i

For Private Circulation to our Equity Shareholders Only

ISSUE ON A RIGHTS BASIS OF 31,98,79,627 EQUITY SHARES OF Re. 1/- EACH FOR CASH AT A PRICE OF Rs. 5/- PERSHARE (INCLUDING PREMIUM OF RS.4/- PER SHARE) FOR AN AMOUNT AGGREGATING Rs 159,93,98,135 TO THEEQUITY SHAREHOLDERS IN THE RATIO OF 2 EQUITY SHARES FOR EVERY 3 EXISTING EQUITY SHARES HELD BYTHE SHAREHOLDERS ON THE RECORD DATE. i.e. MARCH 24, 2009 IN TERMS OF THIS LETTER OF OFFER. THE FACEVALUE OF THE SHARES IS Re.1/- AND THE ISSUE PRICE IS 5 TIMES THE FACE VALUE OF THE EQUITY SHARES.

GENERAL RISKSInvestments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in this Issue unlessthey can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking aninvestment decision in this Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and theIssue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board ofIndia (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to “Risk Factors”beginning on page ix of this Letter of Offer before making an investment in this Issue.

ISSUER’S ABSOLUTE RESPONSIBILITYThe Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all informationwith regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Letter of Offer istrue and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein arehonestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information or theexpression of any such opinions or intentions misleading in any material respect.

LISTINGOur existing Equity Shares are listed on Bombay Stock Exchange Limited (“BSE”), National Stock Exchange of India Limited(“NSE”) and Madras Stock Exchange Limited (“MSE”). We have received “in- principal” approvals from BSE, NSE and MSE forlisting the Equity Shares arising from the Issue vide letters dated November 11,2008, January 5,2009 and November 20, 2008respectively. BSE shall be the Designated Stock Exchange.

Lead Manager to the Issue Registrar to the Issue

Ernst & Young Merchant Banking Services Pvt. Ltd.Jalan Mill Compound, 95 Ganpatrao Kadam Marg, Lower Parel, Mumbai 400013.Tel: +91-22-6657 9326, 4035 6300 Fax: +91-22-4035 6400Contact Person: Ms. Nishita JohnE-mail id: nishita.john@in.ey.comWebsite: www.ey.com/india

CHEMPLAST SANMAR LIMITED(Chemplast Sanmar Limited was originally incorporated on March 13, 1985 as Urethanes India Limited (“UIL”) under theprovisions of Companies Act, 1956. Chemicals and Plastics India Limited (“CPIL”), was amalgamated with UIL with effectfrom 1st October 1991 and our name was changed from “Urethanes India Limited” to “Chemicals and Plastics India Limited”with effect from May 15, 1992. The name of our Company was further changed to Chemplast Sanmar Limited with effect fromSeptember 28, 1995. For further details please refer to the section “History of the Company and other Corporate Matters”beginning on page 63 of this Letter of Offer).

Registered Office:9, Cathedral Road, Chennai - 600086

Phone: +91-44-28128500 Fax: +91-44-28112627, Website: www.sanmargroup.comContact Person & Compliance Officer: Mr. M. Raman, Company Secretary

E-mail: mr1@sanmargroup.comPhone: +91-44-28128722 Fax: +91-44-28112627

LETTER OF OFFER March 13, 2009

For private circulation to our equity shareholders only

Integrated Enterprises (India) Ltd.2nd Floor. “Kences Towers”, No.1 Ramakrishna Street, North Usman Road, T Nagar, Chennai- 600 017Tel : +91-44-2814 0801 - 03, Fax : +91-44-2814 2479Contact Person: Mr S SriramEmail: sureshbabu@iepindia.comWebsite:www.iepindia.com

ISSUE PROGRAMME

ISSUE OPENS ON LAST DATE FOR RECEIVING ISSUE CLOSES ONREQUEST FOR SPLIT FORMS

MONDAY, MARCH 30, 2009 MONDAY, APRIL 6, 2009 MONDAY, APRIL 13, 2009

ii

CONTENTS

NO OFFER IN THE UNITED STATES ................................................................................................................ iii

PRESENTATION OF FINANCIAL AND MARKET DATA ................................................................................. iv

FORWARD-LOOKING STATEMENTS..................................................................................................................v

ABBREVIATION AND TECHNICAL TERMS .................................................................................................... vi

RISK FACTORS ..................................................................................................................................................... ix

SUMMARY ..............................................................................................................................................................1

THE ISSUE ..............................................................................................................................................................4

SELECTED FINANCIAL INFORMATION ............................................................................................................5

GENERAL INFORMATION .................................................................................................................................10

CAPITAL STRUCTURE ........................................................................................................................................17

OBJECTS OF THE ISSUE ....................................................................................................................................23

BASIS FOR ISSUE PRICE ....................................................................................................................................29

STATEMENT OF TAX BENEFITS .......................................................................................................................31

INDUSTRY OVERVIEW ......................................................................................................................................36

OUR BUSINESS ....................................................................................................................................................44

HISTORY OF OUR COMPANY AND OTHER CORPORATE MATTERS .........................................................63

DIVIDEND POLICY .............................................................................................................................................69

MANAGEMENT ...................................................................................................................................................70

PROMOTERS AND PROMOTER GROUP ..........................................................................................................80

FINANCIAL INFORMATION .............................................................................................................................130

STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY ........................................................159

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OFOPERATIONS ................................................................................................................................................161

MATERIAL DEVELOPMENTS ..........................................................................................................................169

OUTSTANDING LITIGATIONS AND DEFAULTS...........................................................................................170

GOVERNMENT APPROVALS ...........................................................................................................................226

STATUTORY AND OTHER INFORMATION ....................................................................................................248

TERMS OF THE ISSUE ......................................................................................................................................257

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ........................................................................277

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ..............................................................283

DECLARATION ..................................................................................................................................................285

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NO OFFER IN THE UNITED STATESThe rights and the Equity Shares of our Company have not been and will not be registered under the United StatesSecurities Act of 1933, as amended (the “Securities Act”), or any U.S. state securities laws and may not be offered, sold,resold or otherwise transferred within the United States of America or the territories or possessions thereof (the ‘‘UnitedStates’’ or ‘‘U.S.’’) or to, or for the account or benefit of, “U.S. Persons” (as defined in Regulation S under the SecuritiesAct (‘‘Regulation S’’), except in a transaction exempt from the registration requirements of the Securities Act. Therights referred to in this Letter of Offer are being offered in India, but not in the United States. The offering to which thisLetter of Offer relates is not, and under no circumstances is to be construed as, an offering of any shares or rights for salein the United States or as a solicitation therein of an offer to buy any of the said shares or rights. Accordingly, this Letterof Offer should not be forwarded to or transmitted in or into the United States at any time.

Neither our Company nor any person acting on behalf of our Company will accept subscriptions from any person, orthe agent of any person, who appears to be, or who our Company or any person acting on behalf of our Company hasreason to believe is, a resident of the United States and to whom an offer, if made, would result in requiring registra-tion of this Letter of Offer with the United States Securities and Exchange Commission. Rights may not be trans-ferred or sold to any U.S. Person.

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PRESENTATION OF FINANCIAL AND MARKET DATA

Financial DataUnless indicated otherwise, the financial data in this Letter of Offer is derived from our audited restated financialstatements prepared in accordance with Indian GAAP and the Securities and Exchange Board of India (SEBI)Guidelines and included in this Letter of Offer. Our fiscal year commences on April 1 and ends on March 31 so allreferences to a particular fiscal year are to the twelve-month period ended March 31 of that year.

There are significant differences between Indian GAAP and U.S. GAAP; accordingly, the degree to which thefinancial statements prepared in accordance with Indian GAAP included in this Letter of Offer will provide meaning-ful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any reli-ance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Letter ofOffer would accordingly be limited. We have not attempted to explain those differences or quantify their impact onthe financial data included herein, and we urge you to consult your own advisors regarding such differences and theirimpact on our financial data.

Currency of PresentationAll references to “Rs.” or “INR” refer to Rupees, the lawful currency of India, “SGD” refer to Singapore Dollar, thelawful currency of Singapore, “USD” or “US$” refer to the United States Dollar, the lawful currency of the UnitedStates of America, “CHF” refers to Swiss Francs, the lawful currency of Switzerland, “LE” refers to Egyptian Pounds,the lawful currency of Egypt, “EURO” refers to Euro, the lawful currency of the European Union, “GBP” refers toGreat Britain Pound, the lawful currency of Great Britain. References to the singular also refers to the plural and onegender also refers to any other gender, wherever applicable, and the words “Lakh” or “Lac” mean “100 thousand”and the word “million” means “10 lakh” and the word “crore” means “10 million” or “100 lakhs” and the word“billion” means “1,000 million” or “100 crores”. Any discrepancies in any table between the total and the sums of theamounts listed are due to rounding off.

All references to “India” contained in this Letter of Offer are to the Republic of India.

Market DataUnless stated otherwise, industry data used throughout this Letter of Offer has been obtained from internal Companyreports, data, websites, industry publications and governmental sources. Industry publication data and website datagenerally state that the information contained in those publications has been obtained from sources believed to bereliable but that their accuracy and completeness and underlying assumptions are not guaranteed and their reliabilitycannot be assured. Although, we believe industry data used in this Letter of Offer is reliable, it has not been verifiedby any independent sources. Similarly, internal Company reports, while believed by us to be reliable, have not beenverified by any independent sources.

v

FORWARD-LOOKING STATEMENTSWe have included statements in this Letter of Offer which contain words or phrases such as “will”, “aim”, “will likelyresult”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”,“future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of suchexpressions, that are “forward-looking statements”.

Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertaintiesassociated with our expectations with respect to, but not limited to, regulatory changes pertaining to the industries inIndia in which our Company has its businesses and our ability to respond to them, our ability to successfully implementour strategy, our growth and expansion, technological changes, our exposure to market risks, general economic andpolitical conditions in India and which have an impact on our business activities or investments, the monetary andfiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equityprices or other rates or prices, the performance of the financial markets in India and globally, changes in domesticlaws, regulations and taxes and changes in competition in our industry, changes in the value of the Rupee & othercurrencies, the occurrence of natural disasters or calamities, changes in political conditions in India and other countries.

For further discussion of factors that could cause our actual results to differ, see the sections titled “Risk Factors” and“Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on pages ixand 161 respectively of this Letter of Offer. By their nature, certain market risk disclosures are only estimates andcould be materially different from what actually occurs in the future. As a result, actual future gains or losses couldmaterially differ from those that have been estimated. Neither our Company, nor any of their respective affiliateshave any obligation to update or otherwise revise any statements reflecting circumstances arising after the datehereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.In accordance with SEBI requirements, our Company and the Lead Manager will ensure that investors in India areinformed of material developments until such time the grant of trading permission by the Stock Exchanges for theEquity Shares allotted pursuant to this Issue.

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ABBREVIATION AND TECHNICAL TERMSIn this Letter of Offer, the terms “Chemplast Sanmar Limited” or “CSL” “we” or “us” or “our” or “our Company” or“the Company”, unless the context otherwise implies, refer to Chemplast Sanmar Limited.

General Terms and AbbreviationsIn this Letter of Offer, save and except as otherwise defined, and the sections titled “Statement of Tax Benefits” and“Auditors Report” beginning on page 30 and page 130 of this Letter of Offer, the following terms shall have themeaning set forth below.

Act The Companies Act, 1956 together with any statutory amendments ormodifications thereto

AGM Annual General Meeting

Articles or AOA Articles of Association of the Company as originally framed or as altered fromtime to time in accordance with the provisions of the Act

AS Accounting Standards as issued by Institute of Chartered Accountants of India

Board or Board of Directors Board of Directors of Chemplast Sanmar Limited

BSE Bombay Stock Exchange Limited

Capital or Share Capital Share Capital of the Company

CFO Chief Finance Officer

CDSL Central Depository Services (India) Limited

“Chemplast Sanmar” or Chemplast Sanmar Limited, a public limited company incorporated under the“CSL” or “the Company” provisions of the Actor “we” or “us” or “our”or “our Company”

Depository Act Depositories Act, 1996

DP Depository Participants

DSIR Department of Scientific and Industrial Research

EGM Extra Ordinary General Meeting

EPS Earnings Per Share

Equity Share(s) or Share(s) The equity shares of the Company having a face value of Re. 1 /-

Equity Shareholder A holder of Equity Shares of the Company

FCNR Foreign Currency Non Repatriable

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999

FI Financial Institutions

FII(s) Foreign Institutional Investors registered with SEBI under applicable laws

FIPB Foreign Investment Promotion Board

FY/ Fiscal Financial Year ending as on March 31

GAAP Generally Accepted Accounting Principles

GOI Government of India

IOB Indian Overseas Bank

ISIN International Securities Identification Number allotted by the depository

Issuer Chemplast Sanmar Limited, a public limited company incorporated under theprovisions of the Act having it registered office at 9, Cathedral Road,Chennai – 600086

IT Act Income Tax Act, 1961 and amendments thereto

ITAT Income Tax Appellate Tribunal

MCA Ministry of Corporate Affairs

Memorandum or MOA Memorandum of Association of Chemplast Sanmar Limited as originally framedor as altered from time to time in accordance with the provisions of the Act

MSE Madras Stock Exchange Limited

MoU Memorandum of Understanding

N.A. Not applicable

vii

NBFC Non Banking Finance Company

NCD Non Convertible Debentures

NIC National Industry Classification

Non Resident A Person Resident Outside India

NRI Non Resident Indian

NSE National Stock Exchange of India Limited

OCB(s) Overseas Corporate Bodies

PAN Permanent Account Number

PAT Profit After Tax

PCB Pollution Control Board

Person Shall have the same meaning ascribed to it under the FEMA.

Person of Indian Origin Shall be a citizen of any country other than Bangladesh and Pakistan, if (a) he atany time held Indian passport or (b) he or either of his parents or any of hisgrand-parents was a citizen of India by virtue of the Constitution of India or theCitizenship Act, 1955 (57 of 1955) or (c) the person is a spouse of an Indiancitizen or a person referred to in sub-clause (a) or (b)

Person Resident Outside Shall have the same meaning as ascribed to the term under the FEMAIndia

PLR Prime Lending Rate

RBI Reserve Bank of India

ROC The Registrar of Companies, Chennai

SEBI Securities and Exchange Board of India

SEBI Act Securities and Exchange Board of India Act, 1992 and amendments thereto

SEBI DIP Guidelines Securities and Exchange Board of India (Disclosure and Investor Protection)Guidelines, 2000 and amendments thereto

SEBI (SAST) Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations, 1997 and amendments thereto

SIA Secretariat of Industrial Assistance

SICA Sick Industrial Companies Act

Issue related terms and abbreviationsASBA Application Supported by Blocked Amount

Bankers to the Issue State Bank of India

CAF Composite Application Form

CDSL Central Depository Services (India) Limited

Designated Stock Exchange The designated stock exchange for the Issue shall be Bombay StockExchange Ltd

Draft Letter of Offer Draft Letter of Offer of Chemplast Sanmar Limited dated September 25, 2008filed with SEBI for its comments

ECS Electronic Clearing Service

EYMBS / Lead Manager Ernst & Young Merchant Banking Services Private Limited (previously knownas Ind Global Corporate Finance Private Limited (IGCF))

Investor(s) Shall mean the holder(s) of Equity Share(s) of the Company as on the RecordDate, i.e. March 24, 2009 and Renouncees

Issue Opening Date March 30, 2009

Issue Closing Date April 13, 2009

Issue This Rights Issue of Equity Shares

Issue Price Rs. 5 /- per Equity Share.

Issue Size Issue of 31,98,79,627 fully paid up Equity Shares of Re 1/- each for cash at aprice of Rs 5/- per Equity Share aggregating to Rs 159,93,98,135 on rights basisto the existing equity shareholders of our Company in the ratio of 2 fully paid upEquity Shares for every 3 fully paid up Equity Shares held on the Record Date

Letter of Offer or LoF Letter of Offer dated March 13, 2009 as filed with the Stock Exchanges afterincorporating SEBI comments on the Draft Letter of Offer

viii

NSDL National Securities Depository Limited

Promoter Mr N. Sankar, Mr. N. Kumar,Mr. Vijay Sankar and Sanmar Holdings Limited

Promoter Group / The group of companies, trusts, partnership firms and individuals as set out inSanmar Group the chapter “Promoter and Promoter Group” beginning on page 80 of this

Letter of OfferRecord Date March 24, 2009

Registrar to the issue or Integrated Enterprises (India) LimitedRegistrar

Renouncees Shall mean the persons who have acquired Rights Entitlements from EquityShareholders

Right(s) Entitlement The number of Equity Shares that a shareholder is entitled to in proportion tohis/her shareholding in Chemplast Sanmar Limited as on the Record Date

RTGS Real Time Gross Settlement

SCSB Self Certified Syndicate Bank

Stock Exchange(s) Shall refer to the BSE, NSE and MSE, where the Shares of the Company arepresently listed

Technical and Industry Terms and Abbreviations

Industry/Business Related Terms

Terms Description

BSR Battery Separator Resin

CCPP Combined Cycle Power Plant

CDM Clean Development Mechanism

CER Certified Emission Reductions

CFC Chloro Flouro Carbon

CMP Chloromethanes

CTC Carbon Tetrachloride

DG Diesel Genset

DNS Denatured Spirit

EPDM Ehtylene Propylene Diene M-class rubber

FRLS Fire Resistant Low Smoke

HCFC Hydro Chloro Fluoro Carbon

HFC Hydro Fluoro Carbon

KL Kilo Litres

KLD Kilo Liters per Day

MOEF Ministry of Environment and Forest

PVC Poly Vinyl Chloride

VCM Vinyl Chloride Monomer

EDC Ethylene Di Chloride

HFC Hydro Fluro Carbons

LSHS Low Stock Heavy Sulphur

MTF Marine Terminal Facility

MW Mega Watts

PSQ Pseudo Square

PTFE Poly Tetra Fluoro Ethylene

TCE Tri Chloroethylene

TNPCB Tamil Nadu Pollution Control Board

Tpa/TPA/tpa Tonnes per annum

ix

RISK FACTORSAn investment in Equity Shares involves a high degree of risk. You should carefully consider all the information inthis Letter of Offer, including the risks and uncertainties described below, before making an investment in the EquityShares of our Company. If any of the following risks actually occur, our business, results of operations and financialcondition could suffer or be materially affected, the price of our Equity Shares could decline, and you may lose all orpart of your investment. The financial and other implications of material impact of risks concerned, whereverquantifiable, have been disclosed in the risk factors mentioned below. However there are risk factors where theimpact is not quantifiable and hence the same has not been disclosed in such risk factors.

This Letter of Offer also includes statistical and other industry data. This data was obtained from industry publications,reports and other sources that the Lead Manager and we believe to be reliable. Neither the Lead Manager nor wehave independently verified such data.

Unless otherwise stated, the financial information used in this section is derived from our audited financial statementsunder Indian GAAP, as restated. Bracketed numbers indicate losses/ negative figures.

Internal Risk Factors

1. We, our Promoter and our Promoter Group companies are involved in litigation proceedings and wecannot assure you that we, our Promoter and our Promoter Group companies will prevail in these actions.

We, our Promoter and our Promoter Group companies are involved in legal proceedings incidental to our businessand operations. These legal proceedings are pending at different levels of adjudication before various authoritiesincluding courts and tribunals. Should any new developments arise, such as a change in the Indian law which couldhave an adverse bearing or rulings against us, our Promoter, and our Promoter Group companies by the variousauthorities including courts or tribunal, we may need to make a provision for all or a portion of the disputed amountswhich could adversely impact our business results. Furthermore, if any significant claims are determined against us,our Promoter, and our Promoter Group companies and if we are required to pay all or a portion of the disputedamounts, it could have a material adverse effect on our business and profitability as well as, our Promoter, and ourPromoter Group companies. The risk outlined herein are our views on the pending cases of the Company which maynot be accurate as the cases are sub judice. The details of the outstanding litigations involving us, our Promoter andour Promoter Group companies and the amounts involved (save and except the cases where the amount involved isnot ascertainable) in the aforesaid cases are tabulated as under:

Details of pending legal cases against the Company, our Promoters & our Promoter Group companies and companiesno longer part of our Promoter Group companies:

Criminal Cases (Rs.in lacs)

Pending Against Number Amountof Cases Involved

the Company ( including cases filed against employees of the company) 3 NilPromoter Group companies Nil Nilcompanies no longer part of our Promoter Group companiessince July 2008 Nil Nil

Labour cases (Rs.in lacs)

Pending Against Number Amountof Cases Involved

The Company 24 26.07Promoter Group companies 7 16.12companies no longer part of our Promoter Group companies since July 2008 Nil Nil

Civil and Arbitration Cases (Rs.in lacs)

Pending Against Number Amountof Cases Involved

The Company 16 775.67Promoter 1 NilPromoter Group companies 5 28.00companies no longer part of our Promoter Group companies since July 2008 Nil Nil

x

Income Tax Cases (Rs.in lacs)

Pending Against Number Amountof Cases Involved

The Company 24 938.38Promoter Group companies 11 1076.68companies no longer part of the Promoter Group companies since July 2008. 6 10.19

Central Excise Cases (Rs.in lacs)

Pending Against Number Amountof Cases Involved

The Company 24 482.01Promoter Group companies 20 63.30

Service Tax Cases (Rs.in lacs)

Pending Against Number Amountof Cases Involved

The Company 17 247.12Promoter Group companies 5 13.55companies no longer part of the Promoter Group companies since July 2008. 2 1.24

Sales Tax Cases (Rs.in lacs)

Pending Against Number Amountof Cases Involved

The Company Nil NilPromoter Group companies 9 69.90companies no longer part of the Promoter Group companies since July 2008. Nil Nil

A. Details of cases/ Appeals filed against the Company: (Rs.in lacs)

Type of Case Number Amountof Cases Involved

Criminal 3 NilLabour 24 26.08Civil Cases & Arbitration Proceedings 16 775.67Income Tax 24 938.38Central Excise Proceedings 24 482.01Service Tax 17 247.12

B. Details of cases/ Appeals filed by the Company (Rs.in lacs)

Type of Case Number Amountof Cases Involved

Criminal 4 117.97Labour 9 101.49Civil Cases & Arbitration Proceedings 19 2241.96Income Tax 11 2548.92Central Excise Proceedings 54 537.42Service tax 22 89.70Sales Tax 7 460.16Customs Proceedings 13 11.58

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C. Briefly set out below are the criminal and civil cases filed against us, our Promoters and our PromoterGroup companies. For further details please refer to the section titled Outstanding Litigation on page170 of the Letter of Offer.a. Criminal Cases filed against us (including cases filed against our employees):

(i) The Chief Inspector of Factories has launched prosecution proceedings against our Manager of Plant IIIat Mettur, before the Chief Judicial Magistrate, Salem, for alleged violation of the provisions of the FactoriesAct, 1948, in complaint C.C.No.13 of 2007.No order has been passed as yet and the matter is currentlypending.

(ii) The Chief Inspector of Factories has launched prosecution proceedings against the Manager of Plant III atMettur, before the Chief Judicial Magistrate, Salem, alleging the violation of the provisions of the FactoriesAct, 1948, in complaints C.C.No.45/2007 and C.C.No:57/2007.No order has been passed as yet and thematter is currently pending.

(iii) The Chief Inspector of Factories has launched prosecution proceedings against the Manager of Plant III atMettur, before the Chief Judicial Magistrate, Salem for alleged violation of the provisions of the FactoriesAct, 1948, in complaint C.C.No.46/2007.No order has been passed as yet and the matter is currentlypending.

Depending on the outcome of the cases at a(i), a(ii) and a(iii) above, the Company may be faced withadverse orders and / or fines which may be monetary in nature under the relevant statutes.

b. Civil Cases filed against us:

(i) The Government of Tamil Nadu has filed a Special Leave Petition (“SLP”) in the Supreme Court ofIndia being SLP (Civil) No(s) 8743-8752 of 2004. challenging the Order of Madras High Court whichhad quashed the Government of Tamil Nadu Order No. Ms No. 64 for increasing the AdministrativeService fee on Industrial Alcohol / Denatured Spirit production from Rs. 0.50 to Rs. 1.00 per litre. In theevent the SLP is held against us, we will have to pay an amount of Rs.7,75,67,000/- to the Governmentof Tamil Nadu. The matter is currently pending in the Supreme Court.

(ii) With respect to a part of our lands in Palladam, Coimbatore, which are used as windmills by us, theTrustees of Sellandi Amman Temple have filed a Suit against us and others being O.S.No.826 of 1995before the District Munsif, Palladam raising dispute over the ownership of these lands to the extent of14.42 Acres. No order has been passed by the Court and the matter is currently pending. Any adversedecision in this matter may result in the Company not being able to use these lands.

(iii) A group of employees attached to the Mettur and Panrutti Plant have filed a writ petition being W.P.No.685of 2007 before the High Court, Madras with respect to imposition of tax on housing accommodationunder the Income Tax Act, 1961. The writ petition has been admitted and is currently pending.

(iv) One Dharmadurai has filed a Suit being O.S.No.325 of 2008 before the District Munsiff Court atCuddalore restraining TNEB from erecting 110 KVA power line over his land for the use of our Plant atCuddalore. No orders are passed and the matter is currently pending. Any adverse decision in thismatter may result in TNEB having to provide us with an alternate power line which may cause delay insupply of power to us by TNEB and consequential cost involved.

(v) A Suit being O.S.No.19 of 2006 has been filed before the District Munsiff Court at Cuddalore by localvillagers in Cuddalore District in January 2006 against Union of India and 11 others including us (the 6th

Defendant) against the installation and erection of our PVC Project in Cuddalore SIPCOT Complex onalleged grounds that such project is injurious to the health of the villagers residing in and aroundCuddalore.The Court by its order dated September 15, 2006 rejected the Plaint filed by the said localvillagers. However, the contempt petition filed by the company against one of the petitioners in theabove suit is pending.

(vi) A Writ Petition being W.P.No. 37043 of 2006 before the High Court Madras was filed in October, 2006by two individuals, Palanivel and Elumalai of Cuddalore against Ministry of Environment & Forest,Delhi, Department of Environment & Forest, Chennai, TNPCB, Chennai, Inspector of Factories,Cuddalore, and us as Public Interest Litigation, challenging the Environmental clearance granted forour PVC Project at Cuddalore.The writ petition is currently posted for final hearing and the same ispending.

(vii) A Writ Petition being W.P. No. 23122 of 2007 before the High Court Madras was filed in June 2007 byone Kadal Dhanasekaran of Cuddalore against Ministry of Environment & Forest, Delhi, Department ofEnvironment & Forest, Chennai, TNPCB, Chennai, SIPCOT, Inspector of Factories, Cuddalore, and us

xii

as a Public Interest Litigation challenging the Environmental clearance granted for our PVC Project atCuddalore.The case is pending and it is to be posted for final hearing.

(viii) A Writ Petition being W.P. No. 8125 of 2007 before the High Court Madras was filed in February 2007by an individual Elumalai of Chittrapettai Village, Cuddalore District against the Ministry of Environmentand Forests, Department of Environment & Forest ,Government of Tamil Nadu, TNPCB, Chennai, andus, challenging the Environmental clearance granted for the Marine Terminal Facility Project (“MTF”)attached to our PVC Project at Cuddalore.

(ix) One Jayachandran and another have filed a suit O.S.No.35/2009 before the District Munsif Court,Cuddalore in representative capacity for the relief of permanent injunction restraining the companyfrom carrying out construction activities in the project site at Semmanguppam village. No orders havebeen passed and the suit is currently pending.

Any adverse decision by the Court in the matters set out at (vi), (vii), (viii) and (ix) above would delaythe commissioning of our Cuddalore PVC Project and may cause financial impact on us.

(x) A Writ Petition being W.P. No. 8060 of 2007 before the High Court Madras was filed in February 2007by West Gonur Farmers Welfare Association represented by one Madheswaran, against the Departmentof Environment and Forests, Govt. of Tamil Nadu, TNPCB, Chennai, and us as public interest litigationchallenging the Environmental clearance given for our Coal based Power Plant Project at Mettur.Thiscase is currently pending.

(xi) TNPCB issued an order dated January 22, 2008 revoking the approval / consent granted by them to usin May 2006 for setting up a captive co-generation plant at Mettur, alleging that we had violated theprovisions of GO MS No 213 dated March 30, 1989 and GO MS No 127 dated May 8, 1998 of theEnvironment & Forest Department and for not obtaining the clearance from Environment ImpactAssessment Authority (“EIA”) as required under the EIA notification dated September 14, 2006. TheHigh Court of Madras vide its order dated September 18, 2008 in WP No. 12663 and 12664 struckdown the revocation order of the TNPCB and remitted the matter back to TNPCB for reconsideration.The subject matter is pending before the TNPCB.

Any adverse decision by the court/ TNPCB in the matters listed out in (x) and (xi) above would delaythe commissioning of our coal based captive co-generation plant at Mettur and the benefits of lowercosts of power.

(xii) The High court of Madras in Writ Petition No.17333 of 1995 in the matter of Sugarcane GrowersAssociation vs. Sakthi Distilleries Ltd, has directed Tamil Nadu Pollution Control Board (“TNPCB”)to conduct a study of the distilleries situated in Tamil Nadu and submit its report to the Court. Pursuantto the High Court order we were served a notice by the TNPCB, to prove if our units is functioning asper the suggestions of NEERI. We have obtained the report from NEERI which will be submitted by uswhen the matter is listed for hearing. We are not a party to this WP. The matter is currently pending.

(xiii) The High Court of Madras in WP No. 13433 of 1996 in the matter of Vellore Citizens Welfare Forum &others vs. Union of India, TNPCB and others, has directed TNPCB to issue notices to about 1960industries in the State which are said to be located within 1 km of the designated water sources. We havereceived notices in respect of our Industrial Alcohol Plant I, Krishnagiri and Plant I at Mettur fromTNPCB. We are not a Party to this WP. The case is currently pending.

(xiv) We have received a Notice dated February 14, 2007 from Loss of Ecology (P&PC) AuthorityChennai – 86 Constituted by the Ministry of Environment and Forests Government of India, under theNotification S.O.671 (E) dated September 1996 under Section (3) of the Environment (Protection) Act,1986 in relation to a claim determined by Loss of Ecology Authority at Rs. 2,19,816/- towards allegedloss and / or damages to the wells in the nearby villages. The matter is pending before the said authority.

(xv) A show cause notice bearing No.Roc.No.P&E III (1) / 6702 / 2005 (SCN) has been issued by theSpecial Commissioner of Prohibition and Excise, Chennai dated July 22, 2008 with respect to ourIndustrial Alchohol Plant at Krishnagiri, which is presently not in operation. The proceedings in theSCN are completed and orders awaited.

c. Case filed against one of our Promoters:

(i) Mr. N. Sankar who is one of the promoters of our Company is a non-executive director in Bata India Ltd,Kolkata. One of the shareholders of the Bata India Ltd., viz., Anil Kumar Poddar who is holding 1 (one)equity share, has filed a complaint bearing No. C / 8682 / 06, in the 10th Metropolitan Magistrate atBankshall Court at Calcutta against Bata India Ltd and has made all the directors of Bata India Ltd(including Mr. N.Sankar) as respondents in the said matter alleging non compliance with certain provisions

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of the Companies Act, 1956 by Bata India Limited. Bata India Ltd filed a Criminal Revision Petitionbeing No. 4485 of 2008 (“CRP”) for quashing the aforesaid proceedings before the Hon’ble CalcuttaHigh Court. The aforesaid CRP came up for hearing before the Hon’ble Justice Mr. Arunbha Basu onJanuary 27, 2009 and an order of stay of all proceedings before the Magistrate Court in C / 8682/06 hasbeen passed until March 20, 2009 and the matter is posted for extension of the interim order on March19, 2009.

d. Civil Cases filed against our Promoter Group companies:

Sanmar Foundries Ltd (“SFL”)

(i) Mrs. Devi, wife of the deceased employee Rajendran has filed a Suit being O.S.No.1564 of 2008 before theDistrict Munsiff Court at Trichirapalli for a declaration that she and her children are the legal heirs of thedeceased Rajendran and also for a permanent injuction restraining SFL from making any payment to herin-laws under the Special Settlement Scheme. The Suit is currently pending.

Sanmar Speciality Chemicals Ltd (“SSCL”)

(ii) Nagamma and 3 others have filed a Suit being O.S.No. 5 of 2006 before the District Munsif Court, Hosur fordeclaration of title and possession of the property admeasuring an extent of 2.56 Acres out of 5.56 acressituated in Suligunta Village, Hosur, Taluk, alleging that they are the absolute owner. The matter is currentlypending.

SHL Property Holdings Ltd (“SHL PHL”)

(iii) Chennai Garr –Tech Ltd has filed a suit being OSA No.206 of 2006 in The High Court, Madras, against variousparties including SHL PHL for declaring that they are owners of land measuring an extent of 14 Acres inSeevaram Village, Perungudi, they having purchased the same through a sale deed dated March 14, 2006which include SHL PHL’s property to the extent of 2.00 Acres. This matter is currently pending and no ordershave been passed.

(iv) SHL PHL has received a Revision in the property tax in respect of the property at No. 9, Cathedral Road,Chennai. Since there is a discrepancy in the area in the revised assessment, we filed an appeal before theTaxation Appellate Committee, Chennai Corporation. The appeal is currently pending.

Sanmar Engineering Services Ltd (“SESL”):(formerly Sanmar Property Development Ltd)

(v) Royal Striches Pvt Ltd has filed a claim before the State Consumer Redressal commission for payment a sum ofRs. 18,00,000 towards compensation / damages alleging delay in completion of the project at Guindy. Thematter is currently pending.

2. Latest restated financial results for the six months ended September 30,2008 resulted in a loss / negativecash flow

The operations of the Company for the six months period ended September 30, 2008 resulted in a net loss after tax(restated) of Rs.3631.35 lacs. The cash loss (restated) for the period was Rs.2509.17 lacs. The net loss is after anexceptional charge of Rs.3050.47 lacs during this period resulting from the write-down of the carrying value ofstocks of major raw materials, intermediates and finished products to levels corresponding to the current net realisablevalue of finished products. This write-down which was effected as a measure of conservatism and in line withgenerally accepted accounting principles, was a result of the sudden steep fall in prices of crude oil and the globalfinancial crisis that led to collapse of Petrochemical prices, by almost 50%.

3. Contingent Liabilities as on March 31, 2008

As per the audited financial statements as on March 31, 2008, we have a contingent liability of Rs.1,605.74 lacs,which, if crystallizes, may impact our financial position adversely. The contingent liabilities on account of claimsagainst us which have not been provided in the accounts and which have not been acknowledged as debts are asfollows.

Contingent Liability Rupees (lacs)

Excise disputes cases 351.13

Sales tax related cases 605.81

Income tax related cases 583.10

Employee related cases 58.04

Others 7.66

Total 1,605.74

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4. We will be providing a standby letter of credit of US$ 35 million to Lenders to TCI Sanmar Chemicals LLCwhich if called upon could affect our financial position.

The raw material for our green field plant at Cuddalore will be VCM. We will be sourcing the VCM from our groupcompany, TCI Sanmar Chemicals LLC (formerly Trust Chemical Industries LLC) (TCI) in Egypt. The SanmarGroup acquired TCI in 2007 which is engaged in the business of manufacturing caustic soda and has a capacity of2,00,000 tpa. The capacity utilization of TCI is at 60% due to chlorine utilization constraints. Post acquisition, TCIis expanding the capacity of the plant to manufacture 2,75,000 tpa of caustic soda and create downstream capacitiesfor VCM of 4,00,000 tpa and PVC of 2,00,000 tpa respectively which would ensure that the entire chlorine producedby TCI is fully utilized. Out of the 4,00,000 tpa of VCM to be produced by TCI, 2,00,000 tpa will be sold to us forthe Cuddalore PVC plant. TCI is expected to begin commercial production of VCM by early 2010. To keep controlon a long term basis over the critical feed stock (VCM) for its PVC off-take agreement, we have entered into an Off-take Agreement on January 8, 2009 for supply of VCM by TCI Sanmar Chemicals LLC, Egypt (TCI) to us. Underthis agreement and in terms of the above, TCI will supply 200,000 tpa of VCM for a period of 18 years at a formuladriven price.

As part of supply arrangement, TCI has requested the Company to make a deposit up to a maximum of US$ 100million against these future supplies. TCI will use this amount for completion of its projects. The Shareholders haveapproved of this arrangement. The Company has proposed that it will open a Letter of Credit (LC) for this amount,which TCI can encash if required for completion of its project. After project completion, any drawings on thisaccount would be adjusted towards the deposit to be made against VCM supplies by TCI to us.

At TCI’s request, we expect to open a LC for an amount of US$ 35 million in favour of the lenders to TCI, which canbe encashed, to meet TCI’s cost overrun on its projects or if TCI unable to service its debts till the date TCI’s projectis notified by the lenders as financially complete.

As indicated above, after project completion, any drawings on this account would be adjusted towards the deposit tobe made against the VCM supplies.

Any call by TCI lenders on this LC and which the Company is unable to adjust against supplies of VCM would affectthe financial position of the Company.

5. The increase in the capacity of Greenfield project at Cuddalore from 1,70,000 tpa to 2,00,000 tpa is subjectto our obtaining the required approvals from the MOEF and TNPCB

We are setting up a 2,00,000 tpa Greenfield project at Cuddalore to manufacture PVC. Our Company, at present hasenvironmental clearances/approvals from MOEF and TNPCB for production of 1,70,000 tpa of PVC from ourGreenfield project at Cuddalore. The increase in capacity from 1,70,000 tpa to 2,00,000 tpa is subject to our obtain-ing the required approvals from the MOEF and TNPCB. We are initiating necessary steps for obtaining approvals forenhancing the capacity to 2,00,000 tpa of PVC from these authorities. If we do not receive these approvals, ourbusiness may be adversely impacted.

6. Our failure to obtain and renew regulatory approvals required for our business may detrimentally affectour business operations.

We have registrations and permits required by us for carrying on our business operations and in cases where permitsand registration have expired or where otherwise required, we have made 68 applications to the authorities con-cerned in respect of our various plants and are awaiting the consent/ approval/ renewal of registrations and permitsfrom them. Applications for fresh renewals of registrations and permits are also required to be made by us on aperiodic basis. If these registrations and permits of authorities in respect of which we have applied for or thoseregistrations and permits where fresh renewals are to be made are not received, they may impact our business. For thedetails of the approvals required for our business and which are currently pending, please refer to Page 226 of thisLetter of Offer.

7. We depend on various contractors or specialist agencies to construct and commission our Cuddalore project,some of whom supply sophisticated and complex machineries.

We depend on the availability and skills of 317 third party contractors for the development and construction of ourCuddalore project and supply of certain key equipments, of whom 10 are major contractors. We do not have directcontrol over the timing or quality of services, equipment or supplies provided by these contractors. We cannot assurethat such contractors will continue to be available at reasonable rates in the areas in which we conduct our opera-tions, and we may be exposed to risks relating to the quality of their services, equipment and supplies. In addition, werequire the continued support of certain original equipment manufacturers to supply necessary services and parts tomaintain our project at affordable cost. If we are not able to procure the required services or parts from thesemanufacturers or if the cost of these services or parts exceed the budgeted cost, there may be a material adverseimpact on our business, financial condition and results of operation.

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8. Risk of time and cost overrun in the Greenfield project at Cuddalore and delay in the commencement ofcommercial production.

As per the appraisal report of SBI Capital Markets Limited dated October 2006 and addendum to the appraisal reportdated May 2007, the Cuddalore plant will begin commercial production in July, 2008. However, having regard to thestatus of the project implementation at Cuddalore, we expect to commence the commercial production in March2009. We have made certain assumptions on the time frame by which the Green field plant at Cuddalore will becompleted. The total cost is subject to fluctuations due to hike in input cost, higher levies etc. Further, the Cuddaloreproject currently under implementation, is subject to risks, including, among other things, contractor performanceshortfalls, unforeseen engineering and commissioning problems, force majeure events, unanticipated cost increasesor changes in scope of certain government approvals, any of which could give rise to further delays, cost overruns ortermination of the project.

Any cost overrun will be met by the Company arranging the necessary funds. Time and cost overrun and related costsof funding overrun would adversely impact our future profitability.

9. There may arise production problems on account of possible flaws in designing.

We have entered into a technology agreement with Ineos Vinyls, U.K for the Greenfield PVC plant at Cuddalore.There may arise production problems on account of flaws in the design/technology provided by Ineos Vinyls, U.Kwhich may affect our financial performance and competitiveness in the market. We may have to incur additionalexpenditure to rectify the flaws.

10. Threats mentioned in the appraisal report, as perceived by SBI Capital Markets Limited

As per the appraisal report of SBI Capital Markets Limited in October 2006 and addendum to the appraisal report inMay 2007, the following are the threats for the PVC project:

The nature of the PVC industry is moderately cyclical. Any fluctuations in the cost of VCM will impact themargins adversely.

The Government of India has been continuously reducing the customs duty on PVC imports and the spreadbetween import duty on PVC and the intermediate (EDC/VCM) has reduced substantially.

The project faces a dominant threat in the form of expansion of the capacity of other players operating in thePVC industry.

Environmental degradation and safety issue are significant concerns in the Chemical Industry.

The proposed project at Cuddalore will have to maintain the highest environmental compliance and safetystandards.

11. The raw material supply to our Cuddalore plant may not be consistent, which could hamper the productionand our financial performance may be adversely affected.

The raw material for our Greenfield plant at Cuddalore will be VCM. We have entered into an agreement withMitsubishi Corporation of India Private Limited for supply upto 1,50,000 tpa of VCM initially for one year.

We will be sourcing the VCM from our group company, TCI Sanmar Chemicals LLC (formerly Trust ChemicalIndustries LLC) (TCI) in Egypt from early 2010. The Sanmar Group acquired TCI in March 2007 which is engagedin the business of manufacturing caustic soda and has a capacity of 2,00,000 tpa. The capacity utilization of TCI is at60% due to chlorine utilization constraints. Post acquisition, TCI is expanding the capacity of the plant to manufac-ture 2,75,000 tpa caustic soda and create downstream capacities for VCM of 4,00,000 tpa and PVC of 2,00,000 tparespectively which would ensure that the entire chlorine produced by TCI is fully utilized. Out of the 4,00,000 tpa ofVCM to be produced by TCI, 2,00,000 tpa will be sold to us for the Cuddalore PVC plant. TCI is expected to begincommercial production of VCM by early 2010. To keep control on a long term basis over the critical feed stock(VCM) for its PVC operations at Cuddalore, we have entered into an Off-take Agreement on January 8, 2009 forsupply of VCM by TCI Sanmar Chemicals LLC, Egypt (TCI) to us. Under this agreement and in terms of the above,TCI will supply 200,000 tpa of VCM for a period of 18 years at a formula driven price.

In case we are unable to obtain supplies of the required quantity of VCM from TCI and other suppliers, our produc-tion and therefore financial performance will be adversely affected.

12. Land we used for Green field project not registered in the name of the company.

Of the 139.52 acres of freehold and leasehold lands being used by the company for its Green field project, 0.45 acresof leasehold lands are not registered in the name of company.

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13. Our operations will have significant power requirements, and we may not be able to ensure the availabilityof power at competitive prices.

All our manufacturing plants are power intensive, particularly our caustic soda plants at Mettur and Karaikal. Thesuccess of our operations will depend upon, among other things, our ability to provide power supply to both theplants at lower cost. Although majority of our power requirements are from captive power plants and we are imple-menting a project for conversion of existing LSHS based power plant into coal based Power Plant to ensure captivesupply of power at lower cost, there is no assurance that even after the commencement of the coal based power plant,the cost per unit of power will be lower.

14. We are vulnerable to volatility in prices of our raw materials and supply constraints.

We depend on external suppliers for Ethylene, the raw material for manufacturing PVC at Mettur and VCM for ourGreenfield PVC project at Cuddalore. The prices of Ethylene and VCM, the raw materials we purchase from oursuppliers may fluctuate due to changes in demand and supply conditions for these raw materials in domestic andinternational markets. In the event of any significant increase in the prices of these raw materials and if we are unableto pass on fully such increase in the prices to our customers, our profitability will be adversely affected. If we areunable to ensure adequate and timely supply of raw materials our production plans would be adversely affectedimpacting our profitability.

15. Our results of operations and financial condition would suffer if we are unable to pass the increases in coststo our customers.

The cost of goods sold (raw materials and intermediates consumed plus other manufacturing expenses) constituted83% and 82% of the total expenses incurred by us (excluding depreciation and interest) for the financial years endingMarch 31, 2008 and March 31, 2007 respectively. The prices of the raw materials we use depend on the supply anddemand relationships, and are therefore subject to fluctuation.

Our plants manufacturing chlorine and caustic soda are energy intensive and consume large amounts of electricity. Aprolonged interruption of supply or a significant increase in energy prices could have an adverse impact on ourfinancial results.

Prices of the raw materials and energy required by us may increase, and if they do, we may not be able to pass on theentire cost of such increases to our customers to offset fully the effects of higher raw material and energy costs. Thismay cause our profitability to decline.

16. We may face risk of under utilisation of our PVC capacity.

After the commencement of commercial production from our Greenfield plant at Cuddalore, our total capacity toproduce PVC will be increased from 64,000 tpa to 2,64,000 tpa., subject to we obtaining the necessary approvals forincrease in capacity from 1,70,000 tpa to 2,00,000 tpa for our Cuddalore Greenfield project from MOEF and TNPCB.We may face a risk of our capacity remaining unused if the market conditions deteriorate and the market is not ableto absorb the full production of our Company.

17. We face competition in India and internationally

We operate in a competitive environment as our principal products are produced by a number of other manufacturers inIndia and abroad. The details of the domestic competition and market share of our major products are mentioned below:

Source: For caustic Soda – Alkali Manufacturers Association of India ( AMAI) Annual Report – 2007-08.

Major products Our market Number of Countries/Regions fromshare domestic which international

competitors competition is faced by us

PVC Suspension resin 2% 6 Middle East, North-East Asia andsporadically from Europe Middle East,

PVC Paste resin 36% 3 Korea and Europe

PVC BSR resin 35% NIL -

Caustic Soda 4% 32 Korea, China, Indonesia, Thailand,Qatar and Saudi Arabia

Chloromethanes 15% 3 Europe (including Russia), China, Korea andUSA

Refrigerant gas 2% 3 -

Silicon wafers 1% 2 -

PVC pipes 3% 12

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Players in product segments in which we operate, generally compete with each other on key attributes such astechnical competence, quality of products and services, pricing and track record. We compete with our competitorson the basis of our track record of quality, technical competence, distribution channels, logistics facilities, after salesrelationships, technical support to customers and overall credibility as a professional organization of long standingrepute. There is however no assurance that we will continue to compete successfully in future.

For further details with respect to competition, please refer ‘Our Business’ Chapter in the Letter of Offer.

18. We have not branded our products and we do not intend to brand or patent any of our products or processes.

We do not own any brand names/trade marks for any our products except for “TRUBORE”, the brand name for PVCpipes acquired by us. Our Company also owns the Trade Mark “Chemplast” Logo which is used for the commoditychemicals manufactured by the Company. However, the characteristic of the industry i.e. commodity chemicals inwhich we mainly operate is that the customers depend on quality of the products and reputation of the Company andnot on brands or trade marks.

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

We expect that our growth strategy will place significant demands on our management, financial and other resources.It will require us to continuously develop and improve our operational, financial and internal controls. In particular,continued expansion increases the challenges involved in financial and technical management, recruitment, trainingand retaining sufficient skilled technical and management personnel and developing and improving our internaladministrative infrastructure. Any inability to manage such growth could disrupt our business, reduce our profitabil-ity and adversely affect our results of operations and financial condition.

20. Our future growth requires additional working capital, which may not be available on terms acceptable to us.

Our business has high working capital requirements. We intend to pursue a strategy of funding our major workingcapital requirements from banks and other financial institutions. We may not be successful in obtaining these fundsin a timely manner, or on favorable terms or at all.

21. Change in Technology and trends in the industry may affect Company’s ability to compete.

Any failure to keep abreast of the latest trends in the Chemical industry, and more particularly in the PVC andchlorochemicals industry, may adversely affect our competitiveness and ability to compete in the market.

22. Some of our group companies are loss making

Following companies of the Sanmar Group have incurred losses in the past 3 years:

A. Domestic group companies.

List of domestic group companies which have incurred losses in the past three financial years:

Rs. in Lakhs

S.no. Company 2008 2007 2006 Remarks

1 Sanmar Foundries Limited (543) 478 620

2 Sanmar Ferrotech Limited (14) - -

3 NS Family Consolidations (0.056) (0.003) (0.020)Private Limited

4 SHL Research Foundation (0.285) (0.378) (3.12)

5 Strategic Properties Private (0.077) (0.0568) -Limited

6 SHL Investment Services Private (1.75) (0.078) (0.11)Limited

The company wasincorporated on May 7,2007 and the firstaccounting year ended on 31st March 2008.

The company wasincorporated on March26, 2007 and the firstaccounting year ended on 31st March 2007.

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The company wasincorporated on November30, 2007 and the firstaccounting year ended on31st March 2008.

The company wasincorporated on April 27,2006 and the firstaccounting year ended on31st March 2007.

The company wasincorporated on February21, 2006 and the firstaccounting year ended on 31st March 2007.

The company wasincorporated on February7, 2007 and the firstaccounting year ended on 31st March 2007.

The company wasincorporated on June 28,2006 and the firstaccounting year ended on 31st March 2007.

S.no. Company 2008 2007 2006 Remarks

7 Twinpeaks Technologies Private (0.31) - -Limited

8 Bay View Properties Private Limited (26.94) (16.84) (17.96)9 Kelambakkam Properties Private

Limited (2.86) (2.08) (2.34)10 Greenvalley Investments (Alpha)

Private Limited (2.53) (0.99) 1.3111 Poes Garden Properties Private Limited (0.14) (0.39) (2.27)12 Hillcrest Investments (Alpha) Private

Limited (0.16) (0.05) (0.09)13 Madhura Kumar Properties Private

Limited (1.70) (8.93) (2.34)14 Cubbon Road Properties Private Limited (2.19) (1.25) (0.69)

15 Jumbo Properties (Alpha) Private Limited (29.04) (2.13) -

16 Jumbo Properties Private Limited (0.11) (0.06) -

17 NS Family Investments Private Limited (0.05036) (0.00668) (0.00412)18 SHL Securities (Alpha) Limited (0.04732) (0.005) (0.002)

19 SHL Trading Limited 110.25 (0.06) -

20 Indchem Communications Limited (5.396) (32.91) (6.27)21 SHL Property Holdings Limited (2,247.95) 310.71 168.2022 N Sankar Properties and Holdings

Private Limited (0.05036) (0.013) (0.08)23 Fortis Properties Private Limited (41.65) (1.66) -

24 Indchem Software Technologies (India)Limited (0.08047) (0.28) 0.051

25 Apex NK Software Solutions Limited (0.128) (0.075) (0.072)26 Indchem Software Technologies Limited (11.30) (1.43) (9.23)27 Silkroute Indchem Limited (0.747) (1.22) (0.56)28 Fingertip Technologies Private Limited (2.45) (4.94) (28.04)29 iSkills (India) Private Limited (4.62) (6.23) (18.11)30 eG Innovations Private Limited (10.77) (6.23) 47.7231 Chemplast Sanmar Aromatics

Private Limited (26.19) 0.94 -

32. Sanmar Realty Private Limited (45.79) 5.61 465.76

Till March 31, 2006, theCompany has notcommenced operationsand hence no profit &Loss account was drawnup till March 31, 2006.

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S.No. Company Currency 2008 2007 20061 Cav-Nile AG CHF (56,194) – –

INR (23.04) – –(1 CHF=41 INR)

2 Pharaoh International US$ (69,122) – –Limited INR (33.87) – –

(1 USD =49 INR)

3 Pharaoh Consolidations US$ (3,16,728) – –Limited INR

(1 USD = (155.20) – –49 INR)

4 Matrix Metals US$ (70) – –Holdings Inc INR (0.03) – –

(1 USD =49 INR)

5 Sanmar Group Germany Euros (10,964) (2,444) –GmbH INR (6.80) (1.52) –

(1 Euro =62 INR)

6 Eisenwerk Erla Euros 1,99,528 (1,08,834) –Beteiligungsgesellschaft INR 123.71 (67.48) –GmbH (1 Euro =

62 INR)

7 Metalcast Overseas CHF (19,060) – –Steel AG 1 CHF =

41 INR (7.81) – –

8 Multicontintental CHF (19,217) – –Ferro AG 1 CHF (7.88) – –

41 INR

9 Matrix Metals AG CHF (7,584) – –1 CHF (3.11) – –41 INR

10 eG Innovations Pte Ltd. SGD1 16,47,456 7,49,323 (1,33,042)SGD - 32

INR 119.90 239.78 (42.57)

B. Overseas group companies.

List of overseas group companies which have incurred losses in the past three financial years:Rs. in Lakhs

The company wasincorporated on February1, 2007 and the firstaccounting year ended on31st March 2008.

The company wasincorporated on January26, 2007 and the firstaccounting year ended on31st March 2008.

The company wasincorporated on February9, 2007 and the firstaccounting year ended on31st March 2008.

The company wasincorporated on March4, 2008 and the firstaccounting year endedon 31st March 2008.

The company wasincorporated onNovember 29, 2006 andthe first accounting yearended on 31st March2007.

The company wasincorporated onNovember 29, 2006 andthe first accounting yearended on 31st March2007.The company wasincorporated onFebruary 26, 2008 andthe first accounting yearended on 31st March2008.

The company wasincorporated onFebruary 26, 2008 andthe first accounting yearended on 31st March2008.

The company wasincorporated on March4, 2008 and the firstaccounting year endedon 31st March 2008.

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23. Companies With Negative Networth

List of domestic group companies which have Negative Net worth in the last three years

24. In respect of the following companies, their stand alone audited financials have not been provided but havebeen presented on a consolidated basis (i.e. together with their holding / subsidiary companies) and thereforethe investors do not have information on the individual companies’ performances:

(a) eG Innovation UK Limited(b) Acerlan Matrix LLC(c) Acerlan Sa de CV(d) Immobilieria Acerlan SA de CV(e) Matrix Metals LLCInvestors are advised to refer to the page 120 for (a) above and page 123 for (b) to (e) above, under section entitled“Promoters and Promoter Group” of this Letter of Offer for consolidated financial information.

(Figures in Rs.Lakhs)

S.no. Name of the Company 2008 2007 2006 Remarks

1 Sanmar Industrial Filters Limited (0.97) (0.97) (0.97)

2 Sanmar Ferrotech Limited (0.09) – –

3 NS Family InvestmentsPrivate Limited (0.76) (0.71) (0.71)

4 NS Family Consolidations Private Limited (0.91) (0.96) (0.96)

5 Indchem Communications Limited (315.56) (310.17) (277.26)

6 Chemplast Sanmar Aromatics PrivateLimited (25.36) 0.83 5.00

7 SHL Investment Services Private Limited (1.93) (0.18) (0.11)

8 N Sankar Property and Holdings PrivateLimited (1.13) (1.08) (1.07)

9 Bay View Properties Private Limited (83.03) (56.08) (39.24)

10 Cubbon Road Properties Private Limited (6.16) (3.97) (2.72)

11 Jumbo Properties (Alpha) Private Limited (30.23) (1.19) –

12 Fortis Properties Private Limited (42.38) (0.73) –

13 Apex NK Software Solutions Limited (107.54) (107.41) (107.33)

14 Indchem Software Technologies Limited (522.96) (511.66) (510.16)

15 Fingertip Technologies Private Limited (142.58) (140.13) (135.19)

16 iSkills (India) Private Limited (27.96) (23.34) (17.11)

List of overseas group companies which have negative networth in the last three years

The company wasincorporated on May 7,2007 and the firstaccounting year ended on31st March 2008.

The company wasincorporated on Apirl 27,2006 and the firstaccounting year ended on31st March 2007.

The company wasincorporated on June 28,2006 and the firstaccounting year ended on31st March 2007.

(NOTE: Conversion to INR worked out based on the exchange value of INR against the respective overseas curren-cies as on November 14,2008).

(Figures in Rs.Lakhs)Sl.No. Name of the Co March 31, 2008 March 31, 2007 March 31, 20061 Blue Chips Limited GBP 20,10,200 9,50,700 (30,200)

INR 1467.45 694.01 (22.05)2 eG Innovations Pte. Ltd

(Consolidated) SGD (24,10,776) (31,31,918) (38,37,621)INR (771.44) (1,002.21) (1228.03)

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25. Our operations are subject to environmental and health related laws and regulations. Compliance withsuch laws and regulations may be expensive and any non-compliance exposes our Company and our Directorsand key personnel to criminal liability.

Our production operations are subject to laws and regulations, in particular environmental and health related lawsand regulations in India. Under these laws and regulations we are required to control the use of as well as restrict thedischarge or disposal of hazardous or environmentally objectionable by products of our production process.

If we breach or fail to comply with these laws and regulations, penalties or fines may be imposed on us, our directorsand officers responsible for such breach or non compliance and may also be subjected to imprisonment. Further ourmanufacturing licenses may be suspended, withdrawn or terminated in the event of such breach or non-compliancethereby disrupting our operations. Should these penalties or fines be significant or should any of our manufacturinglicenses be suspended, withdrawn or terminated, our business will be adversely affected.

If there are new regulations or laws imposed, we may incur additional expenditure or costs or we may be required toacquire additional equipment in order to comply with such new laws or regulation. Where such expenditure or costsare significant, our profitability will be adversely affected.

26. Our success depends upon our ability to recruit key managerial and other required man power for theCuddalore project and retain the existing key management and other personnel across the organisation.

The success of our new project at Cuddalore, located in the state of Tamil Nadu, will significantly depend on ourability to recruit the required key personnel and manpower including the technical and non technical staff. Further,our success would also depend on the expertise, experience and continued efforts of our existing key managementand other personnel. Our future performance may be affected by any disruptions in the continued service of thesepersons. There is a dearth of managerial talent, including key managerial personnel, with related business experience.The loss of one or more of our key managerial personnel and our inability to recruit the right candidates for the newprojects may impact our operations and ability to maintain growth in our business.

27. Most of our workers are represented by labour unions and any labour unrest at our manufacturing unitscould have an adverse effect on our financial conditions and prospects.

A significant number of our employees are members of labour unions. These unions are specific to the local area inwhich each plant is situated. If our relationship with our employees deteriorates and there is labour unrest resultingin a work stoppage, slowdown or a strike, our production facilities may not be able to continue operations at thenormal level, or at all. Our production at the Metkem Silicon Plant was adversely affected due to 40 of the 58unionised employees going on strike during September 2007 on account of dispute relating to bonus payments. Theconciliation talks before the Conciliation officer, Salem failed and the 40 employees were terminated from service intwo batches. While we believe that we maintain good relationship with our employees, there can be no assurance thatwe will not experience future disruptions to our operations due to disputes or other problems with our work forcewhich may adversely affect our business.

28. Possibilities of accidents due to wrong handling of any dangerous materials used in our business or anykind of human errors.

The nature of our business requires us to work with and transport highly flammable and explosive materials. Despitecompliance with the requisite safety requirements and standards, our operations are subject to hazards associatedwith handling of such dangerous materials. If improperly handled or subjected to unsuitable conditions, these materialscould hurt our employees or other persons, cause damage to our properties or harm the environment. This couldsubject us to significant disruption in our business, legal and regulatory actions, costs and liabilities, which couldadversely affect our business, financial condition and results of operations, problems with our work force which mayadversely affect our business.

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

Our future ability to pay dividends will depend on our earnings, financial condition, cash flows and working capitalrequirements. Our ability to pay dividends could also be restricted under certain financing arrangements that we mayenter into. Our future dividend policy will depend upon our capital requirements and financing arrangements for anynew projects, financial condition and results of operation.

30. The promoters of our Company hold 75% of the Equity Share Capital.

The promoters of our Company hold 75% of our Equity Share Capital. They exercise the major control on themanagement and the investors holding the remaining 25% of our Equity Share Capital would not have any say in themanagement decisions taken by the Promoters of our Company.

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31. Additional issuance of equity may dilute your holdings in our Company.

Any future issuance of our Equity Shares or securities linked to our Equity Shares may dilute the positions ofinvestors in our Equity Shares. We intend to use the proceeds of this issue to part finance the Greenfield PVC plantat Cuddalore and we may further issue additional Equity Shares or securities linked to our Equity Shares to carry outfurther expansion projects that we may plan.

32. The insurance policies obtained by us may not be adequate to protect us against all potential losses, whichwe may be subject to in the future

Our insurance policies consist of coverage for risks relating to physical loss or damage as well as business interruptionloss. In addition, we have obtained separate insurance coverage for personnel related risks and motor vehicle risks.There is no certainty that the insurance coverage we maintain would be adequate to cover all material risks associatedwith the operation of our business. There can be no assurance that any claim under the insurance policies maintainedby us will be honoured fully, in part or on time.

33. Foreign Exchange Risk

Though currently our dependence on export market for finished products is marginal at 3.43% we may depend on theoverseas market in the future. Any appreciation of rupee value in the future against the currency of the country wherewe would be exporting will have a negative impact on our profitability.

We are importing some of the equipments for the Greenfield project at Cuddalore. Also, the raw material used formanufacture of PVC ,i.e., VCM will be imported. Any depreciation in the value of rupee may result in the escalationof the cost of the project and may cause a decrease in our profitability due to increased cost of raw materials.

34. Over the past many years, there is no trading of our Equity Shares on MSE.

There is no trading of our Equity Shares on MSE for the past many years. Investors dealing on this exchange will notbe able to do trading of the Equity Shares held by them.

External Risk Factors

35. Our sales and profitability may be adversely affected by delivery and production disruptions of our rawmaterials and supplies and by other adverse conditions.

Delivery disruptions for various reasons including infrastructure bottlenecks at Ports, airports, railways, weatherconditions such as typhoons, floods and events such as political turmoil, social unrest and strikes would lead todelayed or lost deliveries of our products or raw materials. A disruption in our raw material supply would affect ourproduction schedule. Our sales and profitability may be seriously affected in the event of any disruption of supply ofraw materials or if we are unable to procure an alternative supply on a timely basis or at similar prices.

Weather conditions such as typhoons and floods may also affect our delivery to our customers. In the event that weare required to compensate our customers for losses arising from such delay which may be significant our profitabil-ity will be adversely affected.

36. Any significant change in the Government’s economic liberalization and deregulation policies could disruptthe business and adversely affect the financial performance of our Company.

The Government of India has traditionally exercised and continues to exercise a dominant influence over manyaspects of the economy. Its economic policies had and could continue to have a significant effect on public & privatesector entities, including our Company, on market conditions, prices of Indian securities, including in the future onour Company’s Equity Shares. Any significant change in the Government’s policies or any political instability inIndia could adversely affect the business and economic conditions in India and could also adversely affect thebusiness, future financial performance and the price of our Company’s Equity Shares.

37. We are subject to adverse impact of economic and political conditions.

Global economic and political factors that are beyond our control, influence forecasts and directly affect performance.These factors include interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation,deflation, consumer credit availability, consumer debt levels, tax rates and policy, unemployment trends, terroristthreats and activities, worldwide military and domestic disturbances and conflicts, and other matters that influenceconsumer confidence, spending and tourism. Increasing volatility in financial markets may cause these factors tochange with a greater degree of frequency and magnitude. The taxation system within the country still remainscomplex. Changes in local taxes and levies can impact our performance adversely.

38. Terrorist attacks or acts of war may seriously harm our business.

Terrorist attacks may cause damage or disruption to our company, our employees, our facilities and our customers,

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which could impact our results from operations. Any future terrorist attacks, the national and international responsesto terrorist attacks, or other acts of war or hostility may cause greater uncertainty and cause our business to suffer inways that we currently cannot predict.

39. Natural calamities could have a negative impact on the Indian economy and cause our business to suffer.

India has experienced natural calamities such as earthquakes, a tsunami, floods and drought in the past few years.The extent and severity of these natural disasters determines their impact on the Indian economy. For example, as aresult of drought conditions in the country during fiscal 2003, the agriculture sector recorded a negative growth of5.2%. The erratic progress of the monsoon in 2004 has also adversely affected the sowing operations of certaincrops. Further prolonged spells of rainfall below normal levels or other natural calamities could have a negativeimpact on the Indian economy, and may also have an adverse impact on our business and results of operations.

40. Sensitivity to the economy and extraneous factors

Our Company’s performance is correlated to the performance of the economy and the financial markets. The healthof the economy and the financial markets in turn depends on the domestic economic growth, state of the globaleconomy and business and consumer confidence, among other factors. Any event disturbing the dynamic balance ofthese diverse factors would directly or indirectly affect the performance of our Company.

41. The price of our Equity Shares may be volatile.

The price of our Equity Shares on the Indian Stock Exchanges may fluctuate as a result of several factors including -

1. Volatility in Indian and global securities market;

2. Our results of operations and performance;

3. Performance of our competitors and perception in the Indian market about investment in the PVC/Chlorochemicals Industry;

4. Adverse media reports, if any, on our Company or on Industry we operate in;

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

6. Significant development in India’s economic liberalization and de-regulation policies; and significantdevelopment in India’s fiscal and environmental regulations.

42. We depend on banks and financial institutions and other sources for meeting our long and medium termfinancial requirements.

Any delay in the disbursements of funds from these bodies can impact our completing the project and which couldadversely impact our profitability.

43. Any trading closures at the BSE and the NSE may adversely affect the trading price of our Equity Shares

The regulation and monitoring of Indian securities markets and the activities of investors, brokers and other participantsdiffer, in some cases significantly, from those in Europe and the United States of America. The BSE and the NSEhave in the past experienced problems, including temporary exchange closures, broker defaults, settlements delaysand strikes by brokerage firm employees, which, if continuing or recurring, could affect the market price and liquidityof the securities of Indian companies, including the Equity Shares, in both domestic and international markets. Aclosure of or trading stoppage on, either of the BSE and the NSE could adversely affect the trading price of theEquity Shares.

44. Our ability to raise foreign capital may be constrained by Indian law

As an Indian company, we are subject to exchange controls that regulate the borrowing in foreign currencies. Suchregulatory restrictions may limit our financing sources for our future expansion projects and other strategic acquisitionsand hence could constrain our ability to obtain financing on competitive terms and refinance existing indebtedness.In addition, we cannot assure you that the required approvals will be granted to us without onerous conditions, or atall. Limitations on foreign debt may have a material adverse impact on our business growth, financial condition andresults of operations.

45. If inflation worsens, our results of operation and financial condition may be adversely affected

In recent years, India’s wholesale price inflation has suggested an increasing inflation trend. An increase in inflationin India could cause a rise in the transportation costs, wages, raw materials or any other of our expenses. If this trendcontinues, we may be unable to reduce our costs or pass the increased costs to our customers and our results ofoperations and financial condition may be materially and adversely affected.

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Notes to Risk Factors

A. Net Worth of our Company as per the restated financials as on March 31, 2008 is Rs.36,621.24 lakhs. The IssueSize is Rs.15,993.98 lakhs. The Net Asset Value per share (book value) as on March 31, 2008 is Rs.5.13 forEquity Shares of face value Re. 1/-

B. This Issue of 31,98,79,627 Equity Shares of Re. 1/- each for cash at a price of Rs. 5 on rights basis to theexisting Equity Shareholders of our Company in the ratio of 2 Equity Shares for every 3 existing Equity Sharesheld on the Record Date i.e. March 24, 2009 in terms of this Letter of Offer.

C. The average book cost per Share to the Promoters of our Company is Rs. 1.61 per Share

D. Before making an investment decision in respect of this offer the investors are advised to refer to the sectionentitled “Basis for Issue Price” beginning on page 29 of this Letter of Offer.

E. Please refer to the sub section titled ‘Basis of Allotment’ on page 269 of this Letter of Offer.

F. For details of transactions in Equity Shares of our Company by the promoters, directors and the key managerialpersonnel in last 6 months please refer to the section titled “Capital Structure” beginning on page 17 of thisLetter of Offer.

G. For interests of our directors and key managerial personnel, please refer to the section titled “Management” onpage 70 of this Letter of Offer. For interests of our Promoters and Promoter Group please refer to the sectiontitled “Promoters and the Promoter Group” beginning on page 80 of this Letter of Offer.

H. Our Company had entered into certain related party transactions. For details please refer to the section titled“Financial Information” beginning on page 130 of this Letter of Offer.

There were no transactions between the Company and the companies in the Promoter Group for sales orpurchases whose value exceeded in the aggregate 10% of the total sales or purchases of the Company for thelast five financial years.

I. Our company has changed its name from Chemicals and Plastics India Limited to Chemplast Sanmar Limitedon September 28, 1995.

J. The Lead Manager and we shall update this Letter of Offer and keep the shareholders and public informed ofany material changes till the listing and trading commences.

K. In the ordinary course of our business, we enter into transactions with certain related parties. The aggregatevalue of related party transactions for the six month ended September 30, 2008 are as given below:

(Rs. in lacs)

Transaction/ nature of relationship For the half year ended September 30, 2008

Parties where Associates/ Key managementcontrol exist Fellow Subsidiaries personnel

Transaction during the year

Purchases 107.30

Sales 500.73

Share of income from partnership firm 20.57

Expenses recovered 1.00

Rent recovered/ (paid) (242.09)

Remuneration 80.86

Balances at the year end

Advance against share capital 12,000

Loans and advances 339.17

Deposits received 6.00

Sundry Debtors 83.52

Sundry Creditors 45.56

For further details on related party transactions, please refer to Annexure XI under the ‘Financial Information’Chapter on page no. 152 of the Letter of Offer.

Investors are free to contact the Lead Manager or the Compliance Officer for any clarification or information or anycomplaints pertaining to this Rights Issue. For contact details please refer to the cover page of this Letter of Offer.

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SUMMARY

Industry Overview

Chemical Industry - Global OutlookThe center of chemical industry growth is shifting to Asia, with China and India leading the move. The emergence ofChina and India as major consumers of chemical products is set to increasingly determine the future of petrochemicals,as these countries have vast new capacities that will come on-stream by the end of the decade. This trend will presenteven more opportunities for the global chemical industry with people in China and India enjoying higher livingstandards and greater wealth, and thus more demand for petrochemicals.

Asian chemical producers are now key players in the global chemical market, with China’s Sinopec in the world’s topten chemical companies at the number seven slot, and Taiwan’s Formosa Plastics Group at the number nine slot,based on the Chemical and Engineering News (C&EN), a weekly magazine published by the American ChemicalSociety’s survey on global top 50 chemical companies in 2006. (Source: Mergent-The Asia-Pacific Chemicals Sectors,March 2008)

Sector Overview for IndiaThe chemical sector plays a very important role in India’s economic development. The rapid economic growth in thepast few years, and growing industrialization, coupled with a rapidly increasing and more affluent population, havecreated a huge demand for chemicals. Ministry of Commerce and Industry figures show that the country’s chemicalindustry has outpaced global growth by 500% over the past five years. The industry is becoming more competitive, withM&A consolidation more frequent. It manufactures more than 70,000 products and its exports were worth more thanUS$12 billion in fiscal year 2005 to 2006. (Source: Mergent The Asia Pacific Chemicals Sectors, February 2007)

The Indian chemicals industry has been growing at multiple of GDP growth rates but the performance has beensubdued in the last couple of years. The sharp rise in raw materials prices due to high crude oil price affected both thedemand growth and the margins. Raw materials prices are rising faster than industry players can raise their prices andthis situation could put commodity chemical and petrochemical pricing under severe pressure and has caused greatconcern to the domestic chemicals industry. (Source: Mergent-The Asia-Pacific Chemicals Sectors, March 2008)

PVC – Global ScenarioFrom 2001 to 2006, the global demand for PVC increased at a CAGR of 4.8 per cent. In 2006 – 2011, the demand forPVC is expected to grow at 4.1 per cent to 41 million tonnes with China, Asia-Pacific, North America and WestEurope account for significant portion of world PVC consumption. Taiwan is the fourth largest producer of PVC inthe world.(Source: Mergent-The Asia-Pacific Chemicals Sectors, February 2007)

PVC Business in 2007-08Global PVC demand grew in excess of 5% in 2007 to around 35.3 mn tons. China , with a 10 mn tons demand in2007 is the single largest market for PVC both in terms of volume and growth rate.

North America accounts for around 23% of global PVC demand. A slowdown in US GDP could have some impacton demand. However, housing slowdown in the US could have limited impact on global PVC demand since growthin building, construction, irrigation and infrastructural development in the developing world would compensate forthis slowdown.

Global PVC capacity is expected to reach 50 mn tons from the current 42 mn tons over the next 5 years. In 2007, 2.3mn tons of capacity was added. Of this China alone added 2.1 mn tons of new capacity based on Carbide process.PVC capacity in China in 2007 was 12.5 mn tons and is expected to reach 17.5 mn tons in 2012. More than 85% ofthis incremental 5 mn tons would be carbide based.

PVC consumption in India was 1.4 mn tons in 2007-08, a growth of 12% over the previous year. Pipes and fittingscontinued to be the major sector accounting for 70% of domestic PVC demand.

PVC is a major product for irrigation, water conveyance & sewage and infrastructure sector. Pipes for transportationof water for irrigation, drinking water, various sewage applications, profiles for building industry, wire and cable,require PVC as raw material. This has resulted in PVC demand mimicking growth of infrastructure sector in asignificant way.

With increasing emphasis and higher budgetary outlays on irrigation, infrastructure and housing, health and hygiene,PVC consumption is expected to grow in the coming years. Due to stagnant domestic capacity and increasing domesticdemand, some major players imported and augmented its supply.

(Source:www.plastemart.com/upload/Literature/Thermoplastics-PP-PE-PVC-scenario-global-2007-08.asp)

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Chlor-Alkali IndustryChlor-alkali industry is the key to many sectors of the world chemical industry since chlorine and caustic soda areimportant feedstock and process chemicals for a range of downstream derivatives. These derivatives either incorporatechlorine or caustic soda in the finished product – such as PVC or sodium hypochlorite – or employ these products asprocess chemicals not contained in the final chemical – such as isocyanates.

Our BusinessWe are a 40 year old backward and forward integrated chemical company. Our main businesses are – PolyvinylChloride (PVC), Chlorochemicals and PVC Piping Systems. We are an integrated player captively producing theraw materials for many finished products.

PVCOur PVC operations began in May 1967, at Mettur, near Salem in Tamil Nadu, with technology from B F Goodrich,USA, to manufacture a variety of PVC Resins having a wide range of end use applications.

Initially we began our operations with an installed capacity of 6,000 TPA of PVC, which has grown to 64,000 TPAcurrently.

Our plant is designed with the flexibility to operate using different feedstock at different points in the manufacturingchain. The choice of feedstock is based on availability and price level.

Our integrated facility at Mettur Dam has a capacity to produce 64,000 TPA of PVC. We have facility to manufactureEthylene Dichloride (EDC) and Vinyl Chloride Monomer (VCM) the feedstock for the manufacture of PVC. Ourplant at Karaikal manufactures Caustic Soda and Chlorine. Besides, Chlorine generated from this plant is used formanufacture of EDC.

EDC is the key intermediate to produce PVC. We have an EDC production facility at Mettur based on both directchlorination and oxychlorination processes. The actual production of EDC at Mettur depends on the cost of rawmaterials, i.e., Molasses and Denatured Spirit (DNS). The cost of DNS depends upon the vicissitudes of the sugarindustry, which determines availability of molasses for alcohol production, demand of alcohol from the potablesector, etc. These factors impact the availability of molasses and DNS on a sustained basis at affordable prices.

To mitigate this risk, in October 2007 we have commissioned a EDC manufacturing facility with a capacity of 84,000tpa at Karaikal. We have also commissioned a Marine Terminal Facility, which helps in importing Ethylene and anethylene storage facility of 4,000 tons at Karaikal. The intermediates required at Karaikal plant for the manufactureare ethylene and chlorine. While ethylene is imported, the entire chlorine required for this plant is met captively andthe EDC manufactured from this plant is transferred to Mettur for manufacture of PVC.

Of the total requirement of 1,09,000 tpa of EDC for manufacture of 64,000 tpa of PVC, 84,000 tonnes of EDC willbe made at Karaikal using imported ethylene and balance will be met from the oxychlorination process at EDCmanufacturing facility available at Mettur.

Our Company is setting up a Greenfield plant for manufacture of 2,00,000 tpa of PVC at Cuddalore, subject to weobtaining the necessary approvals for increase in capacity from 1,70,000 tpa to 2,00,000 tpa for our CuddaloreGreenfield project from MOEF & TNPCB. The feedstock for this plant will be VCM. The entire VCM requirementfor this plant will be imported and the Company is setting up a Marine Terminal Facility to facilitate import of VCM.

The four different grades of resins manufactured by us are suspension resin, paste resin, battery separator resin andcopolymer resin.

ChlorochemicalsChlorochemicals mainly deals with Chlor-alkali (Caustic Soda and Chlorine), Solvents (Chloromethanes), RefrigerantGases and Silicon wafers.

PVC Pipes BusinessOur Company has acquired the PVC pipes businesses of Polytrusions Pvt Ltd and Vinplex India Pvt Ltd in September2006. Located at Sholavaram in Tamil Nadu, these businesses had a combined capacity to produce 22,000 tpa ofpipes. With this acquisition, our Company has moved into the forward integration mode in its PVC business and partof its PVC production from the greenfield project can be consumed in-house.

We have expanded the capacity of these plants to 36,000 tpa and also have set up a greenfield PVC pipes plant atShinoli in Maharashtra with a capacity of 20,000 tpa.

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We have also set up a facility at Sholavaram to manufacture PVC fittings for sale along with PVC pipes.

Our Manufacturing facilitiesOur manufacturing facilities are located at the following locations:

Our StrategyTowards realizing our vision of attaining a more dominant position in the PVC market and improving our competi-tiveness in the PVC industry, we have already embarked / completed several expansions at our existing facilitiesincluding:

i) MTF facility at Karaikal for import of Ethylene directly in to the factory.ii) EDC manufacturing facility at Karaikal with a capacity of 84,000 tpa.iii) Conversion of mercury cell based technology to membrane-based technology for manufacture of Chlorine

and Caustic Soda at Mettur.iv) Switching over of fuel for the power plant at Mettur from LSHS to coal.

Upon completion of our Greenfield project at Cuddalore (together with a MTF Facility to import VCM and conveydirectly to the plant by a pipeline), our total capacity to manufacture PVC will increase from 64,000 tpa to 2,64,000tpa. Our power generation capacity will also provide power at competitive cost after the commissioning of the coalbased power plant. All the above projects will help increase our market share and significantly reduce our costs.

S. Product Plant Location Plant CapacityNo.

1 PVC Mettur, Tamil Nadu 64,000 tpa

2 PVC Cuddalore, Tamil Nadu 2,00,000 tpa

3 Caustic Soda Mettur, Tamil Nadu 62,100 tpa

4 Caustic Soda Karaikal, Pondichery 51,750 tpa

5 Chlorine Mettur, Tamil Nadu 55,000 tpa

6 Chlorine Karaikal, Pondicherry 46,000 tpa

7 EDC Karaikal, Pondicherry & Mettur, Tamil Nadu 84,000 tpa110,000 tpa

8 Silicon Wafers Mettur, Tamil Nadu 1.2 million 5" PSQ wafers per annum

9 Refrigerant gases Mettur, Tamil Nadu 2,500 tpa

10 Solvents Mettur, Tamil Nadu 34,500 tpa

11 PVC pipes Sholavaram, Tamil Nadu 36,000 tpa

12 PVC Pipes Shinoli,, Maharashtra 20,000 tpa

13 Salt Vedaranyam, Tamil Nadu 200,000 tpa

14 Industrial Alcohol Panruti, Tamil Nadu 22,000 KL per annum

15 Industrial Alcohol Krishnagiri, Tamil Nadu 14,850 KL per annum

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THE ISSUE

Equity Shares proposed to be issued by the Company 31,98,79,627 Equity Shares

Rights Entitlement 2 Equity Share for every 3 existing Equity Sharesheld on the Record Date

Record Date March 24, 2009

Issue Price per Equity Share Rs. 5/- per Equity Share

Equity Shares outstanding prior to the Issue 47,98,19,440 Equity Shares

Equity Shares outstanding after the Rights Issue ofEquity shares 79,96,99,067 Equity Shares

Terms of the Issue For more details please refer to the section titled“Terms of the Issue” beginning on page 257 of thisLetter of Offer

Terms of Payment

Due Date Amount

On application Rs. 5 per Equity Share, which constitutes 100%of the Issue Price.

5

SELECTED FINANCIAL INFORMATIONThe following table sets forth our selected financial information derived from our restated financial statements asof 30th September 2008 and for the fiscal years ended March 31, 2008, March 31, 2007, March 31, 2006, March31, 2005, and March 31, 2004. These financial statements have been prepared in accordance with Indian GAAPand SEBI Guidelines, and the Act and the annual financial statements have been restated as described in theauditors’ report included therewith, beginning on page 130 of this Letter of Offer. Bracketed numbers indicatelosses/ negative figures. The selected financial information presented below should be read in conjunction withour financial statements, the notes thereto and the section titled “Management’s Discussion and Analysis of FinancialCondition and Results of Operations” beginning on page 161 of this Letter of Offer.

RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS Rs.lacs

Particulars For the For the year For the year For the For the For thesix months ended ended year ended year ended year ended

ended 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

INCOME

Sales 42837.37 73426.40 70227.47 67601.29 60303.76 57360.89

Less: Excise duty 4914.96 9408.53 8964.90 8882.60 7983.69 7465.85

Other income 2929.21 7630.61 844.12 2403.32 1021.70 556.91

40851.62 71648.48 62106.69 61122.01 53341.77 50451.95

Increase/(Decrease) inInventories 2083.70 955.57 (757.60) 987.07 (620.21) 607.17

Total 42935.32 72604.05 61349.09 62109.08 52721.56 51059.12

Expenditure

Raw Materials and purchasedintermediates consumed(Refer Note 18 in Annexure IV) 19805.35 25454.11 18058.08 20213.08 15413.01 18422.43

Staff Costs 2827.91 5572.92 5121.11 4776.74 5083.91 4417.94

Other manufacturing expenses 16923.72 26384.53 24610.82 23220.68 20235.05 17541.39

Administration Expenses 2138.18 3851.17 3154.07 2499.72 2178.74 2076.67

Selling and Distribution Expenses 713.21 1493.24 1153.95 1324.29 1467.88 1162.70

Interest and finance cost 3036.12 4476.98 2331.96 1841.12 2522.61 3595.82

Depreciation 2497.18 4513.12 3442.98 3600.70 2853.18 3494.56

Total 47941.67 71746.07 57872.97 57476.33 49754.38 50711.51

Net Profit/(Loss) before tax andextraordinary items (5006.35) 857.98 3476.12 4632.75 2967.18 347.61

Provision for current tax – (168.43) (780.04) (1566.18) (908.78) (247.42)

Provision for deferred tax 1405.00 86.22 (179.22) 396.00 (2.00) (162.00)

Provision for fringe benefits tax (30.00) (42.00) (35.00) (32.88) – –

Total 1375.00 (124.21) (994.26) (1203.06) (910.78) (409.42)

Net Profit/(Loss) after tax beforeextraordinary items (3631.35) 733.77 2481.86 3429.69 2056.40 (61.81)

Extra-ordinary items(net of taxes)

Net Profit/(Loss) after tax andextraordinary items (3631.35) 733.77 2481.86 3429.69 2056.40 (61.81)

Profit brought forward 14301.97 13568.20 11086.34 7656.65 7182.40 2347.53

Balance of Profit and Loss

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Notes:

1. Net Profit/(Loss) after tax before extraordinary items:

The net profit for fiscal 2008 was Rs.733.77 lacs which has fallen by almost 70% as compared to the net profit figurefor fiscal 2007, for which the figure was Rs.2,481.86 lacs. The reason for the fall in profitability is mainly on accountof increase in cost of goods sold, increase in interest expenditure and Depreciation.

2. Other Income

The other income has increased from Rs. 844.12 lacs in fiscal 2007 to Rs. 7630.61 lacs in fiscal 2008. The increasein other income is mainly on account of the following :

Account of amalgamating company – – – – – 2724.24

10670.62 14301.97 13568.20 11086.34 9238.80 5009.96

Transfer from DebentureRedemption Reserve – – – – 512.50 2612.50

10,670.62 14,301.97 13,568.20 11,086.34 9,751.30 7,622.46

Transfer to CapitalRedemption Reserve – – – – (2050.00) (200.00)

Interim Dividend

- Preference dividend(previous year - subject to tax) – – – – (39.48) (212.80)

- Tax on dividend – – – – (5.17) (27.26)

Proposed final dividend

- Equity dividend – – – – – –

- Tax on dividend – – – – – –

Profit carried to Balance Sheet 10670.62 14301.97 13568.20 11086.34 7656.65 7182.40

Earnings Per Share (Rs.) (0.76) 0.15 0.52 0.71 0.42 (0.07)

Rs.lacs

Particulars For the For the year For the year For the For the For thesix months ended ended year ended year ended year ended

ended 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

3. Balance of Profit and Loss Account of amalgamating companyUnder a Scheme of Arrangement between the Company, Sanmar Properties and Investments Limited (SPIL) andSanmar Holdings Limited (SHL), SPIL was amalgamated with the company. This scheme of arrangement wasapproved by the High Court of Judicature at Madras vide its order dated March 3, 2004 and pursuant to thisscheme, the balance in the Profit and Loss account of SPIL of Rs 2,724.24 lacs was transferred to and vested in theCompany as balance in Profit and Loss account of the Company. The details of the Scheme and the assets, liabilitiesand reserves of SPIL transferred to and vested in the company are provided in the Section titled Financial Informationbeginning on page 130.

4. Transfer from Debenture Redemption ReserveThe Company had issued debentures prior to 31st March 2004 and redemption of these debentures were completedin the Financial Year 2004-05. The reserves created for the redemption of the debentures were written back for theyear ended 31.03.2004 – Rs 2,612.50 lacs and for the year ended 31.03.2005- Rs 512.50 lacs.

(Rs.lacs)Nature of Income Income during Income during Increase in

fiscal 2008 fiscal 2007 Amount

Income from Certified Emission Reduction 4,774.70 248.13 4,526.57Montreal protocol Compensation 1,777.89 176.38 1,601.51Profit on sale of fixed assets 655.54 44.25 611.29

7

RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIESRs. lacs

Particulars As at As at As at As at As at As at30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

Fixed Assets

Gross block 103420.25 99683.60 81666.96 65358.26 59583.03 55745.46

Less: Depreciation 35548.83 33091.75 30249.53 26865.37 23428.92 20837.55

Net block 67871.42 66591.85 51417.43 38492.89 36154.11 34907.91

Capital work in progress 67440.45 48820.89 21761.50 8140.50 2498.06 892.84Total 135311.87 115412.74 73178.93 46633.39 38652.17 35800.75

Investments 165.23 165.23 165.23 2.74 2.74 433.74

Current Assets, Loans andAdvances

Inventories 10498.17 6479.23 4427.69 4894.49 3522.98 5003.24

Sundry debtors 5658.47 4883.89 5513.51 5239.96 6513.01 6262.47

Cash and bank balances 599.02 627.91 443.97 533.44 497.77 445.41

Other current assets 2994.27 2441.52 347.83 61.05 24.80 10.41

Loans and advances 12863.68 10179.46 6327.64 5950.74 5130.06 3757.85Total 32613.61 24612.01 17060.64 16679.68 15688.62 15479.38

Liabilities and Provisions

Secured loans 102835.81 77528.60 49002.45 22914.46 20946.63 17811.80

Unsecured loans 11980.86 7219.62 – 4214.16 – 3626.85

Current Liabilities 16406.37 13470.51 11636.90 8881.85 8404.29 5651.36

Provisions 752.95 752.01 1125.43 936.25 1726.86 1307.62Total 131975.99 98970.74 61764.78 36946.72 31077.78 28397.63

Deferred Tax Liability(Net) 3193.00 4598.00 4684.22 4505.00 4901.00 4899.00

Networth 32921.72 36621.24 23955.80 21864.09 18364.75 18417.24

Represented byShare Capital

- Equity 4798.19 4798.19 4798.19 4798.19 4798.19 4798.19- Preference – – – – – 2050.00

Advance towards rightsentitlement from SanmarHoldings Limited 12000.00 12000.00 – – – –Reserves and surplus 16692.47 20323.82 19590.05 17108.19 13678.50 11666.75

Total 33490.66 37122.01 24388.24 21906.38 18476.69 18514.94Less: Miscellaneous Expenditure to the extent not written off 568.94 500.77 432.44 42.29 111.94 97.70

Networth 32921.72 36621.24 23955.80 21864.09 18364.75 18417.24

Notes

Investments

The increase in Investment from Rs 2.74 lacs in 2006 to Rs 165.23 lacs in 2007, is represented mainly by investmentin Sai Regency Power Corporation Private Limited of Rs 165.00 lacs.

8

RESTATED CASH FLOW STATEMENT Rs. lacs

Particulars For the For the year For the year For the For the For thesix months ended ended year ended year ended year ended

ended 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

A. CASH FLOW FROMOPERATING ACTIVITIES

NET PROFIT/(LOSS) BEFORE TAX (5,006.35) 857.98 3,476.12 4,632.75 2,967.18 347.61Adjustments for:Add: Depreciation 2,497.18 4,513.12 3,442.98 3,600.70 2,853.18 3,494.56

Interest and finance charges 3,036.12 4,476.98 2,331.96 1,841.12 2,522.61 3,595.82 526.95 9,848.08 9,251.06 10,074.57 8,342.97 7,437.99

Less: Profit on sale of assets/Investments (Net) 26.38 655.54 44.25 183.49 442.40 39.36Reversal of Asset impairment provision (Net) – – – 11.24 – –Interest/Dividend/share of profit 47.47 152.96 127.00 104.18 138.69 78.54

OPERATING PROFIT BEFORE WORKINGCAPITAL CHANGES 453.10 9,039.58 9,079.81 9,775.66 7,761.88 7,320.09

Adjustments for changes inTrade and other receivables (3,999.68) (5,276.72) (896.95) 411.21 (1,587.28) (260.60) Inventories (4,018.94) (2,051.54) 466.80 (1,371.51) 1,480.26 (941.31) Trade and other payables 4,186.91 610.04 1,248.49 (441.54) 2,802.17 (294.87)

CASH GENERATED FROM OPERATIONS (3,378.61) 2,321.36 9,898.15 8,373.82 10,457.03 5,823.31Direct taxes paid (Net) (29.08) (583.82) (665.63) (1,139.67) (489.54) (189.85)

NET CASH FROM OPERATING ACTIVITIES (3,407.69) 1,737.54 9,232.52 7,234.15 9,967.49 5,633.46B. CASH FLOW FROM INVESTING

ACTIVITIESPurchase of fixed assets (23,963.79) (45,597.04) (28,975.72) (12,145.16) (5,722.26) (4,340.17)Sale of investments – – 7.51 – 862.00 137.52Purchase of investments – – (170.00) – – (5.03)Sale of fixed assets 59.46 663.88 606.00 309.75 29.06 44.88Interest received/share of profit 35.60 113.79 86.64 109.09 88.83 70.75Dividend received – – – – – 16.74

NET CASH USED IN INVESTINGACTIVITIES (23,868.73) (44,819.37) (28,445.57) (11,726.32) (4,742.37) (4,075.31)C. CASH FLOW FROM FINANCING

ACTIVITIESAdvance towards rights entitlement fromSanmar Holdings Limited – 12,000.00 – – – –

Redemption of preference shares – – – – (2,050.00) (200.00)Increase/Decrease in dues from subsidiary – – – – – –Proceeds from long term borrowings 15,000.00 36,037.72 38,829.43 8,736.53 9,500.00 8,250.10Repayment of long term borrowings (3,376.47) (5,825.74) (13,568.10) (8,650.10) (4,350.00) (11,304.08)Proceeds/(Repayment) of short termborrowings (Net) – 5,533.77 (3,387.50) 6,095.56 (5,642.02) 1,085.03Interest and finance charges paid (2,820.92) (4,479.98) (2,750.25) (1,654.15) (2,586.09) (3,968.40)Dividends/Tax on dividends paid – – – – (44.65) (636.96)

NET CASH USED IN FINANCINGACTIVITIES 27,247.53 43,265.77 19,123.58 4,527.84 (5,172.76) (6,774.31)

D. ACCOUNTS RECEIVABLE TAKEN OVERON AMALGAMATION, REALISED – – – – – 5,000.00

NET INCREASE IN CASH AND CASHEQUIVALENTS(A to D) (28.89) 183.94 (89.47) 35.67 52.36 (216.16)

Cash and cash equivalents at the beginningof the year 627.91 443.97 533.44 497.77 445.41 661.57Cash and cash equivalents at the endof the year 599.02 627.91 443.97 533.44 497.77 445.41

(28.89) 183.94 (89.47) 35.67 52.36 (216.16)

9

The purchase of fixed assets in cash flow statement during the Period April 01, 2008 to September 30, 2008 , onpage 8 includes the following :

Net increase in gross block Rs. 3,736.65 lacs

Add: Deletions of assets Rs. 73.18 lacs

Gross addition of fixed assets Rs. 3,809.83 lacs

Add: Closing balance of Capital Work in Progress Rs. 67,440.45 lacs

Less: Opening balance of Capital Work in Progress Rs. 48,820.89 lacs

Add: Opening Capital Creditors Rs. 3,534.56 lacs

Less: Closing Capital Creditors Rs. 2,000.16 lacs

Cash flow on account of fixed assets Rs. 23,963.79 lacs

10

GENERAL INFORMATIONDear Equity Shareholder(s),

Pursuant to the resolutions passed by our Board of Directors at their meeting held on July 25, 2006 and October 31,2007 and the resolutions passed by the Committee of Directors on September 9, 2008 and 23rd February, 2009 it hasbeen decided to make the following offer to the Equity Shareholders of our Company with a right to renounce.

ISSUE OF 31,98,79,627 EQUITY SHARES OF Re.1 EACH FOR CASH AT A PREMIUM OF RS. 4 PEREQUITY SHARE FOR AN AMOUNT AGGREGATING RS. 159,93,98,133 TO OUR EQUITY SHARE-HOLDERS ON RIGHTS BASIS IN THE RATIO OF 2 EQUITY SHARES FOR EVERY 3 EXISTING EQ-UITY SHARES HELD BY THE SHAREHOLDERS ON THE RECORD DATE i.e. MARCH 24, 2009 (“IS-SUE”), IN TERMS OF THIS LETTER OF OFFER. THE FACE VALUE OF THE SHARES IS Re.1/- ANDTHE ISSUE PRICE IS 5 TIMES THE FACE VALUE OF EQUITY SHARES.

Works & Products

1. Mettur Dam, Salem, Tamil Nadu PVC- Resins –Suspension, Paste, Battery Separator andCopolymers

Chlorochemicals - Caustic Soda, Chlorine,Chloromethanes, TCE and Refrigerant Gases

(i) Plant I - Mettur Dam RS 636 402, Salem DistrictRefrigerant Gases

(ii) Plant II - Raman Nagar Post , Mettur Dam 636 403,Salem District

PVC Resins – Suspension, Paste, Battery Separator andCopolymers

(iii) Plant III - Raman Nagar Post, Mettur Dam 636 403,Salem District

Caustic Soda, Chlorine and Chlorinated Solvents

(iv) Plant IV - Raman Nagar Post, Mettur Dam 636 403,Salem District

Silicon Wafers

2. Krishnagiri, Tamil Nadu, Marigampalli Village,Krishnagiri 635 001

Industrial Alcohol

3. Panruti, Tamil Nadu, Kadampuliyur Panruti 607 103 Industrial Alcohol

4. Vedaranyam, Tamil Nadu, Salt Works SethuRasthaVedaranyam 614 810

Industrial Salt

5. Cuddalore, Tamil Nadu, Phase IISIPCOT IndustrialComplex Semankuppam, SIPCOTCuddalore – 607 005

PVC Resin - Suspension

6. Sholavaram, Tamil Nadu, 64, Irullipattu Village,Alinijivakkam Post, Sholavaram, Chennai – 600 067

Pressure pipes, pipe fittings, casing & screen pipes, SWRpipes, plumbing pipes, conduits

7. Karaikal, Pondicherry, 315, Melavanjore NagorePost Karaikal 611 002

Caustic Soda, Chlorine & Ethylene Di- Chloride

8. Dewarwadi Village, Maharashtra, DewarwadiVillage, Post Shinoli, Chandgad Taluk, KolhapurDistrict 416 507 Maharashtra

Pressure pipes, casing & screen pipes, HDPE pipes, SWRpipes, plumbing pipes, conduits

Name of the stock exchanges where the equityshares of the Company are listed

Bombay Stock Exchange LimitedNational Stock Exchange of India LimitedMadras Stock Exchange Limited

Registration Number of the Issuer Company 18-011637

Registered Office Chemplast Sanmar Limited9, Cathedral RoadChennai 600 086.

11

Corporate Identification Number (CIN) L24230TN1985PLC011637

Date of Incorporation March 13, 1985.

Address of the Registrar of Companies that the Com-pany is registered with

Registrar of Companies – Tamil Nadu–I Block No.6,B Wing, 2nd Floor Shastri Bhavan, 26, Haddows RoadChennai 600 006.

Our Board of Directors

Flat No.B-2, “Ashok Aishwaryam”, New No.13 (Old No.3)Habibullah Road, T Nagar, Chennai 600 017.

58Mr P. S. JayaramanChairmanNon Independent,Executive Chairman

Name and Designation Age Address(Years)

“Sri Krish”, 47-A, IV Main Road, Gandhi Nagar, Adyar,Chennai 600 020.

58Mr S GopalManaging DirectorNon Independent,Executive Director

Plot No.2, Anmol Garden, 66/1, Naidu Street, Kottur,Chennai 600 085.

59Mr V RameshDeputy Managing DirectorNon Independent,Executive Director

3, Gajapathy Road, Kilpauk, Chennai 600 010.81Mr M. K. KumarNon-Executive,Independent Director

B-201, “The Atrium” 49, Kalakshetra RoadThiruvanmiyur, Chennai 600 041.

71Mr S. V. MonyNon-Executive, Independent Director

8/243, TTK Road , Chennai 600 018.70Mr V. K. ParthasarathyNon-Executive, Independent Director

12, Besant Avenue, Karpagam Gardens, Adyar, Chennai 600 020.65Mr M. N. RadhakrishnanNon-Executive,Non Independent Director

“Sri Raj” 30, Krishnapuri, R A Puram, Chennai 600 028.60Mr M. S. SekharNon-Executive,Independent Director

For more details of our directors, please refer to the section titled “Management” beginning on page 70 of this Letterof Offer.

Company Secretary and Compliance Officer

Mr M RamanChemplast Sanmar Limited9, Cathedral Road, Chennai 600 086, India.Tel: +91-44-2812 8722, 2812 8500Fax: +91-44-28112627e-mail:mr1@sanmargroup.com

grd@sanmargroup.com

Investors may contact our Compliance Officer for any pre/ post issue related matters.

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Lead Manager To The IssueErnst & Young Merchant Banking Services Private Limited(Formerly Ind Global Corporate Finance Private Limited)Jalan Mill Compound, 95 Ganpatrao Kadam MargLower Parel, Mumbai 400 013Tel: +91-22- 6657 9326/ 4035 6300Fax: +91-22-4035 6400Contact Person: Ms. Nishita JohnE-mail: nishita.john@in.ey.comWebsite: www.ey.com/india

Legal Advisors To The IssueWadia Ghandy & Co.N. M. Wadia Buildings,123 Mahatma Gandhi Road,Mumbai – 400 001.Tel: +91-22-2271 5600/ 2271 5601Fax: +91-22-2267 6784/ 2267 0226Contact Person: Ms. Fariyal TahseenEmail: contact@wadiaghandy.com

Registrar To The IssueIntegrated Enterprises (India) Limited2nd Floor. “Kences Towers”,No.1 Ramakrishna Street,North Usman Road,T Nagar, Chennai- 600 017Tel: +91-44 -2814 0801 - 03Fax: +91-44 -2814 2479Contact Person: Mr S Sriram, Senior ManagerE- mail: sureshbabu@iepindia.comWebsite: www.iepindia.com

Note: Investors are advised to contact the Registrar to the Issue/ Compliance Officer in case of any pre-issue/post issuerelated problems such as non-receipt of this Letter of Offer/letter of allotment/ share certificate(s)/ refund orders.

Bankers To The CompanyICICI Bank LtdSanthome Towers93, Santhome High RoadChennai 600 028Tel: +91-044-4206 3108Fax: +91-044-4206 3126Contact Person: Mr. Kaushik SridharanEmail: kaushik.sridharan@icicibank.comWebsite: www.icicibank.com

Indian Overseas BankC & IC Branch98 A Dr. Radhakrishnan SalaiMylapore, Chennai 600 004Tel: +91-44-2847 8634 / 35Fax: +91-44-2847 8633Contact Person: Mr. K.V. AnanthamoorhtyEmail: canicbr@chemrc01.iobnet.co.inWebsite: www.indianoverseasbank.com

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State Bank of IndiaCAG BranchNew No.64, Greams Road, Chennai 600 006Tel: +91-44-2829 3671Fax: +91-44-2829 3455Contact Person: Mr. K.SivalingamEmail: siva.k@sbi.co.inWebsite: www.statebankofindia.com

Standard Chartered Bank19, Rajaji Salai, Chennai 600 001Tel: +91-44-2534 9821Fax: +91-44-2534 0877Contact Person: Mr Amaresh MohapatraEmail: Amaresh.Mohapatra@in.standardchartered.comWebsite: www.standardchartered.com

IDBI Bank Limited115, Anna Salai, Saidapet,Chennai – 600 015Tel: +91-44-2235 5201Fax: +91-44-2235 5226Contact Person: Ms Radha SridharEmail: r.sridhar@idbi.co.inWebsite:www.idbi.com

Axis Bank LimitedKarumuthu Nilayam,Ground Floor,192, Anna Salai, Chennai - 600 002Tel: +91-44-6450 1623Fax: +91-44-2854 4193Contact Person:- K.Sathishe-mail: Sathish.K@axisbank.comWebsite: www.axisbank.com

Bank of IndiaIV floor, Tarapore Towers826, Anna Salai, Chennai - 600 002.Tel: +91-44-2852 1185Fax: +91-44-2852 1912Contact Person: C.S. Veeraraghavane-mail: boi8015@eth.netWebsite: www.bankofindia.com

Our Registrar And Share Transfer AgentIntegrated Enterprises (India) Limited2nd Floor, “Kences Towers”,No.1 Ramakrishna Street, North Usman Road,T Nagar, Chennai- 600 017.Tel: +91-44-2814 0801 - 03Fax: +91-44-2814 2479Contact Person: Mr S Sriram,E- mail: sureshbabu@iepindia.comWebsite: www.iepindia.com

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Auditors of The CompanyPrice Waterhouse & Co.Chartered AccountantsPWC Centre, 32 Khader Nawaz Khan Road,Nungambakkam, Chennai 600 006Tel: +91-44-4228 5000Fax: +91-44- 4228 5100Contact Person: Mr. S DattaE- mail: sankar.datta@in.pwc.com

Bankers To The IssueState Bank of IndiaCMP Centre31, Mahal Industrial Estate, Gr. Floor,Off Mahakali Caves RoadAndheri (East)Mumbai – 400093Tel: +91-22-2687 2727Fax: +91-22-2687 5060Contact Person : Mr Ashok NayyarE mail: dgm.cmp@sbi.co.in

Monitoring of utilization of fundsThere is no requirement for a monitoring agency in terms of Clause 8.17 of the SEBI DIP Guidelines. Our AuditCommittee, appointed by our Board will monitor the utilization of the Issue proceeds. We will disclose the details ofthe utilization of the Issue proceeds, including interim use, under a separate head in our financial statements forFiscal 2009, specifying the purpose for which such proceeds have been utilized or otherwise, as per the disclosurerequirements of our listing agreements with the Stock Exchanges and in particular Clause 49 of the Listing Agree-ment. No part of the proceeds from the Issue will be paid by us as consideration to our Promoters, our Directors,Promoter group companies or key managerial employees, except in the normal course of our business.

Appraising AgencyThe Project has been appraised by:-SBI Capital Markets Limited202, Maker Tower, “E”, Cuffe Parade,Mumbai – 400 005Tel: +91-22-2218 7052 / 9182Contact Person: Ms. Shalini.ShrivastavE-mail: Shalini.Shrivastav@sbicaps.com

Statement of Inter-se allocation of responsibility:Not applicable

Credit RatingThis being an issue of Equity Shares no credit rating is required.

Statutory DeclarationIn the reasonable opinion of the Board, there are no circumstances that have arisen since the date of the last financialstatement disclosed in this Letter of Offer, that materially or adversely affect or are likely to affect our performanceor profitability or value of our assets or our ability to pay our liabilities within the next twelve months.

Important:1. This Issue is applicable only to those shareholders whose names appear as beneficial owners as per the list to

be furnished by Depositories in respect of the Equity Shares held in the electronic form and on the register ofmembers of the Company in respect of the Equity Shares held in physical form at close of business hours onMarch 24, 2009, i.e. the Record Date.

2. Shareholders’ attention is drawn to the section titled “Risk Factors” beginning at Page ix of this Letter of Offer.

15

3. Please ensure that the CAF is received with this Letter of Offer.

4. Please read this Letter of Offer and the instructions contained therein and in the CAF carefully, before filling inthe CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefullyfollowed. The application is liable to be rejected if it is not in conformity with the terms of this Letter of Offerand/or the CAF.

5. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrar to the Issueviz., Integrated Enterprises (India) Limited, quoting the registered folio number / DP ID/ Client ID number andthe serial number of the CAF and his/her full name and address.

6. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar/ we will issue aduplicate CAF on the request of the shareholder who should furnish the registered folio number/ DP ID/ clientID number and his/her full name and address to the Registrar/ Company. Please note that those applicants whoare making the application in the duplicate CAF should not utilize the original CAF for any purpose includingrenunciation, even if it is received/ found subsequently. In case the original and the duplicate CAFs are lodgedfor subscription, allotment will be made on the basis of the original CAF.

7. The Issue will be kept open for a minimum period of 15 days. If extended, it will be kept open for a maximumperiod of 30 days.

8. The Lead Manager and we shall make all information available to the Equity Shareholders and no selective oradditional information would be available for a section of the Equity shareholders in any manner whatsoeverincluding at presentations, in research or sales reports etc. after filing of the Letter of Offer with SEBI/ StockExchanges.

9. The Lead Manager and we shall keep the public informed of any material changes till the listing and tradingcommences.

10. All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock Exchangehave been complied with.

Overseas ShareholdersThe distribution of this Letter of Offer and the Issue of Equity Shares on a rights basis to persons in certain jurisdic-tion outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whosepossession this Letter of Offer may come are required to inform themselves about and observe such restrictions. Weare making this issue of Equity Shares on a rights basis to the shareholders of our Company and will dispatch theLetter of Offer to those shareholders who have an Indian address.

No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for thatpurpose, except that this Letter of Offer has been filed with SEBI for observations and SEBI has given its observa-tions. Accordingly, the Equity Shares represented thereby may not be offered or sold directly or indirectly and thisLetter of Offer may not be distributed in any jurisdiction outside India. Receipt of this Letter of Offer will notconstitute an offer in those jurisdiction in which it would be illegal to make such an offer and under those circum-stances, this Letter of Offer must be treated as sent for information only and should not be copied or redistributed. Noperson receiving a copy of this Letter of Offer in any territory other than in India may treat the same as constitutingan invitation or offer to him, nor should he in any event use the CAF. We will not accept any CAF where the addressas indicated by the applicant is not an Indian address. Accordingly, persons receiving a copy of this Letter of Offershould not, in connection with the issue of Equity Shares or the rights entitlement distribute or send the same in orinto the United States or any other jurisdiction where to do so would or might contravene local securities laws orregulations. If this Letter of Offer is received by any person in any such territory or by their agent or nominee, theymust not seek to subscribe to the Equity Shares or the rights entitlement referred to in this Letter of Offer.

Neither the delivery of this Letter of Offer nor any offer hereunder, shall under any circumstances create any impli-cation that there has been no change in our Company’s affairs from the date hereof or that the information containedherein is correct as at any time subsequent to this date.

No Offer in the United StatesThe Equity Shares of our Company and the Rights Entitlement are not registered under the United States SecuritiesAct, 1933, as amended, and the Issue is not, and under no circumstances is to be construed as, an offering of anyEquity Shares or rights for sale in the United States of America or the territories or possessions thereof. For furtherdetails please see “Terms of the Issue” beginning on page 257 of this Letter of Offer.

ImpersonationAs a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of sub-section (1)of section 68A of the Act which are reproduced below:

“Any person who makes in a fictitious name an application to a company for acquiring, or subscribing for, any equity

16

shares therein, or otherwise induces a company to allot, or register any transfer of equity shares therein to him, or anyother person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”

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

Issue Opening Date : Monday, March 30, 2009

Last date for receiving requests for split forms : Monday, April 6, 2009

Issue Closing Date : Monday, April 13, 2007

Authority for the Present IssuePursuant to the resolution passed by our Board of Directors at their meetings held on July 25, 2006 & October 31,2007 and the resolutions passed by the Committee of Directors on September 9, 2008 and 23rd February 2009, it hasbeen decided to make the rights offer to the Equity Shareholders of our Company with a right to renounce.

Allotment Letters / Refund OrdersWe will issue and dispatch letters of allotment / share certificates / demat credit or letters of regret along with refundorder or credit the allotted securities to the respective beneficiary accounts, if any, within a period of fifteen (15) daysfrom the date of closure of the Issue. If such money is not refunded within eight days from the day that we becomeliable to pay it, we shall pay that money with interest as stipulated under Section 73 of the Act.

Our Board of Directors declares that funds received against this Issue will be transferred to a separate bank accountother than the bank account referred to sub-section (3) of Section 73 of the Act except the sum of Rs.12000 lakhsreceived from Sanmar Holdings Limited, Promoter company of our Company and utilised for part financing theproject. The amount so received from Sanmar Holdings Limited shall be treated as an interest free advance againstshare application for its entitlement in the Rights Issue.

Our Promoters intend to subscribe to the full extent of their entitlement in the Issue.

We have received a sum of Rs. 12000 lakhs from Sanmar Holdings Limited, promoter company of our Company asan interest free advance against share application for its entitlement in the Rights Issue and utilized the amountreceived for part financing the project. The amount paid by Sanmar Holdings Limited will be adjusted towards theamount payable by them for the shares allotted to them in this Issue and any balance amount shall be refunded toSanmar Holdings Limited, without interest.

The Letter of Allotment / Refund Order exceeding Rs.1,500 would be sent by registered post/speed post to the sole/first applicant’s registered address. Refund Orders up to the value of Rs. 1,500 will be sent under Certificate ofPosting. Such Refund Orders would be payable at par at all places where the applications were originally accepted.The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole / first applicant. Adequatefunds would be made available to the Registrar to the Issue for this purpose.

Minimum Subscription:If we do not receive the minimum subscription of 90% of the Issue, the entire subscription, including advancereceived from Sanmar Holdings Limited, shall be refunded to the applicants within 15 days from the date of closureof the Issue. If there is a delay in the refund of subscription by more than 8 days after the Company becomes liable torepay the subscription amount, (fifteen days after closure of the Issue), the Company will pay interest for the delayedperiod, at the rates prescribed in sub-sections (2) and (2 A) of Section 73 of the Companies Act, 1956.

The Issue will become undersubscribed after considering the number of shares applied as per entitlement plus addi-tional shares. The undersubscribed portion shall be applied for only after the Issue Closing Date.

In the event of under subscription, the promoters will not apply for additional shares in the issue and therefore, theexemption in terms of provisio to Regulation 3(1) (b) (ii) of the SEBI (SAST) Regulations shall not be applicable tothe issue. Further, the promoters do not intend to buy-out the remaining shares from the public at the Issue Price inaccordance with the SEBI (Delisting of Securities) Guidelines 2003.

UnderwritingThis Issue of Equity Shares is not underwritten.

17

* The share premium account amounting to Rs.9,900.38 lakhs was reduced to nil pursuant to scheme of arrangementapproved by the High court of Judicature at Madras vide its order dated 18th June 1999, in respect of the demerger ofour shipping division into Sanmar Shipping Limited and the transfer to and vesting in the Company of the activity ofexport of our Company’s products carried on by Sanmar International Limited (Now known as Stargate InvestmentsPrivate Limited). The entire share premium amount of Rs.9900.38 lakhs was adjusted against the total deficit ofRs.21,155.43 lacs arising under the scheme of arrangement.

Notes to the Capital Structure

1. Build up of Equity Share Capital from inception is as follows:

Subscribers to the MOA

Issued to Chemicals andPlastics India Limited(CPIL)

Shares allotted to theshareholders of CPIL onamalgamation of CPILwith our Company – inthe ratio of 1 : 1

Bonus shares issued inthe ratio of 1: 2.

Issued by way of privateplacement to variousallotteesIssued by way of privateplacement to variousallotteesIssued by way of privateplacement to variousallottees

Date of No. of Cumulative Face Issue Consid Cumulative Nature ofAllotment Equity Shares no. of Equity Value Price eration Paid-up Issue/Reason

Allotted Shares (Rs.) per share Capital(Rs.) for allotment

March 10 10 10 10 Cash 10018, 1985

June 1,99,940 1,99,950 10 10 Cash 19,99,50025, 1986

June 88,72,885 88,72,885 10 – Other than 8,87,28,85011, 1992 Cash

April 44,36,443 1,33,09,328 10 – Bonus 13,30,93,2801, 1994

July 9,45,000 1,42,54,328 10 200 Cash 14,25,43,28026, 1994

July 6,00,000 1,48,54,328 10 200 Cash 14,85,43,28029,1994

July 1,50,000 1,50,04,328 10 200 Cash 15,00,43,28030,1994

Particulars Nominal Aggregateamount value at Issue Price( Rs.) ( Rs. )

Authorized share capital(i) 200,00,00,000 Equity Shares of Re.1/- each 200,00,00,000(ii) 35,00,000 Convertible Redeemable Preference Shares

of Rs.100/- each 35,00,00,000

Issued, subscribed and paid-up capital47,98,19,440 Equity Shares of Re.1/- each 47,98,19,440 47,98,19,440

Present Issue being offered to the Equity Shareholdersthrough the Letter of Offer31,98,79,627 Equity Shares of Re.1/- each at a premiumof Rs. 4 i.e., at a price of Rs. 5/- 31,98,79,627 159,93,98,135

Paid-up capital after the issue79,96,99,067 Equity Shares of Re 1/- each 79,96,99,067 207,92,17,575

Share Premium AccountExisting share premium account NIL*Share premium Account after the Issue 127,95,18,508

CAPITAL STRUCTUREOur capital structure and related information is set forth below:

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Date of No. of Cumulative Face Issue Consid Cumulative Nature ofAllotment Equity Shares no. of Equity Value Price eration Paid-up Issue/Reason

Allotted Shares (Rs.) pershare Capital(Rs.) for allotment

August 8,00,000 1,58,04,328 10 185 Cash 15,80,43,28011, 1994

November 17,05,000 1,75,09,328 10 200 Cash 17,50,93,2802, 1994

July 36,00,000 2,11,09,328 10 111.5 Cash 21,10,93,28026, 1995

October 1,29,82,326 3,40,91,654 10 – Bonus 34,09,16,54025, 1996

November 10,90,560 3,51,82,214 10 – – 35,18,22,14018, 1996

140,72,886

April 1,27,99,730 4,79,81,944 10 – Other than 47,98,19,44020,2004 cash

March – 47,98,19,440 1 – – 47,98,19,44015, 2006

Issued by way of privateplacement to Unit Trust ofIndia

Issued by way of privateplacement to variousallottees

Shares issued onconversion of the warrantsheld by the Promoters

Bonus shares issued in theratio of 2 : 3

Shares allotted onamalgamation of SPILwith our Company

Sub-Division of eachequity shares of Rs.10/-into 10 equity shares ofRe.1/- each

2. Shares issued otherwise than for cash –We have not issued any equity shares for consideration other than cash except the following:

1. 88,72,885 equity shares of face value of Rs.10/- each allotted on June 11, 1992, pursuant to the Scheme ofAmalgamation of erstwhile Chemicals and Plastics India Limited (CPIL) with the Company, in the ratio of oneequity share of Rs.10 of the Company for every one equity share of Rs.10 of CPIL.

2. 44,36,443 equity shares of face value of Rs 10/- each allotted on April 1,1994, as Bonus shares, issued in theratio of 1 equity share of Rs.10 for every 2 equity shares of Rs.10.

3. 1,29,82,326 and 10,90,560 shares of face value of Rs 10/- each allotted on October 25,1996 and November 18,1996respectively as Bonus shares issued in the ratio of 2 equity shares of Rs.10 for every 3 equity shares of Rs.10.

4. 1,27,99,730 equity shares of face value of Rs.10/- each allotted on April 20, 2004, pursuant to Scheme ofArrangement of Sanmar Properties and Investments Limited (SPIL) with the Company, in the ratio of oneequity share of Rs.10 each of the Company for every equity share of Rs.10 of SPIL.

3. Reduction of share capital:-We have not reduced our share capital till date.

4. Promoters’ Contribution and Lock-In:The present issue being a rights issue, provisions of promoters’ contribution and lock-in are not applicable and theexisting shareholding of our Promoters is not subject to any lock-in period.

5. Unsubscribed Portion of the IssueThe unsubscribed portion, if any of the equity shares offered to the shareholders after considering the applicationfor the number of shares as per entitlement plus additional equity shares, shall be disposed by the Board of ourCompany or Committee of Directors authorised in this behalf by the Board of our Company at their full discretionand absolute authority, in such manner as they think most beneficial to our Company and the decision of the Boardof our Company or Committee of Directors in this regard shall be final and binding. The Issue will becomeundersubscribed after considering the number of shares applied as per entitlement plus additional shares. Theundersubscribed portion shall be applied for only after the Issue Closing Date.

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7. The Shareholding Pattern of the Company

* Since the current issue is a Rights Issue, the Shareholding pattern post-issue will remain unchanged assuming thatall the applicants exercise their rights in full.

Category of Shareholder Pre Issue as on February 20, 2009 Post Issue

1. Shareholding of Promoter Total number Total shareholding Total number % of post-Issueand Promoter Group of shares as a % of of shares* capital assuming

total number allotment of allof shares Equity Shares

Offered.

(A) Indian Promoters

Individuals/ Hindu Undivided Family 11,09,360 0.23 18,48,933 0.23

Bodies Corporate:Sanmar Holdings Limited 35,86,52,480 74.75 59,77,54,133 74.75Sanmar Realty Private Limited 1,360 0.00 2,266 0.00

Any Others (Trust) 1,01,380 0.02 1,68,966 0.02

Sub Total (A) 35,98,64,580 75.00 59,97,74,299 75.00

(B) Foreign Promoters – – – –

Total Shareholding of Promoterand Promoter Group (A) and (B) 35,98,64,580 75.00 59,97,74,299 75.00

2. Public Shareholding

(A) Institutions

Mutual Funds / UTI 100,120 0.02 1,66,866 0.02

Financial Institutions / Banks 4,11,08,550 8.57 6,85,14,250 8.57

Central Government / StateGovernment(s) 1,400 0.00 2,333 0.00

Insurance Companies 98,32,056 2.05 1,63,86,760 2.05

Foreign Institutional Investors 4,08,764 0.09 6,81,273 0.09

Sub Total (A) 5,14,50,890 10.72 8,57,51,482 10.72

(B) Non-Institutions

(1) Bodies Corporate 1,15,81,930 2.41 1,93,03,217 2.41

(2) Resident Individuals & HUF 5,52,01,287 11.50 9,20,02,145 11.50

(3) Non- Resident Individuals &Foreign nationals 9,09,376 0.19 15,15,627 0.19

(4) Others Trust Clearing Members 8,37,162 0.17 13,95,270 0.17

Sub Total (B) 6,85,03,970 14.28 11,41,73,283 14.28

Total Public Shareholding (2) =(A) and (B) 11,99,54,860 25.00 19,99,24,765 25.00

TOTAL (1) + (2) 47,98,19,440 100.00 79,96,99,064 100.00

GRAND TOTAL 47,98,19,440 100.00 79,96,99,064 100.00

6. Details of Equity Shares bought back-We have not bought back the Equity Shares of our Company.

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8. Details of shareholding of the Promoters and Promoter Group of the Company

Promoter and Promoter Group

Name of the Shareholder Equity Shares Percentage of(face value of Re.1 each) Pre-Issue Capital

Sanmar Holdings Limited 35,86,52,480 74.75

N Sankar 6,49,360 0.14

Vijay Sankar 1,74,430 0.04

Sankar N – Trustee, Madhurika Benefit Trust 1,01,380 0.02

Madhura Visweswaran 84,090 0.02

Mayura Kumar 57,800 0.01

N Kumar 52,960 0.01

K S Narayanan 52,680 0.01

Chandra Sankar 19,020 0.00

Bhavani Kumar 19,020 0.00

Sanmar Realty Private Limited 1,360 0.00Grand Total 35,98,64,580 75.00

9. Details of the shareholding of the directors of the Promoter company in our Company -

S No. Name of the Director Equity Shares(face value of Re.1 each)

1 N Sankar 6,49,3602 Vijay Sankar 1,74,4303 K S Narayanan 52,680

10. Details of transactions in Equity Shares by the Promoters and Promoter Group and the directorsof the Promoter during the period of 6 months prior to filing of this Letter of Offer with SEBI

There has been no transaction in the Equity shares of our Company by the Promoters and Promoter Group and the

directors of the Promoter Company during the period of 6 months prior to filing of the Letter of Offer with SEBI.

