sah petroleums limited - kotak securities · sah petroleums limited (sah petroleums limited was...

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

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Karvy Computershare Private LimitedKarvy House,46, Avenue 4, Street No. 1,Banjara Hills, Hyderabad 500 034Tel. : +91 40 23320251 / 2331 2454,Fax : +91 40 2343 1551SEBI Registration No.: INR/000000221Email : [email protected]

PROSPECTUS

ISSUE PROGRAMME

ISSUE OPENS ON MONDAY, AUGUST 30, 2004 ISSUE CLOSES ON MONDAY, SEPTEMBER 06, 2004

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SAH PETROLEUMS LIMITED(Sah Petroleums Limited was incorporated as Private Limited Company on 6th July 1983 in Mumbai. On 17th October 1989 under theprovisions of Section 43A it became a deemed limited company styled as Sah Petroleums Limited. Due to deletion of the provisions ofSection 43A it converted into a private limited company on 16th December 2002.The Company got converted into a Limited Companywith effect from 10th March 2004)

REGISTERED OFFICE406/407, Embassy Centre, Nariman Point, Mumbai – 400 021

Tel: 022- 5630 1911/22873097 Fax : 022 - 2287 5751Email: [email protected]; Website: www.sahpetroleums.com

PUBLIC ISSUE OF 90,80,000 EQUITY SHARES OF RS.5/- EACH FOR CASH AT PREMIUM OF RS.30/- EACHAGGREGATING TO RS. 31,78,00,000 (HEREINAFTER REFERRED TO AS THE ‘ISSUE’).

RISK IN RELATION TO FIRST ISSUE

This being the first issue of Sah Petroleums Limited, there has been no formal market for the shares of the company. The facevalue of the share is Rs.5/- and the issue price is 7 times of the face value. The issue price (as has been determined andjustified by the Lead Manager and Sah Petroleums Limited as stated herein under the paragraph on Justification of Premium)should not be taken to be indicative of the market price of the equity shares after the shares are listed. No assurance can begiven regarding an active or sustained trading in the shares of the Company nor regarding the price at which the EquityShares will be traded after listing.

GENERAL RISKS

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in thisIssue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefullybefore taking an investment decision in this Issue. For taking an investment decision, investors must rely on their ownexamination of the Company and the Issue including the risks involved. The securities have not been recommended or approvedby Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this document.The attention of the investors is drawn to the statement of Risk Factors appearing on page no. (iii) herewith of this Prospectus.

COMPANY’S ABSOLUTE RESPONSIBILITY

The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains allinformation with regard to the Company and the Issue which is material in the context of the Issue, that the informationcontained in this Prospectus is true and correct in all material aspects and is not misleading in any material respect, that theopinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makesthis Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in anymaterial respect.

LISTING

The Equity Shares are proposed to be listed on The National Stock Exchange of India Limited (NSE), the Designated StockExchange and The Stock Exchange, Mumbai (BSE). The in-principle approvals of the Stock Exchanges for listing EquityShares have been received pursuant to letters dated June 25, 2004 and June 22, 2004 respectively.

Karvy Investor Services Limited“Karvy House”,46, Avenue 4, Street No.1,Banjara Hills, Hyderabad 500 034,Tel No.: +91 40 23374714 / 23320751Fax No.: +91 40 23374714SEBI Registration No.: INM000008365Email: [email protected]

TABLE OF CONTENTS

Title Page No.

I Definitions and Abbreviations .................................................................................................................................... i

II Forward-Looking Statements; Market Data ................................................................................................................ iii

III Risk Factors ................................................................................................................................................................. iii

PART – I

I General Information......................................................................................................................................................1

II Capital Structure of the Company ................................................................................................................................9

III Terms of the Present Issue ......................................................................................................................................... 14

IV Particulars of the Issue ............................................................................................................................................... 22

V Company, Management and Project .......................................................................................................................... 23

VI Promoters and their Background ............................................................................................................................... 34

VII Other Group Companies/Ventures of the Promoters .................................................................................................. 35

VIII Board of Directors of the Company ........................................................................................................................... 41

IX Brief Details about the Project ................................................................................................................................... 45

X Industry Information .................................................................................................................................................. 70

XI Marketing and Sales Strategy .................................................................................................................................... 75

XII Stock Market Data ...................................................................................................................................................... 77

XIII Management Discussion and Analysis ..................................................................................................................... 77

XIV Captial issues in the past and promises vs. performance .......................................................................................... 79

XV Basis for Issue price ................................................................................................................................................... 79

XVI Litigations / Disputes / Defaults / Contingent Liabilities .......................................................................................... 81

XVII Risk Factors ................................................................................................................................................................ 82

XVIII Redressal of Investors Grievances ............................................................................................................................ 84

PART – II

A General Information.................................................................................................................................................... 86

B Financial Information and Auditors Report ............................................................................................................... 90

C Statutory and other information ............................................................................................................................... 102

D Main provisions of the Articles of Association ...................................................................................................... 104

E Material Contracts and Documents for Inspection .................................................................................................. 113

PART – III

Declaration ............................................................................................................................................................... 114

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I. DEFINITIONS / ABBREVIATIONS

Articles Memorandum & Articles of Association of the Company

Act The Companies Act, 1956

APM Administered Price Mechanism

API American Petroleum Institute

APSRTC Andhra Pradesh State Road Transport Corporation

Board The Board of Directors of Sah Petroleums Ltd.

BSE The Stock Exchange, Mumbai

BEST Brihanmumbai Electric Supply Transport

CC Cash Credit

CDSL Central Depository Services (India) Limited

DTC Delhi Transport Corporation

EPS Earnings Per Share

FII Foreign Institutional Investors

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

GIR General Index Registration

GSRTC Gujarat State Road Transport Corporation

HUF Hindu Undivided Family

HRTC Haryana Road Transport Corporation

HLP High Liquid Pressure

IPO Initial Public Offer

JASO Japan Automobile Standards Organization

Karvy Karvy Investor Services Limited

KSRTC Karnataka State Road Transport Corporation

MOU Memorandum of Understanding

MSRTC Maharashtra State Road Transport Corporation

NMMT Nave Mumbai Municipal Transport

NAV Net Asset Value

NRI Non Resident Indian

NSDL National Securities Depository Limited

NSE/Designated Stock Exchange National Stock Exchange of India Limited

OCB Overseas Corporate Bodies

OEM Original Equipment Manufacturer

PAN Permanent Account Number

PSU Public Sector Undertaking

PMT Pune Municipal Transport

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PMC Pune Municipal Corporation

QC Quality Control

R & O Rust and Oxidant inhibitor

R & D Research and Development

Registrar/KCPL Registrars to the Issue viz., Karvy Computershare Private Limited

ROC Registrar of Companies, Maharashtra at Mumbai

RONW Return on Net Worth

RBI Reserve Bank of India

SEBI (SAST) Regulations, 1997 Securities & Exchange Board of India (Substantial Acquisition of Shares &Takeovers) Regulations, 1997

SEBI Securities & Exchange Board of India

The Company / SPL Sah Petroleums Limited

TMT Thane Municipal Transport

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II. FORWARD-LOOKING STATEMENTS; MARKET DATA

Statements included in this Prospectus which contain words or phrases such as “will”, “aim”, “will likely result”,“believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”,“objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions, thatare “forward-looking statements”.

Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertaintiesassociated with the Company’s expectations with respect to, but not limited to, the Company’s ability to successfullyimplement its strategy, its growth and expansion, technological changes, its exposure to market risks, general economicand political conditions in India which have an impact on its business activities or investments, the monetary andinterest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equityprices or other rates or prices, the performance of the financial markets in India and globally, changes in domesticand foreign laws, regulations and taxes and changes in competition in the industry.

For further discussion of factors that could cause the Company’s actual results to differ, see the section entitled“Risk Factors” beginning on page no. (iii) of this Prospectus. By their nature, certain market risk disclosures are onlyestimates and could be materially different from what actually occurs in the future. As a result, actual future gains orlosses could materially differ from those that have been estimated. In accordance with SEBI requirements, the Companywill ensure that investors are informed of material developments until such time as the grant of listing and tradingpermission by the Stock Exchanges.

Market data used throughout this Prospectus was obtained from internal company reports. The information containedin this Prospectus has been obtained from sources believed to be reliable, but that their accuracy and completenessand underlying assumptions are not guaranteed and their reliability cannot be assured. Although, the Companybelieves that the market data used in this Prospectus is reliable, it has not been independently verified. Similarly,internal Company reports and data, while believed to be reliable, have not been verified by any independent source.

III. RISK FACTORS

Investors should consider carefully the following risk factors, together with the other information contained in thisProspectus, before they decide to invest in the Company’s equity shares. If any of the following risks actually occur,the Company’s business, financial condition and results of operations could suffer, the trading price of the Company’sequity shares could decline and investors may lose all or part of their investment.

A. INTERNAL TO THE COMPANY

01. The Company is promoted by first generation entrepreneurs and the investors will be subjected to allconsequential risk associated with such ventures.

Management proposal to address the risk factor:

The Company has been promoted by Mr.Rajendra Sah who has experience in the relevant industry for thelast forty years. Over the years he has also brought in relevant professionals to address the key areas ofoperation like Production, Marketing and Finance.

02. The objects of the Issue for which funds are being raised are as per the Company’s own estimates and havenot been appraised by any Bank/Financial Institution and no monitoring agency has been appointed tomonitor the use of funds.

03. The proposed expansion project is mainly funded by the Public Issue. Any delay in raising the funds fromIPO as depicted under the caption, “Means of Finance” on page No.22, may have adverse impact on theperformance of the Company.

04. The Company has not placed orders for any of the Plant and Machinery for which an amount of Rs.2341.75lacs has been included in the Objects of the Issue.

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05. Part of Plant and Machinery are to be imported for which orders are yet to be placed and the estimated costis arrived at by translating foreign currency at the exchange rate prevalent on the date of the quotation. Anyweakening of rupee against the respective currency mentioned may increase the cost of the equipment.

06. Contingent Liabilities as on March 31, 2004

Estimated amount of contracts remaining to be executed on Capital Account and not provided for isRs.5,23,000/-.

07. There has been a delay in the schedule of implementation of the project that the company proposes toundertake.

08. The Company has identified to buy Plot 13 to 16, Behind Dewan & shah Indl. Estate, Village Valliv, Vasai(East), Thane, Maharashtra, which belongs to Industrial Agencies, a partnership firm in which Mr. AshokSah (brother of Mr. Rajendra Sah, Executive Chairman of the Company) is one of the Partners.

09. Losses of other Ventures of the Promoters

The following partnership ventures of the Promoters have incurred losses during the year 2002/2003.

(Rs.)

Name of the Venture Year ended Loss Incurred

Sah Marketing Co. 31 March 2002 26,377.61

Industrial Trading Co. 31 March 2002 136,546.57

Industrial Trading Co. 31 March 2003 18,67,301.00

Sah Udyog 31 March 2002 39,404.85


Since all of these are partnership concerns of the Promoters, it does not affect the operations and profitabilityof the Company in any manner.

B. EXTERNAL TO THE COMPANY

01. Raw material prices are subject to fluctuations.

02. A substantial portion of the Company’s raw materials is imported. Hence, the Company carries a potentialforeign exchange risk on its imports.

03. Competition from new entrants as well as existing players may affect the profitability of the Company.

04. Any changes in regulatory environment may have an impact on the business of the Company.

Management Perception:

Changes in regulatory environment relating to Manufacturing and marketing of its products in India andabroad will significantly impact the business of the Company. The Company keeps itself abreast of thevarious developments relating to the regulatory environment and gears itself in order to comply with suchregulatory changes.

Notes:

l The net worth of the Company as per the Financial Accounts of the Company as on March 31, 2004 is Rs.1564.85lacs and the size of the Issue is Rs 3178.00 lacs

l The average cost of acquisition of Equity Shares of the Promoters is Rs.0.83 per share. The book value per share ason March 31, 2004 is Rs.14.33 per share of Rs. 5/- each.

l The promoters/ directors/ key management personnel of the Company have no interest other than reimbursement ofexpenses incurred or normal remuneration or benefits.

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l None of the other ventures of promoters have business interests/other interests in the Issuer Company.

l No loans and advances have been made to any person(s)/companies in which directors are interested.

l The investors are advised to refer to the Para on “Basis for Issue Price” before making any investment in this Issue.

l Investors may note that in case of over – subscription, allotment shall be on proportionate basis and will be finalizedin consultation with the National Stock Exchange of India Limited (Designated Stock Exchange). If the Issue isoversubscribed, the Executive Director / Managing Director of the Designated Stock Exchange along with Post-issueLead Merchant Banker and Registrar to the Issue shall be responsible to ensure that the basis of allotment isfinalized in a fair and proper manner.

l The Promoter Group/ directors of the Company/ directors of the Promoter have not purchased and or sold/ financedany shares of the Company during the past six months.

l The investors may contact the Lead Manager or the Compliance Officer for any complaint/clarification/informationpertaining to the Issue, who will be obliged to attend to the same.

l RELATED PARTY TRANSACTION

[A] Relationship:

(a) Key Management Personnel :

Shri Rajendra Sah

Smt. Shobha Sah

Shri Vivek Sah

Shri Aditya Sah

(b) Relatives of Key management personnel with whom transactions have taken place:

Smt. Asha V. Sah

Smt. Chaitali A. Sah

Shri Ashok P. Sah

Smt. Sudha Poddar

Miss. Malhar V. Sah

Master Ranay V. Sah

Miss. Tanaaya A. Sah

Smt. Shantadevi Sah

Smt. Lata Banka

Smt. Shashikanta Sukhani

Shri Shivkumar Mundra

Shri Vinodkumar Mundra

Smt. Godavaridevi Mundra

Rajendra Sah HUF

Vivek Sah HUF

Aditya Sah HUF

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(c) Enterprises over which Key management personnel exercise significant Influence

Sah Udyog

Sah Exports

Sah Marketing Company

Sah Agrotechs

Industrial Trading Company

Rs. In Lacs

Nature of Key Management Personnel Relatives of Key Management Enterprises over Which KeyTransaction Personnel Management Personnel

exercise significant influence31st March 31st March 31st March

2004 2003 2002 2001 2004 2003 2002 2001 2004 2003 2002 2001

Salary & RelatedPayments 1.56 3.42 3.18 10.24 - 0.06 1.49 5.59 - - - -

Car Hire Charges 6.64 8.01 2.63 - - - - - - - - -

Rent Paid - - - 0.24 - - - - - 1.50 0.60 -

Sales Promotion - - - - - - - - - 15.92 1.70 2.47

Garden Expenses - - - - - - - - - 4.96 - -

Interest - 3.98 2.74 25.63 14.63 19.57 15.08 11.92 - - - -

Rent Received - - - - - - - - - - 0.77 -

Payables - 3.56 2.71 - - 4.04 - - - 0.16 - -

Receivables - - - 0.44 - - - 0.18 - 0.66 0.03 0.43

Loans Received 97.60 143.60 139.82 396.21 114.00 114.00 110.50 166.42 - 15.00 - -

Property Deposit Paid - - 1.20 2.65 - - - - - - - -

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SAH PETROLEUMS LIMITED

(Sah Petroleums Limited was incorporated as Private Limited Company on 6th July 1983 in Mumbai. On 17th October 1989 underthe provisions of Section 43A it became a deemed limited company styled as Sah Petroleums Limited. Due to deletion of theprovisions of Section 43A it converted into a private limited company on 16th December 2002.The Company got converted into aLimited Company with effect from 10th March 2004)

REGISTERED OFFICE CUM HEAD OFFICE :

406/407, Embassy Centre, Nariman Point, Mumbai – 400 021Tel: 022- 5630 1911/22873097 Fax : 022 - 2287 5751

Email: [email protected]; Website: www.sahpetroleums.com

PUBLIC ISSUE OF 90,80,000 EQUITY SHARES OF RS.5/- EACH FOR CASH AT PREMIUM OF RS.30/- EACHAGGREGATING TO RS. 31,78,00,000 (HEREINAFTER REFERRED TO AS THE ‘ISSUE’).

PART - I

I. GENERAL INFORMATION

AUTHORITY FOR THE ISSUE

Pursuant to Section 81(1A) of the Companies Act, 1956, the present issue of equity shares has been authorised vide SpecialResolution passed at the Extra Ordinary General Meeting of the Company held on April 2, 2004 and a resolution passed by theBoard of Directors at its meeting held on April 6, 2004.

ELIGIBILITY OF THE COMPANY TO COME OUT WITH IPO

The Company is eligible to access the capital market through public issue of equity shares as per clause 2.2.1 of SEBI (Disclosureand Investor Protection) Guidelines, as it fulfills the net worth, distributable profits and net tangible assets criteria in the followingmanner:

1. The Company has a net worth of more than Rs.1 Crore in each of the preceding 3 full years.

Rs. In lacs

Particulars Year ended Year ended Year ended31.03.2002 31.03.2003 31.03.2004

Net worth 520.20 765.28 1564.85

2. The Company has a track record of distributable profits in terms of Section 205 of the Companies Act, 1956 for immediatelypreceding 3 years. The Company has declared and paid dividend for the last three years. The profits and dividend paid for thelast three years is given below:

Rs. In lacs

Particulars FY 2001-02 FY 2002-03 FY 2003-04

PAT 142.29 245.10 804.58

Dividend % 0.01 0.01 0.01

3. The Company’s net tangible assets during the last three years ended 31st March 2002, 31st March 2003 and 31st March 2004 aregiven below:

Rs. In lacs

Particulars Year ended Year ended Year ended31.03.2002 31.03.2003 31.03.2004

Net tangible assets 520.20 765.28 1564.85

Monetary Assets 114.42 160.31 651.47

% of Monetary Assets to Net tangible assets 22.00 20.95 41.63

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The monetary assets in each of these years are not more than 50% of net tangible assets. The Company has made firm commitmentsto deploy the monetary funds in the proposed expansion plan.

The aggregate of the proposed issue and all previous issues made in the same financial year in terms of size (i.e. Issue throughProspectus + firm allotment + promoters contribution through the Prospectus) does not exceed five times its pre-issue net worth asper the audited balance sheet of the last financial year.

Since the Company is meeting the track record specified above, the Equity Shares are offered in accordance with Clause 2.2.1 and2.2.2A of the SEBI (DIP) Guidelines wherein the prospective allottees are not less than one thousand (1000) in number.

PROHIBITION BY SEBI

The Company, its directors/ Promoters and persons in control, its subsidiaries, its associates and companies/entities with which theCompany’s directors/promoters and any of the company’s associates of group companies are associated as directors have not beenprohibited from accessing/ operating in the capital markets under any direction or order passed by SEBI.

DISCLAIMER CLAUSE:

A. SEBI DISCLAIMER CLAUSE

AS REQUIRED A COPY OF THIS PROSPECTUS HAS BEEN SUBMITTED TO THE SEBI, MUMBAI. IT IS TO BEDISTINCTLY UNDERSTOOD THAT SUBMISSION OF THIS PROSPECTUS TO SEBI SHOULD NOT IN ANY WAYBE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOTTAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECTFOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTSMADE OR OPINIONS EXPRESSED IN THIS PROSPECTUS. LEAD MANAGER, M/S KARVY INVESTOR SERVICESLIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THIS DRAFT PROSPECTUS ARE GENERALLYADEQUATE AND ARE IN CONFORMITY WITH SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINESIN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMEDDECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLYUNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS,ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS PROSPECTUS, THE LEAD MANAGERIS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER DISCHARGES ITSRESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, M/SKARVY INVESTOR SERVICES LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATEDMAY 11, 2004 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS, 1992 WHICH READS ASFOLLOWS :

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKECOMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHERMATERIALS IN CONNECTION WITH THE FINALISATION OF THIS PROSPECTUS PERTAINING TO THESAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORSAND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTSCONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION ANDTHE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHEDBY THE COMPANY.

WE CONFIRM THAT:

A. THIS PROSPECTUS FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALSAND PAPER RELEVANT TO THE ISSUE;

B. ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE GUIDELINES,INSTRUCTIONS, ETC. ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENTAUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

C. THE DISCLOSURES MADE IN THIS PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THEINVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSEDISSUE.

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3. WE CONFIRM THAT BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THIS PROSPECTUS AREREGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID.

THE FILING OF THIS PROSPECTUS DOES NOT, HOWEVER ABSOLVE THE COMPANY FROM ANY LIABILITIESUNDER SECTION 63 OR 68 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENTS OF OBTAINING SUCHSTATUTORY OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE.SEBI, FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGER(S) ANYIRREGULARITIES OR LAPSES IN THIS PROSPECTUS.

B. GENERAL DISCLAIME R

Investors may note that the Company accepts no responsibility for statements made otherwise than in this Prospectus or in theadvertisements or any other material issued by or at the instance of the Company or the Lead Manager and that anyone placingreliance on any other source of information would be doing so at his/her own risk.

All information shall be made available by the Lead Manager and the Issuer to the members at large and no selective oradditional information would be available for a section of the members in any manner whatsoever.

C. DISCLAIMER IN RESPECT OF JURISDICTION

This Issue is being made in India to persons resident in India (including Indian nationals resident in India who are majors, HinduUndivided Families, companies, corporate bodies and societies registered under the applicable laws in India and authorized toinvest in shares, Indian mutual funds registered with SEBI, Indian financial institutions, commercial banks, regional rural banks,co-operative banks (subject to RBI permission), Trusts registered under the Societies Registration Act, 1860, or under any othertrust law and who are authorized under their constitution to hold and invest in shares) and to NRIs, and FIIs as defined underthe applicable Indian laws. This Prospectus does not, however, constitute an Issue to sell or an invitation to subscribe to sharesissued hereby in any other jurisdiction to any person to whom it is unlawful to make an Issue or invitation in such jurisdiction.Any person into whose possession this Prospectus comes is required to inform himself about and to observe any suchrestrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Mumbai,Maharashtra only. No action has been or will be taken to permit a public offering in any jurisdiction where action would berequired for that purpose, except that this Prospectus has been submitted to the SEBI. Accordingly, the equity shares, representedthereby may not be offered or sold, directly or indirectly, and this Prospectus may not be distributed, in any jurisdiction, exceptin accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Prospectus nor any salehereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Companysince the date hereof or that the information contained herein is correct as of any time subsequent to this date.

The draft Prospectus has been filed with SEBI for its observations and SEBI has given its observations and that the finalProspectus has been filed with RoC as per the provisions of the Companies Act, 1956.

