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CRANE INFRASTRUCTURE LIMITED

(A Public Limited Company incorporated on 13th May 2008 under the Companies Act, 1956

and obtained the certificate of commencement of business on 5th August 2008)

Registered Office:

D.No. 25-2-1,G.T. Road, Opp. Mastan Dargah, Guntur-522 004.

Telephone: 0863-2223311 Fax: 0863-2356712

Contact Person: Mr. G.V.S.L.Kantha Rao, Director

INFORMATION MEMORANDUM FOR LISTING OF 7,242,000 EQUITY

SHARES OF RE. 10 /- EACH FULLY PAID UP

GENERAL RISKS

Investment in Equity and Equity related securities involve a degree of risk and investors

should not invest any funds in the equity shares of CRANE INFRASTRUCTURE

LIMITED unless they can afford to take the risk of losing their investment. Investors are

advised to read the Risk Factors carefully before taking an investment decision in the

shares of CRANE INFRASTRUCTURE LIMITED. For taking an investment decision,

investors must rely on their own examination of the Company including the risks

involved. The securities have not been recommended or approved by Securities and

Exchange Board of India (SEBI) nor does SEBI guarantees the accuracy or adequacy of

this document. Specific attention of the investors is invited to the statement of Risk

Factors of this Information Memorandum.

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ISSUER’S ABSOLUTE RESPONSIBILITY

CRANE INFRASTRUCTURE LIMITED having made all reasonable inquiries, accepts

responsibility for, and confirms that this Information Memorandum Contains all

information with regard to CRANE INFRASTRUCTURE LIMITED, which is material,

that the information contained in this Information Memorandum is true and correct in

all material respects and is not misleading in any material respect, that the opinions

and intentions, expressed herein are honestly held and that there are no other facts,

the omission of which makes this document as a whole or any of such information or

the expression of any such opinions or intentions misleading in any material respect.

LISTING

The Equity shares of CRANE INFRASTRUCTURE LIMITED are proposed to be listed on

the Bombay Stock Exchange Limited (BSE). The company has submitted this

information Memorandum with BSE and the same has been made available on the

company website viz. www.craneindia.net The Information Memorandum would also be

made available in the website of BSE (www.bseindia.com).

REGISTRAR AND SHARE TRANSFER AGENT

Bigshare Services Pvt Limited

306, Right Wing, 3rd Floor, Amrutha Ville, Opp. Yashoda Hospital

Somajiguda, Rajbhavan Road, Hyderabad 500082, Telangana

Land : 040-40144967

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TABEL OF CONTENTS

PARTICULARS PAGE NO.

I. Definition / Abbreviation

II. Risk Factors and management Perceptions thereof

III. General Information

IV. Capital Structure

V. Object of the Scheme of Arrangement

VI. Salient Features of the Scheme of Arrangement

VII. Statement of Possible Tax Benefit

VIII. Company History and Management

IX. Overview of Organisation Structure & Senior

Management Personnel

X. Promoter & Subsidiary Companies

XI. Financial statement

XII. Details and Financial Highlights of Companies

under same Management.

XIII. Management Discussions and Analysis

XIV. Outstanding Litigations, Defaults and Material

Development

XV. Articles of Association

XVI. Documents for Inspection

XVII. Declaration

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I. DEFINITION, ABBREVIATIONS

Act The Companies Act, 1956

Articles Articles of Association of Crane

Infrastructure Limited

Board Board of Directors of Crane

Infrastructure Limited

BSE Bombay Stock Exchange Limited

CDSL Central Depository Services (India)

Limited

Company CRANE INFRASTRUCTURE LIMITED

Company incorporated under the Companies Act,

1956

DCA Department of Company Affairs

Depositories Act The Depositories Act, 1996 as amended

from time to time

Depository A Depository registered with SEBI under

the SEBI (Depositories & Participants)

Regulations, 1996 as amended from

time to time

Directors Directors on the Board of CRANE

INFRASTRUCTURE LIMITED

DP Depository Participant

Equity Shares Fully paid-up shares of Re. 10/- each of

the Company

Equity Shareholders Equity Shareholders of the Company

Information Memorandum This Information Memorandum

I T Act Income Tax Act, 1961 and subsequent

amendments thereto

MOA Memorandum of Association of CRANE

INFRASTRUCTURE LIMITED

NSDL National Securities Depository Limited

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NSE National Stock Exchange of India

Limited

RBI Reserve Bank of India

Record Date or Book Closure Date Record Date means 5th June 2010

announced by Crane Infrastructure

Limited as Book Closure Period.

Registrar and Share Transfer Agent /

Registrars / Intime

Bigshare Services Pvt Limited

306, Right Wing, 3rd Floor, Amrutha

Ville, Opp. Yashoda Hospital

Somajiguda, Rajbhavan Road,

Hyderabad 500082, Telangana

Land : 040-40144967

ROC

Registrar of Companies, Andhra

Pradesh, Guntur.

Scheme/Scheme of

Arrangement

Scheme of Arrangement between Virat

Crane Industries Ltd and their

respective shareholders, for Demerger

of its real estate/ infrastructure

business.

Aforesaid scheme was approved by the

Hon’ble High Court of Hyderabad on 18th

February 2010 and the same is became

effective 23rd April 2010.

SEBI

Securities and Exchange Board of India

SEBI Act

Securities and Exchange Board of India

Act, 1992

SEBI Guidelines Extant Guidelines for Disclosure and

Investor Protection issued by Securities

and Exchange Board of India,

constituted under the Securities and

Exchange Board of India Act, 1992 (as

amended), called Securities and

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Exchange Board of India (Disclosure and

Investor Protection) Guidelines, 2000, as

amended, including instructions and

clarifications issued by SEBI from time

to time.

In the Information Memorandum all reference to “Rs.” refer to Rupees, the lawful currency

of India, reference to one gender also refers to another gender and the word “Lakh” or “Lac”

means “one hundred thousand” and the word “million” means “ten lacs” and the word

“crore” means “ten million”.

In the Information Memorandum all reference to ‘Rs’ refer to Rupees, the lawful currency of

India, reference to one gender also refers to another gender and the word ‘Lakh’ or ’Lac’

means ‘one hundred thousand’ and the word ‘million’ means ‘ten lacs’ and the word ‘crore’

means ‘ten million’.

CERTAIN CONVENTIONS; USE OF MARKET DATA

Unless stated otherwise, the financial data in this Information Memorandum is derived

from our restated financial statements. The fiscal year commences on April 1st and ends on

March 31st of each year, so all references to a particular fiscal year are to the twelve month

period ended March 31st of that year. In this Information Memorandum, any discrepancies

in any table between the total and the sums of the amounts listed are due to rounding.

All references to “India” contained in this Information Memorandum are to the Republic of

India. All references to “Rupees” or “Rs.” are to Indian Rupees, the official currency of the

Republic of India.

For additional definitions, please see the section titled “Definitions, Abbreviations and

Industry Related Terms” of this Information Memorandum.

Unless stated otherwise, industry data used throughout this Information Memorandum has

been obtained from the published data and industry publications. Industry publications

generally state that the information contained in those publications has been obtained from

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sources believed to be reliable but that their accuracy and completeness are not guaranteed

and their reliability cannot be assured. Although we believe that industry data used in this

Information Memorandum is reliable, it has not been independently verified.

The information included in this Information Memorandum about various other Companies

is based on their respective Annual Reports and information made available by the

respective companies.

FORWARD-LOOKING STATEMENTS

We have included statements in this Information Memorandum which contain words or

phrases such as “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”,

“anticipate”, “estimate”, “intend”, “plan”, contemplate”, “seek to”, “future”, “objective”,

“goal”, “project”, “should”, “will pursue” and similar expressions or variations of such

expressions, that are “forward looking statements”. Similarly, statements that describe our

objectives, plans or goals also are forward-looking statements, actual results may differ

materially from those suggested by the forward looking statements due to risks or

uncertainties associated with our expectations with respect to, but not limited to:

General economic and business conditions in India and other countries;

Regulatory changes and our ability to respond to them;

Our ability to successfully implement our strategy, our growth and expansion plans;

Technological changes;

Our exposure to market risks, general economic and political conditions in India

which have an impact on our business activities or investments;

The monetary and fiscal policies of India, inflation, deflation, unanticipated

turbulence in interest rates, foreign exchange rates, equity prices or other rates or

prices, the performance of the financial markets in India and globally;

Changes in domestic and foreign laws, regulations and taxes and changes in

competition in our industry.

For further discussion of factors that could cause our actual results to differ, see the

section titled “Risk Factors” of this Information Memorandum. By their nature, certain

market risk disclosures are only estimates and could be materially different from what

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actually occurs in the future. As a result, actual future gains or losses could materially

differ from those that have been estimated.

We do not have any obligation to, and do not intend to, update or otherwise revise any

statements reflecting circumstances arising after the date hereof or to reflect the occurrence

of underlying events, even if the underlying assumptions do not materialize.

II. RISK FACTORS AND MANAGEMENT PERCEPTION THERETO

An investment in equity securities involves a high degree of risk. Investors should are fully

consider all of the information in this Information Memorandum, including the risks and

uncertainties described below, before making an investment in our Equity Shares.

Occurrence of any of the following risks as well as the other risks and uncertainties

discussed in this Information Memorandum could have a material adverse effect on our

business, financial condition and results of operations and could cause the trading price of

our Equity Shares to decline, which could result in the loss to the investor.

The investor(s) should consider the following risk factors carefully in evaluating the

Company and its business before making any investment decision.

A) INTERNAL RISK FACTORS: RISKS RELATED TO OUR BUSINESS OR COMPANY

1) Demand for construction services depends primarily on the activity and

expenditure levels in the infrastructure and real estate industries, and any

reduction in such activity and expenditure may adversely affect our business and

prospects and may reduce the number of projects we undertake and impede our

growth.

Demand for our construction services for ports, terminals, industrial, commercial, retail,

residential and other projects that we undertake is particularly sensitive to the level of

development, production, exploration and transportation activity of, and the

corresponding capital spending by, infrastructure and real estate companies. Demand for

our construction services in the infrastructure sector is primarily dependent on

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sustained economic development in the regions that we operate in and government

policies relating to infrastructure development. It is also significantly dependent on

budgetary allocations made by central and state governments for this sector as well as

funding provided by international and multilateral development finance institutions for

infrastructure projects. Investment by the private sector in infrastructure projects is

dependent on the potential returns from such projects and is therefore linked to

government policies relating to private sector participation and sharing of risks and

returns from such projects. There can be no assurance that government policies will

continue to favor infrastructure investment.

2) The demand for construction services for the real estate sector is dependant on the

performance of the property market in the areas in which we operate, and any slow

down in the demand for real estate and the demand for business of our customers

could adversely affect our business.

The provision of construction services for the real estate sector is dependant on the

performance of the property market in the areas in which we operate. It is not possible to

predict whether demand for commercial or residential property in the areas in which we

operate or India generally will continue to grow in the future, as many social, political,

economic, legal and other factors may affect the development of the property market.

Accordingly, there can be no assurance that the level of demand will consistently match

the level of supply. In the event of any unfavorable developments in the supply and

demand or any decreases in property prices in the areas in which we operate or other

parts in India, our business, financial condition and results of operations may be

adversely affected.

3) Projects included in our Order Book may be delayed, cancelled or not fully paid for

by our clients, which could materially harm our cash flow position, revenues or

profits.

Future earnings related to the performance of the work in the Order Book may not

necessarily be realized. Although projects in the Order Book represent business that we

consider firm, cancellations or scope adjustments may occur. Due to changes in project

scope and schedule, we cannot predict with certainty when or if the projects in our Order

Book will be completed. In addition, even where a project proceeds as scheduled, it is

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possible that contracting parties may default and fail to pay amounts owed or dispute the

amounts owed to us. Any delay, cancellation or payment default could materially harm

our cash flow position, revenues or profits, and adversely affect the trading price of our

Equity Shares.

4) Our revenues depend upon the award of new contracts and the timing of those

awards. Consequently, our results of operations and cash flows may be adversely

affected or fluctuate materially from period to period.

Our revenues are derived primarily from contracts awarded to us on a project-by-project

basis. Generally, it is very difficult to predict whether and when we will be awarded a new

contract since many potential contracts involve a lengthy and complex bidding and

selection process that may be affected by a number of factors, including changes in

existing or assumed market conditions, financing arrangements, governmental approvals

and environmental matters. Because our revenues are derived primarily from these

contracts, our results of operations and cash flows may be adversely affected or fluctuate

materially from period to period depending on the timing of contract awards. The

uncertainty associated with the timing of contract awards may increase our cost of doing

business over a short period or a comparatively longer term. For example, we may decide

to maintain and bear the cost of a workforce in excess of our current contract needs in

anticipation of future contract awards. If an expected contract award is delayed or not

received, we could incur costs in maintaining an idle workforce that may have a material

adverse effect on our results of operations. Or, we may decide that our long term

interests are best served by reducing our workforce and incurring increased costs

associated with severance and termination benefits which also could have a material

adverse effect on our results of operations for the period when incurred. Reducing our

workforce could also impact our results of operations if we are unable to adequately staff

projects that are awarded subsequent to a workforce reduction.

5) We have little or no prior experience in dealing with government entities or

agencies on PPP projects or in undertaking PPP projects. Such PPP projects could

be delayed, and these delays could adversely affect our financial condition and

results of operations.

We intend to bid for PPP projects in the future. Such projects are dependent on initiatives

undertaken by governments, or agencies which may directly or indirectly be owned or

controlled by the government or relevant government organizations. There could be

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delays on such projects due to changes in government policies or initiatives, changes in

budgetary allocation or the insufficiency of funds on the part of the government or

government organization. We have little or no prior experience in dealing with

governmental entities or agencies or on projects that face such a risk of regulatory

change. In addition, documentary closure or completion of PPP projects, including the

release of performance guarantees, retention money and final acceptance notices,

generally takes significant amounts of time and are subject to material delays, which also

adversely affects our financial condition and results of operations.

6) We have little or no prior experience in constructing, managing or operating BOT

projects. The risks associated with undertaking BOT projects can be substantial,

and could adversely affect our business, prospects, financial condition and results

of operations.

We have commenced the process of bidding for certain BOT projects. In a BOT project,

we are required to arrange for the financing and incur all expenditure related to the

project. We are required to maintain and manage the project assets for a stipulated

period during which we derive income from such project. Any delay in completion of the

project may adversely affect our results of operations. The risks associated with

undertaking BOT projects can be substantial, including the risk of incorrect forecasts at

the bid stage concerning revenues to be derived from the use of the constructed facility

and the risk of extended exposure to fluctuating economic conditions. BOT projects

typically have long gestation periods and we may incur substantial capital expenditure

before we derive expected benefits or returns on our investment, which can adversely

impact our business, results of operations and financial condition. There might be delays

in the bid selection process owing to a variety of reasons which may be outside our

control, and our bids may not be selected or, if selected, may be challenged by non-

successful bidders or may not be finalised within the expected time frame or on expected

terms or at all.

7) Our profitability and results of operations may be adversely affected in the event of

increases in the price of raw materials, fuel costs, labor or other inputs.

Our business is affected by the availability, cost and quality of the raw materials that we

use in construction activities. Our principal raw materials include steel and cement.

Generally our longer term contracts have price escalation clauses for increases in the

cost of principal raw materials, however, we bear the risk of increases in costs of other

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raw materials. The prices and supply of these and other raw materials, including fuel and

labor costs, depend on factors not under our control, including but not limited to general

economic conditions, global and domestic market prices, competition, production levels,

transportation costs and import duties, and these prices are cyclical in nature. If, for any

reason, our primary suppliers of raw materials should curtail or discontinue their

delivery of such materials to us in the quantities we need and at prices that are

competitive, our ability to meet our material requirements for our projects could be

impaired, our construction schedules could be disrupted, and we may not be able to

complete our projects as per schedule or at all. We may also not be able to pass on any

increase in the prices of these building materials to our customers. Any of these factors

may materially and adversely affect our results of operations and financial condition.

8) Our industry is highly fragmented and competitive and increased competitive

pressure may adversely affect our results.

We operate in a highly fragmented and competitive industry. We enter into contracts

primarily through a competitive bidding process or on negotiated rate basis. Our

competition varies depending on the size, nature and complexity of the project and on the

geographical region in which the project is to be executed. We compete against various

construction companies. In selecting contractors for major projects, clients generally

limit the tender to contractors they have pre-qualified based on several criteria, including

experience, technical ability, past performance, reputation for quality, safety record,

financial strength and the size of previous contracts executed in similar projects with

them or otherwise. Additionally, while these are important considerations, price is a

major factor in most tender awards and in negotiated contracts and our business is

subject to intense price competition. A number of our competitors are larger and better

placed, which would enable them to take advantage of efficiencies created by size, and

may have better financial resources or greater access to capital at lower costs, and may

be better known in regional markets in which we compete. In addition, as the industry is

highly fragmented, we also face competition from local contractors, who may be able to

cater to local demands at fees and costs lower than ours. Our inability to compete

successfully in our industry would materially and adversely affect our business prospects

and results of operations.

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9) High equipment costs may adversely affect our results of operations.

Our construction operations require various bulk construction equipment, including,

scaffolding, hoists, concrete manufacturing equipment, cranes, pumps and excavators.

In addition, we are required to procure various other equipment, including, process

equipment, mechanical equipment, vessels, machinery, piping materials and electrical

and instrumentation components. Increases in equipment costs not anticipated by us in

our bid, including any foreign exchange rate risk in relation to equipment to be imported

from outside India, may adversely affect our results of operations.

10) Timely and successful completion of our projects is dependent upon our

performance and, in the case of many projects, the cooperation of our sub-

contractors, and any failure or delay in successful completion could adversely

affect the construction quality of our developments and adversely affect our

profitability and reputation.

We rely on third parties for the implementation of projects where we have entered into

arrangements with third parties for the supply of labor, equipment and raw material.

Accordingly, the timing and quality of construction of our properties depend on the

availability and skill of those sub-contractors. Typically, construction contracts are

subject to specific completion schedule requirements with liquidated damages chargeable

in the event that a project falls behind schedule. Although we have completed our

projects on or before schedule, in case of sub-contracting, the completion of the contract

depends in part on the performance of our sub-contractors. Delay or failure on the part

of a sub-contractor to complete its project work on time, for any reason, could result in

additional costs to us, including the payment of contractually agreed liquidated damages.

The amount of such additional costs could adversely affect our profit margins on the

project. While we may seek to recover these amounts as claims from the supplier, vendor,

sub-contractor, joint venture or other third party responsible for the delay or for

providing nonconforming products or services, we cannot assure you that we will recover

all or any part of these costs in all circumstances. If we enter into joint ventures for any

project in the future, we may face similar risks as we may experience with a sub-

contractor. Performance problems for existing and future projects could cause our actual

results of operations to differ materially from those anticipated by us and could damage

our reputation within our industry and our customer base.

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11) Our business strategy may change in the future and may be different from that which is

contained herein. Changes in our business strategy may expose us to additional risks,

and an inability to manage such risks may have an adverse effect on our business and

results of operations.

12) We are dependant on our directors and senior management and our inability to retain

them and attract new key personnel may have an adverse impact on the functioning of

our business.

13) Our inability to attract and retain skilled personnel could adversely affect our

business and results of operations.

Our ability to meet future business challenges depends on our ability to attract and

recruit talented and skilled personnel. A significant number of our employees are skilled

engineers, technicians and tradesman and we face strong competition to recruit and

retain skilled and professionally qualified staff. We are not certain that we will be able to

increase their salaries at historical rates in future and maintain our profitability

margins. Further, there can be no assurance that an increase in salary will result in

lesser attrition. Our future performance will depend upon the continued services of

these persons. The loss of any key personnel or an inability to manage the attrition

levels in different employee categories may materially and adversely impact our business

and results of operations. In addition, we cannot assure you that we will be successful

in our efforts to retain or attract qualified personnel when needed. Therefore, when we

anticipate or experience growing demand for our services, we may incur the cost of

maintaining a professional staff in excess of our current contract needs in an effort to

have sufficient qualified personnel available to address this anticipated demand.

14) Given the long-term nature of the projects we undertake, we face various kinds of

implementation risks and our inability to successfully manage such risks may

have an adverse impact on the functioning of our business.

Most infrastructure construction projects involve agreements that are long-term in

nature. Long-term agreements have inherent risks associated with them that may not

necessarily be within our control and accordingly our exposure to a variety of

implementation and other risks, including construction delays, material shortages,

unanticipated cost increases, cost overruns, inability to negotiate satisfactory

arrangements with joint venture partners, and disagreements with our joint venture

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partners is enhanced. For example, business circumstances may materially change over

the life of one or more of our agreements and we may not have the ability to modify our

agreements to reflect these changes. Further, being committed under these agreements

may restrict our ability to implement changes to our business plan. This limits our

business flexibility, exposes us to an increased risk of unforeseen business and industry

changes and could have a material adverse effect on our business, financial condition

and results of operations.

15) We have high working capital requirements. If we have insufficient cash flows to

meet working capital requirements there may be an adverse effect on our results

of operations.

Our business requires a significant amount of working capital. We may require working

capital to finance the purchase of materials and the performance of construction and

other work on projects before any payment is received from clients. Our working capital

requirements may increase if, in certain contracts, payment terms include reduced

advance

payments or payment schedules that specify payment towards the end of a project or

are less favorable to us. To qualify for large construction contracts and the BOT

contracts, we need adequate funding. Continued increases in working capital

requirements may have an adverse effect on our financial condition and results of

operations.

16) We may be unable to pre-qualify to bid on certain larger construction projects on

our own and if we are unable to forge alliances with third parties, we may be

precluded from bidding for those large construction projects, which could have an

adverse effect on our growth prospects.

We enter into contracts through a competitive bidding process or on negotiated rate

basis. In selecting contractors for major projects, clients generally limit the tender to

contractors they have pre-qualified based on several criteria, including experience,

technical ability, past performance, reputation for quality, safety record, financial

strength and the size of previous contracts executed in similar projects with them or

otherwise. Additionally, while these are important considerations, price is a major factor

in most tender awards and in negotiated contracts and our business is subject to

intense price competition. Our recent experience indicates that clients in the port

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infrastructure, residential, industrial and other commercial sectors are increasingly

developing larger, more technically complex projects and increasingly awarding the

entire contract to a single project contractor. Pre-qualification is key to our winning

such major projects. We may not be able to compete for some larger projects in the

immediate future since our ability to bid for and win such major projects is dependent

on our ability to show experience of working on such large contracts and develop strong

technical capabilities and credentials to execute more technically complex turnkey

projects. Since we may be unable to pre-qualify to bid on certain large construction

projects on our own, we may enter into memoranda of understanding or joint venture

agreements with various other companies to meet capital adequacy, technical or other

criteria that may be required as part of the bidding process or execution of the contract.

In cases where we are unable to forge an alliance with appropriate companies to meet

pre-qualification requirements, we may lose out on opportunities to bid, which could

have an adverse effect on our growth prospects.

17) Our inability to provide financial and performance guarantees in favor of our

clients may adversely affect our business.

We are required to provide financial and performance guarantees guaranteeing our

performance and/or financial obligations in relation to a project. The amount of

guarantee facilities available to us depends upon our financial condition and availability

of adequate security for the banks and financial institutions that provide us with such

facilities. If we are unable to provide sufficient collateral to secure the bank guarantees

or performance bonds, our ability to enter into new contracts could be limited. Providing

security to obtain bank guarantees and performance bonds increases our working

capital needs. Such bank guarantees and performance bonds generally impose

restrictive covenants on raising additional debt or payment of dividends. We may not be

able to continue obtaining new bank guarantees and performance bonds that match our

business requirements. A failure to do so may have a material adverse effect on our

business.

18) We could be adversely affected if we fail to keep pace with technical and

technological developments in the construction industry.

Our recent experience indicates that clients are increasingly developing larger, more

technically complex projects in the port infrastructure, residential, industrial and other

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commercial sectors. To meet our clients’ needs, we need to continuously update existing

technology and equipment for our construction services. In addition, rapid and frequent

technology and market demand changes can often render existing technologies and

equipment obsolete, requiring substantial new capital expenditures and/or write downs

of assets. Our failure to anticipate or respond adequately to changing technical, market

demands and/or client requirements could adversely affect our business and results of

operations.

19) Our inability to obtain, renew or maintain, or any delay in obtaining, renewing or

maintaining, our statutory and regulatory permits and approvals required to

operate our business may have a material adverse effect on our business.

We require certain statutory and regulatory permits and approvals for our business. In

some states in which we operate, or may operate, activities related to construction of our

projects may be subject to the prior granting of environmental licenses or permits or to

prior notification. Further, we are required to renew certain of our existing approvals in

respect of our current and planned projects. While we believe we will obtain approvals or

renewals as may be required, there cannot be any assurance that the relevant

authorities will issue any such approvals or renewals in the anticipated time frames or

at all. There can be no assurance that the relevant authorities will issue any of such

permits or approvals in the time-frame anticipated by us or at all. Failure by us to

renew, maintain or obtain the required permits or approvals may result in the

interruption of our operations and may have a material adverse effect on our business,

financial condition and results of operations.

B) GENERAL RISK FACTORS:

1) The company’s ability to generate revenues and pay dividends is dependent on a

number of factors and may vary significantly from quarter to quarter.

2) The Company’s growth depends on acquiring new customers apart from increasing

business from existing customers.

3) The Company operates in a highly competitive environment and this competitive

pressure on the business is likely to continue.

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4) The Company’s client contracts can usually be terminated without cause and with little

or no notice or penalty, which could negatively impact its revenues and profitability.

5) The valuations in the Real Estate / Infrastructure Business may not be sustained in

future and may also not be reflective of future valuations in the industry.

6) The Company’s success depends largely upon its senior management and key personnel

and the Company’s ability to attract and retain them.

7) We are subject to regulation by central, state and local governments / bodies, which

may impose costs and restrictions. Central, state and local governments /bodies

extensively regulate the Real and Infrastructure industry. We expect that legislative

enactments, court actions and regulatory proceedings will continue to clarify and in

some cases change the rights and obligations of Real Estate and Infrastructure

Companies and other entities under the Real Estate and Infrastructure Acts and

Regulations and other laws, possibly in ways that we have not foreseen. The

Government may consider new legislative requirements which potentially can affect our

businesses.

8) The results of these legislative, judicial and administrative actions may materially affect

our business operations.

9) The Company may be exposed to interest rate fluctuations.

C) EXTERNAL:

1) We operate in a regulated environment, and the government policies, laws and

regulations affecting the sectors in which we operate and the related industries,

could adversely affect our operations and our profitability.

We operate in a regulated environment and must comply with a number of requirements

mandated by Indian laws and regulations, including policies and procedures established

by local authorities and designed to implement such laws and regulations. If we fail to

obtain any of these approvals or licenses, or renewals thereof, in a timely manner, or at

all, our business and results of operations could be adversely affected. The regulatory

framework in India is evolving. Future government policies and changes in laws and

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regulations in India may adversely affect our business and operations, and restrict our

ability to do business in our existing and target markets. The timing and content of any

new law or regulation is not in our control and such new law or regulation could have

an adverse effect on our business, results of operations and financial condition.

2) Our revenues are subject to a significant number of tax regimes and changes in

the legislation governing the rules implementing them or the regulator enforcing

them in any one of these states could negatively and adversely affect our results

of operations.

Taxes and other levies imposed by the central or state governments in India that affect

our industry include customs duties, excise duties, service tax, income tax and other

taxes, duties or surcharges introduced on a permanent or temporary basis from time to

time. The central and state tax scheme in India is extensive and subject to change from

time to time. Any adverse changes in any of the taxes levied by the central or state

governments may adversely affect our competitive position and profitability.

3) A slowdown in economic growth in India or in the States in India in which we

operate, could cause our business to suffer.

Our performance and the quality and growth of our assets are dependent on the health

of the overall Indian economy and the economy of the States in India in which we

operate. India’s economy could be adversely affected by a general rise in interest rates,

weather conditions adversely affecting agriculture, commodity and energy prices or

various other factors. Any slowdown in the Indian economy or in the States in India in

which we operate or future volatility in global commodity prices could adversely affect

the policy of the various governments towards infrastructure, which may in turn

adversely affect our financial performance.

4) Our performance is linked to the stability of policies and the political situation in

India.

Since 1991, the Government of India has pursued policies of economic liberalization,

including significantly relaxing restrictions on the private sector. Any political instability

could delay the reform of the Indian economy and could have a material adverse effect

on the market for our Equity Shares. We cannot assure you that these liberalization

policies will continue under the newly elected government. Protests against privatization

could slowdown the pace of liberalization and deregulation. The rate of economic

20

liberalization could change, and specific laws and policies affecting companies in the

infrastructure sector, foreign investment, currency exchange rates and other matters

affecting investment in our securities could change as well. A significant change in

India’s economic liberalization and deregulation policies could disrupt business and

economic conditions in India and our business in particular.

5) Outbreak of contagious diseases in India may have a negative impact on the

Indian infrastructure and real estate industry.

Recently, there have been threats of epidemics, including the H1N1 virus that causes

“swine flu” and which the World Health Organization has declared a pandemic, in the

Asia Pacific region, including India, and in other parts of the world. If any of our

personnel are suspected of having contracted any of these infectious diseases, we may

be required to quarantine such persons or the affected areas of our facilities and

temporarily suspend a part or all of our operations. Further, the fear of contracting such

contagious diseases could prevent our clients from traveling to India or within or from

India and could restrict our personnel from traveling within or outside India, which

would have a material adverse effect on our business, prospects, financial condition and

results of operations and could cause the price of our Equity Shares to decline.

6) Natural calamities and force majeure events may have an adverse impact on the

Indian economy.

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. The erratic progress

of the monsoon in 2004 affected sowing operations for certain crops. Further prolonged

spells of below normal rainfall or other natural calamities could have a negative impact

on the Indian economy, adversely affecting our business and the price of our Equity

Shares.

7) Terrorist attacks and other acts of violence or war, including those involving India or

other countries could adversely affect operations of the Company resulting in a loss of

business confidence.

21

8) There has been no public market for the Company’s equity shares till now and the

prices of the Company’s equity shares may fluctuate after listing. The Company’s share

price could be volatile.

D) RISKS ASSOCIATED WITH THE SHARES

Economic developments and volatility in securities markets in other countries especially in

USA and Europe may cause the price of the Shares to decline. In addition, investing in

securities that carry emerging market risks can be affected generally by volatility in the

emerging markets.

The securities markets are influenced by economic developments and volatility in securities

markets in other countries. Although economic conditions differ in each country, investors’

reactions to developments in one country may affect securities of issuers in other countries,

including India. For instance, the economic downturn in the United States and several

European countries from 2001 to 2003 adversely affected market prices in the world

securities’ markets. The markets for securities bearing emerging market risks, such as

risks relating to India, are, to varying degrees, influenced by economic and securities

market conditions in other emerging market countries. Negative economic developments,

such as rising fiscal or trade deficits, or a default on sovereign debt, in other emerging

market countries may affect investor confidence and cause increased volatility in Indian

securities. Accordingly, the price and liquidity of the share may be subject to significant

fluctuations, which may not necessarily be directly or indirectly related to our financial

performance.

So the prices of our equity shares may fluctuate after listing due to a wide variety of factors,

including volatility in the Indian and global securities markets; our operational

performance, financial results and capacity expansion; developments in India’s economic

liberalization and deregulation policies, particularly in the real estate / infrastructure

sector; and changes in India’s laws and regulations impacting our business. There is no

assurance that an active trading market for our equity shares will develop or be sustained

after listing.

This section should also be read in conjunction with the section titled “Outstanding

Litigations and Material Developments.”

22

After listing, the price of our equity shares may be volatile, or an active trading

market for our equity shares may not develop.

The prices of our equity shares may fluctuate after listing due to a wide variety of factors,

including volatility in the Indian and global securities markets; our operational

performance, financial results and capacity expansion; developments in India’s economic

liberalization and deregulation policies, particularly in the real estate sector; and changes

in India’s laws and regulations impacting our business. There is no assurance that an

active trading market for our equity shares will develop or be sustained after listing.

INTRODUCTION

This is only a summary. Investors should read the following summary with the Risk Factors

mentioned and the more detailed information about us and our financial statements included

elsewhere in this Information Memorandum

INDUSTRY AND BUSINESS OVERVIEW:

The Indian Economy

India, the world’s largest democracy in terms of population (~1.16 billion people) had a GDP

on purchasing power parity basis of approximately US$ 3,267 billion in 2008. This makes

India the fourth largest economy in the world after the United States of America, China and

Japan in purchasing power parity terms. (Source: CIA World Fact Book)

India is also amongst the fastest growing economies globally and has grown at an average

growth rate of more than 7% in the decade since 1997, reducing poverty by about 10

percentage points. India achieved 9.7% GDP growth in FY 2007 and 9.0% in FY 2008. The

economic growth decelerated to 6.7 % in FY 2009. (Source: Economic Survey FY 2009)

23

The following table sets forth the key indicators of the Indian economy for the past five

fiscal years.

(Annual percentage change, except for foreign exchange

reserves)

As at and for the year ended March 31,

2005 2006 2007 2008 2009

Real GDP growth (1)

7.5 9.5 9.7 9 6.7

Index of Industrial Production (2) 8.4 8.2 11.5 8.5 2.6

Wholesale Price Index (2) 6.5 4.4 5.4 4.7 8.3

Foreign Exchange Reserves (in US$

billion) 135.6 145.1 191.9 309.1 252

(1) At 1999-2000 prices

(2) Index Base 1993-94= 100

(Source: Economic Survey 2008-2009, RBI; Ministry of Statistics and Programme Implementation)

Construction Industry in India: Overview

The Indian construction industry is highly fragmented, as the entry barriers are low due to

lower fixed capital requirements. However, due to increased focus on public private

partnership projects by the government, the entry barriers for the companies have become

more complex in terms of meeting up the prequalification criteria and other technical

requirements.

Although the industry is not fixed capital intensive, it is working capital intensive in terms

of the gross working capital requirements. Most projects, especially infrastructure, have a

gestation period of more than a year. In addition, any delay in payments from government

agencies pushes up receivables.

CRISIL Research defines construction to include infrastructure and industrial construction.

Infrastructure construction encompasses the design and construction of buildings (related

to infrastructure projects), ports, bridges, canals, dams, and roads whereas industrial

construction includes construction activities in key industries such as automobiles,

textiles, petrochemicals, and oil and gas. The following activities are included under the

24

umbrella of infrastructure construction:

� Ports

� Power (generation, transmission and distribution)

� Roads

� Urban infrastructure (including water supply, sanitation and MRTS)

� Railways

� Telecommunication

� Irrigation

� Airports

(Source: CRISIL Research, Construction Annual Review, July 2008)

Investments in Construction

Construction investments are expected to increase, to Rs 12,189 billion during the five year

period from 2008-09 to 2012- 13 from Rs 6,217 billion during 2003-04 to 2007-08 (2008-

09 prices). The construction industry is expected to grow at a healthy CAGR of 35 % during

2008-09 and 2012-13. Infrastructure spending especially in roads, power, irrigation and

urban infrastructure will drive this growth. This coupled with higher construction intensity

augurs well for the construction industry in terms of larger opportunity size. Investments in

the industrial sector are driven by capacity addition/expansion plans of companies

operating in key sectors of the economy. However, construction intensity being lower, the

basket of opportunities arising out of industrial investments is comparatively smaller.

Metals and oil and gas, backed by higher operating rates, continue to drive industrial

construction investments.