11. Top ten Shareholders

(a) Top ten shareholders as on the date of filing this Letter of Offer is as follows:

Name of the Shareholder Equity Shares % of pre- issue(Face value of Re.1/- each) capital

Sanmar Holdings Limited 35,86,52,480 74.75

Life Insurance Corporation of India 4,09,35,200 8.53

Nine International Securities Private Limited 54,24,500 1.13

United India Insurance Company Limited 53,12,550 1.11

The Oriental Insurance Company Limited 45,19,506 0.94

Minu Budhia 6,49,530 0.14

N Sankar 6,49,360 0.14

Patton International Limited 5,83,720 0.12

Bharath Visalakshi 4,03,488 0.08

Religare Securities Ltd 3,86,384 0.08

Total 41,75,16,718 87.02

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Name of the Shareholder Equity Shares % of pre- issue(Face value of Re.1/- each) capital

Sanmar Holdings Limited 35,86,52,480 74.75

Life Insurance Corporation of India 4,09,35,200 8.53

Nine International Securities Private Ltd 54,24,500 1.13

United India Insurance Company Limited 53,12,550 1.11

The Oriental Insurance Company Limited 45,19,506 0.94

Minu Budhia 6,49,530 0.14

N Sankar 6,49,360 0.14

Patton International Limited 5,83,720 0.12

Bharath Visalakshi 4,03,488 0.08

Religare Securities Ltd 3,87,834 0.08

41,75,18,168 87.02

(b) Top ten shareholders as on ten days prior to the date of filing this Letter of Offer with theStock Exchanges are as follows:

(c) The ten largest shareholders two years prior to the date of filing of this Letter of Offer with theStock Exchanges are as follows:

Name of the Shareholder Equivalent Equity Shares of % of pre-issue Face value Re.1/- each capital

Sanmar Holdings Limited 35,86,52,480 74.75

Life Insurance Corporation of India 4,09,35,200 8.53

The Oriental Insurance Company Limited 60,35,247 1.40

The United India Insurance Company Limited 57,85,050 1.21

Nine International Securities Private Limited 54,24,500 1.13

H B Stockholdings Limited 26,65,349 0.56

Minu Budhia 7,49,530 0.16

Keen Investment & Leasing Ltd 7,12,670 0.15

N Sankar 6,49,360 0.14

Patton International Limited 6,37,730 0.13

Total 42,18,33,109 87.91

12. We have not availed of bridge loans to be repaid from the proceeds of the Issue for incurring expenditure on theobjects of the Issue.

13. Our Promoters and Directors and the Lead Manager to the Issue have not entered into buy-back, standby orsimilar arrangements for any of the securities being issued through this Letter of Offer.

14. The terms of issue to Non-Resident Equity Shareholders / Applicants have been presented under the section“Terms of the Issue” beginning on page 257 of this Letter of Offer.

15. At any given time, there shall be only one denomination of the Equity Shares of our Company. The EquityShareholders of our Company do not hold any warrant, option or convertible loan or debenture, which wouldentitle them to acquire further shares in our Company.

16. We have not granted any options or shares under any scheme of employees’ stock option or employees’ stockpurchase.

17. No further issue of capital by way of issue of bonus shares, preferential allotment, rights issue or public issueor in any other manner which will affect our equity capital, shall be made, during the period commencing fromthe filing of the Letter of Offer with the SEBI and the date on which the Equity Shares issued under the Letterof Offer are listed or application moneys are refunded on account of the failure of the Issue. Further, presentlywe have no intention to alter the equity capital structure by way of split / consolidation of the denomination ofthe shares or issue of bonus or rights or public issue of shares or issue of shares on a preferential basis or anyother securities within a period of six months from the date of opening of the Issue except that if business needsarise, the Company may, subject to necessary approvals consider raising additional capital to fund these needs.

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18. The Issue will remain open for 15 days. However, the Board or Committee thereof will have the right to extendthe Issue period, as it may determine from , but not exceeding 30 days from the Issue Opening Date.

19. If we do not receive the minimum subscription of 90% of the Issue, the entire subscription, including theadvance received from Sanmar Holdings Limited shall be refunded to the applicants within 15 days from thedate of closure of the Issue. If there is a delay in the refund of subscription by more than 8 days after ourCompany becomes liable to repay the subscription amount, (fifteen days after closure of the Issue), our Companywill pay interest for the delayed period, at the rates prescribed in sub-sections (2) and (2 A) of Section 73 of theCompanies Act, 1956. The Issue will become undersubscribed after considering the number of shares appliedas per entitlement plus additional shares. The undersubscribed portion shall be applied for only after the IssueClosing Date.

We have received a sum of Rs. 12,000 lakhs from Sanmar Holdings Limited, promoter company of our Companyas an interest free advance against share application for its entitlement in the Rights Issue and utilized theamount received for part financing the project. The amount paid by Sanmar Holdings Limited will be adjustedtowards the amount payable by them for the shares allotted to them in this Issue and any balance amount shallbe refunded to Sanmar Holdings Limited, without interest. The Company undertakes that it will comply withthe provisions of Clause 40A of the Listing Agreement.

In the event of under subscription, the promoters will not apply for additional shares in the issue and therefore,the exemption in terms of provisio to Regulation 3(1)(b)(ii) of the SEBI (SAST) Regulation shall not beapplicable to the issue. Further, the promoters do not intend to buy-out the remaining shares from the public atthe Issue price in accordance with the SEBI (Delisting of Securities) Guidelines 2003.

20. We have 31,837 members as on February 28, 2009.

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OBJECTS OF THE ISSUEOur Company intends to use the proceeds of Issue to part finance the setting up of a greenfield plant at Cuddalore,Tamil Nadu, with a capacity to manufacture 200,000 tpa of suspension grade Poly Vinyl Chloride (PVC) Resin, at anestimated cost of Rs.52,080 lakhs. We have received the envirornmental clearances/approvals from MOEF andTNPCB for production of 1,40,000 tpa of PVC upgradable to 1,70,000 tpa. The increase in capacity from 1,70,000tpa to 2,00,000 tpa is subject to our obtaining required approval from MOEF and TNPCB. The feedstock for themanufacture will be Vinyl Chloride Monomer (VCM). VCM is proposed to be imported and to facilitate this acaptive Marine Terminal Facility (MTF) is also being built at Cuddalore as a part of the project.

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

COST OF THE PROJECT AND MEANS OF FINANCING

Cost of the ProjectThe cost of the project as per the appraisal reports of SBI Capital Markets Limited, Mumbai, is Rs.52,080 lakhs, thebreakup of which is given in the table below:

(Rs.Lakhs)

S.No. Item/Description Amount (As per Additions (As per TOTAL Appraisal report the addendum to appraisaldated Oct 2006) report dated May 2007)

1 Land 900 - 900

2 Site Development 700 300 1000

3 Factory Buildings 1450 3500 4950

4 Non-factory buildings 150 - 150

5 Core Plant & Machinery 16695 757 17452

6 Utilities 15330 3720 19050

7 Miscellaneous Fixed Assets 525 (105) 420

8 Contingency 1220 (144) 1076

Total Hard Costs 36970 8028 44998

9 Preoperative Expenses 3261 - 3261

10 Working Capital Margin 3223 (1226) 1997

11 Interest During Construction 1546 278 1824

Total Soft Costs 8030 (948) 7082

Total Project Cost 45000 7080 52080

Means of Finance Amount Rs. in Lakhs

Equity (Rights Issue) 16,000

Debt 30,000

Internal Accruals/Securitisation Carbon Credit/Buyers Credit 6,080

Total 52,080

Means of FinancingAs per the addendum to the appraisal report of SBI Capital Markets Limited dated May 2007, the proposed means offinance for the Project is as under:

Proceeds of the IssueOur Company proposes to issue 31,98,79,627 Equity Shares of Re 1/- each at a price of Rs 5/- per equity shareaggregating Rs 15,993.98 lacs on a rights basis. The net proceeds of the Issue after expenses related to the Issue:

Particulars Rs. In Lakhs

Gross proceeds of the Issue 15,993.98

Less: Issue related expenses 155.25

Net proceeds of the Issue 15, 838.73

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Means of Finance Amount Rs. in Lakhs

Equity (Rights Issue) 15,838.73

Debt 30,000.00

Internal Accruals/Securitisation of Carbon Credit/Buyers Credit 6,241.27

Total 52,080.00

Net proceeds of the issue after the issue expenses will be Rs.15,838.73 lakhs. The internal accruals/ securitisationcarbon credit/ buyers credit of Rs. 6,080.00 lakhs as per the appraisal report will be increased to the extent of issueexpenses of Rs.155.25 lakhs and to extent of the difference in the Issue size (Rs.6.02 lakhs). Therefore, the totalinternal accruals / securitisation carbon credit/ buyers credit towards the means finance will be Rs.6,241.27 lakhs asagainst Rs.6,080.00 lakhs.

Pursuant to the above the means of finance is as under;

We have received a sum of Rs. 12,000 lakhs from Sanmar Holdings Limited, promoter company of our Companyand utilized this amount for part financing the project. The amount paid by Sanmar Holdings Limited is an interestfree advance and will be adjusted towards the amount payable by them for the shares allotted to them.

DebtWe have made firm arrangements for the debt funding of Rs.30,000.00 lakhs from the following banks :

APPRAISALSBI Capital Markets Limited, Mumbai, India vide their reports dated October 2006 and May 2007, carried out afinancial appraisal of the PVC project at Cuddalore.

Initially, the financial appraisal was for a capacity of 1,70,000 tpa and the estimated project cost was Rs.45,000lakhs. Subsequently, the capacity of the PVC plant at Cuddalore was reworked at 2,00,000 tpa after the Sanmargroup acquired Trust Chemical Industries LLC (name subsequently changed to TCI Sanmar Chemicals LLC) (TCI),in March 2007, a company in Egypt primarily engaged in the business of manufacturing caustic soda. The capacityutilization of TCI is 60% due to chlorine utilization constraints. Post acquisition, TCI is expanding the capacity ofthe plant to manufacture 2,75,000 tpa of caustic soda and create downstream capacities for VCM of 4,00,000 tpa andPVC of 2,00,000 tpa respectively which would ensure that the entire chlorine produced by TCI is fully utilized. Outof the 4,00,000 tpa of VCM to be produced by TCI, 2,00,000 tpa will be sold to us for the Cuddalore PVC plant. TCIis expected to begin commercial production of VCM by early 2010. To keep control on a long term basis over thecritical feed stock(VCM) for its PVC operations at Cuddalore, our Company has entered into a long term offtakeagreement (buy or pay) with TCI which will secure stable supplies of VCM, and benefit from better pricing linked toa committed large volume offtake.

Weaknesses and threats mentioned in the Appraisal Report, as perceived by SBI Capital Markets Limited

Weaknessesa) The project is not being set up through a fixed price time bound turnkey construction contract.

Threatsa) Any fluctuation in the cost of VCM will impact the margins. The nature of PVC industry is moderately cyclical.b) The Government of India has been continuously reducing the customs duty on PVC imports and the

spread between import duty on PVC and the intermediate (EDC/VCM) has reduced substantially.c) The project faces a dominant threat in the form of expansion if capacity of other players operating in the

PVC industry.

(Rs. Lakhs)

Name of Bank Amount Sanctioned Amount Drawn-Down(as on January 31,2009)

State Bank of India 7,500 7,200

State Bank of Hyderabad 7,500 7,200

State Bank of Mysore 7,500 7,200

Canara Bank 7,500 7,200

Total 30,000 28,800

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d) Environmental degradation and safety issues are significant concerns in the Chemicals industry.e) The proposed project at Cuddalore will have to maintain the highest environmental compliance and

safety standards. The Company has claimed that it has plans in place to maintain the highest environmentalcompliance and safety standards.

Sources and Deployment of FundsFunds deployed in the Project as on January 31, 2009

As at January 31, 2009, we have deployed funds aggregating to Rs. 49,138 lakhs towards the Project. The deploy-ment of funds as on January 31, 2009 and its means of finance as certified by Mr. D. V. Muralidharan (MembershipNo. 18484), Partner, Raghu & Murali, Chartered Accountants vide certificate dated February 9, 2009 are set forthbelow:

Deployment of funds in the Project as on January 31, 2009

Particulars Amount (Rs. Lakhs)

Land 1,631

Site Development 1,517

Building and Civil works 5,011

Plant & Machinery and Miscellaneous Fixed Assets 36,320

Preoperative expense 1,437

Interest during construction 3,222

TOTAL 49,138

Sources of funds deployed in the Project as on January 31, 2009

Particulars Amount (Rs. Lakhs)

Advance from Sanmar Holdings Limited 12000

Amount drawn down from Banks 28800

Internal Accruals / Securitisation of Carbon Credit / Buyers Credit. 8338

TOTAL 49,138

Purchases from Group CompaniesOf the total amount, an amount of Rs.372.18 lakhs represents purchase of components and machineries as detailedbelow from companies forming part of the Promoter Group.

Sl.No. Name of the Company Description of the item Amount (Rs. In Lakhs)

1 Asco (India) Limited Solenoid Valves 15.71

2. Flowserve Sanmar Limited Mechanical Seal & Spares 18.54

3. Xomox Sanmar Limited Plug Valves & Elomatic Actuator 122.16

4. BS&B Safety Systems (India) Limited Rupture Discs 61.15

5. Fisher Sanmar Limited Control Valves & Spares 136.42

6. Tyco Sanmar Limited Relief Valves 18.19

Total 372.18

Deployment of balance funds in the projectThe proposed deployment of balance funds is set out in the table below:

Particulars Amount (Rs. In Lakhs)

Amount to be spent from February 1, 2009 to March 31, 2009 2,942

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Issue Expenses

Category Estimated Expenses % of the Issue % of Total(Rs. in Lakhs) Expenses Issue Size

Lead Manager Fees 50.00 32.21 0.31

Fees for the Registrar to the issue 6.75 4.35 0.04

Fees for the Legal Counsel to the Issue 22.50 14.49 0.14

Advertisement and Marketing Expenses 10.00 6.44 0.06

Printing, Postage and Stationery 51.00 32.85 0.32

Contingency, Stamp Duty and Listing Fee 15.00 9.66 0.09

Total 155.25 100% 0.97

A summary of the deployment and sources of funds is given below:

Deployment of Funds (Figures in Rs.Lakhs)

Amount deployed till January 31, 2009

- Amount deployed in the Project 49,138.00

- Issue Expenses 60.00

Total amount spent till January 31, 2009 49,198.60 “A”

Balance to be deployed/spent

- Towards the project 2,942.00

- Towards Rights Issue Expenses 94.65

Total amount to be deployed/spent 3,036.65 “B”

Total deployment of funds 52,235.25 “C” = A + B

Sources of funds

Amount received till January 31, 2009

- Amount received from Sanmar Holdings Limited to beadjusted against the amount payable towards the sharesto be allotted to them 12,000.00

- Debt drawn down from Banks 28,800.00

- Internal accruals / Securitisation of Carbon Credit /Buyers Credit 8,398.60

Total as on January 31, 2009 49,198.60 “D”Balance sources of funds

Proceeds of Rights Issue (net of amount received fromSanmar Holdings Limited) 3,993.98

Debt to be drawn down 1,200.00

Total balance source of funds 5,193.98 “E”

Total source of funds 54,392.58 “F” = D+E

- Amount to be replenished to the Company for excessutilization of Internal Accruals / Securitization of CarbonCredit / Buyers Credit till January 31, 2009 2,157.33 ‘G” = F-C

STATUS OF THE PROJECT

Land

Our Company has purchased / taken on lease a total of 228.17 acres of land at Cuddalore. Of this, a total of 139.52

acres has been used for the Greenfield project. Of this 139.52 acres of land, 69.64 acres of land is freehold land andthe balance 69.88 acres is leasehold land.

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Technology and EPCM Contractor

1. The technology licensor is Ineos Vinyls UK Limited, United Kingdom. The agreement dated 30th April 2006with Ineos Vinyls UK Limited (“Ineos”) sets out the details of technology transferred, terms of transfer,perperformance guarantee and damages payabe by Ineos if the performance guaranteed is not achieved.

2. The Engineering Procurement and Construction Management Contractor (EPCM) is Jacobs Engineering IndiaPrivate Limited, Mumbai, India.

Particulars Completion date Actual/Estimatedas per SBI Appraisal Report Completion Date

Acquisition of land August 2006 August 2006

Civil Work December 2007 July 2008

Placement of order for critical equipment (Set I) December 2006 December 2006

Delivery of critical equipments (Set I) January 2008 January 2008

Placement of orders - electrical (Set II) March 2007 March 2007

Delivery of electrical (Set II) October 2007 January 2008

Placement of order for other equipment (Set III) May 2007 October 2007

Delivery of other equipments (Set III) October 2007 July 2008

Erection of equipments, electrical, piping, etc. April 2008 August 2008

Arrangement of Utilities February 2008 August 2008

Desalination and zero discharge – design and order December 2006 February 2007

Desalination and zero discharge–delivery and execution January 2008 July 2008

MTF – Land acquisition March 2007 October 2007

MTF – Jetty Construction February 2008 January 2009

MTF – Jetty approvals April 2008 February 2009

MTF –Under sea pipeline January 2008 January 2009

MTF –Land pipeline February 2008 January 2009

Pre-commissioning and trial run June 2008 February 2009

Commissioning of the facilities Q2 FY 2008-2009 March 2009

The commissioning of the facilities was scheduled to commence in July 2008 as per the appraisal report. Thereschedulement of commissioning is mainly due to disputes raised by some of the land owners/ third parties inrespect of land possessed by the Company for laying pipe line from MTF to the PVC plant under construction.

Our company has applied for / obtained all the approvals as are required for the construction of the PVC Plant andMarine Terminal Facility at Cuddalore except to the extent highlighted as a risk factor.

Rs. in Lakhs

A Total Finance required 52,080.00

B Amount to be raised through the Rights Issue (net of issue expenses) 15,838.73

C Amount excluding Rights Issue (A-B) 36,241.27

D Loans Sanctioned (firm arrangements made) 30,000.00

E Internal Accruals (C-D) 6,241.27

Undertaking By Our CompanyPursuant to clause 2.8 of the SEBI (Disclosure and Investor Protection Guidelines, 2000), our Company has madefirm arrangements for the stated means of finance as follows:

We hereby confirm that firm arrangements of finance through verifiable means towards 75% of the stated means offinance, excluding the amount to be raised through the proposed rights issue have been made.

Schedule of ImplementationThe schedule of implementation of the PVC plant at Cuddalore with progress made so far with respect to details ofland acquisition, civil works, installation of plant and machinery, trial production, date of commercial production etcare given below:

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The Company is in compliance with the clarification issued on clause 2.8 of SEBI(DIP) Guidelines vide CircularSEBI/CFD/MB/IS/2008/29/08 dated August 29, 2008 as the company has already obtained the final sanction lettersfrom all the lenders and has drawn Rs 288 crores as on January 31, 2009.

Interim Use of FundsPending utilization for the purposes described above, during this period, depending on options available, we mayconsider temporarily investing the funds available if any in interest/dividend bearing liquid instruments includingmoney market mutual funds and deposits with banks for the necessary duration and / or to temporarily deposit thefunds in Cash Credit accounts with banks for reducing overdraft and short term loans. The funds will not be deployedin equity or in equity related instruments.

Monitoring Of FundsOur Audit Committee will monitor the utilization of the Issue proceeds. We will disclose the details of the utilizationof the Issue proceeds, including interim use, under a separate head in our financial statements for Fiscal 2009,specifying the purpose for which such proceeds have been utilized or otherwise disclosed as per the disclosurerequirements of our listing agreements with the Stock Exchanges and in particular Clause 49 of the Listing Agree-ment. No part of the proceeds from the Issue will be paid by us as consideration to our Promoters, our Directors,Promoter group companies or key managerial employees, except in the normal course of our business.

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1. Earning Per share (EPS)

Period Ended EPS (Rs.) Weight

March 31, 2008 0.15 3

March 31, 2007 0.52 2

March 31, 2006 0.71 1

Weighted Average EPS 0.37

2. Price/Earning Ratio (P/E) in relation to the Issue Price of Rs. 5

The Price/ Earning Ratio based on the weighted average EPS of Rs 0.37 for the past 3 years is 13.51

The Price/ Earning Ratio based on the EPS of Rs 0.15 for the financial year ending March 31, 2008 is 33.33

3. Industry P/E Details

The Company’s main businesses are Poly Vinyl Chlorine (PVC), Chlorochemicals and PVC Piping Systems.At present, there is no listed company which is operating in all these segments. The following table provides acomparison of companies which are operating in one or more of the segments in which we operate. Kindly notethat since there are no identical listed companies, the information given below is of limited relevance.

Highest (DCW Ltd) 4.8

Lowest (Finolex Industries Ltd) 3.8

Industry Composite (Petrochemicals) 4.2

Source: Capital Market Vol XXIII/24 Jan 26 - Feb 08, 2009.

4. Return on Networth (RoNW)

Period Ended RoNW% Weight

March 31, 2008 3 3

March 31, 2007 10 2

March 31, 2006 16 1

Weighted Average RoNW 8

BASIS FOR ISSUE PRICEOur Equity Shares, now being offered, are subject to the terms and conditions of this Letter of Offer, the CAF, theMemorandum and Articles of Association of our Company, the guidelines for listing of securities issued by theGovernment of India and the guidelines issued by SEBI from time to time, the Depositories Act 1996, the provisionsof the Act and all other applicable Acts, Rules and Regulations.

Investors should also refer to the sections titled “Risk factors” and “Auditors’ Report” forming part of “Finan-cial Information” to get a more informed view before making the investment decision.

Qualitative Factors

1. CSL is the flagship company of the Sanmar group which has significant presence in PVC/Chlorochemicals,Speciality Chemicals, Engineering and shipping businesses having a total turnover of nearly 2,500 crores forthe fiscal 2007-08.

2. CSL is one of the major players in the PVC segment in India for more than four decades and is managed byprofessionals having extensive experience in the PVC/Petrochemical sector.

3. CSL has an established set of customers in the various geographical regions of India with a strong marketposition in Southern India.

4. CSL is a backward and forward integrated chemical company - an integrated player captively producing rawmaterial for many finished products.

Quantitative FactorsInformation presented in this section is derived from our audited restated financial statements presented in accord-ance with Indian GAAP.

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5. Minimum Return on post-Issue Networth to maintain EPS at Rs.0.15 (pre-Issue EPS for March 31, 2008) is3%. Minimum Return on post-Issue Networth to maintain EPS at Rs.0.37 (pre-Issue weighted average EPS ofpast three years) is 7%.

6. Net Asset Value (NAV) – Per Equity Share

NAV (pre-issue) as on March 31, 2008 (Rs.) 5.13

After Issue (Rs) 5.08

Issue Price (Rs) 5.00

* Except for P/E, figures of Chemplast Sanmar Limited have been taken from the restated audited financialstatements for the year ended March 31, 2008.

Source – PeerGroup: Capital Market Vol XXIII/24 Jan 26 - Feb 08, 2009.

8. The face value of our Equity Shares is Re.1/- each and the Issue is to be made at a price of Rs. 5/- pershare.

The Issue Price of Rs. 5/- has been determined by us in consultation with our Lead Manager and is justified onthe basis of the above qualitative and quantitative factors. The Issue Price is 5 times of the face value.

Based on the above mentioned qualitative, quantitative factors and market price of the Equity Shares of our Com-pany, we and the Lead Manager to the Issue, are of the opinion that the issue price of Rs.5/- per Equity Share isreasonable and justified.

Net Asset Value per Equity Share represents net worth, as restated divided by number of Equity Shares outstand-ing at the end of the period.

7. Comparison with other listed companies

The Company’s main businesses are Poly Vinyl Chloride (PVC), Chlorochemicals and PVC Piping Systems.At present, there is no listed company which is operating in all these segments. The following table provides acomparison of companies which are operating in one or more of the segments in which we operate. Kindly notethat since there are no identical listed companies, the information given below is of limited relevance.

Name of Company EPS (Rs.) P/E Return on Net Asset Value(times) Net Worth (%) per Equity Share (Rs.)

Chemplast Sanmar Ltd.* 0.15 33.33 3 5.13

Peer Group:DCW Ltd. 1.9 4.8 13.2 15.2Finolex Industries Ltd. 7.8 3.8 13.2 44.7Industry Average 4.2

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STATEMENT OF TAX BENEFITS

The following key tax benefits are available to the Company and the prospective shareholders under the currentdirect tax laws in India.

The tax benefits listed below are the possible benefits available under the current tax laws presently in force in India.

Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed underthe relevant tax laws. Hence the ability of the Company or its shareholders to derive the tax benefits is dependent

upon fulfilling such conditions, which based on business imperatives it faces in the future, it may not choose to

fulfill. This statement is only intended to provide the tax benefits to the Company and its shareholders in a generaland summary manner and does not purport to be a complete analysis or listing of all the provisions or possible tax

consequences of the subscription, purchase, ownership or disposal etc. of shares. In view of the individual nature of

tax consequence and the changing tax laws, each investor is advised to consult his/her own tax adviser with respectto specific tax implications arising out of their participation in the issue.

1. Key benefits available to the Company under the Income-tax Act, 1961 (‘the Act’)

A) BUSINESS INCOME:

i. Depreciation

The Company is entitled to claim depreciation on specified tangible and intangible assets owned by it and usedfor the purposes of its business under Section 32 of the Act.

In case of any new plant and machinery (other than ships and aircraft) that will be acquired by the Company, theCompany is entitled to a further sum equal to twenty per cent of the actual cost of such machinery or plantsubject to conditions specified in Section 32 of the Act.

Unabsorbed depreciation if any, for an Assessment Year (AY) can be carried forward and set off against anysource of income in subsequent AYs as per Section 32 of the Act subject to the provisions of Section 72(2) andSection 73(3) of the Act.

ii. Preliminary Expenditure

As per Section 35D of the Act, the Company is eligible for deduction in respect of specified preliminaryexpenditure incurred by the Company in connection with extension of its industrial undertaking or in connectionwith setting up a new industrial unit for an amount equal to 1/5th of such expenses over 5 successive AYs subjectto conditions and limits specified in that section.

iii. Expenditure incurred on voluntary retirement scheme

As per Section 35DDAof the Act, the Company is eligible for deduction in respect of payments made to itsemployees in connection with his voluntary retirement for an amount equal to 1/5th of such expenses over 5successive AYs subject to conditions specified in that Section.

iv. Expenditure on Scientific Research

As per Section 35of the Act, the Company is eligible for deduction in respect of any expenditure (not beingexpenditure on acquisition of land) on scientific research related to the business subject to conditions specifiedin that Section.

v. Income exempt from Taxa) Any sum received as a compensation, from the multilateral fund of the Montreal Protocol on substances

that deplete the Ozone layer under the United National Environment Programme, in accordance with theterms of agreement entered into with the Government of India, is exempt under Proviso (ii) to Section28(va) of the Act.

b) Share of income of Partners from Partnership Firm is exempt under Section 10(2A) of the Act.

vi. Deductions under Chapter VI-A of the Acta) As per Section 80-IA of the Act, the Company is eligible for deduction of an amount equal to specified

per cent of the profits and gains derived by specified industrial undertakings for such number of assessmentyears as may be specified subject to the conditions specified in that Section.

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b) The Company is eligible for deduction under Section 80G in respect of Donations subject to conditionsspecified in that Section.

vii. Carry forward of business loss

Business losses if any, for any AY can be carried forward and set off against business profits for eight subsequent AYs.

viii. MAT Credit

As per Section 115JAA(1A) of the Act, the Company is eligible to claim credit for Minimum Alternate Tax(“MAT”) paid for any AY commencing on or after April 1, 2006 against normal income-tax payable in subsequentAYs. MAT credit shall be allowed for any AY to the extent of difference between the tax computed as per thenormal provisions of the Act for that AY and the MAT which would be payable for that AY. Such MAT creditwill be available for set-off upto 7 years succeeding the AY in which the MAT credit initially arose.

B) CAPITAL GAINS

i. Long Term Capital Gain (LTCG)

LTCG means capital gain arising from the transfer of a capital asset being share held in a Company or any othersecurity listed in a recognized stock exchange in India or unit of the Unit Trust of India or a unit of a mutualfund specified under clause (23D) of Section 10 of the Act, held by an assessee for more than 12 months.

In respect of any other capital assets, LTCG means capital gain arising from the transfer of an asset, held by anassessee for more than 36 months.

ii. Short Term Capital Gain (STCG)

i. STCG means gain arising out of transfer of capital asset being share held in a Company or any other securitylisted in a recognized stock exchange in India or unit of the Unit Trust of India or a unit of a mutual fundspecified under clause (23D) of Section 10 of the Act, held by an assessee for 12 months or less.

In respect of any other capital asset, STCG means capital gain arising from the transfer of capital asset, held byan assessee for 36 months or less.

ii. LTCG arising on transfer of equity shares or units of an equity oriented fund (as defined) which has been set upunder a scheme of a Mutual Fund specified under Section 10(23D) of the Act, on a recognized stock exchangeon or after October 1, 2004 are exempt from tax under Section 10(38) of the Act provided the transaction ischargeable to Securities Transaction Tax (STT) and subject to conditions specified in that Section.

W.e.f AY 2007-08, income by way of long term capital gain exempt u/s 10(38) of the Act, of a Company shallbe taken into account in computing the Book profit and income tax payable under Section 115JB.

iii. As per second proviso to Section 48 of the Act, LTCG arising on transfer of capital assets, other than bonds anddebentures excluding capital indexed bonds issued by Government, is to be computed by deducting the indexedcost of acquisition and indexed cost of improvement from the full value of consideration.

a) As per Section 112 of the Act, LTCG is taxed @ 20% plus applicable surcharge thereon and applicableeducation cess on tax plus surcharge (if any) (hereinafter referred to as applicable SC + EC).

b) However as per proviso to Section 112(1) of the Act, if such tax payable on transfer of listed securities/ units / zero coupon bonds exceeds 10% of the LTCG, without availing benefit of indexation, theexcess tax will be ignored.

iv. As per Section 111A of the Act, STCG arising on sale of equity shares or units of equity oriented mutual fund(as defined) under Section 10(23D)of the Act, on a recognized stock exchange are subject to tax at the rate of15 per cent (plus applicable SC + EC), provided the transaction is chargeable to STT.

v. As per Section 71 read with Section 74 of the Act, short-term capital loss arising during a year is allowed to beset-off against short-term as well as long-term capital gains of the said year. Balance loss, if any, should becarried forward and set-off against short-term as well as long-term capital gains for subsequent 8 years.

vi. As per Section 71 read with Section 74, long-term capital loss arising during a year is allowed to be set-off onlyagainst long-term capital gains. Balance loss, if any, should be carried forward and set-off against subsequentyear’s long-term capital gains for subsequent 8 year.

vii. Under Section 54EC of the Act, capital gains arising on the transfer of a Long Term Capital Asset will be exemptfrom Capital Gains Tax if investment is made in certain bonds, subject to the conditions specified therein.

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C) INCOME FROM OTHER SOURCES

Dividend Income

Dividend (both interim and final) income, if any, received by the Company on its investment in shares ofanother domestic company shall be exempt from tax under Section 10(34) read with Section 115-O of the Act.

Income received in respect of units of a Mutual Fund specified under Section 10(23D) of the Act shall beexempt from tax under Section 10(35) of the Act, subject to such income not arising from transfer of units insuch Mutual Fund.

D) SPECIAL TAX BENEFITS TO THE COMPANY

None.

2. Key benefits available to the Members of the Company

2.1 Resident Members

a) Dividend IncomeDividend (both interim and final) income, if any, received by the resident shareholder from a domesticcompany is exempt under Section 10(34) of the Act, read with Section 115-O of the Act.

b) Capital Gains

i. Benefits outlined in Paragraph 1(B) above are also applicable to resident shareholders. In additionto the same, the following benefits are also available to resident shareholders.

ii. As per Section 54F of the Act, LTCG arising from transfer of shares will be exempt from tax if netconsideration from such transfer is utilized within a period of one year before, or two years after thedate of transfer, in purchase of a new residential house, or for construction of residential house withinthree years from the date of transfer and subject to conditions and to the extent specified therein.

c) RebateIn terms of Section 88E of the Act, STT paid by a shareholder in respect of taxable securitiestransactions (i.e. transaction which is chargeable to STT) entered into in the course of businesswould be eligible for rebate from the amount of income-tax on the income chargeable under the head‘Profits and Gains under Business or Profession’ arising from taxable securities transactions subjectto conditions and limits specified in that Section.

2.2 Non-Resident Members

a) Dividend IncomeDividend (both interim and final) income, if any, received by the non-resident shareholders from adomestic Company shall be exempt under Section 10(34) read with Section 115-O of the Act.

b) Capital GainsBenefits outlined in Paragraph 2.1(b) above are also available to a non-resident shareholder exceptthat as per first proviso to section 48 of the Act, the capital gains arising on transfer of capital assetsbeing shares of an Indian company need to be computed by converting the cost of acquisition,expenditure in connection with such transfer and full value of the consideration received or accruingas a result of the transfer into the same foreign currency in which the shares were originally purchased.The resultant gains thereafter need to be reconverted into Indian currency. The conversion needs tobe at the prescribed rates prevailing on dates stipulated. Further, the benefit of indexation as providedin second proviso to section 48 is not available to non-resident shareholders.

c) RebateBenefits outlined in Paragraph 2.1.c. above are also applicable to the non-resident shareholder.

d) Tax Treaty BenefitsAs per Section 90 of the Act, the shareholder can claim relief in respect of double taxation, if any, asper the provision of the applicable double tax avoidance agreements.

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e) Special provision in respect of income / LTCG from specified foreign exchangeassets available to non-resident Indians under Chapter XII-A.i. Non-Resident Indian (NRI) means a citizen of India or a Person of Indian Origin who is not a

resident. Person is deemed to be of Indian origin if he, or either of his parents or any of hisgrandparents, was born in undivided India.

ii. Specified foreign exchange assets include shares of an Indian company acquired / purchased /subscribed by NRI in convertible foreign exchange.

iii. As per Section 115E of the Act, income (other than dividend which is exempt under section10(34) of the Act, from investments and LTCG from assets (other than specified foreign exchangeassets) shall be taxable @ 20% (plus applicable SC + EC). No deductions in respect of anyexpenditure allowance from such income will be allowed and no deductions under chapter VI-Awill be allowed from such income.

iv. As per Section 115E of the Act, LTCG arising from transfer of specified foreign exchange assetsshall be taxable @ 10% (plus applicable SC + EC).

v. As per Section 115F of the Act, such LTCG shall be exempt under that Section, in the proportion ofthe net consideration from such transfer being invested in specified assets or savings certificateswithin six months from date of such transfer, subject to further conditions specified under that Section.

vi. As per Section 115G of the Act, if the income of a NRI taxable in India consist only of income /LTCG from such shares and tax has been properly deducted at source in respect of such incomein accordance with the Act, it is not necessary for the NRI to file return of income under Section139 of the Act.

2.3 Foreign Institutional Investors (FIIs)

1. Dividend IncomeDividend (both interim and final) income, if any, received by the shareholder from the domesticCompany shall be exempt under Section 10(34) read with Section 115-O of the Act.

2. Capital Gains

i. Under Section 115AD of the Act, income (other than income by way of dividends referred to inSection 115-O of the Act) received in respect of securities (other than units referred to in Section115AB of the Act) shall be taxable at the rate of 20% (plus applicable SC & EC). No deductionin respect of any expenditure / allowance shall be allowed from such income.

ii. Under Section 115AD of the Act, capital gains arising from transfer of securities (other thanunits referred to in Section 115AB of the Act), shall be taxable as follows:

´ As per Section 111A of the Act, STCG arising on transfer of securities where such transactionis chargeable to STT, shall be taxable at the rate of 10% (plus applicable SC & EC). STCGarising on transfer of securities where such transaction is not chargeable to STT, shall betaxable at the rate of 30% (plus applicable SC & EC).

´ LTCG arising on transfer of securities where such transaction is not chargeable to STT, shallbe taxable at the rate of 10% (plus applicable SC & EC). The benefit of indexation of cost ofacquisition, as mentioned under 1st and 2nd proviso to Section 48 of the Act would not beallowed while computing the capital gains.

3. Exemption of capital gains from Income-taxi. LTCG arising on transfer of securities where such transaction is chargeable to STT is exempt

from tax under Section 10(38) of the Act.

ii. Benefit of exemption under Section 54EC of the Act, shall be available as outlined in Paragraph1 (B)(vii) above.

4. RebateBenefit as outlined in Paragraph 2.1.c above are also available to FIIs.

5. Tax Treaty BenefitsAs per Section 90 of the Act, a shareholder can claim relief in respect of double taxation, if any, asper the provision of the applicable double tax avoidance agreements.

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2.4 Mutual FundsAs per the provisions of Section 10(23D) of the Act, any income to Mutual Funds registered under theSecurities and Exchange Board of India Act, 1992 or Regulations made thereunder, Mutual Funds set up bypublic sector banks or public financial institutions and Mutual Funds authorized by the Reserve Bank ofIndia, would be exempt from income-tax, subject to the prescribed conditions.

2.5 SPACIAL TAX BENEFITS TO THE MEMBERS OF THE COMPANY

None.

3. Wealth Tax Act, 1957Shares in a company held by a shareholder are not treated as an asset within the meaning of Section 2(ea) ofWealth Tax Act, 1957; hence, wealth tax is not leviable on shares held in a Company.

Notes:

a) All the above benefits are as per the current tax law and will be available only to the sole / first named holderin case the shares are held by joint holders.

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

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

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INDUSTRY OVERVIEWInformation presented in this section has been extracted from publicly available documents and industry publica-tions and has not been prepared or independently verified by us, the Lead Manager or any of our or its respectiveaffiliates or advisors.

Chemical Industry - Global Outlook

The center of chemical industry growth is shifting to Asia, with China and India leading the move. The emergenceof China and India as major consumers of chemical products is set to increasingly determine the future ofpetrochemicals, as these countries have vast new capacities that will come on-stream by the end of the decade.This trend will present even more opportunities for the global chemical industry with people in China and Indiaenjoying higher living standards and greater wealth, and thus more demand for petrochemicals.

Asian chemical producers are now key players in the global chemical market, with China’s Sinopec in theworld’s top ten chemical companies at the number seven slot, and Taiwan’s Formosa Plastics Group at thenumber nine slot, based on the Chemical and Engineering News (C&EN), a weekly magazine published by theAmerican Chemical Society’s survey on global top 50 chemical companies in 2006. (Source: Mergent-TheAsia-Pacific Chemicals Sectors, March 2008)

Sector Overview for India

The chemical sector plays a very important role in India’s economic development. The rapid economic growthin the past few years, and growing industrialization, coupled with a rapidly increasing and more affluentpopulation, have created a huge demand for chemicals. Ministry of Commerce and Industry figures show thatthe country’s chemical industry has outpaced global growth by 500% over the past five years. The industry isbecoming more competitive, with M&A consolidation more frequent. It manufactures more than 70,000 productsand its exports were worth more than US$12 billion in fiscal year 2005 to 2006. (Source: Mergent The AsiaPacific Chemicals Sectors, February 2007)

The Indian chemical industry has been growing at multiple of GDP growth rates but the performance has beensubdued in the last couple of years. The sharp rise in raw materials prices due to high crude oil price affectedboth the demand growth and the margins. Raw materials prices are rising faster than industry players can raisetheir prices and this situation could put commodity chemical and petrochemical pricing under severe pressureand has caused great concern to the domestic chemicals industry. (Source: Mergent-The Asia-Pacific ChemicalsSectors, March 2008)

Introduction to Polymers

The most important polymers (commonly known as plastics) are low density Polyethylene (LDPE), high densityPolyethylene (HDPE), Poly Vinyl Chloride (PVC), Polypropylene (PP), and Polystyrene (PS). These are knownas commodity plastics and comprise the bulk of the plastics used in the country. Other speciality polymersinclude Acrylonitrile-Butadiene-Styrene (ABS), Styrene-Acrylonitrile (SAN), Polyacetals, and Polycarbonates.

Plastics are used in a wide range of end-use sectors including industry, agriculture, water management, packaging,automobiles, electronics, communications, health care, hygiene and education.

Plastics have numerous advantages over natural materials like metals, wood, and jute, including lower cost,longer life, and versatility of use. In developed nations, the per capita consumption of plastics is quite highwhereas in developing nations, the per capita consumption is low. For instance, the per capita consumption ofPVC in India is very low, even when compared to that of Asian economies such as China, Thailand, andMalaysia etc. and therefore, the potential for demand growth is high.

The production of polymers is a continuous process with plants usually producing a single product. Capitalcosts are high with long lead times for design and construction. Capital costs represent a significant entrybarrier in this sector. Companies tend to focus on process improvements in order to achieve cost reductions,since the technology is well established.

The polymer industry is characterized by a high degree of concentration. The top 5-7 producers in the countryaccount for majority of the capacity of polymers. The main factor leading to high concentration is due to thehigh capital investments.

Price is one of the important factors affecting demand for plastics. Price advantage has made plasticsmore cost-competitive in relation to other materials.

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Demand for plastics depends upon a number of factors including the relative prices of substitutes, the effortsmade by producers to develop new applications etc. The real prices of plastics are likely to continue theirflattish trend. This will make plastics cheaper than alternatives like aluminium (where power costs are pushingup end product prices), wood (where restrictions on deforestation are increasing prices) or paper (whose priceshave been moving up faster than plastics).

PVC INDUSTRY

Introduction

PVC is the most commonly used thermoplastic. It is produced from Vinyl Chloride Monomer (VCM), which isobtained from Ethylene Dichloride (EDC), a derivative of ethylene and chlorine. PVC is used in a variety ofitems, such as pipes and fittings, wires and cables, calendared sheets, blow-moulded bottles, profiles, footwear,roofing, automotive parts, table cloths, shower curtains and furniture.

PVC – Global Scenario

From 2001 to 2006, the global demand for PVC increased at a CAGR of 4.8 per cent. In 2006 – 2011, thedemand for PVC is expected to grow at 4.1 per cent to 41 million tonnes with China, Asia-Pacific, NorthAmerica and West Europe accounting for significant portion of world PVC consumption. Taiwan is the fourthlargest producer of PVC in the world.(Source: Mergent-The Asia-Pacific Chemicals Sectors, February 2007)

PVC Business in 2007-08

Global PVC demand grew in excess of 5% in 2007 to around 35.3 mn tons. China , with a 10 mn tons demandin 2007 is the single largest market for PVC both in terms of volume and growth rate.

North America accounts for around 23% of global PVC demand. A slowdown in US GDP could have someimpact on demand. However, housing slowdown in the US could have limited impact on global PVC demandsince growth in building, construction and infrastructural development in the developing world would compensatefor this slowdown.

Global PVC capacity is expected to reach 50 mn tons from the current 42 mn tons over the next 5 years. In2007, 2.3 mn tons of capacity was added. Of this China alone added 2.1 mn tons of new capacity based onCarbide process. PVC capacity in China in 2007 was 12.5 mn tons and is expected to reach 17.5 mn tons in2012. More than 85% of this incremental 5 mn tons would be carbide based.

PVC consumption in India was 1.3 mn tons in 2007-08, a growth of 12% over the previous year. Pipes andfittings continued to be the major sector accounting for 70% of domestic PVC demand.

PVC is a major product for irrigation, water conveyance & sewage and infrastructure sector. Pipes fortransportation of water for irrigation, drinking water, various sewage applications, profiles for building industry,wire and cable require PVC as raw material. With increasing emphasis and higher budgetary outlays on irrigation,infrastructure and housing, health and hygiene, PVC consumption is expected to grow in the coming years.Due to stagnant domestic capacity and increasing domestic demand, some major industry players imported andaugmented its supply.

(Source:www.plastemart.com/upload/Literature/Thermoplastics-PP-PE-PVC-scenario-global-2007-08.asp)

Global Thermoplastics Scenario

Thermoplastics are polymers that can be heated and reformed over and over again, like polyethylene andpolypropylene.

Consumption of major thermoplastics in 2007-08 was at 183 mn tons globally. Polyethylene, comprising ofHigh-density Polyethylene (HDPE), Linear Low-density Polyethylene (LLDPE) and Low-density Polyethylene(LDPE) constitute about 38% of major thermoplastics usage followed by Polypropylene (PP) 24% and PolyVinyl Chloride (PVC) 19%. The graph below pictorially depicts the global demand for thermoplastics, includingPVC:

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Source: CMAI 2008(Source:www.plastemart.com/upload/Literature/Thermoplastics-PP-PE-PVC-scenario global-2007-08.asp)

PVC - Domestic Scenario

The consumption of PVC in India was 1.3 mn tons in 2007-08, a growth of 7% over the previous year . This growthis primarily due to the Government’s increasing focus on irrigation projects, which leads to a growing demand forpipes. There is thus a demand overhang in India currently, which is only expected to increase in the years ahead.

The following table shows the polymers production in India during the years 2005-2008

(in ‘000 Metric tons)

All Polymers 2005 2006 2007* 2008*

Capacity 5,109 5,472 5,662 6,700

Production 4,668 5,105 5,547 5,612

Import 658 629 605 817

Export 777 884 859 650

Net Trade 119 255 254 (168)

Apparent Demand 4,549 4,850 5,293 5,780

Demand Growth 12% 6.6% 9.1% 9.2%

*ProjectedSource: Directorate General of Commercial Intelligence and Statistics, 2007

Technology

Following table shows the technology and process used by major Suspension - PVC producers:

Producers Technology/ Capacity Route FeedstockLicensor (tpa)

Reliance Industries Geon (BFGoodrich), 300,000 Oxychlorination Imported EDC,USA captive ethylene

IPCL (Baroda) Geon (BF Goodrich), 55,000 Oxychlorination CaptiveUSA EDC and ethylene

IPCL (Gandhar) * Geon (BF Goodrich), 315,000 Oxychlorination CaptiveUSA EDC and ethylene

Chemplast Geon (BF Goodrich), 64,000 Direct chlorination ImportedUSA Ethylene / EDC

DCM Shriram Shinetsu, Japan 60,000 Calcium carbide Acetyleneroute

Finolex Industries Hoechst, Germany 270,000 Oxychlorination Imported EDC,domestic ethylene

DCW Kureha, Japan 88,000 VCM cracking Imported VCMSource: CRIS INFAC

*Note: IPCL (Gandhar) uses the European Vinyl Corporation (Belgium) technology for production of VCM.

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Demand and Supply

Demand for PVC declined by 2.9% in 2006 owing to high product prices. Demand for PVC was forecast to grow by7% to reach 11,99,000 mt and 12,83,000 mt in 2007 and 2008 respectively. Indian PVC demand will further beboosted with the upcoming PVC pipe capacity expansion in India. PVC imports dropped from 2,52,000 mt in 2005to 1,77,000 mt in 2006 and to 1,40,000 mt in 2007, while imports increased to 2,00,000 mt in 2008,as a result ofhigher PVC demand and stagnant capacity at 11,55,000 mt. (Source: Mergent-The Asia-Pacific Chemicals Sectors,March 2008)

Following table shows the PVC production in India, 2005-2008 (in ‘000 Metric Tons)

2005 2006 2007 2008

Capacity 955 1085 1155 1155

Production 922 965 1097 1097

Imports 252 177 140 200

Exports 19 20 38 14

Apparent Demand 1154 1121 1199 1293

Demand Growth 21% (2.9%) 7% 7%

(Source: Mergent-The Asia-Pacific Chemicals Sectors, March 2008)

The capacity of the PVC production has gone up by over 20% in the last 4 years while the production for the same periodhas increased by around 19%. The growth in the demand of PVC in 2008 as compared to the previous year is 7%.

The trend over the last four years shows that the imports as well as the exports of PVC has gone down, whichindicates a growth in the domestic demand and an increase in the domestic production capability.

(Source: Mergent-The Asia-Pacific Chemicals Sectors, March 2008)

The graph mentioned below shows the demand supply gap in PVC in India for the next 4 years:

Product, Markets and Applications:

Demand for PVC comes largely from the irrigation sector followed by construction sector and packaging sectors.PVC can be used in either of two forms — as rigid PVC or as flexible PVC. Rigid PVC is used for pipes andconduits. This application accounts for almost one-third of the total PVC demand. Flexible PVC is used in calenderedsheets, wire and cable coating, flooring, and shower curtains.

PVC is produced by the polymerisation of VCM. There are four methods of polymerisation - suspension, emulsion,bulk, and solution. Most PVC capacities are based on suspension polymerisation.

VCM can be manufactured by three methods:1. Reaction of acetylene with hydrochloric acid.2. Reaction of chlorine with ethylene.3. Reaction of Hydrochloric Acid (HCl) with ethylene.

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In general, PVC resins are not used alone; they are compounded with different types of additives. An importantproperty of PVC is that it can be compounded with various types of ‘compounding materials’, to vary its mechanical,physical, and chemical properties.

PVC is of two types, flexible and rigid, both of which have a wide range of properties and have good chemical andabrasion resistance. Materials made from the flexible type are soft and can be stretched up to 4.5 times their originallength. Flexible PVC has high porosity, to enable absorption of plasticisers.

Rigid PVC has specific gravity, in the range of 1.3-1.6. Rigid materials are hard, and cannot be stretched beyond 40per cent of their original length.

PVC is available in suspension grade and other speciality grades. Suspension PVC end-use sectors are determinedby the K-value of the suspension grade PVC (The K-67 grade is largely used in the manufacture of pipes andconduits).

Among the PVC grades, suspension PVC differs from emulsion or paste grade PVC, in terms of processes andapplications. The suspension grade is a coarse grade PVC, with a grain size of 150 microns. The emulsion grade hasa grain size of 20 microns, while paste grade PVC has a grain size of 0.2 microns. Though technically different, theterms emulsion and paste grade are used interchangeably in India.

(Source : Industry Estimate)

Among the various end-uses, a significant portion of PVC demand comes from pipes, conduits and fittings followedby Films & Sheets and wire & cable. Demand growth is expected from end-uses such as profiles, pipes andconduits, fittings and calendared sheets and films. Demand from end-uses such as bottles are expected to decrease,due to competition from PET, while increased use of polyurethanes in footwear has resulted in negative demandgrowth for PVC in footwear.

Pipes and Conduits

PVC Pipes and fittings is the largest consuming sector for suspension resin. PVC pipes are also at times referred toas Soil, Waste and Rain water pipes “SWR pipes”. They are used in the following major applications:

1. Water supply and irrigation

2. Plumbing pipes in construction for water conveyance

3. Drainage pipes for sewers – non pressure application

4. Casing and riser pipes for tube wells

5. Electrical conduits

6. Rainwater harvesting

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Considerable progress in implementing drinking water schemes by State/Central Governments is expected to resultin significant growth for PVC pipes in the country. All major pipe producers are expanding capacity. Large metalpipe manufacturers have also started investing in PVC pipe plants. The interlinking of rivers is another project thatis expected to boost demand for PVC pipes in the country.

While water pipes, casing pipes and electrical conduits are very popular in India, the applications in sewage have nottaken off as yet in our country. Large diameter PVC pipes, for water conveyance and sewage are the preferred choicein the developed world. India still continues to use traditional material. Since the principal consumer is the Govern-ment, it would take considerable effort to establish this product. However, once established, demand in this segmentis likely to grow exponentially.

Profiles

PVC profiles are used in the construction industry for many applications such as doors, windows, partitions, falseceiling, wall cladding and cabinet shutters. Internationally, profiles is a large application, but is yet to take off inIndia. PVC profiles are used in door/window frames. This sector is poised for a robust growth in the years ahead.

The winning combination of low cost, flame retardant and durability of PVC over other profile materials like alu-minium and wood is expected to result in high penetration levels for PVC in the profile sector.

While use of PVC doors in India has been growing in the area of bathroom doors, PVC profiles for windows is stillin the nascent stage. Considering the fact that there are more windows than doors in a building, PVC profile con-sumption can grow if usage in windows grows. Buildings fitted with PVC window profiles are known to consumeless electricity for heating and cooling. The bureau of energy efficiency (BEE), Ministry of Power, Government ofIndia has recommended usage of PVC windows in all air-conditioned buildings.

Dwindling forest cover, and concern to save our forests is likely to drive the banning of wood for commercialbuildings. This could give a fillip to usage of PVC in this sector.

The industry, dominated by the small-scale sector in the past, is witnessing the entry of large/medium scale organisedplayers now. The entry of organised sector in profiles (many are joint venture companies) is expected give a fillip tothe industry in terms of application/market development and quality. This sector has good medium and long-termgrowth potential.

Wire & Cable

PVC cables are used in power, telecom, automotive and instrument cables insulation and sheathing applications. Inhouse wires, PVC cables are used exclusively. In power cables of voltage 1.1 KV and below, PVC cables are used inboth sheathing and insulation. Above 1.1 KV, PVC is used in sheathing only. Growth in this sector is dependant oninvestment in power generation and growth in construction activity. Newer developments in heavy-duty cables areabove 1.1 KV and hence growth is likely to be affected in power cables. In automotive cables, new generation carsrequire higher heat resistance. Newer materials like silicon and EPDM rubber are replacing PVC cables in theseapplications. In telecom cables, PVC is not used in primary distribution. Secondary distribution and telephone in-strument cables are made in PVC.

Calendared Sheets

Calendaring is a process wherein the PVC melt is rolled on hot rollers to form sheets and films. PVC films are of twotypes – rigid films for packaging in pharmaceutical and consumer goods blister packs, and flexible films for floorcoverings and stationary. Properties like low cost, transparency and production flexibility to produce films andsheets of varying thickness are winning combinations provided by PVC, in these applications. Growth in consumer-ism, health care is likely to fuel growth in this sector.

Hoses & Tubes

Flexible and semi rigid and rigid corrugated hoses are used in water and air hose systems for gardening, automotiveand appliance sectors. Small diameter tubes for healthcare are also a major application for PVC tubes.

Long-term historical growth in this sector has been good and is likely to continue in the next five years.

Footwear

PVC footwear is one of the lowest cost footwear in the country and is popular in rural and semi-urban areas. Thissector also uses a high percentage of regrind and scrap material and is highly, price sensitive. As the economy movesforward, growth in demand for low cost footwear is likely to decline slightly over historical growth.

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Bottles

PVC bottles for mineral water and packaging is replaced by newer materials like PET in recent past due to a bettercombination of transparency and production efficiency offered by PET. Growth in this sector is expected to benegative. PVC will continue to be used in wide-mouth containers, where PET is more expensive. Other majorapplications for PVC are in medical films and crown cap sealants for beverages.

CHLOR-ALKALI INDUSTRY

Chlor-alkali industry is the key to many sectors of the world chemical industry since chlorine and caustic soda areimportant feedstock and process chemicals for a range of downstream derivatives. These derivatives either incorpo-rate chlorine or caustic soda in the finished product – such as PVC or sodium hypochlorite – or employ theseproducts as process chemicals not contained in the final chemical – such as isocyanates.

Current Market Scenario - Caustic SodaThe year 2006-07 has also witnessed increase in consumption of caustic soda. Being a basic chemical used indiverse sectors such as alumina, soaps and detergents, textiles, and paper, the general buoyancy in industrialactivity directly translates to additional consumption.

Analysis of End Use Application and Emerging TrendsThe major applications and consumption pattern for caustic soda are as under:

Caustic Usage in Textile:Textile and rayon pulp is the major consumer of caustic in India.

Caustic Usage in Alumina:In terms of caustic soda demand in India, alumina is an important application. The capacity expansions by differentplayers in the segment will further fuel demand of caustic soda. With couple of more alumina plants slated tocome up in Orissa, this sector will soon be the single biggest consumer.

Caustic Usage in Pulp & Paper:Pulp & paper are also caustic consumers and are set to grow in the future.

Caustic in Other Sectors:Consumption by the organic and inorganic chemical industry and the soaps and detergents sector is likely to grow.

Current Market for Chloromethanes:Chloromethanes are compounds containing Carbon, Hydrogen and Chlorine.Methylene Chloride (MDC) is the largest product in the Chlromethane family. The biggest consumer of MDC isthe Pharmaceutical industry.Analysis of End Use Applications and Emerging Trends of Chloromethanes

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PharmaceuticalsMDC accounts for a dominant share. The rest is mostly CFM. CTC usage is negligible in this segment. Overallchloromethanes consumption in pharma application is expected to grow in the future.

Chloroform (CFM) Usage in Pharma:Six drugs / intermediates (Ranitidine, Nevirapine, Salbutamol, Rifampicin, Naproxen and D (-) Alpha PhenylGlycine Chloride) account for bulk of CFM consumption.

Agrochemicals:CTC and MDC are the chloromethanes, which find significant usage as feedstock in the manufacture ofagrochemicals. The usage of chloromethanes in agrochemicals is dominated by Carbon Tetra Chloride, whichaccounts for majority of the consumption.

Refrigerant GasesRefrigerant gases account for substantial consumption of chloromethanes. Chloroform (in HCFC-22) and CarbonTetra Chloride (in CFC 11 & 12) find extensive usage in refrigerant gas production. CTC usage in refrigerant gasproduction within India will end by year 2010 because of the phasing out of CFC-11 and CFC-12 under obligationsto the Montreal Protocol. Most of CFC 11 & 12 capacity will be available to produce HCFC 22. HCFC 22 demand(domestic and export) is expected to grow.

Other ApplicationsOther miscellaneous applications of chloromethanes are in PU Foam, PTFE, Phytochemicals.

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OUR BUSINESSWe are a 40 year old backward and forward integrated chemical company. Our main businesses are – PolyvinylChloride (PVC), Chlorochemicals and PVC Piping Systems. We are an integrated player captively producing therawmaterials for many finished products.

PVCOur PVC operations began in May 1967 at Mettur, near Salem in Tamil Nadu, with technology from B F Goodrich,USA, to manufacture a variety of PVC Resins having a wide range of end use applications.

Initially we began our operations with an installed capacity of 6,000 TPA of PVC, which has grown to 64,000 TPAcurrently. We are also the only manufacturer of Battery Separator Resins and Copolymer Suspension Resins in India.(www.domain-b.com/companies/companies_c/chemplast/20001113_chemplast_backward.html)

Our plant is designed with the flexibility to operate using different feedstock at different points in the manufacturingchain. The choice of feedstock is based on availability and price level.

Our integrated facility at Mettur Dam has a capacity to produce 64,000 TPA of PVC. We have facility to manufactureEthylene Dichloride (EDC), and Vinyl Chloride Monomer (VCM) the feedstock for the manufacture of PVC.

Our plant at Karaikal manufactures Caustic Soda and Chlorine. Besides, Chlorine generated from this plant is usedfor manufacture of EDC.

EDC is the key intermediate to produce PVC. We have an EDC production facility at Mettur based on both directchlorination and oxychlorination process. The actual production of EDC at Mettur depends on the cost of rawmaterials, i.e., Molasses and Denatured Spirit (DNS). The cost of DNS depends upon the vicissitudes of the sugarindustry, which determines availability of molasses for alcohol production, demand of alcohol from the potablesector etc. These factors impact the availability of molasses and DNS on a sustained basis at affordable prices.

To mitigate this risk, in October 2007 we have commissioned a EDC manufacturing facility with a capacity of 84,000tpa at Karaikal. We have also set up at Karaikal a Marine Terminal Facility which is used in importing Ethylene andan ethylene storage facility of 4,000 tons. The intermediates required at Karaikal plant for the manufacture of EDCare ethylene and chlorine. While ethylene will be imported, the entire chlorine required for this plant will be metcaptively. The EDC manufactured from this plant will be transferred to Mettur for manufacture of PVC.

Of the total requirement of 1,09,000 tpa of EDC for manufacture of 64,000 tpa of PVC, 84,000 tonnes of EDC willbe made at Karaikal using imported ethylene and balance will be met from the oxychlorination process at EDCmanufacturing facility at Mettur.

Our Company is in the process of setting up a Greenfield plant for manufacture 2,00,000 tpa of PVC at Cuddalore,subject to we obtaining the necessary approvals for increase in capacity from 1,70,000 tpa to 2,00,000 tpa for ourCuddalore Greenfield project from MOEF & TNPCB. The feedstock for this plant will be Vinyl Chloride Monomer

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(VCM). The entire VCM will be imported and the Company is setting up a Marine Terminal Facility to facilitateimport of VCM.

On completion of this Greenfield PVC project, our capacity to manufacture PVC resin will be 264,000 tpa

The four different grades of resins manufactured by us are:

a. Suspension Resin

Suspension Resin is a general plastic. This grade of PVC finds major application in the PVC Pipes industry.Other major applications include flooring, shoes, cables, etc.,

We manufacture five types of suspension grade PVC resin, which have different applications in the industry.The following are the different types of suspension resins manufactured by us:i) Suspension 103 EP: A medium molecular weight Suspension resin suitable for both rigid and flexible

applications like pipes, conduits, hoses and tubes, wire and cable coating, calendered films/sheets, extrudedprofiles and for making cable/footwear compounds.

ii) Suspension 103 EP M7: A medium molecular weight polymer specially made for flexible PVC applicationswith higher porosity than 103 EP.

iii) Suspension 106 M: A low molecular weight Suspension Resin specially tailored for the manufacture ofcrystal clear blow moulded bottles, rigid and clear calendered PVC films, and injection moulded pipefittings.

iv) Suspension 104 EPM7: A low-medium molecular weight Suspension Resin developed for pipe fittingsand rigid calendered films.

v) Suspension 101 EP: A high molecular weight Suspension Resin specially developed for heat resistant andFire Resistant Low Smoke (FRLS) cables.

b. Paste Resin

Paste Resin is a grade of PVC that is used in applications like Leather cloth, Tarpaulins, Conveyor Belting andVinyl flooring industry

We manufacture three types of paste resins targeted at different applications, namely:i) Paste resin 124: A medium molecular weight Dispersion Resin best suited for the leather cloth industry

and for applications like dip moulding and roto moulding.ii) Paste resin 120: A high-medium molecular weight Dispersion Resin ideal for applications like wall paper,

dip moulding, roto moulding, conveyor belting and tarpaulin coating.iii) Paste resin 121: A high molecular weight Dispersion Resin specially tailored for applications like conveyor

belting, wear layers of leathercloth and flooring.

c. Battery Separator Resin (BSR)

Battery Separator Resin is a grade of PVC, which finds major applications in the auto ancillary industry as aseparator in the automobile batteries.

Battery Separator Resin grade CP 172 SG: A special emulsion polymerized resin made for the manufacture ofsintered battery separators. It’s carefully controlled particle size and shape enable the production of separatorswith minimum thickness and optimum mechanical properties.

d. Copolymer Resin

Copolymer Resin is a grade of PVC, which finds major applications in the screen printing ink, solvent basedcement industry etc.

We manufacture two types of Copolymer resins to cater to specific needs, viz:i) Copolymer 440: A low molecular weight copolymer of vinyl chloride and vinyl acetate (14%). Its good

solubility in ketonic solvents and its blends make it suitable for solution coating applications like vinylscreen printing inks, lacquering and solvent based cements.

ii) Copolymer 434: A low molecular weight copolymer of vinyl chloride and vinyl acetate (13%) speciallytailored for vinyl floor tile manufacture.

CHLOROCHEMICALSChlorochemicals mainly deals with Chlor-alkali (Caustic Soda and Chlorine), Solvents (Chloromethanes andTrichloroethylene), Refrigerant Gases and Silicon wafers.

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a. Caustic Soda / Chlorine

We have two caustic soda / chlorine manufacturing units, one at Mettur and the other at Karaikal.

The Mettur plant has a capacity of 62,100 tpa of caustic soda and 55,000 tpa of chlorine. The manufacturingprocess at this plant was converted from Mercury based Caustic technology to high energy efficient andenvironmental friendly Membrane based Caustic technology in August 2007. This conversion of technologyhas helped to reduce the power consumption by approximately 25% per MT of Caustic Soda. The Karaikalplant has a capacity of 51,750 TPA of caustic soda and 46,000 TPA of Chlorine. Chlorine is a main product ofthese plants, and the entire chlorine produced at these plants is consumed captively in the manufacture of EDC,PVC, Chloromethanes and Trichloroethylene.

Caustic Soda is generated as a by-product in the process of manufacture of Chlorine. The main uses of causticsoda are in the manufacture of paper, soap, textiles, viscose and aluminium. The caustic soda produced at boththese above locations are sold.

As chlorine and caustic soda are produced by the electrolysis of brine, the main raw materials are salt andpower. We have our salt fields at Vedaranyam (in Tamil Nadu) and the salt produced at these salt fields go tomeet the substantial salt requirements of both Mettur and Karaikal caustic soda plants.

The power requirement at Mettur is met from captive gensets and from private group captive power plant. Wehave our own power generating capacity of about 48.5 MW from Low Sulphur Heavy Stock (LSHS) based DGsets. We also have windmills that can generate 1.2 MW of power. We are in the process of change over of thefuel for the generation 48.5 MW of power, from LSHS to Coal at Mettur.

The power requirement at Karaikal plant is 22 MW of which 12 MW is met by the power generated from gasbased power plants located at Karaikal and the balance from the state grid.

b. Chloromethanes & Trichloroethylene

In this division two types of products are manufactured viz. Chloromethanes (CMP) and Trichloroethylene(TCE). CMP essentially refers to the group of products - methyl chloride, methylene chloride, chloroform andcarbon tetra chloride. These are used in the Pharmaceuticals, Agrochemicals, PTFE and Refrigerant gasesindustries. TCE is used as a vapour degreasing agent.

The main feedstocks for CMP are methanol and chlorine. We source our chlorine requirement for CMP captively.Methanol is purchased either by imports or from domestic suppliers. TCE is manufactured from calcium carbideand chlorine.

As per Montreal Protocol, we need to cut down the Carbon Tetra Chloride (CTC) production relating to suppliesto Solvents and process agent sector by 85% by 1st January 2005 and subsequently taper down to 0% by theyear 2010. We have executed an agreement with Ministry of Environment and Forest, Government of India. Asper this agreement, we will receive an aggregate compensation of USD 9.375 Mn from 2005-06 to 2010-11 forphase out of CTC production. Of this we have received USD 8.742 Mn till 31st January 2009.

c. Silicon Wafers

We have a completely integrated manufacturing facility with the ability to manufacture polysilicon, monosilicon ingots and wafers. Only a few manufacturers in the world have the technology to manufacture polysilicon.We have developed this technology indigenously in association with the Indian Institute of Science, Bangalore.We were manufacturing silicon wafers from imported mono silicon ingots polysilicon till recently as this optionwas cost effective. However, with the increase in prices of polysilicon and availability constraints (due todemand created by the thrust on non-conventional energy sources), we have revived our own Polysiliconmanufacturing facility. Depending on the profitability, we sell silicon wafers or mono silicon ingots. Photovoltaicsilicon wafers are used in the manufacture of solar cells and modules.

We have a capacity to make about 1.2 million of 5" PSQ wafers which goes into manufacture of solar cells andmodules.

d. Refrigerant gases

The manufacturing facility of refrigerant gases is situated at Mettur and has a capacity of 2,500 tpa. Refrigerantgases comprises of three different grades - CFC 11, CFC 12 and HCFC 22. These are essentially used in therefrigeration and air conditioning industries. The main feedstocks for refrigerant gases are hydrogen fluorideand chloroform or CTC. Chloroform and CTC are produced captively in our chloromethanes plant.

The manufacturing of refrigerant gas is controlled by the Montreal Protocol. CFC 11 and 12 is already phasedout and HCFC 22 is to be phased out by 2030.

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However, we have a swing plant capable of producing the CFC 11/12 grades or producing the HCFC 22 grade.Since HCFC 22 is required to be phased out by 2030 as per Montreal Protocol, there is adequate potential tokeep this plant running to full capacity till 2030.

We have a capacity to produce in excess of 1700 TPA of HCFC 22. Manufacture of HCFC 22 involves generationof by product HFC 23. HFC 23 is a green house gas and therefore our company has invested in a technology toincinerate HFC 23. Incineration of HFC 23 enables us to earn Certified Emission Reductions (CER’s) underthe Clean Development Mechanism (CDM) of the Kyoto Protocol and can be traded internationally. We haveentered into an agreement for sale of Certified Emission Reduction (CERs) with Sempra Energy Europe Limited(Sempra Energy) in March 2008 and Novation Agreement in April 2008 with Sempra Energy and Royal Bankof Scotland.

PVC PIPES BUSINESSOur Company has acquired the PVC pipes businesses of Polytrusions Pvt Ltd and Vinplex India Pvt Ltd in Septem-ber 2006. Located at Sholavaram in Tamil Nadu, these companies had a combined capacity to produce 22,000 tpa ofpipes. With this acquisition, our Company has moved into the forward integration mode in its PVC business and partof its PVC production from the Greenfield project can be consumed in-house.

We have expanded the capacity of these plants to 36,000 tpa and also have set up a Greenfield PVC pipe plant atShinoli in Maharashtra with a capacity of 20,000 tpa. We have also set up a facility to manufacture PVC fittings atSholavaram, for sale along with PVC pipes.

RESEARCH AND DEVELOPMENTOur Research & Development laboratory at Mettur, is engaged in carrying out process/product improvement pro-grammes. In particular, the areas of focus have been on import substitution, optimizing the utilization of availableresources, evolving alternative and more economic processes for the existing range of products and environmentconservation.

MANUFACTURING FACILITIESOur manufacturing facilities are located at the following locations:

S.No. Product Plant Location Plant Capacity

1 PVC Mettur, Tamil Nadu 64,000 tpa

2 PVC Cuddalore, Tamil Nadu 2,00,000 tpa

3 Caustic Soda Mettur, Tamil Nadu 62,100 tpa

4 Caustic Soda Karaikal, Pondichery 51,750 tpa

5 Chlorine Mettur, Tamil Nadu 55,000 tpa

6 Chlorine Karaikal, Pondicherry 46,000 tpa

7 EDC Karaikal, Pondicherry & Mettur, 84,000 tpa110,000 tpaTamil Nadu

8 Silicon Wafers Mettur, Tamil Nadu 1.2 million 5" PSQ wafers per annum

9 Refrigerant gases Mettur, Tamil Nadu 2,500 tpa

10 Solvents Mettur, Tamil Nadu 34,500 tpa

11 PVC pipes Sholavaram, Tamil Nadu 36,000 tpa

12 PVC Pipes Shinoli, Maharashtra 20,000 tpa

13 Salt Vedaranyam, Tamil Nadu 200,000 tpa

14 Industrial Alcohol Panruti, Tamil Nadu 22,000 KL per annum

15 Industrial Alcohol Krishnagiri, Tamil Nadu 14,850 KL per annum

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CAPACITY

LICENSED & INSTALLED CAPACITY FOR THE PAST THREE YEARS

** Silicon wafers are made from mono silicon ingots. The company now sells mono silicon ingots or silicon wafersdepending on profitability of the respective product. Indicated numbers include mono silicon ingots converted intoequivalent wafers

* partial period operation

PROPOSED CAPACITY UTILISATION FOR THE 2,00,000 tpa GREENFIELD PVC PLANT ATCUDDALORE

2008-09 2009-2010 2010-2011

S.No Product Plant Unit Installed Utilized Installed Utilized Installed UtilizedLocation Capacity Capacity Capacity Capacity Capacity Capacity

1 PVC Cuddalore tpa 200,000 5,000*$ 200,000 200,000 200,000 200,000Capacity 3 100 100Utilisation(%)

* partial period operation $ Trial Production

2007-08 2006-2007 2005-2006

S.No Product Plant Unit Installed Utilized Installed Utilized Installed UtilizedLocation Capacity Capacity Capacity Capacity Capacity Capacity

1 PVC Mettur tpa 64,000 52208 64,000 50,674 64,000 60,177Capacity 82 79 94Utilisation(%)

2 CausticSoda Mettur/ tpa 1,13,850 1,02,194 1,01,775 90,297 1,01,775 83,919Karaikal

Capacity 90 89 82Utilisation(%)

3 Chlorine Mettur/ tpa 1,00,740 91,045 90,055 80,911 90,055 74,929Karaikal

Capacity 90 89 83Utilisation(%)

4 EDC Karaikal tpa 84,000 28,310* - - - -

Capacity 34Utilisation(%)

5 Silicon Wafers ** Mettur ‘000 no 1,200 1,146 1,200 1,342 1,200 1,251

Capacity 95 112 104Utilisation(%)

6 Refrigerant Gases Mettur tpa 2,500 2,010 2,500 895 2,500 1,159

Capacity 80 36 46Utilisation(%)

7 Solvents Mettur Tpa 34,500 32,541 34,500 35,454 34,500 35,051

Capacity 94 103 102Utilisation(%)

8 PVC Pipes Sholavaram tpa 36,000 12,721 22,000 7,743 * - -

Capacity 35 35 -Utilisation(%)

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PROPOSED CAPACITY UTILISATION FOR THE COMPANY AS A WHOLE FOR THE NEXT THREEYEARS FROM THE COMMENCEMENT OF COMMERCIAL PRODUCTION OF PVC IN THEGREENFIELD PLANT AT CUDDALORE

2008-09 2009-2010 2010-2011

S.No Product Plant Unit Installed Utilized Installed Utilized Installed UtilizedLocation Capacity Capacity Capacity Capacity Capacity Capacity

1 PVC Cuddalore tpa 200,000 5,000*$ 200,000 200,000 200,000 200,000

Capacity 3 100 100Utilisation(%)

PVC Mettur tpa 64,000 63,000 64,000 63,000 64,000 63,000

Capacity 98 98 98Utilisation(%)

2 CausticSoda Mettur/ tpa 1,13,850 1,10,000 1,13,850 1,10,000 1,13,850 1,10,000Karaikal

Capacity 97 97 97Utilisation(%)

3 Chlorine Mettur/ tpa 1,00,740 97,333 1,00,740 97,333 1,00,740 97,333Karaikal

Capacity 97 97 97Utilisation(%)

4 EDC Karaikal tpa 84,000 63,000 84,000 84,000 84,000 84,000

Capacity 75 100 100Utilisation(%)

5 Silicon Wafers** Mettur ‘000no 1,200 1,140 1,200 1,140 1,200 1,140

Capacity 95 95 95Utilisation(%)

6 Refrigerant Gases Mettur tpa 2,500 1,700 2,500 1,700 2,500 1,700

Capacity 68 68 68Utilisation(%)

7 Solvents Mettur tpa 34,500 32,600 34,500 34,500 34,500 34,500

Capacity 94 100 100Utilisation(%)

8 PVC Pipes Sholavaram tpa 36,000 12,000 36,000 30,000 36,000 36,000

Capacity 33 83 100Utilisation(%)

PVC Pipes Shinoli, tpa 20,000 4,350 * 20,000 15,000 20,000 20,000Maharashtra

Capacity 22 75 100Utilisation(%)

** Silicon wafers are made from mono silicon ingots. The company now sells mono silicon ingots or silicon wafersdepending on profitability of the respective product. Indicated numbers include mono silicon ingots converted intoequivalent wafers

* partial period operation

$ Trial Production.

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Mettur Complex, Tamil NaduThe manufacturing facility at Mettur is divided into four units - Plant I, Plant II, Plant III and Plant IV:

Plant 1, Mettur : This plant is spread over an area of 70.78 acres and manufactures refrigerant gas HCFC 22. Theplant for incineration of by-product HFC 23 was commissioned in July 2007. The destruction ofHFC 23 results in the generation of carbon credits.

Plant II: This plant is spread over an area of 136.84 acres. The plant manufactures PVC. In this plant, weproduce four grades of PVC resins. The capacity of this plant is 64,000 tpa.

Plant III: This plant is spread over an area of 129.12 acres. The plant manufactures Caustic Soda using themembrane based technology and Solvents (Chloromethanes & Trichloroethylene).

Plant IV: This plant is spread over an area of 9.83 acres. The plant manufactures Poly Silicon and Siliconwafers.

UtilitiesThe following are the utilities we have to support the manufacturing facilities at the plant:

a) Power Plant: Currently our power requirement is fully met by LSHS based DG sets that can produce 48.5 MWof power and from private group captive power plant. We are in the process of switching over of fuel for thegeneration of power, to coal. At present the process steam requirement for our Plants are met from cogenerationof steam & power by the DG sets and by additional boilers. Upon commissioning of the coal based plant, theentire process steam requirement will be met from the coal based cogeneration plant.

b) Reverse Osmosis plant: A reverse osmosis plant is installed to cater to the water requirement of the plant. Theplant has a capacity to produce 300 cubic metres of water per day.

Raw MaterialsThe major raw materials required for the Mettur plant are Chlorine and Industrial Alcohol.

Chlorine is sourced internally from the chlorine plants in Mettur and Karaikal and Alcohol is sourced from ourIndustrial alcohol plant at Panruti.

Manufacturing process followed by us currently

PVC:

Initially the alcohol is dehydrated to produce ethylene. Ethylene is reacted with chlorine to form Ethylene Dichloride(EDC). Purified EDC is subjected to thermal cracking when Vinyl Chloride Monomer and Hydrogen Chloride alongwith some impurities are formed. Hydrogen Chloride is reacted with Ethylene to manufacture EDC in theoxychlorination process.

The Vinyl Chloride Monomer (VCM) is then polymerized in special reaction vessels to form Poly Vinyl Chloride(PVC) in the presence of a catalyst.

Caustic Soda

The main raw material for the manufacture of Caustic soda is salt. Salt is mixed in water in the desired concentrationand the resulting solution is called Brine solution. This process is carried out in the Brine plant.

After removal of impurities, the brine plant feeds the brine solution to the membranes where heavy current is passedthrough the solution and electrolysis takes place. During the process of electrolysis, Caustic soda is formed andchlorine and hydrogen gas is liberated.

The hydrogen gas is then reacted with chlorine to form hydrochloric acid, and the remaining hydrogen gas, whichdoes not react with chlorine is used as energy source in fusion plant and limited quantity is sent to the bottling plant.

We have in August 2007 converted the Caustic soda manufacturing at Mettur from mercury based technology tomembrane based technology. The technology used for manufacture of Caustic Soda at Karaikal is membrane based.

Salt is produced at the salt fields at Vedaranyam (in Tamil Nadu).

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Chlorochemicals

Chloromethanes

With a capacity of 34,500 Tonnes per annum, Chemplast is one of the largest producers of Chloromethanes in India.Chloromethanes find use as a solvent in the manufacture of Pharmaceuticals and fine chemicals and also as a feedstockin refrigerant gas and agrochemical industries.

Feedstock methanol is first converted to methyl chloride by reaction with hydrochloric acid. The methyl chloride islater chlorinated to produce methylene chloride, chloroform and carbon tetrachloride. The ratio of these three prod-ucts can be varied depending on the feed ratio of chlorine and methyl chloride. The individual products are separatedby distillation.

Trichloroethylene

Trichloroethylene, which is a powerful degreasing chlorinated solvent, is manufactured using Calcium Carbide andChlorine as raw materials.

For manufacture of Trichloroethylene, we have to initially manufacture Tetrachloroethane, which is obtained fromreaction of acetylene and chlorine. Acetylene is generated using Calcium carbide.

In the process of manufacture of Trichloroethylene, calcium carbide is reacted with water in a wet type acetylenegenerator to generate acetylene.

Acetylene thus produced is purified and dried before use in reaction with vapourised liquid chlorine gas. CalciumHydroxide produced as a by-product is allowed to settle in tanks and sold.

Acetylene and chlorine are reacted together and tetrachloroethane is produced, which is then chemically cracked inbatch process and trichloroethylene is produced in a crude form, which is then subjected to continuous distillationfor purification.

At the end of the process, pure trichloroethylene is produced and filled in barrels/tankers and marketed.

Silicon Tetrachloride

Metallurgical grade of Silicon of about 1 to 2" size is reacted with chlorine. A controlled reaction of the two producessilicon tetrachloride.

Ethyl Silicate

Ethyl silicate is a speciality chemical used as a binder in paints and special aluminium castings. The process ofmanufacture involves chlorination of Silicon metal to silicon tetrachloride (STC) followed by the reaction of STCwith alcohol to produce Ethyl silicate.

Silicon wafers

The raw material for manufacturing silicon wafers is Poly Crystaline Silicon. Poly Crystaline Silicon is charged intoa quartz crucible. After the completion of the process, the crystal is then sliced into wafers in wire saw machine. Thewafers are then washed and packed.

The flowchart of the manufacturing process of PVC is given below.

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Developmental Activities Being Undertaken At The Mettur PlantA brief note on the various capex programmes currently being undertaken by our Company is given below.

Coal based power plantTo reduce the cost of power, we are in the process of implementing a project for conversion of existing LSHS basedpower plant into imported coal based power plant at Mettur of a total capacity of 48.5 MW to meet our total powerand steam requirement and also the power requirement of the new PVC plant at Cuddalore.

There are two units under construction with aggregate capacity of 48.5 MW. Railways siding work has been com-pleted and we are ready to receive the coal. In May 2006, TNPCB had given the necessary consent for conversion offuel from LSHS to coal to generate 48.5 MW of power. However in Jan 2008, TNPCB passed orders revoking theconsent given by them earlier alleging contravention of conditions imposed while granting the consent. The compa-ny’s appeal against the order of TNPCB was dismissed by the Appellate Authority in May 2008. Against this Orderof the Appellate Authority, the company filed a writ in the Hon’ble Madras High Court. Though the constructionactivities which was earlier stopped by the Appellate Authority were restarted in May 2008 consequent to the interimstay against the Appellate Authority’s Order granted by the Madras High Court, the construction activities werestopped on 3rd July 2008 pursuant to the directions of the Madras High Court. The High Court of Judicature atMadras vide its orders dated 18th September 2008 had set aside the revocation order and remanded back the subjectmatter for fresh consideration by TNPCB. Orders of TNPCB in this regard are awaited.

Benefits of the projectThe savings from the project will accrue to the company on the following accounts:

Savings in power cost as compared to the power generated from LSHS based gensets or obtained from the stategrid

Reduction in cost of steam generation as compared to cost of generating steam through LSHS based boilers

Membrane Conversion at MetturThe Caustic soda plant at Mettur was based on Mercury cell technology. When this plant was established, Mercurycell process was the best available technology then. However, it had the following drawbacks:

High Power consumption – Approximately 27% higher compared to Membrane Cell technology.

Higher maintenance costs – higher by approx 60% compared to membrane cell plant

Environmental issues relating to use and consumption of Mercury – Pollution Control Board stipulates thatmercury cell technology should be converted into membrane cell by 2012 by all Caustic Soda Manufacturers.

Keeping these in mind, our Company has converted its mercury cell technology into membrane cell technologyahead of the statutory period prescribed for such conversion.

The above conversion was completed at Mettur in August 2007.

Savings on conversionSavings will accrue on account of the following:

Reduction in power consumption from 3481 KWH / MT to 2650 KWH / MT

The flowchart for the manufacturing process of the chlorochemicals section is mentioned below.

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Savings due to additional availability of chlorine due to incremental caustic production

Reduction in maintenance costs

Savings in manpower costs

Zero discharge plant at MetturIn the PVC Plant at Mettur, we have already brought down the quantity of treated effluent discharge from 2485 KLD to1175 KLD in the last few years by implementing various steps for the recycling of processed water and reduction ofeffluents at source. Apart from this we had an effluent load of 664 KLD from the Caustic & Chloromethanes plants.

We have now reduced the treated effluent discharge from 1175 KLD of the PVC plant and the 664 KLD from otherplants to Zero KLD by implementing this project. This Zero liquid discharge project possibly one of the first of itskind in the country wherein the liquid effluents are first collected and the dissolved solids are separated in a series ofsteps and the water is recovered through a Reverse osmosis process, which is recycled back for process use.

Caustic Soda Plant at Karaikal is already a zero discharge plant as there is no process effluent discharged from theplant.

Clean Development Mechanism (CDM) Project at MetturWe have set up a facility to capture and incinerate HFC 23 to enable us to earn and trade in Certified EmissionReduction (CER) internationally.

Our project to generate CER is registered by United Nations Framework Convention for Climate Change (UNFCCC)and this entitles us to generate approximately 540,000 CER’s per year for next 10 years.

A total of 539,809 CER’s have already been issued towards the first year of the operation of the HFC 23 destruction project.

Poly silicon plant at Mettur – 30 TPAOur Company is presently manufacturing Silicon Wafers from imported Poly silicon as this is a more cost-effectiveoption. However, with the recent increase in the prices of polysilicon in the international markets and the availabilityconstraints, our company has revived Polysilicon manufacturing facility at Mettur.

Karaikal Complex, PondicheryThe plant is spread over an area of 136.02 acres. The plant manufactures chlorine, caustic soda and EDC. We havecommissioned EDC manufacturing facility by chlorination of ethylene which will be imported and transported intothe plant using the Marine Terminal Facility, with a capacity to produce 84,000 tpa of EDC. A cryogenic tank with astorage capacity of 4,000 MT of ethylene has already been constructed.

UtilitiesThe following are the utilities we have to support the manufacturing facilities at the plant:

a) Power Plant: Currently our power requirement is satisfied by two gas based power plant which have a capacityto produce 12 MW of power. The total power requirement in Karaikal is 22 MW. Balance power of 10 MW isdrawn from the grid.

b) Steam boiler: A steam boiler of 4.6 T/Hr capacity from the waste heat obtained from the gas engine has beeninstalled. This and three other boilers cater to the steam requirement of the plant.

c) Reverse Osmosis plant: A reverse osmosis plant is in the plant to cater to the water requirement of the plant.The plant has a capacity to produce 1200 cubic metres of water per day.

Raw MaterialsThe major raw materials required for the Karaikal plant are ethylene and salt. Ethylene is being imported and trans-ported into the plant through MTF and salt is be procured from salt fields in Vedaranyam.

EDC facilityWith a view to obtain reduction in input cost and to eliminate the dependency on alcohol based EDC, our companyhas set up production facilities for manufacture of 84,000 TPA of EDC at Karaikal based on imported ethylene andchlorine available at Karaikal Plant. The cost of production through this route is lower than the cost of imported EDCas well as EDC manufactured out of purchased alcohol. This will also reduce the dependency on the domesticalcohol for which the availability is becoming tighter post implementation of the Gasohol program in Tamil Nadu.

The reason for selecting Karaikal as location for setting up the EDC plant is that ethylene cannot be transported byroad and Karaikal being a coastal location a Marine Terminal facility was set up to import ethylene. With the avail-able chlorine and imported ethylene, the EDC manufactured at Karaikal is transported by road to Mettur for manu-facture of PVC resins.

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This project has been commissioned in October 2007. Our Company is now fully self sufficient for its EDC require-ment for operating the PVC plant at Mettur.

Clean Development Mechanism Project at KaraikalThe utilization of waste heat from the gas engines that generate power to generate steam that in turn used to concen-trate the caustic soda from electrolysers, is eligible for carbon credits. This project is also registered by UNFCCCand potentially can generate 7,500 Certified Emission Reductions (CER’s) annually.

Cuddalore Plant, Tamil NaduA Greenfield plant to produce PVC using VCM as the feedstock is being constructed. The plant will have a capacityto produce 2,00,000 tpa , subject to we obtaining the necessary approvals for increase in capacity from 1,70,000 tpato 2,00,000 tpa for our Cuddalore Greenfield project from MOEF & TNPCB.

Industrial Alcohol Plant, Panruti, Tamilnadu

This plant is spread over 134 acres. This distillery produces industrial alcohol from Molasses and the entire quantityof Industrial Alcohol produced is transported to our PVC plant at Mettur.

PVC Pipes Plant, Sholavaram, TamilnaduAs a part of our forward integration strategy our company has re-entered into PVC pipe manufacturing facility byacquiring two pipe manufacturing plants at Sholavaram, near Chennai. In this plant Pressure pipes, casing, screenpipes, SWR pipes, plumbing pipes and conduits are produced and sold. These plants are spread over an area of 7.38acres. The company has also commenced manufacture of PVC fittings along side PVC pipes in the above plant.

PVC Pipes Plant, Shinoli, MaharashtraAs part of expansion of PVC Pipes capacity, we have set up a 20,000 TPA plant at Dewarwadi Village, KolhapurDistrict, Maharashtra. This modern facility was commissioned in December 2008.

Our StrengthsOur strengths, as perceived by SBI and mentioned in their appraisal report dated October 2006 and addendum totheir appraisal report dated May 2007 are as under:

1. CSL is promoted by the Sanmar Group which is a well renowned group of South India. The Group has significantpresence in PVC/Chlorochemicals, Speciality chemicals, Engineering and Shipping businesses having a totalturnover of nearly 1,600 crores.

2. Chemplast is one of the major players in the PVC segment in India. It is the market leader in paste grade andbattery separator resins and has a market share of 8% in suspension grade resin.

3. Chemplast is managed by professionals having extensive experience in the PVC/petrochemical sector whohave been successfully managing the current operations for more than three decades. The implementation ofthe proposed project will benefit from the availability of in-house technical manpower.

4. Chemplast is considering a number of capex plans for environmental and safety compliance and self-sufficiencyin power generation. The project is expected to benefit from the availability of low cost captive power.

5. The Company has a well established set of customers in the various geographical regions of India with a strongmarket position in Southern India. The Company will be able to leverage its strong marketing network toensure off-take from the proposed project.

6. The location proposed for the PVC project is suitable in terms of proximity National Highway, local availabilityof all infrastructures, and availability of 10.50 mtr draft for the MTF.

7. Various approvals from the State and Central authorities to set up the project have already been secured byChemplast, e.g., allotment of land, pollution control clearance, environmental and CRZ clearance etc.

8. With the recent acquisition of pipe and manufacturing units, the Company has moved into forward integrationand part of its PVC production can be consumed in-house.

9. The production process of PVC division at Mettur of Chemplast offers high flexibility in case of feedstockwhich improves the ability of the Company to face adverse situations in a particular market.

10. Apart from PVC, the Company also generates good revenues from other product lines such as Caustic Soda,Chlorochemicals, refrigerant gases and silicon wafers, which decentralize the risks.

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Our StrategyTowards realizing our vision of attaining a more dominant position in the PVC market and improve our competitivenessin the PVC industry, we have already embarked / completed several expansions at our existing facilities including:

1. Construction of a MTF facility at Karaikal for import of Ethylene directly in the factory.

2. Commissioning of EDC manufacturing facility at Karaikal with a capacity of 84,000 tpa.

3. Conversion of mercury cell based technology to membrane based technology for manufacture of Chlorine andCaustic Soda at Mettur.

4. Switching over of fuel for the power plant at Mettur from LSHS to coal .

Upon completion of our Greenfield project at Cuddalore (together with a MTF facility to import VCM and conveydirectly to the plant by a pipeline), our total capacity to manufacture PVC will increase from 64,000 tpa to 2,64,000tpa. Our power generation capacity will also provide power at competitive cost after the commissioning of the coalbased power plant.

CompetitionIn the industry to which our Company belongs, we face competition from established Indian and International pro-ducers operating in the markets where our Company is present.

We operate in a competitive environment as our principal products are produced by a number of other manufacturers inIndia and abroad. The details of the domestic competition and market share of our major products are mentioned below:

The details of the international competition of our major products are mentioned below:

PVC - Suspension

India is a net importer of Suspension PVC resin with demand in far excess of supply. Even after the establishment ofour Cuddalore Plant, significant imports have to take place to bridge the gap between demand and supply. We faceInternational competition from Middle East, North-East Asia and sporadically from Europe.

PVC – Paste

Indian demand for paste PVC is in excess of supply and hence imports are inevitable. In paste PVC, we face Interna-tional competition from Middle East, Korea and Europe.

Caustic Soda

In India, Demand and Supply are more or less matched. Freight component of the price is significant for caustic sodaand hence large-scale imports of caustic soda do not take place. India imports caustic soda from Korea, China,Indonesia, Thailand, Qatar and Saudi Arabia.

Chloromethanes

Demand is in excess of supply in two of the three products – Methylene Chloride and Chloroform. Carbon tetrachlo-ride is an ozone depleting substance and imports are regulated by the Montreal protocol for feedstock use only.International suppliers of these products are from Europe (including Russia), China, Korea and USA.

Refrigerant Gas

Imports of refrigerant gas are regulated and governed by the Montreal Protocol as these substances are Ozonedepleting substances and can be imported only through licenses issued by the Government. Hence, large scale im-ports do not take place for these products.

Silicon wafers

Chemplast is very small player in this market and does not have capacity to cater to the Indian demand. Imports are

Source: For caustic Soda – Alkali Manufacturers Association of India ( AMAI) Annual Report – 2007-08.

Major products Our market share Number of domestic competitors

Suspension resin 2% 6Paste resin 36% 3BSR resin 35% NILCaustic Soda 4% 32Chloromethanes 15% 3Refrigerant gas 2% 3Silicon wafers 1% 2PVC pipes 3% 12

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inevitable and since freight costs are a fraction of the cost of the product imports are sourced from all across theglobe, wherever available.

PVC Pipes

This product is characterised by a huge variety of sizes and high freight costs. Therefore, the market is highlylocalised and imports are rare.

Players in this market generally compete with each other on key attributes such as technical competence, quality ofproducts and services, pricing and track record. We compete with our competitors on the basis of our track record ofquality, technical competence, distribution channels, logistics facilities, after sales relationships, technical support tocustomers and overall credibility as a professional organization of long standing repute.

Marketing StrategyIn all our products, we compete with reputed manufacturers and multinational companies. We have a reputation ofbeing a long and committed player through our long presence in the domestic industry.

Marketing ArrangementsProducts of Chemplast are sold either directly or through a network of company owned depots and dealers, delcredere& consignment agents.

Logistics & Distribution ArrangementsThese are spread strategically all over the country. The company also has a depot in Mumbai and Delhi to cater to thesedistribution arrangements to optimize logistics. The company also has a separate distribution and marketing arrange-ments for PVC Pipes with a network of 100 tier 1 and tier 2 dealers, 9 branches and depots spread over South India.

The company is an exporter of Chemical products. The exports of these products are done through company author-ized clearing agents located in respective ports.

There are no sole selling agents for any of the products of Chemplast Sanmar Limited. The distribution arrangementsfor various products comprises of dealers, delcredere agents and consignment agents. The agreements for appoint-ment of these arrangements are common for all products albeit with minor variations. Typical sales arrangements foreach product group is:

1. PVC Resins – Sold directly or through Consignment agents / Delcredere agents

2. Caustic Soda & Chlorine – Direct and through Dealers / Delcredere agents

3. Chloromethanes, Chloroethanes & Ethyl silicate – Direct and through Dealers / Delcredre agents

4. Silicon wafers – Sold directly.

5. Referigerant Gases – Direct and through Dealers

6. Pipes – Institutional and dealers

Pricing and Discount StructuresThe pricing for all products of Chemplast is based on International parity and the Indian market prices prevalent atvarious points of time.

The discounts and pricing structure would vary from product group to product group depending on market practices.These are outlined in detail below:

1. PVC Resins – Cash and quantity discounts in line with industry practice, Special discounts based on off take,Contractual pricing with select customers.

2. Chloromethanes,Chloroethanes & Ethyl Silicate – Market based pricing to customers. Dealers work on anincentive basis that is dependent on price of the product.

3. Caustic Soda & Chlorine – Market based pricing to consumers on both spot and contract basis.

4. Refrigerant Gases – Prices are based on International prices.

5. Silicon wafers – Contractual Pricing based on international prices to customers, quotes through tenders andspot pricing based on International prices.

6 Pipes – Market based pricing for Institutional consumers and dealers.

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Technology LicencesWe entered into a technology license agreement with Ineos Vinyls, U.K., in April 2006 who is providing ProcessTechnology for manufacture of PVC suspension grade at our Greenfield PVC plant at Cuddalore. INEOS VINYLSUK LTD., is a company incorporated under the laws of England and Wales (Registered in England No. 547640),having its registered office at Runcorn Site HQ, P.O. Box 9, Runcorn, Cheshire WA74JE, United Kingdom.

Our PropertiesWe have our registered office located at 9, Cathedral Road, Chennai – 600086. The building is owned by SHLProperty Holdings Limited, a Sanmar Group Company, with whom our Company has lease arrangement. We haveproperties situated in the following cities / locations:

S.No Location Leased Owned/ Address Activity Description and area

1 Plant 1, Mettur Dam, Owned OLD P.N.Patti Refrigent cases Building - aboutSalem District, Village (Now Mettur 1,31,000 Sq.mtrs and Land - aboutTamil Nadu Township area) 70.78 Acres

2 Plant II, Mettur Dam, Owned Veerakkal Pudur PVC resins Building - aboutSalem District, Village 30,337 Sq.mts and Land - aboutTamil Nadu 136.84 Acres

3 Plant III, Mettur Dam, Owned Gonur Village Caustic Soda, Building - about 72,000 Sq.mts andSalem District, and Veerakkal Pudur Chlorine, Land - about 129.12 AcresTamil Nadu Village Chloromethane etc

4 Plant IV, Mettur Dam, Owned/ Veerakkal Pudur Silicon wafer Building - about 4072.58 Sq.Mt andSalem District, Leased Village Land - about 9.83 Acres (out of thisTamil Nadu 1.19 Acres is under lease)

5 Vedaranyam, Owned/ Kodiakadu and Salt works Building —about 1,958 Sq.Mtrs andTamil Nadu Leased Agasthampalli Land - about 3,551.05 Acres ( out of

Villages this 3,500 Acres is under lease fromGovernment)

6 Cuddalore, Owned/ Semmankumpam PVC project/ Building - about 30,337 Sq.Mtrs andTamil Nadu Leased Village and Vacant Land Land - about 227.853 Acres. Of this,

Thiyagavalli 139.223 acres is utilised for theGreenfield project and balance 88.63acres is vacant. Out of 139.223acres, 69.433 Acres is under 99 yearslease from SIPCOT.

7 Panruti, Owned Kadampuliyur Indusrial Building - about 3,500 Sq.Mtrs andTamil Nadu and Melmampattu Alcohol plant –II Land - about 153.03 Acres

Villages and Bio Compost

8 Karaikkal, Owned/ Chlorine, Building- -about 33,721 Sq.Mtrs andPondicherry Leased Caustic soda, Land –- about 136.02 Acres( out of

EDC etc this 2.57 Acres is under lease fromPort Authority)

9 Krishnagiri, Owned Marigampalli Industrial Building- about 2,800 Sq.Mtrs andTamil Nadu village Alcohol plant – I Land - about 58.75 Acres

10 Sholavaram, Owned Irulipattu, PVC pipes division Building - about 3,802.58 sq MtrsTamil Nadu Panchetty and about 1,411.37 sq. Mtrs and

Land - about 6.02 Acres and 1.36Acres respectively.

11 Coimbatore, Owned Varapatti, Windmill lands Land - about 298.79 Acres.Tamil Nadu Poorandam

Palayam,Metrothi

12 Thirunelveli, Owned Aralvaimozhi, Windmill lands Land - about 9.02 Acres.Tamil Nadu Levinjipuram

13 Hosur, Owned/ Suligunta Village Used by SSCL Land - about 15.88 Acres (out of thisTamil Nadu Leased 0.34 Acres is under lease)

14 Shinoli, Leased Dewarwadi Village Pipes Plant 3.53 acres of land with building ofMaharashtra about 11,840 sqft.

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Sl No Vendor & Address of the Vendor Survey Acres Village1 Pankajavalli Ammal No.30-B, South Car Street, Sirkali 10 163/3 1.50 Thiyagavalli

2 Padmanabhan T, Friends Colony, Cuddalore 158/5 0.89 Thiyagavalli160/4 0.4539/14 0.90

Total 2.243 Sumathy N, Notchikadu Village, Cuddalore District 166/9 0.91 Thiyagavalli

4 Muniappan & Kasambu Ammal Chithirapet Village, 166/10 2.08 ThiyagavalliCuddalore District 168/4 1.40

168/5 1.70166/11 1.40166/9 0.74

Total 7.325 Elangovan & Others Naduthittu Village, Thiagavalli Post, 139/8 0.74 Thiyagavalli

Cuddalore District 139/10 0.42139/7 0.44139/9 0.32

Total 1.926 Kannagi No.215 Friends Nagar, Manjakuppam, Cuddalore 136/1 2.96 Thiyagavalli

7 Sundaramurthy M No.5, Ramasamy Nagar, 1st Floor, 165/2 1.05 ThiyagavalliManjakuppam, Cuddalore District 139/13 0.25

174/2 1.78174/4 0.93139/13 0.41

Total 4.428 Kumaraguru No.75 Pudupalayam Main Road, Cuddalore 175/1 1.69 1/2 Thiyagavalli

District 176/2 2.81Total 4.50 1/2

9 Kaliaperumal Notchikadu Village, Cuddalore District 175/4 0.40 Thiyagavalli175/4 1.35

Total 1.7510 Balagurunathan Naduthittu Village, Thiagavalli Post, 134/1 0.74 Thiyagavalli

Cuddalore District 133/16 0.23 1/2Total 0.97 1/2

11 Jagadeesan D No.45, Subbarayalu Nagar, Thiruppapuliyur, 178/1 to 5.65 ThiyagavalliCuddalore District 178/5

139/11Total 5.65

12 Ambigaidoss Notchikadu Village, Thiagavalli Post, 133/19 0.13 ThiyagavalliCuddalore District 133/20 0.49Total 0.62

13 Manikandan Notchikadu Village, Thiagavalli Post, 177/2 0.70 ThiyagavalliCuddalore District

14 Devanathan & others Naduthittu Village, Thiagavalli Post, 137/9 0.43 ThiyagavalliCuddalore District 137/2 0.11

137/12 0.70137/13 0.07

Total 1.3115 J Prabhakaran Alagesan and others Naduthittu Village, 163/2 2.90 Thiyagavalli

Cuddalore Taluk, Cuddalore District

16 Panchalingam & Bhanumurthy Thiyagavalli Mathura, 160/5 1.12 ThiyagavalliNochikkadu Village, Cuddalore District 160/5 0.70

Total 1.82

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Sl No Vendor & Address of the Vendor Survey Acres Village

17 Rajulu & others Naduthittu Village, Thiagavalli Post 166/10 3.21Cuddalore District

18 Ilavarasan, Sivakumar & others Naduthittu Village, 138/2 1.20 1/2 ThiyagavalliThiagavalli Post, Cuddalore District 137/9 0.43

133/15 0.06133/21 0.05

Total 1.74 1/219 Rajinikanth Thiyagavalli Mathura, Naduthittu Village,

Cuddalore District 137/14 0.10 Thiyagavalli139/3 0.30

Total 0.4020 P Somasundaram Naduthittu Village, Thiagavalli Post 139/15 0.30 Thiyagavalli

Cuddalore District21 Kaliamurthy @ Venkatachalapathy & others Naduthittu 133/17 0.27 Thiyagavalli

Village, Thiagavalli Post, Cuddalore District22 Ramanujam Notchikadu Village, Thiagavalli Post, 164/2 1.60 Thiyagavalli

Cuddalore District23 Sathyanarayanan Notchikadu Village, Thiagavalli Post, 164/2 1.60 Thiyagavalli

Cuddalore District24 Senthamizhselvi Notchikadu Village, Cuddalore District 177/2 1.00 Thiyagavalli25 Azhagia Thadalasamy & others Thiayagavalli Village, 166/2 0.69 Thiyagavalli

Cuddalore District26 Tamaraiselvi No.4, A.J. Colony, III Street, Royapuram, 168/3 0.96 Thiyagavalli

Chennai 600 01327 Kennedy Thiyagavalli Mathura, Notchikadu Village, 138/13 2.65 Thiyagavalli

Cuddalore Taluk, Cuddalore District28 Kennedy & UmaThiyagavalli Mathura, Notchikadu 139/11 1.21 Thiyagavalli

village, Cuddalore Taluk, Cuddalore District29 Durairaj & others Thiyagavalli Mathura, Naduthittu 112/1B 1.28 Thiyagavalli

Village, Cuddalore Taluk, Cuddalore District30 Natarajan & Ramani Nochikkadu Village, Cuddalore 141/4 0.84 Thiyagavalli

District 141/5 1.70Total 2.54

31 Perumal Naduthittu Village, Thiyagavalli Post, Cuddalore 138/4 0.40 Thiyagavalli32 Purushothaman Naduthittu Village, Thiyagavalli Post, 160/6 0.34 1/2 Thiyagavalli

Cuddalore33 Rajalakshmi U Naduthittu Village, Thiagavalli Post, 139/12 2.83 Thiyagavalli

Cuddalore district 138/934 Kalimuthu Thiagavalli Village, Cuddalore District 139/6 0.31 Thiyagavalli35 Krishnaswamy Naduthittu Village, Cuddalore District 138/5 0.47 Thiyagavalli36 Purushothaman & Kamalakrishnan Naduthittu Village, 134/4 0.06 Thiyagavalli

Cuddalore District 166/4 0.67Total 0.73

37 Senthil Murugan Naduthittu Village, Cuddalore District 133/19 0.31 Thiyagavalli133/4 0.26134/5 0.17166/1 0.75138/3 0.40

Total 1.8938 V Gopalakrishnan & others Naduthittu Village, 176/1 2.50 Thiyagavalli

Thiagavalli Post Cuddalore District39 V Gopalakrishna & others Naduthittu Village, 177/3 2.72 Thiyagavalli

Thiagavalli Post Cuddalore District40 A V Ilangovan Naduthittu Village, Cuddalore District 160/7 0.34 1/2 Thiyagavalli41 Tirumavalavan Naduthittu Village, Thiagavalli Post 160/4 0.89 Thiyagavalli

Cuddalore District 139/14 0.50174/1 2.11174/3 0.79

Total 4.29

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Sl No Vendor & Address of the Vendor Survey Acres Village42 Thulasirajan & Thayumanavan Naduthittu Village, 154/2 0.07 Thiyagavalli

Cuddalore District43 Azhagiya Thadala Samy & others (Senthil group) 178/6 2.20 Thiyagavalli

Naduthittu Village, Cuddalore District44 Kothandaramasamy & Azhagia Thadala Samy Naduthittu

Village, Cuddalore District 134/3 0.11 Thiyagavalli45 Kannappan Naduthittu Village, Cuddalore District 133/6 0.12 1/2 Thiyagavalli46 B Manohar Thiagavalli Village, Cuddalore District 137/10 0.19 1/2 Thiyagavalli47 Thulasirajan Naduthittu Village, Cuddalore District 158/7 0.89 Thiyagavalli48 Thulasirajan Naduthittu Village, Cuddalore District 165/2 0.12 Thiyagavalli49 Kamalakrishnan Naduthittu Village, Cuddalore District 133/18 0.34 Thiyagavalli

138/450 R Ilangovan Naduthittu Village, Thiagavalli Post 175/1 0.30 Thiyagavalli

Cuddalore District51 C Ranganathan & 2 others Thiyagavalli Mathura, 168/2 0.52 Thiyagavalli

Nochikkadu Village, Cuddalore District52 A V Ilangovan & 2 others Naduthittu Village, 163/3 4.50 Thiyagavalli

Cuddalore District53 A V Ilangovan & Ayyadurai Krishna Naduthittu Village, 141/2 0.47 Thiyagavalli

Cuddalore Taluk, Cuddalore District 141/3 0.53Total 1.00

54 Damodaran Nochikkadu Village, Cuddalore Taluk, 62/2 3.02.5 ThiyagavalliCuddalore District

55 Ramanujam Padayachi Nochikkadu Village, Cuddalore 165/1 A 2.27.5 ThiyagavalliTaluk, Cuddalore District

56 V Kennedy Nochikkadu Village, Cuddalore Taluk, 67/2 4.76 ThiyagavalliCuddalore District

57 Arunagiri East street, Nochikadu Village, Cuddalore 61/2 4.37 Thiyagavalli Taluk, Cuddalore District

58 Tirugnana Sambandam No.3 First Street, Vallalar nagar, 165/1 B 2.42 ThiyagavalliVilvaraya Naththam, Cuddalore Taluk, Cuddalore District

59 Kaliaperumal Desingu & others Nochikkadu Village, 62/1 4.84 ThiyagavalliCuddalore District

60 Stalin & Lenin Nochikkadu Village, Cuddalore Taluk, 67/1 B 2.70 ThiyagavalliCuddalore DistrictTotal – Thiyagavalli 115.48

61 A Selvarasu Padayachi Semmankuppam village, 132/1 2.36 SemmankuppamCuddalore Taluk, Cuddalore District

62 G Jayabalan & G Jayachandran Semmankuppam village, 79/8 0.23 SemmankuppamCuddalore Taluk, Cuddalore District 79/9 0.65Total 0.88

63 Opil Venkatesa Perumal Kayalpattu Madura, Puthravalli 79/6 0.45 Semmankuppamvillage, Cuddalore Taluk

64 Tirumurugan Semmankuppam village, Cuddalore Taluk, 79/8 Pt 0.90 SemmankuppamCuddalore District

65 C Ramalingam Semmankuppam village, Cuddalore Taluk, 79/7 0.45 SemmankuppamCuddalore District

66 Dhandapani & 2 others Semmankuppam village, Cuddalore 47/5 1.40 Semmankuppam47/6 0.0747/9 0.05

1.52Total - Semmankuppam 6.56

Total Purchase of freehold land 122.04

In addition, the company took on lease in Cuddalore anaggregate land area of 69.88

Total 191.92

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Of the 191.92 acres of land at Cuddalore that was purchased / taken on lease during the preceding two years by us:

122.04 acres are freehold land and 69.88 acres are leasehold land.

The entire freehold lands were free of mortgages when acquired. In respect of about 107.04 acres of freeholdland title is clear and are registered in the name of the company. In respect of about 15 acres there are disputeson the title, details of which disputes are set out in the chapter on litigation and out of these 15 acres, 7.44 acresare registered in the name of the company and 7.56 acres are not yet registered.

The entire leasehold land were free from encumbrances and mortgages when the lease arrangements wereentered into. Of the 69.88 acres of leasehold land, 69.43 acres of land has been leased to our Company by StateIndustrial Promotion Corporation of Tamilnadu (SIPCOT) for a period of 99 years. The leasehold arrangementhas been registered in the name of the Company. 0.45 acres of land has been leased to the Company by theGovernment of Tamilnadu initially for a period of one year and this arrangement has not been registered.

KEY INDUSTRIAL REGULATIONSThe following is a summary of the relevant industry related regulations and policies as prescribed by the Governmentof India that are applicable to us and a list of some of the regulations/ statutes that are generally applicable to us. Theregulations set out below are not exhaustive, and are only intended to provide general information to the investors.

Licensing PolicyAs per the New Industrial Policy issued by Government of India dated July 24, 1991 and the amendments to theannexes thereto from time to time, all industrial undertakings are exempted from licensing, subject to the conditionthat the proposed article (s) of manufacture are not (i) reserved for the public sector, or (ii) under compulsorylicensing or (iii) reserved for the small-scale sector and the proposed project confirms to the locational policy. Anindustrial undertaking exempt from licensing is required to file an Industrial Entrepreneurs Memorandum (“IEM”)with the Secretariat for Industrial Assistance (“SIA”), Department of Industrial Policy and Promotion, Ministry ofCommerce and Industry, Government of India, and no industrial approval is required for such exempted industries.Under the said Industrial Policy, the products do not require Industrial Licence.

Environmental RegulationsThe three major statutes in India which seek to regulate and protect the environment against pollution are the Water(Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution) Act, 1981 and theEnvironment (Protection) Act, 1986. In order to achieve these objectives Pollution Control Boards (“PCBs”) whichare vested with diverse powers to deal with water and air pollution, have been set up in each State. The PCBs areresponsible for setting the standards for maintenance of clean air and water, directing the installation of pollutioncontrol devices in industries and undertaking investigations to ensure that the industries are functioning in compli-ance with the standards prescribed.

Apart from the above, the following environmental laws and regulations are also be applicable to the Company:

Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989;

Hazardous Wastes (Management and Handling) Rules, 1989;

Water (Prevention and Control of Pollution) Cess Act, 1977; and

Other rules framed under the Environment (Protection) Act, 1986, the Water (Prevention & Control of Pollution)Act 1974 and the Air (Prevention & Control of Pollution) Act, 1981.

The Poisons Act, 1919This statute regulates the importation, possession and sale of poisons. The statute empowers the State Government toregulate the possession and the sale of chemicals / products which come under the list of items declared as ‘poison’under the applicable state rules.

Electricity related LawsThe Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003 consolidates the law relating to the levy of duty/ taxes on captive generation, consumption and sale of electricity by companies in the state of Tamil Nadu. Thepurpose of the Electricity Act, 2003 is to consolidate the laws relating to the generation, transmission, distribution,trading and use of electricity. It is applicable to the extent of captive generation, consumption and sale of electricityby our Company.

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Labour Legislations

The Factories Act, 1948

The Factories Act, 1948 is the principal legislation for regulating various aspects relating to safety, health andwelfare of workers employed in factories. A ‘factory’ is defined to cover any premises which employs ten or moreworkers and in which manufacturing process is carried on with the aid of power and any premises where there are atleast twenty workers even though there is or no electrically aided manufacturing process being carried on. Stategovernments and union territory administrations frame rules in respect of the prior submission of plans and theirapproval for the establishment of factories and registration and licensing of factories.

Contract Labour (Regulation and Abolition) Act, 1970Companies use the services of contract labour through contractors in respect of certain jobs. Accordingly, suchcompanies are regulated by the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 whichrequires the company to be registered as a principal employer and prescribes certain obligations with respect to thewelfare and health of contract labour.

Besides the above, our Company is governed by various other labour legislations such as theEmployees Provident Funds and Miscellaneous Provisions Act, 1952,Payment of Gratuity Act, 1972,Payment of Bonus Act, 1965,Minimum Wages Act, 1948,Employees State Insurance Act, 1948,Industrial Disputes Act, 1947,Industrial Employment (Standing Orders) Act, 1946,Equal Remuneration Act, 1976,Apprentices Act, 1961,The Trade Union Act, 1926,The Maternity Benefit Act, 1961,The Workmen’s Compensation Act, 1923, andThe Tamil Nadu Labour Welfare Fund Act, 1972, etc.

Other Laws and RegulationsCertain laws and regulations that are applicable to the Company in relation to its business include the following:

Bureau of Indian Standards Act, 1986,Indian Boilers Act, 1923,Petroleum Act, 1934,Standards of Weights and Measures Act, 1956,Standards of Weights and Measures (Enforcement) Act, 1985,All fiscal laws including Income Tax, Wealth Tax, Excise laws, Sales Tax, Customs Tariff Act, 1975, VAT,Ancillary local tax laws,Employment Exchange (Compulsory Notification of Vacancies) Act, 1959,Fatal Accidents Acts, 1855,Foreign Exchange Management Act, 1999,Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 and the RBI’s MasterCircular on Export of Goods and Services,Foreign Trade (Development & Regulation) Act, 1992,Foreign Trade Policy 2004-2009,RBI’s Master Circulars on Import and Export of Goods and Services,Negotiable Instrument Act, 1881,Fire Service Laws,Shops and Establishments Act, 1947, andTamil Nadu Prohibition Act, 1937, and all the Rules framed by State Government under the said Act.

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HISTORY OF OUR COMPANY AND OTHER CORPORATE MATTERS

Our History and the major events of our Company are as under:

Our Company is the flagship company of the Sanmar Group, with its corporate headquarters at Chennai, the capitalcity of Tamil Nadu.

Incorporation / Schemes of Amalgamation / Arrangement

I. Chemplast Sanmar Limited (“CSL”) was originally incorporated on March 13, 1985 as Urethanes India Limited(“UIL”) under the provisions of the Act and was a wholly owned subsidiary of Chemicals and Plastics India Limited.

II. During 1992, Chemicals and Plastics India Limited (“CPIL”/”Transferor Company”), a company incorporatedunder the Act on September 29, 1962 and belonging to the Sanmar Group and whose shares were listed on BSEand MSE, was amalgamated with UIL with effect from October 1, 1991 pursuant to the Scheme of Amalgamationapproved by the Hon’ble High Court of Madras vide its Order dated April 10,1992.

III. Under the said Scheme of Amalgamation, UIL allotted 88,72,885 equity shares of Rs.10 each on June 11, 1992,to the then shareholders of CPIL. Pursuant to this Scheme of Amalgamation, the name of our Company waschanged from “Urethanes India Limited” to “Chemicals and Plastics India Limited” with effect from May 15,1992. During 1994-95, the equity shares were also listed on the bourses of NSE. In 1995 the name of ourCompany was further changed to Chemplast Sanmar Limited with effect from September 28, 1995.

IV. In April 1995, Metkem Sillicon Limited (MSL), our Company’s wholly owned subsidiary which was engagedin the manufacture of silicon wafers was merged with our Company pursuant to the Scheme of Amalgamationapproved by the Hon’ble High Court of Madras vide its Order dated December 22,1995.

V. Pursuant to the Scheme of Arrangement between ourselves and Sanmar Shipping Limited (SSL) (i) the shippingundertaking was vested with SSL and (ii) the activity of export of our Company’s products carried on bySanmar International Limited was taken over by our Company. The scheme of arrangement was approved bythe High Court of Judicature at Madras vide its Order dated June 18,1999.

VI. In April 2003, the High Court of Judicature at Madras vide its Order dated 29th April 2003 had approved aScheme of Arrangement between ourselves, Sanmar Properties and Investments Limited, Polygon HoldingsLimited, SPIL Securities (Beta) Limited and SPIL Securities (Gamma) Limited pursuant to which our residualshipping business was demerged into Sanmar Properties and Investments Limited (SPIL).

VII.Pursuant to the Scheme of Arrangement between between ourselves, Sanmar Holdings Limited (SHL) andSanmar Properties and Investments Limited (SPIL) (i) the investment and shipping business of SPIL wasdemerged into SHL effective November 1, 2003 and (ii) the remainig business of SPIL (other than investmentand shipping business) was merged into our Company effective September 2, 2003. The Scheme of Arrangementwas approved by the High Court of Judicature at Madras vide its Order dated 3rd March 2004.

Main objects of our Company

The objects for which we have been established are set out in our Memorandum of Association, these main objectsare mentioned hereunder:

1. To manufacture, test, purchase, import, export, sell, distribute, stock, deal and trade in, process Polyurethanechemicals, intermediates, resins, compounds, systems and formulations of all types and articles made therefromand equipment involved in processing of the same towards all types of end-use application.

2. To manufacture, test, purchase, import, export, sell, distribute, stock, deal and trade in, process polymers andplastics, fine, heavy and petro chemicals, drugs and pharmaceuticals, insecticides and pesticides, water treatmentchemicals, food chemicals, natural products, detergents and surfactants, antioxidants and antiozonants, includingcompounding, formulations, and processing thereof towards all types of end-use applications.

3. To carry out research in the development and manufacture of any of the above mentioned products, substancesor equipment and to provide technical services and to act as consultants and technical advisers in connectiontherewith.

4. To manufacture, buy, sell, import, export, process, use, lease, deal and trade in plant and machinery, apparatus,articles, additives and materials in connection with any of the above mentioned businesses.

5. (a) To manufacture, test, purchase, import, export, sell, distribute, stock, deal and trade in Silicon Metal in allforms and qualities and Silicon Wafers of all grades, sizes and thickness and Silicon based chemicals andcompounds.

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(b) To manufacture, test, purchase, import, export, sell, distribute, stock, deal and trade in photovoltaic cells,solar power generation modules panels and systems, solar-powered electrical appliances and accessories,semi-conductor materials, electronic micro circuits, LSIs, VLSIs and products developed therefrom andoptical and other sensors based on Silicon material.

(c) To manufacture, buy, sell, import, export, process, use, lease, deal and trade in plant and machinery,equipment, apparatus, articles and materials in connection with any of the above mentioned activities.

6. (a) To carry on the business as manufacturers, producers, testers, importers, exporters, purchasers, sellers,distributors, commission agents, brokers, wholesalers and retailers, and to stock, deal and trade in allaromatic chemicals, compounds, blends, and formulations, fragrances and flavours, scents, attars, perfumes,flower concentrates, natural extracts from natural and medicinal plants, pharmaceuticals, chemicals, plastics,petrochemicals, thermoplastic resins, synthetic oils, essential oils, toilet requisites, cosmetics, ointments,cleaning compounds, water softeners, glycerine, fatty acids, fatty alcohols, soaps, detergents includingpackaging thereof and to render services in connection therewith.

(b) To carry out research in the development and manufacture of any of the above mentioned products,substances or equipment including dealing technology thereof, and to provide design, advisory and technicalservices and to act as consultants and technical advisers in connection therewith.

(c) To buy, sell, import and export, process, use, lease, deal and trade in plant and machinery, apparatus,articles, additives and materials in connection with any of the above mentioned business.

7. (a) To produce, manufacture, treat, process, prepare, refine, import, export, purchase, sell and generally todeal in either as principals or as agents either solely or in partnership with others, all types and kinds ofcement ordinary, white, coloured, Portland, Pozzolana, Alumina, Blast furnace, Silica and all other varietiesof cement, lime and limestone, clinker and/or by-products thereof, as also cement products of any or alldescriptions, such as pipes, poles. slabs, asbestos sheets, blocks, tiles, gardenwares, Plaster of Paris, limepipes, building materials and otherwise, and articles, things, compounds and preparations connected withthe aforesaid products, and in connection therewith to take on lease or otherwise acquire, erect, construct,establish, work, operate and maintain factories, quarries, mines and workshop.

(b) To carry on all or any of the business as manufacturers and sellers of, and dealers and workers in cementsof all kinds, lime, plasters, whiting, clay, gravel, sand, minerals, earth, coke, fuel, gypsum, coal, jute,hessian cloth, gunny bags, paper bags, artificial stone and all builders’ requisites made out of cement andcement products and convenience of all kinds.

(c) To work mines or quarries and to prospect for, search for, find, win, get, work, crush, smelt, manufactureor otherwise deal with lime stone, chalk, clay, ores, metals, mineral oils, stones or deposits or products andgenerally to carry on the business of mining in all its branches.

8. (a) To engage in coastal and international shipping in India or in any part of the world, to purchase, charter,hire, build or otherwise acquire, steam and other ships or vessels, trawlers, drifters and tugs together withall the requisite equipment and to employ the same in conveyance of merchandise of all kinds, passengersand mails in any part of the world, and to undertake and carry on all or any of the trades and business ofshippers, ship owners, ship repairers, ship brokers, agents, aeroplane owners and carriers.