D. DISCLAIMER CLAUSE OF STOCK EXCHANGES

The National Stock Exchange of India Limited (NSE/Designated Stock Exchange)

As required, a copy of this Prospectus has been submitted to NSE. The NSE has given vide their letter dated June 25, 2004permission to the Company to use the NSE’s name in this Prospectus as one of the stock exchanges on which the Company’ssecurities are proposed to be listed. The NSE has scrutinized this Prospectus for its limited internal purpose of deciding thematter of granting the aforesaid permission to the Company.

The NSE does not in any manner:

i) Warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus; or

ii) Warrant that this Company’ securities will be listed or will continue to be listed on the exchange;

iii) Take any responsibility for the financial or other soundness of this Company, its promoters, its management or any schemeor project of this Company.

And it should not for any reason be deemed or construed that this Prospectus has been cleared or approved by the NSE. Everyperson who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independentinquiry, investigation and analysis and shall not have any claim against the exchange whatsoever by reason of any loss whichmay be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason ofanything stated or omitted to be stated herein of for any other reason whatsoever.

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The Stock Exchange, Mumbai (BSE)

As required, a copy of this Prospectus has been submitted to BSE. The BSE has given vide their letter dated June 22, 2004permission to the Company to use the BSE’s name in this Prospectus as one of the stock exchanges on which the Company’ssecurities are proposed to be listed. The BSE has scrutinized this Prospectus for its limited internal purpose of deciding the matterof granting the aforesaid permission to the Company.

The BSE does not in any manner:

i) Warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus; or

ii) Warrant that this Company’ securities will be listed or will continue to be listed on the exchange;

iii) Take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme orproject of this Company.

And it should not for any reason be deemed or construed that this Prospectus has been cleared or approved by the BSE. Everyperson who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry,investigation and analysis and shall not have any claim against the BSE whatsoever by reason of any loss which may be suffered bysuch person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to bestated herein of for any other reason whatsoever.

FILING

A copy of this Prospectus, has been filed with SEBI, B Wing, First Floor, Mittal Court, Nariman Point, Mumbai - 400 021. A copyof this Prospectus, along with documents required to be filed under Section 60 of the Act has been delivered for registration to theRegistrar of Companies, Maharashtra at Mumbai.

LISTING

Initial listing applications have been made to The National Stock Exchange of India Limited (Designated Stock Exchange) and TheStock Exchange, Mumbai for permission to list the Equity Shares and for an official quotation of the equity shares of the Company.

In case, the permission for listing of the Equity Shares is not granted by any of the above mentioned Stock Exchange, the Companyshall forthwith repay, without interest, all moneys received from the applicants in pursuance of the Prospectus. If such money is notrepaid within 8 days after the day from which the Issuer becomes liable to repay it, then the Company and every director of theCompany who is an officer in default shall, on and from expiry of 8 days, be jointly and severally liable to repay that money withinterest as prescribed under Section 73 of the Companies Act, 1956.

GOVERNMENT / STATUTORY APPROVALS

The Company can undertake all the present and proposed activities in view of the present approvals and no further approvals fromany government authorities/RBI are required by the Company to undertake the present and proposed activities except those approvalsthat may be required to be taken in the normal course of business from time to time.

The following approvals are already obtained by the Company:

1. Memorandum & Articles of Association of the Company along with the certificate of Incorporation no. 30372 of 1983 issuedby the Registrar of Companies, Maharashtra.

2. Registration with Sales Tax Authority. Sales Tax Registration no.400021-S-582.

3. Registration with Daman Local Sales Tax Authority. Sales Tax Registration no. DA/ST/5893.

4. Registration with Central Sales Tax Authority. Sales Tax Registration no.400021-C-579.

5. Registration with Daman Central Sales Tax Authority. Sales Tax Registration no. DA/CST/5351.

6. Registration under the Factory’s Act for Vasai Plant Registration no.2m(i) 30-305-9/8-A.

7. Registration under the Factory’s Act for Daman Plant Registration no. 1828.

8. Lub License DI/Chem/Lub oil & Greases Order-87/009/88.

9. Registration with Pollution Control Board. Registration no. for Vasai Plant ROT/Ulhas/322/R/E/22-90/C-197 and ROT/ULH/322/R/E-22-90/A-124 dated 17th May 1995.

10. Registration with Pollution Control Board. Registration no. for Daman Plant DCC/DDD/O-1422/WA/RW/99-00/78.

11. Registration with National Small Industrial Corporation, Registration no. NSIC/GPB/RS/s-229/MH

5

12. Registration with Small Scale Industries, Registration no.11/07/17795 for Vasai Plant.

13. Registration with Small Scale Industries, Registration no.60/01/1684 for Daman Plant.

14. Vasai Excise Registration no. AABCS4676GXM002

15. Daman Excise Registration no. AABCS4676GXM004

16. Import Export Code no.0392057387.

It must be specifically understood that in giving the above approvals, the Central Government/RBI does not take any responsibilityfor financial soundness or correctness of the statements made by the Company.

MINIMUM SUBSCRIPTION

If the Company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the issue, or ifthe subscription level falls below 90% after the closure of the issue on account of cheques having been returned unpaid or withdrawalof applications, the company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days afterthe Company becomes liable to pay the amount, the Company shall pay interest as per Section 73 of the Companies Act, 1956.

UNDERTAKING FROM PROMOTERS AND DIRECTORS

The issuer accepts full responsibility for the accuracy for the information given in the prospectus and confirms that to the best oftheir knowledge and belief, there are no other facts, their omission of which make any statement in the prospectus misleading andthey further confirm that they have made all reasonable inquiries to ascertain such facts. The Issuer further declares that the StockExchanges to which an application for official quotation is proposed to be made do not take any responsibility for the financialsoundness of this Issue or for the price at which the equity shares are offered or for the correctness of the statement made oropinions expressed in this Prospectus. The promoter/directors declare and confirm that no information/material likely to have abearing on the decision of investors in respect of the shares offered in terms of this prospectus has been suppressed, withheld and/or incorporated in the manner that would amount to mis-statement, misrepresentation and in the event of its transpiring at any pointof time till allotment/refund, as the case may be, that any information/material has been suppressed/withheld and/or amounts to amis-statement/mis-representation, the promoters/directors undertake to refund the entire application monies to all the subscriberswithin 7 days thereafter without prejudice to the provisions of Section 63 of the Companies Act.

CORPORATE GOVERNANCE

The SEBI Guidelines in respect of Corporate Governance shall be applicable to the Company immediately upon listing of its shareson the various Stock Exchanges. The Company undertakes that it shall take the necessary steps to comply with all the requirementsof the guidelines on Corporate Governance as would be applicable to it upon listing of its shares. In this regard, the Company hasalready set up an Audit Committee and Shareholders/Investors Grievances Committee. The other Committees as per the requirementsof the revised guidelines will be set up before listing of the equity shares of the Company.

IMPERSONATION

Attention of applicants is specifically drawn to sub-section (1) of Section 68-A of the Act, which is reproduced below:

“Any person who—

1. makes in a fictitious name, an application to a Company for acquiring, or subscribing for, any shares therein, or

2. otherwise induces a Company to allot, or register any transfer of shares therein to him, or any other person in afictitious name,

shall be punishable with imprisonment for a term which may extend to five years” as applicable under the provisionsof law.

UTILISATION OF ISSUE PROCEEDS

The Board of Directors certifies that -

a. All monies received out of the issue of shares to the public shall be transferred to a separate Bank account other than the Bankaccount referred to in Sub-section (3) of Section 73 of Companies Act, 1956;

b. Details of all monies utilized out of this issue referred to in item (a) shall be disclosed under an appropriate separate head in theBalance Sheet of the Company indicating the purpose for which such monies had been utilized;

c. Details of all unutilized monies out of this issue of shares, if any referred to in item (a) shall be disclosed under an appropriateseparate head in the Balance Sheet of the Company indicating the form in which such unutilized monies have been invested.

6

ALLOTMENT / REFUND ORDERS

Allotment letter(s)/letter of regret as the case may be, together with refund orders/pay orders shall be dispatched by registered post(refund orders/pay orders of value up to Rs. 1500/- Under Certificate of Posting) to the sole/first named applicants address within10 weeks from the date of closing of the subscription list. If such money is not repaid within the 8th day from the day when suchmoney is liable to be paid, the Company shall on and from the expiry of the 8th day be liable to repay that money with interest @15% per annum.

As far as possible allotment of equity shares shall be done within 30 days from closure of the subscription list. The Company shallpay interest at the rate of 15% p.a., if the allotment is not made and the refund orders are not dispatched to the investors within30 days from closure of the Issue period for delay beyond 30 days. The Company will also make available adequate funds to theRegistrars to the Issue for the purpose of dispatch of Share Certificates/allotment letters/refund orders as stated above.

Dispatch of share certificates/refund orders and demat credit would be completed and allotment and listing documents would besubmitted to the stock exchanges within two working days of the finalization of the basis of allotment. All steps for completion ofnecessary formalities for listing and commencement of trading of the securities offered through this Prospectus shall commence at thestock exchanges where they are proposed to be listed will be taken within 7 working days of the date of finalization of the basis ofallotment.

Refunds will be made by refund orders or pay orders drawn on the bank(s) appointed by the Company as refund banker. Suchinstruments will be payable at par at the places where applications are accepted. Bank charges, if any, for encashing such cheques orpay orders will be payable by the applicant.

ISSUE PROGRAMME

THE SUBSCRIPTION LIST WILL BE KEPT OPEN AT THE COMMENCEMENT OF BANKING HOURS AND WILLCLOSE AT THE CLOSING OF BANKING HOURS ON THE DAYS AS MENTIONED BELOW:

ISSUE OPENS ON : MONDAY, AUGUST 30, 2004

ISSUE CLOSES ON : MONDAY, SEPTEMBER 06, 2004

REGISTERED OFFICE OF THE COMPANY

406/407, Embassy Centre,

Nariman Point,

Mumbai – 400 021

Phone Nos. 022 – 56301911/22873097

Fax No. 022 – 22875751

Email: [email protected]

ISSUE MANAGEMENT TEAM

Lead Managers to the Issue

Karvy Investor Services Limited Fortune Financial Services (India) Limited

“Karvy House”, KK Chambers, 2nd Floor,

46, Avenue 4, Street No.1, Sir P T Marg,

Banjara Hills, Fort,

Hyderabad – 500 034. Mumbai – 400 001

Tel. No. +91 40 23374714 Tel: +91 22 22077931

Fax No. +91 40 23374714 Fax +91 22 22072948

Email: [email protected] Email: [email protected]

SEBI Regn. No.INM000008365 SEBI Regn. No. INM000000529

7

Registrar to the Issue Advisors to the Company

Karvy Computershare Private Limited Consort Capital Services (P) Limited“Karvy House”, 1409, Maker Chamber V,46, Avenue 4,Street No.1 Nariman Point,Banjara Hills, Mumbai – 400 021.Hyderabad 500 034 Tel: +91 22 2285 2933/2204 7427Tel: +91 40 23320251/23320751 Fax: +91 22 2285 2932Fax: +91 40 23431551 Email: [email protected]: [email protected] Regn. No. INR/000000221

INTERSE ALLOCATION OF RESPONSIBILITIES

Interse allocation of responsibilities entered into among the Merchant Bankers is as under:

Sl.No. Activity Responsibility Co-Ordination

1. Capital Structuring with the relative components and formalities such as Karvy Karvycomposition of debt equity, type of instruments, etc.

2. Design of Draft Prospectus and of advertising publicity material including Karvy Karvynewspaper advertisements and brochure/ memorandum containing salientfeatures of the Draft Prospectus.

3. To ensure compliance with the Guidelines for Disclosure and Investor Karvy KarvyProtection and other stipulated requirements and completion of prescribedformalities with Stock Exchanges, Registrar of Companies and SEBI.

4. Marketing of the Offer, which will cover, inter-alia, Karvy, Fortune Karvy

- formulating marketing strategies,

- preparation of publicity budget,

- arrangements for selection of:

Ad media

Centres of holding conferences of Brokers, Trustees , etc,.

Bankers to the Issue

Collecting centres

Distribution of publicity material

Brokers to the Issue

Underwriters and underwriting arrangement, if any, distribution ofpublicity and issue material including application forms, Prospectusand Brochure and deciding on quantum of the Issue material.

5. Selection of various agencies connected with the Issue, namely Registrars Karvy Karvyto the Issue, Printers and Advertising Agencies.

6. Follow up with Bankers to the Issue to get estimates of collection and Fortune Fortuneadvising the Company about the closure of the Issue,based on the correct figures.

7. Post Issue activities including follow up steps which must include Fortune Fortunelisting of instruments and dispatch of Certificates and Refunds, withthe various agencies connected with the work such as Registrars to theIssue and Bankers to the Issue, and the Bank handling refund business.The designated Lead Manager shall be responsible for ensuring that theseagencies fulfill their functions and enable him to discharge thisresponsibility through suitable agreements with the Company.

8

AUDITOR OF THE COMPANY

N.D.Daga & Co.Chartered Accountants5/2, Tardeo, AC Market Building,Tardeo Road,Mumbai – 400 034.Tel: 022 – 23522347/451

COMPANY SECRETARY & COMPLIANCE OFFICER

Mr. D. Malla Reddy

406/407, Embassy Centre,Nariman Point,Mumbai – 400 021.Phone Nos. 022 – 56301911/22873097Fax No. 022 – 22875751Email: [email protected]

Investors may note that in case of any pre Issue/ post Issue related problems such as non-receipt of letters of allotment / sharecertificates / refund orders, etc. they should contact the Compliance Officer.

LEGAL ADVISORS TO THE ISSUE

Shiralkar & Co

Advocates and Solicitors16, Bansilal Mansion,1st Floor, Homi Modi Street,Fort, Mumbai – 400 001.Tel: 022 – 22644335/22644336

BANKERS TO THE COMPANY

Dena Bank Sachivalaya Corner Branch, “The Beacon”, M.K.Road, Opp. Mantralaya, Mumbai 400 021.

BANKERS TO THE ISSUE

HDFC Bank Limited Maneckji Wadia Building, Ground Floor, Nanik Motwani Marg, Fort Mumbai – 400 001.

CREDIT RATING/DEBENTURE TRUSTEE

This being Public Issue of equity shares, neither Credit Rating nor appointment of Debenture Trustee is required.

UNDERWRITERS TO THE ISSUE

The equity shares being offered are not being underwritten.

UNDERTAKING BY THE ISSUER COMPANY

The Company undertakes that

1. the Investors complaints received in respect of proposed public issue shall be attended expeditiously and satisfactorily.

2. that all steps for completion of the necessary formalities for listing and commencement of trading at all the Stock Exchangeswhere the Equity Shares are to be listed are taken within 7 working days of finalisation of the basis of allotment.

3. The Company will provide adequate funds to the Registrars to the Issue to dispatch the Allotment Letters/ Refund Orders byregistered post/certificate of posting as the case may be.

4. The Refund orders to the non-resident Indians shall be dispatched within the specified time.

5. No further issue of securities shall be made till the securities offered through this Prospectus are listed or till the applicationmoneys are refunded on account of non listing, under subscription, etc.

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II. CAPITAL STRUCTURE OF THE COMPANY

Particulars Nominal Value (Rs.) Aggregate Value (Rs.)

A AUTHORISED

2,20,00,000 equity shares of Rs.5/- each. 11,00,00,000

B ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL

1,09,20,000 equity shares of Rs.5/- each 5,46,00,000(Of the above, 99,50,000 Equity Shares of Rs.5/- eachwere allotted as fully paid up by way ofbonus issue of shares)

C PRESENT ISSUE

90,80,000 equity shares of Rs.5/- each for cash at a premium of 4,54,00,000 31,78,00,000Rs. 30/- each aggregating to Rs. 31,78,00,000/-

D TOTAL PAID UP CAPITAL AFTER THE PRESENT ISSUE

2,00,00,000 equity shares of Rs.5/- each 10,00,00,000

E SHARE PREMIUM ACCOUNT

Before the Issue Nil

After the Issue 27,24,00,000

NOTES TO CAPITAL STRUCTURE

1. CAPITAL HISTORY

Details of present equity share capital of the Company are as follows:

Date of Date when No. of Face Issue Consideration Cumulative % of post Lock inAllotment fully paid up Shares Value price Total issue capital period*

Upto 9.5.1990 - 71,000 10/- 10/- Cash 71,000 0.71 1 year10.05.90 10.05.90 71,000 10/- - 1:1 Bonus by capitalization 1,42,000 0.71 1 year

of reserves29.01.93 29.01.93 2,84,000 10/- - 2:1 Bonus by capitalization 4,26,000 2.84 1 year

of reserves18.05.93 18.05.93 4,14,000 10/- 10/- Rights – Cash 8,40,000 4.14 1 year06.03.96 06.03.96 8,40,000 10/- - 1:1 Bonus by capitalization of reserves 16,80,000 8.40 1 year15.03.04 - 16,80,000 - - Split of shares from face value 33,60,000 - -

of 10/- to 5/-15.03.04 15.03.04 75,60,000 5/- - 2.25:1 Bonus by capitalization 1,09,20,000 37.80 40,00,015

of reserves shares lockedin for 3 years.Balance35,60,000shares lockedin for 1 year

* The lock in will start from the date of allotment in the present public issue and the last date of the lock in shall bereckoned as 3 years/1 year from the date of commencement of commercial production or from the date of allotment in thepublic issue, whichever is later.

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2. Details of increase in authorised capital

Sl. No. Particulars of increase Date of meeting

1 Rs.7,50,000/- Incorporation2 From Rs.7,50,000/- to Rs.15,00,000/- 10th January 19903 From Rs.15,00,000/- to Rs.90,00,000/- 31st December 19924 From Rs.90,00,000/- to Rs.2,00,00,000/- 6th March 19965 From Rs.2,00,00,000/- to Rs.6,00,00,000/- 5th March 20046 From Rs. 6,00,00,000/- to Rs. 11,00,00,000/- 2nd April 2004

3. Promoters contribution and lock in periodName Date Of Consider- No. of Face Issue % Of Post Lock In Period*

Allotment/ a t ion Shares Value Price Issue CapitalFully Paid Up

Mr. Rajendra Sah Upto 09.05.1990 Cash 3 8 7 9 5 1 0 1 0 0.12 1 year10.05.1990 Bonus 3 8 7 9 5 1 0 — 0.39 1 Year29.01.1993 Bonus 155180 1 0 — 1.55 1 Year18.05.1993 Righ ts 1 6 7 8 0 1 0 1 0 0.17 1 Year06.03.1996 Bonus 249595 1 0 — 2.49 1 YearTransfers Cash 6 6 5 1 0 — 0.27 1 Year15.03.2004 Sp l i t 9 9 9 6 2 0 5 — — —15.03.2004 Bonus 2249145 5 — 11.25 700000 Shares are subject to

lock in for 3 years and thebalance shares will be subjectto lock in for 1 year

15.03.2004 Cash 1 5 5 5 Negl ig ib le 3 YearsMrs. Shobha Sah Upto 09.05.1990 Cash 2 1 0 0 0 1 0 1 0 0.08 1 Year

10.05.1990 Bonus 2 1 0 0 0 1 0 — 0.21 1 Year29.01.1993 Bonus 8 4 0 0 0 1 0 — 0.84 1 Year18.05.1993 Righ ts 4000 1 0 1 0 0.04 1 Year06.03.1996 Bonus 130000 1 0 — 1.30 1 Year15.03.2004 Sp l i t 5 2 0 0 0 0 5 — — —15.03.2004 Bonus 1170000 5 — 5.85 1000000 Shares are subject to

lock in for 3 years and thebalance shares are subject tolock in for 1 year

Mr. Vivek Sah Upto 09.05.1990 Cash 4 1 0 1 0 1 0 Negl ig ib le 1 Year10.05.1990 Bonus 4 1 0 1 0 — Negl ig ib le 1 Year29.01.1993 Bonus 1640 1 0 — Negl ig ib le 1 Year18.05.1993 Righ ts 9 7 5 4 0 1 0 1 0 0.98 1 Year06.03.1996 Bonus 100000 1 0 — 1.00 1 Year15.03.2004 Sp l i t 4 0 0 0 0 0 5 — 1.00 —15.03.2004 Bonus 900000 5 — 4.50 3 years

Mr. Aditya Sah Upto 09.05.1990 Cash 1 0 1 0 1 0 Negl ig ib le 1 Year10.05.1990 Bonus 1 0 1 0 — Negl ig ib le 1 Year29.01.1993 Bonus 4 0 1 0 — Negl ig ib le 1 Year18.05.1993 Righ ts 9 9 9 4 0 1 0 1 0 1.00 1 Year06.03.1996 Bonus 100000 1 0 — 1.00 1 Year15.03.2004 Sp l i t 4 0 0 0 0 0 5 — 1.00 —15.03.2004 Bonus 900000 5 — 4.50 3 Year

Mr. Rajendra Sah Upto 09.05.1990 Cash 1 0 7 1 0 1 0 1 0 Negl ig ib le 1 Year(HUF) 10.05.1990 Bonus 1 0 7 1 0 1 0 — 0.05 1 Year

29.01.1993 Bonus 4 2 8 4 0 1 0 — 0.43 1 Year18.05.1993 Righ ts 1 9 5 7 4 0 1 0 1 0 1.96 1 Year06.03.1996 Bonus 260000 1 0 — 2.60 1 Year15.03.2004 Sp l i t 1040000 5 — — —15.03.2004 Bonus 2340000 5 — 11.70 500000 Shares for 3 years and

balance for 1 year

* The lock in will start from the date of allotment in the present public issue and the last date of the lock in shall be reckoned as 3 years/1 year from the date of

commencement of commercial production or from the date of allotment in the public issue, whichever is later.

