INFORMATION MEMORANDUM

Dated: September 13, 2012

HARIA APPARELS LIMITED

(Incorporated as Haria Apparels Limited on February 01, 2011, under the Companies Act, 1956, with the Registrar of Companies, Mumbai. The registration number assigned to our Company is 212887.) Registered Office & Corporate Office: Vilco Centre, 8, Subhash Road, Vile Parle (East), Mumbai, Maharashtra – 400 057 Tel: +91-22-40973000; Fax: +91-22-40973030 Contact Person: Ashwin Shah, Company Secretary and Compliance Officer Website: www.hariagroup.com Email: accounts@hariagroup.com Registered with Registrar of Companies: RoC-Mumbai, Everest, 100, Marine Drive, Mumbai, Maharashtra – 400 002, India.

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF THE COMPANY ONLY INFORMATION MEMORANDUM FOR LISTING OF 1,52,89,800 FULLY PAID UP EQUITY SHARES OF ` 10

EACHNO EQUITY SHARES ARE PROPOSED TO BE SOLD OR OFFERED PURSUANT TO THIS INFORMATION

MEMORANDUM

GENERAL RISKS Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds 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. For taking an investment decision, investors must rely on their own examination of the issuer, including the risks involved. The securities have not been recommended or approved by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document." Specific attention of investors is invited to the statement of “Risk factors” beginning on page 05 of this Information Memorandum under the section “General Risks”.

ABSOLUTE RESPONSIBILITY OF HARIA APPARELS LIMITED Haria Apparels Limited, having made all reasonable inquiries, accepts responsibility for and confirms that this Information Memorandum contains all information with regard to Haria Apparels Limited, which is material, that the information contained in the Information Memorandum is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING ARRANGEMENTS The Equity Shares of our Company are proposed to be listed on The Bombay Stock Exchange Limited (BSE). The Company has submitted this Information Memorandum to BSE and the same is available on the Company’s website www.hariagroup.com. The Information Memorandum would also be made available on the website of BSE, www.bseindia.com.

REGISTRAR AND TRANSFER AGENT LINK INTIME INDIA PVT. LTD. SEBI Registration No. -INR000004058 C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup (West), Mumbai - 400 078 Email – chetana.vaity@linkintime.co.in Tel No. – 2596 3838 Ext.2282 Fax No. – 2594 6969 Contact Person -Ms. Chetana Vaity

SECTION CONTENTS PAGE NO.

I GENERAL 1 DEFINITION, ABBREVIATIONS & INDUSTRY RELATED TERMS 1

CERTAIN CONVENTIONS; PRESENTATION OF FINANCIAL AND MARKET DATA 3

FORWARD LOOKING STATEMENTS 4

II RISK FACTORS 5

III INTRODUCTION 11 SUMMARY OF INDUSTRY OVERVIEW 11

SUMARRY OF BUSINESS OVERVIEW 13 COMPOSITE SCHEME OF ARRANGEMENT 14 SUMMARY OF FINANCIAL INFORMATION 43 GENERAL INFORMATION 47 CAPITAL STRUCTURE 49 STATEMENT OF TAX BENEFITS 58

IV ABOUT THE COMPANY 66 INDUSTRY OVERVIEW 66

BUSINESS OVERVIEW 70

HISTORY AND CERTAIN CORPORATE MATTERS 71 KEY INDUSTRY REGULATIONS 73

OUR MANAGEMENT 77

OUR PROMOTERS AND PROMOTERS GROUP 84

CURRENCY OF PRESENTATION 87

DIVIDEND POLICY 88

V FINANCIAL INFORMATION 89

AUDITOR’S REPORT 89

FINANCIAL INFORMATION OF GROUP COMPANIES 101

MANAGEMENT DISCUSSION AND ANALYSIS 111 VI LEGAL AND OTHER INFORMATION 112

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS 112

GOVERNMENT APPROVALS OR LICENSING ARRANGEMENTS 118

VII OTHER REGULATORY AND STATUTORY DISCLOSURES 119

VIII MAIN PROVISIONS OF ARTICLES OF ASSOCIATION 123

IX OTHER INFORMATION 167

MATERIAL DOCUMENTS FOR INSPECTION 167

DECLARATION 168  

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SECTION – I – GENERAL

DEFINITIONS, ABBREVIATIONS & INDUSTRY RELATED TERMS ABBREVIATIONS & TECHNICAL TERMS In this Information Memorandum, the terms “we”, “us”, “our”, “the Company”, “our Company” or “HAL”, unless the context otherwise implies, refer to Haria Apparels Limited. All references to “Rs.” or “Re.” or “INR” or “`” refer to Rupees, the lawful currency of India, “USD” or “US$” refer to the United States Dollar, the lawful currency of the United States of America, references to the singular also refers to the plural and one gender also refers to any other gender, wherever applicable, and the words “Lakh” or “Lac” means “100 thousand” and the word “million” or “mn” means “10 lacs” and the word “crore” means “10 million” or “100 lacs” and the word “billion” means “1,000 million” or “100 crores”. Any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. CONVENTIONAL / GENERAL TERMS Term Description

‘Haria Apparels’ or ‘HAL’ or ‘The Company’ or ‘Our Company’ or ‘Issuer Company’ or ‘we’ or ‘us’ or ‘our’ or’ Resultant Company’

Unless the context otherwise requires, refers to, Haria Apparels Limited, a Public Company incorporated under the provisions of the Companies Act, 1956 and having its registered office at 8, Subhash Road, Vile Parle (East), Mumbai, Maharashtra – 400 057.

Promoter(s) Shall mean Mr. Kantilal Haria, Mr. Manish Haria, Ms. Sheetal Haria, Mr. Kantilal Maru, Mr. Milan Mehta, Mr. Rajesh Parmar

COMPANY/INDUSTRY RELATED TERMS Term DescriptionAct /The Companies Act The Companies Act, 1956 and amendments thereto. AGM Annual General Meeting

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

Auditors Sunderji Gosar & Co., Chartered Accountants Board /Board of Directors Board /Board of Directors of the Company Capital or Share Capital Share Capital of the Company BSE Bombay Stock Exchange Demerged Company Haria Exports Limited Depositories Act The Depositories Act, 1996 and amendments thereto DP Depository Participant EGM Extraordinary General Meeting

Equity Share(s) or Share(s) Means the Equity Share of the Company having a face value of ` 10/- unless otherwise stated

Equity Shareholder Means a holder of Equity Shares of Haria Apparels Limited

Financial Year/Fiscal/FY Period of twelve months ended March 31 of that particular year, unless otherwise stated

GOI Government of India

Scheme or Scheme of Arrangement or Scheme of Arrangement of Demerger or Demerger Scheme or Scheme of Demerger

Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 amongst Best Plastex Private Limited (Amalgamating Company) AND Haria Exports Limited (Amalgamated Company / Demerged Company) AND Haria Apparels Limited (Resulting Company) and their respective shareholders and creditors as sanctioned by the High Court of Judicature at Mumbai.

SEBI Securities and Exchange Board of India

Takeover Code The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as amended to date

Regulations/ ICDR Regulations SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009

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ABBREVIATIONS Term DescriptionAGM Annual General Meeting A.Y. Assessment Year A/c Account AS Accounting Standards as issued by ICAI BSE Bombay Stock Exchange Bn / bn Billion CAGR Compounded Annual Growth Rate CCPS Convertible Cumulative Preference Shares CDSL Central Depository Services (India) Limited CLB Company Law Board CST Central Sales Tax DP Depository Participant EGM Extraordinary General Meeting ECB External Commercial Borrowing EPS Earnings per share ESI Employee State Insurance

FEMA Foreign Exchange Management Act, 1999 as amended from time to time and the Rules and Regulations thereunder

FERA Foreign Exchange Regulations Act, 1973 FII Foreign Institutional Investor FIPB Foreign Investment Promotion Board FY Financial Year FCNR Account Foreign Currency Non Resident Account FDI Foreign Direct Investment FI Financial Institutions GOI Government of India GDP Gross Domestic Product HUF Hindu Undivided Family ICAI Institute of Chartered Accountants of India IFSC Indian Financial System Code IPR Intellectual Property Rights Lac/Lakh One hundred thousand MCA Ministry of Corporate Affairs MOU Memorandum of Understanding Mn / mn Million NA Not Applicable NAV/BV Net Asset Value/Book Value

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CERTAIN CONVENTIONS; PRESENTATION OF FINANCIAL AND MARKET DATA In this Information Memorandum, the terms “Haria Apparels Limited”, “our Company”, “we”, “us” and “our” unless the context otherwise indicate or implies, refers to Haria Apparels Limited, a public company incorporated under the Companies Act,1956. Unless stated otherwise, the financial data in this Information Memorandum is derived from our financial statements prepared in accordance with Indian GAAP and audited by our statutory auditors. Our fiscal year commences on 1st April and ends on 31st March. Hence all references to a particular fiscal year are to the twelve month period ended March 31 of that year. All references to “India” contained in this Information Memorandum are to the Republic of India. All references to “Rupees” or “Rs.” or “`” are to Indian Rupees, the official currency of the Republic of India. In this Information Memorandum, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off. For definitions, please see the section titled “Definitions & Abbreviations “in 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 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.

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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”, “may”, “shall” “project”, “should”, “will pursue” and similar expressions or variations of such expressions, that are “forward looking statements”. Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with the Company’s expectations with respect to, but not limited to, regulatory changes pertaining to the industries in India in which the Company has its businesses or proposes to have its business, and the Company’s ability to respond to them, its ability to successfully implement its strategy, its growth and expansion, its exposure to market risks, competitive landscape, general economic and political conditions in India which have an impact on its business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated fluctuations 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 the Company’s industries. Important factors that could cause actual results to differ materially from the Company’s expectations include, among others:

• General economic and business conditions; • Company’s ability to successfully implement its strategy, its growth and expansion plans, and

technology initiatives; • Increase in labour cost, raw materials price, cost of equipments and insurance premia; • Ability to retain management team and skilled personnel; • Changes in the value of the Indian Rupee and other currencies; • Amount that the Company is able to realize from the clients; • Potential mergers, acquisitions or restructurings; • Changes in fiscal, economic or political conditions in India; • Social or civil unrest or hostilities with neighboring countries or acts of international terrorism; • Changes in the foreign exchange control regulations, interest rates and tax laws in India.

For further discussion of factors that could cause the Company’s actual results to differ, please refer to the section titled “Risk Factors”, “Business Overview” and “Management’s Discussion and Analysis” beginning on pages 5, 70 and 111 respectively, of this Information Memorandum. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither our Company, its Directors and Officers nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.

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SECTION – II

RISK FACTORS

RISK FACTORS ENVISAGED BY MANAGEMENT An investment in securities involves a high degree of risk. You should carefully consider all of the information in this Information Memorandum, including the risks and uncertainties described below. If any of the following risks actually occur, the business, financial condition and results of operations could suffer, the trading price of the securities could decline, and all or part of the investment may be lost. Materiality The Risk factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality: 1. Some events may not be material individually but may be found material collectively. 2. Some events may have material impact qualitatively instead of quantitatively. 3. Some events may not be material at present but may be having material impacts in future. Internal Risk Factors and Risk Relating to Our Business 1) If we are unable to commence operations as expected, our results of operations will be

adversely affected. As per the Scheme of Amalgamation, Haria Exports Limited’s – Garment Division post Demerger will be

merged into Haria Apparels Limited. If on post-amalgamation, there is any difficulty in starting our operations into the garment business which could then affect our business, results of operation and financial results adversely.

2) Any failure to renew or maintain our statutory and regulatory permits and approvals can have

a material adverse effect on our business and operations. Our Company is required to comply with the provisions of various legislations. If we do not receive, renew or maintain our statutory and regulatory permits and approvals required to operate our business, it may have a material adverse effect on our business and operations. Failure or delay in obtaining these approvals may result in the appropriate authorities initiating action against us, restraining our operations, imposition of fines/ penalties or initiating legal proceedings. Consequently failure or delay to obtain the above approvals could have a material adverse effect on our business, financial condition and profitability.

3) We have incurred losses in all period of Financial Disclosure.

For information, kindly refer to the section titled ‘Auditor’s Report’ on page 89 of this Information

Memorandum.

4) Some of our Directors are also on the Board of other companies, which could lead to potential conflict of interest.

For information, kindly refer to the section ‘Our Management’ on page 77 of this Information

Memorandum.

5) Our senior management team and other key team members in our business units are critical to our continued success and the results of our operations may be adversely affected by the departure of our senior management and key personnel.

Our business operations require a team of professionals to oversee the operations and growth of our

business. Our performance and success depends largely on our management team and skilled personnel and our ability to attract and retain such persons. In order to sustain our business, we need to attract and retain such Key Management Personnel. We face a continuing challenge to recruit and retain a sufficient number of suitably skilled personnel, particularly as we continue to grow. There is significant competition

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for management and other skilled personnel in our industry, and it may be difficult to attract and retain the personnel we need in the future. The loss of services of one or more members of our key management team could adversely affect our business and results from operations.

6) Our business depends on our ability to maintain consistency in customer service and other

operations. Competition for personnel, particularly for employees with wholesale expertise, is intense. Additionally,

our ability to maintain consistency in the quality of customer service is critical to our success. This will depend on our ability to hire the right personnel and also train the new personnel in the implementation of our processes effectively. In the event we lose employees at a high rate or we cannot recruit fresh talent, it may adversely affect our operations.

7) Some of our Group Companies have incurred Losses in the past

For information, kindly refer to the section ‘Financial Information of Group Companies’ on page 101 of this

Information Memorandum.

8) We have negative cash flows from operations for all the period of financial disclosure. For information, kindly refer to the section ‘Auditor’s Report’ on page 89 of this Information Memorandum.

9) Our growth requires additional capital, which may not be available on terms acceptable to us. The garment industry is capital intensive and requires significant expenditures for stocks of products,

sourcing of products and raw materials. We anticipate that we will need to obtain additional financing as we expand our operations. We may not be successful in obtaining additional funds in a timely manner, on favourable terms or at all. Moreover, certain of our loan documentations contain provisions that limit our ability to incur future debt. In addition, the availability of borrowed funds for our business may be greatly reduced, and the lenders may require us to invest increased amounts of equity in a project in connection with both new loans and the extension of facilities under existing loans. If we do not have access to additional capital, we may be required to delay, scale back or abandon some or all of our plans or growth strategies or reduce capital expenditures and the size of our operations.

10) The Company is subject to the risk of price volatility and availability of the raw materials

required for their production. Unexpected volatility and availability related problems pertaining could adversely affect our Results of Operations and Financial Condition.

Post Amalgamation, the company will be in the manufacturing business, our success largely depends on

the timely supply of raw materials at competitive prices. Our principal raw materials, namely Fabrics for our Ready-made garments are subject to domestic and international supply side factors which are beyond the Company’s control and any changes in prices and availability will significantly impact our product costs and manufacturing activities.

Secondly, we procure our raw materials from local traders or suppliers who in turn depend on the

manufacturers for supply of raw materials to them. Hence, any delay in supply or non-deliveries to them by the manufacturing companies or by way of imports will impair our production operations also.

The Company has been in the business for considerable period of time and has strong relationships with

the raw material suppliers and service providers. However, no assurance can be given that future unfavourable movements in the price of the various raw materials or a reduction in demand for finished products will not have a material adverse effect upon the financial condition and results of operations.

11) Our readymade garments exports business is subject to foreign currency fluctuations. We do

not have any specific currency risk hedging policies or strategies in place currently and hence we may be vulnerable to sharp moves in the foreign exchange markets, which may negatively affect our financial condition and results of operations.

Our earnings post amalgamation from our readymade garment business is denominated in foreign

currency since our clients are primarily based in the US and the UK and thereby this exposes us to the

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risks of foreign currency fluctuations. The exchange rate between the Indian Rupee and the US Dollar, UK Pound Sterling and the Euro has fluctuated substantially in the past and may continue to fluctuate in the future. Also, since we do not have any specific currency risk hedging policies or strategies in place currently we are even more vulnerable to such currency risk. Changes in foreign exchange rates may therefore have a material adverse effect on our businesses, financial condition and results of operations.

12) We do not own certain key properties, such as our registered office.

Our registered office located at 8, Subhash Road, Vile Parle (E), Mumbai – 400057 belongs to M/s. Vilco

Pharma Pvt. Ltd., which is our promoter company. There is a lease agreement of 60 months starting from April 01, 2009 between the company and M/s. Vilco Pharma Pvt. Ltd. for the said premises being used by our company. There is no guarantee that our lease agreement will be renewed on acceptable terms and conditions.

13) We have entered into certain related party transactions and we cannot assure you that we

could not have achieved more favorable terms had such transactions been entered into with unrelated parties.

For information, kindly refer to the section ‘Auditor’s Report’ on page 89 of this Information Memorandum.

14) Our ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirements, capital expenditures and the terms of its financing arrangements. Due to some of these or other constraints we may not be in a position to pay dividends.

The amount of future dividend payments, if any, will depend upon our future earnings, financial condition,

cash flows, working capital requirements and capital expenditures. There can be no assurance that we will be able to pay dividends in the foreseeable future.

15) The market price of our Equity Shares may be adversely affected by additional issues of

equity or equity linked securities by our Company or by sale of a large number of our Equity Shares by our significant shareholders.

We may finance our growth plans through additional equity offerings. Any future issuance of equity or

equity linked securities by our Company may dilute the shareholding of investors in our Equity Shares and could adversely affect the market price of our Equity Shares. Sales of a large number of our Equity Shares by any significant shareholder could adversely affect the market price of our Equity Shares. In addition, any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity Shares. EXTERNAL RISK FACTORS 16) The extent and reliability of Indian infrastructure could adversely impact our results of

operations and financial condition. India’s physical infrastructure is less developed than that of many developed nations and problems with its port, rail and road networks, electricity grid, communication systems or any other public facility could disrupt our normal business activity. Any deterioration of India’s physical infrastructure would harm the national economy, disrupt the transportation of goods and supplies, and add costs to doing business in India. These problems could interrupt our business operations, which could have a material adverse effect on our results of operations and financial condition. 17) Changes in Indian Government policies could adversely affect economic conditions in India,

and thereby adversely impact our results of operations and financial condition. All of our production facilities are located in India, and a significant portion of its revenue is derived from sales of its products in the Indian market. Consequently, our Company, and the market price and liquidity of the Equity Shares, may be affected by changes in the policies of the Government of India. For example, the imposition of foreign exchange controls, rising interest rates, inflation, increases in taxation or the creation of new regulations could have a detrimental effect on the Indian economy. The Indian

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Government has in recent years sought to implement economic reforms, and the current Indian Government has implemented policies and undertaken initiatives that continue the economic liberalization policies pursued by previous Indian Governments. The Indian Government has announced its general intention to continue India’s current economic and financial sector deregulation policies and encourage infrastructure Projects. However, the roles of the Indian Government and the state governments in the Indian economy as producers, consumers and regulators have remained significant and there can be no assurance that liberalization policies will continue in the future. Any significant change in such liberalization and deregulation policies could adversely affect business and economic conditions in India generally and our results of operations and financial conditions in particular. 18) If regional hostilities, terrorist attacks or social unrest in India increases, our business could

be adversely affected and the trading price of the Equity Shares could decrease. The Asian region has from time to time experienced instances of civil unrest, terrorist attacks and hostilities among neighbouring countries, including between India and Pakistan. Since May 1999, military confrontations between India and Pakistan have occurred in Kashmir. Also, since early 2003, there have been a number of terrorist attacks in India in the last several years, including recent terrorist attacks in Mumbai in November 2008. Military activity or terrorist attacks in India in the future could influence the Indian economy by creating a greater perception that investments in Indian companies involve higher degrees of risk. These hostilities and tensions could lead to political or economic instability in India and a possible adverse effect on the Indian economy and our business and its future financial performance and the trading price of the Equity Shares. Furthermore, India has also experienced social unrest in some parts of the country. If such tensions occur in other parts of the country, leading to overall political and economic instability, it could have an adverse effect on our business, future financial performance and the trading price of the Equity Shares. 19) Financial instability in other countries, particularly countries with emerging markets, could

disrupt Indian markets and our business and cause the trading price of our Equity Shares to decrease.

The Indian financial markets and the Indian economy are influenced by economic and market conditions in other countries, particularly emerging market countries in Asia. Further the current financial turmoil in the United States has had a significant impact on the Indian economy as well as the stability of the Indian Markets. Financial instability in other countries such as Latin America, Russia and elsewhere in the world in recent years have had limited impact on the Indian economy and India was relatively unaffected by financial and liquidity crises experienced elsewhere. Although economic conditions are different in each country, investors´ reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets may cause volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy. This in turn could negatively impact the movement of exchange rates and interest rates in India. In short, any significant financial disruption could have an adverse effect on our business, future financial performance and the trading price of the Equity Shares. 20) Any downgrading of India´s debt rating by an international rating agency could have a

negative impact on our business and the trading price of the Equity Shares. Any adverse revisions to India´s credit ratings for domestic and international debt by international rating agencies may adversely affect our ability to raise additional financing and the interest rates and other commercial terms at which such additional financing is available. This could have an adverse effect on our ability to obtain financing to fund our growth on favourable terms or at all and, as a result, could have a material adverse effect on our results of operations and financial condition. 21) The Indian securities markets are more volatile than certain other advanced securities

markets. Global or local economic, business or market conditions will have an adverse impact on liquidity and market prices of shares as well as the businesses of the Company will be affected.

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The Indian securities markets are more volatile than the securities markets in certain countries which are members of the Organisation for Economic Co-operation and Development. Indian stock exchanges have, in the recent past, experienced substantial fluctuations in the prices of listed securities. Indian stock exchanges have experienced problems which, if such or similar problems were to continue or recur, could affect the market price and liquidity of the securities of Indian companies, including the Equity Shares. These problems have included temporary exchange closures, broker defaults, settlement delays and strikes by brokers. A closure of, or trading stoppage on, either of the BSE and the NSE could adversely affect the trading price of the Equity Shares. Historical trading prices, therefore, may not be indicative of the prices at which the Equity Shares will trade in the future. In addition, the governing bodies of the Indian stock exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. Furthermore, from time to time disputes have occurred between listed companies, stock exchanges and other regulatory bodies, which in some cases may have had a negative effect on market sentiment. 22) Post-issue volatility in prices of the scrip may result due to mainly the following factors or due

to some other factors we cannot foresee for the future. The price of our Company’s equity shares in Indian stock exchanges may fluctuate after this Issue as a result of several factors, including:

• Volatility in the Indian and Global securities market; • The results of operations and performance of our Company; • Perceptions about our Company’s future performance or the performance of other Indian

companies in the same industry; • Performance of four Company’s competitors in the industry and market perception of investments

in the textile sector; • Adverse media reports on our Company or on the industry; • Change in the estimates of our Company’s performance or recommendations by financial

analysts; • Significant development in India’s economic liberalization and deregulation policies; and • Significant development in India’s fiscal and environmental regulations

Equity Shares related Risks 23) Our Equity Shares may experience price and volume fluctuations or an active trading market

for our Equity Shares may not develop The price of the Equity Shares may fluctuate after this Issue as a result of several factors, including volatility in the Indian and global securities markets, the results of our operations, the performance of our competitors, developments in the Indian readymade garment and note/exercise books sector and changing perceptions in the market about investments in the Indian readymade garment and note/exercise books sector, adverse media reports on us or in the Indian readymade garment and note/exercise books sector, changes in the estimates of our performance or recommendations by financial analysts, significant developments in India’s economic liberalization and deregulation policies, and significant developments in India’s fiscal regulations. 24) Conditions in the Indian securities market may affect the price or liquidity of the Equity Shares The Indian securities markets are smaller than securities markets in more developed economies. Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. These exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time restricted securities from trading, limited price movements and restricted margin requirements. Further, disputes have occurred on occasion between listed companies and the Indian stock exchanges and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. If similar problems occur in the future, the market price and liquidity of the Equity Shares could be adversely affected.

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25) Fluctuation in the exchange rate between the Rupee and the United States dollar could have a material adverse effect on the value of Shares, independent of our Company’s operating results.

The Shares are quoted in Rupees on the BSE. Any dividends in respect of the Shares will be paid in Rupees and subsequently converted into US dollars for repatriation. Any adverse movement in exchange rates during the time it takes to undertake such conversion may reduce the net dividend to investors. In addition, any adverse movement in exchange rates during a delay in repatriating outside India the proceeds from a sale of Shares, for example, because of a delay in regulatory approvals that may be required for the sale of Shares may reduce the net proceeds received by shareholders. The exchange rate between the Rupee and the U.S. dollar has changed substantially in the last two decades and could fluctuate substantially in the future, which may have a material adverse effect on the value of the Shares and returns from the Shares, independent of our Company’s operating results. 26) Future issuances or sales of the Shares could significantly affect the trading price of the

Shares The future issuances of Shares by our Company or the disposal of Shares by any of the major shareholders of our Company or the perception that such issuance or sales may occur may significantly affect the trading price of the Shares. There can be no assurance that our Company will not issue further Shares or that the shareholders will not dispose of, pledge or otherwise encumber their Shares. 27) There is no guarantee that the Shares issued pursuant to the Issue will be listed on the BSE in

a timely manner or at all. In accordance with Indian law and practice, permission for listing and trading of the Shares issued pursuant to the Issue will not be granted until after those Shares have been issued and allotted. Approval will require all other relevant documents authorising the issuing of Shares to be submitted. Approval will require all other relevant documents authorising the issuing of Shares to be submitted. There could be a failure or delay in listing the Shares on the BSE. Any failure or delay in obtaining the approval would restrict your ability to dispose of your Shares. Further, historical trading prices, therefore, may not be indicative of the prices at which the Shares will trade in the future. 28) Foreign investors are subject to foreign investment restrictions under Indian law that limit our

Company’s ability to attract foreign investors, which may adversely impact the market price of the Shares.

Under the foreign exchange regulations currently in force in India, transfers of shares between non-residents and residents freely permitted (subject to certain restrictions) if they comply with the pricing guidelines and reporting requirements specified by the RBI. If the transfer or shares, which are sought to be transferred is not in compliance with such pricing guidelines or reporting requirements or fall under any of the exceptions referred to above, then the prior approval of the RBI will be required. Additionally, shareholders who seek to convert the Rupee proceeds from a sale of shares in India into foreign currency and repatriate that foreign currency from India will require a no objection/ tax clearance certificate from the income tax authority. Our Company cannot assure investors that any required approval from the RBI or any other Government agency can be obtained on any particular terms or at all.

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SECTION III - INTRODUCTION

SUMMARY OF INDUSTRY OVERVIEW The Textiles Industry in India enjoys a distinctive position due to the pivotal role it plays by way of contribution to industrial output, employment generation (second largest after agriculture) and export earnings of the country. The industry is rich and varied, embracing the hand-spun and hand-woven sector at one end and the capital intensive, sophisticated mill sector at the other. Its association with the ancient culture and tradition of the country lends it a unique advantage in comparison with textiles industry of other countries, thus giving it an uncommon edge to cater to a vast variety of products and market segments both domestically, as well as, globally. The textile industry comprises the following:

• Organized Cotton/Man-Made Fiber Textiles Mill Industry • Man-Made Fiber / Filament Yarn Industry • Wool and Woollen Textiles Industry • Sericulture and Silk Textiles Industry • Handlooms, Handicrafts, the Jute and Jute Textiles Industry • Textiles Exports

TEXTILE EXPORTS India's textiles and clothing industry is one of the mainstays of the national economy. It is also one of the largest contributing sectors of India's exports worldwide. The Vision Statement for the textiles industry for the 11th Five Year Plan (2007-12), inter-alia, envisages India securing a 7% share in the global textiles trade by 2012. At current prices the Indian textiles industry is pegged at US$ 55 billion, 64% of which services domestic demand. The textiles industry accounts for 14% of industrial production, which is 4% of GDP; employs 35 million people and accounts for nearly 12% share of the country's total exports basket. (Source: Annual Report 2011-12, Ministry of Textiles) India's textile exports at a glance (Principal Commodities)

Item 2007-08 2008-09 2009-10 2010-11 Apr-Oct

2011(P) ` in Crore ` in Crore ` in Crore ` in Crore ` in Crore

Readymade Garment 36497.79 47112.77 47608.39 48355.57 32436.57

RMG of cotton including accessories 30335.79 38522.72 38070.33 37687.51 24076.03RMG of Man-made fibre 3912.26 4721.94 5745.29 6489.07 5265.62RMG of other textile material 2249.74 3868.11 3792.77 4178.99 3094.92Cotton Textiles 27599.81 21795.4 27016.21 38038.19 22418.43Cotton raw including waste 8865.39 2865.86 9537.08 12981.04 5085.34Cotton yarn, fabrics & madeups 18734.42 18929.54 17479.13 25057.15 17333.09Man-made textiles 12785.02 15090.76 18783.13 21125.13 14713.41Manmade staple fibres 1121.72 1172.01 1690.68 1998.11 1338.66

Manmade yarn, fabrics & madeups 11663.3 13918.75 17092.45 19127.02 13374.75Wool & Woolen textiles 1783.13 2199.49 2224.14 1955.31 1485.53RMG of Wool 1409.55 1742.97 1799.2 1477.27 1092.21

Woollen yarn, fabrics & madeups 373.58 456.52 424.94 478.04 393.32Silk 2646.75 3107.78 2819.46 2708.02 1291.94RMG of Silk 1093.67 1437.73 1383.42 1095.10 741.12

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Natural silk yarn, fabrics & madeups 1540.93 1664.82 1411.12 1578.40 536.10Silk waste 12.15 5.23 24.92 34.52 14.72Handloom Products* 1252.81 1662.89 1483.21Textiles (excluding handicrafts, jute & coir)

81312.5 89306.2 99704.14 113845.11 73829.09

Handicrafts 5844.12 4949.23 4548.91 5445.45 2476.59Handicrafts (excluding handmade carpets) 2046.21 1384.19 1066.58 984.65 462.05

Carpets (excluding silk) handmade 3725.8 3506.37 3441.74 4444.96 2006.50Silk carpets 72.11 58.67 40.59 15.84 8.04Coir & Coir Manufacturers 644.87 680.7 759.66 689.18 531.43Coir & Coir Manufacturers 644.87 680.7 759.66 689.18 531.43Jute 1319.36 1375.78 1033.09 2076.34 1197.02Floor covering of jute 317.56 251.63 281.07 336.93 141.31Other jute manufactures 322.22 491.64 300.19 505.58 448.61Jute yarn 215.14 216.92 144.2 533.90 136.31Jute hessian 464.44 415.59 307.63 699.93 470.79Total Textiles Exports (incl. handicrafts, coir & jute)

89120.85 96311.91 106045.8 122056.08 78034.13

% Textile Exports 13.59% 11.46% 12.54% 10.63% 10.03%

India's exports of all commodities 655863.52 840755.06 845533.64 1148169.56 778375.03 The Road Ahead India's T&C industry has great potential, and is one of the mainstays of the country’s economy. The industry has enormous opportunities for domestic as well as international investors given its consistent growth performance, abundant cheap skilled manpower and growing domestic demand. With the abolition of quotas, India has surged ahead of other countries and positioned itself as a value-added manufacturer with a varied material base, an educated and English-speaking class of executives with high product development and design orientation. On the global front, India is set to become an even bigger participant, both as a consumer and as a producer. The country offers an attractive combination of a large domestic market, and a base for low cost production. The industry has gained a strong position in cotton based products, especially in the readymade garments and home furnishings segment, which are expected to be the key drivers of growth for the industry. (Source: IBEF, May 2012)

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SUMMARY OF BUSINESS OVERVIEW The following information is qualified in its entirety by, and should be read together with, the more detailed financial and other information included in the Information Memorandum, including the information contained in the section entitled “Risk Factors” beginning on page 05 of this Information Memorandum. Haria Apparels Limited (“HAL”) is a company incorporated on February1, 2011 under the Companies Act, 1956having its registered office at 8, Subhash Road, Vile Parle (East), Mumbai, Maharashtra – 400 057.The shares of the Company are not listed on any Stock Exchange. As on May 31, 2011, the Company has a paid-up capital of ` 80,000,000 and is promoted by Mr. Kantilal L. Haria. Since HAL is a recently incorporated company, it has not commenced any operations. The Hon’ble High Court Bombay, vide its Order dated October 21, 2011 has approved the Scheme of Arrangement/ De-merger of HEL whereby the Garment Division of HEL has been transferred to and vested in Haria Apparels Ltd. with effect from June 1, 2011 (i.e. the Appointed Date under the Scheme) and BPPL has been transferred to and vested in the remaining entity of HEL, i.e. the Stationery division, under Sections 391 to 394 of the Companies Act, 1956. The Demerger of Haria Exports Limited (“HEL”), amalgamation of “HEL-Garments” into “HAL”, and amalgamation of “BPPL” into “HEL-Stationary” have been decided by the Management of the respective Companies. Towards this purpose, the Directors of “HEL”, “HAL” and “BPPL” have approved the proposed demerger of Garments Division of HEL into “HAL” and the subsequent merger of the remaining entity of “HEL” i.e. the Stationary division with “BPPL” and approved the draft scheme of amalgamation at the Board meeting held on June 14, 2011. The company is engaged in the business of manufacture and exports of Garments.

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COMPOSITE SCHEME OF ARRANGEMENT

UNDER SECTIONS 391 TO 394 OF THE COMPANIES ACT, 1956 AMONGST

Best Plastex Private Limited ---- Amalgamating Company

AND

Haria Exports Limited---Amalgamated Company / Demerged Company

AND

Haria Apparels Limited----Resulting Company

and their respective shareholders and creditors

PREAMBLE

(A) Description of Companies

I Haria Exports Limited, (the Demerged Company” or HEL as more particularly defined hereunder) is a public limited company incorporated under Part IX of the Companies Act, 1956 (as defined hereunder) and having its Registered Office at Haria Centre, 8, Subhash Road, Vile Parle (E) Mumbai- 400 057 the date hereof, the Demerged Company or HEL is engaged in the businesses inter alia of

(i) Stationery and Note book (the “Stationery Business”) ; (ii) Garment Manufacturing (the “Garment Business”); and

The equity shares of HEL are listed on the Bombay Stock Exchange Limited.

II Haria Apparels Limited ( “the Resulting Company” or HAL as more particularly defined

hereunder) a public limited company incorporated under the Act, having its registered office at Haria Centre, 8, Subhash Road, Vile Parle (E) Mumbai 400 057, (“HAL” or the “Resulting Company”). The Resulting Company is engaged in the business inter alia of Garment Manufacturing. The equity shares of the Resulting Company are not listed on any stock exchange.

III Best Plastex Private Limited (the “Amalgamating or the Transferor Company” or BPPL as

more particularly defined hereunder) is a company , originally incorporated in the name and style of “Sumaria Trading Private Limited” and is renamed on as Best Plastex Private Limited and having its registered office situated at 2, Ram Niwas, Pranjpe ‘B’ Scheme, Road No 3, Vile Parle (East), Mumbai- 400057 and is engaged in the business of manufacturing, extruding, laminating and moulding articles made out of various kind of plastics products and polymers etc.

(B) Purpose of Composite Scheme

The Composite Scheme of Arrangement provides for the demerging of demerged business of Garment Manufacturing of demerged Company (viz HEL) in the Resulting Company (viz. HAL) and the amalgamation of the Amalgamating or Transferor Company (viz. BPL) with the Amalgamated Company (viz.HEL ) by the transfer and vesting of entire and whole of the undertaking, properties, assets and liabilities of the Amalgamating Company to and in the Amalgamated Company and for various other matters consequential or otherwise integrally connected with the Scheme.

(C) Rationale for the Scheme–

I In order to concentrate growth efforts in a focused manner and enable rationalisation of its

businesses, it is proposed that the Demerged Undertaking (as hereinafter defined) comprising the

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Garment Business of HEL be segregated from its Stationery and Note Book Business and transferred to and vested in the Resulting Company by way of a Demerger ), and that the Amalgamating Company (as hereinafter defined) be amalgamated with HEL by way of the Amalgamation with a view to creating focused entities engaged in

(i) the Garment Business (ii) the Stationery and Note Book Businesses respectively.

II The reorganization of various businesses as contemplated in the Scheme would, inter alia, have the following benefits:

a) The Demerger and the Amalgamations pursuant to this Scheme will create a focused platform for

future growth of the Stationery and Note Book Business, distinct from the Demerged Undertaking which will be operated in the Resulting Company.

b) The Stationery and Note Book Business and the Garment business each have tremendous growth

and profitability potential and require focused leadership and management attention. c) Fund raising from investors based on their sector preference. d) The nature of technology, risk and competition involved in each of these businesses is distinct and is

capable of addressing independent business opportunities, deploying different technologies and attracting a different set of investors, strategic partners, lenders and other stakeholders.

e) Facilitating sector specific Technology & Marketing tie-ups and collaboration including arrangements f) There are also differences in the manner in which each of these businesses are required to be

managed. The Scheme will result in focused business operations of HEL and the Resulting Company and allow them increased flexibility in taking advantage of the huge growth opportunities in their respective business segments.

g) Cash management and funds deployment of the combined business of the Amalgamating

Companies can be efficiently handled. h) Cost savings are expected to flow from rationalization and simplification of business processes and

elimination of duplication of work in various support functions. i) Greater internal control on the business processes by combining similar businesses together and

ease of decision-making of the respective verticals. j) Unlocking shareholders value k) The scheme is beneficial to both the companies and their shareholders as it will enhance

shareholder value. The current equity shareholders of the HEL would continue to remain its shareholders as also become shareholders of the Resulting Company, thereby giving them an opportunity to participate in the management, operations, decision-making and profits of both the companies. It also gives the shareholders the flexibility to invest in only one of the two listed companies

l) The Amalgamation will also result in: a. Synergies in procurement, manufacturing, administration and marketing operations. b. Achieving economies of scale.

c. Pooling of the human talents in terms of manpower, management, administration and marketing

which would result in savings of costs.

d. Cost saving in fees/ duties payable on statutory and procedural compliance.

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In view of the above benefits, the Board of Directors of the Demerged Company /Amalgamated Company, the Resulting Company and the Amalgamating Company believe that the Scheme of Arrangement would benefit the respective companies and other stakeholders of the respective companies.

(D) (a) The above shall be undertaken through this Scheme (as hereinafter defined) under the provisions

of Sections 391 to 394 and other relevant provisions of the Act and applicable laws in India and accordingly, this Scheme provides for :

(i) the transfer by way of a Demerger of the Demerged Undertaking of HEL to the Resulting Company,

and the consequent issue of equity shares by the Resulting Company to the shareholders of HEL; and

(ii) the amalgamation of the Amalgamating Company( BPPL) with HEL and the consequent issue of equity shares by HEL to the shareholders of BPPL

(iii) the reorganisation of the share capital of the Amalgamated Company (iv) and various other matters consequential to or otherwise integrally connected with the above in the

manner provided for in the Scheme,

pursuant to section 391 to section 394 and other relevant provisions of the Act and other applicable law(s) in the manner provided for in this Scheme.

(b) The Scheme provides for the demerger of the Demerged Undertakings from the Demerged

Company to the Resulting Company such that: (i) all the properties of the Demerged Company pertaining and relatable to its Garment Business , being

transferred by the Demerged Company, immediately before the Demerger shall become the properties of the Resulting Company by virtue of such Demerger;

(ii) all the liabilities relatable to the Demerged Garment Business , being transferred by the Demerged Company, immediately before the Demerger shall become the liabilities of the Resulting Company by virtue of such Demerger;

(iii) the properties and the liabilities relatable to the Demerged Garment Business being transferred by HEL shall be transferred to the Resulting Company at the values appearing in the books of account of HEL immediately before the Demerger. For this purpose, any change in the value of assets consequent to their revaluation, if any, shall be ignored;

(iv) the Resulting Company shall issue, in consideration of the Demerger, shares to the shareholders of HEL on a proportionate basis;

(v) all shareholders of HEL shall become the shareholders of the Resulting Company by virtue of the Demerger, otherwise than as a result of the acquisition of the property or assets of the Demerged Company or any undertaking thereof by HEL ; and

(vi) the transfer of the Demerged Undertaking shall be on a going concern basis. (c) The Scheme also provides for the Amalgamations of the Amalgamating Company with HEL such

that: (i) All the properties of the Amalgamating Company, immediately before the Amalgamations become

the property of HEL, by virtue of the Amalgamations; (ii) all the liabilities of the Amalgamating Company, immediately before the Amalgamations become the

liability of HEL, by virtue of the Amalgamations; and (iii) all shareholders in the Amalgamating Company, will become shareholders of HEL by virtue of the

Amalgamations. (iv) the transfer of the Undertaking of the Amalgamating company shall be on a going concern basis. (v) The Amalgamation does not arise as a result of the acquisition of the property of the Amalgamating

Company by HEL pursuant to the purchase of such property by HEL or as a result of the distribution of such property to HEL after the winding up of the Amalgamating Companies.

 

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PARTS OF THE SCHEME

The Scheme is divided into the following parts:

(i) Part I, which deals with the definitions & share capital; (ii) Part II, which deals with the Demerger of Garment Business of HEL to the Resulting Company

(HAL); (iii) Part III, which deals with the amalgamation of the Amalgamating Company (BPPL) with HEL; (iv) Part IV, which deals with the general terms and conditions that would be applicable to Part II and

Part III of the Scheme.

PART I

DEFINITIONS AND SHARE CAPITAL

1 DEFINITIONS AND INTERPRETATION For the purpose of this Scheme, unless repugnant to the meaning or context thereof, the following

expressions shall have the following meanings: 1.1. “Act” means the Companies Act, 1956 or any statutory modification or re-enactment thereof.

1.2. “Amalgamated Company or Transferee Company” means Haria Exports Limited - (“HEL”) , a

public limited company incorporated under Part IX of the Act, (as defined ) and having its Registered Office at Haria Centre, Subhash Road, Vile Parle (E) Mumbai 400 057 is also referred to as “Demerged Company” wherever the context permits or requires)

1.3. “Amalgamating Company” means the Best Plastex Private Limited- (“BPPL” or the Transferor

Company”), a company incorporated and registered under the Act, having its registered office at 2, Ram Niwas, Pranjpe ‘B’ Scheme, Road No 3, Vile Parle (East), Mumbai- 400 057.

1.4. “Appointed Date” shall means, for the purpose of demerger of the Demerged Undertaking from

the demerged Company to the Resulting Company as provided in Part II hereof, June 1, 2011 before coming into effect of Part III and for the purpose of amalgamation of Amalgamating Company with the Amalgamated Company as provided in Part III hereof, June 1, 2011 subsequent to coming into effect of Part II

1.5. “Court or High Court” shall mean High Court of Judicature at Bombay having jurisdiction in relation to the Amalgamating Companies, the Amalgamated Company / Demerged Company and the Resulting Company and shall include the National Company Law Tribunal, if applicable; or such other forum or authority as may be vested with the powers of High Court under section 391 to section 394 of the Act

1.6. “Companies” shall mean the Demerged Company or Amalgamated Company, the Resulting

Company, Amalgamating Company or any one or more of them as the context may admit or require. 1.7. “Demerged Company” shall mean Haria Exports Limited - (“HEL”) having its Registered Office at

Haria Centre, Subhash Road, Vile Parle (E) Mumbai is also referred to as Amalgamated Company” or the “Transferee Company”), wherever the context permits or requires )

1.8. “Demerged Undertaking” shall mean and include without limitation all the undertaking, business,

activities and operations pertaining to the Garment Business of the Demerged Company as a going concern comprising of :-

1.8.1(a) all assets and properties wherever situated, whether moveable or immovable, real or personal, in

possession or reversion, corporeal or incorporeal, tangible or intangible, present or contingent and including but without being limited to all funds, buildings, structures, offices, lands (whether leasehold or freehold, benefits of any rental agreements for use of premises, tenancies in relation to the office and/or residential properties for the employees, lease rights, plants, machineries, equipments, capital work in progress, vehicles, fixed assets, D G sets, furniture and fixtures including office

18

equipments, current assets including inventories, sundry debtors, bills of exchanges and other negotiable instruments, loans and advances, accessories, computers, power lines, share of any joint assets, any finished goods and any facilities, cash and bank accounts including balances, benefit of any deposits, privileges, all other rights including sales tax deferrals and exemptions and other benefits, receivables and liabilities related thereto,, investments including investments in any form and in any entity, financial assets, benefits of any performance guarantee or bank guarantee letters of credit and all cash and cash equivalents appertaining or relatable to the Garment business ,

(b) all permits, quotas, rights, entitlements, industrial and other licences, bids, tenders, letter of intent,

expressions of interest , municipal permissions, approvals, consents from various authorities including municipal (whether granted or pending), subsides, licenses, powers and facilities of every kind, nature and description whatsoever, rights to use and avail of telephone, telexes, facsimile connections and installations, utilities, electricity and other services, provisions and benefits of all agreements, contracts and arrangements, letters of intent, memorandum of understanding, expression of interest under agreement or otherwise and all other interests in connection with or relating to Garment Business.

(c) all earnest moneys and/or security deposits paid by the Demerged Company in connection with or

relatable to the Garment Business.

(d) all permanent employees engaged by the Demerged Company at various locations who perform functions relatable to the Garment Business as on the Effective Date.

(e) all records, files, papers, engineering and process information, any computer programs, licenses for

software, and any other software licenses, drawings, manuals, data, catalogues, quotations, sales and advertising materials, lists of present and former customers and suppliers, customers credit information, customer pricing information, and other records whether in physical or electronic form in connection with or relatable to the Garment Business;

(f) advantages of whatsoever nature and whatsoever situate belonging to or in the ownership , power or

possession and in the control of or vested in or granted in favour of or enjoyed by the Demerged Company including such trade names, patents, copy rights, IPRs, service names, brands and marks, whether registered or unregistered, relatable to the Garment Business, but excluding any other trademarks, service names or brands and excluding any patents, copyrights, designs, and other intellectual property rights; and

(g) all debts, borrowings, obligations and liabilities, both present and future, (including deferred tax

liabilities, contingent liabilities, reserves, provisions, funds and obligations under any licenses or permits or schemes), dues, duties and obligations of every kind, nature and description whatsoever and howsoever accruing or arising out of, and all loans and borrowings raised or incurred and utilized for Garment business, activities and operations, including all credits, advances, loans, fixed deposits, provisions, commitments whether secured or unsecured, whether provided for or not in the books of account or disclosed in the balance sheet of the Demerged Company, appertaining or relatable to the Garment Business.

1.8.2 For the purpose of this Scheme, it is clarified that liabilities pertaining to the Demerged Undertaking

include:

(a) The liabilities which arise out of the activities or operations of the Garment Business (b) Specific loans and borrowings raised, incurred and utilized solely for the activities or operation of the

Garment Business. (c) Liabilities other than those referred to in Sub-Clauses (a) and (b) above, being the amounts of

general or multipurpose borrowings of the Demerged Company, allocated to the Garment Business in the same proportion in which the value of Demerged Undertaking’s assets (ignoring the re-valued amount) transferred under this Scheme bear to the total value of the assets of the Demerged Company immediately before giving effect to Demerger under Part II of this Scheme.

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1.8.3 Any question that may arise as to whether a specified asset or liability pertains or does not pertain to the Garment Business whether it arises out of the activities or operations of the Garment Business shall be decided by mutual agreement between the Board of Directors of the Demerged Company and the Resulting Company.

1.9 “Effective Date” means the date on which all the conditions and matters in relation to the Scheme

referred to in Clause 26 of this Scheme have been fulfilled. References in this Scheme to the date of “coming into effect of this Scheme” or “effectiveness of this Scheme” shall mean the Effective Date;

1.10 “Record Date” shall mean the date to be fixed by the Board of Directors of HEL/ HAL / BPPL for the

purpose of issuing and allotting shares as per the Scheme to demerged company’s shareholders and to amalgamating company’s shareholders.

1.11 “Remaining Business” means all other businesses, divisions, assets and liabilities, activities

operations including investments in shares and securities and identified assets and bank balances) of the Demerged Company other than those comprised in the Demerged Undertaking as defined in clause 1.9 hereof. Remaining Business, inter alia includes the business of Stationery and Notebook Undertaking after giving effect to Part II of this Scheme

1.12 “Resulting Company” means Haria Apparels Limited is a public limited company incorporated under the Act, having its registered office at Haria Centre, 8, Subhash Road, Vile Parle (E) Mumbai – 400 057, (“HAL” ).

1.13 “Scheme” means this composite Scheme of Arrangement including any modifications or

amendments hereto. References in this Scheme such as “this Scheme” or “the Scheme” shall mean Part I of the Scheme or Part II of the Scheme or the entire composite Scheme, as the context may require or permit.