(b) To construct, hire, purchase and work steamships and other vessels of any class, and to establish andmaintain lines or regular services of steamships or other vessels, and generally to carry on the business ofship owners, and to enter into contracts for the carriage of goods, cargo of any kind, passengers, and mailsby any means, and either by its own vessels or by or over the vessels of others.

(c) To undertake and carry on all or any of the trades and business, of shippers, ship owners, ship brokers,shipping agents and insurance brokers, underwriters, ship managers, tug owners, shipping agents, loadingbrokers, freight contractors, carriers by land, air and water, transport haulage and general contractors, bargeowners, lightermen, railway and forwarding agents, dock owners, engineers, ice merchants, refrigeratorstorekeepers, ships’store merchants, ships’ husbands, stevedores, ware-housemen, wharfingers, salvors, shiprepairers, manufacturers of and dealers in rope, tarpaulins, waterproofs, machinery, engines, nauticalinstruments, and ships’ rigging, gear fittings and equipment of every description, importers and exporters ofand dealers in goods, provisions, live and dead stock, commodities, articles, chattels, merchandise and propertyof every kind, general traders and merchants, and generally to carry on the said business in all their branchesand to carry on the said business either as principals or agents or on commission or otherwise.

To generate, supply, sell, accumulate, convert and distribute electricity or any power or energy (conventional andnon-conventional) and to do all such things as may be required in connection therewith and to acquire, construct,manufacture, export, import and maintain all movable and immovable properties and assets used in connection withthe generation, supply, sale, accumulation, conversion and distribution of electricity or any power or any energy.

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Date of shareholder Natureof Meeting Amendments/Changesapproval

31.10.1991 EGM Authorisation under section 149(2A) of the Act forcommencement of new lines of business by the company.

Amendment to Memorandum & Articles of Association forincrease in the authorised capital from Rs 350 lakhs to 1000lakhs by the creation of additional 65 lakhs equity shares ofRs 10 each

31.03.1992 AGM Change of the name of the company from “Urethanes IndiaLimited” to “Chemicals and Plastics India Limited.”

5.05.1992 EGM Alteration to Article 93(a) of the Articles of Association ofour Company for minimum & maximum number of directors

17.02.1993 EGM Amendment to Memorandum & Articles of Association ofour Company for increase in the authorised share capitalfrom Rs 1000 lakhs to Rs 1500 lakhs by the creation of 50lakhs equity shares of Rs 10 each.

25.02.1994 EGM Cancellation of 5,000 12% Cumulative RedeemablePreference Shares of Rs. 100/- each in Authorised Capital.

Amendment to Memorandum and Articles of Association ofour company for increase in the Authorised Capital fromRs.1495 lakhs to Rs.3000 lakhs by creation of 1,50,50,000equity shares of Rs.10/- each

5.09.1994 AGM Alteration of the Objects clause of Memorandum ofAssociation of our Company

1.09.1995 AGM Amendment to Memorandum & Articles of Association ofour Company for increase in the Authorised Capital Rs.3000lakhs to Rs.5500 lakhs by the creation of 25,00,000preference shares of Rs 100 each.

Name changed from “Chemicals and Plastics IndiaLimited”to”Chemplast Sanmar Limited.”

Alteration to certain clauses in the Articles of Associationof our Company.

14.05.1996 EGM Amendment to Memorandum & Articles of Association ofour Company for increase in the authorised share capitalfrom Rs 5500 lakhs to Rs.10,000 lakhs by the creation of4,50,00,000 equity shares of Rs 10 each.

Alteration to the Articles of Association of our Company.

Approval to the board of directors of our Company to borrowmoneys from time to time.

2.09.1997 AGM Amendment to Memorandum & Articles of Association ofour Company for increase in the authorised share capitalfrom Rs 10,000 lakhs to Rs.11,000 lakhs by the creation of10 lakhs preference shares of Rs 100 each.

Alteration to the Articles of Association of our Company

29.08.2000 AGM Alteration to the Articles of Association of our Company.

20.02.2006 By Postal Amendment to Memorandum & Articles of Association ofBallot Process our Company for sub-division of equity shares in the

Authorised capital of our Company by sub-dividing eachequity shares of Rs.10 into ten equity shares of Re.1 each.

01.09.2006 By Postal Amendment to Memorandum and Articles of Association ofBallot process our company for increase in the Authorised Capital from

Rs.11,000 lakhs to Rs.23,500 lakhs by the creation of1,25,00,00,000 equity shares of Re.1/- each.

Amendments to the Memorandum of Association since Inspection

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Important Events /Milestones

The Important Events / Milestones achieved by our Company including such Events /Milestones achieved by erst-while Chemicals and Plastics India Limited, are summarized hereunder:

Year Event /Milestone

1962-63 Incorporation of erstwhile Chemicals and Plastics India Limited .

1967-68 Commencement of manufacture of PVC Resins at Mettur Plant with an Annual capacity of 6,000Tonnes per annum, in technical collaboration with BF Goodrich, USA

1973-74 Expansion in production capacity from 6,000 Tonnes to 13,500 Tonnes per annum of PVC Resinsat Mettur Plant.

1978-79 Commissioning of Industrial Alcohol Plant at Krishnagiri, Tamil Nadu, with an annual capacity of 5Million litres. This Plant was commissioned to meet the part of the requirements of IndustrialAlcohol of the Company for production of PVC Resins.

1978-79 Increase in Production Capacity of PVC Resins from 13,500 TPA to 20,000 TPA. Oxyhydrochlorinationtechnology license from BF Goodrich to enable recovery of chlorine from by-product hydrochloricacid.

1978-79 Agreement with BF Goodrich for VCM Containment Technology.

1981-82 Acquisition of Arvind Distillery & Chemicals Limited which had its distillery with a capacity ofabout 130 lakh litres of industrial alcohol per annum, located at Kadampuliyur, Cuddalore District,now this plant being called IAP II. Arvind Distillery was subsequently amalgamated with erstwhileChemicals and Plastics India Limited during the year 1986-87.

1983-84 PVC Paste Resin expansion programme was completed and capacity was enhanced to 22,000 TPA.Installation of an Oxy-chlorination facility at Mettur.

1983-84 Technical Know-how Agreement entered into with Imperial Chemicals Industries PLC. UK formanufacture of Battery Separator Resin.

1984-85 Acquisition of and take over of the management of Mettur Chemical and Industrial CorporationLimited (“MCIC”). MCIC was having its manufacturing facilities in Mettur and was engaged interalia in the manufacture of Caustic Soda (60 Tonnes per day), Chloromethane, and Refrigerant gases.

1986-87 Setting up of Plant at Mettur for production of Trichlorethylene with an installed capacity of 5,000MT per annum.

1987-88 LSHS fired gas turbine based Combined Cycle Power Plant (“CCPP”) in Mettur commissioned witha capacity of 4800 KW of 11 KV power and 20 Tonnes of steam per hour. Installation of CCPPenabled our Company to achieve a high energy utilization and maintain steady plant operation andsustained production levels.

1988-89 Amalgamation of MCIC with Chemicals and Plastics India Limited pursuant of a Scheme toAmalgamation approved by the High Court of Madras. Post amalgamation, CPIL was engaged in themanufacture of PVC Resins, Caustic Soda / Chlorine, Industrial Solvents (Chloromethane andTrichloroethylene), Refrigerant gases and Silicon Wafers, apart from Industrial Salts at its VedaranyamPlant for captive consumption

1991-92 Increase in production capacity of PVC Resins to 44,000 TPA with the commissioning of MonomerPlant II.

1991-92 Erstwhile Chemicals and Plastics India Limited merged with Urethanes India Limited, under a Schemeof Amalgamation approved by the High Court of Madras. As a part of the Scheme, the name of themerged entity, was changed from “Urethanes India Limited” to “Chemicals and Plastics India Limited”.

1994-95 Our Company diversified into the shipping industry.

1995-96 The name of our Company was changed from Chemicals and Plastics India Limited toChemplast Sanmar Limited

1995-96 Amalgamation between Metkem Silicon Limited and Chemplast Sanmar Limited

1996-97 Second Unit for production of Chloromethanes solvents was commissioned with the combinedproduction capacity of solvents comprising Methylene Chloride, Chloroform and Carbon Tetrachlorideof 35,000 Tonnes per day.

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1997-98 Expansion of Production capacity of PVC Resins to 60,000 TPA with the Commissioning of MonomerPlant III.

1998-99 II stage chlorine liquefaction unit was commissioned with technology from Krupp Uhde, Germany

1999-2000 Agreement signed between Government of India and Multilateral fund on payment of closurecompensation in respect of gradual phasing out as per the terms of Montreal Protocol.

2000-01 Commissioning of Oxychlorination Plant having a capacity of 24,000 TPA for Production of Ethylene.

2002-03 Our Company has set up a captive shore-based EDC facility using imported ethylene.

2003-04 Acquisition of Caustic Soda facility with a capacity of 100 TPD at Karaikal from Kothari PetrochemicalsLimited with the objective of producing low cost feedstock for PVC and it a is a major strategic moveon the part of our Company.

2003-04 Commencement of setting up of a captive shore-based EDC facility at Karaikal using imported ethylene.

2005-06 The expansion of Caustic Soda plant at Karaikal from 100 TPD to 150 TPD was successfully completedin March 2006.Commissioning of desalination plant based on the Reverse Osmosis technology witha capacity to produce 1200 m / day of treated water to meet the needs of the expanded Caustic Sodafacility and the EDC project under implementation.Our Company acquired further utilities at Karaikkalincluding 77 acres of land from Kothari Sugars and Chemicals Limited. Project initiated for conversionfrom Mercury to Membrane Cell technology at Mettur Dam well ahead of time prescribed byGovernment of India and as part of strategic move to make this project viable, our Company alsoinitiated the project for coversion of the LSHS based power generation to Coal based power generationat Mettur. Clearance of from Ministry of Environment and Forests, Government of India, obtained forproduction of 170,000 TPA of PVC Resins at Cuddalore.

2006-07 Commencement of activities for setting up of plant with capacity of 200,000 TPA of PVC Resins atCuddalore and for setting up of a captive MTF for transporting VCM. Commissioning of 50 TPD ofCaustic Soda flaker at Karaikal.Completion of project relating to storage facility of – 84,000 TPAEDC and Ethylene at Karaikal.

2006-07 Acquisition of PVC Pipes manufacturing units (two) in Tamil Nadu in September 2006 as part of ourCompany’s forward integration strategy, with a capacity of 22,000 TPA.

2007-08 Commissioning of the Marine Terminal Facility in Karaikal in June 2007 for import of Ethylene forEDC Plant at Karaikal. Commissioning of the Project / Plant for conversion of the manufacturingprocess of Caustic Soda at Mettur Dam from Mercury to Membrane Cell.Commissioning of Plantcomprising of Reverse Osmosis plant, evaporator and crystalliser for Zero discharge of liquid effluentsat Mettur Plant.

2008-09 Commissioning of Zero Liquid Discharge Facility.

2008-09 Commissioning of PVC Pipes Plant at Shinoli, Devarwadi Village , Maharashtra.

Year Event /Milestone

Key terms of Shareholders AgreementThere are no shareholders agreement involving us or any of the Promoter Group shareholders.

Summary of Other Agreements

Detailed below are the key provisions of certain agreements:1. We have entered into an license agreement dated April 18, 2006 with Ashai Kasei Chemicals Corporation

(“the Licensor”). Under the agreement, the Licensor has provided us rights in respect of the membranebased manufacturing process for production of chlorine and caustic soda at our Mettur Dam Plant.

2. We have entered into an agreement dated December 4, 2006 with Jacob H&G Private Limited(“Consultant”) in terms of which the Consultant is providing us engineering, buying and home officeexpediting, construction management services in connection with our installation of the Greenfield PVCplant at Cuddalore, Tamil Nadu..

3. We have entered into an Information Technology Services Total Outsourcing Agreement dated August 2,2005 with Wipro Limited (“Wipro”). Under the agreement we have agreed to procure and Wipro hasagreed to outsource information technology related services which inter alia includes business strategy,strategic and operational plans. Further, we have also agreed to outsource certain equipments / software’sfrom Wipro more specifically set out in and on the terms contained in this agreement.

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4. We have entered into a VCM Sales and Purchase Agreement with Mitsubishi Corporation of India PrivateLimited (“Mistubishi”) dated August 14, 2008 for supply of VCM by Mitsubishi in accordance with andon the terms and conditions set out therein. The quantity of VCM to be bought and sold per year is aminimum of 110,000 MT and a maximum of 150,000 MT per year and the agreement is for a period ofone year and the Agreement specifies the price determination mechanism.

5. We have entered into an agreement with Thermax Limited, and Thermax Instrumentation Limited bothdated December 12, 2006 (together “Thermax”) for supply, commissioning and erection of equipmentsand other associated civil works, required in connection with the conversion of the LSHS based powergeneration process into a Coal based cogeneration process power plant at Mettur Dam.

6. We have entered into a license agreement dated April 30, 2006 with Ineos Vinyls UK Limited (“theLicensor”). Under the agreement, the Licensor has provided us rights in respect of the PVC manufacturingprocess at Cuddalore, Tamil Nadu using VCM as the feedstock.

7. We have entered into an Off-take Agreement on January 8, 2009 for supply of VCM by TCI SanmarChemicals LLC, Egypt (TCI) to us. Under this agreement and in terms of the above, TCI will supply200,000 tpa of VCM for a period of 18 years at a formula driven price.. .

8 We have entered into an Emissions Reduction Purchase Agreement dated March 19, 2008, with SempraEnergy Europe Limited (“Sempra”), for sale of Certified Emission Reductions,to Sempra on the termsand conditions mentioned therein. The Agreement is valid till March 31, 2013.

9. We have also entered into a Novation Agreement dated April 15, 2008, with Sempra and the Royal Bankof Scotland PLC (“RBS”), by which Sempra assigns and transfers all of its rights, liabilities, duties andobligations in the Emissions Reduction Purchase Agreement mentioned above to RBS and RBS consentsto the same, on the terms and conditions mentioned therein and at the time specified in the novation datenotice. The novation date notice was served to our Company and the novation date has been stated asOctober 17, 2008.

10. We have entered into a Memorandum of Agreement dated January 31, 2009, with Sai Regency PowerCorporation Private Limited (“SRPCPL”) for the sale of power to TNEB / Third Party, from and out ofour entitlement of power from Group Captive Power Plant operated by SRPCPL, at such considerationand on such terms and conditions as specified in the agreement, as per the Power Delivery Agreementdated May 23, 2006, entered into by us and SRPCPL.

Our SubsidiariesAt present, the Company does not have any subsidiary companies. During last 10 years the Company had the followingsubsidiary companies:

Year Ended Name of the Subsidiary Company

31.03.1999 Polygon Holdings Limited

31.03.2000 Polygon Holdings Limited

31.03.2001 Polygon Holdings Limited

31.03.2002 Polygon Holdings Limited and Chemplast Chlorochemicals Limited(Subsidiary of Polygon Holdings Limited)

Strategic PartnersWe have no strategic partners as on the date of this Letter of Offer

Financial PartnersWe have no financial partners as on the date of this Leter of Offer

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DIVIDEND POLICY

The declaration and payment of dividends on equity shares is recommended by the Board of Directors and approvedby the shareholders, at their discretion, and will depend on a number of factors, including but not limited to theprofits, capital expenditure requirements and overall financial conditions.

With a view to conserving resources to meet the capital expenditure programmes of the company, the Directors havenot recommended payment of dividend on equity shares for the financial years ended March 31, 2004, March 31,2005, March 31,2006, March 31, 2007 and March 31, 2008.

We do not have a formal dividend policy. Dividend declaration is determined from year to year in accordance withthe Board’s assessment of the earnings, cash flow, capital expenditure requirements, financial conditions and otherfactors prevailing at that time.

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MANAGEMENTThe following table sets forth details regarding our Board of Directors as on January 31, 2008:

Sr No. Name, Address, Designation, Nationality Age Other DirectorshipOccupation (years)

Name:Mr M K Kumar

Address:3 Gajapathy RoadKilpauk, Chennai 600 010.

Designation:Non-Executive, IndependentDirector

Occupation:Retired - Company Executive.

Indian 81 Gillette India Limited.Chennai Willingdon CorporateFoundationNew Lease Software Private Limited

2

Name:Mr P S Jayaraman

Address:Flat No.B-2“Ashok Aishwaryam”New No.13 (Old No.3)Habibullah Road,T Nagar Chennai 600017.

Designation:Chairman, Executive andNon - Independent Director.

Occupation:Company Executive

Indian 58 Cabot Sanmar LimitedSHL property Holdings LimitedSanmar Speciality Chemicals LimitedSanmar Foundries LimitedSanmar Ferrotech LimitedPharaoh International Limited*Pharaoh Consolidations Limited*Pharaoh Egyptian Holdings Limited*Cav-Nile AG*Member of Board of Managers of TCISanmar Chemicals LLC*Cav-Nile Holdings Public CompanyLimited*Pharaoh Egyptian Investments Limited*

1

Name:Mr S V Mony

Address:B-201, The Atrium49 Kalakshetra RoadThiruvanmiyur Chennai 600 041.

Designation:Non-Executive,Independent Director

Occupation:Retired - Company Executive

Indian 70 Cholamandalam MS Risk ServicesLimitedCholamandalam MS General InsuranceCompany LimitedEconomist Communications LimitedCentury Real Estate Holdings PrivateLimited

3

Name:Mr V K Parthasarathy

Address:8 / 243 T T K RoadChennai 600 018.

Designation:Non-Executive,Independent Director

Occupation:Retired - Company Executive

Indian 69 Reed Relays & Electronics IndiaLimitedSHL Property Holdings LimitedSanmar Speciality Chemicals LimitedSanmar Foundries LimitedSanmar Ferrotech Limited

4

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Sr No. Name, Address, Nationality Age Other DirectorshipDesignation, Occupation (years)

Name:Mr. S. GopalAddress:“Sri Krish” 47-A,IV Main Road, Gandhi Nagar,Adyar, Chennai 600020Designation:Managing Director,Executive, Non IndependentOccupation:Company Executive

Indian 58 SHL Property Holdings LimitedSanmar Speciality Chemicals LimitedSanmar Foundries LimitedSanmar Ferrotech Limited

6

Name:Mr M N Radhakrishnan

Address:12 Besant AvenueKarpagam GardensAdyar, Chennai 600 020.

Designation:Non-Executive,Non- Independent Director

Occupation:Company Executive

Indian 65 Sanmar Engineering Corporation LimitedFlowserve Sanmar LimitedBS&B Safety Systems (India) LimitedSanmar Ferrotech LimitedFisher Sanmar LimitedSanmar Engineering Services LimitedXomox Sanmar LimitedTyco Sanmar LimitedSanmar Foundries LimitedCabot Sanmar LimitedSanmar Speciality Chemicals LimitedSHL Property Holdings LimitedSanmar Group Germany GMBH*Eisenwerk Erla Beteiligungsgesellschaft GmbH*Metalcast Steel Overeas AG*Matrix Metals AG*Multicontinental Ferro AG*Eisenwerk Erla GmbH (Supervisory Board)*Multicontinental Ferro Holdings PublicCompany Limited*SFL Holdings Public Company Limited*

5

Name:Mr. V RameshAddress:Plot No.2, Anmol Garden66/1 Naidu StreetKottur, Chennai - 600085Designation:Deputy Managing Director,Executive, Non IndependentOccupation:Company Executive

Indian 59 SHL Property Holdings LimitedSanmar Speciality Chemicals LimitedSanmar Foundries LimitedSanmar Ferrotech Limited

7

Name:Mr M S SekharAddress:“Sri Raj” 30, KrishnapuriR A Puram, Chennai 600 028.Designation:Non-Executive, IndependentDirectorOccupation:Consultant

Indian 60 Three D Management Services Private LimitedMultifacet Infrastructure (India) Private Limited

8

* Incorporated outside India

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Brief Biography of our Board of Directors:(i) Mr P S Jayaraman - Mr. Jayaraman is a Chartered Accountant with over 3 decades of industrial experience invaried capacities. He has been with the Sanmar Group over the past twelve years. He was the Managing Director ofour Company from September 1, 2000 till December 31, 2008. Effective January 1, 2009 he has been appointed asChairman of our Company. The term of his appointment is for a period upto March 31, 2011. Before joining ourCompany in 1996 as Executive Director – Finance, Mr.P.S.Jayaraman was employed in J.K.Corp Ltd, Delhi forabout 20 years.

(ii) Mr M. K. Kumar - Mr. Kumar is a mathematics graduate and a Chartered Accountant and has served theindustry in full time director level upto 1995. He was appointed to our Board of Directors on April 24, 1992. Inaddition to his interest in management, he has been a past President of the Associated Chambers of Commerce andIndustry in India, Indian Society for Training and Development, Delhi and takes an active interest in social work astrustee of a number of charities. He was a director of Export-import Bank of India, Master Share Advisory Board,Unit Trust of India, Non-Executive Chairman of Shaw Wallace & Co Limited, Executive Chairman and ManagingDirector of Best & Crompton Engineering Limited and Managing Director of Pierce Leslie India Limited. He wasthe first President of Association for Non-Traditional Employment for Women. He is the founder member of Indo-Australian Chamber of Commerce and Industry.

(iii) Mr. S. V. Mony- Mr. S. V. Mony is a B.Sc (Honours) and F.C.I.I (London). He was appointed to our Board ofDirectors on January 16, 2006. Mr. Mony has over four decades of experience in the insurance and general manage-ment field. He was the Chairman of General Insurance Corporation of India and has held chairmanship/ directorshipin institutions such as Asian Reinsurance Corporation, Bangkok, LIC of India, Securities Trading Corporation, UTIBank, CRISIL. He was a Regional Insurance Advisor to 13 Caribbean countries in West Indies with the associationof Government of India and United Nations Conference on Trade and Development (UNCTAD), Geneva. He was amember of Indian delegation representing India on Financial Services in the Uruguay Round Talks.

(iv) Mr V K Parthasarathy - Mr Parthasarathy is a Commerce Graduate and has extensive experience in diversefields. He was appointed to our Board of Directors on July 29, 2004. He has held various positions in differentbusinesses such as Shipping, Sugar, Fertilizer, Pesticides, Securities Trading and Merchant Banking. He has goodexposure in financial and securities market.

(v) Mr M N Radhakrishnan – Mr. Radhakrishnan is a Mechanical Engineer with over four decades of experience ingeneral management field. He was appointed to our Board of Directors on June 8, 2005. He has been with the SanmarGroup for over 25 years. He had been responsible for growth of Sanmar Engineering Corporation and was activelyinvolved in establishing and implementing the joint ventures forming part of Sanmar Engineering Corporation.

(vi) Mr S Gopal- Mr.Gopal, B.Tech. and MBA, has over 35 years of industrial experience. He has been with TheSanmar Group for over 10 years in the chemicals, engineering and speciality chemicals businesses. He was theDeputy Managing Director of our Company from April 1, 2008 to December 31, 2008. Effective January 1, 2009 hehas been appointed as the Managing Director of our Company. The term of his appointment is for a period uptoMarch 31, 2011.

(vii) Mr V Ramesh- Mr V Ramesh, B.E. and M.Tech., has over 35 years of industrial experience. He has been withThe Sanmar Group for about 25 years in the engineering and chemicals businesses. He is currently responsible for allproject activities of our company. He has been appointed as the Deputy managing Director of our Company fromApril 1, 2008 for a period upto March 31, 2011.

(viii) Mr M S Sekhar - Mr Sekhar is a Chartered Accountant and has done a Post Graduate Diploma in BusinessManagement, Indian Institute of Management, Kolkata. He was appointed to our Board of Directors on April 15,2005. He has over three decades of industrial experience and has served in various positions from finance managerto managing director and is currently a consultant in the field of corporate governance

Details of Borrowing Powers:Our Board of Directors are authorised to borrow under the provisions of our Memorandum and Articles of Associa-tion. Our shareholders have vide resolution passed through postal ballot on 24th June 2008 pursuant to Section 192 Aof the Act read with the Companies (Passing of the Resolution by Postal Ballot Rules) 2001 authorised our Board toborrow such sum or sums of money in any manner from time to time as may be required for the purposes of ourbusiness with or without security and upon such terms and conditions as they may think fit and proper, which sumstogether with the moneys already borrowed by us (apart from temporary loans obtained or to be obtained from ourbankers in the ordinary course of business) may exceed the aggregate of our paid up share capital and our freereserves that is to say the reserves not set apart for any specific purpose provided that the total moneys so borrowedby our Board of Directors and outstanding at any time shall not exceed the sum of Rs.2000 crores over and above ourpaid-up capital and our free reserves. Our Board of Directors have by a resolution passed at their meeting held onJuly 25, 2006 authorized our Committee of Directors to, inter alia to borrow money from banks, financial institu-tions, bodies corporate etc and create charges / mortgages as may be required in regard to company’s borrowingsfrom banks, financial institutions, bodies corporate etc.

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Compensation of Directors:

Compensation to Non Executive Directors:

Non executive directors are paid sitting fees of (i) Rs.10,000 for every meeting of the Board and Audit Committee,(ii) Rs.5,000 for every meeting of Shareholders/Investors Grievance Committee and Remuneration Committee, and(iii) Rs.500 for every meeting of Share and Debenture Committee, attended by them. No other remuneration is paidto our non executive directors. Till date none of our directors mentioned above, have been paid commissions on ourprofits.

The following Table sets forth the Compensation paid by us to our Non-Executive Directors for the fiscal year endedMarch 31, 2008:

Name of the Director Meetings Attended* Sitting Fees # (Rs)

Mr M K Kumar 10 90,000

Mr S V Mony 5 45,000

Mr B Natraj** 4 40,000

Mr V K Parthasarathy 26 1,21,000

Mr M N Radhakrishnan 21 96,000

Mr M S Sekhar 9 90,000

*includes Meetings of Board, Audit Committee, Remuneration Committee and Shareholders / Investors GrievanceCommittee and Share and Debenture Committee held during the period 1st April 07 to 31st March 08.

** Ceased to be director w.e.f. March 31, 2008

# includes Sitting Fees for Meetings of Board, Audit Committee, Remuneration Committee, Shareholders / InvestorsGrievance Committee and Share and Debenture Committee.

Compensation to Managing Director for the fiscal year ended March 31, 2008 :

Name of the Director All elements of remuneration Number of equity sharespackage Amount (Rs.) owned in our Company

Mr P S Jayaraman 52,20,250 NIL

Terms of appointment of Wholetime directors

1. Mr P S Jayaraman, Chairman

The terms of appointment of Mr P S Jayaraman, Chairman approved by the Board on January 8, 2009, subject to theapproval of the shareholders are as follows:

1) Basic Salary Rs.2,50,000 p.m.2) Perquisites As applicable to other senior management employees of the company,

including inter alia.Housing; Leased accommodation / House Rent Allowance equal to 60%of basic salary.Conveyance; Conveyance allowance or company car equal to 50% of basicsalary.Medical; 10% of basic salary.Special Allowance; 13% of basic salary.Miscellaneous reimbursement allowance; 25% of basic salary.Special Annual Payment; 50% of the basic salary- payable in accordancewith the Company’s Special Annual Payment- Scheme.Retirement Benefits; Provident Fund and Gratuity.

3) Commission As determined by the Board from year to year, subject to the overall ceilingsstipulated in Sections 198 and 309 of the Act.

4) Minimum Remuneration In accordance with paragraph 1(B) of Section II of Part II of Schedule XIIIof the Act, in the event of loss or in adequacy of profits.

Note : Mr S Gopal and Mr V Ramesh were appointed as Deputy Managing Directors of our Company with effectfrom 1st April 2008. Mr S Gopal was appointed as Managing Director effective 1.1.2009 and Mr P S Jayaraman,Chairman effective 1.1.2009.

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5) Notice period 3 months on either side or gross salary in lieu thereof.

The other terms of employment, including leave, insurance, etc. would be as is applicable to other senior manage-ment employees of the Company.

2. Mr S Gopal, Managing Director

The terms of appointment of Mr. S Gopal, Managing Director approved by the Board on January 8, 2009, andsubject to the approval of the shareholders are as follows:

1) Basic Salary Rs.1,75,000 p.m. w.e.f. January 1, 2009.

2) Perquisites As applicable to other senior management employees of the company,including inter alia.Housing; Leased accommodation / house rent allowance equal to 60% ofbasic salary.Conveyance; Conveyance allowance or company car equal to 50% of basicsalary.Medical; 10% of basic salary.Special Allowance; 13% of basic salary.Miscellaneous reimbursement allowance; 25% of basic salary.Special Annual Payment; 50% of the basic salary - payable in accordancewith the Company’s Special Annual Payment - Scheme.Retirement Benefits; Provident Fund and Gratuity.

3) Commission As determined by the Board from year to year, subject to the overall ceilingsstipulated in Sections 198 and 309 of the Companies Act, 1956.

4) Minimum Remuneration In accordance with paragraph 1(B) of Section II of Part II of Schedule XIIIof the Act, in the event of loss or in adequacy of profits.

5) Notice period 3 months on either side or gross salary in lieu thereof.

The other terms of employment, including leave, insurance, etc. would be as is applicable to other senior manage-ment employees of the Company.

3. Mr V Ramesh, Deputy Managing Director

The terms of appointment of Mr. V Ramesh, Deputy Managing Director approved by the board resolution on April1, 2008 and by the shareholders through a postal ballot on 24th June, 2008 are as follows:

1) Basic Salary Rs.1,50,000 p.m. w.e.f. January 1, 2009.

2) Perquisites As applicable to other senior management employees of the company,including inter alia.Housing; Leased accommodation / House Rent Allowance equal to 60%of basic salary.Conveyance; Conveyance Allowance or Company car equal to 50% ofbasic salary.Medical; 10% of basic salary.Special Allowance; 13% of basic salary.Miscellaneous reimbursement allowance; 25% of basic salary.Special Annual Payment; 50% of the basic salary- payable in accordancewith the Company’s Special Annual Payment- Scheme.Retirement Benefits; Provident Fund and Gratuity.

3) Commission As determined by the Board from year to year, subject to the overall ceilingsstipulated in Sections 198 and 309 of the Companies Act, 1956.

4) Minimum Remuneration In accordance with paragraph 1(B) of Section II of Part II of Schedule XIIIof the Act, in the event of loss or in adequacy of profits.

5) Notice period 3 months on either side or gross salary in lieu thereof.

The other terms of employment, including leave, insurance, etc. would be as is applicable to other senior manage-ment employees of the Company.

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Shareholding of our Directors in our Company

Particulars Number of equity shares pre-issue Number of equity(face value of Re.1 each) shares post issue*

Mr V K Parthasarathy 20,900 34,833

Mr M N Radhakrishnan 360 600

Mr V Ramesh 1730 2,883

* The number of shares have been calculated on the basis of assumption that the rights entitlement in this Issue isfully subscribed.

Our Directors are not required to hold any qualification shares in our Company.

Changes in our Board of Directors during the last three years:

Name of the Director Date of Date of Brief particulars of ChangeAppointment Cessation

Mr. B Natraj 16.01.2006 31.03.2008 ResignationMr. S V Mony 16.01.2006 – Co-opted as an additional director of our Company

with effect from 16.01.2006Mr C H Mahadevan 29.10.1999 23.11.2006 ResignationMr S Gopal 01.04.2008 – Appointed as Deputy Managing Director with effect

from 01.04.2008 Appointed as Managing Directorwith effect from 01.01. 2009.

Mr V Ramesh 01.04.2008 – Appointed as Deputy Managing Director with effectfrom 1.04.2008

Mr. P S Jayaraman 01.01.2009 – Appointed as Chairman with effect from 01.01. 2009.

Corporate Governance

SEBI has introduced a code of corporate governance for listed companies which is implemented through the ListingAgreements with the Exchanges where the shares of a company are listed. We have complied with the corporategovernance requirements set out in Clause 49 of the Listing Agreements executed by us.

We believe that good corporate governance leads to corporate growth and long term gain in shareholder value. Weare committed to maintaining the highest standards of corporate governance in our conduct towards our sharehold-ers, employees, customers, suppliers and other stake holders.

Our Board of Directors consists of 5 non executive directors of whom 4 are independent directors and 3 whole-timeDirectors. The composition of our Board is in conformity with the Listing Agreement. None of the directors arerelated to each other.

None of our Directors on our Board hold office of directors in more than 15 companies (in terms of Section 275 ofthe Act) or membership of committees of the Board in more than 10 committees or chairmanship of more than 5committees of the Board across all companies. The composition of our Board of Directors is as follows:

Name of the Director Independent / Non Independent

Mr. P. S. Jayaraman, Chairman Executive, Non-Independent Director.

Mr S.Gopal, Managing Director Executive, Non-Independent Director.

Mr V Ramesh, Deputy, Managing Director Executive, Non-Independent Director.

Mr. M. K. Kumar Non-Executive, Independent Director.

Mr. S. V. Mony Non-Executive, Independent Director.

Mr. V. K. Parthasarathy Non-Executive, Independent Director.

Mr. M. N. Radhakrishnan Non-Executive, Non-Independent Director.

Mr. M. S. Sekhar Non-Executive, Independent Director.

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The Board Committees formed are as follows:

a. Audit Committee:Our Audit Committee consists of 4 non-executive directors – 3 of them being independent. The composition of theAudit Committee and the qualification of the members of the Audit Committee are in compliance with the require-ments of Clause 49 of the Listing Agreement.

The members of the Audit Committee are Mr M K Kumar, (Chairman), Mr V K Parthasarathy, Mr. M. N. Radhakrishnanand Mr. M. S. Sekhar.

The Audit Committee adheres to the listing agreements entered into by the Company with the Stock Exchanges andSEBI guidelines in terms of quorum for its meetings, functioning, role and powers as also those set out in the Act.

During 2007-08, the Audit Committee met four times – 12th April 2007, 25th July 2007, 31st October 2007 and17th January 2008. Mr V K Parthasarathy, Mr M N Radhakrishnan and Mr M S Sekhar attended all the meetings andMr. M K Kumar attended three meetings. The interval between two meetings convened was not more than fourmonths. The details of the businesses transacted in these meetings are given hereunder.

Date of the Meeting Businesses Transacted

12th April 2007 Review of Internal Audit, Review of audited financial results for the year ended31st March 2007, Review of Directors’ Report and Corporate Governance Report,Consideration of budget for the quarter April-June 2007, recording of related partytransaction for the quarter January-March 2007.

25th July 2007 Review of Internal Audit, Review of unaudited financial results for the quarter ended30th June 2007, Consideration of budget for the quarter July-September 2007,recording of related party transaction for the quarter April-June 2007.

31st October 2007 Review of Internal Audit, Review of unaudited financial results for the quarter ended30th September 2007, Consideration of budget for the quarter October-December2007, recording of related party transaction for the quarter July-September 2007.

17th January 2008 Review of Internal Audit, Review of unaudited financial results for the quarter ended31st December 2007, Consideration of budget for the quarter January-March 2008,Consideration of appointment of Cost Auditor for the financial year 2008-09,recording of related party transaction for the quarter October-December 2007.

b. Shareholder’s /Investors’ Grievance Committee:

Our Board of Directors has constituted a Shareholders/Investors Grievance Committee, which looks into sharehold-ers and investors grievances. The members of our Shareholder’s /Investors’ Grievance Committee are Mr. M .K.Kumar (Chairman), Mr. P. S. Jayaraman (Managing Director) and Mr. V. K. Parthasarathy. Our Compliance officeris Mr M Raman (Secretary).

The terms of reference for our Committee includes inter-alia to specifically look into the redressing of shareholdersand investors’ complaints like transfer of shares, non-receipt of balance sheet, non-receipt of dividend and sharecertificate.

During 2007-08, the Shareholders/ Investors Grievance Committee met four times on 12th April 2007, 25th July2007, 31st October 2007 and 17th January 2008.

Date of the Meeting Businesses Transacted

12th April 2007 Review of the report on redressal of investors’ grievances for the quarter ended31st March 2007.

25th July 2007 Review of the report on redressal of investors’ grievances for the quarter ended31st June 2007.

31st October 2007 Review of the report on redressal of investors’ grievances for the quarter ended30th September 2007.

17th January 2008 Review of the report on redressal of investors’ grievances for the quarter ended31st December 2007.

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c. Remuneration Committee:Our Remuneration Committee consists of three Non-executive independent directors. The members of our Remu-neration Committee are Mr. M. K. Kumar, (Chairman), Mr. S. V. Mony and Mr. V. K. Parthasarathy.

The scope / role of the Remuneration Committee is to recommend to our Board the remuneration payable to ourwhole time Director as and when they come for review.

During 2007-08, the Remuneration Committee met on April 12, 2007, at which meeting, all members were presentand recommended to the Board revision in the remuneration payable to Mr P S Jayaraman, Managing Director witheffect from January 1, 2007.

Interest of DirectorsOur directors including independent directors, may be deemed to be interested to the extent of fees, if any, payableto them for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration andreimbursement of expenses payable to them and are also interested in our Company to the extent of equity sharesheld by them or their dependants and relatives in the Company, or that may be subscribed for and allotted to them,out of the present Issue in terms of the Letter of Offer and also to the extent of any dividend payable to them andother distributions in respect of the said Equity Shares in our Company and to the extent of the benefits arising outof their shareholding.

The Chairman, Managing Director and Deputy Managing Director may be deemed to be interested to the extent ofremuneration paid to them for services rendered by them as officers of the Company.

Our Directors confirm that they have no interest in any property acquired by our Company during the last two yearsbefore the date of filing of this Letter of Offer.

Key Management PersonnelThe details of our key managerial personnel are as follows:

Name Designation Age Date of Qualification Previous Annual& Total Years Joining Employment Remunerationof Experience (Rs.)

Mr P S Jayaraman Chairman- 58 March B.Com, J.K. Corp Ltd 60,25,15636 Years. 7, 1996 ACA

Mr S Gopal Managing 58 September B.Tech, Sanmar Speciality 51,56,250Director- 1, 2007 PGDM Chemicals Limited33 Years.

Mr V Ramesh Deputy MD- 59 August B.E, M.Tech Flowserve 43,31,25036 Years. 19, 2002 Sanmar Ltd

Ms Sarada Jagan ED – HR- 50 February M.Sc, B.Ed., Maxworth 34,23,75022 Years. 19, 1997 PGDBM Orchard (I) Ltd

Mr S B Prabakara ED – Corporate 70 May B.A, M.A India Cements Ltd 41,66,250Rao Affairs- 12, 1980

46 Years.

Mr K S Venkiteswaran ED – Industrial 58 April B.Sc., Apple Industries 34,23,750Relations- 28, 1994 PGPM, LLB Ltd37 Years.

Mr M S Srinivasan ED – Projects- 54 May B.Tech Polaris Software 34,23,75030 Years. 12, 2006 Labs

Mr. G Balasubramanyam CFO- 22 Years. 45 October ACA , ACS TANFAC 11,55,0001, 2008 Industries Ltd (for 6 months)

(except Mr P S Jayaraman, Mr S. Gopal ,Mr. V Ramesh no other key managerial persons are on the Board of ourCompany)

All the above mentioned key managerial personnel are permanent employees of our Company and are on the rolls ofthe Company.

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Other Senior Management Personnel

The details of other senior management personnel who are not employees of our Company are as follows:

(i) Mr. R. Rangarajan: R Rangarajan ,53 Years, presently the Executive Director – Finance (Treasury) is aBE (Hons) with MBA from IIM, Kolkata with over 30 years of experience in the area of corporatefinance, Treasury etc. He has been with Sanmar Group for last 3 years.

(ii) Mr. S. Sankaran: S.Sankaran, 54 Years, Presently the Executive Director – Finance (Accounting) ofSanmar Group Corporate Division, is a Chartered Accountant with 30 Years of experience in finance andaccounting . He has been with The Sanmar Group for over 20 years.

(iii) Mr. P U Aravind: P U Aravind, 50 years., presently the Executive Director – Finance (Legal, Secretarial& Taxation) of Sanmar Group Corporate Division, is a Chartered Accountant and Company Secretary,with nearly 25 years of experience in finance, accounting, secretarial and legal functions. He has beenwith The Sanmar Group for over 20 years.

(iv) Mr. M. Raman: Raman, 49 years, presently the Secretary & Compliance Officer of Chemplast SanmarLimited, is a Graduate in General Laws and Associate Member of Institute of Company Secretaries ofIndia (ICSI), with nearly 20 years of experience in secretarial and legal functions. He has been with theSanmar Group for nearly 20 years.

Shareholding of Key Managerial PersonnelNone of our key managerial employees hold any shares or options except Mr. V Ramesh , Deputy Managing Directorof the company, who holds 1,730 equity shares of the company.

Shareholding of Senior Management PersonnelNone of our senior management personnel hold any shares or options of the company.

Bonus or Profit Sharing Plan for Key Managerial PersonnelThere is no bonus or profit sharing plan for our key managerial employees.

Changes in the Key Managerial Personnel in the last one year.Mr.P.U.Aravind , Executive Director (Legal, Secreterial and Taxation) and Mr.S.Sankaran, Executive Director Fi-nance (Accounting) were moved from the rolls of our Company to the rolls of Xomox Sanmar Limited and SanmarShipping Limited, respectively (our Promoter Group companies), w.e.f. April 1, 2008. Mr. N Muralidharan, Execu-tive Vice President finance has been relieved from the responsibilities of CFO of our Company with effect fromSeptember 30,2008 and Mr. G Balasubramanyam has been appointed as CFO of our Company with effect fromOctober 1,2008.

EMPLOYEES

Employee Stock Option Scheme

We do not have an Employees Stock Option Scheme. We have not made any payments or given any benefits to anyof our officers which are non-salary related.

Payment of benefit to officers of our Company

Except as stated otherwise in this section, “Management”, no amount or benefit has been paid or given in theprevious two years or is intended to be paid or given to any of our officers except the normal remuneration forservices rendered as Directors, officers or employees.

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N. Kumar

Mr. N Kumar, aged 59 years, is an Engineering Graduate from the College of Engineering(Anna University), Chennai, India. Mr. Kumar is the Vice-Chairman of the Sanmar Group.Mr. N. Kumar has more than three decades of experience with the Group.

Mr. Kumar serves on the Board of a few companies outside the Sanmar Group, such as BhartiAirtel Limited, Bharti Infratel Limited,, Entertainment Network (India) Limited, Times Innova-tive Media Limited, Takes Solutions Limited, Cochin Shipyard Limited, Vaakya TechnologiesPrivate Limited and MRF Limited. Mr. Kumar is the Honorary Consul General of Greece inChennai. Mr. Kumar is the Honorary Business Representative of the International EnterpriseSingapore (formerly Singapore Trade Development Board). As a spokesman of Industry andTrade, Mr. Kumar was a Past-President of Confederation of Indian Industry, a leading industrial

body, and has participated in various other apex bodies. Mr. Kumar has a wide range of public interests going beyondthe confines of corporate industrial management, in health, social welfare, education and sports. One special area whereMr. Kumar and the Sanmar Group are involved is a centre for Exceptional Children called the Madhuram NarayananCentre and the Sanmar Group runs a number of educational institutions.

His Driving License Number : R/TN/007/021475/2005

His Voter Id No. : TN/02/010/0276783

The Permanent Account Number, Bank Account Number and Passport Number of Mr.N Kumar has been submittedto BSE, NSE and MSE, in compliance with clause 6.9.6.1(b) of SEBI DIP Guidelines.

PROMOTERS AND PROMOTER GROUPThe Company is a constituent of the Sanmar Group, with Sanmar Holdings Limited, holding 74.75% of the paid upequity share capital of the Company and other constituents holding 0.25% of the paid up equity share of the company.

The Sanmar Group is a business conglomerate having interests in chemicals, engineering, speciality chemicals andshipping businesses.

The following companies, individuals and entities form part our Promoters and Promoter Group as per the terms ofExplanation II to Clause 6.8.3.2 of SEBI DIP Guidelines.

PROMOTERS OF THE COMPANY

Individual Promoters

The Promoters of the Company are Mr N. Sankar, Mr. N. Kumar, Mr. Vijay Sankar and Sanmar Holdings Limited.

Mr N Sankar, aged 63 years, obtained his B.Sc. Tech in Chemical Engineering from the ACCollege of Technology, Madras, graduating First Class with distinction. Mr. N. Sankar hasmore than four decades of experience with the group.

He thereafter obtained his Masters Degree from the Illinois Institute of Technology, Chicago.He is Chairman of the Sanmar Group, with turnover of around Rs.2500 crores. In recent yearsthe Sanmar Group has made a strong thrust overseas with major acquisitions in Egypt, Germanyand USA. Mr. Sankar serves on the Board of a few companies outside the Sanmar Group,such as F.L. Smidth Private Limited, Bata India Limited and National Organic ChemicalIndustries Limited. Over the years, Mr. Sankar has held office in several public bodiesrepresenting trade and industry, including President – Assocham, Chairman – Indo-US JointBusiness Council, Chairman – Madras Chamber of Commerce and Industry, President – Madras

Management Association, etc. He has received awards recognizing his services to business and industry, such as the‘Lala Shriram National Award for Leadership in Chemical Industry’ from the Indian Institute of Chemical Engineers.He has been awarded the Rasa Udyog Ratna Award by the Chemical Industries Association. He has also been electeda Fellow of the Indian Institute of Chemical Engineering. Mr. Sankar is involved with the management of manyeducational and charitable organizations. A keen sportsman, he has been the Vice President of the All India TennisAssociation and President of the Tamil Nadu Cricket and Tennis Associations. Mr. Sankar has been the HonoraryConsul General for Denmark in South India since 1989, and has been awarded the ‘Knight of the Order of theDannebrog, First Class’ by the Danish Government in recognition of his services.

His Driving License Number : R/TN/07X/OO9772/2007

His Voter Id No. : CJJ0961557

The Permanent Account Number, Bank Account Number and Passport Number of Mr.N Sankar has been submittedto BSE, NSE and MSE, in compliance with clause 6.9.6.1(b) of SEBI DIP Guidelines.

N. Sankar

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Mr. Vijay Sankar, aged 36 years, holds a Masters in Business Administration from theJ L Kellogg Graduate School of Management, Northwestern University, and is also a qualifiedChartered Accountant. He earned his Bachelor of Commerce degree from Loyola College inChennai. He has been with the Sanmar Group since 1998 in different capacities. He is theDeputy Chairman of The Sanmar Group responsible for the group’s operational management.Apart from organic growth of the main businesses, he has been actively involved in SanmarGroup’s foray overseas . Mr. Vijay Sankar is Honorary Consul General for Spain in Chennai.Mr. Vijay Sankar also serves as a Council Member of the Tamil Nadu Tennis Association, andserves on its developmental “TATE” Committee. He is active in the Young Presidents’Organization, and is a member of the Executive Committee of the Chennai Chapter.

His Driving License Number : C/TN/007/05764/2004

His Voter Id No. : TN/02/010/0279693

The Permanent Account Number, Bank Account Number and Passport Number of Mr.Vijay Sankar has been submittedto BSE, NSE and MSE, in compliance with clause 6.9.6.1(b) of SEBI DIP Guidelines.

Vijay Sankar

Sanmar Holdings Limited (“SHL”)

History of SHLSanmar Holdings Limited (SHL) was incorporated on February 2, 1979 under the name Sanmar Holdings PrivateLimited. The name of the company was changed to Sanmar Holdings Limited on September 27, 1980. The companyhas its Registered Office at 9, Cathedral Road, Chennai 600 086, India. SHL is in the business of investment inshares and securities, and debt collection.

History of the Promoter of SHLSHL Securities (Alpha) Limited (SHLSEC) the promoter of SHL was incorporated on May 30, 1990 under the nameFortis Investments (Delta) Limited. The ultimate promoters of the issuer company are Mr. N. Sankar, Mr. N.Kumarand Mr. Vijay Sankar. The name of the company was changed to SHL Securities (Alpha) Limited on January27, 1999. The company has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.

SHLSEC is in the business of providing advisory services and holding shares and securities.

Shareholding of SHLSEC as of January 31, 2009

Directors of SHLSEC as on January 31, 20091. Mr. K S Narayanan2. Mr. N Sankar3. Mr. Vijay Sankar

Board of Directors of SHL1. Mr. K S Narayanan2. Mr. N Sankar3. Mr. Vijay Sankar

Shareholding of SHL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding

1 NS Family Consolidations PrivateLimited & its nominees 25,000 50%

2 SHL Research Foundation 25,000 50%50,000 100%

S. No. Name of the Shareholder No. of Shares Percentage of HoldingEquity

1 SHL Securities (Alpha) Limited 10,000 100%& its nomineesPreference

1 Mr N Sankar 20,60,000 100%2 Mr Vijay Sankar 5,10,000

25,70,000

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PROMOTER GROUP

Individuals forming part of Promoter Group:1. Mr. K.S. Narayanan2. Mrs. Chandra Sankar3. Mrs. Bhavani Kumar4. Mrs. Sukanya Sankar5. Miss. Madhurika Sankar6. Mrs. Madhura Visweswaran7. Miss. Mayura Kumar

Corporate Bodies, Partnerships, Association of Persons and Trusts forming part of PromoterGroup:

1. Sanmar Shipping Limited2. Sanmar Speciality Chemicals Limited

3. Cabot Sanmar Limited4. BS&B Safety Systems (India) Limited5. Fisher Sanmar Limited6. Flowserve Sanmar Limited7. Sanmar Engineering Services Limited8. Sanmar Foundries Limited

9. Tyco Sanmar Limited10. Xomox Sanmar Limited11. Sanmar Industrial Filters Limited12. Sanmar Ferrotech Limted13. NS Family Investments Private Limited14. NS Family Consolidations Private Limited

15. SHL Securities (Alpha) Limited16. SHL Research Foundation

17. Pharaoh Egyptian Investments Ltd18. Sanmar Engineering Corporation Limited

19. B SEC Services Limited20. SHL Trading Limited21. Strategic Properties Private Limited22. Kalamkriya Limited23. Indchem Communications Limited24. SHL Property Holdings Limited

25. Chemplast Sanmar Aromatics Private Limited26. SHL Investment Services Private Limited27. Twinpeaks Technologies Private Limited28. Sanmar Group International Limited29. Sanmar Overseas Investments AG30. Cav-Nile AG

31. Pharaoh International Limited32. Pharaoh Consolidations Limited

Change in capital structure and management of SHL

There is no change in the capital structure and management of SHL in the last six months.

SHL’s PAN, registration number and address of Registrar of Companies

S. No Particulars Information

1 Company Identification Number U65993TN1979PLC007711

2 Address of Registrar of Companies “Shastri Bhavan”, 26, Haddows Road,Nungambakkam, Chennai, 600034

3 PAN AAACS7747M

Financial Performance

Audited Financial information for Fiscal 2008, 2007 and 2006 are as under: (In Rupees lakhs except per share data)

Particulars March March March31, 2008 31, 2007 31, 2006

(a) Total Income 390 1,449 1,781(b) Profit / (Loss) After Tax (PAT) 334 1,318 1,364(c) Equity Share Capital (Par value INR 100 per Share) 10 10 10(d) Preference Share Capital (Par value INR 3.40 per Share) 87 87 87(d) Reserves (excluding Revaluation Reserve) 11,751 11,427 10,116(e) Earning per Share 3,264 13,10,843 13,56,703(f) Book Value per Share 3,46,573.96 3,08,991.64 2,95,753.21

S. COMPANIESNo

S. COMPANIESNo

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33. Pharaoh Egyptian Holdings Limited

34. Trust Chemical Industries LLC(Now known as TCI Sanmar Chemicals LLC)

35. Matrix Metals Holding Inc.

36. Sanmar Group Germany GmbH

37. Eisenwerk Erla Beteiligungsgesellschaft GmbH,Germany

38. Eisenwerk Erla GmbH, Germany

39. N Sankar Properties and Holdings Private Limited40. Sanmar Realty Private Limited

41. Bay View Properties Private Limited

42. Kelambakkam Properties Private Limited

43. Hillcrest Investments (Alpha) Private Limited

44. Stargate Investments Private Limited

45. BlueChips Limited

46. Chandra Sankar Investment Holdings PrivateLimited

47. Madhurika Sankar Investment Holdings PrivateLimited

48. Greenvalley Investments (Alpha) Private Limited

49. Vijay Sankar Investment Holdings Private Limited

50. Poes Garden Properties Private Limited

51. N Kumar Investment Holdings Private Limited

52. Madhura Kumar Properties Private Limited

53. Cubbon Road Properties Private Limited

54. Jumbo Properties (Alpha) Private Limited

55. Jumbo Properties Private Limited

56. Fortis Properties Private Limited

57. Indchem Software Technologies (India) Limited

58. Apex NK Software Solutions Limited

59. Indchem Software Technologies Limited

60. Silkroute Indchem Limited

61. Fingertip Technologies Private Limited

62. iSkills (India) Private Limited

63. eG Innovations Pte. Ltd.

64. eG Innovations Private Limited

65. eG Innovations Inc.

66. eG Innovations UK Limited

67. WYSINE Technologies Private Limited.

68. Metalcast Overseas steel AG

69. Multicontinental Ferro AG

70. Matrix Metals AG

71. Sanmar IP Repository Limited

72. Matrix Metal LLC

73. Acerlan Matrix LLC

74. Acerlan Sa de CV

75. Immobiliaria Acerlan Sa de CV

76. Sanmar Consultancy Private Limited

77. SFL Holdings Public Company Limited

78. Cav-Nile Holdings Public Company Limited

79. Multicontinental Ferro Holdings Public companyLimited

PARTNERSHIP FIRMS

80. Sanmar Estates and Investments

81. Sanmar Group Corporate Finance

82. Cathedral Corporate Finance

ASSOCIATION OF PERSONS

83. Cathedral & Co

TRUSTS

84. Sanmar Welfare Trust

85. Madhurika Benefit Trust

86. Sanmar Special Welfare Trust

87. The Sruti Foundation

88. KSN Family Trust

89. Madhuram Narayanan Centre for Exceptional Children90 The KSN Sports Foundation

91 The Mrs.Madhuram Narayanan Charitable Trust

92 The Mrs. Madhuram Narayanan Charitable Foundation.

Disclosures in respect of bodies corporate, partnership firms,association of persons, trusts and foundations formingpart of Promoter Group are given below

S.No. Name of the Shareholder No. of Shares Percentage of Holding

1 Sanmar Holdings Limited & its nominees 1,40,00,000 100%

Directors of SSL as on January 31, 20091. Mr. R Rangarajan.2. Mr. C V Subba Rao (whole time director)3. Mr. P U Aravind

1. Sanmar Shipping LimitedSanmar Shipping Limited (SSL) was incorporated on September 15, 1994 and has its Registered Office at

9, Cathedral Road, Chennai 600 086, India.

SSL is in the business of owning and operating Ships.

Shareholding of SSL as of January 31, 2009

S. COMPANIESNo

S. COMPANIESNo

84

Directors of SSCL as on January 31, 2009

1. Mr. Murli Ramachandran, Managing Director

2. Mr. M N Radhakrishnan

3 Mr. S Sankaran

4. Mr S Gopal

5. Mr V Ramesh

6. Mr P S Jayaraman

7. Mr V K Parthasarathy

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

SSCL has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of SSCL in the last six months.

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 13,635 16,935 11,451

(b) Profit / (Loss) After Tax (PAT) 114 2,092 240

(c) Equity Share Capital (Par value INR 10 per Share) 2,300 2,300 2,300

(d) Reserves (excluding Revaluation Reserve) 2,933 2,819 726

(e) Earnings per Share 0.50 9.10 1.48

(f) Book Value per Share 22.75 22.25 13.16

2. Sanmar Speciality Chemicals LimitedSanmar Speciality Chemicals Limited (SSCL) was incorporated on June 16, 1982 under the name of IEPL Investments

Private Limited. This company’s name was changed to Sanmar Electronics Corporation Limited on March 30,

1992 and to Sanmar Speciality Chemicals Limited on May 17, 2005. This company has its Registered Office at 9,

Cathedral Road, Chennai 600 086, India.

SSCL is engaged in the manufacture and sale of Organic and Phyto-Chemicals, Bulk Drugs, Biotech Regents, Organic

Titanics, Poly Isocyanates, PVF, Phenolics. This company is also engaged in providing contract research.

Shareholding of SSCL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding

1 Sanmar Holdings Limited & its nominees 2,30,00,000 100%

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 19,915 11,761 13,766

(b) Profit / (Loss) After Tax (PAT) 8,575 4,274 5,013

(c) Equity Share Capital (Par Value INR 10 per Share) 1,400 1,400 1,400

(d) Reserves (excluding Revaluation Reserve) 32,100 23,525 19,251

(e) Earning per Share 61.25 30.53 35.81

(f) Book Value per Share 239.29 178.04 147.51

SSL has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of SSL in the last six months.

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

85

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Holdings Limited and its nominees 43,10,000 50%2 Cabot Corporation, USA 43,10,000 50%

Total 86,20,000 100%

Directors of Cabot as on January 31, 2009

1. Mr. P S Jayaraman

2. Mr. M N Radhakrishnan

3. Mr. S Sankaran

4. Mr. Patrick M Prevost

5. Mr. Rajesh Ahuja

6. Mr. Sean Denis Keohane

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 2,625 2,554 2,448

(b) Profit / (Loss) After Tax (PAT) 646 689 622

(c) Equity Share Capital (Par value INR 10 per Share) 862 862 862

(d) Reserves (excluding Revaluation Reserve) 1,372 1,130 1,128

(e) Earning per Share 7.49 8.00 7.22

(f) Book Value per Share 25.92 23.11 23.09

Cabot has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of Cabot in the last six months.

3. Cabot Sanmar LimitedCabot Sanmar Limited (Cabot) was incorporated on March 8, 1996 and has its Registered Office at 9, Cathedral

Road, Chennai 600 086, India.

Cabot is engaged in the manufacture and sale of Silicon Dioxide.

Shareholding of Cabot as of January 31, 2009

4. BS&B Safety Systems (India) LimitedBS&B Safety Systems (India) Limited (BS&B) was incorporated on November 21, 1980 and has its Registered

Office at 9, Cathedral Road, Chennai 600 086, India.

BS&B is engaged in the manufacture and sale of Rupture Disks and Safety Equipments.

Shareholding of BS&B as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 B SEC Services Limited & its nominees 7,200 50%2 Paget Limited, Mauritius 7,200 50%

Total 14,400 100%

Directors of BS&B as on January 31, 2009

1. Mr. M N Radhakrishnan

2. Mr. R Rangarajan

3. Mr. P Natarajan

4. Mr. S Sankaran5. Mr. A R Huse6. Mr. T D Kenneally7. Mr. John Smallwood8. Dr. Joseph M Izzo

86

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 24,565 15,131 12,634

(b) Profit / (Loss) After Tax (PAT) 2,936 2,011 2,281

(c) Equity Share Capital (Par value INR 10 per Share) 85 85 85

(d) Reserves (excluding Revaluation Reserve) 8,613 7,264 5,253

(e) Earning per Share 346.43 237.24 269.17

(f) Book Value per Share 1,026.32 867.08 629.85

Fisher has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of Fisher in in the last six months.

(In Rs. lakhs except per share data)

Particulars March March March31, 2008 31, 2007 31, 2006

(a) Total Income 3,008 2,268 2,062

(b) Profit / (Loss) After Tax (PAT) 790 608 549

(c) Equity Share Capital (Par value INR 100 per Share) 14 14 14

(d) Reserves (excluding Revaluation Reserve) 884 793 550

(e) Earning per Share 5,485.71 4,220.09 3,815.90

(f) Book Value per Share 6,236.09 5,605.68 3,922.64

BS&B has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of BS&B in the last six months.

Directors of Fisher as on January 31, 2009

1. Mr. M N Radhakrishnan (whole time director)

2. Mr. R Rangarajan

3. Mr. P Natarajan

4. Mr. S Sankaran

5. Mr. Terry D Buzbee

6. Mr. Frank De Jong

7. Mr. Micheal J Mason

8. Mr. Michael H Train

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Engineering Corporation Limited & its nominees 4,32,000 50.97%2 Fisher Controls International LLC, USA 4,15,500 49.03%

Total 8,47,500 100.00%

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

5. Fisher Sanmar LimitedFisher Sanmar Limited (Fisher) was incorporated on February 18, 1985 under the name of Invest Valves Private

Limited. The Company’s name was changed to Xomox Valves (India) Limited on February 17, 1993, to Fisher-

Xomox (India) Limited on January 27, 1994, to Fisher-Xomox Sanmar Limited on January 1, 1996, and to Fisher

Sanmar Limited on July 31, 2003. The Registered of the Company is at 9, Cathedral Road, Chennai 600 086, India.

Fisher is engaged in the manufacture and sale of Regulators and Valves.

Shareholding of Fisher as of January 31, 2009

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Directors of Flowserve as on January 31, 2009

1. Mr. M N Radhakrishnan

2. Mr. R Rangarajan

3. Mr. S Sankaran

4. Mr. P Natarjan

5. Mr. Andrew Taylor

6. Mr. S Gopinath

7. Mr. Andrew J Beall

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 11,150 8,281 7,786(b) Profit / (Loss) After Tax (PAT) 2,699 1,866 2,211(c) Equity Share Capital (Par value INR 100 per Share) 48 48 48(d) Reserves (excluding Revaluation Reserve) 3,685 3,513 3,262(e) Earning per Share 5622.92 3,887 4,607.05(f) Book Value per Share 7,777.55 7,419.39 6,896.13

Flowserve has not become a sick company under the meaning of SICA and is not under winding up. There is no

change in the capital structure and management of Flowserve in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Engineering Corporation Limited & its nominees 26,400 55%2 Ms. Madhu Sarin 2,400 5%3 Flowserve International Inc., USA 19,200 40%

Total 48,000 100%

6. Flowserve Sanmar LimitedFlowserve Sanmar Limited (Flowserve) was incorporated on September 8, 1987 under the name of SFS Footwear

International Private Limited. The name of the Company was changed to Sanmar Footwear Limited on January 1,

1996 and to Flowserve Sanmar Limited on March 23, 2004. The Company has its Registered Office at

9, Cathedral Road, Chennai 600 086, India.

Flowserve is engaged in manufacture and sale of Mechanical Seals & Spares.

Shareholding of Flowserve as of January 31, 2009

7. Sanmar Engineering Services LimitedSanmar Engineering Services Limited (SESL) was incorporated on March 10, 1995 under the name of Septagon Holdings

Private Limited. The Company’s name was changed to Sanmar Property Development Private Limited on December 5,

1997 to Sanmar Maintenance Services Limited on April 13, 2006 and to Sanmar Engineering Services Limited on July

17, 2006. The Company has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.

SESL is engaged in providing Implant Maintenance Solutions.

Shareholding of SESL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Engineering Corporation Limited & its nominees 5,30,000 100%

Directors of SESL as on January 31, 20091. Mr. M N Radhakrishnan2. Mr. P Natarajan3. Mr. S Sankaran

88

SFL has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and the management of SFL in the last six months.

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 386 228 3,083

(b) Profit / (Loss) After Tax (PAT) 109 24 1,366

(c) Equity Share Capital (Par value INR 10 per Share) 53 53 53

(d) Reserves (excluding Revaluation Reserve) 481 371 348

(e) Earning per Share 20.65 4.44 257.71(f) Book Value per Share 100.68 80.03 75.59

SESL has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of SESL in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Engineering Corporation Limited & its nominees 40,00,000 100%

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 16,225 14,470 11,401

(b) Profit / (Loss) After Tax (PAT) (543) 478 620

(c) Equity Share Capital (Par value INR 100 per Share) 4,000 1,000 1,000

(d) Reserves (excluding Revaluation Reserve) 409 952 474

(e) Earning per Share (9.33) 14.69 23.80

(f) Book Value per Share 110.24 195.24 147.40

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

8. Sanmar Foundries LimitedSanmar Foundries Limited (SFL) was incorporated under the name Geosource (India) Private Limited on March 28,

1983. The name of the Company was changed to Moorco (India) Limited on November 19, 1984, to FMC Sanmar

Limited on January 1, 1996 to FMC Technologies Sanmar Limited on November 28, 2001 and to Sanmar Foundries

Limited on April 4, 2003. The Company has its Registered Office at 9, Cathedral Road, Chennai 600 086.

SFL is engaged in the manufacture and sale of Sand and Investment Castings.

Shareholding of SFL as of January 31, 2009

Directors of SFL as on January 31, 2009

1. Mr M N Radhakrishnan

2. Mr P Natarajan (whole time director)

3. Mr S Sankaran

4. Mr S Gopal

5. Mr V Ramesh

6. Mr P S Jayaraman

7. Mr V K Parthasarathy

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

89

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Engineering Corporation Limited & its nominees 36,00,000 60%2 Tyco Asia Investments Limited, Mauritius 24,00,000 40%

Total 60,00,000 100%

Directors of Tyco as on January 31, 2009

1. Mr. M N Radhakrishnan2. Mr. P Natarajan3. Mr. S Sankaran4. Mr. Nestor Claudio Sequeiros5. Mr. James Edward Rushing

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 12,323 8,668 7,676(b) Profit / (Loss) After Tax (PAT) 2,588 1,532 1,242(c) Equity Share Capital (Par value INR 10 per Share) 600 600 600(d) Reserves (excluding Revaluation Reserve) 3,813 3,400 1,868(e) Earning per Share 43.14 25.54 20.70(f) Book Value per Share 73.54 66.67 41.14

Tyco has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of Tyco in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Engineering Corporation Limited & its nominees 4,32,000 51%2 Xomox Corporation, USA 4,15,500 49%

Total 8,47,500 100%

Directors of Xomox as on January 31, 2009

1. Mr. M N Radhakrishnan

2. Mr. R Rangarajan

3. Mr. P Natarajan

4. Mr. S Sankaran

5. Mr. Dale John Friemoth

6. Mr. Jeffery P Rodgers

7. Mr. William C Hayes

8. Mr. Juergem K Sonderschaefer

9. Tyco Sanmar LimitedTyco Sanmar Limited (Tyco) was incorporated on December 9, 1998 and has its Registered Office at 9, Cathedral

Road, Chennai 600 086, India.

Tyco is engaged in the manufacture and sale of Safety Valves and Spares.

Shareholding of Tyco as of January 31, 2009

10. Xomox Sanmar LimitedXomox Sanmar Limited (Xomox) was incorporated on May 1, 2001 under the provisions of the Companies Act

1956 and has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.

Xomox is engaged in the manufacture and sale of Vane Type Actuators, Plug Valves and Butterfly Valves.

Shareholding of Xomox as of January 31, 2009

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

90

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 6,570 5,944 4,741(b) Profit / (Loss) After Tax (PAT) 1,233 1,231 746(c) Equity Share Capital (Par value INR 10 per Share) 85 85 85(d) Reserves (excluding Revaluation Reserve) 2,068 1,827 1,418(e) Earning per Share 145.43 145.25 88.07(f) Book Value per Share 254.04 225.60 177.27

Xomox has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of Xomox in the last six months.

11. Sanmar Industrial Filters LimitedSanmar Industrial Filters Limited (SIFL) was incorporated under the name of Sanmar-PTI Filters Limited on March

20, 1996. The name of the Company was changed to Sanmar Industrial Filters Limited on June 19, 2002. The

Company has its Registered Office at 9, Cathedral Road, Chennai 600 086.

The Company’s main objects is to engage in the manufacture and sale of Filtration Equipment / Systems.

Shareholding of SIFL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Engineering Corporation Limited & its nominees 50,00,000 100%

Directors of SIFL as on January 31, 20091. Mr. N Narayanan2. Mr. Arjun Ananth3. Mr. M Raman

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 0.00 0.00 4(b) Profit / (Loss) After Tax (PAT) 0.00 0.00 1(c) Equity Share Capital (Par value INR 10 per Share) 500 500 500(d) Reserves (excluding Revaluation Reserve) (597) (597) (597)(e) Earning per Share (0.00) (0.01) 0.02(f) Book Value per Share (1.94) (1.94) (1.94)

SIFL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of SIFL in the last six months.

12. Sanmar Ferrotech LimitedSanmar Ferrotech Limited (Ferrotech) was incorporated on May 7, 2007 under the provisions of the Companies

Act 1956 and has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.

Ferrotech will be engaged in the manufacture and sale of castings of iron and steel.

Shareholding of Ferrotech as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Holdings Limited & its nominees 50,000 100%

91

Directors of Ferrotech as on January 31, 20091. Mr. M N Radhakrishnan2. Mr. P Natarajan3. Mr. S Gopal4. Mr. S Sankaran5. Mr. V Ramesh6. Mr. P S Jayaraman7. Mr. V K Parthasarathy

Audited financial information for Fiscal 2008 is as hereunder:(In Rs. lakhs except per share data)

Particulars March31, 2008

(a) Total Income —(b) Profit / (Loss) After Tax (PAT) (14)(c) Equity Share Capital (Par value INR 10 per Share) 5(d) Reserves (excluding Revaluation Reserve) (14)(e) Earning per Share (27.48)(f) Book Value per Share (17.48)

Ferrotech has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of Ferrotech in the last six months.

13. NS Family Investments Private LimitedNS Family Investments Private Limited (NSFIPL) was incorporated on June 25, 1991 under the name PenthouseInvestments (Beta) Private Limited. The name of the Company was changed to NS Family Investments PrivateLimited on January 21, 1992. The Company has its Registered Office is at 9, Cathedral Road, Chennai 600 086,India.NSFIPL is in the business of providing advisory services and holding investment in shares and securities.

Shareholding of NSFIPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of HoldingEquity

1 Mr N Sankar 24 75%2 NS Family Consolidations Private Limited 8 25%

32 100%Preference

1 Mr N Sankar 10,000 99.91%2 Mr. Vijay Sankar 1 0.09%

10,001 100.00%

Directors of NSFIPL as on January 31, 20091. Mr. N Sankar2. Mr. Vijay Sankar

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

NSFIPL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of NSFIPL in the last six months.

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 0.07 0.06 0.06(b) Profit / (Loss) After Tax (PAT) (0.050) (0.0067) (0.00412)(c) Equity Share Capital (Par value INR 10 per Share) 0.0032 0.0032 0.0032(d) Preference Share Capital (Par value INR 10 per Share) 1.000 1.000 1.000(e) Reserves (excluding Revaluation Reserve) (0.768) (0.718) (0.711)(f) Earning per Share (157.38) (20.88) (12.88)(g) Book Value per Share (2,391.41) (2,234.03) (2,213.16)

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14. NS Family Consolidations Private LimitedNS Family Consolidations Private Limited (NSFCPL) was incorporated on June 25, 1991 under the name GreenvalleyInvestments (Beta) Private Limited. The name of the Company was changed to NS Family Consolidations PrivateLimited on January 21, 1992. The Company has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.NSFCPL is in the business of providing advisory services and holding investment in shares and securities.

Shareholding of NSFCPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of HoldingEquity

1 NS Family Investments Private Limited & its nominee 9,600 100%Preference

2 Mr N Sankar 1,540 100%Directors of NSFCPL as on January 31, 2009

1. Mr. N Sankar2. Mr. Vijay Sankar

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 0.070 0.070 0.075(b) Profit/ (Loss) After Tax (PAT) (0.0563) (0.00335) (0.02012)(c) Equity Share Capital (Par value INR 10 per Share) 0.960 0.960 0.960(d) Preference Share Capital (Par value INR 100 per Share) 1.54 1.54 1.54(e) Reserves (excluding Revaluation Reserve) (0.056) 0.0002 0.00360(f) Earning per Share 0.59 (0.03) (0.21)(g) Book Value per Share 9.42 10.00 10.04

NSFCPL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of NSFCPL in the last six months.

15. SHL Securities (Alpha) LimitedSHL Securities (Alpha) Limited (SHLSEC) was incorporated on May 30, 1990 under the name Fortis Investments(Delta) Limited. The name of the Company was changed to SHL Securities (Alpha) Limited on January 27, 1999.The Company has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.SHLSEC is in the business of providing advisory services and holding shares and securities.

Shareholding of SHLSEC as of January 31, 2009S.No. Name of the Shareholder No. of Shares Percentage of Holding1 NS Family Consolidations Private Limited & its nominees 25,000 50%2 SHL Research Foundation 25,000 50%

50,000 100%

Directors of SHLSEC as on January 31, 2009

1. Mr. K S Narayanan2. Mr. N Sankar3. Mr. Vijay Sankar

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 0.070 0.070 0.070(b) Profit / (Loss) After Tax (PAT) (0.047) (0.005) (0.00242)(c) Equity Share Capital (Par value INR 10 per Share) 5 5 5(d) Reserves (excluding Revaluation Reserve) (2.337) (2.29) (2.285)(e) Earning per Share (0.09) (0.01) (0.00)(f) Book Value per Share 5.32 5.42 5.43

93

SHLSEC has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of SHLSEC in the last six months.

16. SHL Research FoundationSHL Research Foundation (SHLRF) was incorporated on December 23, 2002 and has its Registered Office at 9,Cathedral Road, Chennai 600 086, India.SHLRF is in the business of promotion of research in bulk drugs, pharmaceutical and chemicals etc.Shareholding of SHLRF as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 NS Family Consolidations Private Limited 50,000 50%2 SHL Securities (Alpha) Limited 50,000 50%

1,00,000 100%

Directors of SHLRF as on January 31, 20091. Mr. N Sankar2. Mr. Vijay Sankar

Financial PerformanceAudited financial performance for Fiscal 2008, 2007and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income — — —(b) Profit / (Loss) After Tax (PAT) (0.285) (0.378) (3.12)(c) Equity Share Capital (Par value INR 10 per Share) 10 10 10(d) Reserves (excluding Revaluation Reserve) (7.37) (7.43) (7.30)(e) Earning per Share (0.28) (0.38) (3.12)(f) Book Value per Share 2.63 2.56 2.69

SHLRF has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of SHLRF in the last six months.

17. Pharaoh Egyptian Investments Limited (PEIL)PEIL was incorporated on September 15,2008, in Cayman Islands having Registered Office at Walker House, 87Mary Street, George Town, Grand Cayman KY1-9002, Cayman Island.PEIL is a wholly owned subsiadiary of Sanmar IP Repository Limited.

Directors as on January 31, 20091. Mr. P S Jayaraman.2. Mr. P U Aravind

Financial PerformanceThe Company was incorporated in Financial Year 2008-09. The financials are not available as the first year ofoperation ends on March 31, 2009.PEIL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of PEIL, since incorporation.

18. Sanmar Engineering Corporation LimitedSanmar Engineering Corporation Limited (SECL) was incorporated on June 25, 2001 and has its Registered Officeat 9, Cathedral Road, Chennai 600 086, India.SECL is in the business of holding investments.

Shareholding of SECL as of January 31, 2009S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Holdings Limited & its nominees 4,00,000 100%

Directors of SECL as on January 31, 20091. Mr. M N Radhakrishnan, Chairman2. Mr. S Sankaran3. Mr. P Natarajan

94

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 2,340 2,605 2,427(b) Profit / (Loss) After Tax (PAT) 2,319 2,604 2,426(c) Equity Share Capital (Par value INR 10 per Share) 40 40 40(d) Reserves (excluding Revaluation Reserve) 11,304 8,986 6,381(e) Earning per Share 579.69 651.23 606.58(f) Book Value per Share 2,836.12 2,256.44 1,605.21

SECL has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of SECL in the last six months.

19. B SEC Services LimitedB SEC Services Limited (B SEC) was incorporated on October 3, 2001 and has its Registered Office at 9, Cathedral

Road, Chennai 600 086, India.

B SEC is in the business of Trading and Consultancy and holding investments in shares and securities.

Shareholding of B SEC as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Engineering Corporation Limited and its nominees 50,000 100%

Directors of B SEC as on January 31, 2009

1. Mr. N Narayanan

2. Mr. R Natarajan

3. Mr. M Raman

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 217 261 160(b) Profit / (Loss) After Tax (PAT) 217 261 160(c) Equity Share Capital (Par value INR 10 per Share) 5 5 5(d) Reserves (excluding Revaluation Reserve) 1,407 1,191 930(e) Earning per Share 433.76 521.45 320.54(f) Book Value per Share 2825.71 2,391.95 1,870.50

B SEC has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of B SEC in the last six months.

20. SHL Trading LimitedSHL Trading Limited (SHLTL) was incorporated on February 7, 2007 and has its Registered Office at 9, Cathedral

Road, Chennai 600 086, India.

SHLTL is in the business of trading and holds investments.

Shareholding of SHLTL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of HoldingEquity

1 Sanmar Enginering Corporation Limited & its nominees 50,000 100%Preference

2 Sanmar Engineering Corporations Limited 9,501 100%

95

Directors of SHLTL as on January 31, 20091. Mr M Raman2. Mr N Narayanan3. Mr P U Aravind

Financial PerformanceAudited Financial information for Fiscal 2008 & 2007 is as hereunder:

(In Rs. lakhs except per share data)

Particulars March March31,2008 31, 2007*

(a) Total Income 124.62 0.0205

(b) Profit / (Loss) After Tax (PAT) 110.25 (0.06)

(c) Equity Share Capital (Par value INR 10 per Share) 5 5

(d) Preference Share Capital (Par value INR 10 per Share) 0.95 –

(e) Reserves (excluding Revaluation Reserve) 852.98 (0.243)

(f) Earning per Share 220.5 (0.49)

(g) Book Value per Share 1,715.97 9.51

* First accounting year

SHLTL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the management of SHLTL in the last six months.

Directors of SPPL as on January 31, 20091. Mr. M Raman2. Mr. S Subramanian

Financial PerformanceAudited Financial information for Fiscal 2008 & 2007 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March31,2008 31, 2007*

(a) Total Income – –

(b) Profit / (Loss) After Tax (PAT) (0.077) (0.057)

(c) Equity Share Capital (Par value INR 10 per Share) 1 1

(d) Reserves (excluding Revaluation Reserve) (0.195) (0.118)

(e) Earning per Share (0.77) (0.57)

(f) Book Value per Share 8.04 8.81

* First accounting year.

SPPL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the management of SPPL in the last six months. During the last six months, SPPL has raised Rs.27,48,750/- (net)preference capital.

S.No. Name of the Shareholder No. of Shares Percentage of HoldingEquity

1 Sanmar Realty Private Limted and its nominee 10,000 100%

21. Strategic Properties Private LimitedStrategic Properties Private Limited (SPPL) was incorporated on March 26, 2007 and has its Registered Office at

9, Cathedral Road, Chennai 600 086, India.

SPPL is in real estate business.

Shareholding of SPPL as of January 31, 2009

96

22. Kalamkriya LimitedKalamkriya Limited (Kalamkriya) was incorporated on April 9, 1991 and has its Registered Office at 9, CathedralRoad, Chennai 600 086, India.Kalamkriya is in the business of printing, designing and artwork.

Shareholding of Kalamkriya as of January 31, 2009S.No. Name of the Shareholder No. of Shares Percentage of Holding

Equity1 Sanmar Holdings Limited & its nominees 31,000 100%

Preference2 Sanmar Holdings Limited 9,000 100%

Directors of Kalamkriya as on January 31, 20091. Mrs. Chandra Sankar2. Mr. P U Aravind3. Mr. S Subramanian

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 59.96 67.91 62.22(b) Profit / (Loss) After Tax (PAT) 2.61 0.438 0.96(c) Equity Share Capital (Par value INR 10 per Share) 3.10 3.10 3.10(d) Preference Share Capital (Par value INR 100 per Share) 9 1.90 1.90(d) Reserves (excluding Revaluation Reserve) 6.43 3.81 3.37(e) Earning per Share 8.43 1.42 3.10(f) Book Value per Share 30.73 22.30 20.89

Kalamkriya has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of Kalamkriya in the last six months.

23. Indchem Communications LimitedIndchem Communications Limited (ICL) was incorporated on November 21, 1988 and has its Registered Office at9, Cathedral Road, Chennai 600 086, India.ICL is a manufacturer of Multiplexers / Load Test Generators.

Shareholding of ICL as of January 31, 2009

Directors of ICL as on January 31, 20091. Mr. S Nandagopal2. Mr. P U Aravind3. Mr. Ramkumar Shankar

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income – – 0.758(b) Profit / (Loss) After Tax (PAT) (5.396) (32.91) (6.27)(c) Equity Share Capital (Par value INR 10 per Share) 575 575 575(d) Reserves (excluding Revaluation Reserve) (890.56) (885.17) (852.26)(e) Earning per Share (0.09) (0.57) (0.11)(f) Book Value per Share (5.49) (5.39) (4.82)

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Holdings Limited & its subsidiaries 51,05,000 88.78%2 Electronics Corporation of Tamil Nadu Limited (ELCOT) 6,32,500 11.00%3 State Industrial Promotion Corporation of Tamil Nadu

Limited (SIPCOT) 12,500 0.22%57,50,000 100.00%

97

ICL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of ICL in the last six months.

24. SHL Property Holdings LimitedSHL Property Holdings Limited (SHLPHL) was incorporated on October 25, 1999 under the name KarapakkamProperties Private Limited. The name of the Company was changed to SHL Property Holdings Limited on March14, 2005. The Company has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.SHLPHL is in real estate business.

Shareholding of SHLPHL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Holdings Limited & its nominees 80,000 100%

Directors of SHLPHL as on January 31, 20091. Mr. M Raman2. Mr. M N Radhakrishnan3. Mr. P S Jayaraman4. Mr V Ramesh5. Mr S Gopal6. Mr V K Parthasarathy

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 635.30 651.99 323.24(b) Profit / (Loss) After Tax (PAT) (2247.95) 310.71 168.20(c) Equity Share Capital (Par value INR 10 per Share) 8 8 8(d) Reserves (excluding Revaluation Reserve) 1769.07 4017.02 3706.31(e) Earning per Share (2,809.94) 388.39 210.25(f) Book Value per Share 2,221.34 5,031.28 4,642.89

SHLPHL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of SHLPHL in the last six months.

25. Chemplast Sanmar Aromatics Private LimitedChemplast Sanmar Aromatics Private Limited (CSAL) was incorporated on January 18, 1996 and has its RegisteredOffice at 9, Cathedral Road, Chennai 600 086, India.CSAL is in the real estate business.Shareholding of CSAL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Strategic Properties Private Limited & its nominee 50,000 100%

Directors of CSAL as on January 31, 20091. Mr. P V Sriram2. Mr. M Raman

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income – 1.02 –(b) Profit / (Loss) After Tax (PAT) (26.19) 0.94 –(c) Equity Share Capital (Par value INR 10 per Share) 5 5 5(d) Reserves (excluding Revaluation Reserve) (30.36) (4.17) –(e) Earning per Share (52.38) 1.88 –(f) Book Value per Share (50.72) 1.66 –

98

CSAL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of CSAL in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Stargate Investments Private Limited and its Nominee. 50,000 100%

Directors of SHL Investment as on January 31, 20091. Mr. M Raman2. Mr. S Subramanian

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

SHL Investment has not become a sick company under the meaning of SICA and is not under winding up. There isno change in the capital structure and management of SHL Investment in the last six months.

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 0.15 – –(b) Profit / (Loss) After Tax (PAT) (1.75) (0.078) (0.11)

(c) Equity Share Capital (Par value INR 10 per Share) 5 5 5

(d) Reserves (excluding Revaluation Reserve) (6.93) (5.18) (5.11)(e) Earning per Share (3.5) (0.16) (0.22)

(f) Book Value per Share (3.87) (0.38) (0.22)

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Stargate Investments Private Limited and its Nominee. 10,000 100%

Directors of TPTPL Investment as on January 31, 20091. Mr. M Raman2. Mr. V.Shankar

Financial PerformanceAudited financial performance for Fiscal 2008 is as hereunder:

Particulars March31, 2008

(a) Total Income –(b) Profit / (Loss) After Tax (PAT) (0.31)(c) Equity Share Capital (Par value INR 10 per Share) 1(d) Reserves (excluding Revaluation Reserve) (0.31)(e) Earning per Share (3.10)(f) Book Value per Share 6.90

TPTPL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of TPTPL in the last six months.

26. SHL Investment Services Private LimitedSHL Investment Services Private Limited (SHL Investment) was incorporated on October 3, 2001 under the nameS SEC Services Private Limited. The name of the Company was changed to SHL Investment Services Limited onJanuary 13, 2006. The Company has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.

SHL Investment is in real estate business.

Shareholding of SHL Investment as of January 31, 2009

27. Twinpeaks Technologies Private LimitedTwinpeaks Technologies Private Limited (TPTPL) was incorporated on 30th November 2007 and has its Registeredoffice at No 9, Cathedral Road Chennai - 600086.

TPTPL is in the business of software development

Shareholding of TPTPL Investment as of January 31, 2009

99

28. Sanmar Group International LimitedSanmar Group International Limited (SGIL) was incorporated on March 28, 2002 under the name ChemplastChlorochemicals Limited. The name of the Company was changed to Sanmar Group International Limited onJanuary 11, 2007. The Company has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.

SGIL holds investments.

Shareholding of SGIL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Equity

Sanmar Holdings Limited & its nominees 2,00,000 100%Preference

1 Sanmar Holdings Limited 14,063 1.42%2 SHL Property Holdings Limited 2,58,942 26.10%3 Sanmar Shipping Limited 4,12,636 41.58%4 Sanmar Engineering Corporation Limited 1,57,632 15.88%5 B Sec Services Limited 25,504 2.57%6 Strategic Properties Private Limited 1,23,600 12.45%

9,92,377 100.00%

Directors of SGIL as on January 31, 20091. Mr. R.Rangarajan2. Mr. P U Aravind3. Mr. R.Kumar

Financial PerformanceAudited Financial information for three Accounting Periods are as hereunder:

(In Rs. lakhs except per share data)

Particulars March 07.03.2007 to 01.02.2007 to31,2008 31.03. 2007 06.03.2007

(a) Total Income 78.66 13.25 29.17(b) Profit / (Loss) After Tax (PAT) 74.94 12.58 28.87(c) Equity Share Capital (Par value INR 10 per Share) 20 20 20(d) Preference Share Capital (Par value INR 10 per Share) 86.53 46.50 46.50(e) Reserves (excluding Revaluation Reserve) 61,398.14 35,745.17 35,732.60(f) Earning per Share 37.47 6.29 14.43(g) Book Value per Share 30,709.07 17,882.59 17,876.30

SGIL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the management of SGIL in the last six months. During the last six months, SGIL has raised Rs 27,55,100/- (net)preference capital and redeemed Rs. 14,83,900 preference capital.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Group International Limited & its nominees 10,000 100%

Directors of SOIAG as on January 31, 20091. Mr. N Sankar2. Mr. Sandro Frei3. Mr. Thomas Fasseler4. Mr. Mauro Battiroli5. Mr. Vijay Sankar

29. Sanmar Overseas Investments AGSanmar Overseas Investments AG (SOIAG) was incorporated on November 2, 2006 under the name Sanmar GroupAG. The name of the Company was changed to Sanmar Overseas Investments AG on February 1, 2007. TheCompany has its Registered office at Lindenhof 6,CH-6060, Sarnen/Obwald, Switzerland.

SOIAG is in the business of holding investments, and providing financial and management support to overseasventures of The Sanmar Group.

Shareholding of SOIAG as of January 31, 2009

100

Financial PerformanceAudited financial performance for Fiscal 2008 is as hereunder:

(In Rs. lakhs except per share data)

ParticularsMarch 31,2008

CHF INR(1 CHF = 41 INR)

(a) Total Income 1,46,464 60.05(b) Profit / (Loss) After Tax (PAT) 35,801 14.68(c) Equity Share Capital (Par value CHF 100 per Share) 10,00,000 410(d) Reserves (excluding Revaluation Reserve) 35,801 14.68(e) Earning per Share 3.58 146.78(f) Book Value per Share 103.58 4,246.78

Note : The Company’s first accounting period ends on 31st March 2008.SOIAG is not under winding up. There is no change in the capital structure and management of SOIAG in the lastsix months.

30. Cav-Nile AGCav-Nile AG (Cav-Nile) was incorporated on February 1, 2007 has its Registered Office Lindenhof 6,CH-6060,Sarnen/Obwald, Switzerland.Cav-Nile is in the business of holding investments, and providing financial and management support for the operationsin the chemical industry of The Sanmar Group in different parts of the world.

Shareholding of Cav-Nile as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Overseas Investments AG & its nominees 1,000 100%

Directors of Cav-Nile as on January 31, 20091. Mr P S Jayaraman2. Mr P U Aravind3. Mr Sandro Frei4. Mr Thomas Fasseler5. Mr Mauro Battiroli

Financial PerformanceAudited financial performance for Fiscal 2008 is as hereunder:

(In Rs. lakhs except per share data)

ParticularsMarch 31,2008

CHF INR(1 CHF = 41 INR)

(a) Total Income 84 0.03(b) Profit / (Loss) After Tax (PAT) (56,194) (23.04)(c) Equity Share Capital (Par value CHF 100 per Share) 1,00,000 41.00(d) Reserves (excluding Revaluation Reserve) (56,194) (23.04)(e) Earning per Share (56.19) (2,303.79)(f) Book Value per Share 43.81 1,796.21

Note : The Company’s first accounting period ends on 31st March 2008.Cav-Nile is not under winding up. There is no change in the capital structure and management of Cav-Nile in thelast six months.

31. Pharaoh International LimitedPharaoh International Limited (PIL) was incorporated on January 26, 2007 and has its Registered Office at WalkerHouse, 87, Mary Street, George Town, Grand Cayman KY1-9001, Cayman Islands.PIL is in the business of holding investments.Shareholding of PIL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Common Shares

Cav-Nile AG 57,500 100%2 Redeemable Preferred Shares

Cav-Nile AG 43,200 100%

101

Directors of PIL as on January 31, 20091. Mr P S Jayaraman2. Mr. Sandro Frei3. Mr. J K Menon

Financial PerformanceAudited financial performance for Fiscal 2008 is as hereunder:

(In Rs. lakhs except per share data)

ParticularsMarch 31,2008

USD INR(1 USD = 49 INR)

(a) Total Income 92,897 45.52

(b) Profit / (Loss) After Tax (PAT) (69,122) (33.87)

(c) Equity Share Capital (Par value US$ 0.01 per Share) 575 0.28

(d) Reserves (excluding Revaluation Reserve) 8,72,80,848 42,767.62

(e) Earning per Share (1.20) (58.80)

(f) Book Value per Share 766.63 37,564.87

Note : The Company’s first accounting period ends on 31st March 2008.

PIL is not under winding up. There is no change in the capital structure and management of PIL in the last sixmonths.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Pharaoh International Limited 50,000 100%

Directors of PCL as on January 31, 2009

1. Mr. P S Jayaraman

2. Mr. Sandro Frei

3. Mr. R Kalidas

Financial PerformanceAudited Financial performance for Fiscal 2008 is as hereunder:

(In Rs. lakhs except per share data)

ParticularsMarch 31,2008

USD INR(1 USD = 49 INR)

(a) Total Income 2,31,91,754 11,363.96

(b) Profit / (Loss) After Tax (PAT) (3,16,728) (155.20)

(c) Equity Share Capital (Par value US$ 0.01 per Share) 500 0.25

(d) Reserves (excluding Revaluation Reserve) 5,16,82,772 25,324.56

(e) Earning per Share (6.33) (310.17)

(f) Book Value per Share 1,033.67 50,649.83

Note: PCL’s first accounting period ends on 31st March 2008.PCL is not under winding up. There is no change in the capital structure and management of PCL in the last sixmonths.

32. Pharaoh Consolidations LimitedPharaoh Consolidations Limited (PCL) was incorporated on February 9, 2007 and has its Registered Office at

Walker House, 87, Mary Street, George Town, Grand Cayman KY1-9001, Cayman Islands.

PCL is in the business of holding investments.

Shareholding of PCL as of January 31, 2009

102

33. Pharaoh Egyptian Holdings Limited

Pharaoh Egyptian Holdings Limited (PEHL) was incorporated on January 26, 2007 and has its Registered Office at

Walker House, 87, Mary Street, George Town, Grand Cayman KY1-9001, Cayman Islands.

PEHL is in the business of holding investments.

Shareholding of PEHL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Pharaoh Consolidations Limited 1 100%

Directors of PEHL as on January 31, 2009

1. Mr. P S Jayaraman

2. Mr. Sandro Frei

3. Mr. J K Menon

Financial PerformanceAudited Financial performance for Fiscal 2008 is as hereunder:

(In Rs. lakhs except per share data)

ParticularsMarch 31,2008

USD INR(1 USD = 49 INR)

(a) Total Income 2,17,08,836 10,637.33

(b) Profit / (Loss) After Tax (PAT) 3,16,728 155.19

(c) Equity Share Capital (Par value US$ 0.01 per Share) 0.01 0.0000049

(d) Reserves (excluding Revaluation Reserve) 3,16,728 155.20

(e) Earning per Share 3,16,728 1,55,19,672

(f) Book Value per Share 3,16,728 1,55,19,672

Note : The Company’s first accounting period ends on 31st March 2008.

PEHL is not under winding up. There is no change in the capital structure and management of PEHL in the last six

months.

S.No. Name of the Shareholder No. of Quotas Percentage of Holding1 Pharaoh Egyptian Holdings Limited 93,000 98.94%2 Pharaoh International Limited 1,000 1.06%

Board of Managers of TCI as on January 31, 20091. Mr. P S Jayaraman2. Mr. R Kalidas3. Mr. J K Menon4. Mr. P U Aravind5. Mr. Omar Salah Bassiouny

34. TCI Sanmar Chemicals LLC

TCI Sanmar Chemicals LLC (TCI) was incorporated under the name of Trust Chemical Industries LLC on July 24,

2001.The name of the Company was changed to TCI Sanmar Chemicals LLC on October 10, 2007. The Company

has its Registered Office at Flat No.601, 5th Floor, 111 El Thawra Street, Heliopolis, Cairo.

TCI is in the business of manufacture and sale of Caustic Soda, Chlorine and Chlorine derivatives.

TCI was acquired by The Sanmar Group on 20th March 2007.

Shareholding of TCI as of January 31, 2009

103

Financial PerformanceAudited Financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

# The accounting period is 1st January 2007 to 31st March 2007.

* not annualized.

TCI is not under winding up. There is no change in the capital structure and management of TCI in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Matrix Metals AG 210,71,75,000 100%

Directors of MMHI as on January 31, 20091. Mr. Jerry Raman2. Mr. B Natraj3. Mr. P U Aravind

Financial PerformanceAudited Financial performance for Fiscal 2008 is as hereunder:

(In Rs. lakhs except per share data)

ParticularsMarch 31, 2008

USD INR(1 USD = 49 INR)

(a) Total Income – –

(b) Profit / (Loss) After Tax (PAT) (70) (0.0343)

(c) Equity Share Capital (Par value US$ 0.01 per Share) 2,10,71,750 10,325.16

(d) Reserves (excluding Revaluation Reserve) (42) (0.021)

(e) Earning per Share – –

(f) Book Value per Share – –

Note : The Company’s first accounting period ends on 31st March 2008.

MMHI is not under winding up. There is no change in the management of MMHI since its incorporation. An

amount of US $ 21.01 Million was raised since incorporation.

35. Matrix Metals Holdings IncMatrix Metals Holdings Inc (MMHI) was incorporated on January 28, 2008 and has its Registered Office at

2711,Centerville Road, suite 400, Wilmington, New castle, Delaware USA, Zip Code 19808.

MMHI is in the business of holding investments.

Shareholding of MMHI as of January 31, 2009

(In Rs. lakhs except per share data)

Particulars

March 31, 2008 March 31, 2007# December 31, 2006

Egyptian INR Egyptian INR Egyptian INRPounds (1 LE = 9 Pounds (1 LE = 9 Pounds (1 LE =

(LE) INR) (LE) INR) (LE) 9 INR)

(a) Total Income 20,05,11,400 18,046.03 3,81,19,691 3,430.77 12,83,02,787 11,547.25

(b) Profit / (Loss) After Tax (PAT) 7,84,32,440 7,058.92 1,13,10,175 1,017.92 5,89,85,155 5,308.66

(c) Share Capital (Par value LE1,000 per Share) 9,40,00,000 8,460.00 9,40,00,000 8,460.00 9,40,00,000 8,460.00

(d) Reserves (excluding Revaluation Reserve) 13,99,05,564 12,591.50 5,96,69,358 5,370.24 5,13,08,441 4,617.76

(e) Earning per Share 834.39 7,509.51 120 * 1,080 628 5,652

(f) Book Value per Share 2,488 22,392 1635 14,715 1546 13,914

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36. Sanmar Group Germany GmbHSanmar Group Germany GmbH (SGG) was incorporated on November 29, 2006 and has its Registered Office atHohenzollernring 72,50672 Cologne, Germany, C/o DLA Piper UK LLPSGG is in the business of holding investments.

Shareholding of SGG as on January 31, 2009 (the shares do not have a nominal value):

S.No. Name of the Shareholder Value of Shares Percentage of Holding1 Sanmar Overseas Investments AG Euro 25,000 100%

Directors of SGG as on January 31, 20091. Mr M N Radhakrishnan2. Mr. Sandro Frei3. Mr. J Ramdas

Financial PerformanceAudited financial performance for Fiscal 2008 & 2007 are as hereunder:

( In Rupees Lakhs except per share data)

Particulars March 31,2008 November29, 2006to March 2007*

Euro INR Euro INR(1 Euro = 62 INR) (1 Euro = 62 INR)

(a) Total Income 5,080 3.15 4,587 2.84(b) Profit / (Loss) After Tax (PAT) (10,964) (6.80) (2,444) (1.52)(c) Share Capital 25,000 15.50 25,000 15.50(d) Reserves (excluding 86,91,592 5,388.79 32,22,556 1,997.98

Revaluation Reserve)(e) Earning per Share — —(f) Book Value per Share — —

* First accounting year.

SGG is not under winding up. There is no change in the capital structure and management of SGG in the last six months.

37. Eisenwerk Erla Beteiligungsgesellschaft GmbHEisenwerk Erla Beteilligungsgesellschaft mbH (Eisenwerk Erla GmbH) was incorporated on November 29, 2006and has its Registered Office at Hohenzollernring 72,50672 Cologne, Germany, C/o DLA Piper UK LLPEisenwerk Erla GmbH is in the business of holding investments.

Shareholding pattern of Eisenwerk Erla GmbH as on January 31, 2009 (the shares do not have a nominal value):

S.No. Name of the Shareholder Value of Shares Percentage of Holding1 Sanmar Group Germany GmbH Euro 25,000 100%

Directors of Eisenwerk Erla mbH as on January 31, 20091. Mr. M.N Radhakrishnan2. Mr.Sandro Frei3. Mr.J.Ramdas

Financial PerformanceAudited financial performance for Fiscal 2008 and 2007 are as hereunder:

( In Rupees Lakhs except per share data)

Particulars March 31, 2008 November29, 2006to March 2007*

Euro INR Euro INR(1 Euro = 62 INR) (1 Euro = 62 INR)

(a) Total Income 7,01,776 435.10 — —(b) Profit / (Loss) After Tax (PAT) 1,99,528 123.71 (1,08,834) (67.48)(c) Share Capital 25,000 15.50 25,000 15.50(d) Reserves (excluding

Revaluation Reserve) 1,07,73,695 6,679.69 98,91,166 6,132.52(e) Earning per Share — — — —(f) Book Value per Share — — — —

* First accounting year.

105

Eisenwerk Erla GmbH is not under winding up. There is no change in the capital structure and management ofEisenwerk Erla GmbH in the last six months.

38. Eisenwerk Erla GmbHEisenwerk Erla GmbH was incorporated on November 29, 2006 and has its Registered Office at Karlsbader StraBe70, D 08340 Schwarzenberg, Germany.Eisenwerk Erla GmbH is in the business of development, manufacture and sale of all kinds of Castings. EisenwerkErla GmbH was acquired by The Sanmar Group on 1st January 2007.

Shareholding pattern of Eisenwerk Erla GmbH as on January 31, 2009 (the shares do not have a nominal value):

S.No. Name of the Shareholder Value of Shares Percentage of Holding1 Eisenwerk Erla Betelligungsgesellschaft GmbH Euro 16,00,000 100%

Managing Directors of Eisenwerk Erla GmbH as on January 31, 20091. Mr. Dietmar Hahn2. Mr. J Ramdas

Supervisory Board Members of Eisenwerk Erla GmbH as on January 31, 20091. Mr. Vijay Sankar, Chairman2. Mr. B Natraj3. Mr. M N Radhakrishnan4. Mr. Betram Kawlath

Financial PerformanceAudited financial information for Fiscal 2008, 2007 and 2006, are as hereunder:

(In Rs. lakhs except per share data)

Particulars March 31,2008 March 31, 2007 December 31, 2006#(Three months)

Euro INR Euro INR Euro INR(1 Euro = 62 (1 Euro = 62 (1 Euro = 62

INR) INR) INR)

(a) Total Income 9,00,86,504 55,853.63 2,62,60,833 16,281.72 8,73,02,340 54,127.45(b) Profit / (Loss) After Tax (PAT) 27,45,048 1,701.93 8,30,766 515.07 14,65,570 908.65(c) Share Capital 16,00,000 992.00 16,00,000 992.00 16,00,000 992.00(d) Reserves (excluding

Revaluation Reserve) 82,71,861 5,128.55 62,26,813 3,860.62 53,96,047 3,345.55(e) Earning per Share — — — — — —(f) Book Value per Share — — — — — —

# The accounting period is 1st January 2007 to 31st March 2007.Eisenwerk Erla GmbH is not under winding up. There is no change in the capital structure and management ofEisenwerk Erla GmbH in the last six months.

39. N Sankar Properties and Holdings Private LimitedN Sankar Properties and Holdings Private Limited (NSPHPL) was incorporated on October 14, 1991 under thename Narayanan Kumar Holdings Private Limited. The name of Narayanan Kumar Holdings Private Limited waschanged to NSPHPL on May 5, 2005. NSPHPL has its Registered office at 9, Cathedral Road, Chennai 600 086,India.NSPHPL is in real estate business.

Shareholding of NSPHPL as of January 31, 2009

S.No. Name of the Shareholder Value of Shares Percentage of HoldingEquity

1 Mrs Chandra Sankar 10 10%2 Mr N Sankar 90 90%

100 100%Preference

1 Mr N Sankar 990 100%

Directors of NSPHPL as on January 31, 20091. Mr. N Sankar2. Mrs. Chandra Sankar

106

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rupees lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 0.07 0.05 —

(b) Profit / (Loss) After Tax (PAT) (0.05) (0.013) (0.087)

(c) Equity Share Capital (Par value INR 10 per Share) 0.01 0.01 0.01

(d) Preference Share Capital (Par value INR 100 per Share) 0.99 0.99 0.99

(e) Reserves (excluding Revaluation Reserve) (1.14) (1.09) (1.08)

(f) Earning per Share (50.36) (12.68) (86.93)

(g) Book Value per Share (1,134.83) (1,084.47) (1,071.79)

NSPHPL has not become a sick company under the meaning of SICA and is not under winding up. There is no

change in the capital structure and management of NSPHPL in the last six months.

Directors as on January 31, 20091. Mr. P U Aravind2. Mr. S Subramanian

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 42.55 40.89 530.29

(b) Profit / (Loss) After Tax (PAT) (45.79) 5.60 465.76

(c) Equity Share Capital (Par value INR 10 per Share) 53 53 53

(d) Reserves (excluding Revaluation Reserve) 1,843.01 1,888.81 1,883.19

(e) Earning per Share (8.63) 1.06 87.88

(f) Book Value per Share 357.73 366.38 365.32

SRPL has not become a sick company under the meaning of SICA and is not under winding up. There is no change

in the capital structure and management of Sanmar Realty Private Limited in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 N Sankar Properties and Holdings Private

Limited & its nominee 5,30,000 100%

40. Sanmar Realty Private LimitedSanmar Realty Private Limited (SRPL) was incorporated on March 10, 1995 under the name Octagon Holdings

Private Limited (OHPL). The name of OHPL was changed to Sanmar Realty Limited on December 5, 1997 and to

Sanmar Realty Private Limited on January 30, 2006. The Company has its Registered Office at 9, Cathedral Road,

Chennai 600 086, India.

The Company is in real estate business.

Shareholding of SRPL as of January 31, 2009

41. Bay View Properties Private LimitedBay View Properties Private Limited was incorporated on September 26, 1990 under the name SPIL Properties

Private Limited. The name of the Company was changed to Bay View Properties Private Limited on May 13, 1997.

The Company has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.

The Company is in the real estate business.

107

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Equity

Sanmar Realty Private Limited & its nominee 49,820 100%1 Preference

Sanmar Realty Private Limited 18 100%

Shareholding of Bay View Properties Private Limited as of January 31, 2009

Directors as on January 31, 20091. Mr. S Subramanian2. Mr. M Raman3. Mr. V Shankar

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 0.037 3.20 9.68(b) Profit / (Loss) After Tax (PAT) (26.94) (16.84) (17.96)(c) Equity Share Capital (Par value INR 10 per Share) 4.98 4.98 4.98(d) Preference Share Capital (Par value INR 100 per Share) 0.018 0.018 0.018(d) Reserves (excluding Revaluation Reserve) (88.01) (61.06) (44.22)(e) Earning per Share (54.08) (33.81) (36.05)(f) Book Value per Share (166.66) (112.58) (78.77)

Bay View Properties Private Limited has not become a sick company under the meaning of SICA and is not underwinding up. There is no change in the capital structure and management of Bay View Properties Private Limited inthe last six months.

42. Kelambakkam Properties Private LimitedKelambakkam Properties Private Limited (KPPL) was incorporated on June 22, 1994 and has its Registered Officeat 9, Cathedral Road, Chennai 600 086, India.The Company is in the business of agricultural operations.

Shareholding of KPPL as on January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Realty Private Limited & its nominee 50,000 100%

Directors as on January 31, 20091. Mr. S Subramanian2. Mr. M Raman3. Mr. V Shankar

Financial PerformanceAudited financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 0.52 0.57 0.62(b) Profit / (Loss) After Tax (PAT) (2.87) (2.08) (2.34)(c) Equity Share Capital (Par value INR 10 per Share) 5 5 5(d) Reserves (excluding Revaluation Reserve) 8.35 11.21 13.30(e) Earning per Share (5.74) (4.17) (4.68)(f) Book Value per Share 26.70 32.44 36.60

KPPL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of KPPL in the last six months.

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43. Hillcrest Investments (Alpha) Private LimitedHillcrest Investments (Alpha) Private Limited (HCAPL) was incorporated on May 20, 1991 and has its RegisteredOffice at 9, Cathedral Road, Chennai 600 086, India.HCAPL is in the Real Estate and Agriculture businesses.

Shareholding of HCAPL as on January 31, 2009S.No. Name of the Shareholder No. of Shares Percentage of Holding

Equity1 Sanmar Realty Private Limited & its nominee 49,820 100%

Preference2 Sanmar Realty Private Limited 18 100%

Directors of HCAPL as on January 31, 20091. Mr. S Subramanian2. Mr. M Raman3. Mr. V Shankar

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income — 0.022 —(b) Profit / (Loss) After Tax (PAT) (0.16) (0.053) (0.09)(c) Equity Share Capital (Par value INR 10 per Share) 4.98 4.98 4.98(d) Preference Share Capital (Par value INR 100 per Share) 0.018 0.018 0.018(e) Reserves (excluding Revaluation Reserve) (3.24) (3.07) (3.02)(f) Earning per Share (0.33) (0.11) (0.20)(g) Book Value per Share 3.49 3.82 3.93

HCAPL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of HCAPL in the last six months.

44. Stargate Investments Private LimitedStargate Investments Private Limited (Stargate) was incorporated on January 21, 1992 under the name SanmarInternational Limited. The name of the Sanmar International Limited was changed to Stargate Investments Limitedon July 5, 2005 and to Stargate Investments Private Limited on March 31, 2006. Stargate has its Registered Officeat 9, Cathedral Road, Chennai 600 086, India.Stargate is in the business of investments in shares and securities.

Shareholding of Stargate as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Mr N Sankar & his nominee 10,00,000 100%

Directors of Stargate as on January 31, 20091. Mr P U Aravind2. Mr N Narayanan

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 11,764.38 129.52 22,912.41(b) Profit / (Loss) After Tax (PAT) 10,512.37 128.72 22,912.03(c) Equity Share Capital (Par value INR 10 per Share) 100 100 100(d) Reserves (excluding Revaluation Reserve) 20,516.96 10,304.52 5,675.80(e) Earning per Share 1,051.24 12.87 9,558.39(f) Book Value per Share 2,061.70 1,040.45 577.58

Stargate has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of Stargate in the last six months.

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45. BlueChips LimitedBlueChips Limited (BlueChips) was incorporated on April 5, 2004 and has its Registered Office at First Floor,

Millenium House, Victoria Road, Douglas, Isle of Man.

BlueChips is in the business of investments in shares and securities.

Shareholding of BlueChips as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Mr N Sankar 10,000 100%

Directors of BlueChips as on January 31, 2009

1. Mr N Sankar

2. Mr D W Slack

3. Mr K L Jones

4. Mr. Sandro Frei

Financial PerformanceAudited financial performance for Fiscal 2007, 2006 and 2005 are as hereunder:

(In Rs. lakhs except per share data)Particulars March 31, 2008 March 31, 2007 March 31, 2006

GBP INR GBP INR GBP INR( 1 GBP = ( 1 GBP = ( 1 GBP =73 INR) 73 INR) 73 INR)

(a) Total Income 10,71,452 782.16 983,563 718.00 3,624 2.65

(b) Profit / (Loss) After Tax (PAT) 10,59,496 773.43 980,920 716.07 1,328 0.97

(c) Equity Share Capital(Par value GBP 1 per Share) 10,000 7.30 10,000 7.30 10,000 7.30

(d) Reserves (excludingRevaluation Reserve) 20,00,241 1,460.18 940,745 686.74 (40,175) (29.33)

(e) Earning per Share 105.95 7,734.35 98.09 7,160.57 0.13 9.49

(f) Book Value per Share 201.02 14,674.46 95.07 6,940.11 (3.02) (220.46)

BlueChips is not under winding up. There is no change in the capital structure and management of BlueChips in the

last six months.

S.No. Name of the Shareholder No. of Shares Percentage of HoldingEquity

1 Mrs Chandra Sankar 1,000 9.09%2 Mr N Sankar 10,000 91.91%

11,000 100.00%Preference

1 Mrs Chandra Sankar 9,000 100%

46. Chandra Sankar Investment Holdings Private LimitedChandra Sankar Investment Holdings Private Limited (CSIHPL) was incorporated on November 7, 2005 and has

its Registered Office at 9, Cathedral Road, Chennai 600 086, India.

CSIHPL is in the business of investment in shares and securities.

Shareholding of CSIHPL as of January 31, 2009

Directors of CSIHPL as on January 31, 20091. Mr N Sankar2. Mrs Chandra Sankar

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Financial PerformanceAudited financial performance for Fiscal 2008 , 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 180 127 38(b) Profit / (Loss) After Tax (PAT) 175 127 38(c) Equity Share Capital (Par value INR 10 per Share) 1.1 1.1 1.1(d) Preference Capital (Par value INR 10 per share) 1.5 1.4 1.4(e) Reserves (excluding Revaluation Reserve) 3,139 2,664 2,537(f) Earning per Share 1,591.59 1,149.82 374.19(g) Book Value per Share 28,543.30 24,225.60 23,075.78

CSIHPL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the management of CSIHPL in the last six months. During the last six months, CSIHPL has redeemed Rs.56,000/- (net) preference capital.

47. Madhurika Sankar Investment Holdings Private LimitedMadhurika Sankar Investment Holdings Private Limited (MSIHPL) was incorporated on November 7, 2005 andhas its Registered Office at 9, Cathedral Road, Chennai 600 086, India.MSIHPL is in the business of investment in shares and securities.

Shareholding of MSIHPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Equity

Mrs Chandra Sankar, Trustee, Madhurika Benefit Trust 1,000 9.09%2 Mr N Sankar 10,000 91.91%

11,000 100.00%1 Preference

Mrs Chandra Sankar, Trustee, Madhurika Benefit Trust 9,000 100.00%

Directors of MSIHPL as on January 31, 20091. Mr N Sankar2. Mrs Chandra Sankar

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 165 119 427(b) Profit / (Loss) After Tax (PAT) 162 114 391(c) Equity Share Capital (Par value INR 10 per Share) 1.10 1.10 1.10(d) Preference Share Capital (Par value INR 100 per Share) 1.40 1.40 1.40(d) Reserves (excluding Revaluation Reserve) 2,684 2,522 2,408(e) Earning per Share 1,469.18 1,037.14 3,878.81(f) Book Value per Share 24,411.34 22,942.76 21,905.62

MSIHPL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the management of MSIHPL in the last six months. During the last six months, MSIHPL has redeemedRs. 50,000/- (net) preference capital.

48. Greenvalley Investments (Alpha) Private LimitedGreenvalley Investments (Alpha) Private Limited (GIAPL) was incorporated on June 25, 1991 and has its RegisteredOffice at 9, Cathedral Road, Chennai 600 086, India.GIAPL is in real estates business.

111

Shareholding of GIAPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Madhurika Sankar Investment Holdings

Private Limited & its nominee 50,000 100%

Directors of GIAPL as on January 31, 20091. Mr S Subramanian2. Mr M Raman3. Mr V Shankar

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income — 1.76 9.04(b) Profit / (Loss) After Tax (PAT) (2.53) (0.99) 1.31(c) Equity Share Capital (Par value INR 10 per Share) 5 5 5(d) Reserves (excluding Revaluation Reserve) (1.87) 0.67 1.66(e) Earning per Share (5.07) (1.99) 2.62(f) Book Value per Share 6.27 11.33 13.32

GIAPL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of GIAPL in the last six months.

49. Vijay Sankar Investment Holdings Private LimitedVijay Sankar Investment Holdings Private Limited (VSIHPL) was incorporated on November 7, 2005 and has itsRegistered Office at 9, Cathedral Road, Chennai 600 086, India.VSIHPL is in the business of investment in shares and securities.

Shareholding of VSIHPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding

Equity1 Mr Vijay Sankar 1,000 1.64%2 Mr N Sankar 60,000 98.36%

61,000 100.00%Preference

1 Mr Vijay Sankar 9,000 100.00%

Directors of VSIHPL as on January 31, 20091. Mr N Sankar2. Mr Vijay Sankar

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March Nov 7, 2005 to31,2008 31, 2007 March 31, 2006

(a) Total Income 122.18 86.26 25.84(b) Profit / (Loss) After Tax (PAT) 122.07 86.18 25.53(c) Equity Share Capital (Par value INR 10 per Share) 6.10 1.10 1.10(d) Preference Capital (Par value INR 100 per share) 0.90 1.40 1.40(e) Reserves (excluding Revaluation Reserve) 2,733.07 2,611.06 2,524.95(f) Earning per Share 200.11 782.88 252.35(g) Book Value per Share 4,490.44 23,746.95 22,964.08

VSIHPL has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of VSIHPL in the last six months.

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50. Poes Garden Properties Private LimitedPoes Garden Properties Private Limited (PGPPL) was incorporated on September 25, 2000 under the name NewGen

Lifesciences Private Limited. The name of NewGen Lifesciences Private Limited was changed to Poes Garden

Properties Private Limited on March 31, 2006. PGPPL has its Registered Office at 9, Cathedral Road, Chennai

600 086, India.

PGPPL is in real estates business.

Shareholding of PGPPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding

1 Vijay Sankar Investment Holdings Private

Limited & its nominee 50,000 100%

Directors of PGPPL as on January 31, 2009

1. Mr Vijay Sankar

2. Mr M Raman

3. Mr S Subramanian

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income — — —

(b) Profit / (Loss) After Tax (PAT) (0.14) (0.39) (2.27)

(c) Equity Share Capital (Par value INR 10 per Share) 5 5 5

(d) Reserves (excluding Revaluation Reserve) (2.80) (2.65) (2.26)

(e) Earning per Share (0.29) (0.77) (4.55)

(f) Book Value per Share 4.39 4.69 5.46

PGPPL has not become a sick company under the meaning of SICA and is not under winding up. There is no

change in the capital structure and management of PGPPL in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of HoldingEquity

1 Mr N Kumar 78,000 76.47%

2 Mr N Sankar 24,000 23.53

1,02,000 100%

Preference

1 Mr N Kumar 2,000 100%

Directors of NKIHPL as on January 31, 20091. Mr N Sankar2. Mr N Kumar

51. N Kumar Investment Holdings Private LimitedN Kumar Investment Holdings Private Limited (NKIHPL) was incorporated on September 4, 1991 under the name

N Kumar Investments Private Limited. The name of N Kumar Investments Private Limited was changed to N

Kumar Investment Holdings Private Limited on November 28, 2005. NKIHPL has its Registered Office at 9,

Cathedral Road, Chennai 600 086, India.

NKIHPL is in the business of investments in shares and securities.

Shareholding of NKIHPL as of January 31, 2009

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Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31, 2008 31, 2007 31, 2006

(a) Total Income 263.38 211.30 74.55

(b) Profit/ (Loss) After Tax (PAT) 263.20 211.22 74.18

(c) Equity Share Capital (Par value INR 10 per Sharefor 2006 & 2007, INR 100 per share for 2005) 10.20 3.20 3.20

(d) Preference Share Capital (Par value INR 10 per Share) 0.20 0.70 0.70

(e) Reserves (excluding Revaluation Reserve) 5,547.01 5,283.85 5,072.66

(f) Earning per Share 258.03 659.96 521.10

(g) Book Value per Share 5,448.24 16,522.02 15,862.06

NKIHPL has not become a sick company under the meaning of SICA and is not under winding up. There is no

change in the capital structure and management of NKIHPL in the last six months.

52. Madhura Kumar Properties Private LimitedMadhura Kumar Properties Private Limited (MKPPL) was incorporated on June 4, 1987 under the name Madhura

Holdings Private Limited. The name of Madhura Holdings Private Limited was changed to Madhura Kumar

Properties Private Limited on April 2, 1991. MKPPL has its Registered Office at 9, Cathedral Road, Chennai

600 086, India.

MKPPL is in real estate business.

Shareholding of MKPPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding

N Kumar Investment Holdings Private Limited &its nominee

-Equity shares 8,850 100%

-Preference shares 150 100%

Directors of MKPPL as on January 31, 20091. Mrs Bhavani Kumar2. Mr N Kumar3. Mrs Madhura Visweswaran

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 6.40 0.17 0.007

(b) Profit / (Loss) After Tax (PAT) (1.70) (8.93) (2.34)

(c) Equity Share Capital (Par value INR 100 per Share) 8.85 8.85 8.85

(d) Preference Share Capital (Par value INR 100 per Share) 0.15 0.15 0.15

(e) Reserves (excluding Revaluation Reserve) 9.73 11.44 20.40

(f) Earning Per Share (19.19) (101.16) (67.66)

(g) Book Value per Share 211.58 229.30 330.46

MKPPL has not become a sick company under the meaning of SICA and is not under winding up. There is no

change in the capital structure and management of MKPPL in the last six months.

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53. Cubbon Road Properties Private LimitedCubbon Road Properties Private Limited (CRPPL) was incorporated on October 13, 2000 under the name SPDLProperties Private Limited. The name of SPDL Properties Private Limited was changed to Cubbon Road PropertiesPrivate Limited on November 3, 2000. CRPPL has its Registered Office at 9, Cathedral Road, Chennai 600 086,India.

CRPPL is in real estate business.

Shareholding of CRPPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Mrs Madhura Visweswaran & her nominee 10,000 100%

Directors as on January 31, 20091. Mr N Kumar2. Mrs Bhavani Kumar3. Mrs Madhura Visweswaran

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income — — 2.40(b) Profit / (Loss) After Tax (PAT) (2.19) (1.25) (0.69)(c) Equity Share Capital (Par value INR 10 per Share) 1.00 1.00 1.00(d) Reserves (excluding Revaluation Reserve) (7.16) (4.97) (3.72)(e) Earning Per Share (21.87) (12.51) (6.92)(f) Book Value per Share (61.62) (39.74) (27.24)

CRPPL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of CRPPL in the last six months.

54. Jumbo Properties (Alpha) Private LimitedJumbo Properties (Alpha) Private Limited (JPAPL) was incorporated on April 27, 2006 and has its RegisteredOffice at 9, Cathedral Road, Chennai 600 086, India.The Company is in real estate business.

Shareholding of JPAPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 N Kumar Investment Holdings Private

Limited & its nominee 10,000 100%

Directors of JPAPL as on January 31, 20091. Mr M Raman2. Mr S Subramanian

Financial PerformanceAudited financial information for Fiscal 2008 & 2007 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March31,2008 31, 2007*

(a) Total Income 3.27 —(b) Profit / (Loss) After Tax (PAT) (29.04) (2.13)(c) Equity Share Capital (Par value INR 10 per Share) 1.00 1.00(d) Reserves (excluding Revaluation Reserve) (31.23) (2.19)(e) Earning per Share (290.44) (22.00)(f) Book Value per Share (302.34) (11.90)

* First accounting year.JPAPL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of JPAPL in the last six months

115

55. Jumbo Properties Private LimitedJumbo Properties Private Limited (JPPL) was incorporated on February 21, 2006 and has its Registered Office at9, Cathedral Road, Chennai 600 086, India.

JPPL is in real estate business.

Shareholding of JPPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 N Kumar Investment Holdings Private

Limited & its nominee 10,000 100%

Directors of JPPL as on January 31, 20091. Mr M Raman2. Mr S Subramanian

Financial PerformanceAudited financial information for Fiscal 2008 & 2007 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March31,2008 31, 2007*

(a) Total Income – –(b) Profit / (Loss) After Tax (PAT) (0.11) (0.06)(c) Equity Share Capital (Par value INR 10 per Share) 1.00 1.00(d) Reserves (excluding Revaluation Reserve) (0.23) (0.12)(e) Earning per Share (1.10) (1.24)(f) Book Value per Share 7.66 8.76

* First accounting year.