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The Company confirms that the Promoter contribution does not consist of

a) Shares acquired for consideration other than cash and revaluation of assets or capitalisation of intangible assets or bonus sharesout of revaluation reserves or reserves without accrual of cash resources

b) securities issued during the preceding one year, at a price lower than the price at which equity shares is being offered to public

c) private placement made by solicitation of subscription from unrelated persons either directly or through any intermediary

d) shares for which specific written consent has not been obtained from the respective shareholders for inclusion of their subscriptionin the minimum promoters contribution subject to lock-in

e) shares issued to promoters on conversion of partnership firms into limited company

f) shares with a contribution less than Rs.25,000/- per application from each individual and contribution less than Rs.1,00,000/-from firms and companies

4. PRE-ISSUE AND POST-ISSUE SHAREHOLDING PATTERN

Pre-Issue and post-Issue shareholding pattern of the Company assuming full subscription of the present Issue is given below:

Particulars Pre Issue Capital Post Issue Capital

No. of Equity Shares % No. of Equity Shares %

Promoters and their associates 1,09,20,000 100.00 1,09,20,000 54.60

Public - - 90,80,000 45.40

Total 1,09,20,000 100.00 2,00,00,000 100.00

5. Pre and Post issue shareholding pattern of the Core Promoters

Name of the No. of Shares % on Pre-issue % on post-issue Lock in *Promoter held holding capital

Mr. Rajendra Sah 32,48,780 29.75 16.24 700015 shares are subject to lock infor 3 years and balance shares arelocked in for one year

Mrs. Shobha Sah 16,90,000 15.48 8.45 1000000 shares are subject to lockin for 3 years and balance shares arelocked in for one year

Mr. Vivek Sah 13,00,000 11.91 6.50 900000 shares are subject to lock infor 3 years and balance shares arelocked in for one year

Mr. Aditya Sah 13,00,000 11.91 6.50 900000 shares are subject to lock infor 3 years and balance shares arelocked in for one year

Mr. Rajendra Sah 33,80,000 30.95 16.90 500000 shares are subject to lock in(HUF) for 3 years and balance shares are

locked in for one year

* The lock in will start from the date of allotment in the present public issue and the last date of the lock in shall bereckoned as 3 years/1 year from the date of commencement of commercial production or from the date of allotment in thepublic issue, whichever is later.

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6. The ten largest shareholders two years prior to date of filing of this Prospectus with ROC is as follows:

Sl. No. Name of the Shareholder No. of Shares % to post issue(Of Rs.5/- each) capital

1 Rajendra Sah 999600 5.00

2 Rajendra Sah HUF 1040000 5.20

3 Shobha Sah 520000 2.60

4 Vivek Sah 400000 2.00

5 Aditya Sah 400000 2.00

6 Raghunath P Sah 20 Negligible

7 S K Mundra HUF 20 Negligible

8 G R Modi 20 Negligible

9 G B Modani 20 Negligible

10 Ramesh R Jhaveri 20 Negligible

7. The ten largest shareholders 10 days prior to date of filing of this Prospectus with ROC is as follows:

Sl. No. Name of the Shareholder No. of Shares % to post issue(of Rs.5/- each) capital

1 Rajendra Sah 3248780 16.24


3 Shobha Sah 1690000 8.45

4 Vivek Sah 1300000 6.50

5 Aditya Sah 1300000 6.50

6 Asha V Sah 32 Negligible

7 Malhar V Sah 32 Negligible

8 Master Ranay V Sah 32 Negligible

9 Chaitali A Sah 32 Negligible

10 Tannaya Sah 32 Negligible

8. The ten largest shareholders as on date of filing of this Prospectus with ROC are as follows:

Sl. No. Name of the Shareholder No. of Shares % to post issue(of Rs.5/- each) capital

1 Rajendra Sah 3248780 16.24


3 Shobha Sah 1690000 8.45

4 Vivek Sah 1300000 6.50

5 Aditya Sah 1300000 6.50

6 Asha V Sah 32 Negligible

7 Malhar V Sah 32 Negligible

8 Master Ranay V Sah 32 Negligible

9 Chaitali A Sah 32 Negligible

10 Tannaya Sah 32 Negligible

9. 1,09,19,678 Shares are held by the Promoters Group. The Promoter Group/ directors of the Company/ directors of the Promoterhave not purchased and or sold/ financed any shares of the Company during the past six months.

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III. TERMS OF THE PRESENT ISSUE

AUTHORITY FOR THE PRESENT ISSUE


PRINCIPAL TERMS AND CONDITIONS OF THE ISSUE

The Equity shares now being offered are subject to the terms of this Prospectus, the Application Form and Memorandum andArticles of Association of the Company, the guidelines for listing of Securities issued by Government of India and guidelines issuedby the Securities and Exchange Board of India (SEBI) from time to time, the Depositories Act, 1996 and the provisions of theCompanies Act 1956.

In addition, the equity shares shall also be subject to such other terms and conditions as may be incorporated in the Letter ofAllotment, Share Certificates, as per guidelines, notifications and other regulations for the issue of the capital and listing of securitieslaid down from time to time by the Government of India and / or other authorities and other documents that may be executed inrespect of equity shares.

Face Value:

Each equity share shall be of Face value of Rs.5/-

Terms of Payment:

The Applications should be for minimum of 150 equity shares and in multiples of 150 equity shares thereafter.

The entire amount of Rs. 35/- per share is payable in full on application.

Where an applicant is allotted lesser number of equity shares than he / she has applied for, the excess amount paid on applicationremaining thereafter will be refunded to the applicant.

If there is any delay in dispatch of allotment letters/refund orders the Company shall pay interest for the delay period in compliancewith clause 6.5.1.1 of SEBI (DIP) Guidelines, 2000.

Rights of the Equity share holders

1. To receive dividend, if declared.

2. To attend general meeting and exercise voting rights unless prohibited by law.

3. To vote either personally or by proxy.

4. To receive offer for rights shares and be allotted bonus shares.

5. To receive surplus on liquidation.

Ranking of equity shares

The equity shares to be issued shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari-passu with the existing equity shares of the Company including rights in respect of dividends.

Reservation to small individual applicants

A minimum 50% of the net offer of securities to the public shall initially be made available for allotment to retail individual investorsand the balance net offer of securities to the public shall be made available for allotment to individual applicants other than retailindividual investors and other investors including corporate bodies/institutions irrespective of the number of shares applied for.

The unsubscribed portion of the net offer to any one of the categories specified above may be made available for allotment toapplicants in the other category, if so required.

Interest In Case of Delay On Allotment/Dispatch

The Company agrees that –

a. As far as possible allotment of securities offered to the public shall be made within 30 days of the closure of the public issue.

b. It shall pay interest @ 15% per annum if the allotment has not been made and the allotment letters/refund orders have not beendispatched to the investors within 30 days from the date of the closure of the issue.

15

HOW TO APPLY

GENERAL INSTRUCTIONS

a. Availability of Application Forms and Prospectus

Application forms with Memorandum containing salient features of the Prospectus and copies of the Prospectus under Section56(3) of the Act may be obtained from the Registered Office of the Company, the Lead Managers to the issue and the Bankersto the issue named herein or from their branches as stated on the reverse of the application form.

b. Who can apply?

Applications may be made by:

1. Indian nationals resident in India who are not minor, in single or joint names (not more than three);

2. Hindu Undivided Families through the Karta of the HUF;

3. Companies, Corporate bodies and Societies registered under the applicable law in India and authorised to invest in theshares;

4. Scientific and/or Industrial Research Organisations, which are authorised to invest in shares;

5. Indian Mutual Funds registered with SEBI, Indian Financial Institution, Commercial Banks and Regional Rural Banks, Co-operative Banks may also apply subject to permission from RBI;

6. Indian Financial Institutions and Banks;

7. Trusts or Societies registered under the Societies Registration Act, 1860 or any other applicable Trust Law and which areauthorised under their constitution to hold and invest in equity shares of a Company;

8. Non Resident Indians (NRIs) on a non-repatriation basis.

9. Foreign Institutional Investors

Application not to be made by:

l Minors

l Foreign Nationals

l Partnership firms or their nominees

l Trusts (except as stated above)

l HUFs (except as stated above)

l NRIs (except as stated above)

l OCBs

A single application can be made only for the number of equity shares that are being offered to each respective category.

c. Procedure for Application

Application by Resident Indian Public

Application must be:

1. Made only in the prescribed application form accompanying the memorandum.

2. Completed in full in block letters in English except signatures in accordance with the instructions contained herein and inthe application form. Applications not so made are liable to be rejected.

3. For a minimum of 150 equity shares and in multiples of 150 thereafter.

4. In the name of Resident Indian Individuals, Limited Companies, Statutory Corporations/Institutions Incorporated in India,Indian Mutual Funds registered with SEBI and Banks. Applications in the name of minors, foreign nationals, Trusts notregistered under the Societies Registration Act, 1860, or any other Trust laws, partnership firms or their nominees, OCBs,NRIs on repatriation basis will be treated as invalid.

HUF should specify that the application is being made in the name of the HUF in the application form as “Name of thesole or first applicant : XYZ HUF applying through XYZ, where XYZ is the name of the Karta”. Application byHUFs would be considered at par with those from individuals.

16

5. Applicants residing at places where no collection centers have been opened may submit / mail their applications at theirsole risk along with application money due there unto by Demand Draft to the Registrar to the Issue, Karvy ComputersharePrivate Limited super scribing the envelope “Sah Petroleums- Public Issue” so as to reach the Registrar on or beforethe closure of the Subscription List. Such demand drafts should be payable at Mumbai only. The charges, if any, forpurchase of the demand draft will have to be borne by the applicant.

6. Application by Mutual Funds: A separate application can be made in respect of each scheme of an Indian Mutual Fundregistered with SEBI and such applications will not be treated as multiple applications provided the applications made bythe Mutual Funds / Trustees / the Custodians clearly indicate their intention as to each Scheme concerned for whichapplication has been made.

7. Subscription by NRIs/FIIs registered with SEBI

As per the extant policy of the Government of India, OCBs cannot participate in this Issue. Investments made by NRIs/FIIs are governed by the regulations contained in FEMA 20/2000-RB dated May 3, 2000 read with AP (DIR Series)Circular No.38 dated December 2, 2003 shall be applicable. It is to be distinctly understood that there is no reservation forNRIs and FIIs registered with SEBI and all NRI and FII registered with SEBI applicants will be treated on the same basiswith other categories for the purpose of allotment.

8. All cheques / bank drafts accompanying the application should be crossed “ A/c payee only” and made payable to any ofthe Bankers to the Issue and lodged at any of their nominated branches and should bear the words “ Sah Petroleums -Public Issue”.

Applicants should indicate the application numbers on the reverse of the instrument through which the payment is made.

All application forms duly completed together with cash / cheques / demand draft drawn on any of the Bankers to the issuementioned on the prescribed application form for the amount payable on application at the rate of Rs. 35/- per equityshare, should be lodged with the bankers to the issue mentioned in the prescribed application form.

d. Instructions for payment: Payments should be made in cash or cheque or demand draft drawn on any Bank (including a Co-operative Bank), which is situated at, and is a member or a sub-member of the Bankers’ “Clearing House” located at the Centers(indicated in the Application Form) where the Application is accepted. A separate cheque / demand draft should accompanyeach Application.

Money orders, postal orders, outstation cheques or demand drafts, cheques / draft drawn on banks not participating in the“clearing” will not be accepted and applications accompanied with such instruments may be rejected.

In case payment is effected in contravention of the conditions mentioned herein, the application money will be refundedand no interest will be paid thereon.

Investors will not have facility of applying through stockinvest instrument as RBI has withdrawn the stockinvest schemevide notification no.DBOD.NO.FSC.BC.42/24.47.001/2003-04 dated 5/11/2003.

APPLICATION(S) WILL NOT BE ACCEPTED BY THE LEAD MANAGERS OR REGISTRAR TO THE ISSUE.

GROUNDS FOR TECHNICAL REJECTIONS

Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following:-

a) Bank account details are not provided

b) Age is not mentioned

c) Application by Minors

d) PAN or GIR number is not given if the value of the application is for Rs.50,000/- or more.

e) Multiple applications

f) In case of under power of attorney or by limited companies, corporate, trust etc., relevant documents are not submitted.

g) Applications accompanied by Stockinvests

h) Application by OCBs

i) Applications not duly signed by the sole/joint applicants

j) Application forms does not have the applicants depository account details

k) Application not in multiples of 150 shares

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Particulars of Bank Account

All the applicants should mention particulars relating to Savings Bank/Current Account number and the name of the bank and branchwith whom such account is held in the appropriate place in the application form to enable the Registrar to print the said details inthe refund orders after the name of the payee.

Please note that it is mandatory to provide the aforementioned details. Applications without these details would be treatedas incomplete and applications are liable to be rejected.

Note

Applicants are requested to write their names and application serial number on the reverse of the instruments by which thepayments are being made to avoid misuse of instruments submitted along with the applications for equity shares. For furtherinstructions, please read the Application Form carefully.

Disposal of Application and Application Money:

No receipt will be issued for application money. However, the Bankers to the issue receiving the application will acknowledge thereceipt of the application by stamping and returning the detachable acknowledgment slip appended to each application.

The sum received in respect of the issue will be kept in separate bank accounts and the Company will not have any access to thefunds unless approval of the National Stock Exchange of India Limited, Mumbai is obtained for the basis of allotment and listingapproval from the Stock Exchanges where listing is proposed.

The Company reserves the full unqualified and absolute right to accept or reject any application in whole or part and in either casewithout assigning any reason thereof.

Basis of Allotment

In the event of the public Issue being oversubscribed, the allotment will be on a proportionate basis subject to market lots asexplained below:

a. A minimum 50% of the net Issue to the Indian public will be made available for allotment in favour of those retail individualapplicants who have applied for Equity Shares of or for a value not more than Rs.50,000/-. This percentage may be increasedin consultation with the Designated Stock Exchanges depending on the extent of response to the Issue from investors in thiscategory. In case allotments are made to a lesser extent than 50% because of lower subscription in the above category, thebalance Equity Shares would be added to the higher category and allotment made on a proportionate basis as per relevant SEBIGuidelines.

The Executive Director / Managing Director of the National Stock Exchange along with the post issue Lead Manager and theRegistrars to the issue shall be responsible to ensure that the basis of allotment is finalised in a fair and proper manner inaccordance with the guidelines.

b. The balance of Net Issue to Indian Public shall be made available to investors including corporate bodies/institutions andindividual applicants who have applied for Equity Shares for a value more than Rs.50,000/-.

c. The Unsubscribed portion of the net issue to any of the categories specified in (a) or (b) shall be made available for allotmentto applicants in the other category, if so required.

d. Applicants will be categorized according to the number of equity shares applied for.

e. The total number of equity shares to be allotted to each category as a whole shall be arrived at on a proportionate basis i.e. thetotal number of shares applied for in that category (number of applications in the category multiplied by the number of equityshares applied for) multiplied by the inverse of the over subscription ratio.

f. Number of equity shares to be allotted to the successful allottees will be arrived at on a proportionate basis i.e. total numberof equity shares applied for by each applicant in that category multiplied by the inverse of the over subscription ratio.

g. In all the applications where the proportionate allotment works out to less than 150 equity shares per applicant, the allotmentshall be made as follows:

i. Each successful applicant shall be allotted a minimum of 150 equity shares, and

ii. The successful applicants out of the total applicants of that category shall be determined by drawal of lots in such amanner that the total number of equity shares allotted in that category is equal to the number of equity shares worked outas per (b) above.

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h. If the proportionate allotment to an applicant works out to a number that is more than 150 but is not a multiple of 150 (whichis the marketable lot for the purpose of allotment) the number in excess of the multiple of 150 would be rounded off to thehigher multiple of 150 if that number is 75 or higher. If that number is lower than 75, it would be rounded off to the lowermultiple of 150. All applicants in such categories would be allotted equity shares arrived at after such rounding off.

If the equity shares allocated on a proportionate basis to any category is more than the equity shares allotted to the applicants inthe category, the balance available equity shares for allotment shall be first adjusted against any other category where the allottedequity shares are not sufficient for proportionate allotment to the successful applicants in that category. The balance equity sharesif any, remaining after such adjustment will be added to the category comprising of applicants applying for minimum number ofequity shares.

In the event of over subscription, in the process of rounding off to ensure allotment in marketable lots, the Company may make suchadjustments in the basis of allotment, as may be necessary, in consultation with SEBI/Stock Exchanges. As the basis of allotment ison proportionate basis, in the process of rounding off to the nearest multiple of 150, the issue size may increase by a maximum of10% of the net offer to Indian Public.

Issue of Certificates

In terms of Sec 68B of the Companies Act, 1956, the company will not issue any share certificates instead, the Company shall givecredit to the beneficiary account with Depository participant within 3 working days of finalization of allotment of shares.

Allotment Letters & Share Certificates & Refund Orders

In accordance with The Companies Act, 1956 and the requirement of stock exchanges, the Company shall pay interest @ 15% perannum on the entire amount if the allotment of the Equity Shares has not been made within 30 days from the date of closure of theIssue. This interest will be paid from the 31st day from the closure of the Issue until the actual date of allotment. Alternatively, incase of any delay in the dispatch of refund orders beyond 30 days from the closure of the Issue, interest @ 15% per annum, willbe paid on the refund amount from the 31st day from the closure of the Issue until the date of dispatch of the refund orders.

The Company shall ensure dispatch of refund orders of value up to Rs. 1,500/- under certificate of posting / Allotment advice and/or regret letters together with refund orders over Rs.1,500/- by Registered Post only.

The Company has undertaken to make available necessary funds to the Registrar for the purpose of dispatch of Allotment Letters/ Refund Orders as stated above.

Interest on Excess Application Money

Payment of interest @15% per annum on excess application money (after adjusting the amount due on allotment) will be made tothe applicants, if refund orders are not dispatched within 30 days from the date of the closure of the Issue as per the Guidelinesissued by the Government of India, Ministry of Finance vide their letter no. F-8/6/SE/79 dated July 21, 1983, as amended vide theirletter no. F/14/SE/85 dated September 27, 1985 addressed to the Stock Exchanges, and as further modified by SEBI’s circular SMD/RCG/33/1819/96 dated May 15, 1996.

Interest in case of delay on allotment & dispatch

a. As far as possible, allotment of securities offered to the public shall be made within 30 days of the closure of this Issue.

b. The issuers shall pay interest @ 15% per annum for the period of delay beyond 30 days if the allotment has not been madeand / or refund orders have not been dispatched to the investors within 30 days from the date of closure of the Issue.

However, applications received after the closure of the issue in fulfillment of underwriting obligations to meet minimumsubscription requirement shall not be entitled for the said interest.

Scope of activities of the Registrars to the Issue

The Registrars to the Issue shall also be the Share Transfer Agent and would also be responsible for all the post issue activitiespertaining to this issue.

Undertaking by the Company in terms of SEBI Clause 6.5.6. of SEBI Guidelines

The Company hereby undertakes -

a. That the complaints received in respect of the Issue shall be attended to expeditiously and satisfactorily;

b. That all steps for completion of the necessary formalities for listing and commencement of trading at all Stock Exchanges wherethe securities are to be listed are taken within 7 working days of finalisation of basis of allotment.

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c. That the issuer company shall apply in advance for the listing of equities on the conversion of Bonds, if applicable;

d. That the funds required for dispatch of refund orders/allotment letters by registered post shall be made available to the Registrarto the Issue by the issuer company;

e. That the promoters’ contribution in full, wherever required, shall be brought in advance before the Issue opens for publicsubscription and the balance, if any, shall be brought in pro rata basis before the calls are made on public;

f. That share certificates/refund orders to the non-resident Indians shall be dispatched within specified time;

g. That no further issue of securities shall be made till the securities offered through this Prospectus are listed or till theapplication moneys are refunded on account of non-listing, under subscription, etc.

h. That necessary cooperation with the credit rating agency (ies) shall be extended in providing true and adequate information tillthe debt obligations in respect of the instrument are outstanding, if applicable.

i. The Company, its promoters, any of the company’s associates of group companies, and other Companies with which directorsof the company are associated as directors or promoters have neither suspended by SEBI or been prohibited from accessing thecapital market or any disciplinary action taken by any order or direction passed by SEBI.”

GENERAL INFORMATION

1. Joint Applications

An application may be made in single or joint names (not more than three) as mentioned elsewhere in the prospectus. In caseof a joint application, refund pay order (if any) and dividend / warrants, etc. will be made out in favour of the first applicant.

All communications will be addressed to the applicant whose name appears first and will be dispatched to the first applicant’saddress stated in the application form.

2. Multiple Applications

An applicant should submit only one application (and not more than one) for the total number of equity shares required.Applications may be made in single or joint names (not more than three). Two or more applications, in single and / or in jointnames will be deemed to be multiple applications if the sole and / or first applicant is one and the same.

3. Application under Power of Attorney

In case of applications under a Power of Attorney or by limited companies or bodies corporate or societies, the relevant Powerof Attorney or the relevant resolution or authority to make the application, as the case may be, together with a certified truecopy thereof along with a copy of Memorandum and Articles of Association and /or bye-laws must be attached to theApplication Form at the time of making the application or lodged for scrutiny separately indicating the Serial No. of theApplication Form with the Registrar to the Issue at their address, within 10 days from the closure of the Issue, failing which,the Issuer reserve the full, unqualified and absolute right to accept or reject any application in whole or in part and in either casewithout assigning any reason thereof.

4. Thumb impression or signature in language other than English, Hindi or any other language specified in the 8th Schedule of theConstitution of India must be attested by Magistrate or Notary Public or a special Executive Magistrate under his official seal.

5. All communications should be addressed to the Registrar to the Issue.

6. The applicant should mention the Application Form number on the reverse of the instrument through which payment is made.

7. Applicants are advised that it is mandatory for them to indicate in the space provided in the application form, details regardingtheir Savings Bank / Current Account Numbers and the name of the branch of the bank to which they want the proceeds ofrefund to be credited. Applications not containing such details are liable to be rejected.

8. Where an application is for allotment of equity shares for a total value of Rs. 50,000 or more i.e. the total number of securitiesapplied for multiplied by the Issue price is Rs. 50,000/- or more, the applicant or in the case of applicants in joint names, eachof the applicants should mention his permanent account number allotted under the Income Tax Act, 1961 or where the same hasnot been allotted, the GIR number and the Income Tax Circle / Ward / District should be mentioned. In case where neither thePermanent Account Number (PAN) nor the GIR number has been allotted, the fact of non-allotment should be mentioned in theapplication form. Application forms without this information will be considered incomplete and will be liable to be rejected.

9. Having regard to provisions of Section 269SS of the Income Tax Act, 1961, the subscription against the equity shares applicationfor an amount of Rs. 20,000 or more should not be effected in cash and must be offered only by an A/c. payee cheque / bankdraft. In case payment is effected in contravention of the provisions, the application is liable to be rejected and applicationmoney will be refunded without interest.

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10. A separate cheque / bank draft must accompany each application form.

11. Depository option to Investors

In terms of section 68B of the Companies Act, the equity shares in this Issue shall be allotted only in dematerialized form, (i.e.not in the form of physical certificates but be fungible and be represented by the statement issued through electronic mode).

Tripartite agreements have been signed between the Company, the registrar and CDSL and NSDL. The ISIN No. allotted to theCompany is INE586G01017.

