Bidders and Retail Individual Bidders, Bids would not be rejected except on the technical grounds listed on page [] in this Draft Red Herring Prospectus. (h) It is to be distinctly understood that the permission given by BSE and NSE 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 or BRLM are cleared or approved by BSE and NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the

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compliances 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. (i) It is also to be distinctly understood that the approval given by BSE and NSE for the use of their online IPO system should not in any way be deemed or construed that this Draft Red Herring Prospectus has been cleared or approved by the BSE and NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Red Herring Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on the BSE and NSE. Build Up of the Book and Revision of Bids (a) Bids registered by various Bidders through the members of the Syndicate shall be electronically transmitted to the BSE and NSE mainframe on half-hourly basis. (b) The book gets built up at various price levels. This information will be available with the BRLM on a half-hourly basis. (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 numbers of Equity Shares and the Bid Price 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-cumApplication 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 unchanged. The members of the Syndicate will not accept incomplete or inaccurate Revision Forms. (e) 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 Draft Red Herring Prospectus. In case of QIBs, the members of the Syndicate may at their sole discretion waive the payment requirement at the time of one or more revisions by the QIB Bidders. (f) The Bidder can make this revision any number of times during the Bidding Period. However, for any revision(s) in the Bid, the Bidders will have to use the services of the same member of the Syndicate through whom he or she has placed the original Bid. Bidders are advised to retain copies of the blank Revision Forms and the revised Bid must be made only in such Revision Form or copies thereof. (g) When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and get a revised TRS from the members of the Syndicate. 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. (h) In case of discrepancy of data between BSE and NSE and members of the Syndicate, the decision of the BRLM based on the physical records of Bid-cum-Application Forms shall be final and binding to all concerned.

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Price Discovery and Allocation (a) After the Bid/Issue Closing Date, the BRLM shall analyze the demand generated at various price levels and discuss pricing strategy with our Company. (b) Our Company, in consultation with the BRLM shall finalize the Issue Price, the number of Equity Shares to be allotted and the allocation to successful QIB Bidders. The allocation will be decided based on the quality of the Bidder and the size, price and time of the Bid. (c) The allocation for QIBs for a maximum of 50% of the Net Issue would be on a proportionate basis subject to 10% of the Issue size being mandatory allotted to QIBs in consultation with the Designated Stock Exchange, subject to valid bids being received at or above the Issue Price in the manner as described in the section titled Basis of Allotment. The allocation to Non-Institutional Bidders and Retail Individual Bidders of not less than 15% and 35% of the Net Issue, respectively, would be on proportionate basis, in the manner specified in the SEBI Guidelines, in consultation with Designated Stock Exchange, subject to valid Bids being received at or above the Issue Price. (d) Under subscription in the reserved category if any shall be added back to the net offer to the public. Under subscription, if any, in any category under the net offer to the public would be allowed to be met with spill over from any of the other categories under net offer to the public or allowed to be met from over subscription, if any, in the reserved category at the discretion of our Company and the BRLM; except in case of the QIBs, who shall be mandatorily allotted 10% of the Issue size, failing which the entire subscription monies shall be refunded. (e) Allocation to NRIs, FIIs, Foreign Venture Capital Funds registered with SEBI applying on basis will be subject to the terms and conditions stipulated by the FIPB and RBI while granting permission, if applicable, for Allotment of Equity Shares to them. (f) The BRLM, in consultation with our Company shall notify the Syndicate Member(s) of the Issue Price and allocations to their respective Bidders, where the full Bid Amount has not been collected from the Bidders. (g) We reserve the right to cancel the Issue any time after the Bid/Issue Opening Date without assigning reasons whatsoever. (h) In terms of SEBI Guidelines, QIB Bidders shall not be allowed to withdraw their Bid after the Bid / Issue Closing Date. Proportionate Allotment Procedure As specified in the SEBI Guidelines and this Draft Red Herring Prospectus, allotment shall be on proportionate basis within the specified categories, rounded off to the nearest integer subject to a minimum allotment being equal to the minimum application size i.e. [] Equity Shares. Signing of Underwriting Agreement and RoC Filing (a) Our Company, the BRLM, and the Syndicate Member(s) shall enter into an Underwriting Agreement on finalization of the Issue Price and allocation(s) to the Bidders. (b) After signing the Underwriting Agreement, we will update and file the updated Red Herring Prospectus with RoC, which then would be termed Prospectus. The Prospectus would have details of the Issue Price, Issue Size, underwriting arrangements and would be complete in all material respects.

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Advertisement regarding Issue Price and Prospectus A statutory advertisement will be issued by us after the filing of the Prospectus with the RoC. This advertisement, in addition to the information that has to be set out in the statutory advertisement, shall indicate the Issue Price along with a table showing the number of Equity Shares to be issued. Any material updates between the date of the Draft Red Herring Prospectus and the date of the Prospectus will be included in such statutory advertisement. Issuance of Confirmation of Allocation Note a) The BRLM or Registrars to the Issue shall send to the Syndicate Member(s), a list of their Bidders who have been allocated Equity Shares in the Issue. b) The Members of the Syndicate would then send the CAN to their Bidders who have been allocated Equity Shares in the Issue. The despatch of a CAN shall be deemed to be a valid, binding and irrevocable contract for the Bidder to pay the entire Issue Price for all the Equity Shares allocated to such Bidder. Those Bidders who have not paid the full Bid Amount into the Escrow Account on or prior to the time of bidding shall pay in full amount into the Escrow Account on or prior to the Pay-in Date specified in the CAN. c) Bidders who have been allocated Equity Shares and who have already paid the full Bid Amount into the Escrow Account at the time of bidding shall directly receive the CAN from the Registrars to the Issue subject, however, to realization of their cheque or demand draft paid into the Escrow Account. The despatch of a CAN shall be deemed to be a valid, binding and irrevocable contract for the Bidder to pay the entire Issue Price for allotment to such Bidder. Designated Date and Transfer of Funds to Public Issue Account (a) Our Company will ensure that the allotment of Equity Shares is done within 15 days of the Bid/Issue Closing Date. After the funds are transferred from the Escrow Account to the Issue Account on the Designated Date, our Company would ensure the credit to the successful Bidders' depository accounts with the allotted Equity Shares to the allottees within two working days of the date of Allotment. (b) As per the SEBI Guidelines, Equity Shares will be issued and allotted only in dematerialized form to the allottees. Allottees will have the option to re-materialize the Equity Shares so allotted, if they so desire, as per the provisions of the Companies Act and the Depositories Act. Investors are advised to instruct their Depository Participant to accept the Equity Shares that may be credited to their Depository Account pursuant to Allotment in this Issue. GENERAL INSTRUCTIONS Dos: (a) Check if you are eligible to apply; (b) Ensure that you Bid within the Price Band; (c) Read all the instructions carefully and complete the Bid-cum-Application Form [(Green), (White), (Blue) or (Pink) in colour] as the case may be; (d) Ensure that the details about your Depository Participant and beneficiary account are correct as Equity Shares will be allotted in the dematerialized form only;

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(e) Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a member of the Syndicate; (f) Ensure that you have been given a TRS for all your Bid options; (g) Submit Revised Bids to the same member of the Syndicate through whom the original Bid was placed and obtain a revised TRS; (h) If your Bid is for Rs. 50,000 or more, ensure that you mention your PAN allotted under the I.T. Act and ensure that you have attached a copy of your PAN card or PAN allotment letter with the Bid cum Application Form. In case the PAN has not been allotted, mention Not Allotted in the appropriate place. (See section titled Issue Procedure - PAN on page [] of this Draft Red Herring Prospectus.); and (i) 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 if you are prohibited from doing so under the law of your local jurisdiction; b) Do not Bid for lower than minimum Bid size; c) Do not Bid or revise the Bid to less than the lower end of the Price Band or higher than the higher end of the Price Band; d) Do not Bid on another Bid-cum-Application Form after you have submitted a Bid to the members of the Syndicate; e) Do not pay bid amount in cash, through Stock invest, by Money Order or by Postal Order; f) Do not Bid at cut off price (for QIB Bidders and Non-Institutional Bidders for whom the Bid Amount exceeds Rs. 1,00,000); g) Do not fill up the Bid-cum-Application Form for an amount that exceeds the investment limit or maximum number of Equity Shares that can be held by a Bidder under the applicable law; h) Do not send Bid-cum-Application Form by post; instead submit the same to a member of the Syndicate only; and i) Do not provide your GIR number instead of your PAN. Instructions for Obtaining the Bid-Cum-Application Form Bidders can obtain Bid-cum-Application Forms and / or Revision Forms from the Syndicate Member(s). 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 (white in colour for Resident Indians and blue in colour for NRI or FII or foreign venture capital fund registered with SEBI applying on repatriation basis).

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(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. (c) The Bids from the Retail Individual Bidders must be for a minimum of [] Equity Shares and in multiples of [] thereafter subject to a maximum of Rs. 1,00,000. (d) For Non-Institutional and QIB Bidders, Bids must be for a minimum of such number of Equity Shares that the Bid amount exceeds Rs. 1,00,000 and in multiples of [] Equity Shares thereafter. Bids cannot be made for more than the size of the Issue. 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 applicable laws or regulations. (e) In single name or in joint names (not more than three and in the same order as their Depository Participant details). (f) 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. Bids by Eligible Employees of our Company For the purpose of the Employee Reservation Portion, Eligible Employee means permanent employees including Executive Directors of our Company, who are Indian Nationals, are based in India and are physically present in India on the date of submission of the Bid- cumApplication Form. Bids under Employee Reservation Portion by Eligible Employees shall be. Made only in the prescribed Bid-cum-Application Form or Revision Form (i.e. green in colour form). Eligible Employees, as defined above, should mention the following at the relevant place in the Bid-cum-Application Form, in addition to other details contained therein: o Employee Number

The sole/ first bidder should be Eligible Employees as defined above. Only Eligible Employees would be eligible to apply in this Issue under the Employee Reservation Portion. Only those Bids by Eligible Employees, which are received at or above the Issue Price, would be considered for allocation under this category. Eligible Employees who apply or bid for securities of or for a value of not more than Rs. 100,000 in any of the bidding options can apply at Cut-Off. This facility is not available to Eligible Employees whose minimum Bid amount exceeds Rs. 100,000. The maximum bid in this category by any Eligible Employee cannot exceed Rs.25,000,000. Bid/ Application by Eligible Employees can also be made in the Net Issue to the Public Portion and such Bids shall not be treated as multiple Bids.

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If the aggregate demand in this category is less than or equal to [] Equity Shares at or above the Issue Price, full allocation shall be made to the Eligible Employees to the extent of their demand. Under-subscription in this category would be added back to the Non-Institutional and Retail Individual Bidders category in the ratio of 50:50. In case of under-subscription in the Net Issue to the Public Portion, spill over to the extent of under-subscription shall be permitted from the Employee Reservation Portion. If the aggregate demand in this category is greater than [] Equity Shares at or above the Issue Price, the allocation shall be made on a proportionate basis. For the method of proportionate basis of allocation, refer to Para Basis of Allotment or Allocation on page [] of this Draft Red Herring Prospectus.