JPPL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of JPPL in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 N Kumar Investment Holdings Private

Limited & its nominee 10,000 100%

Directors of FPPL as on January 31, 20091. Mr M Raman2. Mr S Subramanian

Financial PerformanceAudited financial information for Fiscal 2008 & 2007 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March31,2008 31, 2007*

(a) Total Income — —(b) Profit / (Loss) After Tax (PAT) (41.65) (1.66)(c) Equity Share Capital (Par value INR 10 per Share) 1.00 1.00(d) Reserves (excluding Revaluation Reserve) (43.38) (1.73)(e) Earning per Share (416.52) (17.25)(f) Book Value per Share (423.77) (7.25)

* First accounting year.

FPPL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of FPPL in the last six months.

56. Fortis Properties Private LimitedFortis Properties Private Limited (FPPL) was incorporated on June 28, 2006 and has its Registered Office at 9,Cathedral Road, Chennai 600 086, India.FPPL is in real estate business.

Shareholding of FPPL as of January 31, 2009

116

57. Indchem Software Technologies (India) LimitedIndchem Software Technologies (India) Limited (ISTIL) was incorporated on October 25, 1999 and has its RegisteredOffice at 37, Sterling Road, Nungambakkam, Chennai 600 034, India.ISTIL is in the business of Software Development.

Shareholding of ISTIL as of January 31, 2009S.No. Name of the Shareholder No. of Shares Percentage of Holding1 N Kumar Investment Holdings Private

Limited & its nominees 17,00,000 100%

Directors of ISTIL as on January 31, 20091. Mr R Nagaraajan2. Mr N Narayanan3. Mr P V Sriram

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income — 0.10 0.15(b) Profit / (Loss) After Tax (PAT) (0.08) (0.28) 0.05(c) Equity Share Capital (Par value INR 10 per Share) 170.00 170.00 170.00(d) Reserves (excluding Revaluation Reserve) (2.66) (2.58) (2.30)(e) Earning per Share — (0.02) —(f) Book Value per Share 9.84 9.85 9.86

ISTIL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of ISTIL in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 N Kumar Investment Holdings Private

Limited & its nominees 50,000 100%

58. Apex NK Software Solutions LimitedApex NK Software Solutions Limited (Apex NK) was incorporated on May 30, 1990 under the name RectangleInvestments Private Limited. The name of Rectangle Investments Private Limited was changed to Apex NKInvestments Private Limited on November 29, 1991 and to Apex NK Software Solutions Limited on February 13,2001. Apex NK has its Registered Office at 9, Cathedral Road, Chennai 600 086, India.Apex NK is in the business of Software Consultancy and holding investment in shares and securities.

Shareholding of Apex NK as of January 31, 2009

Directors of Apex NK as on January 31, 20091. Mr P V Sriram2. Mr R Nagaraajan3. Dr P Vasudevan

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income — — —(b) Profit / (Loss) After Tax (PAT) (0.13) (0.08) (0.07)(c) Equity Share Capital (Par value INR 100 per Share) 5.00 5.00 5.00(d) Reserves (excluding Revaluation Reserve) (112.54) (112.41) (112.33)(e) Earning per Share (0.26) (0.15) (0.14)(f) Book Value per Share (215.07) (214.82) (214.67)

Apex NK has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of Apex NK in the last six months.

117

59. Indchem Software Technologies LimitedIndchem Software Technologies Limited (ISTL) was incorporated on February 26, 1999 and has its RegisteredOffice at 9, Cathedral Road, Chennai 600 086, India.ISTL is in the business of Software Development.

Shareholding of ISTL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of HoldingEquity

1 Apex NK Software Solutions Limited & its nominees 75,00,000 100%Preference

1 Apex NK Software Solutions Limited & its nominees 45,00,000 100%

Directors of ISTL as on January 31, 20091. Mr. M Raman2. Mr. N Narayanan3. Mr. R Kumar

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 7.87 53.53 55.10(b) Profit / (Loss) After Tax (PAT) (11.30) (1.43) (9.23)(c) Equity Share Capital (Par value INR 10 per Share) 750.00 750.00 750.00(d) Preference Share Capital (Par value INR 10 per Share) 450.00 450.00 450.00(d) Reserves (excluding Revaluation Reserve) (1,272.96) (1,261.66) (1,260.16)(e) Earning per Share (0.15) (0.02) (0.12)(f) Book Value per Share (6.97) (6.82) (6.80)

ISTL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of ISTL in the last six months.

60. Silkroute Indchem LimitedSilkroute Indchem Limited (Silkroute) was incorporated on May 17, 2000 and has its Registered Office at 2, MuraliStreet, Mahalingapuram, Nungambakkam, Chennai 600 034, India.Silkroute is in the business of Software Development.

Shareholding of Silkroute as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Indchem Software Technologies (India)

Limited & its nominees 15,38,462 100%

Directors of Silkroute as on January 31, 20091. Mr M Raman2. Mr N Narayanan3. Mr R Kumar

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 43.14 19.64 60.85(b) Profit / (Loss) After Tax (PAT) (0.75) (1.22) (0.56)(c) Equity Share Capital (Par value INR 10 per Share) 153.85 153.85 153.85(d) Reserves (excluding Revaluation Reserve) 494.28 495.03 496.26(e) Earning per Share (0.05) (0.08) (0.04)(f) Book Value per Share 42.13 42.18 42.26

Silkroute has not become a sick company under the meaning of SICA and is not under winding up. There is nochange in the capital structure and management of Silkroute in the last six months.

118

61. Fingertip Technologies Private LimitedFingertip Technologies Private Limited (FTPL) was incorporated on November 27, 2000 under the nameFingertiponline Private Limited. The name of Fingertiponline Private Limited was changed to Fingertip TechnologiesPrivate Limited on February 5, 2002. FTPL has its Registered Office at 2, Murali Street, Mahalingapuram, Chennai600 034, India.FTPL is in the business of Software Development.

Shareholding of FTPL as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Silkroute Indchem Limited & its nominee 10,000 100%

Directors of FTPL as on January 31, 20091. Mr S Sriraman2. Mr Ram Satagopan

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income — — 19.21(b) Profit / (Loss) After Tax (PAT) (2.45) (4.94) (28.04)(c) Equity Share Capital (Par value INR 10 per Share) 1.00 1.00 1.00(d) Reserves (excluding Revaluation Reserve) (143.58) (141.13) (136.19)(e) Earning per Share (24.54) (49.35) (280.35)(f) Book Value per Share (1,425.82) (1,401.28) (1,351.93)

FTPL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of FTPL in the last six months.

62. iSkills (India) Private LimitediSkills (India) Private Limited (iSkills) was incorporated on June 1, 2005 and has its Registered Office at 2, MuraliStreet, Mahalingapuram, Chennai 600 034, India.ISkills is in the business of providing training for aspiring professionals and others with relevant skills to enablethem to kick-start their career and enhance their job opportunities.

Shareholding of iSkills as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Silkroute Indchem Limited & its nominee 10,000 100%

Directors of iSkills as on January 31, 20091. Mr S Sriraman2. Mr S Balaji

Financial PerformanceAudited financial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March Sep 2006 to June 2005 to31, 2008 March 2007 August 2006

(a) Total Income 1.98 17.12 5.42

(b) Profit / (Loss) After Tax (PAT) (4.62) (6.23) (18.11)

(c) Equity Share Capital (Par value INR 10 per Share) 1.00 1.00 1.00

(d) Reserves (excluding Revaluation Reserve) (28.96) (24.34) (18.11)

(e) Earning per Share (46.16) (62.32) (181.08)

(f) Book Value per Share (279.57) (233.40) (171.08)

iSkills has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of iSkills in the last six months.

119

63. eG Innovations Pte. Ltd.eG Innovations Pte. Ltd. (eG Innovations Pte) was incorporated on 15th February 2001 and has its RegisteredOffice at 33A, Tanjong Pagar Road, Singapore 088456.Shareholding of eG Innovations Pte as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of HoldingEquity

1 Indchem Software Technologies (India) Limited 152,788 40.78%2 SilkRoute Indchem Limited 133,690 35.68%3 Cresciendo Investments Limited 50,000 13.34%4 Mr Srinivas Ramanathan 38,197 10.20%

3,74,675 100.00%PreferenceCresciendo Investments Limited 1,27,388 100%

Directors of eG Innovations Pte as on January 31, 20091. Mr Narayanan Kumar2. Mr Santanagopalan Sriraman3. Mr Srinivas Ramanathan4. Mr Chua Joo Hock

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 ( Stand alone) are as hereunder:

(In Rs. lakhs except per share data)Particulars March 31, 2008 March 31, 2007 March 31, 2006

SGD INR SGD INR SGD INR( 1 SGD = ( 1 SGD = ( 1 SGD =32 INR) 32 INR) 32 INR)

(a) Total Income 29,49,838 943.95 18,38,658 588.37 7,30,213 233.67(b) Profit / (Loss) After Tax (PAT) 16,47,456 527.19 7,49,323 239.78 1,33,042 (42.57)(c) Equity Share Capital

(Par value SGD 1per Share) 3,74,675 119.90 3,74,675 119.90 3,74,675 119.90(d) Preference Share Capital

(Par value SGD 0.10 per Share 1,274 0.41 1,274 0.41 1,274 0.41(e) Reserves (excluding

Revaluation Reserve) (16,43,176) (525.82) (32,90,632) (1,053.00) (40,49,955) (1,292.79)(f) Earning per Share 4.40 140.80 2.00 64.00 (0.36) (11.52)(g) Book Value per Share (3.40) (108.80) (7.78) (248.96) (9.78) (312.96)

Consolidated Audited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)Particulars March 31, 2008 March 31, 2007 March 31, 2006

SGD INR SGD INR SGD INR( 1 SGD = ( 1 SGD = ( 1 SGD =32 INR) 32 INR) 32 INR)

(a) Total Income 57,33,550 1,834.74 41,60,708 1,331.43 31,56,442 1,010.06(b) Profit / (Loss) After Tax (PAT) 7,13,798 228.42 7,02,799 224.90 5,39,350 172.59(c) Equity Share Capital

(Par value SGD 1 per Share) 3,74,675 119.90 3,74,675 119.90 3,74,675 119.90(d) Preference Share Capital

(Par value SGD 0.10 per Share 1,274 0.41 1,274 0.41 1,274 0.41(e) Reserves (excluding

Revaluation Reserve) (27,85,441) (891.34) (35,06,593) (1,122.11) (42,12,296) (1,347.93)(f) Earning per Share 1.91 61.12 1.88 60.16 1.44 46.08(g) Book Value per Share (6.43) (205.90) (8.36) (267.52) (10.24) (327.76)

Note: The consolidated financial information above comprises the financial information in respect of(i) eG Innovations Private Limited (ii) eG Innovations Inc and (iii) eG Innovations U.K. Limited.eG Innovations Pte is not under winding up and there is no change in its capital structure and management in thelast six months.

120

64. eG Innovations Private LimitedeG Innovations Private Limited (eG Innovations) was incorporated on 5th July 2000 and has its Registered Officeat 2, Murali Street, Mahalingapuram, Chennai 600 034

Shareholding of eG Innovations as of January 31, 2009S.No. Name of the Shareholder No. of Shares Percentage of Holding1 eG Innovations Pte. Ltd. 47,90,000 100%

Directors eG Innovations as on January 31, 20091. Mr Narayanan Kumar2. Mr Santanagopalan Sriraman3. Mr Srinivas Ramanathan4. Mr Chua Joo Hock

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 263.79 259.81 208.73

(b) Profit / (Loss) After Tax (PAT) (10.77) (6.24) 47.72

(c) Equity Share Capital (Par value INR 10 per Share) 479.00 479.00 479.00

(d) Reserves (excluding Revaluation Reserve) (281.35) (270.58) (264.34)

(e) Earning per Share (0.22) (0.13) 1.00

(f) Book Value per Share 4.13 4.35 4.48

eG Innovations private Limited has not become a sick company under the meaning of SICA and is not underwinding up. There is no change in the capital structure and management of eG Innovations in the last six months.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 eG Innovations Pte. Ltd. USD10,000 100%

Officers of eG Innovations Inc as on January 31, 20091. Mr Srinivas Ramanathan, President2. Mr Anand Sampath, Treasurer

Financial PerformanceAudited financial performance for Fiscal 2007, 2006 and 2005 are as hereunder:

(In Rs. lakhs except per share data)Particulars March 31, 2007 March 31, 2006 March 31, 2005

USD INR USD INR USD INR( 1 USD = ( 1 USD = ( 1 USD =49 INR) 49 INR) 49 INR)

(a) Total Income 14,62,594 716.67 14,80,453 725.42 2,37,311 116.28(b) Profit/ (Loss) After Tax (PAT) 13,527 6.63 3,09,024 151.42 (3,38,837) (166.03)(c) Equity Share Capital 10,000 4.90 10,000 4.90 10,000 4.90(d) Reserves (excluding

Revaluation Reserve) (1,98,845) (97.43) (2,12,372) (104.06) (5,21,397) (255.48)(e) Earning per Share — — — — — —(f) Book Value per Share — — — — — —

eG Innovations Inc is not under winding up and there is no change in its capital structure and management in the lastsix months.

65. eG Innovations Inc.eG Innovations Inc. was incorporated on 7th February 2001 and has its Registered Office at 33, Wood Ave, South,Suite 600, Iselin, NJ 08830.

Shareholding of eG Innovations Inc, as of January 31, 2009

121

66. eG Innovations UK Limited.eG Innovations UK Limited was incorporated on 27th September 2007 and has its Registered Office at WalmarHouse , 288-292 Regent Street , London W 1B 3AL

Shareholding of eG Innovations UK Limited, as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 eG Innovations Pte. Ltd. UK Pounds1 100%

Officers of eG Innovations Inc as on January 31, 2009

1. Mr Srinivas Ramanathan, Director

2. Mr Anand Sampath, Director

Financial PerformanceAccounts are consolidated with eG Innovations Pte. Ltd. and no separate financial statements available.

For consolidated financial information, please refer to the sub-section titled “eG Innovations Pte. Ltd.” underSection titled “Promoters and Promoter Group”

eG Innovations UK Limited is not under winding up and there is no change in its capital structure and managementin the last six months

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Mr B. Visweswaran 5,000 50%2 Mr Anoop R Kulkarni 5,000 50%

( Par value INR 10 per share)

Directors of WTPL as on January 31, 2009

1. Mr B. Visweswaran

2. Mr Anoop R Kulkarni

Financial PerformanceWTPL ’s first accounting year will end on March 31, 2009

WTPL has not become a sick company under the meaning of SICA and is not under winding up. There is no changein the capital structure and management of WTPL since incorporation.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Overseas Investments AG 1,000 100%

Directors of MOSAG as on January 31, 20091. Mr. M.N.Radhakrishnan2. Mr. PU Aravind3. Mr. Sandro Frei4. Mr. Thomas Fasseler5. Mr. Mauro Battiroli

67. WYSINE Technologies Private LimitedWYSINE Technologies Private Limited ( WTPL) was incorporated on April 16,2008 and has its Registered Officeat 9, Bhagirathiammal Street , R A Puram, Chennai 600 028, India.

WTPL is in Wireless Network Solutions Business.

Shareholding of WTPL as of January 31, 2009

68. Metalcast Overseas Steel AGMetalcast Overseas Steel AG ( MOSAG) was incorporated on February 26, 2008 and has its Registered Office atLindenhof 6,CH 6060- Sarnen / Obwald, Switzerland.

MOS AG is in the business of provision of financial and management support to the companies of the group.

Shareholding of MOSAG as of January 31, 2009

122

Financial PerformanceFinancial information for Fiscal 2008 is as hereunder

(In Rs. lakhs except per share data)

ParticularsMarch 31,2008*

CHF INR(1 CHF = 41 INR)

(a) Total Income 176 0.07

(b) Profit / (Loss) After Tax (PAT) (19,060) (7.81)

(c) Equity Share Capital (Par value CHF 100 per Share) 1,00,000 41.00

(d) Reserves (excluding Revaluation Reserve) (19,060) (7.81)

(e) Earning per Share (19.06) (781.46)

(f) Book Value per Share 80.94 3,318.54

* First accounting year.

MOSAG is not under winding up. There is no change in the capital structure and management of MOS AG, sinceincorporation.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Sanmar Overseas Investments AG 1,000 100%

Directors of MCFAG as on January 31, 20091. Mr. M.N.Radhakrishnan2. Mr. P U Aravind3. Mr. Sandro Frei4. Mr. Thomas Fasseler5. Mr. Mauro Battiroli

Financial PerformanceFinancial information for Fiscal 2008 is as hereunder

(In Rs. lakhs except per share data)

ParticularsMarch 31,2008*

CHF INR(1 CHF = 41 INR)

(a) Total Income — —

(b) Profit / (Loss) After Tax (PAT) (19,217) (7.88)

(c) Equity Share Capital (Par value CHF 100 per Share) 1,00,000 41.00

(d) Reserves (excluding Revaluation Reserve) (19,217) (7.88)

(e) Earning per Share (19.22) (788.02)

(f) Book Value per Share 80.78 3,311.98

* First accounting year.

MCFAG is not under winding up.

There is no change in the capital structure and management of MCFAG, since incorporation.

69. Multicontinental Ferro AGMulticontinental Ferro AG ( MCFAG) was incorporated on February 26, 2008 and has its Registered Office at

Lindenhof 6,CH 6060- Sarnen / Obwald, Switzerland.

MCF AG is in the business of provision of financial and management support to the companies of the group.

Shareholding of MCFAG as of January 31, 2009

70. Matrix Metals AGMatrix Metals AG ( MMAG) was incorporated on March 04, 2008 and has its Registered Office at Lindenhof

6,CH 6060- Sarnen / Obwald, Switzerland.

MMAG is in the business of provision of financial and management support to the companies of the group.

123

Shareholding of MMAG as of January 31, 2009

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Metalcast Overseas Steel AG 1,000 100%

Directors of MMAG as on January 31, 20091. Mr. M.N.Radhakrishnan2. Mr. P U Aravind3. Mr. Sandro Frei4. Mr. Thomas Fasseler5. Mr. Mauro Battiroli

Financial PerformanceFinancial information for Fiscal 2008 is as hereunder

(In Rs. lakhs except per share data)

ParticularsMarch 31,2008*

CHF INR(1 CHF = 41 INR)

(a) Total Income 11,678 4.79

(b) Profit / (Loss) After Tax (PAT) (7,584) (3.11)

(c) Equity Share Capital (Par value CHF 100 per Share) 1,00,000 41.00

(d) Reserves (excluding Revaluation Reserve) (7,584) (3.11)

(e) Earning per Share (7.58) (310.78)

(f) Book Value per Share 92.42 3,789.22

* First accounting year.

MMAG is not under winding up. There is no change in the capital structure and management of MMAG, since incorporation.

S.No. Name of the Shareholder No. of Shares Percentage of Holding1 Matrix Metals Holding Inc 1,000 100%

Board of Directors Of MMLLC as on January 31, 20091. Mr. P Natarajan2. Mr. B Natraj3. Mr. Taylor

71. Sanmar IP Repository LimitedSanmar IP Repository Limited was incorporated on 18th July 2007 under the name Ra Investments Limited. Thename of the company was changed to Sanmar IP Repository Limited on 8th April 2008. The Company has registeredoffice at Walker House, 87 Mary street, George Town, Grand Cayman KY1-9002, Cayman Islands.The Share capital of the Company consist of 50 equity shares of US$ 0.01 each. The entire shares are held bySanmar Overseas Investments AG

Directors as on January 31, 20091. Mr. P U Aravind.2. Mr. J Ramdas3. Mr. Sandro Frei

Financial PerformanceThe audited financials are not available as this is the first year of operation of the Company

Sanmar IP Repository Limited not under winding up. There is no change in the capital structure and managementof Sanmar IP Reporitory Limited, since incorporation.

72. Matrix Metals LLCMatrix Metals LLC (MM LLC) was incorporated on May 04, 2001, in the State of Delaware.MM LLC is in the business of Manufacturing of Steel Casting.MM LLC was acquired by Sanmar Group on 01.04.2008.

Share holding of MM LLC as of January 31, 2009

124

Financial PerformanceAudited financial performance for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)Particulars March 31, 2008 December 31, 2007 December 31, 2006

USD INR USD INR GBP INR(‘000) ( 1 USD = (‘000) ( 1 USD = (‘000) ( 1 USD =

49 INR) 49 INR) 49 INR)(a) Net sales 37,676 18.46 1,57,397 77.12 1,42,497 69.82(b) Profit / (Loss) After Tax (PAT) 1,687 0.83 14,056 6.89 9,982 4.89(c) Share Capital (Par value

US$ 10 per share) 10,000 4.90 10,000 4.90 10,000 4.90(d) Reserves (excluding

Revaluation Reserve) — — — — — —(e) Earning per Share — — — — — —(f) Book Value per Share — — — — — —

Note: The consolidated financial information above companies the financial information in respect of (i) AcerlanMatrix LLC (ii) Acerlan Sa de CV and (iii) Immobilieria Acerlan Sa de CV

MMLLC is not under winding up. There is no change in the capital structure and management of MM LLC, sinceacquired by Sanmar Group.

73. Acerlan Matrix LLCAcerlan Matrix LLC (AM LLC) was incorporated on November 12, 2002, in the State of Delaware.

Shareholding of AM LLC as of January 31, 2009

S.No. Name of the Shareholder Percentage of Holding1 Matrix Metals LLC 100%

Officer as on January 31, 20091. Mr. B.Natraj

Financial PerformanceAccounts are consolidated with Matrix Metals LLC and no separate financial statements available.

For consolidated financial, please refer to the Sub-section titled “ Matrix Metals LLC” since incorporation.

AM LLC is not under winding up. There is no change in the capital structure and management of AM LLC, sinceincorporation.

74. Acerlan Sa de CVAcerlan Sa de CV was incorporated on November 12, 2002, in Mexico.

Shareholding of Acerlan Sa de CV as of January 31, 2009

S.No. Name of the Shareholder Percentage of Holding1 Acerlan Matrix LLC 99.99%2 Matrix Metals LLC 0.01%

Directors as on January 31, 20091. Mr. B Natraj2. Mr. Taylor3. Mr. Larry Key4. Mr. Helguera

Financial PerformanceAccounts are consolidated with Matrix Metals LLC and no separate financial statements available.

For consolidated financial, please information, please refer to the Sub-section titled “Matrix Metals LLC” underSection titled “Promoter and Promoters Group.

Acerlan Sa de CV is not under winding up. There is no change in the capital structure and management of AcerlanSa de CV, since incorporation.

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75. Immobilieria Acerlan Sa de CVImmobilieria Acerlan Sa de CV was incorporated on November 12, 2002, in Mexico.

Shareholding of Immobilieria Acerlan SA de CV as of January 31, 2009

S.No. Name of the Shareholder Percentage of Holding1 Acerlan Sa de CV 99.99%2 Acerlan Matrix LLC 0.01%

Directors as on January 31, 20091. Mr. B Natraj2. Mr. Taylor3. Mr. Larry Key

Financial PerformanceAccounts are consolidated with Matrix Metals LLC and no separate financial statements available.

For consolidated financial, please information, please refer to the Sub-section titled “Matrix Metals LLC” under

Section titled “Promoter and Promoters Group.

Immobilieria Acerlan Sa de CV is not under winding up. There is no change in the capital structure and managementof Immobilieria Acerlan Sa de CV, since incorporation.

76. Sanmar Consultancy Private LimitedSanmar Consultancy Private Limited was incorporated on 19th June 2008.

The Share Capital of the Company is Rs 1,00,000/- being 10000 Equity Shares of Rs 10 each and the entire Share

Capital is a held by Sanmar Holdings Limited.

Directors as on January 31, 20091. Mr. M.Raman2. Mr. N.Narayanan.

Financial PerformanceThe Company was incorporated in Financial Year 2008-09. The financials are not available as the first year ofoperation ends on March 31, 2009.

Sanmar Consultancy Private Limited is not under winding up. There is no change in the capital structure andmanagement of Sanmar Consultancy Private Limited, since incorporation

77. SFL Holdings Public Company LimitedSFL Holdings Public Company Limited was incorporated on July 15, 2008, in Cyprus having Registered Office at

38, Karaiskai Street, Kanika Alexander Ctr.Block 1, Offices 113 CD, Limassol 3032, Cyprus.

The Share Capital of the Company is Euro 1,000 being 1000 Shares at Euro 1 each and the entire Share Capital is

held by Metalcast Overseas Steel AG.

Directors as on January 31, 20091. Mr. M N Radhakrishnan.2. Mr. Neophytos Savva3. Mr. Haroula Constantinou

Financial PerformanceThe Company was incorporated in Financial Year 2008-09. The financials are not available as the first year of

operation ends on March 31, 2009.

SFL Holdings Public Company Limited is not under winding up. There is no change in the capital structure andmanagement of SFL Holdings Public Company Limited, since incorporation.

78. Cav-Nile Holdings Public Company LimitedCav-Nile Holdings Public Company Limited was incorporated on July 15, 2008, in Cyprus having RegisteredOffice at 38, Karaiskai Street, Kanika Alexander Ctr.Block 1, Offices 113 CD, Limassol 3032, Cyprus.

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The Sharecapital of the Company is Euro 1,000 being 1000 Shares at Euro 1 each and the entire Share Capital isheld by Cav-Nile AG.

Directors as on January 31, 20091. Mr. P S Jayaraman.2. Mr. Neophytos Savva3. Mr. Haroula Constantinou

Financial PerformanceThe Company was incorporated in Financial Year 2008-09. The financials are not available as the first year of

operation ends on March 31, 2009.

Cav-Nile Holdings Public Company Limited is not under winding up. There is no change in the capital structure

and management of Cav-Nile Holdings Public Company Limited, since incorporation.

79. Multicontinental Ferro Holdings Public Company LimitedMulticontinental Ferro Holdings Public Company Limited was incorporated on July 15, 2008, in Cyprus havingRegistered Office at 38, Karaiskai Street ,Kanika Alexander Ctr.Block 1, offices 113 CD, Limassol 3032 , Cyprus

The Share capital of the Company is Euro 1,000 being 1000 Shares at Euro 1 each and the entire Share Capital isheld by Multicontinental Ferro AG.

Directors as on January 31, 20091. Mr. P S Jayaraman.2. Mr. Neophytos Savva3. Mr. Haroula Constantinou

Financial PerformanceThe Company was incorporated in Financial Year 2008-09. The financials are not available as the first year of

operation ends on March 31, 2009.

Multicontinental Ferro Holdings Public Company Limited is not under winding up. There is no change in thecapital structure and management of Multicontinental Ferro Holdings Public Company Limited, since incorporation.

80. Sanmar Estates and InvestmentsSanmar Estates and Investments is a Partnership Firm with its Office at 9, Cathedral Road, Chennai 600 086, India.

Sanmar Estate and Investments is in the business of dealing in financial instruments, securities, bills etc.

Details of Partners of Sanmar Estate and Investments as on January 31, 2009

1. Sanmar Holdings Limited2. SHL Trading Limited

Financial PerformanceFinancial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31, 2008 31, 2007 31, 2006

(a) Total Income – – –

(b) Profit / (Loss) After Tax (PAT) – – –

(c) Capital 0.10 0.07 0.07

(d) Accumulated Profits – – –

81. Sanmar Group Corporate FinanceSanmar Group Corporate Finance (SGCF) is a Partnership Firm with its Office at 9, Cathedral Road,

Chennai 600 086, India.

SGCF is in the business of dealing in financial instruments, securities, bills etc.

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Names of partners of SGCF as on January 31, 2009 are given below:

1. Mr N Sankar

2. Mrs Chandra Sankar

3. Madhurika Benefit Trust

4. Chandra Sankar Investment Holdings Private Limited

5. Stargate Investments Private Limited

6. Madhurika Sankar Investment Holdings Private Limited

7. Sanmar Realty Private Limited

8. Mr Vijay Sankar

9. Mrs Sukanya Sankar

10. Vijay Sankar Investment Holdings Private Limited

11. Mr N Kumar

12. Mrs Bhavani Kumar

13. Mrs Madhura Visweswaran

14. Miss Mayura Kumar

15. N Kumar Investment Holdings Private Limited

16. Sanmar Holdings Limited

17. Sanmar Engineering Corporation Limited

18. SHL Property Holdings Limited

19. Sanmar Shipping Limited

20. Sanmar Foundries Limited representing Cathedral Corporate Finance

Financial PerformanceFinancial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 3,103.02 2,858.59 1,181.61(b) Profit / (Loss) After Tax (PAT) 3,094.17 2,768.23 1,142.91(c) Capital 33,562.28 31,642.43 55,128.94(d) Accumulated Profits — — —

Profits are shared by Partners with positive daily balance in the proportion of such balances. Losses are sharedequally by Partners.

82. Cathedral Corporate FinanceCathedral Corporate Finance (CCF) is a Partnership Firm with its Office at 9, Cathedral Road, Chennai - 600 086, India.CCF is in the business of dealing in financial instruments, securities, bills etc.

Details of Partners of CCF as on January 31, 2009

BS&B Safety Systems (India) Limited

Cabot Sanmar Limited

Chemplast Sanmar Limited

Fisher Sanmar Limited

Flowserve Sanmar Limited

Sanmar Engineering Services Limited

Sanmar Foundries Limited

Sanmar Group International Limited

Sanmar Shipping Limited

Sanmar Speciality Chemicals Limited

Tyco Sanmar Limited

Xomox Sanmar Limited

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Financial PerformanceFinancial information for Fiscal 2008, 2007 and 2006 are as hereunder:

(In Rs. lakhs except per share data)

Particulars March March March31,2008 31, 2007 31, 2006

(a) Total Income 1,020.14 854.14 503.26(b) Profit / (Loss) After Tax (PAT) 1,015.41 848.68 503.19(c) Capital 1,400 1,400 1,300(d) Accumulated Profits — — —

Profits are shared by Partners with positive daily balance in the proportion of such balances. Losses are sharedequally by Partners.

83. Cathedral & Co.Cathedral & Co. is an Association of Persons with its Office at 9, Cathedral Road, Chennai 600 086, India.

Cathedral & Co is in the business of dealing in financial instruments, securities, bills etc.

The members of Cathedral & Co on January 31, 2009 were Cathedral Corporate Finance and SHL PropertyHoldings Limited.

Cathedral & Co. did not have any transaction on the revenue account during the preceding three years.

The Promoter Group has also promoted the following public charitable/ private trusts/foundations for public/ social cause which form part of the Promoter Group:The Mrs Madhuram Narayanan Charitable Trust

The Mrs Madhuram Narayanan Charitable Foundation

The KSN Sports Foundation

Sanmar Welfare Trust

Madhurika Benefit Trust

Sanmar Special Welfare Trust

The Sruti Foundation

KSN Family Trust

Madhuram Narayanan Centre for Exceptional Children

None of the Promoter and Promoter Group entities listed hereinabove have been termed as sick companies underthe SICA and there are no winding up proceedings against any of such companies.

Common PursuitsThere are no common pursuits among the Company, the Promoters or Promoter Group that could result in a potentialconflict of interest amongst the Sanmar Group companies.

Disassociation by PromotersPromoter and Promoter Group have not disassociated themselves from any of the companies /firms during theproceeding three years except as described below:

Name of the company Date of Disassociation Reason/Circumstances forDisassociation

AMP Sanmar Life Insurance CompanyLimited (now called Reliance LifeInsurance Company Limited) October 2005 Sale of sharesVishay Sanmar Limited (now known asVishay Transducers India Limited) June 2008 Sale of sharesAsco (India) Limited July 2008 Sale of sharesIndia Cements Ltd (ICL) # September 2007 Sale of shares

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#Stargate Investments Private Limited (SIL), earlier known as Sanmar International Ltd., a Sanmar Group company

held 3,48,86,625 equity shares of Rs.10 each of ICL representing 25.17% of the paid up equity capital of ICL. SIL

sold its entire shareholding in tranches: September 2005 (2,00,00,000 shares) , March 2006 (80,00,000 shares)

and September 2007 (68,86,625 shares). Mr. N Sankar and Mr. N Kumar resigned from the Board of Directors of

ICL in September 2007. The current shareholding of Mr. N Sankar, Mr N Kumar and Mr Vijay Sankar in ICL is

1800, 992 and 6520 equity shares respectively (constituting 0.0006%, 0.0004% and 0.0023% of the paid up capital

of ICL) and the current aggregate shareholding of the other members of the Promoter Group is 0.003% of the paid

up capital of ICL. None of the individual promoters or members of the Promoter Group are on the Board of

Directors of ICL or are involved anyway in its management.

Others:

Nicco Uco Alliance Credit LimitedSanmar Holdings Limited holds 71,30,441 equity shares of Rs.10/- each (17.76%) in the equity capital of Nicco UcoAlliance Credit Limited (Nicco Uco), a Company incorporated under the Companies Act, 1956 and having its Reg-istered Office is at “Nicco House”, 2, Hare Street, Kolkata 700 001.

Nicco Uco is a listed Non-Banking Finance Company engaged in the business of inter-alia of Hire Purchase, Leasing, etc.

The shareholding in Nicco Uco was acquired consequent on the merger of Overseas Sanmar Financial ServicesLimited (an erstwhile constituent of the Sanmar Group) with Nicco Uco effective 1st April 1999 pursuant to theOrders of the Calcutta High Court dated 22nd March 2000 and Madras High Court dated 20th April 2000.

Nicco Uco has not been disclosed as a member of the Promoter Group as Sanmar Holdings Limited is not a foundingpromoter of Nicco Uco nor is Nicco Uco a venture formed by the Promoters of our Company. There are no repre-sentatives of The Sanmar Group on the Board of Directors of Nicco Uco. Sanmar Holdings Limited neither controlsNicco Uco nor is in any way directly or indirectly involved day-to-day management of Nicco Uco. Other than theshareholding in Nicco Uco, the Sanmar Group has no other interest in Nicco Uco. Nicco Uco, a listed Company, hasnot disclosed Sanmar Holdings Limited as one of its promoters.

Other than the information available to Sanmar Holdings Limited as a shareholder, no other information on NiccoUco is available to Sanmar Holdings Limited. Sanmar Holdings Limited has no access to any other information fromor pertaining to Nicco Uco.

Interest of PromotersOur Promoters are interested to the extent of their shareholding in the Company. Further, our Promoters may bedeemed to be interested to the extent of remuneration and reimbursement of expenses payable to them. Our Promot-ers may also be deemed to be interested to the extent of Equity Shares that may be subscribed for and allotted tothem, out of the present Issue in terms of this Letter of Offer and also to the extent of any dividend payable to themand other distributions in respect of the said Equity Shares.

Further, our Promoters are also directors on the boards of certain Promoter Group companies and they may bedeemed to be interested to the extent of the payments made by us , if any, to these Promoter Group companies.

Except as stated otherwise in this Letter of Offer, we have not entered into any contract, agreements or arrangementsduring the preceding two years from the date of this Letter of Offer in which our Promoters are directly or indirectlyinterested and no payments have been made to them in respect of the contracts, agreements or arrangements whichare proposed to made with them including the properties purchased by us other than in the normal course of business.

For the payments that are made by our Company to certain Promoter Group companies that are related parties as perAccounting Standard 18, please refer to the section titled “Related Party Transactions” on Page 152 of this Letter ofOffer.

We confirm that the permanent account numbers, bank account numbers and passport number of our Promoters havebeen submitted to the BSE, NSE and MSE at the time of filing the Letter of Offer with the Stock Exchanges.

Further, our Promoters have not been detained as a willful defaulter by the Reserve Bank of India or any otherGovernment Authority and there are no violations of securities laws committed by our Promoters in the past or nosuch proceedings are pending against our Promoters.

Further, our Promoters have not been detained as a willful defaulter by the Reserve Bank of India or any other

Government Authority and there are no violations of securities laws committed by our Promoters in the past or no

such proceedings are pending against our Promoters.

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FINANCIAL INFORMATIONAuditors’ Report

The Board of DirectorsChemplast Sanmar Limited9 Cathedral RoadChennai 600 086

Dear Sirs,

1. We have examined the attached financial information of Chemplast Sanmar Limited (“the Company”) for the six

months ended September 30,2008 and for each of the financial years ended on March 31, 2008, 2007, 2006, 2005and 2004, as approved by the Committee of Directors nominated by the Board of Directors of the Company, prepared

in terms of the requirements of Paragraph B (1) of part II of Schedule II to the Companies Act, 1956 (the Act) and the

Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000 as amended to date(“SEBI Guidelines”) and in terms of our engagement letter agreed upon with you in accordance with our engagement

letter dated April 4, 2008 in connection with the proposed rights issue of equity shares of the Company.

2. We have examined the attached ‘Summary Statement of Assets and Liabilities, as restated’ of the Company as at

September 30,2008, March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure I) and the attached ‘SummaryStatement of Profit and Loss, as restated’ (Annexure II) and the ‘Statement of Cash Flows, as restated’ (Annexure

III) for the six months ended September 30,2008 and for each of the financial years ended on March 31, 2008,

2007, 2006, 2005 and 2004. Based on our examination of these Summary Statements and in accordance with therequirements of Part II B of Schedule II to the Act, the SEBI Guidelines and terms of our engagement agreed with

you, we report that :

a) the Restated Summary Statement of Assets and Liabilities of the Company, as at September 30,2008,

March 31, 2008, 2007, 2006, 2005 and 2004 as set out in Annexure I to this report are after making

adjustments and regroupings as in our opinion were appropriate and more fully described in SignificantAccounting Policies, Changes in Significant Accounting Policies, Notes and Statement of adjustments/

restatements in the financial information (Refer Annexures I, IV and V)

b) the Restated Summary Statement of Profit and Loss of the Company for the six months ended September

30,2008 and for each of the financial years ended on March 31, 2008, 2007, 2006, 2005 and 2004, as setout in Annexure II to this report are after making adjustments and regroupings as in our opinion were

appropriate and more fully described in Significant Accounting Policies, Changes in Significant Accounting

Policies, Notes and Statement of adjustments / restatements in the financial information (Refer AnnexuresII, IV and V)

c) the Restated Cash Flow Statement of the Company for the six months ended September 30,2008 and foreach of the financial years ended on March 31, 2008, 2007, 2006, 2005 and 2004, as set out in Annexure III

to this report are after making adjustments and regroupings as in our opinion were appropriate and more

fully described in Significant Accounting Policies, Changes in Significant Accounting Policies, Notes andStatement of adjustments / restatements in the financial information (Refer Annexures III, IV and V)

d) based on above we are of the opinion that the restated financial information have been made after

incorporating:

(i) adjustments for the changes in accounting policies retrospectively in respective financial years to

reflect the same accounting treatment as per changed accounting policy for all the reporting periods.

(ii) adjustments for the material amounts in the respective financial years to which they relate and thatthere are no extra ordinary items that need to be disclosed separately in the Summary Statements andthere are no audit qualifications which require adjustments in the Summary Statements.

131

3. We have also examined the following other financial information set out in Annexures (VI to XII) prepared by

the management and approved by the Board of Directors relating to the Company for the six months ended

September 30, 2008 and for each of the financial years ended on March 31, 2008, 2007, 2006, 2005 and 2004.

(i) Statement of Dividends paid (Annexure VI)

(ii) Statement of Accounting Ratios (Annexure VII)

(iii) Statement of Capitalisation as at March 31, 2008 (Annexure VIII)

(iv) Statement of Secured and Unsecured Loans (Annexure IX)

(v) Details of Other income (Annexure X)

(vi) Details of Related party transactions (Annexure XI)

(vii) Statement of Tax Shelter (Annexure XII)

In our opinion, the financial information contained in Annexure I to XII of this report read along with the

Significant Accounting Policies, Changes in Significant Accounting Policies, Notes and Statement of adjustments

/ restatements in the financial information (Refer Annexures IV and V) after making adjustments and regroupings

as considered appropriate have been prepared in accordance with Part II B of the Act and the SEBI Guidelines.

4. This report should not in any way be construed as a re-issuance or re-dating of any of the previous audit reports

issued by us nor should this report be construed as a new opinion on any of the financial statements referred to

herein.

5. Our report is intended solely for use of the management and for inclusion in the offer document in connection

with the proposed rights issue of equity shares of the Company and should not be used, referred to or distributed

for any other purpose without our prior written consent.

S. DattaPartner(Membership No. F14128)For and on behalf ofPrice Waterhouse & CoChartered Accountants

Place: ChennaiDate: February 13, 2009

132

A Fixed AssetsGross block 103420.25 99683.60 81666.96 65358.26 59583.03 55745.46Less: Depreciation 35548.83 33091.75 30249.53 26865.37 23428.92 20837.55Net block 67871.42 66591.85 51417.43 38492.89 36154.11 34907.91Capital work in progress 67440.45 48820.89 21761.50 8140.50 2498.06 892.84

Total 135311.87 115412.74 73178.93 46633.39 38652.17 35800.75

B Investments 165.23 165.23 165.23 2.74 2.74 433.74C Current Assets, Loans and Advances

Inventories 10498.17 6479.23 4427.69 4894.49 3522.98 5003.24Sundry debtors 5658.47 4883.89 5513.51 5239.96 6513.01 6262.47Cash and bank balances 599.02 627.91 443.97 533.44 497.77 445.41Other current assets 2994.27 2441.52 347.83 61.05 24.80 10.41Loans and advances 12863.68 10179.46 6327.64 5950.74 5130.06 3757.85

Total 32613.61 24612.01 17060.64 16679.68 15688.62 15479.38

D Liabilities and ProvisionsSecured loans 102835.81 77528.60 49002.45 22914.46 20946.63 17811.80Unsecured loans 11980.86 7219.62 - 4214.16 - 3626.85Current Liabilities 16406.37 13470.51 11636.90 8881.85 8404.29 5651.36Provisions 752.95 752.01 1125.43 936.25 1726.86 1307.62

Total 131975.99 98970.74 61764.78 36946.72 31077.78 28397.63

E Deferred Tax Liability (Net) 3193.00 4598.00 4684.22 4505.00 4901.00 4899.00

F Networth 32921.72 36621.24 23955.80 21864.09 18364.75 18417.24

G Represented by

Share Capital

- Equity 4798.19 4798.19 4798.19 4798.19 4798.19 4798.19

- Preference - - - - - 2050.00

Advance towards rights entitlement from

Sanmar Holdings Limited 12000.00 12000.00 - - - -

Reserves and surplus 16692.47 20323.82 19590.05 17108.19 13678.50 11666.75

Total 33490.66 37122.01 24388.24 21906.38 18476.69 18514.94

Less:

Miscellaneous Expenditure to the extent 568.94 500.77 432.44 42.29 111.94 97.70not written off

Networth 32921.72 36621.24 23955.80 21864.09 18364.75 18417.24

Rs. lacs

Particulars As at As at As at As at As at As at30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

CHEMPLAST SANMAR LIMITED

RESTATED SUMMARY STATEMENT OF ASSETS AND LIABILITIESAnnexure I

133

INCOMESales 42837.37 73426.40 70227.47 67601.29 60303.76 57360.89Less: Excise duty 4914.96 9408.53 8964.90 8882.60 7983.69 7465.85Other income 2929.21 7630.61 844.12 2403.32 1021.70 556.91

40851.62 71648.48 62106.69 61122.01 53341.77 50451.95Increase/(Decrease) in Inventories 2083.70 955.57 (757.60) 987.07 (620.21) 607.17

Total 42935.32 72604.05 61349.09 62109.08 52721.56 51059.12

ExpenditureRaw Materials and purchasedintermediates consumed(Refer Note 18 in Annexure IV) 19805.35 25454.11 18058.08 20213.08 15413.01 18422.43Staff Costs 2827.91 5572.92 5121.11 4776.74 5083.91 4417.94Other manufacturing expenses 16923.72 26384.53 24610.82 23220.68 20235.05 17541.39Administration Expenses 2138.18 3851.17 3154.07 2499.72 2178.74 2076.67Selling and Distribution Expenses 713.21 1493.24 1153.95 1324.29 1467.88 1162.70Interest and finance cost 3036.12 4476.98 2331.96 1841.12 2522.61 3595.82Depreciation 2497.18 4513.12 3442.98 3600.70 2853.18 3494.56

Total 47941.67 71746.07 57872.97 57476.33 49754.38 50711.51

Net Profit/(Loss) before tax andextraordinary items (5006.35) 857.98 3476.12 4632.75 2967.18 347.61Provision for current tax - (168.43) (780.04) (1566.18) (908.78) (247.42)Provision for deferred tax 1405.00 86.22 (179.22) 396.00 (2.00) (162.00)Provision for fringe benefits tax (30.00) (42.00) (35.00) (32.88) - -

Total 1375.00 (124.21) (994.26) (1203.06) (910.78) (409.42)

Net Profit/(Loss) after tax beforeextraordinary items (3631.35) 733.77 2481.86 3429.69 2056.40 (61.81)Extra-ordinary items (net of taxes) – – – – – –Net Profit/(Loss) after tax andextraordinary items (3631.35) 733.77 2481.86 3429.69 2056.40 (61.81)Profit brought forward 14301.97 13568.20 11086.34 7656.65 7182.40 2347.53Balance of Profit and Loss Accountof amalgamating company - - - - - 2724.24

10670.62 14301.97 13568.20 11086.34 9238.80 5009.96Transfer from DebentureRedemption Reserve - - - - 512.50 2612.50

10670.62 14301.97 13568.20 11086.34 9751.30 7622.46Transfer to Capital Redemption Reserve - - - - (2050.00) (200.00)Interim Dividend- Preference dividend (previous year - subject to tax) - - - - (39.48) (212.80)-Tax on dividend - - - - (5.17) (27.26)

Profit carried to Balance Sheet 10670.62 14301.97 13568.20 11086.34 7656.65 7182.40

Earnings Per Share (Rs.) (0.76) 0.15 0.52 0.71 0.42 (0.07)

RESTATED SUMMARY STATEMENT OF PROFIT AND LOSS

Annexure II

Rs.lacs

ParticularsFor the six For the year For the year For the year For the year For the year

months ended ended ended ended ended ended30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

134

RESTATED CASH FLOW STATEMENT

Annexure III

A. CASH FLOW FROMOPERATING ACTIVITIESNET PROFIT/(LOSS)BEFORE TAX (5006.35) 857.98 3476.12 4632.75 2967.18 347.61Adjustments for:Add: Depreciation 2497.18 4513.12 3442.98 3600.70 2853.18 3494.56

Interest and finance charges 3036.12 4476.98 2331.96 1841.12 2522.61 3595.82526.95 9848.08 9251.06 10074.57 8342.97 7437.99

Less: Profit on sale of assets/Investments (Net) 26.38 655.54 44.25 183.49 442.40 39.36Reversal of Asset impairmentprovision (Net) – – – 11.24 – –Interest/Dividend/share of profit 47.47 152.96 127.00 104.18 138.69 78.54

OPERATING PROFIT BEFOREWORKING CAPITAL CHANGES 453.10 9039.58 9079.81 9775.66 7761.88 7320.09

Adjustments for changes inTrade and other receivables ( 3999.68) (5276.72) (896.95) 411.21 (1587.28) (260.60)Inventories ( 4018.94) (2051.54) 466.80 (1371.51) 1480.26 (941.31)Trade and other payables 4186.91 610.04 1248.49 (441.54) 2802.17 (294.87)

CASH GENERATEDFROM OPERATIONS (3378.61) 2321.36 9898.15 8373.82 10457.03 5823.31

Direct taxes paid (Net) (29.08) (583.82) (665.63) (1,139.67) (489.54) (189.85)NET CASH FROMOPERATING ACTIVITIES (3407.69) 1737.54 9232.52 7234.15 9967.49 5633.46

B. CASH FLOW FROMINVESTING ACTIVITIES

Purchase of fixed assets (23963.79) (45597.04) (28975.72) (12145.16) (5722.26) (4 340.17)Sale of investments – – 7.51 – 862.00 137.52Purchase of investments – – (170.00) – – (5.03)Sale of fixed assets 59.46 663.88 606.00 309.75 29.06 44.88Interest received/share of profit 35.60 113.79 86.64 109.09 88.83 70.75Dividend received – – – – – 16.74

NET CASH USED ININVESTING ACTIVITIES (23868.73) (44,819.37) (28,445.57) (11,726.32) (4,742.37) (4,075.31)

C. CASH FLOW FROM FINANCINGACTIVITIES

Advance towards rights entitlementfrom Sanmar Holdings Limited – 12000.00 – – – –Redemption of preference shares – – – – (2050.00) (200.00)Increase/Decrease in dues from subsidiary – – – – – –Proceeds from long term borrowings 15000.00 36037.72 38829.43 8736.53 9500.00 8250.10Repayment of long term borrowings (3376.47) (5825.74) (13568.10) (8650.10) (4350.00) (11304.08)Proceeds/(Repayment) of shortterm borrowings (Net) 18444.92 5533.77 (3387.50) 6095.56 (5642.02) 1085.03Interest and finance charges paid (2820.92) (4479.98) (2750.25) (1654.15) (2586.09) (3968.40)Dividends/Tax on dividends paid – – – – (44.65) (636.96)

NET CASH USED INFINANCING ACTIVITIES 27247.53 43265.77 19123.58 4527.84 (5172.76) (6774.31)

D. ACCOUNTS RECEIVABLE TAKENOVER ON AMALGAMATION – – – – – 5,000.00NET INCREASE IN CASH ANDCASH EQUIVALENTS (A to D) (28.89) 183.94 (89.47) 35.67 52.36 (216.16)Cash and cash equivalents at thebeginning of the year 627.91 443.97 533.44 497.77 445.41 661.57Cash and cash equivalents atthe end of the year 599.02 627.91 443.97 533.44 497.77 445.41

(28.89) 183.94 (89.47) 35.67 52.36 (216.16)

Rs.lacs

ParticularsFor the six For the year For the year For the year For the year For the year

months ended ended ended ended ended ended30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

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Annexure IV

1. SIGNIFICANT ACCOUNTING POLICIES :

1.1 Revenue Recognition :Sales are recognised on dispatch of products to customers, which generally coincides with transfer ofownership. Sales are net of returns, trade discounts and allowances.

1.2 Valuation of assets :

a) Inventories are valued at lower of cost and net realisable value. Cost is determined on weightedaverage basis and comprises of all applicable costs incurred for bringing the inventories to theirpresent location and condition and includes appropriate overheads wherever applicable.

b) Fixed assets are valued at cost excepting Land, Buildings and Plant and Machinery in respect of PVCdivision which are stated at revalued amounts.

c) Long term investments are valued at cost or lower of cost where there is any diminution in value, otherthan temporary.

1.3 Depreciation/ Amortisation :Depreciation on fixed assets is provided on a straight line basis at the rates (other than the Assets statedbelow) specified in Schedule XIV of the Companies Act, 1956 :

i) On all assets whose actual cost does not exceed Rs.5,000/- - 100%.

ii) On moulds, computers and peripherals and Motor cars – 33.33%.

iii) On furniture and office equipment - 20%

iv) Leasehold land is amortised over the period of lease

v) In the event the useful life of any fixed asset being assessed to be lower than the life derived fromSchedule XIV rates or above mentioned rates, the book value of such assets is charged off as depreciation,during the balance useful life of such assets.

1.4 New Project expenses/ Borrowing costsSalaries and related costs, travel and other direct costs including exchange difference arising from settlement/restatement of foreign currency liability contracted for import of fixed assets relating to new projects incurredprior to their commencement of operation are capitalised. Borrowing costs that are directly attributable tothe acquisition, construction or production of a qualifying asset are capitalized as part of the cost of theasset. These borrowing costs include exchange differences arising from foreign currency borrowings to theextent these are regarded as adjustment to interest.

1.5 Employee BenefitsShort term employee benefits including accumulated compensated absence are recognized as an expense asper the Company’s Scheme based on expected obligations on undiscounted basis.Post Retirement benefits comprise of employees provident fund and gratuity which are accounted for asfollows:-

(a) Provident FundThis is a defined contribution plan and contributions made to the fund are charged to revenue. Thecompany has no further obligations for future provident fund benefits other than annual contributions.

(b) GratuityThis is a defined benefit plan and the Company’s Scheme is administered by Life Insurance Corporationof India. The liability is determined based on the actuarial valuation using projected unit credit method.Actuarial gains and losses, comprising of experience adjustments and the effects of changes in actuarialassumptions, are recognized immediately in the Profit and Loss Account as income or expense.

136

1.6 Foreign currency transactionsForeign currency transactions are recorded at the rate of exchange prevailing on the date of the respectivetransactions.Monetary assets and liabilities denominated in foreign currency are converted at contracted/year end ratesas applicable.Exchange differences arising on settlement/conversion are adjusted to Profit and Loss Account except to theextent indicated in note 1.4Wherever forward contracts are entered into, the exchange difference is dealt with in the Profit and LossAccount over the period of the contracts. Realised gains or losses on cancellation of forward contracts arerecognized in the Profit and Loss Account of the year in which they are cancelled.

1.7 Income taxProvision for current tax and fringe benefits tax is made based on the liability computed in accordance withthe relevant tax rates and tax laws. Deferred tax is accounted for by computing the tax effect of the timingdifferences which arise during the year and reverse out in the subsequent periods. Deferred tax is calculatedat the tax rates enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognisedonly if there is a virtual certainty that they will be realised.

1.8 Research and Development

Revenue expenditure on research and development is charged as an expense for the period in which it is incurred.

2 Adjustments/ restatements in financial informationStatement of adjustments / restatements made in the financial information is set out in Annexure V.

3 Revaluation of fixed assetsLand, Buildings and Plant and Machinery of the PVC division ( other than certain buildings and machinery)

were revalued as at October 1, 2002 on the governing principles of current cost after considering depreciationupto the date of revaluation as per the valuer’s report and the net increase in the book value arising from

such revaluation aggregating to Rs 11780.60 lacs was credited to revaluation reserve which was adjusted to

the extent of Rs. 11330.36 lacs in terms of the Scheme of Arrangement referred to in Note 4 below and thebalance of Rs. 450.24 lacs was adjusted towards depreciation and loss on sale of assets.

4 Scheme of Arrangement (“Scheme”) - 2002-03Pursuant to the Scheme between the Company, Sanmar Properties and Investments Limited (SPIL) and their

respective shareholders for demerger of the Company’s shipping undertaking as approved by the shareholdersof the Company at their meeting held on March 26, 2003 and as sanctioned by the Honourable High Court

of Madras vide its Order dated April 29, 2003 the Company’s shipping undertaking stood transferred to and

vested in SPIL on and from January 1, 2003 at the book values which as per the Scheme were adjustedagainst the Revaluation Reserve referred to in Note 3.

Rs Lacs

Net book value of - Fleet 540.16

- Other Fixed Assets 0.07

Sundry Debtors 97.20

Advances to subsidiary - Polygon Holdings Limited 8,995.00

Investment in subsidiary - Polygon Holdings Limited 5.00

9,637.43

Pursuant to the Scheme as sanctioned by the Honourable High Court of Madras as referred above, followingbalances standing in the books of the Company as on January 1, 2003 have also been adjusted against theRevaluation Reserve.

137

Rs LacsBalance in Miscellaneous Expenditure Account(to the extent not written off or adjusted )

Revenue expenditure on implementation of ERP 109.26

Compensation paid under voluntary retirement scheme 191.43

Ancillary cost relating to borrowings 122.11

Unabsorbed PVC Project Expenses 20.13

442.93

Further in terms of the abovementioned Scheme a sum of Rs.1250 lacs was transferred from the RevaluationReserve and credited to Asset Impairment Provision of which Rs. 1238.76 lacs was adjusted against assetimpairment loss during the year ended March 31, 2006 and the balance Rs. 11.24 lacs was written back andincluded under Other Income (Liabilities / Provisions no longer required written back) in Annexure X.

5 Scheme of Arrangement - 2003-04

5.1 Pursuant to the Scheme of Arrangement (Scheme) between the Company, Sanmar Properties and InvestmentsLimited (SPIL), Sanmar Holdings Limited (SHL) and their respective shareholders as approved by theshareholders of the Company at their meeting held on February 6, 2004 and as approved by the High Courtof Judicature at Madras vide its Order dated March 3, 2004, SPIL was amalgamated with the Company witheffect from November 2, 2003 ( the Effective Date ). Prior to the amalgamation SPIL was carrying on thebusiness of investment in shares and securities. The amalgamation has been accounted under the “pooling ofinterest” method.

5.2 As per the Scheme the entire business of SPIL (other than the investment and shipping business which wasdemerged into SHL with effect from November 1, 2003 under the Scheme ), rights, liberties, privileges andpowers, investments, inventories, assets, stocks, securities and all assets of whatsoever nature, the amountrequired to be paid by SHL to SPIL in terms of the Scheme, benefits of all contracts, deeds and instruments,licences, trademarks, agreements and all other instruments of whatsoever kind, nature or description ofSPIL and all debts, liabilities, duties and obligations of SPIL (other than those relating to the investment andshipping business as mentioned aforesaid) without any further act or deed have been transferred to andvested in the Company at the values appearing in the books of account of SPIL, on the Effective Date.

5.3 The assets, liabilities and reserves of SPIL transferred to and vested in the Company as set out below havebeen dealt with in accordance with the Court order.

Rs. Lacs Rs. LacsAssets

Accounts Receivable 5000.00Bank Balance - Unpaid Dividend Account 13.86Advance payment of tax and tax deducted at source 326.77 5340.63

LiabilitiesUnclaimed Dividend 13.86Provision for taxation 338.11 351.97

Net Assets 4988.66

Represented by(i) Issue and allotment of 12,799,730 equity shares of Rs 10 each

as fully paid up to the shareholders of SPIL in the proportion ofone equity share in the company for every one equity share heldby them in SPIL. 1279.97

(ii) Reserves and surplusCapital Redemption Reserve 2.95General Reserve 981.50Profit and Loss Account 2724.24 3708.69

4988.66

138

Rs. Lacs

30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.046 Contingent Liabilities

a) Claims against the Company notacknowledged as debts 1550.11 1605.74 767.30 884.92 912.61 549.00

b) In respect of guarantees to banks and financial institutions for loans / obligations granted by them to associate companies - - - - - 147.41

7 Capital commitmentsEstimated amount of contracts remainingto be executed on capital account and notprovided for (Net of advances) 11198.00 20698.00 35218.00 7011.00 7332.00 1450.00

8 Deferred taxation

Net Deferred Tax Liability is on account of :

- Difference between book and tax writtendown value of depreciable fixed assets 7733.00 7384.00 5698.00 5236.00 5333.00 5223.00

- Unabsorbed depreciation/Business loss (3444.00) (1692.00) - - - -

- Others (1096.00) (1094.00) (1013.78) (731.00) (432.00) (324.00)

3193.00 4598.00 4684.22 4505.00 4901.00 4899.00

9 Foreign exchange contracts

Exchange difference (debit) deferred tobe recognised in subsequent accounting period in respect of forward exchange contracts 72.73 62.95 176.32 12.91 26.71 13.55

10 Future Lease Commitments - - - - - 80.00

11 Borrowing and other costs capitalised

Interest on fixed loans 1968.57 2031.12 904.67 304.27 62.58 8.83

Salaries, wages and bonus 77.57 73.08 30.67 - - -

Contribution to provident and other funds 4.07 3.32 1.46 - - -

Power and fuel 6.12 39.18 20.68 - - -

Exchange differences (152.13) (57.95) - - - -

Other direct expenses 122.64 551.10 54.75 - - -

Total 2026.84 2639.85 1012.23 304.27 62.58 8.83

12 Miscellaneous ExpenditureMiscellaneous Expenditure to the extent not written off or adjusted represents unamortised balance of ancillarycosts related to borrowings, which is being amortised over the currency of the borrowing commencing fromthe first withdrawal of the amount borrowed.

13 Montreal Protocol compensationThe Company is eligible to receive compensation from Multilateral Fund under the Montreal Protocol for phasingout the production of Chlorofluorocarbons and supply of Carbon Tetra Chloride to non feed stock sector. Theaforesaid compensation is received in periodic instalments subject to meeting certain conditions stipulated in theProtocol and accordingly the compensation is accounted only after complying with such conditions and ensuringthat there is no uncertainty in this regard. Following this practice compensation received during the year alone hasbeen accounted and shown under Other Income in the respective years in Annexure X.

14 Income from Certified Emission Reduction (CER)Pursuant to an agreement entered into with Sempra Energy Europe Limited for a period of five years effective19th March, 2007, the Company is entitled to receive Carbon Credits towards CER from United NationsFramework Convention of Climate Change (UNFCCC).

139

Income from CER shown under other income in Annexure X is reckoned when the Company is entitled tosuch credits, which occurs- on incineration of HFC 23 at Mettur- on production of steam from Waste Heat Recovery Boiler at Karaikal.

15 Segment ReportingThe Company is principally engaged in a single business segment viz, Chemicals and operates in onegeographical segment. Accordingly there are no separate reportable segments as per Accounting Standard17 on “Segment Reporting” issued by the Institute of Chartered Accountants of India.

16 The Company entered the PVC products business by acquiring two PVC Pipes business undertakings onSeptember 7, 2006. The financial statements consider this acquisition and the operations of the PVC Pipesbusiness undertakings from September 7, 2006 and consequently the figures for previous years are notcomparable with those for the years ended March 31,2007 and 2008. The revenue from Pipes businessconstitutes Rs.3971.09 lacs for the period September 2006 to March 2007, Rs.7740.11 lacs for the year2007-08 and Rs. 4533.85 lacs for the six months ended September 30, 2008.

17 Disclosure as per AS15 revised - Defined Benefit Plans Gratuity2007-08

Rs. Lacs

Present value of obligation at the beginning of the year 1612.73Interest cost 112.67Current service cost 104.47Benefits paid (222.81)Actuarial (gain) / loss on obligation (22.64)Present value of obligation as at the end of the year 1584.42

Fair value of planned assets at the beginning of the year 741.67Expected return on plan assets 65.91Contributions 507.27Benefits paid (222.81)Actuarial gain / (loss) on plan assets 10.45Fair value of plan assets at the end of the year 1102.49

Amounts recognised in the balance sheetPresent value of obligation as at the end of the year 1584.42Fair value of plan assets at the end of the year 1102.49Funded status of the plan - (asset) / liability 481.93

Amounts recognised in the statement of profit and lossCurrent service cost 104.47Interest cost 112.67Expected return on plan assets (65.91)Net actuarial (gain) / loss recognised in the year (33.09)Expenses recognised in the statement of profit and loss 118.14Principal actuarial assumptionsDiscount rate 8.00%Salary escalation 8.00%Expected return on plan assets 8.00%

Attrition rate 1% - 3%

Since financial year 2007-08 is the first year of disclosure , earlier years’ figures have not been furnished.The disclosures as required by the Accounting Standard 15 on Defined Benefit Plans have not been provided forthe six months ended September 30, 2008 as these disclosures are made by the Company for the year as a whole.

18 The sudden steep fall in prices of crude oil and the global financial crisis have led to collapse of Petrochemicalprices over the last few months by almost 50%. Since both inputs and finished products price levels havebeen deflated, margins have not been affected significantly on an ongoing basis. However, as a measure ofconservatism, and in line with generally accepted accounting principles, the company has written down thecarrying value of stocks of major raw materials, intermediates and finished products, to levels correspondingto the current net realizable value of finished products. This has led to an exceptional charge of Rs.3050.47lakhs during the six months ended September 30, 2008 and this has been included in the cost of RawMaterials and purchased intermediates consumed for the period.

140

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142

STATEMENT OF DIVIDENDS PAID Annexure VI

PREFERENCE SHARES

Year Ended No. of Preference Rate of dividend Amount of Dividendshares of Rs. 100/- each (in Rs. Lacs)

31.03.2005 2,050,000 9.50% 39.48

31.03.2004 4,300,000 8.00%-11.50% 212.80

EQUITY SHARES

No dividend was paid on equity shares during the six months ended September 30, 2008 and during each of thefinancial years ended 31 March 2008, 2007, 2006, 2005 and 2004

STATEMENT OF ACCOUNTING RATIOS Annexure VII

Rs. Lacs

Sl . Particulars 2008-09 2007-08 2006-07 2005-06 2004-05 2003-04No Sep 08

1 Net Profit/(Loss) after tax (3631.35) 733.77 2,481.86 3,429.69 2,056.40 ( 61.81)Less: Preference dividend - - - - 39.48 212.80Less: Tax on dividend - - - - 5.17 27.26Net Profit/(Loss) availablefor equity shareholders (3,631.35) 733.77 2,481.86 3,429.69 2,011.75 (301.87)

2 Weighted average numberof equity sharesoutstanding at the end ofthe year Number 479819440 479819440 479819440 479819440 479819440* 404629770*

3 Net worth(As per Annexure I ) 32,921.72 36,621.24 23,955.80 21,864.09 18,364.75 18,417.24Less : Advance towards rights entitlement fromSanmar Holdings Limited. 12,000.00 12,000.00 - - - -Adjusted Net Worth 20,921.72** 2 4,621.24** 2 3,955.80 21,864.09 18,364.75 18,417.24Accounting Ratios :Earnings Per Share(EPS) (1)/(2) Rs./ Share (0.76) 0.15 0.52 0.71 0.42 (0.07)Net Asset Value per share(3)/(2) Rs. / Share 4.36 5.13 4.99 4.56 3.83 4.55Return on net worth (1)/(3) -17% 3% 10% 16% 11% -0.3%

(*) Consequent upon the stock split effected during the year 2005-06, by the company by sub-dividing eachequity share of Rs. 10/- into 10 equity share of Re.1/- each, the number of equity share for the previousyears has been restated as per the requirements of Accounting Standard 20- “Earnings per share”.

(**) Pending completion of the formalities including approval from Securities and Exchange Board of India(SEBI), the advance towards rights entitlement has not been considered as part of the net worth for thepurpose of calculating net asset value per share and return on net worth for the six months ended Sep-tember 30, 2008 and for the year ended March 31, 2008. Also refer Note 5 in the Statement of Capitali-sation (Annexure VIII)

143

STATEMENT OF CAPITALISATION Annexure VIIIRs. Lacs

Particulars Pre-issue Adjustedas at 30th for issue

September, 2008

Borrowings:

Short Term 26,762.23

Long Term 88,054.44

Total Debts 114,816.67

Shareholders funds

Equity Share Capital 4 ,798.19

Reserves and surplus

General Reserve 2,308.90

Capital Redemption Reserve 3,712.95

Surplus as per Profit and Loss Account 10,670.62 16,692.47

Total Shareholders Funds 21,490.66

Long Term Debt / Equity Ratio 4 .10

Notes:1. The above has been computed on the basis of Restated Summary Statement of Assets and Liabilities.2. The Statement for the Post-issue period will be made on the conclusion of the Rights Issue process.3. Short term debt is considered as debt having original repayment term not exceeding 12 months and includes

balance in cash credit account.4. Long term debt is considered as debt other than short term debt, as defined above.5. The Board of Directors have approved, subject to compliance with all related formalities, the Company raising

equity resources on rights basis (Share Capital and premium) not exceeding Rs 200 crores. Pending completionof such formalities and the necessary approval from SEBI the Company has received an advance of Rs. 120crores from Sanmar Holdings Limited, the Company’s holding company towards their rights entitlement, whichwill be considered in the above statement in the ‘Adjusted for issue’ as a post issue equity.

Statement of Secured and Unsecured Loans as at Annexure IXRs. Lacs

Particulars September March March March March March30, 2008 31, 2008 31, 2007 31, 2006 31, 2005 31, 2004

A) DETAILS OF SECUREDLOANS

Debentures - - - - - 2,050.00

Term loans from

Bank 79,354.44 64,355.91 36,443.91 12,661.30 11,671.98 6,171.97

Others 8,700.00 9,575.00 7,275.00 6,800.00 9,200.00 7,500.00

Cash credit and buyers’ credit 14,781.37 3,597.69 5,283.54 3,453.16 74.65 2,089.83from banks

102,835.81 77,528.60 49,002.45 22,914.46 20,946.63 17,811.80

B) DETAILS OF UNSECUREDLOANSShort term loans from

Banks 11,980.86 7,219.62 - 4,214.16 - 3,626.8511,980.86 7,219.62 - 4,214.16 - 3,626.85

Notes:1) There is no outstanding unsecured loan from Promoters / Group company / Associate company as at September

30, 2008.2) The details of principal terms and conditions of the secured loans and unsecured loans outstanding as at September

30, 2008 are set out below

144

Term

Loa

n F

rom

Ban

ks

Len

der

Sanc

tion

Tota

lD

ate

ofB

alan

ce a

sR

ate

ofR

epay

men

t Ter

ms

Secu

rity

Let

ter

Dat

esa

ncti

oned

avai

lmen

t and

on 3

0.09

.08

Inte

rest

(%)

Am

ount

Am

ount

Ava

iled

(Rs.

Lac

s)(R

s. L

acs)

Indi

an O

vers

eas

Ban

k

Term

Loa

n I

5-Se

p-05

3,00

019

-Jan

-06

-2,

022.

75 1

1.00

%Se

p-06

to J

un-1

3(R

enew

alR

s. 3

000

lacs

Dat

e)

Term

Loa

n II

I20

-Feb

-06

2,25

031

-Mar

-06

1,12

5.00

11.0

0% J

un-0

6 to

Mar

-11

Rs.

225

0 la

cs

Term

Loa

n IV

29-M

ay-0

65,

000

8-N

ov-0

6 -

3,75

1.68

8.65

%4-

Oct

-06

Rs.

3000

lacs

19-O

ct-0

6 -

Rs.

200

0 la

cs.

Term

Loa

n V

26-M

ay-0

77

,500

Jul-

07 -

Rs.

500

07,

000.

0010

.10%

for

lacs

Feb

-08

-R

s.45

00 L

akhs

Rs.

250

0 la

cs&

11.

75%

for

Rs.

2500

Lak

hs

Indu

stri

al D

evel

opm

ent B

ank

of4-

Apr

-05,

5 ,0

0030

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-05

-2,

750.

008.

30%

Indi

a22

-Sep

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&R

s.50

0 la

cs23

-May

-06

17-F

eb-0

6 -

Rs.

1500

lacs

30-M

ay-0

6R

s.30

00 la

cs.

Indu

stri

al D

evel

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ent B

ank

of16

-Apr

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7 ,0

0016

-Jun

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-7,

000.

0013

.00%

Indi

a15

- May

-08

Rs

7000

lacs

.

Fir

st p

arip

assu

cha

rge

on e

ntir

efi

xed

asse

ts o

f the

com

pany

pre

sent

& f

utur

e ex

clud

ing

the

asse

ts s

pe-

cifi

cally

cha

rged

to H

DFC

& A

xis

Ban

k

Fir

st p

arip

assu

cha

rge

on e

ntir

efi

xed

asse

ts o

f the

com

pany

pre

sent

& fu

ture

exc

ludi

ng th

e as

sets

spe

-ci

fica

lly c

harg

ed to

HD

FC &

Axi

sB

ank

Sep

-07

to

Ju

n-1

2-

Rep

ayab

le in

20

Qua

rter

lyIn

stal

lmen

t aft

er a

hol

iday

peri

od o

f 12

Mon

ths

from

avai

lmen

t

Sep

-08

to

Ju

l-1

3

20

Qua

rter

ly In

stal

lmen

t aft

er a

holid

ay p

erio

d of

12

Mon

ths

from

ava

ilmen

t

Oct

-06

to J

ul-1

1 -

Rep

ay-

able

in

2

0

qu

arte

rly

inst

allm

ent

star

ting

fro

m01

- Oct

-06

Fir

st p

arip

assu

cha

rge

on C

ER

rece

ivab

les

60%

of

CE

R r

ecei

pts

for

the

firs

t tw

o ye

ars

and

70%

for

3rd,

4th

and

5th

yea

rs

145

Oct

-07

to J

ul-1

1. R

epay

able

in 1

6 qu

arte

rly

inst

allm

ents

star

ting

from

01-

Oct

-07

Fir

st p

arip

assu

cha

rge

on e

ntir

efi

xed

asse

ts o

f the

com

pany

pre

sent

& f

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e ex

clud

ing

the

asse

ts s

pe-

cifi

cally

cha

rged

to H

DFC

& A

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Ban

k

Jul-

09 to

Apr

-16.

Rep

ayab

lein

28

quar

terl

y in

stal

lmen

tsst

artin

g fr

om 1

5-Ju

l-09

Fir

st p

arip

assu

cha

rge

on e

ntir

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xed

asse

ts o

f the

com

pany

pre

sent

& f

utur

e ex

clud

ing

the

asse

ts s

pe-

cifi

cally

cha

rged

to H

DFC

& A

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Ban

k

Jun-

10 t

o M

ar-1

4. R

epay

-ab

le

in

16

q

uar

terl

yin

stal

lmen

ts s

tart

ing

from

Jun-

10

Exc

lusi

ve c

harg

e to

be

crea

ted

onth

e la

nd &

bui

ldin

g in

Hou

sing

col

o-ni

es a

t Pla

nt I

and

III,

Met

tur D

am,

Sale

m D

istr

ict

Sep

-09

to J

un-1

6. R

epay

-ab

le

in

28

q

uar

terl

yin

stal

lmen

ts s

tart

ing

from

30-S

ep-0

9

Fir

st p

arip

assu

cha

rge

on e

ntir

efi

xed

asse

ts o

f the

com

pany

pre

sent

& f

utur

e ex

clud

ing

the

asse

ts s

pe-

cifi

cally

cha

rged

to H

DFC

& A

xis

Ban

k

Term

Loa

n F

rom

Ban

ks

Len

der

Sanc

tion

Tota

lD

ate

ofB

alan

ce a

sR

ate

ofR

epay

men

t Ter

ms

Secu

rity

Let

ter

Dat

esa

ncti

oned

avai

lmen

t and

on 3

0.09

.08

Inte

rest

(%)

Am

ount

Am

ount

Ava

iled

(Rs.

Lac

s)(R

s. L

acs)

Stat

e B

ank

of In

dia

30-J

un-0

67

,500

28-A

ug-0

6 -

6,56

6.09

8.50

%R

s 75

00 la

cs.

Can

ara

Ban

k16

-Nov

-06

9 ,0

005-

Feb-

07 -

8,45

0.00

9.25

%R

s.16

00 L

acs

30-M

ar-0

7 -

Rs.

1200

Lac

s

Axi

s B

ank

27-A

ug-0

85,

000

26-S

ep-0

8 -

2,50

0.00

12.7

5%R

s.25

00 L

acs

SBI

- PV

C P

roje

ct L

oan

9-Fe

b-07

7,50

028

-Mar

-07

-6,

500.

009.

25%

Rs.

1000

Lac

s;26

-Mar

-07

-R

s.50

0 la

cs;

28-S

ep-0

7 -

Rs.

1500

lacs

;28

-Dec

-07

-R

s.15

00 la

cs;

25-A

pr-0

8 -

Rs.

1000

lacs

;12

-Jun

-08

-R

s.10

00 la

cs.

146

Term

Loa

n F

rom

Ban

ks

Len

der

Sanc

tion

Tota

lD

ate

ofB

alan

ce a

sR

ate

ofR

epay

men

t Ter

ms

Secu

rity

Let

ter

Dat

esa

ncti

oned

avai

lmen

t and

on 3

0.09

.08

Inte

rest

(%)

Am

ount

Am

ount

Ava

iled

(Rs.

Lac

s)(R

s. L

acs)

SBM

- P

VC

Pro

ject

Loa

n9-

Feb-

077

,500

01-M

ar-0

7 -

6,50

0.00

9.25

%R

s.10

00 L

acs;

26-M

ar-0

7 -

Rs.

500

lacs

;28

-Sep

-07

-R

s.15

00 la

cs;

28-D

ec-0

7 -

Rs.

1500

lacs

;25

-Apr

-08

-R

s.10

00 la

cs;

12-J

un-0

8 -

Rs.

1000

lacs

.SB

H -

PV

C P

roje

ct L

oan

9-Fe

b-07

7 ,5

0013

-Apr

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FCN

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498.

429.

25%

- Rs.

1498

.42

lacs

;Fo

r R

upee

-28

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-07

--R

s.15

00 L

acs

Rs

1500

lacs

;&

LIB

OR

+28

-Dec

-07

-1.

50%

for

Rs.

1500

lacs

;FC

NR

Fac

ility

25-A

pr-0

8 -

Rs.

100

0 la

cs;

12-J

un-0

8 -

Rs.

1000

lacs

.

Can

ara

Ban

k -

PVC

Pro

ject

9-Fe

b-07

7,50

001

-Mar

-07

-6,

500.

0011

.00%

Loa

nR

s.10

00 L

acs;

29-M

ar-0

7 -

Rs

500

lacs

;28

-Sep

-07

-R

s.15

00 la

cs;

28-D

ec-0

7 -

Rs.

1500

lacs

;25

-Apr

-08

-R

s.10

00 la

cs;

19-J

ul-0

8 -

Rs.

1000

lacs

.

Sep

09 to

Jun

-16.

Rep

ayab

lein

28

quar

terl

y in

stal

lmen

tsst

artin

g fr

om 3

0-Se

p-09

Fir

st p

arip

assu

cha

rge

on e

ntir

efi

xed

asse

ts o

f the

com

pany

pre

sent

& f

utur

e ex

clud

ing

the

asse

ts s

pe-

cifi

cally

cha

rged

to H

DFC

& A

xis

Ban

k

Sep

09 to

Jun-

16. R

epay

able

in 2

8 qu

arte

rly

inst

allm

ents

star

ting

from

30-

Sep-

09

Fir

st p

arip

assu

cha

rge

on e

ntir

efi

xed

asse

ts o

f the

com

pany

pre

sent

& f

utur

e ex

clud

ing

the

asse

ts s

pe-

cifi

cally

cha

rged

to H

DFC

& A

xis

Ban

k

Sep-

09 to

Jun-

16. R

epay

able

in 2

8 qu

arte

rly

inst

allm

ents

star

ting

from

30-

Sep-

09

Fir

st p

arip

assu

cha

rge

on e

ntir

efi

xed

asse

ts o

f the

com

pany

pre

sent

& f

utur

e ex

clud

ing

the

asse

ts s

pe-

cifi

cally

cha

rged

to H

DFC

& A

xis

Ban

k

147

Term

Loa

n F

rom

Ban

ks

Len

der

Sanc

tion

Tota

lD

ate

ofB

alan

ce a

sR

ate

ofR

epay

men

t Ter

ms

Secu

rity

Let

ter

Dat

esa

ncti

oned

avai

lmen

t and

on 3

0.09

.08

Inte

rest

(%)

Am

ount

Am

ount

Ava

iled

(Rs.

Lac

s)(R

s. L

acs)

ICIC

I Ban

k30

-Nov

-06

USD

30

Mio

27-D

ec-0

6 U

SD12

,190

.50

9.64

% R

s.13

500

7.50

Mill

ions

14-F

eb-0

7 U

SD5.

00 M

illio

ns15

-Mar

-07

USD

5.00

Mill

ions

Tota

l Dra

wn

USD

17.5

0 M

illio

ns

Tota

l Ter

m L

oans

Fro

m B

anks

79,3

54.4

4

Term

Loa

ns F

rom

Oth

er th

an B

anks

HD

FC C

orpo

rate

Loa

n4,

000

26-F

eb-0

4 -

250.

0014

.00%

Rs.

1000

lacs

Infr

astr

uctu

re D

evel

opm

ent

25-S

ep-0

69,

000

14-D

ec-0

6 -

8,45

0.00

9.25

%Fi

nanc

e C

orpo

ratio

nR

s.20

00 la

cs29

-Mar

-07

-R

s.15

00 la

cs

Tota

l Ter

m L

oans

Fro

m O

ther

than

Ban

ks8,

700.

00

Apr

-10

to M

ar -

14 (E

stim

ate

Onl

y). R

epay

able

in 9

equ

alha

lf y

earl

y in

stal

lmen

ts.

With

firs

t ins

tallm

ent f

allin

gdu

e on

36t

h M

onth

from

the

aver

age

draw

dow

n da

te.

Firs

t par

ipas

su c

harg

e on

ent

ire

fixe

das

sets

of

the

com

pany

pre

sent

&fu

ture

ex

clu

din

g

the

asse

tssp

ecif

ical

ly c

harg

ed t

o H

DF

C &

Axi

s B

ank

Jul-

07 to

Jan

-09.

Rep

ayab

lein

4

eq

ual

h

alf

yea

rly

inst

allm

ents

sta

rtin

g fr

om31

- Jul

-07

Exc

lusi

ve c

harg

e on

the

lan

d &

buil

ding

in

Hou

sing

col

onie

s at

Plan

t II,

Met

tur D

am, S

alem

Dis

tric

t

Jul-

09 to

Apr

-18.

Rep

ayab

lein

3

6

equ

al

qu

arte

rly

inst

allm

ent s

tart

ing

from

15-

Jul-

09

Fir

st p

arip

assu

cha

rge

on e

ntir

efi

xed

asse

ts o

f the

com

pany

pre

sent

& f

utu

re e

xcl

ud

ing

th

e as

sets

spec

ific

ally

cha

rged

to

HD

FC

&A

xis

Ban

k

148

Cas

h C

redi

t Fro

m B

ank

As

on 3

0.09

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Len

der

Sanc

tion

Tota

lD

ate

ofB

alan

ce a

sR

ate

ofR

epay

men

t Ter

ms

Secu

rity

Let

ter

Dat

esa

ncti

oned

avai

lmen

t and

on 3

0.09

.08

Inte

rest

(%)

Am

ount

Am

ount

Ava

iled

(Rs.

Lac

s)(R

s. L

acs)

IOB

5-Se

p-05

Fund

- 3

200

Not

App

licab

le1,

995.

1611

.00%

Non

Fun

d -

5500

LC

- 5

000

Lac

s&

BG

-50

0 la

cs

SBI

19-D

ec-0

5Fu

nd -

320

0N

ot A

pplic

able

2,81

7.30

12.5

0%N

on F

und

-10

200

LC

-10

000

lacs

& B

G -

200

lacs

ICIC

I Ban

k29

-Aug

-06

Fund

- 6

00N

ot A

pplic

able

445.

8313

.75%

Non

Fun

d -

500

Stan

char

t5-

Jul-

06Fu

nd -

600

Not

App

licab

le61

.85

14.2

5%N

on F

und

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0L

C &

BG

inte

rcha

ngea

ble

with

max

.C

ap o

f B

G f

orR

s.10

0 la

cs.

One

off

LC

Rs.

6500

lacs

Cas

h C

redi

t Fro

m B

anks

5,32

0.15

Hyp

othe

catio

n of

inve

ntor

ies,

boo

kde

bts,

goo

ds i

n tr

ansi

t an

d ot

her

good

s ly

ing

at A

irpo

rt/H

arbo

urpe

ndin

g tr

ansp

orta

tion

to th

e fa

ctor

yon

par

ipas

su b

asis

with

oth

er le

nder

s

Hyp

othe

catio

n of

inve

ntor

ies,

boo

kde

bts,

goo

ds i

n tr

ansi

t an

d ot

her

good

s ly

ing

at A

irpo

rt/H

arbo

urpe

ndin

g tr

ansp

orta

tion

to th

e fa

ctor

yo

n p

arip

assu

bas

is w

ith

oth

erle

nder

s. F

or o

ne o

ff L

C -

Ass

ets

purc

hase

d un

der L

C.

N.A

N.A

N.A

N.A

149

Buy

ers

Cre

dit

Len

der

Sanc

tion

Tota

lD

ate

ofB

alan

ce a

sR

ate

ofR

epay

men

t Ter

ms

Secu

rity

Let

ter

Dat

esa

ncti

oned

avai

lmen

t and

on 3

0.09

.08

Inte

rest

(%)

Am

ount

Am

ount

Ava

iled

(Rs.

Lac

s)(R

s. L

acs)

IOB

(Buy

ers

Cre

dit)

27-M

ay-0

8 -

2,6

44.6

84.

01%

Rs.

230.

87 la

cs,

18-S

ep-0

8R

s 19

04.2

7 la

cs,

19-A

ug-0

8R

s.15

6.19

lacs

,28

-Aug

-08

Rs.

181.

84 la

cs,

08-S

ep-0

8R

s.17

1.52

lacs

SBI (

Buy

ers

Cre

dit)

15-F

eb-0

8 -

4,89

8.69

3.68

%R

s.18

75.9

3 la

cs,

07-M

ay-0

8R

s 14

9.62

lacs

,24

-Apr

-08

Rs.

1526

.86

lacs

, 2

3-M

ay-0

8 R

s.98

9.17

lacs

,19

-Jun

-08

Rs.

158.

79 la

cs,

23-J

ul-0

8R

s 19

8.29

lacs

ICIC

I (B

uyer

s cr

edit)

18-A

ug-0

8 -

1,77

4.82

4.48

%R

s.18

7.03

lacs

,07

-Jan

-08

Rs.

1587

.79

lacs

SCB

(Buy

ers

cred

it)09

-Apr

-08

-14

3.03

3.18

%

Rs.

143.

03 la

csSe

cure

d B

uyer

s C

redi

tF

rom

Ban

ks9,

461.

22

Tota

l14

,781

.37

24-O

ct-0

8 - R

s.23

0.87

lacs

,16

-Mar

-09

Rs

1904

.27

lacs

,17

-Feb

-09

Rs

156.

19 la

cs,

25-F

eb-0

9 R

s 18

1.84

lacs

,06

-Mar

-09

Rs

171.

52 la

cs

22-J

an-0

9 - R

s.18

75.9

3 la

cs,

03-N

ov-0

8 R

s 14

9.62

lacs

,24

-Apr

-08

Rs

1526

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acs,

19-N

ov-0

8 R

s 98

9.17

lacs

,16

-Mar

-09

Rs

158.

79 la

cs,

21-O

ct-0

8 R

s 19

8.29

lacs

10-J

ul-0

9 - R

s.18

7.03

lacs

,15

-Dec

-08

Rs.

1587

.79

lacs

06-O

ct-0

8 - R

s.14

3.03

lacs

150

Uns

ecur

ed L

oan

Det

ails

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der

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tion

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ate

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ce a

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ate

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epay

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t Ter

ms

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rity

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ter

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esa

ncti

oned

avai

lmen

t and

on 3

0.09

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Inte

rest

(%)

Am

ount

Am

ount

Ava

iled

(Rs.

Lac

s)(R

s. L

acs)

Ban

k of

Indi

a3-

Mar

-08

5,00

06-

Mar

-08

5,00

0.00

11.2

5%

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shm

i Vila

s B

ank

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5,00

05-

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0013

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Supp

liers

Cre

dit

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plie

rs C

redi

t)14

-Jul

-08

-1,

980.

86R

s.19

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6 la

cs

Tota

l Uns

ecur

ed L

oan

and

Buy

ers

Cre

dit F

rom

Ban

ks11

,980

.86

Rep

ayab

le b

y bu

llet p

aym

ent

at th

e en

d of

12

mon

ths,

with

a pu

t op

tion

at t

he e

nd o

f 6

mo

nth

s w

ith

on

e m

on

thno

tice

Uns

ecur

ed fo

r a p

erio

d of

6 m

onth

san

d 2n

d ch

arge

on

Fixe

d as

sets

to

be c

reat

ed i

f pu

t op

tion

is

to b

eex

erci

sed

and

loan

is o

utst

andi

ngbe

yond

6 m

onth

s.

Rep

ayab

le b

y bu

llet p

aym

ent

at th

e en

d of

6 m

onth

s

22-J

an-0

9 - R

s. 1

980.

86la

cs

Secu

rity

Par

ticu

lars

A.

Term

loan

s fr

om b

anks

and

oth

ers

aggr

egat

ing

Rs.

79,

354.

44 L

acs

and

Rs

8,45

0.00

Lac

s re

spec

tive

ly a

re s

ecur

ed b

y fi

rst p

ari p

assu

cha

rge

on la

nd, b

uild

ings

and

pla

nt a

ndm

achi

nery

of

the

Com

pany

sub

ject

to e

xclu

sive

cha

rge

on a

sset

s re

ferr

ed to

in B

bel

ow. C

reat

ion

of c

harg

e in

res

pect

of

Rs

2500

lacs

is in

pro

gres

s.B

.Te

rm lo

an f

rom

oth

ers

to th

e ex

tent

of

Rs

250

Lac

s is

sec

ured

by

equi

tabl

e m

ortg

age

of s

peci

fic

land

and

bui

ldin

gsC

.C

ash

cred

it f

rom

ban

ks a

re s

ecur

ed b

y a

firs

t par

i pas

su c

harg

e on

inve

ntor

ies

and

book

deb

ts

2nd

char

ge o

n Fi

xed

asse

ts to

be

cre-

ated

if lo

an is

out

stan

ding

bey

ond

6m

onth

s.

151

Che

mpl

ast

Sanm

ar L

imit

ed

DE

TA

ILS

OF

OT

HE

R I

NC

OM

EA

nnex

ure

XR

s. L

acs

Part

icul

ars

For

the

For

the

For

the

For

the

For

the

For

the

Nat

ure

ofR

elat

ed o

rpe

riod

end

edye

ar e

nded

year

end

edye

ar e

nded

year

end

edye

ar e

nded

Inco

me

not r

elat

ed30

.09.

0831

.03.

0831

.03.

0731

.03.

0631

.03.

0531

.03.

04to

bus

ines

s

Div

iden

ds fr

om n

on-t

rade

long

term

inve

stm

ents

--

--

-16

.74

Non

-rec

urri

ngR

elat

ed

Shar

e of

inco

me

from

par

tner

ship

firm

20.5

741

.26

23.8

827

.38

40.7

06.

51R

ecur

ring

Rel

ated

Mon

trea

l Pro

toco

l Com

pens

atio

n12

2.66

1,77

7.89

176.

381,

839.

8017

4.25

193.

61R

ecur

ring

Rel

ated

Inco

me

from

Cer

tifie

d E

mis

sion

Red

uctio

n (C

ER

)2,

413.

294,

774.

7024

8.13

--

-R

ecur

ring

Rel

ated

Prof

it on

sal

e of

fix

ed a

sset

s (n

et)

26.3

865

5.54

44.2

518

3.49

11.4

039

.36

Rec

urri

ngR

elat

ed

Prof

it on

sal

e of

non

-tra

de lo

ng te

rm in

vest

men

ts-

--

-43

1.00

-N

on-r

ecur

ring

Not

rela

ted

Inte

rest

on

depo

sits

etc

.26

.90

111.

7010

3.12

76.8

097

.99

55.2

9R

ecur

ring

Rel

ated

Com

mis

sion

--

89.8

078

.14

67.2

261

.46

Rec

urri

ngR

elat

ed

Lia

bilit

ies/

Prov

isio

ns n

o lo

nger

requ

ired

wri

tten

back

-32

.71

113.

3273

.02

59.1

720

.62

Rec

urri

ngR

elat

ed

Surp

lus

of C

hem

plas

t Sta

ff P

rovi

dent

Fun

d T

rust

*-

166.

83-

--

-N

on-r

ecur

ring

Rel

ated

Dif

fere

nce

in E

xcha

nge

(net

)29

0.54

--

--

-R

ecur

ring

Rel

ated

Mis

cella

neou

s in

com

e28

.87

69.9

845

.24

124.

6913

9.97

163.

32R

ecur

ring

Rel

ated

Tota

l of O

ther

Inc

ome

2,92

9.21

7,63

0.61

844.

122,

403.

321,

021.

7055

6.91

* R

epre

sent

s am

ount

tran

sfer

red

to th

e C

ompa

ny c

onse

quen

t to

the

win

ding

up

of th

e T

rust

on

appr

oval

of T

he C

omm

issi

oner

of I

ncom

e Ta

x.

152

List of related parties Annexure XI

(a) List of parties where control exists

Cabot Sanmar Limited (The company holds 50% of equity capital for 2003-04)

N. Sankar (for 2003-04)

Sanmar Holdings Limited (Holding Company)

(b) Associates / Fellow Subsidiaries

AMP Sanmar Life Insurance Co Limited (Till 2005-06-part of the year)

Asco India Limited (till July 31, 2008)

Bay View Properties Private Limited (from 2004-05 to 2006-07)

BS&B Safety Systems (India) Limited

Cabot Sanmar Limited (from 2004-05)

Cathedral Corporate finance

Chemplast Chlorochemicals Limited (for 2003-04)

Chemplast Sanmar Aromatics Limited (for 2006-07)

Fisher Sanmar Limited

Flowserve Sanmar Limited

Fortis Investments (Beta) Limited (for 2003-04)

Indchem Software Technologies Limited (for 2003-04)

Kalamkriya Limited

Sanmar Engineering Services Limited (for 2004-05 and 2005-06)

Sanmar Foundries Ltd

Sanmar Group Corporate Finance (from 2003-04)

Sanmar Properties and Investments Ltd (for 2003-04)

Sanmar Realty Ltd (for 2003-04)

Sanmar Shipping Limited

Sanmar Speciality Chemicals Limited

Sanmar Weighing Systems Limited (for 2003-04)

SHL Property Holdings Limited (from 2004-05)

TCI Sanmar Chemicals LLC (from 2007-08)

Tyco Sanmar Limited

Vishay Sanmar Limited (from 2005-06 upto June 30, 2008)

Xomox Sanmar Limited

(c) Key Management Personnel

N Sankar - also controlling party (for 2003-04)

P S Jayaraman

S Gopal

V Ramesh

(d) Relatives of Key Management Personnel

N Kumar - Brother of N Sankar (for 2003-04 and 2004-05)

Vijay Sankar - Son of N Sankar (for 2003-04 and 2004-05)

(e) The above information regarding related parties have been determined to the extent such parties have beenidentified on the basis of information available with the Company.

153

Tran

sact

ions

dur

ing

the y

ear

Purc

hase

s-

107.

3-

-72

7.83

--

337.

51-

-27

2.74

--

422.

50-

-19

1.33

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les

-50

0.73

--

736.

09-

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128.

69-

-67

6.41

--

538.

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-48

0.56

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mm

isson

rece

ived

--

--

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--

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m p

artn

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rm-

20.5

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--

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--

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Inte

rest

rece

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/ (p

aid)

--

--

--

--

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--

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1.79

)-

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pens

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cove

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/(pai

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1 .0

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--

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47-

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ceiv

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(pai

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--

(358

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--

( 326

.64)

--

( 125

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(93.

07)

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0)-

( 63.

07)

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ase r

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--

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--

--

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0.03

--

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7513

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aid

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( 147

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5)-

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--

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--

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Dep

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refu

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-14

7.41

-

Tran

sact

ions

/ Nat

ure o

f rel

atio

nshi

p

For t

he H

alf y

ear e

nded

30.0

9.08

Part

ies

wher

eco

ntro

lex

ists

For t

he ye

ar en

ded

31.0

3.08

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he ye

ar en

ded

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3.07

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he ye

ar en

ded

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3.06

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he ye

ar en

ded

31.0

3.05

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he ye

ar en

ded

31.0

3.04

Asso

ciate

s/F

ellow

Subs

idia

ries

Key

Man

agem

ent

Pers

onne

l

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Che

mpl

ast

Sanm

ar L

imit

ed

Lis

t of t

rans

acti

ons

wit

h re

late

d pa

rtie

sR

s. L

acs

154

Tran

sact

ions

/ Nat

ure o

f rel

atio

nshi

p

For t

he H

alf y

ear e

nded

30.0

9.08

Part

ies

wher

eco

ntro

lex

ists

For t

he ye

ar en

ded

31.0

3.08

For t

he ye

ar en

ded

31.0

3.07

For t

he ye

ar en

ded

31.0

3.06

For t

he ye

ar en

ded

31.0

3.05

For t

he ye

ar en

ded

31.0

3.04

Asso

ciate

s/F

ellow

Subs

idia

ries

Key

Man

agem

ent

Pers

onne

l

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Part

ies

wher

eco

ntro

lex

ists

Asso

ciate

s/ F

ellow

Subs

idia

ries

Key

Man

agem

ent

Perso

nnel

Lis

t of t

rans

acti

ons

wit

h re

late

d pa

rtie

sR

s. L

acs

Purc

hase

sA

sco

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a Lim

ited

--

--

--

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78-

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54-

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81-

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15-

Bay

View

Pro

perti

es L

imite

d-

--

--

--

--

--

--

0.82

--

--

BS&

B Sa

fety

Sys

tem

s(In

dia )

Lim

ited

-17

.12

--

80.9

4-

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.01

--

11.9

5-

-11

.53

--

3.49

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bot S

anm

ar L

imite

d-

--

--

--

1.16

--

10.3

3-

-0.

01-

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sher

San

mar

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ited

-26

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--

279.

74-

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--

6 9.

10-

-55

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--

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owse

rve S

anm

ar L

imite

d-

19.5

9-

-70

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--

35.7

0-

-17

.22

--

19.9

7-

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dche

m S

oftw

are T

echn

olog

ies L

td-

--

--

--

--

--

--

--

-15

.00

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alam

kriy

a Li

mite

d-

18.8

8-

-37

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--

26.3

0-

-29

.98

--

30.6

9-

-30

.45

-Sa

nmar

Eng

inee

ring

Serv

ices

Ltd

--

--

--

--

--

--

-1

.06

--

--

Sanm

ar F

ound

ries L

imite

d-

--

--

--

22.1

0-

-53

.02

--

84.4

1-

-57

.27

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nmar

Sec

uriti

es T

radi

ng L

td-

--

--

--

--

--

--

--

-1.

43-

Sanm

ar S

peci

ality

Che

mic

als L

imite

d-

--

--

--

--

-0

.01

--

--

--

-Sa

nmar

Wei

ghin

g Sy

stem

s Lim

ited

--

--

--

--

--

1.19

--

--

-0.

21-

Vish

ay S

anm

ar L

imite

d-

--

--

--

--

-2.

30-

--

--

--

Tyco

San

mar

Lim

ited

--

--

--

-15

.83

--

22.6

4-

-10

0.50

--

11.4

1-

Xom

ox S

anm

ar L

imite

d-

19.9

3-

-19

4.04

--

130.

44-

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.46

--

116.

91-

-37

.65

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ther

s-

4.80

--

64.7

7-

--

--

--

--

--

--

Tota

l Pur

chas

es-

107.

30-

-72

7.83

--

337.

51-

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2.74

--

422.

50-

-19

1.33

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lesBa

y Vi

ew P

rope

rties

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ited

--

--

--

--

--

0.06

--

--

--

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&B

Safe

ty S

yste

ms

--

--

--

--

--

8.10

--

--

--

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bot S

anm

ar L

imite

d-

422.

84-

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7.29

--

507.

31-

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5.09

--

428.

70-

-37

3.25

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sher

San

mar

Lim

ited

--

--

--

--

--

0.18

--

0.10

--

--

Sanm

ar A

lloy

Casti

ngs L

td-

--

--

--

--

--

--

--

-1.

92-

Sanm

ar F

ound

ries L

imite

d-

--

-22

.43

--

1.42

--

1.89

--

1.54

--

--

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s/ F

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wher

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Asso

ciate

s/ F

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idia

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Key

Man

agem

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Perso

nnel

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wher

eco

ntro

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Asso

ciate

s/ F

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idia

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Key

Man

agem

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Perso

nnel

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wher

eco

ntro

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ciate

s/ F

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idia

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Key

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nnel

Part

ies

wher

eco

ntro

lex

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ciate

s/ F

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idia

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t of t

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h re

late

d pa

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Man

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Part

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Asso

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s/ F

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158

Particulars For the For the For the For the For the For theperiod ended year ended year ended year ended year ended year ended

30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

A Net Profit/ (Loss) before (5,006.35) 857.98 3,476.12 4,632.75 2,967.18 347.61current and deferredtaxes, as restatedIncome Tax rates 33.99% 33.99% 33.66% 33.66% 36.5925% 35.875%applicable - Normal Tax(including surcharge andeducation cess)

Tax at applicable rate (A) Note below 291.63 1,170.06 1,559.38 1,085.76 124.71

Adjustments

B Permanent DifferencesPermanent Allowances/ 191.77 (1,128.48) 643.55 (1,124.94) 14.44 445.69(Disallowances) as perIncome Tax Act (Net)Total (B)

C Timing DifferencesDifference between Tax (1,962.11) (5,071.82) (2,497.10) 267.10 (934.38) 46.43Depreciation andBook Depreciation inrespect of depreciableassets

Other Allowances / (317.72) 338.03 694.83 878.06 372.46 (150.05)(Disallowances) as perIncome-tax Act (Net)

Total (C) (2,279.83) (4,733.79) (1,802.27) 1,145.16 (561.92) (103.62)

D Net Adjustments (B+C) (2,088.06) (5,862.27) (1,158.72) 20.22 (547.48) 342.07

E Tax Savings thereon (E) (709.73) (1,992.59) (390.02) 6.80 (200.34) 122.71

F Taxation Charge - (1,700.96) 780.04 1,566.18 885.42 247.42Current (A+E)Note below

G Tax on Long termCapital gains (G) - - - - 23.36 -

H Provision for MAT - 168.43 - - - -

J Total current taxes(H)/(F+G) - 168.43 780.04 1,566.18 908.78 247.42

Note :In view of the business loss, no provision for income tax has been made in the accounts for the six months endedSeptember 30, 2008.

STATEMENT OF TAX SHELTER Annexure XII

Rs. Lacs

159

STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY

Stock market data for Equity Shares of our Company

The equity shares of our Company are listed on BSE, NSE and MSE. Our shares are traded on the BSE and NSE.There is no trading of our shares on the MSE.

The high and low of closing prices recorded on the BSE and NSE for the preceding three financial years and thenumber of Equity Shares traded on the days the high and low prices were recorded are stated below:

High Low

Price Date Volume Price Date Volume(Rs.) (Rs.)

2008 23.50 04-Jan-2008 17,06,440 6.21 17-Oct-2007 1,06,467 9.492007 10.31 09-Feb-2007 11,01,474 4.65 15-Jun-2006 52,700 7.222006 – Post 9.80 20-Mar-2006 94,470 7.60 29-Mar-2006 96,974 8.73Split (i.e., from 8March 2006 to31 March 2006)*

2006 – Pre split 110.70 19-July-2005 2,28,524 38.50 01-Apr-2005 2,132 79.95(i.e., from 1 Apr2005 to 7 Mar2006)*

Year endingMarch 31

AveragePrice forthe year/

period (Rs.)

BSE

NSE

High Low

Price Date Volume Price Date Volume(Rs.) (Rs.)

2008 23.50 04-Jan-2008 18,19,393 6.10 17-Oct-2007 89,747 9.51

2007 10.30 09-Feb-2007 9,93,681 4.65 15-Jun-2006 1,53,331 7.21

2006 – Post Split 9.70 16-Mar-2006 209,294 7.60 29-Mar-2006 1,40,348 8.72(i.e., from 8 March2006 to 31 March2006)*

2006 – Pre split 111.05 19-Jul-2005 4,37,951 37.60 01-Apr-2005 8,025 80.00(i.e., from 1 Apr2005 to 7 Mar2006)*

Year endingMarch 31

AveragePrice forthe year/

period (Rs.)

* Pursuant to stock split approved by the Members of our Company during March 2006, the above share prices arecategorized into:

Pre-split period - Upto 7 March 2006 - Face value of Rs.10/- each

Post-split period - From 8 March 2006 onwards – Face value of Re.1/- each

160

The high and low prices and volume of Equity Shares traded on the respective dates during the last six months are asfollows:

BSE

NSE

In the event the high and low price of the Equity Shares are the same on more than one day, the day on which therehas been higher volume of trading has been considered for the purposes of this section.

September 08 7.35 02-Sep-08 59,093 4.85 30-Sep-08 84,938 6.53

October 08 6.10 03-Oct-08 35,796 3.75 27-Oct- 08 1,05,031 4.67

November 08 5.45 05-Nov-08 2,29,769 3.10 25-Nov-08 67,267 3.50

December 08 4.85 18-Dec-08 49,393 3.40 02-Dec-08 23,107 3.88

January 09 4.70 02-Jan-09 92,757 3.15 27-Jan-09 49,587 3.92

February 09 4.00 25-Feb-09 72,841 3.40 20-Feb-09 23,688 3.64

Month High(Rs)

Date of High Volume ondate ofHigh

Low(Rs.)

Date of Low Volume onDate of Low

WeightedAverage Pricefor the month

(Rs.)

In the event the high and low price of the Equity Shares are the same on more than one day, the day on which therehas been higher volume of trading has been considered for the purposes of this section.

The closing market price on July 26, 2006, the trading day immediately following the day on which Board meetingwas held to approve the Rights Issue, was Rs 5.10 on NSE and Rs 5.19 on BSE.

The closing price was Rs. 3.60 on BSE and Rs. 3.60 on NSE on 20th February 2009, the trading day immediately precedingthe day on which the Committee of Directors met to finalize the offer price for the Issue i.e. 23rd February, 2009.

September 08 7.29 02-Sep-08 25,982 5.00 30-Sep 08 43,477 6.52

October 08 6.03 03-Oct-08 20,462 3.50 27-Oct-08 51,875 4.65

November 08 5.56 05-Nov-08 77,913 3.20 24-Nov-08 1,19,087 4.19

December 08 4.43 19-Dec-08 25,652 3.81 29-Dec-08 26,688 3.96

January 09 4.68 02-Jan-09 36,099 3.50 13-Jan-09 33,723 3.91

February 09 4.00 25-Feb-09 13,645 3.40 24-Feb-09 20,356 3.64

Month High(Rs)

Date of High Volume ondate ofHigh

Low(Rs.)

Date of Low Volume onDate of Low

WeightedAverage Pricefor the month

(Rs.)

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIALCONDITIONS AND RESULTS OF OPERATIONSYou should read the following discussion in conjunction with our selected financial and other operating data andour financial statements under Indian GAAP, the related notes appearing in the section titled “Our Business”, andthe related notes to accounts and significant accounting policies that have been incorporated in the section titled“Financial Information”. This discussion and analysis contains forward-looking statements that involve risks, un-certainties and assumptions. A description of what constitutes a forward-looking statement is provided in “For-ward-Looking Statements”. Our actual results may differ materially from those anticipated in these forward-lookingstatements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors”, “OurBusiness” and “Objects of the Issue” in this Letter of Offer. Unless otherwise stated, the financial information usedin this section is derived from our standalone audited financial statements under Indian GAAP, as restated.

Our fiscal year ends on March 31 of each year, hence all references to a particular fiscal are to the 12-month periodended March 31 of that year. In this section, any reference to “we”, “us” or “our” refers only to Chemplast SanmarLimited. Bracketed numbers indicate losses/negative figures.

Overview of the Business of the Company

Chemicals and Plastics India Limited was incorporated in 1962, as single product company to make PVC Resin.PVC operations started in 1967 in Mettur with technology from B F Goodrich, USA to manufacture a variety of highquality PVC Resin products having wide range of end use applications.

We built a track record of partnership over a period of time, started with B F Goodrich of the USA, technologypartner and continued with suppliers, customers and other constituents. In the year 1988. The Mettur Chemical &Industrial Corporation Limited (MCIC) our supplier of chlorine merged with Chemicals and Plastics India Limited.MCIC was a manufacturer of caustic soda since 1936.

Chemplast Sanmar Limited was originally incorporated on March 13,1985 as Urethanes India Limited (UIL)underthe provisions of Indian Companies Act, 1956. During 1992, Chemicals and Plastic India Limited was amalgamatedwith our company.

Our businesses are PVC, Chlorochemicals and Piping Systems.

Our integrated facility at Mettur has a capacity to produce 64,000 tpa of PVC, Ethylene Di-chloride (EDC), thefeedstock required to manufacture PVC is also produced in this location.

The Cholorochemicals division at Mettur manufactures Caustic Soda and Chlorine, Chlorinated Solvents, Refriger-ant Gases and Silicon Wafers. The Mettur plant has a capacity of 62,100 tpa of caustic soda and 55,000 tpa ofchlorine. We have changed the old Mercury based Caustic technology to environment friendly Membrane basedCaustic technology in the year 2007 resulting in 20% (approximately) reduction in power consumption. We have ourown salt fields at Vedaranyam and the salt required for manufacturing Chlorine/Caustic Soda at Mettur and Karaikalare procured from these salt fields .

Strategic Acquisitions

Karaikal Plant: With the intension of achieving self sufficiency in feedstock, we completed strategic acquisition in2003 of a Choloralkali plant at Karaikal with 33,000 tpa capacity for caustic soda and 30,000 tpa capacity forchlorine. Subsequently, these capacities have been increased to 51,750 tpa and 46,000 tpa for caustic soda andchlorine respectively.

The profitability of our PVC division has been affected with the continuous reduction in the custom duty on PVC andthe minimal spread of import duty on PVC and the intermediate (EDC). The spread between the import duty on PVCand EDC which was 15% in 2002 has been brought down to 3% now. Further, we are faced with a challenge of non-availability of Denatured Spirit (DNS) because of the increased demand coming from the potable sector and thegasohol programme of the Government of India. Having foreseen this situation a couple of years earlier, we built in2007 an EDC plant of 84,000 tpa capacity to captively utilise the chlorine from the Karaikal plant together marineterminal facilities for the import of ethylene. EDC manufactured in Karaikal is used as the feedstock for PVC atMettur. The balance requirement of EDC of around 25,000 TPA is met from the Oxychlorination facility operating atMettur Dam.

PVC Pipe Business: In pursuit of our forward integration strategy, we acquired the PVC pipes businesses ofPolytrusions Pvt. Ltd and Vinplex India Pvt. Ltd. in 2006, located in Sholavaram near Chennai. These units, withoperating facilities of manufacturing wide variety of pipes such as pressure pipes, casing and screen pipes, SWRpipes, plumbing pipes and conduits have come with an established brand name “TRUBORE”. With this acquisition,

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part of our PVC production from the Greenfield project at Cuddalore can be consumed in-house. The PVC pipescapacity has been increased from 22,000 tpa to 36,000 tpa after the acquisition. We have also set up a GreenfieldPVC pipe plant at Shinoli, Maharashtra with a capacity of 20,000 tpa. We also have facility to manufacture PVCfittings at Sholavaram.

Chlorochemicals

The Chlorochemicals Division of Chemplast, itself the result of backward integration by the group, manufactures awide range of products using a highly integrated manufacturing process. Chlorochemicals mainly deals with Chlor-alkali (Caustic Soda and Chlorine), Solvents (Chloromethanes and Trichlorethylene), Refrigerant Gases and Siliconwafers. These downstream products are either chlorine derivatives or chlorine users in the production process.

Industrial Solvents: In this division two types of products are manufactured viz. chloromethanes (CMP) and Trichlo-roethylene (TCE). CMP essentially refer to methyl chloride, methylene chloride, chloroform and carbon tetra chlo-ride. These are used in the Pharmaceuticals, Agrochemicals, Poly Tetra Flouro Ethylene (PTFE) and Refrigerantgases industries. TCE is used as a vapour degreasing agent. We also produce small quantities of Perchloroethylene(PCE).The main feedstocks for CMP are methanol and chlorine. We source our chlorine requirement for CMPinternally. Methanol is imported/ purchased from imports / domestic suppliers. TCE is manufactured from calciumcarbide and chlorine. We are phasing out the production of Carbon Tetra Chloride (CTC) for non-feedstock applica-tion in line with Montreal Protocol.

Refrigerant Gases: The manufacturing facility of refrigerant gases is situated at Mettur plant in Tamil Nadu and hasa capacity of 2,500 TPA. Refrigerant gases comprises of three different grades, CFC 11, CFC 12 and HCFC 22 andmixtures of the first two grades. These are essentially used in the refrigeration and air conditioning industries. Themain feedstocks for refrigerant gases are hydrogen fluoride and chloroform / CTC. We source our chloroform / CTCfrom our solvents division. The manufacturing of refrigerant gases are covered by the Montreal Protocol and as perthe terms of the Protocol, CFC 11 and CFC 12 grades of refrigerant gases are to be phased out by 2010 and HCFC 22grade is to be phased out by 2040. Our Clean Development Mechanism (Carbon Credit) Project for incinerating theby-product HFC-23 was registered with United Nations Framework Convention of Climate Change (UNFCCC) inFebruary 2007.

Silicon Wafers: We have completely integrated manufacturing facilities with the ability to manufacture poly silicon,mono silicon ingots and wafers. Only a few manufactures in the world have the technology to manufacture polysilicon whereas we have developed this technology indigenously in association with the Indian Institute of Science,Bangalore. We were manufacturing Silicon wafers based on imported polysilicon till recently as this option was costeffective. However, with the increase in prices of polysilicon and the availability constraints (due to demand createdby the thrust on non-conventional energy sources), we have revived our own Polysilicon manufacturing facility. Wemanufacture about 1.2 million 5" PSQ wafers of electronic grade, which goes into electronic applications.

Power Generation : Power is one of the major raw materials in our business. The power requirement at Mettur ismet from captive power plants. Presently, we are generating 48.50 MW power at Mettur using Low Sulphur HeavyStock (LSHS) as the fuel. We are in the process of setting up a 48.50 MW coal based power plant by conversion ofexisting LSHS based power plant, of Mettur to meet its total power and steam requirement at Mettur facilities.Almost 50% of power requirement at Karaikal is met through our own gas based power plant of 12 MW

Projects

We are now implementing a greenfield plant for the manufacture of PVC at Cuddalore at a cost of Rs.520 crores witha capacity of 2,00,000 tpa., subject to our obtaining the necessary approvals for increase in capacity from 1,70,000tpa to 2,00,000 tpa from MOEF & TNPCB. The feedstock for this plant will be Vinyl Chloride Monomer (VCM).The entire VCM will be imported and the Company is setting up a Marine Terminal Facility to facilitate import ofVCM as part of this project.

We have undertaken several other project initiatives which have already been implemented or being implemented.These include conversion of the technology relating to manufacture of Caustic Soda at Mettur from Mercury Cell toMembrane Cell, a coal based power project, a Polysilicon project based on in-house developed technology to enablecontinuous production of Silicon Wafers, acquisition and expansion of PVC pipes business, an effluent treatmentprocess that enables the plants at Mettur to achieve the status of ‘Zero Discharge’ of liquid effluents.

Material Developments since March 31, 2008

The following are the material developments since March 31, 2008:

a) Revocation of consent order/appeal issued by TNPCB in respect of conversion of existing LSHS based plantinto coal based plant for production of power and steam. In September 2008, the High Court of Madras set

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aside the revocation order of TNPCB and the matter has been remitted back to TNPCB for fresh consideration.Proceedings before the TNPCB were completed in January 2009 and the orders of TNPCB are awaited.

b) Disputes raised by some of the land owners/ other parties in respect of lands purchased by the Company for thepipe line corridor (part of MTF Project) project at Cuddalore. The legal proceedings initiated by/against theCompany are pending in courts of appropriate jurisdictions.

c) Writ Petitions (3) were filed and pending before the Madras High Court challenging the environmental clearancesgranted to the Company for its PVC Project and Marine Terminal Project at Cuddalore.

d) The sudden steep fall in prices of crude oil and the global financial crisis had led to collapse of Petrochemicalprices by almost 50%. However, as a measure of conservatism, and in line with generally accepted accountingprinciples, the company wrote the carrying value of stocks of major raw materials, intermediates and finishedproducts, to levels corresponding to the net realizable value of finished products as on September 30, 2008.This has led to an exceptional charge of Rs 3050.47 lacs, during the quarter ended September 30, 2008.

Factors that may affect Results of Operations

Factors that may affect our future results of operations are:Our ability to successfully commission projects at the scheduled time;

Increasing competition from additional capacities being set up in India as well as neighbouring countriesdue to their lower labour costs and ready availability of raw material;

Increase in raw material, power, labour and other manufacturing costs;

Duties and taxes and exchange rates;

General economic and business conditions;

Cyclical nature of PVC and Chlorochemical businesses;

Operating cost & efficiency and

Availability of skilled human resources

Risk and Concerns

The major risks identified by our Company are discussed in the following sections:

1. Business RiskConcentration Risk: The polymer industry is characterized by high degree of concentration. The topproducers are:

Reliance Industries Limited

Finolex Industries Limited

DCW Limited

DCM Shriram Consolidated Limited

2. Operations Risk

Delay in start up of expansion

Break down

Raw material sourcing

3. Financial risk

Credit risk: We have in place an extensive credit evaluation and appraisal process. An internal ratingmechanism grades and sorts existing and new customers based on their credit worthiness. The paymentterms with various customers are decided based on their respective credit ratings.

Financing risk: Our success depends on the ability to secure long-term debt financing for funding theprojects under implementation as well as future expansions, which might lead to asset liability mismatch.Besides, we are also exposed to interest rate risks arising from long-term debt obligation.

Foreign exchange fluctuation risk.

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Summary of Results of OperationCHEMPLAST SANMAR LIMITED

RESTATED SUMMARY STATEMENT OF PROFIT AND LOSSRs. In Lakhs

Particulars For the For the year For the year For thesix months ended ended year ended

ended 30.09.08 31.03.08 31.03.07 31.03.06

INCOMESales 42837.37 73426.40 70227.47 67601.29Less: Excise duty 4914.96 9408.53 8964.90 8882.60Other income 2929.21 7630.61 844.12 2403.32

40851.62 71648.48 62106.69 61122.01Increase/(Decrease) in Inventories 2083.70 955.57 (757.60) 987.07Total 42935.32 72604.05 61349.09 62109.08

EXPENDITURERaw Materials and purchased intermediatesconsumed 19805.35 25454.11 18058.08 20213.08Staff Costs 2827.91 5572.92 5121.11 4776.74Other manufacturing expenses 16923.72 26384.53 24610.82 23220.68Administration Expenses 2138.18 3851.17 3154.07 2499.72Selling and Distribution Expenses 713.21 1493.24 1153.95 1324.29Interest and finance cost 3036.12 4476.98 2331.96 1841.12Depreciation 2497.18 4513.12 3442.98 3600.70Total 47941.67 71746.07 57872.97 57476.33

Net Profit/(Loss) before tax andextraordinary items (5006.35) 857.98 3476.12 4632.75Provision for current tax - (168.43) (780.04) (1566.18)Provision for deferred tax 1405.00 86.22 (179.22) 396.00Provision for fringe benefits tax (30.00) (42.00) (35.00) (32.88)Total 1375.00 (124.21) (994.26) (1203.06)

Net Profit/(Loss) after tax beforeextraordinary items (3631.35) 733.77 2481.86 3429.69Extra-ordinary items (net of taxes)Net Profit/(Loss) after tax andextraordinary items (3631.35) 733.77 2481.86 3429.69Profit brought forward 14301.97 13568.20 11086.34 7656.65

10670.62 14301.97 13568.20 11086.34

Debenture Redemption Reserve written back - - - -Investment Allowance Reserve written back - - - -Transfer from Debenture Redemption Reserve - - - -

10,670.62 14,301.97 13,568.20 11,086.34Transfer to Capital Redemption Reserve - - - -Interim Dividend- Preference dividend

(previous year - subject to tax) - - - - - Tax on dividend - - - -Proposed final dividend - Equity dividend - - - -- Tax on dividend - - - -Profit carried to Balance Sheet 10670.62 14301.97 13568.20 11086.34

Earnings Per Share (Rs.) (0.76) 0.15 0.52 0.71

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Discussion on Results of Operations

Comparison of Results of Operation

Comparison of fiscal 2008 and fiscal 2007

Income from OperationsNet income from operations has increased from Rs. 61,262.57 lacs in fiscal 2007 to Rs. 64,017.87 lacs in fiscal 2008registering an increase of Rs.2,755.30 lacs. This increase of 4.49% was mainly on account of increase in PVC saleand sale of caustic Soda by Rs 1,926 lacs and 1,450.79 lacs respectively , however this increase was partly offset bydrop in sale of other products.

Other IncomeOther income consists of share of income from partnership firm, Montreal Protocol compensation, income fromCertified Emission Reduction (CER), Profit on sale of fixed assets, commission, liabilities /provision no longerrequired and miscellaneous income.

The other income has increased from Rs. 844.12 lacs in fiscal 2007 to Rs. 7630.61 lacs in fiscal 2008. The spurt inother income is mainly on account of income from Certified Emission Reduction which stood at Rs.4,774.70 lacs forfiscal 2008 as compared to Rs.248.13 lacs for fiscal 2007 and Montreal Protocol compensation of Rs.1,777.89 lacsin fiscal 2008 compared to Rs.176.38 lacs received in fiscal 2007. Also, there was a higher amount of profit realizedon sale of fixed assets of Rs.655.54 lacs in fiscal 2008 as compared Rs. 44.25 lacs in fiscal 2007.

Operating ExpenditureThe operating expenditure has increased by around 20% in fiscal 2008 as compared to fiscal 2007. This increase of20% is on account of the inflation and increase in labour costs. The operating expenditure for fiscal 2008 is around86% of the total income as compared to the same being 85% of total income for fiscal 2007.

Interest and Finance ChargesThe interest and finance charges for fiscal 2008 were Rs.4,476.98 lacs which were higher by Rs.2,145 lacs ascompared to fiscal 2007, for which the interest and finance charges stood at Rs. 2,331.96 lacs.

The reason for almost 92% increase in interest and finance charges during fiscal 2008 is on account of the increasein secured loans from Rs. 49,002.45 lacs in fiscal 2007 to Rs.77,528.60 lacs in fiscal 2008 and an increase inunsecured loans by Rs.7,219 lacs in fiscal 2008. Increase in loan was towards various projects such as MTF, EDC,Membrane, Poly Silicon, Incinerator etc.

DepreciationThe depreciation in fiscal 2008 stood at Rs.4,513.12 lacs, which was Rs.3,442.98 lacs for fiscal 2007. The higherdepreciation is on account of additions to Plant and Machinery like Membrane plant and HCL plant in Mettur andMTF and EDC plant at Karaikkal

Profit before Interest, Depreciation/Amortisation, Tax and Exceptional itemsThe profit before interest, depreciation/amortization, tax and exceptional items for fiscal 2008, which was Rs. 9,848.08lacs, registered an increase of around 6% as compared to that for fiscal 2007, for which the figure was Rs. 9,251.06 lacs.

Net ProfitThe net profit for fiscal 2008 was Rs.733.77 lacs which has fallen by almost 70% as compared to the net profit figurefor fiscal 2007, for which the figure was Rs.2,481.86 lacs. The reason for the fall in profitability is mainly on accountof increase in cost of goods sold, increase in interest expenditure and Depreciation.