25

(Source: CRISIL Research, Construction Annual Review, Sep 2009)

Construction Opportunity from Infrastructure Segment (2008-09) Prices

(Source: CRISIL Research, Construction Annual Review, Sep 2009)

Construction opportunity arising from the infrastructure segment is expected to almost

double to Rs 9,548 billion over the next 5 years (2008-09 to 2012-13) from Rs 5,006 billion

incurred during 2003-04 to 2007-08 (2008-09 prices).

Types of Contracts used in the Infrastructure and Construction Industries

There are different models currently being adopted for Public Private Partnerships in India

which vary in the distribution of risks and responsibility between the public and the private

sectors for financing, constructing, operating, and maintaining projects. Two important

types of contracts - BOT and BOOT - are explained below, as well as certain other contracts

generally used in the Indian construction industry.

26

Build, Operate and Transfer (“BOT”)

Under this type of PPP contract, the Government grants to a contractor a concession to

finance, build, operate and maintain a facility for a concession period. During the life of the

concession, the operator collects user fees and applies these to cover the costs of

construction, debt-servicing and operations. At the end of the concession period, the facility

is transferred back to the public authority. BOT is the most commonly used approach in

relation to new highway projects in India, and is also used in the energy and port sectors.

Build, Own, Operate and Transfer (“BOOT”)

BOOT contracts are similar to BOT contracts, except that in this case the contractor owns

the underlying asset, instead of only owning a concession to operate the asset. For example,

in the case of hydroelectric power projects, the contractor would own the asset during the

underlying concession period and the asset would be transferred to the Government at the

end of that period pursuant to the terms of the concession agreement.

Design, Build, Finance and Operate (“DBFO”)

The NHAI is planning to award new highway contracts under the DBFO scheme, wherein

the detailed design work is done by the concessionaire. The NHAI would restrict itself to

setting out the exact requirements in terms of quality and other structure of the road, and

the design of the roads will be at the discretion of the concessionaire. The DBFO scheme

will improve the design efficiency, reduce the cost of construction and reduce time to

commence operations, in addition to giving the concessionaire greater flexibility in terms of

determining the finer details of the project in the most efficient manner.

27

Item Rate Contracts

These contracts are also known as unit-price contracts or schedule contracts. For item rate

contracts, contractors are required to quote rates for individual items of work on the basis

of a schedule of quantities furnished by the customer. The design and drawings are

provided by the customer. The contractor bears almost no risk in these contracts, except

escalation in the rates of items quoted by the contractor, as it is paid according to the

actual amount of work on the basis of the per-unit price quoted.

Engineering Procurement Construction/Lump-Sum Turnkey Contracts

In this form of contract, contractors are required to quote a fixed sum for the execution of

an entire project including design, engineering and execution in accordance with drawings,

designs and specifications submitted by the contractor and approved by the customer. The

contractor bears the risk of incorrect estimation of the amount of work, materials or time

required for the job. Escalation clauses might exist in some cases to cover, at least partially,

cost overruns.

Operations and Maintenance (O&M) Contracts

Typically an operations and maintenance contract is issued for operating and maintaining

facilities. This could be in sectors such as water, highways, buildings and power. The

contract specifies routine maintenance activities to be undertaken at a predetermined

frequency as well as break-down maintenance during the contract period. While the

contractor is paid for the routine maintenance based on the quoted rates which are largely

a function of manpower, consumables and maintenance equipment to be deployed at the

site, any breakdown maintenance is paid for on a cost-plus basis.

Front End Engineering and Design (FEED) Contracts

Ordinarily, FEED work is carried out as a part of a consultancy assignment where the

consultant provides FEED data to the project owner to enable it to take a decision on

making a tender for construction. In addition to this, the FEED is also a prerequisite to

enable a contractor to bid for EPC/turnkey projects. A FEED project can be an independent

consultancy project or a part of an EPC/turnkey contract.

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Price Preference

In tenders for the projects funded by multilateral agencies such as the World Bank and the

Asian Development Bank, where there is international competitive bidding, generally there

is a clause giving a price preference of 7.5% for domestic Indian bidders. In this case, if the

bid by the domestic Indian contractor is 7.5% higher than the lowest international bid, then

the employer has to award the project to the domestic bidder. This would be subject to

certain conditions specific to the project. In case the domestic bidder is in a joint venture

with an international bidder, then the domestic bidder would need to own 51% or more in

the joint venture in order to qualify for the preferential treatment.

Purchase Preference

In government tenders for projects normally less than Rs. 1.00 billion, there is a purchase

preference clause wherein a tender submitted by a Public Sector Undertaking (“PSU”) will

entail 10% price preference over other bidders. In this case, if the bid by the PSU is 10%

higher than the lowest bidder, the employer reserves the right to award the project to the

PSU.

Indian Ports Sector: Overview

India has 12 major ports and 187 intermediate and minor ports with 7,517 km of coastline.

Indian ports handle 95% of the country's total trade by volume and 70% by value.

• In FY09, the total cargo handled at Indian Ports was 754.3 Million Tonnes, of which

530.3 Million Tonnes was handled by Major Ports and the balance of 224.0 Million

Tonnes was handled by Non-Major Ports. (Source: Indian Ports Association)

29

The total traffic at major and minor ports over the last five years is provided in the table

below:

Fiscal Year 2005 2006 2007 2008 2009

Major Ports Traffic (Million

tonnes) 383.7 423.4 463.8 519.3 530.3

Traffic Growth (%) 11 10 10 12 2.1

Minor Ports Traffic (Million

tonnes) 136.9 145.4 171.9 196.4 224.0

Traffic Growth (%) 15 6 18 14 14

Total Port Traffic (Million tonnes) 520.6 568.8 635.7 715.7 754.3

Overall Traffic Growth (%) 12 9 12 13 5

(Source: Indian Ports Association, National Maritime Development Program)

(Source: Plan Document for XIth five year plan, in million tonnes)

At the end of the Xth five year plan, the total capacity at Major ports was 508.60 million

tonnes. A total of 493.20 million tonnes of capacity is expected to be added in the XIth plan

period, taking the total installed capacity at major ports to 1001.80 million tonnes.

30

State-Wise Capacity Addition Planned at Non-Major Ports (in million tonnes) in the

XIth plan:

(Source: Plan Document for XIth five year plan)

At the end of the Xth plan, the total capacity at Non-Major ports was 228.31 million tonnes.

A total of 345.19 million tonnes of capacity is expected to be added in the XIth plan period,

taking the total installed capacity at non-major ports to 573.50 million tonnes.

Key Government Initiatives in the Sector

� Foreign Direct Investment (FDI) up to 100% under automatic route is permitted for

construction and maintenance of ports and harbor.

� National Maritime Development Programme (NMDP): All major ports in India have

been asked to identify those projects, which would meet the challenges of the growing

international traffic demand of the country along with developing the port facilities at

par with world standards and give shape to the vision and strategy laid down in the

Maritime policy document over a period through FY12. With this in view, most of the

ports have categorized their projects under the 5 broad heads of development process

as:

31

� Projects related to Port Development (construction of jetties berths etc.)

� Procurement, Replacement or Upgradation of Port Equipment

� Deepening of Channels for Improvements in Drafts

� Projects related to Port Connectivity

� Other related schemes.

The NMDP has earmarked Rs. 558 billion for this purpose and is proposed to be

implemented through public private partnership. Out of the total investment required,

Rs. 36 billion is proposed to be invested through budgetary support, Rs. 138 billion

through port’s own internal resources, Rs. 345 billion from private sector and Rs. 39

billion from other sources, which include investment by Ministry of Railway, NHAI, etc.

(Source: National Maritime Development Program).

Construction Investments in Ports

Construction opportunity arising from investments in the ports sector is expected to grow

threefold to Rs 325 billion over the next 5 years (2008-09 to 2012-13) as compared to the

previous 5-year period (2003-04 to 2007-08). Of the total construction opportunity of Rs

325 billion, around Rs 164 billion is expected in major ports and remaining Rs 161 billion

in non-major ports. Traffic at Indian ports is expected to grow at a CAGR of 8.6 % during

2008-09 and 2012- 2013. Traffic handled by non-major ports is likely to increase, with

expected faster traffic growth, on the back of huge capacity additions.

(Source: CRISIL Research, Construction Annual Review, Sep 2009)

Container Freight Station

Containerization is the method of packing goods in reusable containers of uniform shape

and size for transportation. The trend towards containerization has increased in India

during the last decade. Improvements in port infrastructure and increased private

participation in port infrastructure has led to the development of modern container

handling port terminals at JNPT, Mundra, Pipavav, Chennai and Vishakapatnam. With

increasing amounts being spent on port infrastructure, facilities supplemental to ports will

also need to be developed. One key example of such off-dock facilities are container freight

stations that are located near gateway ports and set up for the purpose of in-transit

32

container handling, examination and assessment of both import and export cargo with

respect to regulatory clearances. These facilities form an integral part of the supply chain

with respect to containerized cargo. The graph below highlights the growth in the container

traffic at the major ports in India over the FY 2003-FY 2009 period, which has witnessed a

CAGR of 13.5%:

The opportunity to provide CFS services has attracted a number of players who have

indicated interest and are setting up or are considering setting up Greenfield projects

around various ports. The increased activity in this area is expected to result in increased

engineering and construction work for construction companies.

Indian Real Estate Sector: Overview

The real estate sector in India has historically been unorganized and characterized by

various factors that impeded organized dealing, such as the absence of a centralized title

registry providing title guarantee, a lack of uniformity in local laws and their application,

non-availability of bank financing, high interest rates and transfer taxes and the lack of

transparency in transaction values. In recent years however, the real estate sector in India

has exhibited a trend towards greater organization and transparency through various

regulatory reforms.

The above trend has contributed to the development of reliable indicators of value and

organized investment in the real estate sector by domestic and international financial

institutions and has resulted in the greater availability of financing for real estate

developers. The nature of demand is also changing, with heightened consumer expectations

that are influenced by higher disposable incomes, increased globalization and the

33

introduction of new real estate products and services. Urbanisation, substantial rise in

income levels and growing trend of nuclear families led demand for housing to grow

exponentially over the past few years. In spite of India's housing industry flourishing, the

country still faces humungous shortage of houses, especially in urban areas. Housing

shortage in India was a whopping 79.2 million units by the end of 2008-09. (Source: CRISIL

Research, Housing Annual Review, July 2009)

Key Segments in the Real Estate Industry:

Residential real estate development

The residential construction activity has been on the upswing for the past five years, aided

by population growth and urbanization. Moreover, it has been observed that the growth is

localized to the organized urban housing segment, extending to the relatively prosperous

rural belts. This growth is being driven by the following factors:

� Faster growth in urban households as a result of nuclearization and reduction of average

size of household;

� Easy availability of housing finance and a favorable tax regime; and

� Conversion from slum, kutcha or semi-pucca in urban areas to pucca non-slums (driven

by income).

Drivers of demand in residential real estate market:

In addition to rising income levels and increasing affordability, changing demographics,

lower interest rates, rising disposable incomes and fiscal incentives have spurred demand

for real estate in India. By 2013, India is expected to add 91 million people to the working

population (aged 25-44 yrs). Over the next 20 years, the working age population is projected

to grow at 1.9% per annum. (Source: Ministry of Urban Affairs, Government of India, 2006)

34

Some more economic factors supporting housing demand are

CRISIL research estimates the population of India to grow at a CAGR of 1.4% until 2014,

which would act as a strong demand driver for housing in the country. Also, the proportion

of country’s population in the 20-59 years bracket is expected to gradually increase to over

55% by 2025, boosting demand for housing.

Urbanization is a critical factor that has led the demand for housing to grow exponentially

over the past few years. CRISIL research believes that urbanization would keep on growing,

35

as it has grown over the last century and as a result, 32% of India’s population would

reside in urban cities by 2021.

Trend towards high-rise in urban locales

A large proportion of the above demand for houses, especially in urban centers such as

Mumbai, Bangalore, Delhi (Gurgaon, Noida) and Pune, is likely to come from high-rise

residential buildings. Since this is a fairly new segment, the growth of the high-rise segment

is expected to faster than the growth of the urban housing segment. The reasons for the

construction of high-rise apartment buildings are the lack of space in cities such as

Mumbai and proximity to offices and information technology (“IT”) parks in places such as

Gurgaon, Bangalore and Pune. The high-rise culture is gradually seeping into other cities

such as Kolkata, Hyderabad and Chennai due to increasing affordability, nearness to IT or

business process outsourcing (“BPO”) parks and the township concept being embraced

within close proximity to such IT/BPO parks. According to CRISIL Construction Annual

Review, May 2007, over the period between 2006 to 2007 and 2010 to 2011, housing

investments are expected to grow to Rs. 17,338 billion as compared with Rs. 9,810 billion

invested in the previous five years. As can be seen from the following graph, housing

investments are expected to be driven by urban housing investments.

36

Affordable Housing

In spite of the recent economic slowdown, India is expected to remain amongst the fastest

growing economies of the world, leading to a significant increase in purchasing power of its

population. The housing shortage is expected to increase to 26.53 million dwelling units for

75.01 million households by 2012, of which approximately 85 per cent. is expected to be in

the Economically Weaker Section (EWS) and Low Income Group (LIG) segments.

(Source: Ministry of Housing and Urban Poverty Alleviation, India)

MHUPA has framed the National Urban Housing and Habitat Policy, which carefully

analyses ways and means of providing ‘Affordable Housing to All’ with special emphasis on

the EWS and LIG segments. The new policy lays emphasis on earmarking of land for the

EWS/LIG groups in new housing projects and also emphasizes on the Government

retaining its role in social housing so that affordable housing is made available to EWS and

LIG of the population as they lack affordability and are hopelessly out priced in urban land

markets. Government initiatives coupled with increasing per capita income in India on the

back of high economic growth is expected to provide strong impetus to affordable housing

demand.

Slum Rehabilitation Scheme: Government of Maharashtra (“SR Scheme”)

Mumbai has the highest percentage of population living in slums in the top cities of India

as shown by the chart below:

37

In 1995, the State Government of Maharashtra initiated the Slum Rehabilitation Scheme to

be administered by the newly-created Slum Rehabilitation Authority (“SRA”) to redevelop

slums in the Mumbai area. The main features of this scheme are:

� Slum dwellings have to be replaced by residential buildings containing flats of 225 square

feet that are constructed free of cost to former slum dwellers by private real estate

developers participating in the scheme. The Government of Maharashtra subsidizes this

clearance and construction by granting developers the right to develop a proportion of

former slum land for their own purposes, or by granting them transferable development

rights (“TDRs”), which may be used to develop land elsewhere in Mumbai, north of the slum

land concerned.

� For every 10 square meters of rehabilitation tenements constructed for free for former

slum dwellers, a real estate developer is allowed to construct a certain amount of for-sale

flats. Moreover, TDRs permit developers to develop land in certain parts of Mumbai that are

outside the rehabilitated slum area that gave rise to the TDRs. A TDR is made available in

the form of a certificate issued by the municipal corporation of Mumbai, and its owner can

use it either for actual construction or can sell it on the open market.

� Residential development on slum land that is subject to the SR Scheme also benefits from

a superior FSI allowance which determines the total permitted construction area as a

portion of the total land area of a site. Under the SR Scheme, the FSI is 2.5 as against a

normal FSI of 1.33 thereby making the SR Scheme attractive for developers.

� Moreover, the SR Scheme can enable a developer to acquire land in prime locations in

Mumbai. The acquisition can be made at effectively a lower cost than traditional purchases

of land for cash, thereby reducing the asset cycle risk for the developer between land

acquisition and sale of developed property or TDRs.

The innovative subsidy mechanism of the SR Scheme has spurred redevelopment activity in

certain deprived areas of Mumbai which were previously unattractive to real estate

developers. In addition to helping fulfil the social obligations of the administration, which

may not have all the resources to undertake rehabilitation projects on a large scale within a

particular time period, an on-going benefit of the SR Scheme to the administration of

38

Mumbai includes the addition of individuals to the tax rolls when they occupy new housing

who, as slum dwellers, were not previously part of the tax base.

The Indian real estate sector plays a significant role in the country's economy. The real

estate sector is second only to agriculture in terms of employment generation and

contributes heavily towards the gross domestic product (GDP). Almost five per cent of the

country's GDP is contributed to by the housing sector. In the next five years, this

contribution to the GDP is expected to rise to 6 per cent.

According to Jones Lang LaSalle, faster economic growth in Brazil, Russia, India and China

(BRIC) could result in the property markets of those nations recovering at a faster rate than

the UK and US real estate markets. It has also been suggested that India's property sector

could begin to improve from late 2009 and may attract up to US$ 12.11 billion in real

estate investment over a five-year period.

The IT and ITES sector alone is estimated to require 150 million sq ft of office space across

urban India by 2010. Organized retail is also responsible for the growth in commercial

office space requirement. The organized retail industry is likely to require an additional 220

million sq ft by 2010. Moreover, growth is not restricted to a few towns and cities but is

pan-India, covering nearly all tier-I and tier-II cities.

Almost 80 per cent of real estate developed in India is residential space, the rest comprising

of offices, shopping malls, hotels and hospitals. According to the Tenth Five-Year-Plan,

there is a shortage of 22.4 million dwelling units. Thus, over the next 10 to 15 years, 80 to

90 million housing dwelling units will have to be constructed with a majority of them

catering to middle and lower-income groups.

Moreover, a report by leading international property consultants, Jones Lang LaSalle

Meghraj and Cushman & Wakefield India in association with Shopping Centres Association

of India, named Mall Realities India 2010, states that over 100 malls of over 30 million sq

feet of new shopping centre space are projected to open in India between 2009 and end-

2010. Apart from the huge demand, India also scores on the construction front. A McKinsey

report reveals that the average profit from construction in India is 18 per cent, which is

double the profitability for a construction project undertaken in the US.

39

Foreign institutional investors (FIIs) have also shown confidence in the country’s

construction sector and are shoring up investment. With the BSE Sensex touching a 15-

month high, the market capitalization of FII investment in construction has gone up a

whopping 422 per cent in the past six months.

The real estate sector is also likely to get a boost from Real Estate Mutual Funds (REMFs)

and Real Estate Investment Trusts (REITs). In fact, according to a CRISIL paper, the REITs

would have the potential to hold at least 5 per cent share of the total global real estate

market by 2010, the size of which would turn to US$ 1,400 billion in the next 3 years. The

paper titled, ‘Indian REITs; Are We Prepared', says that by 2010, REITs alone would hold a

market size of US$ 70 billion of the total real estate market as its concept is gaining ground

in countries like India and other developing nations.

Foreign direct investment (FDI) into India in the real estate sector for the fiscal year 2008-

09 has been US$ 12.62 billion approximately, according to the latest data given by the

Department of Policy and Promotion (DIPP).

New Projects

• Zuri Group Global is planning to invest about US$ 247.5 million for setting up five-star

business hotels and luxury residential properties over the next three years.

• Accor Hospitality, the largest hotel chain in Europe, with 4,000 hotels in 90 countries will

invest US$ 130 million to come up with 50 hotels in India by 2012.

• An investment of US$ 627.3 million will be made by industries in the Aeropsace and

Precision Engineering Special Economic Zone at Adibatla, Andhra Pradesh.

• Shriram Properties, part of Chennai-headquartered diversified Shriram Group, is planning

to invest around US$ 1.02 billion in various residential and commercial projects.

40

Government Initiatives

The government has introduced many progressive reform measures to unlock the potential

of the sector and also meet increasing demand levels. The stimulus package announced by

the government, coupled with the Reserve Bank of India's (RBI) move allowing banks to

provide special treatment to the real estate sector, is likely to impact the Indian real estate

sector in a positive way. RBI has decided to extend exceptional concessional treatment to

the commercial real estate exposure and restructured it to June 30, 2009.

• 100 per cent FDI allowed in realty projects through the automatic route.

• In case of integrated townships, the minimum area to be developed has been brought

down to 25 acres from 100 acres.

• Urban Land (Ceiling and Regulation) Act, 1976 (ULCRA) repealed by increasingly larger

number of states.

• Minimum capital investment for wholly-owned subsidiaries and joint ventures stands at

US$ 10 million and US$ 5 million, respectively.

• Full repatriation of original investment after three years.

• 51 per cent FDI allowed in single-brand retail outlets and 100 per cent in cash-and-carry

through the automatic route.

The Union Ministry of Commerce & Industry has initiated steps to reduce the time taken to

develop special economic zones (SEZs) by simplifying procedures to get the tax-free

industrial enclaves notified.

41

Developers will now be able to get their land classified as an SEZ at the initial stage of

approvalby submitting legal documents that prove land ownership. Budget 2009-2010, has

also given sops to the realty sector. Developers of affordable housing projects (units of

1,000-1,500 sq ft) have been granted a tax holiday on profits from projects initiated in the

2007-08 financial year. Such projects would have to be completed before March 1, 2012.

At the same time, the finance minister allocated US$ 207 million to grant a 1 per cent

interest subsidy on home loans up to US$ 20,691, provided the cost of the home is not

more than US$ 41,382. This subsidy is expected to give a further boost to the Real estate

sector.

III. GENERAL INFORMATION

CRANE INFRASTRUCTURE LIMITED

(A Public Limited Company, incorporated on 13th May 2008 under the

provisions of the Companies Act, 1956) (hereinafter referred to as the Act)

Registered Office:

D.No. 25-2-1,G.T. Road, Opp. Mastan Dargah, Guntur-522 004.

Telephone: 0863-2223311 Fax: 0863-2356712

Authority for Listing

The Honorable High Court of Andhra Pradesh at Hyderabad, vide its order dated February

18th 2010 has approved the Scheme of Arrangement being the demerger of the Real estate

/ Infrastructure Business undertaking of Virat Crane Industries Limited hereinafter

referred to as (VCIL) in this Company i.e. CRANE INFRASTRUCTURE LIMITED (hereinafter

referred to as the Resulting Company). The entire Real estate / Infrastructure Business of

VCIL shall be transferred to and vested with the Company w.e.f. April 1st, 2007 (the

Appointed Date under the Scheme) pursuant to Sections 391 to 394 of the Companies Act,

42

1956. In accordance with the said Scheme, the Equity Shares of the Company to be issued

pursuant to Scheme subject to applicable regulations, shall be listed and admitted to

trading on the Bombay Stock Exchange Limited (BSE). Such listing and admission for

trading is not automatic and will be subject to fulfillment by the Company of listing criteria

of BSE for such issues and also subject to such other terms and conditions as may be

prescribed by BSE at the time of the application by the Company seeking listing.

Eligibility Criterion

There being no Initial Public Offering or Rights Issue, the eligibility criteria in terms of

Chapter III of the SEBI Regulations does not become applicable. However, SEBI has vide its

Circular SEBI/CFD/SCRR/01/3009/03/09 Dated September 9, 2009 relaxed the

applicability provisions of regulation 19 (2)(b) of the SCRR. The Company has submitted its

Information Memorandum, containing information about itself, making disclosures in line

with the disclosure requirement for public issues, as applicable, to BSE for making the said

Information Memorandum available to public through their websites viz. www.bseindia.com

The Company has made the said Information Memorandum available on its website viz.

www.craneindia.net.

The Company will publish an advertisement in the newspapers containing its details in line

with the details required as in terms of Circular SEBI/CFD/SCRR/01/3009/03/09 Dated

September 9, 2009. The advertisement will draw specific reference to the availability of this

Information Memorandum on its website.

Prohibition by SEBI

The Company, its directors, its promoters, other companies promoted by the promoters and

companies with which the Company’s directors are associated as directors have not been

prohibited from accessing the capital markets under any order or direction passed by SEBI.

General Disclaimer from the Company

The Company accepts no responsibility for statement made otherwise than in the

Information Memorandum or in the advertisements to be published in terms of the SEBI

43

Circular No. SEBI/CFD/SCRR/01/2009/03/09 dated September 3, 2009, rules, byelaws,

and regulations of the exchange and other applicable statutory requirements or any other

material issued by or at the instance of the Company and anyone placing reliance on any

other source of information would be doing so at his or her own risk. All information shall

be made available by the Company to the public and investors at large and no selective or

additional information would be available for a section of the investors in any manner.

Disclaimer – BSE

As required, a copy of this Information Memorandum has been submitted to BSE. The BSE

has vide its letter dated February 13, 2008 approved the Scheme of Arrangement under

clause 24(f) of the Listing Agreement and by virtue of that approval the BSE’s name in this

Information Memorandum as one of the Stock Exchanges on which the Company’s

securities are proposed to be listed.

The BSE does not in any manner:

Warrant, certify or endorse the correctness or completeness of any of the contents of

this Information Memorandum; or

Warrant that this Company’s securities will be listed or will continue to be listed on

the BSE; or

Take any responsibility for the financial or other soundness of this Company; and

It should not for any reason be deemed or construed to mean that this Information

Memorandum has been cleared or approved by the BSE.

Every person who desires to apply for or otherwise acquires any securities of this Company

may do so pursuant to independent inquiry, investigation and analysis and shall not have

any claim against the BSE whatsoever by reason of any loss which may be suffered by such

person consequent to or in connection with such subscription/acquisition whether by

reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

Filing

This Information Memorandum has been filed with BSE.

44

Listing

Applications will be made to BSE for permission to deal in and for an official quotation of

the Equity Shares of the Company. The Company has nominated BSE as the Designated

Stock Exchange for the aforesaid listing of the shares. The Company has taken steps for

completion of necessary formalities for listing and commencement of trading at all the Stock

Exchanges mentioned above.

Demat Credit

The Company has executed Tripartite Agreements with the Registrar and the Depositories

i.e. NSDL and CDSL for admitting its securities in demat form and has been allotted ISIN:

INE176L01017

Auditors:

For Umamaheswara Rao & Co.

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

Main Road, Arundelpet,

GUNTUR – 2.

REGISTRAR AND SHARE TRANSFER AGENT

Bigshare Services Pvt Limited

306, Right Wing, 3rd Floor, Amrutha Ville, Opp. Yashoda Hospital

Somajiguda, Rajbhavan Road, Hyderabad 500082, Telangana

Land : 040-40144967

Bankers to the Company

1. HDFC BANK, Lakshmipuram, Guntur.

45

Compliance Officer:

Mr. G.V.S.L.Kantha Rao, Director is the Compliance Officer of the Company.

V CAPITAL STRUCTURE

A. Pre Scheme of Arrangement:

Number of Shares Amount (Rs.)

Authorised Capital

10,00,000 shares of Rs.10/ each 1,00,00,000

Total 1,00,00,000

Issued, Subscribed and Paid up Capital

50000 shares of Rs.10/ each 5,00,000

Total 5,00,000

B. Post Scheme of Arrangement Amount

In terms of the Scheme of Arrangement the Company has issued and allotted on 5th June

2010, 72,42,000 equity shares of Rs. 10/- each fully paid up to the equity shareholders of

VCIL.

Number of Shares Amount (Rs.)

Authorised Capital

75,00,000 shares of Rs.10/ each 7,50,00,000

Total 7,50,00,000

72,42,000 Issued, Subscribed and Paid-up Capital 7,24,20,000

shares of Rs.10/ each

Total 7,24,20,000

46

Notes to Capital Structure:

Authorised Share Capital:

The Company was incorporated with authorized capital of Rs. 100 Lacs divided into

10,00,000 equity shares of Rs. 10/- each

Issued , Subscribed & Paid up

50,000 Equity Shares of Rs. 10 each for cash at par aggregating to Rs. 5 Lacs were

subscribed by the signatories to the memorandum.

In terms of the Scheme of Arrangement the Company has issued and allotted on 5th June

2010, 72,42,000 equity shares of Rs. 10/- each fully paid up to the equity shareholders of

VCIL.

SHAREHOLDING PATTERN

PRE ARRANGEMENT

Statement showing shareholding pattern as on: 4th June 2010:

Category of

Shareholder

Number of

Shareholders

Total

number

of

shares

Number of

shares held in

dematerialized

form

Total shareholding as a

percentage of total

number of shares

As a

percentage

of(A+B)1

As a

percentage

of (A+B+C)

Shareholding of

Promoter and Promoter

Group2

Indian

Individuals/ Hindu

Undivided Family 7 50000 0 100.00 100.00

Central Government/ 0 0 0 0.00 0.00

47

State Government(s)

Bodies Corporate 0 0 0 0.00 0.00

Financial Institutions/

Banks 0 0 0 0.00 0.00

Any Others(Specify) 0 0 0 0.00 0.00

Sub Total(A)(1) 7 50000 0 100.00 100.00

Foreign

Individuals (Non-

Residents Individuals/

Foreign Individuals) 0 0 0 0.00 0.00

Bodies Corporate 0 0 0 0.00 0.00

Institutions 0 0 0 0.00 0.00

Any Others(Specify) 0 0 0 0.00 0.00

0 0 0 0.00 0.00

0 0 0 0.00 0.00

Sub Total(A)(2) 0 0 0 0.00 0.00

Total Shareholding of

Promoter and

Promoter Group (A)=

(A)(1)+(A)(2) 2 50000 0 100.00 100.00

Public shareholding

Institutions

Mutual Funds/ UTI 0 0 0 0.00 0.00

Financial Institutions /

Banks 0 0 0 0.00 0.00

Central Government/

State Government(s) 0 0 0 0.00 0.00

Venture Capital Funds 0 0 0 0.00 0.00

Insurance Companies 0 0 0 0.00 0.00

Foreign Institutional

Investors 0 0 0 0.00 0.00

48

Foreign Venture Capital

Investors 0 0 0 0.00 0.00

Foreign Direct

Investment 0 0 0 0.00 0.00

Any Other (specify) 0 0 0 0.00 0.00

0 0 0 0.00 0.00

Sub-Total (B)(1) 0 0 0 0.00 0.00

Non-institutions

Bodies Corporate 0 0 0 0.00 0.00

Individuals 0 0 0 0.00 0.00

Individuals -i. Individual

shareholders holding

nominal share capital up

to Rs 1 lakh 0 0 0 0.00 0.00

ii. Individual

shareholders holding

nominal share capital

in excess of Rs. 1 lakh. 0 0 0 0.00 0.00

Any Other (specify)

Clearing Members 0 0 0 0.00 0.00

NRI 0 0 0 0.00 0.00

Sub-Total (B)(2) 0 0 0 0.00 0.00

Total Public

Shareholding (B)=

(B)(1)+(B)(2) 0 0 0 0.00 0.00

TOTAL (A)+(B)

7

50000

0

100.00

100.00

Shares held by

Custodians and against

which Depository 0 0 0 0.00

49

Receipts have been

issued

GRAND TOTAL

(A)+(B)+(C) 7 50000 0 100.00 100.00

(1)(b) Statement showing shareholding of persons belonging to the category "Promoter

and Promoter Group"

Sr. No. Name Number of Shares Shares as

percentage of total

no. of

shares {i.e.Grand

Total(A)+(B)+C)

indicated in

statement at

para(1)(a)

above}

1 Mr.G.Subba Rao 24,750 49.50

2 Mr. G.V.S.L.Kantha Rao 24,750 49.50

3 G.L.Hymavathi 100 0.02

4 Ch. Madhavi 100 0.02

5 Ch.V.S.S.Kishore Kumar 100 0.02

6 Divakar M 100 0.02

7 Himaja M 100 0.02

TOTAL 50,000 100.00

50

(1)c)Statement showing shareholding of persons belonging to the category "Public"

and holding more than 1% of the total number of shares

Sr. No. Name Number of Shares Shares as

percentage of total

no. of

shares {i.e.Grand

Total(A)+(B)+C)

indicated in

statement at

para(1)(a)

above}

1 Nil

2

TOTAL

(1)d) Statement showing details of locked in shares

Sr. No. Name Number of Locked

–in Shares

Locked-in Shares

as percentage of

total no. of

shares {i.e.Grand

Total(A)+(B)+C)

indicated in

statement at

para(1)(a)

above}

1 NA

2

TOTAL

51

(II) (a) Statement showing details of Depository Receipts (DRS)

Sr. No. Type of

outstanding DR

(ADRs, GDRs,

SDRs, etc.)

Number of

outstanding

DRs

Number of

shares

underlying

outstanding

DRs

Shares underlying

outstanding DRs as a

percentage of total

number of shares {i.e.,

Grand Total (A)+(B)+(C)

indicated in Statement

at para (I)(a) above}

1 NA

TOTAL

(II) (a) Statement showing details of Depository Receipts (DRS)

Sr. No. Name of the DR

Holder

Type of

outstanding

DR (ADRs,

GDRs, SDRs,

etc.)