1.14 “Undertaking” of the Amalgamating Company shall mean and include without limitation all the undertaking and entire business of the Amalgamating Company as a going concern comprising amongst others :-

1.4.1 the entire and all the assets and properties including, without limitation of amalgamating Company wherever situate, whether moveable or immovable, real or personal, in possession or reversion, corporeal or incorporeal, tangible or intangible, present or contingent and including but without being limited to all funds, buildings, structures, offices, lands(whether leasehold or freehold), benefits of any rental agreements for use of premises, tenancies in relation to the office and/or residential properties for the employees, lease rights, plants, machineries, equipments, capital work in progress, vehicles, fixed assets, D G sets, furniture and fixtures including office equipments, trademarks, patents, copyrights, all other intellectual property rights, goodwill, assets, properties or other interests, current assets including inventories, sundry debtors, receivables, bills of exchanges and other negotiable instruments, loans and advances, accessories, computers, power lines, share of any joint assets, any finished goods and any facilities, cash and bank accounts including balances and all cash and cash equivalents, benefits of any deposits, privileges, all other rights and benefits including any tax direct or indirect including advance tax paid or any tax deducted in respect of any income received, sales tax deferrals and exemptions and other benefits, receivables and liabilities related thereto, financial assets, investments including investments in any form and in any entity and in shares, stocks, warrants, debentures, bonds and other such securities, whether encumbered or unencumbered, whether in certificate form or in dematerialized form, and agreements to purchase, sell, assign, mortgage in relation thereto

1.4.2 all permits, quotas, rights, entitlements, industrial and other licences, registrations, bids, tenders,

letter of intent, expressions of interest , municipal permissions, approvals, consents from various authorities whether granted or pending, subsides, licences, powers and facilities of every kind, nature and description whatsoever, rights to use and avail of telephone, telexes, facsimile connections and installations, utilities, electricity and other services, provisions, funds and benefits of all agreements, contracts and arrangements letters of intent, memorandum of understanding, expressions of interest whether under agreement or otherwise and all other interests

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1.4.3 all permanent employees engaged by the Amalgamating Company 1.4.4 all earnest moneys and/or security deposits paid by the Amalgamating Company 1.4.5 advantages of whatsoever nature and wheresoever situate and belonging to or in the ownership,

power or possession and in control of or vested in or granted in favour of or enjoyed by the Amalgamating Company;

1.4.6all present and future debts (whether secured or unsecured), liabilities (including contingent

liabilities), dues, duties and obligations of the Amalgamating Company of every kind, nature and description whatsoever and howsoever accruing or arising out of, and all loans and borrowings raised or incurred and utilized for its business, activities and operations, obligations under any licenses or permits including all credits, advances, loans, fixed deposits, provisions, commitments

1.4.7 all necessary records, files, papers, computer programmes, websites, domain names, manuals,

data, catalogues, quotations, sales and advertising materials, lists of present and former customers, customer credit information, customer pricing information, and other records, whether in physical form or electronic form

2 SHARE CAPITAL

Details of the Share capital structure of the companies as at May 31, 2011 are given below:

2.1 Amalgamating or Transferor Company: (Best Plastex Private Limited) [BPL] Particulars (in `)Authorized Capital: 70,00,000 of Equity Shares of ` 10/- each 7,00,00,000 Issued, Subscribed and Paid up: 70,00,000 of Equity Shares of ` 10/- each 7,00,00,000

1) The ordinary shares of the Amalgamating Company (BPPL) are not listed on any stock exchange. 2) Subsequent to May 31 2011 there has been no change in the Capital structure of the Amalgamating

Company.

2.2 Amalgamated or demerged or Transferee Company: (Haria Exports Limited) [HEL] Particulars (in `) Authorised Capital: 2,00,00,000 of Equity Shares of `10/- each 20,00,00,000 Issued, Subscribed and Paid up: 57,40,000 Equity Shares of ` 10/- each 5,74,00,000

1) The ordinary shares of the Amalgamated Company (HEL) are listed on BSE 2) Subsequent to May 31 2011 there has been no change in the Capital structure of the Amalgamated

Company.

2.3 Resulting Company: Haria Apparels Limited[HAL]

Particulars (in `) Authorized Capital: 80,00,000 of Equity Shares of Re.10/- each 8,00,00,000 Issued, Subscribed and Paid up: 80,00,000 of Equity Shares of ` 10/- each 8,00,00,000

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1) The ordinary shares of the Resulting Company (HAL) are not listed on any stock exchange. 2) Subsequent to May 31 2011 there has been no change in the Capital structure of the Resulting

Company. 3 DATE OF TAKING EFFECT AND OPERATIVE DATE 3.1 The Scheme set out herein in its present form or with any modification(s) approved or imposed or

directed by the High Court of Judicature at Bombay shall be effective from the Appointed Date but shall be operative from the Effective Date.

3.2 The sequence of taking effect of Part II and Part III of the Scheme, which is an essence of the

Scheme, shall be as under:

(i) Part II which provides for demerger of the Demerged Undertaking from the Demerged Company to the Resulting Company shall take effect and be operative prior to coming into effect Part III which provides for amalgamation of the Amalgamating Company with the Amalgamated Company. The Appointed Date for the purpose of Part II is June 1, 2011 prior to coming into effect of Part III

(ii) Part III which provides for amalgamation of the Amalgamating Company with the Amalgamated

Company shall take effect and be operative subsequent to coming into effect Part II, which provides for the demerger of the Demerged Undertaking. The Appointed Date for the purpose of Part III is June 1, 2011 and shall take effect and be operative subsequent to coming into effect of Part II

PART II

DEMERGER SECTION - 1: TRANSFER AND VESTING OF THEDEMERGED UNDERTAKING 4 Transfer and Vesting of Undertaking 4.1 Upon coming into effect of this Scheme and with effect from the Appointed Date,the entire business

and the whole of the demerged Undertaking including all the estate, assets, rights, claims, title, interest and authorities (including accretions and appurtenances ) and the Liabilities whether secured, unsecured or contingent of whatsoever nature and wheresoever situate comprised in the demerged Undertaking of the Demerged Undertaking shall subject to the provisions of this Clause 4 in relation to the mode of transfer and vesting and pursuant to section 394(2) and other applicable provisions of the Act and without any further act or instrument or deed, be demerged from the Demerged Company and be transferred to and vested in or be deemed to be transferred to and vested in the Resulting Company as a going concern so as to become as and from the Appointed Date, assets (subject to encumbrances and charges, if any, existing thereon), and the said liabilities of the Resulting Company and there shall be vested in the Resulting Company all the rights, title, interest, authorities or obligations of the Demerged Company therein subject to the provisions of this Scheme in relation to Encumbrances in favour of Banks and or Lenders

4.2 Transfer of Assets

Without prejudice to the generality of Clause 4.1 above, upon the coming into effect of this Scheme

and with effect from the Appointed Date, the transfer and vesting of the Demerged Undertaking shall be done in the following manner:-

a) In respect of the whole of the Undertakings and properties, as aforesaid, of the Demerged

Undertaking, ( including all the estate, assets, rights, claims, title, interest, authorities including accretions and appurtenances ) except for the portions dealt with under sub-clause (b) and sub-clause (c) below, of whatsoever nature and whosesoever situate and which are incapable of passing by manual delivery, shall, under the provisions of Sections 391 to 394 and all other applicable provisions, if any, of the Act, without any further act or instrument or deed, be demerged from the Demerged Company and stand transferred to and vested in the Resulting Company or be deemed to be transferred to and vested in the Resulting Company as a going concern so as to become, as and

22

from the Appointed Date, the assets and properties of the Resulting Company to vest in the Resulting Company all the right, title and interest therein subject to the provisions of this Scheme in relation to Encumbrances in favour of banks and/or financial institutions and secured lenders

b) Without prejudice to the provisions of Clause 4.1 and sub-clause (a) of this Clause 4.2 in respect of

such of the Assets of the Demerged Undertaking, as are movable in nature or are otherwise capable of transfer or passing by manual delivery of possession or by endorsement and delivery the same shall be so transferred or delivered or endorsed and delivered, as the case may be, by the Demerged Company to the Resulting Company to the end and intent that the property therein passes to the Resulting Company, on such delivery or endorsement and delivery and shall, upon such transfer, become the assets and properties of the Resulting Company, as an integral part of the Demerged Undertaking pursuant to the provisions of section 394 of the Act without requiring any deed or instrument or conveyance for transfer of the same, subject to the provisions of this Scheme in relation to Encumbrances in favour of banks and/or financial institutions and secured lenders.

c) In respect of such of the assets of the Demerged Undertaking as are movable in nature other than

those dealt with in sub-clause (b) above including sundry debtors, receivables, bills, credits, loans and advances, if any, whether recoverable in cash or in kind or for value to be received, bank balances, investments, earnest money and deposits with any Government, Semi-Government, local or other authority or body or with any company or other person, rights, title and interest, the same shall pursuant to the section 391 to section 394 of the Act stand transferred to without requiring any further consent, deed or instrument of conveyance for transfer of the same, and shall become property of the Resulting Company and the demerged Company shall, if required, give notice in such form as they may deem fit and proper, to each person, debtor, or depositee, as the case may be, to the effect that pursuant to the High Court having sanctioned the demerger of the demerged undertaking into the Resulting Company under Sections 391 to 394 of the Act, the said debt, loan, advance, balance or deposit be paid or made good or held on account of the Resulting Company as the person entitled thereto and that appropriate entry should be passed in its or their books to record the aforesaid change. The Resulting Company shall, if required, also give notice in such form as it may deem fit and proper to each person, debtor or depositee that, pursuant to the High Court having sanctioned the demerger of the demerged Undertaking into the Resulting Company under Sections 391 to 394 of the Act, the said debt, loan, advance, balance or deposit be paid or made good or held on account of the Resulting Company.

d) In respect of such of the assets of the Demerged Undertaking other than those referred to in sub

clause (b) and (c) above, the same shall, as more particularly provided in sub clause (a) above, without any further act, instrument or deed, be demerged from the demerged Company and transferred to and vested in and/ or be deemed to be transferred to and vested in the Resulting Company on the Appointed date pursuant to the provisions of Section 391 to section 394 of the Act and shall be appropriately mutated by the Statutory and other Authorities concerned in favour of the Resulting Company. The concerned authorities having jurisdiction over the Assets shall endorse and record the name of Resulting Company in its record so as to facilitate the implementation of the Scheme and vesting of the Demerged Undertaking in the Resulting Company without hindrance from the Appointed Date.

e) All the statutory and other licenses, permits, approvals, permissions, registrations including without

limiting registration with export promotion councils and authorities, incentives, benefits, subsidies, concessions, grants, rights including land development rights, claims, leases, tenancy rights, liberties, special status and privileges enjoyed or conferred upon or held or availed of by the Demerged Undertaking and all rights and benefits that have accrued or which may accrue to the demerged Undertaking , whether before or after the Appointed Date, shall pursuant to the provisions of Sections 391 to 394 of the Act, without any further act, instrument or deed, cost or charge be and stand transferred to and vest in or be deemed to be transferred to and vested in and be available to the Resulting Company so as to become as and from the Appointed Date licenses, permits, approvals, permissions, registrations, incentives, benefits, subsidies, concessions, grants, rights including land development rights, claims, leases, tenancy rights, liberties, special status and privileges of the Resulting Company and shall remain valid, effective and enforceable on the same terms and conditions and shall be appropriately mutated by the Statutory and other Authorities concerned in favour of the Resulting Company upon the Scheme becoming effective.

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5 Contracts, Deeds, etc.

Subject to the other provisions of this Scheme, all contracts, deeds, bonds, agreements and other instruments, if any, of whatsoever nature relating to the Demerged Undertaking and to which the Demerged Company is party and subsisting or having effect on the Effective Date, shall be in full force and effect against or in favour of the Resulting Company, as the case may be, and may be enforced by or against the Resulting Company as fully and effectually as if, instead of the Demerged Company, the Resulting Company had been a party thereto. The Resulting Company shall enter into and/or issue and/or execute deeds, writings or confirmations or enter into any tripartite arrangements, confirmations or novations, to which the Demerged Company will, if necessary, also be party in order to give formal effect to the provisions of this Scheme, if so required or becomes necessary. The Resulting Company shall be deemed to be authorised to execute any such deeds, writings or confirmations on behalf of the Demerged Company and to implement or carry out all formalities required on the part of the Demerged Company to give effect to the provisions of this Scheme.

6 Transfer of Liabilities 6.1 Upon the coming into effect of this Scheme and with effect from the Appointed Date, all debts,

liabilities, loans raised and used, obligations incurred, duties of every kind, nature and description including contingent liabilities which arise out of the activities or operations of the Demerged Company relatable to the Demerged Undertaking as on the Appointed Date shall also, under the provisions of Sections 391 and 394 of the Act, without any further act or deed, be transferred to or be deemed to be transferred to the Resulting Company to the extent they are outstanding as on the Effective Date so as to become as from the Appointed Date the debts, liabilities, contingent liabilities, duties and obligations of the Resulting Company 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 debts, liabilities, contingent liabilities, duties and obligations have arisen in order to give effect to the provisions of this sub-clause.

6.2 Where any of the loans raised and used, debts, liabilities, duties and obligations of the Demerged

Company relatable to the Demerged Undertaking as on the Appointed Date deemed to be transferred to the Resulting Company have been discharged by the Demerged Company on or after the Appointed Date and prior to the Effective Date, such discharge shall be deemed to have been for and on account of the Resulting Company.

6.3 Upon the coming into effect of the Scheme, all loans raised and used and all debts, liabilities, duties

and obligations incurred by the Demerged Company for the operations of the Demerged Undertaking with effect from the Appointed Date and prior to the Effective Date, subject to the terms of this Scheme, shall be deemed to have been raised, used or incurred for and on behalf of the Resulting Company and to the extent they are outstanding on the Effective Date, shall also without any further act or deed be and stand transferred to and be deemed to be transferred to the Resulting Company and shall become the loans, debts, liabilities, duties and obligations of the Resulting Company.

6.4 The transfer and vesting of the undertaking of the Demerged Undertaking of the Demerged

Company as aforesaid, shall be subject to the existing Encumbrances securities, charges and mortgages, if any subsisting, over or in respect of the property and assets or any part thereof relatable to the Demerged Undertaking unless otherwise agreed by the relevant creditors of the Demerged Company; Provided however, any reference in any security documents or arrangements (to which the Demerged Company is a party) to the assets of the Demerged Undertaking of the Demerged Company offered or agreed to be offered as security for any financial assistance or obligations, shall be construed as reference only to the assets pertaining to the undertaking of the Demerged Undertaking of the Demerged Company as are vested in the Resulting Company by virtue of the aforesaid Clauses, to the end and intent that such security, charge and mortgage shall not extend or be deemed to extend, to any of the assets of the Resulting Company. Provided further that the securities, charges and mortgages (if any subsisting) over and in respect of the assets or any part thereof of the Resulting Company shall continue with respect to such assets or part thereof and this Scheme shall not operate to enlarge such securities, charges or mortgages to the end and intent that such securities, charges and mortgages shall not extend or be deemed to extend, to any of the assets of the Demerged Undertaking of the Demerged Company vested in the Resulting

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Company under this Scheme . Provided also that the Scheme shall not operate to enlarge the security for any loan, deposit or facility created by the Demerged Undertaking of the Demerged Company which shall vest in the Resulting Company by virtue of this Scheme and the Resulting Company shall not be obliged to create any further or additional security there for after the arrangement has become operative.

6.5 For the avoidance of doubt, it is hereby clarified that in so far as the assets comprising the

Remaining Business are concerned, the Encumbrances over such assets relating to the Liabilities of the Demerged Undertaking shall, as and from the Effective Date without any further act, instrument or deed be released and discharged from the obligations and Encumbrances relating to the same. The absence of any formal amendment which may be required by a lender or trustee or third party shall not affect the operation of the above. Further, in so far as the assets comprised in the Demerged Undertaking are concerned, the Encumbrances over such assets relating to any loans, borrowings or debentures or other debts or debt securities which are not transferred pursuant to this Scheme (and which shall continue with the Demerged Company), shall without any further act or deed be released from such Encumbrances and shall no longer be available as security in relation to such liabilities.

6.6 For the avoidance of doubt, It is further clarified that no obligations in relation to the Demerged

Undertaking shall be retained with or assumed by the Demerged Company following the Demerger pursuant to this Scheme and upon the coming into effect of this Scheme, the Resulting Company alone shall be liable to perform all obligations in respect of the liabilities of Demerged Undertaking transferred to it in terms of this Scheme.

7 Legal Proceedings 7.1 All legal proceedings of whatsoever nature by or against the Demerged Company pending and/or

arising at the Appointed Date relating to the Demerged Undertaking, shall be continued and /or enforced until the Effective Date as desired by the Resulting Company and as and from the Effective Date shall be continued and enforced by or against the Resulting Company in the manner and to the same extent as would or might have been continued and enforced by or against the Demerged Company. On and from the Effective Date, the Resulting Company shall and may, if required, initiate any legal proceedings in relation to the Demerged Undertaking in the name of the Resulting Company.

7.2 After the Appointed Date for demerger if any proceedings are taken against the Demerged Company

in respect of the matters referred to in the Clause 7.1 above, it shall defend the same at the cost of the Resulting Company and the Resulting Company shall reimburse and indemnify the Demerged Company against all liabilities and obligations incurred by the Demerged Company in respect thereof.

7.3The Resulting Company undertakes to have all legal or other proceedings initiated by or against the

Demerged Company referred to in Clause 7.1 above transferred into its name and to have the same continued, prosecuted and enforced by or against the Resulting Company to the exclusion of the Demerged Company.

8 Existing Obligations& Saving of Concluded Transactions

The transfer of properties, contracts and liabilities under Clause 4,5 and 6 above and the continuance of proceedings by or against the Demerged Company under Clause 7 above shall not affect any transaction or proceedings already concluded by the Demerged Company on or after the Appointed Date till the Effective Date, to the end and intent that the Resulting Company accepts and adopts all acts, deeds and things done and executed by the Demerged Company in respect thereto as done and executed on behalf of itself.

9 Staff, Workmen and Employees

9.1 Upon the Scheme becoming operative, all staff, workmen and employees of the Demerged Undertaking in service on the Effective Date shall be deemed to have become staff, workmen and employees of the Resulting Company with effect from the Appointed Date without any break in their service and on the basis of continuity of service, and the terms and conditions of their employment

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with the Resulting Company shall not be less favourable than those applicable to them with reference to the Demerged Undertaking of the Demerged Company on the Effective Date.

9.2 It is expressly provided that, on the Scheme becoming effective, the Provident Fund, Gratuity Fund,

Superannuation Fund or any other Special Fund created or existing for the benefit of the staff, workmen and employees of the Demerged Undertaking shall be transferred to and form part of the corresponding funds of the Resulting Company and the Resulting Company shall stand substituted for the Demerged Company for all purposes whatsoever in relation to the administration or operation of such Fund or Funds or in relation to the obligation to make contributions to the said Fund or Funds in accordance with the provisions thereof as per the terms provided in the respective Trust Deeds, if any, to the end and intent that all rights, duties, powers and obligations of the Demerged Company in relation to such Fund or Funds shall become those of the Resulting Company. It is clarified that the services of the staff, workmen and employees of the Demerged Undertaking will be treated as having been continuous for the purpose of the said Fund or Funds. Until such time that the Resulting Company creates/or arranges for its own funds, the Resulting Company may, subject to necessary approvals and permissions if any, continue to make contributions pertaining to the employees of the Demerged Undertaking to the relevant fund of the Demerged Company. Such contributions pertaining to the employees of the Demerged Undertaking shall be transferred to the funds created by the Resulting Company on creation of relevant funds/arrangements by the Resulting Company.

SECTION - 2: CONDUCT OF BUSINESS

10 Conduct of business

10.1 As and from the date of acceptance of this Scheme by the Board of Directors of the Demerged Company and the Board of Directors of the Resulting Company and till the Effective Date:

10.1.1 The Demerged Company shall carry on the businesses of the Demerged Undertaking with

reasonable diligence and in the same manner as it had been doing hitherto before, and the Demerged Company shall not alter or expand the business of the Demerged Undertaking except with the concurrence of the Resulting Company.

10.1.2 The Demerged Company shall not, without the written concurrence of the Resulting Company,

alternate, charge or encumber any of its properties relatable to the Demerged Undertaking except in the ordinary course of business or pursuant to any pre-existing obligation undertaken prior to the date of acceptance of the Scheme by the respective Boards of Directors of the Demerged Company and the Resulting Company.

10.1.3 The Demerged Company shall not vary or alter, except in the ordinary course of its business, the

terms and conditions of employment of any of its employees of the Demerged Undertaking. 10.1.4 Neither the Demerged Company nor the Resulting Company shall alter its capital structure other

than alterations pursuant to commitments, obligations or arrangements subsisting prior to the Appointed Date for demerger, either by fresh issue of shares or convertible securities (on a rights basis or by way of bonus shares or otherwise) or by any decrease, reduction, reclassification, subdivision, consolidation, re-organisation or in any other manner which may in any way affect the share exchange ratio prescribed hereunder, except by the consent of the Boards of Directors of the Demerged Company and the Resulting Company.

10.2 With effect from the Effective Date, the Resulting Company shall commence and carry on and shall

be authorised to carry on the businesses carried on by the Demerged Undertaking 10.3 The Demerged Company shall be entitled, pending the sanction of the Scheme, to apply to the

Central Government and all other agencies, departments and authorities concerned as are necessary under any law for such consents, approvals and sanctions which the Resulting Company may require to own and carry on the business of the Demerged Undertaking.

11 Business and Property in Trust for the Resulting Company

11.1 As and from the Appointed Date for demerger and till the Effective Date:

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11.1.1 The Demerged Company shall carry on and be deemed to have carried on its business and

activities in relation to the Demerged Undertaking and shall stand possessed of all assets and properties of the Demerged Undertaking in trust for the Resulting Company and shall account for the same to the Resulting Company.

11.1.2 Any income or profit accruing or arising to the Demerged Company in relation to the Demerged

Undertaking and all costs, charges, expenses and losses incurred by the Demerged Company in relation to the Demerged Undertaking shall for all purposes be treated as the income, profits, costs, charges, expenses and losses, as the case may be, of the Resulting Company and shall be available to the Resulting Company for being disposed off in any manner as it thinks fit, including declaration of dividend.

11.1.3 The Demerged Company shall not utilize the profits or income, if any, relating to the Demerged

Undertaking for the purpose of declaring or paying any dividend or for any other purpose in respect of the period falling on and after the Appointed Date for demerger, without the prior written consent of the Resulting Company.

11.2 With effect from the Appointed Date for demerger and time fixed for the purpose of Demerger, all

debts, liabilities, duties and obligations of the Demerged Undertaking of the Demerged Company, whether or not provided in the books of the Demerged Undertaking of the Demerged Company, and all other liabilities relating to the Demerged Undertaking which arises or accrues on or after the Appointed Date for demerger and time fixed for the purpose of Demerger, but which relates to the period on or upto the Appointed Date , shall be deemed to be the debts, liabilities, duties and obligations of the Resulting Company.

SECTION - 3: REMAINING BUSINESS

12 Remaining Business

12.1 The Remaining Business and all the assets, liabilities and obligations pertaining thereto shall continue to belong to and be vested in and be managed by the Demerged Company.

12.2 Any legal or other proceedings by or against the Demerged Company under any statute, whether

pending on the Appointed Date or which may be instituted in future whether or not in respect of any matter arising before the Effective Date and relating to the Remaining Business (including those relating to any property, right, power, liability, obligation or duties of the Demerged Company in respect of the Remaining Business) shall be continued and enforced by or against the Demerged Company, which shall keep the Resulting Company fully indemnified in that regard. The resulting Company shall in no event be responsible or liable in relation to any such legal or other proceeding against the Demerged Company

SECTION - 4: CONSIDERATION

13 Issue of Equity Shares by the Resulting Company to the Shareholders of the Demerged

Company

13.1 The provisions of this clause shall operate notwithstanding anything to the contrary in any other instrument, deed, or writing.

13.2 Upon the coming into effect of this Scheme and in consideration of the transfer and vesting of the

Demerged Undertaking in the Resulting Company in terms of this Scheme, the Resulting Company shall, without any further application, act, instrument or deed, issue and allot to the equity shareholders of the Demerged Company, whose names are registered in the Register of Members of the Demerged Company on the Record Date (to be fixed by the Board of Directors of the Resulting Company) or his / her / its legal heirs, executors, administrators or as the case may be, successors, 127 (One hundred twenty seven) equity share of ` 10- (Rupees Ten only) each, credited as fully paid up of the Resulting Company (hereinafter called the “New Equity Shares”) for every 100 (one hundred ) equity share of face value of ` 10/- (Rupees Ten only) each held in the Demerged Company on the Record Date by such equity shareholders or their respective legal

27

heirs, executors, administrators or as the case may be, the successors in title, with the rights attached thereto as mentioned in this Scheme.

13.3 Notwithstanding anything contained herein, in the event of any shareholders of HEL having a

shareholding such that such shareholder becomes entitled to a fraction of the New Equity Shares in the Resulting Company, all the fractional entitlements of various shareholders shall be aggregated and without any further act, deed or thing to be done, such consolidated New Equity Shares shall stand vested to a director or an officer of the Resulting Company, as the case may be, or such other person as the respective Board of Directors shall appoint in this behalf who shall hold the New Equity Shares in trust on behalf of the members entitled to fractional entitlements with the express understanding that such director(s) or officer(s) or person(s) shall sell the same in the market at such time or times and at such price or prices and to such person or persons, as it/he/they may deem fit, and pay to the Resulting Company, the net sale proceeds thereof, whereupon the Resulting Company shall distribute such net sale proceeds subject to taxes, if any, to the members in proportion to their respective fractional entitlements.

13.4 Where New Equity Shares of the Resulting Company are to allotted to the heirs, executors or

administrators or, as the case may be to the successor of the deceased equity shareholders of the Demerged Company, the concerned heirs, executors or administrators or, as the case may be to the successor shall be obliged to produce evidence of title satisfactory to the Board of Directors of the Resulting Company.

13.5 The ratio in which the equity shares of the Resulting Company are to be issued and allotted to the

shareholders of the Demerged Company is herein referred to as the “Share Exchange Ratio”. In the event that the Demerged Company restructures its equity share capital by way of share split / consolidation during the pendency of the Scheme, the Share Exchange Ratio shall be adjusted accordingly to take in to account the effect of such corporate actions.

13.6 No Special Resolution under Section 81(1A) of the Act, shall be required to be passed by the

Resulting Company separately in the General Meeting for issue of New Equity Shares to the shareholders of the Demerged Company under the Scheme and on the members of the Resulting Company approving this Scheme, it shall be deemed that they have given their consent to the issue of New Equity Share of the Resulting Company to the shareholders of the Demerged Company as per the Share Exchange Ratio.

13.7 In so far as the issue of New Equity Shares by the Resulting Company pursuant to Clause 13.2

above is concerned, each of the shareholders of the Demerged Company holding shares in physical form shall have the option, exercisable by notice in writing by them to the Resulting Company on or before the Record Date, to receive, the New Equity Shares of the Resulting Company either in certificate form or in dematerialised form, in lieu of their shares in the Demerged Company in accordance with the terms hereof. In the event that such notice has not been received by the Resulting Company in respect of any of the members of the Company shall be issued to such members in physical form. Those of the members of the Demerged Company who exercise the option to receive the shares in dematerialised form shall be required to have an account with a Depository Participant and shall provide full details thereof and such other confirmations as may be required in the notice provided by such shareholder to the Resulting Company. It is only thereupon that the Resulting Company shall issue and directly credit the demat/dematerialised securities account of such member with the New Equity Shares of the Resulting Company.

13.8 Each of the members of the Demerged Company holding shares of the Demerged Company in

dematerialised form shall have the option, exercisable by notice in writing by them to the Resulting Company on or before the Record Date, to receive, the New Equity Shares of the Resulting Company either in certificate form or in dematerialised form, in lieu of their shares in the Demerged Company in accordance with the terms hereof. In the event that such notice has not been received by the Resulting Company in respect of any of the members of the Demerged Company, the shares of the Resulting Company shall be issued to such members in dematerialised form as per the records maintained by the National Securities Depository Limited and/or Central Depository Services (India) Limited on the Record Date in terms of Clause 13.2 above.

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13.9 In the event of there being any pending share transfers, whether lodged or outstanding, of any shareholder of the Demerged Company, the Board of Directors of the Demerged Company shall be empowered in appropriate cases, prior to or even subsequent to the Record Date, to effectuate such a transfer as if such changes in the registered holder were operative as on the Record Date, in order to remove any difficulties arising to the transferor or transferee of equity shares in the Demerged Company, after the effectiveness of this Scheme.

13.10 The New Equity Shares allotted by the Resulting for any equity shares of the Demerged Company

which are held in abeyance under section 206A or other applicable provisions of the Act or otherwise shall, pending settlement of dispute by order of Court or otherwise, be held in abeyance by the Resulting Company.

13.11 The New Equity Shares issued and allotted by the Resulting Company in `terms of this Scheme shall

be subject to the provisions of the Memorandum and Articles of Association of the Resulting Company and shall inter-se rank pari passu in all respects with the then existing equity shares of the Resulting Company, including in respect of dividend, if any, that may be declared by the Resulting Company on or after the Effective Date.

13.12 The Resulting Company, shall, to the extent required, increase their Authorised Share Capital in

order to issue New Equity Shares under this Scheme.

13.13 The New Equity Shares of the Resulting Company issued in terms of Clause 13.2 of this Scheme will be listed and/or admitted to trading on the Bombay Stock Exchange Limited, where the shares of the Demerged Company are listed and/or admitted to trading. The Demerged Company and / or the Resulting Company, as the case may be, shall make such applications to the Bombay Stock Exchange/ Securities and Exchange Board of India as required u/r 19 (7) of SCCR ,1957 or any other applicable Rules for listing of the New Equity Shares of the Resulting Company on the said stock exchange and also enter into such arrangements and give such confirmations and/ or undertakings as may be necessary in accordance with the applicable laws or regulations for complying with the formalities of the said stock exchanges.

13.14 For the purpose of issue of New Equity Shares to the shareholders of the Demerged Company, the

Resulting Company shall, if and to the extent required, apply for and obtain the required statutory approvals and approvals of other concerned regulatory authorities for the issue and allotment by the Resulting Company of such equity shares.

13.15 The shares allotted pursuant to the Scheme shall remain frozen in the depositories system till listing /

trading permission is given by the designated stock exchange. 13.16 Until the listing of the equity shares of the Resulting Company with the Stock Exchanges, except as

provided in this Scheme, including Part III hereof, there shall be no change in the shareholding pattern or control or pre-arrangement capital structure of the Resulting Company.

SECTION – 5: ACCOUNTING TREATMENT

14 Accounting Treatment

14.1 In the books of the Demerged Company (HEL) Upon coming into effect of this Scheme and with effect from the Appointed Date:

14.1.1 The accounts representing the assets and liabilities of the Demerged Undertaking shall

stand closed and transferred to the Resulting Company. In so far as the accounts representing common or multipurpose borrowings, they shall stand reduced by the amounts transferred to the Resulting Company in accordance with the provisions of this Scheme.

14.1.2 The excess of book value of assets as appearing in the balance sheet of HEL and

transferred as a part of the Garment Business to the Resulting Company over the book

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value of liabilities transferred as a part of the Garment Business, shall be adjusted and debited against the following in the order specified, to the extent required:

(a) Capital Reserve (b) General Reserve Account (c) Profit & Loss Account (d) The balance left will be debited to Goodwill Account in the books of the Demerged

Company.

14.1.3 All costs and expenses incurred by Resulting Company in connection with excise re-registrations, all advisory fees, professional fees, consultant fees & expenses and any other expenses or charges incurred by the Resulting Company for implementation of the Scheme shall be adjusted against the General Reserves Account and/or Profit and Loss Account . In case of shortfall in General Reserves and/or Profit and Loss Account it shall be debited to Goodwill Account.

14.1.4 The Demerged Company (By its Board of Directors) may alter or modify the provisions of

this clause 14.1 in consultation with their Auditors, as they may deem fir and consider necessary to settle any question or difficulty arising out of the Scheme to comply with the relevant laws and applicable Accounting Standard

14.2 In the books of the Resulting Company (HAL)

Upon coming into effect of this Scheme and with effect from the Appointed Date:

14.2.1. The Resulting Company shall, upon the arrangement becoming operative, record the assets and liabilities of the Demerged Undertakings of the Demerged Company transferred and vested in it pursuant to this Scheme, at the respective book values thereof as appearing in the books of the Demerged Company at the Appointed Date

14.2.2 The Resulting Company shall credit to its Share Capital Account in its books of account the

aggregate face value of the New Equity Shares issued by it to the members of the Demerged Company pursuant to clause 13.2 of this Scheme.

14.2.3 The difference, being the excess of the New Equity Shares issued by the Resulting

Company on demerger, over the net value of assets (assets-liabilities) of the demerged Undertaking (Garment Business) of the demerged Company transferred to the Resulting Company and recorded under 14.2.1above shall be adjusted and debited against the following in the order specified, to the extent required:

a) Capital Reserve b) General Reserve Account c) Profit & Loss Account d) The balance left will be debited to Goodwill Account of the Resulting

Company as the case may be.

In case of there being a shortfall, the same shall be credited to General Reserve Account. The amount credited to General Reserve shall for all purposes constitute a part of the Free Reserves of the Resulting Company.

14.2.4 All costs and expenses incurred by Resulting Company in connection with excise re-

registrations, all advisory fees, professional fees, consultant fees & expenses and any other expenses or charges incurred by the Resulting Company for implementation of the Scheme shall be adjusted against the General Reserves Account. In case of shortfall in General Reserves it shall be debited to Goodwill Account.

14.2.5 The Resulting Company (By its Board of Directors) may alter or modify the provisions of

this clause 14.2 in consultation with their Auditors, as they may deem fir and consider necessary to settle any question or difficulty arising out of the Scheme to comply with the relevant laws and applicable Accounting Standard

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PART III AMALGAMATION OF THE AMALGAMATING COMPANY WITH THE AMALGAMATED COMPANY Upon the occurrence of the Demerger pursuant to Part II of this Scheme, the Demerged Company shall be referred to as the "Amalgamated Company or the Transferee Company", comprising the Remaining Business, for the purposes of this Part III.

SECTION – I:TRANSFER AND VESTING OF UNDERTAKING

15 Upon the coming into effect of this Scheme and with effect from the Appointed Date the entire Undertaking of the Amalgamating Company shall be transferred to and vested in or be deemed to be transferred to and vested in the Amalgamated Company in the following manner:

15.1. The entire business and the whole of the Undertaking including all the estate, assets, rights, claims, title, interest and authorities including accretions and appurtenances ) and the Liabilities whether secured, unsecured or contingent of whatsoever nature and wheresoever situate, comprised in the Undertaking of the Amalgamating Company shall subject to the provisions of this Clause 15 in relation to the mode of transfer and vesting, pursuant to Section 394(2) and other applicable provisions of the Act without any further act, instrument or deed, matter or thing be transferred to and vested in or be deemed to be transferred to and vested in the Amalgamated Company as a going concern so as to become as and from the Appointed Date estate, assets(subject to encumbrances and charges, if any, existing thereon),and the said liabilities of the Amalgamated Company and there shall be vested in the Amalgamated Company all the rights, title, interest, authorities or obligations of the Amalgamating Company therein subject to the provisions of this Scheme in relation to Encumbrances in favour of Banks and or Lenders

15.2 Transfer of Assets (a) In respect of the whole of the Undertakings and properties, as aforesaid, of the Undertaking of the

Amalgamating Company, ( including all the estate, assets, rights, claims, title, interest, authorities including accretions and appurtenance) of whatsoever nature and whosesoever situate except for the portions dealt with under sub-clause (b) and sub-clause (c) below, and which are incapable of passing by manual delivery, shall, under the provisions of Sections 391 to 394 and all other applicable provisions, if any, of the Act, without any further act or instrument or deed, be transferred from the Amalgamating Company and stand transferred to and vested in the Amalgamated Company or be deemed to be transferred to and vested in the Amalgamated Company as a going concern so as to become, as and from the Appointed Date, the assets and properties of the Amalgamated Company to vest in the Amalgamated Company all the right, title and interest therein subject to the provisions of this Scheme in relation to Encumbrances in favour of banks and/or financial institutions and secured lenders

(b) Without prejudice to the provisions of Clause 15.1 and sub-clause (a) of this Clause 15.2 in respect of such of the Assets of the Undertaking of the Amalgamating Company as are movable in nature or are otherwise capable of transfer by delivery or possession or by endorsement and delivery, the same shall be so transferred upon the coming into effect of the Scheme, and shall become the property and assets of the Amalgamated Company with effect from the Appointed Date pursuant to the provisions of Section 391 to 394 of the Act and all other provisions of applicable law, if any, without requiring any deed or instrument of conveyance for transfer of the same subject to the provisions of this Scheme in relation to Encumbrances in favour of banks and/or financial institutions and secured lenders

(c) In respect of such of the assets of the Undertaking of the amalgamating Company as are movable in

nature other than those referred to in sub-clause 15.2.(b) above, including sundry debtors, receivables, bills, credits, loans and advances, if any, whether recoverable in cash or in kind or for value to be received, bank balances, investments, earnest money and deposits with any Government, Semi-Government, local or other authority or body or with any company or other person, the same shall, as more particularly provided in sub-clause 15.1 and 15.2.(a) above, without requiring any further consent, act, instrument or deed, be transferred to and vested in and/or be

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deemed to be transferred to and vested in the Amalgamated Company on the Appointed Date pursuant to the provisions of Section 394(2) and other applicable provisions of the Act. and shall become property of the Amalgamated Company without any notice or other intimation to the debtors and the Amalgamating Company shall, if required, give notice in such form as may deem fit and proper, to each person, debtor, or depositee, as the case may be, to the effect that pursuant to the High Court having sanctioned the amalgamation of the Amalgamating Company with the Amalgamated Company under Sections 391 to 394 of the Act, the said debt, loan, advance, balance or deposit be paid or made good or held on account of the Amalgamated Company as the person entitled thereto and that appropriate entry should be passed in its or their books to record the aforesaid change. The Amalgamated Company shall, if required, also give notice in such form as it may deem fit and proper to each person, debtor or depositee that, pursuant to the High Court having sanctioned the amalgamation of the Amalgamating Company with the Amalgamated Company under Sections 391 to 394 of the Act, the said debt, loan, advance, balance or deposit be paid or made good or held on account of the Amalgamated Company and the debtors person, or depositee shall be obliged to make payments to the Amalgamated Company on and after the Effective Date.. It is hereby clarified that all the investments made by the Amalgamating Company pursuant to Section 394(2) and other applicable provisions of the Act and the subject to the provisions of this Scheme, without any further act or deed, be transferred to and vested in or be deemed to have been transferred to and vested in the Amalgamated Company

(d) In respect of such of the Assets and the rights, title and interests including in the lease hold

properties of the Amalgamating Company other than those referred to in sub clause(b) and (c) above, the same shall, as more particularly provided in sub clause (a) above, without any further act, instrument or deed, be transferred to and vested in and/ or be deemed to be transferred to and vested in the Amalgamated Company on the Appointed date pursuant to the provisions of Sections391 to 394 of the Act and the concerned authorities having jurisdiction over the Assets shall endorse and record the name of Amalgamated Company in its record so as to facilitate the implementation of the Scheme and vesting of the Undertaking of the Amalgamating Company in the Amalgamated Company without hindrance from the Appointed Date.

(e) All Assets comprised in the Undertaking of the Amalgamating Company as on the Appointed Date,

whether or not included in the books of the Amalgamating Company, and all assets and properties, which are acquired by the Amalgamating Company, on or after the Appointed Date till the Effective Date, shall be deemed to be and shall become the assets and properties of the Amalgamated Company by virtue of and in the manner provided in this Scheme.

(f) All estates, assets, rights, intellectual property rights(IPR), trade mark, brands, title, interests and authorities accrued to and/or acquired by the Amalgamating Company after the Appointed Date and prior to the Effective Date shall be deemed to have been accrued to and/ or acquired for and on behalf of the Amalgamated Company and shall, upon the coming into effect of this Scheme, pursuant to the provisions of Section 394(2) and other applicable provisions of the Act, without any further act, instrument or deed be and stand transferred to or vested in or be deemed to have been transferred to or vested in the Amalgamated Company to that extent and shall become the estates, assets, rights, title, interests and authorities of the Amalgamated Company.

(g) For the avoidance of doubt and without prejudice to the generality of the foregoing, it is clarified that upon the coming into effect of this Scheme, all the statutory licenses, permits, approvals, permissions, registrations, incentives, benefits, subsidies, concessions, grants, rights including land development rights, claims, leases, tenancy rights, liberties, special status and privileges enjoyed or conferred upon or held or availed of by the Amalgamating Company and all rights and benefits that have accrued or which may accrue to the Amalgamating Company, whether before or after the Appointed Date, shall, pursuant to the provisions of Sections 391 to 394 of the Act, without any further act, instrument or deed, cost or charge be and stand transferred to and vest in or be deemed to be transferred to and vested in and be available to the Amalgamated Company so as to become as and from the Appointed Date licenses, permits, approvals, permissions, registrations, incentives, benefits, subsidies, concessions, grants, rights including land development rights, claims, leases, tenancy rights, liberties, special status and privileges of the Amalgamated Company and shall remain valid, effective and enforceable on the same terms and conditions. and shall be appropriately mutated by the statutory authorities concerned in favour of the Amalgamated Company upon the vesting and transfer of the undertaking of the Amalgamating Company pursuant to this Scheme

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15.3 Transfer of Liabilities

Upon the coming into effect of this Scheme and with effect from the Appointed Date:

15.3.1 Without prejudice to the generality of Clause 15.1 above, all secured and unsecured debts

(whether in rupees or foreign currency), all Liabilities, duties, obligations and undertakings of every kind, description and nature whatsoever with or without any charge, encumbrance, lien or security thereon including those arising on account of taxation laws and other allied laws, (hereinafter referred to as the “Liabilities”) of the Amalgamating Company shall, pursuant to the sanction of this Scheme by the High Court and pursuant to the provisions of Sections 391 to 394 and other applicable provisions, if any, of the Act, without any further act, instrument or deed, be and stand transferred to and vested in or be deemed to have been transferred to and vested in, the Amalgamated Company, and the same shall be assumed by the Amalgamated Company to the extent they are outstanding on the Effective Date so as to become as and from the Appointed Date, the Liabilities of the Amalgamated Company on the same terms and conditions as were applicable to the Amalgamating Company and the Amalgamated Company shall meet, discharge and satisfy the same and further that it shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or any arrangement by virtue of which such liabilities have arisen in order to give effect to the provisions of this clause. Provided always that, the Scheme shall not operate to alter / change /enlarge the security for any loan, deposit or facility availed by the Amalgamating Company, and the Amalgamated Company shall not be obliged to create any further or additional security therefore after the Effective Date.

15.3.2 All debentures, bonds, notes or other debt securities of the Amalgamating Company, whether

convertible into equity or otherwise, (the ”Securities”), shall, pursuant to the provisions of Section 394(2) and other applicable provisions of the Act , without any further act, instrument or deed become securities of the Amalgamated Company and all rights, powers, duties and obligations in relation thereto shall be and stand transferred to and vested in or deemed to have been transferred to and vested in and shall be exercised by or against the Amalgamated Company as if it were the Amalgamating Company in respect of the Securities so transferred.

15.3.3 All Liabilities whether or not provided in the books of the Amalgamating Company, and all debts or loans raised and liabilities and obligations incurred, duties and obligations relating to the Amalgamating Company which arise or accrue to the Amalgamating Company on or after the Appointed Date for amalgamation till the Effective Date, shall be deemed to be and shall become the debts, liabilities and loans raised and liabilities and obligations incurred, duties and obligations of the Amalgamated Company by virtue of and in the manner provided in this Scheme.

15.3.4 Where any of the Liabilities of the Amalgamating Company as on the Appointed Date for

amalgamation transferred to the Amalgamated Company have been discharged by the Amalgamating Company after the Appointed Date for amalgamation and prior to the Effective Date, such discharge shall be deemed to have been for and on account of the Amalgamated Company.

15.3.5 Upon this Scheme becoming effective (with effect from the Appointed Date) all loans raised

and utilized and all debts, duties, undertakings, liabilities including all income taxes, excise duty, customs duty, sales tax, value added tax, service tax and other Government and Semi-Government liabilities and obligations incurred or undertaken , by the Amalgamating Company in relation to or in connection with the Undertaking after the Appointed Date for amalgamation and prior to the Effective Date subject to the provisions of this Scheme shall be deemed to have been raised, used, incurred or undertaken for and on behalf of the Amalgamated Company and to the extent they are outstanding on the Effective Date, shall, upon the coming into effect of this Scheme, pursuant to the provisions of Section 394(2) and other applicable provisions of the Act, without any further act or deed be also transferred or be deemed to be transferred to and vest in and be absorbed, taken over and assumed by the Amalgamated Company so as to become as from the Appointed Date the debts, liabilities, duties and

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obligations of Amalgamated Company on the same terms and conditions as were applicable to the Amalgamating Company and it is further specifically clarify, admit, assure and declared by the Amalgamated Company that it will pay and discharge the same on due date(s) .

15.3.6 It is expressly provided that, save as herein provided, no other term or condition of the

liabilities transferred to the Amalgamated Company is modified by virtue of this Scheme accept to the extent that such amendment is required statutorily or by necessary implication

15.3.7 It is further specifically clarify, admit, assure and declared by the Amalgamated Company that

on this Scheme becoming effective it will take over, absorb and pay and discharge on due date all the liabilities including liabilities for income tax, sales tax, excise, service, tax, if any, of the Amalgamating Company.

15.4 Security, Mortgages, Charges and Encumbrances

15.4.1 In so far as the Assets of the Amalgamating Company is concerned, the securities,

mortgages, charges, encumbrances or liens (hereinafter referred to as the "Encumbrances") if any existing or if created at any time prior to the Effective Date, over the Assets or any part thereof, transferred to the Amalgamated Company in terms of this Scheme and relating to the Liabilities of the Amalgamating Company, shall, after the Effective Date, without any further act or deed, continue to relate or attach to such Assets or any part thereof, but such Encumbrances, if any, shall not relate or attach to any of the assets and properties of the Amalgamated Company or any part thereof or to any of the other Assets of the Amalgamating Company transferred to the Amalgamated Company pursuant to this Scheme, save to the extent warranted by the terms of any existing security arrangements to which the Amalgamating Company and the Amalgamated Company are party, and consistent with the joint obligations assumed by them under such arrangements.

15.4.2 Without prejudice to sub-clause 15.4.1 above it is clarified that the transfer and vesting of the

Undertaking of the Amalgamating Company to and in the Amalgamated Company in terms of this Scheme shall be subject to the Encumbrances, if any, on the Assets so transferred and vested and with effect from the Effective Date, any reference in any security documents or arrangements to the Amalgamating Company and its assets and properties, shall be construed as a reference to the Amalgamated Company and the assets and properties of the Amalgamated Company, provided always that such Encumbrances, if any, shall extend only to and over those assets and properties of the Amalgamating Company transferred to and vested in the Amalgamating Company pursuant to this Scheme and not any assets and properties of the Amalgamated Company

15.4.3 The existing securities, mortgages, charges, encumbrances or liens (including floating charges)

over the assets and properties of the Amalgamated Company or any part thereof which relate to any liability, loan, deposit or facility availed of by the Amalgamated Company shall continue to relate or attach to the assets and properties of the Amalgamated Company to which the same relate or attach and nothing contained in this Scheme shall operate to enlarge or extend such securities, mortgages, charges, encumbrances or liens (including floating charge) to any of the assets or properties of the Amalgamating Company or any part thereof which are transferred to and vested in the Amalgamated Company under and pursuant to this Scheme.

15.4.4 For the removal of doubt it is further clarified that, in so far as the assets comprising the

Undertaking are concerned:

a) the security or charge relating to loans, debentures or borrowings of the Amalgamating Company or other parties shall without any further act or deed continue to relate to the said assets after the Effective Date and shall not relate to or be available as security in relation to the borrowings of the Amalgamated Company; and the assets of the Amalgamated Company shall not relate to or be available as security in relation to the said borrowings of the Amalgamating Company.

b) the securities, charges and mortgages (if any subsisting) over and in respect of the assets or

any part thereof of the Amalgamated Company shall continue with respect to such assets or

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part thereof and this Scheme shall not operate to enlarge such securities, charges or mortgages to the end and intent that such securities, charges and mortgages shall not extend or be deemed to extend, to any of the assets of the Undertaking vested in the Amalgamated Company under this Scheme.

16.1 Inter-se Transactions

16.1.1 With effect from the Appointed Date for amalgamation all inter-party transactions between the

Amalgamating Company and the Amalgamated Company shall be considered as intra-party transactions for all purposes from the Appointed Date for amalgamation

16.1.2 Loans, advances and deposits of money, if any, receivable or which may at any time in the

future become receivable between the Amalgamating Company on one hand and the Amalgamated Company on the other hand shall ipso facto, stand discharged and there shall be no receivable in that behalf from either party.

16.1.3 Loans, advances and other obligations (including any guarantees, letters of credit, letters of comfort or any other instrument or arrangement which may give rise to a contingent liability in whatever form), if any, due or which may hereafter become due between the Amalgamating Company and the Amalgamated Company shall, ipso facto, stand discharged and come to an end and there shall be no liability in that behalf on any party and appropriate effect shall be given in the books of accounts and records of the Amalgamated Company. It is hereby clarified that there will be no accrual of interest or other charges in respect of any such inter-company loans, advances and other obligations with effect from the Appointed Date for amalgamation.

16.2 Contracts, deeds, bonds and other instruments

16.2.1 Without any further acts or deeds, upon the coming into effect of this Scheme and subject to

the provisions of this Scheme, all contracts, deeds, bonds, agreements, assurances, licenses, engagements, registrations, benefits, entitlements, arrangements and other instruments of whatsoever nature, including all the bids and tenders which have been submitted and/or accepted, exemptions including but not limited to all sales tax exemptions and/or deferral benefits and/or any other direct or indirect tax benefits and incentives and other instruments of whatsoever nature including but not limited to all land development rights, tenancies, leases, licenses and other assurances of whatsoever nature, in favour of the Amalgamating Company or powers or authorities granted by or to it of whatsoever nature to which the Amalgamating Company is a party or to the benefit of which the Amalgamating Company may be eligible, and which are subsisting or having effect immediately before the Effective Date, shall be continued and remained in full force and effect against or in favour of the Amalgamated Company as the case may be and may be enforced as fully and effectually as if, instead of the Amalgamating Company, the Amalgamated Company had been a party or beneficiary or obligee thereto or thereunder without the requirement of obtaining or seeking consent or approval of any third party.

16.2.2 Without prejudice to the other provisions of this Scheme and notwithstanding the fact that the

vesting of the Undertakings occurs by virtue of this Scheme itself, the Amalgamated Company may, at any time after the coming into effect of this Scheme in accordance with the provisions hereof, if so required, under any law or otherwise, take such actions or enter into, or issue or execute deeds, writings, confirmations, novations, declarations, or other documents with, or in favour of any party to any contract or arrangement to which the Amalgamating Company is a party or any writings as may be necessary to be executed in order to give formal effect to the provisions of this Scheme. The Amalgamated Company shall, be deemed to be authorised to execute any such writings on behalf of the Amalgamating Company and to carry out or perform all such formalities or compliances required for the purposes referred to above on the part of the Amalgamating Company.