Application from any investor without the following details of his or her depository account are liable to be rejected.

1. An applicant applying for equity shares must have at least one beneficiary account either of the depository participants ofNSDL or CDSL prior to making the Application.

2. The applicant must necessarily fill in the details (including the beneficiary account number and depository participantsidentification number) appearing in the application form.

3. Equity shares allotted to applicant will be credited in electronic form directly to the beneficiary account (with the depositoryparticipant) of the applicant.

4. Names in the application form should be identical to those appearing in the account details in the Depository. In case ofjoint holders, the names should necessarily be in the same sequence as they appear in the Depository account of theBidder(s).

5. If incomplete or incorrect details are given under the heading applicant Depository account details in the application formit is liable to be rejected.

6. The applicant is responsible for the correctness of his or her demographic details given in the application form vis-à-visthose with his or her Depository participant.

7. It may be noted that equity shares in electronic form can be traded only on the Stock exchanges having electronicconnectivity with NSDL or CDSL. All the stock exchanges where our equity shares are proposed to be listed are connectedto NSDL and CDSL.

8. The trading of equity shares would be in dematerialized form only for all investors.

MARKETABLE LOT

The Company shall allot the Equity Shares in dematerialized form only. The trading in the Equity Shares of the company shall onlybe in dematerialized form for all investors., where the tradeable lot is one equity share.

The marketable lot for the purpose of allotment is 150 shares.

ARRANGEMENT FOR DISPOSAL OF ODD LOTS

The Company has not made any arrangements for disposal of odd lot of shares arising out of this Issue as the tradeable lot is ONE.

NOMINATION FACILITY TO INVESTORS

In accordance with Section 109A of the Act, applicants, may nominate any one person in whom, in the event of the death of theapplicants as the case may be the equity shares allotted if any, shall vest. A person being a nominee, entitle to the equity shares byreason of death of the original holders (s), shall in accordance with Section 109A of the Act be entitled to the same advantages towhich he or she would be entitled if he or she were the registered holder of the equity shares. Where the nominee is a minor, theholder may make a nomination to appoint, in the prescribed manner, any person to become entitled to equity shares in the event ofhis or her death during the minority. A nomination shall stand rescinded upon a sale of equity shares by the person nominating. Abuyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made on a prescribed formavailable on request at the registered office of the Company or to the Registrar and Transfer Agents of the company. In accordancewith Section 109B of the Act, any person who becomes nominee by virtue of 109A of the Act shall upon production of suchevidence as may be required by the Court, elect either:

a) To register himself or herself as holder of Equity Shares or

b) To make such transfer of the Equity Shares, as the deceased holder could have made.

Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or totransfer the Equity Shares, and if the notice is not complied with, within a period of 90 days, the Board may thereafter withholdpayment of all dividends, bonuses or other monies payable in respect of the equity shares, until the requirement of the notice havebeen complied with.

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In case of allotment in demat form, the nominations registered with the respective depository participants of the applicant wouldprevail.

UTILISATION OF ISSUE PROCEEDS

The Board of Directors certifies that -

a. All monies received out of the issue of shares to the public shall be transferred to a separate Bank account other than the Bankaccount referred to in Sub-section (3) of Section 73 of Companies Act, 1956;

b. Details of all monies utilized out of this issue referred to in item (a) shall be disclosed under an appropriate separate head in theBalance Sheet of the Company indicating the purpose for which such monies had been utilized;

c. Details of all unutilized monies out of this issue of shares, if any referred to in item (a) shall be disclosed under an appropriateseparate head in the Balance Sheet of the Company indicating the form in which such unutilized monies have been invested.

STATEMENT OF TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS

The Company has been advised by M/s.N D Daga & Co., Auditors of the Company, vide their letter dated 9th April 2004 thatunder the current provisions of the Income Tax Act, 1961 and the existing laws for the time being in force, the following benefits,inter alia, will be available to the Company and the Members.

To the Company under Income Tax Act, 1961

Profit from industrial undertaking located in backward area exempt U/s. 80 IB of the Act.

To the members of the Company under the Income Tax Act, 1961

B-1 Resident Members

l Dividend exempt under Section 10(34) & under Section 115 O of the Act.

l Computation of capital gains under Section 112 of the Act.

l Exemption of capital gain from Income Tax U/S. 54 EC, 54 ED and 54 F of the Act.

B-2 Non-Resident Indians

l Dividend exempt u/s. 10(34) & under Section 115 O of the Act.

l Computation of capital gain under first proviso to Section 48 & u/s.112 of the Act.

l Capital gain tax option available u/s. 115E, 115F, 115G & 115I of the Act.

l Exemption of capital gain from Income Tax u/s.54EC, 54ED and 54F of the Act.

l Provisions as per Section 90 (2) of the Act.

B-3 Foreign Institutional Investors

l Taxability of capital gains under Section 115AD of the Act.

l Dividend exempt under Section 10(34) and under section 115 O of the Act.

l Exemption of capital gain from Income Tax under Section 54EC, 54ED of the Act.

B-4 Venture Capital Companies/Funds

In terms of Section 10(23FB) of the Income Tax Act, 1961, all venture capital companies/funds registered with Securities andExchange Board of India subject to the conditions specified , are eligible for exemption from income tax on all their income, includingdividend from and income from sale of shares of the company.

C. To the members of the Company under the Wealth Tax Act, 1957

Shares of Company held by the Shareholders will not be treated as asset within the meaning of Section 2 (ea) of Wealth TaxAct, 1957, hence, no wealth tax will be payable on the market value of shares of the Company held by the Shareholder of theCompany.

D. To members of the Company under the Gift Tax Act, 1958.

Gift made after 1st October 1998 is not liable for any gift tax and hence gift of shares of the Company would not be liable forany gift tax.

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IV. PARTICULARS OF THE ISSUE

OBJECTS OF THE ISSUE

The objects of the issue is

a) For expansion and modernisation of existing plant at Vasai and Daman.

b) To meet the additional working capital requirement

c) To set up new branches in India and abroad

d) To meet the issue expenses

e) To get the shares listed on The National Stock Exchange of India Limited and the Stock Exchange, Mumbai.

The main objects clause and objects incidental or ancillary to the main objects clause of the Memorandum of Association of theCompany enable the Company to undertake its existing activities and the activities for which the funds are being raised throughthis Issue.

COST OF THE PROJECT AND MEANS OF FINANCE

Funds requirement as per Company’s own estimates in accordance with the objects of the issue are as under:

Cost of the Project (Rs. In lacs)

Sl. Particulars AmountNo.

A VASAI PLANT1 Purchase of Land 61.852 Construction works 61.203 Plant & Machinery 1059.95

Sub- total 1183.00B. DAMAN PLANT1 Purchase of Land 125.002 Construction works 43.203 Plant & Machinery 1281.80

Sub-total 1450.00C. OTHERS1 Marketing & advertisement expenses 200.002 Margin money for working capital 450.003 IPO expenses 250.004 New Branch Offices & Depots 50.005 Overseas Branch Off expenses for exports 75.006 Contingencies 395.00

Sub-total 1420.00

GRAND TOTAL (A+B+C) 4053.00

Means of Finance (Rs. In Lacs)

Sl. Particulars AmountNo.

1. Public Issue of Equity Shares 3178.00

2. Internal Accruals 875.00

Total 4053.00

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Notes:

a) The Company confirms that firm arrangements of finance through verifiable means towards 75% of the stated means of finance,excluding the amount to be raised through proposed public issue, have been made.

b) Any shortfalls in meeting project cost will be met through further internal accruals & promoters contribution.

c) No part of the issue proceeds will be paid as consideration to promoters, directors, key managerial personnel, associate or groupcompanies. However, the Company has identified to buy Plot 13 to 16, Behind Dewan & shah Indl. Estate, Village Valliv, Vasai(east), Thane, Maharashtra, which belongs to Industrial Agencies, a partnership firm in which Mr. Ashok Sah (brother ofMr.Rajendra Sah, Executive Chairman of the Company) is one of the Partners.

d) Pending utilisation the proceeds will be invested in Bank deposits and/or Gilt Edged Government Securities, either directly orthrough Government Security based funds.

Proposed deployment of funds in the project

The year-wise breakup of proposed deployment of funds is mentioned below:

(Rs. In lacs)

Particulars FY 2004-05 FY 2005-06 FY 2006-07 TotalSept.’04 Jan. – April – July – Oct. – Jan. – Apr.’06–Dec.’04 Mar

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Revaluation of Assets:

The Fixed Assets of the company were revalued during the accounting year ended 31st March 1995 Land, Factory Building and Plant& Machinery at Vasai were valued by approved valuers on the basis of current replacement value and office premises at Bombaywere valued on the basis of market rate furnished by the society.

Sr. Head Book WDV Valuers Fig Appreciation

On Amount Rs. Rs.Rs.

i Land at Vasai 01.04.94 2,44,728 30,28,000 27,83,272

ii Factory Building at Vasai 01.04.94 24,14,300 84,80,000 60,65,700

iii Plant & Machinery at Vasai Factory 01.04.94 59,45,062 98,22,700 38,77,638

iv Office premises at Mumbai 01.08.94 3,63,837 3,70,50,000 3,66,86,163

BUSINESS OF THE COMPANY

In 1981, the top management of SPL established a blending plant at Vasai near Mumbai. The plant is equipped with the latestmanufacturing, testing, R & D, and storage facilities. This plant has storage capacity of approx 5000 kl. In 2000 the company starteda unit at Daman and is enjoying benefits under the Income Tax & Sales Tax Act. The company has set up sales offices and depotsin various parts of India. The Company produces a wide range of Industrial Lubricants, Automotive Lubes, Rubber Processing Oil,Greases, Transformer Oils & Specialties. It is recognized as amongst one of the top most private companies in India manufacturinga wide range of industrial lubricants, specialties, process oils, automotive lubricants and greases under the registered brand name“IPOL®™”. The company caters to the needs of various renowned companies like Goodyear, Ceat, Tata Motors, Bridgestone,Eicher and others. It also supplies to Railways & State Road Transport.

Corporate Milestones

l Industrial Products, a partnership firm commenced manufacturing activities in 1976 with the goal of becoming a minor oilcompany. In 1983 Sah Pertoleums Pvt. Ltd. was incorporated to take over the business of Industrial Products.

l SPL became one of the first private oil companies to break into the Sugar industries, which was dominated by the public sectoroil companies. Extensive R&D enabled SPL to develop a comprehensive and the large range of mill bearing oils & open gearcompounds that were by far superior to the ones available.

l In 1983-1984 SPL developed special type of oils as an import substitutes for manufacturing ball pen tips & jotter refills.

l SPL got a major break through by becoming a supplier to Telco, as they were one of the only companies to be able to satisfytheir broaching oil requirements. SPL has been achieving a 100 per cent quality rating as their Vendors for the last several years.

l SPL was one of the first private players to enter into the glass mould oil business. Today the Company supplies to companieslike Mahalaxmi Glass & Astral Glass.

l SPL subsequently entered the sector of rubber process oils. SPL took on extensive research on the actual requirements of theindustry and developed a wide range of grades, which were tailor made to suit the needs of each specific type of application.SPL is one of the companies to be an approved vendor in ACC Bridgestone, a company, which has the strictest, & the moststringent norms for quality assurances.

l In due course of time SPL started supplying a variety of oils like hydraulic oils, cutting oils etc. to reputed customers like BajajAuto, Bajaj Tempo, Godrej & Boyce, NRB Bearings, Voltas Group, Kirloskar Group etc. To become a regular supplier to suchblue chip companies became quite a significant achievement for SPL as it opened up the doors for them to start approaching avariety of industries all over the country.

l In 1997, SPL secured an O.E.M. approval from Eicher Motors & started supplying engine oils for their O.E.M. fills.

l In 1998, SPL got approval by the Railways & Developments Standards Organization opening the doors for supplies to theRailways who are a large consumer of lubricants.

l In early 1998, SPL in its endeavor to maintain & improve its quality was successfully accredited with the ISO 9002 certification.

l In 1998, after extensive field trials during 1995-1997 SPL was finally successful in being one of the first private players to getan approval from the University of Horticulture and Forestry-Solan, Himachal Pradesh for agricultural spray oil to be used inapple orchards. SPL has also under development a special “Summer Spray Oil” which can become an import substitute. Thisproduct once developed can not only replace the existing Orchard Spray Oil but can also be used for all types of citrus fruitslike oranges, limes, lemons etc.

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l In 1999, SPL achieved the distinction of being approved as an O.E.M. supplier to Ashok Leyland Ltd. for a variety of grades.SPL is one of the few private players to be awarded this prestigious approval.

l In 1999, SPL received an Allison approval of transmission fluid (sae-30) which has a tremendous potential in mining & roadconstruction equipment. Allison manufactures most of these equipments & therefore only O.E.M. approved oil should be usedto meet the necessary requirements. SPL also has a Japan Automobile Standards Organization (J.A.S.O.) approval for its 2T Oiland an American Petroleum Institute (A.P.I.) Doughnut approval for its CF4 Oil. As very few companies have been issued theseapprovals they will help us to increase our volumes in the automotive trade.

l In 2000-2001 SPL’s Automotive Greases got approvals from TELCO & Ashok Leyland for O.E. fill.

l The Year 2000-2001 has made inroads into State Transport Undertakings and other Govt. Transport Undertakings. It’s productsgot established in MSRTC / BEST / APSRTC / KSRTC / GSRTC / HRTC / DTC / NMMT / TMT / PMT / PMC etc.

l Intensive R & D get SPL’s specialized Thread Compounds and specialized Greases approved for supply to ONGC’s various Onand Offshore operations.

l In 2003-2004 SPL makes it International debut by starting export of Greases and other Lubes to the Middle East & Sri Lanka.

l In the Year 2003-2004 SPL get a major break-through by establishing supplies to the Defence Sector.

l From 2001-2004 SPL has added many OEM’s to it’s list of clients namely Eicher Tractors, Escorts Construction Equipment,ACE Cranes, Royal Enfield, Godrej – Forklift, Simpson, Bajaj Auto, Bajaj Tempo, TATA Motors, TATA Indica, Sonalika AgroIndustries etc.

l In the Year 2003-2004 SPL commenced supplies to various major Engineering Industries like Hero Honda, Sono Koyo, OmaxGroup, JBM, Aarti Steel, Hero Cycle, TATA Motors, Jamshedpur etc.

MAIN OBJECTS OF THE COMPANY

The Object Clause of the Memorandum of Association of the Company enables it to undertake its present and proposed activities.The objects that permit the Company’s main operations are:

To carry on the business of manufacturers, buyers, sellers, dealers, commission agents, importers, exporters and distributors ofchemicals of any nature, petrochemicals including lubricants, greases, petroleum jelly, wax impulsion, chemical compounds, insulatingoils, petroleum specialties, chemical products and intermediates, organic and inorganic chemicals, textile chemicals, dyes, pigments,colours, intermediates, chemical compounds and elements (solid and liquid) paints, varnishes, heavy and fine chemicals, rubberchemicals, sanitary chemicals, industrial, organic and inorganic chemicals, agricultural chemicals, photographic chemicals, laboratorychemicals, chemicals for moulding materials, surface acting agents, adhesives and surface coatings, detergents, wetting out agents,natural and synthetic resins such as alkyds, phenolics, urea epoxy, acrylic and melamine, chemical auxiliaries for goods, ceramics,pottaries, natural and synthetic fabrics, papers.

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Products manufactured by the Company

The products manufactured by the Company are:

New generation diesel engine oils, eco-friendlymotor oils, low emission cng engine oils, highperformance gear oils and transmission fluids,conventional engine oils & gear oils, 2 stroke engineoils, 4 stroke engine oils, pump set oils.

Chassis grease, heel bearing grease, multipurposegrease.

Brake fluids, flushing oils, shock absorber oils,calibration oils, radiator coolant, antirust undercoat,running in cum preservative engine oils.

General machinery oils, gear box and bearinglubricants, high speed machinery lubricants,circulating oils – R & O type, antiwear type,HLP type, turbine oils, steam cylinder oils, high-speed spindle oils, sugar mill bearing lubricants,conventional type, non bituminous type Stationerydiesel engine oils, air tool oils, machine tool wayoils, open gear and wire rope compounds, hydraulic-cum-way oils, special compressor oils, industrialgear oils, ginning oils, dual purpose oils.

High temperature greases, low temperature greases,multipurpose greases, lithium complex greases,molyplex greases, sobex greases, graphited greases.

Neat cutting oils, emulsifiable coolants, syntheticcoolants, semi-synthetic coolants, drawinglubricants, rolling oils, spark erosion oils.

Aromatic oils, naphthelic oils, paraffinic oils

Uninhibited – is 335:1993

Inhibited – is 12463:1988

Tempering & quenching oils, rust preventives, heattransfer oils, cable oilsthread compounds, ink oils,dg cleanser, mould oils, chassie grease, wheel bearinggrease, multipurpose grease, orchard spray oil.

Automotive lubricants

Automotive greases

Automotive specialties

Industrial lubricants

Industrial greases

Metal working lubes

Rubber processing oils

Transformer oils

Specialties

State Road Transport UndertakingsFertiliser IndustriesEngineering IndustriesRetail (Dealer/Distributor Network)

State Road Transport UndertakingsEngineering Industries Steel IndustriesExploration & Mining Industries Marine IndustryRetail (Dealer/Distributor Network)

State Road Transport UndertakingsEngineering IndustriesOthers

State Road Transport UndertakingsFertiliser IndustriesEngineering IndustriesTextile IndustriesRailwaysSteel IndustriesExploration & Mining IndustriesPower Generation IndustryMarine IndustryTyre Manufacturers

State Road Transport UndertakingsFertiliser IndustriesEngineering IndustriesTextile IndustriesRailwaysSteel IndustriesExploration & Mining IndustriesPower Generation IndustryMarine IndustryRetail (Dealer/Distributor Network)

Engineering IndustriesRailwaysSteel IndustriesOthers

Tyre ManufacturersRubber component Manufacturers

Power Generation Industry

Engineering IndustriesTextile IndustriesRailwaysRetail (Dealer/Distributor Network)Others

Product Specification End users

27

SUBSIDIARIES OF THE COMPANY

The Company has no subsidiaries.

SELECTIVE FINANCIAL DATA OF THE COMPANY

PROFIT AND LOSS ACCOUNT

Rs. In Lacs

Year Ended Year Ended Year Ended Year Ended Year EndedMarch 31, March 31, March 31, March 31, March 31,

2004 2003 2002 2001 2000

INCOME

Gross Turnover

Manufactured 7,190.18 5,222.08 3,890.72 3,227.03 2,866.66

Traded 50.19 266.74 285.54 388.93 416.58

7,240.37 5,488.82 4,176.26 3,615.96 3,283.24

Less: Excise Duty 989.76 725.73 540.83 448.34 397.44

Net Turnover 6,250.61 4,763.09 3,635.43 3,167.62 2,885.80

Other Income 122.52 37.57 2.18 3.69 0.81

Increase/(Decrease) in Finished Goods 51.45 39.17 (13.43) (12.30) 39.20

6,424.58 4,839.83 3,624.18 3,159.01 2,925.81

EXPENDITURE

Materials 4,417.63 3,643.56 2,543.34 2,239.52 1,833.27

Staff Cost 122.66 125.61 123.27 165.26 172.64

Other Manufacturing Expenses 377.91 255.06 220.05 248.74 301.67

Administration Expenses 260.43 240.82 172.23 151.93 195.74

Selling & Distribution Expenses 243.71 234.39 315.11 131.03 186.33

5,422.34 4,499.44 3,374.00 2,936.48 2,689.65

PROFIT BEFORE INTERESTDEPRECIATION AND TAX 1,002.24 340.39 250.18 222.53 236.16

Interest 33.85 44.19 66.83 147.61 184.29

Depreciation 27.81 27.30 29.06 29.58 29.48

PROFIT BEFORE TAX ANDEXTRAORDINARY ITEMS 940.58 268.90 154.29 45.34 22.39

Taxation 136.00 23.80 12.00 3.50 3.00

PROFIT BEFORE EXTRAORDINARY ITEMS 804.58 245.10 142.29 41.84 19.39

Extra Ordinary Items (net of tax) - - - - -

PROFIT AFTER EXTRAORDINARY ITEMS 804.58 245.10 142.29 41.84 19.39

28

ASSETS AND LIABILITIES

Rs. In Lacs

As At As At As At As At As AtMarch 31, March 31, March 31, March 31, March 31,

2004 2003 2002 2001 2000

1 Fixed Assets

a. Gross Block 1,064.65 1,026.23 982.08 1,001.28 981.87

b. Less: Depreciation 300.67 282.74 264.84 241.69 204.44

c. Net Block 763.98 743.49 717.24 759.59 777.43

d. Capital Work-In-Progress 29.29 20.06 1.67 - 16.40

793.27 763.55 718.91 759.59 793.83

Less: Revaluation Reserve 397.64 407.49 417.34 427.19 437.04

395.63 356.06 301.57 332.40 356.792 Investments (Unquoted) - 0.50 0.50 0.74 0.77

3 Current Assets, Loans and Advances

a. Inventories 1,698.75 782.23 426.03 419.56 599.36

b. Sundry Debtors 1,607.74 1,285.02 1,100.13 1,079.66 1,120.87

c. Cash and Bank Balances 651.48 160.31 114.42 149.89 54.53

d. Loans and Advances 195.19 99.24 94.86 99.28 99.82

4,153.16 2,326.80 1,735.44 1,748.39 1,874.58

Less: Current Liabilities and Provisions

a. Current Liabilities

Sundry Creditors 214.89 296.88 34.52 48.83 159.14

Other Liabilities 413.43 355.60 144.60 142.16 144.85

b. Provisions 101.37 0.02 0.02 0.02 -

c. Deferred Tax Liabilities 1.87 3.15 - - -

731.56 655.65 179.14 191.01 303.99

Net Current Assets 3,421.60 1,671.15 1,556.30 1,557.38 1,570.59

Less: Borrowings

a. Secured Loans 1,853.52 863.68 924.45 804.87 916.06

b. Unsecured Loans 398.86 398.75 413.72 709.48 677.90

2,252.38 1,262.43 1,338.17 1,514.35 1,593.96

Net Assets 1,564.85 765.28 520.20 376.17 334.19

REPRESENTED BY

a. Share Capital 546.00 168.00 168.00 168.00 168.00

(1,09,20,000 (P.Y. 16,80,000)

Eq. Shares of Rs. 5/- (Previous

Years Rs.10/- ) each)

30

h] Retirement and other Benefits

The company has the following retirement schemes.