Bids by Shareholders of our Group Company Bids under Reservation Portion for shareholders of Group Company shall be. Made only in the prescribed Bid-cum-Application Form or Revision Form (i.e. pink in colour form). Eligible Shareholders, as defined above, should mention the following at the relevant place in the Bid-cum-Application Form: The sole/ first bidder should be Eligible shareholder as defined above. Bids by Eligible shareholders will have to bid like any other Bidder. Only those bids, which are received at or above the Issue Price, would be considered for allocation under this category. Eligible Shareholders who apply or bid for securities of or for a value of not more than Rs. 100,000 in any of the bidding options can apply at Cut-Off. This facility is not available to other Eligible Shareholder whose minimum Bid amount exceeds Rs. 100,000. The maximum bid in this category by any Eligible shareholder cannot exceed Rs. 50,000,000. Bid/ Application by Eligible shareholder can be made also in the Net Issue to the Public and such bids shall not be treated as multiple bids. If the aggregate demand in this category is less than or equal to [] Equity Shares at or above the Issue Price, full allocation shall be made to the Eligible shareholders to the extent of their demand. Under subscription in this category would be added back to the Non-Institutional and Retail Individual Bidders category in the ratio of 50:50. In case of under-subscription in the Net Issue, spill over to the extent of under-subscription shall be permitted from the Shareholders Reservation Portion. If the aggregate demand in this category is greater than [] Equity Shares at or above the Issue Price, the allocation shall be made on a proportionate basis. For the method of proportionate basis of allocation, refer to para Basis of Allocation on page [] of this Red Herring Prospectus. This is not an issue for sale within the United States of any equity shares or any other security of our Company. Securities of our Company, including any offering of its equity shares, may not be offered or sold in the United States in the absence of registration under U.S. securities laws or unless exempt from registration under such laws. Bidder's Bank Account Details Bidders should note that on the basis of name of the Bidders, Depository Participants Name, Depository Participants 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 Bidders bank account details. These bank account details would be printed on the Refund order, if any, to be sent to the Bidders. Hence, Bidders are advised to

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immediately update their bank account details as appearing on the records of the Depository Participant. Please note that failure to do so could result in delays in credit of refunds to Bidders at the Bidders sole risk and neither the BRLM nor our Company shall have any responsibility and undertake any liability for the same. Bidders Depository Account Details It is mandatory for all the bidders to get their equity shares in the dematerialised form. All bidders should mention their depository participant's name, depository participant's identification number and beneficiary account number in the bid-cumapplication form. Investors must ensure that the name given in the bid-cumapplication 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. Bidders should note that on the basis of name of the Bidders, Depository Participants name, Depository Participants 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 demographic details of the Bidders such as address, bank account details for printing on refund orders and occupation (hereinafter referred to as Demographic Details). Hence, Bidders should carefully fill in their Depository Account details in the Bid-cumApplication Form. These Demographic Details would be used for all correspondence with the Bidders including mailing of the refund orders/ CANs/Allocation Advice and printing of Bank particulars on the refund order and the Demographic Details given by Bidders in the Bid-cum-Application Form would not be used for these purposes by the Registrar. Hence, Bidders are advised to update their Demographic Details as provided to their Depository Participants. 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/ Allocation Advice/ CANs would be mailed at the Bidder as per the Demographic Details received from the Depositories. Bidders may note that delivery of refund orders/ allocation advice/ CANs 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 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. In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Bidders (including the order of names of joint holders), the Depository Participants identity (DP ID) and the beneficiarys identity, then such Bids are liable to be rejected. Investors should note that the refund cheques will be overprinted with details of bank account as per the details received from the depository. Bids under Power of Attorney In case of bids made pursuant to a power of attorney or by limited companies, corporate bodies or registered societies, 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

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& Articles of Association and/or Bye Laws must be lodged along with the Bid-cumApplication Form. Failing this, the Issuer reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefor. In case of Bids made pursuant to a Power of Attorney by FIIs, 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 their SEBI registration certificate must be submitted with the Bid-cum-Application Form. Failing this, we reserve the right to accept or reject any Bid in whole or in part, in either case without assigning any reason therefor. In case of Bids made by insurance companies registered with Insurance Regulatory and Development Authority, a certified copy of the Certificate of Registration issued by Insurance Regulatory and Development Authority must be submitted with the Bid-cum-Application Form. Failing this, we reserve the right to accept or reject any Bid in whole or in part, in either case without assigning any reason therefor. In case of Bids made by provident fund with the minimum corpus of Rs. 2500 Lacs and pension fund with the minimum corpus of Rs. 2500 Lacs, a certified copy of certificate from a chartered accountant certifying the corpus of the provident fund/ pension fund must be lodged with the Bid-cum-Application Form. Failing this, we reserve the right to accept or reject any Bid in whole or in part, in either case without assigning any reason therefor. We, in our absolute discretion, reserve 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 as our Company/BRLM may deem fit. Bids by NRIs NRI Bidders will have to comply with the following: 1. Individual NRI Bidders can obtain the Bid-cum-Application Forms from our registered office or from members of the Syndicate or the Registrars to the Issue. 2. NRI Bidders may please note that only such Bids as are accompanied by payment in free foreign exchange shall be considered for allotment. NRIs who intend to make payment through Non-Resident Ordinary (NRO) accounts shall use the Bid-cumApplication Form meant for Resident Indians (white in colour). Bids by non-residents including NRIs, FIIs and Foreign Venture capital Funds registered with SEBI on a repatriation basis. Bids and Revision to Bids must be made: 1) On the prescribed Bid-cum-Application Form or Revision Form, as applicable (blue 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) 3) NRIs for a Bid Amount of up to Rs. 1,00,000 would be considered under the Retail Individual Bidders portion for the purposes of allocation and Bids for a Bid amount of more than Rs. 1,00,000 would be considered under the Non-Institutional Bidders portion for the purposes of allocation; by FIIs for a minimum of such number of Equity Shares and in multiples of [] thereafter that the Bid Amount exceeds Rs. 1,00,000; for further details see Maximum and Minimum Bid Size at page[] of this Draft Red Herring Prospectus.

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4) In the names of individuals, or in the names of FIIs but not in the names of minors, OCBs, firms or partnerships, foreign nationals (excluding NRIs) or their nominees. 5) 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 U.S. 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. We will not be responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency. It is to be distinctly understood that there is no reservation for Non Residents, NRIs, FIIs and Foreign Venture Capital Funds and all Non Residents, NRI, FII and Foreign Venture Capital Fund applicants will be treated on the same basis with other categories for the purpose of allocation. Payment Instructions We shall open an Escrow Account of our Company with the Escrow Collection Banks for the collection of the Bid Amounts payable upon submission of the Bid-cum-Application Form. The BRLM and Syndicate Member(s) shall also open Escrow Accounts of the Syndicate with one or more of the Escrow Collection Banks for the collection of the margin amounts payable upon submission of the Bid-cum-Application Form and for amounts payable pursuant to allocation in the Issue. Each Bidder shall draw a cheque or demand draft for the amount payable on the Bid and/or on allocation as per the following terms: Payment into Escrow Account to the Issue 1. The Bidders for whom the applicable Margin Amount is equal to 100% shall, with the submission of the Bid-cum-Application Form, draw a payment instrument for the Bid Amount in favour of the Escrow Account of our Company and submit the same to the member of the Syndicate. 2. In case the above Margin Amount paid by the Bidders during the Bidding Period is less than the Issue Price multiplied by the Equity Shares allocated to the Bidder, the balance amount shall be paid by the Bidders into the Escrow Account of our Company within the period specified in the CAN which shall be subject to a minimum period of two days from the date of communication of the allocation list to the members of the Syndicate by the BRLM. 3. The payment instruments for payment into the Escrow Account of our Company should be drawn in favour of: (i) In case of Resident Bidders: "Escrow Account - Janki Corp Limited - Public Issue" (ii) In case of Non Resident Bidders: "Escrow Account - Janki Corp Limited - Public Issue - NR" (iii) In case of Eligible Employees: "Escrow Account - Janki Corp Limited - Public Issue - Eligible Employee" (iv) In case of Eligible Shareholders of Group Company: "Escrow Account - Janki Corp Limited - Public Issue - Eligible Shareholders"

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In case of Bids by NRIs applying on 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. Payment will not be accepted out of a Non-Resident Ordinary (NRO) Account of a Non-Resident bidder bidding on a 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 Account. 4. In case of Bids by FIIs, the payment should be made out of funds held in a Special Rupee Account along with documentary evidence in support of the remittance. Payment by drafts should be accompanied by a bank certificate confirming that the draft has been issued by debiting the Special Rupee Account. 5. Where a Bidder has been allocated a lesser number of Equity Shares than what 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 Escrow Account of our Company. 6. The monies deposited in the Escrow Account of our Company will be held for the benefit of the Bidders till the Designated Date. 7. On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow Account of our Company as per the terms of the Escrow Agreement into the Public Issue Account with the Bankers to the Issue. 8. On the Designated Date and no later than 15 days from the Bid/Issue Closing Date, the Escrow Collection Bank shall also refund all amounts payable to unsuccessful Bidders and also the excess amount paid on Bidding, if any, after adjusting for allocation to the Bidders. Payments should be made by cheques or demand drafts 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 centre 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. Payment by Stock invest In terms of Reserve Bank of India Circular No. DBOD No. FSC BC 42/24.47.00/2003-2004 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 stock invest will not be accepted. 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 BRLM/Syndicate Member(s) at the time of submitting the Bid-cum-Application Form. The BRLM/Syndicate Member(s) shall collect 10% or 100% margin amount as may be applicable at the time of submission of the Bid-cum-Application Form and Revision Form. No separate receipts shall be issued for the money payable on submission of Bid-cumApplication Form or Revision Form. However, the collection centre of the BRLM/Syndicate

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Member(s) 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. 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 will be made out in favour of the Bidder whose name appears first in the Bidcum-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. 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 in single or joint names will be deemed to be multiple bids if the sole and/ or first bidder is one and the same. 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 Employees or Shareholders of Group Company can also be made in the Net Issue to the public category and such Bids will not be considered to be multiple bids. We reserve the right to reject, in our absolute discretion, all or any multiple Bids in any or all categories. Permanent Account Number (PAN) Where Bid(s) is/are for Rs.50,000 or more, the Bidder or in the case of a Bid in joint names, each of the Bidders, should mention his/her Permanent Account Number (PAN) allotted under the I.T. Act. The copy of the PAN card or PAN allotment letter is required to be submitted with the application form. 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. In case the Sole/First Bidder and Joint Bidder(s) is/are not required to obtain PAN, each of the Bidder(s) shall mention Not Applicable and in the event that the sole Bidder and/or the joint Bidder(s) have applied for PAN which has not yet been allotted each of the Bidder(s) should mention Applied for in the Bid-cum-Application Form. Further, where the Bidder(s) has/have mentioned Applied for or Not Applicable, the Sole/First Bidder and each of the Joint Bidder(s), as the case may be, would be required to submit Form 60(Form of declaration to be filed by a person who does not have a permanent account number and who enters into any transaction specified in rule 114B) or Form 61 (form of declaration to be filed by a person who has agricultural income and is not in receipt of any other income chargeable to income tax in respect of transactions specified in rule 114B), as may be applicable, duly filled along with a copy of any one of the following documents in support of the address: (a)Ration Card (b) Passport (c) Driving License (d) Identity Card issued by any institution (e) Copy of the electricity bill or telephone bill showing residential address (f) Any document or communication issued by any authority of the Central Government, State Government or local bodies showing residential address (g)Any other documentary evidence in support of address given in the declaration. It may be noted that Form 60 and Form 61 have been amended vide a notification issued on December 1, 2004 by the Ministry of Finance, Department of Revenue, Central Board of Direct

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Taxes. All Bidders are requested to furnish, where applicable, the revised Form 60 or 61 as the case may be. Unique Identification Number (UIN) With effect from July 1, 2005, SEBI has decided to suspend all fresh registrations for obtaining Unique Identification Number (UIN) and the requirement to contain/quote UIN under the MAPIN Regulations/Circulars vide its circular MAPIN/Cir- 13/2005. Right to Reject Bids Our Company and the BRLM reserve the right to reject any Bid without assigning any reason therefor in case of QIBs. In case of Non-Institutional Bidders and Retail Individual Bidders and Employees, we would have a right to reject bids based on technical grounds. Consequent refunds shall be made by cheque or pay order or draft and will be sent to the Bidders address at the Bidders risk. Grounds for Technical Rejections Bidders are advised to note that Bids are liable to be rejected on technical grounds, including the following:1. Amount paid doesnt tally with the amount payable for the highest value of Equity Shares bid for; 2. Bank account details (for refund) are not given; 3. Age of First Bidder not given; 4. Bid by minor; 5. PAN Number not given if Bid is for Rs. 50,000 or more; 6. Bids for lower number of Equity Shares than specified for that category of investors; 7. Bids at a price less than the lower end of the Price Band; 8. Bids at a price more than the higher end of the Price Band; 9. Bids at cut-off price by Non-Institutional Bidders and QIB Bidders; 10. Bids for number of Equity Shares, which are not in multiples of []; 11. Category not ticked; 12. Multiple bids as defined in this Draft Red Herring Prospectus; 13. In case of Bid under power of attorney or by limited companies, corporate, trust etc., relevant documents are not submitted; 14. Bids accompanied by Stock invest/money order/ postal order/ cash; 15. Bids not duly signed by the sole/joint Bidders; 16. Bid-cum-Application Form does not have the stamp of the Syndicate Member(s); 17. Bid-cum-Application Form does not have Bidders depository account details; 18. Bid-cum-Application Forms are not submitted by the Bidders within the time prescribed as per the Bid-cum-Application Form, Bid/Issue Opening Date advertisement and this Draft Red Herring Prospectus and as per the instructions in this Draft Red Herring Prospectus and the Bid-cum-Application Form; 19. Bids for amounts greater than the maximum permissible amounts prescribed by the relevant regulations; 20. In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Bidders (including the order of names of joint holders), the depository participants identity (DP ID) and the beneficiarys identity; 21. Bids by OCBs; 22. Bids by U.S. persons other than qualified institutional buyers as defined in Rule 144A of the Securities Act. 23. Bids by NRIs not disclosing their residential status.