16.2.3 For the avoidance of doubt and without prejudice to the generality of the foregoing, it is clarified that upon the coming into effect of this Scheme, all consents, permissions, licences, certificates, clearances, authorities, powers of attorney given by, issued to or executed in favour of the Amalgamating Company shall stand transferred to the Amalgamated Company,

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as if the same were originally given, issued to or executed in favour of the Amalgamated Company, and the Amalgamated Company shall be bound by the terms thereof, the obligations and duties thereunder and the rights and benefits under the same shall be available to the Amalgamated Company.

16.3 Legal proceedings

16.3.1 Upon the coming into effect of this Scheme, all suits, actions and proceedings by or against

the Amalgamating Companies pending and/or arising on or before the Effective Date shall be continued and be enforced by or against the Amalgamated Company as effectually and in the same manner and to the same extent as if the same had been instituted and/or pending and/or arising by or against the Amalgamated Company.

. 16.3.2 The Amalgamated Company undertakes to have all legal or other proceedings initiated by or

against the Amalgamating Company referred to in sub-clause 16.7.1 above transferred to its name and to have the same continued, prosecuted and enforced by or against the Amalgamated Company.

16.4 Transfer of workmen, Employees and staff

16.4.1 Upon the coming into effect of this Scheme:

a. All the employees of the Amalgamating Company who are in employment as on the Effective Date shall become the employees of the Amalgamated Company with effect from the Effective date without any break or interruption in service and on the same terms and conditions as to employment and remuneration on which they are engaged or employed by the Amalgamating Company.

b. It is clarified that the employees of Amalgamating Company who become employees of the

Amalgamated Company by virtue of this Scheme, shall not be entitled to the employment policies and shall not be entitled to avail of any schemes and benefits that may be applicable and available to any of the employees of the Amalgamated Company, unless otherwise determined by the Amalgamated company.

c. The Amalgamated Company undertakes to continue to abide by any agreement/settlement, if any,

entered into by any of the Amalgamating Company with any Union/ employee of any of the Amalgamating Company which is in force as on the Effective Date.

d. The Amalgamated Company shall have the right to transfer such employees to any unit, division,

subsidiary, profit/cost centre or department of the Amalgamated Company situated anywhere in India or abroad if warranted and as may be necessary from time to time.

e. As far as the provident fund, gratuity fund or any other special fund or schemes (including the

Employee Stock Option Scheme(s)) existing for the benefit of the employees of the Amalgamating Company are concerned, upon the coming into effect of this Scheme, the Amalgamated Company shall be substituted and / or transferred for the Amalgamating Company for all purposes whatsoever related to the administration/operation of such funds or schemes or in relation to the obligation to make contribution to the said funds or schemes in accordance with provisions of such funds or schemes according to the terms provided in the respective trust deeds or other documents and till such time shall be maintained separately. All the rights, duties, powers and obligations of the Amalgamating Company in relation to such funds or Schemes shall become those of the Amalgamated Company and the services of the employees will be treated as being continuous for the purpose of the aforesaid funds or schemes

17 SECTION - II: CONDUCT OF BUSINESS

17.1 With effect from the Appointed Date for Amalgamation up to and including the Effective Date: (i) the Amalgamating Company shall carry on and shall be deemed to have carried on all its business

and activities as hitherto and shall hold and stand possessed of and shall be deemed to have held

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and stood possessed of the entire undertaking and all the assets and liabilities of the Amalgamating Company on account of, and in trust for, the Amalgamated Company;

(ii) all profits and income accruing or arising to the Amalgamating Company, and losses and expenditure arising or incurred by it (including taxes, if any, accruing or paid in relation to any profits or income) shall, for all purposes, be treated as and be deemed to be the profits, income, losses or expenditure, as the case may be, of the Amalgamated Company; and

(iii) any of the rights, powers, authorities, privileges exercised by the Amalgamating Company shall be deemed to have been exercised by the Amalgamating Company for and on behalf of, and in trust for and as an agent of the Amalgamated Company. Similarly, any obligations, duties and commitments that have been undertaken or discharged by the Amalgamating Company shall be deemed to have been undertaken for and on behalf of and as an agent for the Amalgamated Company

17.2 With effect from the Appointed Date and up to and including the Effective Date the Amalgamating

Company shall carry on its business and activities with reasonable diligence and utmost business prudence and shall not undertake any additional financial commitments of any nature whatsoever, borrow any amounts nor incur any other liabilities or expenditure, issue any additional guarantees, indemnities, letters of comfort or commitments either for itself or on behalf of its subsidiaries or group companies or any third party or sell, transfer, alienate, charge, mortgage or encumber or deal with its undertakings save and except in each case in the following circumstances:

a. if the same is in its ordinary course of business as carried on by it as on the date of filing this

Scheme with the High Court; or b. if the same is expressly permitted by this Scheme; or c. if the same is pursuant to any pre-existing obligations undertaken prior to the Appointed Date

for amalgamation d. if written consent of the Board/Committee of Directors of the Amalgamated Company has been

obtained

17.3 The Amalgamating Company shall not make any change in its capital structure, whether by way of increase (by issue of equity shares on a rights basis, bonus shares, and convertible debentures or otherwise) decrease, reduction, reclassification, sub-division or consolidation, re-organisation or in any other manner except under any of the following circumstances:

a. by mutual consent of the respective Board/Committee of Directors of the Amalgamating

Company and of the Amalgamated Company; or b. as may be permitted under this Scheme.

18 SECTION – III: SAVING OF CONCLUDED TRANSACTIONS & VALIDITY OF EXISTING

RESOLUTIONS, ETC

18.1 Saving of concluded transactions

The transfer and vesting of the Undertakings of the Amalgamating Company under Clause 15 of this Scheme shall not affect any transactions or proceedings already concluded by the Amalgamating Company on or before the Appointed Date or after the Appointed Date till the Effective Date, to the end and intent that the Amalgamated Company accepts and adopts all acts, deeds and things made, done and executed by the Amalgamating Company as acts, deeds and things made, done and executed by or on behalf of the Amalgamated Company.

18.2 Validity of existing resolutions, etc. a) upon the coming into effect of this Scheme the resolutions, if any, of the Amalgamating Company,

which are valid and subsisting on the Effective Date, shall continue to be valid and subsisting and be considered as resolutions of the Amalgamated Company and if any such resolutions have upper monetary or other limits imposed under the provisions of the Act, or any other applicable provisions, then the said limits shall be added to the limits, if any, imposed under like resolutions passed by the Amalgamated Company and shall constitute the aggregate of the said limits in the Amalgamated Company.

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b) the limits of the Amalgamated Company for borrowings (apart from temporary loans obtained from the bankers in the ordinary course of business) in terms of Section 293(1)(d) of the Act shall, without any further act, instrument or deed, stand enhanced by the limits approved for the Amalgamating Company.

c) the limits and power of the Amalgamated Company for creating security etc in terms of Section

293(1)(a) of the Act shall, without any further act, instrument or deed, stand enhanced by the limits approved for the Amalgamating Company.

19 SECTION IV: CONSIDERATION AND REORGANISATION OF SHARE CAPITAL OF HARIA

EXPORTS LIMITED

19.1 Issue of equity shares by Amalgamated Company 19.1.1 Upon the coming into effect of this Scheme and in consideration of the shareholders of the

amalgamating company agreeing to the extinguishment of the shares of amalgamating company, consequent to the transfer and vesting of the Undertakings of the Amalgamating Company in the Amalgamated Company, on amalgamation of amalgamating company in the amalgamated Company, and the dissolution without winding-up of amalgamating company in terms of this scheme, the Amalgamated Company shall, without any further application, act, instrument or deed, issue and allot to the equity shareholders of the Amalgamating Company, whose names are registered in and appearing on its Register of Members on the Record Date (to be fixed by the Board of Directors of the Amalgamated Company or a Committee of such Board of Directors) or his/her/its heirs, executors or, as the case may be, successors,) equity shares of ` 10/- (Rupees Ten only) each, credited as fully paid up of the Amalgamated Company, in the ratio of 83 (Eighty-three equity share of ` 10/- (Rupees Ten only) each of the Amalgamated Company for every 100 ( one hundred ) equity shares of Re.10/- (Rupee Ten only) each credited as fully paid up held by such equity shareholders or their respective heirs, executors or, as the case may be, successors in the Amalgamating Company on the Record Date.

19.1.2 Notwithstanding anything contained herein, in the event of any shareholders of BPL having a

shareholding such that such shareholder becomes entitled to a fraction of the New Equity Shares in the Amalgamated Company, all the fractional entitlements of various shareholders shall be aggregated and without any further act, deed or thing to be done, such consolidated New Equity Shares shall stand vested to a director or an officer of the Amalgamated Company, as the case may be, or such other person as the respective Board of Directors shall appoint in this behalf who shall hold the New Equity Shares in trust on behalf of the members entitled to fractional entitlements with the express understanding that such director(s) or officer(s) or person(s) shall sell the same in the market at such time or times and at such price or prices and to such person or persons, as it/he/they may deem fit, and pay to the Amalgamated Company, the net sale proceeds thereof, whereupon the Amalgamated Company shall distribute such net sale proceeds subject to taxes, if any, to the members of amalgamating company entitled to the fraction in proportion to their respective fractional entitlements.

19.1.2 It is clarified that no Special Resolution under Section 81(lA) of the Act shall be required to be

passed by the Amalgamated Company in a general meeting for issue of shares to the shareholders of the Amalgamating Company under this Scheme and on the members of the Amalgamated Company approving this Scheme, it shall be deemed that they have given their consent to the issue of equity shares of the Amalgamated Company to the shareholders of the Amalgamating Company in the relevant Share Exchange Ratio.

19.2 Issue of Shares in dematerialized form: 19.2.1 In so far as the issue of new equity shares pursuant to Clause 19.1. above is concerned, each of

the shareholders of the Amalgamating Company holding shares in physical form shall have the option, exercisable by notice in writing by them to the Amalgamated Company on or before such date as may be determined by the Board of Directors of the Amalgamated Company or a Committee of such Board of Directors, to receive, the new equity shares of the Amalgamated Company either in certificate form or in dematerialised form, in lieu of their shares in the Amalgamating Company in accordance with the terms hereof. In the event that such notice has

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not been received by the Amalgamated Company in respect of any of the members of the Amalgamating Company, the shares of the Amalgamated Company shall be issued to such members in physical form. Those of the members of the Amalgamating Company who exercise the option to receive the shares in dematerialised form shall be required to have an account with a depository participant and shall provide details thereof and such other confirmations as may be required. It is only thereupon that the Amalgamated Company shall issue and directly credit the demat/dematerialized securities account of such member with the new equity shares of the Amalgamated Company.

19.2.2 Each of the members of the Amalgamating Company holding shares of the Amalgamating

Company in dematerialised form shall have the option, exercisable by notice in writing by them to the Amalgamated Company on or before the Record Date, to receive, the New Equity Shares of Amalgamated Company either in certificate form or in dematerialised form, in lieu of their shares in the Amalgamating Company in accordance with the terms hereof. In the event that such notice has not been received by the Amalgamated Company in respect of any of the members of the Amalgamating Company, the shares of the Amalgamated Company shall be issued to such members in dematerialised form as per the records maintained by the National Securities Depository Limited and/or Central Depository Services (India) Limited on the Record Date in terms of Clause 19.2 above.

19.3 Pending share transfers, etc.:

19.3.1 In the event of there being any pending share transfers whether lodged or outstanding, of any

shareholder of any of the Amalgamating Company, the Board of Directors of the Amalgamated Company or any Committee thereof shall be empowered in appropriate cases, prior to or even subsequent to the Record Date, to effectuate such a transfer as if such changes in the registered holder were operative as on the Record Dale. in order to remove any difficulties arising to the transferor or transferee of equity shares in the Amalgamating Company, after the effectiveness of this Scheme.

19.3.2 The new equity shares to be issued by the Amalgamated Company pursuant to this Scheme in

respect of any equity shares of the Amalgamating Company which are held in abeyance under the provisions of Section 206A of the Act or otherwise shall pending allotment or settlement of dispute by order of Court or otherwise, be held in abeyance by the Amalgamated Company.

19.4 New Equity Shares subject to same terms: 19.4.1 The new equity shares issued and allotted by the Amalgamated Company in terms of this Scheme

shall be subject to the provisions of the Memorandum and Articles of Association of the Amalgamated Company and shall inter-se rank pari passu in all respects with the then existing equity shares of the Amalgamated Company, including in respect of dividend, if any, that may be declared by the Amalgamated Company on or after the Effective Date.

19.4.2 The new equity shares of the Amalgamated Company issued in terms of Clause 19.1. of this

Scheme will be listed and/or admitted to trading on the Bombay Stock Exchange Limited where the shares of the Amalgamated Company are listed and/or admitted to trading. The Amalgamated Company shall enter into such arrangements and give such confirmations and/or undertakings as may be necessary in accordance with the applicable laws or regulations for complying with the formalities of the said Stock Exchange.

19.5 Obtaining of approvals:

For the purpose of issue of equity shares to the shareholders of the Amalgamating Company, the Amalgamated Company shall, if and to the extent required apply for and obtain the required statutory approvals including approval of Reserve Bank of India and other concerned regulatory authorities for the issue and allotment by the Amalgamated Company of such equity shares.

39

19.6 Cancellation of Shares of Amalgamating Company: The shares and share certificates of each of the Amalgamating Company held by the members of the Amalgamating Company shall, without any further application, act, instrument or deed, be deemed to have been automatically cancelled and non-negotiable and be of no effect on and from the Record Date.

20 Merging of Authorised Capital 20.1 Upon sanction of this Scheme, the authorised share capital of the Amalgamated Company in

terms of its Memorandum of Association and Articles of Association shall automatically stand merged, enhanced and increased without any further act, instrument or deed on the part of the Amalgamated Company including payment of stamp duty and fees payable to Registrar of Companies, by the authorised share capital of the Amalgamating Company amounting to ` 7,00,00,000/- (Rupees Seven Crores) comprising of 70,00,000 (Seventy Lac) equity shares of ` 10/- each and the Memorandum of Association and Articles of Association of the Amalgamated Company(relating to the authorized share capital) shall, without any further act, instrument or deed, be and stand altered, modified and amended and the consent of shareholders to the Scheme shall be deemed to be sufficient for the purposes of effecting this amendment and no further resolution(s) under Section 16, Section 31, Section 94 or any other applicable provisions of the Act, would be required to be separately passed. For this purpose the stamp duties and filing fees already paid by the Amalgamating Company on the authorized capital shall be utilized and applied to the increased authorized share capital of the Amalgamated Company and no payment of any extra stamp duty and/or fee shall be payable by Transferee Company for increase in the authorised share capital to that extent.

20.2 Accordingly, in terms of this Scheme, the authorised share capital of the Amalgamated Company

shall stand enhanced to an amount of ` 27,00,00,000/- (Rupees Twenty seven crore only)divided into 2,70,00,000 equity shares of ` 10/- each and the capital clause being Clause V of the Memorandum of Association of the Amalgamated Company shall stand substituted to read as follows: “V. The Authorised Capital of the Company is ` 27,00,00,000/- (Rupees Twenty Seven crores only ) divided into 2,70,00,000 equity shares of ` 10/- each with power to increase or reduce and repay the Share Capital or any portion thereof at any time and from time to time in accordance with the regulation of the Company and the legislative provisions for the time being in that behalf. These shares in the Share Capital of the Company for the time being, whether original or increased, may be divided, consolidated and subdivided into two classes by any issue or new issue of any class, of any value, with such preferential , qualified or special rights, privileges or conditions as may be determined or in accordance with the Articles of Association of the Company and the right to vary, modify or abrogate any such rights, privileges, or conditions in such manner as may for time being provided by Articles of Association of the Company”

20.3 Article 4 of the Article of Association of the Amalgamated Company shall, on the Effective date, also stand substituted to read as follow:

“4 The Authorised Capital of the Company is ` 27,00,00,000/- (Rupees Twenty seven crores ) divided into 2,70,00,000 equity shares of ` 10/- each ”

20.4 Upon the Scheme becoming effective, the issued, subscribed and paid –up capital of the

Amalgamated Company shall stand suitably increased consequent upon the issuance of new equity shares in accordance with clause 19.1 of this Scheme.

20.5 Consequent upon the amalgamation, the authorized capital of the Amalgamated Company will be

as under:

Authorised Capital Amount in `

2,70,00,000 Equity shares of Rs 10/- each 27,00,00,000

40

SECTION - V: TAX AND ACCOUNTING TREATMENT 21. Treatment of Taxes

21.1 Any tax liabilities under the Income-tax Act, 1961, Wealth Tax Act, 1957, Customs Act, 1962, Central Excise Act, 1944, Maharashtra Value Added Tax Act, 2002, Central Sales Tax Act, 1956, any other State Sales Tax / Value Added Tax laws, Service Tax, Stamp laws or other applicable laws/ regulations [hereinafter in this Clause referred to as "Tax Laws"] dealing with taxes/ duties/ levies allocable or related to the business of the Amalgamating Company to the extent not provided for or covered by tax provision in the Accounts made as on the date immediately preceding the Appointed Date for amalgamation shall be transferred to Amalgamated Company.

21.2 Any refund under the Tax Laws received by / due to Amalgamating Company consequent to the assessments made on Amalgamating Company subsequent to the appointed Date for amalgamation and for which no credit is taken in the accounts as on the date immediately preceding the Appointed Date for amalgamation shall also belong to and be received by the Amalgamated Company.

21.3 All taxes and duties (including income tax, sales tax, excise duty, customs duty, service tax, VAT, etc.) paid or payable by the Amalgamating Company in respect of the operations and/or the profits of the Amalgamating Company before the Appointed Date, for Amalgamation including any refund and claims shall be on account of the Amalgamating Company and, insofar as payment of taxes and duties (including, without limitation, income tax, sales tax, excise duty, custom duty, service tax, VAT, etc.), whether by way of deduction at source, advance tax or otherwise howsoever, by the Amalgamating Company in respect of the profits or activities or operation of the Amalgamating Company after the Appointed Date for Amalgamation, including any refund and claims are concerned, the same shall be deemed to be the corresponding item paid/ receivable by the Amalgamated Company and shall, in all proceedings, be dealt with accordingly.

21.4 Without prejudice to the generality of the above, all benefits including under the income tax, sales tax, excise duty, customs duty, service tax, VAT, etc., to which the Amalgamating Company is entitled to in terms of the applicable Tax Laws of the Union and State Governments, shall be available to and vest in the Amalgamated Company.

21.5 Upon the Scheme coming into effect, the Amalgamated Company through its Board of Directors, or any person(s) or committee authorized/ appointed by them, may carry out or assent to any modifications/ amendments to the returns and other documents filed by the Amalgamating Company for periods falling prior to the Appointed Date for amalgamation, in relation to taxation and other allied laws, desirable or appropriate by them (i.e. the Board of Directors or the person(s)/committee).

22 Accounting Treatment 22.1 The Amalgamated Company shall account for the amalgamation of Amalgamating Company as

per the Accounting Standard 14 – Accounting for Amalgamations (AS14) as stated in the Companies (Accounting Standards) Rules, 2006 and any amendments thereto.

22.2 All the assets and liabilities of the Amalgamating Company transferred to the Amalgamated Company shall be recorded at their Book Values as appearing in the books of the Amalgamating Company

22.3 All the reserves of the Amalgamating Company shall be recorded in the books of the Amalgamated Company in the same form in which they appeared in the books of the Amalgamating Company.

22.4 All costs and expenses incurred whether of the Amalgamating or of the Amalgamated company, incidental with the finalization of the scheme and to put it into operation, including all advisory fees and charges and expenses attributable to implementation of the Scheme, shall be borne by the Amalgamated Company, be kept in a ‘merger suspense” account and adjusted against the general reserves in the books of the Amalgamated Company on completion of the Scheme

22.5 Further, in case of any difference in accounting policy between the Amalgamating Company and the Amalgamated Company, the impact of the same till the amalgamation will be quantified and adjusted in the Profit and Loss account and/or Revenue Reserve(s) as mentioned earlier, at the

41

discretion of the Amalgamated Company to ensure that the financial statement of the Amalgamated Company reflects the financial position on the basis of consistency in the accounting policy.

22.6 Upon coming into effect of this scheme, to the extent that there are inter-company deposits / loans and advances balances and obligations outstanding as between the Amalgamated Company and Amalgamating Company will stand cancelled and there shall be no further obligation / outstanding in that behalf and corresponding effect shall be given in the books of accounts and records of the Amalgamated Company. For the removal of doubts, it is clarified that from the Appointed Date for amalgamation there would be no accrual of interest or other charges in respect of any deposits / loans and advances balances and obligations between or amongst the Amalgamating Company and Amalgamated Company.

22.7 The differences between the value of net assets of the Amalgamating Company transferred to the Amalgamated Company pursuant to the orders of High Court over the face value of New Shares issued by the Amalgamated Company andafter giving effect to sub-clause 22.4, 22.5 and 22.6 above and adjusting the appreciation and /or diminution, if and to the extent considered appropriate by the Board of Directors of the Amalgamated Company, in the value of certain assets as on the Appointed Date, shall in case of surplus, an amount, as may be considered appropriate by the Board, be credited to Amalgamation Reserve Account and in case of deficit, be debited to General Reserve Account / Amalgamation Goodwill Account as the case may be of the Amalgamated Company.

SECTION - VI ----DISSOLUTION OF AMALGAMATING COMPANY 23 Dissolution of Demalgamating Company

On the coming into effect of this Scheme, the Amalgamating Company shall, without any further act or deed, stand dissolved without winding-up.

PART IV

GENERAL TERMS AND CONDITIONS APPLICABLE TO Part II AND Part III OF THE SCHEME 24. Application

The Amalgamated Company/ the Demerged Company, the Amalgamating Company and the Resulting Company shall with all reasonable dispatch make necessary applications before the High Court of Judicature at Bombay for the sanction of this Scheme under Sections 391 and 394 of the Act and

25 Modification or Amendments to the Scheme 25.1 HEL, HAL and BPL by their respective board of directors or any Committee there of or any Director

authorised in that behalf (without recourse to shareholders) may consent on behalf of all persons concerned, to any modification/s or amendment/s of this Scheme or agree to any conditions which the Court and/or any other authorities under law may deem fit to direct or impose or approved of or which may otherwise be considered necessary or desirable for setting any question or doubt or difficulty that may arise for carrying out the Scheme and do all acts, deeds and things as may be necessary, desirable or expedient for putting this Scheme into effect.

25.2 For the purpose of giving effect to this Scheme or to any modification thereof, the directors of HEL,

HAL and BPL are authorised to take such actions and/or to take such steps as may be necessary or desirable, including any actions for settling any questions, doubts or difficulty whatsoever that may arise.

26 Conditionality of the Scheme

This Scheme is conditional upon and subject to: (a) The Scheme being agreed to by the requisite majority of the members of the Amalgamated

Company/the Demerged Company, the Amalgamating Company and the Resulting Company as

42

required under the Act and the requisite orders of the High Court of Judicature at Bombay being obtained;

(b) Such other sanctions and approvals including sanctions of any governmental or regulatory

authority, creditor, lessor, or contracting party as may be required by law or contract in respect of the Scheme being obtained; and

(c) The certified copies of the court orders referred to in this Scheme being filed with the Registrar of

Companies, Maharashtra.

27 Effect of Non-Receipt of Approvals

In the event of this Scheme failing to take effect finally by December 31, 2012 or by such later date as may be agreed by the respective Board of Directors of the Amalgamated Company / the Demerged Company, the Amalgamating Company and the Resulting Company or the respective Delegate, this Scheme shall become null and void and in that event no rights and liabilities whatsoever shall accrue to or be incurred inter se by the parties or their shareholders or creditors or employees or any other person. In such case each Company shall bear its own costs or as may be mutually agreed.

28 Severability

If any part or provision of this Scheme is found to be unworkable for any reason whatsoever, the same shall not, subject to the decision of the respective Amalgamated Company / Demerged Company, the Amalgamating Company and the Resulting Company, affect the validity or implementation of the other parts and/or provisions of this Scheme.

29 Cost and Charges and Expenses

All costs, charges, levies, fees, duties and expenses in relation to or in connection with or incidental to this Scheme or the implementation thereof shall be borne by the Amalgamated Company / the Demerged Company.

43

SUMMARY OF FINANCIAL INFORMATION The following summary of financial data has been prepared in accordance with Indian GAAP, the Companies Act and the SEBI (ICDR) Regulations, 2009 and restated as described in the report of our Statutory Auditor, M/s. Sunderji Gosar & Co, Chartered Accountants, dated 13/08/2012 in the section titled ‘Financial Information’. You should read this financial data in conjunction with our financial statements for financial year 2011-12 including the notes thereto and the reports thereon, which appears under the section titled “Financial Information” beginning on page 89 of this Information Memorandum. STATEMENT OF ASSETS AND LIABILITIES

Particulars Note No.

For the year ended

31st March, 2012 31st March, 2011

I. EQUITY AND LIABILITIES (1) Shareholder's Funds

(a) Share Capital 1.1

152,898,000

500,000

(b) Reserves and Surplus 1.2

14,996,760

-

(c) Money received against share warrants 1.3

-

- Sub-total (1) 167,894,760 500,000

(2) Share Application money pending

allotment 2.1

-

- Sub-total (2) - -

(3) Non-Current Liabilities

(a) Long-Term Borrowings 3.1

124,292,967

59,997,000

(b) Deferred Tax Liabilities (Net) 3.2

-

-

(c) Other Long Term Liabilities 3.3

-

-

(d) Long Term Provisions 3.4

-

- Sub-total (3) 124,292,967 59,997,000

(4) Current Liabilities

(a) Short-Term Borrowings 4.1

3,340,000

-

(b) Trade Payables 4.2

73,465,727

37,000

(c) Other Current Liabilities 4.3

-

-

(d) Short-Term Provisions 4.4

-

- Sub-total (4) 76,805,727 37,000

TOTAL EQUITY & LIABILITIES 368,993,454 60,534,000

II.ASSETS (1) Non-Current Assets (a) Fixed Assets

(i) Tangible Assets 5.1 52,809,117

-

44

(ii) Intangible assets 5.1 15,498,000

-

(iii) Capital work-in-progress 5.1 -

-

(iv) Intangible assets under development 5.1 -

-

(b) Non-current investments 5.2 69,100

-

(c) Deferred tax assets (net) 3.2 33,796,450

2,287

(d) Long term loans and advances 5.3 108,512,532

60,029,600

(e) Other non-current assets 5.4 -

-

Sub-total (1) 210,685,199 60,031,887 (2) Current Assets

(a) Current investments 6.1

-

-

(b) Inventories 6.2

24,810,688

-

(c) Trade receivables 6.3

131,342,740

-

(d) Cash and cash equivalents 6.4

1,175,172

497,000

(e) Short-term loans and advances 6.5

-

-

(f) Other current assets 6.6

979,655

- Sub-total (2) 158,308,255 497,000

Profit and Loss Account

-

5,113 TOTAL ASSETS 368,993,454 60,534,000

45

STATEMENT OF PROFIT & LOSS ACCOUNT

Sr. No. Particulars Note

No. For the year ended

31st March, 2012 31st March, 2011 I Revenue from operations 7.1 - - II Other Income 8.1 - - III III Total Revenue (I +II) - - IV Expenses: Cost of materials consumed 9.1 - - Purchase of Stock-in-Trade - -

Changes in inventories of finished goods, work-in-progress and Stock-in-Trade 10.1

- - Employee Benefit Expenses 11.1 - - Financial Costs 12.1 8,874 - Depreciation and Amortization Expense 13.1 - - Other Administrative Expenses 14.1 721,354 7,400 Total Expenses (IV) 730,228 7,400

V Profit before exceptional and extraordinary items and tax (III - IV) (730,228) (7,400)

VI Exceptional Items - -

VII Profit before extraordinary items and tax (V - VI) (730,228) (7,400)

VIII Extraordinary Items - -

IX Profit before tax (VII - VIII) (730,228) (7,400) X Tax expense: (1) Current tax (2) Deferred tax 23,846 2,287

XI Profit(Loss) from the period from continuing operations (IX-X) (706,382) (5,113)

XII Profit/(Loss) from discontinuing operations - -

XIII Tax expense of discounting operations - -

XIV Profit/(Loss) from Discontinuing operations (XII - XIII) - -

XV Profit/(Loss) for the period (XI + XIV) (706,382) (5,113)

XVI Earning per equity share:

(1) Basic (0.05) (0.01) (2) Diluted (0.05) (0.01)

46

CASH FLOW STATEMENT

PARTICULARS 31-Mar-12 31-Mar-11 Cash Flows From Operating Activities: Net income (730,228) (7,400)Adjustment to reconcile net income to net cash provided by operating activities:

Less: Increase in Fixed Assets (68,307,117) - Less: Increase in Loan & Advances Assets (48,482,932) (60,000,000)Less: Increase in Investment (69,100) - Less: Increase in Preliminary Expenses - 29,600 Less: Increase in Deferred Tax Assets (33,794,163) - Less: Increase in inventories (24,810,688) - Less: Increase in Sundry Drs. (131,342,740) - Less: Increase in Security Deposits (979,655) - Add:Increase in Creditors 73,428,727 37,000 Add: Increase in deposits 3,340,000 - Net cash flows from operating activities (A) (231,017,668) (60,000,000) Cash Flows From Investing Activities: Add: Loan taken 64,295,967 59,997,000 Less: Loan repaid - - Net cash flows from investing activities (B) 64,295,967 59,997,000 Cash Flows from Financing Activities: Add: Issue of Share Capital 152,398,000 500,000 Add: Reserve & Surplus 15,001,873 - Net cash flow from financing activities (C) 167,399,873 500,000 Net increase (decrease) in cash (A+B+C) 678,172 497,000 Cash/Bank at beginning of period (D) 497,000 - Cash/Bank at the end of period {(A+B+C)+D} 1,175,172 497,000

47

GENERAL INFORMATION Incorporation: Our Company was incorporated as Haria Apparels Limited on February 01, 2011, under the Companies Act, 1956, with the Registrar of Companies, Mumbai. The registration number assigned to our Company is 212887. CIN: U18204MH2011PLC212887 Registered Office: Vilco Centre, 8, Subhash Road, Vile Parle (East), Mumbai, Maharashtra – 400 057. Tel: +91-22-40973000 Fax: 40973030

Corporate Office: Vilco Centre, 8, Subhash Road, Vile Parle (East), Mumbai, Maharashtra – 400 057. Tel: +91-22-40973000 Fax: 40973030

Registrar of Companies: RoC-Mumbai Everest, 100, Marine Drive, Mumbai, Maharashtra – 400 002, India. Board of Directors:

Name, Father’s Name, Designation, Experience, Occupation, Address

Age (in years)

Qualifications DIN Details of Directorships

in Other Companies

Name: Kantilal Lakhamshi Haria S/o Mr. Lakhamshi Govinji Haria Designation: Executive Director Experience: More than 40 years Occupation: Business Address: 7, Laxmi Building, North Avenue Road, Santacruz (West), Mumbai 400 054.

71 FBIM 00585400

• Haria Exports Limited • Vilco Pharma Private

Limited • Haria Property And

Developers Private Limited

• Haria Investments Private Limited

• South East Textiles Private Limited

Name: Manish Kantilal Haria S/o Mr. Kantilal Lakhamshi Haria Designation: Executive Director Experience: More than 23 years Occupation: Business Address: 7, Laxmi Building, North Avenue Road, Santacruz (West), Mumbai 400 054.

42 B.COM 00585234

• Haria Exports Limited • Veer Haria Securities

Private Limited • Blueweb Infosystems

Private Limited • Vilco Pharma Private

Limited • Haria Property And

Developers Private Limited

• Haria Investments Private Limited

• South East Textiles Private Limited

• Powerloom Development

48

And Export Promotion Council

• Anakin Real Estate Private Limited

Mr. Nitin Kumar Vasudev Oza 304, Deepkiran Apartment, 3rd Floor, Bhagyodaya Society, Daman Road, Chala, Vapi, Gujarat – 396191.

43 Independent Director

Service Graduate DIN: 02777627

• Haria Exports Ltd • Best paper mills private

limited

Mr. Mohith Ramamurthy Suddala N1, A wing, Room No.404, Pratham chs, Pratiksha Nagar, Sion, Mumbai-400 022.

28 Independent Director

Service Graduate DIN: 05266111

NIL

Company Secretary and Compliance Offer Mr. Ashwin Shah 20/8, SINDHI COLONY, ROAD NO.24, SION (WEST), MUMBAI – 400 022 Bankers to the Company HDFC BANK National House Plot No.13/14/15, Sahar Road Junction, Western Express Highway, Vile Parle (East), Mumbai- 400 057 Registrar and Share Transfer Agent LINK INTIME INDIA PVT LTD C-13, Pannalal Silk Mills Compound, L.B.S Marg, Bhandup (West), Mumbai - 400 078 Auditors SUNDERJI GOSAR & CO 301, Hind Rajasthan Bldg, 95, Dadasaheb Phalke Road, Dadar (C. Rly), Mumbai - 400 014

49

CAPITAL STRUCTURE Upon issue and allotment of Shares pursuant to the scheme, the share capital of the company as at the date of filing of this Information Memorandum is as follows:

Particulars as on the date of this Information Memorandum Aggregate Value at Face Value (in `)

Authorised Share Capital 1,60,00,000 equity shares of ` 10/- each 160000000

Issued, Subscribed & Paid up Capital

(i) Before the Scheme Issued, Subscribed & Paid up capital 80,00,000 equity shares of ` 10/- each

(ii) After the Scheme

Issued, Subscribed & Paid up capital 1,52,89,800 equity shares of ` 10/- each

80000000

152898000

Share Premium Account Before the Scheme After the Scheme

NIL

NIL The Company was incorporated with an Authorised Share Capital of ` 5,00,000/- (Rupees Five Lakhs Only) divided into 50,000 shares (Fifty Thousand) of ` 10/- each. The Authorised Share Capital of the company has been increased from ` 5,00,000/- (Rupees Five Lakhs Only) divided into 50,000 shares (Fifty Thousand) of ` 10/- each to 8,00,00,000/- (Rupees Eight Crore) divided into 80,00,000 shares (Eighty Lakhs) of ` 10/- each. As per the Scheme of Arrangement, 127 shares will be issued in Haria Apparels Ltd for every 100 shares held in Haria Exports Ltd. The Pre-demerger paid up capital of ` 8,00,00,000/- shall stand cancelled as per the Scheme of Arrangement. As per the Scheme of Arrangement, the ratio of allotment is 100:127 and as on the record date i.e. the total paid up capital of Haria Apparels Ltd is ` 15,28,98,000/- comprising of 1,52,89,800 shares of ` 10/- each. The details of increase and change in authorized share capital of our Company after the date of incorporation till filing of the Information Memorandum is as follows:

Date of Change

Nature of Increase/Change

Type of Shares

Number of Shares

Face Value(in `)

Cumulativeauthorized Share Capital(in `)

01/02/2011 On Incorporation Equity Shares 50000 10 500000

05/04/2011 Increase Equity Shares 79500000 10 80000000

50

Notes to Capital Structure:

1) Equity Share Capital History of our Company

Date of Allotment

Number of Equity Shares Allotted

Face Valu

e (in `)

Issue Price (in `)

Nature of

Payment

Nature of Issue & reason

for Allotment

Cumulative

No. of Equity Shares

Cumulative

paid up share

capital(in `)

Cumulative Share

premium (in `)

01/02/2011 50000 10 10  Cheque

Initial issue 50000 500000 -

03/05/2011 7950000 10 10  Cheque

Additional issue 8000000 80000000 -

2) Preference Share Capital History of our Company - N.A. 3) Details of Equity Shares allotted / acquired to / by the Promoters in the one year preceding

the date of filing the Information Memorandum –

Date of Allotment of the Equity Shares

Number of Equity Shares Allotted Face Value (in `) Issue Price (in `) Nature of

Payment

01/02/2011 50000 10 500000 Cash 03/05/2011 7950000 10 79500000 Cash

4) Details of Shareholding of the Promoters

Name of the

Promoter

Date of Allotment/Acquisitio

n

Allotment/ Transfer

Considerati

on

No. of Equity Shares

Face Value (in `)

Issue/ Acquisition

Price (in `)

% of Pre

Issue capital

% of Post Issue

Capital

Kantilal Haria 01/02/2011

Allotment pursuant to the scheme

Cash 100 10 1000 0.00 0.00

Manish Haria 01/02/2011

Allotment pursuant to the scheme

Cash 100 10 1000

0.00 0.00

Kantilal Maru 01/02/2011

Allotment pursuant to the scheme

Cash 100 10 1000

0.00 0.00

Sheetal Haria 01/02/2011

Allotment pursuant to the scheme

Cash 100 10 1000

0.00 0.00

Milan Mehta 01/02/2011

Allotment pursuant to the scheme

Cash 100 10 1000

0.00 0.00

Rajesh Parmar 01/02/2011

Allotment pursuant to the scheme

Cash 100 10 1000

0.00 0.00

Vilco Pharma 01/02/2011 Allotment

pursuant to

Cash 49400 10 494000 0.62 0.32

51

Pvt. Ltd.

the scheme

Kantilal Haria 03/05/2011

Allotment pursuant to the scheme

Cash 750000 10 7500000 9.38 4.91

Manish Haria 03/05/2011

Allotment pursuant to the scheme

Cash 3000000 10 30000000 37.50 19.62

Sheetal Haria 03/05/2011

Allotment pursuant to the scheme

Cash 699700 10 6997000 8.75 4.58

Vilco Pharma Pvt. Ltd.

03/05/2011 Allotment

pursuant to the scheme

Cash 3500300 10 35003000 43.75 22.89

Total 8000000 80000000 100.00 52.32 Lock in Period as per terms of the Issue: 8,944,775 Equity Shares being 58.50% of the issued capital of the Company, post demerger, will be placed under lock-in for a period of three years from the date of listing of shares out of Promoters/ Promoter group holdings in the Company. 5) Details of aggregate shareholding of the Promoter Group companies: Nil Note: None of the promoter group companies hold any shares in HAL, hence N.A. 6) Details of the aggregate number of Equity Shares purchased or sold by the Promoter Group and/or by

the Directors of the Company which is a Promoter of The Issuer and/or by the Directors of The Issuer and their immediate relatives within six months immediately preceding the date of filing Information Memorandum:

There have been no such purchases or sales by Promoters. 7) Details of the maximum and the minimum price at which purchases and sales referred to above were

made, along with the relevant dates: NA 8) Details of transfers among the Promoter Group during the period from date of approval of Scheme till

the date of Information Memorandum: NA 9) Details of all financing arrangements whereby the Promoter Group, the Directors of the Company

which is a Promoter of The Issuer, the Directors of The Issuer and their relatives have financed the purchase by any other person of securities of The Issuer other than in the normal course of the business of the financing entity during the period of six months immediately preceding the date of filing the Information Memorandum with SEBI: NA

10) Details of Lock-in of shares of Promoter and Promoter group (Pre Demerger): NA

52

11) Shareholding Pattern of our Company Before Implementation of the Scheme (Pre Demerger)

Category Code

Category of Shareholder

Number of shareholders

Total number

of shares

Total shareholding as a percentage of total number of

shares

Shares pledged or otherwise

encumbered

(I)

(II)

(III)

(IV)

As a % of

(A+B) (V)

As a % of

(A+B+C)

(VI)

Number of

shares (VII)

As a %

(VIII) = (VII)/(IV)

(A) Promoter & Promoter Group

(1) Indian

(a) Individuals/Hindu Undivided family 6 4450300 55.63 55.63 - -

(b) Central Government / State Government(s)

- - - - - -

(c) Bodies Corporate 1 3549700 44.37 44.37 - -

(d) Financial Institutions / Banks - - - - - -

(e) Any other (specify) - - - - - - Sub-total (A) (1) 7 8000000 100.00 100.00 - -

(2) Foreign

(a) Individuals (Non- resident individuals / Foreign individuals)

- - - - - -

(b) Bodies Corporate - - - - - -(c) Institutions - - - - - -(d) Any other (specify) - - - - - -

Sub-total (A) (2) - - - - - -

Total Shareholding of Promoter and Promoter Group (A)=(A)(1)+(A)(2)

7 8000000 100.00 100.00 - -

(B) Public Shareholding - - - - - -

(1) Institutions - - - - - -(a) Mutual Funds / UTI - - - - - -

(b) Financial Institutions/Banks - - - - - -

(c) Central Government / State Government(s)

- - - - - -

(d) Venture Capital Funds - - - - - -

(e) Insurance Companies - - - - - -

(f) Foreign Institutional Investors - - - - - -

(g) Foreign Venture Capital investors - - - - - -

(h) Any other (specify) - - - - - - Sub-total (B) (1) - - - - - -

(2) Non-Institutions (a) Bodies Corporate - - - - - -

(b) (i) Individuals - - - - - -

53

shareholders holding nominal share capital up to ` 1 lakh

(b) (ii)

Individuals shareholders holding nominal share capital in excess of ` 1 lakh

- - - - - -

(c) Any other (specify) - - - - - -

(i) Non-Resident Indians - - - - - -

(ii) Clearing Members - - - - - - Sub-Total (B) (2) - - - - - -

Total Public Shareholding (B) = (B)(1)+(B)(2)

- - - - - -

Total (A)+(B) 7 8000000 100.00 100.00 - -

(C)

Shares held by Custodians and against which Depository Receipts have been issued

- - - - - -

1 Promoter and promoter group - - - - - -

2 Public - - - - - -

Grand Total (A) + (B) + (C) 7 8000000 100.00 100.00 - -

12) Details of Shareholders holding more than one percent of the share capital of HAL (Pre Demerger)

Sr. No. Name of the Shareholder Number of Shares % of Equity Share Capital

1 Vilco Pharma Pvt. Ltd. 35,49,700 44.37 2 Manish Haria 30,00,100 37.50 3 Kantilal Haria 7,50,100 9.38 4 Sheetal Haria 6,99,800 8.75 Total 79,99,700 99.99

13) Details of Lock-in of shares of Promoter and Promoter group (Post Demerger)

89,44,775 Equity Shares being 58.50% of the issued capital of the Company, post-demerger, will be placed under lock-in for a period of three years from the date of listing of shares out of Promoters/ Promoter group holdings in the Company.

54

14) Shareholding Pattern of our Company After Implementation of the Scheme as on 27-04-2011 (Post Demerger)

Category Code

Category of Shareholder

Number of shareholders

Total number of shares

Total shareholding as a percentage of total number of shares

Shares pledged or otherwise encumbered

(I)

(II)

(III)

(IV)

As a % of

(A+B) (V)

As a % of

(A+B+C) (VI)

Number of

shares (VII)

As a %

(VIII) = (VII)/(IV)

(A) Promoter & Promoter Group

(1) Indian (a) Individuals/Hindu

Undivided family 7 4648376 30.40 30.40 - -

(b) Central Government / State Government(s)

- - -

-

- -

(c) Bodies Corporate 1 4296399 28.10 28.10 - -(d) Financial Institutions

/ Banks - - - - - -

(e) Any other (specify) - - - - - - Sub-total (A) (1) 8 8944775 58.50 58.50 - -(2) Foreign (a) Individuals (Non-

resident individuals / Foreign individuals)

- - - - - -

(b) Bodies Corporate - - - - - -(c) Institutions - - - - - -(d) Any other (specify) - - - - - - Sub-total (A) (2) - - - - - - Total Shareholding

of Promoter and Promoter Group (A)=(A)(1)+(A)(2)

8 8944775 8.50 58.50 - -

(B) Public Shareholding

(1) Institutions (a) Mutual Funds / UTI 2 1607 0.01 0.01 - -(b) Financial

Institutions/Banks 1 178 0.00 0.00

(c) Central Government / State Government(s)

- - - - - -

(d) Venture Capital Funds - - - - - -

(e) Insurance Companies - - - - - -

(f) Foreign Institutional Investors - - - - - -

(g) Foreign Venture Capital investors - - - - - -

(h) Any other (specify) - - - - - - Sub-total (B) (1) 3 1245 0.01 0.01 - -(2) Non-Institutions (a) Bodies Corporate 127 416170 2.72 2.72 - -(b) (i) Individuals - -

55

shareholders holding nominal share capital up to ` 1 lakh

7208

4344175

28.35 28.35

(b) (ii) Individuals shareholders holding nominal share capital in excess of ` 1 lakh

45

1521925

9.95

9.95

- -

(c) Any other (specify) - - - - - -(i) Non-Resident

Indians - - - - - -

(ii) Clearing Members 19 39195 0.26 0.26 - -(iii) Trust - - - - - -(iv) NRIs 16 29430 0.19 0.19 (v) NRN 6 2885 0.02 0.02 (vi) Foreign Company - - - - - - Sub-Total (B) (2) 7421 6343780 41.49 41.49 - - Total Public

Shareholding (B) = (B)(1)+(B)(2)

7424 6345025 41.50 41.50 - -

Total (A)+(B) 7432 5289800 00.00 100.00 - -

(C) Shares held by Custodians and against which Depository Receipts have been issued

- - - - - -

1 Promoter and promoter group - - - - - -

2 Public - - - - - - Grand Total (A) +

(B) + (C) 7432 15289800 100.00 100.00 - -

15) Details of Shareholders holding more than one percent of the share capital of HAL (Post

Demerger)

Sr. No. Name of the Shareholder Number of

Shares % of Equity Share Capital

1 Vilco Pharma Pvt. Ltd. 4296399 28.10 2 Manish Haria 3020396 19.75 3 Kantilal Haria 927779 6.07 4 Sheetal Haria 699800 4.58 5 Harsha Hitesh Zaveri, Hitesh Ramji Zaveri, Radhabai Ramji Zaveri 190500 1.25 6 Hitesh Ramji Zaveri, Radhabai Ramji Zaveri, Harsha Hitesh Zaveri 158750 1.04 Total 9293624 60.79

16) Pre and Post Demerger Shareholding of Promoter and Promoter Group of our Company:

Particulars

Pre Demerger Post Demerger

No. of Equity Shares

% of Equity Share Capital

No. of Equity Shares

% of Equity Share Capital

Promoters Kantilal Haria 750100 9.38 927779 6.07Manish Haria 3000100 37.50 3020496 19.75

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Sheetal Haria 699800 8.75 699800 4.58Vilco Pharma Pvt. Ltd. 3549700 44.37 4296399 28.10Kantilal Maru 100 0.00 100 0.00Milan Mehta 100 0.00 100 0.00Rajesh Parmar 100 0.00 100 0.00Total Holding of Promoters (A) 8000000 100.00 8944775 58.50

Promoter Groups Nil Nil Nil Nil NilTotal Holding of Promoter Groups (B) Nil Nil Nil Nil

Total Holding of Promoters and Promoter Groups (A+B)

8000000 100.00 8944775 58.50

17) A list of top ten shareholders of the Company and the number of Equity Shares held by them

is as under:

a. As on date of the Information Memorandum (POST DEMERGER)

Name of Shareholders Number of Shares Held % of Total

Vilco Pharma Pvt. Ltd. 4296399 28.10 Manish Haria 3020396 19.75 Kantilal Haria 927779 6.07 Sheetal Haria 699800 4.58 Harsha Hitesh Zaveri, Hitesh Ramji Zaveri, Radhabai Ramji Zaveri 190500 1.25 Hitesh Ramji Zaveri, Radhabai Ramji Zaveri, Harsha Hitesh Zaveri 158750 1.04 Ketan Shah 143690 0.94 Kusum Vira 131789 0.86 Dharmapal Satyapal Ltd. 121031 0.79 Arihant Capital Market Ltd. 66149 0.43 Total 9756284 64.00 Note: The shares of the Company are not yet listed and hence are not being traded. Therefore, the information as to the top 10 shareholders as on the date of filing of the Information Memorandum is based on the top ten shareholders of Haria Apparels Limited on the Demerger Record date to whom an equal number of equity shares have been allotted in the Company, on the April 27, 2011.

b. Two years prior to the date of this Information Memorandum*

Name of Shareholders Number of Shares Held

% of Equity Share Capital

Kantilal Haria 100 0.20Manish Haria 100 0.20Kantilal Maru 100 0.20Sheetal Haria 100 0.20Milan Mehta 100 0.20Rajesh Parmar 100 0.20Vilco Pharma Pvt. Ltd. 49400 98.20Total 50000 100.00

57

* The Company “Haria Apparels Limited” was incorporated on February 01, 2011 and therefore the number of Shareholders two years prior to the date of Information Memorandum is not applicable. However, we have included the shareholding pattern as on the date of incorporation of this company for the purposes of disclosure.

c. Ten days prior to the date of this Information Memorandum (POST DEMERGER)

Name of Shareholders Number of Shares Held % of Total

Vilco Pharma Pvt. Ltd. 4296399 28.10Manish Haria 3020396 19.75Kantilal Haria 927779 6.07Sheetal Haria 699800 4.58Harsha Hitesh Zaveri, Hitesh Ramji Zaveri,Radhabai Ramji Zaveri 190500 1.25Hitesh Ramji Zaveri, Radhabai Ramji Zaveri, Harsha Hitesh Zaveri 158750 1.04Ketan Shah 143690 0.94Kusum Vira 131789 0.86Dharmapal Satyapal Ltd. 121031 0.79Arihant Capital Market Ltd. 66149 0.43Total 9756284 64.00

18) There are no options granted or equity shares issued under any scheme of employee stock option or

employee stock purchase of the Company.

19) The Company has not instituted any employee stock option scheme as on the date of this Information Memorandum.

20) As on the date of filing the Information Memorandum, there are no outstanding financial instruments

or any other right, which would entitle the Promoters or shareholders or any other person any option to receive equity shares after the Issue. The Company does not have any shares to be allotted, which are outstanding under ESOPs.

21) There are no outstanding warrants, options or rights to convert debentures, loans or other instruments

into equity shares of the Company as on date of filing this Information Memorandum. 22) We have not issued any Equity Shares out of revaluation reserve or reserves without accrual of cash

resources. 23) At any given time, there shall be only one denomination of the Equity Shares of the Company and the

Company shall comply with such disclosure and accounting norms specified by SEBI from time to time. The Equity Shareholders of the Company do not hold any warrant, option or convertible loan or debenture, which would entitle them to acquire further shares in the Company.