Number of

shares

underlying

outstanding

DRs

Shares underlying

outstanding DRs as a

percentage of total

number of shares {i.e.,

Grand Total (A)+(B)+(C)

indicated in Statement

at para (I)(a) above}

1 NA

TOTAL

52

POST ARRANGEMENT

Statement showing shareholding pattern as on: 05.06.2010

Category of

Shareholder

Number of

Shareholders

Total

number

of shares

Number of

shares held in

dematerialized

form

Total shareholding as a

percentage of total

number of shares

As a

percentage

of(A+B)1

As a

percentage

of (A+B+C)

Shareholding of Promoter and

Promoter Group2

Indian

Individuals/ Hindu Undivided

Family 129 3498889 2146809 48.31 48.31

Central Government/ State

Government(s) 0 0 0 0.00 0.00

Bodies Corporate 0 0 0 0.00 0.00

Financial Institutions/ Banks 0 0 0 0.00 0.00

Any Others(Specify) 0 0 0 0.00 0.00

129 3498889 2146809 48.31 48.31

Foreign

Individuals (Non-Residents

Individuals/

Foreign Individuals) 0 0 0 0.00 0.00

Bodies Corporate 0 0 0 0.00 0.00

Institutions 0 0 0 0.00 0.00

Any Others(Specify) 0 0 0 0.00 0.00

Sub Total(A)(2) 0 0 0 0.00 0.00

Total Shareholding of Promoter

and Promoter Group (A)=

(A)(1)+(A)(2) 129 3498889 2146809 48.31 48.31

Public shareholding

Institutions

Mutual Funds/ UTI 1 5000 0 0.07 0.07

Financial Institutions /Banks 2 22300 0 0.31 0.31

53

Central Government/ State

Government(s) 0 0 0 0.00 0.00

Venture Capital Funds 0 0 0 0.00 0.00

Insurance Companies 0 0 0 0.00 0.00

Foreign Institutional Investors 0 0 0 0.00 0.00

Foreign Venture Capital Investors 0 0 0 0.00 0.00

Any Other (specify) 0 0 0 0.00 0.00

Nri Banks 0 0 0 0.00 0.00

0 0 0 0.00 0.00

Sub-Total (B)(1) 3 27300 0 0.38 0.38

Non-institutions

Bodies Corporate 102 367511 300111 5.07 5.07

Individuals

Individuals -i. Individual

shareholders holding nominal

share capital up to Rs 1 lakh 6980 2805675 1376175 38.74 38.74

ii. Individual shareholders holding

nominal share capital in excess

of Rs. 1 lakh. 22 504414 483414 6.97 6.97

Any Other (specify) NRI / OCB 58 38211 5611 0.53 0.53

Sub-Total (B)(2) 7162 3715811 2165311 51.31 51.31

Total Public Shareholding

(B)= (B)(1)+(B)(2) 7165 3743111 2165311 51.69 51.69

TOTAL (A)+(B) 7294 7242000 4312120 100.00 100.00

Shares held by Custodians and

against which Depository

Receipts have been issued 0.00

GRAND TOTAL (A)+(B)+(C) 7294 7242000 4312120 100.00 100.00

54

(I)(b) Statement showing Shareholding of persons belonging to the category “Promoter and Promoter

Group”

Total shares held

Sr. No. Name of the shareholder Number of

shares

Shares as a percentage

of total number of

shares {i.e., Grand Total

(A)+(B)+(C) indicated in

Statement at para (I)(a)

above}

1 GRANDHI SUBBA RAO 9000 0.12

2 G V S L KANTHA RAO 710780 9.81

3 WG LAKSHMI HYMAVATHI 10 0.00

4 GRANDHI NARASAMMA 10 0.00

5 S DHANALAKSHMI THYRU 10 0.00

6 M SRIVASTA 10 0.00

7 P VENKATA SRI KRISHNA 10 0.00

8 A BALA KRISHNA RAO 1700 0.02

9 A NAGESWARA RAO 2500 0.03

10 CHAMPALAL TANI 3700 0.05

11 D NAGESH BABU 1200 0.02

12 D RAMACHANDRAIAH 5000 0.07

13 DONTHU SESHUKUMAR 3900 0.05

14 G S GANAPATHI 5000 0.07

15 GANDULURI CHINNA VEERA REDDY 5000 0.07

16 GELLI KALAVATHI 3000 0.04

17 JASTI VIJAYA LAKSHMI 5000 0.07

18 K MANGAYAMMA 5000 0.07

19 K MANIKYAMBA 5000 0.07

20 K SIVA RAMA KRISHNA 5000 0.07

21 K VISHALAKSHI 5000 0.07

22 LAKSHMI DEVI 1700 0.02

23 M VIJAYA KUMAR 7500 0.10

24 MITTA NAGAMANI 5000 0.07

25 M V S KUMAR 5000 0.07

26 N NAGAMANI 1200 0.02

27 P V KRISHNA 5800 0.08

28 PARISA BI 5000 0.07

29 R PARIMALA 5000 0.07

30 RAJENDRA BHAGIRATH 300 0.00

55

31 RANGARAJ JAIN 700 0.01

32 SUMATMULL HASTIMAL 5000 0.07

33 V V S S CHOWDARY 200 0.00

34 A NARASINGA RAO 5000 0.07

35 A V K SASTRY 100 0.00

36 AKULA BALAKRISHNA RAO 5000 0.07

37 ANAND KUMAR AGARWALA 2500 0.03

38 V N PALANI 5000 0.07

39 CHANDAR BHANDERI 500 0.01

40 CHANDRAKANT A SHAH 10000 0.14

41 D BHASKARA RAO 2500 0.03

42 D M SHANKARAPPA 2500 0.03

43 DOKI NAGESWARA RAO 200 0.00

44 DUMPA RAMA RAO 200 0.00

45 G RAJA GOPAL 5000 0.07

46 H R SUBBARAO 5000 0.07

47 HARSHED KUMAR DOSHI 1000 0.01

48 JAMI CHANDRA SEKHARAO 200 0.00

49 JAYANTHILAL 1000 0.01

50 JITENDRA CHUNILAL SHAH 500 0.01

51 K G PANCHAKSHARAPPA 2500 0.03

52 K MANI 800 0.01

53 K RAMESH 2500 0.03

54 K SUBBAYAMMA 2500 0.03

55 KAMLESH 500 0.01

56 KANTILAL JAIN 500 0.01

57 KISHAV JALAN 2500 0.03

58 M GANESH GUPTA 2500 0.03

59 M N OMKARAPPA 2500 0.03

60 M N OMKARAPPA 2500 0.03

61 MAHINDRA SABETO 100 0.00

62 MANOJ KUMAR AGARWALA 2500 0.03

63 MEENA JAIN 2500 0.03

64 MOHINIDEVI THARED AGARWALA 2500 0.03

65 MUKUNDA PANDA 100 0.00

66 N VENKATESWARA RAO 1250 0.02

67 NAGAVARDHINI 2500 0.03

68 NEMICHAND MEHTA 500 0.01

69 OM PRAKASH AGARWALA 2500 0.03

70 P KRISHNAVENI 400 0.01

71 P MADHUSUDAN 2500 0.03

56

72 PRADEEP KUMAR JAIN 2500 0.03

73 RADHAKRISHNA SABETO 100 0.00

74 RAMALINGAIAH 2500 0.03

75 RASHMI JALANI 5000 0.07

76 S MADAULAL 500 0.01

77 S RUDRAPPA 5000 0.07

78 SANJAY KUMAR AGARWALA 2500 0.03

79 SATYANARAYANA SABETO 100 0.00

80 SINDIRI RAJA 100 0.00

81 SNEHA AGARWALA 2500 0.03

82 T LAKSHMI 5000 0.07

83 T R SHANKARAPPA 5000 0.07

84 T S PRAKASH 5000 0.07

85 T S R ANJANEYELU 2500 0.03

86 TANGADU BAIRAGI 100 0.00

87 UMA SANKER SABETO 100 0.00

88 V C SHANKARAPPADYEYA 2500 0.03

89 V SUBRAMANYAM 2500 0.03

90 VUTLE MEENAKATENE RAO 200 0.00

91 A RAMESH 2500 0.03

92 B CHANDRA SEKHAR 2500 0.03

93 B MURALI KRISHNA 2500 0.03

94 B V RAVI KUMAR 2500 0.03

95 KUSUM DEVI JALAN 2500 0.03

96 P SIVA PRASAD 10000 0.14

97 SEEMA MURARKA 10000 0.14

98 VOGGU LAKSHMI NARASIMHA RAO 2500 0.03

99 BHARATHI VISVESWARAN 500 0.01

100 VAKACHARLA SATYANAGESWARA RAO 500 0.01

101 SINGAMSETTI NAGARAJU 500 0.01

102 VAKACHARLA CHINNA VENKATESWARA RAO 500 0.01

103 NAGULUKONDA VENKATESWARA RAO 500 0.01

104 BADDIREDDY NAGAMANI 500 0.01

105 BADDIREDDY VENKATASWAMY 500 0.01

106 R PAVITRA 500 0.01

107 VIDYA SHIVA KUMAR 500 0.01

108 G V SURESH 1000 0.01

109 V CHANDRAMATHI 2500 0.03

110 S SUBRAMANYAM 2500 0.03

111 DEEPIKA HASMUKHBHAI PATEL 2500 0.03

112 RAGHAVENDRA PRASAD 5000 0.07

57

113 R JAGADISH KUMAR 6500 0.09

114 G V S L KANTHA RAO 347800 4.80

115 SARANAM DHANALAKSHMI THAYARU 6600 0.09

116 R VISVESWARAN 500 0.01

117 KANRAJ M JAIN 5000 0.07

118 SHAKUNTALA DEVI 5000 0.07

119 BATCHU SUBRAMANYAM 900 0.01

120 RAGHAVENDRA RAO MITTA 5000 0.07

121 GRANDHI SUBBARAO 1974670 27.27

122 RAMA MOHAN DEVATHI 3250 0.04

123 BHARATH S BHOOPALAM 2500 0.03

124 GRANDHI HIMAJA 73189 1.01

125 RAMA GOVINDA RAO VYTLA 2500 0.03

126 S RAMAIAH 5000 0.07

127 G.V.S.L. KANTHA RAO 62000 0.86

128 PIRATLA RAMBABU 500 0.01

129 VASA SADASIVA RAO 200 0.00

TOTAL 3498889 48.31

(1)c)Statement showing shareholding of persons belonging to the category "Public"

and holding more than 1% of the total number of shares

Sr. No. Name Number of Shares Shares as

percentage of total

no. of

shares {i.e.Grand

Total(A)+(B)+C)

indicated in

statement at

para(1)(a)

above}

1 M S Karishma Fiscal Services

Limited

85000

1.17

2

Grandhi Lakshmi Hymavathi

104295

1.44

TOTAL 189295 2.61

58

(1)d) Statement showing details of locked in shares

Sr. No. Name Number of

Lcocked –in

Shares

Locked-in Shares

as percentage of

total no. of

shares {i.e.Grand

Total(A)+(B)+C)

indicated in

statement at

para(1)(a)

above}

1 NA

2

TOTAL

(II) (a) Statement showing details of Depository Receipts (DRS)

Sr. No. Type of

outstanding DR

(ADRs, GDRs,

SDRs, etc.)

Number of

outstanding

DRs

Number of

shares

underlying

outstanding

DRs

Shares underlying

outstanding DRs as a

percentage of total

number of shares {i.e.,

Grand Total (A)+(B)+(C)

indicated in Statement

at para (I)(a) above}

1 NIL

TOTAL

59

(II) (a) Statement showing details of Depository Receipts (DRS) Where underlying shares are in

excess of 1% of the total number of shares

Sr.

No.

Name of

the DR

Holder

Type of

outstanding DR

(ADRs, GDRs,

SDRs, etc.)

Number of

shares

underlying

outstanding

DRs

Shares underlying outstanding DRs as

a percentage of total number of shares

{i.e., Grand Total (A)+(B)+(C) indicated

in Statement at para (I)(a) above}

1 NIL

TOTAL

1) As on date of this Information Memorandum, there are no outstanding warrants,

options or rights to convert debentures, loans or other instruments into equity shares of

the Company.

2) There will be no further issue of capital by the Company whether by way of issue of

bonus shares, preferential allotment, rights issue or in any other manner during the

period commencing from the date of approval of the Scheme by the High Court till listing

of the Equity Shares to be allotted as per the Scheme.

3) The face value of the equity shares is Re. 10/- and there shall be only one denomination

for the Equity Shares of the Company, subject to applicable regulations and the

Company shall comply with such disclosure and accounting norms specified by SEBI,

from time to time.

4) The Company has 7294 members as on date of filing of this Information Memorandum.

60

V. OBJECTS OF THE SCHEME OF ARRANGEMENT

The composite scheme of arrangement envisages the demerger of Real Estate /

Infrastructure Division of M/s.Virat Crane Industries Limited into a Separate Listed

Company in the name and style of M/s. Crane Infrastructure Ltd, first and then the merger

/ amalgamation of M/s. Durga Dairy Limited (Transferor company) with M/s.Virat Crane

Industries Limited.

Virat Crane Industries Limited (VCIL or Company) is into Food Products, Fruit Masala, Pan

Masala and Guthka. In Early 2000, Gutkha was banned in Andhra Pradesh and the

company’s major revenue generating business and the company’s financial model got

impaired. Since then VCIL has been operating in the Fruit Masala Segment and looking for

avenues to strengthen its revenue model.

The company to strengthen its revenue model has embarked on expansion of its activities

into Food / Dairy and Food / Dairy related Products. Hither to, the company has picked up

stake up to the extent of 41.8% in M/s. Durga Dairy Ltd, a company engaged in

manufacturing and sale of Ghee. During the year 2006-07, the company has increased its

stake in Durga Dairy Limited from 41.8% to 51% and made it a subsidiary of the company

to gain the consolidated strength in terms of revenues.

With a view to augment its activities as a combined entity, the company with the consent of

the residual stake holders in M/s. Durga Dairy Ltd has embarked on the Amalgamation of

this entity with itself.

61

The company also has 60,000 Sq.ft Office Premises and approximately 60,000 Sq.ft of

Factory Premises. Also the company has in its possession, 10.5 acres of land of which 6

acres of the land is vacant is located at the centre of Guntur City.

The company has already converted its 60,000 Sq.ft office premises into a Software Park

and currently 40,000 Sq.ft is occupied by Software Companies.

The company intends to use about 1.5 acres of land for setting up a Multiplex and the

remaining 4.5 acres for developing commercial office premises in the fast growing city of

Guntur.

For achieving the above said goals in Real estate / Infrastructure Business, the company

needs to have separate focus and dedicated approach to exploit the vast potential that the

Real estate / Infrastructure and property development plans that the company possesses.

In view of this, the company has decided to demerge the real estate / infrastructure

business undertaking from Virat Crane Industries Limited into a separate company by

name Crane Infrastructure limited .

It is submitted that the proposed composite scheme of arrangement shall hive off the real

estate and infrastructure business to a new entity and shall combine all the manufacturing

activities of the companies into one single entity for achieving maximum utilisation of the

resources of VCIL. Therefore it has been decided to incorporate a new company to pursue

the activities of Real Estate Business of VCIL which would enhance the value of its

shareholders. It is further submitted that considering the exigencies of the business of the

company and in keeping with their interest in Real Estate Business, the company feel that

for greater focus on the different activities of the company and to ensure accelerated growth

and improved profitability in the specific areas of operation, it would be advantageous to

reorganize the company and demerge the Real Estate Business and to focus on

manufacturing activities separately. It is further submitted that the said arrangement /

reorganization is essential to ensure better business opportunities and focus on accelerated

growth of the individual segments in the current scenario in the real estate market. The

proposed arrangement of reorganization would act to the benefit of the shareholders,

creditors and employees and would sub-serve their interests with further growth.

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The main business focus of CIL will be that of project management and development of

commercial, retail and residential properties. The Company's operations span all aspects of

real estate development, from the identification and acquisition of land, to the planning,

execution and marketing of its projects (including architecture, design management and

interior design), through to the maintenance and management of its completed

developments, as well as providing consultancy services on engineering, industrial and

technical matters to all forms of industries including companies engaged in construction-

development of real estate and infrastructure projects. In the commercial business area, the

Company's intention is to build, lease and sell commercial office space, with a focus on

properties attractive to large multinational tenants. The Company's intention with regard to

its retail business area is to develop, manage and lease or sell shopping malls. In the

residential area, the Company aims to build and lease or sell a wide range of properties

including houses, duplexes and apartments of varying sizes, with a focus on the higher end

of the market.

With the growth of the Indian economy and the resulting increase in corporate and

consumer incomes, as well as foreign investment, the Company believes there are

significant opportunities for growth in its three primary business areas.

VI SALIENT FEATURES OF THE SCHEME OF ARRANGEMENT

20. TRANSFERS AND VESTING OF REAL ESTATE BUSINESS

20.1 Upon the coming into effect of this Scheme and with effect from the Appointed

Date i.e. 1st April, 2007 and subject to the provisions of this Scheme, the entire Real

estate / Infrastructure business Undertaking of Virat Crane Industries Limited (VCIL)

shall without any further act, instrument or deed, be transferred to and vest in or be

deemed to be transferred to and vested in the Company, as a going concern in

accordance with Section 2 (19AA) of the Income Tax Act, 1961, so as to vest in the

Company all the rights, title and interest of VCIL therein, subject to subsisting charges

and pledges, if any.

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20.2 With effect form the Appointed Date, the Real Estate Business of VCIL, shall,

under the provisions of Section 391 to 394 and all other applicable provisions, if any, of

the Act, without any further Act or deed, stand transferred to and vested in and/or

deemed to be transferred to and vested in CIL, so as to vest in CIL all the rights, title

and interest pertaining to the Real estate / infrastructure business of VCIL.

20.3 The entire Real Estate business of VCIL as a going concern along with

liabilities and all the properties whether moveable or immovable, real or personal,

corporeal or incorporeal, present or contingent including but without being limited to all

assets, fixed assets, work-in-progress, current assets, investments, reserves, provisions,

funds, quota rights, import quotas, licenses, registrations, patents, trade names,

copyrights, trade marks and other industrial rights and licenses in respect thereof,

leases, tenancy rights, flats, telephones, telexes, facsimile connections, e-mail

connections, internet connections, installations and utilities., benefits of agreements

and arrangements, powers, authorities, permits, allotments, approvals, permissions,

sanctions, consents, privileges, liberties, easements and all the rights, titles, interests,

benefits and advantages of whatsoever nature and wheresoever situated belonging to or

in the possession of or granted in favour of or enjoyed by the Real Estate business of

VCIL as on the Effective Date shall be transferred to and vested in or deemed to be

transferred to and vested in CIL in the following manner :

(a) With effect from the Appointed Date the whole of the properties, as aforesaid,

of Real Estate business of VCIL (except for the portions specified in Clause

20.3(b) and Clause 20.3(c) below of whatsoever nature and wheresoever

situated and capable of being and passing by manual delivery and/or

endorsement or otherwise howsoever) shall, under the provisions of Sections

391 and 394 and all other applicable provisions, if any of the Act, without any

further act or deed be transferred to and vested in and/or be deemed to be

transferred to and vested in CIL so as to vest in CIL the right title and

interest of VCIL therein.

(b) All the movable assets including cash in hand, if any, of Real Estate business

of VCIL, capable of passing by manual delivery or by endorsement and

delivery shall be so delivered or endorsed and delivered as the case may be to

CIL to the end and intent that the property therein passes to CIL, on such

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delivery or endorsement and delivery. Such delivery and transfer shall be

made on a date mutually agreed upon between the Board of Directors of VCIL

and the Board of Directors of CIL within thirty days from the date of the last of

Orders of the Hon’ble Court sanctioning the Scheme of Amalgamation

specified herein under sections 391 and 394 of the Act.

(c) In respect of the movable properties other than specified in Clause 20.3(b)

above including sundry debtors, outstanding loans and advances, if any,

recoverable in cash or in kind or for value to be received, bank balances and

deposits, if any, with Government, Semi Government, local and other

authorities and bodies, the following modus operandi shall, to the extent

possible, be followed :-

(i) CIL shall give notice in such form as it may deem fit and proper, to

each person, debtor or depositor, as the case may be, that pursuant to

the Hon'ble Court having sanctioned the Scheme, the said debt, loan,

advance or deposit be paid or made good or held on account of CIL as

the person entitled thereto to the end and intent that the right of the

Real Estate business of VCIL to recover or realize all such debts

(including the debts payable by such person or depositee to the Real

Estate business of VCIL) stands transferred and assigned to CIL and

that appropriate entries should be passed in its books to record the

aforesaid change

(ii) VCIL shall also give notices in such form as it may deem fit and proper

to each person, debtor or depositor of the Real Estate business of VCIL,

that pursuant to the Hon’ble Court having sanctioned the Scheme, the

said debt, loan, advance or deposit shall be paid or made good or held

on account of CIL and that thereafter the right of VCIL to recover or

realize the same stands extinguished.

(d) If and to the extent there are inter corporate loans Investments or balances between

Real Estate Business of VCIL and CIL, the obligations in respect thereof shall, on and

from the Appointed Date, come to an end and corresponding suitable effect be given in

the books of accounts and records of CIL and VCIL. For removal of doubts it is hereby

clarified that there would be no accrual of interest or other charges in respect of any

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such inter company loans or balances between CIL and the Real Estate business of

VCIL from the appointed date.

20.4 With effect from the Appointed Date, all debts, liabilities, duties,

obligations of every kind, nature and description of VCIL relatable to the Real

Estate Business shall, without any further act or deed be and stand transferred

to CIL and it shall not be necessary to obtain the consent of any third party or

other person who is a party to any contract or arrangement by virtue of which

such liabilities have arisen in order to give effect to the provisions of this sub-

clause. After the Effective Date, CIL undertakes to meet, discharge and satisfy

the said liabilities to the exclusion of VCIL and to keep VCIL indemnified at all

times from and against all such liabilities and from and against all actions,

demands and proceedings in respect thereto.

20.5 With effect from the Appointed Date and upon the Scheme becoming

effective, any statutory license, permission or approvals or consents, held by

VCIL required to carry on operations in the Real Estate Business shall stand

transferred to CIL without any further act or deed, and shall be appropriately

mutated by the statutory authorities concerned therewith in favour of CIL. The

benefit of all statutory and regulatory permissions, environmental approvals and

consents, registration or other licenses and consent shall vest in and become

available to CIL pursuant to the Scheme. In so far as the various incentives,

subsidies, rehabilitation Schemes, special status and other benefits or privileges

enjoyed, granted by any Government Body, local authority or by any other

person, or availed of by VCIL relating to the Real Estate Business, are concerned,

the same shall vest with and be available to CIL on the same terms and

conditions.

21. ISSUE OF SHARES

21.1 Upon this scheme becoming operative and upon vesting of the Real Estate /

Infrastructure Business of VCIL in CIL in terms of this Scheme, CIL shall without

any further application or deed, issue and allot 1 (One) Equity Shares of the face

value of Rs. 10 each (Rupees Ten each) credited as fully paid-up to all shareholders

of VCIL and whose name appears in the Register of members of VCIL on the Record

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Date, in respect of every 1 (One) equity Shares of the face value of Rs. 10/- fully paid

up.

21.6. The new Shares of CRANE INFRASTRUCTURE LIMITED shall be listed on Bombay

stock exchange on which the shares of VCIL is listed as on the Effective Date.

Particulars of Assets and Liabilities transferred on Demerger of Real Estate and

Infrastructure Business Undertaking to the Company As per Scheme, Real Estate and

Infrastructure Business Demerged Undertakings means collectively, the Real Estate

and Infrastructure Business Undertaking of VCIL.

3.1 “Real estate / Infrastructure Business” means the undertaking of VCIL along with its

properties and already available constructed premises and other business engaged in

development of Real estate and includes;

3.1.1 All assets and liabilities pertaining to the Real Estate/Infrastructure Business of

VCIL;

3.1.2 Without prejudice to the generality of the provisions of sub-clause 3.10.1 above,

the Real Estate /Infrastructure Business shall include, in particular;

(i) The whole of the undertaking of real estate Business of VCIL, as a going

concern, including all debts, liabilities, duties, obligations and

provisions;

(ii) All assets and properties, whether movable or immovable, real or

personal, in possession or reversion, leasehold land, factory shed,

buildings, corporeal or incorporeal, tangible or intangible, present or

contingent of whatsoever nature and where so ever situated, belonging

to or in the ownership, power or possession and / or in the control of or

vested in or granted in favor of or enjoyed by the Real Estate Business

of VCIL such as industrial and other licenses, permits, quotas,

approvals, import entitlements, excise license and registrations, lease,

tenancy rights in relation to office or residential properties,

permissions, investments, buildings (but excluding Plant and

machinery related to Gutkha business), investments, current assets, all

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deposits including security deposits, inventories/ stocks, funds, plants

and machinery, electrical installation, office equipment, Xerox

equipment, Air-conditioning plant, offices, capital work-in-progress,

furniture, fixtures, computers, appliances, accessories, vehicles,

incentives, if any, and all other rights, title, interest, labels and brand

registrations, trademarks, patents and copyrights, technical know-how,

trade names and other industrial or intellectual property rights of any

nature whatsoever, contracts, agreements, consent, approvals or

powers of every kind nature and description:

(iii) All permits, quotas, rights, entitlements, licenses including factory

licenses, industrial licenses, leases, hire purchase arrangements, bids,

tenders, letters of intent, expressions of interest, municipal and other

statutory permissions, approvals, consents, registrations, subsidies,

concessions, exemptions, remissions, tax deferrals, tenancies in

relation to office, bank accounts, lease rights, powers and facilities of

every kind, nature and description whatsoever, rights to use and avail

of telephones, telexes, facsimile connections and installations, utilities,

electricity and other services, provisions, funds, benefits of all other

interests in connection with or relating to the Real Estate Business of

VCIL; and

(iv) All records, files, papers, engineering and process information,

computer programs, manuals, data, catalogues, quotations, sales and

advertising materials, lists of present and former customers and

suppliers, customer credit information, customer pricing information,

and other records, whether in physical form or electronic form in

connection with or relating to the Real Estate Business of VCIL.

3.1.3 For the purpose of this Scheme, it is clarified that liabilities pertaining to the Real

Estate Business of VCIL are:

(a) The liabilities which arise out of the activities or operations of the Real

Estate Business of VCIL

(b) Specific loans and borrowings raised, incurred and utilized solely for the

activities or operation of the Real Estate Business of VCIL; and

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(c) Liabilities other than those referred to in sub- clauses (a) and (b) above, if

any, being the amounts of general or multipurpose borrowings of VCIL

prior to the Appointment Date, allocated to the Real Estate Business of

VCIL in the same proportion in which the book value of the assets

transferred under this Scheme bear to the total value of the assets of

VCIL on the Appointed Date.

3.1.4 All employees of VCIL employed in the Real Estate Business of VCIL, as identified

by the Board of Directors of VCIL, as on the Effective Date.

3.1.5 Any question that may arise as to whether a specific assets or liabilities pertains

or does not pertain to the Real Estate Business of VCIL or whether it arises out of

the activities or operations of the Real Estate Business of VCIL shall be decided

by mutual agreement between the Boards of Directors of VCIL and CIL .

“Remaining Business” means such business of VCIL after demerger of the Real

Estate Business of VCIL (as defined in Clause 3.10) and will consist of the

properties, assets and liabilities of the business other than the Real Estate

Business of VCIL including in particular Plant and Machinery related to Gutkha

business.

Particulars of Assets & Liabilities of Real Estate / Infrastructure Business

Undertaking transferred to CRANE INFRASTRUCTURE LIMITED.

The Real Estate / Infrastructure Division and All Assets related to the Real Estate /

Infrastructure Division including the properties developed and properties that are in the

process of development.

Assets Unit /s Value (Rs. In Lakhs)

Vacant Land (In acres) 6 900

Office Building (In Sq.ft)* 60000 990

Factory (In Sq.ft)* 60000 510

Plant & Machinery 100

Total Infrastructure division 2500

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*Office Building and Factory are located in additional 4.5 acres of land.

The Infrastructure Division is valued at Rs. 25 crores based on various valuation

methodologies on going concern basis.

The value after taking the Asset Base in terms of Net Block into consideration, has been

considered as the Infrastructure Division’s established business valuation accordingly.

VII. STATEMENT OF POSSIBLE TAX BENEFITS

Based on our understanding of Current laws applicable, the following tax benefits shall be

available to the Company and the shareholders/prospective shareholders under THE

INCOME TAX ACT, 1961 (‘The IT Act’)

The tax benefits listed below are the possible benefits available under the current tax laws

in India. Several of these benefits are dependent on the company or its shareholders

fulfilling the conditions prescribed under the tax laws.

Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent

upon fulfilling such conditions as may be prescribed under the relevant sections of the

Income Tax Act, 1961.

I. BENEFITS AVAILABLE TO THE COMPANY

DEDUCTIONS UNDER CHAPTER VI A OF THE IT Act.

1.1 Subject to the conditions specified under Section 80-IB (10) of the IT Act, the Company

is eligible for hundred percent deduction of the profits derived from development and

building of housing projects approved before March 31, 2007, by a local authority.

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INCOME FROM HOUSE PROPERTY

2.1 The Company is eligible for deduction of thirty percent of the annual value of the

property (i.e. actual rent received or receivable on the property or any part of the property

which is let out) as per the provisions of section 24(a) of the IT Act.

2.2 Wherever the property has been acquired, constructed, repaired, renewed or

reconstructed with borrowed capital, the amount of interest payable on such capital shall

be allowed as a deduction in computing Income from house property, as per the provisions

of section 24(b).

II BENEFITS AVAILABLE TO THE COMPANY AND PROSPECTIVE RESIDENT

SHAREHOLDERS OTHER THAN DOMESTIC COMPANIES

DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE ACT

1 Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003)

from a domestic company are exempt in the hands of the Company/shareholders, if the

same is subject to dividend distribution tax as referred to in Section 115-O, as per the

provisions of section 10(34) of the IT Act. However, Section 94(7) of the IT Act provides that

the losses arising on account of sale/transfer of shares purchased up to three months prior

to the record date and sold within three months after such date will be disallowed to the

extent of dividend on such shares are claimed as tax exempt by the shareholder.

INCOME FROM CAPITAL GAINS

2.1 Section 48 of the IT Act, categorizes capital assets into two major categories viz. Long

term Capital Assets and Short Term Capital Assets. If the shares are held for a period more

than 12 months it is termed as a long term asset and otherwise as a short term asset. Any

profit or loss arising on account of sale/transfer of such Long Term Assets are termed as

long term capital gains and short term assets as short term capital gains.

2.2 Section 48 of the IT Act, which prescribes the mode of computation of capital gains,

provides for deduction of cost of acquisition / improvement and expenses incurred wholly

71

and exclusively in connection with the transfer of a capital asset, from the sale

consideration to arrive at the amount of capital gains. However, as per second proviso to

Section 48 of the IT Act, in respect of long term capital gains arising from transfer of shares

of Indian Company, it offers a benefit by permitting substitution of cost of acquisition /

improvement with the indexed cost of acquisition / improvement, which adjusts the cost of

acquisition / improvement by a cost inflation index, as prescribed annually.

2.3 Provisions of Section 112 of the IT Act, permit taxing long term capital gains (which are

not exempt under Section 10(38) of the IT Act) arising on transfer of shares in the Company

at a rate of 20 percent (plus applicable surcharge and education cess) after factoring the

indexation benefit.

However, the share holder may opt for the tax on long term gains computed at the rate of

10 percent (plus applicable surcharge and education cess), if the tax on indexed long term

capital gains resulting on transfer of listed securities calculated at the rate of 20 percent

exceeds the tax on long term gains computed at the rate of 10 percent without indexation

benefit.

2.4 Provisions of Section 111A of the IT Act, prescribes for taxing the short-term capital

gains arising from sale of equity shares in the Company at a rate of 10 percent (plus

applicable surcharge and education cess) where such transaction of sale is entered on a

recognized stock exchange in India and is liable to securities transaction tax.

2.5 Provisions of section 10(38) of the IT Act, exempts from tax the long term capital gains

arising on sale of equity shares in the Company where the sale transaction has been

entered on a recognized stock exchange of India and is liable to securities transaction tax.

2.6 Provisions of Section 54EC of the IT Act exempts long-term capital gains (which are not

exempt under section 10(38) of the IT Act from being taxed to the extent specified therein,

subject to the conditions as referred to in the section and to the extent such capital gains

are invested within 6 months from the date of such transfer in the bonds (long term

specified assets) issued by

a. National Highway authority of India constituted under section 3 of The National Highway

Authority of India Act, 1988;

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b. Rural Electrification Corporation Limited, the company formed and registered under the

Companies Act, 1956; If only part of the capital gain is so reinvested, exemption available

shall be in the same proportion as the cost of long term specified assets bears to the whole

of the capital gain. However, in case the long term specified asset is transferred or

converted into money within three years from the date of its acquisition, the amount so

exempted shall be chargeable to tax during the year such transfer or conversion into money

takes place.

2.7 Subject to the conditions specified under the Provisions of Section 54F of the IT Act,

long-term capital gains (which are not exempt from tax under Section 10(38) of the IT Act)

arising to an individual or a Hindu Undivided Family (‘HUF’) on transfer of shares of the

Company will be exempt from capital gains tax if the sale proceeds from transfer of such

shares are used for purchase of residential house property within a period of 1 year before

or 2 years after the date on which the transfer took place or for construction of residential

house property, within a period of 3 years after the date of such transfer.

Provisions of Section 88E provides that where the total income of a person includes income

chargeable under the head “Profits and Gains of business or profession” arising from

purchase or sale of equity shares in a company entered into on a recognized stock

exchange, i.e. from taxable securities transactions, he shall get a rebate equal to the

securities transaction tax paid by him in the course of his business. Such rebate is to be

allowed from the amount of income tax in respect of such transactions calculated by

applying average rate of income tax on such income.

III BENEFITS AVAILABLE TO CORPORATE RESIDENT SHAREHOLDERS (DOMESTIC

COMPANIES).

DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE ACT

1 Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003)

from a domestic company are exempt in the hands of the Company/shareholders, if the

same is subject to dividend distribution tax as referred to in Section 115-O, as per the

provisions of section 10(34) of the IT Act. However, Section 94(7) of the IT Act provides that

the losses arising on account of sale/transfer of shares purchased up to three months prior

73

to the record date and sold within three months after such date will be disallowed to the

extent dividend on such shares are claimed as tax exempt by the shareholder.

INCOME FROM CAPITAL GAINS

2.1 Section 48 of the IT Act, categorizes capital assets into two major categories viz. long

term capital assets and short term capital assets. If the shares are held for a period more

than 12 months it is termed as a long-term asset and otherwise short-term asset. Any profit

or loss arising on account of sale/transfer of such long term assets are termed as long term

capital gains and short term assets as short term capital gains.

2.2 Section 48 of the IT Act, which prescribes the mode of computation of capital gains,

provides for deduction of cost of acquisition / improvement and expenses incurred wholly

and exclusively in connection with the transfer of a capital asset, from the sale

consideration to arrive at the amount of capital gains. Further, in respect of long term

capital gains from transfer of shares of Indian Company, it offers a benefit by permitting

substitution of cost of acquisition / improvement with the indexed cost of acquisition /

improvement, which adjusts the cost of acquisition / improvement by a cost inflation index,

as prescribed annually.

2.3 Provisions of Section 112 of the IT Act, permit taxing long term capital gains (which are

not exempt under Section 10(38) of the IT Act) arising on transfer of shares in the Company

at a rate of 20 percent (plus applicable surcharge and education cess) after factoring the

indexation benefit. However, the share holder may opt for the tax on long term gains

computed at the rate of 10 percent (plus applicable surcharge and education cess), if the

tax on indexed long term capital gains resulting on transfer of listed securities calculated at

the rate of 20 percent exceeds the tax on long term gains computed at the rate of 10

percent without indexation benefit.

2.4 Provisions of Section 111A of the IT Act, prescribes for taxing the short-term capital

gains arising from sale of equity share in the Company at a rate of 10 percent (plus

applicable surcharge and education cess) where such transaction of sale is entered on a

recognized stock exchange in India and is liable to securities transaction tax.

74

2.5 Provisions of section 10(38) of the IT Act, exempts from tax the long term capital gains

arising on sale of equity shares in the Company where the sale transaction has been

entered into on a recognized stock exchange of India and is liable to securities transaction

tax, subject to the condition that the income by way of long-term capital gain of the

company shall be taken into account in computing the book profit and income tax payable

under Section 115JB.

2.6 Provisions of Section 54EC of the IT Act exempts long-term capital gains (which are not

exempt under section 10(38) of the IT Act from being taxed to the extent specified therein,

subject to the conditions as referred to in the section and to the extent such capital gains

are invested within 6 months from the date of such transfer in the bonds (long term

specified assets) issued by

a. National Highway authority of India constituted under section 3 of The National Highway

Authority of India Act, 1988;

b. Rural Electrification Corporation Limited, the company formed and registered under the

Companies Act, 1956; If only part of the capital gain is so reinvested, exemption available

shall be in the same proportion as the cost of long term specified assets bears to the whole

of the capital gain. However, in case the long term specified asset is transferred or

converted into money within three years from the date of its acquisition, the amount so

exempted shall be chargeable to tax during the year such transfer or conversion into money

takes place.

Provisions of Section 88E provides that where the total income of a person includes income

chargeable under the head “Profits and Gains of business or profession” arising from

purchase or sale of an equity share in a company entered on a recognized stock exchange,

i.e. from taxable securities transactions, the company shall get a rebate equal to the

securities transaction tax paid by it in the course of its business. Such rebate is to be

allowed from the amount of income tax in respect of such transactions calculated by

applying average rate of income tax on such income.

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IV BENEFITS AVAILABLE TO MUTUAL FUNDS

1. Provisions of Section 10(23D) of the IT Act exempts the Mutual Funds registered under

the Securities and Exchange Board of India or Mutual Funds set up by Public Sector Banks

or Public Financial Institutions or authorized by the Reserve Bank of India and subject to

the conditions specified therein, from income tax on their income.

V BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (‘FIIS’)

DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE ACT

1. Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003)

from a domestic company are exempt in the hands of the Company/shareholders, if the

same is subject to dividend distribution tax as referred to in Section 115-O, as per the

provisions of section 10(34) of the IT Act. However, Section 94(7) of the IT Act provides that

the losses arising on account of sale/transfer of shares purchased up to three months prior

to the record date and sold within three months after such date will be disallowed to the

extent dividend on such shares are claimed as tax exempt by the shareholder.