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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 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 tripartite agreements have been signed among our Company, the Depositories and the Registrar: 1. An Agreement dated [] among our Company, NSDL and Bigshare Services Private Limited. 2. An Agreement dated [] among our Company, CDSL and Bigshare Services Private Limited All bidders can seek allotment only in dematerialized mode. Bids from any Bidder without the following details of his or her depository account are liable to be rejected: 1. A Bidder applying for Equity Shares must have at least one beneficiary account with either of the Depository Participants of NSDL or CDSL prior to making the Bid.

2. The Bidder must necessarily fill in the details (including the beneficiary account number and Depository Participants Identification number) appearing in the Bid-cum-Application Form or Revision Form. 3. Equity Shares allotted to a Bidder will be credited in electronic form directly to the beneficiary account (with the Depository Participant) of the Bidder.

4. 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 depository account of the Bidder(s). 5. 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. 6. The Bidder is responsible for the correctness of his or her demographic details given in the Bid-cum-Application Form vis--vis those with his/her Depository Participant. 7. It may be noted that Equity Shares in electronic form can be traded only on the stock exchanges having electronic connectivity with NSDL or CDSL. BSE and NSE, where Equity Shares are proposed to be listed, are connected to NSDL and CDSL. 8. The trading of our Equity Shares would only be in dematerialized form for all investors in the demat segment of BSE and NSE. 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-cumApplication Form number, number of Equity Shares applied for, date of Bid Form, name and address of the member of the Syndicate where the Bid was submitted and cheque or draft number and issuing bank thereof.

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Pre-Issue and Post Issue Related Problems We have appointed Mr. Paras Pangaria, Company Secretary, as the Compliance Officer and he may be contacted in case of any pre-Issue or post-Issue-related problems. He can be contacted at the following address: Mr. Paras Pangaria, Company Secretary, Janki Corp Limited, 39/C, 1st Floor, Raj Industrial Complex, Military Road, Marol, Andheri (E), Mumbai 400 059. Telefax: 91-22-2859 3721 E-Mail: ipo@jankicorplimited.com Disposal of Applications and Application Money We shall ensure despatch of Allotment advice or refund orders and giving of benefit to the beneficiary account with Depository Participants and submission of the Allotment and Listing documents to the stock exchanges within two working days of finalization of the basis of allotment of Equity Shares. We shall ensure the despatch of refund orders, if any, of value up to Rs. 1,500, if any, Under Certificate of Posting and despatch of refund orders above Rs. 1,500, if any, by registered post or speed post at the sole or First Bidder's sole risk. We shall use our best efforts to ensure that all steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges, where the Equity Shares are proposed to be listed are taken within seven working days of finalization of the basis of allotment. In accordance with the Companies Act, the requirements of the Stock Exchanges and SEBI Guidelines, we further undertake that: i) Allotment of Equity Shares shall be made only in dematerialized form within 15 days of the Bid/Issue Closing Date; We would ensure despatch of refund orders within 15 days of the Bid/Issue Closing Date; and We agree that allotment of securities offered to the public shall be made not later than 15 days of the closure of public issue. We further agrees that we shall pay interest @15% per annum if the allotment letters/ refund orders have not been despatched to the applicants 73 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 within 15 days from the date of the closure of the issue.

ii)

iii)

We will provide adequate funds required by the Registrars to the Issue for despatch of refund orders or allotment advice. Refunds will be made by cheque, pay orders or demand drafts drawn on a bank appointed by our Company as a refund banker 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.

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Basis of Allotment or Allocation 1. For Eligible Employees Bids received from the Eligible Employees at or above the Issue Price shall be grouped together to determine the total demand under this category. The allocation to all the successful Eligible Employees will be made at the Issue Price. If the aggregate demand in this category is less than or equal to [] Equity Shares at or above the Issue Price, full allocation shall be made to the Eligible Employees to the extent of their demand. If the aggregate demand in this category is greater than [] Equity Shares at or above the Issue Price, the allocation shall be made on a proportionate basis up to a minimum of [] Equity Share. For the method of proportionate basis of allocation, refer below. Only Eligible Employees during the period commencing from the date of filing the Red Herring Prospectus with RoC and ending with the Bid/Issue Closing Date are eligible to apply. 2. For Shareholders of our Group Company, JPL Industries Limited, resident in India (Shareholders of Group Company) for purposes of this paragraph. Bids received from the Shareholders of Group Company at or above the Issue Price shall be grouped together to determine the total demand under this category. The allocation to all the successful Shareholders of Group Company will be made at the Issue Price. If the aggregate demand in this category is less than or equal to [] Equity Shares at or above the Issue Price, full allocation shall be made to the Shareholders of Group Company to the extent of their demand. If the aggregate demand in this category is greater than [] Equity Shares at or above the Issue Price, the allocation shall be made on a proportionate basis up to a minimum of [] Equity Share. For the method of proportionate basis of allocation, refer below. Only Shareholders of Group Company during the period commencing from the date of filing the Red Herring Prospectus with RoC and the Issue Closing Date are eligible to apply.

3. For Retail Individual Bidders Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped together to determine the total demand under this portion. The allocation to all the successful Retail individual Bidders will be made at the Issue Price. The Net Issue size less allocation to Non-Institutional Bidders and QIBs shall be available for allocation to Retail Individual Bidders who have bid in the Issue at a price, which is equal to or greater than the Issue Price. If the aggregate demand in this category is less than or equal to [] Equity Shares at or above the Issue Price, full allocation shall be made to the Retail Individual Bidders to the extent of their demand. If the aggregate demand in this category is greater than [] Equity Shares at or above the Issue Price, the allocation shall be made on a proportionate basis up to a minimum of [] Equity Shares or in multiples of one Equity Share. For the method of proportionate basis of allocation, refer below. 4. For Non Institutional Bidders Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together to determine the total demand under this portion. The allocation to all successful Non-Institutional Bidders will be made at the Issue Price.

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The Issue size less allocation to QIBs and Retail Individual Bidders shall be available for allocation to Non- Institutional Bidders who have bid in the Issue at a price, which is equal to or greater than the Issue Price. If the aggregate demand in this category is less than or equal to [] Equity Shares at or above the Issue Price, full allocation shall be made to Non-Institutional Bidders to the extent of their demand. In case the aggregate demand in this category is greater than [] Equity Shares at or above the Issue Price, allocation shall be made on a proportionate basis up to a minimum of [] Equity Shares or in multiples of one Equity Share. For the method of proportionate basis of allotment refer below.

5. For QIB Bidders Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all the QIB Bidders will be made at the Issue Price. The Issue size less allocation to Non-Institutional Portion and Retail Portion shall be available for allocation to QIB Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price. Allotment shall be undertaken in the following manner: (a) In the first instance allocation to Mutual Funds for up to 5% of the QIB portion shall be determined as follows: i. In the event that Mutual Fund bids exceed 5% of the QIB Portion, allocation to Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB Portion. ii. In the event that the aggregate demand from Mutual Funds is less than 5% of the 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 to all QIB Bidders as set out in (b) below; (b) In the second instance allocation to all QIBs shall be determined as follows: i. In the event that the oversubscription in the QIB Portion, all QIB Bidders who have submitted Bids above the Issue Price shall be allotted Equity Shares on a proportionate basis for up to 95% of the QIB Portion. ii. 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. iii. Under-subscription below 5% of the QIB Portion, if any, from Mutual Funds, would be included for allocation to the remaining QIB Bidders on a proportionate basis. The aggregate allocation to QIB Bidders shall not be less than [] Equity Shares. Method of Proportionate Basis of Allocation in the Retail and Non-Institutional Portions Bidders will be categorized according to the number of Equity Shares applied for by them. The total number of Equity Shares to be allotted to each portion 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 shares applied for) multiplied by the inverse of the over-subscription ratio. 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 portion multiplied by the inverse of the over-subscription ratio.

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In all Bids where the proportionate allotment is less than [] Equity Shares per Bidder, the allotment shall be made as follows: Each successful Bidder shall be allotted a minimum of [] Equity Shares; and 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 portion is equal to the number of Equity Shares calculated in accordance with (b) above.

If the proportionate allotment to a Bidder works out to a number that is more than [] but is a fraction, the fraction would be rounded off to the higher whole number if that decimal is 0.5 or more. If that decimal is lower than 0.5, it would be rounded off to the lower whole number. Allotment to all Bidders in such categories would be arrived at after such rounding off. If the Equity Shares allocated on a proportionate basis to any portion 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 Equity 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. Letters of Allotment or Refund Orders We shall give credit to the beneficiary account with Depository Participants within two working days from the date of the finalization of basis of allocation. We shall ensure dispatch of refund orders, if any, of value up to Rs. 1,500 by Under Certificate of Posting, and shall dispatch refund orders above Rs. 1,500, if any, by registered post or speed post at the sole or First Bidder's sole risk within 15 days of the Bid/Issue Closing Date. The permissible modes of making refunds are as follows: (a) In case of applicants residing in any of the centres where clearing houses are managed by the Reserve Bank of India by crediting of refunds to the bank accounts of applicants through electronic transfer of funds by using ECS (Electronic Clearing Service), Direct Credit, RTGS (Real Time Gross Settlement) or NEFT (National Electronic Funds Transfer), as is for the time being permitted by the Reserve Bank of India; (b) In case of other applicants by despatch of refund orders by registered post, where the value is Rs 1500/- or more, or under certificate of posting in other cases, (subject however to postal rules); and (c) In case of any category of applicants specified by the Board crediting of refunds to the applicants in any other electronic manner permissible under the banking laws for the time being in force which is permitted by the Board from time to time.) In accordance with the Companies Act, the requirements of the Stock Exchanges and SEBI Guidelines, we undertake that: Allotment shall be made only in dematerialized form within 15 days from the Bid/Issue Closing Date; Dispatch of refund orders shall be done within 15 days from the Bid/Issue Closing Date; and We agree that allotment of securities offered to the public shall be made not later than 15 days of the closure of public issue. We further agrees that we shall pay interest @15% per annum if the allotment letters/ refund orders have not been despatched to the applicants 73 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 within 15 days from the date of the closure of the issue.

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Undertakings by Our Company We undertake as follows: (i) that the complaints received in respect of the Issue shall be attended to by us expeditiously and satisfactorily. (ii) that all steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the securities are to be listed will be taken within seven working days of finalisation of basis of allotment. (iii) that we shall apply in advance for the listing of equities on the conversion of debentures/ bonds. (iv) that funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be made available to the Registrar to the issue by us. (iv)(a) that where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 30 days or 15 days of closure of the issue, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund. (v) that the promoters contribution in full, wherever required, shall be brought in advance before the Issue opens for public subscription and the balance, if any, shall be brought in pro rata basis before the calls are made on public. (vi) that the certificates of the securities/ refund orders to the non-resident Indians shall be despatched within specified time. (vii) that no further issue of securities shall be made till the securities offered through this prospectus are listed or till the application moneys are refunded on account of non-listing, under subscription, etc. Utilization of Issue Proceeds Our Board of Directors 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 the Issue as referred above shall be disclosed under an appropriate separate head in the balance sheet of our Company indicating the purpose for which such monies have been utilized; (c) details of all unutilized monies out of the Issue, if any, shall be disclosed under the appropriate separate head in the balance sheet of our Company indicating the form in which such unutilized monies have been invested. Our Board of Directors further certifies that: (i) the utilization of monies received under promoters contribution and from firm allotments and reservations shall be disclosed under an appropriate head in the balance sheet of the Company, indicating the purpose for which such monies have been utilized; and (ii) the details of all unutilized monies out of the funds received under promoters contribution and from firm allotments and reservations shall be disclosed under a separate head in the balance sheet of the issuer company, indicating the form in which such unutilized monies have been invested.