24) Our Company has 7 shareholders as on the date of filing the Information Memorandum. 25) Other than as mentioned in this Information Memorandum, the Equity Shares held by the Promoter

are not subject to any pledge. 26) None of the Directors or Key Management Personnel holds Equity Shares in the Company except as

stated in the section titled “Our Management” on page 77 of this Information Memorandum. 27) As on date there are no partly paid up shares.

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STATEMENT OF TAX BENEFITS

The statement of tax benefits has been audited by Tax Auditors, M/s SUNDERJI GOSAR & CO., Chartered Accountants; vide their letter dated March 15, 2012. STATEMENT OF TAX BENEFITS The information provided below sets out the possible tax benefits available to prospective investors in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the subscription, ownership and disposal of securities, under the current tax laws presently in force in India. Several of these benefits are dependent on the prospective investors fulfilling the conditions prescribed under the relevant tax laws. Hence the ability to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives it faces in the future, it may not choose to fulfill. The following overview is not exhaustive or comprehensive and is not intended to be a substitute for professional advice. INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX CONSULTANT WITH RESPECT TO THE TAX IMPLICATIONS OF AN INVESTMENT IN THE SECURITIES, PARTICULARLY IN VIEW OF THE FACT THAT CERTAIN RECENTLY ENACTED LEGISLATION MAY NOT HAVE A DIRECT LEGAL PRECEDENT OR MAY HAVE A DIFFERENT INTERPRETATION ON THE BENEFITS, WHICH AN INVESTOR CAN AVAIL. In respect of non-residents, the tax rates and the consequent taxation, mentioned in this section shall be further subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which the non-resident has fiscal domicile. Statement of General Tax Benefits: These are the general tax benefits available to the all companies and shareholders, subject to compliance with relevant provisions.

A. Under the Income Tax Act, 1961

I. Benefits available to the company

1. As per Section 10(34) of the ITA, any income by way of dividends referred to in Section 115- O (i.e. dividends declared, distributed or paid on or after 1st April, 2003 by domestic companies) received on the shares of any company is exempt from tax.

Moreover, the company will also be entitled to avail the credit of dividend received by it from its subsidiaries in accordance with the provisions of section 115-O (1A) on which tax on distributed profits has been paid by the subsidiary.

2. As per Section 10(35) of the ITA, the following income will be exempt in the hands of the Company:

a. Income received in respect of the units of a Mutual Fund specified under clause (23D) of Section 10; or

b. Income received in respect of units from the Administrator of the specifiedundertaking; or c. Income received in respect of units from the specified company:

However, this exemption does not apply to any income arising from transfer of units of the Administrator of the specified undertaking or of the specified Company or of a mutual fund, as the case may be. For this purpose (i) "Administrator" means the Administrator as referred to in Section 2(a) of the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002 and (ii) "Specified Company" means a Company as referred to in Section 2(h) of the said Act.

3. As per Section 2(29A) read with Section 2(42A), shares held in a company or a Unit of a Mutual Fund specified under clause (23D) of Section 10 are treated as long term capital asset if the same are held by the assessee for more than twelve months period immediately preceding the date of its transfer. Accordingly, the benefits enumerated below in respect of long term capital assets

59

would be available if the shares in a company or a Unit of a Mutual Fund specified under clause (23D) of Section 10 are held for more than twelve months.

4. As per Section 10(38) of the ITA, long term capital gains arising to the company from the transfer of long term capital asset being an equity share in a company or a unit of an equity oriented fund where such transaction is chargeable to securities transaction tax will be exempt in the hands of the Company. For this purpose, "Equity Oriented Fund" means a fund –

i. where the investible funds are invested by way of equity shares in domestic companies to the extent of more than sixty five percent of the total proceeds of such funds; and

ii. which has been set up under a scheme of a Mutual Fund specified under Section 10(23D) of the

ITA. As per Section 115JB, while calculating "book profits" the Company will not be able to reduce the long term capital gains to which the provisions of Section 10(38) of the ITA apply and will be required to pay Minimum Alternate Tax @ 18% (plus applicable surcharge and education cess) of the book profits.

5. The company will be entitled to amortize preliminary expenditure, being expenditure incurred on public issue of shares, under Section 35D (2)(c)(iv) of the ITA, subject to the limit specified in Section 35D(3).

6. As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein, long-term capital gains (in cases not covered under Section 10(38) of the ITA) arising on the transfer of a long-term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a "long term specified asset" within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed ` 50 Lacs. However, if the assessee transfers or converts the long term specified asset into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money. A "long term specified asset" for making investment under this section on or after 1st April 2007 means any bond, redeemable after three years and issued on or after the 1st April 2007 by:

i.National Highways Authority of India constituted under Section 3 of the National Highways Authority of India Act, 1988; or

ii. Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956

7. As per Section 111A of the ITA, short term capital gains arising to the Company from the sale of

equity share or a unit of an equity oriented fund transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax, will be taxable at the rate of 15% (plus applicable surcharge and education cess).

8. As per Section 112 of the ITA, taxable long-term capital gains, if any, on sale of listed securities or units or zero coupon bonds will be charged to tax at the concessional rate of 20% (plus applicable surcharge and education cess) after considering indexation benefits in accordance with and subject to the provisions of Section 48 of the ITA or at 10% (plus applicable surcharge and education cess) without indexation benefits, at the option of the company.

9. In respect of any Minimum Alternate Tax ('MAT') paid under Section 115JB of the ITA for any

assessment year commencing on or after April 1, 2006. Tax credit eligible to be carried forward will be the difference between MAT paid and the tax computed as per the normal provisions of the

60

ITA for that assessment year. Such MAT credit is allowed to be carried forward for set off purposes for up to 10 years succeeding the year in which the MAT credit is allowable.

II. Benefits available to Resident Shareholders 1. Under Section 10(32) of the IT Act, any income of minor children clubbed in the total income of

the parent under Section 64(1A) of the IT Act, will be exempt from tax to the extent of `1,500/- per minor child whose income is so included.

2. The company is liable to pay a dividend distribution tax currently at the rate of 15% (plus applicable surcharge and education cess) on total amount of income distributed or declared or paid as dividend.

3. As per Section 10(34) read with Section 115-O (6) of the ITA, any income by way of dividends referred to in Section 115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003 by the domestic companies) received on the shares of the Company is exempt from tax. However it is pertinent to note that Section 14A of the IT Act restricts claims for deduction of expenses incurred in relation to exempt income. Thus, any expenses incurred to earn the dividend income are not an allowable expenditure.

4. As per Section 2(29A) read with Section 2(42A), shares held in a company are treated as long term capital asset if the same are held by the assessee for more than twelve months period immediately preceding the date of its transfer. Accordingly, the benefits enumerated below in respect of long term capital assets would be available if the shares are held for more than twelve months.

5. As per Section 10(38) of the ITA, long term capital gains arising from the transfer of a long term capital asset being an equity share of the Company, where such transaction is chargeable to securities transaction tax, will be exempt in the hands of the shareholder. As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein, long-term capital gains (in cases not covered under Section 10(38) of the ITA) arising on the transfer of a long-term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a "long term specified asset" within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the longterm asset by an assessee during any financial year cannot exceed ` 50 Lacs. However, if the assessee transfers or converts the long term specified asset into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money. A "long term specified asset" means any bond, redeemable after three years and issued on or after the 1st day of April 2007 by:

i. National Highways Authority of India constituted under Section 3 of the National Highways Authority of India Act, 1988; or

ii. Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.

6. As per Section 54F of the ITA, long term capital gains (in cases not covered under Section

10(38)) arising on the transfer of the shares of the Company held by an individual or Hindu Undivided Family (HUF) will be exempt from capital gains tax if the net consideration is utilized, within a period of one year before, or two years after the date of transfer, in the purchase of a residential house, or for construction of a residential house within three years. Such benefit will not be available: a) If the individual or Hindu Undivided Family-

• owns more than one residential house, other than the new residential house, on the date of transfer of the shares; or

61

• purchases another residential house within a period of one year after the date of transfer of the shares; or

• constructs another residential house within a period of three years after the date of transfer of the shares; and

b) The income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property".

If only a part of the net consideration is so invested, so much of the capital gain as bears to the whole of the capital gain, the same proportion as the cost of the new residential house bears to the net consideration, will be exempt.

If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, will be deemed to be income chargeable under the head "Capital Gains" of the year in which the residential house is transferred.

7. As per Section 111A of the ITA, short term capital gains arising from the sale of equity shares of the Company transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax, will be taxable at the rate of 15% (plus applicable surcharge and education cess).

8. As per Section 112 of the ITA, taxable long-term capital gains, if any, on sale of listed securities will be charged to tax at the rate of 20% (plus applicable surcharge and education cess) after considering indexation benefits or at 10% (plus applicable surcharge and education cess) without indexation benefits, whichever is less.

9. Benefits available to Non-Resident Indians/Non-Resident Shareholders (Other than FIIs). III. Under Section 10(32) of the IT Act, any income of minor children clubbed in the total income of

the parent under Section 64(1A) of the IT Act, will be exempt from tax to the extent of ` 1,500 per minor child whose income is so included.

1. The company is liable to pay a dividend distribution tax currently at the rate of 15% (plus

applicable surcharge and education cess) on total amount of income distributed or declared or paid as dividend.

2. As per Section 10(34) read with Section 115-O (6) of the ITA, any income by way of dividends

referred to in Section 115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003 by the domestic companies) received on the shares of the Company is exempt from tax. However it is pertinent to note that Section 14A of the IT Act restricts claims for deduction of expenses incurred in relation to exempt income. Thus, any expenses incurred to earn the dividend income are not an allowable expenditure.

3. As per Section 2(29A) read with Section 2(42A), shares held in a company are treated as long term capital asset if the same are held by the assessee for more than twelve months period immediately preceding the date of its transfer. Accordingly, the benefits enumerated below in respect of long term capital assets would be available if the shares are held for more than twelve months.

4. As per Section 10(38) of the ITA, long term capital gains arising from the transfer of long term capital asset being an equity share of the Company, where such transaction is chargeable to securities transaction tax, will be exempt in the hands of the shareholder.

5. As per first proviso to Section 48 of the ITA, in case of a non resident shareholder, the capital gain/loss arising from transfer of shares of the Company, acquired in convertible foreign exchange, is to be computed by converting the cost of acquisition, sales consideration and expenditure incurred wholly and exclusively incurred in connection with such transfer, into the same foreign currency which was initially utilized in the purchase of shares. Cost Indexation

62

benefit will not be available in such a case. As per Section 112 of the ITA, taxable long-term capital gains, if any, on sale of shares of the company will be charged to tax at the rate of 20% (plus applicable surcharge and education cess).

6. As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein, long-term capital gains (in cases not covered under Section 10(38) of the ITA) arising on the transfer of a long-term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a "long term specified asset" within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed ` 50 Lacs. However, if the assessee transfers or converts the long term specified asset into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money. A "long term specified asset" for making investment under this Section on or after 1st April 2007 means any bond, redeemable after three years and issued on or after the 1st April 2007 by:

i. National Highways Authority of India constituted under Section 3 of the National Highways Authority of India Act, 1988; or

ii. Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.

7. As per Section 54F of the ITA, long term capital gains (in cases not covered under Section 10(38)

arising on the transfer of the shares of the Company held by an individual or Hindu undivided Family (HUF) will be exempt from capital gains tax if the net consideration is utilized, within a period of one year before, or two years after the date of transfer, in the purchase of a residential house, or for construction of a residential house within three years.

Such benefit will not be available:

a) If the individual or Hindu Undivided Family- • owns more than one residential house, other than the new residential house, on the

date of transfer of the shares; or • purchases another residential house within a period of one year after the date of

transfer of the shares; or • constructs another residential house within a period of three years after the date of

transfer of the shares; and b) The income from such residential house, other than the one residential house owned on the date

of transfer of the original asset, is chargeable under the head "Income from house property". If only a part of the net consideration is so invested, so much of the capital gain as bears to the whole of the capital gain, the same proportion as the cost of the new residential house bears to the net consideration, will be exempt. If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, will be deemed to be income chargeable under the head "Capital Gains" of the year in which the residential house is transferred.

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

63

9. As per Section 111A of the ITA, short term capital gains arising from the sale of equity shares of the Company transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax, will be taxable at the rate of 15% (plus applicable surcharge and education cess).

10. As per Section 115E of the ITA, in the case of a shareholder being a Non-Resident Indian, and subscribing to the shares of the Company in convertible foreign exchange, in accordance with and subject to the prescribed conditions, long term capital gains arising on transfer of the shares of the Company (in cases not covered under Section 10(38) of the ITA) will be subject to tax at the rate of 10% (plus applicable surcharge and education cess), without any indexation benefit.

11. As per Section 115F of the ITA and subject to the conditions specified therein, in the case of a shareholder being a Non-Resident Indian, gains arising on transfer of a long term capital asset being shares of the Company will not be chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period of six months in any specified asset or savings certificates referred to in Section 10(4B) of the ITA. If part of such net consideration is invested within the prescribed period of six months in any specified asset or savings certificates referred to in Section 10(4B) of the ITA then such gains would not be chargeable to tax on a proportionate basis. Further, if the specified asset or savings certificate in which the investment has been made is transferred within a period of three years from the date of investment, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such specified asset or savings certificates are transferred.

12. As per Section 115G of the ITA, Non-Resident Indians are not obliged to file a return of income under Section 139(1) of the ITA, if their only source of income is income from specified investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the ITA.

13. As per Section 115H of the ITA, where Non-Resident Indian becomes assessable as a resident in India, he may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year under Section 139 of the ITA to the effect that the provisions of Chapter XII-A shall continue to apply to him in relation to such investment income derived from foreign exchange assets, the specified assets for that year and subsequent assessment years until such assets are converted into money.

14. As per Section 115I of the ITA, a Non-Resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing a declaration along with his return of income for that assessment year under Section 139 of the ITA, 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 ITA. For the purpose of aforesaid clauses "Non-Resident Indian" means an Individual, being of an Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.

Provisions of the ITA vis-à-vis provisions of the Tax Treaty

In respect of non-residents, the tax rates and consequent taxation mentioned above will be further subject to any benefits available under the Tax Treaty, if any, between Indiathecountry in which the non-resident is resident. As per the provisions of Section 90(2) of the ITA, the provisions of the ITA would prevail over the provisions of the Tax Treaty to the extent they are more beneficial to the non-resident. Tax Deduction at Source

No income-tax is deductible at source from income by way of capital gains under the present provisions of the IT Act, in case of residents. However, as per the provisions of section 195 of the IT Act, any income by way of capital gains, payable to non residents (except long- term capital gains exempt under section 10(38) of the IT Act), may be eligible to the provisions of with-holding

64

tax, subject to the provisions of the relevant tax treaty. Accordingly income tax may have to be deducted at source in the case of a non- resident at the rate under the domestic tax laws or under the tax treaty, whichever is beneficial to the assessee unless a lower withholding tax certificate is obtained from the tax authorities.

As per Section 206AA of the Act, w.e.f 1 April 2010, every person who is entitled to receive any sum or income or amount on which tax is deductible at source, is required to furnish the Permanent Account Number (PAN) to the person responsible for deducting such tax, failing which tax shall be deducted at the rates as per the Act or rates in force or 20% whichever is higher. The provisions of Section 206AA shall apply on capital gains payable to non-residents.

IV. Benefits available to Foreign Institutional Investors ('FIIs')

1. As per Section 10(34) read with Section 115-O (6) of the ITA, any income by way of dividends referred to in Section 115-O (i.e. dividends declared, distributed or paid on or after 1 April 2003 by the domestic companies) received on the shares of the Company is exempt from tax.

2. As per Section 2(29A) read with Section 2(42A), shares held in a company are treated as long

term capital asset if the same are held by the assessee for more than twelve months period immediately preceding the date of its transfer. Accordingly, the benefits enumerated below in respect of long term capital assets would be available if the shares are held for more than twelve months.

3. As per Section 10(38) of the ITA, long term capital gains arising from the transfer of long term capital asset being an equity share of the Company, where such transaction is chargeable to securities transaction tax, will be exempt to tax in the hands of the FIIs.

4. As per Section 54EC of the ITA and subject to the conditions and to the extent specified therein, long-term capital gains (in cases not covered under Section 10(38) of the ITA) arising on the transfer of a long-term capital asset will be exempt from capital gains tax to the extent such capital gains are invested in a "long term specified asset" within a period of 6 months after the date of such transfer. It may be noted that investment made on or after April 1, 2007 in the long term specified asset by an assessee during any financial year cannot exceed ` 50 Lacs.

However, if the assessee transfers or converts the long term specified asset into money within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the long term specified asset is transferred or converted into money.

A "long term specified asset" for making investment under this Section on or after 1st April 2007 means any bond, redeemable after three years and issued on or after the 1st April 2007 by:

i. National Highways Authority of India constituted under Section 3 of the National Highways Authority of India Act, 1988; or

ii. Rural Electrification Corporation Limited, a company formed and registered under the Companies Act, 1956.

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

6. As per Section 111A of the ITA, short term capital gains arising from the sale of equity shares of

the Company transacted through a recognized stock exchange in India, where such transaction is chargeable to securities transaction tax, will be taxable at the rate of15% (plus applicable surcharge and education cess).

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7. As per Section 115AD of the ITA, FIIs will be taxed on the capital gains that are not exempt under the provision of Section 10(38) of the ITA, at the following rates: Nature of income Rate of tax (%) Long term capital gains 10 Short term capital gains (other than referred to in Section 111A) 30 The above tax rates have to be increased by the applicable surcharge and education cess.

In case of long term capital gains, (in cases not covered under Section 10(38) of the ITA), the tax is levied on the capital gains computed without considering the cost indexation.

8. As per Section 196D, no tax is to be deducted from any income, by way of capital gains arising

from the transfer of shares or dividend on shares as referred to in section 115AD payable to Foreign Institutional Investor. Provisions of the ITA vis-à-vis provisions of the Tax Treaty The tax rates and consequent taxation mentioned above will be further subject to any benefits available under the Tax Treaty, if any, between India and the country in which the FII is resident. As per the provisions of Section 90(2) of the ITA, the provisions of the ITA would prevail over the provisions of the Tax Treaty to the extent they are more beneficial to the FII.

a. Benefits available to Mutual Funds

As per Section 10(23D) of the ITA, any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made there under, Mutual Funds set up by public sector banks or public financial institutions and Mutual Funds authorized by the Reserve Bank of India will be exempt from income tax, subject to such conditions as the Central Government may, by notification in the Official Gazette, specify in this behalf.

b. Benefits available under the Wealth Tax Act, 1957

Asset as defined under Section 2(ea) of the Wealth tax Act, 1957 does not include shares in companies and hence, shares of the Company are not liable to wealth tax in the hands of shareholders.

c. Benefits available under the Gift Tax Act, 1958 Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore, any gift of shares of the Company will not attract gift tax. However as per section 56(2) (vii) of the I.T.Act, in case where individual or Hindu undivided Family receives shares from any person on or after 1st October, 2009

a. Without any consideration, aggregate fair market value of which exceeds fifty thousand rupees, then the whole of the aggregate fair market value of such property or;

b. For a consideration which is less than the aggregate fair market value of the shares by an amount exceeding fifty thousand rupees, then the aggregate fair market value of such property as exceeds such consideration shall be taxable as the income of the recipient.

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SECTION IV – ABOUT THE COMPANY

INDUSTRY OVERVIEW You should read the following summary together with the risk factors included in this Information Memorandum and the more detailed information about us and our financial data included in this Information Memorandum. Unless otherwise indicated, all data relating to the industry in the following discussion is derived from internal Company reports and data, industry publication and estimates. This data has been reclassified in certain respects for purposes of presentation. For more information, see “Forward-Looking Statements” in this Information Memorandum. Industry Overview The Textiles Industry in India enjoys a distinctive position due to the pivotal role it plays by way of contribution to industrial output, employment generation (second largest after agriculture) and export earnings of the country. The industry is rich and varied, embracing the hand-spun and hand-woven sector at one end and the capital intensive, sophisticated mill sector at the other. Its association with the ancient culture and tradition of the country lends it a unique advantage in comparison with textiles industry of other countries, thus giving it an uncommon edge to cater to a vast variety of products and market segments both domestically, as well as, globally. The textile industry comprises the following:

• Organised Cotton/Man-Made Fibre Textiles Mill Industry • Man-Made Fibre / Filament Yarn Industry • Wool and Woollen Textiles Industry • Sericulture and Silk Textiles Industry • Handlooms, Handicrafts, the Jute and Jute Textiles Industry • Textiles Exports

Market Size India earns about 27 per cent of its total foreign exchange through textile exports. The textile industry contributes nearly 14 per cent of the total industrial production of the country. Fabric production rose to 60,996 million sq meters in FY 2011 from 52,665 million sq meters in FY 2007. Production of raw cotton grew to 32.5 million bales in FY11 from 28 million bales in FY07, while production of man-made fibre rose to 1,281 million kgs in FY11 from 1,139 million kgs in FY07. Production of yarn grew to 6,233 million kgs in FY11 from 5,183 million kgs in FY07. India has the potential to increase its textile and apparel share in the world trade from the current level of 4.5 per cent to 8 per cent and reach US$ 80 billion by 2020. Exports of textile grew to US$ 26.8 billion in FY10 from US$ 17.6 billion in FY06. India's textile trade is dominated by exports with a CAGR of 6.3 per cent during the same period. (Source: IBEF, May 2012)

India's textiles and clothing industry is one of the mainstays of the national economy. It is one of the largest contributing sectors of India's exports worldwide. The Vision Statement for the textiles industry for the 11th Five Year Plan (2007-12), inter-alia, envisages India securing a 7% share in the global textiles trade by 2012. At current prices the Indian textiles industry is pegged at US$ 55 billion, 64% of which services domestic demand. The textiles industry accounts for 14% of industrial production, which is4% of GDP; employs 35 million people and accounts for nearly 12% share of the country's total exports basket. The Textiles sector is the second largest provider of employment after agriculture. Thus, the growth and all round development of this industry has a direct bearing on the improvement of the economy of the nation. The Indian textiles industry is extremely varied, with the hand-spun and hand-woven sector at one end of the spectrum, and the capital intensive, sophisticated mill sector at the other. The decentralized

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Power looms / hosiery and knitting sector from the largest section of the Textiles Sector. The close linkage of the Industry to agriculture and the ancient culture, and traditions of the country make the Indian textiles sector unique in comparison with the textiles industry of other countries. This also provides the industry with the capacity to produce a variety of products suitable to the different market segments, both within and outside the country. The Cotton / Man-made fibre textile industry is the largest organized industry in the country in terms of employment (nearly 1 million workers) and number of units. Besides, there are a large number of subsidiary industries dependent on this sector, such as those manufacturing machinery, accessories, stores, ancillaries, dyes & chemicals. As on September 30, 2010, there were 1896 cotton/man-made fibre textile mills (non-SSI) in the country with an installed capacity of 38.53 million spindles 5,18,000 rotors and 57,000 looms. Man-made fibre production recorded a marginal fall and filament yarn production recorded a slight increase of about 1.89% during 2010-11 (April - October 2010). The production of spun yarn during the same period showed an increasing trend by 9.17%. The production of cotton yarn recorded an increase of 11% whereas Blended and 100% Non-cotton yarn production recorded an increase of about 4% and Cloth production by mill sector showed marginal increase of 3%. During the same period cloth production by power loom and hosiery sector showed an increase of 1.7% and 5.30% respectively. However the cloth production in handloom sector showed a decrease of 4.7%. (Source: Annual Report 2010-11, Ministry of Textiles) TECHNICAL TEXTILE SEGMENT The Technical textiles segment is expected to employ over 300,000 additional workers increasing the total employment in the sector to 1.2 million by 2012. The Government has set up four Centres of Excellence (CoEs) for Meditech, Agrotech, Geotech and Protech group of technical textile, providing one-stop facilities for testing, human resource development and research and development. India has the largest area under cotton cultivation — 9 million hectares — constituting 25 per cent of the world’s total cultivation area. India is the second-largest producer of silk in the world.

• Under the Eleventh Plan (2007–2012), the Planning Commission has set a growth rate of 16 per cent for the garments, technical textiles and processing segments, projecting an investment of US$ 31.37 billion (INR 1,506 billion) during the Plan period.

• Foreign direct investment (FDI) of up to 100 per cent is allowed in the textiles sector through the automatic route. The Ministry of Textiles has set up an FDI cell at the Economic Division to attract FDI in the sector.

• Initiatives, such as the Technology Upgradation Fund Scheme (TUFS) and Technology Mission on Cotton (TMC), among others, aid the development of the domestic industry and attract potential investors.

• Several international retail players, such as Marks & Spencer, Haggar Clothing, Kellwood, Little Label and Boules Trading Company, are using India as a key global sourcing destination.

• The Private Final Consumption Expenditure (PFCE) on clothing stood at US$ 20,742 million in 2007–08 and had grown with a CAGR of 6.8 percent over the last five years.

• The National Skill Development Corporation (NSDC) is targeting creation of 150 million skilled workforce in India by 2022 for sustaining high economic growth.

(Source: www.ibef.org – Textiles and Apparel) TEXTILE EXPORTS India's textiles and clothing industry is one of the mainstays of the national economy. It is also one of the largest contributing sectors of India's exports worldwide. The Vision Statement for the textiles industry for the 11th Five Year Plan (2007-12), inter-alia, envisages India securing a 7% share in the global textiles trade by 2012. At current prices the Indian textiles industry is pegged at US$ 55 billion, 64% of which services domestic demand. The textiles industry accounts for 14% of industrial production, which is 4% of GDP; employs 35 million people and accounts for nearly 12% share of the country's total exports basket. (Source: Annual Report 2011-12, Ministry of Textiles)

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India's textile exports at a glance (Principal Commodities)

Item 2007-08 2008-09 2009-10 2010-11 Apr-Oct

2011(P) ` in Crore ` in Crore ` in Crore ` in Crore ` in Crore

Readymade Garment 36497.79 47112.77 47608.39 48355.57 32436.57

RMG of cotton including accessories 30335.79 38522.72 38070.33 37687.51 24076.03RMG of Man-made fibre 3912.26 4721.94 5745.29 6489.07 5265.62RMG of other textile material 2249.74 3868.11 3792.77 4178.99 3094.92Cotton Textiles 27599.81 21795.4 27016.21 38038.19 22418.43Cotton raw including waste 8865.39 2865.86 9537.08 12981.04 5085.34Cotton yarn, fabrics & madeups 18734.42 18929.54 17479.13 25057.15 17333.09Man-made textiles 12785.02 15090.76 18783.13 21125.13 14713.41Manmade staple fibres 1121.72 1172.01 1690.68 1998.11 1338.66

Manmade yarn, fabrics & madeups 11663.3 13918.75 17092.45 19127.02 13374.75Wool & Woolen textiles 1783.13 2199.49 2224.14 1955.31 1485.53RMG of Wool 1409.55 1742.97 1799.2 1477.27 1092.21

Woollen yarn, fabrics & madeups 373.58 456.52 424.94 478.04 393.32Silk 2646.75 3107.78 2819.46 2708.02 1291.94RMG of Silk 1093.67 1437.73 1383.42 1095.10 741.12

Natural silk yarn, fabrics & madeups 1540.93 1664.82 1411.12 1578.40 536.10Silk waste 12.15 5.23 24.92 34.52 14.72Handloom Products* 1252.81 1662.89 1483.21Textiles (excluding handicrafts, jute & coir)

81312.5 89306.2 99704.14 113845.11 73829.09

Handicrafts 5844.12 4949.23 4548.91 5445.45 2476.59Handicrafts (excluding handmade carpets) 2046.21 1384.19 1066.58 984.65 462.05

Carpets (excluding silk) handmade 3725.8 3506.37 3441.74 4444.96 2006.50Silk carpets 72.11 58.67 40.59 15.84 8.04Coir & Coir Manufacturers 644.87 680.7 759.66 689.18 531.43Coir & Coir Manufacturers 644.87 680.7 759.66 689.18 531.43Jute 1319.36 1375.78 1033.09 2076.34 1197.02Floor covering of jute 317.56 251.63 281.07 336.93 141.31Other jute manufactures 322.22 491.64 300.19 505.58 448.61Jute yarn 215.14 216.92 144.2 533.90 136.31Jute hessian 464.44 415.59 307.63 699.93 470.79Total Textiles Exports (incl. handicrafts, coir & jute)

89120.85 96311.91 106045.8 122056.08 78034.13

% Textile Exports 13.59% 11.46% 12.54% 10.63% 10.03%

India's exports of all commodities 655863.52 840755.06 845533.64 1148169.56 778375.03 Government Initiatives

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• Technology Upgradation Fund Scheme (TUFS) The Government has restructured the TUFS, the flagship scheme of Ministry of Textiles for

upgradation of technology in the textile and jute sectors. The ministry has issued the Government Resolution on Restructured TUFS for the period 28.04.2011 to 31.03.2012 (both the days inclusive) with an overall subsidy cap of Rs 1,972 crore (US$ 0.43 billion) during the period. The objective of the present Scheme is to leverage investments in technology upgradation in the Textiles and Jute Industry, with a special emphasis on balanced development across the value chain.

• The Scheme for Integrated Textile Park (SITP) The scheme was approved in July 2005 to facilitate setting up of textiles parks with world class

infrastructure facilities. Forty parks have been sanctioned till December 31, 2010 in nine states. The estimated project cost (for common infrastructure and common facilities) is ` 4,193.65 Crore (US$ 0.93 billion), of which Government of India assistance would be ` 1,419.69 Crore (US$ 0.31 billion). The projected investment in these parks is ` 19,456.90 Crore (US$ 4.32 billion) and estimated annual production is Rs 33,568.50 Crore (US$ 7.45 billion).

• Integrated Skill Development Scheme - The Government launched the Integrated Skill

Development Scheme for the T&C Sector, including Jute & Handicrafts, in September 2010. The main objective of the scheme is to address the trained manpower needs of textiles and related segments. The Scheme would target to train approximately 2,56,000 persons during 2010-11 and 2011-12.

• The government has initiated a number of steps to ensure raw materials security for the textiles

industry. In order to balance the interests of all stake holders across the value chain. A multipronged approach was adopted which included capping of cotton exports at 55 lac bales for cotton season 2010 – 11; and permitting yarn exports of 720 million kgs for the year 2010-11.

• Fiscal incentives are provided for exports of T&C items under various provisions of the Foreign Trade

Policy 2009-14. • The textile industry is also being supported with an extensive skill development programme to train 3

million persons over a 5 year period, by leveraging the strength of existing institutions under the textile ministry.

• India has the most liberal and transparent policies in Foreign Direct Investment (FDI) amongst

emerging countries. Under the automatic route, 100 per cent FDI is allowed in the textile sector. FDI in sectors to the extent permitted under automatic route does not require any prior approval either by the Government of India or Reserve Bank of India (RBI).

• The government has proposed some more relaxations for the branded garments sector, besides

enhancement of duty abatement from 40 per cent to 55 per cent.

The Road Ahead India's T&C industry has great potential, and is one of the mainstays of the country’s economy. The industry has enormous opportunities for domestic as well as international investors given its consistent growth performance, abundant cheap skilled manpower and growing domestic demand. With the abolition of quotas, India has surged ahead of other countries and positioned itself as a value-added manufacturer with a varied material base, an educated and English-speaking class of executives with high product development and design orientation. On the global front, India is set to become an even bigger participant, both as a consumer and as a producer. The country offers an attractive combination of a large domestic market, and a base for low cost production. The industry has gained a strong position in cotton based products, especially in the readymade garments and home furnishings segment, which are expected to be the key drivers of growth for the industry. (Source: IBEF, May 2012)

BUSINESS OVERVIEW

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The following information is qualified in its entirety by, and should be read together with, the more detailed financial and other information included in the Information Memorandum, including the information contained in the section entitled “Risk Factors” beginning on page 05 of this Information Memorandum. Haria Apparels Limited (“HAL”) is a company incorporated on February1, 2011 under the Companies Act, 1956having its registered office at 8, Subhash Road, Vile Parle (East), Mumbai, Maharashtra – 400 057.The shares of the Company are not listed on any Stock Exchange. As on May 31, 2011, the Company has a paid-up capital of ` 80,000,000 and is promoted by Mr. Kantilal L. Haria. Since HAL is a recently incorporated company, it has not commenced any operations. The Hon’ble High Court Bombay, vide its Order dated October 21, 2011 has approved the Scheme of Arrangement/ De-merger of HEL whereby the Garment Division of HEL has been transferred to and vested in Haria Apparels Ltd. with effect from June 1, 2011 (i.e. the Appointed Date under the Scheme) and BPPL has been transferred to and vested in the remaining entity of HEL, i.e. the Stationery division, under Sections 391 to 394 of the Companies Act, 1956. The Demerger of Haria Exports Limited (“HEL”), amalgamation of “HEL-Garments” into “HAL”, and amalgamation of “BPPL” into “HEL-Stationary” have been decided by the Management of the respective Companies. Towards this purpose, the Directors of “HEL”, “HAL” and “BPPL” have approved the proposed demerger of Garments Division of HEL into “HAL” and the subsequent merger of the remaining entity of “HEL” i.e. the Stationary division with “BPPL” and approved the draft scheme of amalgamation at the Board meeting held on June 14, 2011. The company is engaged in the business of manufacture and exports of Garments. The main objects of the company on its incorporation were to manufacture, market, import, export and otherwise deal in clothings, garments, fashion wear, design wear, and accessories related to clothing and to act as stockiest, agents, brokers, distributors, traders, retailers, wholesalers, jobbers, labour contractors, consultants in clothing including garments, suitings, shirtings, and accessories.

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HISTORY AND CERTAIN CORPORATE MATTERS

History and Major Events Our Company was incorporated as Haria Apparels Limited on February 01, 2011 under the Companies Act, 1956, with the Registrar of Companies, Mumbai. The Registration no. and CIN assigned to our Company is 212887 and U18204MH2011PLC212887 respectively. The Registered Office of the Company is situated at 8, Subhash Road, Vile Parle (East), Mumbai, Maharashtra – 400 057. 1. Major Events Date/Period Activities 01-02-2011 Incorporation as Haria Apparels Limited

14-02-2011 Received Certificate for Commencement of Business

30-04-2011 Increase in Authorised Capital from ` 5,00,000 divided into 50,000 equity shares of ` 10/- each to ` 8,00,00,000 divided into 80,00,000 equity shares of ` 10/- each

03-05-2011 Allotment of 79,50,000 equity shares of ` 10/- each 14-06-2011 Board Resolution for approval of composite scheme of arrangement

21-10-2011 The Hon’ble High Court of Mumbai, Maharashtra, has approved the Scheme of Arrangement/ De-merger of HEL whereby the Garment Division of HEL has been transferred to and vested in Haria Apparels Ltd.

30-11-2011 Shareholder Resolution for approval of composite scheme of arrangement 2. Corporate Profile of the Company (Description of activities and Services provided by the

Company) The Company is engaged in the business of Garments. 3. Injunction or restraining orders: NIL 4. Our Company has seven (7) shareholders as on the date of filing this Information

Memorandum. 5. Main Objects of the Company To manufacture, market, import, export and otherwise deal in clothing’s, garments, fashion wear, design wear, and accessories, related to clothing and to act as stockiest, agents, brokers, distributors, traders, retailers, wholesalers, jobbers, labour contractors, consultants in clothing including garments, suitings, shirtings, and accessories. Changes in Memorandum of Association of the Company There have been no changes in Memorandum of Association of the Company as on date of filing this Information Memorandum with SEBI. SHAREHOLDERS AGREEMENT There are no shareholder agreements as on date of Filing of the Information Memorandum with SEBI. Other Agreements Except the Contracts / Agreements entered into in the ordinary course of the business carried on or intended to be carried on by the Company, the Company has not entered into any other Agreement / Contract.

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Strategic Partners There are no strategic partners as on date of filing this Information Memorandum. Financial Partners There are no financial partners as on date of filing this Information Memorandum with SEBI.

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KEY INDUSTRY REGULATIONS THE PAYMENT OF GRATUITY ACT, 1972 The Payment of Gratuity Act, 1972 was enacted to introduce a scheme for payment of gratuity for certain employees employed in Industrial and commercial establishment as a measure of social security. By the amendment of 1984 by act 26 of 1984 sub section (3A) was inserted in section 1 to the Payment of Gratuity Act 1972 to ensure that once the act has became applicable to such shop or establishment it shall continue to be so notwithstanding the fact that the number of persons employed therein at any time after it has become so applicable falls below ten. To ensure that an unscrupulous employer may not fabricate the records to avoid application of the Act or reduce the number of employees just to avoid payment of gratuity, various provisions, as to notice of opening, notice of change or closure of the shop or establishment, and appointment of inspectors have been made under the Act. Any violations thereof have been made offences punishable with imprisonment or fine or with both. THE EMPLOYEES PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT, 1952 The Act provides for the institution of Provident Funds, Pension Fund and Deposit-Linked insurance fund for employees in Factories and other Establishments. The act applies to (a) every establishment which is a factory engaged in any industry specified in Schedule of the Act and in which 20 or more persons are employed and (b) any other establishment which the Central Government by Notification specify giving not less than two months’ notice of its intention to do so in the Official Gazette. THE CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970 It applies to every establishment in which 20 or more workmen are employed or were employed on any day on the preceding 12 months as contract labour and to every contractor who employs or who employed on any day of the preceding 12 months 20 or more workmen. It does not apply to establishments where the work performed is of intermittent or casual nature. It aims to prevent any exploitation of the persons engaged as contract labour, who are generally neither borne on pay roll or muster roll nor is paid wages directly. It provides for registration requirements of the principal employer, who has the responsibility for inadequate wage payments by the contractor to the labour. THE PAYMENT OF WAGES ACT, 1936 It regulates payment of wages to certain classes of employed persons. It makes every employer responsible for the payment of wages to person employed by him. No deductions can be made from the wages nor can any fine be levied on wages earned by a person employed except as provided under this Act. THE MINIMUM WAGES ACT, 1948 It came into force with an objective to provide for the fixation of a minimum wage by the employer to the employee. Every employer is mandated to pay the minimum wages to all employees engaged to do any work skilled, unskilled, and manual or clerical (including out-workers) in any employment listed in the schedule to this Act, in respect of which minimum rates of wages have been fixed or revised under the Act THE PAYMENT OF BONUS ACT, 1965 It was enacted with the objective of providing of payment of bonus to employees on the basis of profit or on the basis of productivity. This Act ensures that a minimum annual bonus is payable to every employee regardless of whether the employer has made a profit or a loss in the accounting year in which the bonus is payable. Every employer is bound to pay to every employee, in respect of the accounting year, a minimum bonus which is 8.33% of the salary or wage earned by the employee during the accounting year or ` 100, whichever is higher. THE WORKMEN'S COMPENSATION ACT, 1923 It has been enacted with the objective to provide for the payment by certain classes of employers to their workmen or their survivors, compensation for industrial accidents and occupational diseases resulting in death or disablement. In case the employer fails to pay compensation due under the Act within one month

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from the date it falls due the Commissioner may direct the employer to pay the compensation amount along with interest and may also impose a penalty. OTHER REGULATIONS FOR THE COMPANY (HAL) We are subject to a number of central and state legislations which regulate substantive and procedural aspects of our business. Additionally, our operations require sanctions from the concerned authorities, under the relevant Central and State legislations and local bye-laws. The following is an overview of some of the important laws, policies and regulations which are pertinent to our business as a player in the textile industry. The regulations set out below are not exhaustive and are only intended to provide general information to Bidders. Taxation statutes such as the I.T. Act, Central Sales Tax Act, 1956 and applicable local sales tax statutes, labour regulations such as the Employees' Provident Fund and Miscellaneous Act, 1952 and other miscellaneous regulations and statutes such as the Trade Marks Act, 1999 apply to us as they do to any other Indian company. For details of government approvals obtained by us in compliance with these regulations, please refer to the Chapter titled "Government Approvals or Licensing Arrangement" beginning on page 118 of this Information Memorandum. The statements below are based on the current provisions of Indian law, and the judicial and administrative interpretations thereof, which are subject to change or modification by subsequent legislative, regulatory, administrative or judicial decisions. TEXTILE SECTOR 1. TUFS (Technology Upgradation Fund Scheme) TUFS is the "flagship" Scheme of the Ministry of Textiles, Government of India, which aims at making available funds to the domestic textile industry for technology upgradation of existing units as well as to set up new units with state-of-the-art technology to enhance their viability and competitiveness in the domestic as well as international markets. The Government of India launched the TUFS for textiles and jute industries with effect from April 01, 1999 for a period of five (5) years, which was subsequently extended up to March 31, 2007 and further continued the Scheme for a period of five (5) years for the textiles & jute industries making certain further provisions in the financial and operational parameters of the Scheme. The Scheme provides interest reimbursement on spinning machinery at the rate of 4 per cent (4%). However, all the remaining sub-sectors covered under the scheme would get interest reimbursement at the rate of 5 per cent (5%). The Powerloom units under TUFS have an additional option to avail of 20 per cent (20%) margin money subsidy in lieu of 5 per cent (5%) interest reimbursement on investment in TUFS compatible specified machinery subject to a capital ceiling of ` 200 Lac and ceiling on subsidy ` 20 Lac. The specified processing machinery, garmenting machinery and machinery required in manufacture of technical textiles will get a 5 per cent (5%) interest reimbursement plus 10 per cent (10%) capital subsidy. The Scheme further provides for 25 per cent (25%) capital subsidy on purchase of the new machinery and equipment for the pre-loom and post-loom operations, handlooms/ upgradation of handlooms and testing and quality control equipment, for handloom production units. The main feature of the scheme is a 5% interest reimbursement in respect of loans availed there under from the concerned financial institution on a project of technology upgradation in conformity with this scheme. 2. National Textile Policy Additionally, subsequent to the announcement of Textile Policy, the woven segment of readymade garment sector and the knitting sector have been de-reserved from the list of items reserved for exclusive manufacture in the small scale sector. The Textile Policy also targets the development of a strong multi-fibre base to facilitate product upgradation and diversification. The Textile Policy provides for government financing and venture capital funding for setting up textile plants. Particular emphasis is laid on exports with the proposal of multi-disciplinary institutional mechanisms to formulate policy and action plans, including the restructuring of Export Promotion Councils and operating a brand equity fund exclusively for textile and apparel products. The Textile Policy also contains sector specific agendas. For the cotton sector, it designates the Technology Mission of Cotton as the nodal body to bring about increase in productivity and stability in prices. For the spinning and weaving sectors, decentralised modernisation is the thrust of the government policy and for the garments sector, the government proposes a number of

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measures in light of the WTO rules and regulations, including strategic alliances with leading global manufacturers and the establishment of textile/apparel parks. The Ministry of Textiles announced the formulation of the National Textile Policy, 2000 ("Textile Policy") in November 2000 with the objective of enabling the textile industry to attain and sustain a pre-eminent global standing in the manufacture and export of clothing. The Textile Policy envisages a multi-pronged strategy to achieve these long term goals. The strategy aims at modernising the equipment and technology that is used in the sector and simultaneously strengthening the traditional knowledge, skills and capabilities in this sector. 3. Cotton Control Order 1986 The Cotton (Control) Order, 1986 ("Cotton Order") prescribes the maximum quantity of cotton that may be possessed by a manufacturer, a cotton ginning factory, a cotton pressing factory, a cotton ginning and pressing factory and a person (other than a member of a Hindu Undivided Family growing cotton). The Cotton Order establishes the office of the Textile Commissioner as the regulator thereunder. The Cotton Order further specifies the quality standards that have to be met while picking cotton for the purposes of export and domestic consumption as well as the markings that have to be made on the cotton bale before marketing of the same. Trade related incentives 1. Export Promotion Capital Goods Scheme The scheme facilitates import of capital goods at 5% concessional rate of duty with appropriate export obligation. Import of second hand capital goods without any restriction on age is also allowed under the Foreign Trade Policy, which came into effect on September 01, 2004. The Foreign Trade Policy also permits EPCG license holders to opt for technological upgradation for their existing capital goods imported under the EPCG license, subject to certain prescribed conditions. 2. Advance licensing scheme With a view to facilitating exports and to access duty-free inputs under the scheme, standard input-output norms for about 300 textiles and clothing export products have been prescribed and this scheme remained under operation. 3. Duty entitlement pass book ("DEPB") scheme DEPB credit rates have been prescribed for 83 textiles and clothing products. The scheme aims to neutralize the incidence of basic and special custom duty on the import content of the export product, by way of grant of duty credit against the export product at specified rates. However, these export incentives may be reviewed shortly to make them WTO-compatible. 4. Duty drawback scheme Exporters are allowed refund of the excise and import duty suffered on inputs of the export products under this scheme. The Ministry of Finance, GoI announced the revised "All Industry Rates of Duty Drawback", which came into effect on May 05, 2005. The drawback rates have been determined on the basis of certain broad parameters including, inter alia, the prevailing prices of input, standard input/output norms published by the Directorate General of Foreign Trade, share of imports in the total consumption of inputs and the applied rates of duty. Regulations for Foreign Investment 1. FEMA Regulations As laid down by the FEMA Regulations, no prior consents and approvals are required from the Reserve Bank of India, for Foreign Direct Investment under the 'automatic route' within the specified sectoral caps. In respect of all industries not specified as FDI under the automatic route, and in respect of investment in excess of the specified sectoral limits under the automatic route, approval may be required from the FIPB and/or the RBI. Presently, investments in companies engaged in the textile sector fall under the RBI's 'automatic route' for FDI/NRI investment of up to 100%. The RBI, in exercise of its power under the FEMA, has notified the Foreign Exchange Management (Transfer or Issue of Security by a Person

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Resident Outside India) Regulations, 2000 ("FEMA Regulations") to prohibit, restrict or regulate, transfer by or issue security to a person resident outside India. Foreign investment in India is governed primarily by the provisions of the FEMA which relates to regulation primarily by the RBI and the rules, regulations and notifications thereunder, and the policy prescribed by the Department of Industrial Policy and Promotion, Ministry of Commerce & Industry, Government of India. 2. Ministry of Industry, Department of Industrial Policy and Promotion, Press Note No. 17 (1998 series) With a view to encouraging investments towards setting up of integrated units and thus achieving value additions, as well as to address the current difficulties of the cotton yarn export oriented units, the Government of India issued Press Note No. 17 (1998 Series), which allows export oriented units the operational flexibility of exporting cotton yarn without being subject to domestic cotton sourcing restrictions to the extent provided for within the press note. Certain other laws and regulations that are relevant to the operation of our Company's business include the following: 1. Factories Act, 1948; 2. Shops and Commercial Establishment Act 3. Payment of Wages Act, 1936; 4. Payment of Bonus Act, 1965; 5. Employees' State Insurance Act, 1948; 6. Employees' Provident Funds and Miscellaneous Provisions Act, 1952; 7. Payment of Gratuity Act, 1972; 8. Minimum Wages Act 1948; 9. Workmen Compensation Act, 1923; 10. Provident Funds and Miscellaneous Provisions Act 1952; 11. Contract Labour (Regulation and Abolition) Act, 1970; 12. Water (Prevention and Control of Pollution) Act, 1974; 13. Air (Prevention and Control of Pollution) Act, 1981; 14. Environment (Protection) Act, 1986 15. Hazardous Wastes (Management and Handling) Rules 1989, etc.

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OUR MANAGEMENT Board of Directors: The company has two (2) Executive Directors and two (2) Non-Executive Independent Directors. The following table sets forth the details of the Board of Directors as on the date of this Information Memorandum:

Sr. No.

Name, Father’s Name & Address Age Designation

& Term

Occupation, Qualification, & DIN

Other Directorships

1

Mr. Kantilal Lakhamshi Haria S/o Mr. Lakhamshi Govinji Haria 7, Laxmi Building, North Avenue Road, Santacruz (West), Mumbai 400 054.

71 Managing Director

Business FBIM DIN: 00585400

• Haria Exports Limited • Vilco Pharma Private

Limited • Haria Property And

Developers Private Limited

• Haria Investments Private Limited

• South East Textiles Private Limited

2

Mr. Manish Kantilal Haria S/o Mr. Kantilal Lakhamshi Haria 7, Laxmi Building, North Avenue Road, Santacruz (West), Mumbai 400 054.

42 Executive Director

Business B.COM DIN: 00585234

• Haria Exports Limited • Veer Haria Securities

Private Limited • Blue web Infosystems

Private Limited • Vilco Pharma Private

Limited • Haria Property And

Developers Private Limited

• Haria Investments Private Limited

• South East Textiles Private Limited

• Powerloom Development And Export Promotion Council

• Anakin Real Estate Private Limited

3

Mr. Nitin Kumar Vasudev Oza 304, Deepkiran Apartment, 3rd Floor, Bhagyodaya Society, Daman Road, Chala, Vapi, Gujarat – 396191.

43 Independent Director

Service Graduate DIN: 02777627

• Haria Exports Ltd • Best paper mills private

limited

4

Mr. Mohith Ramamurthy Suddala N1, A wing, Room No.404, Pratham chs, Pratiksha Nagar, Sion, Mumbai-400 022.