Provident Fund for all employees.

The contribution to the above fund is charged to Profit and Loss Account.

Gratuity as Actuarially determined and funded by payments to the trust established for the purpose is charged to Profitand Loss Account.

i] Research and Development

Capital expenditure on Research and Development (R & D) is included in fixed assets under appropriate heads and revenueexpenditure on R & D is charged as expenditure in the year in which it is incurred.

j] Provision for Current and Deffered Tax

Provision for Current tax is made after taking into account benefits admissible under the provisions of Income Tax Act,1961. Deffered tax resulting from “timing difference” between book profit and taxable profit using the tax rates and lawsthat have been enacted or substantively enacted as on Balance Sheet date.

2] Sah Petroleums Limited was incorporated as Private Limited Company. By virtue of section 43A(1A) of the Companies Act,1956 the Company became a deemed public Company in 1989. However the provision of the said section have been madeinapplicable after the commencement of Companies (Amendment) Act, 2000. Consequently, Company had become a “PrivateCompany”. The Company is converted to a Public Limited Company on 10th March, 2004.

3] i] Sundry Creditors includes Rs. 14,79,734/- (Previous Year Rs.24,59,155/-) due to Small Scale Industrial undertakings and Rs.NIL towards interest accrued thereon (To the extent such parties have been identified on the basis of information availablewith the Company). This has been relied upon by the Auditors.

ii] Names of Small Scale industrial undertakings to whom company owes any sum which is outstanding for more than 30 daysas at 31at March, 2004 are as under:

Rs.

1. Endeavour Chemicals Pvt. Ltd. 80,904

2. Makwell Plastisizers Pvt. Ltd. 1,03,929

3. Pax Enterprises Pvt. Ltd. 24,075

4. R.K. Metal & Plastic Pvt. Ltd. 5,48,587

5. Eastern Petroleums Pvt. Ltd. 7,22,239

Total 14,79,734

4] Estimated amount of Outstanding contracts/Capital commitment Rs.5,23,000/- (Previous year Rs. NIL)

5] Previous years’ figures have been regrouped / recast wherever necessary.

6] ADDITIONAL INFORMATION AS FAR AS APPLICABLE PURSUANT TO PART II OF SCHEDULE VI OF THECOMPANIES ACT, 1956.

Particulars of Capacity:

(a) The Company’s unit being a registered Small Scale Industry is exempted from licensing of capacity.

Installed capacity for the manufacturing of Industrial Oils and Lubricants – 40,000 KL per annum (approx).

Since the companies installed capacity is dependent on Product-mix, which in turn is dependent on the basis of actualdemand for various products from time to time, it is not feasible for the company to give the exact installed capacity. Thecompany has, however indicated the installed capacity on the basis of the normal year’s product-mix as certified by theManaging Directors and the same being a technical matter is accepted by the Auditors.

31

(b) Particulars in respect of opening and closing stocks, production, purchases and sales of goods produced and traded:

2003-2004 2002-2003

Qty. Value (Rs.) Qty. Value (Rs.)

Opening Stock

Oils & Lubricants 543,760 15,220,860 503,781 12,737,169

Traded Goods 57,539 1,933,598 13,644 500,650

Purchases

Traded Goods 13,490 2,012,567 180,110 23,874,782

Sales

Oils & Lubricants 27,347,055 719,017,604 19,778,555 449,635,166

Traded Goods 72,091 5,019,403 735,076 26,674,257

Closing Stock

Oils & Lubricants 659,081 22,399,610 543,760 15,220,860

Traded Goods 2,697 295,218 57,539 1,933,598

Excess / Shortage

Oils & Lubricants 11,181 46,478

Traded Goods 3,759 -1,139

Actual Production

Oils & Lubricants 27,451,194 19,772,056

(c) Raw Materials Consumed :

Oils & Lubricants 27,805,421 440,054,964 20,258,063 340,481,457

(d) Imported / Indigenous Materials Consumed :

2003-2004 2002-2003

Imported Indigenous Imported Indigenous

Raw Materials 237,603,597 202,451,367 104,653,960 235,827,497

53.99% 46.01% 30.74% 69.26%

Stores & Spares Nil 26,226,278 NIL 22,396,331

- 100% - 100%

(e) Value of Direct Imports (C.I.F. Value) :

Raw Materials Rs. 293,776,136 (Previous Year Rs. 141,536,027)

(f) Expenditure in Foreign Currency

Travelling Rs. 267,629 (Previous year Rs.79,249)

(g) Earning in Foreign Exchange :

On Export of goods (FOB Basis) Rs. 3,308,306 (Previous year NIL)

7] Defferred Tax Liability at the year end comprise timing difference on account of difference between Book and Tax DepreciationRs. 187,200 (Previous year Rs. 315,200)

32

8] RELATED PARTY TRANSACTION

[A] Relationship :

(a) Key Management Personal :

Shri Rajendra Sah

Smt. Shobha Sah

Shri Vivek Sah

Shri Aditya Sah

(b) Relatives of Key management personnel with whom transactions have taken place :

Smt. Asha V. Sah


Shri Ashok P. Sah

Smt. Sudha Poddar

Miss. Malhar V. Sah

Master Ranay V. Sah


Smt. Shantadevi Sah

Smt. Lata Banka





Rajendra Sah HUF

Vivek Sah HUF

Aditya Sah HUF


Sah Udyog

Sah Exports


Sah Agrotechs


33

Rs. In Lacs



2004 2003 2002 2001 2004 2003 2002 2001 2004 2003 2002 2001


Car Hire Charges 6.64 8.01 2.63 - - - - - - - - -

Rent Paid - - - 0.24 - - - - - 1.50 0.60 -

Sales Promotion - - - - - - - - - 15.92 1.70 2.47

Garden Expenses - - - - - - - - - 4.96 - -

Interest - 3.98 2.74 25.63 14.63 19.57 15.08 11.92 - - - -

Rent Received - - - - - - - - - - 0.77 -

Payables - 3.56 2.71 - - 4.04 - - - 0.16 - -

Receivables - - - 0.44 - - - 0.18 - 0.66 0.03 0.43

Loans Received 97.60 143.60 139.82 396.21 114.00 114.00 110.50 166.42 -15.00 - -


34

VI. PROMOTERS AND THEIR BACKGROUND

Mr. Rajendra Sah: 59 years of age, he is the Executive Chairman of the company. He is a BSC graduate from Wilson college ofMumbai & has also done his L.L.B. from Government Law college of Mumbai. He is the founder promoter of the company.

Mr. Rajendra Sah started his career in 1964 as dealer of IOC & HPCL Lubricant Product on a small scale. Over the decade he grewthe business multifold and in the year 1973 he started manufacturing of Lubricant Products under the brand name IPOL.He has 40years of work experience in this Industry.

The brand and the business of IPOL was taken over by Sah Petroleums Ltd. in 1983.

His vision shaped the growth of the organization and he is the key person looking after the Development & strategic planning.

He is the Trustee of Rotary Club Of Bombay Cuffe Parade Charitable Trust & President of Rotary Club Of Bombay Cuffe Parade.

Mrs. Shobha Sah: 56 years of age, she is a BA graduate from Rajasthan University, Jaipur. She looks after the general administration/operations of the company having 25 years of work experience. She is the founder promoter of the company and has also beeninstrumental for the growth of the company.

Mr. Vivek Sah: He is 34 years of age, he is a B.Com graduate with specialization in marketing. He has work experience of 15 years.

He looks after Strategic Marketing, new areas of Business Development & Product Development across the whole chain.

He has been instrumental in diversifying the business risks of the company across products like rubber process oils, hydraulic oils,cutting oils and transformer oils spreading up to the clients like Telco, ACC Bridgestone, Bajaj Auto, Godrej & Boyce, EicherMotors etc.

He has been the key person for the company to make inroads into state transport undertakings, Government transport undertakingsand the defence sector.

He has been actively involved in the company obtaining for ISO 9001:2000 and IS0 14001:1996 certification for quality systemsand environment, applicable to manufacturing practices and distribution process across the entire product chain

Mr. Aditya Sah: 30 years of age, he is a B.Com graduate with specialization in finance. He has been involved with the companysince 1992. He has a work experience of 12 years.

He is incharge of purchase, finance and production matters of the company. The Company has been able to tap new suppliers &geographical locations for raw materials at competitive rates. On the production side the company has been able to reduce itsmanufacturing cost and increase its production to cater to the demands of the customers.

Mr. Rajendra Sah Mrs. Shobha Sah Mr. Vivek Sah Mr. Aditya SahVoter ID Voter ID Voter ID Voter IDMT/04/019/271546 MT/04/019/271572 MT/04/019/270299 NilDriving Licence No. Driving Licence No. Driving Licence No. Driving Licence No.204982 40795 87/C/23669 MH-01-99/35619

Permanent Account No., Bank Account Nos. and Passport No. of the promoters have been submitted to NSE and BSE at the timeof filing the prospectus with them.

There are no pending litigations/disputes/overdues/defaults to the financial institutions/Banks and instances of non-payment ofstatutory dues by the promoters and the companies/firms promoted by the promoters.

There are no pending litigations, disputes, defaults etc., in respect of companies to which the promoters were associated in the past

35

but are no longer associated.

There are no litigations against the promoters or directors involving violation of statutory regulations or a criminal offence. There areno pending proceedings initiated for economic offences against the directors, the promoters, companies and firms promoted by thepromoters.

There are no outstanding litigations, disputes pertaining to matters likely to effect operations and finances of the Company includingdisputed tax liabilities, prosecution under any enactment in respect of Schedule XIII of the Companies Act, 1956.

VII. OTHER GROUP COMPANIES/VENTURES OF THE PROMOTERS

A) M/s Sah Exports

Partners Of Sah Exports

Sri Rajendra Sah

Smt Shobha Sah

Sri Vivek Sah

Sri Aditya Sah

Smt Chaitali Sah

Date of Formation : 10.05.1990

Constitution : Partnership Firm

Nature of Activities : Manufacturing of Leather articles

Partnership Pattern (As on 31st March, 2004)

Name of the Partners % of control

Rajendra Sah 25.00

Shobha Sah 25.00

Vivek Sah 25.00

Aditya Sah 20.00

Chaitali Sah 5.00

Total 100.00

Audited Financial Highlights (Rs)

Particulars 2001-02 2002-03 2003-04

Partners Capital 15,37,606.67 1,57,711.73 36,84,120.57

Reserves & Surplus - - -

Total Income 85,70,513.65 86,51,282.75 134,73,128.46

Profit/(loss) during the year 97,606.67 12,61,081.13 18,87,011.84

B) M/s Sah Agrotechs

Members Of Sah Agrotechs

Sri Rajendra Sah

Smt Shobha Sah

Sri Vivek Sah

Sri Aditya Sah


Constitution : Association of persons

Nature of Activities : Nursery plants

36


Name of the Partners % of Control

Rajendra Sah 25.00

Shobha Sah 25.00

Vivek Sah 25.00

Aditya Sah 25.00

Total 100.00

Financial Highlights (Rs)

Particulars 2001-02 2002-03 2003-04



Total Income 11,87,602.00 28,38,149.50 21,97,596.75

Profit/(loss) during the year 4,29,165.50 6,66,057.00 9,31,110.75

C) M/s Sah Marketing

Partners Of Sah Marketing

Sri Rajendra Sah

Smt Shobha Sah

Sri Vivek Sah

Sri Aditya Sah



Nature of Activities : Manufacturing of leather articles till 2001. No activity since then.



Rajendra Sah 25.00

Shobha Sah 25.00

Vivek Sah 25.00

Aditya Sah 25.00

Total 100.00


Particulars 2001-02 2002-03 2003-04



Total Income 8,57,648.00 90,000.00 78,532

Profit/(loss) during the year (26,377.61) 6,213.47 1,367.50

37

D) M/s. Industrial Trading Co.

Partners Of Industrial Trading Co.

Sri Rajendra Sah

Smt Shobha Sah

Sri Vivek Sah

Sri Aditya Sah



Nature of Activities : No activity



Rajendra Sah 25.00

Shobha Sah 25.00

Vivek Sah 25.00

Aditya Sah 25.00

Total 100.00


Particulars 2001-02 2002-03 2003-04



Total Income 2,20,000.00 65,812.00 26,54,154.00

Profit/(loss) during the year (1,36,546.57) (18,67,301.00) 17,72,307.50

E) M/s Sah Udyog

Partners Of Sah Udyog

Sri Rajendra Sah

Sri Vivek Sah

Smt. Asha Sah

Smt. Chaitali Sah



Nature of Activities : Retail sale of leather articles. No activity since 2002.



Rajendra Sah 33.40

Vivek Sah 10.00

Asha Sah 23.30

Chaitali Sah 33.30

Total 100.00

38


Particulars 2001-02 2002-03 2003-04



Total Income 3,94,735.05 4,00,436.98 3,069.00

Profit/(loss) during the year (39,404.85) 9,322.05 262.92

None of the above entities had faced/is facing any litigations/defaults/overdues or labour problems/closure etc.,

None of the above entities have business interests in the Company.

39

Key Managerial Personnel

A brief profile of the Key Managerial Personnel and other personnel forming part of Senior Management is set out below:

Name Designation Age Qualification Experience Responsibility Duration Past Experience in years with the

Company/Date ofjoining

Rohit C. Sanghani Senior Vice President 60 Years BSC (Hons) 39 All India 13 Years 2 yrs with SigmaMarketing & Post Graduation Marketing (01.04.1991) Paint Ltd.Coordination in Mktg. Mgmt. & policy 6 yrs with Union

making Carbide I Ltd.6 yrs with AparPvt.Ltd.9 yrs with ParekhMktg. Ltd.3 yrs with RinkiIndl. Oils Ltd.

J. R. Ahmed Vice President 46 Years Diploma in 20 Southern region 5 Years 15 yrs withMarketing & Chemical marketing & (01.03.1999) Chemoleum LtdTech. Services Engineering development

Aditya Roy Senior General 42 Years BSc 21 Overall incharge 21 Years -Manager - Plant for production (23.05.1983)

R&D & dispatch

M.L. Pitroda General Manager - 57 Years Chartered 30 Finance & 30 Years -Finance Accountant Accounting (01.01.1985)

P.K. Johari General Manager - 47 Years Post Graduate 23 Northern Region 23 Years -Marketing Delhi in Botony Marketing & (01.02.1981)

Development

Paritosh Mistry General Manager - 47 Years BSc 22 Bombay region 22 Years -Marketing Mumbai marketing & (01.11.1981)

development

Samar Pataskar General Manager - 41 Years BSc 18 Interior 13 Years 2 yrs withMarketing Pune Maharashtra (01.02.1991) Microtek

marketing & 3 yrs withdevelopment Gaurav

Enterprise

Atul Katbamna General Manager 40 Years DMM 19 Technical Support 11 Years 4 yrs withMarketing & (Mechanical) to Western & (24.05.1993) J.B.Steel Co.Tech. Services eastern region 1 yr with Shah

Patel & Co.1 yr with MipaElectronics2 yrs with EmcoElectric P.Ltd.

Jogesh Sharma General Manager 32 Years BE 11 Technical Support 9 Years 2 yrs withMarketing & (Mechanical) to Northern & (06.12.1994) PremierTech. Services Specialisation in central region Automobiles

Automobile

Murlidhar S. General Manager 50 Years Diploma in 26 Procurement of 2 Years 3 yrs withShanbhag Material & Legal Electrical raw materials, (01.12.2001) NELCO

Engineering packing materials 19 yrs Hind& other related Rectifiers Ltd.servies 2 yrs in Western

Hivolts P.Ltd.

D. Malla Reddy Company Secretary 49 Years M Com., BGL, 25 Legal and 4 months 1year withACS Secretarial (April 5, Garware Marine

2004) Industries Ltd.,Mumbai

40

Name Designation Age Qualification Experience Responsibility Duration Past Experience in years with the

Company/Date ofjoining

4 yearsAntifrictionBearings Corpn.Ltd., Mumbai

5 years withEverest KantoCylinders Ltd.,Mumbai

11 years withMSSIDC Ltd.,Mumbai

Gorakhnath Ghontale Deputy General 38 Years BE (Automobile) 12 Marketing & 11 Years 1 yr withManager Marketing development of (23.03.1993) DevanandBangalore Karnataka Region Automobiles

Sandeep Kedia Deputy General 34 Years Bcom. Inter CA 8 Finance, 8 Years -Manager Finance & Accounting, (18.12.1995)Systems internal systems

& Informationtechnology

M.J. Francis Deputy General 38 Years Diploma in 14 Marketing & 6 Years 2 yrs with AsianManager, Marketing Computer development of (01.12.1997) AgenciesHyderabad Application Andhra Pradesh 2 Yrs with Mody

Region Motors2 yrs with Worldof Business-Dubai2 yrs with PoojaEnterprises

The persons mentioned above are in the employment of the Company as permanent employees.None of the Employees hold any shares in the Company.None of the key personnel mentioned above are related to the promoters/Directors of the Company.No director or member of Senior Management has been selected pursuant to any arrangement /understanding with major shareholders/customers/suppliers.Compensation paid to key managerial personnel for the financial year 2003-04

Sl. No. Name Compensation paid (Rs.)

1 Rohit C. Sanghani 2,83,9882 J. R. Ahmed 3,04,3883 Aditya Roy 2,38,3884 M.L. Pitroda 3,45,9845 P.K. Johari 2,69,9886 Paritosh Mistry 2,95,9887 Samar Pataskar 1,77,5908 Atul Katbamna 1,97,9929 Jogesh Sharma 2,11,99210 Murlidhar S. Shanbhag 1,57,59411 D. Malla Reddy -12 Gorakhnath Ghontale 1,35,99413 Sandeep Kedia 1,82,87214 M.J. Francis 1,31,996

41

No portion of the compensation was paid pursuant to a bonus or profit sharing plan.

Changes in key managerial personnel

There have been no material changes in the key managerial personnel for the past three years other than by way of induction.

VIII. BOARD OF DIRECTORS OF THE COMPANY

The Board of Directors of the Company comprises:

Name, Designation, Age, Experience, Appointment in the Company Other DirectorshipsAddress, Qualification and Occupation and the date of expiration of

current term of office

Mr. Rajendra Sah Date of appointment 01.04.2004 NoneS/o. Pyarelal Sah Date of expiration of currentExecutive Chairman term of office 31.03.2009Age: 59 yearsExperience 40 years17, Firuz Ara, M K Road,Opp. Mantralaya,Mumbai – 400 021.BSc, LLBBusiness

Mr.Vivek Sah Date of appointment 01.04.2004 NoneS/o. Rajendra Sah Date of expiration of current termManaging Director of office 31.03.2009Age: 34 yearsExperience 15 years15, Prem Court, Dinshaw Vachha Road,Churchgate, Mumbai – 400 020B ComBusiness

Mr.Aditya Sah Date of appointment 01.04.2004 NoneS/o. Rajendra Sah Date of expiration of current termJoint Managing Director of office 31.03.2009Age: 30 yearsExperience 12 years15, Prem Court, Dinshaw Vachha Road,Churchgate, Mumbai – 400 020B ComBusiness

Mrs.Shobha Sah Date of appointment 01.04.2004 NoneW/o. Rajendra Sah Date of expiration of current termExecutive Director of office 31.03.2009Age: 56 yearsExperience 25 years17, Firuz Ara, M K Road, Opp.Mantralaya, Mumbai – 400 021.B ABusiness

42

Mr. Noshir B. Dubash Date of appointment 05.04.2004 NoneS/o. Behram Eduljee Dubash Date of expiration of current termIndependent Director of officeAge: 63 years In 2005 AGM by rotationExperience 40 yearsJoshi House,2nd Floor,16, Cumballa Hill, Mumbai 400 036BA, LLBRetired

Mr. Alok Sukhani Date of appointment 05.04.2004 NoneS/o. Dharmchand Sukhani Date of expiration of current termIndependent Director of officeAge: 41 years` In 2005 AGM by rotationExperience 18 yearsD-8, Sai Minar, Saibaba Complex,Goregoan (E), Mumbai 400 063.B Com (Hons)Business

Mr. Pradip C Shah Date of appointment 05.04.2004 NoneS/o. Chimanlal Shah Date of expiration of current termIndependent Director of officeAge: 48 years In 2005 AGM by rotationExperience 30 yearsFlat No.3, Nandkutir, TPS V,Plot no. 334,Shraddhanand Road,Vile Parle (E), Mumbai 400 057.B Com, LLB & FCSPracticing Company Secretary

Mr. Vinay G Rao Date of appointment 05.04.2004 NoneS/o. Gopal Krishna Rao Date of expiration of current termIndependent Director of officeAge: 60 years In 2005 AGM by rotationExperience 40 yearsFlat No. 4, Sharmishtha –2,1077,A, Shivaji Nagar, Pune 411 016.BE (MET)Business

Mrs. Shobha Sah is the wife of Mr.Rajendra Sah and Mr. Vivek Sah and Mr.Aditya Sah are the sons of Mr. Rajendra Sah.

Service contracts entered into the Wholetime Directors does not provide for benefits upon termination of employment.

There are no litigations, disputes pending against the directors of the Company. No proceedings for economic offences have beeninitiated against them.

Interest of Directors and Promoters.

Except as stated elsewhere in the Prospectus, all the Directors may be deemed to be interested to the extent of remuneration and feespayable to them for attending the meeting of the Board or Committee thereof and reimbursement of traveling and other incidentalexpenses, if any, for such attendance as per the Articles of Association of the Company.

All the Directors/Promoters of the Company shall be deemed to be interested to the extent of shares held by them and/or their friendand relatives and which may be allotted to them out of the present issue, and are deemed to be interested to the extent ofremuneration and perquisites being drawn by them from the Company.

43

The Whole-time Directors are interested to the extent of remuneration paid to him for services rendered to the Company, Further, theWhole-Time Directors are interested to the extent of equity shares held by him and also to the extent of any dividend payable to himand other distributions in respect of the said equity shares.

Except as stated otherwise in this Prospectus, the Company has not entered into any contract, agreements or arrangement during thepreceding two years from the date of the Prospectus in which the Directors are interested directly or indirectly and no paymentshave been made to them in respect of these contracts, agreements or arrangements which are proposed to be made to them.

Shareholding of the Directors and Key Managerial Personnel

Directors

Sl. No. Name of the Director No. of Shares held

1 Rajendra Sah 3248780

2 Shobha Sah 1690000

3 Vivek Sah 1300000

4 Aditya Sah 1300000

Shareholding of Key Managerial Personnel: Nil

Changes in the Directors of the Company during the last three years.