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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. Restrictions on Foreign Ownership of Indian Securities Foreign investment in Equity Shares and convertible debentures of an Indian company is regulated through the foreign direct investment policy of the GoI (FDI Policy) and by the Reserve Bank of India (RBI) as per the provisions of the Foreign Exchange Management Act, 1999 (FEMA) and rules, regulations and guidelines there under. While the FDI Policy lays down the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA, along with rules, regulations and guidelines there under, regulates the precise manner in which such investment may be made. Under the FDI Policy, unless specifically restricted, foreign direct investment is freely permitted in all sectors of Indian economy and without any prior approvals, but persons resident outside India are required to follow prescribed procedures for making such investment. In the event an approval of the GoI is required, the same may be obtained through the Foreign Investment Promotion Board (FIPB). By way of Circular No. 53 dated December 17, 2003, the RBI has permitted FIIs to subscribe to Equity Shares of an Indian company in a public offer without prior RBI approval, so long as the price of Equity Shares to be issued is not less than the price at which Equity Shares are issued to residents.

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MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF OUR COMPANY The Authorized capital of our Company is Rs. 5000 Lacs divided into 500 Lacs Equity Shares of Rs. 10/- each. Pursuant to Schedule II of the Companies Act and the SEBI Guidelines, the main provisions of the Articles of Association of our Company are detailed below: (i) Preliminary Matter 1. Contents The regulations contained in the table 'A' in Schedule-I of the Companies Act, 1956 shall not apply to this Company but the regulations for the management of the company and for observance of the members and their representatives shall be subjected to any exercise of the statutory powers of Company in reference to the repeal or alterations of or additions to its regulations by special resolution as prescribed by the said Companies Act, 1956 be such as are contained in these Articles.

(ii) Articles relating to rights of members regarding voting, dividend, lien on shares, process for modification of such rights and forfeiture of shares
VOTES OF MEMBERS Title of Article Members in arrears not to vote Article number and contents 67. No member shall be entitled to vote either personally or by proxy for another member, at any General Meeting or meeting of a class of sharesholders if he has shares registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the Company has any right or lien and has exercised the same. 68. On a show of hands, every holder of equity shares entitled to vote and present in person or by proxy shall have one vote and on a poll the voting right of every holder of equity shares whether present in person or by proxy, shall be in proportion to his share of the paid up equity capital of the Company. 69. On a poll taken at a meeting of the Company, a member entitled to more than one vote or his proxy or other person entitled to vote for him, as the case may be, need not if he votes, use all his votes, or cast in the same way all the votes he uses.

Voting rights of members

Casting of votes by a member entitled to more than one votes How member non composments and minor may vote

70. 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, if any member be a minor the vote in respect of his shares may be cast by his guardian or any one of his guardians, if more than one. Voting in 71.(i) Subject to the provisions of these Articles votes may be given either person or by personally or by proxy. A corporation being a member may vote by proxy representative duly authorised in accordance with Section 187 of the Act, and such representative shall be entitled to speak, demand a poll, vote, appoint a proxy and in all other matters reckoned as a member for all purposes.

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Appointment of proxy

Deposit of Instrument of appointment

Form of Proxy

Validity of vote given by proxy notwithstandin g death of member etc. Time for objection to vote Chairman of any meeting to be the judge of validity of any vote Minutes of general meetings and inspection therof by member

(ii) Every proxy (whether a member or not) shall be appointed in writing under the hand of the appointer or his attorney or if such appointer is a corporation under the Common seal of such corporation or under the hand of its officer or an attorney, duly authorised by it and any committee or guardian may appoint such proxy. The proxy so appointed shall not have any right to speak at the meetings. (iii) 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 the Company not less than forty-eight hours before the time for holding the meeting at which the person named in the instrument proposes to vote and in default the instrument of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiration of twelve month from the date of its execution. (iv) Every instrument of proxy whether for a specified meeting or otherwise shall, as nearly as circumstances will admit, be in either of the forms set out in Schedule IX to the Act. (v) A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death of the principal or revocation of the proxy or of any power of attorney under which such proxy was signed, or the transfer shall have been received at the office before the meeting. 72.(i) No objection shall be made to the validity of any vote, except at the meeting or poll at which such vote shall be tendered and every vote, whether given personally or by proxy, not disallowed at such meeting or poll shall be deemed valid for all purposes of such meeting or poll whatsoever. (ii) The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at such meeting. The Chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll.

73. The Company shall cause to be kept minutes of all proceedings of general meetings which shall contain a fair and correct summary of the proceedings thereat and a book containing such minutes shall be kept at the registered office of the Company and shall be open during business hours for such periods not being less in the aggregate than two hours in each day as the directors may determine, for inspection of any member without charge. The minutes aforesaid shall be kept in accordance with the provisions of section 193 of the Act.

DIVIDENDS AND RESERVES How Profits 113. Subject to the rights of members entitled to shares (if any) with shall be prefererential or special rights attached thereto, the profits of the Company which it shall from time to time determine to divide in respect of any year or divisible other period shall be applied in the payment of a dividend on the equity shares of the Company but so that a partly paid-up share shall only entitle the holder with respect thereto such proportion of the distribution upon a fully paid-up share as the amount paid thereon bears to the nominal amount of such share and so that where capital is paid-up in advance of calls upon the following that same shall carry interest, such capital shall not with carrying interest confer a right to participate in profit. Declaration of 114. The Company in General Meeting may declare dividends to be paid to dividends the members according to their rights and interest out of the profits and may

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Ascertainment of amount available for dividend

What to be deemed net profit. Interim 119. The director may from time to time pay to the members such interim dividend dividends as in their judgement the position of the Company justifies. 120. The Directors may retain dividends on which the Company has a lien and may apply the same in or towards satisfaction of debts liabilities or engagements in respect of which the lien exists. Dividend and 121. Any General Meeting declaring a dividend may make a call on the call together members of such amount as the meeting fixes, but so that the call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend and the dividend may, if so arranged between the Company and the members, be set off against call. No members 122. No member shall be entitled to receive payment of any interest or receive dividend in respect of his shares, whilest any money may be due or owing dividend whilst from him to the Company in respect of such share or shares or otherwise indebt to the however either alone or jointly with any other persons and the Board may Company and deduct from the interest or dividend payable to any member all sums of of money so due from him to the Company. right reimbursement thereout Transfer of 123. A transfer of shares shall not pass the right to any dividend declared shares must thereon before the registration of transfer. be registered Dividend how 124.(a) Unless otherwise directed any dividend may be paid by a cheque or remstied warrant or by a pay slip or receipt having the force of cheque or warrant sent through the post to the registered address of the member or person entitled or in case of joint-holders to that one of them first named in the Register of Member in respect of the joint-holdings. Every such cheque or warrant shall be made payable to the order of the person to whome it is sent. The Company shall not be liable or responsible for any cheque or warrant or pay slip or receipt lost in transmission or for any dividend lost to the member or person entitled thereto by any forged endorsement of any cheque or warrant or forged signature of any pay slip or receipt or the fraudulent recovery of the dividend by any other means. If several persons are registered as jointholders of any shares, any one of them can give effectual receipts for any

fix the time for payment. 115. No larger dividend shall be declared than is recommended by the Directors but the company in General Meeting may declare a smaller dividend. 116. No dividend shall be payable except out of the profits of the Company of the year or any other undistributed profits. 117. When any assets, business or property is bought by the Company as from a past date upon terms that the Company shall as from the date take the profits and bear the losses thereof such profits and losses as the case may be shall, at the discretion of the Directors, be so credited or debited wholly or in part to the Profit and Loss Account and in that case the amounts so credited or debited shall for the purpose of ascertaining the fund available for dividend be treated as a profit or loss arising from the business of the Company and available for dividend Accordingly, if any shares or securities are purchased with dividend or interest, the dividend or interest when paid may at the discretion of the directors be treated as revenue and it shall not be obligatory to capitalise the same or any part thereof. 118. The declaration of the directors as to amount of the net profits of the company shall be conclusive.

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dividends or other moneys payable in respect thereof. Unpaid Dividend Account (b) Subject to the provisions of Section 205A, 205B and 206A of the Companies Act, 1956, the unpaid or unclaimed dividend amount shall be transferred by the Company to a special account to be opened in any scheduled bank to be called "Unpaid Dividend Account" of the Company.

FORFEITURE & L I E N If call or instalment not paid notice must given 26. If any members fails to pay any call or instalment on or before the day appointed for the payment of the same the directors may at any time thereafter during such time as the call or instalment remains unpaid serve a notice on such member requiring him to pay the same, together with any interest that may have accrued and all expenses that may have been incurred by the company by reason of such non payment. 27. The notice shall name a day (not being less than fourteen days from the date of the notice) and a place or places on and at which call or instalment and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the event of non-payment of at or before the time and at the place appointed, the shares in respect of which such call was made or instalment is payable will be liable to be forfeited. 28. If the requisitions of any such notice as aforesaid be not complied with any shares in respect of which such notice has been given may at any time thereafter before payment of all calls or instalments, interests and expenses due in respect thereof, be forfeited, by a resolutions of the Directors to that effect. 29. When any share shall have been so forfeited, notice of the resolution shall be given to the member in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture with the date thereof shall forthwith be made in the Register but no forfeiture shall be in any manner invalidated by any commission or neglect to give such notice or to make such entry as aforesaid. 30. Any share so forfeited shall be deemed to be property of the Company and the directors may sell, re-allot or otherwise dispose of the same in such manner as they think fit.

From of notice

If notice not complied with shares may be forfeiture Notice after forfeiture

Forfeited share to become property of the company. Power to annual forfeiture Arrears to be paid notwithstanding forfeiture

31. The Directors may at any time before any share so forfeited shall have been sold, re-allot or therwise dispose off annul the forfeiture thereof on such conditions as they think fit. 32. Any member whose shares have been forfeited shall notwithstanding be liable to pay and shall forthwith pay to the Company all call, instalments, interest and expenses, owing upon/to in respect of such shares at the time of the forfeiture together with the interest thereon, from the time of forfeiture until payment at 12 percent per annum and the Directors may enforce the payment thereof, without any deduction or allowance for the value of the shares at the time of forfeiture but shall not be under any obligation to do so. Effect of 33. The forfeiture of a share shall involve the extinction of all interest in and Forfeiture also of all claims and demands against the company in respect of the share and all other rights incidental to the share, except only such of those rights as by these Articles are expressly saved. Evidence of 34. A duly verified declaration in writing that the declarant is a director or forfeiture secretary of the Company and that certain shares in the Company have been duly forfeited on a date stated in the declaration shall be conclusive enidence

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of the facts therein stated as against all persons claiming to be entitled to the shares and such declaration and the receipt of the Company for the consideration, if any, given for the shares on the sale or disposal thereof shall constitute a good title to such shares and the person to whom the shares are sold be registered as the holder of such shares and shall not be bound to see to the application of the purchase money nor shall his title to such shares be affected by any irregularity or invalidity in the proceeding in reference to such forfeiture, sale or disposal. Company's lien 35. The Company shall have a first and paramount lien upon all the on shares/debentures (other than fully paid-up shares/debentures) registered in shares/debentu the name of each member (whether solely or jointly with others) and upon res the proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares/debentures and no equitable interest in any share shall be created except upon the footing and 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 shares/debentures shall operate as a waiver of the Company's lien if any, on such shares/debentures, wholly or in part to be exempt from the provisions of this clause. As to enforcing 36. For the purpose of enforcing such lien, the directors may sell the shares lien by sale subject there to in such manner as they think fit, but no sale shall be made until such period as aforesaid shall have arrived and until notice in writing of the intention to sell shall have been served on such member, his executors or administrators or his committee curators, bonis or other iegal curator and default shall have been made by him or them in the payment of moneys called in respect of such shares for seven days after such notice. Application of 37. The net proceeds of any such sale shall be received by the Company proceeds of and applied in or towards payment of such Part of the amount in respect of sale which the lien exists as is presently payable and residue, if any, shall (subject to like lien sums not presently payable, as existed upon the share before the sale) be paid to the person entitled to the shares at the date of sale. Validity of sales 38. Upon any sale after forfeiture or for enforcing a lien in purported upon forfeiture exercise of the powers herein before given, the directors may appoint some persons 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 nor to the application of the purchase money and after his name has been entered in the register in respect of such share 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 damage only and against the company exclusively. Cancellation of old Certificate and issue of new certificate 39. Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the certificate or certificates originally issued in respect of the relative share shall (unless the same shall on demand by the company have been previously surrendered to it by the defaulting member) stand cancelled and become null and void and of no effect and the directors shall be entitled to issue a new certificates or certificates in respect of the said shares to the person or persons entitled thereto distinguishing it or them in such manner as they think fit from the old certificate or certificates.