28 Independent Director

Service Graduate DIN: 05266111

NIL

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Brief Profile of Our Directors Mr. Kantilal Lakhamshi Haria, aged 71 years, is the Chairman and Managing Director of our Company. He is a highly versatile businessman engaged in various activities ranging from business to Cultural & Social activities. He has built up world-wide contacts in export trade and to name a few they consist of Heads of States of Uganda, Tanzania, Zambia and Kenya. His vast experience of business and capabilities of business Management has significantly contributed to the Company’s growth. He was the Managing Committee Member of The Handloom Export Promotion Council, MADRAS, the Cotton Textiles Export Promotion Council, Mumbai, the Federation of Indian Export Organisations, Western Region, Mumbai and the Synthetic Textiles Export Promotion Council, Mumbai. He led the five member sales-cum-study team sponsored by The Handloom Export Promotion Council, Madras to African Countries. Mr. Manish K. Haria, Executive Director, is a Commerce Graduate from Bombay University. He is the key person in the company who looks after factory operations and marketing related matters. Mr. Manish K. Haria is a dynamic young businessman with good execution capacity. He has widely traveled outside India for the purpose of Export Business of the Company and has developed good contacts with Foreign Buyers. At a young age, Mr. Manish K. Haria has been handling the overall activities of the Haria Group entirely i.e. Marketing, Overseas Tours for Export promotion, controlling the Staff/Workers., etc. Mr. Manish K. Haria is Executive Committee member in the Handloom Export Council, setup by Government of India. Mr. Nitin Kumar Vasudev Oza, aged 43 years, is the Independent Director of our Company. He is a part of the Senior Management and is in-charge of the Factory at Vapi where he looks after Liaison with Government Authorities. In view of the valuable contribution received by the Company from his experience, it is in the interest of the Company to appoint him as a Director of the Company. Mr. Mohith Ramamurthy Suddala, aged 28 years, is the Independent Director of our Company. He is a young dynamic professional and is in-charge of Liaison with statutory requirements authorities in Mumbai like Income Tax, Sales Tax, Service Tax, Financial Institutions etc. In view of the valuable contribution received by the Company from his experience, it is in the interest of the Company to appoint him as a Director of the Company. Relationship between Directors Except for Mr. Manish Kantilal Haria being the son of Mr. Kantilal Lakhamshi Haria, none of the other directors are related to each other in any manner. There are no arrangements or understanding with major shareholders, customers, suppliers or others, pursuant to which, any of the Directors was selected as a director or member of senior management. THERE ARE NO SERVICE CONTRACTS ENTERED INTO BY THE DIRECTORS WITH THE COMPANY PROVIDING FOR BENEFITS UPON TERMINATION OF EMPLOYMENT. Details of Borrowing Powers The borrowing limits of the Company (apart from temporary loans obtained from the bankers in the ordinary course of business) in terms of Section 293(1)(d) of the Act is ` 50 Crore in excess of the aggregate of the paid-up capital of the company and its free reserves. Compensation of Executive Directors

Sr. No. Name of Executive Director Current Compensation

Term Period Basic Salary

Perquisites and Other Benefits

1 Mr. Kantilal Lakhamshi Haria NA NA NA 2 Mr. Manish Kantilal Haria NA NA NA

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Shareholding of the Directors The following table details the shareholding of the Directors in their personal capacity and either as sole or first holder, as on the date of this Information Memorandum: Name of Director No. of Shares held Holding in PercentageMr. Kantilal Lakhamshi Haria 9,27,779 6.07% Mr. Manish Kantilal Haria 30,20,496 19.75% TOTAL 39,48,275 Compensation of Non-Executive Directors Pursuant to a resolution passed at the meeting of the Board of the Company on 23/04/2012 a sitting fees of ` 5000/- is payable to Non-Executive Directors for attending each meeting of the Board and a sitting fees of ` 5000/- is payable to Non-Executive Directors for attending each meeting of a Committee. Further, if any Director is called upon to advice the Company as an expert or is called upon to perform certain services, the Board is entitled to pay the director such remuneration as it thinks fit. Save as provided in this section, except for the sitting fees and any remuneration payable for advising the Company as an expert or for performing certain services, our non-executive directors are not entitled to any other remuneration from the Company. Interest of Directors Our Company has been promoted by Mr. Kantilal Haria, Mr. Manish Haria, Mr. Kantilal Maru, Mr. Rajesh Parmar, Mr. Milan Mehta, Ms. Sheetal Haria and Vilco Pharma Pvt. Ltd. The Promoters may be deemed to be interested in the promotion of our Company to the extent of shares held by them and their relatives. The Promoters may also benefit from holding directorship in our Company. All our Directors may be deemed to be interested to the extent of remuneration and/or fees, if any, payable to them for attending meetings of the Board and of committees thereof, reimbursement of expenses as well as to the extent of commission and other remuneration, if any, payable to them under the Articles of Association and the applicable laws. Some of the Directors may be deemed to be interested to the extent of consideration received/paid or any loan or advances provided to anybody corporate including companies and firms, and trusts, in which they are interested as directors, members, partners or trustees. Our Directors may also be regarded interested to the extent of dividend payable to them and other distributions in respect of the Equity Shares, if any, held by them or by the companies / firms / ventures promoted by them or that may be subscribed by or allotted to them and the companies, firms, in which they are interested as Directors, members, partners and Promoters, pursuant to this Issue. Except as stated otherwise in this Information Memorandum, the Company has not entered into any Contract, Agreements or Arrangements during the preceding two years from the date of the Information Memorandum in which the Directors are interested directly or indirectly and no payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be entered into with them. Changes in the Board of Directors in the last two years Except as stated below, there have been no changes in the Board of Directors in the last 3 years from the date of filing this Information Memorandum. Mr. Kantilal Maru has resigned on 27/07/2012. Mr. Nitin Oza &Mr. Mohith Ramamurthy Sudala were appointed on 23/04/2012. Corporate Governance The provisions of the Listing Agreement to be entered into with the Stock Exchanges with respect to corporate governance and SEBI ICDR Regulations in respect of corporate governance will be applicable

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to our Company immediately upon the listing of its Equity Shares on the Stock Exchanges. Our Company has complied with the corporate governance code in accordance with Clause 52 of the Listing Agreement to be entered into with the Stock Exchanges, particularly, in relation to appointment of independent directors to our Board and constitution of an audit committee, a remuneration committee and a shareholders’ grievance committee. Our Board functions either on its own or through committees constituted thereof, to oversee specific operational areas. Our Company undertakes to take all necessary steps to continue to comply with all the requirements of the corporate governance code in accordance with Clause 49 of the Listing Agreement to be entered into with the Stock Exchanges. Board Composition The Board of Directors provides strategic direction and thrust to the operations of the Company. As on date the Board is comprised of total two (2)Executive Directors. The Company complies with the revised norms for Independent Directors.

Sr. No. Name of Director Designation Status

1 Mr. Kantilal Lakhamshi Haria Director Managing Director 2 Mr. Manish Kantilal Haria Director Executive Director

Various Committees of Directors

1. Audit Committee The Audit Committee of our Board was constituted by our Directors by a board resolution dated23/04/2012pursuant to section 292A of the Companies Act. The Audit Committee comprises of: Name of the Member Nature of Directorship Designation in committeeMr. Mohith Suddala Independent Director Chairman of the committee Mr. Nitin Oza Independent Director Member of the committee Mr. Manish Haria Director Member of the committee The scope of Audit Committee shall include but shall not be restricted to the following: 1. Oversight of the Issuer’s financial reporting process and the disclosure of its financial information to

ensure that the financial statement is correct, sufficient and credible. 2. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or

removal of the statutory auditor and the fixation of audit fees. 3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. 4. Reviewing, with the management, the annual financial statements before submission to the board for

approval, with particular reference to: a. Matters required to be included in the Director’s Responsibility Statement to be included in the

Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956 b. Changes, if any, in accounting policies and practices and reasons for the same c. Major accounting entries involving estimates based on the exercise of judgment by management d. Significant adjustments made in the financial statements arising out of audit findings e. Compliance with listing and other legal requirements relating to financial statements f. Disclosure of any related party transactions g. Qualifications in the draft audit report.

5. Reviewing, with the management, the half yearly financial statements before submission to the board for approval

6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

7. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.

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8. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

9. Discussion with internal auditors any significant findings and follow up there on. 10. Reviewing the findings of any internal investigations by the internal auditors into matters where there

is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.

11. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

12. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

13. To review the functioning of the Whistle Blower mechanism, in case the same is existing. 14. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading

the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate.

15. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. Explanation (i): The term "related party transactions" shall have the same meaning as contained in the Accounting Standard 18, Related Party Transactions, issued by The Institute of Chartered Accountants of India. Explanation (ii): If the Issuer has set up an audit committee pursuant to provision of the Companies Act, the said audit committee shall have such additional functions / features as is contained in this clause. The Audit Committee enjoys following powers: a. To investigate any activity within its terms of reference, b. To seek information from any employee c. To obtain outside legal or other professional advice, and d. To secure attendance of outsiders with relevant expertise if it considers necessary. e. The audit committee may invite such of the executives, as it considers appropriate (and particularly

the head of the finance function) to be present at the meetings of the committee, but on occasions it may also meet without the presence of any executives of the Issuer. The finance director, head of internal audit and a representative of the statutory auditor may be present as invitees for the meetings of the audit committee.

The Audit Committee shall mandatorily review the following information:

a. Management discussion and analysis of financial condition and results of operations; b. Statement of significant related party transactions (as defined by the audit committee), submitted by

management; c. Management letters / letters of internal control weaknesses issued by the statutory auditors; d. Internal audit reports relating to internal control weaknesses; and e. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to

review by the Audit Committee.

The recommendations of the Audit Committee on any matter relating to financial management, including the audit report, are binding on the Board. If the Board is not in agreement with the recommendations of the Committee, reasons for disagreement shall have to be incorporated in the minutes of the Board Meeting and the same has to be communicated to the shareholders. The Chairman of the committee has to attend the Annual General Meetings of the Company to provide clarifications on matters relating to the audit.

The Company Secretary of the Company acts as the Secretary to the Committee. Meeting of Audit Committee The audit committee shall meet at least four times in a year and not more than four months shall elapse between two meetings. The quorum shall be either two members or one third of the members of the audit committee whichever is greater, but there shall be a minimum of two independent members present.

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2. Shareholder and Investor Grievance Committee The Shareholder and Investor Grievance Committee of our Board was constituted by our Directors by a board resolution dated 23/04/2012.The Shareholder and Investor Grievance Committee comprises of:

The Company Secretary of our Company, Mr. Ashwin Shah acts as the Secretary to the Committee. Terms of Reference The scope, terms of reference and functioning of the Committee is as prescribed under Clause 49 of the Listing Agreement. The primary functions carried out by the Committee are to approve requests for share transfers and transmissions to approve the requests pertaining to remat of shares/sub-division/consolidation/issue of renewed and duplicate share certificates etc. and for this purpose the required authority has been delegated to Ms. Chetana Vaity. Compliance with Listing Agreement The Company in terms of this Information Memorandum intends to list its equity shares on BSE and intends to comply with the requirements under the respective Listing Agreement of the above-mentioned stock exchanges. Further, we are in compliance with clause 49 of the listing agreement to the extent applicable to a company seeking listing for the first time. Key Management Personnel Following is the Key Managerial Personnel of the Company:

Name, Designation

&Qualification Date of Joining

Age (in

years)

Term of office with date of expiration of

term

Details of service contracts

including Termination/ Retirement benefits

Previous Employment

Kantilal Haria 01/02/2011 71 NA NA Haria Exports Ltd.

There are no arrangements or understanding with major shareholders, customers, suppliers or others, pursuant to which any of the Key Management Personnel, was selected as a director or member of senior management. Compensation of Key Management Personnel

Name of Executive Director

Current Compensation Term Period

Basic Salary Perquisites and Other Benefits

Status of Employment

Kantilal Haria NA NA NA Permanent Shareholding of Key Management Personnel The Key Management Personnel together hold 30,36,556Equity Shares. Name No. of shares held Kantilal Haria 9,27,779 Total 9,27,779 There is no Bonus or any profit sharing plan of the Key Management Personnel.

Sr. No. Name of the Member Designation in committee Nature of Directorship

1. Mr. Manish Haria Chairman of committee Executive Director 2. Mr. Mohit Suddala Member of committee Independent Director 3. Mr. Nitin Oza Member of committee Independent Director

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Interests of Key Management Personnel The key management personnel of the Company do not have any interest in the Company other than to the extent of the remuneration, employee stock options held, if any, Equity Shares allotted under employee stock purchase scheme or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business. None of the key management personnel have been paid any consideration of any nature from the Company, other than their remuneration. Changes in the Key Management Personnel (if any) The changes in the key management personnel in the last three years are as follows: Sr. No. Name Date of Reason Joining Leaving1. Kantilal Haria February 01, 2011 NA Appointment Employees Employee Stock Option Scheme and Employee Stock Purchase Scheme At present, the Company does not have any Employee Stock Option Scheme and Employee Stock Purchase Scheme. Other Benefits to the Officers of the Issuer Company Except the payment of salaries and perquisites, no amount or benefit has been paid or given within the two preceding years or intended to be paid or given to any employee and there is no consideration for payment of giving of the benefit.

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OUR PROMOTERS AND PROMOTERS GROUP OUR PROMOTERS Following are the certain key details regarding our promoters: Mr. Kantilal Haria

Identification Details Age 71 Qualifications FBIM Experience MORE THAN 40 YEARS Occupation BUSINESS PAN AASPH5086P Passport No. F7793679 Driving License Number N.A. Voter’s ID N.A. Bank Account Number 00791000177588 Name of Bank & Branch HDFC Bank – Santacruz (West) % of pre-issue share holding in the issuer Company 9.38%

DIN 00585400 Mr. Manish Haria

Identification Details Age 42 Qualifications B.COM Experience MORE THAN 23 YEARS Occupation BUSINESS PAN AASPH5089C Passport No. Z2196420 Driving License Number MH02 20090037038 Voter’s ID N.A. Bank Account Number 00791010006677 Name of Bank & Branch HDFC Bank % of pre-issue share holding in the issuer Company 37.50%

DIN 00585234 Vilco Pharma Private Limited Vilco Pharma Private Limited was incorporated in Mumbai, vide certificate of incorporation dated December 26, 1973, issued by the Registrar of Companies, Mumbai under the provisions of the Companies Act, 1956. The registered office of VPPL is at Haria Center, 8, Subhash Road, Vile Parle East, Mumbai 400 057, Maharashtra. The business of Vilco Pharma Private Limited as described by its Memorandum of Association is: At Present the main business of Vilco Pharma is renting out of property Vilco Pharma Private Limited is engaged in the business of manufacturing, buying, selling, distributing, importing and exporting of pharmaceutical, medicinal preparations and drugs, compounds and cosmetics. They also carry on business as manufacturers, importers, exporters, distributors, buyers, sellers of, and dealers in, plaster of paris, gypsum plasters, rubber plasters, medicated plasters and plasters used for technical purposes, disinfectants, fertilizers, salts and acids. Additionally, they also carry out business activities as wholesale and retail chemists and druggists, chemical engineers, sterilizers, dyers, cleaners, makers of chemical plant and materials, nurses out-fitters laboratory proprietors.

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Details of changes in capital structure during the six months preceding the date of filing of this Information Memorandum There have been no changes in the paid-up Capital since the last six months. Board of Directors: Name Position Mr. Kantilal Maru Director Mr. Manish Haria Director Mr. Bimal Haria Director Mr. Kantilal Haria Director Financial Performance:

(` in lacs)

Particulars Year ended 31/3/2011

Year ended 31/3/2010

Year ended 31/3/2009

Equity share capital (of ` 100/- each) 3.06 3.06 3.06Reserves (excluding revaluation reserves) 596.62 487.46 452.04Networth 599.68 490.52 455.10Total Income 552.05 557.61 515.78PAT/Loss 109.16 35.42 118.75EPS 3567.34 1157.41 3880.59NAV (per equity share) 19597.38 16030.04 14872.63 Other Details pertaining to (Promoter group) Identification Details Company Registration Number 017094 Address of the Registrar of Companies 100, Everest, Marine Drive, Mumbai 400 002 Permanent Account Number AAACV4176B

Bank Account Number & the Address of the Bank

06682320000596 HDFC Bank Sahar Road Junction, Western Express Highway, Vile Parle(East),Mumbai-400 0057.

Information regarding significant adverse factors related to the group companies: (i) Vilco Pharma Private Limited has not become a sick company within the meaning of the Sick Industrial

Companies (Special Provisions) Act, 1995 and is not under winding up; (ii) Vilco Pharma Private Limited has not made a loss in the immediately preceding year. Vilco Pharma Private Limited has not remained defunct and no application has been made to the Registrar of Companies for striking off the name of the Company during the five years preceding the date of filing the Information Memorandum. The Promoters have not disassociated themselves from Vilco Pharma Private Limited during the three years preceding the date of filing the Information Memorandum. Declaration We confirm that the personal details of our Promoter viz., Permanent Account Number and Passport Number have been submitted to the Stock Exchange, at the time of filing of this Information Memorandum.

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We further confirm that, our Promoter has not been declared as willful defaulter by RBI or any other government authority and there are no violations of securities laws committed by our Promoter in the past nor any such proceedings are pending against our Promoter. Interest of Promoter in our Company Our Company is promoted by Mr. Kantilal Haria, Mr. Manish Haria, Mr. Kantilal Maru, Mr. Rajesh Parmar, Mr. Milan Mehta, Ms. Sheetal Haria and Vilco Pharma Pvt. Ltd. At present our Promoters hold 80,00,000 Equity shares of our Company. Our promoters may be deemed to be interested in the promotion of our Company to the extent of shares held by them and also to the extent of shares held by their relatives and group companies. Further, save and except as stated otherwise in the chapters titled ‘Business Overview’, ‘Our Management’ and the section titled ‘Financial Information’ beginning on pages 70, 77 and 89 respectively, of this Information Memorandum, and to the extent of Equity Shares held by them, our Promoters do not have any other interests in our Company as on the date of filing of this Information Memorandum. Litigation For details relating to Litigations involving the Promoters and Promoter Group Entities please refer to the section titled “Outstanding Litigations and Material Developments” on page 112 of this Information Memorandum. Common pursuits Haria Exports Ltd is our Promoter Group Entity and has common pursuits, as it is involved in the business of Garments. We shall adopt necessary procedures and practices as permitted by law to address any conflict situations as and when they may arise. Confirmations Our Promoters have confirmed that they have not been declared as willful defaulters by the RBI or any other governmental authority and there are no violations of securities laws committed by them in the past and no proceedings pertaining to such penalties are pending against them. None of the Promoters was or is a promoter, director or person in control of any other company which is debarred from accessing the capital market under any order or directions made by SEBI. Payment or Benefit to Promoters Except as stated in “Annexure (iii)(e)” of the Auditors Report on page 90 of this Information Memorandum, no amount or benefit has been paid or given to any Promoter within the two years preceding the date of filing of this Prospectus and no such amount or benefit is intended to be paid. Disassociation by the Promoters in the last three years Our Promoters have not disassociated themselves from any of the companies, firms or entities during the last three years preceding the date of this Information Memorandum. Related Party Transactions Save and except as disclosed in “Annexure (iii) (e)” of the Auditors Report on page 90 of this Information Memorandum there has been no payment or benefits to our Promoters during the last five years preceding the date of this Information Memorandum.

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CURRENCY OF PRESENTATION In the Information Memorandum, all references to “Rupees” and “`” and “Indian Rupees” are to the legal currency of the Republic of India. Throughout the sections on ‘Financial Information’ and ‘Summary of Financial Information’ and ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’ in the Information Memorandum figures have been expressed in lacs. The term ‘lacs’ means ‘One Hundred Thousand’. Any percentage amounts, as set forth in “Risk Factors”, “Our Business”, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and elsewhere in the Information Memorandum, unless otherwise indicated, have been calculated on the basis of our financial statements prepared in accordance with Indian GAAP. In the Information Memorandum, any discrepancies in any table between total and the sum of the amounts listed are due to rounding-off.

88

DIVIDEND POLICY The declaration and payment of dividends will be recommended by the Board of Directors and approved by the shareholders of our Company, at their discretion, and will depend on a number of factors, including but not limited to the earnings, capital requirements and overall financial condition. The Board may also from time to time pay interim dividend. Our Company has not declared any dividend since inception.

89

SECTION V - FINANCIAL INFORMATION

AUDITOR’S REPORT The Members of M/s. HARIA APPARELS LIMITED, MUMBAI We have audited the attached Balance Sheet of M/s. HARIA APPARELS LIMITED, as at 31stMarch, 2012 and the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on this financial statement based on our audit. 1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those

Standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India

in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to above, we report that: (i) 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. (ii) 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 these books. (iii) The balance sheet and profit and loss account dealt with by this report are in agreement with the books

of account; (iv) In our opinion, the balance sheet and profit and loss account dealt with by this report comply with the

accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; (v) On the basis of written representations received from the directors and taken on record by the Board of

Directors, we report that none of the directors is disqualified as on 31stMarch, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, 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 31st March, 2012. b) In the case of the profit and loss account, of the profit / loss for the year ended on that date.

For SUNDERJI GOSAR & CO. Chartered Accountants Firm Reg. No. – 115543W (ALPESH K. SAVLA) PARTNER M. No. 047828. Place: Mumbai Date: 13/08/2012

90

ANNEXURE TO THE AUDITORS REPORT Re: M/s. HARIA APPARELS LIMITED Referred to in paragraph 3 of our report of even date, (i) (a) Since there are no Fixed Assets clause (i) from (a) to (c) is not applicable. (ii) (a) Since there is no inventory clause (ii) from (a) to (c) is not applicable.

(iii) (a) The Company has granted loans to two parties covered in the register maintained Under

301 of the Companies Act, 1956, (b) In our opinion the rate of interest, wherever charged, and the other terms and conditions of

such loans are not prima facie prejudicial to the interest of company. (c) According to the information and explanations given to us, no repayment schedule has been

specified and accordingly the question of regularity in repayment of principal amount, wherever applicable, does not arise.

(d) According to the information and explanation given to us, there is no overdue amount for more than Rupees One Lac.

(e) The company has taken loans from five parties covered in the register maintained under section 301 of the Companies Act, 1956.The maximum amount involved during the year was ` 12,42,92,967/-& the yearend balance of Loans Taken from such parties was ` 12,42,92,967/-.

(f) There are no terms and conditions fixed on loans taken from the parties listed in the register maintained under section 301 of the Companies Act 1956 to that extent they are prejudicial to the interest of the Company.

(g) According to the information and explanations given to us, no repayment schedule has been specified and accordingly the question of regularity in repayment of principal amount, wherever applicable, does not arise.

(iv) In our opinion and according to the information and explanations given to us, there is adequate

internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods.

(v) (a) According to the information and explanations given to us, we are of the opinion that the

transactions that need to be entered into the register maintained Under Section 301 of the Companies Act, 1956 have not been entered.

(b) In our opinion and according to the information and explanations given to us, there were no transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year.

(vi). According to the information and explanations given to us, the provisions of sections 58A and 58AA

of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules – 1975 are not applicable to the company in the year under consideration.

(vii) Since neither the paid up capital at commencement of the Financial Year exceeds Rupees Fifty

Lacs nor the average turnover exceeds Rupees Five Crores for the period of three consecutive Financial Years immediately preceding the Financial Years, matter in respect of internal audit system is not applicable.

(viii) As explained to us the Central Government has not prescribed any maintenance of cost record

under section 209(1)(d) of the Companies Act, 1956 to the Industry Company. (ix) (a) According to the information and explanations given to us, there are no undisputed statutory

dues in respect of provident fund, investor education protection fund, employees’ state insurance, sales tax, wealth tax, custom duty, excise duty, cess and other statutory dues

91

applicable to it at the year-end for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no disputed dues.

(x) The Company has incurred cash loss of ` 7,30,228/- during the financial year covered by our audit.

The Company has accumulated losses of ` 7,06,382/- at the year ending 31/03/2012. (xi) The company has no dues to financial institution.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of

shares, debentures and other securities. (xiii) In our opinion, the company is not a chit fund or a nidhimutual benefit fund / society. Therefore, the

provisions of clause 4 (xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion the company is not dealing in or trading in shares, securities, debentures and other

investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the company.

(xv) As per the information and explanations given to us the Company has not given guarantees for

loans taken by others from bank or financial institutions. (xvi) No term loan was raised during the year under consideration. (xvii) According to the information and explanations given to us and on an overall examination of the

balance sheet of the company, no short-term funds have been used to finance long-term assets and vice versa.

(xviii) The company has not made preferential allotment of shares to Promoters and Promoters group

covered in the register maintained under section 301 of the Act. (xix) The company has not received any money through Public Issue of Debentures. (xx) The Company has not received any money through preferential allotment of equity shares to non

Promoters/Promoters group. (xxi) To the best of our knowledge and according to the information and explanations given to us, no

fraud on or by the company has been noticed or reported during the course of our audit. For SUNDERJI GOSAR & CO. Chartered Accountants (ALPESH K. SAVLA) PARTNER M. No.047828 Firm Reg. No – 115543W Place: Mumbai Date: 13/08/2012

92

SCHEDULE “P” NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2012 1. Accounting Convention: The financial statement are prepared under the historical cost convention in accordance with the

accounting principles accepted in India and are in line with the relevant laws as well as the guidelines prescribed by the department of company affairs and the Institute of Chartered Accountants of India.

2. Method of Accounting: Method of accounting employed by the company is generally mercantile both as to income and

expenditure except in the case of refunds from government bodies viz. sales tax, excise, income tax etc, subsidy, insurance claims and dividend receipts which are being accounted on cash basis.

3. a. Fixed Assets:

Fixed assets have been stated at cost. Cost comprises of the purchase price and all other attributable cost of bringing the assets to its working condition for its intended use. b. Capital work in Progress: Since no expenses are disclosed under capital work in progress this clause is not applicable. c. Impairment of Assets: Compliance with Accounting Standards (AS) 28 – “Impairment of Assets” is not applicable.

4. Depreciation:

Since there is no Fixed Assets depreciation is not applicable. 5. Inventory:

Since there is no Inventory, this clause is not applicable. 6. Excise Duty:

The liability for cess duty is not applicable. 7.Revenue Recognition:

Gross Receipts include no income. 8. Retirement Benefits: There are no Retirement benefits in the form of Provident Fund, Family Pension Fund and Super

Annuation Schemes. 9. Foreign Currency Transactions:

No transactions in foreign currencies are recorded during the year under consideration. 10.Borrowing Costs: Interest and other related cost on acquiring qualifying assets are capitalized as per accounting standard

AS-16. 11. Taxes on Income:

Deferred Tax Provision

As per the accounting standard AS-22 issued by ICAI, the net deferred tax liability amounting to ` 69,100/- on account of timing differences as shown below for the year under consideration, is accounted for using the tax rate and laws that have been enacted or substantially enacted as on the Balance Sheet date, has been debited to the profit and loss account.

Deferred tax Liability on account of depreciation: NIL

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12. EARNING PER SHARE: 31.03.2012 Profit after tax as per profit ` (7,06,382) & Loss Account Weighted average No. of Equity Shares ` 71,02,000 of ` 10/- each Outstanding Basic & Diluted EPS ` (0.05) 13. SEGMENT REPORTING: Segment Reporting is not applicable. 14. The balances of sundry Debtors, Creditors, Loans & Advances and non operative banks (as stated by the

company) are accepted as appearing in the ledger accounts and subject to confirmation from individual parties concerned. The Company is confident of receiving all the sums due from debtors and the advances.

15. Auditors remuneration includes 31.03.2012 Audit Fees 40,450.00 --------------- Total Nil

======== 16. In the opinion of the board the current assets, loans and advances are approximately of the values stated in

the Balance Sheet, realized in the ordinary course of business. The company has informed that the balance confirmations have been sent to parties due adjustments will be made if any on receipt thereof.

17. Details of Remuneration to Directors. Current Year Remuneration to Directors Nil Director Sitting Fees Nil ---------------- Nil ========= 18. No loans from bank have been secured by personal guarantee of directors of the Company. 19. The company has not taken any term loan during the year under consideration. 20. Previous year figures have been regrouped & reclassified wherever necessary.

For SUNDERJI GOSAR & CO. For HARIA APPRELS LTD. Chartered Accountants

(ALPESH K. SAVLA) PARTNER M. No. 047828 (DIRECTOR) (DIRECTOR) Firm Reg. No – 115543W Place: Mumbai

Date: 13/08/2012

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STATEMENT OF ASSETS AND LIABILITIES

Particulars Note No.

For the year ended

31st March, 2012 31st March, 2011

I. EQUITY AND LIABILITIES (1) Shareholder's Funds

(a) Share Capital 1.1

152,898,000

500,000

(b) Reserves and Surplus 1.2

14,996,760

-

(c) Money received against share warrants 1.3

-

-

Sub-total (1)

167,894,760

500,000

(2) Share Application money pending allotment 2.1

-

-

Sub-total (2)

-

- (3) Non-Current Liabilities

(a) Long-Term Borrowings 3.1

124,292,967

59,997,000

(b) Deferred Tax Liabilities (Net) 3.2

-

-

(c) Other Long Term Liabilities 3.3

-

-

(d) Long Term Provisions 3.4

-

-

Sub-total (3)

124,292,967

59,997,000 (4) Current Liabilities

(a) Short-Term Borrowings 4.1

3,340,000

-

(b) Trade Payables 4.2

73,465,727

37,000

(c) Other Current Liabilities 4.3

-

-

(d) Short-Term Provisions 4.4

-

-

Sub-total (4)

76,805,727

37,000

TOTAL EQUITY & LIABILITIES 368,993,454 60,534,000 II.ASSETS (1) Non-Current Assets (a) Fixed Assets

(i) Tangible Assets 5.1 52,809,117

-

(ii) Intangible assets 5.1 15,498,000

-

(iii) Capital work-in-progress 5.1 -

-

(iv) Intangible assets under development 5.1 - -

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(b) Non-current investments 5.2 69,100

-

(c) Deferred tax assets (net) 3.2 33,796,450

2,287

(d) Long term loans and advances 5.3 108,512,532

60,029,600

(e) Other non-current assets 5.4 -

-

Sub-total (1) 210,685,199 60,031,887 (2) Current Assets

(a) Current investments 6.1

-

-

(b) Inventories 6.2

24,810,688

-

(c) Trade receivables 6.3

131,342,740

-

(d) Cash and cash equivalents 6.4

1,175,172

497,000

(e) Short-term loans and advances 6.5

-

-

(f) Other current assets 6.6

979,655

- Sub-total (2) 158,308,255 497,000

Profit and Loss Account

-

5,113 TOTAL ASSETS 368,993,454 60,534,000

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STATEMENT OF PROFIT & LOSS ACCOUNT

Sr. No. Particulars Note

No. For the year ended

31st March, 2012 31st March, 2011 I Revenue from operations 7.1 - - II Other Income 8.1 - - III III Total Revenue (I +II) - - IV Expenses: Cost of materials consumed 9.1 - - Purchase of Stock-in-Trade - -

Changes in inventories of finished goods, work-in-progress and Stock-in-Trade 10.1

- - Employee Benefit Expenses 11.1 - - Financial Costs 12.1 8,874 - Depreciation and Amortization Expense 13.1 - - Other Administrative Expenses 14.1 721,354 7,400 Total Expenses (IV) 730,228 7,400

V Profit before exceptional and extraordinary items and tax (III - IV) (730,228) (7,400)

VI Exceptional Items - -

VII Profit before extraordinary items and tax (V - VI) (730,228) (7,400)

VIII Extraordinary Items - -

IX Profit before tax (VII - VIII) (730,228) (7,400) X Tax expense: (1) Current tax (2) Deferred tax 23,846 2,287

XI Profit(Loss) from the period from continuing operations (IX-X) (706,382) (5,113)

XII Profit/(Loss) from discontinuing operations - -

XIII Tax expense of discounting operations - -

XIV Profit/(Loss) from Discontinuing operations (XII - XIII) - -

XV Profit/(Loss) for the period (XI + XIV) (706,382) (5,113)

XVI Earning per equity share:

(1) Basic (0.05) (0.01) (2) Diluted (0.05) (0.01)

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CASH FLOW STATEMENT

PARTICULARS 31-Mar-12 31-Mar-11 Cash Flows From Operating Activities: Net income (730,228) (7,400)Adjustment to reconcile net income to net cash provided by operating activities:

Less: Increase in Fixed Assets (68,307,117) - Less: Increase in Loan & Advances Assets (48,482,932) (60,000,000)Less: Increase in Investment (69,100) - Less: Increase in Preliminary Expenses - 29,600 Less: Increase in Deferred Tax Assets (33,794,163) - Less: Increase in inventories (24,810,688) - Less: Increase in Sundry Drs. (131,342,740) - Less: Increase in Security Deposits (979,655) - Add: Increase in Creditors 73,428,727 37,000 Add: Increase in deposits 3,340,000 - Net cash flows from operating activities (A) (231,017,668) (60,000,000) Cash Flows From Investing Activities: Add: Loan taken 64,295,967 59,997,000 Less: Loan repaid - - Net cash flows from investing activities (B) 64,295,967 59,997,000 Cash Flows from Financing Activities: Add: Issue of Share Capital 152,398,000 500,000 Add: Reserve & Surplus 15,001,873 - Net cash flow from financing activities (C) 167,399,873 500,000 Net increase (decrease) in cash (A+B+C) 678,172 497,000 Cash/Bank at beginning of period (D) 497,000 - Cash/Bank at the end of period {(A+B+C)+D} 1,175,172 497,000

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Notes Forming Integral Part of the Balance Sheet as at 31st March, 2012: Note No.: 1.1 Share Capital (in `)

Sr. No. Particulars Current

Year Previous

Year

1 AUTHORIZED CAPITAL 1,60,00,000 Equity Shares of ` 10 each 160,000,000 500,000 160,000,000 500,000 2 ISSUED, SUBSCRIBED & PAID UP 1,52,89,800 Equity Shares of ` 10/- each 152,898,000 500,000 Fully Paid up

Total 152,898,000 500,000 Note No.: 1.2 Reserve & Surplus (in `)Sr. No. Particulars Current

Year Previous

Year 1 Surplus (Profit & Loss Account) 14,996,760 (5,113)

Details of Profit and Loss surplus is as given below

Net Profit after Tax

(706,382)

- Balance brought forward (5,113) - Profit Available for Appropriation (711,495) - APPROPRIATIONS: Debenture Redemption Reserve - - General Reserve 15,708,255 - Dividend on Equity Shares - - Tax on Dividend - - Surplus Carried to Balance Sheet 15,708,255 -

Total 14,996,760 (5,113) Note No. : 3.1 Long Term Borrowings (in `)Sr. No. Particulars Current

Year Previous

Year 1 Secured Borrowing

Loans From Bank 2,197,141 -

2 Unsecured Borrowing Loans From Directors 41,780,414 -

Loans From Share Holders 2,037,900 - Loans From others 78,277,512 59,997,000 Total 124,292,967 59,997,000

Note No.: 3.2 Deferred Tax Assets (in `)Sr. No. Particulars Current

Year Previous

Year 1 Deferred Tax Assets 33,796,450 2,287 Total 33,796,450 2,287

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Note No.: 4.1 Short Term Borrowings (in `)Sr. No. Particulars Current

Year Previous

Year

1 Deposits 3,340,000 - Total 3,340,000 -

Note No.: 4.2 Trades Payable (in `)Sr. No. Particulars Current

Year Previous

Year 1 Sundry Creditors 73,465,727 37,000 Total 73,465,727 37,000

Note No. : 5.2 Non Current Investment (in `)Sr. No. Particulars Current

Year Previous

Year 1 Investment in Equity shares 69,100 -

Total 69,100 - Note No. : 5.3 Long Term Loans and Advances (in `)Sr. No. Particulars Current

Year Previous

Year 1 Loan & Advances 108,512,532 60,029,600

Total 108,512,532 60,029,600 Note No. : 6.3 Trade Receivables (in `)Sr. No. Particulars Current

Year Previous

Year 1 Outstanding for Less than six months 9,825,065 - Outstanding for a period exceeding Six Months 121,517,675 -

Total 131,342,740 - Note No. : 6.4 Cash & Cash Equivalent (in `)Sr. No. Particulars Current

Year Previous

Year 1 Cash-in-Hand Cash Balance 1,046,935 - Sub Total (A) 1,046,935 - 2 Bank Balance Balance with Bank 128,237 497,000 Sub Total (B) 128,237 497,000

Total [ A + B ] 1,175,172 497,000

100

Note No.: 6.6 Other Current Assets (in `)

Sr. No. Particulars Current

Year Previous

Year 1 Security Deposit 979,655 -

Total 979,655 - Note No. : 12.1 Financial Cost

Sr. No. Particulars Current

Year Previous

Year 1 Bank Charges 8,874 -

Total 8,874 - Note No. : 14.1 Other Expenses (in `)Sr. No. Particulars Current

Year Previous

Year Administrative Expenses 1 Audit Fees 40,450 - 2 Filling Fees 660,454 - 3 Office Expenses 17,950 - 4 Profession Tax 2,500 - 5 Other expenses - 7,400 Total 721,354 7,400

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FINANCIAL INFORMATION OF GROUP COMPANIES

The information for the last 3 years based on the audited statements in respect of 7 group companies, irrespective of whether these are covered under section 370(1) (B) of the Companies Act, 1956 or not is given hereunder: OUR PROMOTER GROUP Apart from our Promoters, the following individuals and companies comprise our Promoter Group. a) Companies, Firms and HUF’s:

Relationship Group Company

Any company in which 10% or more of the share capital is held by the promoter or an immediate relative of the Promoter or a firm or HUF in which the Promoter or any one or more of his immediate relative is a member

1.Haria Investment Pvt. Ltd 2.Haria Property & Developers Pvt. Ltd 3.South East Textile Pvt. Ltd 4.Blueweb Infosystems Pvt. Ltd 5.Ginza Finance Pvt. Ltd 6.M H Realtors Pvt. Ltd 7.Anakin Real Estate Pvt. Ltd

Any company in which a company mentioned in the above, holds 10% of the total holding No such company

Any HUF or firm in which the aggregate share of the Promoter and his immediate relatives is equal to or more than 10% of the total holding No such HUF or Firm

No other person except mentioned above is part of the promoter group. Also, apart from those mentioned above there are no other Companies promoted by our Promoter or where in our Promoter has any controlling interest such that they can be our Group Companies. DETAILS OF OUR PROMOTER GROUP ENTITIES 1. Haria Investments Private Limited Haria Investments Private Limited was incorporated in Mumbai, vide certificate of incorporation dated August 20, 1981, issued by the Registrar of Companies, Mumbai under the provisions of the Companies Act, 1956. The registered office of HIPL is at Haria Center, 8 Subhash Road, Vile Parle East, Mumbai 400 057, Maharashtra. The business of Haria Investments Private Limited as described by its Memorandum of Association is: 1. To carry on the business of investment company and invest and acquire, hold, sell and deal in shares,

debentures, stock, bonds, obligations and securities issued or guaranteed by any Company or by any Government, State, Public body or authority, whether in India or otherwise.

2. To deal with and invest the moneys in such manner and upon such secured or unsecured loans as shall, from time to time, be thought necessary or fit for the benefit of the Company, and to lend, advance or deposit money, securities and property, with or without charges, interest or security to or with such persons or to receive and accept deposits, advances and loans on such terms and conditions as may be thought expedient and in that, the Company shall not carry on the business of banking as defined in the Banking Regulation Act, 1949.

Details of changes in capital structure during the six months preceding the date of filing of this Information Memorandum There have been no changes in the paid-up Capital since the last six months:

102

Board of Directors: Name Position Mr. Manish Haria Director Mr. Bimal Haria Director Mr. Kantilal Haria Director Mr. Lalit Kothari Director Financial Performance:

(` in lacs)

Particulars Year ended 31/3/2011

Year ended 31/3/2010

Year ended 31/3/2009

Equity share capital (of ` 100/- each) 25.00 25.00 25.00Reserves (excluding revaluation reserves) 9.99 9.99 9.93Networth 34.99 34.99 34.93Total Income 277.70 158.66 17.84PAT/Loss 0.00 0.07 (0.08)EPS 0.00 0.26 (0.32)NAV (per equity share) 139.96 139.96 139.74 Other Details pertaining to Haria Investments Private Limited Identification Details Company Registration Number 025044 Address of the Registrar of Companies 100, Everest, Marine Drive, Mumbai 400 002 Permanent Account Number AAACH3418G

Bank Account Number & the Address of the Bank

06682320000724 HDFC BANK Sahar Road Junction, Western Express Highway, Vile Parle(East),Mumbai-400 0057.

Information regarding significant adverse factors related to the group companies (i) Haria Investments Private Limited has not become a sick company within the meaning of the Sick

Industrial Companies (Special Provisions) Act, 1995 and is not under winding up; (ii) Haria Investments Private Limited has not made a loss in the immediately preceding year. Haria Investments Pvt. Ltd. has not remained defunct and no application has been made to the Registrar of Companies for striking off the name of the Company during the five years preceding the date of filing the Information Memorandum. The Promoters have not disassociated themselves from Haria Investments Pvt. Ltd. during the three years preceding the date of filing the Information Memorandum. 2. Haria Property & Developers Private Limited Haria Property & Developers Private Limited was incorporated in Mumbai, vide certificate of incorporation dated August 21, 1981 issued by the Registrar of Companies, Mumbai under the provisions of the Companies Act, 1956. The registered office of HPDPL is at Haria Center, 8 Subhash Road, Vile Parle East, Mumbai 400 057, Maharashtra. The business of Haria Property & Developers Private Limited as described by its Memorandum of Association is:

103

1. To undertake and execute construction work on Company's account or as constructors involving the supply or use of building materials or goods required for such construction and for that purpose to purchase or otherwise acquire, sell, exchange, deal and turn to account, property and rights in lands and buildings.

2. To undertake and execute engineering jobs and works Civil, Mechanical and/or electrical and for that purpose to employ or engage properly qualified persons to act on the Company's behalf as Engineers, Electricians or Plumbers.

Details of changes in capital structure during the six months preceding the date of filing of this Information Memorandum There have been no changes in the paid-up Capital since the last six months Board of Directors: Name Position Mr. Manish Haria Director Mr. Bimal Haria Director Mr. Kantilal Haria Director Mr. Lalit Kothari Director Financial Performance:

(` in lacs)

Particulars Year ended 31/3/2011

Year ended 31/3/2010

Year ended 31/3/2009

Equity share capital (of ` 100/- each) 10.00 10.00 10.00Reserves (excluding revaluation reserves) 0.00 0.00 0.00Networth 10.00 10.00 10.00Total Income 0.18 15.43 59.68PAT/Loss (0.62) 0.36 0.002EPS (6.23) 3.61 0.03NAV (per equity share) 100.00 100.00 100.00 Other Details pertaining to Haria Property & Developers Private Limited Identification Details Company Registration Number 025054 Address of the Registrar of Companies 100, Everest, Marine Drive, Mumbai 400 002 Permanent Account Number AAACH3420J

Bank Account Number & the Address of the Bank

06682000002296 HDFC BANK Sahar Road Junction, Western Express Highway, Vile Parle (East),Mumbai-400 0057.

Information regarding significant adverse factors related to the group companies: (i) Haria Property & Developers Private Limited has not become a sick company within the meaning of the

Sick Industrial Companies (Special Provisions) Act, 1995 and is not under winding up; (ii) Haria Property & Developers Private Limited has not made a loss in the immediately preceding year. Haria Property & Developers Private Limited has not remained defunct and no application has been made to the Registrar of Companies for striking off the name of the Company during the five years preceding the date of filing the Information Memorandum.

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The Promoters have not disassociated themselves from Haria Property & Developers Private Limited during the three years preceding the date of filing the Information Memorandum. 3. South East Textiles Private Limited South East Textiles Private Limited was incorporated in Mumbai, vide certificate of incorporation dated August 11, 1981, issued by the Registrar of Companies, Mumbai under the provisions of the Companies Act, 1956. The registered office SETPL is at Haria Center, 8 Subhash Road, Vile Parle East, Mumbai 400 057, Maharashtra. The business of South East Textiles Private Limited as described by its Memorandum of Association is: 1. To manufacture, produce, weave, process, dye, print, calendar, bleach, import, export, and otherwise

deal in textiles, cotton, silk, rayon, man-made fabrics, fibres, synthetic, woollen, yarn, threads, garments, made-up hosiery, canvas and fabrics quoted and treated with any chemicals or any other preparation.

2. To manufacture, process, dye, bleach, mercerise, spin, otherwise deal in yarn manufactured out of

cotton, silk, weave, knit, crimp, bleach, wash, colour, import, export wool, synthetic staple or any other substances.

Details of changes in capital structure during the six months preceding the date of filing of this Information Memorandum There have been no changes in the paid-up Capital since the last six months. Board of Directors: Name Position Mr. Manish Haria Director Mr. Bimal Haria Director Mr. Kantilal Haria Director Financial Performance:

(` in lacs)

Particulars Year ended 31/3/2011

Year ended 31/3/2010

Year ended 31/3/2009

Equity share capital (of ` 100/- each) 30.00 30.00 30.00Reserves (excluding revaluation reserves) 39.28 41.04 112.37Networth 69.28 71.04 142.37Total Income 0.00 0.33 41.67PAT/Loss (1.77) (71.32) (7.49)EPS (5.88) (237.74) (25.00)NAV (per equity share) 230.93 236.81 474.55 Other Details pertaining to South East Textiles Private Limited Identification Details Company Registration Number 024968 Address of the Registrar of Companies 100, Everest, Marine Drive, Mumbai 400 002 Permanent Account Number AAACH1452J

Bank Account Number & the Address of the Bank

06682000002358 HDFC BANK Sahar Road Junction, Western Express Highway,

105

Vile Parle (East), Mumbai-400 0057.

Information regarding significant adverse factors related to the group companies: (i) South East Textiles Private Limited has not become a sick company within the meaning of the Sick

Industrial Companies (Special Provisions) Act, 1995 and is not under winding up; (ii) South East Textiles Private Limited has not made a loss in the immediately preceding year. South East Textiles Private Limited has not remained defunct and no application has been made to the Registrar of Companies for striking off the name of the Company during the five years preceding the date of filing the Information Memorandum. The Promoters have not disassociated themselves from South East Textiles Private Limited during the three years preceding the date of filing the Information Memorandum. 4. Blueweb Infosystems Private Limited Blueweb Infosystems Private Limited was incorporated in Mumbai, vide certificate of incorporation dated August 21, 1981, issued by the Registrar of Companies, Mumbai under the provisions of the Companies Act, 1956. The registered office of BIPL is at 276, Majithia Chambers, D. N. Road, Mumbai 400 057, Maharashtra. The business of Blueweb Infosystems Private Limited as described by its Memorandum of Association is: 1. To produce, manufacture, purchase, refine, prepare, process, import, export, sell and generally deal

in cement, portland cement, white cement, coloured cement, alumina cement, lime and limestone, kankar with to acquire, erect, construct, establish, operate and maintain cement factories, limestone quarries, workshops and other works.

2. To purchase, sell, process, manufacture, refine, prepare, import, export and deal in cement sheets,

pre-fabricated items, marbles, stones and such other building materials. Details of changes in capital structure during the six months preceding the date of filing of this Information Memorandum There have been no changes in the paid-up Capital since the last six months. Board of Directors: Name Position Mr. Manish Haria Director Mr. Bimal Haria Director Financial Performance:

(` in lacs)

Particulars Year ended 31/3/2011

Year ended 31/3/2010

Year ended 31/3/2009

Equity share capital (of ` 100/- each) 5.00 5.00 5.00Reserves (excluding revaluation reserves) 0.00 0.00 0.00Networth 5.00 5.00 5.00Total Income 0.18 0.13 0.11PAT/Loss (3.24) (0.80) 0.79EPS (64.77) (16.10) 2.16NAV (per equity share) 100.00 100.00 100.00

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Other Details pertaining to Blueweb Infosystems Private Limited Identification Details Company Registration Number 025053 Address of the Registrar of Companies 100, Everest, Marine Drive, Mumbai 400 002 Permanent Account Number AAACH1552R

Bank Account Number & the Address of the Bank

000220100005998 BANK OF INDIA ANDHERI(W),MUMBAI

Information regarding significant adverse factors related to the group companies: (i) Blueweb Infosystems Private Limited has not become a sick company within the meaning of the Sick

Industrial Companies (Special Provisions) Act, 1995 and is not under winding up; (ii) Blueweb Infosystems Private Limited has not made a loss in the immediately preceding year. Blueweb Infosystems Private Limited has not remained defunct and no application has been made to the Registrar of Companies for striking off the name of the Company during the five years preceding the date of filing the Information Memorandum. The Promoters have not disassociated themselves from Blueweb Infosystems Private Limited during the three years preceding the date of filing the Information Memorandum. 5. Ginza Finance Private Limited Ginza Finance Private Limited was incorporated in Mumbai, vide certificate of incorporation dated August 25, 1981 issued by the Registrar of Companies, Mumbai under the provisions of the Companies Act, 1956. The registered office of GFPL is at Haria Center, 8 Subhash Road, Vile Parle East, Mumbai 400 057, Maharashtra. The business of Ginza Finance Private Limited as described by its Memorandum of Association is: 1. To act as financiers and investors and to finance, invest and otherwise deal in shares, securities,

buildings, lands, properties, debentures, fixed deposits, shares, loans whether on security or otherwise.

2. To carry on all or any of the businesses of procuring, developing and supplying technical know-how, patents, inventions, drawings, designs and other scientific formulae and processes for the manufacture of goods and materials and for the installation or erection of machinery or plant or such manufacturing and processing for the working of mines, oil wells and other sources of minerals and deposits and for search and discovery and testing of mineral deposits and for carrying out any operations relating to agriculture, animal husbandry, dairy or poultry farming, forestry and fishing and of rendering services in connection with the provisions of such technical know-how.