Secured and Unsecured LoansThere has been an increase in the secured and unsecured loans. For fiscal 2008, the secured loans stood at Rs.77,528.60lacs, registering an increase of around 58% as compared to fiscal 2007 and we also took an unsecured loan ofRs.7,219.62 lacs during fiscal 2008, which was nil for fiscal 2007.The total outstanding secured and unsecured loanregistered a rise of 73% during fiscal 2008 as compared to fiscal 2007.

The reason for such an increase in the loans is that we are setting up a Greenfield PVC plant at Cuddalore, and to fundthat project and various other projects such as coal power, MTF, EDC, Membrane projects etc, the loans were taken.

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Fixed AssetsThe gross block as on fiscal 2008 stood at Rs.99,683.60 lacs, which was Rs. 81,666.96 lacs for fiscal 2007. Theincrease of around 22% is on account of the following additions:

Rs in lacs

Pipe plant – Sholavaram Expansion - 1,288.21

Membrane and HCL plant at Mettur - 8,215.68

MTF and EDC Plants at Karaikkal - 5,877.00

Zero Liquid Discharge plant at Mettur at plant II - 2,760.00

Comparison of fiscal 2007 and fiscal 2006

Income from Operations

Net income from operations has increased from Rs.58,718.69 lacs in fiscal 2006 to Rs. 61,262.57 lacs in fiscal 2007registering an increase of Rs.2,543.88 lacs. This increase of 4.33% was due to increase in PVC Resin sales by 2,972lacs and Chloromethanes sales by 2,147 lacs, which was partly offset by drop in caustic sales by Rs 2,114 lacs.

Other Income

The other income has reduced from Rs.2,403.32 lacs in fiscal 2006 to Rs.844.12 lacs in fiscal 2007. The reason forthe reduction in the other income is that in fiscal 2006, Rs.1,839.80 lacs was received by way of Montreal Protocolcompensation which in fiscal 2007 was only Rs.176.38 lacs.

Operating Expenditure

The operating expenditure has remained almost at the same level in fiscal 2007 as compared to fiscal 2006. Theoperating expenditure for fiscal 2007 and 2006 is around 84%.

Interest and Finance Charges

The interest and finance charges for fiscal 2007 were Rs.2,331.96 lacs which were higher by Rs.490.84 lacs ascompared to fiscal 2006, for which the interest and finance charges stood at Rs.1,841.12 lacs. The reason for increasein interest and finance charges is due to increase in Term/ FCNR loans.

Depreciation

The depreciation in fiscal 2007 stood at Rs.3,442.98 lacs, which is lower than the depreciation of fiscal 2006, whichstood at Rs.3,600.70 lacs.

Profit before Interest, Depreciation/Amortisation, Tax and Exceptional items

The profit before interest, depreciation/amortization, tax and exceptional items for fiscal 2007 stood at Rs.9,251.06lacs, while for fiscal 2006, the same figure was Rs.10,074.57 lacs. The decrease is around 8.00%, which is mainlydue to reduction in other income.

Net Profit

The net profit for fiscal 2007 has fallen by almost 28% as compared to the figure for fiscal 2006. The reason for thefall in profitability is mainly due to drop in other income and increase in interest cost.

Secured and Unsecured Loans

Our Company has increased the percentage of secured loans. For fiscal 2007, there were no outstanding unsecuredloans, as unsecured loan of Rs.4,214.16 lacs, outstanding as on March 31, 2006 was repaid.

The secured loan has increased from Rs.22,914.46 lacs as on fiscal 2006 to Rs.49,002.45 lacs as on fiscal 2007.

Fixed Assets

The gross block as on fiscal 2007 stood at Rs.81,666.97 lacs, which was Rs.65,358.26 lacs for fiscal 2006. Theincrease is on account of addition of fixed assets of Rs.16,308.70 lacs during fiscal 2007, which includes additions inplant & machinery of Rs.14,522.91 lacs.

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Comparison of fiscal 2006 and fiscal 2005Income from OperationsNet income from operations has increased from Rs. 52,320.07 lacs in fiscal 2005 to Rs.58,718.69 lacs in fiscal 2006,an increase of Rs.6,398.62 lacs. This is an increase of 12.23%. This increase was due to higher quantity of sale ofResin by PVC division, higher quantity sale of Caustic from Karaikkal and higher sale of Chloromethane.

Other IncomeThe other income has increased from Rs.1,021.70 lacs in fiscal 2005 to Rs.2,403.32 lacs in fiscal 2006. The reasonfor more than 100% rise in the other income in fiscal 2006 is on account of the Montreal Protocol compensation ofRs.1,839.80 lacs received by us during fiscal 2006.

Operating ExpenditureThe operating expenditure has increased by less than 1% (as a percentage of the sales revenue) in fiscal 2006 ascompared to fiscal 2005. The operating expenses for fiscal 2005 was Rs. 44,998.79 lacs while the same for the fiscal2006 was Rs.51,047.44 lacs.

Interest and Finance ChargesThe interest and finance charges for fiscal 2006 were Rs.1,841.12 lacs which were lower by Rs.711.49 lacs ascompared to fiscal 2005, for which the interest and finance charges stood at Rs.2,522.61 lacs. The reason for thedecrease in interest and finance charges is the foreclosure of certain loans and lower lease rent.

DepreciationThe depreciation in fiscal 2006 stood at Rs.3,600.70 lacs, which is higher by Rs.747.51 lacs than the depreciation offiscal 2005, which stood at Rs.2,853.18 lacs.

Profit before Interest, Depreciation/Amortisation, Tax and Exceptional itemsThe profit before interest, depreciation/amortization, tax and exceptional items for fiscal 2006 stood at Rs.10,074.57lacs, while for fiscal 2005, the same figure was 8,342.97 lacs. The figure for fiscal 2006 is higher by around 21%,which is mainly due to higher compensation from Montreal Protocol of Rs.1,839.80 lacs.

Net ProfitThere is a jump of almost 67% in the net profit for fiscal 2006, as compared to fiscal 2005.The net profit for fiscal2006 was Rs.3,429.69 lacs while the same for fiscal 2005 was Rs.2,056.40 lacs. The reason for the increase inprofitability is mainly due to higher Montreal Protocol compensation.

Secured and Unsecured LoansThere is an increase in the percentage of secured loans in fiscal 2006, by 9.39% as compared to fiscal 2005. Duringfiscal 2006, an unsecured loan of Rs.4,214.16 lacs was taken. The total of secured and unsecured loans, as on fiscal2006, was Rs.27,128.62 lacs, which for fiscal 2005 stood at Rs.20,946.63 lacs.

Fixed AssetsThe gross block as on fiscal 2006 stood at Rs. 65,358.26 lacs, which was Rs.59,583.03 lacs for fiscal 2005. Theincrease is on account of addition of fixed assets of Rs.5,775.24 lacs during fiscal 2006.

Other matters:Unusual or infrequent events or transactions:To the best of our knowledge, save as described in “Management’s Discussion and Analysis of Financial Conditionand Results of Operations” on Page 161 and “Our Business” on Page 44 of this Letter of Offer, there are no eventsthat may be described as unusual or infrequent events and transactions.

Known trends and uncertaintiesOther than as described elsewhere in this Letter of Offer, particularly in the section titled “Risk Factors” starting onpage ix and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” startingon page 161, to our knowledge there are no trends or uncertainties that have or had or are expected to have a materialadverse impact on revenues or income of our Company from continuing operations.

Turnover for the industry segment in which we operatePlease refer to the section titled “Industry Overview” on Page 36 of this Letter of Offer.

Significant economic/regulatory changesIndian tax system and policy of Government for PVC and Chlorochemicals industry has undergone major changes in

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last few years. Recent economic and regulatory changes which are likely to affect our income from continuingoperations are as under:

Implementation of VAT replacing local taxes has a positive impact on our business;Reduction in excise duty on EDC and VCM from 7.5% to 2%

The management does not foresee any significant economic changes concerning the PVC and ChlorochemicalsIndustry in the immediate future, which might have an impact on the profitability or operations of our Company,other than the changes which are in usual course of business.

New Products or business segments:There are no new products or business segments, which are planned by our Company other than the products andbusiness segments discussed in the Letter of Offer.

Future relationship between costs and revenuesOther than as described in the section titled “Risk Factors” and “Managements Discussion and Analysis of FinancialConditions and Results of Operation” in this Letter of Offer, to our knowledge there are no future relationshipbetween cost and income that have had or expected to have a material adverse impact on our operations and finances.

Seasonality of businessOur industry not being a seasonal industry, no such impact can be there on our Company’s revenue.

Dependence on single or few suppliers/ CustomersWe procure materials from a diverse group of suppliers and thus our operations do not have any risk from suppliers.Similarly, we sell our products to a wide customer base and do not foresee business risk arising from our customers.

Significant Developments after September 30, 2008Our directors hereby state that in their opinion, there are no material developments since the date of the last financialstatements as disclosed in the Letter of Offer which materially and adversely affect or is likely to affect the trading orprofitability of our Company, or the value of its assets, or its ability to pay its liabilities within the next twelve months.

Competitive Conditions:Capacities are being added by players in the PVC manufacturing sector which might lead to increased competition inthe domestic market.

Off Balance Sheet arrangements:There are no off balance sheet arrangements.

Borrowings:Short Term 26,762.23 26,762.23Long Term 88,054.44 2,054.44Total Debts 1,14,816.67 1,18,816.67

Share holders fund:Equity Share Capital 4,798.19 7,996.99

Reserves and SurplusSecurities premium Account 12,795.18General reserve 2,308.90 2,308.90Capital redemption reserve 3,712.95 3,712.95Surplus as per P& L Account 10,670.62 10,670.62

Total 16,692.47 29,487.65

Total Shareholders funds 21,490.66 37,484.64

Long Term Debt/ Equity Ratio 4.10 3.16

(Rs in lacs)

Particulars Pre Issue as at Post issue Position30th September 2008* after adjustments**

* As per Annexure VIII of the Auditors’ Report dated February 13, 2009.

** As computed by our Management.

Note:The data relating to Statement of Capitalization–Post issue position was not included in Annexure VIII-Statement ofCapitalisation of The Auditors’ Report, as the issue price for the Rights Issue was fixed after the Auditors’ Reportdated February 13,2009.

Statement of Capitalization

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MATERIAL DEVELOPMENTSInformation as required by Government of India, Ministry of Finance, Circular No. F2/5/SE/76 dated February5, 1977, as amended vide their circular of even number dated March 8, 1977, is given below:

(i) Working Results of the Company:

(Rs. in Lakhs)

Particulars For the period from 1st October 2008to 31st January 2009

Total Sales (Net of Excise Duty) 19,999.80

Other Income * 2,126.35

Total Income 22,126.15

PBDIT 1,203.86

Interest 3,133.34

Provision for Depreciation 1,722.89

Provision for Deferred Tax and Fringe Benefit Tax (2,635.00)

Profit/Loss carried to Balance Sheet (1,017.37)

Notes:

1. Other Income includes:compensation received from Multilateral Fund for phase out of Carbon Tetra Chloride andChlorofluorocarbons under the Montreal Protocol for the four months period ended January 31,2009 – Rs.379.10 lacs.income from Certified Emission Reduction (CER) reckoned on incineration of HFC 23 at Mettur andon production of steam from Waste Heat Recovery Boiler at Karaikal - for the four months periodended January 31,2009 – Rs.1,557.38 lacs.profit on sale of a helicopter for Rs. 248.80 lacs during the four months period ended January 31, 2009.

2. The Company has recognised deferred tax asset arising out of unabsorbed depreciation & business lossesduring the four months period ended January 31,2009 for Rs. 2,636 lacs, which includes Rs.1,406 lacs pertainingto half year ended September 30, 2008. The Company is of the opinion that sufficient future taxable incomewill be available against which such deferred tax asset, can be realised.

(ii) Material Developments:

There are no material developments, which are likely to affect the financial position of our Company after September30, 2008 (i.e. the last date to which audited information is incorporated in this Letter of Offer).

(i) Week end prices of Equity Shares of our Company for the last four weeks on the BSE and NSE along withthe highest and lowest prices are as below:

BSE NSE

Week ended on Closing Highest Lowest Closing Highest LowestPrice Price Price Price Price Price

February 13, 2009 3.72 3.79 3.45 3.65 3.75 3.65

February 20, 2009 3.59 3.78 3.48 3.60 3.75 3.60

February 27, 2009 3.77 3.95 3.72 3.85 4.00 3.80

March 6, 2009 3.55 4.00 3.50 3.55 3.95 3.10

Note: High/Low prices are based on closing quotations of BSE & NSE (Source: www.bseindia.com andwww.nseindia.com)

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OUTSTANDING LITIGATIONS AND DEFAULTSExcept as described below, there are no outstanding litigations, suits or criminal or civil prosecutions, proceedings ortax liabilities involving us, our Promoter or our Promoter Group companies or the companies no longer part of ourPromoter Group companies and there are no defaults, non payment of statutory dues, over dues to banks/ financialinstitutions, defaults against banks / financial institutions / small scale undertaking(s), defaults in dues payable toholders of any debentures, bonds or fixed deposits, issued by us (including past cases where penalties may or may nothave been awarded and irrespective of whether they are specified under paragraph (i) of part 1 of Schedule XIII ofthe Companies Act, 1956). There are no outstanding litigations, suits or criminal or civil prosecutions, proceedingsor tax liabilities or offences irrespective of whether specified under paragraph (i) of part 1 of Schedule XIII of theCompanies Act, 1956 involving any of our Directors. The following are the outstanding or pending litigations orsuits or proceedings involving us, our Promoter, our Promoter Group companies and the companies no longer part ofour Promoter Group companies and criminal complaints or cases, defaults, non-payment or overdues of statutorydues, proceedings initiated for any economic or civil offences and disciplinary action taken by SEBI or stock ex-changes involving us, our Promoter, our Promoter Group companies and the companies no longer part of our Pro-moter Group companies. Section I details the outstanding cases / litigations involving us, Section II details theoutstanding cases / litigations involving our Promoter, Section III details the outstanding cases/ litigations involvingour Promoter Group companies and Section IV details the outstanding cases/ litigations involving the companies nolonger part of our Promoter Group companies.

SECTION - I

Material Litigations involving us are as provided below:

A. CRIMINAL CASES

Criminal Cases filed against us (including cases filed against our employees):

1. The Chief Inspector of Factories has launched prosecution proceedings against our Manager of Plant III atMettur, before the Chief Judicial Magistrate, Salem, for alleged violation of the provisions of the Factories Act,1948, in complaint C.C.No.13 of 2007. The violation alleged in the aforesaid complaint is the non provision ofsafety equipment to the worker which had resulted in the accident. No order has been passed as yet and thematter is currently pending.

2. The Chief Inspector of Factories has launched prosecution proceedings against the Manager of Plant III atMettur, before the Chief Judicial Magistrate, Salem, alleging the violation of the provisions of the FactoriesAct, 1948, in complaints C.C.No.45/2007 and C.C.No.57/2007.The violation alleged in the aforesaid complaintsis the non provision of safety equipment to the worker which had resulted in the accident and consequently thedeath. No order has been passed as yet and the matter is currently pending.

3. The Chief Inspector of Factories has launched prosecution proceedings against the Manager of Plant III atMettur, before the Chief Judicial Magistrate, Salem for alleged violation of the provisions of the Factories Act,1948, in complaint C.C.No.46/2007.The violation alleged in the complaint is the injuries suffered by certainpersons due to minor chlorine leak. No order has been passed as yet and the matter is currently pending.

Criminal Cases filed by us:

1. Criminal Complaint nos.4119 to 4122 of 2002 have been filed by us in the Magistrate Court at Egmore, Chennaiagainst M/s. Apte Amalgamations Ltd., and all its directors u/s 138 of the Negotiable Instruments Act, 1881,for dishonour of cheques issued by them to us, altogether amounting to a sum total of Rs. 11,50,000/-. A sumof Rs.3,00,000/-(Rupees Three lakhs only) was received by us in December 2008 from the party. No order hasbeen passed as yet and the matter is currently pending.

2. Criminal Complaint Nos.1104, 1105 & 2520 of 2005 have been filed by us in the Magistrate Court at Saidapet,Chennai against M/s Chaudhuri Polycoaters, u/s 138 of the Negotiable Instruments Act,1881, for dishonour ofcheques issued by them to us, altogether amounting to a sum total of Rs. 87,47,426/-. M/s Chaudhuri Polycoatershas from the date of service of summons so far paid Rs. 4,30,000/- (Rupees Four lakhs thirty thousand only)againstthe aforesaid dues. No order has been passed as yet and the matter is currently pending.

3. Criminal Complaint in C.C.Nos.4882 to 4884 of 1999 have been filed by us u/s.138 of the Negotiable InstrumentsAct for dishonor of cheques issued by Kamal Pipes towards the supply of PVC Resins by us. No order has beenpassed as yet and the matter is currently pending. Kamal Pipes has so far paid Rs. 27,50,000/- (Rupees Twentyseven lakhs fifty thousand only) out of Rs 40,00,000/- (Rupees Forty lakhs only) to us and the balance has beenagreed to be paid by them to us in installments.

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4. Four Criminal Complaints u/s.120A, 120B, 405, 406, 415, 417, 463, 465, 468 and 471 of the Indian PenalCode, being M.P.No.2094 to 2098 of 2006 have been filed before Magistrate Court at Saidapet, against ourerstwhile consignment agent Pooja Polymers which had misappropriated our goods meant for our customersto the tune of Rs. 13,80,000/-. No order has been passed as yet and the matter is currently pending.

B. LABOUR SUITSLabour Suits / Appeals filed by us:

1. Our ex-employees at the Mettur plant who opted for Voluntary Retirement Scheme (‘VRS’) in 1994 made aclaim of Rs.47,00,000/- based on the Union settlement made subsequent to their VRS. The claim was allowedby the Labour Court at Salem by its order dated March 18, 1996 which was appealed against by us in the HighCourt, Madras (W.P.No.5395 of 1996 and 3145 of 1997). The Single Judge by the order dated February 02,2005 had upheld the Order of Labour Court, Salem, which was in turn challenged by us by a writ appeal, (WritAppeal No.61 & 62 of 2006). The Division Bench has passed an interim order on February 01, 2006 fordeposit of the amount into the Court pending disposal of the Appeal. This interim order was appealed beforethe Supreme Court of India (SLP (Civil) No.4060 of 2006) and the Supreme Court by its interim order datedMarch 06, 2006 has passed an order staying the interim order of the Madras High Court, to the extent of thedeposit to be made. The case is currently pending.

2. A writ petition was filed by us being, W.P.No.20219 of 2004, by 29 ex-employees of ours, employed atSowdapuram Mines for additional closure compensation amounting to a sum of Rs.50,17,000/- before theMadras High Court against the order of the Central Government Labour Court, Chennai in C.C.P.Nos.44 to 67and 73 to 77 of 1999 dated April 04, 2004. Their claim was based on the enhanced compensation ordered bythe Labour Court for another group of ex-employees. The Labour Court has allowed the claim of the ex-employees, against which, we filed the aforesaid writ petition. The Madras High Court passed a stay order onMarch 29, 2003. The writ petition is currently pending.

3. Devasahayam and M.Muniappan two of our employees, filed a joint claim before the Labour Court, Salemclaiming additional bonus based on the settlement with the Employees Union subsequent to their retirement.We filed a Writ Petition before the Madras High Court (W.P.No.44417 of 2002) challenging the order. TheHigh Court passed an interim order of stay on December 11, 2002.The matter is currently pending.

4. One P. Ayyandurai, an employee of ours, filed a claim for reinstatement before the Labour Court at Salem, whichwas allowed. We filed a Writ Petition (W.P.No.7420 of 2005), before the Madras High Court. The High Courtpassed an interim order on March 4, 2005 staying the Labour Court’s order. The matter is currently pending.

5. One A. Robert, an employee of ours, filed a claim before the Labour Court at Salem, for reinstatement whichwas allowed. We filed a writ petition before the Madras High Court, against the aforesaid order and the samewas dismissed on April 19, 2004. Subsequently we filed a Writ Appeal (W.A.No.2763 of 2004) challenging theorder, which was also dismissed September 29, 2008. An SLP has been filed before the Supreme Court and thesame has been admitted on January 19th, 2009.The Supreme Court has granted an interim stay subject to thecondition that the company deposits a sum of Rs.2,00,000/- within four weeks from the date of receipt of theorder. On receipt of the certified copy of the order, steps will be taken for complying with the orders of theSupreme Court.

6. Mohd.Haniffa, an employee of ours, filed a claim for compensation for a sum of Rs.2,00,000/- before theLabour Court at Salem, which was allowed. We filed a writ petition (W.P.No.24660 of 2005) before the MadrasHigh Court, and the Madras High Court, by its order dated August 2, 2005 stayed the labour court’s order. Thematter is currently pending.

7. Madhappan and Ravichandran, two of our employees, filed a claim for reinstatement before the Labour Courtat Salem which was allowed. We filed a writ petition (W.P.No.38667 of 2004) before the Madras High Court,which by its order dated August 27, 2004 stayed the labour court’s order. The matter is currently pending. Oneof the respondents (Ravichandran) is dead and necessary steps are being taken.

8. Our Employees, Palani, Govindaraj, Ramachandran, M.Venu, S.Ramaswamy and G.Duraswamy filed a claimfor compensation of Rs.32,400/- before the Labour Court at Salem which was allowed. We filed a writ petition(W.P.No.18117 of 1994) before the Madras High Court, which by its order dated October 25, 1994 stayed thelabour court’s order. The matter is currently pending.

9. One S.M.Selvaraj, an employee of ours, filed a claim for reinstatement before the Labour Court at Salem whichwas allowed with back wages. We filed a writ petition (W.P.No.20484 of 2007) before the Madras High Court,which by its order dated June 14, 2007 stayed the labour court’s order. The matter is currently pending.

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Labour Suits /Appeal filed against us /claims made by legal heirs of our employees against us/claims made by creditors of our employees.

Claim for reinstatement by our ex-employees:

1. S.Senguttuvan, an ex-employee of ours, has filed a writ petition before the Madras High Court being W.P.No.6149of 2000 against the order of the Labour Court dated December 16, 1998 which dismissed his claim. No orderhas been passed and the matter is currently pending.

2. Mohd.Haniffa, an ex-employee of ours, filed a counter writ petition being W.P.No.5123 of 2006 challengingthe compensation awarded by the Labour Court passed on November 09, 2004. His claim for reinstatement wasrejected by Labour Court. No order has been passed and the matter is currently pending.

3. S.Rajendran, an ex-employee of ours has filed a claim being I.D.482 of 2004 before the Labour Court, Salem,for reinstatement as his employment was terminated by us on the ground of chronic absenteeism. No order hasbeen passed and the matter is currently pending.

4. N.Ramakrishnan, an ex-employee has filed a claim being I.D.123 of 2000 before the Labour Court, Cuddalore,for reinstatement as his employment was terminated by us on the ground of mis-operation of the boiler – IAP II.No order has been passed and the matter is currently pending.

5. M.Sekar, a contract worker has filed a claim being I.D.138 of 2006 before the Labour Court, Salem, for reinstatementas his employment was terminated by us. No order has been passed and the matter is currently pending.

6. K.V. Krishnamurthy, an ex-employee of ours has filed a claim being I.D.426 of 1998 before the Labour Court,Salem, for reinstatement as his employment was terminated by us. Against the employee’s claim of reinstatement,the labour court has awarded a sum of Rs 70,000/-. We have consented to pay the said amount of Rs. 70,000/-awarded by the labour court to our ex-employee and we await for his consent to accept the above compensation.Response is awaited from our ex-employee.

7. A.K. Chandrasekaran, an ex-employee has filed a writ petition being W.P.No.24374 of 2000 before the MadrasHigh Court against the Labour Court, Cuddalore’s order which dismissed his claim for reinstatement. We hadterminated his employment on the ground of misappropriation by forging the signatures in the cheques. Noorder has been passed and the matter is currently pending.

8. Our Employees Union has raised a dispute on fixing the manpower at 406 arising out of the settlement datedJuly 10, 2008 and have filed a claim being I.D.No.75 of 2008 before the Labour Court, Salem. The matter iscurrently pending.

9. M. Ramesh, an employee of one of our contractors has filed a claim being I.D.No.9 of 2006 before the LabourCourt, Karaikal and the claim is for reinstatement, continuity of service, back wages and all other attendantbenefits along with overtime wages and bonus. The matter is currently pending.

Claims made against us by the legal heirs of our employees for employment with us:1. Our Employees Union has filed a claim being I.D.No.83 of 2004 before the Labour Court, Salem to provide employment

to the legal heirs of our employees. No order has been passed as yet and the matter is currently pending.

2. Sathyamurthy, the legal heir of a contract worker has filed a writ petition being W.P.No.29957 of 2005 beforethe Madras High Court, against the Labour Court’s order dismissing his claim for employment with us. Noorder has been passed as yet and the matter is currently pending.

Claim by the legal heirs of our employees for compensation on account of death of our employees:1. Amirthalingam, the legal heir of an employee has filed claim for compensation against the fatal accident of the

contract workman inside the Plant – IAP II. The competent authority had rejected the claim made against us byhim and directed the insurance company to effect payment of compensation in July 2007. The insurance companyhad filed an appeal in High Court being C.M.A.No.2395 of 2007 and the High Court by its order dated September27, 2007 stayed the aforesaid order.

2. Mathiyazhagan, one of the employees of a contractor has filed a claim petition being W.C.No.428 of 2008,against the contractor and us under the provisions of the Workmen’s Compensation Act, 1923, before theDy.Commnr. Labour, Chennai claiming a sum of Rs.10,00,000/- as compensation for the injury suffered by himat the PVC Plant, Cuddalore. The matter is currently pending.

3. Pannirselvam, driver of one of our contractors has filed a claim petition being W.C.No.463/2008 against thecontractor and us under the provisions of the Workmen’s Compensation Act before the Dy. Commissioner ofLabour, Cuddalore claiming a sum of Rs.15,37,704/ as compensation for the injury suffered during the course ofemployment. We have filed our answer statement to the aforesaid claim petition. The matter is currently pending.

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Claims filed for attachment of salary/terminal benefits of our employee:

1. Navakodi Narayanan, a creditor has filed a suit against our employee T.Chandrasekaran, being O.S.No.172 of2005 before the Dist. Munsiff Court, Mettur, for attachment of the employee’s salary. We have been made aparty in the garnishee application. The matter is currently pending.

2. T.Natarajan, a creditor has filed a suit against our employee T.Chandrasekaran being O.S.No.180 of 2004before the Dist.Munisff Court, Mettur, for attachment of the employee’s salary. We have been made a party inthe garnishee application. The matter is currently pending.

3. Lalitha, a creditor has filed a suit against our deceased employee Sithuraj, being O.S.No.60 of 2001 before theDist.Munisff Court, Mettur, for attachment of the deceased employee’s terminal benefits. We have been madeas a party in the garnishee application. The matter is currently pending.

4. Marakkal, the wife of an employee of ours, Palaniappan, has filed a suit being O.S.No.3 of 2006 before theDist.Munisff Court, Mettur, for maintenance. We have been made a party in the garnishee application. Thematter is currently pending.

5. Venkatesh, a creditor has filed a suit against our employee Manickam, being O.S.No.170 of 2005 before theDist.Munisff Court, Mettur, for attachment of the employee’s salary. We have been made a party in the garnisheeapplication. The matter is currently pending.

6. T.Natarajan, a creditor has filed a suit against our employee Nagarathinam, being O.S.No.179 of 2004 beforethe Dist.Munisff Court, Mettur, for attachment of the employee’s salary. We have been made a party in thegarnishee application. The matter is currently pending.

7. Rajammal, a creditor has filed a suit against our employee Paneerselvam, being P.O.P.No.2 of 2006 before theDist.Munisff Court, Mettur, for attachment of the employee’s salary. We have been made a party in the garnisheeapplication. The matter is currently pending.

8. Gopalakrishnan, a creditor has filed a suit against our deceased employee’s legal heir Gangammal, beingO.S.No.256 of 2006 before the Dist.Munisff Court, Mettur, for attachment of the deceased employee’s terminalbenefits. We have been made a party in the garnishee application. The matter is currently pending.

Claims made by our ex -employee for compensation:1. The Employees Union has filed a claim against us being I.D.No.687 of 2000 before the Labour Court, Salem

for wages on the day of no work no pay i.e. from October 18, 1997 to February 05, 1998. The matter iscurrently pending.

Employees - Miscellaneous case:1. P.Subramanian, an ex-employee of ours has filed a case against us being O.S.No.268 of 2006 before the District.

Munsiff Court, Mettur against order for vacation of our quarters provided to him. The matter is currently pending.

C. CIVIL CASES & ARBITRATION PROCEEDINGS

Cases and Arbitration proceedings filed by us:1. A writ petition being W.P No.6526 of 2000 was filed by us in the High Court, Madras against the Government

of Tamil Nadu challenging G.O.Ms.No.242 of 1999 in respect of leasehold lands at Vedaranyam for saltproduction for increase in the royalty from Rs.25/- per acre to Rs.100/- per acre per annum. The Madras HighCourt passed an interim order on September 11, 2003 and as per the interim order we have paid 50% of therevised rate of royalty. The total liability works out to Rs. 19,75,000/- for the period from 1999 to 2009. Thematter is currently pending.

2. We filed a writ petition before the High Court, Madras, being W.P.No.4104 / 2002 against the Government ofTamil Nadu, challenging the increase in the water charges from Rs.60/- to Rs. 500/- per cubic meters videG.O.Ms.No.890 of 1991 for drawl of water from Cauvery river/ basin. Apart from the increase in the rate whichis being agitated upon, there is also a dispute as to whether water charges will have to be levied on the contractedquantity of water or actual consumption of water. The aforesaid writ petition was dismissed on March 26, 2006.Thereafter we filed a writ appeal being W.A.No.516 of 2006 in the High Court, Madras. No orders are passedas yet and the appeal has been admitted without any interim orders. We have remitted a sum of Rs.3,46,77,000/- (Rupees Three crores forty six lakhs seventy seven thousand only) based on the actual quantity consumedfrom 1991 to 2008. Total liability for the period 1991 to 2008 is Rs.2,88,45,000/- (Rupees Two crores eightyeight lakhs forty five thousand only) net of the amount paid by us. The writ appeal is currently pending and nofurther orders are passed.

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3. We filed a Special Leave Petition being SLP No. 21039 of 2006 against W.A. No. 334/04 (SLP) before theSupreme Court challenging the orders of High Court, Madras upholding the levy of tax under the Tamil NaduTax on Consumption or Sale of Electricity Tax (Act 12 of 2003).This Act provides inter alia for a levy of tax@ Rs.0.10 per unit of Electricity generated through captive generation and consumed by us. The annual estimatedadditional liability arising out of levy of this electricity tax is at Rs.250 lacs per annum. The total liabilitytowards this tax on captive generation and consumption for the period June 2003 to December 2008 works outto Rs. 11,37,48,000/- (Rupees Eleven crores thirty seven lakhs forty eight thousand only). The aforesaid SLPhas been allowed by the Supreme Court vide order dated May 15, 2007. However, the Government of TamilNadu has passed an Act in October 2007 thereby amending the TN Act 12 of 2003 to invalidate the exemptiongranted to the Chemical Industry retrospectively and to nullify the order of Supreme Court. We filed a WPchallenging the above amendment on December 06,2007. The High Court of Madras has passed an order ofinjunction restraining the authorities from enforcing any demand for payment of tax till further orders. TheHigh Court has extended the order of injunction in March 2008, but allowed the authorities to raise a demandfor current consumption, but not to enforce such demand pending disposal of the writ petition. The batch ofwrit petitions on this subject matter including our writ petition, are now posted before the Division Bench ofMadras High Court for final disposal.

4. We have filed a Writ Petition in WP No.29716 of 2004 in the High Court, Kerala, against the State of Keralawith regard to the clarification issued by the State of Kerala under the Cochin Denatured Spirit and MethylAlcohol Rules, 1975 levying the transit fee. This writ petition challenged the transit fee of Rs.2500 per tankerin Kerala for the denatured spirit imported and transported to our Plant at Mettur from Cochin Port. The totaltransit fee liability on us pursuant to the aforesaid rules was Rs. 27,50,000/-.The Kerala High Court passed aninterim order on November 11, 2004, in terms of which 50% of the levy was remitted by us and the balance byway of a bank guarantee. No final orders are passed as yet and the case is pending.

5. We have filed a Writ Petition being W.P.No.39419 of 2004 against the Commercial Tax Officer, Salem in theHigh Court, Madras, challenging the disallowance of consignment sales of Rs.12,24,00,000/-effected throughour consignment agent, by the Sales Tax Authorities and the consequential levy of Sales Tax of Rs.1,21,00,000/-and an additional levy of Rs.1,82,00,000/-towards penalty. The Madras High Court passed an interim stayorder on December 30, 2004 against the demand for Sales Tax. No final order has been passed and the matteris currently pending.

6. We have filed a civil suit being C.S.No.45 of 1998 before the High Court, Madras, for recovery of Rs.40,00,000/- due from Kamal Pipes for the supplies made by them. An out of court settlement has been reachedwith Kamal Pipes and they have started paying back to us in installments.

7. We have filed an execution petition being E.P.No.691 of 1999 in C.S.No.46 of 1998 against Kejariwal Containersbefore the Sub Court, Ernakulam pursuant to the decree passed by the High Court, Madras on January 28, 1998the claim amount being Rs.66,82,494/-. The EP No.691 of 1999 in C.S.No.46 of 1998 is dismissed since theproperty had been the subject matter of a certificate issued by the Debt Recovery Tribunal. We are takingfurther steps to enforce the decree.

8. We have filed a claim petition / affidavit of proof of debt in Form No.66 in our Petition No.17 of 2004 in theMadras High Court before the official liquidator, Madras in the matter of South India Viscose Industries Ltd (inLiquidation) now known as SIV Industries Ltd., which defaulted in payment of its dues to us to the extent ofRs.96, 76,656/- towards the supply of silicon wafers. The claim petition is currently pending.

9. We have initiated arbitration proceedings against our customer M/s.Fari Taj for recovery of Rs.4, 05,079.77/-due by them for supply of PVC Resin in 1996. An award has been passed in favour of us on June 1, 2005awarding a sum of Rs.8, 41,235 with interest @ 15% p.a., with costs. An execution petition filed in RamnadDist.Court to enforce the above award is currently pending.

10. We have filed a writ petition in the High Court of Madras being W.P.No.18035 of 2001, seeking refund ofgallonage fee paid by us under protest. The Prohibition and Excise Dept., Government of Tamil Nadu, leviedgallonage fee to the extent of Rs.30, 28,260/- on methanol imported by us / our predecessor during 1981 to1984. The writ petition is yet to come up for final hearing and is currently pending.

11. We have filed a writ petition in the High Court, Madras being W.P.No.4566 & 4567 of 1987 challenging thewithdrawal of concessional customs duty with respect to 4.8 MW combined power plant imported by us in1985-86. We have paid a sum of Rs.1, 50,99,363.95/- under protest. The aforesaid writ petition was allowed infavour of us and the customs department was directed to repay the amount by the Madras High Court by itsorder dated March 02, 1995. Challenging the Order of Single Judge, the Department has filed W.A’s, videW.A.Nos.358 & 359 of 1997. We did not get the refund as ordered by the Madras High Court and therefore wefiled another writ petition being W.P.No.5299 of 1998 seeking refund of this amount. By its order dated November11, 1998 the Madras High Court passed an order directing the department to pay the refund within four weeks.

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Challenging the aforesaid order the Department has filed a writ appeal being W.A.1686 of 1998. At the finalhearing held on 13.10.08, the W.A filed by the Department was dismissed by the Division Bench. However theWAs (358 & 359 of 1997) filed by the Department challenging the order dated 2.03.1995 for refund ofRs.1,51,00,000/- (Rupees One crore fifty one lakhs only) is pending, though no notice was received by us fromthe Court in these WAs.

12. We have filed a defamation suit being. C.S.No. 12 of 2007 before the Madras High Court claiming damages ofRs. 1,00,00,000/- against an NGO Community Environmental Monitors, and Cuddalore District ConsumerProtection Organization and 4 others. These NGOs had indulged in propaganda activities against us by publishingfalse information / materials through media, photo exhibition and website on pollution matters on Mettur Plant,which are defamatory in nature. The process of service of summons to the defendants is completed. No ordersare passed and the matter is currently pending.

13. We have filed a suit in the Mettur District Munisiff Court being O.S.No.221 of 2002 for a declaration on theownership of lands admeasuring an extent of 0.60 acres at Mettur which was encroached by a group of personsrepresented by Babu and others. No orders are passed yet and the matter is currently pending.

14. There are disputes over the lands purchased by us in Thiyagavalli Village, Cuddalore District to the extent ofabout 15 Acres and these disputes / cases are pending before the Principal Sub Court, Cuddalore and PrincipalDistrict Judge Cuddalore as per details given below:a. In O.S No.137/2007 the vendor Ms. Sumathi with whom we had entered into an agreement had revoked

the power of attorney after receiving the entire sale consideration. The vendor had sold the same propertyto M/s Cuddalore Power Company Ltd (CPCL).This suit was filed by CPCL for declaration that they arethe owners of the extent of 91 cents in survey no 166/9 Thiyagavalli Village. The suit is currently pending.CPCL filed an interim application being I.A.No.421 of 2007 to restrain us or our officers from interferingwith their peaceful possession of the suit property till the disposal of the suit and obtained an order intheir favour. We preferred an appeal being C.M.A.No.1 of 2008 before the Principal District Judge andby order dated January 10, 2008 the Principal District Judge stayed the aforesaid order. The appeal wasallowed in November, 2008. We have also filed a Suit in O.S.No.3 of 2008 before the Sub-Court, Cuddaloreagainst the Vendor (Ms.Sumathi) and CPCL for a declaration that the sale deed executed in favour ofCPCL is null and void. The above suit is currently pending. We have filed a Suit being O.S.No.121 of2008 before the Sub-Court, Cuddalore, against Sumathy, the Vendor who had executed an agreementwith us for sale of an extent of 0.91 acres of land to us, for the relief of specific performance. Since the

defendant did not enter appearance, she was set ex-parte and we have to lead evidence ex-parte.

b. We have filed a suit being O S No.14/2008 for an injunction restraining CPCL and the previous vendorMr.Jagadeesan from interfering with our peaceful possession and enjoyment in respect of an extent of5.65 acres in survey no 178/1 to 5 and 139/11 at Cuddalore. The property was agreed to be sold to us andthe entire sale consideration was paid. The suit is currently pending. We have also filed a suit beingO.S.No.133 of 2008 for a declaration that the sale deed executed by Jagadeesan in favour of CPCL is nulland void. We also filed an application No.351/2008 seeking leave of the court for filing a suit for specificperformance against Jagadeesan for breach of contract and the same is pending for leave of the HighCourt, Madras.

c. We have filed a suit being O.S.No.25 / 2008 for an injunction to restrain the vendor Mr.KaliaperumalPadayachi from alienating the suit property measuring an extent of 0.40 cents and for specific performance.The Principal District Judge by order dated March 11, 2008 passed an injunction order against the vendor.The suit is currently pending. In the meantime the vendor has executed sale deed in our favour and thevendor is no more alive. We are in the process of taking steps to implead the legal representatives. CPCLhas filed a suit against us being OS No 40/08 for declaration and injunction that they are the owners of anextent of 1.75 acres of land in survey no 175/4 Thiyagavalli Village, Cuddalore. Our possession in respectof 40 cents of the aforesaid land is evidenced under a registered sale agreement with Mr.Kaliaperumal.We have also filed a Suit in O.S.No.70 of 2008 before the Sub-Court, Cuddalore, to declare the sale deedexecuted in favour of CPCL by the Vendor is null and void. No orders are passed and all the suits arecurrently pending.

d. We have filed a suit being O S No 28/2008 for an injunction restraining CPCL and the previous vendorMs.Shentamil Selvi from interfering with our peaceful possession and enjoyment in respect of an extentof 1 acre in survey no 177/2 Thiyagavalli Village, Cuddalore. The property was agreed to be sold to usand the entire sale consideration was paid. No orders are passed yet and the suit is currently pending. Wehave filed another Suit being O.S.No.122 of 2008 before the Sub-Court, Cuddalore against Senthamizhselvi,the Vendor who had executed an agreement with us for sale of an extent of 1 acre of land to us for aspecific performance in not executing the sale deed in our favour after receiving the entire sale considerationand subsequently sold the same to CPCL. No order haves been passed and the suit is currently pending.

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e. We and CPCL respectively have filed suits being O S No 17/2008 and O S No 45/2008. We had acquiredan extent of 1.05 acres in survey no 165/2 Thiyagavlli Village. CPCL claims to have purchased an extentof 37 cents in survey no 165/2 and 174/1 from one Dhanapandian. The suit OS No 17/2008 is filed by usfor injunction restraining CPCL from interfering with our peaceful possession and enjoyment of theproperty. CPCL has filed the suit OS 45/2008 before the Sub Court, Cuddalore for declaration andinjunction. No orders are passed yet and both the suits are currently pending.

f. CPCL has filed a suit being O.S.No.72 of 2008 before Sub-Court, Cuddalore, against us and the twovendors, for a declaration that they are the owners of the property measuring an extent of 2.69 acres ofland in S.F.No.67/2. We have purchased the property from the vendors, viz., Lenin and Stalin, being thesouthern portion of the land and CPCL has purchased northern portion of the land. CPCL had taken up anapplication for injunction restraining us from interfering with their possession and the said applicationwas dismissed by the Court, vide Order dated 3.11.2008. The suit is currently pending.

g. One Prabhakaran and others have filed a suit being O.S.No.400/2008 before the District Munsiff CourtCuddalore for the relief of declaration of their title, recovery of possession and for mesne profits forunlawful occupation. The suit is currently pending and no orders are passed in the suit.

h. We have filed a writ petition being W.P.No.8647 of 2008 before the High Court, Madras against Union ofIndia, Ministry of Environment & Forests, TNPCB and CPCL, seeking for an injunction that anyenvironmental clearance proposed to be given in favour of CPCL should not be in any way interferingwith our Pipe Corridor Project and before granting the application of CPCL, our representation should beconsidered. Notice has been ordered in the writ petition and the same is currently pending.

Civil Cases and Arbitration proceedings filed against us:1. The Government of Tamil Nadu has filed a Special Leave Petition in the Supreme Court of India being SLP

(Civil) No(s) 8743-8752 of 2004 challenging the Order of Madras High Court which had quashed the GovernmentOrder Ms.No.64 Home Prohibition and Excise (XIII) Department dated April 12, 2000 for increasing theAdministrative Service fee on Industrial Alcohol / Denatured Spirit production from Rs. 0.50 to Rs. 1.00 per litre.The total Administrative Service fee on Industrial Alcohol / Denatured Spirit production pursuant to the aforesaidGovernment Order is Rs. 3,78,25,000/-has been paid. The SLP was admitted on May 6, 2004 and an interim orderwas passed by the Supreme Court staying the impugned order and directing the State of Tamil Nadu to charge fee@ the rate of 0.50 paise per liter only. The matter is currently pending in the Supreme Court and the interim ordercontinues. In the event the SLP is allowed by the Supreme Court we are liable to pay Rs.7,75,67,000/- and in theevent the SLP is dismissed we will be entitled for a refund for the excess fee paid of Rs. 3,78,25,000/-.

2. With respect to a part of our lands of in Palladam, Coimbatore, which are used as windmills land by us, theTrustees of Sellandi Amman Temple have filed a Suit against us and others being O.S.No.826 of 1995 beforethe District Munsiff, Palldam for a declaration that they are the owners of the land measuring an extent of 14.42Acres of land, which forms part of the larger extent of land located at Poorandampalayam for the purpose oferecting windmills. We have filed our written statement on December 16, 1996. No order has been passed bythe Court and the matter is currently pending.

3. A group of employees attached to the Mettur and Panrutti Plant have filed a writ petition being W.P.No.685 of2007 before the High Court, Madras, challenging the notification being No.271 of 2007 dated November 07,2007, issued by Union of India imposing tax on housing accommodation provided to these employees by us interms of Section 17 (2) of Income Tax Act, 1961. The writ petition has been admitted and is currently pending.

4. One Dharmadurai has filed a Suit being O.S.No.325 of 2008 before the District Munsiff Court at Cuddalorerestraining TNEB from erecting 110 KVA power line over his land for the use of our Plant at Cuddalore. Noorders are passed and the matter is currently pending.

Miscellaneous Civil Proceedings:

Pollution related cases - PVC Project at Cuddalore:1. A Suit being O.S.No.19 of 2006 has been filed before the District Munsiff Court at Cuddalore by local villagers

in Cuddalore District in January 2006 against Union of India and 11 others including us (the 6th Defendant)against the installation and erection of our PVC Project in Cuddalore SIPCOT Complex on alleged groundsthat such project is injurious to the health of the villagers residing in and around Cuddalore. The Court by itsorder dated September 15, 2006 has rejected the plaint filed by the said local villagers. The District MunsiffCourt, Cuddalore on a petition filed by the aforesaid plaintiffs granted time till December 18, 2006 to enablethem to file an appeal before the High Court, Madras. As on date no other proceedings are pending / ongoingon the aforesaid issue against us. However, we have filed a contempt petition against the applicant in the above

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suit for his act of misinterpreting the order of the Court and publishing this to media etc. This contempt petitionis currently pending.

2. A Writ Petition being W.P.No. 37043 of 2006 before the High Court Madras was filed in October 2006 by twoindividuals, Palanivel and Elumalai of Cuddalore against Ministry of Environment & Forest, Department ofEnvironment & Forest, Chennai, TNPCB, Chennai, Inspector of Factories, Cuddalore, and us as Public InterestLitigation, challenging the Environmental clearance granted for our PVC Project at Cuddalore on the allegedgrounds that the said Project would create pollution and is hazardous in nature. We and other Respondents havefiled our counter and the writ petition is currently posted for final hearing and the same is pending.

3. A Writ Petition being W.P.No. 23122 of 2007 before the High Court Madras was filed in June 2007 by oneKadal Dhanasekaran of Cuddalore against Ministry of Environment & Forest, Department of Environment &Forest, Chennai, TNPCB, Chennai, SIPCOT, Inspector of Factories, Cuddalore, and us as a Public InterestLitigation challenging the Environmental clearance granted for our PVC Project at Cuddalore on the allegedgrounds that the said Project would create pollution and is hazardous in nature. We have filed our counter andthe case is pending and it is to be posted for final hearing.

4. A Writ Petition being W.P.No. 8125 of 2007 before the High Court Madras was filed in February 2007 by anindividual Elumalai of Chittrapettai Village, Cuddalore District against the Ministry of Environment and Forests,Department of Environment & Forest ,Government of Tamil Nadu, TNPCB, Chennai, and us, challenging theEnvironmental clearance granted for the Marine Terminal Facility Project (“MTF”) attached to our PVC Projectat Cuddalore on the alleged grounds that the said Project would create pollution and is hazardous in nature. Weand the MOEF have filed our counter and the case is pending and is posted for final hearing.

5. One Jayachandran and another have filed a suit O.S.No.35/2009 before the District Munsiff Court, Cuddalorein representative capacity for the relief of permanent injunction restraining the company from carrying outconstruction activities in the project site at Semmanguppam village. No orders have been passed and the suit iscurrently pending.

Pollution related cases - at Mettur:

i. A Writ Petition being W.P.No. 8060 of 2007 before the High Court Madras was filed in February 2007 by WestGonur Farmers Welfare Association represented by one Madheswaran, against the Department of Environmentand Forests, Govt. of Tamil Nadu, TNPCB, Chennai, and us as public interest litigation challenging theEnvironmental clearance given for Coal based Power Plant Project at Mettur by way of amendment to the existingenvironmental clearance for the conversion of the existing LSHS into coal based power plant. The Petitioner haschallenged the approval on the grounds that the said Project would create pollution and is hazardous in nature andthe approval is in violation of the rules and regulations under the Pollution Acts. This case is currently pending.

ii. TNPCB issued an order dated January 22, 2008 revoking the approval / consent granted by them to us in May2006 for setting up a captive co-generation plant for power and steam by conversion from LSHS to coal basedat Mettur Plant III alleging that we had violated the provisions of GO MS No 213 dated March 30, 1989 andGO MS No 127 dated May 8, 1998 of the Environment & Forest Department and for not obtaining the clearancefrom Environment Impact Assessment Authority (“EIA”) as required under the EIA notification dated September14, 2006. Challenging the above revocation, we have filed an appeal before the TNPCB Appellate Authoritybeing Appeal No.26 & 27 of 2008.The Appellate Authority had dismissed the appeals on May 7, 2008.Challenging the dismissal, we have filed a writ petition before the Madras High Court being W.P.No.12663 &12664 of 2008. The aforesaid writ petitions were heard by the Court and the Court has pronounced its orders onSeptember 18, 2008. By its order the High Court has set aside the revocation order of TNPCB dated January22, 2008 and the order dated May 07, 2008 of the Appellate Authority and remitted back the matter to theTNPCB for fresh consideration. Pursuant to the aforesaid Order of the High Court, hearings before TNPCBwere held on 01.12.08, 22.01.2009 and 29.01.2009 and TNPCB is expected to pass orders shortly.

Pollution Case against Distilleries:

1. The High court of Madras in Writ Petition No.17333 of 1995 in the matter of Sugarcane Growers Associationvs. Sakthi Distilleries Ltd, has directed Tamil Nadu Pollution Control Board (TNPCB) to conduct a study ofthe distilleries situated in Tamil Nadu and submit its report to the Court. Pursuant to the High Court order wewere served a notice by the Tamil Nadu Pollution Control Board (‘TNPCB’) calling for us to prove whether itis functioning as per the suggestions given by NEERI as we have two distilleries called IAP I and IAP II. Wehave approached and obtained report from NEERI in respect of Industrial Alcohol Plants I & II. We are not aparty to this case but we would be required to submit the report in respect of our Distilleries as and when thematter comes up for hearing. The matter is currently pending.

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2. The High Court of Madras in WP No. 13433 of 1996 in the matter of Vellore Citizens Welfare Forum & othersvs. Union of India, TNPCB and others, has directed TNPCB to issue notices to about 1960 industries in theState which are said to be located within 1 km of the designated water sources. We have received notices inrespect of its Industrial Alcohol Plant I, Krishnagiri and Plant I at Mettur from TNPCB. We are not a party tothe aforesaid writ petition but would be required to respond to the notices in the High Court as and when thematter is heard. No order has been passed and the case is currently pending.

3. We have received a Notice dated February 14, 2007 from Loss of Ecology (P&PC) Authority Chennai – 86(Constituted by the Ministry of Environment and Forests Government of India, under the Notification S.O.671(E) dated September 1996 under Section (3) of the Environment (Protection) Act, 1986 to show cause as towhy a compensation of Rs.2,19,816/- towards alleged loss or damage to the nearby wells and in the wells in thenearby villages, should not be collected from us and MALCO, Mettur. We have replied to the notice by a letterdated March 08, 2007. The matter is pending before the said authority.

4. A show cause notice bearing No.Roc.No.P&E III (1) / 6702 / 2005 has been issued by the Special Commissionerof Prohibition and Excise, Chennai dated July 22, 2008 to Industrial Alcohol Plant at Krishnagiri, for refusal ofrenewal of their distillery license application for the year 2005-06, 2006-07, 2007-08 and 2008-09 under rule7 I of the Tamil Nadu Distillery Rules, 1981. We have replied to the above show cause notice by a reply datedAugust 20, 2008.

D. INCOME TAX PROCEEDINGS

Appeals filed by us before the Commissioner of Income Tax (Appeals):

1. We have filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedMarch 27, 2006 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2003-04. Theproceedings before the CIT (Appeals) were on behalf of Sanmar Properties and Investments Limited. Subsequentto the merger, the Appeal has been filed by us against treatment of non-compete fee as business income and notas capital gain. No tax impact. The Appeal is pending.

2. We have filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedNovember 25, 2008 of the Assistant Commissioner of Income Tax, Large Taxpayer Unit, Chennai for theAssessment Year 2006-07. The Appeal has been filed against the adjustments made by the Assessing Officer inthe aforesaid order in respect of (i) Non-compete Fees Paid treated as Capital (ii) Contribution to benevolentFund U/s 40A(9), (iii) denial of industrial benefits U/s 80IA of the IT Act on Captive consumption, (iv) treatmentof ERP Expenses as Capital, (v) Disallowance of Provision for Gratuity, (vi) Lower TDS Credit, (vii) ExcessLevy of interest under Section 234B/234C of the IT Act, (viii) Adding of Provision for Gratuity under theprovisions of MAT. The tax impact of the same is Rs.4,81,16,521/-. The Appeal is currently pending.

3. We have filed an appeal before the Commissioner of Income Tax (Appeals), Large Taxpayer Unit, Chennai,against the Order dated December 30, 2008 for the Assessment Year 2003-04. The Appeal is against the additionto income under Section 28(iv), compensation received from Montreal Protocol directly credited to Reservesand Surplus and added back for Book Profit, re-computation of deduction under Section 80HHC for bothConventional Method and Book Profit Method. Excess Levy of Interest U/s 234B & D. The tax impact of thesame is Rs. 4,47,06,192/-. No orders have been passed and the Appeal is currently pending.

Appeals filed by us before the Income Tax Appellate Tribunal (“ITAT”):

1. We have filed an appeal before the ITAT, Chennai against the Order of the Commissioner of Income Tax(Appeals), Chennai dated August 07, 2005 for the Assessment Year 2002-03. The Appeal is against (i) theTreatment of ERP expenses as Capital Expenditure and (ii) denial of deduction u/s 80IA for Captive Consumption.The tax impact of the same is Rs 3,19,05,000/-. The Tribunal vide its Order dated November 04, 2008 dismissedthe aforesaid point (i) and remitted the matter back to the Assessing Officer to decide the aforesaid point(ii). Noorder has been passed as yet by the Assessing Officer and the matter is currently pending.

2. We have filed an appeal before the ITAT, Chennai against the Order of the Commissioner of Income Tax(Appeals), Chennai dated March 31, 2008 for the Assessment Year 2003-04. The Appeal is against the treatmentof Lump Sum consideration received on sale of Drum Plant as Business Income and Adoption of Guidelinevalue for the purpose of computation of Capital Gains as per the provisions of Section 50C of the IT Act. Thetax impact of which is Rs.23,88,500/-. The Appeal is currently pending.

3. We have filed an appeal before the ITAT, Chennai against the Order of the Commissioner of Income Tax(Appeals) Large Taxpayer Unit, Chennai dated December 12, 2008 for the Assessment Year 2005-06. Theappeal is against the confirmation of disallowance of Provision for gratuity by the Commissioner of IncomeTax (Appeals). The tax impact of the same is Rs.2,74,53,025/-

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Appeals filed by the Income Tax Department before the Income Tax Appellate Tribunal:

1. The Income Tax Department has filed an appeal being No 649/2002 against an Order of the Commissioner ofIncome Tax (Appeals), Chennai dated January 15, 2002 for the Assessment Year 1994-95. The Appeal has beenfiled against the granting of investment allowance to us under Section 32A of the IT Act being a sum ofRs.26,17,423/-. The tax impact of which is Rs.13,48,024/-. The Tribunal vide its Order dated January 12, 2006remitted back this issue to the file of CIT (A). No Order has been passed as yet by the CIT (A) and the matteris currently pending.

2. The Income Tax Department has filed an appeal being 1348/08 against an Order of the Commissioner ofIncome Tax (Appeals), Chennai dated March 31, 2008 for the Assessment Year 2003-04. The Appeal has beenfiled against the allowance of contribution to Benevolent Fund U/s 40A(9), deduction under Section 80IA. Thetax impact of the same is Rs.1,15,40,530/-. The appeal is currently pending.

3. The Income Tax Department has filed an appeal being 1349/08 against an Order of the Commissioner ofIncome Tax (Appeals), Chennai dated March 31, 2008 for the Assessment Year 2004-05. The Appeal has beenfiled against the allowance of contribution to Benevolent Fund U/s 40A(9), deduction under Section 80IA,treatment of Upfront end Fees and Guarantee Commission as Revenue deduction and allowance of Provisionfor gratuity made on acturial basis for computing the Book Profit. The tax impact of the same is Rs.2,88,94,685.The appeal is currently pending.

Proceedings made by the Commissioner of Income Tax, Large Taxpayer Unit, Chennai:

1. The Commissioner of Income Tax, Large Taxpayer Unit Chennai initiated Proceedings under Section 263 ofthe Income Tax Act, 1961 bearing F No 107/Chemplast Sanmar/263/2008-09/3 dated February 03, 2009 on usdue to under assessment made in the Order passed under Section 143(3) for the Assessment Year 2004-05.Theissue is in respect of non-consideration of Provision for gratuity for disallowance under the ConventionalMethod, allowance of Provision for Contingencies and Provision no longer required as deduction whilecomputing the Book Profit and allowance of Losses carry forward on Redemption of Unit Trust of India Bondson Indexation. The tax impact of these adjustments is Rs.64,30,406/-. The matter is currently pending beforethe Commisisoner of Income Tax, Large Taxpayer Unit, Chennai.

Appeals / Writ Petitions filed by us before the High Court at Madras:

1. We have filed two appeals before the Madras High Court numbered as S.R.No.78722 and 78711 challengingthe order passed by the ITAT, Chennai in I.T.A.No.154/Mds/96 and M.P.No.234/Mds/2004 on January 30,2004 and May 25, 2005 for the assessment year 1992-93. The Appeal has been filed against the treatment ofsetting off of un-absorbed depreciation and un-absorbed investment allowance as per the provisions of Sec.34A,against business income. The tax impact of which is Rs.37,50,039/-. The Appeal is yet to come up for admission.

2. We have filed an appeal before the Madras High Court being T.C.No.1478 / 05 against the order of the ITAT,Chennai in ITA No.1018 / 99 on June 06, 2005, for the assessment year 1993-94. The Appeal has been filedagainst disallowance of foreign travel expenses of our employees. No tax implications. The appeal has beenadmitted and is currently pending.

3. We have filed a writ petition before the Madras High Court being W.P.No.32398/02 along with aW.P.M.P.No.47116/02 against the notice issued by the Assessing Officer dated July 18, 2002 to re-open theassessment with regard to withdrawal of shipping reserve deduction u/s 33AC for the assessment year 1995-96.The tax implication is Rs.8,74,00,000/-. A stay has been granted by Madras High Court by its order datedSeptember 16, 2003.

4. We have filed a writ petition before the Madras High Court being W.P.No.3109/03 along with aW.P.M.P.No.37855/03 against the notice issued by the Assessing Officer dated October 16, 2003 to re-open theassessment to disallow certain items of expenditure for the assessment year 1996-97. A stay has been grantedby the Madras High Court by its order dated March 22, 2004.

5. We have filed an appeal before the Madras High Court being S.R.No.64431 of 2007 against the order of theITAT, Chennai dated May 08, 2007 in ITA No.1013 / 05 on August 22, 2007 in respect of assessment year2000-01. The Appeal has been filed against disallowance of Textile Project Written Off. The tax impact ofwhich is Rs.91,72,722/-. The matter is currently pending.

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Appeals/ Writ Petitions filed by the Income Tax Department before the High Court at Madras:

1. The Income Tax Department has filed an appeal before the Madras High Court being T.C.No.95/2006 against theorder of the ITAT in I.T.A.No.414/01 on August 05, 2005. The Appeal is filed against allowance of Transit HouseExpenses for the assessment year 1997-98. The tax impact of which is Rs.1,47,540/-. The Appeal is currently pending.

2. The Income Tax Department has filed an appeal before the Madras High Court being T.C.No.887/2004 againstthe order of the ITAT in I.T.A.No.1468/03 on March 22, 2004. The Appeal is filed against adjustment of MATcredit before computing interest u/s 234B and 234C. The tax impact of which is Rs.1,71,92,000/-. The Appealis currently pending.

3. The Income Tax Department has filed an appeal before the Madras High Court being T.C.No. 134/05 againstthe order of the ITAT in I.T.A.No.76/94 on September 30, 2002 for the assessment year 1988-89. The Appealis filed against the disallowance of the claim of bad debt in respect of a subsidiary company and carry forwardof allowances and depreciation. The tax impact of which is Rs.26,25, 000/-. The Appeal is currently pending.

4. The Income Tax Department has filed an appeal before the Madras High Court being T.C.No.950 of 2004against the order of the ITAT in I.T.A.No.1230 of 1993 on February 04, 2003.The Appeal is filed against theallowance of expenditure incurred under voluntary retirement scheme as revenue in nature. The tax impact ofwhich is Rs.38,00,094/-. The Appeal is currently pending.

5. The Income Tax Department has filed two appeals before the Madras High Court being T.C.No. 844/04 and845/04 against the order of the ITAT in I.T.A.No.952/93 and 911/93 on July 19, 2002 for the assessment year1989-90. The Appeal is filed against the disallowance of the claims relating inter alia for bad debt in respect ofa subsidiary company, computation of deduction u/s 80HHC the premium payable on redemption of debenturesin the future, the short fall on account of loss suffered on sale of security by the provident fund trustees. The taximpact of which is Rs.12,85,214/-. The Appeal is currently pending.

6. The Income Tax Department has filed two appeals before the Madras High Court being T.C.No. 281/05 and278/05 against the order of the ITAT in I.T.A.No.657/98 and 560/98 on April 30, 2004 and September 21, 2004for the assessment year 1994-95. The Appeal is filed against the computation of interest u/s 234B of the IT Act.The tax impact of which is Rs.5,15,147/- and Rs.18,10,452/- respectively. The Appeal is currently pending.

7. The Income Tax Department has filed two appeals before the Madras High Court being T.C.No. 1164/05against the order of the ITAT in I.T.A.No.1386 of 1999 on May 16, 2005 for the assessment year 1988-89. TheAppeal is filed against the allowance of provision of bad debts for the purpose of computing the book profitu/s 115J of the IT Act. The Appeal is currently pending.

8. The Income Tax Department has filed an appeal before the Madras High Court being T C No 717/2007 againstthe order of the ITAT dated November 29, 2006 in I.T.A.No.1911/05 on November 29, 2006 for the AssessmentYear 2003-04. The Appeal is filed against the allowance on adjustment of MAT Credit before charging interestunder Sections 234B & 234C of the Income Tax Act, 1961.The Tax impact of which is Rs.98,09,000/-.TheAppeal is currently pending.

9. The Income Tax Department has filed an appeal before the Madras High Court being T C No 1534/2007against the order of the ITAT dated May 08, 2007 in I.T.A.No.1012/05 for the Assessment Year 1999-00. TheAppeal is filed against the Computation of Export Benefits Deduction under Section 80HHC for the purpose ofBook Profit under Section 115JA of the IT Act and the levy of interest under Section 234D of the Act. The Taximpact of which is Rs.24,84,777/-. The Appeal is currently pending.

10. The Income Tax Department has filed an appeal before the Madras High Court being T C No 1535/2007against the order of the ITAT dated May 08, 2007 in I.T.A.No.1013/05 for the Assessment Year 2000-01. TheAppeal is filed against the Computation of Export Benefits Deduction under Section 80HHC for the purpose ofBook Profit under Section 115JA of the IT Act and the levy of interest under Section 234D of the Act. The Taximpact of which is Rs.28,93,628/-. The Appeal is currently pending.

11. The Income Tax Department has filed an appeal before the Madras High Court being T C No 1536/2007against the order of the ITAT dated May 08, 2007 in I.T.A.No.1014/05 for the Assessment Year 2001-02. TheAppeal is filed against the Computation of Export Benefits Deduction under Section 80HHC for the purpose ofBook Profit under Section 115JB of the IT Act and the levy of interest under Section 234D of the IT Act. TheTax impact of which is Rs.8,92,634/-. The Appeal is currently pending.

12. The Income Tax Department has filed an appeal before the Madras High Court being T C No. 81/2008 againstthe order of the ITAT dated May 08, 2007 in ITA No.1213/2005 for the Assessment Year 1998-99. The Appealis against the allowance in adjustment of MAT Credit before computing the interest under Sections234B/ 234C of the IT Act. The appeal is currently pending.

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13. The Income Tax Department has filed an appeal before the Madras High Court being T C No. 82/2008 againstthe order of the ITAT dated May 08, 2007 in ITA No.1214/2005 for the Assessment Year 1999-00. The Appealis against the allowance in adjustment of MAT Credit before computing the interest under Sections 234B /234C of the IT Act. The appeal is currently pending.

14. The Income Tax Department has filed an appeal before the Madras High Court being T C No. 83/2008 againstthe order of the ITAT dated May 08, 2007 in ITA No.1215/2005 for the Assessment Year 2000-01. The Appealis against the allowance in adjustment of MAT Credit before computing the interest under Sections 234B /234C of the IT Act. The appeal is currently pending.

15. The Income Tax Department has filed an appeal before the Madras High Court being T C No. 84/2008 againstthe order of the ITAT dated May 08, 2007 in ITA No.1216/2005 for the Assessment Year 2001-02. The Appealis against the allowance in adjustment of MAT Credit before computing the interest under Sections 234B /234C of the IT Act. The appeal is currently pending.

16. The Income Tax Department has filed an appeal before the Madras High Court being T C No 578/2008 againstthe order of the ITAT dated November 16, 2007 in I.T.A.No.2318/Mds/2006 on March 24, 2008 for theAssessment Year 2003-04. The Appeal is filed against the allowance on adjustment of MAT Credit beforecharging interest under Section 234B & 234C of the Income Tax Act, 1961.The issue is already a subjectmatter of a pending appeal before the High Court in T C No 717/2007 against the order of the ITAT datedNovember 29, 2006 in I.T.A.No.1911/05.The Appeal is currently pending.

Appeals filed by the Income Tax Department before the Supreme Court of India

1. The Income Tax Department has filed a Special Leave Petition (“SLP”) being Civil Appeal No.2981/2008 inthe Supreme Court of India against the order of the Madras High Court in T.C.(A) No. 407/2007 dated June 05,2007 for the Assessment Year 1996-97. The issue challenged in the SLP is whether Chlorine Containers areeligible for depreciation @ 100% or eligible for depreciation @ 25% as applicable to general category of Plant& Machinery. The tax impact of which is Rs.21,68,635/-. The SLP has been admitted and is currently pending.

E CENTRAL EXCISE PROCEEDINGS

Central excise cases, appeals, show cause cum demand notices in excess of Rs. 10 lakhs:

1. The Commissioner of Central Excise, Coimbatore issued a show cause notice bearing C.No. V/28/29/15/162/99 Cx. Adj. Dated November 05, 1999 to us, demanding a sum of Rs.44,53,195/-for the assessment periodfrom October, 1994 to August, 1999. We have availed modvat credit on Low Sulphur Heavy Stock (‘LSHS’) &Furnace oil used for generation of Electricity & Steam. Some of the generated electricity & steam was transferredto other units, housing colony, TNEB & M/s. Cabot Sanmar Ltd. The demand is raised for reversal ofproportionate modvat credit for electricity transferred outside the factory. The Commissioner of Central Excisepassed the order against us and a penalty of Rs.44,53,195/- with interest was imposed. An appeal was filedagainst this order before the Customs, Excise and Service tax Appellate Tribunal (CESTAT), Chennai. TheCESTAT by its order in 1481 and 1482/2007 dated December 13, 2007 remanded back the issue to the originalauthority. However the CESTAT deleted the levy of interest and penalty imposed on us. The matter is currentlypending before the original authority.

2. The Superintendent of Central Excise, Mettur Range I issued a show cause notice bearing O.C.No. 293/2001dated March 21, 2001 on us demanding a sum of Rs.12,14,524/- for the period from March, 2000 to December,2000. We reversed the inputs used for the electricity & steam transferred to other units as per the actual usage.But the department raised the demand for reversal of inputs as per the theoretical norms. The Commissioner ofCentral Excise (Appeals) passed the order against us and a penalty of Rs. 12,14,524/- with interest has alsobeen imposed. We have filed an appeal against the order before the CESTAT, Chennai. The CESTAT by itsorder in 1481 and1482/2007 dated December 13, 2007 remanded back the issue to the original authority.However the CESTAT deleted the levy of interest and penalty imposed on us. The matter is currently pendingbefore the original authority.

3. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. V/39/30/6/2003-T-5 dated May 08, 2003 on us demanding a sum of Rs.12,76,709/-for the period from April, 2002 toDecember, 2002. We reversed the inputs used for the electricity & steam transferred to other units as per theactual usage. But the department raised the demand for reversal of inputs as per the theoretical norms. We havefiled an appeal against the Order in Appeal issued by the Commissioner of Central Excise (Appeals) upholdingthe demand and imposing a penalty of Rs. 4,00,000/- with interest. The matter is currently pending before theCESTAT, Chennai.

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4. The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. V/28/15/224/2003dated January 08, 2004 on us demanding a sum of Rs.10,84,978/- for the period from January, 2003 to August,2003. We reversed the inputs used for the electricity & steam transferred to other units as per the actual usage.But the department raised the demand for reversal of inputs as per the theoretical norms. We have filed anappeal against the Order in Appeal issued by the Commissioner of Central Excise (Appeals) upholding thedemand and imposing a penalty of Rs.10,84,978/- with interest. The matter is currently pending before theCESTAT, Chennai.

5. The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. V/28/15/83/2004dated September 27, 2004 to us demanding a sum of Rs. 14,58,447/- for the period from September, 2003 toJuly, 2004. We reversed the inputs used for the electricity and steam transferred to other units as per the actualusage. But the department raised the demand for reversal of inputs as per the theoretical norms. We have filedan appeal against the Order in Appeal issued by the Commissioner of Central Excise (Appeals) upholding thedemand and imposing a penalty of Rs.14,58,447/- with interest. The matter is currently pending before theCESTAT, Chennai.

6. The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. V/28/15/51/2005dated July 25, 2005 to us demanding a sum of Rs.17,22,434/- for the period from August, 2004 to June, 2005.We reversed the inputs used for the electricity and steam transferred to other units as per the actual usage. Butthe department raised the demand for reversal of inputs as per the theoretical norms. We have filed an appealagainst the Order in Appeal issued by the Commissioner of Central Excise (Appeals) upholding the demandand imposing a penalty of Rs. 15,00,000/- with interest. The matter is currently pending before the CESTAT,Chennai.

7. The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. V/28/15/45/2006dated July 17, 2006 to us demanding a sum of Rs.15,22,522/- for the period from July, 2005 to May, 2006. Wereversed the inputs used for the electricity and steam transferred to other units as per the actual usage. But thedepartment raised the demand for reversal of inputs as per the theoretical norms. The Joint Commissioner,Salem vide his order no. V/28/15/45/2006 dated March 21, 2007 has confirmed the demand of Rs.15,22,522/- in addition to imposing a penalty of Rs.15,00,000/- with interest. We have filed an appeal being A. No. 81 &106/2007 against the order before the Commissioner of Central Excise (Appeals), Salem and the same wasrejected vide Order dated July 30, 2008 with the following modification viz., the demand of Rs.15,887/- raisedon Hydrogen gas in respect of Plant III is set aside and the penalties imposed have been set aside. Furtherappeal being No.E/473/08 was filed before CESTAT, Chennai hearing posted on December 16, 2008. No orderhas been passed and the matter is currently pending.

8. The Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/15/31/2006(sl no 3/2006) dated September 08, 2006 to us demanding a sum of Rs.2,05,38,343/- for the period from July,2001 to December, 2005. We have been supplying Methylene Chloride and Chloroform under Advance ReleaseOrders and Advance Intermediate Licence on deemed export basis as per the international price but by chargingExcise Duty. It is alleged by the department that, to the extent of benefit derived through Advance ReleaseOrders / Advance Intermediate Licence, there is under valuation. The matter has been heard by The Commissionerof Central Excise, Salem who has passed order no. V/28&29/15/31/2006 (Sl no 1/2007) dated February12, 2007 dropping most of the demands and confirming the demand of Rs.30,92,304/- only together with apenalty of Rs.40,92,304/-. We have filed an appeal against the order being no. E/335/07/MAS before CESTAT,Chennai which has issued a Stay order on June 28, 2007 asking us to make a pre-deposit of Rs 10,00,000/- andreport compliance by August 10, 2007, which has since been complied with.

9. The Commissioner of Central Excise, Coimbatore issued a show cause notice bearing C No. V/28/15/252/2001– Cx. Adj dated September 19, 2002 to us demanding a sum of Rs.39,86,225/-for the period from September,1997 to December, 2001. We had cleared finished goods to our depots and consignment agents based on theprice list and had discharged Excise duty obligation thereon. The department has demanded duty for thedifferential amount based on the price at which similar goods were sold by the depots and consignment agentson the given date. The Additional Commissioner of Central Excise Salem had allowed Rs.10,04,217/- beingduplicate demands and confirmed the demand of balance Rs.29,82,008/-. A penalty of Rs.29,82,008/- has alsobeen imposed. The Commissioner of Central Excise (Appeals) had confirmed this demand and we have filedan appeal against the order and the matter is currently pending before the CESTAT, Chennai.

10. The Commissioner of Central Excise, Trichy issued a Show Cause Notice bearing C No V/28/15/15/2005-Cx.Adj dated June 28, 2005 to us demanding aggregate sum of Rs.2,68,01,964/- for the period from September,2004 to April, 2005. We had availed Cenvat Credit of duty paid on the machineries, components and accessoriesused for installing the Gas based power plant and utilized the credit for payment of duty on our final products.As per the Show cause notice, since Diesel Generator set is not an item defined under Rule 2(b) of the Cenvat

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Credit Rules, 2002, the credit has been taken wrongly and is to be recovered from us. We have filed a reply tothe show cause notice by a letter dated August 29, 2005.

11. The Addl. Commissioner of Central Excise, Trichy issued a Show Cause Notice bearing C No V/28/15/9/2008-Cx. Adj dated May 26, 2008 to us demanding aggregate sum of Rs. 27,50,651/- for the material Service Platformof the Marine Terminal facility for unloading the imported ethylene by ship for manufacture of Ethylene Dichloride. As per the Show cause notice, since unloading arm situated outside the factory it has contravened theprovisions of Rule 2(a) (A) of the Cenvat Credit Rules, 2004 read with rule 3 ibid., the credit has been takenwrongly and is to be recovered from us. We have filed a reply to the show cause notice by a letter dated July 10,2008. Since we have moved to Large Tax Payer Unit (“LTU”) in July 2008 the case has since been moved toLTU, Chennai for further proceedings.

12. The Commissioner of Central Excise, Trichy, issued a Show Cause Notice bearing C No V/Ch.28/15/13/2008-Cx. Adj dated July 30, 2008 to us demanding aggregate sum of Rs. 10458429/- for the period April 2005 toDecember 2007. The credit for payment materials like M.S. Angles, M.S. Channels, M.S. Plates etc., are notdefined as capital goods in Rule 2(a) (A) of the cenvat credit Rules 2004. We had availed Cenvat Credit of dutypaid on the above components and accessories used for Pipe line support, Cable tray, tank shell & bottoms ofthe tanks. As per the Show cause notice, the credit has been taken wrongly and is to be recovered from us. Aftermoving to LTU in July 2008, the case has since been transferred to LTU, Chennai and we have sought timeextension for submitting their reply to LTU, Chennai.

13. The Joint Commissioner of Central Excise, LTU, Chennai issued a show cause notice [Plant-III] bearing C.No.IV/16/596/2008 LTG IV [JC] 121/2008 dated 5th November 08, on demanding a sum of Rs. 18,88,775/-for theperiod from October, 2007 to October, 2008. We reversed the inputs used for the electricity & steam transferredto other units as per the actual usage. But the department raised the demand for reversal of inputs as per thetheoretical norms. The Company has filed its reply to the SCN on December 23, 2008.

Central excise cases, appeals, show cause cum demand notices below Rs.10 lakhs:

1. The Deputy Commissioner of Central Excise, Cuddalore issued a show cause notice (‘SCN’) bearing C No IV/1/27/2003-UCD dated February 2, 2004 demanding a duty of Rs 75,767/- on Bio-compost fertilizer for theperiod March, 2003 to October, 2003 under Rule 6 of Cenvat Credit Rules, 2002. We have not paid any duty onbio-compost as this is not excisable. We have replied to the above SCN vide a letter dated March 17, 2004.

2. The Deputy Commissioner of Central Excise, Cuddalore issued a show cause notice bearing C No IV/16/156/2004-UCD dated November 5, 2004 demanding a duty of Rs 2,67,616/- on Bio-compost fertilizer for theperiod November 2003 to June 2004 under Rule 6 of Cenvat Credit Rules, 2002. We have not paid any duty onbio-compost as this is not excisable. We have replied to the above SCN vide a letter dated December 13, 2004.

3. The Deputy Commissioner of Central Excise, Cuddalore issued a show cause notice bearing C No IV/16/50/2005-UCD dated June 9, 2005 demanding a duty of Rs 2,63,639/- on Bio-compost fertilizer for the period July2004 to March 2005 under Rule 6 of Cenvat Credit Rules, 2002. We have not paid any duty on bio-compost asthis is not excisable. We have replied to the above SCN vide a letter dated July 26, 2005.

4. The Deputy Commissioner of Central Excise, Cuddalore issued a show cause notice bearing C No IV/16/25/2006-UCD dated March 20, 2006 demanding a duty of Rs 2,56,491/- on Bio-compost fertilizer for the periodApril 2005 to December 2005 under Rule 6 of Cenvat Credit Rules, 2002. We have not paid any duty on bio-compost as this is not excisable. We have replied to the above SCN vide a letter dated April 13, 2006.

5. The Deputy Commissioner of Central Excise, Cuddalore issued a show cause notice bearing C No IV/16/185/2006-UCD dated December 29, 2006 demanding a duty of Rs 2,49,448/- on Bio-compost fertilizer for theperiod April 2006 to October 2006 under Rule 6 of Cenvat Credit Rules, 2002. We have not paid any duty onbio-compost as this is not excisable. We have replied to the above SCN vide a letter dated January 25, 2007.

6. The Superintendent of Central Excise, Mettur issued a show cause notice bearing C.No. 317/2000 Cx. Adj. DatedMarch 1, 2000 to us demanding a sum of Rs.3,15,749/- for the period from September 1999 to February 2000. Weavailed modvat credit on LSHS & Furnace oil used for generation of Electricity & Steam. Some of the generatedelectricity & steam was transferred to other units, housing colony, TNEB & M/s. Cabot Sanmar Ltd. The demandis raised for reversal of proportionate modvat credit for electricity transferred outside the factory. The Commissionerof Central Excise passed the order against us alongwith interest and a penalty of Rs. 3,15,749/- has also beenimposed. An appeal has been filed being E/633/2003 against this order before the CESTAT, Chennai and theCESTAT by its order in 1481,1482/2007 dated December 20, 2007 remanded the matter back to the originalauthority. However the CESTAT deleted the levy of interest and penalty imposed on us.

7. The Deputy Commissioner of Central Excise, Cuddalore issued a show cause notice bearing C No V/22/15/47/2007-Cx.Adj dated October 12, 2007 demanding a duty of Rs 2,44,618/- on Bio-compost fertilizer for the

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period November 2006 to July 2007 under Rule 6 of Cenvat Credit Rules, 2004. We have not paid any duty onbio-compost as this is not excisable. We have replied to the above SCN vide a letter dated November 09, 2007.

8. The Superintendent of Central Excise, Mettur issued a show cause notice bearing C.No. 126/2001 Cx. Adj. DatedApril 2, 2001 to us demanding a sum of Rs. 6,62,912/- for the period from March 2000 to December 2000. Weavailed modvat credit on LSHS & Furnace oil used for generation of Electricity & Steam. Some of the generatedelectricity & steam was transferred to other units, housing colony, TNEB & M/s. Cabot Sanmar Ltd. The demandis raised for reversal of proportionate modvat credit for electricity transferred outside the factory. The Commissionerof Central Excise passed the order against us along with interest and a penalty of Rs. 6,62,912/- has also beenimposed. An appeal has been filed being E/633 / 2003 against this order before the CESTAT, Chennai and theCESTAT by its order in 1481,1482/2007 dated December 13, 2007 remanded the matter back to the originalauthority. However, the CESTAT deleted the levy of interest and penalty imposed on us.

9. The Deputy Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. 19/2002 Cx. Adj.Dated January 28, 2002 to us demanding a sum of Rs. 7,08,758/- for the period from September 1999 to February2000. We availed modvat credit on LSHS & Furnace oil used for generation of Electricity & Steam. Some of thegenerated electricity & steam was transferred to other units, housing colony, TNEB & M/s. Cabot Sanmar Ltd.The demand is raised for reversal of proportionate modvat credit for electricity transferred outside the factory.The Commissioner of Central Excise passed the order against us alongwith interest and a penalty of Rs. 7,08,758/- has also been imposed. An appeal has been filed being E/633 / 2003 against this order before the CESTAT,Chennai and the CESTAT by its order in 1481,1482/2007 dated December 13, 2007 remanded the mater back tothe original authority. However the CESTAT deleted the levy of interest and penalty imposed on us.

10. The Superintendent of Central Excise, Mettur issued a show cause notice bearing C.No. 794/2002 Cx. Adj.Dated September 26, 2002 to us demanding a sum of Rs. 7,37,158/- for the period from September 2001 toMarch 2002. We availed modvat credit on LSHS & Furnace oil used for generation of Electricity & Steam.Some of the generated electricity & steam was transferred to other units, housing colony, TNEB & M/s. CabotSanmar Ltd. The demand is raised for reversal of proportionate modvat credit for electricity transferred outsidethe factory. The Commissioner of Central Excise passed the order against us along with interest and a penaltyof Rs. 7,37,158/- has also been imposed. An appeal has been filed against this order before CESTAT, Chennaiand the same is currently pending.

11. We have filed an appeal being E/552 / 2006 with CESTAT, Chennai on June 17,2005 against the order of theCommissioner of Central Excise, Trichy bearing no. V/28/15/32/92 dated March 31, 2005. The issue involvedis the adoption of transfer price of Absol from our Vedaranyam plant to Mettur and the duty demanded is for theperiod August 1987 to March 1991. The Excise duty demanded is Rs 3,32,989/- and a penalty of Rs 10,000/-was also imposed. The appeal is currently pending.

12. The Superintendent of Central Excise, Mettur had issued Show cause notice no. 745/2001 dated November 29,2001 for Rs. 16,238/- covering the period November 2000 to July 2001 and SCN no 745/2002 dated September3, 2002 for Rs 8,880/- covering the period August 2001 to March 2002. The issue involved was payment ofduty on the clearance of waste weak HCL and the Commissioner of Central Excise, Salem had confirmed thedemand of the lower authorities and also confirmed the penalty of Rs. 10,000/-. We have filed the appeal beingE/PD/358/04 before the CESTAT, Chennai, which is currently pending.

13 We have filed an appeal with the CESTAT, Chennai on December 5, 1995 against the order in appeal no 135/95 dated August 23, 1995 of the Commissioner of Customs and Central Excise, Trichy who had upheld thedisallowance of modvat credit on certain materials to the extent of Rs. 18,750/-. The modvat credit had beentaken in April, 1994. The matter is currently pending.

14 We have filed an appeal before the CESTAT being against the decision of the Commissioner of Central Excise(Appeals), Salem who had confirmed the order of the lower authorities demanding excise duty on waste weakHCL cleared without payment of duty during the period November 2000 to March 2001 and August 01 toMarch 02. The Appellate order reference is A No 125/2002 & 15/2003 dated February 17, 2004 and thedemand is for Rs. 16,238/- and Rs. 12,216/-. The order also demanded Rs 5,000/- and Rs 10,000/- as penalty.The matter is currently pending.

15 We have filed an appeal being E / 636 / 2006 before the CESTAT against the decision of the Commissioner ofCentral Excise (Appeals), Salem who had confirmed the order of the lower authorities demanding differentialexcise duty on sales made thru depots/consignment agents during the period August 2002 to June 2003 andJuly 2003 to November 2003. The Appellate order reference is A No 69 & 70/2005 (SLM) dated April 28, 2005and the demand is for Rs. 4,75,272 and Rs 529/- together with interest. The appeal is currently pending.

16 We have filed an appeal being E/R-174 / 1996/MAS with the CESTAT against the decision of the Commissionerof Central Excise (Appeals), Salem who had confirmed the order of the lower authorities demanding differential

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excise duty on sales made thru depots/consignment agents during the period January 1994 to March 1994. TheAppellate order reference is A No 55/95 (CBE) dated May 18, 1995 and the demand is for Rs. 3,38,176/-. Thematter is currently pending.

17 The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing no. V/39/15/84/2005 CxAdj dated January 6, 2006 demanding Rs. 5,50,827/- demanding additional duty on As-such removal of goodsduring the period December 2000 to February 2003. While we have reversed the duty availed on the saidgoods, the department has demanded duty on 115% of the cost of the goods. We have filed the reply to the SCNon February 22, 2006.

18 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing O.C.No. 2589/94-95to us demanding a sum of Rs. 2,50,611/- for denial of Cenvat Credit of certain Inputs during June 1994 toAugust 1994 because input documents are not raised against respective units and Assistant Commissionerconfirmed the demand. The Commissioner of Central Excise (Appeals) dropped the demand of Rs.1,79,492/-and confirmed the demand of Rs.71,119/- and passed the order against us vide order 307/95 dated December22, 1995. We have filed an being E/611/96_MD before the CEGAT against the order and matter is currentlypending before the CESTAT, Chennai.

19 The Superintendent of Central Excise, Mettur Range I issued a show cause notice bearing O.C.No. 361/2002dated April 05, 2000 to us demanding a sum of Rs. 6,83,294/- for the period from September 1999 to February2000. We reversed the inputs used for the electricity & steam transferred to other units as per the actual usage.But the department raised the demand for reversal of inputs as per the theoretical norms. The Commissioner ofCentral Excise (Appeals) passed the order against us and a penalty of Rs. 6,83,294/- has also been imposed. Wehave appealed against the order being E /634 / 2003 before the CESTAT, Chennai and the CESTAT by its orderin 1481, 1482/2007 dated December 13, 2007 remanded back the issue to the original authority. However, theCESTAT deleted the levy of interest and penalty imposed on us.

20 The Superintendent of Central Excise, Mettur Range I issued a show cause notice bearing O.C.No. 20/2002dated January 28, 2002 to us demanding a sum of Rs. 4,17,249/- for the period from January 2001 to August2001. We reversed the inputs used for the electricity & steam transferred to other units as per the actual usage.But the department raised the demand for reversal of inputs as per the theoretical norms. The Commissioner ofCentral Excise (Appeals) passed the order against us and a penalty of Rs. 4,17,249/- has also been imposed. Wehave appealed against the order being E /634 / 2003 before the CESTAT, Chennai and the CESTAT by its orderin 1481,1482/2007 dated December 13, 2007 remanded back the issue to the original authority. However, theCESTAT deleted the levy of interest and penalty imposed on us.

21 The Joint Commissioner of Central Excise, Coimbatore issued a show cause notice bearing SCN/V/3904/28/15/163/99 dated October 28, 1999 to us demanding a sum of Rs. 7,76,310/- for the period from October 1994to August 1999. We reversed the inputs used for the electricity & steam transferred to other units as per theactual usage. The department raised the demand for reversal of inputs as per the theoretical norms and we havepaid Rs.3,78,100/- vide Rg23-A sl. no.7412/30.10.1999. The Commissioner of Central Excise (Appeals) passedthe order against us and a penalty of Rs. 3,98,210/- has also been imposed. We have filed an appeal against theorder being E /634 / 2003 before the CESTAT, Chennai and the CESTAT by its order in 1481,1482/2007 datedDecember 13, 2007 remanded back the issue to the original authority. The CESTAT deleted the levy of interestand penalty imposed on us.

22 The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39/15/225/2003dated December 17, 2003 to us demanding a sum of Rs. 2,52,606/- for the period from December 2002 toAugust 2003. We reversed the inputs used for the electricity & steam transferred to other units as per the actualusage. But the department raised the demand for reversal of inputs as per the theoretical norms. The Commissionerof Central Excise (Appeals) passed the order against us and a penalty of Rs. 2,50.000/- has also been imposed.We have filed an appeal being E/958 / 05 against the order and matter is currently pending before CESTAT,Chennai.

23 The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39&28/15/84//2004 dated September 27, 2004 to us demanding a sum of Rs. 6,92,799/- for the period from September 2003to June 2004. We reversed the inputs used for the electricity & steam transferred to other units as per the actualusage. But the department raised the demand for reversal of inputs as per the theoretical norms. The Commissionerof Central Excise (Appeals) passed the order against us and a penalty of Rs. 6,92,799/- has also been imposed.We have filed an appeal being E/959/05 against the order and matter is currently pending before CESTAT,Chennai. by its order in 1184/2008 dated October 16, 2008 remanded back the issue to the original authority.The CESTAT deleted the penalty imposed on us.

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24 The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39/15/49/2005dated July 27, 2005 to us demanding a sum of Rs. 7,57,768/- for the period from July 2004 to May 2005. Wereversed the inputs used for the electricity & steam transferred to other units as per the actual usage. Thedepartment raised the demand for reversal of inputs as per the theoretical norms. The Commissioner of CentralExcise (Appeals) passed the order against us and a penalty of Rs. 7,00,000/- has also been imposed. We havefiled an appeal being E /725 / 2006 against the order and matter is currently pending before the CESTAT,Chennai by its order in 1182/2007 dated October 16, 2008 remanded back the issue to the original authority.The CESTAT deleted the levy of penalty imposed on us..

25 The Superintendent of Central Excise, Range – I, Mettur Dam issued a show cause notice bearing C.No.785/2002 dated September 24, 2002 to us demanding a sum of Rs. 5,00,203/- for the period from September 2001to April 2002 We reversed the inputs used for the electricity & steam transferred to other units as per the actualusage. But the department raised the demand for reversal of inputs as per the theoretical norms. We havereplied to the SCN by a letter dated November 11, 2002 and a personal hearing was held on January 10, 2003.Orders are awaited.

26 The Superintendent of Central Excise, Range – I, Mettur Dam issued a show cause notice bearing C.No.254/2003 dated 12.05.2003 to us demanding a sum of Rs. 3,41,614/- for the period from May 2002 to November2002. We reversed the inputs used for the electricity & steam transferred to other units as per the actual usage.But the department raised the demand for reversal of inputs as per the theoretical norms. We have replied to theSCN by a letter dated July 18, 2003.

27 The Superintendent of Central Excise, Range – I, Mettur Dam issued a show cause notice bearing C.No.46/2000 dated January 10, 2000 to us demanding a sum of Rs. 3,35,959/- as excise duty for waste and scrapclearance for the period from August, 1999 to December, 1999. Joint Commissioner of Central Excise hasdropped duty demand of Rs.2,27,190/- vide his Order in Original Sl No.69/2005(JC) dated. November 12,2005 and confirmed the demand of Rs.1,08,769/-.The Commissioner of Central Excise (Appeals) passed theorder against us confirming the above order. We have filed an appeal being E /650 / 2006 against the order andmatter is currently pending before the CESTAT, Chennai.

28 The Superintendent of Central Excise, Range – I, Mettur Dam issued a show cause notice bearing C.No.244/2003 dated April 21, 2003 to us demanding a sum of Rs. 2,13,259/- as excise duty for waste and scrap clearancefor the period from April 2002 to November 2002. The Joint Commissioner of Central Excise has confirmedduty demand of Rs.2,13,259/-. The Commissioner of Central Excise (Appeals) passed the order against usconfirming the aforesaid order. We have filed an appeal being E /650 / 2006 against the order and matter iscurrently pending before CESTAT, Chennai.

29 The Deputy Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.v/39/30/35/2002 dated August 02, 2002 to us demanding a sum of Rs. 8,07,252/- as excise duty for waste and scrapclearance for the period from July 2001 to March 2002. The Joint Commissioner of Central Excise has droppedthe duty demand of Rs.3,21,195/- and confirmed duty demand of Rs.4,86,057/-. The Commissioner of CentralExcise (Appeals) passed the order against us confirming the aforesaid order. We have filed an appeal being E/650 / 2006 against the order and matter is currently pending before CESTAT, Chennai.

30 The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39&28/15/345/2003 dated January 14, 2004 to us demanding a sum of Rs. 2,89,344/- as excise duty for waste and scrapclearance for the period from December 2002 to August 2003. The Joint Commissioner of Central Excise hasconfirmed duty demand of Rs.2,89,344/-. The Commissioner of Central Excise (Appeals) passed the orderagainst us confirming the aforesaid order. We have filed an appeal being E /650 / 2006 against the order andmatter is currently pending before CESTAT, Chennai.

31 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/28/30/41/2004 dated October 01, 2004 to us demanding a sum of Rs. 1,73,988/- as excise duty for waste and scrapclearance for the period from September, 2003 to June, 2004. The Assistant Commissioner of Central Excisehas dropped the duty demand of Rs.8,681/- and confirmed duty demand of Rs.1,65,307/. The Commissioner ofCentral Excise (Appeals) passed the order against us confirming the aforesaid order. We have filed an appealbeing E /650 / 2006 against the order and matter is currently pending before CESTAT, Chennai.

32 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39/30/19/05/ dated July 28, 2005 to us demanding a sum of Rs. 4,75,101/- as excise duty for waste and scrap clearancefor the period from July 2004 to May 2004. The Assistant Commissioner of Central Excise confirmed dutydemand of Rs.4,75,101/- and imposed penalty of Rs.2,50,000/- The Commissioner of Central Excise (Appeals)passed the order against us. We have filed an appeal being E /650 / 2006 against the order and matter iscurrently pending before CESTAT, Chennai.

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33 The Joint Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/28&39/15/38/2006 dated June 20, 2006 to us demanding a sum of Rs. 3,26,932/- as excise duty for waste and scrap clearancefor the period from June 2005 to May 2006. The Joint Commissioner of Central Excise has confirmed dutydemand of Rs.3,26,932/- and imposed penalty of Rs.50,000/-. We have filed an appeal being 51/2007 CE(SLM) before Commissioner Central Excise (Appeals) Vide Order dated April 30, 2007, the Commissioner(appeals) has confirmed the demand and also imposed a penalty of Rs.50,000/-.We have filed an appeal beforeCESTAT, Chennai and the matter is currently pending.

34 The Asst Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39/30/08/2006 CEx Adj dated June 27, 2006 to us demanding a sum of Rs. 85,207/- for the period from June 2005 to May 2006.We reversed the inputs used for the electricity & steam transferred to other units as per the actual usage. But thedepartment raised the demand for reversal of inputs as per the theoretical norms. The Assistant Commissionerof Central Excise, Salem passed the order being no 40/2006 dated December 21, 2006 against us and a penaltyof Rs. 85,207/- has also been imposed. We have filed an appeal being No.81/2007 against the order with TheCommissioner of Central Excise (Appeals), Salem and the Commissioner of Appeal has passed the Order inAppeal No. 96/2008 CE (SLM) on July 30, 2008 confirming the demand. Further appeal E/473/08 was filedbefore CESTAT Chennai and the matter is currently pending.

35 The Supt of Central Excise, Range-I, Mettur Dam issued a show cause notice bearing C.No.1250 dated June 04,1992 disallowing the Modvat Credit as not eligible (input) for a sum of Rs.6,20,592/- and the Assistant Commissionerof Central Excise has dropped the demand of Rs.5,81,915/- and confirmed Rs.38,677/-. We have filed an appealagainst the AC’s order. Now the matter is pending before the Commissioner Appeal (Central Excise).

36 The Supt of Central Excise, Range-I, Mettur Dam issued a show cause notice bearing C.No.2032 dated August10, 1994 disallowing the Modvat Credit as not eligible (input) for a sum of Rs. 6,71,898.58 and The AssistantCommissioner of Central Excise has dropped the demand of Rs.6,39,112.58 and confirmed Rs.32,877/-. Wehave filed an appeal against the AC’s order. Now the matter is pending before the Commissioner Appeal(Central Excise).

37 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39&28/30/27/2005 dated April 04, 2006 denying the Capital Goods Cenvat credit as not eligible for a sum of Rs. 2,10,100/-. Assistant Commissioner of Central excise passed an order against us and imposed the penalty of Rs.2,10,100/-. We have filed an Appeal before the Commissioner Appeals (Central Excise) being 59 / 2007 and the same iscurrently pending.

38 The Superintendent of Central Excise, Range-I, Mettur Dam issued a show cause notice bearing C.No.1545/1995 dated August 04, 1995 being the Input material Cenvat credit is not eligible on a sum of Rs. 11,50,691/-. Assistant Commissioner of Central excise has dropped demand of Rs.11, 11,841/- and confirmed the demandof Rs.38,850/-. We have filed an Appeal to Commissioner Appeals (Central Excise) and the matter is currentlypending.

39 The Superintendent of Central Excise, Range-I, Mettur Dam issued a show cause notice bearing C.No.1263/1991 dated January 17, 1991 being the Input Chemicals Cenvat credit as not eligible for a sum of Rs. 2,35,119/-. Collector Appeal (Central Excise) has passed the order against us. We have filed an appeal against the orderafter remitting the duty and the matter is currently pending before the CESTAT, Chennai.

40 The Assistant Collector of Central Excise, Salem issued a show cause notice bearing C.No.1128/94 dated April28, 1994 denying the Capital Goods Cenvat credit is not eligible for a sum of Rs. 82,200/-. CommissionerAppeal (Central Excise) has dropped the demand Rs.64,796/- and confirmed Rs.17,404/-. We have filed anappeal against the order and matter is currently pending before the CESTAT, Chennai.

41 The Superintendent of Central Excise, Range-I, Mettur Dam issued a show cause notice bearing C.No.V/39/30/365/95-T5 dated February 20, 1995 to the Capital Goods Cenvat credit is not eligible a sum of Rs. 34,054.94.The Commissioner Appeals (Central Excise) dropped the demand of Rs.25,340.94 and confirmed the demandof Rs.8,714.00. We have filed an appeal against the order and matter is currently pending before the CESTAT,Chennai.

42 The Superintendent of Central Excise, Range-I, Mettur Dam issued a show cause notice bearing C.No.1932/95dated October 24, 1995 to the Capital Goods Cenvat credit is not eligible a sum of Rs. 9,74,430/-. The AssistantCommissioner of central Excise has dropped the demand of Rs.25,624/- and confirmed the demand ofRs.9,48,806/-. We have filed an Appeal against the A.C’s order to Commissioner Appeals (Central Excise) andthe Commissioner Appeals (Central Excise) has dropped the demand of Rs.2,85,282/- and confirmed Rs.6,63,524/-. We have filed an appeal against the order and matter is currently pending before the CESTAT, Chennai.

43 The Superintendent of Central Excise, Mettur Range I, Mettur issued a show cause notice bearing O.C.No. 118/2000 dated February 10, 2000 for sum of Rs. 3,11,483/- towards demanding duty for removal of condemned

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waste & scrap, worn out and obsolete capital goods for the period from August 1999 to December 1999. The JointCommissioner of Central Excise allowed sum of Rs. 1,45,222/- and disallowed Rs. 1,66,261/- vide OIO C.No. V/28/15/175/2004 Cx. Adj. Order Sl. No. 70/2005 (JC) dated November 12, 2005. The total penalty imposedagainst the OIO No. 70/2005 (JC) is Rs. 2,50,000/-. We have filed an appeal with The Commissioner Appeals,Salem and same has been rejected vide OIA No. 89/2006 CE (SLM) dated. 28.04.2006. We have filed an appealagainst the order being E / 658 / 2006 and the matter is currently pending before CESTAT, Chennai.

44 The Superintendent of Central Excise, Mettur Range I, Mettur issued a show cause notice bearing O.C.No.298/2001 dated May 04, 2001 for sum of Rs. 5,08,307/- towards demanding duty for removal of condemnedwaste & scrap, worn out and obsolete capital goods for the period from April, 2000 to January, 2001. The JointCommissioner of Central Excise allowed sum of Rs. 2,27,891/- and disallowed Rs. 2,80,416/- vide OIO C.No.V/28/15/175/2004 Cx. Adj. Order Sl. No. 70/2005 (JC) dated November 12, 2005. The total penalty imposedagainst the OIO No. 70/2005 (JC) is Rs. 2,50,000/-. We filed an appeal with The Commissioner Appeals,Salem and the same was rejected vide IOA No. 89/2006 CE (SLM) dated. April 28, 2006. We have filed anappeal against the order being E / 658 / 2006 and the matter is currently pending before CESTAT, Chennai.

45 The Superintendent of Central Excise, Mettur Range I, Mettur issued a show cause notice bearing O.C.No. 169/2002 dated. March 05, 2002 for sum of Rs. 5,84,056/- towards demanding duty for removal of condemned waste& scrap, worn out and obsolete capital goods for the period from February 2001 to November 2001. The JointCommissioner of Central Excise allowed sum of Rs. 2,28,560/- and disallowed Rs. 3,55,496/- vide OIO C.No. V/28/15/175/2004 Cx. Adj. Order Sl. No. 70/2005 (JC) dated November 12, 2005. The total penalty imposedagainst the OIO No. 70/2005 (JC) is Rs. 2,50,000/-.We have gone on appeal with The Commissioner Appeals,Salem and the same was rejected vide IOA No. 89/2006 CE (SLM) dated April 28, 2006. We have filed an appealagainst the order being E / 658 / 2006 and the matter is currently pending before CESTAT, Chennai.

46 The Superintendent of Central Excise, Mettur Range I, Mettur issued a show cause notice bearing O.C.No. 1088/2002 dated. December 20, 2002 for sum of Rs. 5,99,307/- towards demanding duty for removal of condemnedwaste & scrap, worn out and obsolete capital goods for the period from December 2001 to July 2002. The JointCommissioner of Central Excise allowed sum of Rs. 2,45,887/- and disallowed Rs. 3,53,420/- vide OIO C.No. V/28/15/175/2004 Cx. Adj. Order Sl. No. 70/2005 (JC) dated November 12, 2005. The total penalty imposedagainst the OIO No. 70/2005 (JC) is Rs. 2,50,000/-.We have filed an appeal with The Commissioner Appeals,Salem and rejected vide IOA No. 89/2006 CE (SLM) dated. April 28, 2006. We have filed an appeal against theorder being E / 658 / 2006 and the matter is currently pending before CESTAT, Chennai.

47 The Superintendent of Central Excise, Mettur Range I, Mettur issued a show cause notice bearing O.C.No.453/2003 dated. July 16, 2003 for sum of Rs. 384822/- towards demanding duty for removal of condemnedwaste & scrap, worn out and obsolete capital goods for the period from August 2002 to March 2003. The JointCommissioner of Central Excise was confirmed the demand vide OIO C.No. V/28/15/175/2004 Cx. Adj. OrderSl. No. 70/2005 (JC) dated November 12, 2005. The total penalty imposed against the OIO No. 70/2005 (JC)is Rs. 2,50,000/-. We went on appeal with The Commissioner Appeals, Salem and rejected vide IOA No. 89/2006 CE (SLM) dated April 28, 2006. We have filed an appeal against the order being E / 658 / 2006 and thematter is currently pending before CESTAT, Chennai.

48 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. V/28/30/31/2004 Adj. Dated March 16, 2004 for sum of Rs. 3,95,571/- towards demanding duty for removal of condemnedwaste & scrap, worn out and obsolete capital goods for the period from April 2003 to December 2003. TheJoint Commissioner of Central Excise was confirmed the demand vide OIO C.No. V/28/15/175/2004 Cx. Adj.Order Sl. No. 70/2005 (JC) dated November 12, 2005. The total penalty imposed against the OIO No. 70/2005(JC) is Rs. 2,50,000/-. We went on appeal with The Commissioner Appeals, Salem and rejected vide IOA No.89/2006 CE (SLM) dated April 28, 2006. We have filed an appeal against the order being E / 658 / 2006 and thematter is currently pending before CESTAT, Chennai.

49 The Superintendent of Central Excise, Mettur Range I, Mettur issued a show cause notice bearing O.C.No.962/2002 dated. August 23, 2002 for sum of Rs. 1,72,157/- towards the non-adoption of prevalent price toDepots/consignment agents removal from the factory during the period from September 1997 to December2001. The Assistant Commissioner of Central Excise, Salem confirmed the demand vide Order-in-Original Sl.No. 12/2005 (AC, Salem II) dated March 30, 2005. We went on appeal before the Commissioner Appeal,Salem and the same was rejected vide OIA Sl. No. 136/2005 Dated 12.08.05. We have filed an appeal againstthe order being E/PD/498/2005 and the matter is currently pending before CESTAT, Chennai.

50 The Superintendent of Central Excise, Mettur Range I, Mettur issued a show cause notice bearing O.C.No. 57/2003 dated. January 30, 2003 for sum of Rs. 61,798/- towards the non-adoption of prevalent price to Depots/consignment Agents removal from the factory during the period from January 2002 to July 2002. The AssistantCommissioner of Central Excise, Salem confirmed the demand vide Order-in-Original Sl. No. 04/2005 (AC,

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Salem II) dated January 27, 2005. We went on appeal before the Commissioner Appeal, Salem and the samewas rejected vide OIA Sl. No. 62,63 & 64(2005) Dated April 28, 2005. We have filed an appeal against theorder being E / 637 / 2005 and the matter is currently pending before CESTAT, Chennai.

51 The Superintendent of Central Excise, Mettur Range I, Mettur issued a show cause notice bearing O.C.No.558/2003 dated. August 27, 2003 for sum of Rs. 1,11,647/- towards the non-adoption of prevalent price toDepots/consignment agents removal from the factory during the period from August 2002 to March 2003. TheAssistant Commissioner of Central Excise, Salem confirmed the demand vide Order-in-Original Sl. No. 03/2005 (AC, Salem II) dated 27.01.2005. We went on appeal before the Commissioner Appeal, Salem and thesame was rejected vide OIA Sl. No. 62, 63 & 64(2005) Dated April 28, 2005. We have filed an appeal againstthe order being E / 637 / 2005 and the matter is currently pending before CESTAT, Chennai.

52 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. V/28/30/30/2004 – Adj. Dated March 03, 2004 for a sum of Rs. 5,957/- towards the non-adoption of prevalent price toDepots/consignment Agents removal from the factory during the period from April 2003 to November 2003.The Assistant Commissioner of Central Excise, Salem confirmed the demand vide Order-in-Original Sl. No.02/2005 (AC, Salem II) dated January 27, 2005. We went on appeal before the Commissioner Appeal, Salemand got rejected vide OIA Sl. No. 62,63 & 64(2005) Dated April 28, 2005. We have filed an appeal against theorder being E / 637 / 2005 and the matter is currently pending before CESTAT, Chennai.

53 The Assistant Commissioner of Central Excise, Karaikal issued a show cause notice bearing C. No. V/Ch.29/15/23/2007 Cex. Adj dated June 27, 2007 to us demanding a sum of Rs. 3,99,840/- towards Excise duty & Cesspayable on Waste & Scrap sold by our ICD division during the period June 2006. We have filed the reply datedJuly 21, 2007 justifying our position. Pursuant to a personal hearing the Assistant Commissioner by an Orderbeing No.11/2007 dated September 28, 2007 has confirmed the demand and imposed a penalty of a sum ofRs.3,99,840/-. We filed an appeal before Commissioner of Central Excise (Appeals) on November 28, 2007and Personal hearing was held on December 13, 2007 order is yet to passed.

54 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39&28/30/10/2007 dated May 29, 2007 to us demanding a sum of Rs. 52,959/- for the period from September 2006 toDecember 2006. The issue involved is the adoption of transfer price of resins from our plant 2 at Mettur to Pipeplants at Sholavaram and the duty demanded is Rs. 52,959/-. We have filed the reply to Show Cause Noticevide letter dated July 26, 2007. The Assistant Commissioner of Central Excise, vide order no 02/2008 datedJanuary 17, 2008 has confirmed the demand along with appropriate interest on the duty demanded u/s 11AB(1) of the Central Excise Act, 1944 and imposed a penalty on us.

55 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39&28/30/27/2007 dated May 28, 2007 to us demanding a sum of Rs. 42,417/- for the period from June 2006 to February2007. We reversed the inputs used for the electricity & steam transferred outside the factory as per the actualusage. But the department raised the demand for reversal of inputs as per the theoretical norms. We have filedthe reply to Show Cause Notice vide letter dated June 26, 2007. The Assistant Commissioner of Central Excise,Salem vide order serial no 7/2008 dated February 15, 2008 dropped demand for Rs.38,086/- and confirmed thebalance demand of Rs.4,331/-. A penalty of Rs.10,000/- has also been imposed. We have filed an Appeal beforethe Commissioner (Appeals), Salem against this order. The matter is currently pending.

56 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/28&29/30/12/2008 dated May 05, 2008 to us [Plant-III] demanding a sum of Rs. 3,72,169/-(for LSHS) plus Rs.174/ forHydrogen Short reversal of cenvat credit for the period from April 2007 to May 2007. We have filed a reply toShow Cause Notice vide a letter dated May 30, 2008 bearing Ref.No.SCN 12 / 2008-09. Asst. Commissionerof Central Excise, Salem issued a corrigendum to the above SCN on July 28, 2008 accordingly the SCN replywas submitted by us to The Commissioner of Central Excise, LTU Chennai on August 05, 2008.

57 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/28&29/30/25/2008 dated June 11, 2008 to us [Plant-III] demanding a sum of Rs. 1,84,158/-(for LSHS) plus Rs.78/ for HydrogenShort reversal of cenvat credit for the month of June 2007. We have filed a reply to the Show Cause Notice videa letter dated July 14, 2008 bearing Ref.No.CE/P-III/LSHS-SCN 25 / 2007-08 to Asst. Commissioner of CentralExcise, LTU Chennai as per the direction of Asst. Commissioner Central Excise Salem subsequently we havereceived the Corrigendum to SCN from Asst.Commissioner of Central Excise, Salem on July 16, 2008.

58 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/28&29/30/26/2008 dated June 11, 2008 to us[Plant-III] demanding a sum of Rs. 3,24,408/-(for LSHS) plus Rs.61/- forHydrogen Short reversal of cenvat credit for the month of July 2007. We have filed a reply to the Show CauseNotice vide a letter dated July 14, 2008 bearing Ref.No.CE/P-III/LSHS-SCN 26 / 2007-08 to Asst. Commissionerof Central Excise, LTU Chennai as per the direction of Asst.commissioner Central Excise Salem subsequentlywe have received the corrigendum to SCN from Asst.Commissioner of Central Excise, Salem on July 16, 2008.

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59 The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/28&29/30/27/2008 dated June 11, 2008 to us[Plant-III] demanding a sum of Rs. 4,64,599/-(for LSHS) plus Rs.83/- forHydrogen Short reversal of Cenvat credit for August-2007 & September-2007. We have filed a reply to theShow Cause Notice vide a letter dated July 14, 2008 bearing Ref.No.CE/P-III/LSHS-SCN 27 / 2007-08 toAsst. Commissioner of Central Excise, LTU Chennai as per the direction of Asst.commissioner Central ExciseSalem subsequently we have received the corrigendum to SCN from Asst.Commissioner of Central Excise,Salem on July 16, 2008.

60 The Assistant Comissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/39/28/30/8/2008 dated April 01, 2008 to us demanding a sum of Rs.1,69,722/- for the period from March 2007 to September2007 in respect of Power and steam transferred outside the factory. We have replied to this show cause noticevide a letter dated May 29, 2008.

61 The Asst.Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/28&29/30/34/2007-C.ExAdj. dated July 02, 2007 to us [Plant-III] demanding LSHS Cenvat reversal of Rs.4,49,555/- andexcise duty for hydrogen captive consumption Rs.3,131/- for the period from June-2006 to August-2006 inrespect of power and steam transferred outside the factory. We have filed the reply on August 01, 2007. Afterthe Asst.Commissioner Salem passed the order sl No.8/2008 dated February 18, 2008 to drop the issue accordingto CESTAT final order 1481&1482 /2007, the Department filed an application A155/2008 to CommissionerAppeals Salem as per the direction of Commissioner Central Excise Salem. We have called for Memorandumof Cross objection from Commissioner Appeals Salem. Hearing notice is yet to be received,

62 The Asst.Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/28&29/30/39/2007-C.ExAdj dated September 28, 2007 to us [Plant-III] demanding LSHS Cenvat reversal Rs.4,11,095/- andexcise duty for hydrogen captive consumption Rs.5,616/- for the period from September-2006 to November-2006 in respect of power and steam transferred outside the factory. We have filed the reply on October 05,2007. After The Asst.Commissioner Salem passed the order sl. No.9/2008 dated February 18, 2008 to drop theissue according to CESTAT final order 1481&1482 /2007, the Asst. Commissioner of Central Excise SalemFiled the Department application A157/2008 to Commissioner Appeals Salem as per the direction ofCommissioner Central Excise Salem. We have called for Memorandum of Cross objection from CommissionerAppeals Salem. Hearing notice is yet to be received,

63 The Asst.Commissioner of Central Excise, Salem issued a show cause notice bearing C. No. V/28&29/30/46/2007-C.ExAdj dated October 17, 2007 to us [Plant-III] demanding LSHS Cenvat reversal Rs.4,14,921/- and excise dutyfor hydrogen captive consumption Rs.2,856/- for the period from December-2006 to March-2007 in respect ofpower and steam transferred outside the factory. We have filed the reply on November 14, 2007. After theAsst.Commissioner Salem passed the order sl No.10/2008 dated February 18, 2008 to drop the issue according toCESTAT final order 1481&1482 /2007. The Dept. Salem filed the Department application A156/2008 toCommissioner Appeals Salem as per the direction of Commissioner Central Excise Salem. We have called for theMemorandum of Cross objection from Commissioner Appeals Salem.

64 The Asst.Commissioner of Central Excise, LTU Chennai, issued a show cause notice[Plant-II] bearing C.No.IV/16/595/2008 LTG IV (AC) 118/2008 dated 5th November 2008 to us demanding a sum of Rs. 1,88,006/- for theperiod from October 2007 to September 2008. We have reversed the inputs used for the electricity & steamtransferred to other units as per the actual usage. But the department raised the demand for reversal of inputs asper the theoretical norms. The Company has filed its reply to the SCN on December 22, 2008.

65 The Additional Commissioner of Central Excise, Chennai II Commissionerate issued a show cause noticebearing No.C.NO.v/15/70/08 Cx.Adj. dated. July 31, 2008 demanding the duty amount of Rs.4,92,500/- andEdn. Cess & SHE Cess amounting to Rs.14,775/- along with the Interest and Penalty by denying the exemptionavailable under notification no.108/95-CE dated August 28, 1995 for the clearances made to the project financedby an International Organization and approved by Govt. of India.

F. SERVICE TAX PROCEEDINGS

Service Tax cases, appeals, show cause cum demand notices in excess of Rs. 10 lakhs:

1. The Joint Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/15/37/2006 dated June 23, 2006 to us demanding aggregate sum of Rs. 17,14,021/-for the period from June, 2005 toNovember, 2006 in respect of service tax credit on freight outward and service tax credit on mobile phones, etc.,which are not eligible for input service tax credit. We have filed a reply to the show cause notice by a letter datedJuly 18, 2006. The Additional Commissioner of Central excise Salem has upheld the disallowance and imposed apenalty of Rs 5, 00,000/- by order dated November 07, 2007. We have filed an Appeal against the aforesaid order

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before the Commissioner of Customs & Central Excise. A personal hearing was held before the Commissioner(Appeals) on July 01, 2008 and a Personal Hearing held on 10.11.2008 and orders are awaited.

2. The Commissioner of Central Excise Salem, issued a show cause notice bearing C.No.V/28 & 29 / 15/ 28/2008-Cx.Adj. dated July 09, 2008 to us [Plant-III] demanding service tax credit Rs.1,70,67,674/- for the periodfrom April-2006 to March –2008 towards objection raised for distribution of ISD service tax credit saying asdisproportionate and also show cause to HO why the penalty should not be imposed on this disproportionatedistribution of ISD. We have filed a reply with LTU Commissioner as per the Show cause Notice direction onAugust 09, 2008.

3. The Addl. Commissioner of Central Excise, Trichy issued a show cause notice bearing C.No. V/28/15/8/2008-Cx.Adj. dated July 29, 2008 to us demanding aggregate sum of Rs. 44,16,195/- for the period from December,2005 to May, 2008 in respect of service tax credit on ineligible services like landscaping, cleaning of bushes,earth filling, laying of roads, housekeeping expenses and pest management etc., which are not eligible for inputservice tax credit. We have filed a reply to the show cause noticed by a letter dated August 28, 2008.

Service Tax cases, appeals, show cause cum demand notices below Rs. 10 lakhs:

1. The Asst Commissioner of Central Excise, Cuddalore issued a show cause notice bearing C No IV/16/162/2006-UCD dated November 21, 2006 disallowing certain items of service on which service tax credit wasavailed by us. The service tax disallowed amounts to Rs. 11,563/-. We have filed a reply vide a letter datedDecember 18, 2006. The Asst Commissioner of Central Excise, Cuddalore, vide his order sl no 32/2007 datedAugust 21, 2007 has confirmed the demand and also has imposed a penalty of Rs. 2,500/-. We have filed anappeal being A No 158/07 (P) with the Commissioner of Central Excise (Appeals), Chennai. The appeal iscurrently pending and no orders have been passed.

2. The Deputy Commissioner of Central Excise, Cuddalore issued a Show cause notice bearing C.No.V/Ch.22/15/49/2007-CX.Adj.dated October 17, 2007 disallowing service tax availed on Landscape maintenance duringthe period from October, 2006 to August, 2007.The service tax disallowed amounts to Rs.4,710/-.We havefiled a reply vide a letter dated November 09, 2007.The Deputy Commissioner Central Excise, Cuddalore videhis order sl.no.09/2008 dated March 27, 2008 has confirmed the demand and also imposed a penalty ofRs.5,710-). We have filed an appeal being A. No 130/2008 (P) with the Commissioner of Central Excise(Appeals), Chennai on May 30, 2008 and the matter is currently pending.

3. The Assistant Commissioner of Central Excise, Karaikal, issued a show cause notice bearing C.No. IV/16/56/2007 Cx. Adj dated February 6, 2007 to us demanding a sum of Rs. 4,15,721/- for the period from January2005 to November 2005 in respect of service tax credit availed on freight outward. We have replied justifyingour eligibility to avail credit on outward freight vide letter dated March 1, 2007. The Assistant Commissionerof Central Excise, Karaikal vide his order sl no 8/2007 dated August 24, 2007 confirmed the demand and alsoimposed a penalty of Rs. 8,32,442/-. We have filed an appeal against the aforesaid order before the Commissioner(Appeals) on October 22, 2007 and a personal hearing was held on December 13, 2007. Order is yet to bepassed.

4. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No.V/30/29/2003-STC dated May 09, 2003 to us demanding a sum of Rs. 21,200/- for the period from July 1999 to August 1999.The Excise department has demanded the Service tax on C & F Agents and issued the SCN. We have replied tothe SCN by a letter dated July 18, 2003.

5. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing SCN.No.V/39&28/30/19/2006 dated 02.01.2007 in the mater of the Service Tax credit being not eligible for a sum of Rs. 1,46,624/- for the period from December 2005 to May 2006. We have replied to the SCN by a letter dated January 19,2007. Personal hearing was held on June 22, 2007 and the Assistant Commissioner, Salem vide order serial no10/2007 dated June, 26, 2007 confirmed the demand and also imposed a penalty of Rs. 1,46,624/-.We havefiled an appeal against this order on September 28, 2007 before the Commissioner Appeals, Salem. Order inAppeal No.76/2008-CE (SLM) dated July 03, 2008 passed by Commissioner of Appeals Salem to reduce thedemand from Rs.1,46,624 to Rs.1,325/- and Penalty from Rs.1,46,624/- to Rs.1000/-. Further Appeal E/448/08was filed in CESTAT, Chennai on 07.10.2008. An interim stay order No.1005/2008 dated 26.11.2008 waspassed by CESTAT for recovery of demand and the matter is currently pending.

6. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing SCN.No.V/39&28/30/05/2007 dated February 05, 2007 in the matter of the Service Tax credit being not eligible for a sum of Rs.2,67,257/- for the period from February 2006 to November 2006. We have replied to the SCN by a letter datedApril 26, 2007. Personal hearing was held on September 12, 2007 and the Assistant Commissioner of CentralExcise, Salem vide order serial no 30/2007 dated October 31, 2007 dropped the demand amountingtoRs.1,33,826/- while confirming the balance demand of Rs.1,33,431/-. The order has also imposed a penalty

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of Rs.1,33,431/- in addition to demand of interest. We have filed an appeal before the Commissioner of CentralExcise (Appeals), Salem and the same is pending.

7. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing SCN.No.V/39&28/30/06/2006 dated June 09, .2007 disallowing the Service Tax Cenvat credit as being not eligible for a sum ofRs. 32,424/- for the period from May 2005 to November 2005. Assistant Commissioner of Central Excisedecided against us and imposed the penalty of Rs.32,424/-. We have filed an Appeal to Commissioner Appeals(Central Excise) on March 20, 2007 being 60/2007. Personal hearing was held on April 22, 2008 and the aboveappeal was rejected by Commisisoner Appeals [SLM] vide Order in Appeal No.79/2008-CE[SLM] dated July28, 2008. Further appeal E/453/08 was filed before CESTAT, Chennai and a personal hearing was held on10.11.08 orders are awaited.

8. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/13/2006 – C.Ex. Adj. dated November 02, 2006 to us [Plant-III] demanding a sum of Rs. 4,66,752/- for theperiod from October 2005 to February 2006 in respect of service tax credit availed based on the debit noteissued by the consignment agents towards the service tax for the sales commission paid by us. The departmentis contesting that the Debit Note is not the valid document to avail the credit. We have replied to the show causenotice on December 15, 2006. The Assistant Commissioner of Central Excise, Salem has vide order serial no.4/2007 dated May 29,2007 has confirmed the demand and imposed a penalty of Rs. 4,66,752/-. We have filedan appeal before Commissioner (Appeals) on September 18, 2007. The Commissioner Appeals has passed anorder in appeal No. 90/2008-CE (SLM) on July 30, 2008 confirming the demand. Further appeal E/482/08 wasfiled before CESTAT and personal hearing was held on 16.01.2009, a stay order bearing ref.no.45 to 47 of2009 dated January 21, 2009 was passed. .

9. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. V/TIC/15/01/2006 – Ser. Tax. Adj. Dated December 18, 2006 to us demanding sum of Rs. 18,317/- towards the payment ofservice tax on the testing of chlorine cylinders for Karaikal and other customers for the period from April 2004to January 2006. As per the service tax rule we have remitted the service tax on the service charges collectedfrom other customers amounting to Rs. 1,410/- on March 24, 2006 itself. The SCN was replied by us onDecember 18, 2006 and a personal hearing was held before the Assistant Commissioner on May 03, 2007. TheAssistant Commissioner of Central Excise vide order in original no. V/TIC/15/01/2006 in serial no. 26/2007dated June 06, 2007 has dropped the demand for Rs. 1,410/- and confirmed the demand for Rs. 16,907/-. Apenalty of Rs. 36,224/- has also been imposed. We have filed the appeal before the Commissioner (Appeals)being 163/07. Further appeal No.S/241/08 was filed before CESTAT Chennai on 11.11.2008. No orders havebeen passed and the matter is currently pending.

10. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/20/2006 - C.Ex. Adj. dated January 02, 2007 to us [Plant-III] demanding a sum of Rs. 3,73,677/- for the periodfrom August 2005 to September 2005 in respect of service tax credit availed based on the debit note issued bythe consignment agents towards the service tax for the sales commission paid by us. We have replied to theshow cause notice on March 5, 2007 and the matter is pending with Assistant Commissioner of Central Excise,Salem. Personal hearing was held on June 22, 2007 and the Assistant Commissioner, Salem has vide orderserial no 13/2007 dated June 29, 2007 confirmed the demand and imposed a penalty of Rs. 3,73,677/-. We havefiled an appeal before the Commissioner Appeals on October 5, 2007. The AC passed an order on July 30, 2008confirming the demand. Further appeal E/483/08 was filed before CESTAT, Chennai and a personal hearingwas held on 16.01.2009 , a stay order bearing ref.no.45 to 47 of 09 dated January 21, 2009 was passed.

11. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/21/2006 dated January 03, 2007 to us [Plant-III] demanding a sum of Rs. 3,24,821/- for the period fromDecember 2005 to February 2006 in respect of service tax credit on freight outward and service tax credit onmobile phones, etc., which are not eligible for input service tax credit as contended in the Show Cause Notice.The SCN was replied by us on February 19, 2007. Personal hearing was held on June 22, 2007 and the AssistantCommissioner, Salem has vide order serial no 19/2007 dated July 31, 2007 confirmed the demand and imposeda penalty of Rs. 10,000/-. We have filed an appeal against this order on October 17, 2007 before CommissionerAppeals, Salem. Personal hearing attended before the Commissioner Appeals Salem on June 17, 2008 and thesaid appeal was rejected by Commissioner Appeals Salem vide Order in Appeal No.80/2008 –CE (SLM)Dated July 28, 2008. Further appeal E/452/08 was filed before CESTAT, Chennai on 10.10.2008. No ordershave been passed and the matter is currently pending

12. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/22/2006 dated January 02, 2007 to us[Plant-I ]demanding a sum of Rs. 32,390/- for the period from December2005 to August 2006 in respect of service tax credit on freight outward as being not eligible for input servicetax credit. The SCN was replied by us on March 05, 2007. Personal hearing was held on June 22, 2007 and theAssistant Commissioner, Salem has vide order serial no 14/2007 dated June 29, 2007 confirmed the demand

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and imposed a penalty of Rs. 10,000/-. We have filed an appeal before the Commissioner Appeals on October5, 2007, being A 206/2007.Order in Appeal No.77 /2008 dated July 03, 2008 passed by Commissioner AppealsSLM the demand reduced from Rs.32,390/- to Rs.29,300/- and Penalty reduced from Rs.10,000/- to Rs.7,000/. Further appeal E/447/08 was filed before CESTAT, Chennai on 07.10.2008 and personal hearingwas held on 21.11.2008. A stay order being No.1004/08 dated 26.11.2008 was passed for demand recovery andthe matter is currently pending.

13. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.No. V/28&29/30/4/2007 - C.Ex. Adj. Dated March 02, 2007 demanding a sum of Rs. 1,94,686/- in respect of alleged ineligibleinput service tax credit availed during the period from February 2006 to December 2006. We have filed thereply to the SCN on May 03, 2007. A Personal hearing was held in the matter on September 12, 2007 and theAssistant Commissioner of Central Excise, Salem confirmed the demand and imposed a penalty vide orderserial no 28/2007 dated October 31, 2007. We have filed an appeal before the Commissioner (Appeals), Salembeing A no 28/2008 and the matter is currently pending.

14. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/8/2007 dated April 05, 2007 to us [Plant-III] demanding a sum of Rs. 4,55,669/- for the period from March2006 to June 2006 in respect of service tax credit on freight outward and service tax credit on mobile phones,etc., which are not eligible for input service tax credit as contented in the Show Cause Notice. The SCN wasreplied by us on May 29, 2007. Assistant Commissioner of Central Excise, Salem confirmed the demand andimposed a penalty vide order serial no 26/2007 dated October 18, 2007. We have filed an appeal before theCommissioner (Appeals), Salem being A no 284/2007 on December 11,2007. A personal hearing held beforeCommissioner Appeals Salem on July 01, 2008 and the appeal was rejected vide Order in Appeal No82/2008dated July 28, 2008 passed by Commissioner Appeals, Salem. Further appeal E/450/08 was filed before CESTAT,Chennai on 10.10.2008 personal hearing was held on 10/11/2008. Orders are awaited.

15. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/33/2006 – C.Ex. Adj. dated April 05, 2007 to us [Plant-III] demanding a sum of Rs. 1,46,316/- for the periodfrom March 2006 to April 2006 in respect of service tax credit availed based on the debit note issued by theconsignment agents towards the service tax for the sales commission paid by us. We have replied to the showcause notice on May 04, 2007. Asst.Commissioner of Central Excise, confirmed the demand with interest videorder serial no.21/2007 dated September 21, 2007. We have filed an appeal before the Commissioner (Appeals)Salem on December 12, 2007. The AC passed an order on July 30, 2008 confirming the demand. Furtherappeal No. E/484/08 was filed before CESTAT, Chennai and personal hearing was held on 16.01.2009 , a stayorder bearing ref.no.45 to 47 of 09 dated January 21, 2009 was passed.

16. The Joint Commissioner of Central Excise, Trichy issued a show cause notice bearing C.No. V/Ch/28/15/6/2007– C.Ex. Adj. dated September 25, 2007 for the period from December 2005 to October 2006 for a sum of Rs.7,64,726/- in respect of service tax credit availed on freight outward paid by us. We have filed a reply on October23, 2007. The Additional Commissioner of Central Excise, Trichy has passed an unfavourable order for recoveringan amount of Rs. 764726/- and imposed a penalty of Rs. 10000/- vide OIO No. 4/2008/CE dt. 25.03.2008. Appealhas been filed to Commissioner of Customs & Central Excise, Trichy on 04.06.2008. We have received thecorrigendum letter from Commissioner of Customs & Central Excise, Trichy vide letter No. 04/2008(Appeals –TRY) dt. 29.07.2008 that the above case has been moved to LTU Chennai, and the same is currently pending.

17. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/44/2007 dated July 30, 2007 to us [Plant-III] demanding a sum of Rs. 2,32,939/- for the period from July 2006to September 2006 in respect of service tax credit on freight outward and service tax credit on mobile phones,etc., which are not eligible for input service tax credit as contended in the Show Cause Notice. The SCN wasreplied by us on August 29, 2007. The Assistant Commissioner of Central Excise, Salem has passed the orderin original no 1/2008 dated January 17, 2008 confirmed the demand of Rs.2,32,939/- with appropriate interestand imposed a penalty of Rs.10,000/-. We have filed an appeal against the aforesaid order before theCommissioner of Central Excise (Appeals) on April 22, 2008. The matter is currently pending. Personal hearingattended before the Commissioner [Appeal] Salem, on August 19, 2008.

18. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.no.V/39/28/30/50/2007 dated October 17, 2007 to us demanding a sum of Rs.36,440/- for the period from December 2006 toMarch 2007 in respect of service tax credit on ineligible service, which are not eligible for input service creditas contented in the show cause notice. The SCN was replied by us on November 12, 2007. The Assistantcommissioner of central excise vide order no.11/2008 dated February 22, 2008 confirmed the demand ofRs.25,216/- and allowed Rs.11,224/- We have filed an appeal with Commissioner Appeals Salem against theconfirmed amount of Rs.25,216/- on June 05, 2008 vide an appeal no.196/2008. The matter is currently pending.

19. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C.no.V/39/28/30/40/2007 dated 0ctober 3, 2007 to us demanding a sum of Rs.3,081/- for the period from September 2006 to March

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2007 in respect of outward freight. We filed a reply to the SCN on November 01, 2007. The Assistantcommissioner of Central Excise vide order no.15/2008 dated February 26, 2008 confirmed the demand ofRs.3,081 along with appropriate interest. We have filed an appeal before Commissioner (Appeals) Salem againstthis order on June 05, 2008 vide an appeal no.195/2008. The matter is currently pending.

20. The Deputy Commissioner of Central Excise, Karaikal issued a show cause notice bearing C no IV/16/7/2008dated February 28, 2008 to us demanding a sum of Rs.70,838/- for the period from April 2006 to March 2007being service tax credit on ineligible services. We have filed a reply to the aforesaid SCN on April 02, 2008.The Company has received an unfavourable order from Assistant Commissioner of Central Excise, Karaikalvide OIO No. 12/2008-09 dt. 17.10.2008. An appeal has been filed before the Commissioner of Central Excise(Appeals) LTU, Chennai. No orders have been passed and the matter is currently pending.

21. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/38/07 dated October 03, 2007 to us demanding a sum of Rs 49,399/- for the period September 2006 to March2007 in respect of service tax credit on freight outward and service tax credit on mobile phones, etc., which are noteligible for input service tax credit. The SCN was replied by us on November 01, 2007. The Assistant Commissionerof Central Excise, Salem has vide order in original no 14/2008 dated February 26, 2008 confirmed the demand ofRs.2,32,939/- with appropriate interest and imposed a penalty of Rs.10,000/-. Also imposed personal penalty ofRs 10000/-. We have filed an appeal against the aforesaid order before the Commissioner of Central Excise(Appeals), Salem being Appeal No: 191/2008 on June 05, 2008. The matter is currently pending.

22. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/45/07 dated October 30, 2007 to us [Plant-III] demanding a sum of Rs 4,39,662/- for the period March 2007 inrespect of service tax credit on freight outward and service tax credit on mobile phones, etc., which are noteligible for input service tax credit. The SCN was replied by us on November 29, 2007. The AssistantCommissioner of Central Excise, Salem has vide order in original no 16/2008 dated February 28, 2008 confirmedthe demand of Rs.4,39,662/- with appropriate interest and imposed a penalty of Rs.10,000/-. Also imposedpersonal penalty of Rs 10000/- Against this we, filed an appeal before Commissioner of Central Excise (Appeals),Salem in Appeal No: 194/2008 on June 05, 2008. The matter is currently pending.

23. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/35/07 dated October 30, 2007 to us [Plant-III] demanding a sum of Rs 3,79,976/- for the period October, 2006to February, 2007 in respect of service tax credit on freight outward and service tax credit on mobile phones,etc., which are not eligible for input service tax credit as contented in the Show Cause Notice. The SCN wasreplied by us on November 29, 2007. The Assistant Commissioner of Central Excise, Salem has vide order inoriginal no 12/2008 dated February 22, 2008 confirmed the demand of Rs.3,79,976/- with appropriate interestand imposed a penalty of Rs.10,000/-. Also imposed personal penalty of Rs 10000/-. We have filed an appealagainst the aforesaid order before Commissioner of Central Excise (Appeals), Salem in Appeal No: 187&188/2008 on June 05, 2008. The matter is currently pending.

24. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/18/08dated May 05, 2008 to us [Plant-III] demanding a sum of Rs 82,505/- for the period April-2007 to September-2007 inrespect of availment of service tax eligible for input services like guest house keeping, on line trading, food charges,landscape etc. The SCN was replied by us on May 30, 2008 vide a letter bearing ref. no. SCN 18/ 2008/ 2008-09. .Asst.Commissioner of Central Excise, Salem issued a corrigendum to the above SCN on July 28, 2008 accordingly the SCNreply was submitted to The Asst.commissioner of Central Excise, LTU Chennai on August 05, 2008.

25. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/15/08 dated May 05, 2008 to us[Plant-III] demanding a sum of Rs 4,05,186/- for the period April-2007 toSeptember-2007 in respect of availment of service tax eligible for outward freight and mobile phone. The SCNwas replied by us on May 30, 2008 vide a letter bearing ref. no. SCN 15 / 2008 / 2008-09. .Asst. Commissionerof Central Excise, Salem issued a corrigendum to the above SCN on July 28, 2008 accordingly the SCN replysubmitted to the Asst. Commissioner of Central Excise, LTU Chennai on August 05, 2008.

26. The Assistant Commissioner of Central Excise, Salem, issued a show cause notice bearing C.No. V/28&29/30/16/08 dated May 05, 2008 to us [Plant-I]demanding a sum of Rs 26,708/- for the period April-2007 to September-2007 in respect of availment of service tax eligible for outward freight. The SCN was replied by us on May 30,2008 vide a letter bearing ref. no. SCN 16 / 2008 / 2008-09.Asst. Commissioner of Central Excise, Salemissued a corrigendum to the above SCN on July 28, 2008 accordingly the SCN reply submitted to The Asst.commissioner of Central Excise, LTU Chennai on August 05, 2008.

27. The Assistant Commissioner of Central Excise, Salem issued a show cause notice bearing C. No. V/39/28/30/14/2008 dated May 05, 2008 to us demanding a sum for Rs.51,115/- for the period April 2007 to September2007 in respect of availment of service tax on Garden maintenance service and landscape maintenance. TheSCN was replied by us on June 03, 2008.

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28. The Assistant Commissioner of Central Excise, Salem issued show cause notice bearing C.No.V/39/28/30/13/2008 dated May 05, 2008 to us demanding a sum for Rs.5,763/- for the period April 2007 to September 2007in respect of availment of service tax on Outward freight. The SCN was replied by us on June 03, 2008.

29. The Commissioner of Central Excise, Trichy has reissued a show cause notice bearing C.No.V/ST/15/21/2008– Cx.Adj.(Revision) dated June 11, 2008 to us demanding a sum of Rs1,02,351/- for the period August 2005to November 2005 in respect of availment of service tax on construction of road inside the plant The SCN wasreplied by us on July 15,2008. The earlier Assistant commissioner, Karaikal has issued a SCN Av/Ch28/16/9/2007 Cx- Adj. Dated February 27, 2007 and the Personal Hearing (“PH”) was attended on June 14, 2007 andfavorable orders was passed by AC, Excise Karaikal on July 13, 2007. Aggrieved by the above orderCommissioner of Central Excise, Trichy has issued the above SCN.

30. The Assistant Commissioner of Central Excise, Karaikal has issued a show cause notice bearing C.No.IV/ 15/07/2008 S.Tax. Adj dated August 4, 2008, to us, demanding a sum for Rs3,75,095/- for the period November2007 to June 2008 in respect of availment of service tax on Goods transport agency . The SCN was replied byus on August 28, 2008.

31. The Additional Commissioner of Central Excise, Trichy has issued a show cause notice bearing C.No.V/Ch.28/15/06/2007/ Cx.Adj. January 3, 2008 to us, demanding a sum of Rs.8,15,351/- for the period November 2006 toSeptember 2007 in respect of availment of service tax on Goods transport agency . The SCN was replied by us onJanuary 31,2008. Additional Commissioner of Trichy has passed an unfavourable order for recovering an amountof Rs. 8,15,351/- and imposed a penalty of Rs. 10,000/- vide OIO/ No. 4/2008-CX dated March 25, 2008. Appealpapers filed to Commissioner of Customs & Central Excise, Trichy on 04.06.2008. We have received thecorrigendum letter from Commissioner of Customs & Central Excise, Trichy vide letter No. 04/2008(Appeals –TRY) dt. 29.07.2008 that the above case has been moved to LTU Chennai, and the same is currently pending.

32. The Deputy Commissioner of Central Excise, Karaikal issued a show cause notice bearing C no IV/16/7/2008dated October 16, 2008 to us demanding a sum of Rs.4,807/- for the period July 2007 being service tax crediton ineligible services. We have filed a reply to the aforesaid SCN on November 07, 2008 to LTU Chennai.

33. The Assistant Commissioner of Central Excise, LTU Chennai issued a show cause notice bearing C.No. IV/16/591/2008 LTG IV(AC) 116/2008 dated 05th November, 2008 to us [Plant-I]demanding a sum of Rs 18,792/-for the period October-2007 to March-2008 in respect of availment of service tax credit on outward freight asineligible. Reply filed by us to LTU, Chennai on December 26, 2008.

34. The Assistant Commissioner of Central Excise,LTU, Chennai issued a show cause notice bearing C.No. IV/16/594/2008 LTG IV(AC) 117/2008 dated 05th November, 2008 to us [Plant-II]demanding a sum of Rs 62,834/-for the period October-2007 to September-2008 in respect of eligibility of availment of input service tax .Reply filed by us to LTU, Chennai on December 26, 2008.

35. The Assistant Commissioner of Central Excise,LTU, Chennai issued a show cause notice bearing C.No. IV/16/592/2008 LTG IV(AC) 119/2008 dated 05th November, 2008 to us [Plant-III]demanding a sum of Rs 7,88,861/- for the period October-2007 to September-2008 in respect of Cenvat availment Input service tax credit onmobile phones & GTA outward freight . Reply filed by us to LTU, Chennai on December 26, 2008.

36. The Assistant Commissioner of Central Excise, LTU, Chennai issued a show cause notice bearing C.No. IV/16/593/2008LTG IV(AC) 120/2008 dated 05th November, 2008 to us [Plant-III]demanding a sum of Rs 2,14,861/- for the period October-2007 to October-2008 in respect of Cenvat Input service tax credit availment eligibility.Reply filed by us to LTU, Chennai on December 26, 2008.

G. SALES TAX PROCEEDINGS

Sales Tax cases, appeals, show cause cum demand notices in excess of Rs. 10 lakhs:

1. We have filed an appeal before the Appellate Assistant Commissioner (Commercial Taxes), Salem, (AAC)being CST 113 of 2004 against the assessment order passed by the Commercial Tax Officer (‘CTO’), Omalurfor a sum of Rs. 1,27,72,703/-and a penalty of Rs. 1,82,31,045/-under the Central Sales Tax Act, 1956 for theAccounting year 1995-96. The AAC has passed an order on February 09, 2007 waiving the penalty against usand confirming the demand of tax of Rs.6,57,951/-.The matter is remanded back to CTO, Omalur forreconsideration of the issue of taxability of consignment sales. The tax impact of the same is Rs.1,21,14,752/-and the matter is currently pending.

2. We have filed an appeal before the AAC, Salem, being CST 46 of 2002 against the assessment passed by theCTO, Omalur for a sum of Rs. 87,23,711/- and a penalty of Rs. 41,98,147/- under the Central Sales Tax Act,

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1956 for the Accounting year 1994-95. The AAC has passed an order on December 03, 2004 waiving thepenalty against us and confirming the demand of tax of Rs.12,54,229/-. The matter is remanded back to CTO,Omalur for reconsideration of the issue of taxability of consignment sales. The tax impact of the same isRs.74,69,482/- and the matter is currently pending.

3. We have appealed before the Sales Tax Appellate Tribunal, New Delhi being Appeal No.375 /STT/03-04against the order passed by the Additional Commissioner, New Delhi dated November 19, 2003. The appeal isagainst disallowance of ST1 Form filed. The Appellate Tribunal has granted stay of the AC’s order by its orderdated December 08, 2004. The tax impact of the same is Rs.27,12,799/-. The stay order continues and thematter is currently pending.

4. We have filed a Writ Petition before the Madras High Court being WP no. 27140/2007 and M.P.No.1 and 2 of 2007against the order passed by the Commercial Tax Officer, Omalur bearing reference 33873241159/2007-08 datedJuly 27, 2007. The appeal is against the disallowance of Input VAT credit over 4% on certain commodities. The orderhas demanded payment of VAT to the extent of Rs. 77,98,594/- and also has imposed a penalty of Rs. 1,12,89,891/-.The Madras High Court on March 31, 2008 passed an order remanding the matter back to the CTO, Omalur for afresh consideration. Revised order passed by the Assistant Commissioner (CT) FAC, Omalur on 26.09.2008 and thedemand has been revised to Rs.40,24,156/- for tax and penalty of Rs.20,12,078/-. Against this order, the companyhas filed a Revision petition before Joint commissioner (CT), Salem on 07.10.2008.

5. The Assistant Commissioner of (CT), Omalur has passed orders vide order number TIN 33873241159/2007-08 dated September 12, 2008 to us, demanding a sum of Rs.94,67,686/- for the period January 2007 to July2007 in respect of input tax credit not eligible for Furnace oil used in various plants. We have filed a revisionpetition before the Joint Commissioner (CT) Salem along with a stay application against the aforesaid order onOctober 16, 2008, the same is currently pending.

Sales Tax cases for less than Rs.10 lakhs:

1. We have filed an appeal before the Sales Tax Appellate Tribunal, Coimbatore against the order of the AAC,Salem being AP87/05 dated July 11, 2006. The appeal is filed on the issue of non production of the concessionform and 1% additional tax u/s 3(4) of the TNGST Act 1959. No further order has been passed as yet and thematters are currently pending.

2. The Commercial Tax Officer, Omalur had issued an order on December 05, 2007 demanding a Vat reversal ofRs.4,16,878/-. For the month of January and February, 2007 due to the consignment sale effected by us to otherStates out of input tax credit on opening stock at the time of changeover to VAT. We filed a Revision Petitionbefore the Deputy Commissioner of Commercial Taxes, Salem who has vide order No. RP 2/2008 dated February15, 2008 confirmed the demand of VAT Reversal, against which we filed an appeal before the Joint Commissionerof Commercial Taxes, Chennai on April ,07, 2008 and the matter is currently pending.

H. CUSTOMS PROCEEDINGS:

Customs cases pending before CESTAT, Bangalore:

1. We have filed an Appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT), Bangalorebeing C-224 of 2007 on March 16, 2007 against the Order in Appeal No. 110/2006 dated September 18, 2006.The matter involved is customs duty payable on import of Methanol based on invoiced quantity as against ourcontention of duty payable based on shore tank quantity as per circular no 96/2006 dated 27.12.2002. Customsduty amount involved is Rs 1,35,186/- The matter is currently pending.

2. We have filed an Appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT), Bangalorebeing C-316 to 322 of 2006 on June 28, 2006 against the Order in Appeal No. 76-79/2006 dated March 24,2006 (arising out of Orders-in-Originals No. 53/2005 dated May 13, 2005, No. 52/2005 dated May 13, 2005,No. 98/2004 dated December 17, 2004, No. 97/2004 dated December 17, 2004). The matter involved is customsduty payable on import of Methanol based on invoiced quantity as against our contention of duty payable basedon shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customs duty amount involved isRs 1,64,955/-. The matter is currently pending.

3. We have filed an Appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT ), Bangalorebeing C-316 to 322 of 2006 on June 11, 2006 against the Order in Appeal No. 155-157/2006 dated May31,2006 (arising out of Orders-in-Originals No. 111/2005 dated June 29,2005, No. 133/2005 dated September29, 2005, No. 134/2005 dated September 29,2005). The matter involved is customs duty payable on import ofMethanol and EDC based on invoiced quantity as against our contention of duty payable based on shore tankquantity as per circular no 96/2006 dated December 27, 2006. Customs duty amount involved isRs.1,52,570/-. The matter is currently pending.

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Customs cases pending before Commissioner of Customs, Cochin:

1. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP (I)/58/2007/AU Cus on March 14, 2007 against the Order in Original No. 7/2007 dated January 12, 2007. The matterinvolved is customs duty payable on import of Methanol based on invoiced quantity as against our contentionof duty payable based on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customsduty amount involved is Rs 1,20,643/-. The matter is currently pending.

2. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP(I)/59/2007/AU Cus on March 14, 2007 against the Order in Original No. 8/2007 dated January 12, 2007. The matterinvolved is customs duty payable on import of EDC based on invoiced quantity as against our contention ofduty payable based on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customs dutyamount involved is Rs 37,637/-. The matter is currently pending.

3. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP (I)/60/2007/AU Cus on March 14, 2007 against the Order in Original No. 9/2007 dated January 12, 2007. The matterinvolved is customs duty payable on import of Methanol based on invoiced quantity as against our contentionof duty payable based on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customsduty amount involved is Rs 3,598/-. The matter is currently pending.

4. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP (I)/61/2007/AU Cus on March 14, 2007 against the Order in Original No. 13/2007 dated January 16, 2007. The matterinvolved is customs duty payable on import of Methanol based on invoiced quantity as against our contentionof duty payable based on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customsduty amount involved is Rs 8,733/-. The matter is currently pending.

5. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP (I)/62/2007/AU Cus on March 14, 2007 against the Order in Original No. 14/2007 dated January 16, 2007. The matterinvolved is customs duty payable on import of EDC based on invoiced quantity as against our contention ofduty payable based on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customs dutyamount involved is Rs 2,166/-. The matter is currently pending.

6. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP (I)/63/2007/AU Cus on March 14, 2007 against the Order in Original No. 15/2007 dated January 16, 2007. The matterinvolved is customs duty payable on import of EDC based on invoiced quantity as against our contention ofduty payable based on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customs dutyamount involved is Rs 3,53,358/-. The matter is currently pending.

7. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP (I)/64/2007/AU Cus on March 14, 2007 against the Order in Original No. 16/2007 dated January 16, 2007. The matterinvolved is customs duty payable on import of EDC based on invoiced quantity as against our contention ofduty payable based on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customs dutyamount involved is Rs 56,739/-. The matter is currently pending.

8. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP(I)/218/2006/AU Cus on June 20,2006 against the Order in Original No. 62/2006 dated April 5, 2006. The matter involvedis customs duty payable on import of Methanol based on invoiced quantity as against our contention of dutypayable based on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customs dutyamount involved is Rs 19,556/-. The matter is currently pending.

9. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP (I)/217/2006/AU Cus on June 20, 2006 against the Order in Original No. 54/2006 dated April 5, 2006.The matter involvedis customs duty payable on import of Methanol based on invoiced quantity as against our contention of dutypayable based on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customs dutyamount involved is Rs 20,891/-. The matter is currently pending.

10. We have filed an Appeal before the Commissioner of Customs (Appeals), Cochin being C27/AP(I)/216/2006/AU Cus on June 20, 2006 against the Order in Original No. 55/2006 dated April 5, 2006. The matter involvedis customs duty payable on import of EDC based on invoiced quantity as against our contention of duty payablebased on shore tank quantity as per circular no 96/2006 dated December 27, 2002. Customs duty amountinvolved is Rs 82,231/-. The matter is currently pending.

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SECTION – II

Material Litigations involving our Promoter are as provided below:

A. Income Tax Proceedings against our Promoter:

Sanmar Holdings Limited (“SHL”) (Successors to Sanmar Securities Trading Limited)

1. SHL filed an appeal before the Income Tax Appellate Tribunal, Chennai in ITA No.1561/Mds /2000 for theAssessment Year 1997-98 against the Order of the Commissioner of Income Tax (Appeals) dated July 18, 2000.The appeal is against the confirmation of disallowance of bad debts of Rs. 23,88,759/-. The tax impact of whichis Rs.10,23,726/- .The Tribunal vide its Order dated August 17, 2007 remitted back this issue to the file of theAssessing Officer. No Order has been passed yet by the Assessing Officer and the issue is currently pending.

B. Other ProceedingsMr.N.Sankar who is one of the promoters of the Company is a non-executive director in Bata India Ltd,Kolkata. One of the shareholders of the said Bata India Ltd., viz., Anil Kumar Poddar who is holding 1 (one)equity share, has filed a complaint bearing No. C / 8682 / 06, in the 10th Metropolitan Magistrate at Bank shallCourt at Calcutta against Bata India Ltd and has made all the directors of Bata India Ltd (including Mr.N.Sankar)as respondents in the said matter, alleging that Bata India Ltd and its directors have committed offence’s underSection’s 237(b)(iii), 284, 628 and 629A of the Companies Act, 1956. Summons have been issued and thematter, is pending before the Magistrate court. In the meanwhile Bata India Ltd filed a Criminal RevisionPetition being No.4485 of 2008 (“CRP”)for quashing the aforesaid proceedings before the Hon’ble CalcuttaHigh Court. The aforesaid CRP came up for hearing before the Hon’ble Justice Mr.Arunbha Basu on January27, 2009 and an order of stay of all proceedings before the Magistrate Court in C / 8682/06 has been passeduntil March 20, 2009 and the matter is posted for extension of the interim order on March 19, 2009.

SECTION - III

Material Litigations involving our Promoter Group companies are as provided below:

A. CRIMINAL CASES

Criminal Cases filed by our Promoter Group companies:

SHL Property Holdings Ltd. (“SHL PHL”)

1. Chennai Garr –Tech Ltd has filed a suit in The High Court, Madras, against various parties including SHL PHLfor declaring that they are owners of land measuring an extent of 14 Acres in Seevaram Village, Perungudi,they having purchased the same through a sale deed dated March 14, 2006. Their claim included an extent of2 Acres in Perungudi. SHL PHL filed a Criminal Complaint against Chennai Garr Tech and its Vendors beforethe Commissioner of Police for cheating, forgery and fabrication of documents, who in turn has transferred it toLand Grabbing Division, Thousand Lights Police Station. Upon investigation by the Land Grabbing Division,the Police have filed an FIR against the persons involved in the case.

B. LABOUR SUITS

Labour Suits /Appeals filed by our Promoter Group companies:

Flowserve Sanmar Ltd. (“FSL” / formerly known as Durametallic Sanmar Limited)

1. FSL had terminated the service of Vijayaraghavan an employee on account of misconduct. The employee fileda claim for reinstatement before the Principal Labour Court being I.D. No. 664 of 1997. The Labour Courtdismissed the claim of Vijayaraghavan for reinstatement but awarded compensation of Rs. 2,55,000/-. FSLfiled a Writ Petition No. 24090/2005 in High Court, Madras challenging the Order of Labour Court, Chennai,awarding compensation. The High Court by its interim order dated July 27, 2005 has stayed the aforesaidorder. The compensation amount has not been paid to the ex-employee. Vijayaraghavan also filed a Writ PetitionNo. 4462/2005 in the High Court, Madras challenging the order of Labour Court disallowing the claim ofreinstatement. The petition has been admitted but no orders have been passed by the Madras High Court. Boththe writ petitions are currently pending.

Fisher Sanmar Ltd. (“Fisher”)

1 Fisher filed a suit against its employee P.S.Sathguru before the District Munsiff Court, Alandur (O.S.No.713 of2007), who had resigned from Fisher, along with applications for restraining him from disclosing or using the

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Drawings and Technical Information of Fisher. An Interim Order was passed on September 13, 2007 by theMunsiff Court restraining the employee from using or disclosing the Drawings and Technical Information ofFisher. The suit is currently pending.

Sanmar Foundries Ltd (“SFL”)

1. SFL has received a total claim from Employees State Insurance Corporation for payment of Rs.13,60,000/-forthe year 2003-2004 being the amount of contribution alleged to be payable in respect of outside manufacturingexpenses, additions to building and difference in salary . SFL has challenged these claims by filing CMP. Nos.27 & 28 of 2006 before the ESI Court and CMP No. 61 & 62 of 2006 before the ESI Court. These cases arepending before the ESI Court. An Application being CMA No.1046 of 2006 was filed in High Court of Madrasagainst the order of deposit of the amount in CMP No.61 of 2006, the High Court by its order dated March 16,2006 has stayed the order directing deposit. The matter is currently pending.

Sanmar Speciality Chemicals Ltd (“SSCL”)

1. SSCL has filed an appeal before the ESI Court at Chennai being EIOP No.297 of 2004, challenging the demandfor payment of Rs.1, 56,158/- along with interest @ 18% per annum towards ESI Contribution for the period1986 to 1989. The Principal Labour Court passed an order of interim stay upon payment of 20% of the demand.The case is currently pending.

Labour Suits filed against our Promoter Group companies / Appeal filed against our PromoterGroup companies / claims made by the legal heirs of the employees against our Promoter Groupcompanies:

Claim by ex-employees of our Promoter Group companies against termination of their services:

Sanmar Foundries Ltd (“SFL”)

1. Few ex-employees have filed a writ petition before the Madras High Court (W.P.No.14116 of 1996 challengingthe Order of Labour Court, Trichy, which upheld the termination of service of these employees. Their serviceswere terminated for inciting a strike, adopting go slow and preventing other workmen from entering the premises.The petition has been admitted and the matter is currently pending. The SFL has filed its counter. No orders arepassed and the matter is currently pending.

Claim for reinstatement by ex-employees of our Promoter Group companies:

Sanmar Engineering Services Ltd. (“SESL”) (formerly Sanmar Property Development Ltd renamed as Sanmar Main-tenance Services Limited – Sanmar Engineering Services merged with SMSL and subsequently renamed as SanmarEngineering Services Limited )

1. Gurumurthy, an ex-employee of SESL has raised a dispute before the Labour Court at Chennai (ID No. 656/2003) for reinstatement on the ground that the cessation of his service was not valid. When the case was listedon 31.10.08, since the Petitioner did not appear before the Court, the dispute was dismissed by the Court fordefault. Till date the Petitioner has not filed any petition to restore the dispute.

2. Nelson, an ex-employee of SESL has raised a dispute before the Labour Court at Chennai (ID No. 655/2003)for reinstatement on the ground that the cessation of his service was not valid. The case is currently pending.

3. Nelson, an ex-employee of SESL filed a claim petition in the Labour Court Chennai (CP No. 18 of 2003) forrefund of a sum of Rs.26,628/- deducted under the Special Settlement Scheme applicable to all employees. Itwas alleged by this ex-employee that the deductions were unauthorized and hence to be refunded. The case iscurrently pending.

Sanmar Speciality Chemicals Ltd (“SSCL”) (formerly known as Sanmar Electronics Corporation Ltd) (A Companyby name Sanmar Speciality Chemicals Limited amalgamated with Sanmar Electronics Corporation Limited and themerged entity was named as Sanmar Speciality Chemicals Limited)

1. P.N.Iswarakrishnan, an ex-employee of SSCL has filed a Civil Suit O.S.No.846/2002 before the High Court,Madras for recovery of a sum of Rs.12,60,250/- towards damages and balance salary, alleging he was forced toresign by SSCL. SSCL is contesting this case, issues have been framed and the case is currently pending.

2. Legal heirs of a contractor’s employee Late Purushothaman has filed a claim petition under Workmen CompensationAct vide W.C. No. 7811 of 2006 before the Deputy Commissioner of Labour, Chennai for payment of any sum ascompensation against SSCL and the Contractor. SSCL is contesting the claim since the employee is alreadycovered by Employee State Insurance Act, no orders have been passed and the case is currently pending.

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Claims made by the ex employee of our Promoter Group companies for compensation:

Sanmar Shipping Ltd. (“SSL”)

1. Kantilal Kalasi was an ex-seaman on board “Sanmar Symphony” ship. He filed a claim petition being Application(WCA) No.19/C-7/2007 before the 1st Labour Court at Mumbai under the Workmen’s Compensation Act claiminga sum of Rs 3,25,000/- as compensation for the injury, i.e., heart ailment 90% blockage in the main veinsuffered by him during the course of his employment with SSL’s vessel. No orders have been passed and thematter is currently pending.

C. CIVIL CASES & ARBITRATION PROCEEDINGS

Civil Cases and Arbitration proceedings filed by our Promoter Group companies:

Flowserve Sanmar Ltd. (“FSL” /formerly known as Durametallic Sanmar Limited)

1. FSL along with other Promoter Group companies such as BS&B, Fisher Sanmar (Formerly Fisher XomoxSanmar) and Asco India, have filed appeal Nos. 179 to 189 of 1998 before the Urban Land Tax Tribunal,Chennai, challenging the upholding of revision in ULT by the District Revenue Officer, Kancheepuram by theorder dated December 12, 2004. The amount involved is Rs.23,502/- per annum from 1994 onwards. FSL hasfiled a Revision Petition being 7054, 7057 and 7059 of 2005, against the aforesaid order before the CommissionerLand Reforms, Chennai. The aforesaid revision petition was heard and the orders are reserved. The impact onall these Companies if the appeal is not allowed is Rs. 3,52,530 /- (approx) for 1994 – 2009.

2. Land measuring an extent of 1879 sq.mtrs at Karapakkam, Chennai belonging to FSL was acquired byGovernment of Tamil Nadu for laying I.T Highway in 2005-06. FSL received compensation to the tune ofRs.64,00,000/- as per the award dated September 22, 2006 passed by the Special Tahsildar Radial Road Scheme,Tambaram. FSL has filed petition before the District Collector, Kancheepuram challenging the aforesaid awardand claimed a sum of Rs.5,00,00,000/- as compensation based on the market value then prevailing in Karapakkam.The petition is currently pending.

Sanmar Engineering Services Ltd. (“SESL”)

1. SESL had executed 2 work orders for Gas Authority of India Limited (GAIL) at Usar and Gandhar in 1998-99.While making final payment, GAIL had withheld a total sum of Rs.47,61,000/-towards liquidated damages foralleged delay in completion of the project. SESL has disputed the aforesaid claim and has invoked the arbitrationclause for payment of this amount towards Liquidated Damages by GAIL and GAIL has referred the matter toDispute Avoidance Redressal Committee of GAIL and the same is currently pending.

Sanmar Foundries Ltd (“SFL”)

1. SFL had supplied certain equipment in 1995 to Keltron Ltd through Associated Road Carriers, Trichy (“ARC”).The consignment was delivered by ARC to Keltron without the Original L.R. Keltron after taking delivery ofthe goods, failed to pay and retrieve the documents from the Bank. Suit No. OS No. 328 of 2004 filed by SFLin the District Court, Trichy for recovery of Rs. 8,40,000/-against Keltron and ARC. The suit is currentlypending and no orders have been passed. Meanwhile KELTRON has filed an application in the Court fordismissal of the suit on the Ground that it is a BIFR company. The matter is currently pending.

2. SFL had supplied certain spares for Flow meters to Indian Oil Corporation Limited (IOCL), Panipet in November,2003. IOCL has committed default in the payment of Rs.10,00,000/- being the value of goods supplied. A Suitbeing, O.S. No. 055 of 2007 has been filed against IOCL in 2006 in the District Court at Pudukottai forrecovery of this amount . The case was dismissed for default, when the matter was listed for Trial in October,2008 and when we sought for an adjournment on the ground of settlement. A Petition to restore the above Suithas been filed. The restoration application is currently pending.

3. SFL has filed a Writ Petition before Madurai Bench of Madras High Court being W.P.No. 1112 of 2008 againstthe Enforcement Officer, Employees Provident Fund Organization, challenging the action of PF authorities inissuing show cause notice calling upon SFL to pay PF contributions to the apprentices employed by SFL andalso to call for the records relating to the overtime work done by the employees of the contractor. The HighCourt by its order dated June 25, 2008 has passed an order making the interim stay absolute.

4. SFL had executed a work order for Bharat Heavy Plates and Vessels Ltd, Vizag (“BHPV”) in 1998. BHPV hadwithheld Rs.29,76,000/- towards liquidated damages for the alleged delay in execution of the work order. Thedispute was referred to a sole Learned Arbitrator Retd. Justice Mr. V.Ratnam for arbitration. The arbitrationproceedings were conducted and completed in 2007 and the award is yet to be passed.

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5. Hindustan Petroleum Corporation Limited (“HPCL”) had withheld a sum of Rs.31,22,000/- towards liquidateddamages for alleged delay in execution of work order. The dispute was referred to sole arbitrator Mr. R .R. Nagarkattion February 16, 2002 and the arbitrator upheld the claim of SFL in 2004. HPCL filed an application being ArbitrationPetition No. 358/04 before the High Court, Bombay, challenging the Award. A single judge of the Bombay HighCourt by the order dated August 23, 2005 has allowed the application ex-parte on the ground that the claim wasbarred by limitation. Against this order, SFL filed an appeal being Appeal. No. 470/2005 before the Division, Bench,Bombay High Court. The appeal has been admitted on August 25, 2006 and the case is currently pending.

5. SFL has filed a claim for deemed export benefits amounting to Rs.26,95,163/- (Customs Duty Rs. 19,66,102 ,Excise Duty Rs. 5,16,569 and Cash Compensatory Support Rs. 2,02,492) for the supplies made to Oil andNatural Gas Company (“ONGC”) in 1989-90. In the arbitration proceedings initiated against ONGC, the awardwas passed in favour of SFL vide award dated December 31, 2002 by the arbitral tribunal. ONGC filed anappeal before the Civil Judge, Surat District Court being O.P.No.1 of 2003 challenging the aforesaid arbitrationaward. The Appeal filed by ONGC is currently pending and no orders passed.

Fisher Sanmar Ltd. (“Fisher”)

1. A civil suit being O.S.No.12 of 2007 was filed by Fisher against one Adeeb Bhaijji, Sodawala Business Centre,Pune, for recovery of Rs. 6,16,604/-consequent to their non-payment of the advance paid as rental / securitydeposit. The suit is currently pending. The Suit was decreed ex-parte in November, 2008. Steps to be taken byFisher to enforce the decree.

Sanmar Speciality Chemicals Ltd (“SSCL”)

1. SSCL has initiated action against Dr. Biswajit Roy, Ex-Employee of Bangalore Genei Division of SSCL forviolation of Confidentiality and Non Compete Agreement executed by the said Ex-employee. A mutually agreedsole arbitrator Mr.R.Murari has been appointed and SSCL has submitted its claim statement and application forinterim orders before the Ld Sole Arbitrator. The pleadings are complete and the matter is likely to be taken upfor final hearing by the Arbitrator.

2. A Writ Petition being W.P.No. 5226 of 2002 was filed by SSCL in 2002 before High Court of Madras againstDirector General of Foreign Trade (DGFT) seeking directions for refund of Rs.17,35,916/- along with interest@ 18% p.a., towards cash compensatory support on exports made in 1986-87. No orders have been passed andthe case is currently pending.

3. SSCL has filed an application being O P No. 244 of 2001 before the District Court, Chingleput against an arbitrationaward passed on June 16, 2001for payment of Rs. 1,31,47,000/-plus interest to Centre for Development of Telematics(C-DOT) in the District Court at Chingelput. The Award amount has already been deposited by SSCL into theCourt and was withdrawn by C-DOT as per the orders of the Court. The application is currently pending.

4. An extent of land measuring about 66 cents in Perungudi which was allotted by Government of Tamil Nadu toSSCL (to its erstwhile Sanmar Electronics Corporation Limited) in 1988 for industrial purpose (net of 56 centssurrendered back to Govt.) . The original owner of the land measuring 33 cents had challenged the LandAcquisition by the Government of Tamil Nadu. High Court, Madras vide WP 14319 of 1986 / Writ Appeal19049 of 1997) High Court of Madras rejected the petition and aggrieved by that the land owner (Ms. MayGeorge) filed a Special Leave Petition being SLP. No. 24613 of 2004 in the Supreme Court. The SupremeCourt by its interim order dated April 21, 2006 ordered a status quo in favour of the land owner and directingthe authorities not to disturb her possession. The SLP is to come up for final hearing.

SHL Property Holdings Ltd (“SHL PHL”)

1. Government of Tamil Nadu had acquired land measuring an extent of 489 sq.mtrs of land from SHL PHL’slands at Karapakkam for laying I.T Highway in 2006. SHL PHL received compensation of Rs.12,55,000/-asper the Award dated September 22, 2006 passed by Special Tahsildar Land Acquisition Radial Road Scheme,Tambaram. SHL PHL filed a petition before the Collector of Kancheepuram challenging the Award and claimeda sum of Rs.68,00,000/- based on the market value then prevailing in Karapakkam. No orders have been passedand the case is currently pending.

2. SHL PHL has received a Revision in the property tax in respect of the property at No.9, Cathedral Road,Chennai (order bearing ref No.Z113/00543 dated March 27, 2008 received by us on August 13, 2008) and thetax was revised to Rs.4,27,609/- (Rupee Four lakhs twenty seven thousand six hundred and nine only) per halfyearly from Rs.3,27,685/- (Rupees Three lakhs twenty seven thousand six hundred and eighty five only) asagainst the original assessment of Rs.5,59,909/- (Rupees Five lakhs fifty nine thousand nine hundred and nineonly). Since there is a discrepancy in the area in the revised assessment, we filed an appeal before the TaxationAppellate Committee, Chennai Corporation. Pending appeal we have remitted the existing tax and 50% of therevised tax under protest while filing the above appeal. The appeal is currently pending.

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Bay View Properties Pvt. Ltd. (“BVPL”)

1. Writ Petition No’s.34567 & 34568 of 2002 were filed by BVPL challenging the G.O. of Tamil Nadu Governmentrejecting their plea for regularization of its property at Injambakkam, Kanchipuram District, Tamil Nadu. BVPLhad sought reclassification of Injambakkam Village as CRZ II. The Application for regularization of its propertywas rejected by the Government on alleged violation of Coastal Zone Regulations (CRZ). The case is now postedbefore special bench constituted by the High Court of Madras to examine cases relating to Regularization Schemesand other Writ Petitions. The High Court by its interim order dated September 06, 2002 has restrained the TNGovernment from carrying out any demolition of the said building. The matter is currently pending.

2. BVPL has filed an appeal before the Competent Authority against the Notice issued by the Tahslidhar, TambaramTaluk, alleging encroachment of public land adjacent to BPPL’s property located in Injambakkam Village. Noorders have been passed as yet and the appeal is currently pending.

Sanmar Realty Private Ltd. (“SRPL)

1. SRPL has filed a review petition under section 217 (K) of Tamil Nadu District Municipality Act, 1920 beforethe Revisional Authority, Chennai, against an ex-parte order dated November 23, 2007 bearing no 2370/2007/F1 passed by the Collector, Dindigul District, confirming an order of demolition of SRPL’s premises situated atR S No 277, 278 and 310-B/1, St Mary’s Road, Kodaikanal alleging that the constructions in the premises wereunauthorized and requires demolition. The review petition is currently pending before the Revisional Authority,Government of Tamil Nadu, Chennai.

Civil Cases & Arbitration proceedings filed against our Promoter Group companies:

Sanmar Engineering Services Ltd. (“SESL”)

1. A complaint has been filed before the State Consumer Redressal Commission, Chennai being OP No.262/2005against erstwhile Sanmar Property Development Ltd now renamed as SESL by Royal Stitches Pvt. Ltd claimingcompensation / damages amounting to Rs.18,00,000/- alleging delay in completion of the project at Guindy,Chennai. SESL has filed its counter. No orders have been passed and the matter is currently pending.

Sanmar Foundries Ltd (“SFL”)

1. Mrs. Devi, wife of the deceased employee Rajendran has filed a Suit being O.S.No.1564 of 2008 before theDistrict Munsiff Court at Trichirapalli for a declaration that she and her children are the legal heirs of thedeceased Rajendran and also for a permanent injunction restraining SFL from making any payment to her in-laws. The deceased employee has nominated his wife and father to receive payment under the Special SettlementScheme of the Company, totalling to Rs.20 lacs. We paid Rs.10 lacs in favour of the wife of the deceased.Before making another payment of Rs.10 lacs, the father of the deceased also passed away. Hence the presentSuit. The Suit is currently pending.

Sanmar Speciality Chemicals Ltd (“SSCL”)

1. Nagamma and 3 others have filed a Suit being O.S.No. 5 of 2006 before the District Munsiff Court, Hosur fordeclaration of title and possession of the property admeasuring an extent of 2.56 Acres out of 5.56 acres situatedin Suligunta Village, Hosur Taluk, alleging that they are the absolute owner. SSCL is the owner of the above extentof land and is contesting the case. No orders have been passed and the matter is currently pending.

SHL Property Holdings Ltd (“SHL PHL”)

1. Chennai Garr –Tech Ltd has filed a suit being OSA No.206 of 2006 in The High Court, Madras, against variousparties including SHL PHL for declaring that they are owners of land measuring an extent of 14 Acres inSeevaram Village, Perungudi, they having purchased the same through a sale deed dated March 14, 2006.Their claim included an extent of 2 Acres in Perungudi. SHL PHL is contesting this case. This matter iscurrently pending and no orders have been passed.

D. INCOME TAX PROCEEDINGS

Appeals filed by our Promoter Group companies before the Commissioner of Income Tax (Appeals):

BS&B Safety Systems (India) Limited (“BS&B”)

1. BS&B has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedNovember 28, 2007 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2005-06.The Appeal is filed against disallowance of Provision for Gratuity and treatment of Software Expenses asCapital and allowance of Depreciation. The tax impact of which is Rs 11,93,931/-. No Order has been passedas yet and the appeal is currently pending.

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2. BS&B has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedMay 06, 2008 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2006-07. TheAppeal is filed against the excess levy of interest under Section 234C amounting to Rs.3,32,010/- No order hasbeen passed as yet and the appeal is currently pending.

Flowserve Sanmar Limited (“FSL”)

FSL filed an appeal before the Income Tax Appellate Tribunal, Chennai. against the Order of the Commissionerof Income Tax (Appeals), Chennai for the Assessment Year 2000-01. The appeal is against disallowance ofLegal & Professional Charges & Freight Expenses. The tax impact of which is Rs 3,34,283/-. The ITAT vide itsOrder dated July 14, 2006 set aside the Order of the Commissioner of Income Tax (Appeals) & remanded thematter back to Commissioner of Income Tax (Appeals). The matter is currently pending before CIT (Appeals).

Fisher Sanmar Limited (“Fisher”)

1. Fisher has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedJuly 31, 2006 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 1999-00. TheAppeal is filed against Computation of deduction under Section 80HHC, Non-granting of Credit for Self-Assessment Tax Payment and levy of interest under Section 234B & 234D and also on the point of Jurisdiction.The tax impact of which is Rs.65,85,854/-. No Order has been passed as yet and the appeal is currently pending.

2. Fisher has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Intimationdated January 30, 2008 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2006-07. The appeal is against the excess levy of interest under Section 234C of the IT Act amounting to a sum ofRs.3,63,599/-. The tax impact of which is Rs.3,63,599/-. No order has been passed and the appeal is currentlypending before CIT (A).

Sanmar Foundries Limited (“SFL”)

1. SFL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedFebruary 25, 1999 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 1996-97.The Appeal is filed against Computation of deduction under Section 80HHC and lower Income Tax Depreciation.The tax impact of which is Rs.18,195/-. No Order has been passed as yet and the appeal is currently pending.

Xomox Sanmar Limited (“XSL”)

1. XSL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedAugust 30, 2007 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2006-07. TheAppeal is filed against the excess levy of interest under Section 234C amounting to Rs.1,11,330/-. The appealis currently pending.

Tyco Sanmar Limited (“TSL”)

1. TSL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the order datedDecember 10, 2008 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2005-06.The Appeal is filed against the disallowance of Provision for Gratuity, Section 14A on Exempted Income, non-consideration of Self-Asst.Tax and wrong adoption of surcharge. The tax impact of which is Rs.23,51,781/-.

Sanmar Engineering Services Limited (“SESL”)

i. SESL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedMarch 28, 2006, of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2003-04. TheAppeal is filed against Write of Advances, treatment of Business Income as Income from Other Sources andtreatment of certain expenditure as Capital Expenditure. The tax impact of which is Rs.21,00,000/-. No Orderhas been passed as yet and the appeal is currently pending.

ii. SESL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedNovember 30, 2006, of the Income Tax Officer, Chennai for the Assessment Year 2004-05. The Appeal isagainst disallowance of certain expenses. The tax impact of which is Rs.8,00,000/-. No Order has been passedas yet and the appeal is currently pending.

Sanmar Realty Private Limited (“SRPL”)

1. SRPL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedMarch 30, 2006, of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2003-04. TheAppeal is filed against treatment of certain Income as Income from Other Sources instead of Business Income,Non-consideration of available MAT Credit and Levy of Interest under Section 234D. The tax impact of whichis Rs.1,94,208/-. The Appeal is currently pending.

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2. SRPL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedOctober 27, 2006, of the Income Tax Officer, Chennai for the Assessment Year 2004-05. The Appeal is filedagainst treatment of certain Income as Income from Other Sources instead of Business Income, Levy of Interestunder Section 234D and adoption of guideline value fixed by registration authorities as sale considerationinstead of actual sale consideration received on sale of property. The tax impact of which is Rs.2,97,100/-. Theappeal is currently pending.

Sanmar Shipping Limited (“SSL”)

1. SSL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedNovember 27, 2006 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2004-05.The Appeal is filed against treatment of certain expenses incurred in the ships as non-depreciable capital asset.No Order has been passed as yet and the appeal is currently pending.

2. SSL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedDecember 29, 2008 of the Assistant Commissioner of Income tax, Chennai for the Assessment Year 2006-07.The Appeal is filed against the treatment of certain income as income relating to non-shipping activities andhence added back to income under the Conventional Method. The tax impact of which is Rs.59,96,266/-. TheAppeal is currently pending

Sanmar Speciality Chemicals Limited (“SSCL”)

1. SSCL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedDecember 12, 2006 of the Income Tax Officer, Chennai for the Assessment Year 2004-05. The Appeal is filedagainst disallowance of Product Development Expenses, Professional Fees, Technology Fee, Interest, FarmDevelopment Expenses and treatment of ERP Expenses as depreciable assets. No Order has been passed as yetand the appeal is currently pending.

2. SSCL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedMarch 23, 2006 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2003-04. TheAppeal is filed against writing off of Deposits, Advances Written off and Sales Tax Payments. The tax impactof which is Rs.2,10,684/-. No Order has been passed as yet and the appeal is currently pending.

3. SSCL (formerly known as Sanmar Electronics Corporation Ltd has filed an appeal before the Commissioner ofIncome Tax (Appeals), Chennai against the Order dated December 19, 2006 of the Assistant Commissioner ofIncome Tax, Chennai for the Assessment Year 2004-05. The Appeal is filed in relation to Advances Written off,Computation of Capital Gains. No Order has been passed as yet and the appeal is currently pending.

4. SSCL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedDecember 26, 2008 of the Assistant Commissioner of Income Tax, Chennai for the Assessment Year 2006-07.The Appeal is filed against disallowance of Product Development Expenses, Re-computation of EOU deductionunder Section 10B, treatment of ERP Expenses as Capital and allowance of Depreciation, Lower TDS Creditand levy of interest under Section 234B. The tax impact of which is Rs.28,76,065/-. No Order has been passedas yet and the appeal is currently pending.

5. SSCL has filed an appeal before the Income Tax Appellate Tribunal, Mumbai being Appeal No. 3650/Mum-2008 against the Order of the Commissioner of Income Tax (Appeals) in ITA No.21/06-07 dated February 12,2008. The Appeal is against the disallowances of Advances Written Off, re-computation of Export benefits, re-computation of Industrial benefits and levy of interest under Section 234B of the IT Act. The Tax Impact ofwhich works out to Rs.16,66,303/-. No Order has been passed as yet and the appeal is currently pending.

6. SSCL has filed an appeal before the Income Tax Appellate Tribunal, Mumbai being Appeal No.3651/Mum-2008 against the Order of the Commissioner of Income Tax (Appeals) in ITA No.198/06-07 dated February 12,2008. The Appeal is against the disallowances of re-computation of export benefits, re-computation of Industrialbenefits and levy of interest under Section 234B of the IT Act. The Tax Impact of which works out toRs.22,54,890/-. No Order has been passed as yet and the appeal is currently pending.

Madhurika Sankar Investment Holdings Private Limited (MSIHPL)

1. MSIHPL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order ofthe Assistant Commissioner of Income Tax, Company Circle IV(1), Chennai dated March 13, 2008 for theAssessment Year 2006-07. The Appeal is against the Chargeability of tax liability under MAT and excess levyof Interest under Section 234B/234C of the IT Act, the tax impact of which works out to Rs.2,12,922/- NoOrder has been passed as yet and the appeal is currently pending.

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Appeals filed by our Promoter Group companies before the Income Tax Appellate Tribunal (“ITAT”):

Sanmar Foundries Limited (“SFL”)

1. SFL has filed appeal No ITA 1011/05 dated April 25, 2005 before the Income Tax Appellate Tribunal, Chennaiagainst the Order of the Commissioner of Income Tax (Appeals) dated February 08, 2005 for the AssessmentYear 2000-01. The Appeal is against the confirmation of disallowance of Stock Write Off. The tax impact ofwhich is Rs.33,03,429/-. The Tribunal vide its Order dated remitted this issue to the file of the AssessingOfficer. No order has been passed by the Assessing Officer as yet and the issue is pending.

Appeals filed by the Income Tax Department before the Income Tax Appellate Tribunal:

Fisher Sanmar Limited (“Fisher”)

1. The Income Tax Department has filed appeal being ITA No.2317/06 dated December 01, 2006, before theIncome Tax Appellate Tribunal, against the Order of the Commissioner of Income Tax (Appeals) for theAssessment Year 2001-02. The Appeal is against the allowance of Export Debts and on the issue of Jurisdiction.The tax impact of which is Rs.5,69,204/-. The Tribunal vide its order dated May 14, 2008 set aside and restoredthe matter to the file of the Assessing Officer with a direction to decide it afresh in accordance with law afterproviding adequate opportunity of hearing Fisher. On May 14, 2008, the ITAT, Chennai by its order has remandedthe matter back to the Assessing officer and matter is currently pending before the Assessing officer

2. The Income Tax Department has filed appeal being ITA No 1291/08 dated June 12, 2008, before the IncomeTax Appellate Tribunal, Chennai against the order of the Commissioner of Income Tax (Appeals) for theAssessment Year 1993-94. The Appeal is against the re-opening of the Assessment and Levy of Interest underSection 234B. The Tax and interest impact of which is Rs.10,05,70,539/-. No Order has been passed as yet andthe matter is currently pending.

Sanmar Speciality Chemicals Limited (“SSCL”)

1. The Income Tax Department has filed appeal No. ITA 1583/05 dated July 04, 2005, before the Income TaxAppellate Tribunal, against the Order of the Commissioner of Income Tax (Appeals) dated March 04, 2005 forthe Assessment Year 1999-00. The Appeal is filed against Setting Off lower of Book Loss or Depreciation Lossfor the purpose of computation of Book Profit under Section 115JA. The tax impact of which isRs.17,42,575/-. The order has been passed and the matter is remanded back to the Assessing Officer and thesame is currently pending before the Assessing Officer.

Appeals / Writ Petitions filed by our Promoter Group companies before the High Court at Madras:

Fisher Sanmar Limited (“Fisher”)

1. Fisher has filed appeal dated September 03, 2007 before the High Court of Madras, against the Order of theIncome Tax Appellate Tribunal, Chennai dated June 29, 2007 in ITA Nos.1860/03 for the Assessment Year2000-01. The Appeal is against re-computation of Deduction under Section 80HHC. The tax impact of whichis Rs.20,63,213/-. No Order has been passed as yet and the appeal is currently pending.

2. Fisher has filed appeal dated September 06, 2008 before the High Court of Madras, against the Order of theIncome Tax Appellate Tribunal, Chennai dated February 28, 2008 passed in ITA Nos.720 / 07 for the AssessmentYear 2003-04. The Appeal is against re-computation of Deduction under Section 80HHC. The tax impact ofwhich is Rs.14,11,000/-. No Order has been passed as yet and the appeal is currently pending.

Sanmar Speciality Chemicals Limited (“SSCL”)

1. SSCL (formerly known as Sanmar Electronics Corporation Ltd) has filed an appeal before the Madras HighCourt against the order of the ITAT in ITA No.1938/03 dated October 27, 2006, for assessment year 1999-2000. The Appeal is filed against setting off of un-absorbed depreciation loss of early arrears against theincome under the head Business. The tax impact is Rs.60,96,408/-.The Appeal is yet to come up for hearing.

2. SSCL has filed an appeal dated October 09, 2007 before the Madras High Court against the order of the ITATin ITA No.1092/03 dated May 31, 2007, for assessment year 2000-01. The Appeal is filed against levy ofInterest under Section 234B/234C of the IT Act for the purpose of computing the Book Profit under Section115JA of the IT Act. The tax impact is Rs.5,70,278/-.The Appeal is yet to come up for admission.

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Appeals / Writ Petitions filed by the Income Tax Department before the High Court at Madras:

BS&B Safety Systems (India) Limited (“BS&B”)

1. The Income Tax Department has filed an appeal being T.C.No.15 of 2005 on July 21, 2003 against an Order infavour of BS&B passed by the Income Tax Appellate Tribunal, Chennai for the Assessment Year 1990-91. TheAppeal has been filed against duty embedded on valuation of closing stock. No Order has been passed as yetand the matter is pending.

2. The Income Tax Department has filed an appeal being T.C.No.689/2007 on April 23, 2007 against an Orderpassed by the Income Tax Appellate Tribunal, Chennai dated 15.12.06 in ITA No.2068/Mds/2005 for theAssessment Year 2002-03. The Appeal has been filed against the re-computation of deduction under Section80HHC of the IT Act. The tax impact of which is Rs.8, 23,417/-. No Order has been passed as yet and thematter is pending.

Flowserve Sanmar Limited (“Flowserve”)

1. The Income Tax Department has filed an appeal before the Madras High Court being T.C.No.1387/2006 onMarch 27, 2006 against an Order passed by the Income Tax Appellate Tribunal, Chennai dated 28.10.05 in ITANo.588/Mds/2002 for the Assessment Year 1998-99. The Appeal has been filed against the re-computation ofdeduction under Section 80HHC of the IT Act. The tax impact of which is Rs.1,50,551/-. No Order has beenpassed as yet and the matter is currently pending.

Fisher Sanmar Limited (“Fisher”)

1. The Income Tax Department has filed T.C.No.1408/06 before the Madras High Court against the order of ITATdated September 28, 2006 for the AY 2002-03, for deletion of interest u/s 234D. The tax impact of which isRs.7,79,695/-. No further Order has been passed as yet and the matter is currently pending.

2. The Income Tax Department has filed T.C.No.95/2005 before the Madras High Court against the order of ITATdated May 22, 2002 for only the proposed dividend as mentioned in points (a) to (h) to be added back for thepurpose of arriving the Book Profit under Section 115J. The tax impact of which is Rs.3,02,400/-. No furtherOrder has been passed as yet and the matter is currently pending.

Sanmar Speciality Chemicals Limited (“SSCL”)

1. The Income Tax Department has filed T.C.No.917/2004 before the Madras High Court against the order ofITAT dated September 17, 2002 for the Assessment Year 1989-90 for allowing the assessee to carry forward theexcess of Book Profit over Conventional Income as unabsorbed loss / allowance entitled to carry forward. Nofurther Order has been passed as yet and the matter is currently pending.

2. The Income Tax Department has filed an appeal dated October 29, 2007 before the High Court of Madras inTCA No.1421/2007 against the Order of the Income Tax Appellate Tribunal dated October 27, 2006 in ITA No1092/03 for the Assessment Year 2000-01. The Appeal is against the allowance of Export benefits under Section80HHC of the IT Act while computing the Book Profit under Section 115JA of the IT Act. The tax impact isRs.19,16,886/-. No Order has been passed yet and the appeal is currently pending.

Appeals filed by the Income Tax Department before the Supreme Court of India

Fisher Sanmar Limited (“Fisher”)

1. The Income Tax Department has filed a Special Leave Petition (“SLP”) being Civil Appeal No.2448/2007 inthe Supreme Court of India against the order of the Madras High Court in T.C.(A) No.2304 of 2006 datedSeptember 19, 2006 for the Assessment Year 2000-01. The issue challenged in the SLP is whether excise dutyand sales tax are to be included in the total turnover for the purposes of computing deduction u/s 80HHC. Thetax impact of which is Rs.8,12,305/-. No further Order has been passed after the admission of the SLP and thesame is currently pending.

Appeals filed by our Promoter Group companies before the Commissioner of Wealth Tax (Appeals), Chennai

SHL Property Holdings Limited (“SHLPHL”) (successors to Cathedral Properties (Beta) Limited).

1. SHLPHL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedDecember 14, 2006 for the Assessment Year 1999-00. The appeal is against the re-computation of Net wealth andlevy of interest under Section 17B. The Tax impact of which is Rs.96,830/-. The appeal is currently pending.

2. SHLPHL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedSeptember 28, 2007 for the Assessment Year 2000-01. The appeal is against the re-computation of Net wealth andlevy of interest under Section 17B. The Tax impact of which is Rs.2,63,086/-. The appeal is currently pending.

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3. SHLPHL has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai against the Order datedSeptember 28, 2007 for the Assessment Year 2001-02. The appeal is against the re-computation of Net wealth andlevy of interest Under Section 17B. The Tax impact of which is Rs.2,63,086/-. The appeal is currently pending.

E. CENTRAL EXCISE PROCEEDINGS

Central excise cases, appeals, show cause cum demand notices in excess of Rs. 10 lakhs:

Sanmar Foundries Limited (“SFL”) (formerly Smith Division of FMC Sanmar Ltd)

1. DC of Central Excise, Trichy passed orders bearing no:49 to 56 dated November 22, 2007, denying rebate ofexcise duty paid on exported goods, amounting to Rs.65,82,006/-, on the allegation that SFL is not correct inutilizing CENVAT credit of CVD paid on imported inputs by utilizing DEPB scrip. SFL has filed an appealbefore the Commissioner of Central Excise (appeals) praying to allow the refund in the light of the latest orderof the Tribunal and various CBEC circulars, which has been followed by the DC, Trichy for the subsequentperiods to grant refunds. Matter is currently pending for hearing.

Central excise cases, appeals, show cause cum demand notices below Rs. 10 lakhs:

Cabot Sanmar Ltd. (“CSL”)

1. CSL has filed an appeal before the Commissioner of Central Excise, Salem being A.No.105 / 2007 against theduty demanded on handling charges u/s 4(3)(d) of the Central Excise Act, 1944, in the invoices of consignmentagent for the period September, 2001 to March, 2006 against the order of the Assistant Commissioner ofCentral Excise January 31, 2007. The amount of duty involved is Rs 72,238/-. The appeal was heard on May06, 2008 and by its order dated July 30, 2008 the Commissioner of Appeals held that the demand of duty andinterest is not sustainable and thereby setting aside the order of the Assistant Commissioner of Central Excise.

2. Department has filed an appeal before the Central Excise and Service Tax Appellate Tribunal (‘CESTAT’),Chennai, against the order of the Commissioner of Appeals dated November 29, 2006. The amount of dutyinvolved is Rs 32,503/-. The issue is duty demanded on waste and scrap of inputs and capital goods for theperiod November, 2004 to June, 2005. No order has been passed as yet and the appeal is currently pending.

3. CSL has filed an appeal before the CESTAT, Chennai on December 12, 2005, against the value to be adoptedfor transfer of finished goods to Depot/ Consignment Agents for the period March, 2002 against the order ofthe Commissioner of Central Excise (Appeals) ,Salem dated April 28, 2005. The amount of duty demanded isRs 13,256/-. The appeal is currently pending.

4. The Assistant Commissioner of Central Excise, Salem issued a Show Cause Notice in C. NO: V/28/30/3/2007dated April 10, 2007 raising a demand of Rs. 3,967/- towards duty on handling charges charged in the invoicesof M/s BS Mehra & Sons P Ltd, CSL’s consignment agents during the period April 2006 to July 2006. CSL hasfiled the reply on June 7, 2007 and a personal hearing was conducted on September 25, 2007.

5. The Assistant Commissioner of Central Excise, Salem issued a Show Cause Notice in C. NO: V/28/30/48/2007dated September 03, 2007 raising a demand of Rs. 44,245/- towards duty on handling charges charged in theinvoices of M/s Kawarlal & Co, CSL’s consignment agents during the period August 2006 to December 2006.CSL has filed the reply on September 20, 2007 and a personal hearing was conducted on September 25, 2007,order is awaited.

Sanmar Speciality Chemicals Limited (“SSCL”)

1. SSCL has filed an appeal before the CESTAT, Bangalore on January 04, 2005, against the Exemption claimedby us as per the Notification no:10/1997-CE, for Supplies to DSIC registered institution / Projects for theperiod August, 2003 to August, 2004 , against the order of the Commissioner of Central excise in C.No:IV/3/33/2005 dated May 24, 2005. The amount of duty involved is Rs 8,95,201/-. The CESTAT by its order datedMay 11, 2006 in E/ST/16/2006 in E/19/2006, has stayed the proceedings and the appeal is currently pending.

2. Show cause notice No.C No 29/15/23/2004- E-1 dated 07.12.2006 was served for the period April to September2006 demanding payment of duty of Rs 1,41,736/- on Exemption for Supplies to DSIC registered institution /Projects. Reply to the SCN was filed on 22/12/06 before the Assistant Commissioner of Central Excise, E-1Division Bangalore. The Assistant Commissioner confirmed the demand by order dated 5th May, 2007 in No.42/2007. SSCL thereafter filed an appeal before the Commissioner of Central Excise (Appeals), Bangalore beingA.No.2768 / 2007, against the order of AC, confirming the demand. The Commissioner granted stay of theorder on August 28, 2007 subject to pre-deposit of 50% of the duty demand. Due to non-compliance of pre-deposit of 50% of the duty demand, Commissioner (Appeals), Bangalore rejected the appeal, vide order no:3095/

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2007 dated November 29, 2007, against which SSCL filed an appeal before the Tribunal. The Tribunal on April29, 2008 granted stay and remanded the case back to the Commissioner with direction to decide the matter afterthe Tribunal passes the final order in respect of the previous period.

3. Show cause notice No.C No 29/15/23/2004- E-1 dated September 15, 2005 was served for the period September2004 to August 2005 demanding payment of duty of Rs 4,66,257/- on Exemption for Supplies to DSIC registeredinstitution / Projects. Reply to the SCN was filed on 10/10/2005 before the Assistant Commissioner of CentralExcise, E-1 Division, Bangalore. The Assistant Commissioner confirmed the demand by order dated May 04,2007 in No.42/2007. SSCL thereafter filed an appeal before the Commissioner of Central Excise (Appeals),Bangalore being A.No.2768 / 2007, against the order of AC, The Commissioner granted stay of the order onAugust 28, 2007 subject to pre-deposit of 50% of the duty demand. Due to non-compliance of pre-deposit of50% of the duty demand, Commissioner (Appeals), Bangalore rejected the appeal, vide order no:3095/2007dated 29-11-07, against which SSCL filed an appeal before the Tribunal. The Tribunal on April 29, 2008granted a stay and remanded the case back to the Commissioner (Appeals) with direction to decide the matterafter the Tribunal passes the final order in respect of the previous period.

4. Show cause notice no: C No 29/15/23/2004-E-1, dated 06-06-2006 was served for the period September 2005to March 2006 demanding payment of duty of Rs 3,47,647/- on Exemption for Supplies to DSIC registeredinstitution / Projects. Reply to the SCN was filed on 11/07/2006 before the Assistant Commissioner of CentralExcise, E-1 Division, Bangalore. The AC confirmed the demand by order dated May 5, 2007 in No.42/2007.SSCL thereafter filed an appeal before the Commissioner of Central Excise (Appeals), Bangalore beingA.No.2768 / 2007, against the order of AC, confirming the demand. The Commissioner granted stay of theorder on August 28, 2007 subject to pre-deposit of 50% of the duty demand. Due to non-compliance of pre-deposit of 50% of the duty demand, Commissioner (Appeals), Bangalore rejected the appeal, vide order no:3095/2007 dated 29-11-07, against which SSCL filed an appeal before the Tribunal. , The Tribunal on April 29, 2008granted a stay and remanded the case back to the Commissioner (Appeals) with direction to decide the matterafter the Tribunal passes the final order in respect of the previous period.

5. Show cause notice bearing C no:29/15/23/2004-E1 dated June 20, 2006 was served for the period October,2006 to March, 2007 demanding payment of Rs.1,01,336/- on exemption for supplies to DSIC registeredinstitution/projects. Reply to the SCN was filed on July 11, 2007 before the Assistant Commissioner of CentralExcise, Division E-1 Bangalore and a personal hearing was held on September 10, 2007. Order is awaited.

6. SSCL has filed an appeal before the Commissioner (Appeals), Vapi on October 23, 2006, against the order ofthe Assistant Commissioner of Central Excise and customs, Silvassa in 05/AC/Adj 06 dated July 31, 2006against the duty demanded on shortage of raw materials in packed materials during inspection. The tax impactof which is, amount of duty is Rs 1,30,767/- and penalty is Rs 1,30,767/-. The Commissioner (Appeals) videorder no:KRS/57 to 58/Vapi/2008 dated February 28, 2008 confirmed the demand. SSCL has filed an appealbefore the CESTAT, Ahmedabad bearing No.E / 713 / 2008 on June 27, 2008. The matter is currently pending.

7. SSCL has filed an appeal before the Commissioner (Appeals), Vapi on February 08, 2007, against the order ofthe Assistant Commissioner of Central Excise and Customs, Silvassa in 12/AC/Adj 06 dated October 26, 2006against the duty demand on sale of empty MS drums which is unfit for further repeated use of unused goods andsale of empty scrap for the period June 15, 2005 to November 21, 2005. The tax impact of which isRs 1,53,247/-. The Commissioner ( Appeals) vide Order No. KRS/82/VAPI/2008 dated March 31, 2008confirmed the demand and SSCL has filed an appeal against this order with CESTAT, Ahmedabad bearingNo.E/922/08 dated August 05, 2008. A stay order bearing No.S/1086-1087/WZB/AHD/08 dated 25/09/2008has been passed by CESTAT in the aforesaid appeal. The matter is currently pending.

8. SSCL has filed an appeal before the Commissioner of Central Excise (Appeals), Vapi on 29th Oct, 2007 beingNo.V-2(28) 228/Vapi/SLV-I/07, against the order of the Asst. Commissioner of Central Excise & Customs,Silvassa in 10/AC/Adj/06 dated August 29, 2007 regarding sale of empty scrap drums. The duty impact ofwhich is Rs.1,22,972/- . The Commissioner ( Appeals) vide Order No. KRS/101/VAPI/2008 dated March 31,2008 confirmed the demand and SSCL has filed an appeal against this order with CESTAT, Ahmedabad bearingNo.E/921/08 dated August 05, 2008. A stay order bearing No.S/1086-1087/WZB/AHD/08 dated 25/09/2008has been passed by CESTAT in the aforesaid appeal. The matter is currently pending.

9. SSCL has filed an appeal before the Commissioner (Appeals), Vapi on March 06, 2007, against the order of theAssistant Commissioner of Central Excise and Customs, Silvassa in 15/AC/Adj 06 dated November 13, 2006against the sale of various by-products at concessional rate of duty in DTA for the period January, 05 to December,2005. The tax impact of which is Rs 2,52,657/-. The Commissioner of Appeals vide order No.KRS/165/VAPI/2008 dated June 30, 2008 confirmed the demand. SSCL filed an appeal against the COA Order, bearing No.E/1233/08 dated 06/10/2008. A stay order bearing No.S/1367-1370/WZB/AHD/08 dated 19/11/2008 has beenpassed by CESTAT in the aforesaid appeal. The matter is currently pending before the Commissioner of Appeal.

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10. Show cause notice No.V(CH28)3-37/DEM/06/1482 dated August 23, 2006 was served by the AssistantCommissioner, Silvassa demanding duty of Rs 1,19,652/- against excess sale of finished goods in DTA againstthe approved limit as per the approval by the Development Commissioner. SSCL has filed its reply to the showcause notice by its letter dated October 13, 2006 justifying / clarifying its position. SSCL has received an orderfrom the Asst. Commissioner, Silvassa in 16/AC/Adj/07 dated 27th September, 2007 confirming the duty amountof Rs.1,19,652/-. SSCL filed an appeal before the Commissioner of Central Excise (Appeals), Vapi being V-2(28)02/Vapi/SLV-I/08 on January 03, 2008. The Commissioner of Appeals vide order No.KRS/170/VAPI/2008 dated June 30, 2008 confirmed the demand. SSCL filed an appeal against the COA Order, bearing No.E/1234/08 dated 06/10/2008. A stay order bearing No.S/1367-1370/WZB/AHD/08 dated 19/11/2008 has beenpassed by CESTAT in the aforesaid appeal. The matter is currently pending before the Commissioner of Appeal.

11. Show cause notice No.V(CH28)3-39/DEM/06 dated September 25, 2006 was served by the AssistantCommissioner, Silvassa demanding duty for Rs.1,67,624/- against the methodology of valuation of goodsadopted by SSCL as against the department’s valuation for the captive consumption and DTA sales by EOU.SSCL has filed its reply to the show cause notice by its letter dated October 20, 2006. SSCL received an orderfrom the Dy. Commissioner, Silvassa in 23/DC/Adj/06 dated 30th Oct, 2007 confirming the duty amount ofRs.1,67,624/-. SSCL has filed an appeal before the Commissioner (Appeals), Vapi. The Commissioner ofAppeals vide order No.KRS/164/VAPI/2008 dated June 30, 2008 confirmed the demand. SSCL filed an appealagainst the COA Order, bearing No.E/1235/08 dated 06/10/2008. A stay order bearing No.S/1367-1370/WZB/AHD/08 dated 19/11/2008 has been passed by CESTAT in the aforesaid appeal. The matter is currently pendingbefore the Commissioner of Appeal.

12. Show cause notice No.V(CH)3-83/DEM/06 dated October 09, 2006 was served by the Assistant Commissioner,Silvassa demanding duty of Rs 1,81,145/- on sale of empty MS drums. SSCL has replied to the show causenotice by its letter dated October 20, 2006 justifying / clarifying its position. The Dy. Commissioner of CentralExcise, Silvassa vide order no:35/DC/Adj/07 dated November 28, 2007 confirmed the demand and SSCL hasfiled an appeal before the Commissioner (Appeals), Vapi .The Commissioner of (Appeals) vide Order No.KRS/315/VAPI/2008 dated October 16, 2008 confirmed the demand. An appeal has been filed before the CESTAT,Ahmedabad. No orders have been passed and the appeal is currently pending.

13. Show cause notice No.V(CH)3-112/DEM/06 dated February 22, 2007 was served by the Assistant Commissioner,Silvassa demanding payment of duty for Rs 1,45,386/- against excess sale of finished goods in DTA against theapproved limit as per the approval given by the Development Commissioner. SSCL has replied to the showcause notice by its letter dated March 26, 2007 justifying / clarifying its position. However, the DC, Silvassaconfirmed the demand, aggrieved by which SSCL has filed an appeal before the Commissioner (Appeals),Vapi. The Commissioner (Appeals) vide Order No.KRS/319/VAPI/2008 dated October 21, 2008 confirmedthe demand. An appeal has been filed before the CESTAT, Ahmedabad. No orders have been passed and theappeal is currently pending.

14. Show cause notice No.V (CH28)3-123/DEM/06/4214 dated March 06, 2007 was served by the AssistantCommissioner, Silvassa demanding payment of duty for Rs 2,32,548/- on sale of empty scrap drums. SSCL hasfiled a reply to the SCN on 4th April, 2007. However, the DC, confirmed the demand vide order no:55/DC/Adj/07 dated 10-01-08 against which SSCL has filed an appeal before the Commissioner (Appeals), Vapi. TheCommissioner (Appeals) vide Order No.KRS/304/VAPI/2008 dated September 30, 2008 confirmed the demand.An appeal has been filed before the CESTAT, Ahmedabad. No orders have been passed and the appeal iscurrently pending.

15. Show cause notice No.V (CH28) 3-46/DEM/06/4225 dated March 06, 2007 was served by the AssistantCommissioner, Silvassa demanding payment of duty of Rs 1,42,322/- against the methodology of valuation ofgoods adopted by SSCL as against the department’s valuation. for the captive consumption and DTA sales byEOU. SSCL has replied to the show cause notice by its letter dated April 03, 2007. However, the DC vide orderno:54/DC/Adj/07 dated January 10, 2008 confirmed the demand aggrieved by which SSCL has filed an appealbefore the Commissioner (Appeals), Vapi The Commissioner (Appeals) vide Order No.KRS/313/VAPI/2008dated October 16, 2008 confirmed the demand. An appeal has been filed before the CESTAT, Ahmedabad. Noorders have been passed and the appeal is currently pending.

16. Show cause notice No.V (CH28) 3-105 /DEM/06/2006 dated April 23, 2007 was served by the AssistantCommissioner, Silvassa demanding payment of duty of Rs 3,78,408/- against the methodology of valuation ofgoods adopted by SSCL as against the departments valuation for the captive consumption and DTA sales by EOU.SSCL replied to the show cause notice by its letter dated May 18, 2007. However the DC vide order no:73/DC/Adj/07 dated February 11, 2008 confirmed the demand against which SSCL filed an appeal before the Commissioner(Appeals), Vapi being No. F.No.V(28) 94/Vapi /SLV –I dated April 11, 2008. The Commissioner (Appeals) videOrder No.KRS/314/VAPI/2008 dated October 16, 2008 confirmed the demand. An appeal has been filed beforethe CESTAT, Ahmedabad. No orders have been passed and the appeal is currently pending.

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17. Show cause notice No: V(CH28)3-26/DEM/07-08/2273 dated September 21, 2007 was served by the Asst.Commissioner of Central Excise, Silvassa on SSCL demanding payment of duty of Rs.1,00,995/- on sale of emptyMS drums. SSCL replied to the Show cause notice by its letter dated October 22, 2007. However, the DC confirmedthe demand vide order no:72/DC/Adj/07 dated February 11, 2008 against which SSCL filed an appeal before theCommissioner (Appeals), Vapi being F.No.V.(28) 93 / Vapi / SLV-I/08 dated April 11, 2008. The Commissioner(Appeals) vide Order No.KRS/303/VAPI/2008 dated September 30, 2008 confirmed the demand. An appeal hasbeen filed before the CESTAT, Ahmedabad. No orders have been passed and the appeal is currently pending.

18. Show cause notice No: V(CH28)3-22/DEM/07-08 dated October 23, 2007 was served by the Dy. Commissionerof Central Excise, Silvassa demanding duty of Rs.1,21,915/- against the sales of by-products at concessionalrate of duty in DTA. SSCL replied to the Show cause notice by its letter dated November 22, 2007. Asst.Commissioner of Central Excise has passed the order vide OIO No.AC/04/Adj/08-09 dated 25th July 2008confirming the duty demand, against which company has filed an appeal before the Commissioner of Appealson October 24, 2008. The matter is currently pending.

19. Assistant Commissioner of Central Excise, Hosur-I Division has issued an SCN bearing no:V/15/29/16/2005 datedSeptember 27, 2005, denying CENVAT credit of Rs.1,32,052/- on the ground that the goods (MS channels, MSplates and electrical items) in question are not eligible capital goods. AC confirmed the demand against which wefiled an appeal before the Commissioner of Central Excise (Appeals). The Commissioner (Appeals) allowed ourappeal vide his order no:52/2006(M-I) dated August 25, 2006. However, Dept. filed an appeal before the Tribunal..

20. Show cause notice bearing No. V(CH.28)3-58/DEM/07-08 dated April 10,2008 was served by the Dy.Commissioner of Central Excise, Silvassa. The notice proposes to demand duty of Rs. 3,61,270/- against thesale of various by products at concessional rate of duty for the period May 2007 to December 2007. SSCL fileda detailed reply before the DC on May 13, 2008. The Asst. Commissioner has confirmed the duty demand videorder OIO No.AC/13/Adj/08-09 dated September 25, 2008.An appeal has been filed before the Commissioner(Appeals) Central Excise, Vapi. No orders have been passed and the matter is currently pending.

21. Show cause notice bearing No. V (CH.28)3-Sanmar/DEM/05 dated May 5, 2008 was served by the Asst. Commissionerof Central Excise, Silvassa. The notice proposes to demand duty of Rs. 1,12,823/- against the sale of empty MSdrums for the period June 04 to February 05. SSCL filed a detailed reply before the AC on June 5, 2008.

22. Show cause notice bearing No. V(CH.28)3-9/DEM/06 dated May 8,2008 was served by the Dy. Commissionerof Central Excise, Silvassa. The notice proposes to demand duty of Rs.1,89,519/- against the methodology ofvaluation of goods adopted by the SSCL against the department’s valuation for captive consumption and DTAsales for the period May 04 to December 04. SSCL filed a detailed reply before the AC on June 9, 2008.

23. Show cause notice No. V(CH28) 3-45/DEM/06/3614 dated January 19, 2007 was served by the AssistantCommissioner, Silvassa demanding payment of duty for Rs 46,032/ against the sales of several by products atconcessional rate of duty in DTA. SSCL has replied to the show cause notice by its letter dated February 19,2007. The DC passed an order bearing no:52/DC/Adj/07 dated January 10, 2008 against which SSCL filed anappeal before the Commissioner (Appeals). Commissioner of Appeals vide Order No.KRS/320/VAPI/2008dated Oct 21,2008 confirmed the demand. An appeal has been filed before the CESTAT, Ahmedabad. Noorders have been passed and the matter is currently pending.

24. Show cause notice No. V(CH28) 3-104/DEM/06/203 dated April 23, 2007 was served by the AssistantCommissioner, Silvassa demanding payment of duty for Rs 89,628/- against the sales of by-products atconcessional rate of duty in DTA. SSCL has replied to the show cause notice by its letter dated May 18, 2007.However, the DC vide order no:74/DC/Adj/07 dated February 11, 2008 confirmed the demand. SSCL filed anappeal before the Commissioner (Appeals) being F.No.V/(28)95/Vapi / SLV-I/08. Commissioner of Appealsvide Order No.KRS/318/VAPI/2008 dated Oct 21, 2008 confirmed the demand. An appeal has been filedbefore the CESTAT, Ahmedabad. No orders have been passed and the matter is currently pending.

25. Show Cause notice bearing No. V(CH28) 3-14/DEM/07-08 dated August 10, 2007 was served by the Asst.Commissioner of Central Excise, Silvassa demanding payment of Rs.58,874/- on sale of empty MS drums.SSCL replied to the notice by its letter dated 10th Sept, 2007. The DC, however, passed an order confirming thedemand vide order no:80/DC/Adj/07 dated February 13, 2008. SSCL filed an appeal before the Commissioner(Appeals) being F.No.28.V.No.(28)96/Vapi/SLV-I/08 dated April 11, 2008. Commissioner of Appeals videOrder No.KRS/316/VAPI/2008 dated Oct 21,2008 confirmed the demand. An appeal has been filed before theCESTAT, Ahmedabad. No orders have been passed and the matter is currently pending.

26. Show cause notice bearing No. V(CH28)3-16/DEM/07-08 dated October 23, 2007 was served by the Dy.Commissioner of Central Excise, Silvassa. The notice proposes to demand duty of Rs.76,609/- on goods stocktransferred to the DTA unit in Silvassa. The department is disputing the valuation of the goods used in captiveby SSCL. SSCL filed a detailed reply before the DC on November 22, 2007. However, the Asst. Commissionervide order No:AC/03/Adj/08-09 dated July 24, 2008 has confirmed the demand with interest and penalty.

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27. Show cause notice bearing No. V(CH28)3-16/DEM/07-08 dated November 23, 2007 was served by the Dy.Commissioner of Central Excise, Silvassa. The notice proposes to demand duty of Rs.9,376/- on goods stocktransferred to the DTA unit in Silvassa. The department is disputing the valuation of the goods used in captiveby SSCL. SSCL filed a detailed reply before the DC on December 24, 2007. However, the Asst. Commissionervide order No:AC/02/Adj/08-09 dated July 24, 2008 has confirmed the demand with interest and penalty.

28. SSCL filed refund claim of Rs.2,10,585/- towards rebate of duty paid on export consignments. The DC passedthe rebate claim for Rs.1,83,964/- vide order No. 204 /AC/REB/SLV-1/07-08 dated January 10, 2008 resultingin short rebate of Rs.26,621/-. According to the order, SSCl has adopted higher value (CIF value instead ofFOB value) on which duty paid. SSCL filed an appeal before the Commissioner (Appeals), Vapi being V2(32)59/SLV V-08 dated March 14, 2008 and the same is pending for hearing.

29. SSCL has filed refund claim of Rs.2,10,585/- towards rebate of duty paid on export consignments. The DeputyCommissioner of C.Exc. passed the rebate claim for Rs.1,83,964/- vide order No. 205/AC/REB/SLV-1/07-08dated. January 10, 2008 resulting in short rebate of Rs.26,621/-. According to the order, SSCL has adoptedhigher value (CIF value instead of FOB value) on which duty paid. SSCL filed an appeal before the Commissioner(Appeals), Vapi being V2(32) 60/SLV V-08 dated March 14, 2008 and the same is pending for hearing.

30. SSCL filed refund claim of Rs.5,84,135/- towards rebate of duty paid on export consignments. The DeputyCommissioner of C.Exc. passed the rebate claim for Rs.5,55,867/- vide orders No. 89/AC/REB/SLV-1/07-08dated August 29, 2007 & 90/AC/REB/SLV-1/07-08 dated August 29, 2007 resulting in short rebate ofRs.28,268/-. According to the order SSCL has adopted higher value (CIF value instead of FOB value) on whichduty paid. The Central Excise department has filed an appeal before the Commissioner of Appeals, Vapi. TheCommissioner of Appeals has decided the case vide Order in Appeal No.KRS/103/Vapi/2008 dated March 31,2008. An appeal against the Commissioner of Appeals has been filed by the department before the Jt.Secretary(RA), Ministry of Finance, Department of Revenue against OIA.

31. SSCL filed refund claim of Rs.4,21,170/- towards rebate of duty paid on export consignments. The DeputyCommissioner of C.Exc. passed the rebate claim for Rs.3,67,928/- vide order no’s:204/AC/REB/SLV-1/07-08dated January 10, 2008 & 205/AC/REB/SLV-1/07-08 dated January 10, 2008 resulting in short rebate ofRs.53,242/-. The Central Excise department has filed an appeal before the Commissioner of Appeals, Vapi,contesting that the jurisdictional D.C. has passed the rebate claim erroneously instead of the Maritime Commissionerof Central Excise, Mumbai. The Commissioner of Appeals has decided the case vide Order in Appeal No.KRS/131/Vapi/2008 dated 30.04.2008. An appeal against the Commissioner of Appeals has been filed by the departmentbefore the Jt.Secretary (RA), Ministry of Finance, Department of Revenue against OIA.

32. A Show cause notice No.V(CH28)3-6/DEM/06 dated January 27, 2006 was issued by the Assistant Commissioner,Silvassa demanding duty for Rs 1,84,510/- against the methodology of valuation of goods adopted by the SSCL asagainst the departments valuation for the captive consumption and DTA sales by EOU. The SSCL has filed itsreply to the show cause notice by its letter dated February 22, 2006 justifying / clarifying its position. The companyreceived an order from the Asst. Commissioner, Silvassa in 14/AC/Adj/06 dated 15th Nov, 2006 confirming theduty amount of Rs.1,84,510/-. The SSCL filed an appeal before the Commissioner (Appeals), Vapi TheCommissioner ( Appeals) vide Order No. KRS/163/VAPI/2008 dated June 30, 2008 confirmed the demand andthe SSCL has filed an appeal before CESTAT on 6th October 2008. Stay Order No.S/1367-1370/WZB/AHD/08dtd. 19/11/2008 passed by CESTAT. The matter is pending before the Commissioner of Appeals.

33. A show cause notice bearing C No:29/15/23/2004-E 937/08 dated 08-04-2008 was issued by the AssistantCommissioner of Central Excise E-1 Division Bangalore, for the period April to September, 2007 demanding paymentof Rs.61,892/- on exemption for supplies made to DSIR registered institution/projects. Reply to the SCN was filedon 09th May, 2008 before the Assistant Commissioner of Central Excise, Division E-1 Bangalore and also a personalhearing was held on 18th June, 2008.The Asst. Commissioner of Central Excise confirmed the demand by OrderNo.35/08 dated 07.10.2008. The order was received on 27.11.2008. An appeal before the Commissioner of Appeals(Bangalore) has been filed. No orders have been passed and the matter is currently pending.

34. A Show cause notice bearing C No:29/15/23/2004-E-1 2957 dated 07-11-2008 was served by the AssistantCommissioner of Central Excise E-1 Division Bangalore, for the period October, 2007 to September, 2008demanding payment of Rs.99,962/- on exemption for supplies to DSIR registered institution/projects. TheSSCL has filed its reply on December 10, 2008 objecting to the proposal of demand of duty on such exemptedclearances.

35. A Show cause notice No. V/15/30/18/2008 – Adj dated 12.11.2008 was issued by the Assistant Commissionerof Central Excise, Hosur I Division, Hosur demanding reversal of Service Tax Credit to the extent of Rs.3,581/- towards credit taken for Outward transport service. The SSCL has filed its reply on December 08, 2008objecting to the proposal of reversal of service tax credit.

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36. A Show cause notice No.V/15/30/17/2008 – Adj dtd, 11.11.2008 was issued by the Asst. Commissioner ofCentral Excise, Hosur I Division, Hosur demanding reversal of Service Tax Credit to the extent ofRs.3,38,170/- towards credit taken based on the Debit Notes issued by the selling agents for the period 2006 to2008. The SSCL has filed the reply on December 08, 2008 objecting to the proposal of reversal of service taxcredit.

37. A Show cause notice bearing No. V( CH.28)3-43/DEM/08-09 dated November 25,2008 was served by theAsst. Commissioner of Central Excise, Silvassa. The notice proposes to demand duty of Rs. 4,51,241/- againstthe sale of various by products at concessional rate of duty for the period Jan 08 to Apr 08. The SSCL hasreplied to the aforesaid show cause notice on December 26, 2008.

38. A Show cause notice bearing No.V/(CH.28) 3-44/DEM/08-09 dated November 25, 2008 was served by theAsst. Commissioner of Central Excise,Silvassa. The notice proposes to demand duty amount of Rs.4,48,537/-against the sale of various by products at concessional rate of duty for the period May 08 to Aug 08. The SSCLhas filed a reply to the aforesaid show cause notice on December 26, 2008.

Fisher Sanmar Limited (“Fisher”) (Formerly known as Fisher Xomox Sanmar Limited)

1. FSL has filed an appeal before the Commissioner of Central Excise (Appeals) in Appeal No: 6/07 on February21, 2007 against the order of the Assistant Commissioner in 06/2006 dated December 18, 2006. The appeal isfiled against the rejection of excise duty refund claimed by FSL in terms of para 8.3 of Foreign Trade Policy.The tax impact of the same is Rs 4,67,113/-. The Commissioner of Central Excise (Appeals) vide OIA No:06/2007 (M-IV) dated October 31, 2007 allowed the appeal, subject to verification of the documents by theadjudicating authority. Verification of the records is to be taken up by the Adjudicating authority.

2. Director General of Central Excise Intelligence, New Delhi, issued an SCN bearing no: F/574/CE/15/2004/BCML/FSL/2231 dated November 03, 2004 to demand excise duty of Rs.1,52,652/- and levy of penalty andinterest on the goods supplied by FSL to M/s. Balrampur Chinni Mills Ltd., as allegedly the buyer / BalrampurChinni Mills Ltd., forged the signatures of the officers, to obtain duty exemption certificate. FSL has filed areply and awaits personal hearing in respect of this case.

3. FSL received a Show Cause Notice bearing No. C.NO.v/15/87&84/08 Cx.Adj. dated July 03, 2008 demandingthe duty amount of Rs.15,45,782/- and the Cenvat amount of Rs.13,74,197/- along with the Interest and Penaltyby denying the exemption available under notification no.22/2003-CE dated March 31, 2003 for the clearancesmade to the EOU Units, for which, FSL has filed the detailed reply dated July 03, 2008.

Tyco Sanmar Ltd (“TSL”) (formerly part of Crossby Division of FMC Sanmar)

1. Show cause notice bearing no:DSCN 9/2007 dated 15-05-2007 was issued on TSL by the Asst. Commissionerof Central Excise, Trichy, proposing to demand Rs.1,18,399/- towards duty on the sale of goods to an EOUwithout payment, on the allegation that the re-warehousing certificate in form ARE-3 has not been filed byTSL. TSL filed ARE-3 with the Excise Dept. by September 09, 2007. However, without considering them, theAsst. Commissioner of Central Excise passed an order bearing no:42/2007 dated September 14, 2007 confirmingdemand of Rs.82,986/- and allowing the balance. TSL has filed an appeal before the Commissioner of CentralExcise (Appeals), Trichy which is currently pending.

2. Show cause notice no.574/CE/15/2004/BCMI/Tyco/2469 dated November 3, 2004 issued by Directorate Generalof Central Excise Intelligence, New Delhi denying the benefit of exemption under Notification no.108/95-CEdated August 28,1995 in respect of clearance of excisable goods demanding a sum of Rs.1,46,637/-. UnderOrder No 25/2004- C.Ex (F.No: 208/23/204-CX.6) dated December 3, 2004, the Central Board of Excise andCustoms, New Delhi has assigned the case for adjudication by the Commissioner of Central Excise(Adjudication), New Delhi. TSL has replied to the show cause notice by its letter dated March 04, 2005.A personal hearing was also held and orders are reserved.

F. SERVICE TAX PROCEEDINGS

Service Tax cases, appeals, show cause cum demand notices below Rs. 10 lakhs:

Cabot Sanmar Ltd. (“CSL”)

1. The Assistant Commissioner of Central Excise, Salem issued a show cause notice demanding a sum of Rs. 1,33,630/- bearing SCN No. V/28/30/23/2006 C.Ex. Adj. dated January 02, 2007, in respect of service tax credit availed onGoods Transport Agent freight outwards, contending that freight outward is not eligible for input service taxcredit. CSL has filed the reply to the show cause notice on February 19, 2007. Personal hearing was held on June22, 2007 and the Assistant Commissioner of Central Excise, Salem has, vide order V/28/30/23/2006 dated June27, 2007, confirmed the demand of Rs. 1,33,118/- and dropped Rs. 512/- and also imposed a penalty of

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Rs. 1,33,118/-. CSL has filed an appeal before the Commissioner of Central Excise (Appeals), Salem TheCommissioner of Appeals by order dated July 03, 2008 upheld the order of the lower authority.

2. The Assistant Commissioner of Central Excise, Salem issued a Show cause Notice in C.No: V/28 & 29 /30/7/2007 dated March 05, 2007 towards the service tax credit availed on certain services. The amount demanded isRs.5,255/-.The Assistant Commissioner of Central Excise, Salem vide order sl. no 29/2007 dated October 31,2007 confirmed the demand. CSL has filed an appeal before the Commissioner of Central Excise (appeals)being A no.29/2008 dated October 30, 2008. The matter is currently pending.

Sanmar Speciality Chemicals Limited (“SSCL”)

1. Show cause notice No.02/2006 / dated October 04, 2006 was issued by the Joint Commissioner of CentralExcise, Chennai III Commissonerate demanding reversal of Service Tax Credit to the extent of Rs.7,40,774/-for the period November 2004 to June 2005 in respect of service tax paid on charges for sludge deodorizationservices. SSCL has replied to the show cause notice by its letter dated October 31, 2006. A personal hearingwas held on September 17, 2007 and the order is pending. The JC confirmed the demand aggrieved by whichSSCL filed an appeal before the Commissioner (Appeals) being A.No.8/2008(M-111)(ST) on January 16,2008 and the same is currently pending.

2. Show cause notice No.03/2006 dated October 05, 2006 was issued by the Joint Commissioner of CentralExcise, Chennai III Commissonerate demanding reversal of Service Tax Credit to the extent of Rs.9,83,884/-towards testing charges, sludge deodorization services and education cess for the period July, 2005 to March,2006. SSCL has replied to the show cause notice by its letter dated October 31, 2006, and a personal hearingwas held on September 17, 2007. The JC confirmed the demand aggrieved by which SSCL filed an appealbefore the Commissioner (Appeals) being A.No.8/2008(M-111)(ST) on January 16, 2008 and the same iscurrently pending.

Fisher Sanmar Limited (“FSL”) (Formerly known as Fisher Xomox Sanmar Limited)

1. Show cause notice No.235/2006 dated October 23, 2006 issued by the Assistant Commissioner of Service taxdenying exemption availed by FSL under Notification 32/2004 in respect of service tax paid by FSL as aprovider of Goods Transport Agency Service for the period from January, 2005 to March, 2006 and demandingpayment of service tax of Rs.5,13,433/-. FSL has replied to the show cause notice by its letter dated November23, 2006. The show cause notice is likely to be withdrawn shortly, in view of the recent clarification from theMinistry of Finance, Department of Revenue being Circular No.F.No.166 / 13 / 2006-CX.4 dated March 12,2007, that the manufacturers are also eligible for the abatement.

Flowserve Sanmar Limited (“FLSL”)

1. Show cause notice No.12/2002-03 dated May 19, 2003 has been issued by the Additional Commissionerdemanding service tax of Rs.1,88,808/- on Technical know-how fee and royalty paid for the period from March2000 to December 2002. FLSL has filed a reply to the show cause notice by its letter dated June 14, 2002 andthe matter is pending.

Xomox Sanmar Limited (“XSL”) (Demerged from Fisher Xomox Sanmar Limited and known as Xomox Sanmar)

1. Show cause notice bearing no: IV/09/54/2007.ST dated June 11, 2007 to deny CENVAT Credit of service taxpaid on Security services and courier charges paid by XSL, amounting to Rs.1,82,255/- . XSL filed detailedreply and made submissions during the personal hearing held on August 20, 2007. However, the Asst.Commissioner of Central Excise, Trichy confirmed the demand vide his order no:41/2007 dated August 30,2007. XSL filed an appeal before the Commissioner (Appeals) on December 5, 2007 and the matter is currentlypending.

2. Show cause notice bearing no:30/2007 dated May 04, 2007 was issued on XSL to deny CENVAT credit ofservice tax paid on Garden maintenance and Pest control treatment on the export packing, totaling Rs.32,475/-. XSL filed a detailed reply before the Asst Commissioner of Central Excise and appeared for the personalhearing held on July 18, 2007. However, the Asst. Commissioner of Central Excise, Div-II, Trichy, vide orderno:35/2007-ST dated July 20, 2007 disallowed the CENVAT Credit. Aggrieved by the order, XSL filed anappeal and stay application before the Commissioner of Central Excise (Appeals), Trichy on September 25,2007. The matter is pending for hearing.

3. DC of Central excise, Trichy vide SCN No:IV/09/39-2007-ST dated 17th October, 2007 proposed to denyCENVAT credit of Rs.7,650/- on manpower supply service, which according to the notice is not eligible forCENVAT credit. XSL filed its reply dated November 5, 2007. The DC passed an order bearing no:44/2007 STdated December 4, 2007 denying the credit and imposing penalty of Rs.2000/-. XSL has filed an appeal beforethe Commissioner of Central Excise (Appeals), Trichy and the matter is currently pending.

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4. XSL received a total of nine show cause notice’s from Supdt. Of Central Excise, Viralimalai, Trichy for theperiod relating to August, 1994 to March, 1998 where in they have demanded a duty amount of Rs.9,26,663/-alleging that, there is an undervaluation in the Stock transfers and free sample Clearances. XSL has replied toeach of the show cause notices along with the cost construction statement. The matter was heard and thedemand also confirmed by the Commissioner of Appeals. XSL has filed an appeal before the CESTAT, Chennaibeing E / PD/000461 / 2003 against the order of the Commissioner. A stay order has been passed by CESTATon August 19, 2004. The matter is currently pending.

Tyco Sanmar Ltd (“TSL”) (formerly part of Crossby Division of FMC Sanmar)

1. Show cause notice no.574/CE/15/2004/BCMI/Tyco/2469 dated November 3,2004 issued by the DirectorateGeneral of Central Excise Intelligence , New Delhi denying the benefit of exemption under Notification no.108/95-CE dated August 28,1995 in respect of clearance of excisable goods demanding a sum of Rs.1,46,637/-.Under Order No 25/2004-C.Ex (F.No: 208/23/204-CX.6) dated December 03, 2004, the Central Board ofExcise and Customs, New Delhi has assigned the case for adjudication by the Commissioner of Central Excise(Adjudication), New Delhi. TSL has replied to the show cause notice by its letter dated March 04, 2005.A personal hearing has been concluded in the matter and it is reserved for orders.

2. Show cause notice No.IV/09/32/2007 dated May 10, 2007 was issued by the Assistant Commissioner of CentralExcise as to why the credit taken by TSL on the service viz, garden maintenance services, compound wallconstruction services, rodent pest control services rendered by M/s.MMS Fettling, M/s.Ganesan Builders andM/s. Jardine Henderson amounting to Rs.3,14,214/- should not be denied and recovered along with appropriateinterest. TSL by its letter dated June 08, 2007 replied to the aforesaid show cause notice. The DC pursuant toa personal hearing passed an order confirming the demand of Rs.13,261/- along with appropriate interest andallowed cenvat credit of Rs.3,00,953/-. TSL has filed an appeal before the Commissioner (Appeals), Trichybeing A.No.102 / 2007-TRY(ST) against the aforesaid order. The matter is currently pending.

3. DC of Central Excise, Trichy vide SCN no: IV/16/92/2007-ST Adjn proposed to deny CENVAT credit ofRs.43,935/- on courier services for the period Nov, 2005 to Dec, 2006. TSL filed a reply dated 10th December2007 with the DC of Central Excise. The DC, vide OIO no:03/2008 dated February 26, 2008, confirmed thedemand and imposed a penalty of Rs.10,000/- against which TSL has filed an appeal before the Commissioner(Appeals). The matter is currently pending.

Sanmar Engineering Services Limited (“SESL”)

1. Show cause notice No.14/2002-03 dated May 26, 2003 issued by the Additional Commissioner (STC) demandingservice tax of Rs.2,39,514/- on Technical know-how fee and royalty paid, for the period from May, 1999 toMarch, 2002. SESL has replied to the show cause notice.

G. SALES TAX PROCEEDINGS

Sales Tax cases, appeals, show cause cum demand notices in excess of Rs. 10 lakhs:

Sanmar Speciality Chemicals Limited (“SSCL”)

1. SSCL has filed an appeal before the Joint Commissioner of Appeals (Bangalore) on December 18, 2006 inrespect of Assessment Year 2003-04 CST , against the order of the Deputy Commissioner of Commercial Taxes(DCCT) dated May 25, 2005. The appeal is filed against certain sales made by SSCL to educational institutionsand other organization and eligibility for purchase at a concessional rate of tax by producing Form D. The taximpact of which is Rs 10,54,753/-. The JCCT (Appeals) Bangalore rejected the appeal on 20th March 2007.Against this, SSCL has filed an appeal before the Karnataka Sales Tax Appellate Tribunal on 15.06.2007 beingAppeal No. 363 of 2007, personal hearing held on 29.08.2008, orders are yet to be passed.

2. The Assistant Commissioner of Commercial Taxes issued a Notice under section 39(1) of KVAT Act 2003 forthe year 2005-06 on October 13, 2008 demanding tax amount of Rs 2,19,545/- along with penalty of Rs64,638/- & interest of Rs 1,53,607/- totaling to Rs. 4,37,790/-. The above said demand is on the samplesclearances to customers without payment of sales tax. The Company has filed the reply to the notice on 11th

November, 2008 stating that the samples clearances is not a sale since no consideration was received/ involved.

Flowserve Sanmar Limited (“FLSL”)

1. FLSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 194/05 on May 11, 2005in respect of Assessment Year 2001-02 (CST), against the order of the Appellate Assistant Commissioner datedMarch 17, 2005. The appeal is filed against the issue of C Form. The tax impact of which is Rs 53,48,926/-.

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STAT vide its order dated March 4, 2008 partly remanded back to Assessing Officer (A O) for fresh considerationand partly dismissed the appeal. The tax impact of issues remanded back to the A.O is Rs.16,89,464/-.

2. FLSL has filed an appeal before AAC in AP No: 19/06 on December 02, 2005 in respect of Assessment Year2002-03 (CST), against the order of the CTO dated October 20, 2005. The appeal is regarding declarations ofC Form & H Form. The tax impact of which is Rs 18,82,855/-. No order has been passed as yet and the appealis currently pending.

3. FLSL has filed an appeal before AAC in AP No: 61/06 on July 04, 2006 in respect of Assessment Year 2003-04(CST), against the order of the CTO dated April 27, 2006. The appeal is regarding declarations of C Form & HForm. The tax impact of which is Rs. 78,65,406/-. The Appeal was heard and by its order dated May 19, 2008the AAC partly allowed the appeal and partly dismissed. For the remanded portion. FLSL has filed a revisionbefore the CTO and for the dismissed portion, a second Appeal has been filed before STAT.

4. FLSL has filed writ before Madras High Court against the notice of the Deputy Commercial Tax Officer(DCTO) in the proceedings in TNGST/0700637/2001 RC. 141/04/A5/D.No dated March 15, 2006. In thisnotice, DCTO proposed to revise the assessment on the ground that FLSL has not submitted the details ofcertain purchases. The tax implication cannot be ascertained at this stage. The High Court of Madras videWPMP No: 15247 of 2006 in WP 14461/2006 dated May 16, 2006 passed an order granting interim stay of theproceedings. Currently the writ petition is pending for disposal.

5. FLSL has filed writ before the Madras High Court against the notice of the DCTO in the proceedings in CST/639554/2000-01 RC 141/04/A5/D No March 15, 2006. In this notice, DCTO proposed to revise the assessmenton the ground that FLSL has not submitted certain proof of exports. The tax impact cannot be ascertained atthis stage. The High Court of Madras vide WPMP No: 12723 of 2006 in WP 11181/2006 dated April 25, 2006passed an order granting interim stay of the proceedings. Currently the writ petition is pending for disposal.

Xomox Sanmar Limited (“XSL”) (Demerged from Fisher Xomox Sanmar Limited)

1. Fisher Sanmar Limited filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 261/06 onMay 05, 2006 in respect of Assessment Year 2001-02 (CST), against the order of the AAC dated February 08,2006. The appeal is filed against declaration of C Form. The tax impact on Xomox division is Rs 13,28,718/,the appeal is currently pending.

2. XSL has filed an appeal before the AAC in AP No: 36/06 on May 19, 2006 in respect of Assessment Year 2003-04, against the order of the DCTO dated March 31, 2006. The appeal is relating to non filing of declaration inForm C & Form H. The tax impact of this is Rs 23,45,711/-. No order has been passed as yet and the appeal iscurrently pending.

3. Fisher Sanmar Limited has filed an appeal before the AAC on November 03, 2006 in respect of AssessmentYear 2002-03 (CST), against the order of the Commercial Tax Officer(CTO) dated 31.08.2006. The appeal isrelating to non-filing of declaration in Form C. The tax impact on Xomox division is Rs.11,85,852/-. AACOrder received, in AP No.14/2007 dated May 19, 2008. Partly remanded and partly dismissed. Giving effect tothe AAC, order we have received revision order with refund of Tax amounting Rs.22,75,851/-. Second appealis still pending before STAT.

4. Fisher Sanmar Limited has filed an appeal before the AAC in AP No: 102/05 on April 28, 2005 in respect ofAssessment Year 2002-03 (TNGST), against the order of the Commercial Tax Officer(CTO) dated July 08,2004. The appeal is filed against denial of concessional rate of sales tax on the disputed turnover and non filingof Form XVII declaration and Sale of asset . The tax impact on Xomox Division is Rs 19,99,658/-. By orderdated June 29, 2007, the appeal was partly remanded and partly dismissed and XSL has filed an appeal beforethe Tribunal on September 18, 2007 and the same is currently pending.

BS&B Safety Systems (India) Ltd (“BS&B”)

1. BS&B has filed an appeal before the AAC in 43/06 on May 25, 2006 in respect of Assessment Year 2003-04(CST), against the order of the DCTO dated March 15, 2006, appeal is relating to non-filing of declarations inForm C, Form D and Form H. The tax impact of the same is Rs.11,85,499/-. No order has been passed as yetand the appeal is currently pending.

2. BS&B has filed an appeal before the Sales Tax Appellate Tribunal (STAT) on March 20, 2007 in respect ofAssessment Year 2002-03 (CST), against the order of the AAC dated December 21, 2006. The appeal is relatingto non filing of declaration in C Form and Form H. The tax impact of the same is Rs.14,75,132/-. No orders arepassed yet and the appeal is currently pending.

3. BS&B has filed an appeal before the AAC in respect of Assessment Year 2004-05 (CST), against the order ofthe DCTO dated 19.7.07. Appeal is filed against denial of concessional rate of sales tax on the disputed turnover

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due to non filing of C Form declaration. The tax impact of the same is Rs.11,76,396/-. No orders are passed yetand the appeal is currently pending.

Tyco Sanmar Ltd (“TSL”) (formerly part of Crossby Division of FMC Sanmar)

1. TSL (pre demerger of the division - Cross-By) has filed an appeal before the Sales Tax Appellate Tribunal(STAT) in TA No: 18/03 on December 26, 2002 in respect of Assessment Year 1996-97 (CST), against theorder of the AAC dated September 24, 2002. The appeal is relating to non-filing of declaration in Form C,Form D and stock transfer. The tax impact of the same is Rs.10,15,406/-. No order has been passed as yet andthe appeal is currently pending.

2. TSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 262/06 on May 05, 2006 inrespect of Assessment Year 2001-02 (CST), against the order of the AAC dated February 08, 2006. The appealis relating to non-filing of declaration in Form C. The tax impact of the same is Rs.23,37,150/-. and the appealis currently pending.

3. TSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) on March 20, 2007 in respect ofAssessment Year 2002-03 (CST), against the order of the AAC dated December 21, 2006. The appeal is relatingto non-filing of declaration in Form C. The tax impact of the same is Rs.23,66,053/-. No order has been passedas yet and the appeal is currently pending.

4. TSL has filed an appeal before the AAC in AP No: 52/06 in respect of Assessment Year 03-04 (CST), againstthe order of the CTO dated May 31, 2006. The appeal is relating to non-filing of declaration in Form C. The taximpact of the same is Rs.39,62,630/-. No order has been passed as yet and the appeal is currently pending.

5. TSL has filed an appeal before the AAC in AP No: 104/06 in respect of Assessment Year 03-04 (TNGST),against the order of the CTO dated March 23, 2006. The appeal is filed against denial of concessional rate ofsales tax on the disputed turnover due to non-filing of Form XVII declaration and export sale. The tax impactof the same is Rs.16,67,540/-. No order has been passed as yet and the appeal is currently pending.

6. TSL has filed an appeal before the AAC in AP No: 20/06 in respect of Assessment Year 02-03 (TNGST),against the order of the CTO dated October 05, 2005. The appeal is filed against denial of concessional rate ofsales tax on the disputed turnover due to non-filing of Form XVII declaration, export sale, additional sales taxand levy of penalty. The tax impact of the same is Rs.10,74,661/-. No order has been passed as yet and theappeal is currently pending.

7. TSL has filed an appeal before the AAC in AP No: 26/07 in respect of Assessment Year 02-03 (TNGST),against the order of the CTO dated August 31, 2006. The appeal is filed against the issue of Form XVII andlevy of Penalty. The tax & Penalty impact of this is Rs.19,36,185/-. No order has been passed as yet and theappeal is currently pending.

Sanmar Foundries Limited (“SFL”) (formerly Smith Division of FMC Sanmar Ltd)

1. SFL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) on May 27, 2002 in respect of AssessmentYear 1998-99 (CST), against the order of the AAC dated January 31, 2002. The appeal is relating tonon-production of declaration in Form C, Form H and additional sales tax. The tax impact of the same isRs.18,66,249/-. No order has been passed as yet and the appeal is currently pending.

2. The Commercial Taxes Department has filed Writ Appeal before the Karnataka High Court in WA No: 3337/2004 against the order of the Karnataka High Court in WP No: 12318/2001 dated December 19, 2003. Thiswrit was filed against the issue of works contract tax. The tax impact of the same is 10,76,123/-.

Sanmar Engineering Services Limited (“SESL”)

1. SESL has filed an appeal before the Sales Tax Appellate Tribunal (STAT), Cuttack on March 27, 2002 inrespect of Assessment Year 1999-00, against the order of the Assistant Commissioner dated June 28, 2002. Theappeal is filed against the lower exemption and non- granting of TDS credits under Works Contract. The taximpact of the same is Rs 10,06,856/-. No order has been passed as yet and the appeal is currently pending.

2. Show cause notice No.JCCT/ Admn/BCD-III/SMR.CR.37(a)/04-05 dated NIL was served by the JointCommissioner of Commercial Taxes , Bangalore for the period April 01, 1998 to March 31, 1999 demandingpayment of tax on issue of differential rate of tax. The tax impact of the same is Rs 12,27,625/-. SESL has fileda reply to the show cause notice by its letter dated January 24, 2005.

3. Show cause notice No. JCCT/ Admn/BCD-III/SMR.CR.37(a)/04-05 dated NIL was served by the JointCommissioner of Commercial Taxes , Bangalore for the period April 1, 1999 to March 31, 2000 demandingpayment of tax on issue of differential rate of tax. The impact of this is Rs 10,72,702/-. Reply to SCN was filedon January 25, 2005 before the Joint Commissioner of Commercial Taxes.

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Indchem Communications Limited (“ICL”)

1. ICL has filed an appeal before the High Court of Judicature at Lucknow in TTR 40/2007 in respect of Assessment

Year 1991-92 , against the order of the Trade Tax Tribunal dated January 31, 2007. The appeal is filed against

the works contract tax. The tax impact of the same is Rs.27,53,850/-. The Hon’ble High Court by its order

dated May 21, 2007, granted stay of operation of the aforesaid order. The appeal is currently pending.

Sales Tax cases for less than Rs.10 lakhs:

Cabot Sanmar Ltd. (“CSL”)

1. The Commercial Tax Officer, Omalur vide his order 3242249/2004-05 dated March 28, 2007 has demanded anamount of Rs. 7,968/- being the differential tax payable on concessional purchases related to exports u/s 3(4) ofthe TNGST Act, 1959. CSL has filed its appeal before the Appellate Assistant Commissioner – CT, Salem onJune 22, 2007, the appeal reference being 123/07. The appeal is yet to be heard and is pending.

2. The Commercial Tax Officer, Omalur vide his orders 3242249/2002-03 dated July 31, 2008 and August 26,2008 has demanded an amount of Rs. 47,777/- being the differential tax payable on concessional purchasesrelated to exports u/s 3(4) and penalty of Rs.7,865/- u/s 12(3)(b)(i) of the TNGST Act, 1959. The matter iscurrently pending.

Sanmar Speciality Chemicals Limited (“SSCL”)

1. SSCL has filed an appeal before the Appellate Assistant Commissioner (CT) Chennai (‘AAC’) in respect of AY2004-05 (TNGST), against the order of the Commercial Tax Officer (CTO) dated December 12, 2006. Theappeal is filed against the denial of concessional rate of sales tax on the disputed turnover and non- filing ofForm XVII declaration, Sale of asset and levy of penalty. The tax of impact of which is Rs 6,36,994/- andpenalty demanded is Rs.2,74,979/-. No order has been passed as yet and the appeal is currently pending.

2. SSCL has filed an appeal before the AAC, Chennai in respect of AY 2003-04 (TNGST), against the order of theCommercial Tax Officer (CTO) dated August 08, 2005. The appeal is filed against the denial of concessionalrate of sales tax on the disputed turnover, sale of assets. The tax of impact of which is Rs 5,67,079/-. No orderhas been passed as yet and the appeal is currently pending.

3. SSCL has filed an appeal before Tamil Nadu Sales Tax Appellate Tribunal (TNSTAT), Chennai in respect ofAY 2002-03 (TNGST), against the order of the Appellate Assistant Commissioner dated September 19, 2005.The appeal is filed against the denial of concessional rate of sales tax on the disputed turnover. The tax impactof which is Rs 1,61,097/-. No order has been passed as yet and the appeal is currently pending.

4. SSCL has filed an appeal before TNSTAT, Chennai in respect of AY 2001-02 (TNGST), against the order of theAppellate Assistant Commissioner dated November 09, 2005. The appeal is filed against the denial ofconcessional rate of sales tax on the disputed turnover and levy of penalty. The tax impact of which isRs.1,25,274/- and a penalty of Rs 2,175/-. No order has been passed as yet and the appeal is currently pending.

5. SSCL has filed an appeal before TNSTAT, Chennai in respect of AY 2000-01 (TNGST), against the order of theAppellate Assistant Commissioner dated February 25, 2005. The appeal is filed against the denial of concessionalrate of sales tax on the disputed turnover. The tax impact of which is Rs 98,892/-. No order has been passed asyet and the appeal is currently pending.

6. SSCL has filed the Appeal before the Sales Tax Appellate Tribunal, Karnataka being Appeal No.363 of 2007against the order of the Joint Commissioner of Commercial taxes dated March 20, 2007 dismissing the SSCL’sclaim. The issue pertains to non-filing of Form C and D and sales returns disallowance. No order has beenpassed as yet and the appeal is currently pending.

7. SSCL, Berigai has filed an appeal before the AAC, Chennai in respect of AY 2005-06(TNGST), against theorder of the Commercial Tax Officer (CTO) dated 31.3.08. The appeal was filed on May 12, 2008 against thedenial of concessional rate of sales tax on the disputed turnover and sale of assets. The tax impact isRs.1,19,330/- and penalty is Rs.29,684/-. Appeal is currently pending before AAC.

8. SSCL, Berigai has filed an appeal before the AAC, Chennai in respect of AY 2005-06(CST), against the orderof the Commercial Tax Officer (CTO) dated 31.3.08. The appeal was filed on May 12, 2008 against the denialof concessional rate of sales tax on the disputed turnover. The tax impact is Rs.15,16,447/-. Appeal is currentlypending before AAC.