(iii) Other main provisions of our articles of associations.

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CAPITAL 4. The authorised Share Capital of the Company shall be as stated in clause V of the Memorandum of Association of the Company. The Company shall have power to increase, reduce, sub-divide or to repay the same or to divide the same into several classes and to attach these to any rights to consolidate or sub-divide the shares and to vary such rights as may be determined in accordance with the regulations of the Company. 4. (a) Share Capital The share capital of the Company shall be of two kinds only, namely,: (a) Equity share capital (i) with voting rights; or (ii) with differential rights as to dividend, voting or otherwise in accordance with such rules and subject to such conditions as may be prescribed. 4.(b) Preference share capital Buy back of Shares/Securities Notwithstanding anything contained in the Articles of Association, the Company shall have the powers to buyback its shares or other securities in accordance with the provisions of sections 77 A, 77 AA and 77B of the Companies Act, 1956, as amended from time to time, from its existing shareholders or the holders of other securities on a proportionate basis or by purchase of the shares or securities issued to the employees of the Company pursuant to a scheme or stock options or sweat equity. Preference Shares Consideration 5. Subject to the provisions of Section 80 of the Act, the Board shall be empowered to issue and allot redeemable preference shares carrying a right to redemption out of profit or out of the proceeds of fresh issue of shares. 5. The directors may allot and issue shares in the capital of the Company as payment or part payment for any property goods or machinery supplied sold or transferred or for services rendered to the Company in or about the formation or promotion of the Company, for the conduct of its business and any shares so allotted may be issued as fully paid up or as partly paid up shares. The directors may, at their discretion at the time of issue make such different arrangement with different shareholders in the amounts and times of payments of calls on their shares, may accept from any member whose assets thereto the whole or part of the amount remaining unpaid on any shares held by him although no part of that amount has been called up and may pay dividend in proportion to the amount paid up on each share or may pay interest on the amount so received in excess of calls.

Discretion in calls

6.

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Commission

1. The directors may at any time, pay a commission to any person for subscribing or agreeing to subscribe ( whether absolutely or conditionally ) or any shares, debentures or debenture-stock in the Company, so that if the commission in respect of share shall be paid or repayable out of capital, the statutory conditions and requirements shall be observed and the amount of rate of commission shall not exceed 5 percent on the shares and 2.5 percent on debentures or debenturestock in each case subscribed or to be subscribed. The commission may be paid or satisfied in cash on shares, debenture-stock of the Company.

SHARES AND CERTIFICATES Shares to be numbered progressively and no shares to be subdivided Further issue of shares 9. The shares in the capital shall be numbered progressively according to their several denominations and except in the manner herein before mentioned no share shall be sub-divided. Every forfeited or surrendered share shall continue to bear the number by which the same was originally distinguished. 10.(I) where at the time after the expiry of two years from the formation of the company or at any time after the expiry of one year from the allotment of shares in the company made for the first time after its formation, whichever in earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares whether out of the issued capital or out of the increased share capital then :

a) Such further shares shall be offered to the person who at the date of the offer, are holders of the equity shares of the company in proportion, as near as circumstances admit, to the capital paid up on those shares at the date. b) Such offer shall be made by a notice specifying the number of shares offered and limiting a time not less than thirty days from that date of the offer and the offer if not accepted, will be deemed to have been declined. c) The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to them in favour of any other person and the notice referred to in sub clause (b) hereof shall contain a statement of this right. PROVIDED THAT that Directors may decline, without assigning any reason to allot any shares to any person in whose favour any member may renounce the shares offered to him. d) After expiry of the time specified in the aforesaid notice or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose them off in such manner and to such person (s) as they may think, in their sole discretion, fit. (II) Notwithstanding anything contained in sub-clause (I) hereof, 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 (I) hereof) in any manner whatsoever. a) If a special resolution to that effect is passed by the company in General Meeting, or

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b) Where no such special resolution is passed, if the votes cast (whether on a show of hands or on a poll as the case may be) in favour of the proposal contained in the resolution moved in the general meeting (including the casting vote, if any of the Chairman) by the members who, being entitled to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes if any, cast against the proposal by members, so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf, that the proposal is most beneficial to the Company. (III) Nothing in sub-clause (c) of (I) shall be deemed a) To extend the time within which the offer should be accepted; or b) To authorise any person to exercise the right of renunciation for a second time on the ground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation. (IV) Nothing in this Article shall apply to the increase of the subscribed capital of the company caused by the exercise of any option attached to the debenture issued or loans raised by the company; (a) To convert such debentures or loans into shares in the Company; or (b) To subscribe for shares in the Company (whether such option is conferred in these Article or otherwise), PROVIDED THAT the terms of such loans include a term providing for such option and such term : (I) Either has been approved by the Central Government before the issue of the debentures or the raising of the loans or is in conformity with the Rules, if any, made by that Government in this behalf; and (II) In the case of debentures or loans or other than debentures issued to or loans obtained from Government or any institution specified by the Central Government in this behalf, has also been approved by a special resolution passed by the Company in General Meeting before the issue of the debenture or raising of the loans. Acceptance of 11. Any application signed by or on behalf of any applicant for shares in the shares Company followed by an allotment of any share herein shall be an acceptance of shares within the meaning of these Articles and every person who thus or otherwise accepts an shares and whose name is on the Register shall for the purpose of these Articles be a member. 11A. Nomination

(i) Every shareholder or debenture holder of the company, may at any time, nominate a person to whom his shares or debentures shall vest in the event of his death in such manner as may be prescribed under the Act. (ii) Where the shares or debentures of the company are held by more that one person jointly, joint holders may together nominate a person to whom all the rights in the shares or debentures, as the case may be, shall vest in the event of death of all the joint holders in such manner as may be prescribed under the Act. (iii) Notwithstanding anything contained in any other law for the time being in force or in any deposition, whether testamentary or otherwise, in respect of such shares in, or debentures of, the Company, where a nomination made in the manner aforesaid purports to confer on any person the right to vest the

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shares or debentures, the nominee shall , on the death of the shareholder or debenture holder or, as the case may be, on the death of joint holders become entitled to all the rights in the shares or debentures of the Company to the exclusion of all other persons, unless the nomination is varied or cancelled in the manner as may be prescribed under the Act (iv) Where the nominee is a minor, it shall be lawful for the holder of the shares or debentures, to make the nomination to appoint any person to become entitled to share in or debentures of the company in the manner prescribed under the Act, in the event of his death, during the minority. Deposit and calls to a debt payable immediately 12.(i) The money, (if any ) which the Board shall on the allotment of any share being made by them, require or direct to be paid by way of deposit, call or otherwise in respect of any shares allotted by them shall immediately on the inscription of the name of the allottee in the Register of members as the name of the holder of such shares become a debt due to and recoverable by the Company from the allottee thereof and shall be paid by him on such terms as the Board may deem fit from time to time. (ii) Every member or his heirs, executors or administrators shall pay to the Company the portion of the capital represented by his share or shares which may for the time being, remain, unpaid thereon in such amounts, at such time or times and in such manner, as the board shall from time to time, in accordance with the Companys regulations require to fix for the payment thereof. 13. Every member shall be entitled, without payment, to one or more Certificates in marketable lots, for all the shares of each class or denomination registered in his name, or if the directors so approve (upon paying such fee as the Directors may from time to time determine) to several certificates, each for one more such shares and the Company shall complete and have ready for delivery such certificates within three months from the date of allotment, unless the conditions of issue thereof otherwise provide, or within one month of the receipt of application of registration of transfer, transmission, sub-division, consolidation or renewal of any of its shares as the case may be, Every Certificate of shares shall be under the seal of the company and shall specify the numbers and distinctive nembers of shares in respect of which it is issued and amount paid up thereon and shall be in such form as the Directors may prescribe or approve, provided that in respect of a share or shares held jointly by several persons, the company shall not be bound to issue more then one certificate and delivery of a certificate of shares to one of several joint holders shall be sufficient delivery to all such holders. Members Rights certificates 14. Every member shall be entitled to one or more certificate in marketable lot for all the shares registered in his name or if the Directors so approve to several certificates each for one or more of such shares but in respect of each additional certificate, shall be paid to the Company a fee of Rs. 2/- or less as the Directors may determine. Every certificate of shares shall specify the number and denoting number of the shares in respect of which it is issued and the amount paid up thereon. The Directors may in any case waive the charging of such certificates

Liability members

of

Issue of new 15. In any certificate be worn out, defaced, multilated or torn or if there be certificate in no further space on the back thereof for endoresement or transfer, then upon place of one production and surrender thereof to the Company, a new certificate may be defaced, lost issued in lieu thereof, and if any certificate is lost or destroyed then upon

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for destroyed

proof thereof to the satisfaction of the company and on execution of such indemnity as the company deem adequate, being given, a new certificate in lieu there of shall be given to the party entitled to such lost or destroyed Certificate, Every Certificate under the Article shall be issued without payment of fees if the Directors so decided, or on payment of such fees (not exceeding Rs. 2/- for each certificate) as the Directors shall prescribe, provided that no fee shall be charged for issue of new certificates in replacement of those which are old, descript or worn out or there is no further space on the back there of for endorsement of transfer-provided that notwithstanding what is stated above the Directors shall comply with such rules made under Securities Contracts (Regulation) Act, 1956 or any other Act, or rules applicable in this behalf, the provisions of this Article shall mutatis mutandis apply to debentures of the Company. 15.A Depository

(i) Notwithstanding anything contained in these articles, the company shall be entitled to dematerialise its existing shares, debentures and other securities and rematerialise its such shares, debentures and or securities held by it with the Depository and/or offer its fresh shares and debentures and other securities in dematerialised form pursuant to the Depositories Act, 1996 and the rules framed thereunder, if any. (ii) Notwithstanding anything contained in the Article, where securities are dealt with in a Depository, the company shall intimate the details of allotment of securities to Depository immediately on allotment of such Securities. (iii) Every person subscribing to or holding securities of the company shall have the option to receive security certificates or to hold the securities with a Depository. A beneficial owner of any security can at any time opt out of a Depository, if permitted by law, in the manner provided by the Depositories Act, 1996 and the rules, if any, prescribed thereunder and the company shall, in the manner and within the time prescribed, issue to the beneficial owner the required certificate of securities. (iv) The Company or the investors may exercise an option to issue, deal in, hold the securities (including shares) with Depository, in electronic form and the certificates in respect thereof shall be dematerialised in which event the rights and obligations of the parties concerned and matters connected therewith or incidental thereto shall be governed by the provisions of the Depositories Act, 1996. (v) All securities held by a Depository shall be dematerialised and be in fungible form. Nothing contained in sections 153, 153 A, 153B, 187B, 187C and 372 A of the Act shall apply to a Depository in respect of the securities held by it on behalf of the beneficial owners. (vi) Notwithstanding anything to the contrary contained in the Act or these Articles, a depository shall be deemed to be the registered owner for the purpose of effecting transfer of ownership of security on behalf of the beneficial owner and shall not have any voting rights or any other rights in respect of the securities held by it. (vii) Every person holding securities of the company and whose name is entered as the beneficial owner in the records of the Depository shall be deemed to be a member of the company. The beneficial owner of securities shall be entitled to all the rights and benefits and be subject to all the liabilities in respect of the securities which are held by a Depository.