INCOME FROM CAPITAL GAINS

2.1 Provisions of Section 115AD of the IT Act, provides for taxing income of FIIs arising from

securities (other than income by way of dividends referred to in section 115(O) of the IT Act)

at concessional rates, as follows:

Nature of income Rate of tax (%)

Income in respect of securities 20

(other than units referred to in Section 115AB)

Long Term Capital Gains 10

Short term capital gains

(other than short term capital gain referred to in Section 111A) 30

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The above tax rates would be increased by the applicable surcharge and education cess.

The benefits of indexation and foreign currency fluctuation protection as provided under

Section 48 of the IT act are not available to a FII.

2.2 Provisions of Section 111A of the IT Act, prescribes for taxing the short-term capital

gains arising from sale of equity share in the Company at a rate of 10 percent (plus

applicable surcharge and education cess) where such transaction of sale is entered on a

recognized stock exchange in India and is liable to securities transaction tax.

2.3 Provisions of the Double Taxation Avoidance Agreement between India and the country

of residence of the FII would prevail over the provisions of the IT Act, as per section 90(2) of

the IT Act, to the extent they are more beneficial to the FII.

2.4 Provisions of section 10(38) of the IT Act, exempts from tax the long term capital gains

arising on sale of equity shares in the Company where the sale transaction has been

entered on a recognized stock exchange of India and is liable to securities transaction tax.

2.5 Provisions of Section 54EC of the IT Act exempts long-term capital gains (which are not

exempt under section 10(38) of the IT Act from being taxed to the extent specified therein,

subject to the conditions as referred to in the section and to the extent such capital gains

are invested within 6 months from the date of such transfer in the bonds (long term

specified assets) issued by

a. National Highway authority of India constituted under section 3 of The National Highway

Authority of India Act, 1988;

b. Rural Electrification Corporation Limited, the company formed and registered under the

Companies Act, 1956; If only part of the capital gain is so reinvested, exemption available

shall be in the same proportion as the cost of long term specified assets bears to the whole

of the capital gain. However, in case the long term specified asset is transferred or

converted into money within three years from the date of its acquisition, the amount so

exempted shall be chargeable to tax during the year such transfer or conversion into money

takes place.

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Provisions of Section 88E provides that where the total income of a person includes income

chargeable under the head “Profits and Gains of business or profession” arising from

purchase or sale of an equity share in a company entered on a recognized stock exchange,

ie. from taxable securities transactions, he shall get a rebate equal to the securities

transaction tax paid by him in the course of his business. Such rebate is to be allowed from

the amount of income tax in respect of such transactions calculated by applying average

rate of income tax on such income.

V BENEFITS AVAILABLE TO VENTURE CAPITAL COMPANIES/FUNDS

1. Provisions of Section 10(23FB) of the IT Act, exempts any income of Venture Capital

companies/Funds (set up to raise funds for investment in venture capital undertaking

registered and notified in this behalf) registered with the Securities and Exchange Board of

India, subject to conditions specified therein. However, in view of the provisions of Section

115U of the IT Act, any income derived by a person from his investment in venture capital

companies/funds would be taxable in the hands of the person making an investment in the

same manner as if it were the income received by such person had the investments been

made directly in the venture capital undertaking.

VI BENEFITS AVAILABLE TO NON-RESIDENTS / NON-RESIDENT INDIAN

SHAREHOLDERS (OTHER THAN MUTUAL FUNDS, FIIS AND FOREIGN VENTURE

CAPITAL INVESTORS)

DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE ACT

1. Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003)

from a domestic company are exempt in the hands of the Company/shareholders, if the

same is subject to dividend distribution tax as referred to in Section 115-O, as per the

provisions of section 10(34) of the IT Act. However, Section 94(7) of the IT Act provides that

the losses arising on account of sale/transfer of shares purchased upto three months prior

to the record date and sold within three months after such date will be disallowed to the

extent dividend on such shares are claimed as tax exempt by the shareholder.

78

INCOME FROM CAPITAL GAINS

2.1 In terms of first proviso to Section 48 of the IT Act, in case of a non-resident, while

computing the capital gains arising from transfer of shares in or debentures of the

Company acquired in convertible foreign exchange (as per exchange control regulations)

protection is provided from fluctuations in the value of rupee in terms of foreign currency in

which the original investment was made. Cost indexation benefits will not be available in

such a case. The capital gains/ loss in such a case is computed by converting the cost of

acquisition, sales consideration and expenditure incurred wholly and exclusively in

connection with such transfer into the same foreign currency which was utilized in the

purchase of shares.

2.2 Provisions of Section 112 of the IT Act, permit taxing long term capital gains (which are

not exempt under Section 10(38) of the IT Act) arising on transfer of shares in the Company

at a rate of 20 percent (plus applicable surcharge and education cess) after factoring the

indexation benefit. However, the share holder may opt for the tax on long term gains

computed at the rate of 10 percent (plus applicable surcharge and education cess), if the

tax on indexed long term capital gains resulting on transfer of listed securities calculated at

the rate of 20 percent exceeds the tax on long term gains computed at the rate of 10

percent without indexation benefit.

2.3 Provisions of Section 111A of the IT Act, prescribes for taxing the short-term capital

gains arising from sale of equity share in the Company at a rate of 10 percent (plus

applicable surcharge and education cess) where such transaction of sale is entered on a

recognized stock exchange in India and is liable to securities transaction tax. Short term

capital gains arising from transfer of shares in a company other than those covered by

Section 111A of the IT Act would be subject to tax as calculated under the normal

provisions of the IT Act.

2.4 Provisions of the Double Taxation Avoidance Agreement between India and the country

of residence of the FII would prevail over the provisions of the IT Act, as per section 90(2) of

the IT Act, to the extent they are more beneficial to the non-resident.

79

2.5 Provisions of section 10(38) of the IT Act, exempts from tax the long term capital gains

arising on sale of equity shares in the Company where the sale transaction has been

entered into on a recognized stock exchange of India and is liable to securities transaction

tax.

2.6 Provisions of Section 54EC of the IT Act exempts long-term capital gains (which are not

exempt under section 10(38) of the IT Act from being taxed to the extent specified therein,

subject to the conditions as referred to in the section and to the extent such capital gains

are invested within 6 months from the date of such transfer in the bonds (long term

specified assets) issued by

a. National Highway authority of India constituted under section 3 of The National Highway

Authority of India Act, 1988;

b. Rural Electrification Corporation Limited, the company formed and registered under the

Companies Act, 1956; If only part of the capital gain is so reinvested, exemption available

shall be in the same proportion as the cost of long term specified assets bears to the whole

of the capital gain. However, in case the long term specified asset is transferred or

converted into money within three years from the date of its acquisition, the amount so

exempted shall be chargeable to tax during the year such transfer or conversion into money

takes place.

2.7 Subject to the conditions specified under the Provisions of Section 54F of the IT Act,

long-term capital gains (which are not exempt from tax under Section 10(38) of the IT Act)

arising to an individual or a Hindu Undivided Family (‘HUF’) on transfer of shares of the

Company will be exempt from capital gains tax if the sale proceeds from transfer of such

shares are used for purchase of residential house property within a period of 1 year before

or 2 years after the date on which the transfer took place or for construction of residential

house property within a period of 3 years after the date of such transfer.

3. Where shares of the Company have been subscribed in convertible foreign exchange,

Non-Resident Indians (ie. An individual being a citizen of India or person of Indian origin

who is not a resident) have the option of being governed by the provisions of Chapter XII-A

of the IT Act, which inter alia entitles them to the following benefits:� Under Section 115E,

where the total income of a non-resident Indian includes any income from investment or

income from capital gains of an asset other than a specified asset, such income shall be

80

taxed at a concessional rate of 20 per cent (plus applicable surcharge and education cess).

Also, where shares in the company are subscribed for in convertible foreign exchange by a

non-resident Indian, long-term capital gains arising to the non-resident Indian shall be

taxed at a concessional rate of 10 percent (plus applicable surcharge and education cess).

The benefit of indexation of cost and the protection against risk of foreign exchange

fluctuation would not be available.�

Under Section 115F of the IT Act, long-term capital gains (in cases not covered by section

10(38) of the IT Act) arising to a non-resident Indian from transfer of shares of the

company, subscribed in convertible foreign exchange (in case not covered under Section

115E of the IT Act), shall be exempt from income tax, if the entire net consideration is

reinvested in specified assets/saving certificates referred to in Section 10(4B) within 6

months of the date of transfer.

Where only a part of the net consideration is so reinvested, the exemption shall be

proportionately reduced. The amount so exempted shall be chargeable to tax subsequently,

if the specified assets/saving certificates are transferred or converted into money within 3

years from the date of their acquisition.

Under Section 115G of the IT act, it shall not be necessary for a non-resident Indian to

furnish his return of income under Section 139(1) if his income chargeable under the IT Act

consists of only investment income or long term capital gains or both, arising out of assets

acquired, purchased or subscribed in convertible foreign exchange and tax has been

deducted at source from such income as per the provisions of Chapter XVII-B of the IT

Act.�

Under Section 115I of the IT Act, a Non-Resident Indian may elect not to be governed by the

foregoing provisions for any assessment year by furnishing his return of income for that

assessment year under Section 139 of the IT Act, declaring therein that the provisions of

Chapter XII-A shall not apply to him for that assessment year and accordingly his total

income for that assessment year will be computed in accordance with the other provisions

of the IT Act.

Section 88E provides that where the total income of a person includes income chargeable

under the head “Profits and gains of business or profession” arising from purchase or sale

81

of an equity share in a company entered into on a recognized stock exchange, ie. from

taxable securities transactions, he shall get rebate equal to the securities transaction tax

paid by him in the course of his business. Such rebate is to be allowed from the amount of

income tax in respect of such transactions calculated by applying average rate of income

tax.

BENEFITS AVAILABLE UNDER THE WEALTH TAX ACT, 1957

1. Investment in shares of companies are excluded from the definition of the term “asset” as

given under section 2(ea) of the Wealth Tax act, 1957, and hence the shares held by the

shareholders would not be liable to Wealth tax.

BENEFITS AVAILABLE UNDER THE GIFT TAX ACT

1. Gift tax is not leviable in respect of any gifts made on or after 1st October, 1998.

Therefore, any gift of shares of the Company will not attract Gift tax.

Notes:

The above Statement of Possible Direct Tax benefits sets out the provisions of law in a

summary manner only and is not a complete analysis or listing of all potential tax

consequences of the purchase, ownership and disposal of equity shares.

The above Statement of Possible Direct Tax benefits sets out the possible tax benefits

available to the Company and its shareholders under the current tax laws presently in force

in India. Several of these benefits are dependent on the Company or its shareholders

fulfilling the conditions prescribed under the relevant tax laws.

This statement is only intended to provide general information to the investors and is

neither designed nor intended to be a substitute for professional tax advice. In view of the

individual nature of the tax consequences, the changing tax laws, each investor is advised

to consult his or her own tax consultant with respect of the specific tax implications arising

out of their participation in the issue.

In respect of non-residents, the tax rates and the consequent taxation mentioned above

shall be further subject to any benefits available under the Double Taxation Avoidance

82

Agreement, if any, between India and the country in which the non-resident has fiscal

domicile.

VIII. COMPANY HISTORY AND MANAGEMENT

The Company was incorporated under the Companies Act, 1956 on 13th May 2008 as a

public limited company with an authorized capital of Rs.1,00,00,000 divided into 10,00,000

equity shares of Rs.10/- each with a paid-up capital of Rs.5,00,000 divided into 50,000

equity shares of Rs.10/- each, registered under CIN No. U45209AP2008PLC059135 2008-

2009. It obtained the certificate of commencement of business on 5th August 2008.

The Registered Office of the Company is at D.No. 25-2-1,G.T. Road, Opp. Mastan Dargah,

Guntur-522 004.

The Company entered into a Scheme of Arrangement (“the Scheme”) with Virat Crane

Industries Limited and their respective shareholders. The Said scheme was approved by

Hon’ble High Court of Andhra Pradesh at Hyderabad on 18th February 2010. In terms of

the Scheme, the Company has taken over Real Estate and Infrastructure Business

Undertakings of Virat Crane Industries Limited.

MAIN OBJECTS OF THE COMPANY

The main objects of CRANE INFRASTRUCTURE LIMITED are set out in its Memorandum of

Association and they are briefly as under:

1) To carry in India or elsewhere the business of construction, development, up

gradation, repair, operation and maintenance of roads, highways, bypasses, bridges, rail

over bridges, tunnels, railways, ports, airports, seaports, dredging, Information Technology

parks / facilities, trade fairs, exhibition centers, malls, multiplexes, hotels, buildings,

public utilities, interchangers, telecommunication, Special Economic Zones, Food parks,

water supply, residential / commercial complexes, real estate, mass housing, inland water

ways, pipeline and other related infrastructure works.

83

2) To carry in India or elsewhere the business of Real Estate and to act as

Consultants and Developers on the matters connected with the real estate properties of all

kinds and descriptions and to acquire by purchase, ownership of open Land, agricultural

land, urban buildings including residential houses, flats, blocks, or tenements and

construct buildings of all types on own account or for leasing out or selling for promoting

house projects, hostels and other commercial, residential and all other types of buildings.

SHAREHOLDERS AGREEMENT

There is no separate agreement executed between any shareholder and the Company.

STRATEGIC / FINANCIAL PARTNERS AND OTHER MATERIAL CONTRACTS

The Company does not have any strategic/financial partners or has not entered any

material contracts other than in ordinary course of business.

OVERVIEW

Crane Infrastructure Ltd is a Real Estate and Infrastructure Construction company

headquartered in Andhra Pradesh. Crane Infrastructure Ltd provides construction services

for residential, industrial, commercial, port infrastructure and road infrastructure projects.

Our Services

The company provides Infrastructure and construction services for the five sectors

described below.

(a) Residential: In the residential sector, we provide the following services: (i) the

construction of townships including the construction of infrastructural facilities and the

construction of residential housing; and (ii) the construction of high-rise buildings;

(b) Commercial: In the commercial sector, our services consist of the construction of

structures such as shopping malls and multiplexes, IT parks, warehouse facilities,

hospitals and schools;

84

(c) Industrial: In the industrial sector, our services consist of the construction of

manufacturing facilities such as industrial factories and workshops.

(d) Port Infrastructure: In the port infrastructure sector, we provide the following services:

(i) the construction of onshore container terminals, which consist of reclamation, soil

consolidation, paving and operational services that include fire fighting systems, sewerage

and drainage services; (ii) the construction of container freight stations, which consist of the

preparation of sub-base, paving and operational services that include fire fighting systems,

sewerage and drainage services; (iii) the repair and maintenance services at onshore

container terminal; and (iv) the construction of operational buildings and workshops.

(e) Road Infrastructure: In the road infrastructure sector, we provide the following services:

earthwork, paving, sewerage, storm water drainage, electrification, landscaping and

arboriculture.

The company also bid for and undertake projects on a Build Operate Transfer (“BOT”) basis

and on a Public Private Partnership (“PPP”) basis.

BOARD OF DIRECTORS:

The Board of Directors comprises of 3 members.

The composition of the Board of Directors as on March 31, 2010 is as given below:

Sn

No

Name, Designation, Father’s

Name, Address, DIN and

Occupation

Nationality

Age

(years)

Other Directorships

1

Grandhi Subba Rao

S/o. G. Lakshmikantham

Ramanamakshethram, 3rd Line,

Guntur.

DIN No: DIN1864400

Director

Indian

83

Virat Crane Industries

Limited

85

2 GVSL Kantha Rao

S/o Grandhi Subba Rao

Ramanamakshethram, 3rd Line,

Guntur

DIN No.: DIN1846224

Director

Indian 53 Virat Crane Industries

Limited

3 CH V.S.S Kishore Kumar

S/o Ranga Rao, Chegu

Ramanamakshethram, 3rd Line,

Guntur.

DIN No.: DIN1823606

Director

Indian 51 Nil

BRIEF PROFILE OF DIRECTORS:

1. G.Subba Rrao Chairman :

G. Subba Rao , has over a six decades of rich experience in Betel nut powder business

spread all over India. He is the pioneer in Betel Nut Industry and he has created his own

brand in the name of “CRANE” which is very popular brand in the Betel nut powder

Industry.

2. G.V.S.L.Kantha Rao, Managing Director:

Mr. Kantha Rao, son of Mr. G.Subba Rao has the ability to innovate and excel in every task

and across every activity, inviting the future in to the present and embracing every

opportunity. He is also having a rich experience of more than 30 years in Crane betel nut

industry, real estate, software, Food Products and other industries.

3. Ch.V.S.S.Kishore Kumar, Director:

Kishore Kumar, Graduate has over 15 years of rich experience in the Industry and an

Independent director in the Company.

86

INTEREST OF THE DIRECTORS

Other than their respective shareholding in the Company and re-imbursement of expenses

incurred and normal remuneration/sitting fee from the Company, the directors of the

Company have no other interest in the Company.

APPOINTMENT AND COMPENSATION OF MANAGING DIRECTOR

The Board of Directors of the company has vide its resolution dated November 22nd 2008,

appointed Mr. G.V.S.L.Kantha Rao Managing Director of the Company with immediate

effect. The shareholders of the company passed a resolution dated 28th November 2008 and

as per the terms of resolution, Mr. G.V.S.L.Kantha Rao shall hold the office of Managing

Director for a period of 5 years from November 29, 2008 on such remuneration as detailed

in the aforesaid resolution.

SHAREHOLDING OF DIRECTORS:

The shareholding of the directors as on March 31, 2010 is as under:

S.No Name of the Director No.of Shares held

1 Grandhi Subba Rao

24750

2 G.V.S.L.Kantha Rao 24750

3 CH V.S.S Kishore Kumar

100

Total 49600

Corporate Governance

The Company is fully compliant with the provisions of Clause 49 of the Listing Agreement

and the details are as follows:

87

The Board of Directors of the Company consists of 3 Members and the company has 2

Executive and 1 Non-Executive Directors of which 1 are Independent and 2 are Promoter

Directors. Mr. G.Subba Rao, Chairman and Mr. G.V.S.L.Kantha Rao, Director are the

Promoter Directors.

The Independent Director of the Company include Mr. Ch.V.S.S.Kishore Kumar.

The Board has vide resolution dated December 26, 2008, constituted Audit Committee,

Shareholders/Investor’s Committee and Remuneration Committee as required under

Clause 49 of the Listing Agreement as under:

Committee

Name of the Director

Category

Audit Commiitee Ch.V.S.S.Kishore Kumar

(Chairman)

G.Subba Rao (Member)

G.V.S.L.Kantha

Rao(Member)

Non Executive

Independent Director

Promoter Director

Promoter Director

Remuneration Commiitee G.Subba Rao (Chiarman)

Ch.V.S.S.Kishore Kumar

(Member)

G.V.S.L.Kantha Rao

(Member)

Promoter Director

Non Executive

Independent Director

Promoter Director

Compensation Committee

G.V.S.L.Kantha Rao

(Chiarman)

Ch.V.S.S.Kishore Kumar

(Member)

G.Subba Rao (Member)

Promoter Director

Non Executive

Independent Director

Promoter Director

88

Shareholders / Investor

Grievances Committee

G.V.S.L.Kantha Rao

(Chiarman)

Ch.V.S.S.Kishore Kumar

(Member)

G.Subba Rao (Member)

Promoter Director

Non Executive

Independent Director

Promoter Director

Audit Committee

The Company has established an Audit Committee that consists of three members namely,

Mr Ch.V.S.S.Kishore Kumar (Chairman), Mr. G.Subba Rao (member) and Mr.

G.V.S.L.Kantha Rao (member).

The Audit Committee is required to meet at least three times each year, once immediately

before the finalization of the Company’s annual accounts and once every six months. Its

powers and responsibilities include:

supervising the Company’s financial reporting procedures to ensure that the

financial statements give a true and fair view of the financial position of the

Company;

reviewing with management, the external auditors and the internal auditors the

adequacy of internal control systems;

reviewing the findings of the internal auditors relating to any internal investigations

into matters where there is a suspected fraud or irregularity or failure of internal

control systems of a material nature and reporting the same to the Board;

reviewing the Company’s financial and risk management policies;

reviewing with management the annual financial statements before submission of the

statements to the Board, focusing primarily on any change in accounting policies and

practices, qualifications in audit reports, compliance with accounting standards,

compliance with stock exchange and legal requirements concerning financial

89

statements and any related party transactions that may create a potential conflict of

interest with the Company’s interests;

recommending the appointment and removal of external auditors and audit fees; and

Investigating any default in the payment by the Company to its shareholders,

debenture holders, depositors or creditors.

Compensation Committee

The Company has established a Compensation Committee that consists of three members

namely, Mr. G.V.S.L.Kantha Rao (Chairman) Mr. Ch.V.S.S.Kishore Kumar (member) and

Mr. G.Subba Rao (member).

Remuneration Committee

The Company has established a remuneration committee that consists of three members

namely, Mr. G.Subba Rao (Chairman) Mr. G.V.S.L.Kantha Rao (member) and

Mr.Ch.V.S.S.Kishore Kumar (member).

The responsibilities of the committee are to review, assess and recommend the

remuneration payable to the executive directors and the executive management.

Shareholders / Investor Grievances Committee

The Company has established a shareholder’s / grievances committee that consists of three

membets namely, Mr. G.V.S.L.Kantha Rao (Chairman) Mr. Ch.V.S.S.Kishore Kumar

(member) and Mr. G.Subba Rao (member).

The main function of this committee is to look at the redressing of shareholders and

investors complaints, for example transfer of shares, non-receipt of annual report, non-

receipt of dividend etc.

The role, powers, scope of functions and duties of the Audit Committee, Remuneraion

Committee, Compensation Committee and Shareholders/Investor’s Committee of the Board

90

are as per the applicable provisions of the Companies Act, 1956, Clause 49 of the Listing

Agreement.

The Board of Director has at its Meeting held on December 26, 2008, approved Code of

Conduct for the Members of the Board and Senior Management. Same will be uploaded on

Company's website www.craneindia.net immediately after listing of Company's Shares on

Stock Exchanges.

Compliance Report on Corporate Governance

Particulars Clause of Listing

Agreement

Compliance

Status Yes/No

Remarks

I. Board of Directors 49I

(A) Composition of Board 49(A) Yes -

(B) Non-executive Director

Compensation & Disclosures

49(B) Yes -

(C) Other provisions as to Board and

Committees

49(C) Yes -

(D) Code of Conduct 49(D) Yes -

II. Audit Committee 49(II)

(A) Qualified & Independent Audit

Committee

49(IIA) Yes -

(B) Meeting of Audit Committee 49(IIB) Yes -

(C) Powers of Audit Committee 49(IIC) Yes -

(D) Role of Audit Committee 49 (IID) Yes -

(E) Review of information by Audit

Committee

49(IIE) Yes -

III. Subsidiary Companies 49(III) NA -

IV. Disclosure 49(IV)

(A) Basic of related party transaction 49(IV A) Yes -

(B) Disclosure of Accounting Treatment 49(IV B) NA -

(C) Board Disclosure 49(IV C) Yes -

(D) Proceeds from public issue, rights

issue, preferential issues ect.

49(IV D) NA -

(E) Remuneration of Directors 49(IV E) Yes -

91

(F) Management 49(IV F) Will be complied in the

Annual Report for the

year 2010-2011

(G) Shareholders 49(IV G) Yes -

V. CEO/CFO Certificate 49(V) Will be complied in the

Annual Report for the

year 2010-2011

VI. Report on Corporate Governance 49(VI) Will be complied in the

Annual Report for the

year 2010-2011

VI. Compliance 49(VII) Will be complied in the

Annual Report for the

year 2010-2011

Change in Board of Directors since the Company’s inception – Not Applicable

92

IX. OVERVIEW OF ORGANISATION STRUCTURE

Commercial Development Head

Residential Development Head

Infrastructure Business Head

CD Team RD Team IB Team

Grandhi Subbarao Chairman

G.V.S.L.Kamtha Rao Managing Director

93

X. PROMOTER AND SUBSIDIARY COMPANIES

Promoters

Before the Scheme becoming effective, following were major shareholders and promoters of

the Company:

Sr. No. Name Number of Shares Shares as

percentage of total

no. of

shares {i.e.Grand

Total(A)+(B)+C)

indicated in

statement at

para(1)(a)

above}

1 Mr.G.Subba Rao 24,750 49.50

2 Mr. G.V.S.L.Kantha Rao 24,750 49.50

3 G.L.Hymavathi 100 0.02

4 Ch. Madhavi 100 0.02

5 Ch.V.S.S.Kishore Kumar 100 0.02

6 Divakar M 100 0.02

7 Himaja M 100 0.02

TOTAL 50,000 100.00

After the Scheme has become effective, The existing paid-up Equity Shares of M/s CRANE

INFRASTRUCTURE LIMITED of 50,000 Equity Shares @ Rs. 10/- each was extinguished

and the new Equity Shares of 72,42,000 was allotted in the same ratio of the shareholding

as on the record date as was existing in case of M/s Virat Crane Industries Limited.

94

Sr. No. Name Number of Shares Shares as

percentage of total

no. of

shares {i.e.Grand

Total(A)+(B)+C)

indicated in

statement at

para(1)(a)

above}

1 Mr.G.Subba Rao - _

2 Mr. G.V.S.L.Kantha Rao - _

3 G.L.Hymavathi - _

4 Ch. Madhavi - _

5 Ch.V.S.S.Kishore Kumar - _

6 Divakar M - _

7 Himaja M - _

TOTAL - _

The details of the Promoters post demerger are given below:

1. G.Subba Rrao, Chairman :

G. Subba Rao , has over a six decades of rich experience in Betel nut powder business

spread all over India.

He is the pioneer in Betel Nut Industry and he has created his own brand in the name of

“CRANE” which is very popular brand in the Betel nut powder Industry.

95

2. G.V.S.L.Kantha Rao, Managing Director:

Mr. Kantha Rao, son of Mr. G.Subba Rao has the ability to innovate and excel in every task

and across every activity, inviting the future in to the present and embracing every

opportunity. He is also having a rich experience of more than 30 years in Crane betel nut

industry, real estate, software, Food Products and other industries.

3. Ch.V.S.S.Kishore Kumar, Director:

Kishore Kumar, Graduate has over 15 years of rich experience in the Industry and an

Independent director in the Company.

XI. FINANCIAL STATEMENTS

Consequent to Demerger of Real Estate / Infrastructure Business Undertaking of Virat

Crane Industries Ltd, the assets & liabilities relatable to Real Estate / Infrastructure

of these companies, has been transferred to the Company. Financial Results of the

Company for period ended March 31, 2014 is as under.

INDEPENDENT AUDITORS’ REPORT

To

The Members of

CRANE INFRASTRUCTURE LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of CRANE INFRASTRUCTURE

LIMITED, which comprise the Balance Sheet as at 31-Mar-2014, the Statement of Profit

and Loss and Cash Flow Statement for the year then ended, and a summary of significant

accounting policies and other explanatory information.

96

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a

true and fair view of the financial position, financial performance and cash flow of the

Company in accordance with the Accounting Standards notified under Companies Act,

1956(“the Act”) read with General Circular 15/2013 dated 13th September 2013 of the

Ministry Of Corporate Affairs in respect of section 133 of the Companies Act 2013. This

responsibility includes the design, implementation and maintenance of internal control

relevant to the preparation and fair presentation of the financial statements that are free

from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our

audit. We conducted our audit in accordance with the Standards on Auditing issued by the

Institute of Chartered Accountants of India. Those Standards require that we comply with

ethical requirements and plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the Company’s preparation and fair presentation of

the financial statements in order to design audit procedures that are appropriate in the

circumstances. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of the accounting estimates made by management, as

well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our audit opinion.

97

Opinion

In our opinion and to the best of our information and according to the explanations given

to us, the financial statements give the information required by the Act in the manner so

required and give a true and fair view in conformity with the accounting principles

generally accepted in India:

a)

in the case of the Balance Sheet, of the state of affairs of the Company as at March

31, 2013

b)

in the case of the Profit and Loss Account, of the Profit for the year ended on that

date.

c)

in the case of the Cash Flow Statement, of the Flows for the year ended on that date.

Report on Other Legal and Regulatory

Requirements

1) As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by

the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we

give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the

Order.

2) As required by section 227(3) of the Act, we

report that:

a) we have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the

Company so far as appears from our examination of those books.

c) the Balance Sheet, Statement of Profit and Loss dealt with by this Report are in

agreement with the books of account.

d) in our opinion, the Balance Sheet, Statement of Profit and Loss comply with the

Accounting Standards referred to in subsection (3C) of section 211 of the Companies

Act, 1956;

98

e) on the basis of written representations received from the directors as on March 31,

2014, and taken on record by the Board of Directors, none of the directors is

disqualified as on March 31, 2014, from being appointed as a director in terms of

clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which

the cess is to be paid under section 441A of the Companies Act, 1956 nor has it

issued any Rules under the said section, prescribing the manner in which such cess

is to be paid, no cess is due and payable by the Company.

For Umamaheswara Rao & Co.

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

(CA. S HSY Sarma)

Partner

Membership No. 234083

Place: Guntur

Date : 31-07-2014

ANNEXURE TO AUDITORS' REPORT

Statement referred to in paragraph(3) of our report of even date to shareholders of

CRANE INFRASTRUCTURE LIMITED on the accounts for the year ended 31st March,

2014

(i) (a) The Company has generally maintained proper records showing full particulars

including quantitative details and situation of fixed assets.

(b) All the Fixed Assets have been physically verified by the Management during the

year and there is a regular programme of verification which, in our opinion, is

reasonable having regard to the size of the company and the nature of its Assets.

No discrepancies were noticed on such verification.

(c) No fixed assets has been disposed off during the year.

(ii) The company has no inventory and hence clauses (ii) (a), (ii) (b) and (ii) (c) are not

applicable.

99

(iii) (a) The Company has not granted any loans, secured or unsecured to companies,

firms or other parties covered in the register maintained under section 301 of the

Companies Act, 1956.

In view of (iii)(a) above, clauses (iii)(b), (iii)(c), (iii)(d) are not applicable.

(e) The company has taken interest free Unsecured loans from twelve parties covered

in the Register maintained U/s.301 of the Companies Act, 1956. The year end

balance of loans taken from such parties was Rs.3,51,17,676/-.

(f) The terms and conditions on which loans have been taken from other parties

listed in the register maintained u/s 301 of the Companies Act, 1956 are not

prima-facie prejudicial to the interests of the company

(g) There are no terms and conditions attached as to the repayment of principal on

interest - free unsecured loans taken from other parties listed in the register

maintained u/s 301 of the Companies Act, 1956. Hence, there is no overdue

amount of loans from other parties listed in the register maintained u/s 301 of

the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there

are adequate internal control procedures commensurate with the size of the company

and the nature of its business with regard to purchase of inventory, fixed assets and

with regard to the sale of goods and services. During the course of our Audit, we have

not observed any continuing failure to correct major weaknesses in Internal Control

Systems.

(v) (a) According to the information and explanations given to us, the Company has not

entered into any contracts or arrangements listed in the Register maintained

under section 301 of the Company’s Act 1956 during the year.

In view of (v)(a) above, clause (v)(b) is not applicable.

(vi) The Company has not taken / accepted or repaid Deposits in contravention of

directives of Reserve Bank of India and provisions of Sections 58A, 58AA or any other

relevant provisions of the Act. In our opinion and according to the information given to

us, the Company has not received any order passed by the Company Law Board or

National Company Law Tribunal or Reserve Bank of India or any Court or any other

Tribunal during the year, hence compliance thereto does not arise.

(vii) In our opinion, the Company has an internal audit system commensurate with the

100

size and nature of its business.

(viii) The Central Government has not prescribed the maintenance of cost records under

Section 209(1)(d) of the Companies Act,1956 for any of the products of the company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed

statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax,

Excise Duty, Cess and other material statutory dues applicable to it. No

undisputed amounts payable in respect of income tax, sales tax, excise duty and

cess were in arrears, as at year end for a period of more than six months from the

date they became payable.

(b) According to the information and explanations given to us, no disputed amounts

payable in respect of income tax, service tax, wealth tax were in arrears, as at

year end for a period of more than six months from the date they became

payable.

(x) The company is inexistence for less than five years, hence, Clause(x) is not applicable

(xi) The company has no dues to a financial institution, bank or debenture holders or

debenture holders.

(xii) Clause 4(xii) is not applicable since the company has not granted loans, and advances

on the basis of security by way of pledge of shares, debentures and other securities

(xiii) Clause 4(xiii) is not applicable, since the company is not in the business of a chit fund

or a nidhi / mutual fund / Society.

(xiv) Clause 4(xiv) is not applicable, since the company is not dealing or trading in shares,

securities, debentures and other investments

(xv) Clause (4(xv) is not applicable, since the company has not given any guarantee for

loans taken by others from bank or financial institutions.

(xvi) No term loans were taken by the company. Hence paragraph 4(xvi) is not applicable.

(xvii) No funds raised on short-term basis have been used for long-term investments.

(xviii) Clause 4(xviii) is not applicable, as the company has not made any preferential

allotment of shares to parties and companies covered in the register maintained under

section 301 of the Companies Act, 1956.

(xix) Clause 4(xix) is not applicable, as the company has not issued debentures.

101

(xx) Clause 4(xx) is not applicable, since no public issue of shares have been made by the

Company.

(xxi) No fraud on or by the company has been noticed or reported during the year.

For Umamaheswara Rao & Co.

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

Place: Guntur

Date : 31-07-2014

(CA. S HSY Sarma)

Partner

Membership No. 234083

CRANE INFRASTRUCTURE LIMITED

Balance Sheet as at 31st March, 2014

Particulars Note

No

31st March, 2014 31st March, 2013

Rs. Rs. Rs. Rs.

I. EQUITY AND LIABILITIES

1 Shareholder's Fund

(a) Share Capital 2 7,24,20,000

7,24,20,000

(b) Reserves & Surplus 3 19,78,63,041 27,02,83,041 19,72,31,521 26,96,51,521

2 Share Application Money

pending allotment

3 Non Current Liabilities

(a) Long Term Borrowings 4 3,51,17,676

1,92,93,304

(b) Deferred Tax Liabilities (Net) -

-

(c) Other Long Term Liabilities -

-

(d) Long Term Provisions - 3,51,17,676 - 1,92,93,304

4 Current Liabilities

(a) Short term Borrowings -

-

(b) Trade Payables -

-

102

(c) Other Current Liabilities 5 59,50,097

36,01,006

(d) Short Term Provisions 6 37,58,170 97,08,267 27,47,690 63,48,696

TOTAL

31,51,08,984

29,52,93,521

II. ASSETS

1 Non Current Assets

(a) Fixed Assets 7

(i) Tangible Assets 24,13,10,296

24,47,88,905

(ii) Intangible Assets 3,70,86,141 3,70,86,141

(ii) Capital Work In Progress 31,78,412 -

(iv) Intangible Assets Under

Development

-

(b) Non Current Investments - -

(c) Deferred Tax Asset (net) - -

(d) Long Term Loans &

Advances 8 42,68,634 24,93,956

(e) Other Non-Current Assets - 28,58,43,483 - 28,43,69,002

2 Current Assets

(a) Current Investments - -

(b) Inventories 9 2,32,33,730 94,33,350

(c) Trade Receivables 10 4,84,076 10,97,462

(d) Cash and Cash equivalent 11 36,77,732 3,93,707

(e) Short Term Loans &

Advances 12 13,30,190 -

(f) Other Current Assets 13 5,39,773 2,92,65,501 - 1,09,24,519

TOTAL

31,51,08,984

29,52,93,521

Significant Accounting

Policies 1

Notes on Financial

statements

1 to

20

103

This is the Balance Sheet as per our Report of

Evendate

For Umamaheswara Rao & Co. For and on behalf of the Board

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

(CA. S HSY Sarma) Managing Director

Partner

Membership No. 234083

Place: Guntur

Date : 31-07-2014 Director

Profit and Loss Statement for the year ended 31st March, 2014

Sl.No Particulars Note

No

31st March,

2014

31st March,

2013

Rs. Rs.