There are no changes in the Board of Directors during the last three years except for the inductions and formal appointment ofdirectors.

Management of the Company

The overall management of the Company is vested in the Board of Directors. Sri. Rajendra Sah, Executive Chairman under theguidance and supervision of the Board, manages the affairs of the Company. Sri Rajendra Sah with the assistance of other Directorsdrives the Company to achieve its set goals and is assisted by a team of professionals.

M RRe p re s e nta tive

C u sto m erR e p re se nta tive

Q u a lityR e p re se nta tive

E n v iro n m e ntR ep re s e nta tive

M a na ge m e ntR e p re se nta tive

S a le s C o o rd in a to r

E xe cu tives

S r. M an a g erM a rke ting & E n gg

G MM a rk e ting

& T e c hn ica l S e rv ices

V P M ark e ting& C o o rd

M a na g in g D irec tor

A s st.

D G MF in a nce & Systm es

G M Fin a n ce

A sst.

M a nag er

G M M a te ria l

A ss t.

S r. M an ag erP ro du ction

A s st.

L o g isticsIn cha rge

S r. G M P la n t

C h em ist

Q CIn cha rge

S r. D G MR & D Q C

J t. M an ag in g D ire cto r

A d m in is tra tio n /O p e ra tion

E x e cu tiv e Dire cto r

E x ecu tive C h airm an

ORGANOGRAM

44

Corporate Governance

The Company has complied with listing agreement requirements in respect to Corporate Governance specially with respect to broadbasing its Board of Directors and setting up of necessary committees

Details of the Committee are as under:

Audit Committee

a. Brief description of terms of reference

The terms of reference of this Committee covers the matters specified under Section 292 A of the Companies Act, 1956 and also thematters listed under the Listing Agreement with the Stock Exchanges. The Committee is responsible for effective supervision of thefinancial operation and ensuring that financial, accounting activities and operating controls are exercised as per the laid down policiesand procedures. The financial result of every quarter will be reviewed by the Committee before being placed to the Board ofDirectors for its approval. The Company has set up an internal Audit Team, which review the function and operation of theCompany and submits it report to the Audit Committee. The internal auditors are regular invitees to the Audit Committee meetings.

b. Constitution of Committee

The Audit Committee of the Company was constituted at the meeting of the Board of Directors held on 20th April, 2004. TheCommittee comprises of independent non-executive Director. The said Committee functions under the Chairmanship of Mr. Pradip C.Shah. Mr. Noshir B Dubash and Mr.Alok D. Sukhani are the other members of the Committee.

Remuneration Committee

The company does not have a remuneration committee, however the Board determines and recommends the remuneration packagepayable to the Whole-Time Directors subject to approval by members in the General Meeting. The Board of Directors at its meetingheld on 11th March, 2004 and duly approved by the members at the Extra Ordinary General Meeting held on 2nd April, 2004, thefollowing Directors have been appointed

S. No. Name of Director Designation Remuneration (including all benefits)

1 Mr. Rajendra Sah Executive Chairman Rs. 1,25,000/- per month

2 Mrs. Shobha Sah Executive Director Rs. 1,00,000/- per month

3 Mr. Vivek Sah Managing Director Rs. 1,00,000/- per month

4 Mr. Aditya Sah Joint Managing Director Rs. 1,00,000/- per month

The agreement with each of the Whole-Time Directors is for a period of 5 years and the terms and conditions and payment ofremuneration were decided and approved by the Members at the Extra Ordinary General Meeting held on 2nd April, 2004.

Shareholders / Investors Grievances Committee

The shareholders Grievance Committee has been constituted under the chairmanship of Mr. Noshir B Dubash. Mr. Alok D Sukhaniand Mr. Aditya Sah are the other members of the Committee. The Committee looks after the grievances and other areas relating tothe services of shareholders. Presently the Company is having only 39 shareholders and there are no pending grievances as on thedate. The Company has also appointed Mr. D. Malla Reddy, Company Secretary as Compliance Officer to further strengthen theseareas.

45

IX. BRIEF DETAILS ABOUT THE PROJECT

In order to meet the increase in demand for specialised industrial lubricants in the Country, to enter into new segments, to spread itsmarketing wings and seize the opportunities in the export market, the proposed project is being envisaged.

Acquisition of Land

At present, the Company’s plants at Daman is located on lease premises and Vasai on own premises. It intends to locate itsexpansion plants at Daman and Vasai by acquiring 2000 sq. meters and 2420 sq. yards of Land for which an amount of Rs.125 lacsand Rs.61.85 lacs respectively have been provided in the project cost. The Company has identified the land and will enter intoagreement of sale on completion of IPO formalities.

Construction works

The Company proposes to erect the following structures for installing the Plant and Machinery at Daman and Vasai plants

Vasai Plant

Sl. Supporting Steel Structures for the Shed Name of the supplier Date of quotation (Rs. Lacs)

1 Comprising of Vertical columns supporting Troika Processes 05.02.2004 61.20Beams, pent roof, Purlins, Trusses, required Private LimitedNuts and Bolt Foundation plates, Steelflooring, stairs including painting at the rateof Rs. 60,000/- per Tonne approximately 85T

Daman Project

Sl. Supporting Steel Structures for the Shed Name of the supplier Date of quotation (Rs. Lacs)

1 Comprising of Vertical columns supporting Troika Processes 05.02.2004 43.20Beams, pent roof, Purlins, Trusses, required Private LimitedNuts and Bolt Foundation plates, Steel flooring,stairs including painting at the rate ofRs. 60,000/- per Tonne approximately 60T

The Company does not require any approval from any Government authorities for construction of the above sheds.

Note :

1) All above figures are inclusive of Transportation, Sales Tax installation and other miscellaneous expenses at apx, 20% of theCost

2) The above prices are based on the current cost of raw materials and labour. In case of increase of any of the above, the pricesare subject to variation.

Plant and Machinery

Vasai Plant

Sl. No. Detai ls Name of the Supplier Date of Amount (Rs.)Quotat ion

1 Weigh Bridge 60 T Cap Avery India Ltd 12.03.04 Weigh Bridge 9,25,000Stamping 1,500Sub Total 9,26,500ED @ 16% 1,48,240Sub Total 10,74,740CST @ 4% 42,990Sub Total 11,17,730PC Printer 20,000

Total 11,37,730

46


2 Thermopac (Boiler) Thermax Limited 11.03.04 Thermopac 3,04,880200000 Lac K.Cal ED @ 16% 48,781per Hour Sub Total 3,53,661

MST @ 15.3% 54,110Erection Charges 17,000Total 4,24,771

For two units 8,49,542

3 Can Filling System Elder Instruments P Ltd 24.03.04 Can Filling(1 to 3.5Kg Cap) System 17,64,000

P&F @ 2% 35,280Installation Charges 20,000Stamping 3,000Sub Total 18,22,280ED @ 16% 2,91,565Sub Total 21,13,845MST @ 9.8% 2,07,157

Total 23,21,002

For four units 92,84,008

4 Can Filling System Elder Instruments P Ltd 24.03.04 Can Filling System 4,23,388(5 to 20 Kg Cap) P&F @ 2% 8,468

Installation Charges 5,000Stamping 3,000Sub Total 4,39,856ED @ 16% 70,377Sub Total 5,10,233MST @ 9.8% 50,003

Total 5,60,235

For five units 28,01,175

5 Oil Filling system Elder Instruments P Ltd, 11.03.04 Oil Filling System 1,85,000Mumbai Tilting Mechanism 12,000

PC/Printerconnectivity 5,000S/w for datarecording 25,000Sub-total 2,27,000P&F @ 2% 3,700Sub-Total 2,30,700Stamping 5,000Installation Charges 7,500Sub Total 2,43,200ED @ 16% 38,912Sub Total 2,82,112CST @ 9.8% 27,647Total 3,09,759


47


6 Grease Filling System Elder Instruments P Ltd, 11.03.04 Grease FillingMumbai System 1,55,000

Tilting Mechanism 12,000PC/Printer connectivity 5,000S/w for data recording 25,000Sub-total 1,97,000P&F @ 2% 3,100Sub-Total 2,00,100Installation Charges 7,500Sub Total 2,07,600ED @ 16% 33,216Sub Total 2,40,816MST @ 9.8% 23,600

Total 2,64,416


7 Pumps C Bole & Co 23.02.04 Monex Multipurpose 28,500Gear PumpST @ 15.3% 4,361Total 32,861For four units 1,31,444

8 Valves Flanges JJ Enterprises 27.03.04 Cast SS 316 Bodyball Valve ASA 300 17,125– Size 3”P&F @ 2% 343CST @ 15.3% 2,620Total 20,088For eighteen units 3,61,531

9 Wire Rope Hoist Ishar Hoist & Cranes 22.03.04 1 MT Elec. Wire 62,870P Ltd Rope Hoist with

motorised trolleyDSL Power System 3,500Sub Total 66,370PackingCharges @ 3% 1,991Sub Total 68,361CST @ 15.3% 10,459Total 78,820For four units 3,15,281

10 Trucks Navneet Motors P Ltd 19.02.04 Wheel base 7,13,0863800 mm Eichermake with 11.1CPC Conf.Insurance 16,617One Time Tax 44,600Total 7,74,303For two units 15,48,606

11 Fork Lift Godrej & Boyce Mfg 10.03.04 GX200 D 2 T 6,15,000DieselEd @ 16% 98,400Sub Total 7,13,400MST @ 15.8% 1,12,717Total 8,26,117Accessories 97,400Total 9,23,517For two units 18,47,034

48


12 Grease Facilities New Multifab Engineers 29.03.04 Grease Kettle 21,14,000Equipment P Ltd Crompton Motor 1,17,000

Gear Box 2,72,000Heat Exchanger 3,25,000Sub Total 28,28,000ED @ 16% 4,52,480Sub Total 32,80,480MST @ 15.3% 5,01,913Total 37,82,393

13 Filtration Unit Vaccum Plant & 23.03.04 Filtration Unit 30,00,000Instruments Mfg Co. Ltd ED @ 16% 4,80,000

Sub Total 34,80,000MST @ 15.3% 5,32,440Total 40,12,440

14 Flow Meters SS Engineering Inds Ltd 24.03.04 Kent Oil Meter 99,000Strainer (80mm)2 Nos 17,000Air release system2 Nos 19,000Mating Flange2 Nos 4,000Pulse Generator2 Nos 24,000Remote Totaliser2 Nos 12,000Batching Unit1 No 14,000Sub Total 1,89,000P&F @ 2% 3,780Sub Total 1,92,780ED @ 16% 30,845Sub Total 2,23,625CST @ 4% 8,945Total 2,32,570For thirty fiveuni ts 81,39,950

15 Tata Diesel Vehicle Bafna Motors (Mumbai) 01.04.04 Tata Diesel Vehicle 9,32,630Pvt. Ltd. Model LPT 2515

TCInsurance 16,000One timeregistration 45,000Total 9,93,630For three units 29,80,890

16 Steel Cabin Trimurti Engineers 20.02.04 Steel Cabin Structures 45,000with 14G GalvanizedsheetWC Tax @ 4% 1,800Total 46,800For three Units 1,40,400

49


17 Pipe Industrial Valves & 01.04.04 MS C Class black 4,200Equipment pipe, ERW 3” NB

Zenith Make 4200Mtrs.GI B Class pipe,ERW,- 2” NB – 235 Mtrs. 2,350- 1 ¼” NB–155 Mtrs 1,550- ¾” NB – 85 Mtrs 850MS C Class longbend 3” NB ERW265/E 2,650MS C Class shortbend 3” ERW 145/E 1,450Sub Total 13,050CST @ 4% 522Total 13,572

GRAND TOTAL 3,84,94,346

Lab Equipment

Name of the Supplier Quot. Date Amount Currency Amount (Rs.)

1 Niulab Equipment Company 25.03.04 EURO 55.45Bruker Make Spectrometer-Tensor 27 32335.00P & F Charges 300.00Airfreight and Insurance Charges 500.00With Accessories Kit 9241.00BASF Library-3934 Spectra 8294.00Sadler Lubricant Library-PN4255 9216.00Sadler Chemicals Library-PN4208 3428.00Sadler Lubricant Library-PN4217 6594.00Sub – Total 69908.00 3,876,398.60Required Computer and Printer 178,550.00

Sub-Total 4,054,948.60CVD 5% 202,747.43Sub-Total 4,257,696.03Excise 16% 681,231.36Total 4,938,927.39

2 Lab Systems(I) Pvt. Ltd 24.03.04 USD 44.95Elemental Analyser(C,S,N & Chlorine) 65890.00Microcoulometric Detector 19000.00Total 84890.00Less Special Discount 17760.00Total 67130.00Analytik Jena Model Multi Ea 3100-Sampler 17298.00

84428.00 Sub-Total 3,795,038.60CVD 20% 759,007.72Sub-Total 4,554,046.32Excise 16% 728,647.41Total 5,282,693.73

50


3 Lab Systems(I) Pvt. Ltd 24.03.04 USD 44.95Aas Nova 400 Atomic AbsobtionSpectrophometer 54128.00Manual Sampler 7578.00Automatic Sampler 27945.00Segmented Flow Star SFS 5 Segmented Injection 2275.00AS 52s Auto Sampler 12275.00Compressor 1750.00Pressure Regulator 780.00Subtotal 106731.00 4,797,658.45

CVD 5% 239,877.92Sub-Total 5,037,436.37Excise 16% 805,989.82Total 5,843,426.19

4 Blue Star Ltd 24.03.04 USD 44.95Leeman Labs Direct Reading Echelle IcpSpectometer 72850.00Air Freight 1550.00Computer Controlled Optical System 5971.00Consumable Kit 3556.00Aqueous Sample Introduction system 2872.00Consumable Kit Axial-Aqeous 3380.00Consumable Kit Dual View-Aqeous 3208.00Consumable Kit Dual Organic 3484.00Oil Std Kit 3600.00Standard Solution for Testing 2450.00Sample Introduction System 4516.00Ultrasonic Nebuliser 20900.00Auto Sampler 5920.00Sub-Total 134257.00 6,034,852.15

CVD 5% 301,742.61Sub-Total 6,336,594.76Excise 16% 1,013,855.16Total 7,350,449.92

5 Niulab Equipment Company 26.03.04 EURO 55.45Carbon Residue Tester(D-4530) Model Petrotest 23435.00P & F Charges 300.00Sub-Total 23735.00 1,316,105.75


6 Niulab Equipment Company 25.03.04 Swiss FrancELECTRONIC ANALYTICAL BALANCE 3100.00 35.75MODEL-AB204-SP & F Charges 400.00Air Freight Charges 150.00Subtotal 3650.00 130,487.50

CVD 20% 26,097.50Sub-Total 156,585.00Excise 16% 25,053.60Total 181,638.60

51


7 Niulab Equipment Company 26.03.04 EURO 55.45DETERMINATION OF FOAMING 14000.00CHARACTERISTICSP & F CHARGES 300.00Sub-Total 14300.00 792,935.00

CVD 20% 158,587.00Sub-Total 951,522.00Excise 16% 152,243.52Total 1,103,765.52

8 Marsap Services Pvt. Ltd 25.03.04 EURO 55.45HERZOG MANUAL CLOUD & 8253.00POUR POINT APPARATUSP & F Charges 250.00Air Freight Charges 450.00Sub-Total 8953.00 496443.85


9 Sarbi Engineering & Whg Pvt. Ltd 18.03.04

APPARATUS FOR CIRCULATORYCORROSION TEST 175,000.00AS PER JIS K-2234/94

P&F 3,500.00Sub –Total 178,500.00Tax nilTotal 178,500.00

10 Sarbi Engineering & Whg Pvt. Ltd 18.03.04

APPARATUS FOR HEAT TRANSFERSURFACE 135000.00AS PER JIS K 2234/94 P&F 2,700.00

Sub -Total 137,700.00Tax nilTotal 137,700.00

11 Niulab Equipment Company 26.03.04 EURO 55.45AUTOMATIC CLEVELAND OPEN CUPFLASH AND FIRE POINT TESTERASTM D 92 15130.00P & F Charges 300.00Sub-Total 15430.00 855,593.50


52


12 Niulab Equipment Company 26.03.04 EURO 55.45Oxidation Stability Of Insulating And StreamTURBINE OILS BY TOTATING BOMBASTM D 2112, D 2272, D 4742 48060.00P & F Charges 300.00Sub-Total 48360.00 2,681,562.00


13 Marsap Services Pvt. Ltd 25.03.04 USD 44.95KIN. VISCOSITY BATH FOR 6 VISCOMETERTEMP RANGE RT to 150 D C-ASTM D 445 9302.00PART NO. 75943-1P & F Charges 300.00Air Freight Charges 500.00sub-Total 10102.00 454084.90


14 Niulab Equipment Company 26.03.04 EURO 55.45LOW TEMPERATURE VISCOMETERBATH ASTM D 445MODEL-PETROTEST 19255.00P & F Charges 300.00Sub-Total 19555.00 1084324.75


15 Niulab Equipment Company 26.03.04 EURO 55.45Predicting The Borderline PumpingTemperatureOF ENGINE OIL ASTM D 3829 -D 4684 42000.00(MODEL PETROTEST)P & F Charges 300.00Sub-Total 42300.00 2,345,535.00


16 Niulab Equipment Company 26.03.04 EURO 55.45Oxidation Charateristics By Tost/Too 16010.00MODEL-PETROTEST PART NO 16-0581P & F Charges 300.00Sub-Total 16310.00 904,389.50


53


17 Niulab Equipment Company 26.03.04 EURO 55.45Rust Protection By Metal Preservatives InHumidity Cabinet Model-Petrotest 21304.00ASTM D 1748 PART NO. 16-2350P & F Charges 300.00Sub-Total 21604.00 1,197,941.80


18 Rank Metallurgical Services 23.03.04 EURO 55.45Quenchometer Ivf Smartquench 14740.00 817,333.00alongwith the Consumables CVD 20% 163,466.60

Sub-Total 980,799.60Excise 16% 156,927.94Total 1,137,727.54

19 Niulab Equipment Company 25.03.04 Swiss FrancAutomatic Petentiometric Titrators 35.75Model-Petrotest(Alongwith Consumables) 18047.50P & F Charges 300.00Air Freight Charges 300.00

18647.50 666,648.13CVD 20% 133,329.63Sub-total 799,977.75Excise duty @16% 127,996.44Total 927,974.19

20 Sanjay Biotech 16.03.04Brookefield Viscometer 210,000.00

ST 15.3% 32,130.00Total 242,130.00

Grand Total 4,27,79,347.95

* STORAGE TANKS

Storage Tanks in carbon steel construction constructed as I.S. 803 with adequateman holes, nozzles, level indicators, spiral stair case and rolling round the tankswith one coat of protective and decorative paint calibration chart painted on theexternal. Total storage capacity 3,000MT of 1000MT each.(Quotation obtained from Trioka Processes Private Limited dated February 5,2004) 1,44,00,000

* BLENDING KETTLES

Construction in stainless steel designed for intimate mixing and blending;cylindrical in construction with conical bottle; fitted with coils and agitator.Design for slow but intimate mixing complete with driving mechanismcomprising of Motor, Gear Box, and other drive parts. Each Kettle with 10MTvolumes Rs. 22,00,000/- per Kettle – 3 Nos.(Quotation obtained from Trioka Processes Private Limited dated February 5,2004) 79,20,000

54

* ELECTRICAL INSTALLATION

Complete electrical installation including main panel, cables, earthing materialgeneral lighting for shade.(Quotation obtained from Trioka Processes Private Limited dated February 5,2004) 24,00,000

* Notes:

1) All above figures are inclusive of Transportation, Sales Tax installation and other miscellaneous expenses at apx, 20% of theCost

2) The above prices are based on the current cost of raw materials and labour. In case of increase of any of the above, the pricesare subject to variation.