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Shares at the 16. Subject to the provisions of Sections 81 of the Act and these Articles the disposal of the shares of the capital of the company for the time being shall be under the directors control of the Directors who may issue, allot or otherwise dispose of the same or any of them to such person, in such proportion and on such terms and conditions and either at a premium or at par or (subject to the compliance with the provision of Section 79 of the Act) at a discount and at such time as they may from time to time think fit and with the sanction of the company in the General Meeting to give to any person or persons the option or right to call for any shares either at par or premium during such time and for such consideration as the Directors think fit, and may issue and allot shares in the capital of the company on payment in full or part of any property sold and transferred or for any services rendered to the Company in the conduct of its business and any shares which may so be alloted may be issued as fully paid up shares and if so issued shall be deemed to be fully paid shares. Provided that option or right to call of shares shall not be given to any person or persons without the sanction of the Company in the General Meeting. Commission for 17. The Company may at any time pay a commission to any person in placing shares consideration of his subscribing or aggreeing to subscribe (whether and brokerage absolutely or conditional) for any shares or debentures in the Company or procuring or agreeing to procure subscriptions (whether absolutely or conditionally) for any shares or debentures in the Company, but so that the amount or rate of commission shall not exceed in the case of shares, 5% of the price at which the shares are issued and in the case of debentures two and a half percent of the price at which the debenture are issued. Such commission may be satisfied by payment of cash of allotment of fully or partly paid shares or debentures or partly in one way and partly in the other. The Company may also pay on any issue of shares or debentures such brokerage as may be lawful and reasonable.

JOINT HOLDERS Joint holders 25. Where two or more persons are registered as holders of any shares they shall be deemed to hold the same as joint-holders with benefits of survivrship subject to the following and other provisions contained in the Articles. (a) Shares may be registered in the name of any person, company or other body corporate but not more than three persons shall be registered jointly as members in respect of any shares.

To which of Joint Holder certificate ti be issued.

(b) The certificate of shares registered in the name of two or more per-sons shall be delivered to the person whose name stands first in the Register. Several liabilities of joint holders. The first named of Joint Holder deemed soleholder (c) The joint holders of a share shall be jointly and severally liable topay all calls in respect thereof. (d) If any share stands in the names of two or more person, the person first named in the register shall as regards receipt of share certificates, dividends or bonus or service or notice and all or any other matter connected with the company except voting at meeting and the transfer of the shares be deemed the sole holder thereof but the joint holders of a share shall be liable severally as well as jointly for the payment of all instalments and calls due in

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respect of such share and for all incidentals thereof according to the Companys regulations. Death of one or morejoint holders of share (e) In the case of death of any one or more of the persons named in the register of members as the joint holders of any share, the survivors shall be the only persons ecognized by the Company as having any title to or interest in such share, but nothing herein contained shall be taken to release the estate of a deceased joint-holder from any liability on shares held by him jointly with any other person

Votes of joint (f) If there be joint registered holders of any shares, any one of such members persons may vote at any meeting either personally or by proxy in respect of such shares, as he was solely entitled thereto, provided that if more than one of such joint holders be present at any meeting either personally or by proxy, then one of the said Persons so present whose name stands higher on the register of members shall alone be entitled to vote in respect of such shares, but the other of others or of the joint holders shall be entitled to be persent at the meeting several executors or administrators of a deceased member in whose names shares stand shall for the purpose of these articles be deemed joint holders thereof. On holders joint (g) A document or notice may be served or given by the Company on or to the joint holders of a share by serving or giving the document or notice on or to the joint holder named first in the register of members in respect of the share. (h) Register and Index of Members The Company shall cause to be kept at its registered office or at such other place as may be decided Register and Index of Members in accordance with sections 150 & 151 and other applicable provisions of the Act and Depositories Act, 1996 with details of shares held in physical and dematerialized forms in any media as may be permitted by law including in any form of electronic media. The Register and index of beneficial owners maintained by a Depository under Section of the Depository Act, 1996 shall also be deemed to be the Register and Index of Members for the purpose of this Act. TRANSFER AND TRANSMISSION OF SHARES Instrument transfer of 40. The instrument of transfer shall be in writing and all provisions of Section 108 of the Companies Act,1956 and statutory modification thereof for the time being shall be duly complied with in respect of all transfer of shares and registration thereof. Transfer of securities 40A 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 depository. Applicable transferor by 41. (a) Application for the registration of the transfer of a share may be made either by the transferor or the transferee, provided that where such application is made by the transferor no registration shall, in the case of a partly paid share, be effected in the manner prescribed by Section 101 of the Act, and subject to provisions of these Articles, the Company shall unless objection is made by the transferce within two weeks from the date of receipt

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of the notice, enter in the Register the name of the transferee in the same manner and subject to the same conditions as if the application for registration of the transfer was made by the transferee. (b) The instrument of transfer shall be in the form prescribed by the Act or the rules framed thereunder or where no such form is prescribed in the usual common form or any other form approved by the stock exchange in India or as near thereto as circumstances will admit. Directors refuse register transfer may 42. Subject to the provisions of Section 111 of the Act and Section 22A of to the Securities Contracts (Regulation) Act, 1956, the Directors may at their own, absolute and uncontrolled discretion and by giving reasons decline to register or acknowledge any transfer of shares whether fully paid or not and the right of refusal, shall not be affected by the circumstances that the proposed transferee is already a member of the Company, but in such cases, the Directors shall within one month from the date on which the instrument of transfer was lodged with the Compnay, send to the transferee and transferor notice of the refusal to register such transfer provided that registration of transfer shall not be refused on the ground of the transfer being either alone or jointly with any other person or persons indebted to the Compnay on any account whatsoever except when the company has a lien on the shares. Transfer of shares/debentures in whatever lot shall not be refused. 43. The Directors may from time to time fix a fair value for the shares of the company at which the transfer shall be registered in terms of the Articles mentioned above. The said value shall not in any way be less than the intrinsic value of a share as shown by the last balance sheet of the Company. Registered instrument to remain with the company No fees for transfer or transmission 44. Every instrument of transfer which is registered shall remain in the custody of the company until destroyed by order of the Board.

45. 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. Transmission of shares to Nominee (i) A nominee, upon production of such evidence as may be required by the Board and subject as hereinafter provided, elect, either a) to register himself as holder of the shares or debentures, as the case may be; or b) to make such transfer of the shares or debentures, as the deceased shareholder or debentureholder, as the case may be, could have made. c) if the nominee elects to be registered as holder of the shares of debentures, himself, as the case may be, he shall deliver or send to the company, a notice in writing signed by him stating that he so elects and such notice shall be accompanied with the death certificate of the deceased shareholder or debentureholder, as the case may be. d) a nominee shall be entitled to the share dividends, interests and other advantages to which he would be entitled if he were the registered holder of the shares or debentures, provided that he shall not, before being registered as the member, be entitled to exercise any right conferred by membership in

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relation to meetings of the 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 shares or debentures, and if the notice is not complied with within ninety days, the Board may thereafter withhold payment of all dividends, bonus, interest or other moneys payable in respect of the shares or debentures, until the requirements of the notice have been complied with. The Company not liable for immediate of discharge notice in prohibiting registration of transfer 46. The Company shall incur no liability or responsibility whatever in consequence of its registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner thereof ( as shown or appearing in the register of members) to the prejudice of persons having or claiming any equitable right, title or interest to or in the said shares not withstanding that the Company may have had notice of such equitable right, title or interest or notice prohibiting registration. 47. The Directors may at any time,accept the surrender of any shares from or by any shareholder desirous of surrendering the same on such terms as the directors may think fit Except as otherwise required by a statutory provision or under an order of the competent court of law, the Directors of the company may in their absolute discretion refuse sub-division of share certificates or debenture certificates into denominations of less than the markeble lots.

BORROWING POWERS Power borrow of 48. Subject to the provision of the Act and these Articles, the Board may from time to time at its discretion by a resolution passed at a meeting of the Board accept deposits from members either in advance of calls or otherwise and raise or borrow or secure the payment of any sum or sums of money for the Company subject to the provisions of the Act. 49. The payment or repayment of money so borrowed as aforesaid may be secured in such manner and upon such terms and conditions in all respect as the Board may think fit and in particular by a resolution passed at meeting of the Board or by a circular resolution by the issue of debentures or debenture-stock of the Company (both present and future) including its uncalled capital for the time being and debentures, debenture-stock and other securities may be made assignable free from any equities between the company and person to whom the same may be issued.

The payment or repayment of money borrowed.

Terms of issue 50. Any debentures, debenture-stock or other securities may be issued at a of debenture discount, premium or otherwise and may be issued on condition that they shall be convertible into shares of any denomination and with any privileges and conditions as to redemption, surrender, drawing, allotment of shares, attending (but not voting) at the General Meeting, appointment of Directors and otherwise debentures with the right to conversion into or allotment of Shares shall be issued only with the consent of the Company in the General Meeting by a Special Resolution. Assignment of 51. If any uncalled capital of the Company is included in or charged by any uncalled capital mortgage or other securities, the directors may make calls on the members in respect of such uncalled cpital in trust for the person in whose favour such

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mortgage or security is executed. Indemnity may 52. If the directors, any of them or any other person shall become personally be given liable for the payment of any sum primarily due from the company the directors may exeute or cause to be executed any mortgage, change of security over or affecting the whole or any part of the assets of the Company by way of indemnity to secure the directors or persons so becoming liable as aforesaid from any loss in respect of such liability. GENERAL MEETINGS When annual 56. In addition to any other meetings, general meeting of the Company general meeting shall be held at such intervals and at such times and places as may be to be held determined by the Board as required under section 166 and 167 of the Act. Distinction 57. All other meetings of the Company other than those referred to in the between preceding Articles shall be called Extraordinary General Meetings. ordinary and extra-ordinary meeting When extraordinary meeting to be called 58. The directors may, whenever they think fit and they shall, on the requisition of the holders of not less than one-tenth of the paid up capital of the Company as at the date entitled to vote in regard to the matter in respect of which the requisition is made, forthwith proceed to convene an Extraordinary General Meeting of the Company. 58A. Notwithstanding anything contained in the Articles of Association of the company, the company may and in the case of resolutions relating to such business as the Central Government may, by notification declared to be conducted only by postal ballot, shall, get any resolution passed by means of a postal ballot pursuant to the provisions of section 192 A of the Act or such other rules, regulations and modifications framed thereunder from time to time shall be complied with. Notice meeting of 59. Twenty-one days notice at least of every General Meeting, a meeting may be convened by a shorter notice. In the case of an Annual General Meeting if any business other than (i) the consideration of the accounts, balance sheets and reports of the Board and Auditors, (ii) the declaration of dividend, (iii) the appointment of directors in place of those retiring, (iv) the appointment of and fixing of the remuneration of the Auditors, is to be transacted and in the case of any other meeting in any event, there shall be annexed to the notice of the meeting a statement setting out all the materials facts concerning each such item of business, including in particular the nature and extent of the interest, if any therein of every director and the Manager (if any). Where any such item of business relates to or affects any other company the extent of shareholding interest in that other company of every director and manager if any, of the Company shall also be set out in the statement if the extent of such shareholding and interest is not less than twenty percent of the paid-up share capital of that other company. Where any item of business consists of the according of approval to any document by the meeting, the time and place where the document can be inspected shall be specified in the statement aforesaid. to 60. The accidental omission to give any such notice to or the non-receipt to of notice by any of the members or persons entitled to receive the same

As ommission

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give notice Quorum General Meeting

shall not invalidate the proceedings at any such meeting. at 61. Five members present in person shall be a quorum for a General Meeting. A corporation being a member shall be deemed to be personally present if it is represented, in accordance with Section 187 of the Act. The President of India or the Governor of a State shall be deemed to be personally present if he is represented in accordance with Section 187-A of the Act.

Questions at 62. At any General Meeting, a resolution put to the vote of the meeting general meeting shall be decided on a show of hands, unless a poll is (before or on the how to decide eclaration of the result of the show of hands) ordered by the Chairmen of the meeting of his own motion and shall be ordered to be taken by him on demand made in that behalf by any member or members present in person or by proxy and holding shares, in the Company which Confer a power to vote on the resolution, not being less than one tenth of the total voting power in respect of the resolution, or on which aggregate sum of not less than fifty thousand rupees has been paid up, and unless a poll is so demanded, a declaration be the chairman that a resolution has on a show of hands, been carried or carried unanimously or by a particular majority or lost, and an entry to that effect in the minutes book of the Company shall be conclusive evidence of the fact, without further proof of the number or proportion of the votes recorded in favour of or against that resolution. Chairmans casting vote 63. In the case of an equality of votes the Chairman shall both on a show of hands and poll (if any) have a casting vote in addition to the vote or votes which he may be entitled to as a member.