Details of changes in capital structure during the six months preceding the date of filing of this Information Memorandum There have been changes in the paid-up Capital during last six months. Board of Directors: Name Position Kantilal Lakhamshi Maru Director Milan Rasiklal Mehta Director Pritul Gajendra Sanghavi Director appointed in casual vacancy

107

Financial Performance: (` in lacs)

Particulars Year ended 31/3/2011

Year ended 31/3/2010

Year ended 31/3/2009

Equity share capital (of ` 10/- each) 15.50 15.50 18.50Reserves (excluding revaluation reserves) 117.18 117.31 117.35Networth 132.68 132.81 135.85Total Income 0.00 0.06 0.08PAT/Loss (0.13) (0.04) (0.77)EPS 0.00 0.04 0.05NAV (per equity share) 85.59 85.67 87.64 Other Details pertaining to Ginza Finance Private Limited Identification Details Company Registration Number 025087 Address of the Registrar of Companies 100, Everest, Marine Drive, Mumbai 400 002 Permanent Account Number AAACG5929K

Bank Account Number & the Address of the Bank

06682560001302 HDFC BANK Sahar Road Junction, Western Express Highway, Vile Parle(East),Mumbai-400 0057

Information regarding significant adverse factors related to the group companies: (i) Ginza Finance Private Limited has not become a sick company within the meaning of the Sick

Industrial Companies (Special Provisions) Act, 1995 and is not under winding up; (ii) Ginza Finance Private Limited has not made a loss in the immediately preceding year. Ginza Finance Private Limited has not remained defunct and no application has been made to the Registrar of Companies for striking off the name of the Company during the five years preceding the date of filing the Information Memorandum. The Promoters have not disassociated themselves from Ginza Finance Private Limited during the three years preceding the date of filing the Information Memorandum. 6. M. H. Realtors Private Limited M. H. Realtors Private Limited was incorporated in Mumbai, vide certificate of incorporation dated February 09, 2010 issued by the Registrar of Companies, Mumbai under the provisions of the Companies Act, 1956. The registered office of MHRPL is at Haria Center, 8 Subhash Road, Vile Parle East, Mumbai 400 057, Maharashtra. The business of M. H. Realtors Private Limited as described by its Memorandum of Association is: To carry on India and Abroad either alone or jointly with any other persons or companies in India and Abroad the business as builders, developers, constructors, re-builders, re-constructors, contractors, sub-contractors, government or semi-government contractors, civil and mechanical engineers, demolishers, dismantlers, restorers, erectors, architects, surveyors, decorators, engineers, designers, alterars, improvers, repairers, dealers in real estate business and promoters of Co-operative Housing Societies, Residential Townships, residential houses, row houses, farm houses, bungalows, offices, flats, public & private part and zoos, amusements and water parks, recreations clubs, hotels, bridges, flyovers, subways, shops, commercial complexes, shopping malls, multiplexes, factories, warehouses, reservoirs, dams, harbors, jetties, earthworks, embarkments, motorways, roadways, waterways, railways, yards, wharves, docks, piers, air ports, air port strips, film studios, government and semi government building including office and residential quarters & bungalows, works and conveniences by consolidating, connecting and

108

sub-dividing immovable property and by letting and disposing of the same and act as erectors of prefabricated concrete buildings and to establish, maintain conduct and carry on business of estates owners, dealers, agents, developers and consultants and to purchase for investment or re-sale purpose land with or without construction, buildings & structures, houses or other related properties for any tenure and any interest or rights connected therein and to acquire, erect sell, and deal in freehold land and leasehold land and make advance upon security of land and houses or other properties or any rights or interest connected therein and generally to deal by way of sale lease, exchange, mortgage or otherwise of land and house property and immovable property in India and Abroad and work of all other related varieties and description. Details of changes in capital structure during the six months preceding the date of filing of this Information Memorandum There have been no changes in the paid-up Capital since the last six months. Board of Directors: Name Position Kantilal Lakhamshi Maru Whole-time Director Milan Rasiklal Mehta Whole-time Director Vipul Bhupendra Mehta Director Parag Bhupendra Mehta Director Financial Performance:

(` in lacs)

Particulars Year ended 31/3/2011

Year ended 31/3/2010

Equity share capital (of ` 10/- each) 1.00 1.00Reserves (excluding revaluation reserves) 5.16 0.14Networth 6.16 1.14Total Income 144.82 35.22PAT/Loss 5.02 0.14EPS 50.00 1.37NAV (per equity share) 61.55 11.37 Other Details pertaining to M. H. Realtors Private Limited Identification Details Company Registration Number 199896 Address of the Registrar of Companies 100, Everest, Marine Drive, Mumbai 400 002 Permanent Account Number AAGCM3632D

Bank Account Number & the Address of the Bank

06682020000661 HDFC BANK Sahar Road Junction, Western Express Highway, Vile Parle(East),Mumbai-400 0057

Information regarding significant adverse factors related to the group companies: (i) M. H. Realtors Private Limited has not become a sick company within the meaning of the Sick Industrial

Companies (Special Provisions) Act, 1995 and is not under winding up; (ii) M. H. Realtors Private Limited has not made a loss in the immediately preceding year. M. H. Realtors Private Limited has not remained defunct and no application has been made to the Registrar of Companies for striking off the name of the Company during the five years preceding the date of filing the Information Memorandum.

109

The Promoters have not disassociated themselves from M. H. Realtors Private Limited during the three years preceding the date of filing the Information Memorandum. 7. Anakin Real Estate Private Limited (Earlier known as Haria Real Estate Pvt. Ltd.) Anakin Real Estate Private Limited was incorporated in Mumbai, vide certificate of incorporation dated October 1, 2010, issued by the Registrar of Companies, Mumbai under the provisions of the Companies Act, 1956. The registered office of AREPL is at Haria Centre, 8, Subhash Road, Vile Parle (East), Mumbai 400 057. The business of Anakin Real Estate Private Limited as described by its Memorandum of Association is: To carry on India and Abroad either alone or jointly with any other persons or companies in India and Abroad the business as builders, developers, constructors, re-builders, re-constructors, contractors, sub-contractors, government or semi-government contractors, civil and mechanical engineers, demolishers, dismantlers, restorers, erectors, architects, surveyors, decorators, engineers, designers, alterars, improvers, repairers, dealers in real estate business and promoters of Co-operative Housing Societies, Residential Townships, residential houses, row houses , farm houses, bungalows, offices, flats, public & private part and zoos, amusements and water parks, recreations clubs, hotels, bridges, flyovers, subways, shops, commercial complexes, shopping malls, multiplexes, factories, warehouses, reservoirs, harbors, jetties, earthworks, embarkments, motorways, roadways, waterways, railways, yards, wharves, docks, piers, air ports, air port strips, film studios, government and semi government building including office and residential quarters & bungalows, works and conveniences by consolidating, connecting and sub-dividing immovable property and by letting and disposing of the same and act as erectors of prefabricated concrete buildings and to establish, maintain conduct and carry on business of estates owners, dealers, agents, developers and consultants and to purchase for investment or re-sale purpose land with or without construction, buildings & structures, houses or other related properties for any tenure and any interest or rights connected therein and to acquire, erect sell, and deal in freehold land and leasehold land and make advance upon security of land and houses or other properties or any rights or interest connected therein and generally to deal by way of sale lease, exchange, mortgage or otherwise of land and house property and immovable property in India and Abroad. Details of changes in capital structure during the six months preceding the date of filing of this Information Memorandum There have been no changes in the paid-up Capital since the last six months. Board of Directors: Name Position Manish Kantilal Haria Director Bimal Kantilal Haria Director Financial Performance:

(` in lacs)

Particulars Year ended 31/3/2011

Equity share capital (of ` 10/- each) 1.00Reserves (excluding revaluation reserves) 0.00Networth 0.98Total Income 0.00PAT/Loss (0.02)EPS (0.17)NAV (per equity share) 9.76

110

Other Details pertaining to Anakin Real Estate Private Limited Identification Details Company Registration Number 208516 Address of the Registrar of Companies 100, Everest, Marine Drive, Mumbai 400 002 Permanent Account Number AACCH5158B

Bank Account Number & the Address of the Bank

06682320000717 HDFC BANK Sahar Road Junction, Western Express Highway, Vile Parle(East),Mumbai-400 0057

Information regarding significant adverse factors related to the group companies: (i) Anakin Real Estate Private Limited has not become a sick company within the meaning of the Sick

Industrial Companies (Special Provisions) Act, 1995 and is not under winding up; (ii) Anakin Real Estate Private Limited has not made a loss in the immediately preceding year. Anakin Real Estate Private Limited has not remained defunct and no application has been made to the Registrar of Companies for striking off the name of the Company during the five years preceding the date of filing the Information Memorandum. The Promoters have not disassociated themselves from Anakin Real Estate Private Limited during the three years preceding the date of filing the Information Memorandum.

111

MANAGEMENT DISCUSSION AND ANALYSIS Haria Apparels Limited (“HAL”) is a company incorporated on February 01, 2011 under the Companies Act, 1956, with the Registrar of Companies, Mumbai. The Registration no. and CIN assigned to our Company is 212887 and U18204MH2011PLC212887 respectively. The Registered Office of the Company is situated at 8, Subhash Road, Vile Parle (East), Mumbai, Maharashtra – 400 057. Since HAL is a recently incorporated company, it has not commenced any operations. As on March 31, 2011, the Authorized Share Capital of the Company (prior to the effectiveness of the Scheme) was ` 500,000 divided into 50,000 Equity Shares of ` 10/- each. Upon the Scheme being made effective on May 1, 2011 the authorized share capital of the Company stood at ` 80,000,000 divided into 8,000,000 Equity Shares of `10 /- each. The management of Haria Exports Limited was of the opinion that the Scheme of Arrangement would lead to synergies of operations and more particularly the following benefits:

• HAL is engaged in the business of manufacture and exports of Garments.

• In order to explore the potential to the fullest and provide focused leadership and management attention, it was intended to demerge the garment division to HAL.

• Further in the interest of the shareholders of HEL it is believed that the demerger of Garment

division to a separate company with a focused strategy would enhance shareholder value.

112

SECTION VI - LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS Except as described below, there are no outstanding litigations, suits or civil proceedings, or criminal proceedings, or prosecutions or tax liabilities, irrespective of whether specified in Schedule XIII of the Act, against our Company or the Directors, or the Subsidiaries or the Promoters or group companies, and there are no defaults, non-payment or overdue of statutory dues, overdue to banks / financial institutions, defaults against banks / financial institutions, defaults in dues payable to holders of any debentures, bonds, or fixed deposits, and arrears on preference shares issued by our Company, defaults in creation of full security as per terms of issue/ other liabilities, proceedings initiated for economic/ civil/ and other offences(including past cases where penalty may or may not have been awarded) that would result in a material adverse effect on the business. None of the aforesaid persons/ companies is on RBI’s list of willful defaulters. No disciplinary action has been taken by the SEBI/ Stock Exchanges against our Company, Directors of our Company and Promoters. I. Litigation involving Our Company A. Cases filed against Our Company

There are no litigations filed against any of our companies. II. Litigations involving our Group Companies

A. Cases filed against our Group Companies (HARIA EXPORTS LTD)

Sr. No.

Name of the Party

Case No. & court/Jurisdiction Background Current

status Amount

1 Ahmedabad advance Mill v/s HEL

Suit No.820 OF 1993

Good Sold and Delivered by said company to HEL with interest their on @ 18% ` 2,55,266.43

Pending for final hearing ` 2,55,266.43

B. Statutory Liability/ Dues against our Group Company (HARIA EXPORTS LTD)

Sr. No.

Name of the Party

Case No. & court/Jurisdiction Background Current

status Amount

1 Income Tax

The Hon’ble High Count, Mumbai ITXA/1563/2007 ITXA/1097/2008 ITXA/1098/2008

Income Tax liability for Quota sale u/s 80 HHC is disallowed by the department. Income Tax for F.Y.1998-99, 1999-2000,2000-2001

Income Tax Appeal for hearing and final disposal is pending

` 1,54,50,082

2. FEMA

Appellate Tribunal for Foreign Exchange Appeal no.480/05 to 484/05 and 489/05

Delay in exports realisation

Pending for final hearing. ` 27,19,901.36

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C. Cases filed by our Group Companies (HARIA EXPORTS LTD)

Sr. No.

Name of the Party

Case No. & court/Jurisdiction Background Current

status Amount

1

Haria Exports (Complainant) v/s Mr. Mohan Jayakar (Respondent)

D.C. No.(s) 191 of 2006 before the Bar council of Maharashtra & Goa-Mumbai

Due to negligence on the part of Respondent, complainant has put the Respondent to loss dated 21.1.2004 in D.R.A.T Mumbai in case No. 57/2003 amounting Rs. 29, 21, 53,356.23 @15% interest p.a. and also seeking a refund of Rs. 85000/- for fees and expenses paid to Respondent.

Matter is subjudiced before the Bar council of Maharashtra & Goa at Mumbai. Pending for order

2 HEL v/S State Trading Corporation

Suit No.1130 of 1988 (March 1988) Bombay High Court

Non Supplying complete exports Quota within stipulated period Suits has been filed by the HEL against STC for recovery of said amount as particular of claim ‘”DD” with interest their on @ 22.5%

Pending for final hearing without written statement. Application is filed for fixing hearing of the matter. Next date is 13/3/2012

` 74,74,683.97

3

HEL V/S Ameya Trading Impex Pvt. Ltd

Company Petition 618 of 2006 Bombay High Court

Goods Sold and Deliver by the HEL to the said company for which sum of ` 15,11,58,364/- due to non payment of said amount winding of petition U/S433 & 434 of the companies Act has been filed.

Said petitions has been admitted by the high court on 21-3-2007 and same is pending for company petition for hearing and final disposal

` 15,11,58,364 with interest 24%

4

HEL V/S Aries Remedies Pvt. Ltd

Company Petition 619 of 2006 Bombay High Court

HEL file had winding of petitions U/s 433 & 434 of the companies Act against said co. to fail neglected to outstanding payment of 5,69,74,677 due and payable by the said company @ rate of 24% from 10-1-2006 till full realization

Said petitions has been admitted by the high court on 21-3-2007 and same is pending for company petition for hearing and final disposal

` 5,69,74,677 due and payable by the said company @ rate of 24% from 10-1-2006 till full realization

5 HELV/S Gold Star Trade Impex Pvt. Ltd

Company Petition 620 of 2006 Bombay High Court

Goods Sold and Deliver by the HEL to the said company for which sum of ` 6,94,23,321 due to non payment of said amount winding of petition U/S433 & 434 of the companies Act has been filed.

Said petitions has been admitted by the high court on 21-3-2007 and same is pending for company petition for

` 6,94,23,321 with interest 24%

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hearing and final disposal

6 HEL V/S Ahmedabad advance Mill

Suit No. 3305 of 1993 (March-1993) Bombay High Court

Good Sold and Delivered by the HEL to the said company ` 25,83,266.40 with interest their on 18% on account of for non delivery, Air freight Exp and loss incurred due to cancellation of contract by the said company

Pending for final hearing. ` 25,83,266.40

7

High Court of Bombay HEL V/S Bank of Tokyo

Suit No. 6969 of 1999

20 Plaintiff filed the suit against the bank & others to recovery of sum ` USD 4,33,649 against the invoices interest & damages suffered by the plaintiff co.

Pending for hearing and final disposal.

USD 4,33,649/-

8

Haria Exports Ltd V/s The union Bank of India.

Suit No. 4367 of 1995. High Court at Mumbai.

The said suit has been filed by the plaintiffs for orders and decree that the defendants should pay to the plaintiffs a sum of ` 100 crore or such amount as this court may deem fit and proper together with the interest thereon at the rate of 18% per annum from the date of the suit till payment or realization.

Matter was appeared for hearing on 17th February, 2010. & thereafter no date has been fixed by the court till today.

` 100 Crore with thereon interest 18%.

9

Haria Exports Ltd. V/s. East Mediterranean Navigation

Suit No. 629 of 1985. High Court at Mumbai.

That the Defendants jointly and severally be ordered and decreed to pay to the plaintiffs, the sum of ` 4,75,467.67 as per particulars of claim being Exhibit ‘D’ hereto, with further interest on ` 4,75,467.67 at the rate of 18% per annum from the date of the filing of the suit till payment or realization.

The Matter may be listed for hearing in the month of July 2010 & thereafter. Application for setting aside order dated 10/07/2010 is to be filed after receiving certified copy of the order from the High Court.

` 4,75,467.67 with thereon interest 18%.

10

Haria Exports Ltd. V/s/ East Mediterranean Navigation

Suit No. 49 of 1983 High Court of Mumbai.

The said suit has been filed by the HEL against the said company for damages against the owner of Vessel. That the Defendants jointly and severally be ordered and decreed to

The Matter may be listed for hearing in the month of July 2010 & thereafter.

` 4,75,467.67 with thereon interest 18%.

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pay to the plaintiffs, the sum of ` 4,75,467.67 as per particulars of claim being Exhibit ‘D’ hereto, with further interest on ` 4,75,467.67 at the rate of 18% per annum from the date of the filing of the suit till payment or realization.

11 Haria Exports Ltd. V/s/ Girija Traders

Criminal Complaint No. 2686/SS/ of 2010 in the court of Metropolitan Magistrate Andheri Mumbai

On Account of dishonor of Cheque of ` 1,20,000 In complaint U/S 138 of the negotiable instrument is Filed against the said company

Application for issuance of witnesses summons Cross Examination of Complainant pending Next date of hearing 19/3/2012

`1,20,000

12

Haria Exports Ltd. V/s/ Shri Parshvnath Stationery

Criminal Complaint No. 2687/SS/ of 2010 in the court of Metropolitan Magistrate Andheri ,Mumbai

On Account of dishonor of Cheque of ` 14,92,325 In complaint U/S 138 of the negotiable instrument is Filed against the said company

Application for issuance of Non bailable warrant file on 7/2/2012. Next date of hearing 12/4/2012

30/08/2010 Process issued u/s 138 of the negotiable instrument Act against accused and made returnable on 30/08/2010

13

Haria Exports Ltd. V/s Bhairavnath

SS/2862/2011 Mumbai HC/OCJ

Civil Suit is Filed against the Defendant for recovery of ` 21,00,000 with interest at the rate of 24% p.a. from the date of filing of the suit.

Chamber Summons No. 241 of 2012 filed on 17/1/2012

`21,00,000with interest @ 24% p.a.

14

Haria Exports Ltd. V/s Shubham Sales

CC.440/446/SS/ 2011 MM/COURT/ ANDHERI Court no. 44

Complaint U/S 138 r/w section 142 of the negotiable instrument is Filed against the Defendant to punish him and compensate the complainant for the loss incurred to the complainant by the defendant of dishonored of the Cheque of ` 5,91,517 vide Cheque No. 000079 dated 20/5/2011

Affidavit of Evidence by way of Examination in Chief and compilation of document filed on 21/11/2011 pending for Cross examination of Complainant Next date of hearing 14/3/2012

` 5,91,517 Amount of dishonored cheque.

15

Haria Exports Ltd V/s Shubham Writing Instrument.

6502862/SS OF 2011 MM/COURT/ ANDHERI Court no. 65

Complaint U/S 138 r/w section 142 of the negotiable instrument is Filed against the Defendant to punish him

Affidavit of Evidence/New Vakalatnama filed on 17/2/2012

` 4,95,684 Amount of dishonored cheque.

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and compensate the complainant for the loss incurred to the complainant by the defendant of dishonored of the Cheque of ` 4,95,684 vide Cheque No. 043599 dated 2/11/2011

Next date of hearing 14/3/2012

16

Haria Exports Ltd V/s Uganda Commercial

Execution Appl.11 Mumbai In Suit No. 1063 of 1988 HC/OOCJ

Suit filed for Recovery of `13,55,765.93 with interest @21% p.a. from the date of filing of the suit. To recover balance decreetal amount as per order dated 7-8-1990 Plaintiff filed Execution Application No. 11 of 1991

Chamber Summons No. 2172 of 2011 filed on December 2011

` 13,55,765.93 with interest @ 21% p.a.

17 Haria Exports Ltd V/s Raju Mehta

SS/2922 of 2011 Mumbai HC/OOCJ

Civil Suit is Filed against the Defendant for recovery of ` 1,57,509 with interest at the rate of 24% total amounting to ` 2,22,650.68

Summon for judgment filed on 17/2/2012

` 2,22,650.68

III. Litigations involving our Promoters / Directors A. Cases filed against our Promoters / Directors

There are no cases filed against our Promoters / Directors.

B. Cases filed by our Promoters / Directors

1

Kumar International (Kantilal L Haria sole proprietor of KI ) v/S State Trading Corporation

Suit No 432 of 1988 Bombay High Court

on account of compensation to be paid by STC towards loss of HEL past performance of their contract during period in year 1986 to 1988 with interest their on 18% on said amount

Pending for final hearing. Application is filed

` 5,53,344

2. K.L. Haria V/S Rajesh Totla

Criminal Case No. 4403327 of 2008. in the court of Additional Chief Metropolitan

Case filed against Rajesh Totla by Shri K.L. Haria u/s. 138 of the negotiable instrument act for dishonored by cheque of ` 50,000 on the ground insufficient fund in the a/c of Shri Rajesh Totla

Bailable warrant issued. Next date of hearing 21/4/2012

` 50,000

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3. Kantilal Haria V/s Kenya Airway

CC/83/11 CF/SD/Bandra

Complaint of a sum of ` 47,000 on account of compensation towards mental torrures, agonity and nervous suffered by plentiff and also ` 950/- extra charges for not providing weal chair plus interest @ 18% from 16 July 2010

Affidavit in rejoinder filed in September 2011 Next date of hearing 11/4/2012

` 47,000

IV. Amounts Owed to Small Scale Undertakings There are no amounts owed to small scale undertakings.

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GOVERNMENT APPROVALS OR LICENSING ARRANGEMENTS The Company has all the necessary licenses, permissions and approvals, as may be applicable, from the Central and State Governments and other government agencies/certification bodies required for the business and no further approvals are required by the company, except those mentioned separately hereunder, and those approvals that may be required to be taken from any government or any other authority in the normal course of business from time to time to continue the activities, and those mentioned under the heading Risks Envisaged. The Company does not require any other approvals or renewals, except as mentioned specifically hereunder. In view of the approvals listed below, the Company can undertake its current and proposed business activities and no further material approvals are required from any Government authority to continue such activities. INVESTMENT APPROVALS As per Notification No. FEMA 20 / 2000 - RB dated 3rd May 2000, as amended from time to time, under automatic route of Reserve Bank, the Company is not required to make an application for Issue of Equity Shares to NRIs/FIIs with repatriation benefits. However, the allotment / transfer of the Equity Shares to NRIs/FIIs shall be subject to prevailing RBI Guidelines. Sale proceeds of such investments in Equity Shares will be allowed to be repatriated along with the income thereon subject to the permission of the RBI and subject to the Indian tax laws and regulations and any other applicable laws. GOVERNMENT AND OTHER APPROVALS

SR.NO.

NAME OF REGISTRATION

NAME OF THE ISSUING AUTHORITY/DEPARTMENT

LICENCE / REGISTRATION NO.

1.

Certificate of Incorporation for incorporation of the company as Haria Apparels Ltd

Registrar of Companies, Mumbai U18204MH2011PLC212887

2. Permanent Account Number

Income Tax Department, Government of India AACCH5780P

3. TDS Account Number National Securities Depository Limited, Mumbai. MUMH13227E

4. Import Export Code NA NA

5. Employee Provident Fund Registration NA NA

6. Employee State Insurance Registration NA NA

7. VAT NA NA

8. Service Tax Code NA NA

It must, however be, distinctly understood that in granting the above-mentioned approvals, the Central Government, State Government, RBI and other authorities do not take any responsibility for the financial soundness of the company or for the correctness of any of the statements.

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SECTION VII - OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for listing: The Hon’ble High Court of Bombay at Mumbai, vide its Order dated March 22, 2012, has approved the Scheme of Arrangement/ De-merger of Haria Apparels Limited whereby the Wholesale Trading business undertakings of Haria Exports Limited have been transferred to and vested in Resultant Company i.e Haria Apparels Ltd. with effect from June 1st, 2011 (i.e. the Appointed Date under the Scheme) under Sections 391 to 394 of the Companies Act, 1956. The Scheme is operative from the Appointed Date i.e., June 1st, 2011. However it is effective from the date of filing of Form 42 of the Companies (Court) Rules, 1959 of the High Court in relation to the Scheme along with Form 21 with the Registrar of Companies, Maharashtra, i.e., May 8, 2012 Prohibition by the SEBI There is no prohibition on the Haria Exports Limited, Promoters, Promoter Group, Directors, Group Companies, from accessing the capital market for any reasons by the SEBI or any other authorities. None of the Directors of Haria Apparels Ltd. are associated with the securities market in any manner and SEBI has initiated no action against them ever. Haria Apparels Ltd., its Promoters, Group Companies, The Relatives (as per Companies Act, 1956) of Promoters, Group Companies are not identified as willful defaulters by Reserve Bank of India or other authorities. Eligibility Criterion There being no initial public offering or rights issue, the eligibility criteria in terms of Chapters III and IV of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 are not applicable. However, SEBI has vide its letter no. CFD/DIL/SM/25213/2011 dated August 4, 2011, relaxed the applicability of provisions of Regulation 19(2)(b) of the Securities Contract (Regulations) Rules, 1957. The Company has submitted this Information Memorandum to BSE and the same is available on the Company’s website www.hariagroup.com.The Information Memorandum would also be made available on the website of BSE, www.bseindia.com. Any other information as may be prescribed by SEBI from time to time The Company shall insert any other information in the Information Memorandum as prescribed by SEBI or the Stock Exchanges, if required. 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 relation to this scheme 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. Caution Haria Apparels Ltd. accepts no responsibility for statements made otherwise than in this Information Memorandum or in the advertisement or any other material issued by or at the instance of our Company and that anyone placing reliance on any other source of information would be doing so at his own risk. Our Company shall make all information available to the equity shareholders and no selective or additional information would be available for a section of the equity shareholders in any manner whatsoever including at presentations, in research or sales reports etc. after filing of this Information Memorandum.

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Disclaimer with respect to jurisdiction This Information Memorandum has been prepared under the provisions of Indian laws and the applicable rules and regulations there under. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in New Delhi, India only. Disclaimer Clause of BSE As required, a copy of this Information Memorandum has been submitted to BSE. The BSE had vide its letter dated September 20,2011, given its ‘No-Objection’ to the Scheme of Arrangement under clause 24(f) of the Listing Agreement and by virtue of that No-Objection, BSE’s name in this Information Memorandum can be used 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 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, Listing Department, at Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai, 400001. All the legal requirements applicable till the date of filing the Information Memorandum with the Stock Exchanges have been complied with. Listing The Company has received in-principle approval for listing of its shares from BSE. Designated Stock Exchange The designated stock exchange is BSE. Expert Opinion, if any Save and except as indicated elsewhere in this Information Memorandum, no other expert opinion has been obtained by the Company. Previous Public or Rights issues, if any during the last five years: The Company has not made any previous public or rights issue since incorporation. Previous issues of securities otherwise than for cash. The Company has not issued any security, previously, otherwise than for cash. Commission or brokerage on previous issues: Nil

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Haria Exports Limited did not make any capital issue during the last three years. Details of all Outstanding debentures or bonds and redeemable preference shares and other instruments issued by Haria Apparels Ltd. outstanding as on the date of offer document: Nil Stock market data for equity shares of Haria Apparels Ltd. Equity shares of the Company are not listed on any stock exchange. The Company is seeking approval for listing of its shares through this Information Memorandum. Mechanism evolved for redressal of investor grievances in Haria Apparels Ltd. The Company has appointed M/s Linkintime India Pvt. Ltd. as its Registrar and Transfer agent for handling the share registry work relating to shares held both in physical and electronic form at a single point. As per the Memorandum of Understanding with the Registrar, it shall strive to redress the investor complaints within one month of its receipt. The Company has also constituted an Investors’ Grievance Committee to deal with the grievances of investors related to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividend, transfer, transmission, transposition, nomination, dividend, change of name/address/signature, registration of mandate / Power of Attorney, replacement/split /consolidation of share certificate/demat/remat of shares, issue of duplicate certificates etc. Details of the number of investor complaints received during the three years preceding the filing Information Memorandum with the SEBI and the number of complaints disposed off during that period: Nil Details of the number of investor complaints pending on the date of filing Information Memorandum with the Board: Nil Details of the number of investor complaints pending on the date of filing Information Memorandum with the SEBI in respect of the five largest (in terms of market capitalization) listed group companies: N.A. Details of the time normally taken for disposal of various types of investor grievances:

Sr. No. Nature of Complaint/Grievance Standard Redressal Time

1 Non-receipt of S/C after rejecting DRN 10-15 days 2 Non-receipt of Dividend 10-15 days 3 Non- receipt of S/C 10-15 days 4 Non receipt of Annual Report 02 days 5 Change of Address 7-10 days 6 Bank Mandate 7-10 days 7 Transmission 30 days 8 Demat of Shares 15 days 9 Nomination of Shares 10 days

10 Registration of Power 7-10 days 11 Name Correction 10-15 days

Details of Change, if any, in the auditors of Haria Apparels Ltd. during the last three years, and reasons, thereof: There has been no change in the auditors of Haria Apparels Ltd. during the last three years. Details of Capitalization of reserves or profits (during last five years) by Haria Apparels Ltd.:Nil Details of Revaluation of assets, if any (during the last five years) by Haria Apparels Ltd.:Nil Demat Credit

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The Company has executed Agreements with NSDL & CDSL for admitting its securities in demat form. The Company’s shares were allotted on June 15, 2012 in physical/ dematerialized form to those shareholders who have provided necessary details to the Company and/ or who were holding their shares in Haria Apparels Ltd. in demat form as well as physical shares as on the Demerger Record date. The Company’s ISIN isINE493N01012.

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SECTION VIII - MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ARTICLES OF ASSOCIATION OF HARIA APPARELSLIMITED 1 The regulations contained in Table “A” in the First Schedule to the Companies

Act, 1956 shall apply to the Company so far as they are applicable to a Public Limited Company and so far as the same are not repugnant and/or inconsistent with the following regulations of the company. The regulations for the management of the Company and for the observance by the members thereof and their representatives, shall subject to any exercise of the statutory powers of the Company with reference to the repeal or alteration of, or addition to, its regulation by Special Resolution, as prescribed by the said Companies Act, 1956, be such as are contained in these Articles.

Table “A” to be applied if not inconsistent and Company to be governed by these Articles.

INTERPRETATION 2

In the interpretation of these Articles, unless repugnant to the subject or context 1. The Company” or “This Company” means Haria Apparels Limited.

2. The Act” means “This Companies Act, 1956” or any Statutory modification

or re-enactment thereof for the time being in force.

3. “Auditors” means and includes those persons appointed as such for time being by the Company

4. Board” or “Board of Directors” means a meeting of the Directors duly called and constituted, or as the case may be, the directors assembled at a meeting of the Board of Directors of the Company collectively.

5. “Capital” means the share capital for the time being raised or authorized to be raised for the purpose of the Company

6. Debenture” includes debenture-stock

7. “Director” means the Directors for the time being of the Company or as the case may be the Directors assembled at the Board

8. “Dividend” includes interim dividend and bonus.

9. Words importing the masculine gender also include the feminine gender

10. “In Writing” and Written” includes printing, lithography and other modes of representing or reproducing words in visible form.

11. “Member” means the duly registered holder from time to time of the shares of the Company and includes the subscribers to the Memorandum of Association of the Company.

12. “Meeting” of “ General Meeting” means a meeting of members of the Company

13. “Annual General Meeting” means general meeting of the members held in accordance with the provisions of Section 166 of the Act and any adjourned holding thereof.

14. “Extraordinary General Meeting” means an extraordinary general meeting of the members duly called a constituted and any adjourned holding thereof

15. “Month” means a calendar month

Interpretation Clause The Company The Act Auditors Board or Board of Directors Capitals Debentures Directors Dividend Gender Member Meeting AGM EOGM Month

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16. Non-retiring Director” means a director not subject to retirement by rotation

17. Office” means the registered office for the time being of the Company

18. “Paid-up” includes credited as paid up

19. “Persons” includes companies as well as individuals

20. “Register of Members” means the Register of Members to be kept

pursuant to Section 150 of the Act.

21. “The Registrar” means the Registrar of Companies of the State in which the office of the Company is for the time being situated.

22. “Secretary” includes a temporary or assistant secretary and any person or persons appointed by the Board to perform the duties of a Secretary, as defined under Section 2 (45) of the Companies Act, 1956.

23. “Seal” means the Common Seal for the time being of the Company

24. “Share” means a share in the share capital of the Company and includes stock except where distinction between stock and shares is expressed or implied.

25. Words importing the singular number include, where the context admits or requires the plural number and vice versa.

26. “Ordinary Resolution” and “Special Resolution” shall have the meanings assigned thereto by Section 189 of the Act

27. “Year” means the calendar year and “Financial Year” shall have the meaning assigned thereto by Section 2(17) of the Act.

28. “Beneficial Owner” shall mean beneficial Owner as defined in clause (a) of subsection (1) of Section 2 of Depositories Act, 1996.

29. “Depository” shall mean a Depository as defined under clause (e) of sub-section (1) of Section 2 of the Depositories Act, 1996.

30. “Depositories Act, 1996” shall include any statutory modification or re-enactment thereof for the time being in force.

31. “SEBI” means Securities and Exchange Board of India

32. “Bye-laws” means bye laws made by depository under section 26 of the Depository Act 1996

33. “Member” means the duly registered holder from time to time of the Shares of the company and include every persons whose name is entered as a beneficial owner in the records of the depository”

34. “Record” includes the records maintained in the form of books or stored in the computer in such other form or medium as may be determined by the regulations

35. “Regulations” means the regulations made by the SEBI

36. “Security” means such security as may be specified by SEBI from time to time

Office Persons Register Of Member Registrar Secretary Seal Shares Singular Number Year & Financial Year Beneficial Owner Depository Depositories Act SEBI Member Record Security

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37. “Register and Index of beneficial Owners” means Register and Index of

beneficial Owners maintained by a depository under Section 11 of the Depositories Act, 1996 shall be deemed to be the Register and Index of Members & Security holder for the purpose of the Act and these Articles

38. “Participant” means a person registered as such under sub-section (1A) of section 12 of the Securities & Exchange Board of India Act, 1992

39. Words and expressions used and not defined in this Act but defined in the Depository Act, 1996 shall have the same meanings respectively assigned to them in that Act

Subject as aforesaid, any words or expression defined in the Act shall, if not inconsistent with the subject or context, bear the same meaning in these Articles. The marginal notes used in these Articles shall not affect the construction thereof.

Register and Index of beneficial Owners Participant

CAPITAL & INCREASE AND REDUCTION OF CAPITAL 3 The Authorised Share capital of the Company is ` 5,00,000/- (Rupees Five

Lakh only) divided into 50,000 (Fifty Thousand) Equity Shares of ` 10/- with power to increase or reduce the capital for the time being and divide into several classes and to attach thereto with such preferential, qualified or special rights, privileges or conditions as may be determined by or in accordance with the Articles of the Company for the time being and to vary, modify or abrogate any such rights, privileges or conditions in such manner as may for the time being be provided by the regulations of the Company and to consolidate or sub divide the Shares and issue Shares of higher or lower denomination.

Amount of Capital

4 The Company in General Meeting may, from time to time, increase the capital by the creation of new shares, such increase to be of such aggregate amount and to be divided into shares of such respective amounts, as the resolution shall prescribe. Subject to the provisions of the Act, any shares of the original or increased capital shall be issued upon such terms and conditions and with such rights and privileges annexed thereto, as the general Meeting resolving upon the creation thereof, shall direct and if no direction be given, as the Directors shall determine; and in particular such shares may be issued with a preferential or qualified right to dividends, and in the particular such shares may be issued with a preferential or qualified right to dividends, and in the distribution of assets of the Company, and with a right of voting at General Meeting of the Company in conformity with Section 87 and 88 of the Act. Whenever the Capital of the Company has been increased under the provisions of sections 97 of the Act.

Increase of Capital by the Company

5 Except so far as otherwise provided by the conditions of issue or by these presents, any capital raised by the creations of new shares shall be considered as part of the existing capital and shall be subject to the provisions herein contained, with reference to the payment of calls and installments, forfeiture, lien, surrender, transfer and transmission, voting and otherwise.

New Capital same as existing capital

6 Subject to the provisions of Section 80 of the Act, the Company shall have the power to issue Preference Shares which are at the option of the Company are liable to be redeemed and the resolution authorizing such issue shall prescribe the manner, terms and conditions of redemption.

Redeemable Preference Shares

7 On the issue of Redeemable Preference Shares under the provisions of Article 6 hereof the following provision shall take effect: a) No such shares shall be redeemed except out of the profit of the Company

which would otherwise be available for dividend or out of the proceeds of a

Provision to apply on issue of Redeemable Preference Shares

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fresh issue of shares made for the purpose of the redemption b) No such shares shall be redeemed unless they are fully paid; c) The premium, if any payable or redemption must have been provided for

out of the profits of the Company or the Company’s Shares Premium Account before the shares are redeemed;

d) Where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall, out of profits which would otherwise have been available for dividend, be transferred to a reserve fund, to be called the “Capital Redemption Reserve Account” a sum equal to the nominal amount of the shares redeemed and the provisions of the Act, relating to the reduction of the share capital of the Company shall, expect as provided in Section 80 of the Act, apply as if the Capital Redemption Reserve Account were paid up share capital of the Company

8 The Company may, (subject to the provisions of Section 78, 80, and 100 to 105 both inclusive of the Act) from time to time, by Special Resolution reduce its share capital and any Capital Redemption Reserve Account or Share Premium Account in any manner for the time being authorized by law and particular capital may be paid off on the footing that it may be called up again or otherwise. This Article is not to derogate from any power the Company would have, if it were omitted.

Reduction of Capital

9 Subject to the provisions of Section 94 of the Act, the Company in General Meeting may from time to time, sub-divide or consolidate its shares or any of them and the resolution whereby any share is subdivided, may determine that, as between the holder of the shares resulting from such sub-division one or more of such shares shall have some preference or special advantage as regards dividend, capital or otherwise over or as compared with the others or other. Subject as aforesaid, the Company in General Meeting may also cancel shares which have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of its share capital by the amount of the shares so cancelled.

Sub-division, consolidation and cancellation of Shares

10 None of the funds of the company shall be applied in the purchase of any shares of the company and it shall not give any financial assistance for or in connection with the purchase or subscription of any shares in the Company or in its holding Company save as provided by section 77 of the Act

Funds for Purchase of shares

11 Notwithstanding anything contained in these Articles the company when and if thought fit may buy back its own shares and/or securities as it may think necessary, subject to such limits, upon such terms and conditions and subject to such approvals as may be required or permitted under the provisions of section 77A and 77B of the Act and the Rules prescribed by the central government and or by Security & Exchange Board of India in this regard

Buyback of shares

12 Whenever the Share Capital, by reason of issue of Preference Shares or otherwise, is divided into different classes of shares, all or any of the rights and privileges attached to each class(unless otherwise provided by the term of issue of the shares of that class) may, subject to provisions of Sections 106 and 107 of the Act and whether or not the Company is being wound up be varied, modified, commuted, affected or abrogated, or dealt with by agreement between the Company and any person purporting to contract on behalf of that class, provided such agreements are ratified in writing by holders of at least three-fourths in nominal value of the issued shares of that class or is confirmed by a Special Resolution passed at a separate General Meeting of the holders of shares of that class.

MODIFICATION OF RIGHTS

DEMATERIALISATION OF SECURITIES 13 (1) Notwithstanding anything contained in these Articles, the Company shall be

entitled to dematerialise its securities and to offer securities in a dematerialised form pursuant to Depository Act, 1996 and the rules framed thereunder

(2) All securities held by a Depository shall be dematerialised and shall be in a fungible form

(3) Nothing contained in Section 153, 153A, 153B,187B, 187C and 372 of the Act shall apply to the Depository in respect of the Securities held by it on

Dematerialisation of securities Securities in depositories to be in fungible form

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behalf of the Beneficial Owner 14 (1) Notwithstanding anything to the contrary contained in the Articles, Section

83 of the Act shall not apply to the shares held with a Depository (2) Nothing contained in Section 108 of the Act or these Articles shall apply to

a transfer of Security effected by the transferor and transferee, both of whom are entered as Beneficial Owner in the records of a Depository

(3) Nothing contained in the Act or these Articles regarding the necessity of having distinctive numbers for securities issued by the Company shall apply to securities held with the Depository.

Section 83& Section 108 Not to apply Distinctive Number of securities

15 (1) Either on the Company or on the investor exercising an option to hold his securities with a Depository in a dematerialised form, the Company shall enter into an agreement with the Depository to enable the investor to dematerialise the securities, in which event the right and obligations of the parties concerned shall be governed by the Depositories Act.

(2) Every person subscribing to securities offered by the Company shall have the option to receive the security certificates or hold securities with a depository. Where a person opts to hold a security with a Depository, the Company shall intimate such depository the details of allotment of the security and on receipt of such information, the Depository shall enter in its Record the name of the allottee as the Beneficial Owner of such Security

(3) Where a person opts to hold a security with a depository; the company shall intimate such depository the details of allotment of the security and on receipt of such information the depository shall enter in its records the name of the allottee as the beneficial owner of that security.

Option for investors

16 Notwithstanding anything in the Act or these Articles, where securities are dealt with by a depository, the Company shall intimate the details thereof to the depository immediately on allotment of such securities

Intimation of allotment

17 (1) Notwithstanding anything to the contrary contained in the 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

(2) Save as otherwise provided in (1) above, the Depository as a registered owner shall not have any voting rights or any other rights in respect of securities held by it.

(3) Every person holding equity share capital of the Company and whose name is entered as Beneficial Owner in the records of the Depository shall be deemed to be a member of the company. The Beneficial Owner shall be entitled to all the rights and benefits and be subjected to all the liabilities in respect of the Securities held by a Depository

Rights of depositories and beneficial owners

18 Every Depository shall furnish to the Company information regarding the transfer of securities in the name of the Beneficial Owner at such intervals and in such manner as may be specified by the bye laws and the Company in that behalf

Service of documents

19 Notwithstanding anything to the contrary contained in the Act or these Articles, where securities are held in depository, the records of the beneficial ownership may be served by such depository on the Company by means of electronic mode or by delivery of floppies or discs.

Service of records

20 (1) If a beneficial owner seeks to opt out of a depository in respect of any security, he shall inform the depository accordingly.

(2) The depository shall on receipt of such intimation make appropriate entries in its records and shall inform the company

(3) The Company shall within 30 days of the receipt of intimation from the Depository and on fulfillment of such conditions and on payment of such fees as may be specified by the Regulations, issue the certificate of securities to the Beneficial Owner or the transferee as the case may be.

Option to opt out or Re-materialization of securities

SHARES AND CERTIFICATES 21 The Company shall cause to be kept a Register and Index of Member in

accordance with Sections 150 and 151 of the Act. The Company shall be entitled to keep in any state or country outside India a Branch Register of Members resident in that State or Country

Register and Index of Members

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22 (a) Notwithstanding anything herein contained, a person whose name is at any time entered, in the Register of Members of the Company as the holder of a share in the Company, but who does not hold the beneficial interest in such share, shall, within such time and in such forms as may be prescribed make a declaration to the company specifying the name and a declaration to the Company specifying the name and other particulars of the person or persons, who hold the beneficial interest in such share in the manner provided in Section 187-C of the Act.

(b) A person who hold a beneficial interest in a Share or a class of shares of the Company shall, within the prescribed, after his becoming such beneficial owner, make a declaration to the company specifying the nature of his interest, particulars of the person in whose name the share stand in the Register of Members of the Company and such other particulars as may be prescribed as provided in Section 187-C of the Act;

(c) Whenever there is a change in the beneficial owner shall, within the time prescribed from the date of such change, make a declaration to the Company in such form and containing such particulars as may be prescribed as provided in Section 187-C of the Act;

(d) Notwithstanding anything herein contained or in Section 153 of the Act and Sub-Article (a), (b), (c) above, where any declaration referred to above is made to the Company, the Company shall make a note of such declaration in the Register of Members and file within the time prescribed from the date of receipt of the declaration a return in the prescribed form with the Registrar with regard to such declaration.

(e) In respect of the shares, debentures and securities held by Depository on behalf of the beneficial owner as defined in the Depositories Act 1996 the provision of Section 153, 153A, 153B, 187B, 187C and 372 of the Act shall not apply.

Declaration not holding beneficial interest in any shares

23 The shares in the capital shall be numbered progressively according to their several denominations and except in the manner here in above mentioned no share shall be sub-divided. Every forfeited or surrendered share shall continue to bear the number by which the same was originally distinguished.

Declaration not holding beneficial interest in any shares.

24 1 Subject to the provisions of the Act, where at the time after the expiry of two years from the formation of the company or at any time after the expiry of one year from the allotment of shares in the company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares either out of the unissued capital or out of the increased share capital then:

(a) Such further shares shall be offered to the persons who at the date of the

offer, are holders of the equity shares of the company, in proportion, as near as circumstances admit, to the capital paid up on those shares at the date.

(b) Such offer shall be made by a notice specifying the number of shares offered and limiting a time not less than thirty days from the date of the offer and the offer if not accepted, will be deemed to have been declined.

(c) The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to them in favour of any other person and the notice referred to in sub clause (b) hereof shall contain a statement of this right. PROVIDED THAT the Directors may decline, without assigning any reason to allot any shares to any person in whose favour any member may renounce the shares offered to him.

(d) After expiry of the time specified in the aforesaid notice or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered the Board of Directors may dispose off them in such manner and to such person(s) as they may think, in their sole discretion, fit.

Further Issue of Shares

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2 Notwithstanding anything contained in sub-clause (1) thereof, the further shares aforesaid may be offered to any persons (whether or not those persons include the persons referred to in clause (a) of sub-clause (1) hereof) in any manner whatsoever.

(a) If a special resolution to that effect is passed by the company in general

Meeting, or (b) Where no such special resolution is passed, if the votes cast (whether

on a show of hands or on a poll as the case may be in favour of the proposal contained in the resolution moved in the general meeting (including the casting vote, if any, of the Chairman) by the members who, being entitled to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by members, so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf that the proposal is most beneficial to the company

3 Nothing in sub-clause (C) of (1) hereof shall be deemed;

(a) To extend the time within which the offer should be accepted; or (b) To authorize any person to exercise the right of renunciation for a second

time on the ground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.

4 Nothing in this Article shall apply to the increase of the subscribed capital of the company caused by the exercise of an option attached to the debenture issued or loans raised by the company:

(i) To convert such debentures or loans into shares in the company; or (ii) To subscribe for shares in the company (whether such option is conferred

in these Articles or otherwise PROVIDED THAT the terms of issue of such debentures or the terms of such loans include a term providing for such option and such term: a) Either has been approved by the Central Government before the issue of

the debentures or the raising of the loans is in conformity with Rules, if any made by that Government in this behalf; and

b) In the case of debentures or loans or other than debentures issued to or

loans obtained from government or any institution specified by the Central Government in this behalf, has also been approved by a special resolution passed by the company in general Meeting before the issue of the debentures or raising of the loans

25 Subject to the provision of Section 81 of the Act and these Articles, the shares in the capital of the company for the time being shall be under the control of the Directors who may issue, allot or otherwise dispose of the same or any of them to such persons, in such proportion and on such terms and conditions and either at a premium or at par or(subject to the compliance with the provision of Section 79 of the Act) at a discount and at such time as they may from time to time think fit and with the sanction of the company in the General meeting to give to any person or persons the option or right to call for any shares consideration as the Directors think fit, and may issue and allot shares in the capital of the company on payment in full or part of any property sold and transferred or for any services rendered to the company in the conduct of its business and any shares which may so be allotted may be issued as fully paid up shares and if so issued, shall be deemed to be fully paid shares. Provided that option or right to call of shares shall not be given to any person or persons without the sanction of the company in the General Meeting.

Share under control of Directors

26 In addition to and without derogating from the powers for purpose conferred Power also to

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on the Board under Artcle24 and 25 the company in general meeting may subject to the provision of Section 81 of the Act; 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 Member or not) in such proportion and on such terms and conditions and either subject to compliance with the provision of Section 78 and 79 of the Act, at a premium or at par or at a discount, as such General Meeting shall determine aforesaid and with full power to give any person (whether a Member or not) the option to call for or be allotted shares of any class of the Company either subject to the compliance with the provisions of Section 78 and 79 of the Act, at a premium or at par or at a discount such option being exercisable at such time and for such consideration as may be directed by such General Meeting of the Company in General Meeting may make any other provisions whatsoever for the issue, allotment or disposal of any shares.

Company in general Meeting to issue share

27 Subject to these Articles and the provisions of the Act, the Board may issue and allot shares in the capital of the Company as payment or in consideration or as part of payment or in part consideration of the purchase or acquisition of any property or for services rendered to the Company in the conduct of its business and shares which may be so issued or allotted shall be credited or deemed to be credited as fully paid up shares.

Issue of shares for consideration other than c

28 Any application signed or on behalf of an applicant for shares in the Company, followed by an allotment of any share therein, shall be an acceptance of shares within the meaning of these articles and every person who thus or otherwise accept any shares and whose name is on the Register shall for the purposes of these Articles, be member.

Acceptance of shares

29 The money, if any which the Board shall, on the allotment of any shares being made by them, require or direct to be paid by way of deposit, call or otherwise, in respect of nay shares allotted by them, shall immediately on the insertion of the name of the allottee in Register of Members as the name of the holder of such shares, become a debt due to and recoverable by the Company from the allottee there of and shall be paid by him accordingly.

Deposit and call etc. to be a debt payable immediately.

30 Every member or his heirs, executors or administrators shall pay to the Company the portion of the capital represented by his share or shares which may, for the time being, remain unpaid thereon, in such amounts, at such time or times and in such manner as the Board shall, from time to time in accordance with the company’s regulations, require or fix for the payment thereof.

Liability of Members

31 (a) Every member or allottee of shares shall be entitled without payment received one or more shares certificates in marketable lots specifying the name of the person in whose favour it is issued, the share to which it relates and the amount paid up thereon. Where share certifies are issued for either more or less than marketable lots, subdivisions or consolidation into marketable lots shall be done free of charges. Such certificate shall be issued only in pursuance of a resolution passed by the Board and on surrender to the Company of its letter of allotment or its fractional coupons of requisite value, save in cases of issues against letters of acceptance or renunciation or in case of issue of bonus shares. Every such certificate shall be issued under the seal of the Company, which shall be affixed in the presence of two Directors or persons acting on behalf the Directors under a duty registered Power of Attorney and the Secretary or some other person appointed by the Board for the purpose, and two Directors or their Attorneys and the Secretary or other persons shall sign the Share certificate, provided that if the composition of the Board permits of it, at least on of the aforesaid two Directors shall be person other than a Managing or whole-time Directors shall be person other than a Managing or whole-time Director. Particulars of every share certificate issued shall be entered in the Register of Members against the name of the person to whom it has been issued indicating the date of issue, provided however, no share certificate (s) shall be issued for shares held by a Depository.