I Revenue from Operation 14 1,89,37,916 60,02,560

II Other Non-Operating Revenue 15 2,40,000 68

III Total Revenue (I + II) 1,91,77,916 60,02,628

IV Expenses:

Cost of materials consumed - -

Purchase of Stock in Trade 16 2,61,29,280 94,33,350

Changes in inventories of Finished Goods/

WIP 17 (1,38,00,380) (94,33,350)

Employee benefits expenses 18 10,60,000 1,20,000

Finance cost - -

Depreciation and Amortisation Expenses 15,75,359 11,88,608

Other Expenses 19 6,68,407 2,83,862

Total Expenses 1,56,32,666 15,92,470

V Profit Before exceptional and

extraordinary items and Tax (III - IV) 35,45,250 44,10,158

VI Exceptional items (Net) - -

VII Profit before extradrdinary items and tax

(V + VI) 35,45,250 44,10,158

104

VIII Extraordinary items -

IX Profit Before Tax ( VII - VIII) 35,45,250 44,10,158

X Tax Expenses

(1) Current Tax 10,10,480 11,75,180

(2) Deferred Tax - 11,495

(3) MAT Credit entitlement - (27,918)

XI Profit (Loss) for the period from

continuing operations (VII - VIII) 25,34,770 32,51,402

XII Profit/(Loss) from discontinuing operations - -

XIII Tax expenses of discontinuing operations - -

XIV Profit / (Loss) from discontinuing

operations(after Tax) (XII - XIII) - -

XV Profit / (Loss) for the period (XI +XIV) 25,34,770 32,51,402

XVI Earnings per Equity Share:

(1) Basic 0.35 0.45

(2) Diluted 0.35 0.45

Significant Accounting Policies 1

Notes on Financial statements

1 to

20

This is the Statement of Profit & Loss As per Our Report of Evendate

For Umamaheswara Rao & Co. For and on behalf of the Board

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

(CA. S HSY Sarma) Managing Director

Partner

Membership No. 234083

Place: Guntur

Date : 31-07-2014 Director

105

CASH FLOW STATEMENT FOR THE YEAR ENDED 31st March, 2014

PARTICULARS

For the year ending

31st March,

2014

31st March,

2013

A CASH FLOW FROM OPERATING ACTIVITIES: Rs. Rs.

Net Profit Before Tax and Extrordinary items 35,45,250 44,10,158

Adjustments

Depreciation 15,75,359 11,88,608

(Profit) / Loss on sale of fixed assets - -

Operating Profit Before Working Capital Changes 51,20,609 55,98,766

Adjustments for Working Capital Changes:

Decrease/(Increase) in Inventories (1,38,00,380) (94,33,350)

Decrease/(Increase) in Trade Receivables 6,13,386 4,91,355

Decrease/(Increase) in Loans and Advances (17,74,678) (6,08,254)

Decrease/(Increase) in Other Current Assets (13,30,190) -

Increase /(Decrease) in Current Liabilities and

Provisions 33,59,571 11,93,568

ADJUSTMENTS IN WORKING CAPITAL (1,34,72,063) (83,56,681)

Cash Generated from Operations (83,51,454) (27,57,915)

Income Tax Paid/Provided 10,10,480 11,75,180

Net Cash From Operating Activities {A} (93,61,934) (39,33,095)

B CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of Fixed assets and (Increase) / Decrease in

CWIP (31,78,412) (4,95,055)

Sale proceeds of fixed assets - -

Net Cash Used In Investing activities {B} (31,78,412) (4,95,055)

C CASH FLOW FROM FINANCING ACTIVITIES:

Availment of Unsecured Loans 1,58,24,372 44,15,067

Net Cash Used in Financing Activities {C} 1,58,24,372 44,15,067

D NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 32,84,025 (13,083)

106

Cash and Cash Equivalents at the beginning of the

period

3,93,707 4,06,790

Cash and Cash Equivalents at the end of the period 36,77,732 3,93,707

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 32,84,026 (13,083)

Cash on hand 36,08,903 2,71,999

Balances held with banks 68,829 1,21,708

Cash and cash equivalents as restated 36,77,732 3,93,707

This is the Cash Flow Statement referred to in our report of even date

For Umamaheswara Rao & Co. For and on behalf of the Board

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

(CA. S HSY Sarma) Managing Director

Partner

Membership No. 234083

Place: Guntur

Date : 31-07-2014 Director

Notes forming Part of Financial Statements 31st March, 2014

Note : 1 - MAJOR ACCOUNTING POLICIES

1. METHOD OF ACCOUNTING :

The Company follows Mercantile System of accounting and recognizes income and

expenditure on an accrual basis. The accounts are prepared on historical cost basis.

2. FIXED ASSETS :

Fixed Assets are accounted for on historical cost basis less accumulated depreciation.

Cost comprises of purchase price and all expenses directly attributable to bringing the

asset to its present working condition.

3. DEPRECIATION :

Depreciation is provided on the Straight Line Method basis at the rates and in the

manner specified in Schedule XIV of the Companies Act, 1956.

107

4. INVESTMENTS:

Long Term:

Investments are stated at cost less provision for permanent diminution in value.

Short Term:

Short term investments are stated at cost or market value which ever is lower.

5 PRIOR PERIOD ADJUSTMENTS:

Income and expenditure pertaining to prior periods are accounted under respective

heads of profit and loss account. However, net effect of such amount, where material, is

disclosed separately.

6 RECOGNITION OF INCOME

Rental Income is recognised on accrual basis.

7 TAXES ON INCOME:

a) Current Tax:

Tax on Income for the Current Period is determined on the basis of taxable income and

tax credits computed in accordance with the provisions of the Income Tax Act 1961, and

based on expected outcome of assessments / appeals, if any.

b) Deferred Tax:

Deferred Tax for timing differences between taxable income and accounting income are

considered by using the tax rates that are substantively enacted by the Balance Sheet

date. Deferred Tax assets are recognised only to the extent where there is reasonable

certainity that they shall be realised.

108

Notes forminng Part of Financial Statements for the Year ending 31st March, 2014

Note

No Particulars 31st March, 2014 31st March, 2013

2 Share Capital:

a Authorised Capital:

85,00,000 Equity Shares of Rs. 10/-

Each 8,50,00,000

8,50,00,000

TOTAL

8,50,00,000

8,50,00,000

Subscribed & Paid up Capital:

72,42,000 Equity Shares of Rs. 10/-

Each 7,24,20,000

7,24,20,000

TOTAL

7,24,20,000

7,24,20,000

b Reconciliaiton of Number and Amount of Shares:

Particulars 31st March, 2014 31st March, 2013

Number Amount Number Amount

Shares O/s at the beginning of the

year 72,42,000 7,24,20,000 72,42,000 7,24,20,000

Shares Issued during the year - - - -

Shares bought back/Repaid during

the year -

- -

-

Shares O/s at the end of the year 72,42,000 7,24,20,000 72,42,000 7,24,20,000

c Shares held by Shareholders holding more than 5% of aggregate Shares in the Company

Name of Shareholder

31st March, 2014 31st March, 2013

No. of

Shares held % of Holding

No. of Shares

held % of Holding

Grandhi Subba Rao 19,83,670 27.39% 19,83,670 27.39%

G.V.S.L.Kantha Rao 10,58,580 14.62% 10,58,580 14.62%

3 Reserves & Surplus:

109

Revaluation Reserve

Opening Balance

18,68,34,396

18,87,37,647

Less: Written Off during the year 19,03,250

19,03,250

Closing Balance

18,49,31,146 18,68,34,396

Profit & Loss Appropriation A/c

Opening Balance

1,03,97,125 71,45,723

Add: Profit/(Loss) during the year 25,34,770 32,51,402

1,29,31,895

1,03,97,125

TOTAL

19,78,63,041

19,72,31,521

4 Long Term Borrowings:

Unsecured:

Loans and advances from ralated

parties 3,51,17,676

1,92,93,304

TOTAL

3,51,17,676

1,92,93,304

5 Other Current Liabilities:

Creditors for Capital Goods

2,17,266

2,17,266

Creditors for Others

19,00,000

-

Creditors for Expenses

38,32,831

33,83,740

TOTAL

59,50,097

36,01,006

`

6 Short Term Provisions:

Provision for Taxes

37,58,170

27,47,690

TOTAL

37,58,170

27,47,690

8 Long Term Loans & Advances:

Balance with Government

Authorities 42,68,634

24,93,956

TOTAL

42,68,634

24,93,956

110

9

Inventories:

Stock-in-trade

2,32,33,730

94,33,350

TOTAL

2,32,33,730

94,33,350

10 Trade Receivables:

Secured and considered good

Trade Receivables exceeding six months

Other Trade Receivables

4,84,076

10,97,462

TOTAL

4,84,076

10,97,462

11 Cash & Cash Equivalents:

Balance with banks

68,829

1,21,708

Cash on hand

36,08,903

2,71,999

TOTAL

36,77,732

3,93,707

12 Short Term Loans & Advance:

Unsecured

Advance for Chits

12,00,000 -

Other Loans and Advances

1,30,190

TOTAL

13,30,190

-

13 Other Current Assets

Chit Bid Loss

5,39,773

5,39,773

-

14 Revenue from Operations

Sale of Land

1,26,98,000

Rental Income

62,39,916

60,02,560

1,89,37,916

60,02,560

16 Other Non-Operating Revenues:

Chit Dividend

2,40,000

111

Interest Received

-

68

2,40,000

68

15 Purchase of Stock in trade

Land

2,61,29,280

94,33,350

2,61,29,280

94,33,350

16 Changes in inventories of FG,WIP and Stock in trade

Opening Stocks

Land

94,33,350

Total (A)

94,33,350

-

Closing Stocks

Land

2,32,33,730

94,33,350

Total (B)

2,32,33,730

94,33,350

Decrease in Stock (A-B)

(1,38,00,380) (94,33,350)

17 Empoyee Costs

Salaries, PF, ESI etc

4,60,000

1,20,000

Managerial Remuneration

6,00,000

-

10,60,000

1,20,000

18 Other Expenses:

Bank Charges 6,258 586

Audit Fees

As Auditors 15,000 15,000

In Other Capacity

For Taxation Matters 10,000 10,000

Reimbursement of Service tax 3,090 3,090

Taxes & Licenses 89,802 88,164

Printing & Stationery 8,457 5,500

RTA Expenses 45,395 45,388

Interest on TDS 68 634

Chit Bid Loss 85,227 -

Land development expenses 3,51,670 -

Miscellaneous expenses 53,440 1,15,500

6,68,407

2,83,862

112

19

Other Accompanying Notes to Financial Statements

a) All the figures are rounded off to the nearest

rupee.

b) No claims under Interest on delayed payments to Small Scale and Ancillary Industrial

Undertakings are outstanding with the Company.

c) In the opinion of the Board of Directors, Current Assets, loans and advances as at 31st

March 2014 are expected to produce on realization in the ordinary course of the company’s

business, at least the amounts at which they are stated in the Balance Sheet.

d) The Revaluation Reserve acquired from Virat Crane Industries Ltd, which is created in the

year 2006-07 on revaluation of Fixed Assets, is charged / debited by Rs.19,03,250/- being

the difference between the depreciation computed on revalued buildings and the written

down value of building before revaluation.

e) The difference between the Demerger Reserve and Shares allotted amounting to

Rs.3,70,86,141/- has been treated as Goodwill in the books of accounts.

f) Disclosure requirements as per Accounting Statndards prescribed under Companies Act,

1956.

a) List of Related Parties

Name of the Related Party Relationship

Virat Crane Industries Limited Entities under

the control of

same

management

Virat Crane Bottling Ltd

Virat Crane Agri-Tech Ltd

Apex Solutions Ltd

G.V.S.L.Kantha Rao Key

Managerial

Personnel

(KMP)

Ch.V.S.S.Kishore Kumar

G.Subba Rao

113

b) Transaction with Related

Party

Particulars Associates Subsidiaries

Key

Managerial

Personnel

Entities

under the

control of

KMP

Rental Income 3,60,000

(3,60,000)

Directors Remuneration 6,00,000

-

Trade Receivables / Other

Receivables

-

(5,17,226)

Unsecured Loans

2,21,69,937 59,47,739

(1,25,63,624) (67,30,680)

* Figures in brackes indicates previous year

figures

c) Earnings per Share - AS 20

Profit after Tax available for distribution (Rs.) 25,34,770 32,51,402

Weighted Average Number of

Shares

72,42,000 72,42,000

Face Value of Share

Earnings per Share (Rs.) 0.35 0.45

d) Accounting for Taxes

The Company has adopted Accounting Standard 22 (AS22)"Accounting for Taxes of Income ".

Accordingly, the Deferred Tax Assets and Liabilities comprise of tax effect of following

Components.

114

g) The information reuired by paragraph 5 (viii) of general instruction for preparation of the

statement of profit and loss as per Schedule - VI of the Companies Act, 1956:

A. Expenditure in Foreign

Currency NIL NIL

B. Income in Foreign Currency NIL NIL

C. Particulars of Capacities and Production Not

Applicable

Not

Applicable

D. Particulars of Consumption of Imported

and Indigenous Materials Not

Applicable

Not

Applicable

Consequent to Demerger of Real Estate / Infrastructure Business Undertaking of Virat

Crane Industries Ltd, the assets & liabilities relatable to Real Estate / Infrastructure

of these companies, has been transferred to the Company. Financial Results of the

Company for the year ended as on 31-Mar-2013 is as under:

INDEPENDENT AUDITORS’ REPORT

To

The Members of

CRANE INFRASTRUCTURE LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of CRANE INFRASTRUCTURE

LIMITED, which comprise the Balance Sheet as at 31-Mar-2013, the Statement of Profit

and Loss for the year then ended, and a summary of significant accounting policies and

other explanatory information.

115

Management’s Responsibility for the Financial

Statements

Management is responsible for the preparation of these financial statements that give a

true and fair view of the financial position, financial performance and cash flows of the

Company in accordance with the Accounting Standards referred to in sub-section (3C) of

section 211 of the Companies Act, 1956 (“the Forming an Opinion and Reporting on

Financial Statements Act”). This responsibility includes the design, implementation and

maintenance of internal control relevant to the preparation and presentation of the

financial statements that give a true and fair view and are free from material misstatement,

whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our

audit. We conducted our audit in accordance with the Standards on Auditing issued by the

Institute of Chartered Accountants of India. Those Standards require that we comply with

ethical requirements and plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the Company’s preparation and fair presentation of

the financial statements in order to design audit procedures that are appropriate in the

circumstances. An audit also includes evaluating the appropriateness of accounting

policies used and the reasonableness of the accounting estimates made by management, as

well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide

a basis for our audit opinion.

116

Opinion

In our opinion and to the best of our information and according to the explanations given

to us, the financial statements give the information required by the Act in the manner so

required and give a true and fair view in conformity with the accounting principles

generally accepted in India:

a)

in the case of the Balance Sheet, of the state of affairs of the Company as at March

31, 2013

b)

in the case of the Profit and Loss Account, of the Profit for the year ended on that

date.

Report on Other Legal and Regulatory

Requirements

1) As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by

the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we

give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the

Order.

2) As required by section 227(3) of the Act, we report

that:

a) we have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the

Company so far as appears from our examination of those books.

c) the Balance Sheet, Statement of Profit and Loss dealt with by this Report are in

agreement with the books of account.

d) in our opinion, the Balance Sheet, Statement of Profit and Loss comply with the

Accounting Standards referred to in subsection (3C) of section 211 of the Companies

Act, 1956;

e) on the basis of written representations received from the directors as on March 31,

2013, and taken on record by the Board of Directors, none of the directors is

disqualified as on March 31, 2013, from being appointed as a director in terms of

117

clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which

the cess is to be paid under section 441A of the Companies Act, 1956 nor has it

issued any Rules under the said section, prescribing the manner in which such cess

is to be paid, no cess is due and payable by the Company.

For Umamaheswara Rao & Co.

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

(CA. A.Siva Prasad)

Partner

Membership No. 213675

Place: Guntur

Date : 25-08-2013

ANNEXURE TO AUDITORS' REPORT

Statement referred to in paragraph(3) of our report of even date to shareholders of

CRANE INFRASTRUCTURE LIMITED on the accounts for the year ended 31st March,

2013

(i) (a) The Company has generally maintained proper records showing full

particulars including quantitative details and situation of fixed assets.

(b) All the Fixed Assets have been physically verified by the Management during

the year and there is a regular programme of verification which, in our

opinion, is reasonable having regard to the size of the company and the nature

of its Assets. No discrepancies were noticed on such verification.

(c) No fixed assets has been disposed off during the year.

(ii) The company has no inventory and hence clauses (ii) (a), (ii) (b) and (ii) (c) are not

applicable.

(iii) (a) The Company has not granted any loans, secured or unsecured to companies,

firms or other parties covered in the register maintained under section 301 of

118

the Companies Act, 1956.

In view of (iii)(a) above, clauses (iii)(b), (iii)(c), (iii)(d) are not applicable.

(e) The company has taken interest free Unsecured loans from ten parties covered

in the Register maintained U/s.301 of the Companies Act, 1956. The year end

balance of loans taken from such parties was Rs.1,92,93,304/-.

(f) The terms and conditions on which loans have been taken from other parties

listed in the register maintained u/s 301 of the Companies Act, 1956 are not

prima-facie prejudicial to the interests of the company

(g) There are no terms and conditions attached as to the repayment of principal

on interest - free unsecured loans taken from other parties listed in the

register maintained u/s 301 of the Companies Act, 1956. Hence,there is no

overdue amount of loans from other parties listed in the register maintained

u/s 301 of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us,

there are adequate internal control procedures commensurate with the size of the

company and the nature of its business with regard to purchase of inventory,

fixed assets and with regard to the sale of goods and services. During the course

of our Audit, we have not observed any continuing failure to correct major

weaknesses in Internal Control Systems.

(v) (a) According to the information and explanations given to us, the Company has

not entered into any contracts or arrangements listed in the Register

maintained under section 301 of the Company’s Act 1956 during the year.

In view of (v)(a) above, clause (v)(b) is not applicable.

(vi) The Company has not taken / accepted or repaid Deposits in contravention of

directives of Reserve Bank of India and provisions of Sections 58A, 58AA or any

other relevant provisions of the Act. In our opinion and according to the

information given to us, the Company has not received any order passed by the

Company Law Board or National Company Law Tribunal or Reserve Bank of India

or any Court or any other Tribunal during the year, hence compliance thereto does

not arise.

119

(vii) In our opinion, the Company has an internal audit system commensurate with the

size and nature of its business.

(viii) The Central Government has not prescribed the maintenance of cost records under

Section 209(1)(d) of the Companies Act,1956 for any of the products of the

company.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed

statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax,

Excise Duty, Cess and other material statutory dues applicable to it. No

undisputed amounts payable in respect of income tax, sales tax, excise duty

and cess were in arrears, as at year end for a period of more than six months

from the date they became payable.

(b) According to the information and explanations given to us, no disputed

amounts payable in respect of income tax, service tax, wealth tax were in

arrears, as at year end for a period of more than six months from the date

they became payable.

(x) The company is inexistence for less than five years, hence, Clause(x) is not

applicable

(xi) The company has no dues to a financial institution, bank or debenture holders or

debenture holders.

(xii) Clause 4(xii) is not applicable since the company has not granted loans, and

advances on the basis of security by way of pledge of shares, debentures and other

securities

(xiii) Clause 4(xiii) is not applicable, since the company is not in the business of a chit

fund or a nidhi / mutual fund / Society.

(xiv) Clause 4(xiv) is not applicable, since the company is not dealing or trading in

shares, securities, debentures and other investments

(xv) Clause (4(xv) is not applicable, since the company has not given any guarantee for

loans taken by others from bank or financial institutions.

(xvi) No term loans were taken by the company. Hence paragraph 4(xvi) is not

applicable.

120

(xvii) No funds raised on short-term basis have been used for long-term investments.

(xviii) Clause 4(xviii) is not applicable, as the company has not made any preferential

allotment of shares to parties and companies covered in the register maintained

under section 301 of the Companies Act, 1956.

(xix) Clause 4(xix) is not applicable, as the company has not issued debentures.

(xx) Clause 4(xx) is not applicable, since no public issue of shares have been made by

the Company.

(xxi) No fraud on or by the company has been noticed or reported during the year.

For Umamaheswara Rao & Co.

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

Place: Guntur

Date :31-08-2013

(CA. A.Siva Prasad)

Partner

Membership No. 213675

CRANE INFRASTRUCTURE LIMITED

Balance Sheet as at 31st March, 2013

Particulars Note

No

31st March, 2013 31st March, 2012

Rs. Rs. Rs. Rs.

I. EQUITY AND LIABILITIES

1 Shareholder's Fund

(a) Share Capital 2 7,24,20,000

7,24,20,000

(b) Reserves & Surplus 3 19,72,31,521 26,96,51,521 19,58,83,370 26,83,03,370

2 Share Application Money

pending allotment

3 Non Current Liabilities

(a) Long Term Borrowings 4 1,92,93,304

1,48,78,237

(b) Deferred Tax Liabilities (Net) -

-

121

(c) Other Long Term Liabilities -

-

(d) Long Term Provisions - 1,92,93,304 - 1,48,78,237

4 Current Liabilities

(a) Short term Borrowings -

-

(b) Trade Payables -

-

(c) Other Current Liabilities 5 36,01,006

35,82,618

(d) Short Term Provisions 6 27,47,690 63,48,696 15,72,510 51,55,128

TOTAL

29,52,93,521

28,83,36,734

II. ASSETS

1 Non Current Assets

(a) Fixed Assets 7

(i) Tangible Assets

24,47,88,905

24,73,85,708

(ii) Intangible Assets 3,70,86,141 3,70,86,141

(ii) Capital Work In Progress - -

(iv) Intangible Assets Under

Development -

(b) Non Current Investments - -

(c) Deferred Tax Asset (net) 8 - 11,495

(d) Long Term Loans & Advances 9 24,93,956 18,57,784

(e) Other Non-Current Assets - 28,43,69,002 - 28,63,41,127

2 Current Assets

(a) Current Investments - -

(b) Inventories 10 94,33,350 -

(c) Trade Receivables 11 10,97,462 15,88,817

(d) Cash and Cash equivalent 12 3,93,707 4,06,790

(e) Short Term Loans & Advances - -

(f) Other Current Assets - 1,09,24,519 - 19,95,607

TOTAL

29,52,93,521

28,83,36,734

122

Significant Accounting Policies 1

Notes on Financial statements

1 to

20

For Umamaheswara Rao & Co. For and on behalf of the Board

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

(CA. A.Siva Prasad) Managing Director

Partner

Membership No. 213675

Place: Guntur

Date :31-08-2013 Director

123

CRANE INFRASTRUCTURE LIMITED

Profit and Loss Statement for the year ended 31st March, 2013

Sl.No Particulars Note

No

31st March,

2013 31st March, 2012

Rs. Rs.

I Revenue from Operation 13 60,02,560 55,46,835

II Other Non-Operating Revenue 14 68 23,40,060

III Total Revenue (I + II) 60,02,628 78,86,895

IV Expenses:

Cost of materials consumed - -

Purchase of Stock in Trade 15 94,33,350 -

Changes in inventories of Finished Goods/

WIP 16 (94,33,350) -

Employee benefits expenses 17 1,20,000 1,20,000

Finance cost - -

Depreciation and Amortisation Expenses 18 11,88,608 13,41,595

Other Expenses 19 2,83,862 2,83,541

Total Expenses 15,92,470 17,45,136

V Profit Before exceptional and

extraordinary items and Tax (III - IV) 44,10,158 61,41,759

VI Exceptional items (Net) - -

VII Profit before extradrdinary items and

tax (V + VI) 44,10,158 61,41,759

VIII Extraordinary items -

IX Profit Before Tax ( VII - VIII) 44,10,158 61,41,759

X Tax Expenses

(1) Current Tax 11,75,180 11,70,310

(2) Deferred Tax 11,495 4,45,897

(3) MAT Credit entitlement (27,918) (1,18,220)

XI Profit (Loss) for the period from

continuing operations (VII - VIII) 32,51,402 46,43,771

XII Profit/(Loss) from discontinuing

operations - -

124

XIII Tax expenses of discontinuing operations - -

XIV Profit / (Loss) from discontinuing

operations(after Tax) (XII - XIII) - -

XV Profit / (Loss) for the period (XI +XIV) 32,51,402 46,43,771

XVI Earnings per Equity Share:

(1) Basic 0.45 0.77

(2) Diluted 0.45 0.77

Significant Accounting Policies 1

Notes on Financial statements

1 to

20

For Umamaheswara Rao & Co. For and on behalf of the Board

CHARTERED ACCOUNTANTS

Firm Registration No.004453S

(CA. A.Siva Prasad) Managing Director

Partner

Membership No. 213675

Place: Guntur

Date :31-08-2013 Director

125

Notes forming Part of Financial Statements 31st March, 2013

Note : 1 - MAJOR ACCOUNTING POLICIES

1. METHOD OF ACCOUNTING :

The Company follows Mercantile System of accounting and recognizes income and

expenditure on an accrual basis. The accounts are prepared on historical cost basis.

2. FIXED ASSETS :

Fixed Assets are accounted for on historical cost basis less accumulated depreciation.

Cost comprises of purchase price and all expenses directly attributable to bringing the

asset to its present working condition.

3. DEPRECIATION :

Depreciation is provided on the Straight Line Method basis at the rates and in the manner

specified in Schedule XIV of the Companies Act, 1956.

4. INVESTMENTS:

Long Term:

Investments are stated at cost less provision for permanent diminution in value.

Short Term:

Short term investments are stated at cost or market value which ever is lower.

5 PRIOR PERIOD ADJUSTMENTS:

Income and expenditure pertaining to prior periods are accounted under respective heads

of profit and loss account. However, net effect of such amount, where material, is

disclosed separately.

6 RECOGNITION OF INCOME

Rental Income is recognised on accrual basis.

7 TAXES ON INCOME:

a) Current Tax:

Tax on Income for the Current Period is determined on the basis of taxable income and

tax credits computed in accordance with the provisions of the Income Tax Act 1961, and

based on expected outcome of assessments / appeals, if any.

126

b) Deferred Tax:

Deferred Tax for timing differences between taxable income and accounting income are

considered by using the tax rates that are substantively enacted by the Balance Sheet

date. Deferred Tax assets are recognised only to the extent where there is reasonable

certainity that they shall be realised.

Notes forming Part of Financial Statements for the Year ending 31st March, 2013

Note

No Particulars 31st March, 2013 31st March, 2012

2 Share Capital:

a Authorised Capital:

85,00,000 Equity Shares of Rs. 10/- Each 8,50,00,000

8,50,00,000

TOTAL

8,50,00,000

8,50,00,000

Subscribed & Paid up Capital:

72,42,000 Equity Shares of Rs. 10/- Each 7,24,20,000

7,24,20,000

TOTAL

7,24,20,000

7,24,20,000

d Particulars

31st March, 2013 31st March, 2012

Number Amount Number Amount

Shares O/s at the beginning of the

year 72,42,000 7,24,20,000 72,42,000 7,24,20,000

Shares Issued during the year - - - -

Shares bought back/Repaid during

the year -

- -

-

Shares O/s at the end of the year 72,42,000 7,24,20,000 72,42,000 7,24,20,000

g

Name of Shareholder

31st March, 2013 31st March, 2012

No. of

Shares held % of Holding

No. of

Shares held % of Holding

Grandhi Subba Rao 19,83,670 27.39% 19,83,670 27.39%

G.V.S.L.Kantha Rao 10,58,580 14.62% 10,58,580 14.62%

127

3 Reserves & Surplus:

Revaluation Reserve

Opening Balance

18,87,37,647

19,35,33,322

Less: Written Off during the year 19,03,250

47,95,675

Closing

18,68,34,396 18,87,37,647

Profit & Loss Appropriation A/c

Opening Balance 71,45,723

25,01,951

Add: Profit/(Loss) during the year 32,51,402 1,03,97,125 46,43,771 71,45,723

TOTAL

19,72,31,521

19,58,83,370

4 Long Term Borrowings:

Unsecured:

Loans and advances from ralated parties 1,92,93,304

1,48,78,237

TOTAL

1,92,93,304

1,48,78,237

5 Other Current Liabilities:

Creditors for Capital Goods

2,17,266

2,17,266

Creditors for Expenses

33,83,740

33,65,352

TOTAL

36,01,006

35,82,618

`

6 Short Term Provisions:

Provision for Taxes

27,47,690

15,72,510

TOTAL

27,47,690

15,72,510

8 Deferred Tax Assets (Net)

On Brought forward Losses

-

-

Preliminary Expenses

-

11,495

-

11,495

9 Long Term Loans & Advances:

Balance with Government

Authorities 24,93,956

18,57,784

TOTAL

24,93,956

18,57,784

128

10 Inventories:

Stock-in-trade

94,33,350

TOTAL

94,33,350

-

11 Trade Receivables:

Secured and considered good

Trade Receivables exceeding six months

Other Trade Receivables

10,97,462

15,88,817

TOTAL

10,97,462

15,88,817

12 Cash & Cash Equivalents:

Balance with banks

1,21,708

31,590

Cash on hand

2,71,999

3,75,200

TOTAL

3,93,707

4,06,790

13 Revenue from Operations

Operating Revenue

Rental Income

60,02,560

55,46,835

60,02,560

55,46,835

14 Other Non-Operating Revenues:

Profit on sale of Land

-

23,40,060

Interest Received

68

-

68

23,40,060

15 Purchase of Stock in trade

Land

94,33,350

-

94,33,350

-

16 Changes in inventories of FG,WIP and Stock in trade

Opeing Stocks

Land

-

Total (A)

-

-

Closing Stocks

Land

94,33,350

Total (B)

94,33,350

-

Decrease in Stock (A-B)

(94,33,350)

-

129

17 Empoyee Costs

Salaries, PF, ESI etc

1,20,000

1,20,000

1,20,000

1,20,000

18 Other Expenses:

Bank Charges 586 4,467

Audit Fees

As Auditors 15,000 15,000

In Other Capacity

For Taxation Matters 10,000 10,000

Reimbursement of Service tax 3,090 3,090

Taxes & Licenses 88,164 1,85,707

Office Expenses 2,000 10,923

ROC Expenses - 10,000

Postage & Couriers 1,10,000 -

Printing & Stationery 5,500 -

RTA Expenses 45,388 40,479

Interest on TDS 634 -

Miscellaneous expenses 3,500 3,875

2,83,862

2,83,541

Note 20: Related Party Disclosures:

a) List of Related Parties

Name of the Related Party Relationship

Virat Crane Industries Limited Entities under

the control of

same

management

Virat Crane Bottling Ltd

Virat Crane Agri-Tech Ltd

Apex Solutions Ltd

G.V.S.L.Kantha Rao Key

Managerial

Personnel

(KMP)

Ch.V.S.S.Kishore Kumar

G.Subba Rao

130

b) Transaction with Related Party

Particulars Associates Subsidiaries

Key

Managerial

Personnel

Entities

under the

control of

KMP

Rental Income 3,60,000

(3,60,000)

Trade Receivables 5,17,226

(10,62,053)

Unsecured Loans

1,25,62,624 67,30,680

(60,51,823) (88,26,414)

* Figures in brackes indicates prevous year

figures

Note 21 : Earnings per Share - AS 20

Profit after Tax available for distribution (Rs.) 32,51,402 46,43,771

Weighted Average Number of Shares 72,42,000 72,42,000

Face Value of Share

Earnings per Share (Rs.) 0.45 0.64

Note 22 : Accounting for Taxes

The Company has adopted Accounting Standard 22 (AS22)"Accounting for Taxes of Income

". Accordingly, the Deferred Tax Assets and Liabilities comprise of tax effect of following

Components.

131

Particulars Opening Provision Reversal Closing

Deferred Tax Liability

Fixed Asset - - - -

Deferred Tax Asset

Unabsorbed Depreciation - - - -

Preliminary Expenses 11,495 - 11,495 -

Net Deferred Tax Liability /

(Asset) (11,495) - (11,495) -

Note 23

a) The information reuired by paragraph 5 (viii) of general instructionf for preparation of the

statement of profit and loss as per Schedule - VI of the Companies Act, 1956:

31st

March,

2013

31st March,

2012

A. Expenditure in Foreign

Currency NIL NIL

B. Income in Foreign Currency NIL NIL

C. Particulars of Capacities and Production Not

Applicable

Not

Applicable

D. Particulars of Consumption of Imported

and Indigenous Materials Not

Applicable

Not

Applicable

b) All the figures are rounded off to the nearest

rupee.

c) No claims under Interest on delayed payments to Small Scale and Ancillary Industrial

Undertakings are outstanding with the Company.

d) In the opinion of the Board of Directors, Current Assets, loans and advances as at 31st

March 2013 are expected to produce on realization in the ordinary course of the company’s

132

business, at least the amounts at which they are stated in the Balance Sheet.

e) The Revaluation Reserve acquired from Virat Crane Industries Ltd, which is created in the

year 2006-07 on revaluation of Fixed Assets, is charged / debited by Rs.19,03,250/- being

the difference between the depreciation computed on revalued buildings and the written

down value of building before revaluation.

f) The difference between the Demerger Reserve and Shares allotted amounting to

Rs.3,70,86,141/- has been treated as Goodwill in the books of accounts.

XII. DETAILS & FINANCIAL HIGHLIGHTS OF COMPANIES UNDER SAME

MANAGEMENT

Though there are no other companies under the same management, two Promoter Directors

of the company are also the directors on the board of Virat Crane Industries Limited

Financial Performance

Brief financials of Virat Crane Industries Ltd (consolidated), is as under:

Particulars Year 2009

Amount in Rs.

Sales & Services 24,06,16,266

EBITDA 2,66,21,527

Interest 4,50,663

Depreciation / Amortization 43,52,024

PAT 80,55,438

Equity Share Capital 7,23,85,500

EPS 1.11

133

XIII. MANAGEMENT DISCUSSION AND ANALYSIS

A. Economic and Industrial Review: The Construction sector has grown at about 12

percent annually for the past five years. It contributed Rs.3.8 trillion to the Indian

GDP during the year 2007-08 compared to Rs.3.46 trillion in 2006-07. In the past

five years, the sector has seen many new trends, project sizes have increased, and

equipment and manpower have been ramped up with better technologies deployed.

Until the global crisis, the growth rate of the construction sector was higher than the

GDP growth rate. However, the situation has changed drastically in the past six

months. While the sector witnessed robust growth during the first half of 2008,

growth slowed in the second half of the year and experts estimate that for financial

year 2008-09, the construction sector growth rate would match the fall in the GDP

growth rate.