Poll to be taken 64. If poll is demanded as aforesaid the same shall subject to Article 72 be if demanded taken at such time (not later than forty-eight hours from the time when demand was made) and place and either by open voting or by ballet as the Chairman shall direct and either at once or after an interval or adjournment or otherwise and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand for a poll may be withdrawn at any time by the person or the person who made the demand. Scrutineers the poll of 65. Where a poll is to be taken, the Chairman of the meeting shall appoint two secrutineers to scrutinise the votes given on the poll and to report thereon to him One of the scrutineers so appointed shall always be a member (not being an officer or employee of the Company) present at the meeting provided such a member is available and willing to be appointed. The Chairman shall have power at any time before the result of the poll is declared to remove a scrutineer from the office and fill vacancies in office of scrutinseer arising from such removal or from any other cause.

Business to 66. The demanded for a poll, shall not prevent the continuance of a proceed meeting for the transaction of any business other than the question on notwithstanding which the poll has been demanded demand to poll DIRECTORS Number Directors of 74. Until otherwise determined by a General Meeting and subject to Section 252 and 259 of the Act, the number of Directors shall not be less than three or more than twelve, excluding any Directors appointed under

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Articles 79 and 80. First Directors 75. (a) The First Directors of the Company shall be as follows : 1. Raghunath Mittal 2. Mr. Dinanath Mittal (b) The Company in General Meeting may from time to time increase or reduce the number of Directors within the limit fixed as above. Appointment alternate directors of 76. The Board of Directors of the Company may appoint alternate directors to act for a director (hereinafter in this Article called "the original director") during the absence for a period of not less than three months from the state in which the meetings of the Board are ordinarily held. An alternate director appointed under this Article shall not hold office as such for a period longer than that permissible for the original director in whose place he has been appointed and shall vacate office if and when the original director returns to the State.

Directors may 77. The Directors shall have power at any time and from time to time to fil-up appoint any qualified person to be a director to fill a casual vacancy. Such vacancies casual vacancy shall be filled by the Board of Directors at a meeting of the Board. Any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office, if it had not been vacated as aforesaid but he shall then beeligible for re-election. Additional directors 78. The Directors shall also have power at any time and from time to time to appoint any other qualified person to be a director as an addition to the Board but so that the total number of directors shall not at any time exceed the maximum fixed above. Any person so appointed as an addition to the Board shall retain his office only upto the date of the next Annual General Meeting but shall be eligible for re-election at such meeting.

Power to the 79. The Company may agree with any financial institution, company or any financial other authority, person, state or institution that in consideration of any loan institutions to or financial assistance of any kind whatsoever which may be rendered by nominate it, shall have power to nominate such number of directors on the Board of Directors on Director of the Company as may be agreed to and from time to time the Board remove and appoint them and to fill in vacancy caused by such directors otherwise ceasing to hold office. Such nominated directors shall not be liable to retire by rotation, The Director nominated under this Article is hereinafter referred to as "Institutional Director" in these presents. Debenture Director 80. Any trust deed for securing debenture or debenture-stock may, if so arranged, provide for the appointment from time to time by the trustees thereof or by the holders of the debentures or debenture-stock of some person to be director of the Company and may empower such trustees or holders of debenture-stock from time to time to remove any director so appointed. A director appointed under this Article is herein after referred to as a "debenture Director" and the term "Debenture Director" means a Director for the time being in office under this Article. A debenture director shall not be liable to retire by rotation or be removed by the Company. The trust deed may contain such ancillary provisions as may be agreed between the Company and the trustees and all such provisions shall have effect notwithstanding any of the other provisions herein contained. 81. No share qualifications will be necessary for being appointed as or

No

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Qualification holding the office of a director of the Company. shares for Directors Remuneration 82. The remuneration of each director for attending the meeting of the of Directors Board or Committee thereof shall be such sum as may be prescribed by the Act or the Central Government from time to time for each such meeting of the Board or Committee thereof attended by him. The directors shall be paid such further remuneration (if any) as the Board shall from time to time determine and such additional remuneration shall be divided amongst the directors in such proportion and manner as the Board may from time to time determine and in default of such determination shall be divided among the directors equally. Directors not a resident of the place of the registered office of the Company to be paid traveling expenses Special remuneration of Director performing extra services 83. The Directors may allow and pay any Director who is not a resident of the place where the Registered office for the time being of the Company is situated or where the meeting of the Board is held and who shall come to such place for the purpose of attending a meeting of the Board or a Committee thereof, such sum as the directors may consider fair compensation for traveling and other incidental expenses in addition to his fees for attending such meeting as above specified. 84. If any director be called upon to perform extra services or 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 arrange with such directors for such special remuneration for such extra services or special exertions or efforts by way of a fixed sum or otherwise as may be determined by the board and such remuneration above provided. 85. The continuing directors may act notwithstanding any vacancy in thier body but so that if the number falls below the minimum number fixed the directors shall not act except in emergencies or for purpose of filling up vacancies or for summoning a general meeting of the Company. 86. A director shall not be disqualified from contracting with the company either as vendor, purchaser or otherwise for goods, materials or services or for underwriting the subscription of any shares in or debentures of the Company nor shall any such contract or arrangement entered into by or on behalf of the Company with a relative of such director or a firm in which such director or relative is a partner or with any other partner in such firm or with a private company of which director is a member or director, be avoided nor shall director so contracting or being such member or so interested be liable to account to the Company for any profit realised from any such contract or arrangement by reason of such director holding office or of the fiduciary relation thereby established. 87. A director of a company may be or become a director of any company promoted by the company or in which he may be interested as vendor member or otherwise and no such director may be accountable for any benefit received as director or member of such company.

Directors may act notwithstandin g vacancy Conditions under which directors may contract with Company.

Retention benefit from associated company Rights Directors

of 88. Except as otherwise provided by articles all the directors of the Company shall have in all matters equal rights and privileges and be subject to equal obligations and duties in respect of the affairs of the Company.

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PROCEEDING OF BOARD MEETING Meeting directors Quorum of 94. (i) The Board of Directors may meet for the dispatch of business, adjourn, and otherwise regulate its meeting as it thinks fit. (ii) The quorum for a meeting of the Board shall be one-third of its total strength (any) fraction contained in that one-third being rounded off as one) or two directors, whichever in higher. Adjournment of 95. If a meeting of the Board could not be held for want of quorum, meeting for then the meeting shall stand adjourned to such other time, date and want of quorum place as may be fixed by the directors present not being later than fifteen days from the date originally fixed for the meeting. When meeting 96. The Chairman if any, or the Managing Director of his own motion to be convened or the Secretary of the Company shall upon the request in writing of two directors of the Company of if directed by the Managing Director or Chairman if any convene a meeting of the Board by giving notice in writing to every director for the time being in India and at his usual address in India to every other director. Chairman 97. The Directors may from time to time elect from amongst their number, a Chairman of the Board and determine the period for which he is to hold office. If at any meeting of the Board Chairman is not present within five minutes after the time appointed for holding the same, the directors present may choose one of their number to be chairman of the meeting.

Questions at 98. Questions arising at any meeting of the Board shall be decided by Board Meeting a majority of votes and in case of an equality of votes, the Chairman how decided shall have a second or casting vote subject to the provision that the Nominee if appointed under Article 79 present and voting shall be part of such majority. Powers of 99. A meeting of the Board for the time being at which quorum is Board Meeting present shall be competent to exercise all or any of the authorities, powers and discretions which by the Act or the Articles of the Company are for time being vested in or exercisable by Board generally. Directors may appoint committees and delegate its powers 100.The Board may delegate any of their powers to a committee of directors consisting of such director or directors or one or more directors and a member or members of the company as it thinks fit or to the managing Director, the Manager or any other principal officer of the Company or a branch officer or to one or more of them together and it may from time to time revoke and discharge any such Committee of the Board either wholly or in part and either as to persons or purpose. But every Committee of the Board so formed shall in the exercise of the powers so delegated conform to any resolution 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.

Meeting of 101. The meeting and proceedings of any such committee of the committee how Board consisting of two or more members shall be governed by the provisions herein contained for regulating the meeting and proceeding to be governed

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of the directors so far as the same are applicable hereto and are not super ceded by any regulations made by the directors under the last preceding Articles. Resolution Circulation by 102. A resolution shall be deemed to have been duly passed by the Board or by a Committee thereof by circulation, if the resolution has been circulated in draft together with the necessary papers if any, to all the directors or to all the members of the Committee then in India (not being less in number than the quorum fixed for a meeting of the Board or Committee as the case may be) and to all other directors or members of the Committee at their usual address in India and has been approved by such of the Directors or members of the Committee then in India or by a majority of such of them as are entitled to vote on the resolution.

Acts of Board of 103. All acts done by any meeting of the Board or by committee of the Committees Board or by any person acting as a director shall, notwithstanding that valid it shall afterwards be discovered that there was some defect in the appointment of such director or persons acting as aforesaid or that they or any of them were disqualified or had vacated office 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, was qualified to be a director and not vacated his office or his appointment had nor been terminated provided that nothing in this Article shall be deemed to give validity to acts done by a director after his appointment has been shown to the Company to be invalid or to have terminated. Minutes of 104. (a) The Board shall in accordance with the provisions of Section Proceeding of 193 of the Act cause minutes to be kept of every General Meeting of directors and the Company or of every meeting of the Board or of every committee of committees to the Board. be kept (b) Any such minutes of any meeting of the Board or of any committee of the Board or of the Company in General Meeting, if kept in accordance with the provisions of sections 193 of the Act, shall be evidence of the matters stated in such minutes. MANAGING/WHOLE-TIME DIRECTORS Powers appoint Managing Director to 107. The Board may from time to time, appoint one or more Directors to be Managing Director or whole-time Directors of the Company either for a fixed term or without any limitation as to the period for which he or they is or are to hold such office, and may, from time to time subject to the provisions of any contract between him or them and the company, remove or dismiss him or them from office and appoint another or others in his or their place or places.

Remuneration 108. A manager or whole-time Director shall, in addition to any of Managing remuneration that might be payable to him as a Director of the Director Company under these Articles, receive such remuneration as may from time to time be approved by the Company subject to provisions of the Act. Powers Managing of 109. Subject to the provisions of the Act and in paticular to the prohibitions and restrictions contained in Section 292 thereof, the

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Director

Board may from time to time entrust to or confer upon the Managing Director or whole-time Director for the time being such of the powers exercisable under these presents by the Directors as they may think fit and may confer such powers for such time and conditions and with such restrictions as they think fit, and they may confer such powers either collaterally with or to the exclusion of or in substitution for all or any of the powers of the directors in that behalf and may from time to time revoke, withdraw, alter or vary all or any of such powers.

Special Position 110. Subject to the provisions of the Act the Managing Director or of Managing whole time Director shall not, while he or they continue to hold that Director office, be subject to retirement by rotation. SEAL The Seal, its 111. The Board shall provide a common seal for the purpose of the custody and Company and shall have powers from time to time to destroy the same use and substitute a new seal in lieu thereof and the Board shall provide for the safe custody of the seal for the time being and the seal shall never be used except by the authority of the Board or a committee of the Board previously given. The Company shall also be at liberty to have an official Seal in accordance with Section 50 of Act for use in any territory, district or place outside India. 112. Every Deed or other instruments to which the Seal of the Company is required to be affixed shall unless the same is executed by a duly constituted attorney be signed by one director and the secretary or some other person appointed by the Board for the purpose, provided nevertheless that certificate of shares may be sealed in accordance with the provisions of the Companies (Issue of Share Certificates) Rules, 1960 or the statutory modification or re-enacement thereof for the time being in force. CAPITALISATION OF RESERVES Capitalisation of 125. Any General Meeting may resolve that any moneys, investments reserves or other assets forming part of the undivided profits of the Company standing to the credit of any reserves or any capital redemption reserve fund or in the hands of the Company and available for dividend or representing premiums received on the issue of shares and standing to the credit of share premium account be capitalised and distributed amongst such of the shareholders as would be entitled to receive the same if distributed by way of dividend and in the same proportion on the footing that they become entitled thereto as capital and that all or any part of such capitalised fund be a applied on behalf of shareholders in paying up in full any unissued shares, debentures or debenture-stock of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued shares and that such distribution or payment shall be accepted by such share holders in full satisfaction of their interest in the said capitalised sum provided that any sum standing to the credit of a share premium account or a capital redemption reserve fund may for the Purpose of this Article only be applied in the paying up of unissued shares to be issued to members of the Company as fully paid bonus shares.