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(b) Any two or more joint allottees of shares shall, for the purpose of this Article, be treated as a single member, and the certificate of any share may be the subject of joint ownership, may be delivered to anyone of such joint owners on behalf of all of them. The Company shall comply with the provisions of Section 113 of the Act.

(c) A Director may sign a share certificate by affixing his signature thereon by means of a machine, equipment or other mechanical means, such as engraving in metal or lithography, but not by means of a rubber stamp, provided that the Directors shall be responsible for the safe custody of such machine, equipment or other material used for the purpose.

(d) Every member shall be entitled, without payment, to one or more certificate in marketable lots, for all the shares of each class or denomination registered in his name, or if the Directors so approve (upon paying such fee as the Directors may from time to time to determine) to several certificates, each for one or more of such shares and the company shall complete and have ready for delivery such certificates within three months from the date of allotment, unless the conditions of issue thereof otherwise provide, or within one month of the receipt of application of registration of transfer, transmission, sub-division, consolidation or renewal of any of its shares as the case may be. Every certificate of shares shall be under the seal of the company and shall specify the number and distinction numbers of shares in respect of which it is issued and amount paid-up thereon and shall be in such form as the directors may prescribe or approve, provided that in respect of a share or shares held jointly by several persons, the company and delivery of a certificate of shares to one of several joint holders shall be sufficient delivery to all such holder.

Limitation of time for issue of certificates

32 (a) If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the back thereof for endorsement of transfer, then upon production and surrender thereof to the company, a new Certificate may be issued in lieu thereof, and (if any certificate lost or destroyed then upon proof thereof to the satisfaction of the company and on execution of such indemnity as the company deem adequate, being given), and a new Certificate in lieu thereof shall be given to the party entitled to such lost or destroyed Certificate. Every Certificates under the Article shall be issued without payment of fees if the Directors so decide, or on payment of such fees (not exceeding ` 2/- for each certificate) as the Directors shall prescribe. Provided that no fee shall be charged for issue of new certificates in replacement of those which are old, defaced or worn out or where there is no further space on the back thereof for endorsement of transfer.

Provided that notwithstanding what is stated above the Directors shall comply with such Rules or Regulation or requirements of any Stock Exchange or the Rules made under the Act or the rules made under the Act or the rules made under Securities Contract (Regulation) Act), 1956 or any other Act, or rules applicable in this behalf.

The provisions of this Article shall mutatis mutandis apply to debentures of

the Company (b) When a new share certificate has been issued in pursuance of clause (a)

of this Article, it shall state on the face of it and against the stub or counter foil to the effect that it is “Issued in lieu of share certificate No.__________ subdivided / replaced / on consolidated of shares.

(c) If a share certificate is lost or destroyed, a new certificate in lieu thereof shall be issued only with the prior consent of the Board and on such terms, if any, as to evidence and indemnity as to the payment of out-of-pocket

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expenses incurred by the Company in investigating evidence, as the Board thinks fit.

(d) When a new share certificate has been issued in pursuance of clause (C) of this article, it shall state on the face of it and against the stub of counterfoil to the effect that it is “duplicate issued in lieu of share certificate no.___________”.

“The word “Duplicate” shall be stamped or punched in bold letters across the face of the share certificate.

(e) Where a new share certificate has been issued in pursuance of clause (a_ or clause (C) of this Article, particulars of every such share certificate shall be entered in a Register of Renewed and Duplicate Certificates indicating against the name of the persons to whom the certificate is issued, the number and date of issue of the share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in the Register of Members by suitable cross reference in the “ Remarks” column.

(f) All blank form to be issued for issue of share certificate shall be printed and the printing shall be done only on the authority of a resolution of the Board. The blank forms shall be consecutively machine numbered add the forms and the blocks, engravings, facsimiles and hues relating to the printing of such forms shall be kept in the custody of the Secretary or of such other person as the Board may appoint for the purpose and the Secretary or the other person aforesaid shall be responsible for rendering an account of these forms to the Board.

(g) The Managing Director of the Company for the time being or, if the Company has no Managing Director, every Director of the company shall be responsible for the maintenance, preservation and safe custody of all books and documents relating to the issue of share certificates except the blank forms of shares Certificates referred in Sub-Article (f).

(h) All books referred to in Sub-Article (g) shall be preserved in good order

33 a) Where two or more persons are registered as the holders of any share, they shall be deemed to hold the same as joint tenants with benefits of survivorship but, however, that and the person first named in the Register of Members shall expect provided to the contrary, for all or any matter connected with the Company be deemed the sole holder thereof, subject to the following and other provisions contained in these Articles.

b) The Company shall be entitled to decline to register more than three persons as the holder of any share.

c) The joint holder of any share is liable, severally as well as jointly, for and

in respect of all calls and other payments which ought to be made in respect of such shares.

d) On the death of any such joint holder, the survivor or survivors shall be the

only person or persons recognized by the Company as having any title to the 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 the deceased joint holder from any liability on shares held by him jointly with any other person.

e) Any of such joint holders may give effectual receipts for any dividends or

other moneys payable in respect of such share. f) Only the person whose name stands in the Register of Members as the

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first of the joint holders of any shares shall be entitled to delivery of the certificate relating to such share or to receive notices from the Company and any notice given to such person shall be deemed proper notice to all joint holders.

g) Any one of two or more joint holders may vote at any meeting either

personally or by proxy in respect of such share 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, the holder whose name stands first or higher (as the case may be) on the Register of Members in respect of such share shall alone be entitled to vote in respect thereof. Provided always that a member present at any meeting personally shall be entitled to vote in preference to a person present by proxy although the name of such person present by proxy stands first on the Register of Members in respect of such shares.

34 The company shall be entitled to treat the person whose name appears on the Register of Members as the holder of any Shares or other securities or whose name appear as the Beneficial owner of shares or other securities in the records of Depository as the absolute owner thereof

35 Except as ordered by a court of competent jurisdiction or as required by law the Company shall be entitled to treat the person whose name appears in the Register of Members as the holder of any share or any where the name appears as the beneficial owner of shares in the records of the Depository as the absolute owner thereof and accordingly shall not be bound to recognize any benami trust or equitable, contingent future or partial interest in any share or (except only as is by these articles otherwise expressly provided) any right in respect of a share other than an absolute right thereto, in accordance with these articles, in the person from time to time registered as the holder thereof, but the Board shall be at liberty at their sold discretion to register any share in the joint names of any tow or more persons or the survivor or survivors of them.

Company bound to recognise no interest other than that of registered holder

UNDERWRITING AND BROKERAGE 36 Subject to the provision of Section 76 of the Act, the Company may at any

time pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares or debentures in the Company, or procuring, or agreeing to procure subscriptions (whether absolutely or conditionally) for any shares or debentures in the Company, but so that the commission shall not exceed in the case of shares, two and half percent of the price at which the shares are issued and in the case of debentures, two and a half percent of the price at which the debentures are issued, or such higher rate or rates as may be permissible under any statutory provision for the time being in force. Such commission may be satisfied by payment of cash or by allotment of fully or partly paid shares or partly in on way and partly in the other.

Commission

37 The company may pay such brokerage as may be lawful Brokerage INTEREST OUT OF CAPITAL 38 Where any shares are issued for the purpose of raising money to defray the

expenses of the construction of any work or building or the provision of any plant, which cannot be made profitable for a lengthy period, the Company may pay interest on so much of that share capital as is for the time being paid up, for the period, at the rate and subject to the conditions and restrictions provided by Section 208 of the Act and may charge the same to capital as part of the cost of construction of the work or building, or the provision of plant.

Interest may be paid out of Capital

CALLS

39 The Board may, from time to time, subject to the terms on which any shares may have been issued and subject to the condition of allotment, by a resolution passed at a meeting of the Board (and not by circular resolution) make such call as it thinks fit upon the members in respect of all moneys

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unpaid on the shares held by them respectively and each member shall pay the amount of every call so made on him to the person or persons and at the times and places appointed by the Board. A call may be payable by installments

40 Whenever any calls for further share capital are made on shares, such calls shall be made on a uniform basis on all shares falling under the same class. For the purpose of this Article, shares of the same nominal value of which different amounts have been paid up shall not be deemed to fall under the same class.

Calls on shares of a class to be made on uniform basis

41 Thirty days’ notice in writing of any call shall be given by the Company specifying the time and place of payment and the person or persons to whom such call shall be paid.

Notice of calls

42 A call shall be deemed to have made at the time when the resolution authorizing such call was passed at a meeting of the Board and may be made payable by the members whose names appear on the Register of Members on such date or at the discretion of the Board, on such subsequent date as may be fixed by the Board.

Calls to date from resolution

43 A call may be revoked or postponed at the discretion of the Board Call may be revoked

44 The joint-holder of a share shall be jointly and severally liable to pay all calls in respect thereof.

Liability of joint-holders

45 The Board may, from time to time at its discretion, extent the time fixed for the payment of any call and may extent such time as to all or any of the members whom owing to their residence at a distance or other cause the Board may deem fairly entitled to such extension but no members shall be entitled to such extension may as a matter of grace and favour

Directors may extend time

46 If any member fails to pay any call due from him on the day appointed for payment thereof or any such extension thereof as aforesaid, he shall be liable to pay interest on the same from the day appointed for the payment thereof to the time of actual payment at such rate as shall from time be fixed by the Board but nothing in this Article shall render it obligatory for the Board to demand or recover any interest from any such member. The Board may not recover, or waive interest from concerned members generally or from any particular member or members.

Calls to carry Interest

47 Any sum, which by the terms of issue of a share become payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall for the purpose of these Article be deemed to be call duly made and payable on the date on which by the terms of issue the same becomes payable and in case of non-payment, all the relevant provisions of these Articles as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

Sums deemed to be calls.

48 On the trial or hearing of any action suit brought by the Company against any member or his representatives for the recovery of any money claimed to be due to the Company in respect of his shares, it shall be sufficient to prove that the name of the members, in respect of whose shares the money is sought to be recovered appears entered on the Register of Members as the holder, at or subsequently to the date at which the money is sought to be recovered is alleged to have become due on the share in respect of which such money is sought to be recovered appears entered on the Register of Members as the holder, at or subsequently to the date at which the money is sought be recovered that the resolution making the call is duly recorded in the Minute Book; and that notice of such call was duly given to the member or his representatives issued in pursuance of these Articles, and that it shall not be necessary to prove the appointment of the Directors who made such call, nor that quorum of Directors was present at the Board at which any call was made, nor that the meeting at which any call was made was duly, convened or constituted nor any other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt.

Proof on trial of suit for money due on shares.

49 Neither the receipt by the Company of a part or portion of any money which Partial payment

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shall from time to time, be due from any members to the Company in respect of his shares, either by way of principal or interest, not any indulgence granted by the Company in respect of the payment of any such money, shall preclude the Company from thereafter proceeding to enforce a forfeiture of such shares as hereinafter provided.

not to preclude forfeiture

50 (a) The Board may, if it thinks fit, agree to and receive from any members willing to advance the same, all or any part of the amount of his respective shares beyond the sums actually called-up and upon the moneys so paid in Advance or upon so much thereof, from time to time and at any time thereafter exceeds the amount of the calls then made upon and due in respect of the shares on account of which such advances are made the Board may pay or allow interest, at such rate as the member paying the sum in advance and the Board agree upon. The Board may agree to repay at any time the amount so advanced or may at any time repay the same upon giving to the member three months notice in writing. Provided that moneys paid in advance of calls on any shares may carry interest but shall not confer a right to dividend or participate in profits. (a) No member paying any such sum in advance shall be entitled to voting

rights in respect of the moneys so paid by him until the same would but for such payment become presently payable.

(b) The provisions of this Article shall mutatis mutandis apply to debentures of the Company

Payment in anticipation of call may carry interest

51 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 or jointly with others) and upon the proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares and no equitable interest in any share shall be created except upon the footing and upon the condition the Article 24 hereof is to have full effect. Any such lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed the registration of transfer of shares shall operate as a waiver of the Company’s lien, if any, on such shares. The Directors may at any time declare any shares/debentures wholly or in part to be exempt from the provision of this clause.

Company’s Lien on Share / Debentures

52 For the purpose of enforcing such lien, the Board may sell the shares subject thereto in such manner as they shall think fit, and for that purpose may cause to be issued a duplicate certificate in aspect of such share and may authorized one of their member to execute a transfer thereof on behalf of and in the name of such member. No sale shall be made unless a sum in respect which the lien exists is presently payable nor until notice in writing of the intention to sell shall have been served on such member or his representatives and default shall have been made by him or them in payment, fulfillments, or discharge of such debts, liabilities or engagements for fourteen days after such notice

As to enforcing lien by sale

53 The net proceeds of any such sale shall be received by the Company and applied in or towards payment of such part of the amount in respect of which the lien exists as is presently payable and the residue, if any, shall (subject to a like lien for sums nor presently payable as existed upon the Shares before the sale) be paid to the person entitled to the shares at the date of sale.

Application of proceeds of sale

FORFEITURE OF SHARES 54 If any members fail to pay any call or installment of a call on or before the day

appointed for the payment of the same or any such extension thereof as aforesaid, the Board may at any time thereafter, during such time as the call or installment remains unpaid, give notice to him requiring him to pay the same together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment

If money payable on shares not paid notice to be given to member

55 The notice shall name a day (not being less than fourteen days from the date of the notice) and a place or places on and at which such call or installment and such interest thereon at such rate as the Directors shall determine from the day on which such call or installments ought to have been paid and expenses as aforesaid are to be paid. The notice shall also state that, in the

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event of the non-payment at or before the time and at the place appointed, the shares in respect of which the call was made or installment in payable, will liable to be forfeited.

56 In the requirements of any such notice as aforesaid shall not be complied with, every or any share in respect of which such notice has been given, may at any time thereafter before payment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board to that effect such forfeiture shall include all dividends declared or any other moneys payable in respect of the forfeited share and not actually paid before the forfeiture,

In default of payment shares to be forfeited

57 When any share shall have been so forfeited notice of the forfeiture shall be given to the member in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture, with the date thereof, shall forthwith be made in the Register of Members but no forfeiture shall be in any manner be invalidated by any omission or neglect to give such notice or to make any such entry as aforesaid.

Notice of forfeiture to a member

58 Any share so forfeited shall be deemed to be the property of the Company and may be sold, reallotted or otherwise disposed off, either to the original holder thereof or to any other person, upon such terms and in such manner as the Board shall think fit.

Forfeited share to be property of Company and may be sold, etc.

59 Any member whose shares have been forfeited shall not withstanding the forfeiture, be liable to pay and shall forthwith pay to the Company, on demand all calls, installments, interest and expenses owing upon or in respect of such shares at the time of forfeiture, together with interest thereon from the time of the forfeiture until payment, at such rate as the Board may determine and the Board may enforce the payment thereof, or any part thereof, if it thinks fit

Member still liable to pay money owing at time of forfeiture and interest

60 The forfeiture of a share shall involve extinction, at the time of the forfeiture, of all interest in all claims and demands against the Company, in respect of the share and all other rights incidental to the share, except only such of those rights as by these Articles are expressly saved

Effect of forfeiture

61 A declaration in writing that the declarant is a Director or Secretary of the Company and that a share in the company has been duly forfeited in accordance with these Articles on a date stated in the declaration, shall be conclusive evidence to the facts there in stated as against all persons claiming to be entitled to the shares.

Evidence of forfeiture

62 Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers herein before given, the Board may appoint some persons to execute an instrument of transfer of shares sold and may cause the purchaser’s name ought to be entered in the Register in respect of the shares sold, and the purchased shall not be bound to see to the regularity of the proceedings nor to the application of the purchase money, and after his name has been entered in the Register in respect of such shares, the validity of such share shall not be impeached by any person and the remedy of any person aggrieved by the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively

Validity of sale

63 Upon any sale, re-allotment or other disposal under the provisions of the preceding articles, the certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to it by the defaulting members) stand cancelled and become null and void and of no effect, and the Directors shall be entitled to issue a duplicate certificate in respect of the said shares to the persons entitled thereto

Cancellation of Share certificates in respect of forfeited shares

64 The Board at any time before any share so forfeited shall have been sold re-allotted or otherwise disposed off, annual the forfeiture thereof upon such condition as it thinks fit.

Power to annual forfeiture

SHARE WARRANTS 65 The Company may issue share warrants subject to and in accordance with the

provisions of Section 114 and 115 of the Act and accordingly, the Board may Power to issue share warrants

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in its discretion, with respect to any share which is fully paid, upon 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 identity of the share and the amount of the stamp duty on the warrant and such fee as the Board may from time to time, require issue a share warrant.

66 (a) The bearer of a share warrant may at any time, deposit the warrant at the offer of the Company and so long as the warrant remains so deposited, the deposits shall have the same right of signing a requisition for calling a meeting of the Company and of attending and voting and exercising the other privileges of a member at any meeting held after the expiry of two clear days from the time of deposit, as if this name were inserted in the Register of Members as the holder of the share included in the deposited warrant.

(b) Not more than one person shall be recognized as depositor of the share warrant

(c) The Company shall, on two days, written notice return the deposited share warrant to the depositor.

Privileges and disabilities of the holder of share warrant

67 (a) Subject as herein otherwise expressly provided, no person shall, as bearer of a share warrant, sign a requisition for calling a meeting of the Company, or attend or vote or exercise any other privileges of a member at a meeting of the Company, or be entitled to receive any notice from the Company.

(b) The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages as if he were named in the Register of Member as the holder of the share included in the warrant and he shall be a member of the Company.

Issue of new share warrants of coupons

68 The Board may, from time to time, make rules as to the terms on which (if it shall think fit) a new share warrant or coupon may be issued by way of renewal in case of defacement, loss or destruction

Issue of new share warrant or coupon

CONVERSION OF SHARES INTO STOCK AND RECONVERSION 69 The Company in a General Meeting may convert any paid-up shares into

stock, and when any shares shall have converted into stock, the several holders of such stock may henceforth transfer their respective interest therein, or any part of such interest, in the same manner and subject to the same regulations as, and subject to which shares form which the stock arise might have been transferred if no such conversion had taken place or as near thereto as circumstances will admit. The Company may at any time convert any stock into paid up shares of any denomination.

Shares may be converted into stock

70 The holders of stock shall, according to the amount of stock held by them, have the same right, privileges and advantages as regards dividends, voting at meetings of the Company, and other matters, as if they held the shares from which the stock arose but no such privilege or advantage (except participation in the dividends and profits of 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.

Right of stock-holder

COPIES OF MEMORANDUM AND ARTICLES TO BE SENT TO MEMBERS

71 Copies of the Memorandum an Article of Association of the Company and other documents referred to in section 39 of the Act, shall be sent by the Company to every member at his request, within seven days of the request, on payment of the sum of Rupee One for each copy.

Copies of Memorandum and Articles to be send by the Company

TRANSFER AND TRANSMISSION OF SHARES

72 The Company shall keep a ‘Register of Transfers’ and enter therein fair and distinct particulars of every transfer or transmission of any share, including the

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shares held in material form. 73 In the case of transfer of shares, debentures or other marketable securities

where the Company has not issued any certificate and where such shares or debentures or securities are being held in an electronic and fungible form, the provisions of Depositories Act, 1996 shall apply

Shares held in electronic and fungible form

74 The instrument of transfer shall be in writing and all the provisions of Section 108 of the Companies Act, and or any statutory modification thereof for the time being shall be duly complied with, in respect of all transfer of shares and their registration thereof.

Instrument of Transfer

75 The instrument of transfer duly stamped and executed by the transferor and the transferee shall be delivered to the Company in accordance with the provisions of the Act. The instrument of transfer shall be accompanied by such evidence as the Board may require to prove the title of transferor and his right to transfer the shares and every registered instrument of transfer shall remain in the custody of the Company until destroyed by order of the Board. The transferor shall be deemed to be the holder of such shares until the name of the transferee shall have been entered in the Register of Members in respect thereof. Before the registration of a transfer, the certificate or certificate of the share must be delivered to the Company.

Transfer form to be completed and presented to the Company

76 The Board shall have power on giving not less than seven days’ previous notice by advertisement in some newspaper circulating in the district in which the office of the Company in situate to close Transfer Books, Register of Members or Register of Debenture-holders at such time or times and for such period or periods, not exceeding in the aggregate forty-five days in each year, and thirty days at any one time.

Transfer Books and Register of members when closed

77 Subject to the provisions of Section 22A of the Securities Contract (Regulation) Act 1956 and “Subject to the provisions of Section 111 of the Act, the Board may, at its own absolute and uncontrolled discretion and without assigning any reason, register or acknowledge any transfer of shares (whether fully paid or not and notwithstanding that the proposed transferee be already a member), but in such case it shall, within one month from the date on which the instrument of transfer was lodged with the Company, send to the transferee and the transferor notice of the refusal to register such transfer provided that the registration of a transfer shall not be refused on the ground that the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except a lien on shares.

Board may refuse to register transfer

78 Where, in the case of partly paid share, an application for registration is made by the transferor, the Company shall give notice of the application to the transferee in accordance with the provisions of Section 110 and the Act.

Notice application when to be given

79 In case of the death of any one or more of the persons named in the Register of Members, as the joint holders of any share, the survivors shall be the only persons 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 person.

Death of one or more joint holders of shares

80 The executors or administrators or holders of succession certificate or the legal representatives of a deceased member (not being one of two or more joint holders) shall be the only persons recognized by the Company as having any title to the shares registered in the name of such member and the Company shall not be bound to recognize such executors or administrators of holders of a succession certificate or the legal representatives unless such executors or administrator or legal representative shall have first obtained probate or letters of administration or succession certificate, as the case may be, from a duly constituted court in the Union of India; provided that in any case, where the Board in its absolute discretion thinks fit, the Board may dispense with production of probate or letter administration or succession certificate, upon such terms as to indemnity or otherwise as the Board in its absolute discretion may think necessary, and under Articles, 64, register the

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name of any person, who claims to be absolutely entitled to the shares standing in the name of a deceased member, as a member.

81 No share shall, in any circumstances, be transferred to any firm, insolvent person or person of unsound mind

No transfer to certain persons

82 Subject to the provision of Act and Articles 79 and 80 any person becoming entitled to shares in consequences of the death, lunacy, bankruptcy insolvency of any member or by any lawful means other than by a transfer in accordance with this Articles, may with the consent of the Board (which it shall not be under any obligation to give) upon producing such evidence that he sustains the character in respect of which he proposes to act under this Article or of such title shares or elect to have some person nominated by him and approved by the Board registered as such holder; provided nevertheless, that if such person shall elect to have his nominee registered, he shall testify the election by executing in favour of his nominee an instrument of transfer in accordance with the provisions herein contained, and until he does so he shall not be free from any liability in respect of the shares.

Transmission Clause

83 The directors shall have the same right to refuse to register a person entitled by transmission to any shares or his nominee as if he were the transfer named in the case of a transfer of shares presented for registration

Refusal to register in case of transmission

84 A person entitled to a share transmission shall, subject to the right of the Directors to retain such dividends or moneys, as hereinafter provided, be entitled to receive, and may give discharges for any dividends or other moneys payable in respect of the share.

Persons entitled may receive dividend without being registered as member

85 No fee shall be charged for registration and transfer, transmission, Probate, Succession Certificate and Letters of administration, Certificate of Death or Marriage, Power of Attorney or similar other document.

No Fee on Transfer or Transmission

86 The Company shall incur no liability or responsibility whatsoever in consequence of its registering or giving effect to any transfer of shares made or purporting to be made by any apparent legal owner (as shown or appearing in the Register of Members) to the prejudice of having or claiming any equitable right, title or interest or in the said shares, notwithstanding that the Company may have had notice of such equitable right, title or interest or notice prohibiting registration of such transfer, and may have entered such notice, or referred thereto, in any book of the Company, and the Company shall not be bound to be required to regard or attend to give effect to any notice which may be given to it of any equitable right, title or interest or be under any liability whatsoever for refusing or neglecting so to do, thought it may have been entered or referred to in some book of the Company, but the Company shall nevertheless be at liberty to regard and attend to any such notice and give effect thereto if the Board shall so think fit.

Company not liable for disregard of a notice prohibiting registration of a transfer

87 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 shares, except that he shall not, before being registered as a member in respect of the shares, be entitled to exercise any right conferred by membership in relation to meeting of the Company. Provided that the Directors shall, at any time give notice requiring any such person to elect either to be registered himself or to transfer the shares and if the notice is not complied within ninety days, the Directors may thereafter withhold payment of all dividends, bonuses and other moneys payable in respect of the shares until the requirements of the notice have been complied with.

Rights of Successors

NOMINATION OF SHARES 88 Notwithstanding anything contained in these Articles but subject to the

provisions of section 109A and 109B of the Act, every shareholders of the Company , may at any time, nominate, in the prescribed manner a person to whom his or their shares in the Company shall vest in the event of his/their death

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BORROWING POWERS 89 Subject to the provisions of Section 58A, 293 of the Act, the Board may from

time to time at its discretion, by a resolution passed at a meeting of the Board accept deposit from members either in advance of calls or otherwise and generally raise or borrow or secure the repayment of any sum of sums of money for the purposes of the Company. Provided, however, where the moneys to be borrowed together with the moneys already borrowed (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business), exceed the aggregate of the paid up capital of the Company and its free reserve, (not being reserves set apart for any specific purpose) the Board shall not borrow such moneys without the consent of the Company in General Meeting.

Power to borrow

90 Subject to the provisions of Article 89 hereof, the payment or repayment of moneys borrowed as aforesaid may be secured in such manner and upon such terms and conditions in all respects, as the Company in General Meeting shall prescribe including the issue of bonds, debentures or debenture-stock of the Company charges upon all or any part of the property of the Company (both present and future), including its uncalled capital for the time being and the bonds debentures. Debenture-stock and other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued

Payment or repayment of money borrowed

91 Any bonds, debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise and may be issued on the condition that they shall be fully or partly convertible into shares of any denomination or that they shall not be converted so convertible, and with any privileges and conditions as to redemption surrender, drawing, allotment of Shares, and attending (but not voting) at General Meeting, appointment of Directors and otherwise. Bonds or debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in General Meeting by a special Resolution

Terms of issue of Bonds and Debentures

92 The Board shall cause a proper Register to be kept, in accordance with the provisions of Section 143, of the Act of all mortgages, debentures and charges specifically affecting the property of the Company and shall cause the requirement of Section 118, 125 and 127 to 144 (both inclusive) of the Act in that behalf to be duly complied with, so far as they to be complied with by the Board.

Register of Mortgage etc., to be kept

93 The Company shall, if at any time, it issues debentures, keep a Register and Index of Debenture-holders in accordance with Section 152 of the Act and the Depositories Act, 1996. The Register and Index of beneficial owners maintained by a depository under Section 11 of the Depositories act, 1996 shall be deemed to be Register and Index of Debenture Holders for the purposes of this Act. The Company shall have the power to keep in any state or country outside India, a Branch Register of Debenture-holders resident in that state or country.

Register of Index of Debenture holders

94 The Company shall have power to mortgage or charge the undertaking or all or any of the movable and immovable property, present or future and all or any of the uncalled capital for the time being of the company, and to issue at par or at premium or discount or for such consideration as may be thought fit, debentures, mortgage, debentures or debenture stock, payable to bearer or otherwise and either permanent or redeemable or repayable and collaterally or further secure and securities of the Company by a trust deed or other assurance

Power to mortgage and charge and issue debentures

MEETING OF MEMBERS 95 The Company shall, within a period of not less than one month nor more than

six months from which it is entitled to commence business, hold the Statutory Meeting of the members of the Company subject to and in accordance with the provisions of Section 165 of the Act.

Statutory meeting

96 The Company shall in each year hold a General Meeting as its Annual Annual General

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General Meeting, in addition to and to any other meeting in that year. All General Meetings other than the Annual General Meeting shall be called Extra-ordinary General meetings. An Annual General Meeting of the Company shall be held within six months after the expiry of each financial year provided that no more than fifteen months shall lapse between the date of one Annual General Meeting and that of the next. Provided that it will be permissible to hold its first Annual General Meeting within a period of not less than eighteen months from the date of its incorporation and if such meeting is held within that period, it shall not be necessary for the Company to hold any annual General Meeting in the year of its incorporation or in the following calendar year. Nothing contained in the forgoing provision shall be taken as affecting the right conferred upon the Registrar under the provision of Section 166(1) of the Act to extent the time within which any Annual General Meeting may be held. Every Annual General Meeting shall be called for a time during business hours, on a day that is not a public holiday, and shall be held at the office of the Company or at some other place within the city in which the office of the Company is situated as the Board may determine and the notice calling the Meeting shall specify it as the Annual General Meeting. The Company may in any one Annual General Meeting fix the time for its subsequent Annual General meetings. Every member of the Company shall be entitled to attend either in person or by proxy and the Auditor of the Company shall have the right to attend and to be held at the General Meeting which he attends on any part of the business which concerns him as Auditor. At every Annual General Meeting of the Company there shall be laid on the table, the Directors Report and Audited Statement of Accounts, Auditor’s Report (if not already incorporated in the Audited Statement of Accounts), the Proxy Register with Proxy Register with Proxies and the Register of Director’s share holdings while latter Register shall remain open and accessible during the continuance of the Meeting. The board shall cause to be prepared the Annual List of Members Summary of the Share Capital, Balance Sheet and Profit and Loss Account and forward the same to the Registrar in accordance with Section 159, 161 and 220 of the Act.

meeting andAnnual Summary

97 The Board may, whenever it thinks fit, call an Extra-ordinary General Meeting and it shall do so upon a requisition, in writing, by any members holding in the aggregate not less than one-tenth of such of the paid-up capital as at that date carries the right of voting in regard to the matter in respect of which the requisition has been made

Extraordinary General Meeting

98 Any valid requisition so made by members must state the object or objects of the meeting proposed to be called, and must be signed by the requisitionists and be deposited at the office provided that such requisition may consist of several documents in like form each signed by one or more requisitionists

Requisition of members to state object of meeting

99 Upon the receipt of any such requisition, the Board shall forthwith call an Extraordinary General Meeting and if they do not proceed within twenty one days from the date of the requisition being deposited at the office to cause a meeting to be called on a day not later than forty-five days from the date of deposit of the requisition the requisitionists or such of their number as represent either a majority in value of the paid-up share capital held by all of them or not less than one-tenth of such of the paid-up share capital of the Company as is referred to in Section 169(4) of the Act, whichever is less, may themselves call the Meeting, but in either case any meeting so called be held within three months from the date of the delivery of the requisition as aforesaid

On receipt of requisition Directors to call meeting and in default requisitionists may do so

100 Any Meeting called under the foregoing articles by the requisitionists shall be called in the same manner, as nearly as possible, as that in which meeting are to be called by the Board.

Meeting called by requisitionists

101 Save and except the Statutory Meeting, twenty-one day’s notice at the least of every General Meeting, and the general nature of the business to be transacted thereat, shall be given in the manner hereinafter provided, to such persons as are under these Articles entitled to receive notice from the Company. Provided that in the case of an Annual General Meeting, with the

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consent in writing of all members entitled to vote thereat and in case of any other Meeting, with the consent of the members holding not less than 95 percent of such part of the paid up share capital of the Company as gives a right to vote at the Meeting, a Meeting may be convened by a shorter notice.

102 In the case of an Annual General Meeting, if any business other than: (i) The consideration of the Accounts, Balance Sheets and Reports of the

Board of Directors and Auditors; (ii) The declaration of dividend; (iii) The appointment of Directors in place of those retiring; (iv) The appointment of and fixing of the remuneration of the Auditors, is to be transacted and in the case of any other Meeting in any event there shall be annexed to the notice of the Meeting a statement setting out all material facts concerning each such items of business including in particular the nature of concern or interest, if any, therein of every Director, and the Manager, if any. Where any such item or special business relates to, or affects any other company, the extent of share holding interest in the other company of every Director, and the manager, if any of the Company shall also be set out in the statement, if the extent of such shareholding interest is not less than twenty percent of the paid-up capital of that other company. Where any item of business consists of the according of approval to any document by the meeting the time and place where the document can be inspected shall be specified in the statement aforesaid.

Business to be transacted at the General Meeting and the nature thereof

103 Notwithstanding anything contained in the Articles 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 this behalf in respect of the following matters instead of transacting such business in a general meeting of the Company; (i) Any business that can be transacted by the Company in General Meeting,

and (ii) Particularly, Resolutions relating to such business as the Central

Government may by Notification, declare to be conducted only by Postal Ballot.

Postal Ballot

104 The accidental omission to give such notice as aforesaid to any of the members, or the non-receipt thereof, shall not invalidate any resolution passed at any such Meeting.

Omission to give notice not to invalidate a resolution passed

105 No general meeting, annual or Extra-ordinary, shall be competent to enter upon discuss or transact any business which has not been mentioned in the notice or notices upon which it was convened.

Meeting not to transact business not mentioned in notice

106 Five members present in person shall be quorum for a general meeting Quorum at General Meeting

107 A body corporate being a member shall be deemed to be personally present if it is represented in accordance with Section 187 or the Act

Body Corporate deemed present

108 If, at the expiration of half an hour from the time appointed for holding a Meeting of the Company, a quorum shall not be present, the Meeting is convened by or upon the requisition of members shall stand dissolved, but in any other case, the Meeting shall stand adjourned to the same day in the next week or if that day is a public holiday, until the next succeeding day which is not a public holiday at the same time and place or to such other day an at such other time and place in the city or town in which the office of the Company is for the time being situated, as the Board may determine and if at such adjourned Meeting a quorum is not present at the expiration of half an hour from the time appointed for holding the Meeting, the members, present shall be a quorum, and may transact the business for which the meeting was called

If quorum not present, meeting to be dissolved or adjourned

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109 The Chairman, if any of the Directors shall be entitled to take the Chair at every General Meeting, whether Annual or Extra – Ordinary. If there be no such Chairman of the directors, or if at any Meeting be shall not be present within fifteen minutes of the time appointed for holding such Meeting or if he shall be unable or unwilling to take the chair, then the directors present shall elect another Director as Chairman, and if no Director be present or if all the Director present decline to take the Chair, then the members present shall elect one of their member to be the Chairman.

Chairman of General Meeting

110 No business shall be discussed at any General Meeting except the election of the Chairman whilst the Chair is vacant.

No business except election of Chairman

111 The chairman with the consent of the members may adjourn any Meeting from time to time and from place to place within the city in which the office of the Company is situated. But no business shall be transacted at any adjourned meeting other than the business left unfinished at the Meeting from which the adjournment took place.

Chairman with consent may adjourn

112 At any General Meeting, a resolution put to vote at the meeting shall be decided on show of hand unless a poll (before or on the declaration of The result on a show of hands) is ordered to be taken by the Chairman of the meeting of his own motion or demanded by any member or members present in person or by proxy and holding shares in the company which confer a power to vote on the resolution not being less than one tenth of the total voting power in respect of the resolution or on which an aggregate sum of not less than Rupees Fifty Thousand only has been paid up. The demand for a poll may be withdrawn at any time by the person or persons making the demand. Unless a poll is so ordered to be taken or demanded, a declaration by the Chairman that a resolution has, on a show of hands, been carried or carried unanimously or by a particular majority or lost an entry to that effect in the minute proof of the number or proportion of the votes recorded in favour of or against that resolution

Question at General Meeting how decided

113 In case of an equality of votes, the Chairman shall be on a show of hands and at a poll (if any) have a casting vote in addition to the vote or votes to which he may be entitled as a member.

Chairman’s casting vote

114 If a poll is demanded as aforesaid, the same shall subject to Article 116 be taken at such time (not later than forty-eight hours from the time when the demand was made) and place within the city or town in which the office of the Company is for the time being situated and either by open voting or by ballot, as the Chairman shall direct, and either at one or after an interval or adjournment or otherwise, and the result of the poll shall be deemed to be the resolution of the Meeting at which the poll was demanded. The demand for a poll may be withdrawn at any time by the person or persons who made the demand.

Poll to be taken if demanded

115 Where a poll is to be taken, the Chairman of the Meeting shall appoint two scrutineers to scrutinize the vote given on the poll and to report thereon to him. One of the scrutineers so appointed shall always be a member (not being an officer or employee of the Company) present at the Meeting provided such a member is available and willing to be appointed. The Chairman shall have power at any time before the result of the poll is declared to remove a scruitneer from office and fill vacancies in the office of scrutineer arising from such removal or from any other cause.

Scrutineers at Poll

116 Any poll duly demanded on the election of a Chairman of a Meeting or on any question of adjournment shall be taken at the Meeting forthwith.

Poll to be takenwithout adjournment

117 The demand for a poll except on the question of the election of the Chairman and on an adjournment shall not prevent the continuance of the Meeting for the transaction of any business other than the question or which the poll has been demanded.

Demand for poll not to prevent transaction of other business.

118 No member shall be entitled to vote either personally or by proxy at any General Meeting or Meeting of any class of shareholders either upon a show of hands or upon a poll in respect of any shares registered in his name on

Member in arrears not to vote

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which any calls or other sums presently payable by him have not been paid or in regard to which the Company has exercised any right of lien.

119 Subject to the provision of these Articles and without prejudice to any special privileges or restriction as to voting for the time being attached to any class of shares for the time being forming part of the capital of the Company, every member not disqualified by the last preceding Article shall be entitled to be present, and to speak and vote at such Meeting, and on a show of hands every member present in person or by proxy shall be in proportion to his share of the paid-up equity share capital of the Company. Provided, however, if any preference shares holder be present at any Meeting of the Company, save as provided in clause (b) of sub-section (2) of Section 87, he shall have a right to vote only one resolution placed before the Meeting which directly affect the rights attached to his preference shares.

Number of votes to which member entitled

120 (a) A body corporate (whether a company which in the meaning of the act or not) may by resolution of its Board of Director or other governing body, authorize such person as it thinks fit to act as its representative at any meeting of the Company, or at any meeting of any class of members of the Company. A person authorized by resolution as aforesaid said be entitled to exercise the same rights and power (including the right to vote by proxy on behalf of the body corporate which he represents, as that body could exercise if it were a member, creditor or holder of debentures of the Company

(b) Where the President of India or the Governor of a State is a member of the company, the President or, as the case may be, the Governor may appoint such persons as he thinks fit to act as his representative at any meeting of the Company or at any meeting of any class of members of the Company an shall be entitled to exercise the same rights and powers, including the right to vote by proxy, as the President or, as the case may be, the Governor could exercise as member of the Company.

(c) Where any shares in the Company are held in trust by a person (hereinafter referred to as the Trustee) the rights and powers (including the right to vote by proxy) exercisable at any meeting of the company or at any meeting of any class of members of the company by the trustee as a member of the company shall be exercisable in the manner provided in Section 187B of Act, save as provided by section of the Act

Representation of corporation

121 On a poll taken at a meeting of the Company, a member entitled to more than one vote, or his proxy or other person entitled to vote for him, as the case may be need not, if he votes, use all his votes or cast in the same way all the votes he uses.

Casting of votes by members entitled to more than one vote.

122 A member of unsound mind or in respect of whom an order has been made by upon a poll by his committee or other legal guardian in respect of any shares registered in his name and any such committee or guardian may, on poll vote by proxy and if any member be a minor, the vote in respect of his share or shares, shall be exercised by his guardian, or any one of his guardian, if more than one to be selected in case of dispute by the Chairman of the meeting.

How members of unsound mind and minor may vote

123 If there be joint registered holders of any shares, any one of such persons may vote at any meeting or may appoint another person(whether a member or not) as his proxy in respect of such shares, as if he were solely entitled thereto but the proxy so appointed shall not have any right to speak at the meeting , and if more than one of such joint – holders be present at any meeting, then one of the said persons so present whose name stands higher on the Register shall alone be entitled to speak and to vote in respect of such shares, but the other or other of the joint-holders shall be entitled to be present in the meeting, Several executors or administrators of a deceased member in whose name shares stand shall for the purpose of these articles be deemed joint-holders thereof.

Votes of Joint Members

124 Subject to the provision of these Articles votes may be given either personally or by proxy. A body corporate being a member may vote either by a proxy or

Voting in person or by proxy

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by a representative duly authorized in accordance with Section 187 of the Act and such representative shall be entitled to exercise the same right and power (including the right to vote by proxy) on behalf of the body corporate which he represents, as that body corporate could exercise if it were an individual member.

125 Any person entitled under Article 82 and/or under these Articles to transfer any share may vote at any General Meeting in respect thereof in the same manner as if he were the registered holder of such shares, provided that forty-eight hours at least before the time of holding the meeting or adjourned meeting, as the case may be, at which he proposes to vote he shall satisfy the Directors of his rights to transfer such shares and give such indemnity ( if any) as the Directors may require or the Directors shall have previously admitted his right to vote at such Meeting in respect thereof

Votes in respect of shares of deceased and insolvent member

126 Every proxy (whether a member or not) shall be appointed in writing under the hand of the appointer or his attorney, or if such appointer is a body corporate under the Common Seal of such corporation, or be signed by an officer or any attorney duly authorized by it, and any committee or guardian may appoint such proxy. The Proxy so appointed shall not have any right to speak at the Meeting

Appointment of Proxy

127 An instrument of proxy may appoint a proxy either for the purpose of a particular Meeting specified in the instrument and any adjournment thereof or it may appoint for the purpose of every Meeting of the Company or of every Meeting to be held before a date specified in the instrument and every adjournment of any such Meeting.

Proxy either for specified meeting or for a period

128 A member present by proxy shall be entitled to vote both on a show of hands and on a poll.

Vote by proxy

129 The instrument appointment a proxy and the power of attorney or other authority, if any under which it is signed or a notarially certified copy of that power or authority, shall be deposited at the office not later than forty-eight hours before the time for holding the meeting at which the person named in the instrument proposes to vote and in default the instrument or proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiration of twelve months from the date of its execution

Deposit of instrument of appointment

130 Every instrument of proxy whether for a specified Meeting or otherwise shall as nearly as circumstances will admit, be in any of the format set out in Schedule IX of the Act.

Form of Proxy

131 A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or any power of attorney under which such proxy was signed or the transfer of the share in respect of which the vote is given, provided that no intimation in writing of the death or insanity, revocation or transfer shall have been received at the office before the meeting

Validity of votes given by proxy notwithstanding death, revocation or transfer

132 No objection shall be made to the validity of nay vote, except at any Meeting or poll at which such vote shall be tendered and every vote given personally or by proxy, not disallowed at such Meeting or poll shall be deemed valid for all purposes of such Meeting or poll whatsoever.

Time for objections of votes

133 The Chairman of any Meeting shall be the sole judge of the validity of every vote tendered at such meeting. The Chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll.

Chairman of any meeting to be the judge of validity of any vote.

MINUTES OF MEETING 134 (a) The Company shall cause minutes of all proceedings of every General

Meeting to be kept, within thirty days of the conclusion of every such Meeting concerned, entries thereof in books kept for that purpose with their pages consecutively numbered.

(b) Each page of every such book shall be initialled or signed and the last page of the record of proceedings of each Meeting in such book shall be dated and signed by the chairman of the same Meeting within the

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aforesaid period of thirty days or in the event of the death or inability of that Chairman within that period by a Director duly authorized by the Board for the purpose

(c) In no case the minutes of proceedings of a Meeting shall be attached to any such book as aforesaid by pasting or otherwise.

(d) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.

(e) All appointment of officers made at any Meeting aforesaid shall be included in the minutes of the Meeting.

(f) Nothing herein contained shall require or be deemed to require the inclusion, of any such minutes, of any matter which in the opinion of the Chairman of the Meeting (i) is or could reasonably be regarded as defamatory on any persons; or (ii) is irrelevant or immaterial to the proceedings; or (iii) is detrimental to the interest of the Company.

The Chairman of the meeting shall exercise an absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the aforesaid grounds.

(g) Any such minutes shall be evidence of the proceedings recorded therein.

(h) The book containing the minutes of proceedings of General Meeting shall be kept at the office of the company and shall be open during business hours, for such periods not being less in the aggregate than two hours in each working day as the Directors may determine, to the inspection of any member without charge

DIRECTORS

135 Until otherwise determined by a general Meeting of the company and subject to the provisions of Section 252 and 259 of the Act, the number of Directors (excluding Directors appointed under Articles 138, 139,140 and 141) shall not be less than three and not more than such numbers as may be prescribed and provided in the Act for the time being

NUMBER OF DIRECTORS

136 The first Directors of the Company are: i. KANTILAL HARIA ii. MANISH HARIA iii. KANTILAL MARU

FIRST DIRECTORS

137 Subject to the provisions of Section 255 of the Act, all the Directors of the Company other than Directors appointed under Articles 138, 139,140 and 141 and the Managing Director shall be persons whose period of office shall be liable to determination by retirement of Directors by rotation and same as otherwise expressly provided in the Act be appointed by the Company in General meeting.

Appointment of Directors

138 (a) Notwithstanding anything to the contrary contained in these Article, so long as any money remain owing by the Company to the industrial Development Bank of India (IDBI), Industrial Finance Corporation of India (IFCI), The Industrial Credit and investment Corporation of India Limited (ICICI) or Life Insurance Corporation of India (LIC) or Unit Trust of India (UTI) or to any other public financial Institutions, corporation or credit corporation out of any loans granted by them to the Company or so long as IDBI, IFCI, ICICI, LIC and Unit Trust of India (UTI) or any such public financial institutions, corporation or credit corporation is hereinafter in this Article referred to as ”the Corporation” continue to hold debentures in the Company by direct subscription or private placement, or so long as the Corporation holds shares in the Company as a result of underwriting or subscription pursuant to such underwriting or so long as any liability of the

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Company arising out of any guarantee furnished by the Corporation on behalf of the Company remains outstanding, the Corporation shall have a right to appoint, from time to time, any person or persons, as a Director or Directors (which Director or Directors is / are hereinafter referred to as “ Nominee Director’s”) on the Board of the Company and to remove from such office any person or persons so appointed and to appoint any person or persons in his or their place(s).

(b) The Board of Directors of the Company shall have no power to remove

from office that Nominee Director(s) shall not be required to hold any share qualification in the Company. Also at the option of the Corporation such Nominee Director(s) shall not be liable to retirement by rotation of Directors. Subject as aforesaid, the Nominee director(s) shall be entitled to the same rights and privileges and be subject to the same obligations as any other Director of the Company.

(c) The Nominee Director(s) so appointed shall hold the said office only so long as any money remain owing by the Company to the Corporation or so long as the Corporation holds Debentures in the Company as a result of direct subscription of private placement or so long as the Corporation holds shares in the Company as a result of underwriting or subscription pursuant to such underwriting or the liability of the Company arising out of any guarantee is outstanding and the Nominee Directors(s) so appointed in exercise of the said power shall ipso facto vacate such office immediately the money owing by the Company to the Corporation is paid off or on the Corporation ceasing to hold such debentures or share in the Company or on the satisfaction of the liability of the Company arising out of any guarantee furnished by the corporation.

(d) The Nominee Director(s) appointed under this Article shall be entitled to receive all notices of the committee of which the Nominee Director(s) is/are member(s) as also the minutes of such meetings. The Corporation shall also be entitled to receive all such notice and minutes.

(e) The Company shall pay to the Nominee Directors(s) sitting fees and expenses which the other Directors of the Company are entitled but if any other fees, commission, money or remuneration in any form is payable to the Directors of the Company, the fees, commission, money and remuneration in relation to such Nominee Director(s) shall accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation. Any expenses that may be incurred by the Corporation or such Nominee Director(s) in connection with their appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation or as the case may be to such Nominee Director(s).

(f) Provided that if any such Nominee Director(s) is an officer of the corporation the sitting fees, in relation to such Nominee Director(s) shall also accrue to the Corporation and the same shall accordingly be paid by the Company directly to the corporation.

(g) Provided also that in the event of the Nominee Director(s) being appointed as a member of any Committee, such Nominee Director(s) shall exercise such powers and duties as may be approved by the Corporation and have such right and powers as are usually exercised or available to member of the Committee in the management of the affairs as may have been delegated to such Committee by the Board.

139 Whenever Directors enter into a contract with any Government, Central, State

or Local Authority, any public financial institution or any other person or Power to appoint exofficio

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persons (hereinafter referred to as” the appointer”) for borrowing any money or for providing any guarantee or security or for technical collaboration or assistance or for underwriting or enter into any other arrangement whatsoever, the Directors shall have, subject to the provisions of Section 255 of the Act, the power to agree that such appointer shall have the right to appoint or nominate by notice in writing addressed to the Company, one or more Directors on the Board for such period and upon such conditions as may be mentioned in the agreement and that such Director or Directors may not be liable to retire by rotation nor be required to hold any qualification shares. The Directors may also agree that any required to hold any qualification shares. The Directors may also agree that any such Director or Directors may be removed from time to time by the appointer entitled to appoint or nominate them and the appointer may appoint another or others in his or their place and also fill in any vacancy, which may occur as a result of any such Director or Directors ceasing to hold that office for any reason whatsoever. The Directors appointed or nominated under this Article shall be entitled to exercise and enjoy all or any of the rights and privileges exercised or enjoyed by the Director or Directors of the Company including payment of remuneration and travelling expenses to such Director or Directors as may be agreed by the Company with the appointer

Directors

140 If it is provided by the Trust deed, securing or otherwise, in connection with any issue of debentures of the Company, that any person shall have power to nominate a Director of the Company, then in the case of any and such issue of debenture, the person or persons having such power from time to time may appoint a Director accordingly. A Debenture Director may be removed from office at any time by the person or persons in whole for the time being is vested the power under which he was appointed and another Director may be appointed in his place. A Debenture Director shall not be liable to retire by rotation nor bound to hold any qualification shares.

Debenture Directors

141 The Board may appoint an Alternate Director to act for a Director (hereinafter called the “Original Director”) during his absence for a period of not less than three months from the State in which the meetings of the Board are ordinarily held. An Alternate Director so appointed shall not hold office for a period longer than that permissible to the original Director in whose place he has been appointed and shall vacate office if and when the original Director returns to the State in which the meetings of the Board are ordinarily held. If the term of the office of the original Director is determined before he so returns to that State aforesaid, any provisions in the Act or in these Articles for the automatic reappointment of retiring Director in default of another appointment shall apply to the original Director and not to the Alternate Director.