B. Business Overview: The Company is in the business of real estate development,

with a focus on construction and development of real estate. Through its Real Estate

Affiliates, the Company's operations span all aspects of real estate development, from

the identification and acquisition of land, to the planning, execution, construction

and marketing of its projects (including architecture, design management and

interior design), through to the maintenance and management of its completed

developments, as well as providing consultancy services on engineering, industrial

and technical matters to all forms of industries including companies engaged in

construction development of real estate and infrastructure projects.

C. Scope and Potential: The Company's primary focus in me near term would De on

large scale office, retail/mall and residential developments. It has assembled an

experienced team that has strong capabilities in various aspects of project execution

and strong relationships with corporate, government and financial institutions as

well as in depth knowledge of the localities in which it is developing projects.

D. Opportunities and Challenges: Companies that have a diversified presence even

within the infrastructure sector are doing fine despite the financial down turn. The

134

impetus provided by infrastructure growth continues to throw unprecedented

opportunities for the construction sector. While potential investments are spread

across all sectors, there has certainly been a tremendous growth in the sectors of

Power, comprising, generation and transmission; Oil & Gas, Ports, Airports, Roads &

Bridges, Railways and Urban Infrastructure. As shown below, the estimated

investment across these sectors for the 11th Five year plan is close to Rs.2600

billion.

E. Out Look: The Company is continuously studying various propositions to diversify

its activities. The Management is confident that they will be successfully

implemented once they are finalized. With the proposed merger the Company firmly

believes to expand, diversify and explore new opportunities.

F. Risks & Concerns: There is lot of awareness among the public with respect to Real

estate / Infrastructure sector. Internal Control System is reasonable and adequate.

G. Financial performance:

1. Capital Structure: The Company has only equity shares and the paid-up capital is

Rs.5.00 lakhs.

2. Loan Profile: The Company do not have any loans

H. Cautionary Statement: The Market fluctuations and government policies /

regulations will have an impact on the projections and the future outlook.

135

XIV. OUTSTANDING LITIGATIONS, DEFAULTS AND MATERIAL DEVELOPMENTS

The Company does not have any material litigation. The Company was formed as a vehicle

to take the Real estate / Infrastructure business, which is demerged unit from M/s Virat

Crane Industries Limited. This has been approved by the order of the Hon’ble High Court,

Hyderabad, dated 26th March 2010 and effective 1st April 2007.

The company is compliant with the provisions of Companies Act, 1956. There is no specific

material development or commitment given by the Company as of date.

136

XV. ARTICLES OF ASSOCIATION

ARTICLES OF ASSOCIATION

OF

CRANE INFRASTRUCTURE LIMITED

1. The regulation contained in Table ‘A’ of the First Schedule to the Companies Act, 1956,

shall not apply to the Company except in so far as they are embodied in the following

Articles, which shall be the regulation for the management of the Company.

INTERPRETATION CLAUSE

2. The marginal noted hereto shall not effect the construction here of, in these presents, the

following words and expression shall have the following meanings, unless excluded by the

subject or context;

(a) The Act means “The Companies Act, 1956”

(b) “The Board” or “The Board of Directors” means a meeting of directors duly called and

constituted or as the case may be the Directors assembled at a Board Meeting or the

requisite number of Directors entitled to pass a circular resolution in accordance with these

Articles.

(c) “The Company” or “This Company” means CRANE INFRASTRUCTURE LIMITED

(d) “Directors” means the Directors for the time being of the Company or as the case may be

the Directors assembled at a Board Meeting.

(e) In writing, includes printing, lithography, typewriting and any other usual substitute for

writing.

(f) “Members” shall mean Members of the Company holding a share or shares of any class

and registered in the Share Register of the Company.

(g) “Month” shall mean the Calendar month.

(h) “The Office” means the Registered Office of the Company.

(i) “Paid Up” shall include “Credited as fully paid up”.

(j) “Persons” shall include any corporation as well as individuals.

137

(k) A “Proxy” includes attorney duly constituted under a Power of Attorney.

(l) “These presents” or “Regulation” means these Articles of Association as originally framed

or altered from time to time and in force for the time being and include the Memorandum of

Association where the context so requires.

(m) “The Register” shall mean the Register of Members to be kept as required by Section

150 of the Act.

(n) “The Seal” means the Common Seal for the time being of the Company.

(o) “Special Resolution” shall have the meaning assigned there to by Section 189 of the Act.

(p) “Words Importing the masculine gender shall include the feminine gender and vise versa

(q) “Words Importing the singular shall include the plural and words Importing the plural

shall include the singular.

(r) “Section” means section of the Companies Act, 1956.

(s) “Year” means year of account of the Company.

3. Except as provided by Section 77 of the Act, no part of funds of the Company shall be

employed in the purchase of the shares of the Company and the Company shall not give,

whether directly or indirectly, and whether by means of a loan, guarantee, the provision of

security or otherwise any financial assistance for the purpose of or in connection with the

purchase of or subscription made by any person of or for any shares in the Company.

CAPITAL

4. Authorized Share Capital of the Company is Rs. 1,00,00,000 (Rupees One Crore) divided

into 10,00,000 (Ten Lacs Equity Shares) equally shares of Rs.10 each (Ten only) and same

may be increased or reduced as per the requirements of the business and in accordance

with the provision of law.

5. The Board may at its discretion convert the un issued Equity Shares into Preference

Shares or Redeemable Preference Shares and vice versa and the Board may issue any part

or parts of the un issued shares upon such terms and conditions and with such rights and

privileges annexed thereto as the Board at its discretion and subject to the provision of

Section 86 of the Act think fit, and in particular may issue such shares with such

preferential or qualified right to dividends and in the distribution of the assets of the

Company as the Board may subject to the aforesaid sections determine.

6. The board may at its discretion issue any portion of the Preferences Shares not already

issued as redeemable preference shares which are at the option of the Company liable to be

138

redeemed and subject to the provisions of Section 80 of the Act on such terms as to

dividends preferential payment or return of the amount paid up thereon and as to

conditions and terms of redemption as the Directors may deem fit.

7. The Board shall duly comply with the provision of Section 75 of the Act, with regard to all

allotment of shares from time to time.

8. The Board may, at any time increase the subscribed capital of the Company by issue of

new shares out of the UN issued part of the Share Capital in the original or subsequently

created capital, but subject to section 81 of the Act and the following provisions, namely:

a) Where the offer and allotment of such shares are made within two years from the date of

the incorporation of the Company or within one year from the first allotment of shares

made after its incorporation whichever is earlier, the Board shall be at liberty to offer the

shares and allot the same to any person or persons at their discretion.

b) In respect of offers and allotments made subsequent to the date set out in clause (a)

above the Directors shall subject to the provisions of section 81 of the Act and of sub-clause

(c) hereunder observe the following condition:

i) Such new shares shall be offered to the persons who at the date of the offer, are holders

of the Equity Shares of the Company in proportion as nearly as circumstances admit to the

capital paid up on those shares at that date;

ii) The offer aforesaid shall be made by notice specifying the number of shares offered and

limiting a time not being less than fifteen days from the date of the offer within which the

offer if not accepted will be deemed to have been declined;

iii) The offer aforesaid shall be deemed to include a right exercisable by the person

concerned to renounce the shares offered to him or any of them in favour of any other

person, and the notice referred to in clause (2) shall contain statement of this right.

iv) After the expiry of the time specified in the notice aforesaid or earlier intimation from the

person to whom such notice is given that he declines to accept the shares offered the Board

may dispose of them in such manner as it thinks most beneficial to the Company.

c) The Directors may with the sanction of the Company in General Meeting offer and allot

shares to any person at their discretion provided that such sanction is accorded either by:

i) A special resolution passed at any General Meeting or.

ii) By an ordinary resolution passed at a General Meeting by majority of the votes cast and

with the approval of the Central Government in accordance with Section 81 of the Act.

2) Nothing in this clause shall apply to the increase of the subscribed capital of the

Company caused by the exercise of an option attached to debentures issued or loans raised

by the Company.

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i) To convert such debentures or loans into shares in the Company or.

ii) To subscribe for shares in the Company.

Provided that the terms of issue of such debentures or the terms of such loans include a

term providing for such option and such term.

a) Has been approved by a special resolution passed by the Company in General Meeting

before the issue of the debentures or the raising of the loans, and also

b) Either has been approved by the Central Government before the issue of the debentures

on the raising of the loans or is in conformity with the rules, if any, made by that

Government in this behalf.

3) Option or right to call of shares shall not be given to any persons except with the

sanction of the Company in General Meeting.

9. In addition to and without derogating from the powers for that purpose conferred on the

Board under Article 8 the Company in General Meeting may determine that any shares

(whether forming part of the original capital or of any increased capital of the Company),

shall be offered to such persons (whether members or holders of debentures of the

Company or not) In such proportions and on such terms and conditions and either at

premium or at par or (subject to compliance with the provisions of Section 79 of the Act) at

a discount as such General Meeting shall determine and with full power to give to any

person (whether a member or holder or debentures of the Company or not) the option or

(subject to compliance with the provisions of section 79 of the Act) at a discount such

option being exercisable at such times and for such consideration as may be directed by

such General Meeting or the Company in General Meeting may make any other provision

whatsoever for the issue, allotment or disposal of any shares.

10. The rights attached to each class of shares (unless otherwise provided by the terms of

issue of the shares of that class) may, subject to the provisions of Sections 106 and 107 of

the Act be varied with the consent in writing of the holders of three fourths of the issued

shares of that class or with the sanction of a special resolution passed at a separate

meeting of the holders of the shares of that class. To every such separate meeting the

provisions of these Articles relating to General Meeting shall mutatis mutandis apply,

except that the necessary quorum shall be two persons at least holding or representing by

proxy one tenth of the issued shares of that class.

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11. The rights conferred upon the holders of the shares of any class issued with preferred

or other rights shall not unless otherwise expressly provided for by the terms of issue of the

shares of the class be deemed to be varied by the creation or issue of further shares ranking

pari passu therewith.

12. The Company shall not issue any shares not being preference Shares which carry

voting rights or right in the Company as to dividend, capital or otherwise which are

disproportionate to the rights attached to the holders of other shares not being preference

shares.

13. 1) Subject to the provision of Selection 76 of the Act the Company may at any time pay

a commission to any person for subscribing or agreeing to subscribe (whether absolutely or

conditionally) for any shares debentures or debenture – stock of the Company or procuring

or agreeing to procure subscription (whether absolute or conditional) for shares debentures

or debenture – stock of the Company but so that the statutory conditions and requirements

shall be observed and compiled with the amount or rate of commission shall not exceed live

per cent of the price at which the shares are issued and in the case of debenture the rate of

commission shall not exceed two-and a half percent of the price which the debentures are

issued.

2) The Company may also on any issue, pay such brokerage as may be lawful.

14. 1) The Directors may not allot and issue shares in the Capital of the Company as

payment or part payment for any property sold or transferred, goods or machinery and

appliances supplied, or for services rendered to the Company in or about the formation or

promotion of the Company or the acquisition and conduct of its business; and any shares

which may be so allotted may be fully paid up shares, and if so issued, shall be deemed to

be fully paid up shares.

2) The said power vested in the Board by this Article shall not be exercised except by the

unanimous consent of all the Directors or with the previous sanction of a special resolution

passed at a General Meeting of the Company.

1.5 Where two or more persons are registered as joint holders of any share they shall be

deemed to hold the same as joint tenants with benefit of survivorship subjects to the

following provisions:

(a) The person whose name stands first on the register in respect of such share shall alone

be entitled to delivery of certificate there of:

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(b) Any one of such persons may give effectual receipts for any dividend, bonus or return of

capital payable in respect of such shares and such joint holders shall be severally as well as

jointly liable for payment of all installments and calls due in respect of such share/shares.

c) Any one of such person may vote at any meeting either personally or by proxy in respect

of such shares as if he were solely entitled thereto, and if more than one of such joint

holders be present at any meeting personally or by proxy that one of the said persons so

present whose name stands first on the register in respect of such share shall alone be

entitled to vote in respect thereof. Several executors or administrators of a deceased

member in whose names any shares stands shall for the purpose of this article be deemed

joint holders thereof:

d) In case of death of any one or more of such joint holders the survivors shall be the only

persons recognized by the Company as having any title to or interest in such share but the

directors may require such evidence of death as they may deem fit; and nothing herein

contained shall be taken to release the estate of a deceased joint holder from any liability on

shares held by him jointly with any other persons.

e) All notices directed to be given to the members shall be given to whichever such persons

is named first in the register and notice so given shall be sufficient notice to all the holders

of such shares.

SHARE CERTIFICATES

16. Every Certificate of title to shares shall be issued under the seal of the Company. Every

share certificate and every document of title to the shares whether in renewal of an existing

share certificate or other document of title or issued for the first time shall be issued under

the authority of the Board of Directors and in accordance with provisions of the Companies

(Issue of share Certificates) Rules 1960 or any modification thereof and in accordance with

the provisions of law or other rule having the force of law applicable thereto.

SHARE AND DEBENTURE CERTIFICATES

17.1) every person whose name is entered as a member in the Register shall be entitled to

received without payment:

a) One certificate for all his shares; or

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b) Where the shares so allotted at any one time exceed the number of shares fixed as

marketable lot in accordance with the usage of the Stock Exchange, of at the request of the

shareholder, several certificates one each per marketable lot and one for the balance.

2) The Company shall within three months after the allotment or within one month after

application for the registration of the transfer of any shares or debentures complete and

have ready for delivery the certificates for all the shares and debentures so allotted or

transferred unless the conditions of issue of the said shares or debentures otherwise

provide.

3) Every certificate shall be under the seal and shall specify the shares or debentures to

which it relates and the amount paid up thereon.

4) The provisions of clauses (2) and (3) above shall apply mutatis mutandis to debentures

and debentures – stock allotted or transferred.

5) No free shall be charged for the issue of a new share certificate either for sub-division of

the existing share certificates or for consolidation of several share certificates into one or for

issue of fresh share certificates in lien of share certificates on the back of which there is no

space for endorsement for transfer or for registration of any probate Letter of

Administration, Succession, Certificate of like document, or for registration of any Power of

Attorney Partner – ship Deed, Memorandum and Articles of the Companies, or, other

similar documents.

18. In respect of any shares held jointly by several personal the Company shall not be

bound to issue more than one certificate for the same share and delivery of certificate for a

share to one of several joint holders shall be sufficient delivery to all such holders. Subjects

as aforesaid the joint holders shall be entitled to apply for several certificates each for one

or more shares held by them in accordance with Article 17 above.

19. IN respect of any transfer of shares registered in accordance with the provision of these

Articles, the Board may at their discretion direct and endorsement of the transfer and the

name of the transferee and other particulars, on the existing share certificate and authorize

any Director Officer of the Company to authenticate such endorsement on behalf of the

Company or direct the issue of a fresh share certificate in lieu of and in cancellation of the

existing certificate, in the name of the transferee.

20. If a certificate be worn out, defaced, destroyed or lost or there is no further space on the

back thereof for endorsement of transfer it shall, if requested, be replaced by a new

certificate free of charge provide however that such new certificate shall not be granted

except upon delivery of the worn-out or defaced or used up certificate for the purpose of

cancellation, in accordance with the Companies (Issue of share certificates) Rules, 1960 or

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upon proof of destruction of loss and on such Indemnity as the Board may require in the

case of the certificate having been destroyed or lost, Any duplicate certificate shall be

marked as such.

21. ‘The Company shall have a first and paramount lien upon all the shares (other than

fully paid up shares) registered in the name of each member (whether solely of jointly with

others) and upon the proceeds of sale or thereof for all moneys (whether presently payable

or not) called or payable at a fixed time in respect of such shares and no equitable interest

in any shares shall be created except upon the footing and condition that this Articles will

have full effect. Unless otherwise agreed the registration of a transfer shall operate as a

waiver of the Company’s lien of any on such shares. The Directors may at any operate as

waiver of the Company’s lien if any on such shares. The Directors may at any time declare

any shares wholly or in part to be exempt from the provisions of this clauses.”

22. For the purpose of enforcing such lien, the Board may sell the share subject thereto in

such manner as they think fit but no sale shall be made until the expiration of 14 days

after a notice in writing stating and demanding payment of such amount in respect of

which the lien exists had been given to the registered holder of the shares for the time being

or to the person entitled to the shares by reason of the death or insolvency of the registered

holder.

23. To give effect to such sale, the Board of Directors may authorize some person to transfer

the shares sold to the purchaser thereto and the purchaser shall be registered at the holder

of the shares comprised in any such transfer. The purchaser shall not be bound to see to

the application of the purchase money nor shall his title to the share be affected by any

irregularly or invalidity in the proceedings in reference to the sale.

24.1) the net proceeds of any such sale shall be received by the Company and applied in

payment of such part of the amount in respect of which the lien exists as presently payable.

2) The residue, if any, shall subject to like lien for sums not presently payable as existed

upon the shares before the sale be paid to the person entitled to the shares at the date of

the sale.

25. Any money due from the Company to a shareholder, may without the consent of such

shareholder be applied by the Company in or towards payment of any money due from him,

either alone or jointly with any other person to the Company in respect of calls or

otherwise.

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25. A. DEMATERIALISATION OF SECURITIES

Definitions.

a) For the purpose of this Article:-

‘Beneficial Owner’ means a person or persons whose name is recorded as such with a

depository;

‘SEBI’ means the Securities & Exchange Board of India;

‘Depository’ means a Company formed and registered under the Companies Act, 1956, and

which has been granted a certificate of registration to act as a depository under the

Securities & Exchange Board of India Act, 1992; and

‘Security’ means such security as may be specified by SEBI from time to time.

Dematerialization of Securities

b) Notwithstanding anything contained in these Articles, the Company shall be entitled to

dematerialize its securities and to offer securities in a Company in a dematerialized from

pursuant to the Depositories Act, 1996.

Option for investors

c) Every person subscribing to securities offered by the Company shall have the option to

receive security certificate or to hold the securities with a depository. Such a person who is

the beneficial owner of the securities can at any time opt out of a depository, if permitted by

the law, in respect of any security in the manner provided by the Depositories Act, and the

Company shall, in the manner and within the time prescribed, issue to the beneficial owner

the require Certificate of Securities.

If a person opts to hold his security with a depository, the Company shall intimate such

depository the details of allotment of the security, and on receipt of the information, the

depository shall enter in its record the name of the allottee as the beneficial owner of the

security.

Securities to be in Fungible Form

d) All securities held by a depository shall be de-materialized and be in fungible form.

Nothing contained in Section 153, 153A, 153B, 187B, and 187C of the Companies Act,

1956 shall apply to a depository in respect of the securities held by it on behalf of the

beneficial owners.

e) (a) Notwithstanding anything to the contrary contained in the Companies Act, 1956 or

these Articles, a depository shall be deemed to be the registered owner for the purpose of

effecting transfer of ownership of security on behalf of the beneficial owner.

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b) Save as otherwise provided in (a) above, the depository as the registered owner of the

securities shall not have any voting rights or any other rights in respect of the securities

held by it.

c) Every person holding securities of the Company and whose name is entered as the

beneficial owner in the records of the depository shall be deemed to be a member of the

Company. The beneficial owner of securities shall be entitled to all the rights and benefits

and be subjected to all the liabilities in respect of his securities, which are held by a

depository.

Service of Documents

f) Notwithstanding anything in the Companies Act, 1956 or these Articles to the contrary,

where securities are held in a depository, the records of the beneficial ownership may be

served by such depository on the Company by means of electronic mode or by delivery of

floppies or discs.

Transfer of Securities

g) Nothing contained in section 108 of the Companies Act, 1956 or these Articles shall

apply to a transfer of securities affected by a transferor and transferee both of who are

entered as beneficial owners in the records of a depository.

Allotment of Securities dealt with a Depository

h) Notwithstanding anything in the Companies Act, 1956 or these Articles, where securities

dealt with by a depository, the Company shall intimate the details thereof to the depository

immediately on allotment of such securities.

Distinctive No. of Securities held with a Depository

i) Nothing contained in the Act or these Articles regarding the necessity to having distinctive

numbers for securities issued by the Company shall apply to securities held with a

depository.

Register and Index of Beneficial Owners

j) The Register and Index of beneficial owners maintained by a depository under the

Depositories Act, 1996 shall be deemed to be the Register and the Index of Members and

Security holders for the purposes of these Articles”.

25 B. NOMINATION FACILITY

A holder of joint holder(s) of shares in of debentures (including the Fixed deposit holder

under Section 58A of the Companies, Act, 1956) of the Company may nominate, a person in

the prescribed manner to whom the shares and/or the interest of the members in the

capital of the Company or debentures of the Company shall vest in the event of the

holder(s) death. Such member may revoke or vary his/her nomination, at any time, by

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notifying the same to the Company to that effect. Such nomination shall be governed by the

provision of Section 109 A and 109 B of the Act or such other regulations governing the

matter from time to time

CALLS ON SHARES

26. Subject to the provision of the section 91 of the Act the Board of Director may from time

to time make such calls as they think fit upon the members in respect of all moneys unpaid

on the shares held by them respectively and not by the conditions of allotment thereof

made payable at fixed times and each member shall pay the amount of every calls so made

on him to the persons and at the date-time and place or at the dates times and places

appointed by the Board of directors.

27. The Board of Directors may when making a call by resolution, determined the date on

which such all call shall be deemed to have been made not being earlier than the date of

resolution making such call and there upon the call shall be deemed to have been made on

the date so determined and if no such date is fixed the call shall be deemed to have been

made on the date on which the resolution of the Board making the call was passed.

28. Not less than fourteen days notice of any call shall be given specifying the date, time

and place of payment provided that before the time for payment of such call the Directors

may by notice in writing to the members, extend the time for payment thereof.

29. If by the terms of issue of any share or otherwise any amount is made payable at any

fixed date or by installments at fixed dates whether on account of the share or by way of

premium every such amount or installment shall be payable as if it were a call duly made

by the Directors and of which due notice had been given and all the provisions herein

contained in respect of calls shall relate to such amount or installment accordingly.

30.1) If a sum called in respect of the shares is not paid before or on the day appointed for

payment thereof, the person from whom the sum is due shall pay interest upon the sum at

such rate fixed by the Board of Directors from the day appointed for the payment thereof to

the time of the actual payment but the Board of Director shall be at liberty to waive

payment of that interest wholly or in part.

2) The provisions of the Article a to payment of interest shall apply in the case of non-

payment of any sum which by the terms of issue of share becomes payable at a fixed date

whether on account of the amount of the share or by way of premium as if the same had

become payable by virtue of a call duly made and notified.

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31. The Board of Directors may if they think fit received form any member willing to

advance the same all or any part of the moneys uncalled and unpaid upon any share held

by him upon all or any part of the moneys so advanced may (until the same would, but for

such advance become presently payable) pay interest at such rate not exceeding 9%

(without the sanction of the Company in General Meeting) percent per annum as may be

agreed upon between the member paying the sum in advance confer a right to the dividend

or to participate in profits or to any voting rights.

32. Neither a judgment nor a decree in favour of the Company, for calls or other moneys

due in respect of any share not any part payment or satisfaction there under, nor the

receipt by the Company of a portion of any money which shall from time to time, be due

from any member in respect of any share either by way or principle or interest nor any

indulgence granted by the Company in respect of the payment of any such money, shall

preclude the Company from thereafter proceedings to enforce a forfeiture of such shares as

hereinafter provided.

33. If by the conditions of allotment of any share the whole or part of the amount or issue

price thereof shall be payable by installments, every such installment shall, when due, be

paid to the Company by the person who for the time being and from time to time shall be

the registered holder of the share or his legal representative or representatives if any.

TRANSFER AND TRANSMISSION OF SHARES

34.1) the instrument of transfer of any shares in the Company shall be executed both by

the transferor and the transferee and the transferor shall be deemed to remain holder of the

shares until the name of the transferee is entered in the register of members in respect

thereof. The instrument of transfer shall be in respect of only one class of shares and

should be in the form prescribed under Section 108 of the Act.

2) The Board of Directors shall not register any transfer of share unless proper instrument

of transfer duly stamped and executed by the transferor and transferee has been delivered

to the Company along with the certificate relating to the shares and such other evidence as

the Company may require to prove the title of the transferor or his right to transfer the

shares.

Provided that where it is proved to the satisfaction of the Board of Directors that an

instrument of the transfer signed by the transferor and transferee has been lost the

Company may if the Board of Directors think fit, on an application in writing made by the

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transferee and bearing the stamp require on instrument of transfer register the transfer on

such terms as to indemnity as the Board of Directors may think fit.

3) An application for the registration of the transfer of any share or shares may be made

either by the transferor or by the transferee provided that where such application is made

by the transferor no registration shall in the case of partly paid shares be effected unless

the Company gives notice of the application to the transferee and the Company shall unless

objection is made by the transferee within two weeks from the date of receipt of the notice

enter in the register the name of the transferee in the same manner and subject to the same

conditions as if the application for registration was made by the transferee.

4) For the purpose of sub-clause (3) notice to the transferee shall be deemed to have been

duly given if dispatched by prepaid registered post to the transferee at the address given in

the instrument of transfer and shall be deemed to have been delivered in the ordinary

course of post.

5) Nothing in clause (4) shall prejudice any power of the Board to register as a shareholder

any person to whom the right to any share has been transmitted by operation of law.

6) Nothing in this Article shall prejudice the power of the Board of Directors to refuse to

register the transfer of any shares to a transferee whether a member or not.

35. 1) Subject to the provisions of section 111 of the Act, the Board may at any time in their

absolute discretion and without assigning any reason decline to register any transfer of or

transmission by operation of law of the right to share whether fully paid-up or not and

whether the transferee is a member of the Company or not and may also decline to register

any transfer of shares on which the Company has alien.

Provided further that the registration of transfer shall not be refused on the ground of the

transferor being along or either jointly with any other person or persons indebted to the

Company on any account except a lien on the shares.

2) If the Board refuse to register any transfer or transmission of right they shall within 1

month from the date on which the instrument of transfer or the intimation of such

transmission was delivered to the Company send notice of the refusal to the transferee and

the transferor or the person giving intimation of such transmission, as the case may be.

3) In case of such refusal by the Board the decision of the Board shall be subject to the

right of appeal conferred by section 111 of the Act.

4) The provisions of this clause shall apply to transfers of stock also.

37. The Directors may not accept application(s) for the transfer of less than 25(twenty-five)

equity shares in the Company provided, however that this condition shall not apply to:

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i) Transfer(s) of equity share(s) made in pursuance of any statutory provision or order of a

Court of Law.

ii) Transfer of total equity shares of an existing shares of an existing shareholder holding

less than 25 equity shares by a single transfer to a single or joint names,

iii) Transfer of total equity shares of an existing shareholder holding less than 25 equity

shares to one or more transferees whose holding in the Company will not be less than 25

equity shares each after the said transfer; and

iv) Transfer of not less than 25 equity shares in aggregate in favour of the same transfers in

two or more transfer deeds, submitted together out of which one or more relate(s) to the

transfer of less than 25 equity shares.

38. The Board of Directors may also decline to recognize any Instrument of transfer unless:

a) The Instrument of transfer is accompanied by the certificate of shares to which it relates

and such other evidence as the Board of Directors may reasonably require to show the right

of the transfer; and

b) The instrument of transfer is in respect of only one class of shares.

39. 1) Every endorsement upon the certificate of any share in favour of any transferee shall

be signed by the Managing Director or by some other person for the time being duly

authorised by the Managing Director in this behalf. In case any transferee of a share shall

apply for a new certificate in lieu of the old or existing certificate he shall be entitled to

receive a new certificate in respect of which the said transfer has been applied for and upon

his delivering up to be cancelled every old or existing certificate which is to be replaced by

anew one.

2) Notwithstanding any other provisions to the contrary in these presents no fee shall be

charged for any of the following viz.

a) For registration of transfer and debentures; or for transmission of shares and

debentures;

b) For sub division and consolidation of share and debenture certificates and for

subdivision of letters of allotment and split, consolidation renewal and pucca transfer

receipts into denominations corresponding to the market units of trading.

c) For sub-division of renounceable letters of Right:

d) For issue of certificates in replacement of those which are old decrepit or worn out, or

where the changes on the reverse for recording transfers have been fully utilised;

e) For registration of any power of any attorney probate, letter of administration or similar

other documents.

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40. The Company shall keep a book to be called the “Register of Members” and therein shall

be entered the particulars of every transfer or transmission of any shares and all other

particulars to shares required by the Act to be entered in such Register.

41. The Instrument of transfer shall after registration remain in the custody of the

Company. The Board may cause to be destroyed all transfer deeds lying with the Company

for a period of 6 years or more.

42. The Board of Directors may after giving not less than 7 days previous notice by

advertisement in some newspapers circulating in the district in which the Registered office

of the Company is situated close the Register of Members or the Register of Debenture

holders for any period or periods not exceeding in the aggregate 45 days in each year but

not exceeding 30 days at any one time.

43. 1) The executors or administrators of a deceased member (not being one of several joint

holders) shall be the only persons recognized by the case of death of any one or more of the

joint holders of any registered shares, the survivors shall be only persons recognized by the

Company as having ant title to or interest in such shares.

Provided that if the member should have been a member of a joint Hindu family the Board

on being satisfied to that effect and on being satisfied that the shares standing in his name

in fact belonging to the joint family may recognize the survivors or the Kartha thereof as

having title to the shares registered in the name of such member. Provided further in any

case it shall be lawful for the Board in their absolute discretion to dispense with the

production of probate or letters of administration or other legal representation upon such

terms as to indemnity or otherwise as to the board may deem just.

2) Nothing in Clause (1) shall release the estate of a deceased joint holder from any liability

in respect of any shares which were jointly held by him with other persons.

44. 1) Any person becoming entitled to a share in consequence of the death or insolvency of

a member may upon such evidence being produced as may from time to time be required by

the Board and subject as hereinafter provided, elect either:

a) To be registered himself as holder of the shares; or

b) To make such transfer of the shares as the deceased or insolvent member could have

made

2) The Board shall in either case have the same right to decline or suspend registration as

they would have had, if the deceased or insolvent member had transferred the shares before

his death or insolvency.

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DEVOLUTION OF RIGHTS

45. 1) If the person so becoming entitled shall to be registered as holder of the shares

himself, he shall deliver or spend to the Company a notice in writing by him stating that he

so elects.

2) If the person aforesaid shall elect to transfer the share he shall testify his election by

executing a transfer of the share.

3) All the limitations, restriction and provisions of these regulations to the right to transfer

and the registration of transfer of shares shall be applicable to any such notice or transfer

as aforesaid as if the death or insolvency of the member had not occurred and the notice of

transfer were a transfer signed by that member.

4) A person becoming entitled to a share by reason of the death or insolvency of the holder

shall be entitled to the same dividends and other advantages to which he would be entitled

if he were the registered holder of the share except that he shall not, before being registered

as a member in respect of the share be entitled in respect of it to exercise any right

conferred by membership in relation to relation to meeting of the Company. Provided that

the Board may, at any time give notice requiring any such person to elect either to be

registered himself or transfer the share and if the notice is not complied with within ninety

days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys

payable in respect of the share until the requirements of the notice have been complied

with.

46. The Company shall incur no liability or responsibility whatever in consequence of their

registering or giving effect to any transfer of shares made or purporting to be made by any

person having or claiming any equitable right, title or interest to or in the same shares

notwithstanding that the Company may have had notice of such equitable rights or referred

thereto in any books to the Company and the Company shall not be bound by or required

to regard or attend to or give effect to any notice which may be given to it of any equitable

rights title or interest or be under any liability whatsoever for refusing or neglecting so to

do, through it may have been entered or referred to in the books of the Company; but the

Company shall nevertheless be at liberty to have regard and attend to any such notice and

give effect thereto, if the Board shall think fit.

47. If a member falls to pay any call or installment of a call on the day appointed for the

payment thereof, the Board of Directors may at any time thereafter during such time as any

part of such time any part of such call or installment unpaid together with any interest,

which may have accrued.

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48. The notice shall name a further day (not earlier than the expiration of fourteen days

from the date of service of the notice) on or before which the payment required by the notice

is to be made, and shall state that in the event of non-payment on or before the day named,

the shares in respect which the call was made will be liable to be forfeited.

49. If the requirement of any such notice as aforementioned are not complied with any

share in respect of which the notice has been given, may at any time thereafter before the

payment required by the notice has been made be forfeited by Resolution of the Board of

Directors to the effect. Such forfeiture shall include all dividends declared in respect of the

forfeited shares and not actually paid before the forfeiture.

50. A forfeited share may be sold or otherwise disposed of on such manner as the Board of

Directors may think fit, and at any time before a sale or disposition, the forfeiture may be

cancelled on such terms as the Board of Directors may think fit.

51. A person whose shares have been forfeited shall cease to be a member in respect of the

forfeited shares but shall notwithstanding remain liable to pay and shall forthwith pay the

Company all moneys which at the date of forfeiture were presently payable by him to the

Company received payment in full of the normal amount of shares whether legal proceeding

for the recovery of the same had been barred by limitation or not.

52. A duty verified declaration in writing that the declaring is a Director of the Company

and that a share in the Company has been duly forfeited on a date stated in the declaration

shall be conclusive evidence of the facts therein stated as against all persons claiming to be

entitled to the shares and that declaration and receipt of the Company for the

consideration, if any given for the shares on the sale or disposition thereof shall constitute a

good title to the person to whom the share is sold or disposed of shall be registered as the

holder of the share and shall not be bound to see to the application of the purchase money

(if any), nor shall his title to the share be affected by way of irregularity or invalidity in the

proceedings in reference to the forfeiture sale or disposal of the share.

53. The provisions of these Regulations as to forfeiture shall apply in the case of non-

payment of any sum which by the terms of issue of a share become payable at a fixed time

whether on account of the amount of the share or by way of premium or otherwise as if the

same had been payable by virtue of a call duly made and notified.

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CONVERSION OF SHARES INTO STOCK

54. The Company may by ordinary resolution convey all or any of its fully paid up shares of

any denomination into stock and vise versa.

55. The holder of stock may transfer the same or any part thereof in the same manner as

and subject to the same regulations under which the shares from which the stock arose

might before the conversion have been transferred or as near thereto as circumstances

admit :

Provided that the Board may, from time to time, fix the minimum amount of stock

transferable so however that such minimum shall not exceed the nominal amount of the

shares from which the stock arose.

56. The holder of stock shall, according to the amount of stock held by them have the same

rights, privileges and advantages as regards dividends, voting at meetings of the Company

and other matter as if they held the same from which the stock arose but not such

privileges of advantages (except participation in the dividends and profits of the Company

and in the assets on winding up) shall be conferred by an amount of stock which would

not, if existing in shares, have conferred that privilege or advantage.

57. Such of the regulations contained in these presents (other than those relating to the

share warrants) as are applicable to paid up shares shall apply to stock and the words

‘share’ and ‘share-holder’ in these presents shall include ‘stock’ and stockholder

respectively.

ALTERATION OF CAPITAL

58. The Company may from time to time but subjects to the provisions of Section 94 of the

Act, alter the conditions of its Memorandum as follows:

a) Increase its share capital by such amount as ‘it think’ expedient by issuing new shares;

b) Consolidate and divide all or any of its share capital into shares or larger amount than

its existing shares.

c) Convert all or any of its fully paid up shares into stock and reconvert that stock into fully

paid up shares of any denominations;

d) Subdivide its shares or any of them into shares of smaller amount than is fixed by the

memorandum, so however, that in the subdivision the proportion between the amount, if

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any unpaid on each reduced share shall be the same as it was in the case of the share from

which the reduced share is derived;

e) Cancel any shares which at the date of the passing of the resolution in behalf have not

been taken or agreed to be taken by any person and diminish the amount of its share

capital by the amount of the shares so cancelled;

f) The resolution where by any share is subdivided may determine that as between the

holders of the shares resulting form such subdivision one or more of such shares shall have

some preference or special advantage as regards dividend, capital, voting or otherwise over

or as compared with the others.