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Sanmar Shipping Limited (“SSL”)

1. The department has filed an appeal before Sales Tax Appellate Tribunal in STA 335 / 02 on September 30,2002 in respect of charter hire payments. The demand notice was originally received from the departmenttowards sales tax on charter hire of ships for the year 1998-99 raising a demand of a sum of Rs 6,35,814/- of taxand penalty of Rs 9,53,721/-. Appeal filed by the department against the order of the Appellate AssistantCommissioner is currently pending.

2. SSL has filed an appeal before the Appellate Assistant Commissioner (CT) against the order of the CommercialTax Officer (CTO) for the Assessment Year 2003-04 in respect of sale of asset. SSL charged resale tax of 1% u/s 3H of the TNGST Act, but CTO has demanded a tax @ 12% and also imposed a penalty. The amount involvedis Rs 2,45,050/- and a penalty of Rs 1,93,811/-. The AAC by its order dated September 07, 2007 remanded thematter back to the CTO for fresh consideration. The matter is currently pending before the CTO.

Fisher Sanmar Limited (“FSL”) (Formerly known as Fisher Xomox Sanmar Limited)

1. FSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 360/05 on September 13,2004 in respect of Assessment Year 1999-00 (CST) , against the order of the Appellate Assistant Commissioner(AAC) dated April 29, 2004. The appeal is filed against the declaration of C Form. The tax impact of which isRs 13,58,540/-. Giving effect to the aforesaid AAC Order, a revision order was obtained by FSL with refund ofRs.30,253/-. The STAT vide its order dated March 4, 2008 partly remanded the matter back to the AssessingOfficer (A O) for fresh consideration and partly dismissed the appeal. The tax impact of issues remanded backto the A.O is Rs.40,758/-.

2. FSL has filed an appeal before the AAC in AP No: 46/05 on December 30, 2004 in respect of Assessment Year2000-01 (TNGST), against the order of the Commercial Tax Officer (CTO) dated July 02, 2004. The appeal isfiled against the denial of concessional rate of sales tax on the disputed turnover due to non-filing of FormXVII declaration and Sale of asset. The tax impact of which is Rs 3,44,348/-. AAC dismissed the appeal againstwhich FSL has filed an appeal before the Tribunal and the same is currently pending.

3. FSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) on June 19, 2006 in respect of AssessmentYear 2001-02 (TNGST) , against the order of the AAC dated March 15, 2006. The appeal is filed against thedenial of concessional rate of sales tax on the disputed turnover due to non-filing of Form XVII declaration andexport sale and Sale of asset. The tax impact of which is Rs 2,40,832/-. No order has been passed as yet and theappeal is currently pending. Giving effect to the AAC Order, the CTO has passed the revision order with NIL taxdemand. FSL has filed an appeal for part of the pending issue before the STAT and the same is currently pending.

4. FSL has filed an appeal before the AAC in AP No: 97/06 on July 27, 2006 in respect of Assessment Year 2003-04 (TNGST), against the order of the Commercial Tax Officer dated March 28, 2006. The appeal is filedagainst denial of concessional rate of sales tax on the disputed turnover due to non-filing of Form XVII declarationand export sale and Sale of asset. The tax impact of which is Rs 9,06,235/-. No order has been passed as yet andthe appeal is currently pending.

5. FSL has filed an appeal before the AAC in AP No: 33/06 on July 27, 2006 in respect of Assessment Year2003-04) against the order of the Commercial Tax Officer dated March 28, 2006. The appeal is relating tofiling of Form C & Form H declarations. The tax impact of which is Rs 70,65,599/-. The AAC by its Orderdated May 19, 2008 in AP No.33/2006, has set aside the Assessing Officer order and remitted the issue back tothe Assessing Officer to allow FSL to produce the relevant H forms to a value of Rs.17,00,845/- and C formsfor Rs.5,00,22,708/- and to decide the levy of concessional rate of tax and exemption, based on the verificationof records. Accordingly, FSL has filed for revision before CTO for the remanded portion and for the dismissedportion an appeal has also been filed before STAT.

6. FSL has filed an appeal before the AAC on November 03, 2006 in respect of Assessment Year 2002-03, againstthe order of the Commercial Tax Officer dated August 31, 2006. The appeal is relating to filing of Form Cdeclaration. The tax impact of which is Rs 16,53,565/-. AAC Order received in AP No.14/2007 dated May 19,2008. Partly remanded and partly dismissed. For the remanded portion, we have filed for revision before CTOand for the dismissed portion, FSL has filed a second appeal before STAT which is currently pending.

7. FSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 192/03 on October 28, 2002 inrespect of Assessment Year 1999-2000, against the order of the Appellate Assistant Commissioner (AAC) datedJuly 25, 2002. The appeal is filed against denial of concessional rate of sales tax on the disputed turnover, due tonon-filing of Form XVII declaration and export sale. The tax impact of which is Rs 62,618/-. STAT heard the casein TA No.192/03 and has dismissed FSL’s petition. FSL has filed a writ Petition before High Court, Madras in WPNo.3764/2008 against order of STAT, no orders are passed yet and the matter is currently pending.

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Flowserve Sanmar Limited (“FLSL”)

1. FLSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 71/07 on November 02,2006 in respect of Assessment Year 2000-01 (CST), against the order of the Appellate Assistant Commissioner(AAC) dated August 03, 2006. The appeal is filed regarding declaration of C Form. The tax impact of which isRs 6,57,281/-. No order has been passed as yet and the appeal is currently pending.

2. FLSL has filed an appeal before the AAC in AP No: 58/04 in respect of Assessment Year 2000-01 (TNGST),against the order of the Commercial Tax Officer (CTO) dated April 20, 2004. The appeal is filed against denialof concessional rate of sales tax on the disputed turnover, due to non-filing of Form XVII declaration andexport sale. The tax impact of which is Rs 2,62,744/-. No order has been passed as yet and the appeal iscurrently pending.

3. FLSL has filed an appeal before the AAC in AP No: 117/06 on April 10, 2006 in respect of Assessment Year2003-04 (TNGST), against the order of the Commercial Tax Officer (CTO) dated February 27, 2006. Theappeal is filed against denial of concessional rate of sales tax on the disputed turnover, due to non-filing ofForm XVII declaration, export sale and sale of asset. The tax impact of which is Rs 3,96,394/-. No order hasbeen passed as yet and the appeal is currently pending.

Xomox Sanmar Limited (“XSL”) (Demerged from Fisher Xomox Sanmar Limited)

1. Fisher Sanmar Limited has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 360/05on September 13, 2004 in respect of Assessment Year 1999-00 (CST), against the order of the AppellateAssistant Commissioner (AAC) dated April 29, 2004. The appeal is against the declaration of C Form. The taximpact on Xomox division is Rs 9,75,541/-. Giving effect to the aforesaid AAC Order, a revision order wasobtained by XSL with refund of Rs.30,253/-. The STAT vide its order dated March 4, 2008 partly remanded thematter back to Assessing Officer (A O) for fresh consideration and partly dismissed the appeal. The tax impactof issues remanded back to the A.O is Rs.40,758/-. The matter is currently pending.

2. Fisher Sanmar Limited has filed an appeal before the Sales Tax Appellate Tribunal (STAT) on May 25, 2007 inrespect of AY 2000-01 (CST), against the order of the AAC dated March 30, 2007 in AP No. 27/2005. Theappeal is filed against the non-filing of declaration in Form C. The tax impact of Xomox division isRs.8,66,366/- and the appeal is currently pending.

3. Fisher Sanmar Limited filed an appeal before the AAC in AP No: 46/05 on December 30, 2004 in respect ofAssessment Year 2000-01, against the order of the Commercial Tax Officer(CTO) dated July 02, 2004. Theappeal is filed against denial of concessional rate of sales tax on the disputed turnover and due to non-filing ofForm XVII declaration and Sale of asset. The tax impact on Xomox division is Rs 2,21,007/-. AAC dismissedthe appeal against which XSL has filed an appeal before the Tribunal on July 03, 2007.

4. Fisher Sanmar Limited has filed an appeal before the Sales Tax Appellate Tribunal (STAT) on June 19, 2006 inrespect of Assessment Year 2001-02 (TNGST), against the order of the AAC dated March 15,2006. The appealis filed against denial of concessional rate of sales tax on the disputed turnover and due to non-filing of FormXVII declaration, Sale of asset. The tax impact on Xomox division is Rs 4,07,607/-. No order has been passedas yet and the appeal is currently pending. Giving effect to the AAC Order, the CTO has passed the revisionorder with NIL tax demand. XSL has filed an appeal for part of the pending issue before the STAT.

5. XSL has filed an appeal before the AAC in AP No: 147/06 in respect of Assessment Year 2003-04 (TNGST),against the order of the Deputy Commercial Tax Officer (DCTO) dated March 31, 2006. The appeal is filedagainst denial of concessional rate of sales tax on the disputed turnover and due to non-filing of Form XVIIdeclaration and export sale. The tax impact of this is Rs 7,75,850/-. No order has been passed as yet and theappeal is currently pending.

6. XSL has filed an appeal before the AAC in Assessment Year 2004-05, against the order of the CTO datedNovember 01, 2007. The appeal is relating to non-filing of declaration in Form XVII and 3(4) liability. The taximpact of this is Rs 2,71,843/-. No order has been passed as yet and the appeal is currently pending.

7. Fisher Sanmar Limited has filed an appeal before the AAC in AP no.7/08 in respect of Asst. year 2004-05(CST), against the order of the Commercial Tax Officer (CTO) dated February 05, 2008. The appeal is relatingto non-filing of declaration in Form C. The tax impact on Xomox division is Rs.9,75,715/-. Appeal is currentlypending before AAC.

8. Fisher Sanmar Limited has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 192/03on October 28, 2002 in respect of Assessment Year 1999-00 (TNGST), against the order of the AppellateAssistant Commissioner (AAC) dated July 25, 2002. The appeal is filed against denial of concessional rate of

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sales tax on the disputed turnover, due to non-filing of Form XVII declaration and export sale. The tax impacton Xomox Division is Rs 95,720/- and no order has been passed as yet and the appeal is currently pending.

BS&B Safety Systems ( India) Ltd (“BS&B”)

1. BS&B has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 295/05 on May 11, 2006in respect of Assessment Year 2000-01 (CST), against the order of the Appellate Assistant Commissioner(AAC) dated February 24, 2005. The appeal is relating to non-filing of declaration in C Form. The tax impactof the same is Rs.2,98,993/- and the appeal is currently pending.

2. BS&B has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 18/07 on May 22, 2006in respect of Assessment Year 2001-02, against the order of the AAC dated March 02, 2006. The appeal isrelating to non-filing of declaration in C Form and Form H. The tax impact of the same is Rs.3,69,155/- and theappeal is currently pending.

3. BS&B has filed an appeal before the AAC in AP No: 80/05 on March 09, 2005 in respect of Assessment Year2002-03 (TNGST), against the order of the DCTO dated December 30, 2004, appeal is filed against denial ofconcessional rate of sales tax on the disputed turnover due to non-filing of Form XVII declaration . The taximpact of the same is Rs.6,24,600/-. By order dated July 31, 2007, AAC partly remanded and partly dismissedthe appeal against which BS&B has filed an appeal before the Tribunal on October 03, 2007 and the same iscurrently pending.

4. BS&B has filed an appeal before the AAC in AP No: 136/06 on May 22, 2006- in respect of Assessment Year2003-04 (TNGST), against the order of the DCTO dated March 15, 2006, appeal is filed against denial ofconcessional rate of sales tax on the disputed turnover due to non-filing of Form XVII declaration. The taximpact of the same is Rs.2,43,262/-. No order has been passed as yet and the appeal is currently pending.

5. BS&B has filed an appeal before the AAC in respect of Assessment Year 2004-05 (TNGST), against the orderof the DCTO dated 19.7.07, appeal is filed against denial of concessional rate of sales tax on the disputedturnover due to non-filing of Form XVII declaration. The tax impact of the same is Rs.2,87,757/-. The appealis currently pending.

6. BS&B has filed an appeal before the AAC in respect of Asst. Year 2005-06 (TNGST), against the order of theDeputy Commercial Tax Officer dated.30/07/08 and the appeal is related to denial of concessional rate of salestax on the disputed turnover due to non-filing of Form XVII declaration. The tax impact on the same isRs.2,53,513. The appeal is currently pending.

7. Department has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in STA 29/03 on October 23,2003 in respect of Assessment Year 1999-00 (TNGST) , against the order of the Appellate Assistant Commissioner(AAC) dated May 23, 2003. The appeal is filed against denial of concessional rate of sales tax on the disputedturnover due to non-filing of Form XVII declaration and export sale. . The tax impact of the same is Rs.3,95,711/-. No order has been passed as yet and the appeal is currently pending.

8. BS&B has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 379/05 on February17, 2005 in respect of Assessment Year 2001-02 (TNGST), against the order of the AAC dated November18, 2004. The appeal is filed against denial of concessional rate of sales tax on the disputed turnover due tonon-filing of Form XVII declaration and export sale. The tax impact of the same is Rs.50,827/-. STAT vide itsorder dated February 01, 2008, dismissed the appeal. BS&B has filed a writ petition being W.P.No.16058 of2008 before the High Court of Madras against the aforesaid STAT order. No orders are passed, the matter iscurrently pending.

Tyco Sanmar Ltd (“TSL”) (formerly part of Crossby Division of FMC Sanmar)

1. TSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 24/03 on December16, 2002 in respect of Assessment Year 2002-03 (CST), against the order of the Appellate Assistant Commissioner(AAC) dated September 23, 2002. The appeal is relating to non-filing of declaration in Form C and Form H.The tax impact of the same is Rs.8,67,244/-. No order has been passed as yet and the appeal is currentlypending.

2. TSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 1471/02 on December17, 2002 in respect of Assessment Year 1997-98 (CST), against the order of the Appellate Assistant Commissioner(AAC) dated September 23, 2002. The appeal is relating to non-filing of declarations in Form C and stocktransfer. The tax impact of the same is Rs.6,93,599/-. No order has been passed as yet and the appeal is currentlypending.

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3. TSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in respect of Assessment Year 2001-02(TNGST), against the order of the AAC dated July 10, 2006.The appeal is filed against denial of concessional rateof sales tax on the disputed turnover due to non-filing of Form XVII declaration and export sale. The tax impactof the same is Rs.9,56,012/-. No order has been passed as yet and the appeal is currently pending. Giving effect tothe aforesaid AAC Order, the CTO has passed a revision order on August 31, 2006 with NIL Tax demand.

4. TSL has filed an appeal before the AAC in AP No: 4/06 in respect of Assessment Year 2002-03 (CST), againstthe order of the CTO dated August 31, 2006. The appeal is filed against the levy of penalty. The tax impact ofthe same is Rs 10,521/-. No order has been passed as yet and the appeal is currently pending.

Sanmar Foundries Limited (“SFL”) (formerly Smith Division of FMC Sanmar Ltd)

1. SFL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 24/03 on December 16, 2002 inrespect of Assessment Year 1995-96 (CST), against the order of the Appellate Assistant Commissioner (AAC) datedSeptember 23, 2002. The appeal is relating to non-filing of declaration in Form C and Form H. The tax impact of thesame is Rs.6,67,681/-. No order has been passed as yet and the appeal is currently pending.

2. SFL has filed an appeal before the STAT in T.A.No.18 of 2003 in respect of Assessment Year 1996-97 (CST),against the order of the AAC dated September 24, 2002. The appeal is relating to non-production of declarationin Form C and levy of penalty. The tax impact of the same is Rs.2,96,391/-.The matter is currently pending.

3. SFL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 1471/02 on December 17,2002 in respect of Assessment Year 1997-98 (CST), against the order of the AAC dated September 23, 2002.The appeal is relating to non-production of declaration in Form C and stock transfer and levy of penalty. Thetax impact of the same is Rs.9,34,491/-. No order has been passed as yet and the appeal is currently pending.

4. SFL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA 343/05 on May 11, 2005 inrespect of Assessment Year 2001-02 (CST), against the order of the AAC dated February 24, 2005. The appealis relating to non-production of declaration in Form C. The tax impact of the same is Rs.5,77,719/-. STAT videits order dated March 04, 2008, partly remanded the issue to the Assessing Officer for fresh consideration andpartly dismissed the appeal. The tax impact of which is Rs.5,72,867/-.

5. SFL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA 339/05 in respect of AssessmentYear 2001-02 (TNGST), against the order of the AAC dated December 23, 2004. The appeal is filed againstdenial of concessional rate of sales tax on the disputed turnover due to non-filing of Form XVII declaration andexport sale. The tax impact of the same is Rs.1,33,198/-. STAT vide its order dated March 4, 2008, dismissedthe appeal. SFL has filed a writ petition being W.P.No.16051 of 2008 before the High Court of Madras againstthe aforesaid STAT order. No orders are passed, the matter is currently pending.

6. SFL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in respect of Assessment Year 2002-03(TNGST), against the order of the AAC dated April 13, 2007. The appeal is filed against denial of concessionalrate of sales tax on the disputed turnover due to non-filing of Form XVII declaration and export sale. The taximpact of the same is Rs 69,895/-. No order has been passed as yet and the appeal is currently pending.

Sanmar Engineering Services Limited (“SESL”)

1. SESL has filed an appeal before the Sales Tax Appellate Tribunal (STAT), Hyderabad in 222 /03 on August 20,2002 in respect of Assessment Year 1997-98, against the order of the Deputy Commissioner (CT) dated April24, 2002. The appeal is filed against the composition of rate of tax under Works Contract. The tax impact of thesame is Rs 5,30,126/-. No order has been passed as yet and the appeal is currently pending.

2. Show cause notice No. JCCT/ Admn/BCD-III/SMR.CR.37(a)/04-05 dated NIL was served by JointCommissioner of Commercial Taxes, Bangalore for the period April 2000 to March 31, 2001 demandingpayment of tax on issue of differential rate of tax. The impact of this is Rs 10,09,129/-. Reply to SCN was filedon January 25, 2005 before the Joint Commissioner of Commercial Taxes.

3. SESL has filed an appeal before the Sales Tax Appellate Tribunal (STAT), Chennai in TA 149/2003 on March31, 2003 in respect of Assessment Year 1999-00 (CST), against the order of the AAC dated November 29,2002. The appeal is relating to non-filing of declaration in Form F. The tax impact of the same is Rs.3,69,321/-. No order has been passed as yet and the appeal is currently pending.

Indchem Communications Limited (“ICL”)

1. The Sales Tax Department has filed an appeal before the Sales Tax Appellate Tribunal (STAT), Chennai in STA354/03 in respect of Assessment Year 1998-99 (CST), against the order of the Appellate Assistant Commissioner(AAC) dated December 06, 2001. The appeal is filed against the issue of cancellation of invoice. The taximpact of the same is Rs.1,25,660/-. No order has been passed as yet and the appeal is currently pending.

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H. CUSTOMS PROCEEDINGS

Sanmar Shipping Limited (“SSL”)

1. SSL has filed an appeal before Central Excise and Gold Control Appellate Tribunal (‘CEGAT’) against thelevy of customs duty and penalty on purchase of GMDSS equipment from a ship repair unit. The duty demandedis Rs 8, 15,309/- , penalty of Rs 8, 15,309/- and a redemption fine – Rs 2, 50,000/- instead of confiscation ofgoods imported. The appeal is currently pending.

Sanmar Foundries Limited (“SFL”) (formerly Smith Division of FMC Sanmar Ltd)

1. SFL has filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal in C/000356/2005 onJuly 6, 2005 against the Order in.3866/2005 dated May 30, 2005 passed by the Commissioner of Customs(Exports) imposing a fine of Rs.1, 00,000/- and penalty of Rs.4, 00,000/- on the ground that the pre-shipmentinspection certificate produced by SFL for import of stainless steel scrap is not valid. No further orders arepassed and the appeal is currently pending before the Tribunal.

2. SFL has filed an appeal with the Customs, Excise and Service tax Appellate Tribunal in C/000355/2005 on July6, 2005 against the Order in.3785/2005-Gr.7B dated May 6, 2005 passed by the Commissioner of Customs(Exports) imposing a fine of Rs.3,66,000/- and penalty of Rs.73,000/- on the ground that the pre-shipmentinspection certificate produced by SFL for import of stainless steel scrap is not valid. No further orders arepassed and the appeal is currently pending before the Tribunal.

SECTION – IV

Material Litigations involving the companies no longer part of our Promoter Group companies are as follows:

A. INCOME TAX PROCEEDINGS

Appeals filed by the Companies no longer part of our Promoter Group companies before the Commissioner ofIncome Tax (Appeals):

Vishay Sanmar Limited (formerly Sensortronics Sanmar Limited)

Vishay has filed an appeal before the Commissioner of Income Tax (Appeals), Chennai for the Assessment Year2005-06 against the Order dated December 29, 2008. The Appeal is against the treatment of SAP implementationexpenses as Capital and allowance of Depreciation, and disallowance of Provision for Gratuity, Bad Debts , 40(a)(ia)on Lease Rent, 14A on Exempted Income and excess levy of interest under Section 234B. The tax impact of the sameis Rs.20,30,693/-. No Order has been passed as yet and the appeal is currently pending.

Appeals filed by the Income Tax Department before the Income Tax Appellate Tribunal:

Asco (India) Limited (“Asco”)

1. The Income Tax Department has filed appeal being ITA No.479/08 before the Income Tax Appellate Tribunal,Chennai against the Order of the Commissioner of Income Tax (Appeals) dated December 18, 2007 for theAssessment Year 2004-05. The Appeal is filed against re-computation of export benefits under Section 80HHC,treatment of SAP Implementation Expenses as Depreciable asset and accordingly rates the rates applied asapplicable to computer and software. The tax impact of which is Rs.1,16,547/-. No order has been passed as yetand the matter is currently pending.

Appeals / Writ Petitions filed by the companies no longer part of our Promoter Group companies before theHigh Court at Madras:

Vishay Sanmar Limited (“VSL”)

1. VSL has filed an appeal dated August 28, 2007 before the High Court of Madras, against the Order of theIncome Tax Appellate Tribunal, Chennai dated May 25, 2007 in ITA Nos.1840 & 1841/03 for the AssessmentYear 1999-00. The Appeal is against re-computation of Deduction under Section 80HHC. The tax impact ofwhich is Rs.11,40,653/-. No Order has been passed as yet and the appeal is currently pending.

2. VSL has filed an appeal dated August 28, 2007 before the High Court of Madras, against the Order of theIncome Tax Appellate Tribunal, Chennai dated May 25, 2007 in ITA No.1840 & 1841/03 for the AssessmentYear 2000-01. The Appeal is against re-computation of Deduction under Section 80HHC. The tax impact ofwhich is Rs.22,70,388/-.No Order has been passed as yet and the appeal is currently pending.

3. VSL has filed an appeal dated 5th December, 2007 before the High Court of Madras, against the Order of theIncome Tax Appellate Tribunal, Chennai dated August 03, 2007 in ITA No.2927/ 03 for the Assessment Year

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2001-02. The Appeal is against re-computation of Deduction under Section 80HHC of the IT Act. The taximpact of which is Rs.21,57,055/-. No Order has been passed as yet and the appeal is currently pending.

Appeals / Writ Petitions filed by the Income Tax Department before the High Court at Madras:

Vishay Sanmar Limited (“VSL”)

1. The Income Tax Department has filed two appeals being T.C.No.16/07 and 17/07 against the order of the ITAT,Chennai dated May 19, 2006 for the assessment year 1997-1998 and 1998-1999. The Appeal has been filedagainst re-computation of deduction u/s 80HHC and treatment of certain items as business profits for computationof deduction u/s 80HHC and 80IA. The tax impact of which is Rs.2,88,023/- and Rs.3,20,403/-. The appeal iscurrently pending.

2. The Income Tax Department has filed two appeals being T.C.No.1488/07 and 1489/07 against the order of the ITAT,Chennai dated June 16, 2006 for the assessment years 1999-00 & 2000-01. The Appeal has been filed against re-computation of deduction u/s 80HHC and treatment of certain items as business profits for computation of deductionU/s 80HHC. The tax impact of which is Rs.36,822/- and Rs.1,99,642/-. The appeal is currently pending.

3. The Income Tax Department has filed an appeal being T.C.No.698/08 against the order of the ITAT, Chennaidated 03.08.2007 for the Assessment Year 2001-02. The Appeal has been filed against the eligibility of serviceincome for computing the deduction under Section 80IA. The tax impact of which is Rs.57,600/-. The appealis currently pending.

B. CENTRAL EXCISE PROCEEDINGS

Central excise cases, appeals, show cause cum demand notices in excess of Rs. 10 lakhs:

Vishay Sanmar Limited (“VSL”)

1. VSL has filed an appeal and stay application before the Commissioner of Central Excise (Appeals) [CCE(A)}inAppeal No: 43 & 44 against the order of the Additional Commissioner in order no: 30/2001 dated September28,2001 confirming duty and penalty. The appeal was filed against the valuation dispute. The [CCE(A)] postedfor hearing of stay application , however vide order in 43&44 dated 06.05.2002 rejected the appeal instead ofdisposing the stay application. Against this VSL filed appeal before the Customs, Excise and Service TaxAppellate Tribunal (CESTAT) in 1343 & 1344 / 2002 and CESTAT by order dated December 10, 2002 setaside the orders of [CCE(A)] and directed the [CCE(A)] to decide the stay application and later on decide themain appeal. The [CCE(A)] disposed the stay application in Appeal No: 01/03 9 M-II) & 2/03(M-II) with adirection to pre-deposit Rs 8,00,000/- vide order dated June 25, 2003. Against the order of the [CCE(A)] VSLfiled Writ Petition before the High Court of Judicature at Madras in 20582 of 2003. The Madras High Court inWPMP No: 25661 of 2003 in WP 20582 of 2003 granted interim direction as not to dismiss the appeal on theground that VSL has not made the pre-deposit. The tax impact of the same is Rs 14,65,775/- and penalty being12,25,335/-. No order has been passed as yet and the appeal is currently pending before [CCE(A)].

Central excise cases, appeals, show cause cum demand notices below Rs. 10 lakhs:

Vishay Sanmar Limited (“VSL”)

1. VSL has filed an appeal before the Commissioner of Central Excise (Appeals), Chennai being No.38 of 2007against the order of the Asst. Commissioner of Central Excise, Perungudi Division, Chennai bearing no:4/2007dated March 30, 2007 towards duty of Rs.4,56,921/- along with equal amount of penalty and interest, on saleof steel scrap alleged to have to have been removed in excess. The matter is pending for hearing before theCommissioner of Central Excise (Appeals), Chennai.

Asco ( India) Ltd (“Asco”)

1. Asco has filed an appeal before the High Court of Judicature at Madras being T.C.No. of 2002 on August 10,2002 for the period 1994-95 to 1998-99, against the order of the CEGAT in E/301/MAS/2001 dated April 11,2002. The appeal is filed against the reversal of Cenvat credit. The tax impact of the same is Rs.1,95,588/- Noorder has been passed as yet and the appeal is currently pending.

C. SERVICE TAX PROCEEDINGSService Tax cases, appeals, show cause cum demand notices below Rs. 10 lakhs:

Asco ( India) Ltd (“Asco”)

1. Show cause notice No.848/2006 dated October 23, 2006 issued by the Assistant Commissioner of Service taxdenying exemption availed by Asco under Notification 32/2004 in respect of service tax paid by Asco as a

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provider of Goods Transport Agency Service for the period from January, 2005 to March, 2006 and demandingpayment of service tax Rs.41,395/-. Asco has replied to the show cause notice by its letter dated November 23,2006. The show cause notice is likely to be withdrawn shortly, in view of the recent clarification from theMinistry of Finance, Department of Revenue being Circular No.F.No.166 / 13 / 2006-CX.4 dated March 12,2007, that the manufacturers are also eligible for the abatement.

2. The AC of Central Excise issued an SCN bearing no:20/2007 dated December 06, 2007 proposing to denyCENVAT credit of service tax amounting to Rs.82,494/- paid on outward transportation of finished goods forthe period July 2005 to Jul 2006. Asco has filed its reply on November 29, 2007. The matter is to be posted forpersonal hearing.

D. SALES TAX PROCEEDINGS

Sales Tax cases, appeals, show cause cum demand notices in excess of Rs. 10 lakhs:

Vishay Sanmar Limited (“VSL”)

1. VSL has filed an appeal before the AAC on November 09, 2006 in respect of Assessment Year 2002-03, againstthe order of the CTO dated August 31, 2006. The appeal is relating to declarations of C Form and on sales return.The tax impact of which is Rs.11, 72,504/-. No order has been passed as yet and the appeal is currently pending.

2. VSL has filed an appeal before the AAC in AP No: 35/06 on May 25, 2006 in respect of Assessment Year 2003-04, against the order of the CTO dated April 20, 2006. The appeal is filed relating to declarations of Form C ,Form H and on sales return. The tax impact of which is Rs.10, 01,576/-. No order has been passed as yet and theappeal is currently pending.

Asco ( India) Ltd (“Asco”)

1. Asco has filed an appeal before the AAC in AP No: 51/06 on May 26, 2006 in respect of Assessment Year2003-04 (CST), against the order of the DCTO dated March 30, 2006. The appeal is relating to non filing ofdeclaration in Form C and Form H. The tax impact of the same is Rs.31, 20,522/-. No order has been passed asyet and the appeal is currently pending.

Sales Tax cases for less than Rs.10 lakhs:

Vishay Sanmar Limited (“VSL”)

1. VSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 304/05 on September 13,2004in respect of Assessment Year 2000-01 ,against the order of the Appellate Assistant Commissioner (AAC) datedMay 27, 2004. The appeal is relating to declarations of C Form. The tax impact of which is Rs.2,95,019/-. STATvide its order dated March 4, 2008 partly remanded back to the Assessing Officer (A O) for fresh considerationand partly dismissed the appeal. The tax impact of issues remanded back to the A.O is Rs.1,10,817/-.

2. VSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) on March 20, 2007 in respect ofAssessment Year 2001-02, against the order of the Appellate Assistant Commissioner (AAC) dated December21, 2006. The appeal is filed relating to declarations of C Form. The tax impact of which is Rs.5,45,339/-. Inthe meanwhile, CTO passed revision order giving effect to the AAC order grating refund of Rs.3,84,372/-.

3. VSL has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 296/06 on June 19, 2006 inrespect of Assessment Year 2001-02, against the order of the Appellate Assistant Commissioner dated March15, 2006. The appeal is filed against denial of concessional rate of sales tax on the disputed turnover, due tonon filing of Form XVII declaration and export sale .The tax impact of which is Rs.3,34,946/- No order hasbeen passed as yet and the appeal is currently pending.

4. VSL has filed an appeal before the AAC in MP No: 18/07 on November 30, 2006 in respect of Assessment Year2002-03 (TNGST) , against the order of the CTO dated July 27, 2006. The appeal is filed against denial ofconcessional rate of sales tax on the disputed turnover, due to non filing of Form XVII declaration and export sale.The tax impact of which is Rs 11,58,850/- No order has been passed as yet and the appeal is currently pending.

5. VSL has filed an appeal before the AAC in AP No: 100/06 on April 10, 2006 in respect of Assessment Year 2003-04 (TNGST), against the order of the CTO dated March 16, 2006. The appeal is filed against denial of concessionalrate of sales tax on the disputed turnover due to non filing of Form XVII declaration and export sale. The taximpact of which is Rs 8,08,385/-. No order has been passed as yet and the appeal is currently pending.

6. VSL has filed an appeal before the AAC on December, 2nd, 2008 in respect of Assessment Year 2002-03(TNGST), against the order of the CTO dated 31.10.08. The appeal is filed against wrong classification of

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sales tax on the disputed turnover due to non filing of Form XVII declaration. The tax impact of which isRs.3,21,808/-and surcharge of Rs.12,561/- No order has been passed as yet and the appeal is currently pending.

7. VSL has filed an appeal before the AAC on December, 2nd, 2008 in respect of Assessment Year 2002-03 (CST), against the order of the CTO dated 31.7.08. The appeal is filed against wrong classification of sales tax on thedisputed turnover due to non filing of Form C declaration. The tax impact of which is Rs.3,38,716/- No orderhas been passed as yet and the appeal is currently pending.

Asco ( India) Ltd (“Asco”)

1. Asco has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 21/07 on October 25, 2006in respect of Assessment Year 2001-02 (CST) , against the order of the AAC dated August 03, 2006. The appealis relating to non filing of declaration in Form H. The tax impact of the same is Rs.1,57,889/-. No order hasbeen passed as yet and the appeal is currently pending.

2. Asco has filed an appeal before the AAC in AP No: 150/06 on May 26, 20006 in respect of Assessment Year2003-04 (TNGST), against the order of the DCTO dated March 30, 2006. The appeal is filed against denial ofconcessional rate of sales tax on the disputed turnover due to non filing of Form XVII declaration and exportsale. The tax impact of the same is Rs.7,84,105/-. No order has been passed as yet and the appeal is currentlypending.

3. Asco has filed an appeal before the AAC in AP No: in respect of Assessment Year 2004-05 (TNGST), againstthe order of the CTO dated 14.2.08. The appeal is filed against denial of concessional rate of sales tax on thedisputed turnover due to non filing of Form XVII declaration and 3(4) liability. The tax impact of the same isRs.5,53,399 & penalty of Rs. 18,208/- The appeal is currently pending.

4. Asco has filed an appeal before the Sales Tax Appellate Tribunal (STAT) in TA No: 282/06 on July 06, 2006 inrespect of Assessment Year 2001-02 (TNGST), against the order of the AAC dated April 05, 2006. The appealis filed against denial of concessional rate of sales tax on the disputed turnover due to non filing of Form XVIIdeclaration and export sale. The tax impact of the same is Rs.45,866/- and the appeal is currently pending.

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GOVERNMENT APPROVALSIn view of the approvals listed below, we can undertake this Issue and our current business activities and no furthermaterial approvals are required from any Government authority or the RBI to continue such activities, save andexcept those approvals, which may be required to be taken in the normal course of business from time to time. Incases, where some of our licenses have expired, we have duly applied for renewals thereof and await the same. Weundertake that we will make necessary applications and make best endeavors to obtain the necessary consents,registrations and permits required under law, from time to time for our business. We have received the followingGovernment approvals that are material to our business:

APPROVALS FOR THE ISSUE1. In-principle approval from the Bombay Stock Exchange Limited dated 11th November 2008 for listing of

the Equity Shares issued pursuant to the Issue.

2. In-principle approval from the National Stock Exchange of India Limited dated 5th January 2009 forlisting of the Equity Shares issued pursuant to the Issue.

3. In-principle approval from the Madras Stock Exchange Limited dated 20th November 2008 for listing ofthe Equity Shares issued pursuant to the Issue.

GENERAL(1) Corporate Identification Number (CIN): L24230TN1985PLC011637.(2) Permanent Account Number (PAN): AAACC3000F.(3) Tax deduction Account Number (TAN): CHEC00051C.(4) Certificate of Importer-Exporter Code (IEC) Number 0488016452 issued on June 8, 1988 by the Office

of Joint Director General of Foreign Trade.(5) Certificate of Registration dated October 9, 2007 issued by the Commercial Tax Officer, Omalur registering

our Company as a dealer under the Tamil Nadu Value Added Tax Act, 2006 with Tax Payer’s IdentificationNo. - 33873241159 with effect from October 9, 2007.

(6) Certificate of Registration No: 417739 dated May 25, 1990 issued by the Commercial Tax Officer, Omalurcertifying that our Company is registered as a dealer under Section 7 (1) / 7 (2) of the Central Sales TaxAct, 1956.

(7) Service Tax Code (Registration No.): AAACC3000FST009 dated November 28, 2007 issued by theSuperintendent (Service Tax), Service Tax Commissionerate, Chennai Division for our registered officefor input service distribution, intellectual property services other than copyright, business auxiliaryservices, renting of immovable property services and consulting engineer.

(8) Provident Fund Registration Nos. TN/SLM/0480, TN 6236ATN/SM/5555, TN/SM/19337, TN/TR/32074,TN/SLM/4717 and TN/6236 under the Employees’Provident Funds and Miscellaneous Provisions Act, 1952.

(9) ESI Code/Registration Nos. 51560331, 51961531A, 51956631, 512220734, 5552195034 and 51961531under the Employees’ State Insurance Act, 1948.

I. PLANT / UNIT APPROVALS

Mettur Dam, Salem, Tamil Nadu, - Plant I1. Factory License No. 39042, renewal dated December 12, 2008 issued by the Deputy Chief Inspector of

Factories, Salem is valid till December 31, 2009.

2. Amended Certificate of Registration R.C. No. SLM 16 issued under the Contract Labour (Regulation andAbolition) Act, 1970 and the Tamil Nadu Contract Labour Rules, 1975 dated September 29, 2006 fromDeputy Chief Inspector of Factories, Salem is for maintenance and repairs of pipelines / loading & unloadingof cylinders, security, electrical, gardening and house keeping / filter house maintenance, steel fabrication,civil, and repair & maintenance of plant and machineries.

3. Certificate of Central Excise Registration No. AAACC3000FXM001 dated January 13, 2003 from the DeputyCommissioner of Excise, Salem I Division certifies that our Plant I is registered as a manufacturer of excisablegoods.

4. Certificate of Central Excise Registration No. AAACC3000FXD001 dated January 13, 2003 from the DeputyCommissioner, Salem I Division that our Company is registered as a dealer of excisable goods.

5. Service Tax Code (Registration No.) AAACC3000FST002 dated June 29, 2007 issued by the Superintendent(Service Tax), Salem II Division for Plant I.

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6. Supplemental Agreement dated January 10, 2002 entered into between the Tamil Nadu Electricity Boardand our Company re-fixing the sanctioned demand at 300 kVA under HT Service Connection No. 22.

7. Supplemental Agreement (Additional Demand) dated November 2, 2005 entered into between the TamilNadu Electricity Board and our Company re-fixing the sanctioned demand at 500 kVA under HT ServiceConnection No. 4.

8. Authorization No. 2612 /F dated August 8, 2004 issued by the Tamil Nadu Pollution Control Board, foroperating a facility for collection and storage of hazardous waste (chemical sludge from waste water treatment– 150 T / year) in accordance with the Hazardous Wastes (Management and Handling) Rules, 1989, is validfor a period of 5 years from the date of the issue.

9. Letter No. T 11/TNPCB/F-46332/RL/CHEM/2006 dated May 16, 2006 from the Chairman, Tamil NaduPollution Control Board granting permission for the installation of incinerator for incinerating HFC 23 (R23). Pursuant to the above mentioned permission, our Company has vide letters dated March 21,2007 andMay 23,2007 requested the TNPCB to issue necessary amendments to the consent order under the Air(Prevention and Control of Pollution) Act,1981 by including the stack attached to the HFC-23 incinerator.

10. License No. G/SC/TN/06/147 (G 2849) dated September 26, 2006 from the Joint Chief Controller ofExplosives, Chennai for the possession of cylinders filled with compressed gas (Hydrogen Fluoride – 39Nos.) is valid till September 30, 2009.

11. Letter No. 35/2/2004/PMU/OC dated July 28, 2008 from the Ministry of Environment & Forests (OzoneCell) allots the Production Quota of 58.857 MT for Chlorofluoro Carbons (CFCs) to be produced by ourCompany during January – July 2008, for the Production Quota required post July, 2008, our Company shallobtain the same from the Ministry of Environment& Forests.

12. Letter No. F. 4/2/2006- CCC dated March 10, 2006 from the Ministry of Environment & Forests conveyingHost Country Approval to the CDM project- “Destruction of HFC-23 at refrigerant (HFC-22) manufacturingfacility of our Company” at Mettur.

13. Certificate of verification under the Standards of Weights & Measures (Enforcement) Act, 1985 issued bythe Assistant Controller Inspector of Legal Meteorology for various weights, measures etc. belonging to thePlant, from time to time.

14. Certificates issued by the Deputy Chief Inspector of Boilers, Coimbatore from time to time stating that theboilers are permitted to be worked at a maximum pressure as stated therein.

15. Letter No.CIL:105(91)/Amend/96-LA II issued by the Government of India, Ministry of Industry, Departmentof Industrial policy and Promotion, Secretariat for Industrial Approvals read with Letter No. DGTD /SR/21(99)/19(14)/86/3005 dated August 25, 1986 issued by Directorate General of Technical Development,Government of India granting permission to our Company to manufacture Chlorofluro Methane (RefrigerantGases) up to an annual capacity of 2500 metric tonnes.

16. License No. S/HO/TN/03/125 (s 2551) dated January 11, 2008 from the Joint Chief Controller of Explosives,Chennai for the storage of compressed gas in pressure vessels (Hydrogen Fluoride – 3 Nos.) is valid tillMarch 31, 2010.

17. License No. S/HO/TN/03/230 (s 2763) dated June 27, 2008 from the Joint Chief Controller of Explosives,Chennai for the storage of compressed gas in pressure vessels (R11 – 1 Nos., R12 [Dichlorodifluoromethane]– 3 Nos., R22 – 2 Nos.) is valid till March 31, 2010.

18. License No. G/HO/TN/06/48 (G 305) dated April 15, 2008 from the Joint Chief Controller of Explosives,Chennai for the storage of cylinders filled with compressed gas (Chlorodifluoromethana – 3100 Nos.) isvalid till September 30, 2009.

19. License No. G/HO/TN/05/48 (G 305) dated April 15, 2008 from the Joint Chief Controller of Explosives, Chennaifor filling compressed gas in cylinders (Chlorodifluoromethana – 2 Nos.) is valid till September 30, 2009.

Mettur Dam, Salem, Tamil Nadu - Plant II20. Factory License No. 39044, renewal dated December 12, 2008 issued by the Deputy Chief Inspector of

Factories, Salem is valid till December 31, 2009.

21. Challan for the Renewal of Canteen Licence dated February 2, 2008 for Veerakkalpudur Town Panchayat,Kunjandiyur granted to our Company for the year 2008-2009 evidencing payment for the renewal.

22. Amended Certificate of Registration dated February 8, 2007 is issued by the Deputy Chief Inspector ofFactories under the Contract Labour (Regulation and Abolition) Act, 1970 for registration of contractors.

23. The Executive officer, Veerakalpudur, Town Panchayat vide letter dated April 10, 2007 (Ref No: 79/2007)valid till April 4, 2010 has accorded his consent for construction of certain buildings subject to conditionsthat the construction will be completed within a period of 36 months and our Company shall not encroachupon any space in the street to the disadvantage of the public.

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24. Receipt No. 032119 dated February 16, 2008, for the Renewal of the Pump House License issued to ourCompany for running 125 HP Motors (2 nos.).

25. Certificate of Central Excise Registration No. AAACC3000FXM012 dated September 8, 2006 from theAssistant Commissioner of Central Excise, Chennai that our Company is registered as a manufacturer ofexcisable goods.

26. Certificate of Registration No. AAACC3000FST003 dated February 3, 2005 from the Superintendent (ServiceTax), Salem II Division certifying that our Company is registered for the payment of service tax on theservice of transport of goods by road.

27. Memorandum of Agreement dated April 7, 1999 between the Governor of Tamil Nadu and our Company inrespect of grant of right to take water from the Stanley Reservoir, Salem District for the purpose of thefactories of our Company for a term of ten years between August 9, 1999 and August 8, 2009.

28. Supplemental Agreement dated February 21, 2000 between Tamil Nadu Electricity Board and our Companyin respect of reducing the Sanctioned Demand from 5000 kVA (as sanctioned pursuant to Agreement datedNovember 24, 1997 between the parties under HTSC No. 27) to 4200 kVA.

29. Supplemental Agreement dated January 10, 2002 between Tamil Nadu Electricity Board and our Companyin respect of reducing the Sanctioned Demand from 250 kVA (as sanctioned pursuant to Agreement datedFebruary 10, 1978 between the parties under HTSC No. 35) to 205 kVA.

30. Order No. G.O. Ms. No: 18 dated July, 24 1998 passed by Chairman, Tamil Nadu Electricity Board grantingpermission under Section 28 of the Indian Electricity Act, 1910 for parallel operation of their 2 number(4MW and 6 MW) captive D.G. sets with Tamil Nadu Electricity Board Grid.

31. Letter No. MTR. 12/CEIG/C1/98 dated August 7, 1998 from the Chief Electrical Inspector to the Government,Chennai to our Company issuing the Safety Certificate under Rule 63 of the Indian Electricity Rules, 1956and granting permission for electrical installations at the Plant II premises.

32. Authorization No. 458/R together with Form -2 dated August 11, 2004 from the Tamil Nadu PollutionControl Board to operate a facility for collection, treatment, storage and disposal of hazardous waste for aperiod of 5 years.

33. Letter No. T9TNPCB/F 864/ SLM/R/W dated October 14, 2005 from the Tamil Nadu Pollution ControlBoard to our Company granting amendment to the consent under Section 25 of the Water (Prevention andControl of Pollution) Act, 1974 and Section 21 of The Air (Prevention and Control of Pollution) Act, 1981for enhancement in production quantity of PVC Resins and By Product HC Acid

34. Renewal of Consent, Order No. 9951 dated May 28, 2008 issued to our Company by the Tamil Nadu PollutionControl Board for Proceeding No. T9/TNPCB/F 864/RL/SLM/W/98 to discharge sewage or effluent under theWater (Prevention and Control of Pollution) Act, 1974. The consent is valid up to September 30, 2008.

35. Renewal of Consent, Order No. 7140, dated May 28, 2008 issued by the Tamil Nadu Pollution Control Boardfor Proceeding No. F.SLM0034/DEE/TNPCB/SLM/A/2007 for the existing operation of the plant under theAir (Prevention and Control of Pollution) Act, 1974. The consent is valid up to September 30, 2008.

36. Renewal letter dated May, 15 2008 for Licence No. P/ HQ/TN/15/1284 (P 14991) to store Petroleum ProductClass “B” and “C” up to December 12, 2010.

37. Renewal of Licence No. G/SC/TN/06/1412 (G 18458) issued by the Ministry of Commerce and Industry, Petroleumand Explosives Safety Organization in respect of possession of cylinders (68 Nos.) filled with compressed chlorinegas subject to the provisions of the Indian Explosives Act, 1884 is valid up to September 30, 2014.

38. Form DL 2 No. 2/91-92 dated August 1, 1991 under Section 18 of the Tamil Nadu Prohibition Act, 1937issued by District Revenue Officer, Salem granting licence to possess denatured spirit, the licence is validtill March 31, 2009.

39. Order No. 2042764 dated August 2, 2002 passed by the Joint Commissioner- II, Prohibition and Excisepermitting the use of new storage tanks of Tank 14AA and Tank 15AA.

40. Order dated April 1, 1999 passed by the Collector’s Office, Salem permitting the use of storage tank of TK9B for the storage of denatured spirit.

41. Order dated May 18, 2000 passed by the District Revenue Officer, Salem permitting the use of storage tank16B for storage of denatured spirit instead of ethylene dichloride.

42. Order dated September 29, 1999 passed by the District Revenue Officer, Salem permitting the use of storagetank 8B for storage of denatured spirit.

43. Order dated October 4, 1991 passed by the District Revenue Officer, Salem permitting the use of storagetank 17B for storage of alcohol.

44. Order dated September 19, 1990 passed by the District Revenue Officer, Salem permitting the use of storagetank for storage of ethylene dichloride.

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Product Capacity

Poly Vinyl Chloride 60000 Tonnes

45. Certificate of verification under the Standards of Weights & Measures (Enforcement) Act, 1985 issued bythe Office of the Deputy Inspector of Labour for various weights, measures etc. belonging to the Plant, fromtime to time.

46. Certificate issued by the Deputy Chief Inspector of Boilers, Coimbatore from time to time stating that theboilers are permitted to be worked at a maximum pressure as stated therein.

47. ISO 14001 : 2004 Certificate No. 12 104 23529 TMS issued by the Certification Body of TUV ManagementService GmbH certifying that our Company has established and applies as an Environmental ManagementSystem for manufacture of ethylene dichloride, vinyl chloride and poly vinyl chloride and valid until December10, 2010.

48. Industrial Entrepreneur Memorandum (“IEM”) Acknowledgement bearing No. 5981/SIA/IMO/1995 datedDecember 1, 1995 issued by Government of India, Ministry of Industry, Secretariat for Industrial Approvals,Entrepreneurial Assistance Unit, New Delhi for the manufacture of the following at Veerakkalpudur,Ramannagar PO, Mettur dam, Salem, Tamil Nadu:

49. Order No. K. Dis. 86299/98/AB 3 dated December 31, 1998 passed by the District Revenue Officer, Salempermitting the use of storage tank 8 B for storage of denatured spirit instead of ethylene dichloride.

50. Order dated August 2, 2002 passed by the Joint Commissioner (Prohibition and Excise) Chepauk, Chennaiapproving the use of new storage tanks (14AA and 15AA) as well as permitting one additional abkari lock.

51. Amendment R.C. No. SLM 13 of Registration Certificate dated February 28, 2007 amending the list ofContractors that have been employed by our Company.

52. License No. DL 2/91-92 dated August 1, 1991 issued by the District Revenue Officer, Salem for the storage/procurement of Denatured Spirit with capacity of 255 Lakh litres, renewed for 2008-2009 up to March 31, 2009.

53. Certificate of verification No. 1365874 dated March 10, 2002 under the Standards of Weights & Measures(Enforcement) Act, 1985 issued by the Deputy Inspector of Labour, Storage Tank, Coimbatore, for TankNo.15B having the capacity of 854000 litres. There has been a calibration held on March 19, 2007 and thenext calibration is to be held on March 18, 2012.

Mettur Dam, Salem, Tamil Nadu - Plant III54. Factory License No. 39043, renewal dated December 12, 2008 issued by the Deputy Chief Inspector of

Factories, Salem is valid till December 31, 2009.

55. Amended Certificate of Registration dated March 27, 2007 issued under the Contract Labour (Regulationand Abolition) Act, 1970 and the Tamil Nadu Contract Labour Rules, 1975 from the Deputy Chief Inspectorof Factories, Salem for our Plant III is for various kinds of works in which contract labour is employed or isto be employed.

56. The Executive officer, Veerakalpudur Town Panchayat vide letter dated April 5, 2007 (Ref No: 47/2007)valid till April 4, 2010 has accorded his consent for construction of certain buildings subject to conditionsthat the construction will be completed within a period of 36 months and our Company shall not encroachupon any space in the street to the disadvantage of the public.

57. The Executive officer, Veerakalpudur, Town Panchayat vide letter dated April 5, 2007 (Ref No: 75/2007)valid till April 4, 2010 has accorded his consent for construction of certain buildings subject to conditionsthat the construction will be completed within a period of 36 months and our Company shall not encroachupon any space in the street to the disadvantage of the public.

58. Certificate of Central Excise Registration No. AAACC3000FXM007 dated January 13, 2003 from the DeputyCommissioner, Salem I Division that our Company (Plant III) is registered as a manufacturer of excisable goods.

59. Service Tax Code (Registration No.). AAACC3000FST004 dated June 29, 2007 issued by the Superintendent(Service Tax), Salem II Division in the name of our Company (Plant III).

60. Agreement dated February 22, 2001 between our Company and the Governor of Tamil Nadu in respect ofgrant of right to take water from the Stanley Reservoir, Salem District for the purpose of the factories of ourCompany for a term of ten years between April 7, 2001 to April 6, 2011.

61. Supplemental Agreement dated November 9, 2006 between Tamil Nadu Electricity Board and our Companyin respect of increase of the sanctioned demand from 9,500 kVA to 26,000 kVA.

62. Letter No. 1776 dated September 15, 1989 addressed by the Secretary to the Government of Tamil Nadu tothe Chairman of Tamil Nadu Electricity Board approving the proposal of the Tamil Nadu Electricity Boardby permitting Mettur Chemicals and Industrial Corporation Ltd. (now merged with our Company) to operate

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two 11 KV captive power generating set with an aggregate capacity of 6.5 MV each in parallel with theTamil Nadu Electricity Board grid.

63. Letter No. MTR.50/D3/89 dated October 12, 1989 addressed by Chief Electrical Inspector to the Government,Madras to Thiru Mettur Chemicals and Industrial Corporation Ltd. under Rule 63 of the Indian ElectricityRules 1956 for commissioning the electrical installations at the plant premises.

64. Letter No. SEI/cbe/3523-A/E1/90 dated March 29, 1991 addressed by Chief Electrical Inspector to theGovernment, Madras to Thiru Chemicals and Plastics India Ltd. under Rule 63 of the Indian ElectricityRules 1956 for commissioning the electrical installations at the plant premises.

65. Letter dated January 2, 1997 addressed by the Chairman Tamil Nadu Electricity Board and the Chief ElectricalInspector to the Government to our Company to operate additional three 11KV 6MW each captive dieselgenerators in parallel with the Tamil Nadu Electricity Board grid.

66. Letter No. MTR.50/C1/97 dated February 5, 1997 addressed by Chief Electrical Inspector to the Government,Madras to our Company under Rule 63 of the Indian Electricity Rules 1956, for commissioning the electricalinstallations at the plant premises.

67. Letter No. MTR.50/CEIG/2006-1 dated October 17, 2006 addressed by Chief Electrical Inspector to theGovernment, Madras to our Company under Rule 63 of the Indian Electricity Rules 1956, for commissioningthe electrical installations at the plant premises.

68. Letter No. 12689/SE/Comml./AEE.2/CR1105/D210/2001 dated September 4, 2002 addressed by theChairman Tamil Nadu Electricity Board, to our Company granting revised approval for wheeling of theenergy generated from our Company’s 30.5MW at HTSC 23 and 10MW at HTSC 27 through the TamilNadu Electricity Board to the sister companies of our Company.

69. Letter No. CE/Comml./EE.1/AEE.2/D 289/ 2003 dated December 30, 2003 addressed by the Chairman,Tamil Nadu Electricity Board to our Company granting approval for deletion of HTSC No. 2272 of ChennaiElectricity Distribution Circle from the list of companies permitted for adjustment of wheeling of energygenerated from our Company’s 10MW at HTSC 27 through the Tamil Nadu Electricity Board to the sistercompanies of our Company.

70. Agreements (5 Nos.) dated September 7, 1999 between the Tamil Nadu Electricity Board and our Companyin respect of installations of (i) three windmills of 225kW capacity each; (ii) eight windmills of 225kWcapacity each; (iii) five windmills of 225kW capacity each; (iv) eleven windmills of 225kW capacity each;and (v) nine windmills of 225kW capacity each at Purandampalayam and Varapatti villages and to permitour Company to transmit the power generated through the Tamil Nadu Electricity Board transmission line toour Company’s factory premises at Mettur Dam.

71. Supplementary Agreements (5 Nos.) dated August 20, 2000 between the Tamil Nadu Electricity Board and ourCompany to revise the wheeling and banking periods for the surplus energy available from (i) the three windmillsof 225 kW capacity each; (ii) eight windmills of 225 kW capacity each; (iii) five windmills of 225 kW capacityeach; (iv) nine windmills of 225 kW capacity each; and (v) eleven windmills of 225 kW capacity each.

72. Order dated May 5, 2006 in proceeding No. T10/TNPCB/63208/SLM/W passed by the Tamil Nadu PollutionControl Board under Section 27 of the Water (Prevention and Control of Pollution) Act, 1974 grantingconsent for conversion of LSHS based captive power plant to coal based captive power plant by way ofamendment to the existing consent order. The said amendment to the consent order was revoked by TNPCBin January 2008 alleging certain violation by our Company. The revocation order of TNPCB is subjectmatter of a writ petition filed by our Company in respect of which proceedings have recently been completed.The High Court of Madras vide its orders dated 18th September 2008 had set aside the revocation order andremanded the subject matter back to the TNPCB for fresh consideration.

73. Order dated May 5, 2006 in proceeding No. T10/TNPCB/63208/SLM/A passed by the Tamil Nadu PollutionControl Board under Section 21 of the Air (Prevention and Control of Pollution) Act, 1974 granting consentfor conversion of LSHS based captive power plant to coal based captive power plant by way of amendmentto the existing consent order. The said amendment to the consent order was revoked by TNPCB in January2008 alleging certain violation by our Company. The revocation order of TNPCB is subject matter of a writpetition filed by our Company in respect of which proceedings have recently been completed. The HighCourt of Madras vide its orders dated 18th September 2008 had set aside the revocation order and remandedthe subject matter back to the TNPCB for fresh consideration.

74. Letter of Authorization No. 450/R dated July 29, 2004 addressed by the Tamil Nadu Pollution ControlBoard for operating a facility for collection, storage and disposal of hazardous wastes under Rule (3) and 5of the Hazardous Wastes (Management and Handling) Rules, 1989.

75. Licence No. G/HO/TN/05/22(G256) dated February 21, 2006 (old License No. GC(SC)F-30/TN datedJune 27, 1986) by the Government of India, Ministry of Commerce & Industry, Petroleum and Explosives

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Product Capacity per annum

Chloromethane (Methyl Chloride andChloroethane (Ethyl Chloride) 22,000 TONNES

Hydrochloric Acid 20,000 TONNES

Product Capacity per annum

Caustic soda using membrane cell technology process 50400 TONNES

Chlorine gas: 52140 TONNES

Hydrogen Gas:

Proposed 105 TONNES

Existing 1160 TONNES

Total: 1265 TONNES

Safety Organisation to fill compressed chlorine gas in cylinders subject to the provisions of the IndianExplosives Act, 1884, is renewed up to September 30, 2011.

76. Licence No. G/HO/TN/06/22(G256) dated February 21, 2006 (old License No. GC(SC)S-180/TN datedJune 27, 1986) by the Government of India, Ministry of Commerce & Industry, Petroleum and ExplosivesSafety Organisation to possess cylinders filled with compressed chlorine gas subject to the provisions of theIndian Explosives Act, 1884, is renewed up to September 30, 2011.

77. Approval No. CC (SC) F-30/TN dated December 24, 1993 issued by the Government of India, Departmentof Explosives for carrying out cylinder testing under rule 39(2) of the Gas Cylinder Rules, 1981.

78. Licence dated March 31, 1988 issued by the District Revenue Officer under Rule 9(1) of the Tamil NaduDenatured Spirit Methyl Alcohol and Varnish (French Polish) Rules, 1959, to possess and use methylatedspirit/ methyl alcohol, renewed up to March 31, 2009.

79. Renewal letter dated March 18, 2008 to our Company by which License No. P/HQ/TN/15/1816(P15505)for Existing Petroleum Class “C” Installation at S.No 11, Veerakkalpudur (V) District Salem, is renewed upto December 31, 2010.

80. RL License No.4/87-88 issued by the District Collector, Salem for storage/ possession and use of stipulatedquantities of Rectified Spirit and absolute alcohol, is renewed up to March 31, 2009.

81. Renewal of DL II License No 311307 dated March 24, 2008 issued by the District Revenue Officer, Salemfor storage/ possession of Methylated Spirit (60 liters per annum) is renewed up to March 31, 2009.

82. Certificate of verification under the Standards of Weights & Measures (Enforcement) Act, 1985 issued bythe Deputy Chief Inspector of Labour II Circle, Salem from the Assistant Controller Inspector of LegalMeterology for various weights, measures etc. belonging to the Plant, from time to time.

83. Certificates issued by the Deputy Chief Inspector of Boilers, Coimbatore from time to time stating that theboilers are permitted to be worked at a maximum pressure as stated therein.

84. ISO 14001: 2004 Certificate No. 12 104 25559 TMS issued by the Certification Body of the TUV SUDManagement Service GmbH to our Company certifying that our Company has established and applies anenvironmental management system for manufacture of caustic soda, chlorine, hydrogen, ethyl silicate andchlorinated solvents for industrial application.

85. Letter No.AAI/20012/260/2007-ARI (NOC) dated September 28, 2007 issued by the Manager (ATC), AirportsAuthority of India, informing our Company of their no –objection to the construction of a proposed chimneyby our Company at Plant III as per the terms stated therein. This no-objection certificate is valid for a periodof three years from the date of its issue.

86. Letter No.NM (D2)/16253/2007 dated July 27, 2007 issued by the Deputy Chief Inspector of Factories,informing their consent to the construction of the proposed coal based power plant by our Company at PlantIII as per the terms stated therein.

87. Industrial Entrepreneur Memorandum (“IEM”) Acknowledgement bearing No. 5982/SIA/IMO/95 datedDecember 1, 1995 issued by Government of India, Ministry of Industry, Secretariat for Industrial Approvals,Entrepreneurial Assistance Unit, New Delhi for the manufacture of the following at Veerakkalpudur,Ramannagar PO, Metturdam, Salem, Tamil Nadu:

88. Industrial Entrepreneur Memorandum (“IEM”) Acknowledgement bearing No. 5786/SIA/IMO/2006 datedNovember 17, 2006 ( as amended on December 12, 2006) issued by Government of India, Ministry ofCommerce & Industry, Secretariat for Industrial Assistance, Public Relations & Complaints Section, NewDelhi for the manufacture of the following at Mettur Dam, Salem, Tamil Nadu.

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89. Industrial Entrepreneur Memorandum (“IEM”) Acknowledgement bearing No. 5981/SIA/IMO/1995 datedDecember 1, 1995 issued by Government of India, Ministry of Industry, Secretariat for Industrial Approvals,Entrepreneurial Assistance Unit, New Delhi for the manufacture of the following at Veerakkalpudur,Ramannagar PO, Metturdam, Salem, Tamil Nadu:

90. Approval No. NM (D2)/16235/2007 dated July 27, 2007 granted to our Company for the drawing of coalbased power plant by Chief Inspector of Factories, Chepauk (subject to conditions enclosed therein).

91. DL II License bearing No. 2/2003-04 dated December 4, 2003 issued by the Commissioner of Prohibitionand Excise, Chennai to our Company to possess 41,77,215 litres of methyl alcohol at a time and 1,67,08,860litres of methyl alcohol in a year.

92. Letter No.PL-III/20-8/7615 dated January 30, 2008 from our Company to the District Environmental Engineer,Tamil Nadu Pollution Control Board for renewal of consent given under Consent Order No.100, ProceedingNo. T10/TNPCB/F-63203/RL/SLM/A/2007 dated April 26, 2007 under the Air (Prevention and Control ofPollution) Act, 1981 and Consent Order No.108, Proceeding No. T10/TNPCB/F-63203/RL/SLM/W/2007dated April 26, 2007 under the Water (Prevention and Control of Pollution) Act, 1974.

93. License No. S/HO/TN/03/229 (S2757) dated October 18, 1985 (old Licence No. PV(SC)S-2/TN/MA 592/PV) granted by the joint Chief Controller of Explosives, Petroleum and Explosives Safety Organisation(PESO), Chennai, for Storage of up to 35 Cubic M of Methyl Chloride is renewed up to March 31, 2011.

Mettur Dam, Salem, Tamil Nadu - Plant IV94. Factory License No. 39045, renewal dated December 12, 2008 issued by the Deputy Chief Inspector of

Factories, Salem is valid till December 31, 2009.

95. Amended Certificate of Registration R.C. No. SLM 38 dated January 23, 2007, issued under the ContractLabour (Regulation and Abolition) Act, 1970 and the Tamil Nadu Contract Labour Rules, 1975 from DeputyChief Inspector of Factories, Salem is for PVC Fabrication & Poly Breaking, Security, Gardening andMaintenance of Landscape, Material Movement, Maintenance of drains and other related works, CivilConstruction, and Civil and Structural Fabrication and Erection Works.

96. Certificate of Central Excise Registration No. AAACC3000FXM002 dated January 13, 2003 from the DeputyCommissioner, Salem I Division, that our Company (Plant IV) is registered as a manufacturer of excisable goods.

97. Service Tax Code (Registration No.) AAACC3000FST005 dated June 29, 2007 issued by the Superintendent(Service Tax), Salem II Division in the name of our Company (Plant IV).

98. Supplemental Agreement dated August 18, 2002 entered into between the Tamil Nadu Electricity Board andour Company re-fixing the sanctioned demand at 205 kVA under HT Service Connection No. 10.

99. License No. G/SC/TN/06/773 (G 4117) dated October 7, 1998 from the Joint Chief Controller of Explosives,Chennai for the possession of cylinders filled with compressed gas (ARGON-200 Nos.) is valid till September30, 2009.

100. Certificates issued by the Deputy Chief Inspector of Boilers, Coimbatore from time to time stating that theboilers are permitted to be worked at a maximum pressure as stated therein.

101. Renewal of License No. G/SC/TN/06/773 dated March 27, 2007 by Controller of Explosives for storage isvalid till September 30, 2009.

102. Panchayat license renewed for manufacture of silicon wafers, mono crystals, poly silicon for the year 2008-09.

Krishnagiri, Tamil Nadu – Industrial Alcohol - Plant103. Certificate No. 64/92 dated July 1, 1992 issued by Superintendent of Central Excise, Hosur according its

consent to our plant to manufacture Fusel Oil, Yeast and Ethyl Alcohol (Denatured).

104. Order of the District Revenue Officer, Krishnagiri in Roc. No. 6606/2008/N1 dated April 10, 2008 renewingthe M.L. 4/6 License No. 3/78-79, issued to our Company for the possession of molasses not exceeding15,000 tonnes at any time for the purpose of manufacture of Industrial Alcohol, up to March 31, 2009.Subject to the condition that the Company should start the functioning of the factory with in the renewalperiod for the year 2008-2009. .

105. Certificate of verification under the Standards of Weights & Measures (Enforcement) Act, 1985 issued bythe Assistant Controller Inspector of Legal Meterology for various weights, measures etc. belonging to thePlant, from time to time.

106. Certificates issued by the Deputy Chief Inspector of Boilers, Salem from time to time stating that the boilersare permitted to be worked at a maximum pressure as stated therein.

Product Capacity per annum

Hydrochloric Acid 110000 TONNES

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Panruti, Tamil Nadu – Industrial Alcohol - Plant

107. Factory License No. 21974 dated November 30, 2007 issued by the Deputy Chief Inspector of Factories,Cuddalore is valid till December 31, 2009.

108. Amendment to R.C. No. 19 / SAT / 1982 dated May 8, 2007 from the Deputy Chief Inspector of Factories,Cuddalore under the Contract Labour (Regulation and Abolition) Act, 1970 for addition of fabricationworks, civil work, painting work, fencing work, canteen running and deletion of civil and painting work andkalasi work at maintenance department and casual nature of miscellaneous jobs from the existing works inthe certificate.

109. Central Excise Registration Certificate No. AAACC3000FXM005 from the Superintendent of Central Excise,Range 1, Cuddalore certifies that our Company is registered for manufacture at Kadampuliyur, Cuddalore.

110. Letter No. IV/ 16/ 13/ 2003 –STC dated January 31, 2005 from the Superintendent of Central Excise allottingService Tax Code No. AAACC3000FST001 to IAP II, Kadampuliyur for the services of good transportagency.

111. H.T. Agreement Form dated May 23, 2006 between Cuddalore Electricity Distribution Circle, TNEB,Cuddalore and our Company for the supply of electrical energy at the factory at Kadampuliyur, Panruti forthe purpose of light and power and for a maximum demand not exceeding 600 KVA.

112. Certificate of Registration No. CUD 05 / 2003-04 dated July 21, 2003 from the Electrical Inspector, Cuddalorecertifies that captive generating plants of 937.5 kVA and 320 kVA, the particulars of which are endorsedtherein has been registered. This certificate is issued subject to the compliance with the conditions set outunder Section 5 of the Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003. Meteringarrangements shall be made in conformity with the rules framed under the Act and conditions specified inthe certificate.

113. Certificate of Registration No. CUD 73 / 2004-05 dated October 27, 2004 from the Electrical Inspector,Cuddalore certifies that captive generating plant of 125 kVA, the particulars of which are endorsed thereinhas been registered. This certificate is issued subject to the compliance with the conditions set out underSection 5 of the Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003. Metering arrangementsshall be made in conformity with the rules framed under the Act and conditions specified in the certificate.

114. Authorization No. 1512 dated February 18, 2004 issued by the Tamil Nadu Pollution Control Board, foroperating a facility for collection, storage and disposal of hazardous waste (used/ spent oil from industrialoperations using mineral synthetic oil as lubricant in hydraulic systems or other applications- 1200 litre /year) in accordance with the Hazardous Wastes (Management and Handling) Rules, 1989, is valid for aperiod of 5 years from the date of the issue.

115. Renewal of Consent Order No. 2972 dated May 2, 2008 under the Air (Prevention and Control of Pollution)Act, 1981 to IAP II from the Tamil Nadu Pollution Control Board authorizing to operate the industrial plantin the Air Pollution Control area as notified by the Government and to continue to make existing dischargeof omissions from the stacks / chimneys, is valid till March 31, 2009.

116. Renewal of Consent Order No. 5145 dated May 2, 2008 under the Water (Prevention and Control of Pollution)Act, 1974 to IAP II from the Tamil Nadu Pollution Control Board authorizing to continue to make dischargeof sewage and trade effluent, is valid till March 31, 2009.

117. Letter No. P & E III (1)/3207/2008 dated May 6, 2008 from the Commissioner (Prohibition and Excise),Chennai renewing the Distillery License No. D2/19253/81 for the year 2008-2009.

118. Order No. R 2/4490/2008 dated April 8, 2008 of the District Revenue Officer, Cuddalore states that M.L. 4/6 bearing License No. 4/83-84 held by our Company for the possession of molasses is renewed for the year2008-2009 and is valid up to March 31, 2009.

119. Certificate of verification under the Standards of Weights & Measures (Enforcement) Act, 1985 issued bythe Assistant Controller Inspector of Legal Meterology for various weights, measures etc. belonging to thePlant, from time to time.

120. Certificates issued by the Inspector of Boilers, Cuddalore from time to time stating that the boilers arepermitted to be worked at a maximum pressure as stated therein.

121. The Regional Provident Fund Commissioner Order (Ref. No.TN/TR/32074/SRO/ENP.II/CUD. III/94) datedNovember 18, 1994 allotting at the request of our Company a separate code number to their unit atKadampuliyur, Cuddalore being TN/TR/32074 with effect from November 1, 1991 purely for administrativeand accounting convenience and for all purposes and for complying with the provisions of the Employees’

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Provident Fund and Miscellaneous Provisions Act, 1952 and the Schemes framed thereunder the unit atCuddalore shall be treated as a part and parcel of our Company.

Vedaranyam, Tamil Nadu

122. Certificate of Registration No. A/4942/2006 issued under the Contract Labour (Regulation and Abolition)Act, 1970 dated February 26, 2007 from Registering Officer under the Contract Labour (R&A) Act, 1970 isextended to all workmen.

123. Central Excise Registration No. AAACC3000FXM006 dated September 12, 2003 from the AssistantCommissioner, Central Excise Division, Karaikal certifies that our Company has been registered formanufacturing of excisable goods.

124. Certificate of Registration No. AAACC3000FST007 dated March 03, 2005 under section 69 of the FinanceAct, 1944 issued by the Superintendent (Service Tax), Central Excise Division, Karaikal stating that ourCompany is registered for the payment of service tax.

125. The Secretary, Revenue Department, Government of Tamil Nadu vide its letter No. G.O.No.635 dated October11, 1994 renews the lease of swamp lands of 3500 acres for a period of 20 years beginning July 1, 1993.

126. Certificate of Registration NGPT -03/ 2003-04 dated August 20, 2003 from the Electrical Inspector,Nagapatinam certifies that the two captive generating plants of 200 KVA each, the particulars of which areendorsed therein have been registered. This certificate is issued subject to compliance with the conditionsset out under Section 5 of the Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003.

127. Approvals of the Electrical Inspector, Nagapattinam vide Letter. No. NGPT 376/ ENGT/ 2005 dated June 9,2005 under Rule 63 of the Indian Electricity Rules, 1956 to commission the electrical installations inspectedand being a transformer having 11000/ 433 volts, rating 500 KVA and MV Panel Extension details of whichare provided in the annexure to the approval letter at our Company’s Chlorochemicals Division, II Point ofSupply, Vedaranyam, Nagapattinam (District).

128. Agreement dated August 21, 1998 entered into between the Tamil Nadu Electricity Board and our Companyre-fixing the sanctioned demand from 148.75KVA to 130 KVA under HT Service Connection No. 04.

129. Agreement dated August 21, 1998 entered into between the Tamil Nadu Electricity Board and our Companyre-fixing the sanctioned demand at 140 KVA from 200 KVA under HT Service Connection No. 022.

130. Agreement dated August 21, 1998 entered into between the Tamil Nadu Electricity Board and our Companyfor a maximum demand of 125 KVA under HT Service Connection No.005.

131. Consent Order No. 3531 dated October 10, 2006, issued by the Tamil Nadu Pollution Control Board, Chennaiunder Section 25 of the Water (Prevention & Control of Pollution) Act, 1974 in favour of Chemplast SanmarLimited (Salt and Marine Chemical Works) granting consent to establish or take steps to establish the industryat site S. No. 15/1 to 15/9B, 16/1, 16/2, 17/1A to 17/1D, 17/ 2A, 19/1 to 19 /4, 18/1 Kodikkadu, VedaranyamTaluk, Nagapattinam District for the manufacture of salt and Alkali Bromide Solution at the rate of productionmentioned therein. This consent is valid for two years, or till the industry obtains the consent to operateunder Section 25 of the Water (Prevention & Control of Pollution) Act, 1974, whichever is earlier. We havethe consent/ renewal consent valid till 31st March 2009.

132. Consent Order No. 3475 dated October 10, 2006, issued by the Tamil Nadu Pollution Control Board, Chennaiunder Section 21 of the Air (Prevention & Control of Pollution) Act, 1981 in favour of Chemplast SanmarLimited (Salt and Marine Chemical Works) granting consent to establish or take steps to establish the industryat site S. No. 15/1 to 15/9B, 16/1, 16/2, 17/1A to 17/1D, 17/ 2A, 19/1 to 19 /4, 18/1 Kodikkadu, VedaranyamTaluk, Nagapattinam District for the manufacture of salt and alkali bromide solution at the rate of productionmentioned therein. This consent is valid for two years, or till the industry obtains the consent to operateunder Section 21 of the Air (Prevention & Control of Pollution) Act, 1981, whichever is earlier. We have theconsent/ renewal consent valid till 31st March 2009.

133. R.C. No. 70/ 2004/ P1 dated March 30, 2004 from the Director, Department of Environment, Chennaiclarifies that our Company’s salt production activities at Kodaiakkadu village, Vedaranyam Taluk,Nagapattinam District requires no environmental clearance under the Coastal Regulation Zone Notification,1991 as the said activities are in existence prior to the promulgation of the Coastal Regulation ZoneNotification,1999. However, any additions or expansion to the existing activities or any proposed constructionactivities should be carried out, only after getting necessary environmental clearance under the CoastalRegulation Zone Notification, 1991 & Coastal Regulation Zone Notification, 1999.

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134. The Government of India ,Office of the Deputy Salt Commissioner vide its letter dated May 21,2007 hasgranted permanent registration to our washery in Vedaranyam for manufacture of upgraded salt with anannual capacity of 90,000 MT per annum.

PVC Pipe Plant, Panjetty Village135. Factory License No. 0961 dated October 31, 1988 from the Deputy Chief Inspector of Factories, Madras is

valid till December 31, 2010.

136. License No. OM 8231/A/2008 dated August 7, 2008 issued by the Divisional officer of Fire and RescueServices, Thiruvallur Division to our Company for processing and manufacturing of PVC Pipes and Fittingsis valid for a period of one year from the grant of the License.

137. Certificate of Registration No. AAACC3000FXM011 dated September 8, 2006 from the AssistantCommissioner of Central Excise, Chennai that our Plant is registered as a manufacturer of excisable goods.

138. Service Tax Code (Registration No.). AAACC3000FST012 dated September 9, 2006 issued by theSuperintendent (Service Tax), Service Tax Commissionerate, Chennai Division for our plant for transport ofgoods by road.

139. Tamil Nadu Pollution Control Board Renewal Consent Order No. 920 in proceedings No. F.TLR1550/OL/DEE/TNPCB/TLR/A/2008 dated April 21, 2008 under Section 21of the Air (Prevention and Control ofPollution) Act, 1981 authorizing to operate the industrial plant in the Air Pollution Control area as notifiedby the Government and to continue to make existing discharge of emissions from the stacks / chimneys, isvalid till March 31, 2010.

140. Tamil Nadu Pollution Control Board Renewal Consent Order No. 917 in proceedings No. F.TLR1550/DEE/TNPCB/TLR/W/2008 dated April 21, 2008 under Section 25 of the Water (Prevention and Control ofPollution) Act, 1974 authorizing to continue discharge of sewage is valid till March 31, 2010.

141. License No. 6564076 issued under Bureau of Indian Standards is renewed up to April 6, 2009 vide letterdated June 4, 2007.

142. The HTSC No. 1530 is transferred from Polytrusions (P) Ltd to Chemplast Sanmar Limited vide LetterNo.SE/CEDC/N/HT/AAO/R/A4/E1530 dated November 17, 2006.

143. The HTSC No. 19 of Kanyakumari district is transferred from Polytrusions (P) Ltd to Chemplast SanmarLimited vide Letter No. CE/NCES/SE/EE/WPP/A3/HTSC No. 19 dated August 22, 2007.

144. The HTSC No. 353 of Kanyakumari district is transferred from Polytrusions (P) Ltd to Chemplast SanmarLimited vide Letter No. CE/NCES/SE/EE/WCB/AEE-1 dated August 23, 2007.

145. Certificate of verification under the Standards of Weights & Measures (Enforcement) Act, 1985 issued bythe Assistant Controller Inspector of Legal Meterology for various weights, measures etc. belonging to thePlant, from time to time.

PVC Pipe Plant, Irulupatty Village

146. Factory License No. 0023 dated January 12, 1998 from the Deputy Chief Inspector of Factories, Madras isvalid till December 31, 2010.

147. Certificate of registration dated June 2, 2006 is granted to our Company under Section 7 of the ContractLabour (Regulation and Abolition) Act ,1970 for employing contract workers in the factory for loading andunloading of materials and finished goods

148. Certificate of Registration No. AAACC3000FXM012 dated September 8, 2006 from the AssistantCommissioner of Central Excise, Chennai that our Plant is registered as a manufacturer of excisable goods.

149. Service Tax Code (Registration No.) AAACC3000FST011 dated September 9, 2006 issued by theSuperintendent (Service Tax), Service Tax Commissionerate, Chennai Division for our Plant, for transportof goods by road and intellectual property services other than copyright.

150. License No. 6505666 issued under Bureau of Indian Standards is renewed up to April 12,2010 vide letterdated June 26, 2008.

151. License No. 6041549 issued under Bureau of Indian Standards is renewed up to April 30,2009 vide letterdated May 23,2007.

152. License No. 6151051 issued under Bureau of Indian Standards is renewed up to April 30,2009 vide letterdated May 23,2007.

153. License No. 6669494 issued under Bureau of Indian Standards is renewed up to March 7,2009 vide letterdated April 4,2008.

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154. Agreement dated September 13, 2007 entered into between the Tamil Nadu Electricity Board and our Companyfor private windmill generation for HT Service Connection No.604.

155. Agreement dated October 19, 2007 entered into between the Tamil Nadu Electricity Board and our Companyfor private windmill generation for HT Service Connection No.209.

156. The HTSC No. 1557 is transferred from Vinplex India (P) Ltd to Chemplast Sanmar Limited vide LetterNo.SE/CEDC/N/HT/AAO/R/A4/E1557 dated November 17, 2006.

157. The HTSC No. 209 of Kanyakumari district is transferred from Vinplex India (P) Ltd to Chemplast SanmarLimited vide Letter No. CE/NCES/SE/EE/WPP/A3/HTSC No. 209 dated August 22, 2007.

158. The HTSC No. 604 of Kanyakumari district is transferred from Vinplex India (P) Ltd to Chemplast SanmarLimited vide Letter No. CE/NCES/SE/EE/WPP/A3/HTSC No. 604 dated August 22, 2007.

159. Certificate of verification under the Standards of Weights & Measures (Enforcement) Act, 1985 issued bythe Assistant Controller Inspector of Legal Meterology for various weights, measures etc. belonging to thePlant, from time to time.

160. Industrial Entrepreneur Memorandum (“IEM”) Acknowledgement bearing No. 6061/SIA/IMO/2006 datedDecember 11, 2006 issued by the Government of India, Ministry of Commerce & Industry, Secretariat forIndustrial Assistance, Public Relation & Complaints Section, New Delhi for the manufacture of rigid PVCpipes fitting above 110 mm DIA up to the proposed capacity of 24000 Tonnes at Irulipattu, Ponneri,Thiruvallur, Tamil Nadu.

161. Agreement dated October 19, 2007, WG HT SC no. 209 between the Tamil Nadu Electricity Board and ourCompany to effect the name transfer of one windmill of 225 KW capacity from M/s. Vinplex India (P)Limited to M/S. Chemplast Sanmar Limited for the purpose of utilization of power generated through theprivate windmill of 225 KW capacity installed at SF No. 480/6 of Aralvaimozhi Village in Thovalai Taluk inKanyakumari District and sale of surplus power to the Tamil Nadu Electricity Board at the rate of Rs.2.70per unit.

162. Agreement dated September 27, 2007, WEG HT SC No. 19 between Tamil Nadu Electricity Board and ourCompany to effect the name transfer of one windmill of 250 KW capacity from M/s. Polytrusions PrivateLimited to M/S. Chemplast Sanmar Limited, for the purpose of utilization of power generated through aprivate windmill of 250 KW capacity installed at SF No. 770/1 (Part) of Aralvaimozhi Village in ThovalaiTaluk in Kanyakumari District and sale of surplus power to the Tamil Nadu Electricity Board at the rate ofRs. 2.70 per unit.

163. Letter No.SE/UEDC/UDT/AO/R/HTS/AS/JA5/F.WFHTSC No. 353/07 dated September 17, 2007 fromthe Superintending Engineer Udumalpet Electricity Distribution Circle to our Company, communicatingacceptance of transfer power purchase agreement.

164. Agreement dated September 13, 2007, WF HTSC no. 353 between the Tamil Nadu Electricity Board and ourCompany to effect the name transfer of one windmill of 225 KW capacity from M/s. Polytrusions PrivateLimited to M/S. Chemplast Sanmar Limited for the purpose of utilization of power generated through a privatewindmill of 225 KW capacity installed at SF No. 87/1 (P) of Metrathi Village, Udumpalet Taluk, Coimbatoreand sale of the surplus power to the Tamil Nadu Electricity Board at the rate of Rs.2.75/- per unit.

165. Letter No. AO/Rev/TN/HTS/AS/A3/F.WEG HT SC No. 604/D-1564/07 dated September 23, 2007 bySuperintending Engineer Tirunelvelli Electricity Distribution Circle to our Company for forwarding executedagreement.

166. Agreement dated September 13, 2007, WEG HT SC No. 60 between the Tamil Nadu Electricity Board andour Company to effect the transfer of one windmill of 500 KW capacity in its own name, for the purpose ofutilization of power generated through a private windmill of 500KW capacity installed at SF No. 893/1C1(Part) of Levenjipuram Village in Radhapuram Taluk in Tirunelveli District and for sale of the surpluspower to the Tamil Nadu Electricity Board at the rate of Rs. 2.70 per unit.

167. Letter No. 1557/D 43/07 dated April 24, 2007 from the Superintending Engineer, CEDC/North, Tamil NaduElectricity Board, Chennai to our Company requiring our Company to pay Rs.500/- as registration fees andRs.8,00,000/- as earnest money deposit for our Company’s demand for an additional 1000 KVA over andabove the existing demand of 800 KVA in 11 KV at Trullipattu Village.

168. Letter No. SE/CEDC/N/HT/AAO/R/A4/F 1530 & 1557/ D515/06 dated November 10, 2007 from theSuperintending Engineer, CEDC/North, Tamil Nadu Electricity Board, Chennai to our Company requiringour Company to furnish additional documents in relation to change of name from M/s. Polytrusions (P) Ltd.& M/s.Vinplex India (P) Ltd. to M/s. Chemplast Sanmar Limited.

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169. Certificate of Registration R.C. No. 7/2001 issued under the Contract Labour (Regulation and Abolition)Act, 1970 dated June 2, 2006 by the Deputy Chief Inspector of Factories, Thiruvottiyur, Chennai to VinplexIndia Private Limited under the Contract Labour (R&A) Act, 1970 allowing contract labour to be employedfor the Loading and Unloading of Materials and Finished Goods.

170. Letter No. CE/NCES/SE/NCES/EE/WCB/AEE-1/F. N.T. M/s. Poluytrusions (P) Limited./07/D. 641/07 datedAugust 23, 2007 from the Chief Engineer, NCES, Tamil Nadu Electricity Board, Chennai granting approval forname transfer in WF.HT.Sc. No. 353 of Udumalpet EDC having 1225 KW WEG installed at SF. No. 87/1 (P) ofMethrathi village from M/s. Polytrusions Private Limited, Chennai to M/s. Chemplast Sanmar Limited, Chennai.

171. Letter No. CE/NCES/SE/EE/WPP/A3/F.M/s. Chemplast Sanmar Ltd./ WF HT SC. No.209/D 658/07 datedAugust 22, 2007 from the Chief Engineer, NCES, Tamil Nadu Electricity Board, Chennai granting approvalfor name transfer of 1225 KW Vetsas make WEG installed at SF No.480/6 of Aralvoimozhi Village, ThovalaiTaluka Kanyakumari District assigned with WF.HT.SC. No.209 of Kanyakumari EDC, from M/s. VinplexIndia (P) Ltd., Chennai to M/s. Chemplast Sanmar Ltd., Chennai.

172. Letter No. CE/NCES/SE/EE/WPP/A3/F.M/s. Chemplast Sanmar Ltd./ WF HT SC. No.19/D 659/07 datedAugust 22, 2007 from the Chief Engineer, NCES, Tamil Nadu Electricity Board, Chennai granting approvalfor name transfer of 1*250 KW NEPC make WEG installed at SF No.770/1 of Aralvoimozhi Village,Kanyakumari District assigned with WF.HT.SC. No.19 of Kanyakumari EDC, from M/s. Polytrusions (P)Ltd., Chennai to M/s. Chemplast Sanmar Ltd., Chennai.

173. Letter No. CE/NCES/SE/EE/WPP/A3/F.M/s. Chemplast Sanmar Ltd./ WF HT SC. No.604/D 660/07 datedAugust 22, 2007 from the Chief Engineer, NCES, Tamil Nadu Electricity Board, Chennai granting approvalfor name transfer of 1*500 KW Vetsas make WEG installed at SF No.893/1C1 (P) of Levenjipuram Village,Radhapuram Taluk, Tirunelvelli District assigned with WF.HT.SC. No.604 of Tirunelvelli EDC, from M/s.Vinplex India (P) Ltd., Chennai to M/s. Chemplast Sanmar Ltd., Chennai.

174. Licence No. 703 dated April 5, 1995 for the manufacture of P.V.C. Pipes at Alinjivakkan issued by theCommissioner for Industries and Factories, Sholavaran Panchayat Union to our Company.

Karaikal, Pondicherry

175. Amended Certificate of Registration R.C. No. 7/2004 issued under the Contract Labour (Regulation andAbolition) Act, 1970 dated February 1, 2004 from Registering Officer under the Contract Labour (R&A)Act, 1970 is extended to all workmen.

176. Certificate of Stability dated December 29, 2004 from a Chartered Engineer stating that the building inwhich our Company is housed (for the manufacturing of caustic soda) has been constructed / extended andthe machinery, plant have been installed in accordance with the plans approved by the Chief Inspector ofFactories and that the building is structurally sound and that its stability will not be endangered by its use asa factory for the manufacture of, for which the machinery, plant, etc., installed are intended.

177. Certificate of Registration No. 403247/03-04 dated September 23,2003 from the Assistant Commercial TaxOfficer, Karaikal certifying that our Company has been registered as a dealer under section 22 of thePondicherry General Sales Tax Act, 1967 with its branches at 20 Iyyankulathu veethi, Karaikal, 184 ThiruvallurSalai, Kosapalyam, Pondicherry, Industrial Chemicals Division, No. 34 and 35 Melvanjore, Karaikal, isvalid until cancelled.

178. Central Excise Registration Certificate No. AAACC3000FXM008 dated August 1, 2003 from the AssistantCommissioner of Central Excise, Karaikal certifies that we have been registered for manufacturing of excisablegoods.

179. Certificate of Central Excise Registration No. AAACC3000FXM009 dated November 09, 2005 from theDeputy Commissioner of Central Excise, Karaikal that our Company’s ICD is registered for manufacturingexcisable goods.

180. Certificate of Registration No.1982/KRC 01-08-2003 from the Assistant Commercial Tax Officer, Karaikalcertifies that our Company has been registered as a dealer under section 7 (1)/ 7 (2) of the Central Sales TaxAct, 1956 with effect from August 1, 2003. The certificate is valid until cancellation.

181. Certificate of Registration No. (Service Tax Code) AAACC3000F ST008 dated May 29, 2006 from theSuperintendent of Central Excise, Service Tax Cell, Karaikal certifies that our Company (Industrial ChemicalsDivision) has been registered with the Central Excise Department.

182. Letter No. REV./ BS. I / IU/2005-2006/12179 dated November 18, 2005 from the Electricity Department(Revenue Branch), Karaikal, Government of Pondicherry issued to our Company informs that the electricalservice connection bearing policy No. KV-180 / A1 at Nagore Main Road, K. Vanjore which was hitherto

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been existing in the name of Kothari Sugars and Chemicals Limited, K. Vanjore has now been transferred infavour of our Company with effect from November 2005.

183. Renewal of Authorization No. 56/PPCC/HWM/JSA/2007/2475 issued by the Pollution Control Committee,Puducherry whereby our Company is granted authorization to operate a facility for collection, reception,treatment, storage, transport and disposal of hazardous waste (Used Oil –7.2 TPA – to be stored in animpervious container and placed on the concrete floor with roof) on the premises situated at MelavanjoreVillage, T.R. Pattinam Commune Panchayat, Nagore. The authorization is valid up to August 31, 2009.

184. Authorization No. 56/PPCC/HWM/JSA/2007/2475 issued by the Pollution Control Committee, Pondicherrywhereby our Company is granted an authorization to operate a facility for collection, reception, treatment,storage, transport and disposal of hazardous waste (Used Oil – 0.37 TPA – to be sold to the authorized wastere-processor) on the premises situated at Melavanjore Village, Nagore Post, Karaikal. The authorizationshall be in force until 31st August 2009.

185. Acknowledgement bearing No. 2291/SIA/IMO/2002 dated September 26, 2002 issued by Government ofIndia, Ministry of Commerce & Industry, Secretariat for Industrial Assistance, Entrepreneurial AssistanceUnit, New Delhi for the manufacture of Ethylene Di Chloride up to the proposed capacity of 100000 TPA atMelavanjore Village, T.R. Pattinam, Karaikal, Pondicherry.

186. Letter No. PPCC/NOC/KKL/EE/2003/264 dated January 29, 2003 from the Member Secretary, PondicherryPollution Control Committee stating their no-objection in according clearance to Company’s proposal andthe manufacture of Ethylene-Di-Chloride as additional item subject to the conditions stated therein includingthat our Company obtains clearance from the Pondicherry Coastal Zone Management Authority and Ministryof Environment & Forests, Government of India for construction of jetty and laying of pipe line to themarine terminal etc.

187. The Pondicherry Coastal Zone Management Authority vide its Letter No. 8187/DSTE/PCZMA/MTF/NOC/TA/2004/415 dated February 9, 2004 forwarded the proposal to the Ministry of Environment & Forests,Government of India seeking environmental clearance. The Ministry on examining the proposal accordedthe environmental clearance as per the Coastal Regulation Zone Notification, 1991 (as amended from timeto time) to this project involving the setting up of a Marine Terminal Facility.

188. Letter No. PPCC/NOC/KKL/JE-II/2005/997 dated May 9, 2005 from the Member Secretary, PondicherryPollution Control Committee stating the Committee’s decision to clear the proposal for productionenhancement of Ethylene-Di-Chloride (EDC) from 50,000 TPA to 84,000 TPA subject to the conditionsstated therein.

189. Letter No. DTSE/NOC/POWER/KKL/JE/2004/1215 dated April 19, 2004 issued by the Member Secretary,Pondicherry Pollution Control Committee and issued in the name of our Company at Karaikal, informs of itsno-objection in according permission to enhance the power load required by the unit as long as it does notexceed 13 MW.

190. No- Objection Certificate No. PPCC/NOC/KKL/EE/2004/2113 dated August 2, 2004 from the PondicherryPollution Control Committee according clearance to our Company for the setting up of an industrial unit atR.S. No. 37-40, Melavanjore Village, T.R. Pattinam Commune, Karaikal for natural gas power generation –8.5 MW subject to the conditions stated therein.

191. Letter No. PPCC/NOC/KKL/JE-II/2005/996 dated May 3, 2005 from the Member Secretary, PondicherryPollution Control Committee stating the Committee’s decision to clear the proposal for discharging theReverse Osmosis (RO) plant outfall into Pravadayan River mouth subject to the conditions stated therein.

192. Letter No. PPCC/NOC/KKL/JE-II/2005/3600 dated December 6, 2005 from the Member Secretary,Pondicherry Pollution Control Committee stating the Committee’s no-objection in according permission toour Company for enhancing Caustic Soda production capacity from 100 TPD to 150 TPD (including Causticsoda flakes - 52.5 TPD), subject to the conditions stated therein.

193. Letter No. PPCC/NOC/KKL/JE-II/2006/3100 dated October 17, 2006 from the Member Secretary,Pondicherry Pollution Control Committee addressed to our Company, informing of the Committee’s in-principal approval for the manufacturing of Hydrogen Peroxide -15000 TPA.

194. Letter No. PPCC/NOC/KKL/JE-II/2006/3101 dated October 17, 2006 from the Member Secretary,Pondicherry Pollution Control Committee addressed to our Company, informing of the Committee’s approvalfor the restoration of power of 1000 KVA earlier surrendered to the Electricity Department by KothariSugars and Chemicals Limited, Karaikal.

195. Letter No. PPCC/NOC/KKL/JE/2004/827 dated January 28, 2005 from the Member Secretary, PondicherryPollution Control Committee addressed to our Company, informing of the Committee’s no-objection in

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Caustic Soda using Membrane Cell Technology Capacity per annumProposed 16500 TONNESExisting 33000 TONNES

Total : 49500 TONNESChlorineProposed 15000 TONNESExisting 30000 TONNES

Total : 45000 TONNESHydrogenProposed 400 TONNESExisting 800 TONNES

Total : 1200 TONNESSodium HypochloriteProposed 1000 TONNESExisting 200 TONNES

Total : 1200 TONNES

according clearance for the setting up of Boiler with a capacity of 8 Ton/ Hr. using fuel-Low Sulphur HeavyStock (LSHS) of 13 Tons/ day, to be utilized only to carryout the existing process of Caustic Soda.

196. License No: G/HO/PY/05/11 (G11442) dated December 26, 2005 from the Chief Controller of Explosivesfor the filling of cylinders with compressed gas (Chlorine – 4 Nos. filling points) in the licensed premisessituated at Melavanjore Village is valid till September 30, 2015.

197. License No: G/HO/PY/06/11 (G11442) dated December 26, 2005 from the Chief Controller of Explosivesfor the possession of cylinders filled with compressed gas (Chlorine – 102 Nos.) in the licensed premisessituated at Melavanjore Village, Karaikal is valid till September 30, 2015.

198. No-objection Certificate No. 1775/ DCE/ C2 / 2006-2007 dated June 15, 2006 from the Deputy Commissioner(Excise), Karaikal according clearance to our Company for importing Ethylene for the proposed EthyleneDi- Chloride Plant (subject to the fulfillment of the conditions laid down by the Pondicherry PollutionControl Committee vide their NOC).

199. Letter No. 18/PW/I&PH/D4/2005-06 dated April 7, 2005 from the Executive Engineer- Irrigation and PublicHealth Division, P.W.D., Karaikal granting permission for construction of a pipe carrying bridge acrossriver Pravadayanar.

200. Order No. 3K-8/ED/SAO/HT/U-11/2006-07/105 dated May 30, 2006 from the Electricity Department,Government of Pondicherry informing that the HT service existing in the name of M/s. Kothari Sugars andChemicals Limited stands changed to our Company (Industrial Chemicals Division) with effect from thedate of issue of this letter.

201. Letter No. REV. /BS. I / IU/2005-2006/12165 dated November 18, 2005 from the Electricity Department(Revenue Branch), Karaikal, Government of Pondicherry issued to our Company informs that the electricalservice connection bearing policy No. KV-181 / A2 at Nagore Main Road, K. Vanjore which was hithertobeen existing in the name of Kothari Sugars and Chemicals Limited, has now been transferred in favour ofour Company with effect from November 2005.

202. No- Objection Certificate No. PPCC/NOC/KKL/JE/2006-07/1550 dated June 19, 2006 from the PondicherryPollution Control Committee issued to our Company according permission for 4.0 MW Captive powergeneration at Industrial Chemical Division and also for construction of 4000 L capacity caustic soda (NaOH)storage tank.

203. Certificate of verification under the Standards of Weights & Measures (Enforcement) Act, 1985 issued bythe Assistant Controller Inspector of Legal Meterology / Inspector of Legal Meterology for various weights,measures etc. belonging to the PVC Division, from time to time.

204. Certificates issued by the Chief Inspector of Factories & Boilers, from time to time stating that the boilersare permitted to be worked at a maximum pressure as stated therein.

205. Industrial Entrepreneur Memorandum (“IEM”)Acknowledgement bearing No. 2324/SIA/IMO/2005 datedMay 16, 2005 ( as amended on December 19, 2005) issued by Government of India, Ministry of Commerce& Industry, Secretariat for Industrial Assistance, Public Relations & Complaints Section, New Delhi for themanufacture of the following at Melavanjore Village, T. R. Pattinam, Karaikal, Pondicherry:

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PVC Plant, Cuddalore, Tamil Nadu206. Letter No.3014/06 dated September 25, 2006 issued by the Deputy Chief Inspector of Factories, Cuddalore

approving the drawings for the construction of factory to manufacture PVC.

207. Semmankuppam Panchayat, Cuddalore has vide letter dated December 10, 2005 granted an approval forthe construction of factory to manufacture PVC in SIPCOT, Phase II at Cuddalore.

208. Panchayat Order No. 7/11.09.2006 issued by the President, Semmankuppam Panchayat, Cuddalore grantingno-objection for the construction of factory to manufacture PVC.

209. President, Semmankuppam Panchayat, Cuddalore has vide letter dated September 19, 2006 granted anapproval for the construction of factory to manufacture PVC as per the drawings.

210. The Deputy Director of Health Services, Cuddalore vide Letter No. D. Dis No. 009706 / A5 / 2006 datedSeptember 20, 2006 to the Block Development Officer, Panchayat Union Cuddalore recommended permissionto our Company for the construction of the proposed factory buildings of the machineries estimated HPratings of 10,000 HP SIPCOT Phase II Plot Nos. 4 (part), 5 (part), 6 (part), 7 (part), survey Nos. 70 (part),and 71, (part), 72, 73, 74(part),75(part),76(part), 133 (part), & 134 at Semmankuppam, Thiyagavalli Village.

211. Certificate of Registration R.C. No. 92/ 06 (Cud) from the Assistant Commissioner of Labour, Chennaidated December 15, 2006 is granted under Section 7 (2) of the Contract Labour (Regulation and Abolition)Act, 1970 and the rules made thereunder to our Company at Plot Nos. 4 (part), 5 (part), 6 (part), 7 (part)SIPCOT Phase II, Cuddalore for civil, electrical, steel structural and roof GI sheeting based constructionwork.

212. Certificate of Central Excise Registration No. AAACC3000FXM010 dated July 20, 2006 from the AssistantCommissioner of Central Excise certifies that our PVC Plant at Cuddalore is registered for manufacturingexcisable goods.

213. Service Tax Code (Registration No.) AAACC3000FST010 dated July 20, 2006 issued by the Superintendent(Excise), Service Tax Cell, in the name of our PVC Plant at Cuddalore for the payment of service tax.

214. Consent Order No. 3507 dated February 3, 2009 in proceeding number T9/TNPCB/F.13757/Cud/RL/A/08,Tamil Nadu Pollution Control Board, Chennai under Section 25 of the Water (Prevention & Control ofPollution) Act, 1974 in favour of Chemplast Sanmar Limited (Marine Terminal Facility) for granting consentto establish or take steps to establish the industry at site Poromboke land owned by TNMB Land & 165/1,166/1, 166/9-11 and 168/1 to 4 (within CRZ area), Chitrapettai & Thiyagavalli villages, Cuddalore district.This Order extends the consent till March 31, 2009.

215. Consent Order No. 3451 dated February 3, 2009 in proceeding number T9/TNPCB/F.13757/Cud/RL/A/08,issued by the Tamil Nadu Pollution Control Board, Chennai under Section 21 of the Air (Prevention &Control of Pollution) Act, 1981 in favour of Chemplast Sanmar Limited ( Marine Terminal Facility) forgranting consent to establish or take steps to establish the industry at site Poromboke land owned by TNMBLand & 165/1, 166/1, 166/9-11 and 168/1 to 4 (within CRZ area), Chitrapettai & Thiyagavalli villages,Cuddalore district . This Order extends the consent till March 31, 2009.

216. Consent Order No. 3508 dated September 14, 2006, issued by the Tamil Nadu Pollution Control Board,Chennai under Section 25 of the Water (Prevention & Control of Pollution) Act, 1974 in favour of ChemplastSanmar Limited (PVC Division) for granting consent to establish or take steps to establish the industry atsite SIPCOT Industrial Complex, Phase – II, RS. No. 72, 73, 74, 75, 76, 129-3, 130 Part, 132, 133, 134, 130PT, 131 PT, Semmankuppam, Thyagavalli Village, Cuddalore for manufacture of PVC Resin at the rate ofproduction mentioned therein. The validity of this consent order has been extended upto March 31, 2009.

217. Consent Order No. 3452 dated September 14, 2006, issued by the Tamil Nadu Pollution Control Board,Chennai under Section 21 of the Air (Prevention & Control of Pollution) Act, 1981 in favour of ChemplastSanmar Limited (PVC Division) for granting consent to establish or take steps to establish the industry atsite SIPCOT Industrial Complex, Phase – II, RS. No. 72, 73, 74, 75, 76, 129-3, 130 Part, 132, 133, 134, 130PT, 131 PT, Seemankuppam, Thyagavalli Village, Cuddalore for manufacture of PVC Resin at the rate ofproduction mentioned therein. The validity of this consent order has been extended upto March 31, 2009.

218. Acknowledgement bearing No. 779/SIA/IMO/1999 dated April 12, 1999 issued by Government of India,Ministry of Industry, Secretariat for Industrial Assistance, Entrepreneurial Assistance Unit, New Delhi forthe manufacture of Poly Vinyl Chloride up to the proposed capacity of 150000 TPA at Village SemmanKuppam, Cuddalore, South Arcot Vallalar, Tamil Nadu.

219. Letter No. 11011/80/2004-I-A.II(I) dated 28th November 2005 from the Ministry of Environment and Forests(I A Division) according environmental clearance under the provisions of EIA Notification dated 27th January1994 as amended, for setting up of PVC Plant at Cuddalore to manufacture 1,40,000 MTPA of PVC Resinsupgradable to 1,70,000MTPA . The clearance is subject to the specific and general conditions mentionedtherein.

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220. Letter No. 11-63/2005-IA-III dated December 19, 2005 from the Ministry of Environment and Forests (I.A-III Division) according environmental clearance under the provisions of Coastal Regulation Zone Notification,1991 for the installation of a Marine Terminal Facility (MTF) located off shore of Chittapettai village,Cuddalore District for receiving and transferring Vinyl Chloride Monomer (VCM) from the ships to thePVC Plant. The clearance is subject to the specific and general conditions mentioned therein.

221. License from the Chief Executive Officer, Tamil Nadu Maritime Board, Chennai dated March 2, 2006 forthe use of port land by our Company situated at Chithrapettai Village, Cuddalore District, and having a totalarea of 30,671.96 square meter for the purposes of providing necessary marine terminal facilities for handlingand storing the cargo, viz. Ethylene, Ethylene Di-Chloride (EDC), Vinyl Chloride Monomer (VCM), andother cargo required for the chemical plant of our Company. Unless extended the license shall remain inforce for a period of 25 (twenty five) years from February 23, 2006 to January 22, 2031

222. The Block Development Officer, Cuddalore vide reference No. A2/ 3434/06 dated December 12, 2006approved the construction of factory to manufacture PVC at Phase II, SIPCOT, Cuddalore.

223. No Objection Certificate reference No.11987/ A-1/2006 dated September 20, 2006 issued by the DivisionalOfficer, Fire & Rescue Services, Cuddalore to the manufacture of PVC in the premises.

224. Approval Letter No. 612/2008/JDO.3 dated March 5, 2008 issued by the Divisional Engineer, HighwaysDepartment, Cuddalore to our Company, granting permission to cut trenches on the Thiruchopuram –Thiyagavalli – Naduthittu Road.

225. Approval Letter No. D3/JDO.2/F.46/ 2008 dated February 27, 2008 by the Executive Engineer (PWD),Vellar Basin Division, Vridhachalam to our Company granting permission for the laying of pipelines forcarrying seawater and VCM raw materials crossing Upanar river (subject to conditions enclosed therein).

226. Approval dated March 17, 2008 from Thiyagavalli President to our Company for the corridor line route,road crossings and the buildings as applicable.

227. Register of Resolution passed by the Thiyagayalli panchayat recording the approved corridor line route,road crossings, building (No.135) and welcoming the Project (No.136).

228. License No.12854/D1/2008 dated December 11, 2008 issued by the Divisional Officer, Fire & RescueServices, Cuddalore for the selling/storing/manufacturing/pressing/processing/transporting of fireworks/cracker/petroleum items/L.P.G. gas cylinders/explosives/other items of PVC resins up to 1,60,000 tons/annum valid till December 10, 2009.

229. No Objection Certificate No. G.22(47)172 dated August 27, 2008 issued by the Chief Controller of Explosives,Petroleum and Explosives Safety Organisation (PESO), Nagpur for construction and installation of 2 x7500 MT capacity double wall double integrity tank nos. T1051A & B for the storage of Vinyl ChlorideMonomer (VCM) in a cryogenic state at -13.6°C at Cuddalore, Tamil Nadu. Addendum to the No ObjectionCertificate dated October 17, 2008 has also been received,

230. Letter dated January 19, 2009 in File No.:5-NT (11)/2008, issued by the Nautical Surveyor-cum-Dy. DirectorGeneral of Shipping [Tech], Ministry of Shipping, Road Transport and Highways, Government of India,Mumbai conveying the “In-principle” NSPC Clearance for our Company’s Cuddalore Terminal.

231. Provisional Order dated January 3, 2009 by the Dy. Director of Boilers, Neyveli Thermal Power Station – I,Expansion Project, to operate a Water Tube boiler rating 1442.7m2 at a maximum pressure of 15 kg/cm2under section 9 of the Indian Boilers Act, 1923, valid up to April 30, 2009.

232. Certificate of Verification No. 437695 dated February 3, 2009 by the Deputy Inspector of Labour forElectronic Weigh Bridge “Smart” Model no. 460.E.m/c no. 4903, Class-III, Capacity of maximum 60,000Kg and Minimum of 200 Kg.

233. Certificate of Verification dated December 19, 2008 by the Assistant Controller of Legal Metrology, Chennaifor cylindrical and vertical tank of 20 Kg capacity.

Shiloni PVC Pipe Plant234. Registration Certificate No. AAACC3000FXMO13 dated January 16, 2008 by the Assistant Commissioner,

Central Excise, Kolhapur- II Division registering our Company for the manufacture of excisable goods atGAT No. 96 (1 to 9), Devarwadi village, Shinoli, Taluka – Chandgad, Kolhapur, Maharashtra (subject toconditions enclosed therein).

235. Certificate issued by the Assistant Commissioner, Central Excise, Kolhapur- II Division dated February13, 2008, granting us the Service Tax Code AAACC3000FSTO13 and registering our Company for thetransport of goods by road and business auxiliary services.

236. Acknowledgement of receipt of memorandum dated July 6, 2007 issued by the Secretariat for IndustrialAssistance, Ministry of Commerce and Industry, Government of India, for the manufacture of Rigid PVCPipes, Fittings above 110 MM DIA with the proposed capacity of 20000 M.Tons.

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237. Certificate of Registration No. MH01 V 457099 dated April 01, 2006, issued under the Maharashtra ValueAdded Tax Act, 2002 registering our Company as a dealer.

238. Additional POB Certificate No. 27060283155V dated January 01, 2008, issued by the Sales Tax Officer,Registration Branch, Mumbai.

239. Consent letter No. SRO/KOP/KRI/E-25 of 98/1309/6627 dated December 12, 2008,by the MaharashtraPollution Control Board to manufacture of Rigid PVC pipes up to 20,000 MT/ annum, under section 25 ofthe Water (Prevention and Control of Pollution) Act, 1974, section 21 of the Air (Prevention and Control ofPollution) Act, 1981 and authorization/ renewal of authorization under rule 5 of the Hazardous Waste(Management and Handling) Rules, 2000 and Amendment Rules 2003. The consent to operate is granted upto December 31, 2011.

240. Consent letter No. SRO/KOP/KRI/E-25-828/3702/07 dated September 26, 2007, by the Maharashtra PollutionControl Board to manufacture of Rigid PVC pipes (extrusion molding process) up to 20,000 MT/ annum,under section 25 of the Water (Prevention and Control of Pollution) Act, 1974, section 21 of the Air (Preventionand Control of Pollution) Act, 1981 and authorization/ renewal of authorization under rule 5 of the HazardousWaste (Management and Handling) Rules, 2000. The consent to operate is granted for a period up tocommissioning of the Unit.

241. No Objection Certificate No. Jt.DISH/LIC/NOC.CER/4426/2008 dated August 26, 2008 issued by the I/CJoint Director, Directorate of Industrial Safety and Health, Kolhapur to start manufacturing process

242. Sanction letter No. KPC/Tech/I IT/AE(T) No-2469 dated March 24, 2008, by the Superintending Engineer,Maharashtra State Electricity Distribution Company, Limited, Kohlapur, granting sanction of fresh powersupply at 33 KV to the factory at our premises, for a period of 12 months from the date of issue of sanction,subject to the terms and conditions mentioned therein.

II. PLANT /UNIT APPLICATIONSFor license or approvals which have expired or have to be renewed, we have made the following applications:

Mettur Dam, Salem, Tamil Nadu, - Plant I

(1) Letter No. PL-I/19-7/7616 dated January 30, 2008 from our Company to the District Environmental Engineer,Tamil Nadu Pollution Control Board, for renewal of consent under Consent Order No.3, Proceeding No.T11/TNPCB/CHEM/F.No.46332/SLM/RL/w/07 dated May 3, 2007 under the Water (Prevention and Controlof Pollution) Act, 1974 and Consent Order No. 112 Proceeding No. T11/TNPCB/CHEM/F.No.46332/SLM/RL/A/ 2007 dated May 3, 2007 under the Air (Prevention and Control of Pollution) Act, 1981.

(2) Application to the Tamil Nadu Pollution Control Board for renewal of the Consent Order No. 112 inproceedings No. T11/ TNPCB/ CHEM/FNO. 46332/SLM/RL/A/07 dated May 3, 2007 under Section 21ofthe Air (Prevention and Control of Pollution) Act, 1981 authorizing to operate the industrial plant in the AirPollution Control area as notified by the Government and to continue to make existing discharge of emissionsfrom the stacks / chimneys.

(3) Application to the Joint Chief Controller of Explosives, Chennai dated February 24, 2007for renewal ofLicense No. PV (SC) S-77 / TN (Ma. 1021 / PV) renewed up to March 31, 2006 for the storage of anhydroushydrofluoric acid for three years starting April 1, 2007 to March 31, 2010.

(4) Application to the Joint Chief Controller of Explosives, Chennai dated February 24, 2007 for renewal ofLicense No. PV (SC) S-92 / TN (Ma. 1022 / PV) for the storage of refrigerant gases for three years startingfrom April 1, 2007 to March 31, 2010.

(5) Application to the Joint Chief Controller of Explosives, Chennai dated February 24, 2007 requesting forrenewal of License No. GC (SC) F-68/ TN / Ma 1033 / CY/ F for two refrigerant filling points with connectedfacilities for chlorofluoromethane for three years starting from April 1, 2007 to March 31, 2010.

(6) Application to the Joint Chief Controller of Explosives, Chennai dated February 21, 2007 requesting forrenewal of License No. GC (SC) S-222/ TN / Ma 1034 / CY/ S for possession of 3100 cylinders filled withchlorofluoromethane gas for three years starting from April 1, 2007 to March 31, 2010.

(7) Applied to the Mettur Municipality, Mettur Dam vide letter dated February 26, 2008 for renewal of Licenseunder Section 249 and 259 of the District Municipalities Act for the year 2008 – 2009, for the manufactureof refrigerant / other gases and various motors as mentioned therein, installed at the premises.

(8) Letter No. 8016 dated February 26, 2008 from our Company to the Commissioner Mettur Municipality, forthe renewal of License issued under Section 249 and 250 of the Madras Municipalities Act for the installationof Electric Motors for the year 2008-2009.

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(9) Letter No. 11110, dated November 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO) for Renewal of the said License No. P/HQ/TN/15/12 (P12669), valid tillDecember 31, 2008.

Mettur Dam, Salem, Tamil Nadu, - Plant II

(10) Letter dated November 17, 2007 submitted by our Company to the Joint Chief Controller of Explosives,Department of Explosives, Chennai seeking renewal of License No. P/ HQ/TN/15/121 (P 12813) to storePetroleum Product Class “B” and “C” for the period starting from January 1, 2008 to December 31, 2008.

(11) Application letter dated February 14, 2008 addressed to the Joint Chief Controller Explosives Petroleum &Explosives Safety Organisation, Chennai by our Company for renewal of license PV (SC) S-76/TN (NewNo. S/HO/TN/03/224/ (S2720) for the storage of Vinyl Chloride upto March 31, 2009.

(12) Application letter dated February 14, 2008 addressed to the Joint Chief Controller Explosives Petroleum &Explosives Safety Organisation, Chennai by our Company for renewal of license PV (SC) S-66/TN (NewNo. S/HO/TN/03/196/(S2669) issued for the storage of compressed gas in pressure vessels of the kindstated up to March 31, 2009.

(13) Letter No.1167 dated November 23, 2007 submitted by our Company to the Chairman Tamil Nadu PollutionControl Board, Chennai for the renewal of the consent order granted to our Company under the Air andWater Act till March 31, 2008.

(14) Application letter dated November 1, 2008 to the District Magistrate and Collector, Salem for renewal ofLicense No. M1/ 2000 issued to our Company, enabling our Company to possess certain chemicals underthe Poisons Act, 1919, up to December 31, 2009.

Mettur Dam, Salem, Tamil Nadu - Plant III

(15) Letter dated September 29, 2007 sent by our Company to the District Magistrate and Collector, Salem forrenewal of License No.138/77 to stock poisons for the period of one year from October 1, 2007, and forrenewal of license to possess poisonous chemicals under Rule 9(1) of the Tamil Nadu Denature Ethyl Alcoholand Varnish (French Polish) Rules, 1959 granted by Order dated March 6, 2006.

(16) Application dated February 20, 2008 for renewal of Licence No. PV(SC)S-20/TN/MA 644/PV submitted tothe joint Chief Controller of Explosives, Petroleum and Explosives Safety Organisation (PESO), Chennaifor three years, from April 1, 2008 to March 31, 2011.

(17) Letter dated February 21, 2007 submitted to the Petroleum and Explosives Safety Organisation (PESO)seeking renewal of License no. PV (SC) S-275/TN dated April 15, 1998 granted by the Government ofIndia, Department of Explosives, Nagpur subject to the provisions of the Indian Explosives Act, 1884 inrespect of storage of 12.2M Hydrogen at 10kg/cm2 up to March 31, 2010.

(18) Application dated February 21, 2007 addressed to the Jt. Chief Controller of Explosives Petroleum &Explosives Safety Organisation, Chennai by our Company for renewal of license of Hydrogen Gas Storage12.2 M3 at 10 Kg/Cm2 for 3 Years from March 1, 2007 to March 31, 2010.

(19) Application made by our Company for renewal of Licence No. Ma-525/Cy/S (old No.G/SC/TN/06/2(G2592)) issued by the Ministry of Commerce and Industry, Petroleum and Explosives Safety Organization inrespect of possession of cylinders filled with compressed chlorine gas.

(20) Letter No. 11114, dated November 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said License P/HQ/TN/15/120(P12812), renewedup to December 31, 2008.

(21) Letter No. 11111, dated November 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said License No. P/HQ/TN/15/1283(P14990),renewed up to December 31, 2008.

(22) Letter No. 11113, dated November 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said License No. P/HQ/TN/15/152(P12841),renewed up to December 31, 2008.

(23) Letter No. 11115, dated November 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said License No. P/HQ/TN/15/709(P15380),renewed up to December 31, 2008.

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(24) Letter No. 11112, dated November 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said License No. MA-6882, renewed up toDecember 31, 2008.

(25) Letter No. 10694, dated August 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said Licence No. G/HO/TN/05/23(G258), renewedup to September 30, 2008.

(26) Letter No. 10695, dated August 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said Licence No. G/HO/TN/06/23(G258), renewedup to September 30, 2008.

(27) Letter No. 10696, dated August 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said Licence No. G/HO/TN/05/96(G458), renewedup to September 30, 2008.

(28) Letter No. 10697, dated August 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said Licence No. G/HO/TN/06/96(G458), renewedup to September 30, 2008.

(29) Letter No. 10691, dated August 13, 2008 to the Joint Controller of Explosives, Petroleum and ExplosivesSafety Organisation (PESO), Chennai, for Renewal of the said Licence No. G/SC/TN/06/1249(G17043),renewed up to September 30, 2008.

Mettur Dam, Salem, Tamil Nadu - Plant IV

(30) Application dated January 29, 2008 to the Tamil Nadu Pollution Control Board for renewal of Consent inproceedings R1/TNPCB/SLM/F.146/RL/A/97 under Section 21 of the Air (Prevention and Control ofPollution) Act, 1981 (Chloro-chemicals Division) authorizing our Company to operate the industrial plantin the Air Pollution Control area as notified by the Government to continue for the year 2008-2009.

(31) Application dated January 29, 2008 to the Tamil Nadu Pollution Control Board for renewal of Consent inproceedings R1/TNPCB/SLM/F.146/RL/W/97 under Section 25 of the Water (Prevention and Control ofPollution) Act, 1974 for the discharge of sewage and trade effluent, to continue for the year 2008 - 2009.

Panruti, Tamil Nadu – Industrial Alcohol Plant

(32) Application dated April 21, 2008 made for renewal of the Panchayat License for Industries and Factories(Resolution No. 62/ January 26, 2007 Grama Saba) to the President, Village Panchayat, Kadampuliyur forthe purpose of manufacture of industrial alcohol for the year 2008 -2009.

(33) Letter dated October 29, 2008 to the Joint Chief Controller of Explosives, Chennai for renewal of LicenseNo. 12(12)2875/MA/7504 dated September 18, 1991 renewed as License No. P/HQ/TN/15/1514 (P15193)dated February 28, 2006, for the importation and storage of 300 KL of Furnace Oil (Petroleum Class C inbulk), for three years up to December 12, 2011.

PVC Pipe Plant, Irulupatty Village

(34) Application dated May 29, 2008 for renewal of Consent Order No. 921 in proceedings No. DEE/ TNPCB/TLR/OL-95/A/07 dated April 3, 2007 made to the District Environmental Engineer, Tamil Nadu PollutionControl Board, Chennai under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981, toauthorize our Company to operate the industrial plant in the Air Pollution Control area as notified by theGovernment and to continue to make existing discharge of emissions from the stacks/chimneys.

(35) Application dated May 29, 2008 for renewal of Consent Order No. 918 in proceedings No. DEE/ TNPCB/TLR/OL-95/W/07 dated April 3, 2007 made to the District Environmental Engineer, Tamil Nadu PollutionControl Board, Chennai under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974, toauthorize our Plant to continue discharge of sewage.

PVC Plant, Cuddalore, Tamil Nadu

(36) Application is being made to the Ministry of Environment and Forests (I.A. Division) seeking environmentalclearance for increasing the production capacity of our Plant at Cuddalore, Tamil Nadu, to manufacture

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PVC resins, from the present capacity of 1,40,000 MTPA (up gradable up to 1,70,000 MTPA) to 2,00,000MTPA. The clearance to manufacture 1,40,000 MTPA (up gradable to 1,70,000 MTPA) of PVC resin wasgiven to our Company by the Ministry of Environment and Forests (I.A. Division) vide its Letter No. J-11011/180/2004-I.A.II (I) dated November 28, 2005, with the conditions that prior approval of the Ministryof Environment and Forests shall be required for further expansion of the plant and that 15% of the projectcost shall be provided towards safety and environment facilities and 20% of the annual operating cost shallbe provided towards maintaining and operating safety and environment control facilities.

(37) Letter dated November 20, 2008, by the Controller of Explosives, Government of India, Ministry of Commerce& Industry, Petroleum and Explosives Safety Organisation asking us to submit documents for the renewal ofLicence No. P/HQ/TN/15/4718 (P213754) dated November 20, 2008 issued to import and store up to 20KLPetroleum Class B in bulk till December 31, 2008.

(38) Application No. CSL/TNPCB/550 dated January 9, 2009 to the Tamil Nadu Pollution Control Board, Chennai,in Consent Order No. 3508 dated September 14, 2006 under Section 25 of the Water (Prevention & Controlof Pollution) Act, 1974, for consent to operate in respect of our PVC Plant at Cuddalore.