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Surplus Money

126. A general meeting may resolve that any surplus moneys arising from the realisation of any capital assets of the Company or any investment representing the same or any other undistributed profits of the Company not subject to charge for income-tax, be distributed among the members on the footing that they receive the same as capital. 127. For the purpose of giving effect to any resolution under the preceding two Articles the Board may settle any difficulty which may arise in regard to the distribution as they think expedient and in particular may issue fractional certificates and may fix the value for distribution of any specific assets and may determine that cash payment shall be made to any members upon the footing of the value so fixed in order to adjust the rights of all parties and may vest such cash or specific assets in trustees upon such trusts for the persons entitled to the dividend or capitalised fund as may seem expedient to the Board. Where requisite a proper contract shall be filed in accordance with Section 75 of the Act and the Board may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalised fund and such appointment shall be effective.

Fractional Certificate

BOOKS AND DOCUMENTS Books of 128. The directors shall cause to be kept proper books of accounts in account to be accordance with Section 209 of the Act with respect to : kept (a) all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure take place; (b) (c) all sales and purchases of goods by the Company; the assets and liabilities of the Company.

Provided that the said proper books of account shall be kept on accrual basis and according to the double entry system of accounting. Where kept to be 129. The books of account shall be kept at the office or subject to the provision of Section 209 of the Act at such other place as the directors think fit and shall be open to inspection by the directors during the business hours. by 130. The directors shall from time to time determine whether and to what extent and at what time and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of the members not being directors and no members (not being a director) shall have any right of inspecting any account or book or document of the Company except as conferred by law or authorised by the directors 131. The directors shall, from time to time, cause to be prepared and to be laid before the Company in Annual General Meeting such profit and Loss Accounts, Balance Sheets and reports as are referred to in the Act. 132. A copy of every such Profit and Loss Account and Balance Sheet (including the Auditor's Report and every other document required by

Inspection members

Statement of accounts to be furnishing to General Meeting Accounts to be sent to each

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member

law to be annexed or attached to the Balance Sheet) shall, at least twenty one days before the meeting at which the same are to be laid before the members, be sent to the members of the Company, to holders of debentures issued by the Company (not being debentures which ex-facie are payable to bearer thereof), to trustees for the holders of such debentures and to all persons entitled to receive notice of General Meeting of the Company provided that a copy of the documents aforesaid shall not be required to be sent when the shares of the Company are listed on a recognized stock exchange, if and copies of the documents aforesaid are made available for inspection at the Registered office during working hours for period of twenty-one days before the date of the meeting and a statement containing the salient features of such documents in the prescribed form or copies of the documents aforesaid, as the company may deem fit, be sent to every member of the company and to every trustee for the holders of any debentures issued by the company not less than twenty-one days before the date of the meeting as per provisions of Section 219 of the Act.

AUDIT Account to be 133. Auditors shall be appointed and their rights and duties regulated audited in accordance with Sections 224 to 227 of the Act. Accounts when 134. Every account of the Company when audited and approved by audited and the General Meeting shall be conclusive. approved to be conclusive DOCUMENTS AND NOTICE Service document notices members by Company. of or on the 135.(1) A document or notice may by served or given by the Company on any member or an officer thereof either personally or by sending it by post to him to his registered address of (if he has no registered address in India) to the address if any, within India supplied by him to the Company for serving documents or notices on him. (2) Where a document or notice is sent by post, service of the document or notice shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document or notice, provided that where a member has intimated to the Company in advance that documents or notices should be sent to him under a certificate of posting or by registered post with or without acknowledgement due and has deposited with the Company a sum sufficient to defray the expenses of doing so, service of the document or notice shall not be deemed to be effected unless it is sent in the manner intimated by the member and such service shall be deemed to have been effected in the case of a meeting at the expiration of fortyeight hours after the letter containing the document or notice is posted and in any other case at the time at which the letter would be delivered in the ordinary course of post. By advertisement 136. A document or notice advertised in a newspaper circulating in the neighbourhood of the office shall be deemed to be duly served or sent on the day on which the advertisement appears on or to every member

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who has no registered address in India and has not supplied to the Company any address within India for the service of document on him or the sending of notice to him. On personal 137. A document or notice may be served or given by the Company on Representatives or to the persons entitled to a share in consequence of the death or insolvency of a member by sending it through the post in a prepaid letter addressed to him by name or by the title of representative of the deceased or assignee of the insolvent or by any like description, at the address (if any ) in India supplied for the purpose by the person claiming to he so entitled or (until such an address has been so supplied) by serving the document or notice in any manner in which the same might have been given if the death or insolvency had not occurred. To whom document or notices must be served or given 138. Documents or notices of every General Meeting shall be served or given in same manner hereinbefore authorised on or to (a) every member (b) every person entitled to a share, or bound by every document of a member and (c) the auditor or auditors for the time being of the company. 138A Service of documents of the Company Where securities are held in Depository, the records of the beneficial ownership may be served by such depository on the Company by means of electronic mode or by delivery of floppies or disks. Members bound by documents or notice served on or given to previous holders 139. Every person who, by operation of law, transfer or other means whatsoever, shall become entitled to any share, shall be bound by every document or notice in respect of each share, prior to his name and address being entered on the Register of Members if it shall have been duly served on or given to the person from who he derives his title to such share.

Documents or 140. Any document or notice to be served or given by the Company notice by may be signed by a director or some person duly authorized by the company and board for such purpose and the signature may be written, printed or signature lithographed. thereto Service of 141. All documents or notice to be served or given by members or on document or to the Company or any officer thereof shall be served or given by notice by sending them to the Company or officer at the office by post under a payment certificate of posting or by registered post or by leaving it at the office.

AUTHENTICATION OF DOCUMENTS Authentication of documents and proceedings 142. Save as otherwise expressly provided in the Act or these Articles, documents or proceeding requiring authentication by the Company may be signed by a Director or an authorised officer of the Company and need not be under its seal.

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WINDING UP Liquidator may 143. The liquidator on any winding up (whether voluntary, under divide assets in supervision or compulsory) may, with the sanction of a special specie resolution/orders of the court but subject to the rights attached to any preference share capital, divide among the contributories in specie any part of the assets of the Company and may, with the like sanction, vest any part of the company in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall think fit. INDEMNITY AND RESPONSIBILITY Indemnity 144. Subject to the provisions of Section 201 of the Act every director, manager, office or servant of the company or any person (whether an officer of the company or not) employed by the company as auditor shall be indemnified out of the funds of the Company against all claims and it shall be the duty of the directors to pay out of the funds of the Company, all costs, charges, losses and damages which any such person may incur or become liable to by reason of any contract entered into or act or thing done, about the execution or discharge of his duties or supposed duties (except such if any, as he shall incur or sustain through or by his own willful act, neglect or default) including expenses and in particular and so as not to limit the generality of the foregoing provisions against all liabilities incurred by him as such director, manager, officer or auditor in defending any proceeding whether civil or criminal in which judgement is given in his favour or in which he is acquitted or in connection with any application under Section 633 of the Act in which relief is granted to him by the Court. 145. Subject to the provision of the Act, no director, auditor or other officer of the Company shall be liable for the act, receipts, neglects defaults of any other director or officer or for joining in any receipt or other act for conformity or for any loss or expenses happening to the Company through the insufficiency or deficiency of title to any property acquired by order of the director for on behalf of the Company or for the insufficiency or deficiency or any security in or upon which any of the money of the Company shall be invested or for any loss or damages arising from the bankruptcy, insolvency or tortuous act of any person, firm or company to or with whom any moneys, securities or effects shall be entrusted or deposited or for any loss occasioned by an error of judgement, omission, default or oversight on his part or for any other loss, damage or misfortune whatever which shall happen in relation to the execution of the duties of his office or in relation thereto unless the same shall happen through his own dishonesty. 146. No member shall be entitled to visit or inspect any works of the Company without the Permission of the directors or to require discovery of or any information respecting any detail of the Company's trading or any matter which is or may be in the nature of a trade secret, mystery of trade, secret process or any other matter which may relate to the conduct of the business of the Company and which in the opinion of the Directors it would be inexpedient in the interest of the Company to disclose.

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contracts, not being contracts entered in the ordinary course of business carried on by our Company, which are or may be deemed material have been entered or are to be entered into by our Company. These contracts, copies of which have been attached to the copy of this Red Herring Prospectus delivered to Registrar of Companies, Maharashtra at Mumbai for registration and also the documents for inspection referred to hereunder, may be inspected at the registered office situated at 39/C, 1st Floor, Raj Industrial Complex, Military Road, Marol, Andheri (E), Mumbai 400 059, India between 10.00 a.m. to 4.00 p.m. on any working day, excluding Saturday and Sunday, from the date of this Draft Red Herring Prospectus until the Issue Closing Date. MATERIAL CONTRACTS 1. Memorandum of Understanding dated 23rd August 2005 with UTI Securities Limited, appointing them as the Book Running Lead Manager to this Issue 2. Memorandum of Understanding dated 24th September 2005 signed with Bigshare Services Private Limited, appointing them as Registrar to the Issue. 3. Letter of Appointment dated 16th August 2005 of M/s. Suman Khaitan & Co. Advocates, as Legal Advisor to the Issue. 4. Tripartite Agreement dated [] among our Company, NSDL and Bigshare Services Private Limited. 5. Tripartite Agreement dated [] among our Company, CDSL and Bigshare Services Private Limited. 6. Copy of the resolution dated 25th September 2002 re-appointing Mr. Raghunath Mittal as the Managing Director.

DOCUMENTS FOR INSPECTION 1. Memorandum and Articles of Association of our Company. 2. Certificate of incorporation No. 17-07690 dated 16th September 1993 from the Registrar of Companies, Rajasthan to Janki Processors Private Limited. Fresh Certificate of Incorporation consequent upon change of name to Janki Processors Limited dated 6th July, 2000. 3. Fresh Certificate of Incorporation consequent to change of name to Janki Corp Limited dated 31st December 2003. 4. Certificate of Registration of the order of Company Law Board (Reg. No. 154271) confirming transfer of the registered office from the state of Rajasthan to the state of Maharashtra issued by Registrar of Companies, Maharashtra, Mumbai dated 27th June 2005. 5. Certificate of Registration for Alteration of Objects dated 31st December 2003. 6. Resolution passed under section 81(1A) of the Act, at the Extra Ordinary General Meeting of our Company held on 23rd August 2005.

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7. Resolution passed by the Board of Directors at their meeting held on 10th August 2005 for the proposed issue. 8. Consent from the Directors, Compliance Officer, Auditor, Lead Manager, Registrar to the Issue, Bankers to the Issue, Bankers to our Company, Underwriters, Legal Advisor and Tax Consultant to act in their respective capacities. 9. Certificate dated 19th January 2006 from M/s. O.P. DAD & Co., Chartered Accountants and M/s. A. Bafna & Co, Chartered Accountants and Statutory Auditors of our Company detailing the Tax Benefits. 10. Auditors report dated 31st October 2005 for 5 months ended 31st August, 2005 included in the Draft Red Herring Prospectus and copies of the Balance Sheet referred in the said report. 11. Copy of the Auditors Certificate dated 4th January 2006 regarding the sources and deployment of funds as on 2nd January, 2006. 12. Agreement copy with Popuri Engineering & Consultancy Services to extend consultancy services and know-how to our Company. 13. Agreement copy between M.N. Dastur & Company (P) Limited and our Company for rendering services comprising Detailed Engineering and Procurement, Inspection, Construction Supervision and Assistance in Commissioning for the Project from 19th October 2004 to 18th April 2006. 14. Copies of sanction letters from SBBJ and SBM, vide their letters dated 15th March 2005 & 4th June 2005 respectively. 15. Copy of Appraisal Report from State Bank of Bikaner and Jaipur dated 7th January 2006. 16. Copy of Listing Applications made to BSE and NSE. 17. Copy of in-principal approvals from BSE and NSE. 18. SEBI Acknowledgement Card dated [].

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DECLARATION All the relevant provisions of the Companies Act, 1956 and the guidelines issued by the government or the guidelines issued by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in this Draft Red Herring Prospectus is contrary to the provisions of the Companies Act, 1956 or the Securities and Exchange Board of India Act, 1992 or rules made there under or guidelines issued, as the case may be. We further certify that all statements in this Draft Red Herring Prospectus are true and correct. SIGNED BY THE DIRECTORS

Mr. Raghunath Mittal

Mr. Shivnath Mittal

Mr. Dinanath Mittal

Mr. M.P. Kedia

Mr. Dwijendra Nath Ghorai

Mr. Vijay Sharma

Place: Mumbai Date:

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