59. The new shares shall be subject to the same provisions with reference to the payment of

calls, lien, transfer, transmission forfeiture and otherwise as the shares in the originals

share capital

60. The Company may be Special Resolution reduce in any manner and with and subject to

any incident authorized and consent required by law:

a) Its share capital

b) Any capital redemption reserve account; or

c) Any share premium account

60A. Buy Back of shares

The Company shall have power, subject to and in accordance with all applicable provisions

of the Act, to purchase any of its own shares or other securities, (i.e. buy-back) whether or

not redeemable, from out of the sources as permissible under the Law. As regard to the

financing for subscribing or investing in its own shares or securities by the Company, the

statutory provisions for the time being applicable to the Company shall be observed.

SHARE WARRANTS

61. 1) The Company may issue share warrants subject to and in accordance with provisions

of section 114 and 115 of the Act and accordingly the Board may in their discretion with

respect to any share registered as fully paid-up, on application in writing signed by the

person registered as holder of the share and authenticated by such evidence, if any as the

Board may from time to time require as to the identity of the person signing the application,

and on receiving the certificate if any of the share and the amount of the stamp duty on the

warrant and such fees as the Board may from time to time prescribe, issue a share warrant

and may provide by coupons or otherwise for the payments of the future dividends on the

shares specified in the share warrant.

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2) A share warrant shall entitle the bearer to the share included in and the shares shall be

transferred by the delivery of the share warrant and the provisions of the Articles of the

Company with respect to transfer and transmission of shares shall not apply hereto.

3) The bearer of a share warrant shall, on surrender of the warrant to the Company for

cancelled and on payment of such fees as the Board may from time to time prescribe be

entitled to have his name entered as a member in the Register of Members in respect of the

shares included in the warrant.

62. 1) The bearer of a share warrant may be at any time deposit the warrant at the

Registered office of the Company and so long as the warrant remains so deposited the

depositor shall have the same right on singing a requisition for calling a meeting of the

Company and of attending and voting and exercising the other privileges of a member at

any meeting held after the expiry of two clear days from the time of deposits as if his name

were interested in the Register of Member as the holder of the shares included in the

deposits warrant.

2) Not more than one person shall be recognised as depositor of the share Warrant.

3) The Company shall on two days written notice return the deposited share warrant to the

depositor.

63. 1) Subject as herein otherwise expressly provided no person shall as bearer of a share

warrant sign a requisition for calling a meeting of the Company or attend or vote or exercise

any other privileges of a member at a meeting of the Company or be entitled to receive any

notice form the Company

2) The bearer of a share warrant shall be entitled in all other respects the same privileges

and advantages as if he was named in the Register of members as the holder of the shares

included in the warrant and he shall be a member of the Company.

64. The Board may from time to time taken rules as to the terms on which if they shall

think fit, a new warrant or coupon may be issued by way of renewal in case of defacement

loss or destruction of the original warrant or coupon.

GENERAL MEETINGS.

65. The Company shall in addition to other meetings hold a general meeting which shall be

styled as its Annual General Meeting of the Company at intervals and in accordance with

the provisions specified below:

a) The first Annual General Meeting of the Company shall be held within eighteen months

of its incorporation.

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b) Thereafter an annual general meeting of the Company shall be held once in every

calendar year within 6 months after the expiry of each financial year subject however to the

power of the Registrar of Companies to extend the time within which such a meeting can be

held for a period not exceeding 3 months and subject there to not more than fifteen months

shall elapse from the date of one annual general and that of the next.

c) Every annual general meeting shall be called for at a time during the business hours on a

day that is not a public holiday and shall be held either at the registered office of the

Company or at some other place within the city, town or village in which the registered

office of the Company is situated.

d) Notice calling such meeting shall specify them as the annual general meetings.

e) All other meetings shall be referred to as Extra – ordinary General Meetings.

66. The Board of Directors may whenever they think fit, convene an Extra – ordinary

General Meeting at such time and at such places as they deem fit. Subject to such

directors, if any, given by the Board the Managing Directors or the Secretary may convene

an Extra-ordinary General Meeting.

67. The Board of Directors shall on the requisition of such number of members of the

Company as is specified below proceed duly to call an Extra-ordinary General Meeting of

the Company and comply with the provision of the Act in relation on meetings on

requisition.

b) The requisition shall set out matters for consideration of which the meeting is to be

called, shall be signed by the requisitionists and shall be deposited at the registered office of

the Company or send to the Company or send to the Company by registered post addressed

to the Company at its registered office.

c) The requisition may consist of several documents in like from each signed by one or more

requisitionists.

d) The number of members entitled to requisition a meeting with regard to any matter shall

be such number of them as held at the date of the deposits or dispatch to the registered

office of the requisition, not less than 1/10th of such of the paid up capital of the Company

as at that date carries the right of voting in regard to the matter set out in the requisition.

e) If the Board of Directors do not, within twenty-one days from the date of deposits of

requisition with regard to any matters, proceed duly to call a meeting for the consideration

of those matters on a date not latter than forty five days from the date of deposits of the

requisition the meeting may be called by the requisitionists themselves, or such of the

requisition the as represent either majority in value of the paid-up share capital held by all

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of them or of not less than 1/10th of such paid-up capital of the Company as is referred to

in sub clause (d) above.

68. A General Meeting of the Company may be called by giving not less than 21 days notice

in writing provided that a General Meeting may be called after giving shorter notice if

consent thereto is accorded in case of the Annual General Meeting by all the members

entitled to vote there at and in the case of any other meeting by members of the Company

holding not less than 95% of that part of the paid-up share capital which gives the right to

vote on the matters to be considered at the meeting provided that where any members of

the Company are entitled to vote only on some resolution or resolutions to be moved at a

meeting and not on the others, those members shall be taken into account for purpose of

this Article in respect of the former resolution for resolutions and not in respect of the

latter.

69. The accidental omission to give notice of any meeting to or the non-receipt of any such

notice by any of the members shall not invalidate the proceedings of, or any resolution

passed at such meeting.

70. All business shall be deemed special that is transacted at an Extra-ordinary General

Meeting and also that is transacted at the Annual General Meeting with the exception of

business relating to

i) The consideration of the Accounts, Balance Sheet, Report of the Directors and Auditors;

ii) The declaration of dividend;

iii) The appointment of Directors in the place of those retiring and

iv) The appointment and fixing of the remuneration of the Auditors.

71. Where any items of business to be transacted at the meeting are deemed to be special

as aforesaid, there shall be annexed to the notice of the meeting a statement setting out all

material facts concerning each such items of business, including in particular the nature of

the concern or interest if any therein of every Director and the Managing Director, if any,

where any item of business consists of the according of approval to any document by the

meeting, the time and place where such document can be inspected shall be specified in the

statement aforesaid.

Provided that where any item of special business as aforesaid is to be transacted at the

meeting of the Company relates to or effects any other Company the extent of share holding

interest in that other Company of every Director and the Managing Director of the Company

shall also be set out in the statement if the extent of such share holding interest is not less

than 20% of the paid-up share capital of that other Company.

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PROCEEDING AT GENERAL MEETINGS.

72. Five members personally present shall be a quorum for a general meeting and no

business shall be transacted at any general meeting unless the requisite quorum is present

at the commencement of the business.

73. If within half an hour from the time appointed for the meeting a quorum is not present

the meeting if called upon by the requisition of members shall be dissolved in any other

case it shall stand adjourned to the same day in the next week at the same time and place

or such other day and at such other time and place as the Board may determine and if at

the adjourned meeting a quorum is not present within half an hour form the time appointed

for the meeting the members present within half an hour from the time appointed for the

meeting the members present shall be a quorum.

74. The chairman, if any, of the Board of directors shall preside as Chairman at every

General Meeting of the Company.

75. If there is no such chairman, or if at any meeting he is not present within fifteen

minutes after the time appointed for holding the meeting, or is unwilling to act as Chairman

the Director present shall choose another Director as chairman and if no Directors be

present or if all the Directors decline to take the chair then the members present shall

choose some one of their number to be chairman.

76. The Chairman may with the consent of any meeting at which a quorum is present (and

shall if so directed by the meeting) adjourn that meeting from time to time and from place to

place, but no business shall be transacted at any adjourned meeting other than the

business left unfinished at the meeting from which the adjourned took place. When a

meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given

as nearly as may be in the case of original meeting save as aforesaid it shall not be

necessary to give any adjournment or of the business to transacted at an adjourned

meeting.

77. At any general meeting a resolution put to the vote of the meeting shall be decided on a

show of hands unless before or on the declaration of the results of the voting on a show of

hands a poll may be ordered to be taken by the Chairman of the meeting on his own motion

or shall be ordered to be taken by him on a demand made in that behalf by any member of

members present in person or by proxy and holding shares in the Company.

I. Which confer a power to vote on the resolution not being less than 1/10 of the total

voting power in respect of the resolution or

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II. On which an aggregate sum of not less than Rs. 50,000 has been paid up.

III. Unless a poll is demanded a declaration by the chairman that a resolution on a show of

hands been carried unanimously or by a particular majority or lost and an entry to that

effect in the books of the proceedings of the Company shall be conclusive evidence of the

fact without proof of the number of proportion of the votes recorded in favour of or against

that resolution.

78. If a poll is duly demanded in accordance with the provisions of section 179 it shall be

taken in such a matter as the Chairman in accordance with the provision of the Act and

Section 184 and 185 direct and the results of the poll shall be deemed to be the decision of

the meeting on the resolution on which poll was taken.

79. In the case of an equality of votes the Chairman shall, both on a show of hands and on

a poll have casting vote in addition to the vote or votes to which he may be entitled to as a

member.

80. A poll demanded on the election of Chairman or on a question adjournment shall be

taken forthwith. A poll demanded on any other question shall be taken at such time not

being later than 48 hours from the time when demanded was made as the chairman may

direct.

80 A. PASSING OF RESOLUTION BY POSTAL BALLOT

Notwithstanding anything contained in the Article of Association of the Company, the

Company do adopt the mode of passing a resolution by the members of the Company by

means of a postal ballot and/or other ways as may be prescribed by the Central

Government in his behalf in respect of any business that can be transacted by the

Company in his behalf in respect of any business that can be transacted by the Company

in the General Meeting and particularly, resolutions relating to such business as the

Central Government may by notification, declare to be conducted only by postal ballot.

VOTE OF MEMBERS

81. 1) Every member holding equity shares shall have a right to vote in respect of the

shares on every resolution placed before the meeting on a show of hands every such

member present in person shall have one vote. On a poll his voting right in respect of his

equity shares shall be proportion to his share of the paid-up capital in place of the equity

shares.

2) In the event of the company issuing any preference shares the holder of such preference

shares shall have the voting rights set out in that behalf in section 87 of the Act.

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82. A demand poll shall not prevent the continuance of a meeting for the transaction of any

shares other than on which a poll has been demanded. The demand for a poll may be

withdrawn at any time by the person who made the demand.

83. In the case of joint holders the vote of the first name of such joint holder who endorse a

vote whether in person or by proxy, shall be accepted to the exclusion on the vote of the

other joint holders

84. A member of unsound mind or in respect of whom an order has been made by any one

having jurisdiction in lunacy may vote, whether on a show of hands or on a poll by his

committee or other legal guardian and any such committee or guardian may, on a poll vote

by proxy.

85. No member shall be entitled to vote any general meeting unless all calls on the board

presently payable by him in respect of his shares in the Company have been paid.

86. On poll votes may be given either personally or by proxy.

87. Any member entitled to attend and vote at a meeting of the Company shall be entitled to

appoint any person whether a member or not as his proxy to attend and vote instead of

himself, but the proxy so appointed shall not unless he be a member have any right to

speak at the meeting and shall not be entitled to vote except on a poll.

88. 1) The instrument appointing a proxy shall be in writing under the hand of the person

or of his attorney duly authorised in writing if the appointer is a co operation under the

common seal or under the hand of an officer or attorney authorised. Any person may act as

proxy whether is a member or not.

88. 2) A Corporate body (whether a company within the meaning of the Act or not) may it is

a member, a creditor or a debenture holder of the Company by the resolution of its Board of

Directors or other governing body authorize such person as it thinks fit to set as its

representative at any meeting of the creditors of the company held in pursuance of the

provisions contained in any Debenture or Trust Deed as the case may be. The person so

authorised by resolution as aforesaid shall be entitled to exercise the same rights and

person including the right to vote by proxy on behalf of the body corporate which he

expresses as that body could exercise if it were an individual member creditors or holders of

debentures of the company.

3) So as authorised under clause 2) above as into power to appoint proxy shall be present

and appointed as representative.

89. The instrument appointing a proxy and the power of attorney or other authority if any

under which is signed or a notary certified copy of that power or authority shall be

deposited at the registered office of the Company not less than 48 hours before the time for

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holding the meeting or adjourned meeting at which the person named in the instrument

proposes to vote , or in the case of a poll , not less than 48 hours before the time appointed

for the talking of the poll and in default the instrument of proxy shall not be treated as

valid.

90. A vote given in accordance with the terms of an instrument of proxy shall be valid not

withstanding the previous death of the principal or the revocation of the proxy on the

transfer of the share in respect of which the proxy is given. Provided that no intimation in

writing of the death, revocation or transfer shall have been received at the Registered Office

of the Company before the commencement of the meeting or adjourned meeting at which

the proxy is used.

91.Every instrument appointing of the Companies Act , 1956 , the Chairman of a general

Meeting shall be the sole and absolute judge of t he validity of every vote tendered at such

meeting and may allow or disallow any vote tendered , according as he shall be of opinion

that the same is or is not valid.

Directors

93. Unless otherwise determined by a General Meeting the number of Director shall not be

less than three and not more than twelve, including all kinds of directors.

94. The persons here in after named shall become and be the First Directors of the

Company

1. GRANDHI VENKATA SATYA LAKSHMI KANTHA RAO

2. GRANDHI SUBBA RAO

3. CHEGU VENKATASIVASATYA KISHORE KUMAR

95. Any person whether a member of the Company or not may be appointed as Director and

no qualification by the way of holding share shall be required of any director.

96.Any casual vacancy occurring in the Board of Directors may be filled up by the Directors

and the person so appointed shall hold office up to the date up to which the Director in

whose place he is appointed would have held office if it had not been vacated as aforesaid

97. The Board of Directors shall have power at any time and from time to time at appoint

one or more person as additional Directors, provided that the number of Directors and

additional Directors so appointed shall hold office up to the date of the next annual greeting

meeting but he shall be eligible for election by the Company at the meeting.

98. The Board of Directors may appoint an alternate Director to act for a Director

(hereinafter called the original Director) during the absence of the original Director for a

period of not less than three months from the state in which the meetings of the Board are

ordinarily held. An alternate Director so appointed shall vacate office if and when the

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original Director returns to the state in which meetings of the Board are ordinarily held. If

the terms of office of the original Director are determined before he so returns to the state

aforesaid, any provisions for t he automatic reappointment of retiring Director in default of

another appointment shall apply to the original, and not to the alternate Director.

99.A) Every Directors other than the Managing or Whole time Directors shall be paid out of

funds of the Company by way of remuneration , a sitting fee of such a sum as the Company

may fix in General meeting not exceeding the sum that may be prescribe from time to time,

by the Central Government pursuant to section 310 or any other applicable provisions of

the Act for each meeting of the Board of Directors or of any committee thereof attended by

him and shall be paid in addition thereto travelling , hotel and other expenses properly

incurred by him in attending and returning from the meetings of the Board of the Director

or any committee thereof or General Meetings of the Company or in the connection with

the business of the Company to and from any place.

B). Subject to the provisions of section 198 , 309 , 310 of the Act and subject to such

approvals as may be necessary the Directors may be paid remuneration by fixed sum of by

a fixed percentage of net profits or otherwise as may be fixed by the Company in General

meeting and the remuneration may be paid by way of monthly , quarterly half yearly or

annual payments or otherwise and the remuneration so fixed shall be divided amongst the

Directors in such proportion and manner as the Board may from time to time decide, and

in default of such determination, shall be divided amongst the Directors equally.

100. If any Directors being willing shall be called upon to perform extra services or to make

any special exertions is going residing away/from the town in which the Registration Office

of the Company may be situated for any purposes of the Company or in giving special

attention to the business of the Company or as a member of the Board, then subject to

section 198, 309, 310 and 314 the Board may remuneration the Director so doing either by

a fixed sum or by a percentage of profits or otherwise and such remuneration may be either

in addition to or in substitution for any other remuneration to which he may be entitled.

101. The continuing Directors may act notwithstanding any vacancy in the Board but if and

so long as their number is reduced below three, the continuing Directors of Directors may

act for the purpose of increasing the number of Directors to three or of summoning a

General Meeting of the Company but for no other purpose.

102. The office a Director shall be vacated if;

a) He is found to be of unsound mind by a Court of competent jurisdiction; or

b) He applied to be adjudicated or is adjudged an insolvent; or

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c) he falls to pay dues made on him in respect of shares held by him within six months

form the last date fixed for the payment of the call unless the Central Government has by

notification in the official gazette removed the disqualification incurred by such failure; or

d) he is convicted by a Court of any offence involving moral turpitude and sentenced in

respect thereof to imprisonment for not less than six months; or

e) he absent himself from three consecutive meetings of the Board of from all meetings of

the Board for a continuous period of three months whichever is longer without obtaining

leaves from the Board; or

f) he (whether by himself or by any person for his benefit or on his account), or any firm in

which he is a partner or any private Company of which he is a Director accepts a loan, or

any guarantee or security for a loan from the Company in contravention of Section 299; or

g) He acts contravention of Section 295; or

h) He becomes disqualified by an order of court under Section 203; or

i) He is removed in pursuance of Section 214; or

j) Having been appointed Directors by virtue of his holdings any office or other employment

in the Company; he ceases to hold such office or other employment in the Company.

Provided that notwithstanding anything in sub-clause (b), (d) and (h) above the

disqualification referred to in those clause shall not take effect; \

a) For thirty days from the date of the adjudication, sentences or order.

b) Where any appeal or petition is preferred with in the thirty days aforesaid against the

adjudication, sentences or conviction resulting in the sentence or order until the expiry of

seven days from the date on which such appeal or petition is disposed of, or

c) Where within the seven days aforesaid any further appeal or petition is preferred in

respect of the adjudication sentence conviction or order and the appeal or petition if allowed

would result in the removal of the disqualification until such further appeal or petition is

disposed of

103. 1) Subject to the provisions of the Act, the Directors including the Managing Directors,

if any shall not be disqualified by reason of the office as such from contracting with

Company either as vendor purchaser, lender, agent, broker or otherwise not shall any

contract or arrangement entered into by or on behalf of the Company with any Director or

the Managing Director shall be a member or otherwise interested by avoided nor shall any

Director of the Managing director so contracting or being such member or so interested be

liable to account to the Company for any profit realized by such contract or arrangement by

reason only of such Director or the Managing Director holding that office or of the fiduciary

relation thereby established but the nature of the interest must be disclosed by him or

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them at the meeting of the Board at which the contractor or arrangement is determined on

if the interest then exists or in any other case at the meeting of the board after the

acquisition of the interest.

Provided nevertheless that no Director shall take part in the discussion of or vote as a

Director in respect of any contract or arrangement in which he is so interest as aforesaid

and if he does so his vote shall not be counted but he shall be entitled to be present at the

meeting during the transaction of the business in relation to which he is precluded from

voting although he shall not be counted for the purpose of ascertaining whether there is

quorum of Director present. The provision shall not apply to any contract by or on behalf of

the Company to give to the Directors or the Managing Directors or any of them any security

by way of Indemnity against any loss which they or any of them suffer by becoming or being

sureties for the Company or to any contract or arrangements entered into or to be entered

into with a public Company, or private Company which is a subsidiary of a public Company

in which the interest of the Director aforesaid consists solely in his being a director of such

Company and the holder of not more than share of such number or value therein as is

requisite to qualify him for appointment as a director thereof, he having been nominated as

such Director by the Company or in his being member holding not more than 2% of its paid

up share capital.

2) A general notice that any Director is a Director or a member of any specified Company or

is a member of any specified firm and is to be regarded as interested in any subsequent

transaction be sufficient disclosure under this Article and after such general notice it shall

not be necessary to give any special notice relating to any particular transaction with such

Company or Firm.

3) A Director may be or become a Director or member of any Company promoted by this

Company or in which this Company may be interested as vendor, shareholder or otherwise

and no such Director shall be accountable to the Company for any benefits received as a

Director or member of such Company.

104. Except as otherwise provided in these Articles, all the Directors of the Company shall

have in all matters, equal rights and privileges and be subject to equal obligation and duties

in respect of the affairs of the Company.

105. a) The term ex-officio directors wherever occurring in these presents shall mean and

include the Managing Directors under Article 141 below and the Ex-officio Directors

declared under Article 113 Promoter Directors declared under Article 105b below and to

any Director appointed in pursuance of Article 136 below and referred to as nomination

Director.

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106. a) Not less than one-thirds of the total number of the Directors of the Company for the

time being holding office shall be Directors whose period of office is liable to be determined

by retirement by rotation and who shall be appointed by the Company in General Meeting.

b) At the first Annual general meeting of the Company the whole of the Board of Directors

except Ex-officio Directors shall retire from office and at the Annual General Meeting is

every subsequent year one-third of such of the Directors as are liable to retire by rotation

for time being or if their number is not three or multiple of three then the number nearest

to one-third shall retire from office.

107. A retiring Director shall be eligible for re-election and the Company at the Annual

General Meeting at which a Director retires in the manner aforesaid may fill up the vacated

office by electing a person thereto.

108. The Directors to retire in every year shall be those who have been longest in office

since their last election but as between persons who became directors on the same day

those to retire shall they otherwise agree among themselves be determined by lot.

109. Subject to the provisions of section 256 of the Act if at any Meeting at which an

election of Directors ought to take place, the place of the vacating Directors is not filled up

and the Meeting has not expressly resolved not to fill up the vacancy the Meeting shall

stand adjourned till the same day in next succeeding day which is not a public holiday at

the same time and place, and if at the adjourned Meeting the place of retiring Directors is

not filled up and the Meeting has also not expressly resolved not to fill up the vacancy then

the retiring Directors or such of them as have not had their places filled up shall be deemed

to have been reappointed at the adjourned Meeting.

110. . Subject to the provision of section 252, 255 and 259 of the Act the Company in

General Meeting may by ordinary resolution increase or reduce the number of its Directors

within the limit fixed by Article 93.

111. Subject to the provision of section 284 of the Act Company may by an ordinary

resolution in General Meeting remove any directors before the expiration of his period of

office and may by an ordinary resolution appointed another person in his stead the person

so appointed shall be subject to retirement at the same time as if he had become a director

on the day on which the director in whose he is appointed was last elected as director.

112. A person not being a retiring Director shall be eligible for appointment to the office of a

Director at any General Meeting if he or some other member intending to propose him as a

Director not less than 44 days before the meeting has left at the office of the Company a

notice in writing under his hand signifying his candidature for the office of the Director or

the intention of such member to propose him as a candidate for the office as the case may

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be, along with a deposit of a sum mentioned in section 257 of the Act. The deposit shall be

refunded to such person or as the case may be to such member if the person(s) succeeds in

getting elected as a Director.

113.The Company in General Meeting may when appointed a person as a Director declare

that his continued presence on the Board of Directors is of advantage to the Company and

that his office as Director shall not be determined by retirement by rotation for such period

or until the happening of such event or contingency as the Board may specify and

thereupon such Director shall not be liable for retirement by rotation but shall hold office

for the period or until the happening of any event or contingency set out in the said

resolution. Such directors shall hereinafter be referred to as “Ex-officio Director”.

PROCEEDINGS OF THE DIRECTORS

114. 1) The Board of Directors shall meet at least once in every three calendar months for

the dispatch of business, adjourn and otherwise regulate its meetings and proceedings as it

thinks fit provided that at least four such meetings shall be held in every year.

2) The Managing Director may at any time summon a meeting of the Board and the

Managing Director or a Secretary on the requisition of a Director shall at any time summon

a meeting of the Board. Notice in writing of every meeting of the Board shall be given to

every Director for the time being in India and at his usual address in India to every other

Director.

115. The quorum for a meeting of the Board shall be one-third of the total strength (any

fraction contained in that one-third being rounded off as one) or two Directors whichever is

higher provided that where at any time the number of interested Directors is equal to or

exceeds two-third of total strength the number of remaining Directors, that is to say the

number of Directors who are not interested present at the meeting being not less than two,

shall be the quorum during such time. The total strength of the Board shall mean the

number of Directors actually holding office as Directors on the date of the resolution or

meeting that is to say the total strength of Board after deducting there from the number of

directors. If any, whose places are vacant at the time.

116. 1) Save as otherwise expressly provided in the Act a meeting of the Board for the time

being at which a quorum is present shall be competent to exercise all or any of the

authorities powers and discretions by or under the regulations of the Company for the time

being vested in or exercisable by the Directors generally and all questions arising at any

meeting of the Board shall be decided by a majority of the Board.

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2) In case of an equally of votes the chairman shall have a second or casting vote in

addition to his vote as a Director.

117. The continuing Directors may act notwithstanding any vacancy if the Board but if and

so long as their number is reduced below three, the continuing Directors or Director may

act for the purpose of increasing the number of Directors to three or summoning a General

Meeting of the Company but for no other purpose.

118. 1) The Board may elect a Chairman of its meeting and determine the period for which

he is to hold office.

2) If no such chairman is elected or, if at any meeting the chairman is not present within

five minutes after the time appointed for holding the meeting, the Directors present may

choose one of their members to be Chairman of the meeting.

119. 1) The Board may, subject to the provisions of the Act delegate any of its powers to

committees consisting of such member or members of its body as it think fit.

2) Any Committee so formed shall in the exercise of the powers so delegated conform to any

regulations that may be imposed on it by the Board.

120. 1) If the Chairman of the Board is a member of the Committee he shall preside over all

meetings of the Committee. If the Chairman is not a member thereof, the Committee may

elect a Chairman of its meeting. If no such Chairman is elected, or if at any meeting the

Chairman is not present within five minutes after the time appointed for holding the

meeting the members present may choose one of their number to be Chairman of the

Meeting.

2) The quorum of a Committee may be fixed by the Board of Directors and until so fixed if

the committee is of a single member or two member shall be one and if more than two

members, shall be two.

121. 1) A committee may meet and adjourn as it thinks proper.

2) questions arising at any meeting of committee shall be determined by the sole member of

the committee or by a majority of votes of the members present as the case may be and in

case of an equality of vote the Chairman shall have a second or casting vote in addition to

his vote as a member of the committee.

122. All acts done by any meeting of the Board or of a committee thereof or by any person

acting as a Director shall notwithstanding that it may be afterwards discovered that there

was some defect in the appointment of any one or more of such Directors or of any person

acting as aforesaid or that the or any of them were disqualified be as valid as if every such

director or such person had been duly appointed and was qualified to be a Director.

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123. Save as otherwise expressly provided in the Act, a resolution in writing circulated in

draft together with the necessary papers, if any, to all the Directors or to all the members of

the Committee then in India, not being less in number than the quorum fixed for the

meeting of the Board or the committee as the case may be and to all other Directors or

members at their usual address in India and approved by such of the Directors as are then

in India or by a majority of such of them as are entitled to vote on the resolution shall be

valid and effectual as if it had been a resolution duly passed at a meeting of the Board or

committee duly, convened and held.

POWERS AND DUTIES OF DIRECTORS

124. The business of the Company shall be managed by the Board of Directors who may

exercise all such powers of the Company as are not by the Act or any statutory modification

thereof for the time being in force, or by these presents required to be exercised by the

Company in General Meeting, subject nevertheless to any regulation of these presents to

the provision of the said act, and to such regulations being not inconsistent with the

aforesaid regulations or provision as may be prescribed by the Company in General

Meeting, but no regulation made by Company in General Meeting shall invalidate any prior

act of the Board which would have been valid if that regulation had not been made.

125. Without prejudice to the generally of the foregoing. It is hereby expressly declared that

the Directors shall have the following powers, that is to say, power;

1) To carry on and transact the several kinds of business specified in clause III of the

Memorandum of association of the Company.

2) To draw, accept, endorse, discount, negotiate, and discharge on behalf of the Company

all, bills of exchange, promissory notes, cheques, hundies, drafts, railway receipt dock

warrants delivery, orders, Government promissory notes, other Government instruments

bonds debenture stocks of Corporation Local Bodies port Trusts improvements Trusts or

other Corporate Bodies and to execute transfer deeds for transferring stocks, shares or

stock certificates of the Government and other local or corporate bodies in connection with

any business or any subject of the Company.

3) At their discretion, to pay for any property rights or privileges acquired by or services

rendered to the Company either wholly or partially in cash or in shares, bonds, debentures

or other securities of the Company and such shares may be issued either as fully paid up

or with such amount credited as paid up thereon as may be agreed upon, and such bonds

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debentures or other securities may be either specially charged upon all or any of the

property of the Company or not so charged.

4) To engage and in their discretion to remove, suspend, dismiss and remunerate bankers,

legal advisers, accountants, cashiers, agents commission agent dealers brokers foremen,

servants, employees of every description and to employ such professional or technical or

skilled assistants from time to time may in their option be necessary or advisable in the

interest of the Company and upon such terms as to duration of employment, remuneration

or otherwise and may be required security in such instance and such amount as the

Directors think fit.

5) To accept from any member, on such terms and conditions as shall be agreed, a

surrender of his shares or stock or any part thereof.

6) To secure the fulfillment of any contracts or agreements entered into by the Company, by

mortgage or charge of all or any property of the Company or such other manner as they

may think fit.

7) To institute, conduct, defend, compound, or abandon any action suits and legal

proceedings by against the Company, or otherwise concerning the affairs of the Company

and also to compound or compromise or submit to arbitration the same actions, suits and

legal proceedings.

8) To make and give receipts, released and other discharges for money payable to the

Company and for the claims and demand of the Company.

9) To determine who shall be entitled to sign on the Company’s behalf, bills of exchange,

promotes, dividend warrants, cheques and other negotiable instruments, receipts,

acceptance endorsements, releases, contracts, deeds and documents.

10) From time to time to regulate the affairs of the Company abroad in such manner as

they think fit and in particular to appoint any person to be attorneys or agents of the

Company either abroad or in India, with such powers including power to sub delegate and

upon such terms as may be through fit.

11) To invest and deal with any moneys of the Company not immediately require for the

purposes thereof upon securities as they think fit.

12) To execute in the name and on behalf of the Company in favour of any Director or other

person who may incur or be about to incur any personal liability for the benefits of the

Company, such mortgages of the Company’s property (present) and future, as they think fit

and such mortgage may contain a power of sale and such other powers, covenants and

provisions as shall be agreed upon.

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13) To give to any person employed by the Company, a commission on the profits or any

particular business or transactions or a share in the general profits of the Company and

such commission or share of profits shall be treated as part of the working expenses of the

Company.

14) From time to time, to make, vary and repeal bye-laws for the regulations of the business

of the Company, its officers and servants.

15) To enter into all such negotiations and contracts and rescind and vary all such

contracts and execute and do all such acts deeds and things in the name and on behalf of

the Company as they may consider expedient for or in relation to any of the matters

aforesaid or otherwise, for the purpose of the Company.

16) To pay gratuities, bonus, rewards, presents and gifts to employees or dependents of any

deceased employees to charitable institutions or purposes, to subscribe for provident funds

and other associations for the benefit of the employees.

126. Subject to the provisions of section 292 of the Act, and other provisions of the Act, the

Board may delegate from time to time and at any time to a committee formed out of the

directors all or any of the powers, authorities and discretions for the time being vested in

the Board and any such delegation may be made on such terms and subject to such

conditions as the Board may think fit.

127. The Board may appoint at, any time and form time to time by a power of attorney

under the Company, seal, any person to be the attorney of the Company for such purposes

and with such powers authorities and directions not exceeding those vested in or exercised

by the Board under these Articles, and for such period and subjected to such conditions as

the Board may from time to time think fit and any such appointment may, if the Board

thinks fit be made in favour of the members or any of the members of any firm or Company,

or the members, directors, nominees, or managers of any firm or Company or otherwise in

favour of any body or persons whether nominated directly or indirectly by the Board and

any such power of attorney may contain such provision for the protection or convenience of

persons dealing with such attorney as the Board may think fit.

128. The Board may authorized any such delegated or attorney as aforesaid to sub-delegate

all or any of the powers authorities and discretions for the time being vested in it.

129. 1) The board shall duly comply with the provisions of the Act and in particular, with

the provisions in regard to the registration of the particulars of the mortgages and charges

affecting the properties of the Company, or created by it and to keeping a Register of the

Director and to sending to the Registrar, and annual list of members and a summary of

particulars of shares and stock, and other copies of special resolutions and other resolution

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of the Board as the required to the filed with the Registrar under section 192 of the Act, and

a copy of the Register of Directors and notification of any change therein.

2) The Company shall comply with the requirements of Section 193 of the Act in respect of

keeping of the minutes of all proceedings of every General Meetings and of every meeting of

the Board or any Committee of the Board.

3) The Chairman of the meeting may exclude, at his absolute discretion such of the matters

as are or could reasonably be regarded as defamatory of any person irrelevant or immaterial

to the proceedings or determined to the interests of the Company.

130. The Board shall have power to appoint as the Secretary a person possessing the

prescribed qualification and fit in their opinion for the said office, for such period and on

such terms and conditions as regards remuneration and otherwise as they may determine.

The secretary shall have such powers and duties as may from time to time be delegated or

entrusted to him by the Directors.

131. Any branch or kind of business which by the Memorandum of Association of the

Company or these presents is expressly or by implication authorized to be undertaken by

the Company may be undertaken by the Board at such time or times as they shall think fit

and further may be suffered by them to be in abeyance whether such branch or kind of

business may have been actually commenced or not so long as the Board may deem it

expedient not to commence or proceed with such branch or kind of business.

132. Subject to the provisions of Section 292 the Board may delegate all or any of their

power to any Directors jointly or severally or to any one Director at their discretion.

BORROWING

133. 1) The Board of Director may from time to time but with such consent of the Company

in General Meeting as may be required under section 293 raise any moneys or sums of

money for the purpose of the Company provided that the moneys to be borrowed by the

Company apart from temporary loans obtained from the Company’s bankers in the ordinary

course of business shall not without the sanction of the Company at a General Meeting

exceed the aggregated of the paid up Capital of the Company and its free reserve that is to

say reserves not set apart for any specific purpose and in particular but subjects to the

provisions of section 292 of the Act, the Board may from time to time at their discretion

raise or borrow or secure the payment of any such sum of money for the purpose of the

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Company by the issue of the debentures perpetual or otherwise including debenture

convertible into shares of this or any other Company or perpetual annuities and in security

of any such money so borrowed raised or received mortgage pledge or charge the whole or

any part of the property assets or revenue or the Company present or further including its

uncalled capital by special assignment of otherwise or to transfer or convey the same

absolutely or in trust and to give the lenders powers of sale and other powers as may be

expedient and to purchase, redeem or pay off any such securities.

Provided, that every resolution passed by the Company in General Meeting in relation to the

exercise of the power to borrow as stated above shall specify the total amount up to which

moneys may be borrowed by the Board of Directors.

2) The Directors may by a resolution at a meeting of the Board delegate the above power to

borrow money otherwise than on debentures to a committee of Directors or the Managing

director if any, within the limits prescribed.