Daman Plant


1 Oil Filling system Elder Instruments P Ltd, 11.03.04 Oil Filling System 1,85,000Mumbai Tilting Mechanism 12,000

PC/Printer connectivity 5,000S/w for data recording 25,000Sub-total 2,27,000P&F @ 2% 3,700Sub-total 2,30,700Stamping 5,000Installation Charges 7,500Sub-total 2,43,200ED @ 16% 38,912Sub-total 2,82,112CST @ 4% 11,285Total 2,93,397For two units 5,86,794

2 Grease Filling System Elder Instruments P Ltd, 11.03.04 Grease Filling System 1,55,000Mumbai Tilting Mechanism 12,000

PC/Printer connectivity 5,000S/w for data recording 25,000Sub-total 1,97,000P&F @ 2% 3,100Sub-total 2,00,100Installation Charges 7,500Stamping 5,000Sub-total 2,12,600ED @ 16% 34,016Sub-total 2,46,616CST @ 4% 9,865Total 2,56,481For two units 5,12,962

3 Thermopac (Boiler) Thermax Limited 11.03.04 Thermopac 3,04,880ED @ 16% 48,781Sub Total 3,53,661CST @ 4% 14,146Erection Charges 17,000Total 3,84,807For two units 7,69,614

55

Sl. No. Detai ls Name of the Supplier Date of Amount (Rs.)Quotation

4 Weigh Bridge Avery India Ltd 12.03.04 Weigh Bridge 9,25,000ED @ 16% 1,48,000Sub-total 10,73,000CST @ 4% 42,920Erection Charges 30,359Stamping 1,500Foundation 20,000PC Printer 20,000Total 11,87,779For 2 Nos. 23,75,558

5 Gen. Sets Eram Engineers P Ltd 18.03.04 Gen Sets 9,06,000ED @ 16% 1,44,960Sub Total 10,50,960CST @ 10% 1,05,096Erection & Comm.Charges 77,700Foundation 15,000Total 12,48,756

6 Filtration Unit Vaccum Plant & 23.03.04 Filtration Unit 30,00,000Instruments Mfg Co. Ltd ED @ 16% 4,80,000

Sub Total 34,80,000CST @ 4% 1,39,200Total 36,19,200

7 Can Filling System Elder Instruments P Ltd 24.03.04 Can Filling System 17,64,000(1 to 3.5Kg Cap) P&F @ 2% 35,280

Installation Charges 20,000Stamping 3,000Sub Total 18,22,280ED @ 16% 2,91,565Sub Total 21,13,845MST @ 9.8% 2,07,157Total 23,21,002For six units 1,39,26,012

8 Can Filling System Elder Instruments P Ltd 27.03.04 Can Filling System 4,23,388(5 to 20 Kg Cap) P&F @ 2% 8,468

Installation Charges 5,000Stamping 3,000Sub Total 4,39,856ED @ 16% 70,377Sub Total 5,10,233MST @ 9.8% 50,003Total 5,60,235For five units 28,01,175

9 Grease Facilities New Multifab Engineers 24.03.04 Grease Kettle 21,14,000Equipment P Ltd Crompton Motor 1,17,000

Gear Box 2,72,000Heat Exchanger 3,25,000Sub Total 28,28,000ED @ 16% 4,52,480Sub Total 32,80,480CST @ 4% 1,31,219Total 34,11,619

56


10 Flow Meters SS Engineering Inds Ltd 24.03.04 Kent Oil Meter 99,000(2 Nos) Strainer (80mm) 17,000

2 NosAir release system2 Nos 19,000Mating Flange2 Nos 4,000Pulse Generator2 Nos 24,000Remote Totaliser2 Nos 12,000Batching Unit 1 No 14,000Sub Total 1,89,000P&F @ 2% 3,780Sub Total 1,92,780ED @ 16% 30,845Sub Total 2,23,625CST @ 4% 8,945Total 2,32,570For twenty units 46,51,400

11 Pumps C Bole & Co 23.02.04 Monex MultipurposeGear Pump 28,500ST @ 15.3% 4,361Total 32,861For twenty units 6,57,220

12 Valves Flanges JJ Enterprises 27.03.04 Cast SS 316 Bodyball Valve ASA 300 –Size 3” 17,125P&F @ 2% 343CST @ 4% 699Total 18,166For forty units 7,26,640

13 Wire Rope Hoist Ishar Hoist & Cranes 22.03.04 1 MT Elec. Wire Rope62,870P Ltd Hoist with motorised

trollyDSL Power System 3,500Sub Total 66,370Packing Charges @ 3% 1,991CST @ 4% 2,734Total 71,096For four units 2,84,384

14 Trucks Navneet Motors P Ltd 27.03.04 Wheel base 3800 mmEicher make with 11.1CPC Conf. 7,13,086Insurance 16,617One Time Tax 44,600Total 7,74,303For two units 15,48,606

57


15 Fork Lift Godrej & Boyce Mfg 10.03.04 GX200 D 2 T Diesel 6,15,000Accessories 97,400Sub-Total 7,12,400Ed @ 16% 1,13,984Sub Total 8,26,384CST @ 4% 33,055Total 8,59,439For two units 17,18,878

16 Pipe Industrial Valves & 01.04.04 MS C Class balck 4,200Equipments pipe, ERW 3” NB

Zenith Make 4200MtrsGI B Class pipe, ERW,- 2” NB – 235 Mtrs 2,350- 1 ¼” NB–155 Mtrs 1,550- ¾” NB – 85 Mtrs 850MS C Class long bend 2,6503” NB ERW 265/EMS C Class short bend 1,4503” ERW 145/ESub Total 13,050MST @ 15.3% 1,997Total 15,047

17 Steel Cabin Trimurti Engineers 20.02.04 Steel Cabin Structures 45,000with 14G GalvanizedsheetWC Tax @ 4% 1,800Total 46,800For three Units 1,40,400

18 Tata Diesel Vehicle Bafna Motors (Mumbai) 01.04.04 Tata Diesel Vehicle 9,32,630Pvt. Ltd. Model LPT 2515 TC

Insurance 16,000One time registration 45,000Total 9,93,630For three units 29,80,890

Grand Total 4,19,75,155

58

Lab Equipment


Niulab Equipment Company 25.03.04

1 Bruker Make Spectrometer-Tensor 27 32335.00 EURO 55.45P & F Charges 300.00Airfreight and Insurance Charges 500.00With Accessories Kit 9241.00BASF Library-3934 Spectra 8294.00Sadler Lubricant Library-PN4255 9216.00Sadler Chemicals Library-PN4208 3428.00Sadler Lubricant Library-PN4217 6594.00Sub – Total 69908.00 3,876,398.60Required Computer and Printer 178,550.00

Sub-Total 4,054,948.60CVD 5% 202,747.43Sub-Total 4,257,696.03Excise 16% 681,231.36Total 4,938,927.39

2 Lab Systems(I) Pvt. Ltd 24.03.04 USD 44.95Elemental Analyser(C,S,N & Chlorine) 65890.00Microcoulometric Detector 19000.00Total 84890.00Less Special Discount 17760.00Total 67130.00Analytik Jena Model Multi Ea 3100-Sampler 17298.00

84428.00 Sub-Total 3,795,038.60CVD 20% 759,007.72Sub-Total 4,554,046.32Excise 16% 728,647.41Total 5,282,693.73

3 Lab Systems(I) Pvt. Ltd 24.03.04 USD 44.95Aas Nova 400 Atomic AbsobtionSpectrophometer 54128.00Manual Sampler 7578.00Automatic Sampler 27945.00Segmented Flow Star SFS 5 SegmentedInjection 2275.00AS 52s Auto Sampler 12275.00Compressor 1750.00Pressure Regulator 780.00Subtotal 106731.00 4,797,658.45


59


4 Blue Star Ltd 24.03.04 USD 44.95Leeman Labs Direct Reading EchelleIcp Spectometer 72850.00Air Freight 1550.00Computer Controlled Optical System 5971.00Consumable Kit 3556.00Aqueous Sample Introduction system 2872.00Consumable Kit Axial-Aqeous 3380.00Consumable Kit Dual View-Aqeous 3208.00Consumable Kit Dual Organic 3484.00Oil Std Kit 3600.00Standard Solution for Testing 2450.00Sample Introduction System 4516.00Ultrasonic Nebuliser 4516.00Auto Sampler 5920.00

134257.00 6,034,852.15CVD 5% 301,742.61Sub-Total 6,336,594.76Excise 16% 1,013,855.16Total 7,350,449.92

5 Niulab Equipment Company 26.03.04 EURO 55.45Carbon Residue Tester(D-4530) Model 23435.00PetrotestP & F Charges 300.00Sub-Total 23735.00 1,316,105.75


6 Niulab Equipment Company 25.03.04 Swiss FrancELECTRONIC ANALYTICAL BALANCE 35.75MODEL-AB204-S 3100.00P & F Charges 400.00Air Freight Charges 150.00Subtotal 3650.00 130,487.50


7 Niulab Equipment Company 26.03.04 EURO 55.45DETERMINATION OF FOAMINGCHARACTERISTICS 14000.00P & F CHARGES 300.00Sub- Total 14300.00 792,935.00


60


8 Marsap Services Pvt. Ltd 25.03.04 EURO 55.45HERZOG MANUAL CLOUD & POURPOINT APPARATUS 8253.00P & F Charges 250.00Air Freight Charges 450.00TOTAL 8953.00 496443.85


9 Sarbi Engineering & Whg Pvt. Ltd 18.03.04APPARATUS FOR CIRCULATORYCORROSION TESTAS PER JIS K-2234/94 175,000.00

P&F 3,500.00Sub -Total 178,500.00CST 4% 7,140.00Total 185,640.00

10 Sarbi Engineering & Whg Pvt. Ltd 18.03.04APPARATUS FOR HEAT TRANSFERSURFACEAS PER JIS K 2234/94 135000.00

P&F 2,700.00Sub -Total 137,700.00CST 4% 137,700.00Total 143,208.00

11 Niulab Equipment Company 26.03.04 EURO 55.45AUTOMATIC CLEVELAND OPEN CUPFLASH AND FIRE POINT TESTERASTM D 92 15130.00P & F Charges 300.00Sub-Total 15430.00 855,593.50


12 Niulab Equipment Company 26.03.04 EURO 55.45Oxidation Stability Of Insulating AndStreamTURBINE OILS BY TOTATING BOMBASTM D 2112, D 2272, D 4742 48060.00P & F Charges 300.00Sub-Total 48360.00 2,681,562.00


61


13 Marsap Services Pvt. Ltd 25.03.04 USD 44.95KIN. VISCOSITY BATH FOR 6VISCOMETERTEMP RANGE RT to 150 D C-ASTM D 445 9302.00PART NO. 75943-1P & F Charges 300.00Air Freight Charges 500.00Sub-Total 10102.00 454084.90


14 Niulab Equipment Company 26.03.04 EURO 55.45LOW TEMPERATURE VISCOMETERBATH ASTM D 445MODEL-PETROTEST 19255.00P & F Charges 300.00

19555.00 1084324.75CVD 5% 54,216.24Sub-Total 1,138,540.99Excise 16% 182,166.56Total 1,320,707.55

15 Niulab Equipment Company 26.03.04 EURO 55.45Predicting The Borderline Pumping TemperatureOF ENGINE OIL ASTM D 3829 -D 4684 42000.00(MODEL PETROTEST)P & F Charges 300.00Sub-Total 42300.00 2,345,535.00


16 Niulab Equipment Company 26.03.04 EURO 55.45Oxidation Characteristics By Tost/Too 16010.00MODEL-PETROTEST PART NO 16-0581P & F Charges 300.00Sub-Total 16310.00 904,389.50


17 Niulab Equipment Company 26.03.04 EURO 55.45Rust Protection By Metal Preservatives InHumidity Cabinet Model-Petrotest 21304.00ASTM D 1748 PART NO. 16-2350P & F Charges 300.00Sub-Total 21604.00 1,197,941.80


62


18 Rank Metallurgical Services 23.03.04 EURO 55.45Quenchometer Ivf Smartquench 14740.00 817,333.00alongwith the Consumables


19 Niulab Equipment Company 25.03.04 Swiss FrancAutomatic Petentiometric Titrators 18047.50 35.75Model-Petrotest(Alongwith Consumables)P & F Charges 300.00Air Freight Charges 300.00Sub-Total 18647.50 666,648.13


20 Sanjay Biotech 16.03.04Brookefield Viscometer 210000.00

CST 4% 8400.00Total 218400.00Grand Total 42,768,265.94

* STORAGE TANKS

Storage Tanks in carbon steel construction constructed as I.S. 803 with adequatemanholes, nozzles, level indicators, spiral staircase and rolling round the tanks withone coat of protective and decorative paint calibration chart painted on the external.Total storage capacity 5,000MT with 2 tanks of 1000MT, 2 Tanks of 500MT and10 Tanks of 200MT. 2,40,00,000

* BLENDING KETTLES

Construction in stainless steel designed for intimate mixing and blending; cylindricalin construction with conical bottle; fitted with coils and agitator. Design for slowbut intimate mixing complete with driving mechanism comprising of Motor, GearBox,and other drive parts. Each Kettle with 10MT volumes Rs. 22,00,000/- per Kettle –6 Nos. 1,58,40,000

* ELECTRICAL INSTALLATION

Complete electrical installation including main panel, cables, earthing material generallighting for shade. 36,00,000

* (a) Based on the quotations dated February 5, 2004 obtained from Trioka Processes Private Limited. (b) All above figures areinclusive of Transportation, Sales Tax installation and other miscellaneous expenses at apx, 20% of the Cost (c) The above prices arebased on the current cost of raw materials and labour. In case of increase of any of the above, the prices are subject to variation.

Notes:

a) All suppliers relating to purchase of the new equipments and other accessories are in no way related/connected to the Promoters/Directors of the Company.

b) The Company is yet to place firm orders with the suppliers.

c) The Company intends to place orders after the issue is completed.

63

Others

1. Marketing and Advertisement Expenses

The present expansion is for setting up facilities to manufacture automotive lubricants of various grades in addition to their existingproducts. These lubricants find their uses in all types of Vehicles. To position this product in the market, build brand awareness(IPOLTM), set up dealer network and to compete with the existing players, the Company has provided an amount of Rs.200 lacs inthe project cost for the same.

2. Margin Money for Working Capital

The requirement for margin for working capital has been computed based on the working capital requirements for the F.Y. 2004-05.The company has received a sanction from UTI Bank for additional working capital limits, which has been accepted by theCompany. The limits will be disbursed subject to completion of execution of documents, creating charge on assets and otherformalities. Accordingly, the working capital requirements for the company have been computed as under:

Current Assets F.Y.2004-2005Rs. in Lacs

Raw Material 1,340.00

Finished Goods 220.00

Stores & Spares 50.00

Sundry Debtors 1,950.00

Other Current Assets 360.00

Total Current Assets 3,920.00

Current Liabilities F.Y.2004-2005Rs. in Lacs

Sundry Creditors 2,125.00

Other Current Liabilities 338.00

Total Current Liabilities 2,463.00

Working Capital Gap 1,457.00

Less: Fund Based Bank Limits* 737.50

Net Working Capital 719.50

(Source: Estimates of the Company’s Management)

The above net working capital is proposed to be partly furnished through the proceeds of the IPO to the extent of Rs. 450 lacs asis provided in the project cost and the balance from internal cash generations.

* The break up of the Fund Based Bank Limits is as under:

Existing Fund Based Bank Limits 300.00

Additional Proposed Limits 437.50

Total 737.50

Assumptions underlying projections

Holding period

Raw materials 2.5 months

Finished goods 6 months

Stores 1.5 months

Debtors 2.5 months

Creditors 3 months

64

The working capital calculations for the financial year 2003-04 are as under: (Rs. in lacs)

Particulars Amount Amount

Current Assets

Inventory 1698.75

Sundry Debtors 1607.74

Cash and Bank balance 651.48

Loans and Advances 195.19

4153.16

Current Liabilities

Sundry Creditors 214.89

Other Liabilities 413.43

Provisions 101.37

729.69

Working Capital gap 3423.47The working capital gap was met by

Cash Credit from Dena Bank 289.37

Letter of Credit from Dena Bank 1549.15 1838.52

Unsecured Loans from Promoters/Shareholders 398.86

Internal Acruals 1186.09

3423.47

The detailed terms and conditions of the working capital credit facilities sanctioned by UTI Bank Limited are as under:

a. Cash Credit Facility Rs.175 lacs

b. Non fund based limits Rs.525 lacs (of which 50% (i.e. Rs.262.50 lacs one way interchangeability from non fund based limit tofund based limit allowed. Subject to fund based limt not to exceed Rs.737.50 lacs at any point)

c. Rate of interest PLR – 0.75% for CC facility

d. Security:

Primary

Pari passu first charge by way of hypothecation of all current assets including stock and book debts of the Company.

Collateral

i) Pari Passu first charge of the entire fixed assets of the Company including Land, Building, Plant and Machinery, Furnitureand Fixtures etc.,

ii) Equitable mortgage of registered office premises on pari passu basis

iii) Personal guarantees of Directors namely Shri Rajendra Sah, Vivek Sah, Aditya Sah and Smt. Shobha Sah in their personalcapacity.

3. IPO Expenses

SPL proposes to issue equity shares through Initial Public Offer for an amount of Rs.3178 lacs. Expenses on IPO estimated atRs.250 lacs, which works out to 7.87% of the IPO, which seems to be reasonable. Main components of IPO related expenses arefees to the Lead Managers, Printing of Application Form and Prospectus and other issue stationery, Publicity Expenses, Brokerageand various statutory charges and fees.

4. New Branch Offices and Depots

Presently, the Company has branch offices /depots in Pune, Delhi, Faridabad, Chandigarh, Chennai, Bangalore, Hyderabad, Baroda,Kolkata and Jamshedpur for marketing of its products to various manufacturing & industrial corporate customers and to provide aftersales services. To expand its horizons and to acquire and service new customers, the Company proposes to open three new salesdepots/branch offices in Indore, Noida and Coimbatore at an outlay of Rs.50 lacs.

65

5. Overseas Branch office expenses for exports

The Company sees tremendous potential for its products in Sri Lanka and Middle East Countries. To market the products of theCompany effectively and for providing after sales service, the Company proposes to open two branch offices in Colombo and Dubai,for which an amount of Rs.75 lacs has been provided in the project cost. Out of Rs.75 lacs, Rs.50 lacs is towards office set-upexpenses and the balance Rs.25 lacs is towards salaries and overheads.

6. Contingencies

The Company has provided Rs.395 lacs (15% of the total capital expenditure) towards contingencies to meet any price escalation.

Schedule of implementation

The original schedule of implementation has been delayed by three months due to delay in receiving various regulatory approvals forlaunch of IPO. The revised schedule of implementation of the project, as estimated by the Management is as under:

Activity Vasai Plant Daman PlantStart End Start End

Acquisition of Land Sept. ‘04 Nov.’04 Sept.’04 Nov.’04

Civil Works Nov.’04 Jan.’05 Nov.’04 Jan.’05

Plant and Machinery

- Orders Nov.’04 Feb.’05 Nov.’04 Feb.’05

- Deliveries Apr.’05 Jan.’06 Apr.’05 Jan.’06

Erection Jun.’05 Mar.’06 Jun.’05 Mar.’06

Trial Runs Feb.’06 Mar.’06 Feb.’06 Mar.’06

Commercial Production Apr.’06 Apr.’06

Location

The Company’s registered office is situated at 406/407, Embassy Centre, Nariman Point, Mumbai – 400 021.

The Company’s Branch offices are located at

Location Address

Pune 104, Punit Apartments, 526, Narayan Peth, Pune – 411 030

Delhi 428/2,, Rani Khera Road, Opp. Dhanna Builders, Mundka, New Delhi – 110 041

Baroda 211, World Trade Centre, Sayajiganj, Vadodara - 390 005.

Kolkata 88, Pathuria Ghat Street, Kolkata – 700 006

Bangalore No.D-392, Ist Cross, Ist State, Peenya Industrial Estate, Bangalore – 560 058

Hyderabad 7-1-67/2, Opp. Nature Cure Hospital, Ameerpet, Hyderabad – 500 016.

Chennai GA2 (Part of GA), Ground Floor, Atkinson Palace, Atkinson Road, Vepery, Chennai – 600 007

Jamshedpur Plot No.1350, Tata Kandra Road, Near “S” Type Chowk, Adityapur, Jamshedpur, Jharkhand

Faridabad Plot No.74, New DLF Industrial Area, Faridabad – 121 003

Chandigarh 182/74, Industrial Area, Phase I, Chandigarh – 160 002

SPL’s present and proposed manufacturing facilities are/will be located at

Existing Plant

Vasai Plant (Land and Building owned by the Company)Plot 5 to 12, Behind Dewan & shah Indl. Estate,Village Valliv, Vasai (east), Thane,Maharashtra.

66

Daman Plant (Land and Building are taken on Lease)

8, Silver Indl. Estate,Near Hindustan Lever Limited,Patalia Road, Bhimpore,Daman – 396 210.

97/2, Daman Industrial Estate,Kadaiya, Daman Patalia Road,Nani Daman – 396 210

Proposed Plant

Vasai Plant

The Company has identified to buy Plot 13 to 16, Behind Dewan & shah Indl. Estate, Village Valliv, Vasai (east), Thane, Maharashtra,which belongs to Industrial Agencies, a partnership firm in which Mr. Ashok Sah (brother of Mr. Rajendra Sah, Executive Chairman)is one of the Partner.

Daman Plant

97/2, Daman Indl. Estate,Kadaiya, Daman Patalia Road,Nani Daman – 396 210.

The Company has taken the Land and Building at Daman on lease. The Salient features of the Lease agreements are as under:

Date of entering into lease agreement 4th March 2004

Lessor M/s. Samarpan Convertors Pvt. Ltd.

Area 2070 sq.metres, with RCC Building 8000 sq. feet,

Location ground floor, Plot No. 97/2, Survey No. 99/2,99/4,100/1,& 101/4 at VillageKadaiya, Nani Daman, District Daman.

Main terms and conditions 1) rent payable is Rs. 80,000 per month from 1st March 2004 to 31st

March 2007, and Rs. 88,000 from period 1st April 2007 to 31st March2009.

2) Interest free Security Deposit Rs. 5,00,000

3) Lease commences from 1st March 2004 to 31st March 2009, renewablethereafter at the option of the lessor on the same terms and conditionsexcept rent as may be mutually agree upon at the time of renewal.

Date of Entering into Lease agreement 9th January 2001

Lessor M/s. Kaydees Appliances

Area 3000.00 sq. feet

Location ground floor situated on Plot No.8, Survey No.: 56/11, at Silver IndustrialEstate, Village Bhimpore, Daman.

Main terms and conditions 1) rent payable is Rs. 15000 per month.

2) Interest free Security Deposit Rs.1,85,000.

3) Lease commences from 1st January 2001 to 1st January 2006, renewablethereafter at the option of the lessor on the same terms and conditionsexcept rent as may be mutually agree upon at the time of renewal.

67

Existing Manufacturing Facilities

Vasai

Storage Tank 21 nos (5000 KL)

Blending Kettles 21 nos (150 KL)

Filtration Machine 2 nos

Thermopac Boiler 1 no.

Rotary Pumps 20 nos

Small pack filling machines 4 nos

Grease plant 2 nos

Testing Equipments 50 nos

R & D Equipments 20 nos

Weighbridge 1 no

Generator Set 1 no 180 kva

Forklift 1 no

Daman

Storage Tank 6 nos (215 KL)

Blending Kettles 4 nos (50 KL)

Filtration Machine 1 no

Thermopac Boiler 1 no

Rotary Pumps 10 nos

Grease plant 1 no

Testing Equipments 25 nos

R & D Equipments 10 nos

Generator Set 1 no

Utilities

Raw Materials

The main raw materials required for manufacturing are Base Oils, Additives, Chemicals and Packing Materials (Barrels, SmallContainers)

Methods of procurement of Raw Materials

Base Oils Imported (by Ship) / Domestic (by road)

Additives Imported (by Ship) / Domestic (by road)

Chemicals Domestic (by road)

Packing Material Domestic (by road)

At present the prices of crude oil are prevailing at the highest level seen in the last 15 years. Therefore the general consensus in themarket is an expected reduction in the crude oil prices in the near future. The raw materials are easily available in the domestic aswell as international market and there has never been any difficulties in procuring the same. Imports are under OGL and there are norestrictions.

Power

The Present connected load at Vasai plant is 315 KW and the sanctioned load is 105 KW. The Company will be able to get thesanctions of additional power requirement, since its connected load is far greater than sanctioned load.

The Company has also installed a 180 kva diesel generator set at Vasai plant.

68

The present sanctioned load at Daman plant is 65 KW. The Company has also installed a 100 kva diesel generator set at its Damanplant. It further proposes to install 300 KVA diesel generator set at Daman unit for backup.

The present connected load and the generator sets installed by the Company will fully meet its power requirements for the presentand proposed project.

Water

The Company does not require any water for manufacturing and effluent treatment. Water is required for human consumption, forwhich adequate arrangements were made.

Effluent Treatment

The manufacturing process does not result in any effluents. For cleaning purpose the Company requires saw dust, the disposal ofwhich is taken care through its Environmental Management Systems. The Company has obtained ISO-14001:1996 for its environmentmanagement systems.