Appointment of Alternate Director

142 Subject to the provisions of Section 260 of the act, the Board shall have Power at any time and from time to time, to appoint any other qualified person to be an Additional Director, but so that the total number of Directors shall not at any time exceed and maximum fixed under Article 135. Any such Additional Director shall hold office only up to the date of the next Annual General Meeting.

Appointment of Additional Director

143 Subject to the provisions of Section 262, 264 and 284(6) of the Act, the board shall have power at any time and from time to time to appoint any other qualified person to be a Director to fill a casual vacancy. Any person so appointed shall hold office only up to which the Director in whose place he is appointed would have held office if it had not been vacated by him.

Director’s power to fill casual vacancies

144 A Director shall not be required to hold any qualification shares.

Qualification of Directors

145 (a) Subject to provision of the Act, a Managing Director or Directors, who are in the whole-time employment of the company may be paid remuneration either by way of monthly payment or at specified percentage of the net profit of the Company or partly by one-way and partly by other.

(b) Subject to the provisions of the Act, a Director who is neither in the whole time employment nor a Managing Director may be paid remuneration

Remuneration of Directors

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either

(i) By way of monthly, quarterly or annual payment or (ii) By way of commission, if the Company by a Special resolution

authorizes such payment. (c) The fee to a Director for attending a meeting of the Board of Committee

thereof shall be the maximum sum applicable to the Company as may be prescribed by law or by the Central Government or such other lesser sum as the Board may from time to time determine

(d) If any Director be called upon to perform extra services or make special exertions or efforts (including any work done by him as a member of any Committee of the board) or provide any guarantee on behalf of the Company or for the purposes of securing any borrowing or liability of the company, the Board may arrange with such Director for special remuneration for such service or exertions or efforts either by fixed sum or otherwise or for payment of guarantee commission as may be determined by the Board and such remuneration maybe either in addition to or in substitution for his remuneration as above provided

146 The Board may allow and pay to any Director, who is not a bonafide Resident of the place where the meetings of the Board are ordinarily held and who travels for the purpose of attending and returning from meetings of the Board of Directors or any Committee thereof or General Meetings, his domestic travelling and hotel and other expenses incurred by him in consequence or for the purpose of his attendance, or where the Director travels in connection with the business of the Company, his travelling, hotel or other expenses in addition to his fees for attending such meetings as above specified or other remuneration payable to him. Provided that if so desired by the corporation appointing a Director, the Company may instead reimburse the Corporation appointing such Director, any sums that may be paid to that Director in respect of this attendance at the meeting of the Board.

Travelling expenses incurred by Director for attending meeting or on Company’s business

147 The continuing Directors, may act notwithstanding any vacancy in their body, but if, and so long as their numbers is reduced below the minimum number fixed by Article 135 hereof, may act, for the purpose of increasing the number of Directors to that number, or of summoning a General Meeting but for no other purpose

Directors may act not withstanding any vacancy

148 Subject to Section 283(2) of the Act, of the Act, the office of the Director shall become vacant if; (a) He is found to be unsound mind by a Court of Competent jurisdiction or (b) He applies to be adjudicated an insolvent; or (c) He is adjudged an insolvent; or (d) He fails to pay any call made on him in respect of shares of the company

held by him, whether alone or jointly with others, within six months from the last date fixed for the payment of such call unless the Central Government has by notification in the Official Gazette removed the disqualification incurred by such failure; or

(e) He absents himself from three consecutive meetings of the Directors or from all meeting of the Directors for a continuous period of three months, whichever is longer, without leave of absence from the Board; or

(f) He becomes disqualified by an order of the Court under section 203 of the Act. (g) He removed in pursuance of Section 284; or (h) 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 295 of the Act; or

(i) He acts in contravention of Section 299 of the Act; or

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150

(j) He is convicted by a Court of an offence involving moral turpitude and is sentenced in respect thereof to imprisonment for not less than six months;

(k) Having been appointed a Director by virtue of his holding any office or other employment in the Company, he ceases to hold such office or other employment in the Company; or

(l) He resigns his office by a notice in writing addressed to the Company 149 (a) A Director or his relative, firm in which such Director or relative is partner,

or any other partner, in such firm or a private company of which the Director is a member or Director, may enter in any contract with the company for the sale, purchase or supply of any goods, materials or services or for underwriting the subscription of any shares in or debentures of the Company, the sanction of the Board and the previous approval of the Central government as may be required shall be obtained in accordance with Section 297 of the Act.

(b) No sanction shall, however be necessary for (i) Any purchase of goods and material from the Company, or the sale of

goods or materials to the Company by any such Director, relative, firm, partner or private company as aforesaid for cash at prevailing market prices; or

(ii) Any contract or contracts between the company on one side and any such Director, relative, firm , partner or private company on the other for sale, purchase or supply of any goods, materials and services in which either the Company or the Director, relative, firm, partner or private company as the case may be, regularly trades or does business, where the value of goods and materials or cost of such services does not exceed ` 5000/- in the aggregate in any year comprised in the period of the contract or contracts.

(c ) Provided that in circumstances of urgent necessity, a Director, relative, firm, partner or private company as aforesaid may without obtaining the consent of the Board enter into such contract with the Company for the sale, purchase or supply of any goods, materials or services even if the value of such goods or the cost of such services exceed ` 5000/- in the aggregate in any year comprised in the period of the contract if the consent of the Board shall be obtained to such contract or contracts at a meeting within three months of the date on which the contract was entered into.

Director may contract with company

150 A Director of the company who is in any way, whether directly or indirectly concerned or interested in a contract or arrangement or proposed contract or shall disclose the nature of his concern or interest at a meeting of the Board in the manner provided in Section 299 (2) of the Act. Provided that it shall not be necessary for a Director to disclose his concern or interest in any contract or arrangement entered into or to be entered into between two companies where any of the Directors of the Company or two or more of them together holds or hold not more than two percent of the paid up share capital in any such other company.

Disclosure of interest

151 A general notice given to the Board by the Director, to the effect that he is director or a member of specified firm and is to be regarded as concerned or interested in any contract or arrangement which may after the date of the notice, be entered into with that body corporate or firm, shall be deemed to be a sufficient disclosure of concern or interest in relation to any contract or arrangement so made. Any such general notice shall expire at the end of the financial year in which it is given but may be renewed for a further period to one financial year at a time by a fresh notice given in the last month of the financial year in which it would have otherwise expired. No such general notice and no renewal thereof shall be of effect unless either it is given at a meeting of the Board or the Director concerned takes reasonable steps to secure that it is brought up and read at the first meeting of the Board after it is

General Notice of Interest

151

given. 152 No Director shall as a Director, take any part in the discussion of , or vote on

any contract or arrangement entered into or to be entered into by or on behalf of the Company, if he is in any way, whether directly concerned or interested in such contract or arrangement, nor shall his presence count for the purpose of forming a quorum at the time of any discussion or vote, or vote, and if he does vote, his vote shall be void provided however, that nothing herein contained shall apply to: (a) Any contract of indemnity against any loss which Directors, or any one or

more of them, may suffer by reason of becoming or being a surety or sureties for the Company.

(b) Any contract or arrangement entered into or to be entered into with a public company or a private company which is a subsidiary of a public company in which the interest of the Director consists solely: (i) In his being;

(1) a director of such company, and (2) The holder of not more than shares of such number or value

therein as is requisite to qualify his appointment as a Director thereof, he having been nominated as such director by the Company

(ii) In his being a member holding not more than 2% off its paid-up share capital

Interested Directors not to participate or vote in Board’s proceedings

153 The Company shall keep a Register in accordance with Section 301(1) and shall, within the time specified in Section 301(2) enter therein such of the particulars as may be relevant having regard to the application thereto of Section 297 or Section 299 of the Act as the case may be. The Register aforesaid shall also specify, in relation to each Director of the Company the names of the bodies corporate and firms of which notice has been given by him under Article 151. The register shall be kept at the office of the Company and shall be open to inspection at such office and extracts may be taken there from and copies thereof may be required by any member of the Company to the same extent, the same manner, the same manner, and on payment of the same fee as in the case of the Register of Members of the Company and the provision of Section 163 of the Act shall apply accordingly.

Register of Contracts in which Directors are interested

154 A Director may be or become a Director of any company promoted by the Company, or in which it may be interested as a Vendor, shareholder, or otherwise and no such Director shall be accountable for any benefit received as director or shareholder of such company except in so far as Section 309(6) or Section 314 of the Act may be applicable

Director may be director of companies promoted by the Company

155 At every Annual General meeting of the Company, one-third or such of the Directors for the time being as are liable to retire by rotation or if their number is not three or a multiple of three, the number nearest to one-third shall retire from office. The no-retiring Directors and Debenture Directors, if any, shall not be subject to retirement under this clause and shall not be taken into account in determining the rotation of retirement or the number of Directors to retire.

Retirement and rotation of Directors

156 Subject to provision of the Act, the Directors to retire by rotation under Article 155, at every Annual General Meeting shall be those who have been longest in office since their last appointment, but as between persons who became Directors on the same day, those who are to retire, shall in default of and subject to any agreement among themselves, be determined by lot

Ascertainment of Directors retiring by rotation and filling of vacancies

157 A retiring Director shall be eligible for re-election Eligibility of re-election

158 Subject to Section 258 of the Act, the Company at the General Meeting at which a Director retires in the manner aforesaid, may fill up the vacated office by electing a person thereto

Company to appoint successors

152

159 (a) If the place of the retiring Director is not so filled up and the Meeting has not expressly resolved not to fill the vacancy, the Meeting shall stand adjourned till the same day in the next week, at the same time and place, or if that day is a public holiday, till the next succeeding day which is not a public holiday, at the same time and place.

(b) If at the adjourned Meeting also, the place of the retiring Director is not filled up and that Meeting also has not expressly resolved not to fill the vacancy, the retiring Director shall be deemed to have been re-appointed at the adjourned Meeting unless:

i. At the Meeting or at the previous Meeting, resolution for the re-appointment of such Director has been put to the Meeting and lost

ii. The retiring Director has, by notice in writing addressed to the Company or its Board, expressed his unwillingness to be so appointed

iii. He is not qualified or is disqualified for appointment; iv. A resolution, whether special or ordinary, is required for the

appointment or reappointment by virtue of any provisions of the Act; or v. The provision to sub-section (2) of Section 263 of the Act is applicable

to the case.

Provision in default of appointment

160 Subject to Section 258 of the act, the Company may by Ordinary Resolution from time to time, increase or reduce the number of Directors within the limits fixed in that behalf by these Articles and may alter their qualifications and the Company may (subject to the provisions of Section 284 of the Act) remove any Director before the expiry of his period of office and appoint another qualified person in his stead. The person so appointed shall hold office during such time as the Director in whose place he is appointed would have held the same if he had not been removed.

Company may increase or reduce the number of Directors

161 (a) No person, not being a retiring Director, shall be eligible for appointment to the office of a Director at any general Meeting unless he or some member intending to propose him has, not less than fourteen days before the meeting, left at the office of the Company a notice in writing under his hand signifying his candidature for the office of Director or the intention of such member to propose him as a candidate for that office along with a deposit of ` 500/- (Rupees Five Hundred only) or such sum as may be the time being be prescribed by the Act which shall be refunded to such person or, as the case may be, to such member if the person succeeds in getting elected as a Director.

(b) Every person (other than a Director retiring by rotation or otherwise or a person who has left at the office of the Company a notice under Section 257 of the Act signifying his candidature for the office of the Director) proposed as a candidate for the office of a Director shall sign and file with the Company the consent in writing to act as a Director, if appointed.

(c) A person other than a Director re-appointed after retirement by rotation or immediately on the expiry of his term of office or an Additional or Alternate Director, or a person filing a casual vacancy in the office of a Director, under Section 262 of the Act appointed as Director or re-appointed as an Additional Director or Alternate Director, immediately on the expiry of his term of office, shall not act as a Director of the company, unless he has within thirty days of his appointment signed and filed with the Registrar his consent in writing to act as such Director

Notice of candidate for office of Director except in certain case.

162 The Company shall keep at its office a Register containing the particulars of its Directors, Manager, Secretary and other persons mentioned in Section 303 of the Act, and shall otherwise comply with the provisions of the said Section in all respects.

Register of Directors

163 (a) Every Director (including a person deemed to be a Director by virtue of the Explanation to Sub-Section (1) of Section 303 of the Act), Managing Directors, Manager or Secretary of the Company shall within twenty days

Disclosure by a Director of his appointment to

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of his appointment to any of the above offices in any other body corporate disclose to the Company, the particulars relating to his office in the other body corporate which are required to be specified under sub-section (1) of Section 303 of the Act.

(b) Every Director and every person deemed to be Director of the Company by virtue of sub-section (10) of Section 307 of the Act shall give notice to the Company of such matters relating to himself as may be necessary for the purpose of enabling the Company to comply with the provisions of that Section.

other body corporate and holdings of shares and debentures of the Company

MANAGING DIRECTOR 164 Subject to the provisions of the Act and of these Articles, the Board shall have

power to appoint from amongst the Director or Directors as Managing Director or Managing Directors of the Company for such period and upon such terms and conditions as the Board thinks fit, and subject to the provisions of Article 165, the Board may by resolution vest in such Managing Director or Managing Directors such power may be made exercisable for such period or periods, and upon such conditions and subject to such restrictions as it may determine. The remuneration of a Managing Director may be by way of monthly payment, fee for such meeting or participation in profits, or by any, or all these modes or any other mode not expressly prohibited by the Act.

Board may appoint Managing Director or Managing Directors

165 The Managing Director or Managing Directors shall not exercise the power to : (a) Make calls on shareholders in respect of money unpaid on the shares in

the Company (b) Issue debentures; and except to the extent mentioned in the resolution

passed at the Board meeting under Section 292 of the Act shall also not exercise the power to

(c) Borrow moneys, other than on debentures (d) Invest the funds of the Company, and (e) Make loans

Restriction on Power

166 A Managing Director shall not, while he continues to hold that office, be subject to retirement by rotation, in accordance with Article of 139, if he ceases to hold the office of Directors, he shall ipso facto and immediately cease to be a Managing Director

Special Position of Managing Director

WHOLE TIME DIRECTOR 167 Subject to the provision of the Act and these Articles, the Board shall have the

power to appoint from amongst the Directors any Director or Directors as a Whole-time Director(s) of the Company (to be designated as decided by the Board) for a fixed term not exceeding five years at a time or without prescribing any fixed term and upon such terms and condition as the Board thinks fit, Any Whole-time Director so appointed shall have such duties and responsibilities and shall exercise such powers as the Board may from time to time decide, and such may be made exercisable for such period or periods and upon such conditions and subject to such restrictions as it may determine. A Whole-time Director shall report and be responsible to the Board or may other person appointed by the Board. The remuneration of a Whole time Director may be by way of monthly payment or participation in profits and/or any other mode not prohibited by the Act

Appointment of Whole-time Directors

168 Subject to the provisions of Section 255 and other applicable provisions, if any of the Act, a whole-time Director shall not, while he continues to hold office, be subject to retirement by rotation and shall not be reckoned in determining the number of Directors to retire at any General Meeting and shall not be taken into account for the purpose of determining the retirement of Directors of rotation. A whole time Director, subject to the provisions of any contract between him and the Company, shall be subject to the same provisions as to resignation and removal as the other Directors and he shall, ipso facto and immediately, cause to be a Whole-time Director if he ceases to hold the office of a Director

Position of the Whole time Director

169 The Company shall not appoint or employ or continue the appointment or Certain persons

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employment of a person as its Managing or Whole-time Director who; (a) Is an undischarged insolvent, or has at any time been adjudged an

insolvent (b) Suspends, or has at any time suspended, payment to his creditors, or

makes, or has at any time made, a composition with them or (c) Is or has at any time been, convicted by a Court of an offence involving

moral turpitude

not to be appointed Managing Director

PROCEEDINGS OF THE BOARD OF DIRECTORS 170 The Directors may meet together as a Board for the dispatch of business from

time to time and shall so meet at least once in every three months and at least four such meeting shall be held in every year. The Directors may adjourn and otherwise regulate their meetings, as they think fit.

Meeting of Directors

171 Notice of every meeting of the Board shall be given in writing to Every Director for the time being in India, and at his usual address in India, to every other Director. Such notice shall be accompanied by the agenda setting out of the business proposed to be transacted at the meeting of the Boar

Notice of meeting

172 The Board Meeting can also be held by means of video conferencing, telephonic presence, tele-conferencing, online communication or any other electronic mode as per the prevailing law.

Board meeting can be held by video conferencing

173 Subject to Section 287 of the Act, the quorum for a meeting of the Board shall be one-third of its total strength (excluding Directors, if any, whose places may be vacant at the time and any fraction contained in that one-third being rounded off as one) or two Directors, whichever is higher, provided that where at any time the number of interested Directors exceeds or is equal to two third of the total of the total strength the number of the remaining Directors, that is to say, the number of Directors who are not interested, present at the meeting being not less than two, shall be the quorum during such meeting.

Quorum

174 If a meeting of the Board could not be held for want of a quorum then the meeting shall stand adjourned to such other date and time, if any, as may be fixed by the Chairman.

Adjournment of meeting for want of quorum

175 The Secretary shall, as and when directed by any Director to do so, convene a meeting of the Board by giving a notice in writing to every other Director

When meeting to be convened

176 The Director shall from time to time, elect from amongst the Directors any one of such Directors to be the Chairman of the Board and determine the period for which he is to hold office. If in any meeting of the Board the Chairman is not present within 15 minutes after the time appointed for holding the same, or if present is unable or unwilling to take the chair, the Director present may elect any other Director to be the Chairman of the Meeting

Chairman

177 Questions arising at any meeting of the Board of Directors or in resolution to be passed by circular shall be decided by a majority of votes and in the case of an equality of votes, the Chairman shall have a second or casting vote.

Question by Board how decided

178 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 which by or under the Act or Articles of the Company are for the time being vested in or exercisable by the Board generally.

Powers of Board

179 Subject to the restrictions contained in Section 292 of the Act the Board may delegate any of their powers to one or more Committees of the Board consisting of such member or members of its body as it thinks fit, and it may from time to time revoke and discharge any such Committee of the Board either wholly or in part, and either as to persons or purposes; but every Committee of the Board so formed shall in the exercise of the powers so delegated conform to any regulations that may from time to time be imposed on it by the Board. All acts done by any such Committee of the Board in conformity with such regulations and in fulfilment of the purposes of their appointment but not otherwise shall have the like force and effect as if done by the Board.

Directors may appoint Committee

180 The meetings and proceedings of any such Committee of the Board consisting Meeting of

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of two or more members shall be governed by the provisions herein contained for regulating the meeting and proceedings of the Directors, so far as the same are applicable thereto and are not superseded by any regulations made by the Directors under the last proceeding Article.

Committee how to be governed

181 No resolution shall be deemed to have been duly passed by the Board or by a Committee thereof by circulation unless the resolution has been circulated in draft, together with the necessary papers, if any, to all the Directors or all the members of the Committee, then in India (not being less in number than the quorum fixed for a meeting of Board, or a Committee as the case may be) and to all other Directors or members of the committee at their usual address in India and has been approved by such of the Directors or members as are then in India, or by majority of such of them, as are entitled to vote on the resolution.

Resolution by Circulation

182 All acts done by any meeting of the Board or by a Committee of the Board, or by any person acting as a Director shall not withstanding than it shall afterwards be discovered that there was some defect in the appointment of such Director or persons acting as aforesaid or that they or any of them were disqualified or had vacated office or that the appointment of any of them had been terminated by virtue of any provisions contained in the Act or in these Articles, be as valid as if every such person had been duly appointed, and was qualified to be a Director and had not vacated his office or his appointment had not been terminated; provided that nothing in this Article shall be deemed to give validity to act done by a Director after his appointment has been shown to the Company to be invalid or to have terminated.

Acts of Board or Committee valid notwithstanding any defect in appointment

183 (a) The Company shall cause minutes of all proceedings of every meeting of the Board and committee thereof to be kept by making, within thirty days of the conclusion of every such meeting, entries thereof in books kept for that purpose with their pages consecutively numbered

(b) Each page of every such book shall be initiated or signed and the last page of the record of proceeding of each meeting in such book shall be dated and signed by the Chairman of the said meeting or next succeeding meeting.

(c) In no case the minutes of proceedings of a meeting shall be attached to any such book as aforesaid by pasting or coping.

(d) The minutes of each meeting shall contain a fair correct summary of the proceedings there at.

(e) All appointment of officers made at any of the meeting aforesaid shall be included in the minutes of the meeting.

(f) The minutes shall also contain (i) the names of Directors present at the meeting; and

(ii) In case of each resolution passed at the meeting the names of the directors, if any, dissenting from or not concurring in the resolution

(g) Nothing contained in sub-clause (a) to (f) shall be deemed or require the inclusion in any such minutes of any matter which, in the opinion of the Chairman of the meeting:-

(i) is, or could reasonably be regarded as defamatory of any person; (ii) is irrelevant or immaterial to the proceedings; or (iii) Is detrimental to the interest of the Company

The Chairman shall exercise an absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the ground specified in this sub clause.

(h) Minutes of meetings kept in accordance with the aforesaid provision shall be evidence of the proceeding recorded therein.

Minutes of proceeding of Meeting of the Board and Co

184 The Board may exercise all such powers of the Company and do all such acts and things as are not, prohibited by the Act or other Act or by the memorandum or by the Articles or the Company required to be exercised by the Company in the General Meeting, subject nevertheless to these Articles to the provisions of the Act, or any other Act and to such regulations being not inconsistent with the aforesaid regulations as may be prescribed by the

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Company in General Meeting but no regulation made by the Company in General Meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made. Provided that the Board shall not, except with the consent of the company in General Meeting: (a) Sell, lease or otherwise dispose off the whole, or substantially the whole,

of the undertaking of the Company or where the Company owns more than one undertaking of the whole, or any such undertaking;

(b) Remit, or give time for the repayment of any debt due by a Director

(c) Invest otherwise than in trust securities the amount of compensation received by the Company in respect of the compulsory acquisition of any such undertaking as is referred to in clause (a) or of any premises or properties used for any such undertaking and without which it cannot be carried on or can be carried on only with difficulty or only after a considerable time;

(d) Borrow moneys where the moneys to be borrowed together with the moneys already borrowed by the Company (apart from temporary loans obtained from the Company banker in the ordinary course of business), will exceed the aggregate of the paid up capital of the Company and its free reserves that is to say reserves not set apart for any specific purpose;

Provided further that the power specified in Section 292 of the Act shall subject to these articles be exercised only at meeting of Board, unless the same be delegated to the extent therein stated; or

(e) Contribute to charitable and other funds not directly relating to the

business of the company or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed fifty thousand rupees or five percent of its average net profits as determined in accordance with the provisions of Sections 349 and 350 of the Act during the three financial years immediately proceeding, whichever is greater.

185 Without prejudice to the general powers conferred by the last proceeding Article and so as not in any way to limit or restrict those powers, without prejudice to the other powers conferred by these Articles, but subject to the restrictions contained in the last preceding Articles, it is hereby declared that the Directors shall have the following powers, that is to say, power; (a) To pay the cost, charges and expenses preliminary and incidental to the

promotion, formation, establishment and registration of the Company (b) To pay and charge to the capital amount of the Company commission or

interest lawfully payable thereat under the provisions of Section 76 and 208 of the Act.

(c) Subject to Section 292 and 297 of the Act to purchase or otherwise acquire for the Company any property, right or privileges which the Company is authorized to acquire, at or for such price or consideration and generally on such terms and conditions as they may think fit and in any such purchase or other acquisition to accept such title as the Directors may believe or be advised to be reasonably satisfactory.

(d) At their discretion and subject to the provision of the Act to pay for any property, rights or privileges acquired by or services rendered to the Company, either wholly or partially in cash or in share, bonds, debentures, mortgages, or otherwise wholly or partially in cash or in share, bonds, debentures, mortgages, or otherwise securities of the company and any such shares may be issued either as fully paid-up thereon as may be agreed upon and any such bonds, debentures, mortgages, or otherwise securities of the company and any such shares may be issued either as

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157

fully paid up thereon as may be agreed upon and any such bonds, debentures, mortgages, or other securities may be either specifically charged upon all or any part any part of the property of the Company and its uncalled capital or not so charged.

(e) To secure the fulfilment of any contracts or engagement entered into by the Company by mortgage or charge of all or any of the property of the Company and its uncalled capital for the time being or in any manner, they may think fit.

(f) To accept from any member, as may be permissible by law, surrender of his shares or any part thereof, on such terms and conditions as shall be agreed.

(g) To appoint any person to accept and hold in trust for the Company any property belonging to the Company, in which it is interested, or for any other purposes and to execute and do all such deeds and things as may be required in relation to any trust and to provide for the remuneration of such trustee or trustees.

(h) To institute, conduct, defend, compound or abandon any legal proceedings by or against the company or its officers or otherwise concerning the affairs of the Company and also to compound and allow time for payment or satisfaction of any debts due and of may claim or demand by or against the Company and to refer any differences to arbitration and observe and perform any awards made thereon.

(i) To act on behalf of the Company in all matters relating to bankrupts and insolvents.

(j) To make and give receipts, releases and other discharges for moneys payable to the Company and for the claims and demands of the company.

(k) Subject to the provisions of Section 292, 295, 370 and 372 of the Act, to invest and deal with any moneys of the Company not immediately required for the purposes thereof upon such security (not being shares of his company), or without security and in such manner as they may think fit, and from time to time vary or realize such investments. Save as provided in Section 49 of the Act, all investments shall be made and held in the Company’s own name.

(l) To execute in the name and on behalf of the Company in favour of any Director or other person who any incur or be about any personal liability whether as principal or surety for the benefit of the company, such mortgages of the company’s property (present and future) as they think fit, and any such mortgage may contain a power of sale and other powers, provisions, covenants and agreements as shall be agreed upon.

(m) To determine from time to time who shall be entitled to sign, on the Company’s behalf bills, notes, receipts, acceptances, endorsements, cheques, dividend warrants, releases, contracts and documents and to give the necessary authority for such purpose.

(n) To distribute by way of bonus amongst the staff of the Company and to give to any officer or other person employed by the company a commission on the profits of any particular business or transaction, and to charge such bonus or commission as part of the working expenses of the Company.

(o) To provide for the welfare of Directors or ex-Directors or employees or ex-

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employees of the Company and their wives, widows and families or the dependents or connections of such persons, by building or contributing to the building of houses, dwelling or chawls or by grants or money, pension, gratuities, allowances, bonus or other payments, or by creating and from time to time subscribing or contributing provident fund and other associations, institutions, funds or trusts and by providing or subscribing or contributing towards place of instruction and recreation, hospitals and dispensaries medical and other attendance and other assistance as the Board shall think fit and to subscribe or contribute or otherwise to assist or to guarantee any charitable, benevolent, religious, scientific, national or other institutions or objects which shall have any moral or other claim to support or aid by the Company, either by reason of locality of operation, or of public and general utility or otherwise.

(p) Before recommending any dividend, to set aside out of the profits of the Company such sums as they may think proper for depreciation or to depreciation or to depreciation fund, or to an insurance fund, or as Reserve Fund or any special fund to meet contingencies or to repay debentures or debenture stock, or for special dividends or for equalizing dividends or for repairing, improving, extending and maintaining any of the property of the company and for such other purposes (including the purpose referred to in the preceding clause), as the Board may in their absolute discretion, think conductive to the interest of the Company and subject to Section 292 of the Act, to invest the several sums so set aside or so much thereof as required to be invested upon such investments (other than shares of the Company) as they may think fit and from time to time deal with and vary such investments and dispose off and apply and expend all of any such part thereof for the benefit of the Company in such a manner and for such purposes as the Board in their absolute discretion, think conducive to the interest of the Company not withstanding that the matters to which the Board apply or upon which they expend the same or any part thereof, may be matters to or upon which the capital moneys of the Company might rightly be applied or expended; and to divide the Reserve Fund in such special funds as the Board may think fit with full power to transfer the whole or any portion of Reserve Fund in such special funds as the Board may think fit with full power to transfer the whole or any portion of Reserve Fund or division of a Reserve Fund and with full power to employ assets constituting all or any of the above funds, including the depreciation fund, in the business of the Company or in the purchase or repayment of debentures or debenture-stock and without being bound to pay interest on the same with power however, to the Board at their discretion to pay or allow to the credit of such funds interest at such rate as the Board may think proper.

(q) To appoint, and at their discretion remove or suspend such general managers, managers, securities, assistants, supervisors, clerks, agents and servants for permanents, temporary or special services as they may from time to time think fit and to determine their powers and duties, and fix their salaries or emoluments or remuneration and to require security in such instances and to such amount as they may think fit. And also from time to time to provide for the management and transaction of the affairs of the Company in any specified locality in India or elsewhere in such manner as they think fit and the provisions contained in the four next following sub-clauses shall be without prejudice to the general power conferred by their sub-clauses.

(r) From time to time and at any time to establish any local board for managing any of the affairs of the Company in any specified locality in India or elsewhere and to appoint any person to be members of such local bodies, and to fix their remuneration.

159

(s) Subject to Section 292 of the Act, from time to time and at any time to

delegate to any person so appointed any of the powers, authorities and discretions for the time being vested in the Boar, other than their power to make to make calls or to make loans or borrow moneys, and to authorize the members for the time being of any such local board, or any of them to fill up any vacancies therein and to act not withstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Board may think fit and the Board may at any time remove any person so appointed, and may annual or vary any such delegation.

(t) At any time and from time to time by Power of Attorney under the seal of the Company, to appoint any person or persons to be the Attorney or Attorneys of the company, for such purposes and with such power, authorities and discretions (not exceeding those vested in or exercisable by the Board under these presents and subject to the provision of Section 292 of the Act) and for such period and subject to such appointment may (if the Board think fit) be made in favour of the members or any of the members of local board established as aforesaid or in favour of any company, or the shareholders, directors, nominees, or managers of any company or firm or otherwise in favour of any fluctuating body of person whether nominated directly or indirectly by the Board and any such Power of Attorney may contain such Power for the protection or convenience of persons dealing with such Attorneys as the Board may think fit, and may contain powers enabling any such delegates or attorneys as aforesaid to sub-delegate all or any of the powers authorities and discretions for the time being vested in them.

(u) Subject to Section 294 and 297 of the Act, for or in relation to any of the matters aforesaid or otherwise for the purposes of the Company to enter into all such negotiations and contract and rescind and vary all such contracts, and execute and do all such acts deed and things in the name and on behalf of the Company as they may consider expedient.

(v) From time to time to make, vary and repeal bye-laws for regulations of the business of the company, its officers and servants.

186 The Company shall not appoint or employ at the same time more than one of the following categories of management personnel namely: (a) Managing Director and

(b) Manager

Prohibition of simultaneous appointment of different categories of managerial personnel

187 The Directors shall from time to time appoint a Secretary and at their discretion, remove any such Secretary to perform any functions, which by the Act, are to be performed by the Secretary and to execute any other ministerial or administrative duties, which may from time to time be assigned to the Secretary by the Directors. The Directors may also appoint at any time any person or persons (who need not be the Secretary) to keep the Registers required to be kept by the Company.

Secretary

THE SEAL

188 (a) The Board shall provide a Company Seal for the purpose of the Company and shall have the power from time to time to destroy the same and substitute a new Seal in lieu thereof, and the Board shall provide for the safe custody of the Seal for the time being and the Seal shall never be used except by the authority of the Board or a Committee of the Board previously given.

Custody and Use

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(b) The Company shall also be at liberty to have an official Seal in accordance with Section 50 of the Act, for use in any territory, district or place outside India.

189 Every deed or other instrument, to which the Seal of the Company is required to be affixed, shall unless the same is executed by a duly constituted attorney, be signed by two directors or one director and secretary or some other person appointed by the Board for the purpose, provided that in respect of the Share Certificate the Seal shall be affixed in accordance with Article 31(a).

Deeds how executed

DIVIDENDS 190 The profits of the Company, subject to any special rights relating thereto

created or authorized to be created by these Articles and subject to the provisions of to the period during the year for which the capital is paid up on the share held by them respectively.

Division of profits

191 The company in General Meeting may declare dividends to be paid to members according to their representative rights, but no dividends shall exceed the amount recommended by the board, but the Company in General Meeting may declare a smaller dividend.

Declaration of dividends

192 No dividend shall be declared or paid by the Company for any financial year otherwise than out of profits for that year, arrived at after providing for depreciation in accordance with the provisions of Section 205 of the Act, or out of the profits of the Company for any previous financial year or years, arrived at after providing for depreciation in accordance with these provisions, and remaining undistributed or out of both, provided that:

(a) If the company has not provided for depreciation for any previous financial year or years, the Company shall, before declaring or paying a dividend for any financial year, provide for such depreciation out of the profits of the financial year or out of the profits of any other previous financial year or years.

(b) If the Company has incurred any loss in any previous financial year or years the amount of loss or any amount which is equal to the amount provided for depreciation for that year those years, whatever is less, shall be set off against the profits of the Company for the years for which the dividend is proposed to be declared or paid or against the profits of the Company for any previous financial year or years arrived at in both cases, after providing for depreciation in accordance with the provision of Sub section (2) of Section 205 of the Act or against both.

Provided further that, no dividend shall be declared or paid as aforesaid by

the Company for any financial year, except after the transfer to the reserves of the Company of such percentage of its profits for that year as may be prescribed in accordance with section 205 of the Act or such higher percentage of its profits as may be allowed in accordance with that Section.

Dividends only to be paid out of profits

193 The Board may, from time to time pay to the members such interim dividend as in their judgment the position of the Company justifies

Interim Dividends

194 (a) The amount of dividend including interim dividend shall be deposited in separate bank a/c within five days from the date of declaration of such dividend and the said amount shall be used for payment of dividend or interim dividend

(b) Dividends shall be paid out of such A/c within 30 of declaration in cash

Dividend a/c and payment of dividend

195 Where Capital is paid in advance of calls, such capital may interest by shall not in respect thereof confer a right to dividend or participation in profits.

Capitals paid in advance not to earn dividends

196 All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which dividend is paid; but if any share is issued on terms

Dividends in proportion to amount paid – up

161

providing that it shall rank for dividend as from a particular date, such share shall rank for dividend accordingly.

197 The Board may retain the dividends upon shares in respect of which any persons is under Article 82, entitled to become a member, or which any person under that Article is entitled to transfer, until such person shall become a member, in respect of such shares or share duly transfer the same.

Retention of dividends pending transfer

198 Any one of several persons who are registered as the joint-holders of any shares may give effectual receipts for all dividends or bonus and payments on account of dividends or bonus or other moneys payable in respect of such shares.

Dividends to joint-holders

199 No member shall be entitled to receive payment of nay interest or dividend in respect of his share or shares whilst any money be due or owing from him to the Company in respect of such share or shares otherwise howsoever, either alone or jointly with any other person or persons, and the Board may deduct from the interest or dividend payable to any member all sums of money so due from him to the Company.

No member to receive dividends whilst indebted to Company and right of reimbursement thereof

200 A transfer of shares shall not pass the right to any dividend declared thereon before the registration of the transfer.

Transfer of Shares must be registered

201 Unless otherwise directed, any dividend may be paid by cheque or warrant or by a pay slip or a receipt having the force of a cheque or warrant sent through the post to the registered address of the members or person entitled or in case of joint-holders to that one of them first named in the Register in respect of the joint-holders to that one of them first named in the Register in respect of the joint holdings. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. The Company shall not be liable or responsible for any cheque or warrant or pay slip or receipt lost in transmission, or for any dividend lost to the member or person entitled thereto by the forged endorsement of any cheque or warrant or the forged signature of any pay slip or receipt or the fraudulent recovery of the dividend by any means

Dividend how remitted

202 The Board shall forfeit no unclaimed or unpaid dividend. Where a dividend has been declared by the Company but which has not been paid or claimed within 30 days from the date of declaration to any shareholders entitled to the payment of the dividend, the Company shall within 7 days from the date of expiry of the said period of 30 days open a special account in the that behalf in any scheduled Bank called “The unpaid dividend account of Haria Apparels Limited” and transfer to the said account, the total amount of dividend that has remained unpaid or unclaimed as aforesaid . Any money transferred to the unpaid dividend account of the Company which remains unpaid or unclaimed for a period of seven years from the date of such transfer, shall be transferred by the Company to the Investor Protection & Education Fund after giving individual intimation to the Members concerned at least 6 months before the due date of such transfer. In this Article the expression “dividend which remains unpaid” shall mean any dividends the warrant in respect thereof has not been encashed or which has otherwise not been paid or claimed. No unclaimed dividends shall be forfeited by the Board and the Company shall comply with the provisions of Section 205(A) of the Act in respect of such dividends.

Unclaimed dividend

203 No dividend shall bear interest as against the Company. No interest on dividends

204 Any General Meeting declaring a dividend, may on the recommendation of the Directors, make a call on the members of such amount as the Meeting fixes but so that the call on each Member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend and the dividend may, if so arranged between the Company and the member, be set off against the calls.

Dividend and call together

CAPITALISATION OF PROFITS AND RESERVES

162

205 (a) The Board may resolve that any moneys, investments or other assets forming part of the undivided profits of the Company standing to the credit of the reserve fund or the capital redemption reserve accounts, or in the hands of the Company and available for dividends, or representing premium received on the issue of shares and standing to the credit of the share premium account, be capitalized and distributed amongst such of the share holders as would be entitled to receive the same if distributed by way of dividends and in the same proportions on the footing that they become entitled thereto as capital and that all or any part of such capitalized fund be applied on behalf of such share holders in paying up in full either at par or at such premium as the resolution may provide, any unissued shares or bonds, debentures or debenture-stock of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued shares or bonds or debentures or debenture-stock and that such distribution or payment shall be accepted by such shareholders in full satisfaction of their interest in the said capitalized sum, provided that a share premium account and a capital redemption reserve account may for the purpose of this Article only be applied in the paying of any unissued shares to be issued to members of the Company as full paid bonus shares.

(b) A General Meeting may resolve that any surplus moneys arising from the realization of any capital assets of the Company, or in investment representing the same, or any other undistributed profit of the Company not subject to charge for income-tax be distributed among the members on the footing that they receive the same as capital.

(c) For the purpose of giving effect to any resolution under the preceding paragraphs of this Article, the Board may settle any, difficulty which may arise in regard to the distribution as it thinks expedient and in particular, may issue fractional certificates, or may fix the value for distribution of any specific assets, or may determine that such cash payments shall be made to any members upon the footing of the value so fixed, or that fraction of less value than Rupee 10 (ten) may be disregarded in order to adjust the rights of all parties, and may vest any such cash or specific assets in trustees upon such trusts for the entitled to the dividend or capitalized fund as may seem expedient to the Board. Where requisite, a proper contract shall be delivered to the Registrar for registration in accordance with Section 75 of the Companies Act 1956, and the Board may appoint any person to sign such contract on behalf of the persons entitled to the dividend or capitalized fund, and such appointment shall be effective.

Capitalisation of reserves and Profits and issue of Bonus Shares or debentures etc

ACCOUNTS

206 1 The Company shall keep at the office or at such other place in India, as the Board thinks fit, proper Books of Account in accordance with Section 209 of the Act with respect to: (a) All sums of money received and expended by the company and the

matters in respect of which the receipts and expenditure take place; (b) all sales and purchase of goods of the Company. (c) The assets and liabilities of the Company.

2. Where the Board decides to keep all or any of the Books of Account at any

place other than the office of the Company, the Company shall within seven days of the decision file with the Registrar a notice in writing giving the full address of that other place.

3. The Company shall preserve in good order the Books of Account relating to a period of not less than eight year preceding the current year together with the vouchers relevant to any entry in such books of account.

Directors to keep true accounts

163

4. Where the Company has a branch office, whether in or outside India, the Company shall be deemed to have complied with this Article if proper Books of Account relating to the transactions effected at the branch office are kept at the branch office and proper summarized returns, made up-to-date at intervals of not more than three months, are sent by the branch office to the Company at its office or other place in India, at which the Company’s Book of Account are kept as aforesaid.

5. The Books of Account shall give a true and fair view of the state of affairs of the Company or Brach Office, as the case may be and explain its transactions. The Books of Accounts and other books and papers shall be open to inspection by any Directors during business hours.

207 The Board shall from time to time determine whether and to what extent and at what time and to places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of members not being Directors and no members (not being a Director) shall have any right of inspecting any account or books or documents of the Company except as conferred by law or authorized by the Board.

Inspection of account by members

208 The Directors shall from time to time, in accordance with Section 210, 212, 215, 216 and 217 of the Act, cause to be prepared and to be laid before the Company in General Meeting, such Balance Sheet, Profit and Loss Account and Reports as are required by these Sections.

Statement of Account to be furnished at General Meeting.

209 The Directors shall, if they consider it to be necessary and in the interest of the Company, be entitled to amend the Audited Accounts of the company in General Meeting. The amendment of the Accounts affected by the Directors in pursuance of this Article shall be placed before the members in General Meeting for their consideration and approval.

Amendment of Accounts of the company

210 A copy of every such Profit and Loss Account and Balance Sheet (including the Auditor’s Report and every other document required by law to be annexed or attached to the Balance Sheet) shall at least twenty one days before the meeting at which the same are to be laid before the members be sent to the members of the Company, to every trustee for the holder’s of any debentures issued by the Company, whether such member or trustee is or is not entitled to have notices of general meetings of the Company, sent to him, and to all persons other than such members or trustees being the persons so entitled. Provided that the Board may if it deems fit instead of sending the said documents, as aforesaid may make copies of said documents available for inspection at the office of the Company during working hours for a period of twenty one days before the date of the meeting and send a statement containing the salient features of such documents in the form prescribed under Section 219 of the Act or any modifications thereof to every member of the Company and to every trustees for the holders of any debentures issued by the Company not less than twenty one days before the date of the meeting, they shall, notwithstanding the fact, be deemed to have been duly sent if it is so agreed by all the members entitled to vote at the meeting.

Copies to be sent to each member

AUDIT

211 Auditors shall be appointed and their rights and duties regulated in accordance with Section 224 to 233 of the Act.

Accounts to be audited

DOCUMENTS AND NOTICE

212 A document of notice may be served or given by the Company on any member either personally or by sending it by post to him to his registered address, if any, in India supplied by him to the Company for serving documents or notices on him.

Service on members

213 Where a document or notice is sent by post, service of the documents or notice shall be deemed to be effected by properly addressing, preparing and posting a letter containing the document or notice, provided that where a member has intimated to the Company in advance that documents or notices

Manner of service

164

should be sent to him under a certificate of posting or by registered post with or without acknowledgement due and has deposited with the Company a sum sufficient to defray the expenses of doing so; service of the document or notice shall not be deemed to be effected unless it is sent in the manner intimated by the member and such service shall be deemed to have been effected in the case of a notice of a meeting at the expiration of forty-eight hours after the letter containing the document or notice is posted and in any other cases, at the time at which the letter containing the document or notice is posted and in any other cases, at the time at which the letter would be delivered in the ordinary course of post.

214 A document or notice advertised in a newspaper circulating in the neighbourhood of the office shall be deemed to be duly served or sent to the day on which the advertisement appears on or to every member who has no registered address in India and has not supplied to the Company an address within India for the serving of documents on the sending of notices to him.

By Advertisement

215 A document or notice may be served or given by the Company on or to the joint holders of shares by serving or giving the document or notice on or to the joint holder named first in the Register of Members of the share.

On Joint Holders

216 A document or notice may be served or given by the Company on or to the persons entitled to a share in consequence of the death or insolvency of a member by sending it through the post in prepaid letter addressed to them by names or by the title of representative of the deceased, or assignee of the deceased, or assigned of the deceased or assignee of the insolvent or by any like description, at the address (if any) in India supplied for the purpose by the persons claiming to entitled, or until such an address has been so supplied by serving the document or notice in any manner in which the same might have been given if the death or insolvency had not occurred.

On personal representatives etc.

217 Documents or notices of every General Meeting shall be served or given in the same manner herein before authorized on or to (a) every member, (b) every person entitled to a share in consequence of the death or insolvency to a member, and (c) the Auditor or Auditors for the time being of the Company.

To whom document or notice must be served or given

218 Every person who, by operation of law, transfer or other means whatsoever, shall become entitled to any share shall be bound by every document or notice in respect of such share, which previously to his name and address being entered on the Register of Members, shall have been duly served or given to the person from whom he derives his title to such shares.

Members bound by documents or notices served or given to previous members

219 Any documents or notices to be served or given by the Company may be signed by a Director or some person duly authorised by the Board for such purpose and the signature thereto may be written, printed or lithographed.

Signature on notice and documents

220 All documents or notices to be served or given by members on or to the Company or any other officer there or shall be served or given by sending it to the Company or officer at the office by post under a Certificate of posting or by registered post, or by leaving it at the office. Provided that where the securities are held in depository, the records of the beneficial ownership may be served by such depositories on the company by means of electronic mode or by delivery of depository floppies or discs.

Service of notice or documents by members

WINDING-UP

221 The Liquidator on any winding-up (whether voluntary or under supervision of the Court or compulsory) may, with the sanction of a Special Resolution, but subject to the rights attached to any preference share capital, divide among the contributories in specie any part of the assets of the Company and may b\with the like sanction, vest any part of the assets of the Company in trustees upon such trust for the benefit of the contributories as the Liquidators, with the like sanction, shall think fit.

Liquidators may divide assets in specie

INDEMNITY AND RESPONSIBILITY

222 Subject to Section 201 of the Act, every Director, officer or agent for the time being of the Company shall be indemnified out of the assets of the company

Directors and others right of

165

against all liability incurred by him in defending any proceedings, whether civil or criminal, in which judgement is given in his favour or in which he is acquitted or discharged or in connection with any application under Section 633 of the Act in which relief is granted to him by the Court

indemnity

SECRECY CLAUSE

223 (a) Every Director, Manager, Auditor, Treasurer, 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 Directors, before entering upon his duties sign declaration pledging himself to observe strict secrecy respecting all transactions and affairs of the Company and in the matters relating to the Company’s customers. Collaborations and the state of accounts with individuals and all 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 by law or by the persons to whom such matters relate and excepts so far as may be necessary in order to comply with any of the provision in these presents contained

(b) No member shall be entitled to visit or inspect any works of the company without the permission of the Directors or to require discovery of or any information respecting any details of the company’s business or trading, or any matter which is or may be in the nature of a trade secret, mystery of trade, secret process of any other matter which may relate to the conduct of the business of the company and which in the opinion of the Directors, it would be inexpedient in the interest of the Company to disclose.

Secrecy

We, the several persons, whose names, addresses and description are hereunder subscribed below, are desirous of being formed into a Company in pursuance of these Articles of Association

Name, address, description and occupation of the Subscribers

Signature ofSubscriber

Signature/name/address/Occupation & description of Witness

1. Kantilal Haria S/O Lakhamshi Haria 7, Laxmi Building, North Avenue Road Santacruz West, Mumbai – 400054 Occ : Business 2. Manish Haria S/O Kantilal Haria 7, Laxmi Building, North Avenue Road Santacruz West, Mumbai – 400054 Occ : Business 3. Kantilal Maru S/O Lakhamshi Maru 76, Shubham, 7th Floor, Akurli Road, Kandivali East Mumbai - 400101 Occ : Business

SD/-

SD/- SD/-

WITNESS FOR SUBSCRIBERS NO 1 TO 3 SD/- H.P. SANGHVI HARESH SANGHVI S/O PURSHOTTAMDAS SANGHVI A-6, MAZDOCK APARTMENTS,

166

4. Sheetal Haria W/O Manish Haria 7, Laxmi Building, North Avenue Road Santacruz West, Mumbai – 400054 Occ : Business 5. Milan Mehta Flat No.9, Plot No,57, Jaygunsagar, 90 Ft.Road, Ghatkopar (East), Mumbai-400077 Occ : Service 6. Rajesh Parmar A/404, Kshitij, Film City Road, Goregaon (East), Mumbai – 400 063 Occ : Service 7. Vilco Pharma Pvt Ltd. 8, Haria Centre, Subhash Road, Vile Parle East Mumbai – 400057 Occ : Business

SD/- SD/-

SD/- SD/-

74/G J.P. ROAD, ANDHERI (W), MUMBAI – 400 061 COMPANY SECRETARY

Dated this Day of 20th December, 2010 Place: Mumbai

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SECTION IX - OTHER INFORMATION MATERIAL DOCUMENTS FOR INSPECTION Following documents have been delivered to the Stock Exchanges along with this Information Memorandum:

1. Memorandum and Articles of Association of Haria Apparels Limited

2. Certificate of Incorporation of Haria Apparels Limited

3. Scheme of Arrangement sanctioned by the Hon’ble High Court of Judicature at Mumbai vide its order dated 22/03/2012

4. NOC on the Scheme of Arrangement/ De-merger granted by BSE vide their letter no. DCS/AMAL/BS/24(f)/410/2011-12 dated 20/09/2011

5. Certificate of Statutory Auditors to the Statement of Possible Tax Benefit mentioned in this Information Memorandum.

6. Copies of Audited Annual Accounts of our Company for financial year 2010-11 and 2011-12

7. Copies of tripartite agreement dated 01/06/2012 entered into between the Company, RTA and NSDL.

8. Copies of tripartite agreement dated 15/05/2012 entered into between the Company, RTA and CDSL.

9. Return of Allotment filed by the Company for allotment of Shares pursuant to the Scheme.

10. Letter from BSE granting its in-principle approval to the listing of shares issued pursuant to and in terms of the Scheme vide its letter no.DCS/AMAL/BS/24(f)/410/2011-12 dated 20/09/2012.

Any of the contracts or documents mentioned in this Information Memorandum may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the shareholders subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION All the relevant provisions of the Companies Act, 1956, and the Guidelines issued by the Government of India or the Regulations issued by the Securities and Exchange Board of India, established under Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in this Information Memorandum is contrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or rules or Regulations made there Under or guidelines issued, as the case may be. We further certify that all the disclosures made in this Information Memorandum are true and correct. SIGNED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY Sd/- Mr. Kantilal Haria (Chairman & Managing Director) Place: Mumbai Date: September 13, 2012