3) Subjects to the provision of the above sub-clause the directors may form time to time at

their discretion raise or borrow or secure the repayment of any sum or sums of money for

the purpose of the Company at such time and in such manner and upon such terms and

conditions in all respects as they think fit, and in particular by promissory notes or by

opening current accounts or by receiving deposits and advances with or without security or

by the issue of bonds perpetual or redeemable debentures or debentures stock of the

Company (both present and future) including its uncalled capital for the time being or by

mortgaging or charging or pledging any lands buildings goods or other property and

securities of the Company or by such other means as to them may seem expedient.

134. Such, debentures debenture-stock bonds or other securities may be made assignable

free from any equalities between the Company and the person to whom the same may be

issued.

135. a) Any such debentures, debenture-stock, bonds, or other securities may be issued at

a discount, premium or otherwise and with any special privileges as to redemption,

surrender, drawings allotment of shares of the Company, appointment of Directors or

otherwise, Debentures, debenture-stock, bonds, or other securities with a right of

conversion into or allotment of shares shall be issued only with a right of conversion into or

allotment of shares shall be issued only with the sanction of the Company in General

Meeting.

b) Any trust deed for the securing of any debentures – stock and or any mortgage deed and

or, other bond for securing payment of moneys borrowed by or due by the Company and or,

any contract or any agreement made by the Company with any person, firm, body

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corporate, Government, or authority who may render or agree to render any financial

assistance to the Company by way to loans advanced or by guaranteeing of any loan

borrowed or other obligations of the Company or by subscription to the share capital of the

Company or provide assistance in any other manner may provide for the appointment form

time to time by any such mortgage tender trustees, or holders of debentures or contracting

party as aforesaid of one or more persons to be a Director or Directors of the Company,

such trust deed mortgage deed, bond or contract may provide that the person appointing a

director as aforesaid may from time to time remove any director so appointed by him and

appoint any other person in his place and provide for filling up of any casual vacancy

created by such person vacating office as such director. Such power shall determine and

determinate on the discharge or repayment of the respective mortgage, loan or debt or

debenture or on the termination of such contract and any person so appointed as Director

under mortgage or bond or debenture trust deed or under such contract shall cease to hold

office as such Director on the discharge of the same. Such appointment and provision in

such document as aforesaid shall be valid and effective as in contained in these presents.

136. The Director or Directors so appointed by or under a mortgage deed, debenture trust

deed, or other bond or contract as aforesaid shall be called Nominated Directors. The words

Nominated Director shall mean the Director appointed as aforesaid and for the time being

holding such office. The Nominated Director shall not be required to hold any qualification

shares and shall not be liable to retire by rotation or to be removed from office by the

Company. Such mortgage deed or bond or trust deed or contract may contain such

ancillary provision as may be arranged between the Company and mortgage lender trustee

or contracting party as the case may be and all such provision shall have effect

notwithstanding any of the provisions herein contained but subject to the provisions of the

Act.

137. The Directors shall cause a proper register to be kept in accordance with the Act, of all

mortgages and charges specifically affecting the property of the Company and shall duly

Company with the requirements of the Act in regard to the registration of mortgages and

charges therein specific.

138. Where any uncalled capital of the Company is charged all persons taking any

subsequent charge thereon shall take the same subject to such prior charge and shall not

be titled by notice to the shareholders or otherwise to obtain priority over such prior charge.

139. If the Directors or any of them or any other persons, shall become personally liable for

the payment of any sum preliminary due from the Company the Board may execute or

cause to be executed any mortgage, charge or security over or affecting the whole or any

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part or the assets of the Company by way of indemnity to secure the Directors or the other

persons so becoming liable as a foresaid from any loss in respect of such liability.

140. 1) The Board of Directors shall exercise the following powers on behalf of the Company

and said powers shall exercised only by resolution passed at the meeting of the Board.

a) Power to make calls on shareholders in respect of moneys unpaid on their shares;

b) Power to issue debenture;

c) Power to borrow money otherwise than on debentures;

d) Power to invest the funds of the Company.

e) Power to make loans.

2) The Board of Directors may by a meeting delegate to any committee of the Directors or to

the managing Director the powers specified in sub clauses (c) (d) and (e) above

3) Every resolution delegating the power set out in sub clause (c) shall specify the total

amount upto which money may be borrowed by the said delegate.

4) Every resolution delegating the power referred to in sub-clause (d) above shall specify the

total amount upto which the funds may be invested and the nature of the investment which

may be made by the delegate.

5) Every resolution delegating the power referred to in sub-clause (e) above shall specify the

total amount upto which the loans may be made by the delegate the specify the total

amount upto which the loans may be made by the delegate the purposes for which the

loans may be made and the maximum amount of loans which may be made for each

purpose in individual cases.

MANAGING DIRECTORS / WHOLE TIME DIRECTORS

141. a) The Board may from time to time with such sanction of the Central Government as

may be required by law, appoint one or more of their body to the office of the Managing

Director or Managing Directors of whole time Director (s).

b) The Directors may from time to time resolve that there shall be either one or more

Managing Directors or Whole time Directors.

c) In the event of any vacancy arising in the office of Managing Director or Whole time

Director. If the Director resolve to increase the number of Managing Directors or whole time

Directors the vacancy shall be filled by the Board of Directors and the Managing Director or

whole time Director so appointed shall hold the office for such period as the Board of

Directors may fix.

d) If a Managing Director or whole time Director ceases to hold office as Director, he shall

ipso facto and immediately cease to be a Managing Director / Whole time Director.

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e) The Managing Director or whole time Director shall not be liable to retirement by

rotation, as long as he holds office as Managing Director or whole time Director.

142. Managing Director / Whole time Director shall, subject to the supervision control and

direction of the Board and subject to the provision of the Act, exercise such powers as are

exercisable under these present, by the Board of Directors as they may think fit and confer

such power for such time and to be exercised for such objects, purposes and upon such

terms and conditions and with such restrictions as they may think expedient and they may

confer such power either collaterally with or to the exclusion of any such substitution for all

or any of the powers of the powers of the Board of Directors in that behalf and may from

time to time revoke withdraw after or vary all or any of such powers. The Managing Director

/ Whole time Directors, may exercise all the powers entrusted to them by the Board of

Directors in accordance with the Board’s Direction.

143. Subject to the Provision of the Act and subject to such sanction of the Central

Government as may be required for the purpose the Managing Directors/ Whole time

Directors shall receive such remuneration (whether by way or salary, commission or

participation in profits or partly in one way and partly in another), as the Company in

General Meeting may, from time to time determine.

144. The Managing Director / Whole time Director shall be entitled shall be paid for all

actual expenses. If any, which they may incur for or in connection with the business of the

Company, they shall be entitled to appoint part time employees in connection with the

management of the affairs of the Company and shall be entitled to be paid by the Company

any remuneration that they may pay to such part-time employees.

145. 1) The Managing Director/ Whole Director shall have subject to the supervision,

control and discretion of the Board the management of the whole of the business of the

Company and of all affairs and shall exercise all powers and perform all duties in relation to

the management of the affairs and transaction of the Company except such powers and

such duties as are required by law or by these parents to be exercised or done by the

Company in General Meeting, or by the Board or Directors and also subject to such

conditions or restrictions imposed by the Companies. Act or by these presents.

2) Without prejudice to the generality of the foregoing and subject to the supervision and

control of the Board of Directors the business of the Company shall be carried on by the

Managing Director/ Whole time Director and shall have and exercise all the powers set out

in Article 124 above except those which are by law or by these presents or by any resolution

of the Board required to be done by the Company in General Meeting or by the Board.

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3) The Board may from time to time delegate to the Managing Director or whole time

Director such of their powers and duties and subject to such limitation and conditions as

they may deem fit. The board may from time to time revoke, withdraw, alter or vary all, or

any of the powers conferred on the Managing Director or whole time directors by the Board

or by these presents.

COMMON SEAL

146. The Board shall provide a common seal for the Company and they shall have power

from time to time to destroy the same and substitute a new seal in lieu thereof, and the

common seal shall be kept at the Registered Office of the Company and committed to the

custody of the Managing Director or the Secretary if there is one.

147. The seal shall not be affixed to any instrument except by authority of a resolution of

the Board or of the committee and unless the Board otherwise determines, every deed or

other instrument to which the seal is required to be affixed shall, unless the same is

executed by a duly constituted attorney for the Company be signed by one Director at least

in whose presence the seal shall have been affixed and countersigned by the Managing

Director Secretary or such other person as may from time to time be authorised by the

Managing Director or by the Board, provided nevertheless that any instrument bearing the

seal of the Company and issued for valuable consideration shall be binding on the

Company notwithstanding any irregularity touching the authority to issue the same.

148. a) The profits of the Company subject to any special rights relating thereto, created or

authorised to be created by these presents and subject to the provisions of these presents

as to be Reserve Fund, shall be divisible among the members in proportion to the amount

of capital paid-up on the shares held by them respectively on the last day of the year of

account in respect of account in respect of which such dividend is declared and in case of

interim dividends, on the close of the last day of the period in respect of which such interim

dividend is paid.

b) Where capital is paid upon any shares in advance of calls upon the footing that the same

shall carry interest, such capital shall not whilst carrying interest confer a right to

participate in profits.

149. The Company in General Meeting may declare dividends but no dividend shall exceed

the amount recommended by the Board.

150. The Board may from time to time pay to the members such interim dividends appear

to them to be justified by the profits of the Company.

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151. No dividend shall be payable except out of the profit of the year or any other

undistributed profits except as provided by section 205 of the Act.

152. 1) The Board may before recommending any dividends set aside out of the profits of

the Company such sums as it think proper as a reserve or reserves which shall at the

discretion of the Board be applicable for any purpose to which the profits of the Company

may be property applied including provisions for meeting contingencies or for equalizing

dividends and pending such application may at the like discretion either be employed in the

business of the Company or be invested in such investments (other than shares of the

Company) as the Board may, from time to time think fit.

2) The Board may also carry forward any profits when it may think prudent not to divide,

without setting them aside as Reserve.

153. The Board may deduct from any dividend payable to any members, all sums of money,

if any presently payable by him to the Company on, account of calls or otherwise in relation

to the shares of the Company.

154. Any General Meeting declaring a dividend or bonus may makes a call on the members

of such amount as the meeting fixed, but so that the call on each member shall not exceed

the dividend payable to him and so that the call be made payable at the same time as the

dividend and the dividend may if so arranged between the Company and the members be

set off against the call.

155. 1) Any dividend interest or other moneys payable in cash in respect of shares may be

paid by cheque or warrant sent through post direct to the registered address of the holder

or in the case of joint holders to the registered address of that one of the joint holder who is

first named on the register of members or to such person and to such address as the holder

or joint holders may in writing direct.

2) Every such cheque or warrant shall be made payable to the order or the person to whom

it is sent.

3) Every such cheque or warrant shall be posted within forty two days from the date of

declaration of dividend.

156. Any one of two or more joint holders of a share may give effectual receipt for any

dividends bonuses or other moneys payable in respect of such shares.

157. Notice of any dividend that may have been declared shall be given to the persons

entitled to share thereto in the manner mentioned in the Act.

158. No dividend shall bear interest against the Company.

159. (1) Where dividend has been declared by the Company but has been declared by the

Company but has not been paid or the warrant in respect thereof has not been posted

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within Thirty days from date of declaration to any shareholder entitled to the payment of

dividend the Company shall within 7 days of expiry of the said period of Thirty days

transfer the total amount of dividend which remains unpaid or in relation to which no

dividend warrant has been posted within the said period of Thirty days to a special account

to be opened by the Company in that behalf in any scheduled Bank to be called “Unpaid

Dividend Account”

2) Any money transferred to the unpaid dividend account of the Company in pursuance of

sub-clause (1) which remains unpaid or unclaimed for a period seven years from the date of

such transfer shall be transferred by the Company to the Fund established under sub-

section (1) of Section 205C of the Companies Act, 1956.

3) The Company shall, when making any transfer under sub-clause (2) to (the Fund

established under Section 205C) any unpaid or unclaimed dividend, furnish to such

authority or committee as the Central Government may appoint in this behalf a statement

in the prescribed form setting forth in respect of all sums included in such transfer the

nature of the sums, the names and last known address of the persons entitled to the sum,

the amount to which each person is entitled and the nature of his claim thereto and such

other particulars as may be prescribed.

4) The Company shall be entitled to a receipt from the authority or committee under sub-

section (4) of the Section 205 C of the Companies Act, 1956 for any money transferred by it

to the Fund and such a receipt shall be an effectual discharge of the Company in respect

thereof”.

160. Where an instrument of transfer has been made delivered to the Company for

Registration and transfer of such shares has not been registered by the Company it shall

a) Transfer the dividend in relation to such shares to the special account referred to in

Section 205A of the Act unless the Company is authorized by the registered holder of such

share(s) in writing to pay such dividend to the transferee specified in such instrument of

transfer and

b) Keep in abeyance in relation to such shares any offer either or right shares under Clause

(a0 of sub-section (1) of Section 81 of the Companies Act, 1956 and any issue if full paid up

bonus shares in pursuance to sub-section (3) of Section 205 of the Companies Act, 1956.

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CAPITALIZATION OF PROFITS

161. 1) The Company in General Meeting, may on recommendation of the Board, resolve.

a) That is desirable to capitalize any part of the amount for the time being standing to the

credit of the Company’s reserve accounts or to the credit of the profit and loss accounts or

otherwise available for distribution and

b) That such sum is accordingly set free for distribution in the manner specified in sub-

clause (2) amongst the members who would have been entitled thereto distributed by way of

dividend and in the same proportion.

2) The sum aforesaid shall not be paid in cash but shall be applied subject to the provisions

contained in sub-clause (3) either in or towards;

i) Paying up any amounts for the time being unpaid on shares held by such members

respectively.

ii) Paying up in full un issued shares of the Company to be allotted and distributed credited

as fully paid up to and amongst such members in the proportions aforesaid; or

iii) Party in the way specified in sub-clause (i) and party in that specified in sub-clause (ii).

3) A share premium account and a capital redemption reserve fund may for the purposes of

this regulation only be applied in the playing up of un-issued shares to be issued to

members of the Company as fully paid bonus shares.

4) The Board shall give effect to the resolution passed by the Company in pursuance of this

regulation.

162. 1) Whenever such a resolution as aforesaid shall have been passed the Board shall;

a) Make all appropriations and applications of the undivided profits resolved to be

capitalized thereby and all allotments and issue of fully paid shares if any, and

b) Generally do all acts and things required to give effect thereto.

2) The Board shall have full power.

a) to make such provision by the issue of fractional certificates or by payments in cash or

otherwise a it thinks fit in the case of shares or debentures becoming distributable in

fraction; and also

b) to authorize any person to enter on behalf of all the members entitled thereto into an

agreement with the Company providing for the allotment to them respectively credited as

fully paid up of any further shares or debentures to which they may be entitled upon such

capitalization or (as the case may require) for the payment of by the Company on their

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behalf by the application thereto of their respectively proportions of the profits resolved to

be capitalized of the amounts or any part of the amounts remaining unpaid on the shares.

3) Any agreement made under such authority shall be effective and binding on all such

members.

ACCOUNTS

163. 1) The Board of Directors shall cause true accounts to be kept of all sums of money

received and expended by the Company and the matters in respect of which such receipts

and expenditure takes place of all sale and purchases of goods by the Company and of the

assets, credits and liabilities of the Company.

2) If the Company shall have a Branch Office, whether in or outside proper books of

account relating to the transactions effect at that office shall be kept at that office and

proper summarized returns made up to date at intervals of not more than three months

shall be sent by the Branch Office to the Company at its Registered Office or to such other

place in India as the Board thinks fit, where the main books of the Company are kept.

3) All the aforesaid books shall give a fair and true view of the affairs of the Company or of

its branch office as the case may be with respect to the matters aforesaid and explain its

transaction.

164. The Books of accounts shall be kept at the Registered Office or at such other place in

India s the Directors think fit.

165. The Board of Directors shall from time to time determine whether and to what extent

and at what times and places and under what conditions or regulations the accounts and

books and documents of the Company or any of them shall be open to the inspection of the

members and no members (not being a Director) shall have any right of inspecting any

account books or documents of the Company except as conferred by statute or authorized

by the Directors or by a resolution of the Company in general meeting.

166. The Board of Directors shall lay before each Annual General Meeting a Profit and Loss

Account for the financial year of the Company and a Balance Sheet made up as at the and

of the financial year which shall be date which shall not precede the day of the meeting by

more than six months or such extended period as shall have been granted by the Registrar

under the provision of the Act.

167. 1) Subject to the provisions of Section 211 of the Act every Balance Sheet and Profit

and Loss Account of the Company shall be in the forms set out in parts I and II respectively

of Schedule VI of the Act, or as near thereto as circumstances admit.

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2) So long as the Company is a holding Company having subsidiary, the Company shall

conform to Section 212 and other applicable provisions of the Act.

168. 1) Every Balance Sheet and every Profit and Loss Account of the Company shall be

signed on behalf of the Board by secretary if any and by not less than two Directors of the

Company one of whom shall be the Managing Director where there is one.

Provided that when only one Director is for the time being in India the Balance Sheet and

Profit and Loss Account shall be signed by such director and in such a case there shall be

attached to the Balance Sheet and the Profit and Loss Account a statement signed by him

explaining the reason of non compliance with the provision of sub-clause (1).

2) The Balance Sheet and the Profit and Loss Account shall be approved by the board of

Directors before they are signed on behalf of the Board in accordance with the provisions of

this Article and before they are submitted to the Auditors for their report thereon.

169. The Profit and Loss Account shall be annexed to the Balance Sheet and the Auditors

report shall be attached thereto.

170. 1) Every Balance Sheet laid before the Company in General Meeting shall have

attached to it a report by the Board of Directors with respect to the state of the Companies

affairs the amount if any which it proposes to carry to any Reserves in such Balance Sheet

and the amount if any which it recommends to be paid by way of dividend material changes

and commitments if any affecting the financial position of the Company which have

occurred between the end of the financial year of the Company to which the Balance Sheet

relates and the date to the Report.

2) The Report shall so far as it is material for the appreciation of the state of the Companies

affairs by its members and will not in the Board opinion be harmful to the business of the

Company or of any of its subsidiaries deal with any changes which have occurred during

the financial year in the nature of the Company’s business or in the Company’s

subsidiaries or in the nature of the nature of the business carried on by them and generally

in the classes of business in which the Company has an interest.

3) The Board’s report shall also include a statement showing the name of every employee of

the Company who if employed throughout the financial year was in receipt of remuneration

for that year which is in the aggregate was not less than thirty six thousand rupees or if

employed for part of the financial year was in receipt of remuneration for any part of the

year at a rate which in the aggregate was not less than three thousand rupees per month.

The statement shall also indicate whether any such employee is a relative of any directors

or managers of the Company and if so the names of such Directors and other particulars

prescribed.

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4) The Board shall also give the fullest information and explanation in its report in cases

falling under the provision to Section 222(i) in an addendum to that report on every

reservation qualification or adverse remark contained in the Auditors Report.

5) The Boards Report and addendum (if any) thereto shall be signed by its Chairman if he is

authorised in that behalf by the Board and where he is not so authorised shall be signed by

such number of Directors as are required to sign the Balance Sheet and the Profit and Loss

Account of the Company by virtue of sub-clause (1) and (2) of Article 168.

6) The Board shall have the right to charge any person being a Director with the duty of

seeing that the provisions of sub-clause (1) to (3) of this article are complied with.

171. The Company shall comply with the requirements of section 219 of the Act.

ANNUAL RETURNS

172. The Company shall make the requisite Annual Returns in accordance with Section

159 and 162 of the Act.

AUDIT

173. Every Balance Sheet and Profit and Loss Account shall be audited by one or more

Auditors to be appointed as hereinafter set out.

174.1)The First auditor of the Company shall be appointed by the Board Of Directors within

one month of the date of registration of the Company and the auditor or auditors so

appointed shall hold office until the conclusion of the first annual general meeting.

Provided that:

a) The Company may at a General Meeting remove any such Auditor or all or any of

such Auditors and appoint in his or their places any other person or persons who

have been nominated for appointment by any member of the Company and of whose

nomination special notice has been given to the members of the Company not less

than seven days before the date of the meeting; and

b) If the Board fails to exercise its powers under this clause the Company in General

Meeting may appoint the first auditor or auditors.

2) The Company at the Annual General Meeting in each year shall appoint an Auditor or

Auditors to hold office from the conclusion of that meeting until the conclusion of the next

Annual General Meeting and every auditor shall be intimated of his appointment within

seven days. Provided that before the appointment or reappointment of Auditor or Auditors

is made by the Company at any General meeting proposed to be so appointed to the effect

that the appointment or appointments if made will be in accordance with the limits

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specified in sub section (i)(b) of section 224. Every auditor so appointed shall within 30

days of the receipt from the Company of the intimation of his appointment shall inform the

Registrar of Companies in writing that he has accepted or refused to accept the

appointment.

3) Subject to the provision of section 224(i) and section 224-A at any Annual General

Meeting retiring auditors by whatsoever authority appointed shall be reappointed unless

a) He is not qualified for re- appointment;

b) He has given the Company notice in writing of his unwillingness to be reappointed.

c)A resolution has been passed given of an intended resolution to appoint some person in

the place of a retiring Auditor and by reason of the death incapacity or disqualification of

that person or of all those persons, as the case may be the resolution cannot be proceeded

with.

4) Where at an Annual General Meeting no Auditors are appointed the Central Government

may appoint a persona to fill the Vacancy.

5) The Company shall within seven days of the Central Government Power under sub-

clause (4) becoming exercisable give notice of that fact to the Government.

6) The directors may fill any casual vacancy in the office of an Auditor, but while any such

vacancy continues the remaining Auditor or Auditors (if any) may act where such a vacancy

is caused by the resignation of an auditor the vacancy shall only be filled by the Company

in General Meeting.

7)A person other than a retiring Auditor shall not be capable of being appointed at an

Annual General Meeting unless special notice of a resolution of appointment of that person

to the office of Auditor has been given by a member to the Company not less than fourteen

days before the meeting in accordance with section 190 and the Company shall send a copy

of any such notice to the retiring Auditor and shall give notice thereof to the members in

accordance with the provision of section 190 and all the other provision of section 225 shall

apply in the matter. The provisions of this sub – clause shall also apply to a resolution that

a retiring auditor shall not be re-appointed.

8) The persons qualified for appointment as auditors shall be only those referred to in

section 226 of the Act.

9) None of the persons mentioned in section 226 of the Act as are not disqualified to be

appointed as Auditors shall be appointed as Auditors of the Company.

10) The Company or its Board of Directors shall not appoint or reappoint any person or firm

as its Auditors if such person or firm as at the date of such appointment or holds

appointment as Auditor of the specified number of companies or more than the specified

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number of companies or more than the specified number of companies provided that in the

case of the firm of auditors specified number of companies shall be construed as specified

number of companies per partner of the firm provided further that where any partner of the

firm is also a partner of any other firm of auditors the number of companies which may be

taken in to account y all the firms together in relation to such partner shall not exceed the

specified number in the aggregate. Provided also that where any partner of any other firm of

auditors is holding office in his individual capacity as auditor of one or more companies the

number of companies which may be taken into account in his case shall not exceed the

specified number in the aggregate. Specified number means in the case of a person or firm

holding appointment as auditor of a number of companies each of which has a paid up

share capital of less than Rs. 25 lakhs, 20 companies and the any other case 20 companies

out of which not more than ten shall be companies each of which has a paid up share

capital of Rs. 25 lakhs or more.

175. The Company shall comply with the provision of section 226 of the Act in relation to

the audit of the account s of Branch Offices of the Company.

176. The remuneration of the Auditors shall be fixed by the Company in General meeting

except the remuneration of any auditor appointed to fill any casual vacancy may be fixed by

the board.

177.1) Every Auditor of the Company shall have a right of access at all times to he books of

account and vouchers of the Company and shall be entitles to require from the Directors

and Officers of the Company such information and explanation as may be necessary for the

performance of his duties as Auditor.

2) All notices of and other communications relating to any general meeting of the Company

which any member of the Company is entitled to have sent to him shall also be forwarded

to the auditor and the auditor shall be entitled to attend any General meeting and to be

heard at any General meeting which he attends on any part of the business which concerns

him as a Auditor.

3)The auditor shall make a report to the members of the Company on the accounts

examined by him and every Balance Sheet and Profit and Loss account and on every other

document declared by this act to be part of or annexed to the Balance Sheet or Profit and

Loss account which are laid before the Company in General Meeting during his tenure of

office and the Report shall state whether in his opinion and to the best of his information

and according to the explanations given to him the said accounts give the information

required by the Act in the manner so required and given a true and fair view.

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i) In the case of the Balance Sheet of the state of the Company’s affairs as at the end of its

Financial Year; and

II) In the case of the Profit and Loss account of the profit or loss for its financial year.

4) The auditors report shall also state.

a) Whether he has obtained all the information and explanations which to the best of his

knowledge and belief were necessary for the purpose of this audit.

b)whether in his opinion proper books of account as required by Law have been kept by the

Company so far as appears from his examination of those books and proper returns

adequate for the purpose of his audit have been received fro branched not visited by him;

c)whether the report on the account of any Branch Office audited under section 228 by a

person other than the Company’s auditor has been forward to his and required by clause (c

) of sub section (3) of section 228 of the act and how he has dealt with the same in

preparing Auditors Report; and

d) Whether the Company’s Balance Sheet and Profit and Loss Account dealt with by the

Report are in agreement with the books of accounts and returns.

5) Where any of the matters referred to in items (i) and (ii) of sub-clause (3) above are in

items (a), (b), (c) and (d) of sub-clause (4) above is answered in the negative or with a

qualification the Auditor’s report shall state the reason for the answer.

6) The accounts of the Company shall not be deemed as not having been properly drawn up

on the ground merely that the Company has not disclosed certain matters if-

a) Those matters are such as the Company is not required to disclose by virtue of any

provisions contained in the Companies Act and

b) Those provision are specified in the Balance Sheet and Profit and Loss Account of the

Company.

7) The auditors report shall be read before the Company in General Meeting and shall be

open to inspection by any member of the Company.

178. Every account of the Company when audited and approved by a General meeting shall

be conclusive except as regard any error discovered therein. Within three months next after

the approval thereof. Whenever any such error is discovered within that period the account

shall forth with be corrected and shall henceforth be conclusive.

179. A document may be served on the Company or an Officer thereof by sending it to the

Company or officer at the Registered Office of the Company by post under a certificate of

posting or by registered post, or by leaving it at its Registered Office.

180. 1) A document ( which expression for this purpose shall be deemed to include and

shall include any summons, notice, requisition, process, order, judgement or nay other

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documents in relation to or in the winding up of the Company may be served or sent by the

Company on or to any member, either personally or by sending it by post to him to his

Registered Office, or ( if he has no Registered Office in India ) to the address if any within

India supplied by him to the Company for the giving of notices to him

2) All notices shall, with respect to any registered shares to which persons are entitled

jointly, be given to whichever of such persons is named first in the Register and notice so

given shall be sufficient notice to all the holders of such share.

3) Where a document is sent by post

a) Service thereof shall be deemed to be effected by properly addressing, prepaying and

posting a letter containing the notice provided that where a member has intimated to the

Company in advance that documents should be sent to him under a certificate of posting or

by registered post without acknowledgement due and has deposited with the Company a

sum sufficient to defray the expenses of doing so, service of the documents shall not be

deemed to be affected unless it is sent in the manner intimated by the member; and.

b) Unless the contrary is proved, such services shall be deemed to have been effected;

I) In case of a notice of a meeting, at the expiry of forty – eight hours after the letter

containing the notice is posted, and

II) In any other case, at the time at which the letter would be delivered in the ordinary

course of post.

181. Each registered holder of shares shall from time to time notify in writing to the

Company some place in India to be registered as his address and such registered place of

address shall for all purposes be deemed his place of residence.

182. If a member has not registered an address in India, and has not supplied to the

Company an address within India, for the giving of notices to him, a document advertised in

a newspaper circulating in the neighborhood of Registered Office of the Company shall be

deemed to be duly served on him on the day on which the advertisement appears.

183. A document may be, served by the Company on the persons entitled to a share in

consequence of the death or insolvency of a member by sending it through post in a

prepaid letter addressed to them by name or by the title or representative of the deceased or

assignees of the insolvent or by any like description at the address (if any) in India supplied

for the purpose by the persons claiming to be so entitled, or (until such an address has

been so supplied) by serving the documents in any manner in which the same might have

been served if the death or insolvency had not occurred.

184. Subject to the provisions of the Act and these Articles, Notices of General meeting shall

be given

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i) To the members of the Company as provided by the Articles in any manner authorized by

Articles 180 and 182 as the case may be or as authorized by the Act;

ii) To the persons entitled to a share in consequence of the death or insolvency of a member

as provided by Articles 183 or as authorized by the Act;

iii) To the Auditor or Auditors for the time being of the Company in the manner authorized

by Articles 180 as in the case of any member or members of the Company.

185. Subject to the provisions of the act any documents required to be served or sent by the

Company on or the members, or any of them and not expressly provided for by these

presents, shall be deemed to be duly served or sent if advertised in a newspaper circulating

in the District in which the Registered Office is situate.

186. Every person who by the operation of law, transfer, or other means whatsoever, shall

become entitled to any shares shall be bound by every document in respect of such share

which previously to his name and address being entered on the Register shall have been

duly served or sent to the person from who he derived his title to such share.

187. Any notice to be given by the Company shall be signed by the Managing Director or by

such Director or Officer as Director may appoint. The signature to any notice to be given by

the Company may be written or printed or lithographed.

Authentication of Documents

188. Save as otherwise expressly provided in the Act or these Articles, a document of

proceeding requiring authentication by the Company may be signed by a Director, The

Managing Director, the Manager, the Secretary or an authorized Officer of the Company

and need not be under its seal.

WINDING UP

189. Subject to the provisions of the Act as to preferential payment the assets of the

Company shall on its winding up, be applied in satisfaction of its liabilities pari passu and,

subject to such application shall, be distributed among the members according to their

rights and interests in the Company.

190. If the Company shall be wound up whether voluntarily or otherwise, the liquidators

may with the sanction of a special resolution divide among the contributories in specie or

kind any part of the assets of the Company, and may with the like sanction vest any part of

the assets of the Company in trustees upon such trusts for the benefits of the

contributories or any of them, as the liquidators with the like sanction shall think fit. In

case any shares to be divided as aforesaid involve a liability to calls or otherwise any

persons entitled under such division to any of the said shares may within ten days after the

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passing of the special resolution by notice in writing direct the liquidators to sell his

proportion and pay him the net proceeds and the liquidators shall, if practicable, act

accordingly.

INDEMNITY AND RESPONSIBILITY

191.a) Subject the provisions of section 201of the Act, the Managing Director and every

Director, Manager, Secretary and other Office or employee of the Company shall be

indemnified by the Company against any liability and it shall be the duty of Directors, out

of the funds of the Company to pay all costs and losses and expenses( including travelling

expenses) which any such Director, Officer or Employee may incur or become liable to by

reason of any contract entered into or act or deed done by him as Such Managing Director,

Director, Officer or Employee or in any way in the discharge of his duties.

b) Subject as aforesaid the Managing Director and every Director, Manager, Secretary or

other office or employee of the Company shall be indemnified against any liability incurred

by them of him in defending any proceedings whether civil or criminal in which judgement

is given in their or his favour or in which he is acquitted or discharged or in connection

with any application under section 633 of the act in which relief is given to him by the

court.

192.i) Subject to the provision of section 201 of the Act no Director or other Officer of the

Company shall be liable for the acts, receipts, neglects or defaults of any other director or

officer, or for joining in any receipt or other act for conformity or for any loss or expense

happening to the Company through insufficiency or deficiency of little to any property

acquired by order of the Directors for or on behalf of the Company, or for the insufficiency

or deficiency of any security in or upon which any of the moneys of the Company shall be

invested or for any loss or damage arising from the bankruptcy. Insolvency or tortuous act

of any person, Company or corporation, with whom any moneys, securities or effects shall

be entrusted or deposited or for any loss occasioned by any error of judgement or oversight

on his part, or for any other loss or damage of misfortune whatever which shall happen in

the execution of the duties of his office or in relation thereto, unless the same happen

through his own willful act or default.

2) without prejudice to the generally of foregoing it is hereby expressly declared that any

filling fee or any documents required to be filled with the Registrar of Companies in respect

of any act done or required to be done by any Director or other office by reason of his

holding the said office shall be paid and borne by the Company.

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SECRECY CLAUSE

193. No member shall be entitled to inspect the Company’s works without the permission of

the Director or managing Director or to acquire discovery of or any information respecting

any detail of the Company’s trading or any matter which is or may be in the nature of a

trade secret, mystery of trade or secret process which may relate to the conduct of the

business of the Company and which in the opinion of the Directors it will be expedient in

the interest of the members of the Company to communicate to the public.

194. Every Director, Managing Director, manager, Secretary, Auditor, Trustee, Members of

a Committee, Officer, Servant, agent, accountant or other person employed in the business

of the Company shall if so required by the director before entering upon his duties or at any

time during his term of office sign a declaration pledging himself to observe strict secrecy

respecting all transaction of the Company and the state of accounts and in matters relating

thereto, and shall by such declaration pledge himself not to reveal any of the matters which

may come to his knowledge in the discharge of his duties except when required so to do by

the Directors or any meeting or by a court of Law or by the person to whom such matters

relate and except so far may be necessary in order to comply with any provision of these

Articles of Law.

His duties except when required so to do by the Directors or any meeting or by a court of

law or by the person to whom such matters relate and except so far may be necessary in

order to comply with any provision of these Articles of Law.

XVI. DOCUMENTS FOR INSPECTION

Copies of following documents are available at our registered office of D.No.25-2-1, Opp.

Mastan Darga, G.T.Road, Guntur – 522 004. for inspection on any working day (i.e. Monday

to Friday and not being a bank holiday in Mumbai) from 2.00 p.m. to 5.00 p.m.

1) Memorandum and Articles of Association of the Company along with Certificate of

Incorporation and Certificate of Commencement of Business issued by Registrar of

Companies, Andhra Pradesh, Hyderabad.

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2) The Order of Hon’ble High Court of Andhra Pradesh dated February 18th, 2010

sanctioning the Scheme of Arrangement for demerger of Real Estate and

Infrastructure Business Undertaking of Virat Crane Industries Ltd in to the

Company.

3) Letters issued by BSE dated February 13, 2008 according their no objection to the

Scheme

4) Return of Allotment filed by the Company for allotment of Shares pursuant to the

Scheme

5) Copy of Tripartite Agreement with National Securities Depository Ltd and Central

Depository Services (India) Ltd

6) Memorandum of Understanding with the Registrar and Share Transfer Agent

7) Annual Report containing the Audited Accounts of the Company as on 31st March

2009 and 31.03.2010.

8) Resolution for appointment of Managing Director

XVII. DECLARATION

No statement made in this Information Memorandum contravenes any of the provisions of

the Companies Act, 1956 and the rules made thereunder. All the legal requirements

connected with the said issue as also the guidelines, instructions etc. issued by SEBI,

Government and any other competent authority in this behalf have been duly complied

with.

All the information contained in this document is true and correct.

On behalf of the Board of Directors of

CRANE INFRASTRUCTURE LIMITED

(G.V.S.L. Kantha Rao)

Managing Director

Place:

Date: June 10th 2010