(39) Application No. CSL/TNPCB/551 dated January 9, 2009 to the Tamil Nadu Pollution Control Board, Chennai,in Consent Order No. 3452 dated September 14, 2006, under Section 21 of the Air (Prevention & Control ofPollution) Act, 1981, for consent to operate in respect of our PVC Plant at Cuddalore.

(40) Application No. CSL/TNPCB/552 for consent dated January 9, 2009 to the Tamil Nadu Pollution ControlBoard, Chennai, in Consent Order No. 3507 dated September 14, 2006, under the Water (Prevention &Control of Pollution) Act, 1974, for consent to commence operations in respect of our Marine TerminalFacility at Cuddalore.

(41) Application No. CSL/TNPCB/552 for consent dated January 9, 2009 to the Tamil Nadu Pollution ControlBoard, Chennai, in Consent Order No. 3451 dated September 14, 2006, under Section 21 of the Air (Prevention& Control of Pollution) Act, 1981, for consent to commence operations in respect of our Marine TerminalFacility at Cuddalore.

(42) Application No. CSL/DC/574 dated January 27, 2008, to the Chairman, Disaster Crisis Committee, toformulate the Disaster/Offsite emergency plan for our private port at Chithirapet Village, Cuddalore.

(43) Application No. CSL/DIF/584 dated February 4, 2009, to the Deputy Chief Inspector of Factories, Cuddaloreto issue our Company the factory license.

(44) Application No. CP/CDU/Proj/152 dated May 21, 2008 to the Chief Inspector of Factories, Chennai, for approvalby the Site Appraisal Committee under the Factories Act, 1948 and the Tamil Nadu Factories Rules 1950.

(45) Application No. CSL/TNPCB/588 dated February 6, 2009, to the District Environmental Engineer, TamilNadu Pollution Control Board, for granting us authorization for handling hazardous and non-hazardoussolid wastes.

Vedranayam, Tamil Nadu

(46) Letter No. F-2A/27B, dated October 23, 2008 to the Deputy Chief Inspector of Factories, Thanjavur, forrenewal of the Factory License No. 54234 for the year 2009.

(47) Receipt of renewal application for License No. P/SC/TN/14/3014 (P142554) dated December 15, 2008, bythe Joint Controller of Explosives, Chennai to our Company.

Karaikal, Pudducherry

(48) Renewal Letter dated February 27, 2008 from our Company to the Pondicherry pollution Control Committeefor renewal of Air and Water Consent granted due on April 1, 2008.

(49) Renewal Letter dated February 4, 2008 from our Company to the Joint Chief Controller of Explosives,Chennai for the renewal of the License No. S/HO/PY/03/11 (S13690) issued on September 1, 2003 forstoring Compressed gas (Chlorine), up to March 31, 2011.

(50) Renewal Letter dated November 29, 2007 from our Company to the Joint Chief Controller of Explosives,Chennai for the renewal of the License No. P/HQ/PY/15/524 (P166312) issued on July 7, 2007 for storingPetroleum Class “B” & “C” in bulk - 80 KL (Diesel and Kerosene), for three years with effect from January1, 2008.

(51) Renewal Letter dated April 15, 2008 from our Company to the Commercial Tax Officer, Karaikal for Renewalof VAT Registration for the year 2008-2009.

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(52) Renewal Letter dated February 27, 2007 from our Company to the Joint Chief Controller of Explosives,Chennai for the renewal of the License No. P/HQ/PY/15/524 (P166312) issued on July 7, 2007 for storingPetroleum Class “B” & “C” in bulk - 80 KL (Diesel and Kerosene), for three years with effect from January1, 2008.

(53) Letter dated September 18, 2007 from our Company to the Superintendent Engineer – I, ElectricityDepartment, Government of Pudducherry for the restoration of sanctioned demand of 1250 KVA from thepresent demand of 250 KVA, to revive the Sick Industrial Unit.

(54) Application for renewal dated March 24, 2008 from our company to the Commissioner, T.R. PattinamCommune Panchayat for Licence No. Trp – Cp/A4/35/97 dated July 22, 1997 for the year 2008-2009.

(55) Application for renewal dated March 24, 2008 from our Company to the Commissioner T.R. Pattinam CommunePanchayat for DG License No. TRPCP/A4/13/2000 dated August 7, 2000 for the year 2008-2009.

(56) Application for renewal dated March 24, 2008 from our Company to the Commissioner T.R. PattinamCommune Panchayat for DG License No. Trp-C4/A4/17/91 dated March 3, 1992 to manufacture PNCB /ONCB, PDCB / ODCB, Aminated Hydrogenated Products for the year 2008-2009.

(57) Application to the Commissioner, T.R. Pattinam Commune Panchayat made on March 27, 2007 for renewingthe said trade license for the Industrial Chemicals Division to manufacture PNCB / ONCB, PDCB / ODCB,Aminated Hydrogenated Products for the year 2007-2008.

(58) Application dated February 27, 2008 to the Member Secretary, Pondicherry Pollution Control Committeerequesting renewal of the Air Consent Order No. PPCC/CON/AIR/KKL/JE/2006/1348 dated May 26, 2006,under the Air (Prevention and Control of Pollution) Act, 1981 for the year 2008-2009.

(59) Application dated February 27, 2008 submitted by our Company to the Member Secretary, Department ofScience, Technology and Environment, Pollution Control Committee, Puducherry, to renew the Water ConsentOrder No. PPCC/CON/WTR/KKL/JE/2006/1349 under the Air (Prevention and Control of Pollution) Act,1981 for the year 2008 -2009.

(60) Application dated February 27, 2008 submitted by our Company to the Member Secretary, Department ofScience, Technology and Environment, Pollution Control Committee, Puducherry, to renew of the Air ConsentOrder No. PPCC/CON/AIR/KKL/JE/2006/2650 under the Air (Prevention and Control of Pollution) Act,1981 for the year 2008 -2009.

(61) Application dated August 22, 2008, made by our Company for renewal of Licence No. G/HO/PY/05/14(G321) dated February 20, 2006 to the Chief Controller of Explosives for filling and storing compressed gas(Hydrogen) for the next ten years.

(62) Application dated August 22, 2008, made by our Company for renewal of Licence No. G/HO/PY/06/15(G321) dated February 20, 2006 to the Chief Controller of Explosives for filling and storing compressed gas(Hydrogen) for the next ten years.

(63) Renewal Letter dated December 17, 2007 from our Company to the Commissioner, Food and DrugsAdministration, Government of Pudducherry for renewal of the Poisons License No. POI/010/04 datedAugust 6, 2007 for the year 2008.

(64) Application submitted to the Pondicherry Pollution Control Committee dated November 14, 2002 fortransferring the approval issued to Kothari Petro Chemicals Limited, Karaikal vide letter No. PPCC/NOC/KKL/EE /2002/244 in the name of Chemplast Sanmar Limited.

(65) Application submitted to the Pondicherry Pollution Control Committee dated November 14, 2002 fortransferring the approval for manufacturing of Sodium Hypo chlorite – 2000 T/ Annum as lye productissued to Kothari Petro Chemicals Limited, Karaikal vide letter No. PPCC/NOC/KKL/EE /2002/243 in thename of Chemplast Sanmar Limited.

(66) Letter dated February 27, 2009, to the Member Secretary, Pondicherry Pollution Control Committee forrenewal of Water Consent Order (Renewal) No. PPCC/CON/WTR/KKL/SCI/2007/2695 dated September25, 2007 under the Water (Prevention and Control of Pollution) Act, 1974 and the Air Consent Order (Renewal)No. PPCC/CON/AIR/KKL/SCI/2007/2694 dated September 25, 2007 under the Air (Prevention and Controlof Pollution) Act, 1981.

(67) Letter no. PVC/HR/KKL/Ext./45 dated October 16, 2008, for renewal of Factory License No. KPC 037, forthe year 2009.

(68) Letter no. ICD/HR/KKL/Ext./11 dated October 16, 2008, for renewal of Factory License No. KPC 016, forthe year 2009.

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(69) Letter dated December 17, 2008 to the Deputy General Manager – Tubewells Pondicherry Agro Service andIndustries Corporation Limited, Puducherry (PASIC), for renewal of Agreement dated February 16, 2006between our Company and the PASIC, for Pasic to supply water for the Company’s manufacturing andbusiness activities in the Karaikal Region, for a period of five years.

PVC Plant, Panjetty Village

(70) Letter No. CSL/TPS/13592/08-09/01 made to the Director, Bureau of Indian Standards, Chennai, to renewthe License No. 6494586, the said license is renewed up to February 13, 2009.

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STATUTORY AND OTHER INFORMATION

Authority for the IssuePursuant to the resolution passed by our Board of Directors at their meeting held on July 25, 2006 & October 31,2007 and the resolutions passed by the Committee of Directors on September 9, 2008 and February 23, 2009, it hasbeen decided to make the rights offer to the Equity Shareholders of our Company with a right to renounce.

Consent of LendersThe agreements in respect of some of the debt taken by us contain certain covenants inter-alia for altering our sharecapital and for our expansions and diversification plans, including the expansion proposed to be funded out of theproceeds of this Issue. We have obtained these consents from our lenders, where required.

Prohibition by SEBINeither we, nor our Promoters or Directors or the Promoter Group companies, or companies with which our direc-tors are associated with as directors or promoters, have been prohibited from accessing or operating in the capitalmarkets under any order or direction passed by SEBI. Further, none of our Promoters or their relatives, our Com-pany, Promoter Group companies have been declared as willful defaulters by RBI / Government authorities.

Eligibility for the IssueChemplast Sanmar Limited is an existing company registered under the Act whose Equity Shares are listed on MSE,BSE and NSE. It is eligible to offer this Issue in terms of Clause 2.4.1(iv) of the SEBI DIP Guidelines.

Disclaimer Clause of SEBIAS REQUIRED, A COPY OF THE LETTER OF OFFER HAS BEEN SUBMITTED TO THE SECURITIESAND EXCHANGE BOARD OF INDIA (SEBI). IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUB-MISSION OF THE LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED/ CONSTRUEDTHAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPON-SIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICHTHE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADEOR OPINIONS EXPRESSED IN THE LETTER OF OFFER. THE LEAD MANAGER ERNST & YOUNGMERCHANT BANKING SERVICES PRIVATE LIMITED HAS CERTIFIED THAT THE DISCLOSURESMADE IN THE LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITHSEBI GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION IN FORCE FOR THE TIME BE-ING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FORMAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOODTHAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, AD-EQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE LETTER OF OFFER, THELEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANYDISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSETHE LEAD MANAGER ERNST & YOUNG MERCHANT BANKING SERVICES PRIVATE LIMITED HASFURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED SEPTEMBER 26, 2008 IN ACCORD-ANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS, 1992 WHICH READS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATIONLIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS,ETC. AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXUREHERETO IN CONNECTION WITH THE FINALISATION OF THE LETTER OF OFFERPERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITSDIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OFTHE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION ANDTHE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERSFURNISHED BY THE COMPANY;

WE CONFIRM THAT:A. THE LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH THE

DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;B. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE

GUIDELINES, INSTRUCTIONS ETC., ISSUED BY THE BOARD, THE GOVERNMENT ANDANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIEDWITH;

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C. THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATETO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TOINVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE INACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SEBI(DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 AND OTHERAPPLICABLE LEGAL REQUIREMENTS;

3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THELETTER OF OFFER ARE REGISTERED WITH SEBI AND TILL DATE SUCH REGISTRATION ISVALID;

4. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDSARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED INTHE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OFTHE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOWARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION;

5. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THATTHE MONEYS RECEIVED PURSUANT TO THE RIGHTS ISSUE ARE KEPT IN A SEPARATE BANKACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES ACT, 1956 ANDTHAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSIONIS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE LETTER OF OFFEREXCEPT THE SUM OF RS.12,000 LAKHS RECEIVED FROM SANMAR HOLDINGS LIMITED,PROMOTER COMPANY OF THE ISSUER COMPANY AND UTILISED FOR PART FINANCINGTHE PROJECT. THE AMOUNT SO RECEIVED FROM SANMAR HOLDINGS LIMITED IS ANINTEREST FREE ADVANCE AGAINST SHARE APPLICATION FOR ITS ENTITLEMENT IN THERIGHTS ISSUE. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEENTHE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION;

6. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE LETTER OFOFFER:(a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE

ONLY ONE DENOMINATION FOR THE SHARES OF THE COMPANY AND(b) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH

DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TOTIME;AND

THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER ABSOLVE THE COMPANY FROMANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT, 1956, OR FROMTHE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCES AS MAY BEREQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI, FURTHER RESERVES THE RIGHTTO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGER ANY IRREGULARITIES ORLAPSES IN THE LETTER OF OFFER.

Caution

Our Company and the Lead Manager accept no responsibility for the statements made otherwise than in the Letter ofOffer or in the advertisement or any other material issued by us or at our instance and that anyone placing reliance onany other source of information would be doing so at their own risk.

The Lead Manager and our Company shall make all information available to the Equity Shareholders and no selec-tive or additional information would be available for a section of the Equity Shareholders in any manner whatsoeverincluding at presentations, in research or sales reports etc. after filing of this Letter of Offer with SEBI.

Disclaimer with respect to jurisdiction

This Offer is being made under the provisions of Indian Laws and applicable rules and regulations thereunder. Anydisputes arising out of this issue will be subject to the jurisdiction of the appropriate court(s) in Chennai, India only.

The distribution of the Letter of Offer and the Issue of Equity Shares on a rights basis to persons in certain jurisdic-tions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons in whose pos-session this Letter of Offer may come are required to inform themselves about and observe such restrictions. Anydisputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Chennai, India only.

No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for thatpurpose, except that this Letter of Offer has been filed with SEBI for observations and SEBI has given its observa-

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tions. Accordingly, the Equity shares represented thereby may not be offered or sold, directly or indirectly, and thisLetter of Offer may not be distributed, in any jurisdiction, except in accordance with the legal requirements applica-ble in such jurisdiction. Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circum-stances, create any implication that there has been no change in our affairs from the date hereof or that the informa-tion contained herein is correct as of any time subsequent to this date.

United States Restrictions

THE RIGHTS AND THE SHARES OF OUR COMPANY HAVE NOT BEEN AND WILL NOT BE REGIS-TERED UNDER THE UNITED STATES SECURITIES ACT OF ‘1933, AS AMENDED (THE “SECURITIESACT”) OR ANY U.S. STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, RESOLD OR OTH-ERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFITOF, “U.S. PERSONS” (AS DEFINED IN REGULATIONS UNDER THE SECURITIES ACT), EXCEPT IN ATRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THERIGHTS REFERRED TO IN THIS LETTER OF OFFER ARE BEING OFFERED IN INDIA, BUT NOT IN THEUNITED STATES. THE OFFERING TO WHICH THIS LETTER OF OFFER RELATES IS NOT, AND UNDERNO CIRCUMSTANCES IS TO BE CONSTRUED AS, AN OFFERING OF ANY SHARES OR RIGHTS FORSALE IN THE UNITED STATES, OR THE TERRITORIES OR POSSESSIONS THEREOF, OR AS ASOLICITATION THEREIN OF AN OFFER TO BUY ANY OF THE SAID SHARES OR RIGHTS. ACCORD-INGLY, THIS LETTER OF OFFER AND THE ENCLOSED CAF SHOULD NOT BE FORWARDED TO ORTRANSMITTED IN OR INTO THE UNITED STATES AT ANY TIME EXCEPT IN A TRANSACTION EX-EMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

NEITHER OUR COMPANY NOR ANY PERSON ACTING ON BEHALF OF OUR COMPANY WILL ACCEPTSUBSCRIPTIONS OR RENUNCIATIONS FROM ANY PERSON, OR THE AGENT OF ANY PERSON, WHOAPPEARS TO BE, OR WHO OUR COMPANY OR ANY PERSON ACTING ON BEHALF OF OUR COMPANYHAS REASON TO BELIEVE IS A RESIDENT OF THE UNITED STATES AND TO WHOM AN OFFER, IFMADE, WOULD RESULT IN REQUIRING REGISTRATION OF THIS LETTER OF OFFER WITH THE UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION. THE RIGHTS MAY NOT BE TRANSFERRED ORSOLD TO ANY U.S. PERSON (AS DEFINED IN REGULATIONS UNDER THE SECURITIES ACT)

Designated Stock Exchange

The Designated Stock Exchange for the purposes of this Issue will be BSE.

Disclaimer Clause of BSE

BSE has given vide its letter dated November 11, 2008 permission to our Company to use BSE’s name in this Letterof Offer as one of the stock exchanges on which our company’s securities pursuant to this Issue are proposed to belisted. The Exchange has scrutinized this Letter of Offer for its limited internal purpose of deciding on the matter ofgranting the aforesaid permission to us.

The Exchange does not in any manner:i. warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; orii. warrant that our securities will be listed or will continue to be listed on BSE; oriii. take any responsibility for our financial or other soundness, our Promoters,our management or any of our

scheme or project; and it should not for any reason be deemed or construed that this Letter of Offer hasbeen cleared or approved by the exchange.Every person who desires to apply for or otherwise acquires any of our securities may do so pursuant toindependent inquiry, investigation and analysis and shall not have any claim against the Exchangewhatsoever by reason of any loss which may be suffered by such person consequent to or in connectionwith such subscription /acquisition whether by reason of anything stated or omitted to be stated herein orfor any other reason whatsoever.

Disclaimer Clause of NSE

As required, a copy of this Letter of Offer has been submitted to NSE. NSE has given vide its letter dated January 5,2009 permission to our Company to use NSE’s name in this Letter of Offer as one of the stock exchanges on whichour Company’s securities are proposed to be listed. NSE has scrutinized this Letter of Offer for its limited internalpurpose of deciding on the matter of granting the aforesaid permission to our Company. It is to be distinctly under-stood that the aforesaid permission given by NSE should not in any way be deemed or construed that the Letter ofOffer has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness orcompleteness of any of the contents of this Letter of Offer; nor does it warrant that that our securities will be listed orwill continue to be listed on the Exchange; nor does it take any responsibility for the financial or other soundness of

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this issuer, its Promoters, its management or any scheme or project of this Issuer.

Every person who desires to apply for or otherwise acquires any securities of this Issuer may do so pursuant toindependent inquiry, investigation and analysis and shall not have any claim against the NSE whatsoever by reasonof any loss which may be suffered by such person consequent to or in connection with such subscription/acquisitionwhether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

Disclaimer Clause of MSE

As required, a copy of this Letter of Offer has been submitted to MSE. MSE has given vide its letter dated November20, 2008, permission to our Company to use MSE’s name in this Letter of Offer as one of the stock exchanges onwhich our Company’s securities are proposed to be listed. MSE has scrutinized this Letter of Offer for its limitedinternal purpose of deciding on the matter of granting the aforesaid permission to our Company. It is to be distinctlyunderstood that the Letter of Offer has been cleared or approved by MSE should not in any way be deemed orconstrued that the Letter of Offer has been cleared or approved by MSE; nor does it in any manner warrant, certifyendorse the correctness or completeness of any of the contents of this Letter of Offer; nor does it take any responsi-bility for our financial or other soundness, our Promoters, our management or any scheme or project of our Com-pany. Every person who desires to apply for or otherwise acquires any securities of our Company may do so pursuantto independent inquiry, investigation and analysis and shall not have any claim against the MSE whatsoever byreason 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.

Impersonation

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsec-tion (1) of section 68A of the Companies Act which is reproduced below:

“Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for, anyshares therein, or otherwise induces a Company to allot, or register any transfer of shares therein to him, or anyother person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”

Filing

The Letter of Offer has been filed with Securities and Exchange Board of India at Plot No.C4-A,’G’ Block, BandraKurla Complex, Bandra (East), Mumbai 400051 and after SEBI gave its observations, the Letter of Offer has beenfiled with the Stock Exchanges as per the requirements of the law. All the legal requirements applicable till the dateof filing the Letter of Offer with the Stock Exchanges have been complied with.

Dematerialised dealing

We have entered into agreements dated March 22, 2000 and March 23, 2000 with National Securities DepositoryLimited (NSDL) and the Central Depository Services (India) Limited respectively, and our Equity Shares bear theISIN INE0488A01027.

Listing

The existing Equity Shares are listed on the MSE, BSE and NSE. We have made applications to MSE, BSE and NSEfor permission to deal in and for an official quotation in respect of the Equity Shares being offered in terms of thisLetter of Offer. We have received in-principle approvals from MSE, BSE and the NSE vide letters dated November20, 2008, November 11, 2008 and January 5, 2009, respectively. We will apply to the MSE, BSE and NSE for listingof the Equity Shares to be issued pursuant to this Issue.

If the permission to deal in and for an official quotation of the securities is not granted by any of the Stock Exchangesmentioned above, within 15 days from the Issue Closing Date, we shall forthwith repay, without interest, all moniesreceived from applicants in pursuance of this Letter of Offer. If such money is not paid within eight days after webecomes liable to repay it, then we and our every Director who is an officer in default shall, on and from expiry of eightdays, be jointly and severally liable to repay the money with interest as prescribed under the section 73 of the Act.

Consents

Consents in writing of the Directors, Compliance Officer, Auditors, Lead Manager, Registrar to our Company, Reg-istrar to the Issue, Legal Advisor and the Banker to the Issue to act in their respective capacities have been obtainedand such consents have not been withdrawn up to the time of delivery of this Letter of Offer for registration with thestock exchanges.

Necessary consents of all the lenders, for this issue have been obtained.

Our auditors have given their written consent for the inclusion of their report in the form and content as appearing in

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this Letter of Offer and such consents and reports have not been withdrawn up to the time of delivery of this Letter ofOffer for registration with the stock exchanges.

Our auditors have given their written consent for inclusion of statement of tax benefits in the form and content asappearing in this Letter of Offer, accruing to us and our members.

To the best of our knowledge there are no other consents required for making this Issue. However, should the needarise, necessary consents shall be obtained by us.

Expert OpinionExcept in the sections titled “Financial Statements” and “Statement of Tax Benefits” on pages 130 and 31, respec-tively of this Letter of Offer, no expert opinion has been obtained by our Company in respect of the present RightsIssue or in relation to this Letter of Offer.

Expenses of the IssueThe total expenses of the Issue are estimated to be approximately Rs. 155.25 Lakhs. The Issue related expensesinclude, among others, Issue management fees, registrar fees, printing and distribution expenses, legal fees, adver-tisement expenses, stamp duty, depository charges and listing fees to the stock exchanges. The total expenses for theIssue are estimated not to exceed 0.97% of the size of the Rights Issue.

The following table gives break-up of estimated Issue expenses and is approximately 0.97% of the Rights Issue Size.

Fees payable to the Lead Manager to the IssueThe fees payable to the Lead Manager to the Issue is set out in the relevant documents entered into by us with Ernst& Young Merchant Banking Services Private Limited, copies of which are available for inspection at our RegisteredOffice. The amount of fees payable to the Lead Manager is Rs. 50 lakhs only, which is 32.21% of the total issueexpenses and 0.31% of the total issue size.

Fees Payable to the Registrars to the IssueThe fee payable to the Registrars to the Issue is set out in the relevant documents entered into by us with IntegratedEnterprises (India) Limited, copies of which are available for inspection at our Registered Office. The amount of feespayable to the Registrars is Rs. 6.75 lakhs only, which is 4.35% of the total issue expenses and 0.04% of the totalissue size.

Fees payable to the Legal Counsel to the IssueThe fee payable to the Legal Counsel to the Issue is set out in the relevant documents entered into by us with WadiaGhandy & Co., copies of which are available for inspection at our Registered Office. The amount of fees payable to theLegal Counsel is Rs. 22.5 lakhs only, which is 14.49% of the total issue expenses and 0.14% of the total issue size.

Underwriting commission, brokerage and selling commissionNo underwriting commission, brokerage and selling commission will be paid for this Issue.

Promise vs. PerformanceNot applicable since our Company has not made any public / rights issue since inception. Our shares were initiallylisted pursuant to the scheme of arrangement approved by the Honourable High Court of Madras by its order datedApril 10, 1992 in respect of the merger of erstwhile Chemicals and Plastics India Limited (CPIL) with our Company.

Previous Public Issues or Rights IssuesOur Company has not made any public or rights issues in the past five years.

Category Estimated % of the Issue % of TotalExpenses Expenses Issue Size

(Rs. in Lakhs)Lead Manager Fees 50.00 32.21 0.31Fees for the Registrar to the issue 6.75 4.35 0.04Fees for the Legal Counsel to the Issue 22.50 14.49 0.14Advertisement and Marketing Expenses 10.00 6.44 0.06Printing, Postage and Stationery 51.00 32.85 0.32Contingency, Stamp Duty and Listing Fee 15.00 9.66 0.09

Total 155.25 100% 0.97

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Commission or Brokerage on Previous IssuesNot applicable, since our Company has not made any public / rights issue since inception.

Previous Issue of Shares Otherwise Than For CashWe have not issued Equity Shares for consideration other than cash except in the following cases:

1. 88,72,885 equity shares of face value of Rs.10/- each allotted on June 11, 1992, pursuant to the Scheme ofAmalgamation of erstwhile Chemicals and Plastics India Limited (CPIL) with our Company, in the ratio of oneequity share of Rs.10/- of our Company for every one equity share of Rs.10/- of CPIL.

2. 44,36,443 equity shares of face value of Rs 10/- each allotted on April 1,1994, as Bonus shares, issued in theratio of 1 equity share of Rs.10/- for every 2 equity shares of Rs.10/-.

3. 1,29,82,326 and 10,90,560 shares of face value of Rs 10/- each allotted on October 25,1996 and November18,1996 respectively as Bonus shares issued in the ratio of 2 equity shares of Rs.10/- for every 3 equity sharesof Rs.10/-.

4. 1,27,99,730 equity shares of face value of Rs.10/- each allotted on April 20, 2004, pursuant to Scheme ofArrangement of Sanmar Properties and Investments Limited (SPIL) with our Company, in the ratio of oneequity share of Rs.10/- each of our Company for every equity share of Rs.10/- of SPIL.

Outstanding Debentures or bonds and Redeemable Preference Shares:Our Company has no outstanding debentures or bonds and preference shares.

Option to subscribeOther than the present rights Issue, we have not given any person any option to subscribe to the shares of ourCompany.

Stock market data for Equity Shares of our CompanyThe equity shares of our Company are listed on BSE, NSE and MSE. Our shares are traded on the BSE and NSE.There is no trading of our shares on MSE.

The high and low closing prices recorded on the BSE and NSE for the preceding three years and the number ofEquity Shares traded on the days the high and low prices were recorded are stated below:

* Post Split (i.e., from 8 March 2006 to 31 March 2006)** Pre split (i.e., from 1 Apr 2005 to 7 Mar 2006)

High Low

Price Date Volume Price Date Volume(Rs.) (Rs.)

2008 23.50 04-Jan-2008 18,19,393 6.10 17-Oct-2007 89,747 9.51

2007 10.30 09-Feb-2007 993,681 4.65 15-Jun-2006 153,331 7.21

2006 * 9.70 16-Mar-06 209,294 7.60 29-Mar-06 140,348 8.72

2006 ** 111.05 19-Jul-05 437,951 37.60 01-Apr-05 8,025 80.00

NSE

BSEHigh Low

Price Date Volume Price Date Volume(Rs.) (Rs.)

2008 23.50 04-Jan-2008 17,06,440 6.21 17-Oct-2007 106,467 9.49

2007 10.31 09-Feb-2007 11,01,474 4.65 15-Jun-2006 52,700 7.22

2006 * 9.80 20-Mar-06 94,470 7.60 29-Mar-2006 96,974 8.73

2006 ** 110.70 19-July-2005 228,524 38.50 01-Apr-2005 2,132 79.95

Year endingMarch 31

AveragePrice forthe year/

period (Rs.)

* Post Split (i.e., from 8 March 2006 to 31 March 2006)** Pre split (i.e., from 1 Apr 2005 to 7 Mar 2006)

Year endingMarch 31

AveragePrice forthe year/

period (Rs.)

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The high and low prices and volume of Equity Shares traded on the respective dates during the last six months are asfollows:

In the event the high and low price of the Equity Shares are the same on more than one day, the day on which therehas been higher volume of trading has been considered for the purposes of this section.

The closing market price on July 26,2006, the trading day immediately following the day on which Board meetingwas held to approve the Rights Issue, was Rs 5.10 on NSE and Rs 5.19 on BSE.

The closing price was Rs. 3.59 on BSE and Rs. 3.60 on NSE on February 20, 2009, the trading day immediatelypreceding the day on which the Board met to finalize the offer price for the Issue i.e. February 23, 2009.

Investor GrievancesOur Company has qualified and experienced staff in its Secretarial Department which closely monitors and coordinateswith its Registrar and Transfer Agent (RTA), for attending to and resolving the complaints of our shareholders. OurCompany attempts or uses its best endeavors jointly with the RTA, to ensure that complaints are minimal and that allcomplaints are resolved satisfactorily. Our Company Secretary supervises the process of redressal of grievances.

A Shareholders/Investors Grievances Committee was constituted on January 19, 2001. The Committee presentlyconsists of directors Mr. M K Kumar, Mr V K Parthasarathy and Mr P S Jayaraman. Mr. M K Kumar is the Chairmanof the Committee. All investor grievances received by our Company have been handled by the Share Transfer Agentin consultation with our Company Secretary. The complaints of investors are settled within 15 days of receipt of thecomplaint.

We had received 4 investor grievances during the quarter ended December 31, 2008, of which 2 complaints wererelating to non receipt of share certificates consequent to amalgamation or issue of bonus shares, 2 complaintspertaining to non receipt of annual report. We have disposed off the same and further there are no investor grievancespending as on the date of filing of this Letter of Offer.

August 08 8.25 06-Aug-08 93,705 6.75 01-Aug-08 36,813 7.35

September 08 7.29 02-Sep-08 25,982 5.00 30-Sep 08 43,477 6.52

October 08 6.03 03-Oct-08 20,462 3.50 27-Oct-08 51,875 4.65

November 08 5.56 05-Nov-08 77,913 3.20 24-Nov-08 1,19,087 4.19

December 08 4.43 19-Dec-08 25,652 3.81 29-Dec-08 26,688 3.96

January 09 4.68 02-Jan-09 36,099 3.50 13-Jan-09 33,723 3.91

Month High(Rs)

Date of High Volume ondate ofHigh

Low(Rs.)

Date of Low Volume onDate of Low

WeightedAverage Pricefor the month

(Rs.)

BSE

August 08 8.25 06-Aug-08 84,557 6.50 22-Aug-08 55,369 7.40

September 08 7.35 02-Sep-08 59,093 4.85 30-Sep-08 84,938 6.53

October 08 6.10 03-Oct-08 35,796 3.75 27-Oct- 08 1,05,031 4.67

November 08 5.45 05-Nov-08 2,29,769 3.10 25-Nov-08 67,267 3.50

December 08 4.85 18-Dec-08 49,393 3.40 02-Dec-08 23,107 3.88

January 09 4.70 02-Jan-09 92,757 3.15 27-Jan-09 49,587 3.92

Month High(Rs)

Date of High Volume ondate ofHigh

Low(Rs.)

Date of Low Volume onDate of Low

WeightedAverage Pricefor the month

(Rs.)

NSE

In the event the high and low price of the Equity Shares are the same on more than one day, the day on which therehas been higher volume of trading has been considered for the purposes of this section.

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Investor Grievances arising out of this IssueThe investor grievances arising out of this Issue will be handled by Mr. M Raman, Compliance Officer and CompanySecretary and Integrated Enterprises (India) Limited, Registrars to the Issue. The Registrars will have a separateteam of personnel handling only our post Issue correspondence. Investor grievances are settled expeditiously andsatisfactorily by us. The agreement between us and the Registrars will provide for retention of records with theRegistrars for a period of at least one year from the last date of dispatch of letter of allotment/ share certificate /warrant/ refund order to enable the Registrars to redress grievances of investors.

All grievances relating to the Issue may be addressed to the Registrars to the Issue giving full details such as folio no.,name and address of the first applicant, number and type of shares applied for, application form serial number, amountpaid on application and the name of the bank and the branch where the application was deposited, along with a photo-copy of the acknowledgement slip. In case of renunciation, the same details of the renouncee should be furnished.

The average time taken by the Registrar for attending to routine grievances will be four days from the date of receipt.In case of non-routine grievances where verification at other agencies is involved, it would be the endeavour of theRegistrars to attend to them as expeditiously as possible. We undertake to resolve the investor grievances in a timebound manner.

Investors may contact the Compliance Officer in case of any pre-issue/ post -issue related problems such as non-receipt of allotment advice /share certificates/demat credit/refund orders etc.

Change in AuditorsThere has been no change in our statutory auditors in the last three years.

Capitalisation of Reserves or ProfitsOur Company has not capitalized any of its reserves or profits for the last five years.

Revaluation of Fixed AssetsThere has been no revaluation of our Company’s assets in the last five years.

Particulars in regard to capital issues during the last three years by our CompanyOur Company has not made any capital issue during the last three years.

Listed companies under the same management within the meaning section 370(1)(B) of the Com-panies Act, 1956Our Company does not have any listed group companies

Minimum Subscription

If we do not receive the minimum subscription of 90% of the Issue, the entire subscription shall be refunded to theapplicants within 15 days from the date of closure of the Issue. If there is a delay in the refund of subscription bymore than 8 days after the Company becomes liable to repay the subscription amount, (fifteen days after closure ofthe Issue), will pay interest for the delayed period, at the rates prescribed in sub-sections (2) and (2 A) of Section 73of the Companies Act, 1956.

The Issue will become undersubscribed after considering the number of shares applied as per entitlement plus addi-tional shares. The undersubscribed portion shall be applied for only after the Issue Closing Date.

In the event of under subscription, the promoters will not apply for additional shares in the issue and therefore, theexemption in terms of provisio to Regulation 3(1)(b)(ii) of the SEBI (SAST) Regulations shall not be applicable tothe issue. Further, the promoters do not intend to buy-out the remaining shares from the public at the Issue price inaccordance with the SEBI (Delisting of Securities) Guidelines 2003.

Important:1. This Issue is applicable only to those shareholders whose names appear as beneficial owners as per the

list to be furnished by Depositories in respect of the Equity Shares held in the electronic form and on theregister of members of our Company in respect of the Equity Shares held in physical form at close ofbusiness hours on March 24, 2009 i.e. the Record Date.

2. Shareholders’ attention is drawn to the section titled “Risk Factors” beginning at Page ix of this Letter of Offer.3. Please ensure that the CAF is received with this Letter of Offer.4. Please read this Letter of Offer and the instructions contained therein and in the CAF carefully, before

filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer andmust be carefully followed. The application is liable to be rejected if it is not in conformity with the termsof this Letter of Offer and/or the CAF.

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5. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrar to theIssue viz., Integrated Enterprises (India) Limited, quoting the registered folio number / DP ID/ Client IDnumber and the serial number of the CAF and his/her full name and address.

6. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar to the Issue/we will issue a duplicate CAF on the request of the shareholder who should furnish the registered folionumber/ DP ID/ client ID number and his/her full name and address to the Registrar to the Issue/ us.Please note that those applicants who are making the application in the duplicate CAF should not utilizethe original CAF for any purpose including renunciation, even if it is received/ found subsequently. Incase the original and the duplicate CAFs are lodged for subscription, allotment will be made on the basisof the duplicate CAF.

7. The Issue will be kept open for a minimum period of 15 days. If extended, it will be kept open for amaximum period of 30 days.

8. The Lead Manager and us shall make all information available to the Equity Shareholders and no selectiveor additional information would be available for a section of the Equity shareholders in any mannerwhatsoever including at presentations, in research or sales reports etc. after filing of the Letter of Offerwith SEBI/ Stock Exchanges.

9. The Lead Manager and we shall keep the public informed of any material changes till the listing andtrading commences.

10. All the legal requirements as applicable till the filing of the Letter of Offer with the Designated StockExchange have been complied with.

Issue Schedule

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

Issue Opening Date : Monday, March 30, 2009

Last date for receiving requests for split forms : Monday, April 6, 2009

Issue Closing Date : Monday, April 13, 2009

Allotment Letters / Refund Orders

We will issue and dispatch letters of allotment / share certificates / demat credit or letters of regret along with refundorder or credit the allotted securities to the respective beneficiary accounts, if any, within a period of fifteen (15) daysfrom the date of closure of the Issue. If such money is not refunded within eight days from the day that we becomeliable to pay it, we shall pay that money with interest as stipulated under Section 73 of the Act.

Our Board of Directors declares that funds received against this Issue will be transferred to a separate bank accountother than the bank account referred to sub-section (3) of Section 73 of the Act, except the sum of Rs. 12000 lakhsreceived from Sanmar Holdings Limited, promoter company of our Company and utilised for part financing theproject. The amount paid by Sanmar Holdings Limited will be adjusted towards the amount payable by them for theshares allotted to them in this Issue and the balance amount shall be refunded to Sanmar Holdings Limited, withoutinterest. The Company undertakes that it will comply with the provisions of Clause 40A of the Listing Agreement.

The Letter of Allotment / Refund Order exceeding Rs.1,500 would be sent by registered post/speed post to the sole/first applicant’s registered address. Refund Orders up to the value of Rs. 1,500 will be sent under Certificate ofPosting. Such Refund Orders would be payable at par at all places where the applications were originally accepted.The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole / first applicant. Adequatefunds would be made available to the Registrar to the Issue for this purpose. The amount paid by Sanmar HoldingsLimited will be adjusted towards the amount payable by them for the shares allotted to them in this Issue and thebalance amount shall be refunded to Sanmar Holdings Limited, without interest.

Purchase of property

Other than as set out in the objects of the Issue the present Issue is not being made with the specific objective to buyproperties and properties that may be bought or leased in the ordinary course of business. None of the Directors areinterested in any property acquired by our Company during the last three years.

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TERMS OF THE ISSUEThe Equity Shares, now being issued on right basis, are subject to the terms and conditions contained in this Letterof Offer, the enclosed Composite Application Form (“CAF”), our Memorandum and Articles of Association, ap-proval from RBI, the provisions of the Act, guidelines issued by SEBI, notifications and regulations for issue ofcapital and for listing of securities issued by Government of India, the RBI and/or other statutory authorities andbodies from time to time, terms and conditions as stipulated in the allotment advice or letter of allotment or securitycertificate and rules as may be applicable and introduced from time to time.

Authority for the IssueThis Issue is being made pursuant to the resolutions passed by our Board of Directors under Section 81(1) of the Actat their meetings held on July 25, 2006, October 31, 2007 and the resolutions passed by the Committee of Directorson September 9, 2008. The terms of the issue and the record date have been approved by the Committee of Directorson 23rd February 2009 and March 12, 2009 respectively.

Basis for the IssueThe Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose namesappear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held inthe electronic form and on our Register of Members in respect of Shares held in the physical form at the close ofbusiness hours on the Record Date, i.e., March 24, 2009 fixed in consultation with the Designated Stock Exchange.

Principal Terms and Conditions of the IssueThe Equity Shares, now being issued are subject to the provisions of the Act, terms and conditions contained in thisLetter of Offer, the enclosed CAF, the Memorandum and Articles of Association of the Company, guidelines issuedby SEBI, Foreign Exchange Management Act 1999 (“FEMA”), guidelines, notifications and regulations for issue ofcapital and for listing of securities issued by Government of India and / or other statutory authorities and bodies fromtime to time, terms and conditions as stipulated in the allotment advice or letter of allotment or security certificateand rules as may be applicable and introduced from time to time.

Face ValueEach Equity Share shall have the face value of Re.1/-

Issue PriceEach Equity Share is being offered at a price of Rs.5/- for cash at a premium of Rs. 4/-.

Terms of paymentThe full amount of Rs.5/- shall be payable by the applicant on application. Where an applicant has applied foradditional Shares and is allotted lesser number of Shares than applied for, the excess application money paid shall berefunded. The monies would be refunded by warrants payable at par / demand drafts within 15 days from the closureof the Issue and if there is a delay beyond 8 days from the stipulated period, we shall pay interest on the monies interms of Section 73 of the Act.

Rights Entitlement RatioThe Equity Share are being offered by us on rights basis to our the existing Equity Shareholders in the ratio of 2Equity Shares for every 3 Equity Shares held as on the Record Date.

Fractional EntitlementsFor Equity Shares being offered on a rights basis under this Issue, if the shareholding of any of the Equity Sharehold-ers is less than 3 Equity Shares, such shareholders shall have zero entitlement. If the shareholding is not in multiplesof 3, the fractional entitlement of such holders shall be ignored. Shareholders having less than three shares or whosefractional entitlements are being ignored would be given preference in allotment of one additional share each if theyapply for additional shares.

Those Equity Shareholders who have a holding of less than 3 Equity Shares and therefore entitled to zero EquityShares under this Issue shall be dispatched a CAF with zero entitlement. Such equity shareholders are entitled toapply for additional Equity Shares. However, they cannot renounce the same in favour of third parties. CAF withzero entitlement will be non negotiable / non renounciable.

Joint-holdersWhere two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the sameas joint-holders with benefits of survivorship subject to provisions contained in our Articles of Association.

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Ranking of the Equity SharesThe Equity Shares shall be subject to the provisions of our Memorandum and Articles of Association. Upon beingadmitted for trading subsequent to issue, the Equity Shares allotted in this issue shall rank pari passu with the existingEquity Shares in all respects including dividend. For more details refer to the section titled “Main Provisions of theArticles of Association” on page 277 of this Letter of Offer.

Mode of payment of dividendThe dividend is paid to all the eligible shareholders as per the provisions of the Act.

Rights of Equity ShareholdersSubject to applicable laws, the equity shareholders shall have the following rights:

Right to receive dividend, if declared;

Right to attend general meetings and exercise voting powers, unless prohibited by law;

Right to vote on a poll either in person or by proxy;

Right to receive offers for rights shares and be allotted bonus shares, if announced;

Right to receive surplus on liquidation;

Right to free transferability of Shares; and

Such other rights, as may be available to a shareholder of a listed public company under the Companies Act andour Memorandum and Articles of Association

For a detailed description of the main provisions of our Articles of Association dealing with voting rights dividend,forfeiture and lien, transfer and transmission and/ or consolidation/ splitting, see section titled “Main Provisions ofthe Articles of Association” on page 277 of this Letter of Offer.

Printing of Bank Particulars on Refund OrderAs a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement,printing of the particulars of the applicant’s bank account are mandatory on the refund orders, bank account particularswill be printed on the refund orders / refund warrants which can then be deposited only in the account specified. Wewill in no way be responsible if any loss occurs through these instruments falling into improper hands either throughforgery or fraud.

NoticesAll notices pertaining to this issue to our Equity Shareholder(s) required to be given by us shall be published in oneEnglish national daily with wide circulation, one Hindi national daily with wide circulation and one regional lan-guage daily newspaper in Chennai with wide circulation and / or, will be sent by ordinary post to the registeredholders of the Equity Share from time to time.

Market LotOur Equity Shares are tradable only in dematerialized form. The market lot for Equity Shares in dematerializedmode is 1. In case of holding in physical form, we would issue to the allottees one certificate for the Equity Sharesallotted to one folio (“Consolidated Certificate”). In respect of the Consolidated Certificate, we will, upon receipt ofa request from the Equity Shareholder split such Consolidated Certificate into smaller denomination within twoweek’s time from the request of the Equity shareholder. No fee would be charged by us for splitting the ConsolidatedCertificate.

Nomination facilityIn terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant cannominate any person by filling the relevant details in the CAF in the space provided for this purpose.

A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s)may nominate any person(s) who, in the event of the death of the sole holder or all the joint holders, as the case maybe, shall become entitled to the Equity Shares. A person, being a nominee, becoming entitled to the Equity Shares byreason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he wouldbe entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s)may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the EquityShare(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall standrescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a freshnomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shallbecome entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only inthe prescribed form available on request at our registered office or from the Registrar to the issue.

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Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already regis-tered the nomination with us, no further nomination needs to be made for Equity Shares to be allotted in this Issueunder the same folio.

In case the allotment of Equity Shares is in dematerialized form, there is no need to make a separate nomination forthe Equity Shares to be allotted in this Issue. Nomination registered with respective DP of the applicant wouldprevail. If the applicant requires to change the nomination, they are requested to inform their respective DP.

Minimum SubscriptionIf we do not receive the minimum subscription of 90% of the Issue, the entire subscription shall be refunded to theapplicants within 15 days from the date of closure of the Issue. If there is a delay in the refund of subscription bymore than 8 days after the Company becomes liable to repay the subscription amount, (fifteen days after closure ofthe Issue), the Company will pay interest for the delayed period, at the rates prescribed in sub-sections (2) and (2A)of Section 73 of the Companies Act, 1956.

The Issue will become undersubscribed after considering the number of shares applied as per entitlement plus addi-tional shares. The undersubscribed portion shall be applied for only after the Issue Closing Date

In the event of under subscription, the promoters will not apply for additional shares in the issue and therefore, theexemption in terms of provisio to Regulation 3(1)(b)(ii) of the SEBI (SAST) Regulations shall not be applicable tothe issue. Further, the promoters do not intend to buy-out the remaining shares from the public at the Issue price inaccordance with the SEBI (Delisting of Securities) Guidelines 2003.

Unsubscribed Portion of the IssueThe unsubscribed portion, if any of the equity shares offered to the shareholders after considering the application forthe number of shares as per entitlement plus additional equity shares, as above shall be disposed by the Board of theCompany or Committee of Directors authorised in this behalf by the Board of the Company at their full discretionand absolute authority, in such manner as they think most beneficial to the Company and the decision of the Board ofthe Company or Committee of Directors in this regard shall be final and binding.

The above is subject to the terms mentioned under the section titled ‘Basis of Allotment’ beginning on page 269 ofthis Letter of Offer.

Offer to Non-Resident (including NRI) Equity Shareholders / ApplicantsAs per regulation 6 of notification No.FEMA 20/2000-RB dated May 3, 2000 (FEMA-20), and the Master Circulardated July 1, 2008 issued by the RBI, the RBI has given general permission to Indian companies to issue rightsShares to Non-Resident shareholders including additional Shares, subject to certain conditions being satisfied. Weare making this issue in accordance with the provisions of FEMA and as per its relevant regulations. Applicationsreceived from NRIs, FIIs and other non-resident applicants for allotment of Equity Shares pursuant to this issue shallbe inter alia, subject to the conditions imposed from time to time by the RBI under FEMA and the regulationsthereunder in the matter of refund of application moneys, allotment of Equity Shares, issue of letter of allotment /share certificates, payment of interest, dividend, etc. The NRI shareholders that are barred from participating in theissue by the laws in force in the countries where such NRI shareholders reside shall not make an application to us forthe participation in the Issue and we shall not be liable for any loss / damage or claims that may arise on account ofallotment of the shares under this issue to such shareholders. The Board of Directors may at its absolute discretion,agree to such terms and conditions as may be stipulated by RBI while approving the allotment of Equity Shares,payment of dividend etc. to the Non-Residents (including NRIs) pursuant to this issue. The Rights Issue Sharespurchased by Non-Residents (including NRI(s)) shall be subject to the same conditions including restrictions inregard to the repatriability as are applicable to the original Shares against which Rights Issue Shares are issued. In theevent, any of the Non-Resident (including NRIs) shareholders have been granted any approvals of the RBI and/or theFIPB in respect of any acquisition of Shares of our Company, the acquisition by the Non-Resident (including NRIs)shareholders under the Rights Issue shall be subject to the terms and conditions of such approval.

In case of change of status of holders i.e. from resident to Non-Resident (including NRI), a new demat account shallbe opened for the purpose. DETAILS OF SEPARATE COLLECTING CENTRES FOR NON-RESIDENT (IN-CLUDING NRI) APPLICATIONS ARE BE PRINTED ON THE CAF.

Procedure for ApplicationIn case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may requestthe Registrar to the Issue, Integrated Enterprises (India) Limited, for issue of a duplicate CAF, by furnishing theregistered folio number, DP ID Number, Client ID Number and their full name and address, Non-Resident (includingNRI) shareholders can obtain a copy of the CAF from the Registrar to the Issue, from their office located at 2ndFloor. “Kences Towers”, No.1 Ramakrishna Street, North Usman Road, T Nagar, Chennai - 600 017 by furnishingthe registered folio number, DP ID number, Client ID number and their full name and address. Equity Shares offered

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to you pursuant to this Issue may be renounced, either in full or in part, in favour of any other person or persons. Suchrenouncees can only be Indian Nationals / Limited Companies incorporated under and governed by the Act, statutorycorporations / institutions, trust (registered under the Indian Trust Act, 1882), minors (through their legal guardians),societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/ society is authorized under its constitution / bye laws to hold Equity Shares in a company. Such renouncees cannotbe a partnership firm, more than three persons including joint-holders, HUF, foreign nationals (unless approved byRBI or other relevant authorities) or any person situated or having jurisdiction where the offering in terms of thisLetter of Offer could be illegal or require compliance with securities laws.

The CAF consists of four parts;

Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares

Part B: Form for renunciation

Part C: Form for applicant for renouncees

Part D: Form for request for split application forms

Acceptance of the IssueYou may accept the Issue and apply for the Equity Shares offered, either in full or in part by filling Part A of theenclosed CAF and submitting the same along with the Application Money payable to the Bankers to the Issue or anyof the branches as mentioned on the reverse of the CAF before the close of the banking hours on or before the IssueClosing Date or such extended time as may be specified by the Board or Committee thereof in this regard. Applicantsat centers not covered by the branches of collecting banks can send their CAF together with the cheque / demanddraft, net of bank and postal charges, payable at Chennai in case of resident shareholder and payable at Chennai incase of Non-Resident (including NRI) shareholders, to the Registrar to the Issue by registered post. Such applica-tions sent to anyone other than the Registrar to the issue are liable to be rejected.

Option available to the Equity Shareholders as on the Record DateThe CAF clearly indicates the number of Equity Shares that the Equity Shareholder is entitled to.

If the Equity Shareholder applies for an investment in Equity Shares, then he can:

Apply for his entitlement in part;

Apply for his entitlement in part and renounce the other part;

Apply for his entitlement in full;

Apply for his entitlement in full and apply for additional Equity shares.

Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additionalEquity Shares.

Additional Equity SharesYou are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitledto, provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part infavour of any other person(s). If you desire to apply for additional Equity Shares, please indicate your requirement inthe place provided for additional shares in Part A of the CAF. Applications for additional Equity Shares shall beconsidered and allotment shall be in the manner prescribed under the section titled “Basis of Allotment” on page 269of this Letter of Offer. The renouncees applying for all the Equity Shares renounced in their favour may also applyfor additional Equity Shares.

In case of change of status of holders i.e. from resident to Non-Resident (including NRI), a new demat account shallbe opened for the purpose.

Where the number of additional Equity Shares applied for, exceeds the number available for allotment, the allotmentwould be made on a fair and equitable basis in consultation with the Designated Stock Exchange.

RenunciationThis Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part infavour of any other person or persons.

Any renunciation from Resident Indian Shareholder(s) to Non resident Indian(s) or from Non resident IndianShareholder(s) to Resident Indian(s) or from Non-resident Indian shareholder(s) to other Non-resident Indian(s) issubject to the renouncer(s)/ renouncee(s) obtaining the approval of the FIPB and/ or necessary permission of the RBIunder the FEMA and such permissions should be attached to the CAF. Applications not accompanied by the afore-said approvals are liable to be rejected.

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Your attention is drawn to the fact that we shall not allot and / or register any Equity Shares in favour of:

More than three persons including joint holders

Partnership firm(s) or their nominee(s)

Minors, (unless the minor is allotted Equity Shares through his natural / legal guardian)

Hindu Undivided Family (unless the HUF is allotted Equity Shares through its Karta)

Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any otherapplicable Trust laws and is authorized under its Constitutions to hold Equity Shares of a Company)

The right of renunciation is subject to the express condition that the Board / Committee of Directors shall beentitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning anyreason thereof.

Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. Ifused, this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at itscollecting branches specified on the reverse of the CAF with the form of renunciation (Part B of the CAF) duly filledin shall be conclusive evidence for us of the person(s) applying for Equity Shares in Part C to receive allotment ofsuch Equity Shares. The renouncees applying for all the Equity Shares renounced in their favour may also apply foradditional Equity Shares. Part ‘A’ must not be used by the renouncee(s) as this will render the application invalid.Renouncee(s) will also have no further right to renounce any shares in favour of any other person.

Procedure for renunciation

To renounce the whole offer in favour of one renounceeIf you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In case of jointholding, all joint holders must sign Part B of the CAF. The person in whose favour renunciation has been madeshould complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign this part ofthe CAF.

Renouncee(s) shall not be entitled to further renounce their entitlement in favour of any other person.

To renounce in part / or renounce the whole to more than one person(s)If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of twoor more renouncees, the CAF must be first split into requisite number of forms.

Please indicate your requirement of split forms in the space provided for this purpose in Part D of the CAF and returnthe entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last dateof receiving requests for split forms. On receipt of the required number of split forms from the Registrar, the proce-dure as mentioned in paragraph above shall have to be followed.

In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with thespecimen registered with us, the application is liable to be rejected.

Renouncee(s)The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the Application Formand submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date along with theapplication money in full.

Change and / or introduction of additional holdersIf you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is / are not alreadya joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall haveto be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and theprocedure for renunciation and the procedure, as stated above shall have to be followed.

Please note that:

Part A of the CAF must not be used by any person(s) other than those in whose favour this issue has been made.If used, this will render the application invalid.

Request by the applicant for the Split Application Form should reach the Registrar on or before April 6, 2009.

Only the person to whom this Letter of Offer has been addressed to and not the renouncee(s) shall be entitledto renounce and to apply for Split Application Forms. Forms once split cannot be split again.

Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

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How to Apply

Resident Equity ShareholdersApplications should be made on the enclosed CAF provided by us. The enclosed CAF should be completed in allrespects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the Lead Man-ager or by the Registrar to the Issue or by us at any offices except in the case of postal applications as per instructionsgiven in the section “Terms of the Issue”.

Non-Resident (including NRI) Equity ShareholdersApplications received from the Non-Resident (including NRI) Equity Shareholders for the allotment of Equity Sharespursuant to this Issue shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI/ FIPB or any other regulatory authority, in the matter of refund of application monies, allotment of Equity Shares,Issue of letters of allotment / certificates / payment of dividends etc.

Please see the Procedure for the Application above.

Mutual FundsA separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI andsuch applications shall not be treated as multiple applications. The applications made by asset management compa-nies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which the applica-tion is being made.

The summary of options available to the Equity Shareholder is presented below. You may exercise any of the followingoptions with regard to the Equity Shares offered, using the enclosed CAF:

S. Option Available Action RequiredNo.

Accept whole or in part of your entitlement withoutrenouncing the balance

Accept your entitlement in full and apply foradditional Equity Shares

Renounce your entitlement in full to one person(Joint renouncees not exceeding three areconsidered as one renouncee)

Accept a part of your entitlement and renouncethe balance to one or more renouncee(s),

OR

Renounce your entitlement of all the Equity Sharesoffered to you to more than one renouncee.

Introduce a joint holder or change the sequence ofjoint holders.

Fill in and sign Part A (All joint holders must sign)

Fill in and sign Part A including Block III relating tothe acceptance of entitlement and Block IV relating toadditional Equity Shares (All joint holders must sign)

Fill in and sign Part B (all joint holders must sign)indicating the number of Equity Shares renounced andhand it over to the renouncee. The renouncees mustfill in and sign Part C (All joint renouncees must sign)

Fill in and sign Part D (all joint holders must sign)requesting for Split Application Forms. Send the CAFto the Registrar to the issue so as to reach them on orbefore the last date for receiving requests for SplitForms. Splitting will be permitted only once. Onreceipt of the Split Form take action as indicated below.

(i) For the Equity Shares you wish to accept, if any,fill in and sign Part A.

(ii) For the Equity Shares you wish to renounce, fillin and sign Part B indicating the number ofEquity Shares renounced and hand it over to therenouncees.

(iii) Each of the renouncees should fill in and signPart C for the Equity Shares accepted by them.

This will be treated as a renunciation. Fill in and signPart B and the renouncees must fill in and sign Part C.

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Applications for Equity Share should be made only on the CAF, which are provided by us. The CAF should becompleted in all respects as explained under the head “INSTRUCTIONS”, indicated on the reverse of the CAFbefore submission to the Banker to the issue at its collecting branches mentioned on the reverse of the CAF on orbefore the closure of the subscription list. Non-Resident (including NRI) shareholders / Renouncee should forwardtheir applications to Banker to the Issue as mentioned in the CAF for Non-Resident (including NRI) Equity Share-holders. No part of the CAF should be detached under any circumstances. Applicants must provide information inthe CAF as to their savings / current / NRE / NRO / FCNR bank account and the name of the bank with whom suchaccount is held to enable the Registrar to print the said details in the refund orders after the name of the payees.

For applicants residing at places other than designated Bank Collecting branchesApplicants residing at places other than the cities where the Bank collection centres have been opened should sendtheir completed CAF by registered post / speed post to the Registrar to the Issue, Integrated Enterprises (India)Limited along with demand drafts, net of bank and postal charges, payable in favour of “Chemplast Sanmar Limited– Rights Issue-R” in case of resident shareholders and Non-Resident (including NRI) shareholders applying on non-repatriable basis and in favour of “Chemplast Sanmar Limited – Right Issue-NR” in case of Non-Resident (includingNRI) shareholders applying on a repatriable basis and crossed “A/c Payee only” so that the same are received on orbefore closure of the Issue (i.e. April 13, 2009). In such case the demand draft in case of resident shareholders,should be payable at Chennai and in case of Non-Resident (including NRI) shareholders, should be payable atChennai.

We will not be liable for any postal delays and applications received through mail after the closure of the Issue, areliable to be rejected and returned to the applicants. Applications by mail should not be sent in any other mannerexcept as mentioned below:

All application forms duly completed along with cheque / demand draft for the application money must besubmitted before the close of the subscription list to the Bankers to the Issue named herein or to any of itsbranches mentioned on the reverse of the CAF. The CAF along with application money must not be sent to usor the Lead Managers to the Issue [or the Registrar to the Issue] except as mentioned above.

The applicants are requested to strictly adhere to these instructions. Failure to do so could result in theapplication being liable to be rejected with us, the Lead Managers and the Registrar not having any liabilitiesto such applicants.

Availability of duplicate CAFIn case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue aduplicate CAF on the request of the applicant who should furnish the registered folio number / DP and Client ID No.and his / her full name and address to the Registrar to the Issue. Please note that those who are making the applicationin the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. Thus in case the original and duplicate CAFs are lodged for subscription, allotment will bemade on the basis of the duplicate CAF only.

Application on Plain PaperAn Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAFmay make an application to subscribe to the Issue on plain paper, along with a demand draft net of bank and postalcharges, drawn in favour of “Chemplast Sanmar Limited – Rights Issue-R” in case of resident shareholders and Non-Resident (including NRI) shareholders applying on non-repatriable basis and in favour of “Chemplast Sanmar Limited– Rights Issue-NR” in case of Non-Resident (including NRI) shareholders applying on repatriable basis and send thesame by registered post directly to the Registrar to the issue so as to reach them on or before the closure of the Issue.In such case the demand draft should be payable at Chennai in case of resident shareholders and payable at Chennaiin case of Non-Resident (including NRI) shareholders. The envelope should be superscribed “Chemplast SanmarLimited – Rights Issue-R” in case of resident shareholders and Non-Resident (including NRI) shareholders applyingon non-repatriable basis and in favour of “Chemplast Sanmar Limited – Rights Issue-NR” in case of Non-Resident(including NRI) shareholders applying on repatriable basis.

The application on plain paper, duly signed by the applicants including joint holders, in the same order as perspecimen recorded with us, must reach the office of the Registrar to the issue on or before the Issue Closing Date andshould contain the following particulars:

Name of the Issuer, being Chemplast Sanmar Limited

Name and address of the Equity Shareholder including joint holders

Registered Folio No. / DP ID No. and Client ID No.

Number of Equity Shares held as on Record Date

Certificate numbers and distinctive Nos., if held in physical form

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Number of Rights Equity Shares entitled

Number of Rights Equity Shares applied for

Number of additional Equity Shares applied for, if any

Total number of Equity Shares applied for

Total amount paid on application at the rate of Rs.[5] per Equity Share

Particulars of Cheque / Draft

Savings / Current Account Number and name, address and MICR code of the bank where the Equity Shareholderwill be depositing the refund order

The applicant, and in the case of application in joint names, each of the joint applicants, should mention his/herPAN allotted under the Income-Tax Act, 1961, irrespective of the amount of the application.

Signature of Equity Shareholders to appear in the same sequence and order as they appear in our records.

In case of Non-Resident Shareholders (including NRI), NRE / FCNR / NRO A/c No. Name, Address andMICR code of the Bank and Branch

If payment is made by a draft purchased from NRE / FCNR / NRO A/c as the case may be, an Account debitcertificate from the bank issuing the draft, confirming that the draft has been issued by debiting NRE / FCNR/ NRO Account.

Please note that those who are making the application in plain paper shall not be entitled to renounce their rights andshould not utilise the original CAF for any purpose including renunciation even if it is received subsequently. If theapplicant violates any of these requirements, he / she shall face the risk of rejection of both the applications. We shallrefund such application amount to the applicant without any interest thereon.

Last date of ApplicationThe last date for submission of the duly filled in CAF is April 13, 2009 being the Issue Closing Date. The Board orany committee thereof will have the right to extend the said date for such period as it may determine from time totime but not exceeding 30 (thirty) days from the Issue Opening Date.

If the CAF together with the amount payable is not received by the Banker to the Issue / Registrar to the Issue on orbefore the close of banking hours on the aforesaid last date or such date as may be extended by the Board / Commit-tee of Directors, the offer contained in this Letter of Offer shall be deemed to have been declined and the Board /Committee of Directors shall be at liberty to dispose of the Equity Shares hereby offered, as provided under thesection titled “Basis of Allotment” on page 269 of this Letter of Offer.

Incomplete applicationCAFs which are not complete or are not accompanied with the application money amount payable are liable to berejected.

INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE TRADEDON THE STOCK EXCHANGES ONLY IN DEMATERIALISED FORM

Mode of payment for Resident Equity Shareholders / Applicants

All cheques / drafts accompanying the CAF should be drawn in favour of “Chemplast Sanmar Limited – RightsIssuer” and marked ̀ A/c Payee only’.

· Applicants residing at places other than places where the bank collection centers have been opened by us forcollecting applications, are requested to send their applications together with Demand Draft net of bank andpostal charges, for the full application amount favouring “Chemplast Sanmar Limited – Rights Issue-R” andmarked `A/c Payee only’ payable at Chennai directly to the Registrar to the issue by registered post so as toreach them on or before the Issue Closing Date. We or the Registrar to the Issue will not be responsible forpostal delays or loss of applications in transit, if any.

Mode of payment for Non-Resident (including NRI) Equity Shareholders / ApplicantsAs regards the application by Non-Resident (including NRI) equity shareholders / applicants, the following furtherconditions shall apply;

Payment by Non-Residents (including NRI) must be made by demand draft / cheque payable at Chennai or fundsremitted from abroad in any of the following ways.

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Application with repatriation benefitsPayment by NRIs / FIIs /foreign investors must be made by demand draft / cheque payable at Chennai or fundsremitted from abroad in any of the following ways:

By Indian Rupee drafts purchased from abroad and payable at Chennai or funds remitted from abroad (submittedalong with Foreign Inward Remittance Certificate); or

By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained with banksauthorized to deal in foreign currency in India, along with documentary evidence in support of remittance; or

By Rupee draft purchased by debit to NRE / FCNR Account maintained elsewhere in India and payable inChennai; or

FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.

All cheques/ drafts submitted by Non-Residents (including NRIs) applying on repatriable basis should bedrawn in favour of “Chemplast Sanmar Limited – Rights Issue-NR” payable at Chennai and crossed ̀ A/c Payeeonly’ for the amount payable.

A separate cheque or bank draft must accompany each application form. Applicants may note that where payment ismade by drafts purchased from NRE/ FCNR accounts as the case may be, an Account Debit Certificate from the bankissuing the draft confirming that the draft has been issued by debiting the NRE / FCNR account should be enclosedwith the CAF in the absence of the above, the application shall be considered incomplete and is liable to be rejected.

In the case of Non-Residents (including NRI) who remit their application money from funds held in FCNR / NREAccounts, refunds and other disbursements, if any shall be credited to such account details of which should befurnished in the appropriate columns in the CAF. In the case of NRIs who remit their application money throughIndian Rupee Drafts from abroad, refunds and other disbursements, if any will be made in US Dollars at the rate ofexchange prevailing at such time subject to the permission of RBI. We will not be liable for any loss on account ofexchange rate fluctuation for converting the Rupee amount into US Dollars or for collection charges charged by theapplicant’s Bankers.

Application without repatriation benefitsAs far as Non-Residents (including NRIs) holding Shares on non-repatriation basis is concerned, in addition to themodes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Accountmaintained in Chennai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable atChennai. In such cases, the allotment of Equity Shares will be on non-repatriation basis.

All cheques / drafts submitted by Non-Residents (including NRI) applying on non-repatriation basis should bedrawn in favour of “Chemplast Sanmar Limited – Rights Issue-R” payable at Chennai and must be crossed `A/cPayee only’ for the amount payable. The CAF duly completed together with the amount payable on application maybe deposited either with the Collecting Bank indicated on the reverse of the CAF before the close of banking hourson or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bankissuing the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with theCAF. In the absence of the above, the application shall be considered incomplete and is liable to be rejected.

New Demat account shall be opened for holders who have had a change in status from resident to Non-Resident(including NRI).

Note:

In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment inEquity Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act, 1961.

In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the EquityShares cannot be remitted outside India.

The CAF duly completed together with the amount payable on application must be deposited with the CollectingBank indicated on the reverse of the CAF before the close of banking hours on or before the Issue ClosingDate. A separate cheque or bank draft must accompany each CAF.

In case of an application received from Non-Residents (including NRIs), allotment, refunds and other distribution,if any, will be made in accordance with the guidelines / rules prescribed by RBI as applicable at the time ofmaking such allotment, remittance and subject to necessary approvals.

Payment by StockinvestIn terms of RBI Circular DBOD No FSC BC 42/24 47.00/2003-04 dated November 5, 2003, the Stockinvest Schemehas been withdrawn with immediate effect. Hence, payment through Stockinvest would not be accepted in this Issue.

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Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”)ProcessThis section is for the information of Equity Shareholders proposing to subscribe to the Issue through the ASBAProcess. The Company and the Lead Manager are not liable for any amendments or modifications or changes inapplicable laws or regulations, which may occur after the date of this Letter of Offer. Equity Shareholders who areeligible to apply under the ASBA Process are advised to make their independent investigations and ensure that thenumber of Equity Shares applied for by such Equity Shareholders do not exceed the applicable limits under laws orregulations. Equity Shareholders applying under the ASBA Process are also advised to ensure that the CAF is cor-rectly filled up, stating therein the bank account number maintained with the Self Certified Syndicate Bank (SCSB)in which an amount equivalent to the amount payable on application as stated in the CAF will be blocked by theSCSB.

The list of banks that have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in/pmd/scsb.html. For details on designated branches of SCSB collecting the CAF, please refer theabove-mentioned SEBI link.

Equity Shareholders who are eligible to apply under the ASBA Process

The option of applying for Equity Shares in the Issue through the ASBA Process is only available to Equity Share-holders of the Company on the Record Date. Equity Shareholders who:

is holding Equity Shares in dematerialised form and has applied towards his/her/ their rights entitlements oradditional securities in the Issue in dematerialised form;

has not renounced his /her/ their entitlements in full or in part;

has not split the CAF;

is not making an application on plain paper;

is not a Renouncee;

applies through a bank account with one of the SCSBs,

is a resident shareholder.

Options available to the Equity Shareholders applying under the ASBA ProcessThe summary of options available to the Equity Shareholders is presented below. The Equity Shareholder mayexercise any of the following options with regard to the Equity Shares offered, using the respective CAFs receivedfrom Registrar:

The Equity Shareholder(s) applying under the ASBA Process will need to select the ASBA option process in the CAFand provide required necessary details. However, in cases where this option is not selected, but the CAF is tenderedto the SCSB with the relevant details required under the ASBA process option and SCSB blocks the requisiteamount, then that CAF would be treated as if the Equity Shareholder has selected to apply through the ASBA processoption.

Additional Equity SharesThe Equity Shareholder is eligible to apply for additional Equity Shares over and above the number of Equity Sharesthat he is entitled to, provided that he has applied for all the Equity Shares offered without renouncing them in wholeor in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allot-ment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in themanner prescribed under “Basis of Allotment” on page 269 of this Letter of Offer.

If a Shareholder desires to apply for additional Equity Shares, he should indicate his requirement in the place pro-vided for additional securities in Part A of the CAF.

S. Option Available Action RequiredNo.

Accept whole or part of your entitlement withoutrenouncing the balance.

Accept your entitlement in full and apply foradditional Equity Shares

Fill in and sign Part A of the CAF (All joint holdersmust sign).

Fill in and sign Part A including Block III relatingto the acceptance of entitlement and Block IVrelating to additional Equity Shares (All jointholders must sign)

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Renunciation under the ASBA ProcessRenouncees cannot participate in the ASBA Process.

Application on Plain PaperApplications on plain paper cannot be made by Equity Shareholders availing of the ASBA Process.

Last date of ApplicationThe last date for submission of the duly filled in CAF is April 13, 2009. The Issue will be kept open for a minimumof 15 (fifteen) days and the Board or any committee thereof will have the right to extend the said date for such periodas it may determine from time to time but not exceeding 30 (thirty) days from the Issue Opening Date.

If the CAF together with the amount payable is not received by the Banker to the Issue/Registrar to the Issue or if theCAF is not received by the SCSB on or before the close of banking hours on the aforesaid last date or such date asmay be extended by the Board/Committee of Directors, the offer contained in this Letter of Offer shall be deemed tohave been declined and the Board/Committee of Directors shall be at liberty to dispose off the Equity Shares herebyoffered, as provided under “Basis of Allotment” below.

Option to receive securities in Dematerialized FormEQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITYSHARES OF THE COMPANY UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED INDEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITYSHARES ARE BEING HELD ON RECORD DATE.

General instructions for Equity Shareholders applying under the ASBA Process(a) Please read the instructions printed on the CAF carefully.

(b) Application should be made on the printed CAF only and should be completed in all respects. The CAFfound incomplete with regard to any of the particulars required to be given therein, and/or which are notcompleted in conformity with the terms of this Letter of Offer is liable to be rejected. The CAF must befilled in English.

(c) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose bankaccount details are provided in the CAF and not to the Bankers to the Issue/Collecting Banks (assumingthat such Collecting Bank is not a SCSB), to the Company or Registrar or Lead Manager to the Issue.

(d) All applicants, and in the case of application in joint names, each of the joint applicants, should mentionhis/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application.CAFs without PAN will be considered incomplete and are liable to be rejected.

(e) All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cashpayment is not acceptable. In case payment is effected in contravention of this, the application may bedeemed invalid and the application money will be refunded and no interest will be paid thereon.

(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Scheduleto the Constitution of India. Signatures other than in English or Hindi and thumb impression must beattested by a Notary Public or a Special Executive Magistrate under his/her official seal. The EquityShareholders must sign the CAF as per the specimen signature recorded with the Company/or Depositories.

(g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and asper the specimen signature(s) recorded with the Company. In case of joint applicants, reference, if any,will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(h) All communication in connection with application for the securities, including any change in address ofthe Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment inthis Issue quoting the name of the first/sole applicant Equity Shareholder, folio numbers and CAF number.

(i) Only the person or persons to whom securities have been offered and not Renouncee(s) shall be eligibleto participate under the ASBA process.

Do’s:

(a) Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in.

(b) Ensure that you submit your application in physical mode only. Electronic mode is only available withcertain SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to you.

(c) Ensure that the details about your Depository Participant and beneficiary account are correct and thebeneficiary account is activated as Equity Shares will be allotted in the dematerialized form only.

(d) Ensure that the CAFs are submitted at the SCSBs whose details of bank account have been provided inthe CAF.

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(e) Ensure that you have mentioned the correct bank account number in the CAF.

(f) Ensure that there are sufficient funds {equal to (number of Equity Shares applied for) X (Issue Price ofEquity Shares)} available in the bank account maintained with the SCSB mentioned in the CAF beforesubmitting the CAF to the respective Designated Branch of the SCSB.

(g) Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable onapplication mentioned in the CAF, in the bank account maintained with the respective SCSB, of whichdetails are provided in the CAF and have signed the same.

(h) Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form.

(i) Each applicant should mention their Permanent Account Number (“PAN”) allotted under the Income TaxAct, 1961.

(j) Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiaryaccount is held with the Depository Participant. In case the CAF is submitted in joint names, ensure thatthe beneficiary account is also held in same joint names and such names are in the same sequence inwhich they appear in the CAF.

(k) Ensure that the Demographic Details are updated, true and correct, in all respects.

Don’ts:

(a) Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB.

(b) Do not pay the amount payable on application in cash, by money order or by postal order.

(c) Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting Banks (assumingthat such Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch ofthe SCSB / Company; instead submit the same to a Designated Branch of the SCSB only.

(d) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on thisground.

(e) Do not instruct your respective banks to release the funds blocked under the ASBA Process.

Grounds for Technical Rejection under the ASBA ProcessIn addition to the grounds listed under “Grounds for Technical Rejection” on page 274 of this Letter of Offer,applications under the ABSA Process are liable to be rejected on the following grounds:

(a) Application on plain paper or on split form.(b) Application for entitlements or additional shares in physical form.(c) Equity Shareholders applying under ASBA Process for additional Equity Shares in CAF of Equity Shares

and vice versa.(d) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with

the Registrar.(e) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank is not

a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company.(f) Renouncee applying under the ASBA Process.(g) Insufficient funds are available with the SCSB for blocking the amount.(h) Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen

pursuant to regulatory orders.(i) Account holder not signing the CAF or declaration mentioned therein.

Depository account and bank details for Equity Shareholders applying under the ASBA Process.

IT IS MANDATORY FOR ALL THE EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROC-ESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL THE EQUITY SHARE-HOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PAR-TICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARYACCOUNT NUMBER IN THE CAF. EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROC-ESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAMEIN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINTNAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THESAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF.

Equity Shareholders applying under the ASBA Process should note that on the basis of name of these Equity Share-holders, Depository Participant’s name and identification number and beneficiary account number provided by themin the CAF, the Registrar to the Issue will obtain from the Depository demographic details of these Equity Sharehold-ers such as address, bank account details for printing on refund orders and occupation. Hence, Equity Shareholders

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applying under the ASBA Process should carefully fill in their Depository Account details in the CAF.

These Demographic Details would be used for all correspondence with such Equity Shareholders including mailingof the letters intimating unblock of bank account of the respective Equity Shareholder. The Demographic Detailsgiven by Equity Shareholders in the CAF would not be used for any other purposes by the Registrar. Hence, EquityShareholders are advised to update their Demographic Details as provided to their Depository Participants.

By signing the CAFs, the Equity Shareholders applying under the ASBA Process would be deemed to have author-ised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details asavailable on its records.

Letters intimating allotment and unblocking or refund (if any) would be mailed at the address of the Equity Share-holder applying under the ASBA Process as per the Demographic Details received from the Depositories. Refunds,if any, will be made directly to the bank account in the SCSB and which details are provided in the CAF and not thebank account linked to the DP ID. Equity Shareholders applying under the ASBA Process may note that delivery ofletters intimating unblocking of bank account may get delayed if the same once sent to the address obtained from theDepositories are returned undelivered. In such an event, the address and other details given by the Equity Share-holder in the CAF would be used only to ensure dispatch of letters intimating unblocking of bank account.

Note that any such delay shall be at the sole risk of the Equity Shareholders applying under the ASBA Process andnone of the Company, the SCSBs, the Lead Manager or the Registrar to the Issue shall be liable to compensate theEquity Shareholder applying under the ASBA Process for any losses caused to such Equity Shareholder due to anysuch delay or liable to pay any interest for such delay.

In case no corresponding record is available with the Depositories that matches three parameters, namely, names ofthe Equity Shareholders (including the order of names of joint holders), the DP ID and the beneficiary accountnumber, then such applications are liable to be rejected.

Basis of AllotmentSubject to the provisions contained in this Letter of Offer, our Articles of Association, the approval of SEBI, anyregulatory approvals and the approval of the Designated Stock Exchanges, the Board will proceed to allot the EquityShares in the following order of priority:

(a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full orin part and also to the renouncee(s) who has / have applied for Equity Shares renounced in their favour,in full or in part.

(b) Allotment to the Equity Shareholders who have applied for all the Equity Shares offered to them as partof the Issue and have also applied for additional Equity Shares. The allotment of such additional EquityShares will be made as far as possible on an equitable basis having due regard to the number of EquityShares held by them on the Record Date, provided there is an under-subscribed portion after making fullallotment in (a) above. The allotment of such Equity Shares will be at the sole discretion of the Board /Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Issue andnot preferential allotment.

(c) Allotment to the renouncees who having applied for all the Equity Shares renounced in their favour havealso applied for additional Equity Shares, provided there is an under-subscribed portion after making fullallotment in (a) and (b) above. The allotment of such Equity Shares will be made on a proportionate basisat the sole discretion of the Board / Committee of Directors in consultation with the Designated StockExchange, as a part of the issue and preferential allotment.

(d) Allotment to any other person as the Board may in its absolute discretion deem fit provided there issurplus available after making full allotment under (a), (b) and (c) above.

After taking into account allotment to be made under (a) above, if there is any unsubscribed portion, thesame shall be deemed to be ‘unsubscribed’ for the purpose of regulation 3(1)(b) of the SEBI (SAST)Regulation Takeover Code which would be available for allocation under (b), (c) and (d) above.

In the event of under subscription, the promoters will not apply for additional shares in the issue andtherefore, the exemption in terms of provisio to Regulation 3(1)(b)(ii) of the SEBI (SAST) Regulationshall not be applicable to the issue. Further, the promoters do not intend to buy-out the remaining sharesfrom the public at the Issue price in accordance with the SEBI (Delisting of Securities) Guidelines 2003.

After such allotments as above, any additional Equity Shares shall be disposed off by the Board or committee of theBoard authorized in this behalf by our Board, in such manner as they think most beneficial to us and the decision ofour Board or committee of the Board in this regard shall be final and binding. In the event of oversubscription,allotment will be made within the overall size of the issue.

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To the equity shareholders who have applied for their full rights entitlement of Equity Shares, have applied foradditional Equity Shares, provided there is a surplus after making the allotment under (a), (b), (c) and (d) above. Theallotment of such additional Equity Shares shall be made as far as possible on equitable basis with reference to thenumber of Equity Shares held on Record date of March 24, 2009 within the overall size of Rights Issue at the soleand absolute discretion of the Board of Directors or Committee thereof in consultation with the Designated StockExchange.

We expect to complete the allotment of Equity Shares within a period of 15 days from the date of closure of the Issuein accordance with the listing agreement with BSE, MSE and NSE.

UnderwritingThe present Issue is not underwritten.

Allotment / Refund

We will issue and dispatch allotment advice / share certificate / demat credit and / or letters of regret along withrefund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of 15 daysfrom the Issue Closing Date. Adequate funds will be made available to the Registrar for this purpose. If such moneyis not repaid within eight days from the date we become liable to pay it, we shall pay that money with interest asstipulated under Section 73 of the Act.

Applicants residing at centres where clearing houses are managed by the Reserve Bank of India (RBI) will getrefunds through ECS only (Electronic Clearing Service) except where applicant is otherwise disclosed as eligible toget refunds through direct credit & RTGS. In case of other applicants, we shall ensure dispatch of refund orders, ifany, of value upto Rs.1,500 by “Under Certificate of Posting”, and shall dispatch refund orders above Rs.1,500, ifany, by registered post or speed post.

In case of those applicants who have opted to receive their Right Entitlement Shares in dematerialized form by usingelectronic credit under the depository system, an advice regarding their credit of the Equity Shares shall be givenseparately.

In case of those applicants who have opted to receive their Right Entitlement Shares in physical form and we issueletters of allotment, the corresponding share certificates will be kept ready within three months from the date ofallotment thereof or such extended time as may be approved by the Company Law Board under Section 113 of theAct or other applicable provisions, if any. Allottees are requested to preserve such letters of allotment, which wouldbe exchanges later for the share certificates. For more information, please refer to the section entitled ‘Letters ofAllotment / Share Certificates / Demat Credit’ on page 272 of this Letter of Offer.

Allotment advice / share certificates / demat credit above the value of Rs.1,500 will be dispatched by registered post/ speed post to the sole / first applicant’s registered address.

Payment of RefundApplicants should note that on the basis of name of the applicants, Depository Participant’s name, Depository Par-ticipant – Identification number and Beneficiary Account Number provided by them in the Composite ApplicationForm, the Registrar to the Issue will obtain from the Depositories, the applicant’s bank account details including ninedigit MICR code. Hence, applicants are advised to immediately update their bank account details as appear-ing on the records of the depository participant. Please note that failure to do so could result in delays in credit ofrefunds to applicants at the applicant’s sole risk and neither the Lead Managers nor we shall have any responsibilityand undertake any liability for the same.

The payment of refund would be done through various modes in the following order of preferences:

i. Direct Credit

Applicants having their bank account with the Refund Banker, i.e. State Bank of India shall be eligible toreceive refunds, if any, through direct credit. The refund amount, if any, would be credited directly to theeligible applicant’s bank account with the Refund Banker.

ii. ECS

Payment of refund shall be undertaken through ECS for applicants having an account at any of the following 15RBI centers viz. New Delhi, Chandigarh, Kanpur, Jaipur, Ahmedabad, Mumbai, Nagpur, Hyderabad, Bangalore,Chennai, Trivandrum, Kolkata, Bhubaneshwar, Guwahati and Patna. This mode of payment of refunds wouldbe subject to availability of complete bank account details including the MICR code as appearing on a cheque

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leaf, from the Depositories. One of the methods for payment of refund is through ECS for applicants having abank account at any of the abovementioned 15 centres.

iii. National Electronic Funds Transfer (NEFT)

Payment of refund shall be undertaken through NEFT wherever the applicants’ bank has been assigned theIndian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR),if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on adate prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the applicants haveregistered their nine digit MICR number and their bank account number while opening and operating the demataccount, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment ofrefund will be made to the applicants through this method.

iv. RTGS

Applicants having a bank account at any of the abovementioned 15 centres and whose refund amount exceedsRs. 1 million, have the option to receive refund through RTGS. Such eligible applicants who indicate theirpreference to receive refund through RTGS are required to provide the IFSC code in the CAF. In the event thesame is not provided, refund shall be made through ECS. Charges, if any, levied by the Refund Bank(s) for thesame would be borne by such applicant opting for RTGS as a mode of refund. Charges, if any, levied by theapplicant’s bank receiving the credit would be borne by the applicant.

Only or all the other applicants except for whom the payment of refund is possible through (i), (ii), (iii) and (iv), therefund orders above the value of Rs.1,500 will be dispatched by registered post / speed post to the sole / firstapplicant’s registered address. However, refund orders for value not exceeding Rs.1,500 shall be sent to the appli-cants by way of certificate of posting. Such cheques or pay orders will be payable at par at all the centres where theapplications were originally accepted and will be marked ‘A/c Payee’ and would be drawn in the name of the sole /first applicant. Adequate funds would be made available to the Registrar to the Issue for the dispatch of such allot-ment advice / share certificates / demat credit and refund orders.

We shall ensure that at par facility is provided for encashment of refund orders / pay orders at the places whereapplications are accepted.

For shareholders opting for allotment in physical mode, bank account details as mentioned in the CAF shallbe considered for electronic credit or printing of refund orders, as the case may be. Refund orders will bemade by cheques, pay orders or demand drafts drawn on the Refund Bank(s) and payable at par at placeswhere the applications were received and will be marked account payee and will be drawn in the name of Sole/ First Applicant. The bank charges, if any, for encashing such cheques, pay orders or demand drafts at othercentres will be payable by the Applicants.

As regards allotment / refund to Non-Residents (including NRIs), the following further conditions shall apply:

In case of Non-Residents (including NRIs), who remit their application monies from funds held in NRE / FCNRaccounts, refunds and / or payment of interest / dividend and other disbursement, if any, shall be credited to suchaccounts, details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of Non-Residents (including NRIs), who remit their application monies through Indian Rupee draft purchased from abroad,refund and / or payment of dividend / interest and any other disbursement, shall be credited to such accounts (detailsof which should be furnished in the CAF) and will be made net of bank charges / commission in US Dollars, at therate of exchange prevailing at such time. We will not be responsible for any loss on account of exchange fluctuationsfor converting the Indian Rupee amount into US Dollars. The share certificate(s) will be sent by registered post at theIndian address of the Non-Resident (including NRI) applicant.

Shareholder’s Depository Account and Bank details

Shareholder’s applying for Shares in demat mode should note that on the basis of the name of the shareholder(s),Depository Participant’s Name, Depository Participant’s Identification Number and Beneficiary AccountNumber provided by them in the CAF, the Registrar to the Issue will obtain from the Depository the demo-graphic details including the address, Shareholders bank account details, MICR code and occupation (here-inafter referred to as ‘Demographic Details’). These bank account details would be used for giving refunds tothe shareholder(s). Hence, the shareholder(s) are requested to immediately update their bank account detailsas appearing in the records of the Depository Participant. Please note that failure to do so could result indelays in dispatch / credit of refunds to the shareholder(s) at the shareholder(s) sole risk and neither the LeadManagers or the Registrar or the Refund Banker nor shall we have any responsibility and undertake anyliability for the same.

These demographic Details would be used for all correspondences with the shareholder(s) including mailing ofAllotment advice and printing of bank particulars on the refund order or for refunds through electronic transfer offunds, as applicable. By signing the Composite Application Form, the shareholder(s) would be deemed to have

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authorized the depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Detailsas available in its records.

In case of shareholder(s) receiving refunds through electronic transfer of funds, delivery of refund orders / allocationadvice gets delayed if the same once sent to the address obtained from the depositories are returned undelivered.

No Offer in the United StatesThe rights and the shares of our Company have not been and will not be registered under the United States SecuritiesAct of ‘1933, as amended (the “Securities Act”) or any U.S. state securities laws and may not be offered, sold, resoldor otherwise transferred within the United States or to, or for the account or benefit of, “U.S. Persons” (as defined inRegulation S under the Securities Act), except in a transaction exempt from the registration requirements of theSecurities Act. The rights referred to in this Letter of Offer are being offered in India, but not in the United States.The offering to which this Letter of Offer relates is not, and under no circumstances is to be construed as, an offeringof any shares or rights for sale in the United States, or the territories or possessions thereof, or as a solicitation thereinof an offer to buy any of the said shares or rights. Accordingly, this Letter of Offer and the enclosed CAF should notbe forwarded to or transmitted in or into the United States at any time except in a transaction exempt from theregistration requirements of the Securities Act.

Neither our Company nor any person acting on behalf of our Company will accept subscriptions or renunciationsfrom any person, or the agent of any person, who appears to be, or who our Company or any person acting on behalfof our Company has reason to believe is a resident of the United States and to whom an offer, if made, would resultin requiring registration of this Letter of Offer with the United States Securities and Exchange Commission. Therights may not be transferred or sold to any U.S. Person (as defined in Regulation S under the Securities Act).

Letters of Allotment / Share Certificates / Demat CreditLetter(s) of allotment / share certificates / demat credit or letters of regret will be dispatched to the registered addressof the first named applicant or respective beneficiary accounts will be credited within 15 days, from the date ofclosure of the subscription list. In case we issue letters of allotment, the relative share certificates will be dispatchedwithin three months from the date of allotment. Allottees are requested to preserve such letters of allotment (if any)to be exchanged later for share certificates. Export of letter of allotment (if any) / share certificates / demand creditto Non-Resident (including NRI) allottees will be subject to the approval of RBI.

Option to receive Equity Shares in Dematerialized FormApplicants to our Equity Shares issued through this Issue shall be allotted the securities in dematerialized (elec-tronic) form at the option of the applicant, which enables the Investors to hold and trade in securities in a dematerializedform, instead of holding the securities in the form of physical certificates.

In this Issue, the allottees, who have opted for Equity Shares in dematerialized form, upon allotment, will receivetheir Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. TheCAF shall contain space for indicating number of Shares applied for in demat and physical form or both. Investorwill have to give the relevant particulars for this purpose in the appropriate place in the CAF, which do not accuratelycontain this information, will be given the securities in physical form. No separate applications for securities inphysical and / or demateralized form should be made. If such applications are made, the application for physicalsecurities will be treated as multiple applications and is liable to be rejected. In case of partial allotment, allotmentwill be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares.

We will apply to the BSE, NSE and MSE for listing of the Equity Shares issued and allotted pursuant to the Issue.Upon the final approvals of BSE, NSE and MSE being granted to us, the Equity Shares issued pursuant to the Issuewould be listed on the BSE, NSE and MSE.

Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is as under:

Open a beneficiary account with any depository participant (care should be taken that the beneficiary accountshould carry the name of the holder in the same manner as is exhibited in our records. In the case of jointholding, the beneficiary account should be opened carrying the names of the holders in the same order as withus). In case of Investors having various folios in the Company with different joint holders, the Investors willhave to open separate accounts for such holdings. Those Equity Shareholders who have already opened suchBeneficiary Account(s) need not adhere to this step.

For Equity Shareholders already holding Equity Shares of the Company in dematerialized form as on theRecord Date, the beneficial account number shall be printed on the CAF. For those who open accounts later orthose who change their accounts and wish to receive their Equity Shares pursuant to this Issue by way of creditto such account, the necessary details of their beneficiary account should be filed in the space provided in theCAF. It may be noted that the allotment of Equity Shares arising out of this Issue may be made by the Companyin its discretion in dematerialized form even if the original Equity Shares of the Company are not dematerialized.

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Nonetheless, it should be ensured that the Depository Account is in the name(s) of the Equity Shareholders andthe names are in the same order as in our records.

Responsibility for correctness of information (including applicant’s age and other details) filled in the CAF vis-à-vissuch information with the applicant’s depository participant, would rest with the applicant. Applicants should ensurethat the names of the applicants and the order in which they appear in CAF should be the same as registered with theapplicant’s depository participant.

If incomplete / incorrect beneficiary account details are given in the CAF the applicant will be allotted Equity Sharesin physical form.

The Equity Shares pursuant to this Issue allotted to Investors opting for demateralized form, would be directlycredited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any)would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository participant willprovide to him the confirmation of the credit of such Equity Shares to the applicant’s depository account. Renounceeswill also have to provide the necessary details about their beneficiary account for allotment of securities in this Issue.In case these details are incomplete or incorrect, the application is liable to be rejected.

Utilisation of ProceedsSubscription received against this Issue will be kept in a separate bank account(s) and we would not have access tosuch funds unless it has received minimum subscription of 90% of the Issue and the necessary approval of theDesignated Stock Exchange, to use the amount of subscription.

We have received sum of Rs.12000 lakhs from Sanmar Holdings Limited, promoter company of our Company andutilised for part financing the project. The amount paid by Sanmar Holdings Limited will be adjusted towards theamount payable by them for the shares allotted to them in this Issue and the balance amount shall be refunded toSanmar Holdings Limited, without interest. The Company undertakes that it will comply with the provisions ofClause 40A of the Listing Agreement.

General instructions for applicants

(a) Please read the instructions printed on the enclosed CAF carefully.

(b) Application should be made on the printed CAF, provided by us except as mentioned under the head Applicationon Plain Paper and should be complete in all respects. The CAF found incomplete with regard to any of theparticulars required to be given therein, and / or which are not completed in conformity with the terms of thisLetter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded withoutinterest and after deduction of bank commission and other charges, if any. The CAF must be filled in Englishand the names of all the applicants, details of occupation, address, father’s / husband’s name must be filled inblock letters.

(c) The CAF along with cheque / demand draft should be sent to the Bankers to the Issue / Collecting Bank or tothe Registrar to the Issue and not to us or Lead Managers to the Issue. The Applicants are advised to write theapplication number and name of the first applicant on the reverse of the cheque/ demand draft. Applicantsresiding at places other than cities where the branches of the Bankers to the Issue have been authorized by usfor collecting applications, will have to make payment by Demand Draft payable at Chennai of amount net ofbank and postal charges, and send their application forms to the Registrar to the Issue by REGISTEREDPOST. If any portion of the CAF is / are detached or separated, such application is liable to be rejected.

(d) The applicant, and in the case of application in joint names, each of the joint applicants, should mention his/herPAN allotted under the Income-Tax Act, 1961, irrespective of the amount of the application.

(e) Bank Account Details: It is mandatory for applicants to provide information as to their savings / current accountnumber and our name with whom such account is held in the CAF to enable the Registrar to the issue to printthe said details in the refund orders, if any after the names of the payees. Application not containing suchdetails is liable to be rejected.

(f) Payment by cash: The payment against the application should not be effected in cash if the amount to be paidis Rs.2500 or more. In case payment is effected in contravention of this, the application may be deemed invalidand the application money will be refunded and no interest will be paid thereon. Payment against the applicationif made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.

(g) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to theConstitution of India. Signatures other than in English or Hindi and thumb impression must be attested by aNotary Public or a Special Executive Magistrate under his / her official seal. The Equity Shareholders mustsign the CAF as per the specimen signature recorded with us or depositories.

(h) In case of an application under power of attorney or by a body corporate or by a society, a certified true copyof the relevant power of attorney or relevant resolution or authority to the signatory to make the relevant

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investment under this Issue and to sign the application and a copy of the Memorandum and Articles of Associationand / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue givingreference to the serial number of the CAF. In case the above referred documents are already registered with us,the same need not be furnished again. In case these papers are sent to any other entity besides the Registrar tothe Issue or are sent after the Issue Closing Date, then the application is liable to be rejected. In no case shouldthese papers be attached to the application submitted to the Bankers to the Issue.

(i) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per thespecimen signature(s) recorded with us. Further, in case of joint applicants who are renouncees, the number ofapplicants should not exceed three. In case of joint applicants, reference, if any, will be made in the firstapplicant’s name and all communication will be addressed to the first applicant.

(j) Application(s) received from Non-Residents (including NRIs) for allotment of Equity Shares shall, inter alia,be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refundof application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest,export of share certificates, etc. In case a Non-Resident (including NRI) Equity shareholder has specific approvalfrom the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

(k) Prior to the date of allotment in this Issue, all communications in connection with the application for the EquityShares, including any change in address of the Equity Shareholders, should be addressed to the Registrar to theissue quoting the name of the first / sole applicant, Equity Shareholder, folio number / Demat ID (DP ID+ClientID) and CAF number. After the date of allotment, for Shares held in physical form, any intimation for changeof address of Equity Shareholders, should be sent to the Registrar to the issue as stated above, and for Sharesheld in electronic / dematerialized form, to the respective Depository Participant.

(l) Split forms cannot be re-split.

(m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled toobtain split forms.

(n) Applicants must write their CAF number on the reverse of the cheque / demand draft.

(o) Only one mode of payment per application should be used. The payment must be either in cash or by cheque /demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member ora sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF wherethe application is to be submitted.

(p) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or postdated chequesand postal / money orders will not be accepted and applications accompanied by such cheques / demand drafts/ money orders or postal orders will be rejected. The Registrar will not accept payment against application ifmade in cash. (For payment against application in cash please refer point (f) above).

(q) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank / Registrarwill acknowledge receipt of the same by stamping and returning the acknowledgement slip at the bottom of theCAF.

Grounds for Technical RejectionsApplicants are advised to note that applications are liable to be rejected on technical grounds, including the following:

Amount paid does not tally with the amount payable for the shares applied;

Bank account details (for refund) are not given;

Age of first applicant not given;

Application without mentioning the PAN in the application.

In case of Application under power of attorney or by limited companies, corporate, trust, etc. relevantdocuments are not submitted;

If the signature of the existing shareholder does not match with the one given on the Application Form andfor renouncees if the signature does not match with the records available with their depositories;

If the Applicant desires to have Shares in electronic form, but the Application Form does not have theApplicant’s depository account details;

Application Forms are not submitted by the Applicants within the time prescribed as per the ApplicationForm and the Letter of Offer;

Applications not duly signed by the sole / joint Applicants;

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Applications by OCBs unless accompanies by specific approval from the RBI permitting the OCBs toinvest the Issue;

In case no corresponding record is available with the Depositories that matches three parameters, namely,names of the Applicants (including the order of names of joint holders), the Depository Participant’sIdentity (DP ID) and the beneficiary’s identity;

Applications by US persons;

Applications which have been evidence of being dispatched from the US;

Applications by ineligible Non-Residents (including NRIs) (including on account of restriction orprohibition under applicable local laws) and where last available address in India has not been provided;

Multiple Applications;

Disposal of application and application moneyNo acknowledgement will be issued for the application moneys received by us. However, the Bankers to the Issue /Registrar to the issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledge-ment slip at the bottom of each CAF.

The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, andin either case without assigning any reason thereto.

In case an application is rejected in full, the whole of the application money received will be refunded. Wherever anapplication is rejected in part, the balance of application money, if any, after adjusting any money due on EquityShares allotted, will be refunded to the applicant within 15 days from the close of the Issue in accordance withSection 73 of the Act.

For further instruction, please read the Composite Application Form (CAF) carefully.

Utilisation of Issue ProceedsThe Board of Directors declares that:

i. The funds received against this Issue will be transferred to a separate bank account other than the bankaccount referred to in sub-section (3) of Section 73 of the Act.

ii. Details of all monies utilized out of the Issue shall be disclosed under an appropriate separate head in ourbalance sheet indicating the purpose for which such moneys has been utilized.

iii. Details of all such unutilized moneys out of the Issue, if any, shall be disclosed under an appropriateseparate head in our balance sheet indicating the form in which such unutlised moneys have been invested.

The funds received against this Issue will be kept in a separate bank account and we will not have any access to suchfunds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that we have receivedthe minimum subscription of 90% of the Issue.

We have received sum of Rs.12000 lakhs from Sanmar Holdings Limited, our promoter company, and utilised forpart financing the project. The amount paid by Sanmar Holdings Limited will be adjusted towards the amountpayable by them for the shares allotted to them in this Issue and the balance amount shall be refunded to SanmarHoldings Limited, without interest. The Company undertakes that it will comply with the provisions of Clause 40Aof the Listing Agreement.

Undertakings by the Company1. We shall attend to the complaints received in respect of the Issue expeditiously and satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all StockExchanges where the securities are to be listed will be taken within seven working days of finalization of basisof allotment.

3. The funds required for dispatch of refund orders / allotment letters / certificates by registered post shall bemade available to the Registrar to the Issue.

4. The certificates of the securities / refund orders to the Non-Residents (including NRIs) shall be dispatchedwithin the specified time.

5. No further issue of securities affecting our equity capital shall be made till the securities issued / offeredthrough the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc.

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6. We accept full responsibility for the accuracy of information given in this Letter of Offer and confirm that to bestof its knowledge and belief, there are no other facts the omission of which makes any statement made in this Letterof Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.

7. All information shall be made available by the Lead Manager and the Issuer to the investors at large and noselective or additional information would be available for a section of the investors in any manner whatsoever,including at road shows, presentations, in research or sales reports etc.

8. The Company shall comply with the accounting norms specified by the Board from time to time.

Important

Please read this Letter of Offer carefully before taking any action. The instructions contained in the accompanyingComposite Application Form (CAF) are an integral part of the conditions of this Letter of Offer and must becarefully followed; otherwise the application is liable to be rejected.

All enquiries in connection with this Letter of Offer or accompanying CAF and requests for Split ApplicationForms must be addressed (quoting the Registered Folio Number / DP and Client ID number, the CAF numberand the name of the first Equity Shareholder as mentioned on the CAF and superscribed “Chemplast SanmarLimited - Rights Issue” on the envelope) to the Registrar to the Issue at the following address:

Integrated Enterprises (India) Limited2nd Floor. “Kences Towers”,No.1 Ramakrishna Street,North Usman Road,T Nagar, Chennai- 600 017Tel: (+91) 44 - 2814 0801 - 03Fax: (+91) 44 – 2814 2479Contact Person: Mr S SriramE- mail: sureshbabu@iepindia.comWebsite: www.iepindia.com

It is to be specifically noted that this Issue of Equity Shares is subject to the section titled “Risk Factors”beginning on page ix of this Letter of Offer.

The Issue will not be kept open for more than 15 days unless extended, in which case it will be kept open for amaximum of 30 days.

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MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATIONThe main provisions of the Articles of Association of our Company are set forth below:

CAPITAL AND SHARES

Article 4:

a) The Share Capital of the Company is Rs.235,00,00,000 (Rupees Two Hundred and Thirty five Crores)divided into 200,00,00,000 (Two Hundred Crores) Equity Shares of Re.1/- (Rupee One) each and 35,00,000(Thirty Five Lacs) Preference Shares of Rs.100 (Rupees One Hundred) each.

b) The company shall have the power to convert any portion of the unissued equity shares into PreferenceShares and vice versa and the Company may issue any part or parts of the unissued shares upon such termsand conditions and with such rights and privileges annexed thereto, as the company may at its discretion,and subject to the provisions of Sections 86 to 89 of the Act.

c) Subject to the provisions of the Act and all other applicable provisions of law, the Company may issueshares either equity or any other kind with non voting rights and the resolutions authorising such issueshall prescribe the terms of issue.

ALLOTMENT OF SHARES

Article 6(d):

Subject to the provisions of the Act, and of these Articles the shares, whether part of the original capital or a newcapital issue, shall be under the control of the Board who may issue, allot or otherwise dispose of any such shares atsuch time or times and on such terms and conditions as the Board may think fit.

CALLS

Article 20:

Subject to the provisions of Section 91, the Board of Directors may, from time to time make such calls as they thinkfit upon the members in respect of all moneys unpaid on the shares held by them respectively and not by the condi-tions of allotment thereof made payable at fixed times, and the member shall pay the amount of every call so made onhim to the persons and at the time and place appointed by the Board.

Article 22 provides that “If by the terms of issue of any share or otherwise any amount is made payable at any fixedtime or by installments at fixed times whether on account of the nominal value of the share or by way of premium,every such amount or instalment shall be payable as if it were a call duly made by the Board, of which due notice hadbeen given, and all the provisions herein contained in respect of calls shall relate and apply to such amount orinstallment accordingly.

FORFEITURE AND LIEN

Article 39:

If a member fails to pay any call or instalment of a call on the day appointed for the payment thereof, the Board may,at any time thereafter, during such time as any part of such a call or instalment remains unpaid, serve a notice on himrequiring payment of so much of the call or instalment as is unpaid together with any interest which may haveaccrued. The Board may accept in the name of and for the benefit of the company and upon such terms and conditionsas may be agreed, the surrender of any shares liable to forfeiture.

COMPANY’S LIEN ON SHARES

Article 16:

The company shall have a first and paramount lien upon all the shares (other than fully paid up shares) registered inthe name of each members, whether solely or jointly with others, and upon the proceeds of sale thereof for all moneys(whether presently payable or not) called or payable at a fixed time in respect of such shares and no equitable interestin any share shall be created except upon the footing and condition that Article 11 hereof is to have full effect. Andsuch lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed,the registration of a transfer of shares shall operate as a waiver of the company’s lien, if any, on such shares.

TRANSFER AND TRANSMISSION

Article 29:

Save as provided in Section 108 of the Act it shall not be lawful for the company to register a transfer of any sharesunless the proper instrument of transfer duly stamped and executed by the transferor and the transferee specifying the

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name, address and occupation, if any, of the transferee has been delivered to the company along with the certificateand if no such certificate is in existence, along with the letter of allotment.

APPLICATION FOR TRANSFER

Article 30:

An application for the registration of the transfer of shares may be made either by the transferor or the transfereeprovided that where such application is made by the transferor no registration shall, in the case of partly paid shares,be effected unless the company gives notice of the application to the transferee and subject to the provisions ofArticle 33 hereof the company shall, unless objection is made by the transferee within two weeks from the date ofreceipt of the notice, enter in the Register of Members the name of the transferee in the same manner and subject tothe same conditions as if the application for registration was made by the transferee.

DIRECTOR MAY DECLINE TO REGISTER TRANSFER

Article 32:

Subject to the provisions of Section 111 of the Act, the Board, without assigning any reason for such refusal, maywithin two months from the date on which the instrument of transfer was delivered to the company, refuse to registerany transfer of, or the transmission by operation of law of the right to a share. Provided that registration of a transfershall not be refused on the ground of the transferor being either alone or jointly with any other person or personsindebted to the company on any account whatsoever.

COMPANY’S RIGHT TO REGISTER TRANSFER BY APPARENT LEGAL OWNER

Article 34:

The company shall incur no liability or responsibility whatsoever in consequence of its registering or giving effect toany transfer of shares made or purporting to be made by any apparent legal owner thereof (as shown or appearing inthe Register of Members) to the prejudice of persons having or claiming any equitable right, title or interest to or inthe same shares notwithstanding that the company may have had notice of such equitable right, title, or interest ornotice prohibiting registration of transfer and may have entered such notice or referred thereto in any books of thecompany and the company shall not be bound by or required to regard or attend to or give effect to any notice whichmay be given to it of any equitable right or title or interest or be under any liability whatsoever for refusing orneglecting so to do, though it may have been entered or referred to in the books of the company; but the companyshall, nevertheless be at liberty to have regard to and attend to any such notice and give effect thereto, if the Boardshall think fit.

INCREASE AND REDUCTION OF CAPITAL

Article 60:

The Board may, with the sanction of the company in general meeting accorded by an ordinary resolution, increasethe authorised share capital by such sums, to be divided into shares of such amount, as the resolution shall prescribe.

REDUCTION OF CAPITAL ETC

Article 64:

The Company may by special resolution reduce its share capital or capital redemption fund or share premium ac-count in any manner and with and subject to any incident authorised and consent required by law.

CONSOLIDATION SUB-DIVISION AND CANCELLATION OF SHARES

Article 61:

The Company may by an ordinary resolution:a) Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;b) Sub-divide the whole or any part of its share capital into shares of smaller amount than is fixed by the

Memorandum of Association so however that, in the sub-division, the proportion between the amount, ifany, unpaid on each reduced share shall be the same as it was in the case of the shares from which thereduced share is derived;

c) Cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to betaken by any person.

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VARIATION OF RIGHTS

Article 7(a):

The rights attached to any class of shares (unless otherwise provided by the terms of the issue of that class) may,subject to the provisions of Sections 106 and 107 of the Act, be varied with the consent in writing of the holders ofthe three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a separatemeeting of the holders of the issued shares of that class.

GENERAL MEETING

Articles 65:a) The first annual general meeting of the company shall be held within eighteen months of its incorporation.b) Subsequent annual general meetings shall be held in each calendar year within six months after the expiry

of each financial year provided that not more than fifteen months shall elapse between the date of oneannual general meeting and that of the next. All such meetings shall be held during business hours on aday that is not a public holiday either at the Registered Office of the company or at any place within thecity, town or village in which the Registered Office is situate. The Board may, with the sanction of theRegistrar, extend the time within which any annual general meeting shall be held, by a further period notexceeding three months.

EXTRA-ORDINARY MEETINGS

Article 66:

All general meetings other than annual general meetings shall be called Extraordinary General Meetings.

Article 67:

The Board may, whenever it thinks fit, call extraordinary general meetings.

QUORUM

Article 71

Not less than five members personally present and holding together with the members, if any, present in person or byproxy not less than one third of the total issued shares outstanding in the capital of the Company and entitled to voteat the said meeting or on any business transacted therein shall be the quorum for a general meeting and no businessshall be transacted unless the requisite quorum is present at the commencement of the meeting.

Article 72

If within half an hour from the time appointed for holding the meeting a quorum is not present, the meeting, if calledupon the requisition of members, shall be dissolved, and in any other case, it shall stand adjourned to the same day inthe next week, at the same time and place or to such other day and such other time and place as the Board maydetermine, and if at the adjourned meeting also a quorum is not present within half an hour from the time appointedfor holding the meeting, the members present shall be a quorum.

CHAIRMAN OF GENERAL MEETING

Article 73

The Chairman, if any, of the Board, shall preside at every general meeting of the company.

Article 74

If there is no such Chairman, or if at any meeting he is not present within fifteen minutes after the time appointed forholding the meeting, or is unwilling to act as Chairman, the members present shall choose another director as Chair-man; and if no director be present, or if all the directors decline to take the Chair, then, the members present shallchoose one of their number to be Chairman.

Article 77

Before or on the declaration of the result of the voting on any resolution on a show of hands, a poll may be orderedto be taken by the Chairman of the meeting of his own motion and shall be ordered to be taken by him on a demandmade in that behalf by any member or members present in person or by proxy and holding shares in the companywhich confer a power to vote on the resolution not being less than one-tenth of the total voting power in respect of the

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resolution or on which an aggregate sum of not less than Fifty thousand rupees has been paid-up. The demand for apoll may be withdrawn at any time by the person or persons who made the demand.

VOTES OF MEMBERS

Article 82a) Every question submitted to a General Meeting shall be decided in the first instance by a show of hands.

On a show of hands, every member present in person or by a representative of a member company or abody corporate appointed under the provisions of these Articles, such member or Member Company orbody corporate being entitled to vote on the question, shall have one vote. A proxy (as defined in Article87) shall not be entitled to vote except on a poll.

b) Save as hereinafter provided, on a poll the voting rights of a holder of Equity Shares shall be as specifiedin Section 87 of the Act. Provided that no body corporate shall vote by proxy so long as a resolution of itsboard of directors under the provisions of Section 187 of the Act is in force and the representative namedin such resolution is present at the general meeting at which the vote by proxy is tendered.

c) A member holding any Preference Share capital in the company shall not be entitled to vote in respect ofsuch capital on any resolution unless:i) the dividend due on such capital or any part of such dividend (whether declared or not) has remained

unpaid in respect of an aggregate period of not less than two years preceding the date of commencementof the meeting; or

ii) such a resolution directly affects the rights attached to preference shares; oriii) such a resolution is for winding up of the company or for re-payment or reduction of its share capital.

His voting right, when he is so entitled to vote, shall be, on a show of hands, one vote and, on a poll,in the same proportion as the capital paid up in respect of preference shares held by him bears to thetotal paid up equity capital of the company.

DIRECTORS

Article 93(a):

The Company shall have not less than five and not more than fifteen directors. The company in general meeting mayby an ordinary resolution increase the number of Directors within these limits.”

Article 96:

a) “Subject to the provisions of Section 260 of the Act and to the maximum number of Directors to bestipulated by the Articles, the Board shall have the power to appoint one or more additional Directorswho shall hold office only up to the date of the next Annual General Meeting of the company.

b) Subject to Section 261 of the Act, if the office of any Director appointed by the company in generalmeeting is vacated before the term of office will expire in the normal course, the resulting casual vacancyoccurring on the Board may be filled up by the Board, but the person so chosen shall be subject toretirement at the same time as if he had become a Director on the day on which the Director in whose

place he is appointed was last elected a Director.

Article 97:a) The Directors for the time being of the company shall each be entitled to be paid a sitting fee of such sum

as may be determined by the Board subject to the maximum prescribed by the Central Government underits relevant provisions of the Companies Act, 1956, for every meeting of the Board, or of any committeeof the Board, attended by him and all travelling, halting and other expenses incurred by him in attendingand returning from such meetings of the Board, or of any committee of the Board.

b) In the case of a Director who is neither in the whole-time employment of the company nor a ManagingDirector nor an Ex-officio Director and whose remuneration does not include anything by way of monthlypayment, the company may, by an ordinary resolution, authorise the payment of such Director or whenthere is more than one such Director, to all of them together (to be divided amongst themselves in suchmanner as the Board may from time to time determine and in default of determination equally) of acommission not exceeding three per cent of the net profits of the company, computed in the manner setout in Section 198 of the Act, in addition to the fees to be paid to the Directors for attending meetings ofthe Board or a committee thereof.

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SEAL

Article 120:

The Board shall provide a Seal for the purposes of the company and shall have power from time to time to destroy thesame and substitute a new Seal in lieu thereof, and the Board shall provide for the safe custody of the Seal for the timebeing.

QUORUM FOR MEETINGS

Article 125(1):

Subject to Section 287 of the Act, the quorum for a meeting of the Board shall be one third of the total number ofDirectors, or two Directors, whichever is higher.

RESERVES

Article 140:

The Board may, from time to time, before recommending any dividends set apart any and such portion of the profitsof the company as it thinks fit as Reserves to meet contingencies or for the liquidation of any debentures, debts orother liabilities of the company, for equalisation of dividends for repairing, improving or maintaining any of theproperty of the company and for such other purposes of the company as the Board at its absolute discretion thinksconducive to the interests of the company; and may, subject to the provisions of Section 372 of the Act, invest theseveral sums to set aside upon such investments (other than shares of the company) as it may think fit, and from timeto time deal with and vary such investments and dispose of all or any part thereof for the benefit of the company, andmay divide the Reserves into such special funds as it thinks fit, with full power to employ the Reserves or any partthereof in the business of the company and that without being bound to keep the same separate from the other assets.

DIVIDENDS

Article 147:

No dividend shall be declared or paid except out of the profits of the company available after complying with theprovisions of Section 205 of the Act.

Article 151:a) Any dividend interest or other moneys payable in cash in respect of share may be paid by cheque or

warrant drawn on the company’s bankers sent through the post, directed to the registered address of theregistered holder or in the case of joint holders to the address of that one of the joint holders who is firstnamed on the register of members, or to such person and to such address as the holder or joint holdersmay in writing direct.

b) Every such cheque or warrant shall be made payable to the order of the person to whom it is sent.c) No dividend shall be paid by the company in respect of any share except to the registered holder of such

share or to his order or to his bankers.

Article 152:

No dividend shall bear interest against the company.

UNCLAIMED DIVIDEND

Article 155

The Board may deal with unclaimed dividends, subject to the requirements of Section 205-A of the Act.

WINDING UP

Article 171:a) If the company shall be wound up, the liquidator may, with the sanction of a special resolution of the

company and any other sanction required by the Act, divide amongst the members in specie or kind thewhole or any part of the assets of the company, available for distribution among members (whether theyshall consist of property of the same kind or not) and may, for such purpose set such value as he deemsfair upon any property to be divided as aforesaid and may determine how such division shall be carried

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out as between members or different classes of members. The liquidator may, with the like sanction, vestthe whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as theliquidator, with the like sanction, shall think fit, but so that no member shall be compelled to accept anyshares or other securities whereon there is any liability.

b) On a winding up, the net assets available for distribution shall be applied first for payment of all arrears ofdividend, whether earned, declared, or not, on the preference shares, if any, as at the commencement of thewinding up; secondly for repayment to the preference shareholders of the amount of capital paid up on thepreference shares and the balance, if any, shall be divided among the equity shareholders in proportion tothe amounts paid up on the equity share capital held by them as at the commencement of the winding up.

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTIONThe following contracts (not being contracts entered into in the ordinary course of business carried on by us orentered into more than two years before the date of this Letter of Offer which are or may be deemed material) havebeen entered into by us. These contracts and also the documents for inspection referred to hereunder, may be in-spected at the Registered Office of the Company situated at 9, Cathedral Road, Chennai - 600086 from 11.00 a.m. to2.00 p.m. from the date of this Letter of Offer until the date of closure of the Subscription List.

A. Material Contracts

1. Scheme of amalgamation between Chemicals and Plastics India Ltd. and Urethanes India Limited, now knownas Chemplast Sanmar Limited, w.e.f. October 1, 1991 approved by the Honorable High Court of Judicature atMadras on April 10, 1992.

2. Scheme of amalgamation between Metkem Silicon Ltd. and Chemplast Sanmar Ltd. with effect from 1st April1995 approved by the Honorable High Court of Judicature at Madras on December 22, 1995.

3. Scheme of arrangement between Sanmar Shipping Ltd. and Chemplast Sanmar Ltd. with effect from 1st April1998 approved by the Honorable High Court of Judicature at Madras on June 18, 1999.

4. Scheme of arrangement between Sanmar Properties and Investments Ltd.(SPIL), Polygon Holdings Ltd., SPILSecurities (Beta) Private Ltd., and SPIL Securities (Gamma) Ltd. with effect from 1st January 2003 approvedby the Honorable High Court of Judicature at Madras on April 29, 2003.

5. Scheme of arrangement between Sanmar Holdings Ltd., SPIL and Chemplast Sanmar Ltd. with effect from 1st

November 2003 approved by the Honorable High Court of Judicature at Madras on March 3, 2004.

6. Memorandum of Understanding dated 19th September 2008 between us and Ind Global Corporate Finance Pvt.Ltd., the Lead Managers to the Issue. (now known as Ernst & Young Merchant Banking Services PrivateLimited)

7. Memorandum of Understanding between us and Integrated Enterprises (India) Ltd., the Registrar to the issuedated 1st April 2008 and Memorandum of Agreement dated 23rd January 2009 entered into with IntegratedEnterprises (India) Limited.

8. License agreement dated April 18, 2006 entered into with Ashai Kasei Chemicals Corporation.

9. Agreement dated December 4, 2006 entered into with Jacob H&G Private Limited.

10. Information Technology Services Total Outsourcing Agreement dated August 2, 2005 with Wipro Limited.

11. VCM Sales and Purchase Agreement dated August 14, 2008 entered into with Mitsubishi Corporation of IndiaPrivate Limited.

12. Agreements with Thermax Limited and Thermax Instrumentation Limited both dated December 12, 2006.

13. Agreement dated April 30, 2006 with Ineos Vinyls UK Limited.

14. Emission Reduction Purchase Agreement dated 19th March 2008 entered into with Sempra Energy EuropeLimited (Sempra Energy) and Novation Agreement dated 1st April 2008 with Sempra Energy and Royal Bankof Scotland and Novation Date Notice dated 13th October 2008.

15. Memorandum of Agreement dated 31st January 2009 entered into with Sai Regency Power Corporation PrivateLimited.

16. Agreement dated January 8, 2009 with TCI Sanmar Chemicals LLC, Egypt (TCI).

17. Tri -partite Agreement between us, Integrated Enterprises (India) Ltd. and NSDL dated 22nd March 2000 toestablish connectivity with Depository.

18. Tri-partite Agreement between us, Integrated Enterprises (India) Ltd. and CDSL dated 23rd March 2000 toestablish connectivity with Depository.

19. Common Loan Agreement between the Company and Canara Bank, State Bank of India, State Bank of Hyderabad& State Bank of Mysore dated 9th February 2007.

20. Memorandum of Agreement dated 9th January 2009 entered into with the Bankers to the Issue State Bank of India

B. Documents

1. Our Memorandum of Association and Articles of Association.

2. Certificate of incorporation of our Company dated March 13, 1985.

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3. Fresh certificate of incorporation dated September 1, 1995 consequent on change of name from Chemicals andPlastics India Limited to Chemplast Sanmar Limited.

4. Shareholders Resolution passed at the Annual General Meeting held on July 17, 2008 appointing PriceWaterhouse & Co. as Statutory Auditor for the financial year 2008-09.

5. Copy of the Board Resolutions dated July 25, 2006 & October 31, 2007 and Resolution passed by the committeeof Directors on September 9, 2008 approving the Issue.

6. Copy of the Resolutions appointing Mr P S Jayaraman as Managing Director and Mr.S.Gopal and Mr.V.Rameshas Deputy Managing Directors.

7. Copy of the Resolution passed by the Shareholders under Sections 293(1)(a) and 293(1)(d) of the CompaniesAct, 1956 (Borrowing power of Board of Directors)

8. Copy of the Resolution passed by the Shareholders under Section 372A of the Companies Act, 1956, authorizingBoard of Directors to provide deposit / advance to or letter of credit and / or guarantees on behalf of TCISanmar Chemicals LLC, Egypt.

9. Consents of the Directors, Company Secretary, Chief Financial Officer, Auditors, Lead Manager, Legal Counselto the Issue, Bankers to the Issue, Bankers to the Company, and Registrars to include their names in the Letterof Offer to act in their respective capacities.

10. Board Resolution approving Mr.M.Raman as Company Secretary and Compliance Officer.

11. Letter dated February 13, 2009 from our Statutory Auditor confirming the statement of tax benefits as mentionedin this Letter of Offer.

12. The report of our Statutory Auditor, as setout herein dated February 13, 2009 in relation to our restated financialsfor the last five financial years and for the six months period ending September 30, 2008.

13. Our Annual Reports for the last five financial years.

14. Application to the stock exchanges for listing and in principle approval Letters dated 11th November 2008,5th January 2009 and 20th November 2008 from the BSE, NSE and MSE respectively.

15. Letter of observation on the Draft Letter of Offer from Securities and Exchange Board of India bearing No.CFD/DIL/ISSUES/PB/152435/2009 dated 30th January 2009.

16. Due Diligence Certificate dated September 26, 2008 from the Lead Manager to the Issue.

17. Copy of Resolutions of the Board of Directors and Shareholders dated 8th January 2009 and 3rd March 2009respectively for appointment of Mr P S Jayaraman as Chairman of the Company and Mr S Gopal as ManagingDirector of the Company.

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DECLARATIONNo statement made in this Letter of Offer contravenes any of the provisions of the Act and the rules made thereunder,except as disclosed in this Letter of Offer. All the legal requirements connected with the said issue as also theguidelines, instructions etc. issued by SEBI, Government and any other competent authority in this behalf have beenduly complied with, except as disclosed in this Letter of Offer.

Yours faithfully

For Chemplast Sanmar Limited

Mr. P.S.Jayaraman Chairman

Mr. S.Gopal Managing Director

Mr. V.Ramesh Dy. Managing Director

Mr. M.K.Kumar Independent Director

Mr. S.V.Mony Independent Director

Mr. V.K.Parthasarathy Independent Director

Mr. M.S.Sekhar Independent Director

Mr. M.N.Radhakrishnan Non-Independent Director

Mr. G Balasubramanyam Executive Vice President - Finance

Mr. M.Raman Secretary and Compliance Officer

Place: Chennai.Dated: March 13, 2009