Manpower Requirement

The Company has 104 employees on its rolls as on date at various levels.

The category-wise break-up of the requirement of manpower for the expansion project is as under:

Sl. No. Position No. of people required

1 Vice Presidents 6

2 Senior Manager -

3 Manager 27

4 Support staff 31

5 Workers 15

Total 79

The required manpower would be hired through placement agencies, advertisement and other means at the appropriate time.

Process flow diagram for making lubricants

Bulk Storage for Base Oils(Base Oil Tanks)

69

The major function of lubricant oils is the reduction of friction and wear by separation of surfaces, metallic or plastic which aremoving with respect to each other. The high quality and improved lubricants perform with higher stresses, loads and temperatures.

Lubricants are made in different viscosity ranges based on the requirement of machines. Mostly four type of base oils namely SN70,SN150, SN500, and BS150 are used for blending different grades of lubricants. The additives are used to improve oxidation,corrosion, load carrying and low temperature flowability of lubricants.

Control of products quality at the blending plant is usually based on base oils, additive mfgrs. and own internal standards. Thenumber of tests applied varies with the complexity of the products and the nature of the applications. The more important tests likeviscosity, flash point, color etc. are performing on every batch. Other tests depend on data developed at the individual plant level.

Manufacturing of lubricating oils

Stage I

The blending unit consist of a lot of base oil storage tanks, blending kettles with mechanical stirrer and heating facility. Theproduction is mostly in batch wise. When the batch is taken the blender has to ensure that the pipeline and kettle is thoroughly cleanand no contamination is left of earlier batch. Required quantity of different grades of base oils is put in the blending kettle and heatedand stirred to get demoisturised homogeneous. Then additives are added based on the products formulation; once again the productis thoroughly stirred.

Stage II

One sample from the kettle is drawn and sent to lab for colour, viscosity, aniline point Testing etc. If the product meets theinprocess tests, then the batch is tested completely as per product specification. When the product meets the specification, theproduct is approved by Quality Control dept.

Stage III

Filtration: - The above ready product okayed by Q.C is passed through filtration unit where all contaminant, any gases matter ormoisture is removed.

Stage IV

Finally the product is unloaded into barrel or road tanker. The barrels are stenciled with batch number, month of manufacturing andthe name of the grade and sealed with tamper proof seals.

Manufacturing of Greases

Stage I

Making greases is slightly different than making lubricants. The base oil is taken in kettle and saponified by putting vegetable oil andalkali at around 90°C. The mixture is further heated to around 200°C with constant stirring till the base oil and vegetable oil becomethick and homogeneous mass.

Stage II

The grease is tested as per the set specification. If the sample meets the test then it is put in cooling kettle and cooled to 90°c. EPadditives are added to increase the performance as per formulation. Finally grease is homogenised and packed into barrel

Stage III

Filtration: - The above ready product okayed by Q.C is passed through deareator and filtration unit where all contaminant, any gasesmatter or moisture is removed.

Stage IV

Finally the product is unloaded into barrel. The barrels are stenciled with batch number, month of manufacturing and the name of thegrade and sealed with tamper proof seals.

70

X. INDUSTRY INFORMATION

Industry background

The Indian lubricant market is the fourth largest in the world with an estimated consumption of more than 1.4 million tonnes. Theindustry turnover is currently estimated at Rs 75 billion and is growing at about 3-4 per cent annually. The Indian lubes market wasregulated till 1993, with the market dominated by the 4 public sector undertakings including IOCL, BPCL, HPCL and IBP, who hada collective market share of approximately 89 per cent. Following liberalization, the major policy initiatives taken were:

l Decanalisation of base oil - Before 1993, base oil, the key raw material was imported by IOCL, the sole canalizing agent.

l Pricing - Under APM, the lube base oil pricing was regulated. This was deregulated in a phased manner and now base oil pricingis market determined.

l Quantitative restrictions - Base oil stock was allotted to the users on a quota basis, which became irrelevant after Decanalisationand freer imports.

l Reduction in duties - Customs duty on base oil stock was reduced from a peak of 85 per cent to current levels of 20 per cent.

Liberalization brought in competition for the oil PSUs, with the private players establishing themselves in the market place. Todaythere are some 20 companies operating in the Indian lubricants market.

Until the 1980s, lubricants produced in the country were basically simple blends based on low and medium level technologies. Moresophisticated lubricants were imported and these amounted for a very small market. The entry of multinationals has led to complexand premium brands being introduced into the Indian market.

Industry Growth Rates

1.091.13 1.16

1.201.25

1.321.4

3.6%

3.1%3.3%

4.0%

3.0%

4.9%

6.1%

0.75

0.85

0.95

1.05

1.15

1.25

1.35

1.45

1.55

1.65

1.75

1997 1998 1999 2000 2001 2002 20032.00%2.50%3.00%3.50%4.00%4.50%5.00%5.50%6.00%6.50%

Lubricant Market Size Annual Growth in sales

(Source: Company)

71

Market Segments

The two major segments of the lubricant industry are Industrial lubricants (approx.40 per cent market share) and automotivelubricants (approx. 60 per cent market share).

Indian Lubricants Market

Industrial

16%

Auto

Transmission

3%

Marine

1%

PCMO

2%

Two-Stroke

9%Gear Oil (Auto)

9%

HDD

57%

Railroad

3%

LUBRICANTS (Market Size Rs. 7,500 Cr.)

Industrial (40%) Automotive (60%)

Hydra- ulic

(20%) Rubber Process (13%)

Cutting Honning (5%)

Gear Oil (5%)

Grease (12%)

Diesel (55%)

Four Wheeler (10%)

Gear Oil (15%)

Petrol (25-28%)

2 Wheeler (15-18%)

Turbine / Compressor

(5%) Metal

Working Fluids (10%)

Sugar Lubes (3%)

Transformer (15%)

General Industrial

Oil (12%)

72

Fertiliser

6%

Engineering

5%

State Transport

7%

Others

13%

Retail

42%

Textiles

5%Exploration

5% Railways

5%Steel

5%Mining

3%

Marine

2%Power

2%

Industrial lubricant sector

The industrial lubricants market demands tailor made specific solutions for exacting consumer applications. Hence, the key successfactors in this segment are:

l Strong R&D base for producing exact customer oriented lubricants.

l Strong direct sales force for targeting specific industrial consumers.

l Quality solutions.

l An effective after sales service.

l A fully developed and comprehensive range of lubricants.

Industrial lubricants can further be sub-classified as Hydraulic oil (20 per cent market share), Gear oil (5 per cent market share),Metal lubricant oils (15 per cent), Grease (12 per cent), Transformer oil (15 per cent), Sugar Lubes (3 per cent), General Industrial(12 per cent), Rubber Process Oils (13 per cent) and Compressor oil (5 per cent).

(Source: Company)

Automotive lubricant sector

The automotive lubricants are characterized by brand awareness and the perception of quality in the customers’ mind, therebynecessitating a large advertising and brand promotion budget. This segment can be further sub-classified into two different categoriesnamely – petrol lubricants (35 per cent share) and diesel lubricants (65 per cent share). The petrol lubricants comprise mainly ofengine oils (90 per cent share), Transmission and Gear Oils (8 per cent share) and other oils (2 per cent share). The diesel lubricantsfollow a similar pattern with engine oils accounting for 85 per cent followed by transmission and gear oils (13 per cent). Since retailconsumers dominate this segment, a strong distribution network is a pre-requisite. Also this segment is not very price sensitive asthe price of the lubricant is a small fraction of the price of the engine and the lubricant plays a very important role in enhancing thelife of the engine.

There are some specialized applications like marine lubes also. Automotive lubes can be further sub classified on the basis of use,like 2/3 wheelers, cars, and commercial vehicles; or engine oils, brake oils, greases etc.

(Source: Company)

Automotive Greases

Automobile manufacturers have several areas of lubrication like Wheel Bearings, Chassis etc. Therefore, they require greases for theirOE equipment. Normally W.B. Chassis Grease was offered for their respective application but lately Multipurpose Grease hasreplaced W.B. Chassis Grease for all practical purposes.

Major Consumer Segments

(Source: Company)

74

Potential for growth

The Indian consumption is very low compared to rest of developed world because of high population and low penetration ofautomobiles.

In developed countries, demand for lubes is stagnant or falling due to saturation on vehicle population and industrial activity; andlong drain, high grade lubes.

As against this, India has exhibited good growth and has become the 2nd largest market in Asia. Now, approx. 35 per cent of worldsales takes place in Asia, up from 22 per cent in 1993. The Indian lubricant industry is the fourth largest lubricant producer andconsumer in the world and is growing at a steady pace per annum, thereby comparing favorably with other overseas markets, makingit an attractive entry point for international lubricant manufacturers. Second, the growth in lubricants sales in the US and Europe isabsolutely flat and in some of the regions, it is even showing negative growth and this is forcing players to look out for other areasto maintain their share in the global pie. The Indian lubricants market is showing the second highest growth in the world next onlyto China and MNC’s want to ride on the growth-wave. This amply signifies India’s position in the world lubricant market. This isthe reason why MNC’s are setting shop in India, as lubes demand in the rest of world is stagnant. A chart of the Asian consumptionand how India has moved up.

Asia Comparative Analysis

(Source: Company)

Import Threat

Lubricants are usually made according to the nature of use, climatic conditions, type of road, nature of automobiles and so on.Therefore, it would not be logical to import the same in the country. But at the same time, there is not much difference and the samecan be imported if one prefers to do so. In fact, premium products, even as on today, are imported. However, in the general outlookof things import of lubricants in India would not be competitive due to the prevailing import duty structure as well as high freightcosts.

In consideration of above, it could be safely noted that the key factors to success for any company in the Lubricant industry wouldbe:

l Good brand image.

l An extensive marketing network.

l Strong financial resources.

l Technological innovations and R&D backup.

l Strategically located manufacturing facilities.

(Source: Company)

Phillipines

4%Singapore

6% Taiwan

7%

Thailand

10%

China

20%Hong Kong

7%

India

14%

Indonesia

10%

Korea

10%

Malaysia

12%

Phillipines

4%Singapore

6% Taiwan

6%

Thailand

10%

China

20%Hong Kong

7%

India

17%

Indonesia

9%

Korea

9%

Malaysia

12%

1997 2003

75

XI. MARKETING & SALES STRATEGY

The Company has been in the market for more than three decades under the brand name IPOL and is a name to reckon with in thedomestic market in respect of its products. The Company is preferred on account of its quality, timely delivery and after salesservice, all of which are a requirement for success in the lubricating oils industry. The Company has a good marketing setup. TheVice President marketing under the direct guidance of the Chairman/Managing Director pilots the marketing executives. There arededicated marketing executives for the various segments of the industry. Within the domestic framework of these segments, theexecutives are assigned territories for a focused approach.

IPOL brand is registered in the name of the Company and the registration is valid till 30th August 2006 which is renewable every 7years.

Domestic marketing typically involves identification of buyers for the Company’s products. In this direction, the executives, byattending various conferences, pursuing various literature and by references in the industry, identify the customers and start writingto them and follow up with meetings. Samples are sent for evaluation and thereafter final orders are negotiated based on quantity,price and delivery schedules. The company presently markets its products through its sales offices / depots located at Pune, Delhi,Faridabad, Chandigarh, Chennai, Bangalore, Hyderabad, Baroda, Kolkata, Jamshedpur. The company has necessary qualified marketingpeople at all these places whose key responsibility is marketing of products to various manufacturing & industrial corporatecustomers.

In respect of global markets, the marketing executives get details of overseas buyers through the local embassies, internet, varioustrade associations and chambers of commerce and this is followed up with introductory letters. Besides the above, the marketingteam attend the various international trade fairs relating to the oil industry where they come across new customers as well as meetexisting clients. This is pursued by sending product dossiers and samples. The marketing executives correspond further for trialsupplies. After this stage, the commercial order or supply order is negotiated by the senior management personnel under the guidanceof the Chairman/Managing Director.

In addition to the direct marketing efforts, the company also appoints distributors/agents for both domestic and overseas markets,who also channelise orders for the Company.

Sales and Distribution Strategy

The basic objective of the sales and distribution is to have quick penetration into each market segments in the most appropriate andcost effective manner, through a highly dedicated, committed and motivated channel, whether direct or indirect. The key requirementsconsidered for both channels are:

l Quick penetration into each market segment.

l Meet the needs and sensitivities of diverse market segments.

l Be cost effective.

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MARKETING FLOWCHART

76

l Uphold product and Company’s brand image.

l Be flexible and adapt to changing market conditions.

l Be able to meet customer expectation levels.

l Higher flexibility in operations.

Business Strategy

The Company would continue to focus on the current segments of business considering the market potential, its own inherentstrength in terms of its quality, price and timely delivery. The Company has requisite infrastructure and manufacturing facilities dueto its constant upgradation/modernization and phased expansion of the same.

The Company has a wide product range in various segments and a good marketing setup that ensures distribution of the Company’sproducts being spread over an adequate number of customers to further ensure no dependency on a few customers.

The Company is constantly introducing new products on account of its strong in house R & D and will continue to do the same inthe near future and will also direct efforts for increasing its presence in the export markets.

Research and Development

The research and development activities have been a propheller to the Company’s business model and strategy. The Company’sresearch and development activities are focused on process improvements to optimize cost, introduction of new products.

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XII. STOCK MARKET DATA

This being the first public issue by the Company, no stock market data is available.

XIII. MANAGEMENT DISCUSSION AND ANALYSIS

Investors should read the following discussion of the Company’s financial condition and results of operations together with thedetailed consolidated financial statements and the notes to those statements included in this Prospectus. The following discussion isbased on the Company’s audited financial statements and on information available from other sources. The Company’s fiscal yearends on March 31 of each year, so all references to a particular fiscal year are to the twelve month period ended March 31 of thatyear.

Comparative Profit And Loss Account For Past Three Years

(Rs. in lacs)

Particulars Audited Audited AuditedPeriod Ended Period Ended Period Ended

March 31, 2004 March 31, 2003 March 31, 2002

INCOME

Gross Turnover 7240.37 5,488.82 4,176.26

Less: Excise Duty 989.76 725.73 540.83

Net Turnover 6250.61 4,763.09 3,635.43

Other Income 122.53 37.57 2.18

Increase/(Decrease) in Finished Goods 51.45 39.17 (13.43)

Total 6424.58 4,839.83 3,624.18

EXPENDITURE 5422.34 4,499.44 3,374.00

PROFIT BEFORE INTEREST DEPRECIATION AND TAX 1002.24 340.39 250.18

Interest 33.85 44.19 66.83

Depreciation 27.81 27.30 29.06

PROFIT BEFORE TAX 940.58 268.90 154.29

Taxation 137.28 20.65 12.00

Deferred taxation (1.28) 3.15 -

NET PROFIT 804.58 245.10 142.29

For the year ended 31.03.2002 :

The total income for the year ended 31.03.02 was Rs. 3624.18 lacs as compared to Rs. 3159.01 lacs for the year ended 31.03.2001registering an increase of 14.73 %. The increase in turnover was on account of the company acquiring new customers & volumegrowth of existing products with existing customers.

The net profit for the year increased from Rs. 41.84 lacs to Rs. 142.29 lacs. The increase in profitability is mainly on account ofreduction in interest costs which reduced from Rs. 147.61 lacs to Rs. 66.83 lacs as compared to previous year. This reduction canbe attributed to efficient working capital management.

For the year ended 31.03.2003 :

The total income for the year ended 31.03.03 was Rs. 4839.83 lacs as compared to Rs. 3624.18 lacs for the year ended 31.03.2002registering an increase of 33.54 %. The increase in turnover was on account of the company introducing new products in the marketlike complete range of greases for automotive & industrial applications, acquiring new customers & volume growth of existingproducts with existing customers.

The net profit for the year increased from Rs. 142.29 lacs to Rs. 245.10 lacs as compared to the previous year. The increase inprofitability is mainly on account of increase in margins of the company’s products & volume growth from existing & new customersas well as from a continuing reduction in interest costs which reduced from Rs. 66.83 lacs to Rs. 44.19 lacs as compared to previousyear.

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The company with its strong R & D and tailor made product range along with all OEM approvals (which has rigorous entry barriers)& a strong relationship with corporate customers over the past number of years, has been continuously out performing its peers &is confident of doing so in the future, which is also reflected in the sales and profit growth in the last few years.

XIV. CAPTIAL ISSUES IN THE PAST AND PROMISES VS PERFORMANCE

Sah Petroleums Limited has not made any public issue of shares since its incorporation. There is no group Company, which hasmade any public issues.

Issues made by Companies under the same management under Section 370(1B) of the Companies Act, 1956

There are no listed companies under the same management within the meaning of Section 370(1B) of the Companies Act, 1956,which made any capital issue during the last three years.

SWOT Analysis

Strengths

l One of the few Companies in India to manufacture the entire range of lubricants in house i.e. Automotive, Industrial, Processoils, Greases, Specialties & Transformer oils.

l The products of the Company are approved by almost all Automotive & Engineering Industries in the country and also byRDSO (Railways).

l The Company has latest R & D facilities to develop tailor-made solutions as per the clients’ specifications, requirements andapplication.

Weaknesses

l The Dealer & Distributor Network of the Company, though not suitable for Industrial Lubes is still under development andtherefore still limited.

l The Company need to increase its Manufacturing locations apart from Western India so as to increase its cost competitivenessin Southern & Eastern India.

l A stronger Brand Awareness & Corporate Image needs to be promoted & propagated.

l The Company has low presence in the field of Automotive Lubricants small packs Retail trade & Transformer Oil market.

Opportunities

l A huge opportunity for growth lies ahead for SPL as soon as it sets up its project of Automotive Lubricants small packsretailing.

l There is still a vast expanse of Industrial business that lies untapped for the taking pending investment in Manufacturing andDistribution infrastructure.

l Company’s exports hold a major opportunity to go global and expand its market to boost its top & bottom lines.

Threats

l As in any and every Industry competition from PSUs, MNCs & Regional Local unorganized sector is always going to be on therise.

l If the Govt. decides to reverse it’s open import policy and once again canalize these products through the PSUs then growth inthis sector would be restricted.

XV. BASIS FOR ISSUE PRICE

Qualitative factors

l Promoters have experience in this Industry for over 40 years.

l One of the few Companies in India to manufacture the entire range of lubricants in house i.e. Automotive, Industrial, Processoils, Greases, Specialties & Transformer oils.

l The products of the Company are approved by almost all Automotive & Engineering Industries in the country and also byRDSO (Railways).

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l The Company has latest R & D facilities to develop and perfect tailor-made solutions as per the clients’ specifications,requirements and application.

Quantitative factors

1. Earnings per share

Financial year EPS * (Rs.) Weightage

2001-02 4.23 1

2002-03 7.29 2

2003-04 7.37 3

Weighted average EPS 6.82

* EPS on equity share of face value of Rs.5/-

2. Price/Earning Ratio (P/E Ratio) in relation to issue price of Rs.35/- per share.

Particulars

Based on 2003-04 EPS 4.75

Based on weighted average EPS 5.13

3. Return on Networth

Financial year RONW % W eightage

2001-02 27.35 1

2002-03 32.03 2

2003-04 51.42 3

Weighted average 40.95

4. Minimum return on total networth needed after the issue to maintain EPS (as on March 31, 2004) at Rs.7.37 is 31.08%

5. Net asset value *

As at March 31, 2004 Rs. 14.33

After Issue Rs. 23.71

Issue price Rs. 35.00

* Face Value of Rs.5/-

6. The face value of the share is Rs.5/- and the issue price i.e. Rs.35/- is 7 times of the face value.

Comparison of accounting ratios of the Company with industry average and accounting ratios of peer group for FY 04.

As there are no other listed Companies confined to the similar kind of business, no industry comparison including ratios can beworked out.

The Lead Manager believes that the Issue Price of Rs.35/- is justified in view of the above qualitative and quantitativeparameters. The investors may want to peruse the risk factors and the financials of the Company including importantprofitability and return ratios, as set out in the Auditors’ report in Part II of the Prospectus to have a more informed viewof the investment proposition.

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XVI. LITIGATION/ DISPUTES/ DEFAULTS/ CONTINGENT LIABILITIES

There are no overdues, defaults to the Financial Institutions/Banks, Reschedulement of Loans to Banks/FIs and dues towardsinstrument holders like debenture holders, fixed deposits and arrears on cumulative preference shares by the Promoters and theCompanies/Firms promoted by the Promoters or by the Company. There are no pending offences of non-payment of statutory duesby the Promoters of the Company.

There are no cases of litigations pending against the Promoters/Directors in their personal capacities and also involving in statutoryregulations or criminal offences.

There are no pending proceedings initiated for economic offences against the Directors, Promoters, Companies and Firms promotedby the Promoters.

There are no outstanding litigations, disputes pertaining to the matters likely to affect the operations and financials of the Companyincluding disputed tax liability, prosecution under any enactment in respect of Schedule XIII of the Companies Act, 1956.

None of the Directors have any litigation towards tax liabilities, or any criminal/civil prosecution against them for any offences(irrespective of whether “specified in paragraph (i) of Part I of Schedule XIII of the Act.

There are no litigations’ outstanding against the Promoters/Directors in their personal capacity. The Company, its Promoters andother Companies with which promoters are associated have neither suspended by SEBI nor any disciplinary action has been takenby SEBI. There are no prosecution launched by Income Tax Authorities and no liability compounded by the Promoters/Company/Other Ventures with which the Promoters are associated is subsisting.

There are no cases of pending litigations/defaults in respect of firms /Companies with which the Promoters are associated in the pastbut are no longer associated. The promoters have not resigned as Directors from any Companies during the last three years.

The Company owes money to the following small scale undertakings for more than 30 days as on March 31, 2004:

Sl.No. Name of the Undertaking Amount due (Rs.)

1 Endeavor Chemicals Private Limited 80,904

2 Makwell Plastisizers Private Limited 103,929

3 Pax Enterprises Private Limited 24,075

4 R K Metal & Plastic Private Limited 548,587

5 Eastern Petroleums Private Limited 722,239

Contingent Liabilities as on March 31, 2004

Estimated amount of contracts remaining to be executed on Capital Account and not provided for is Rs.5,23,000/-.

DEFAULTS

The Company has not defaulted in meeting any statutory dues, institutional dues and dues towards instrument holders likedebentureholders, fixed depositholders.

There are no proceedings launched or initiated against the promoters of the Company for any economic offences.

MATERIAL DEVELOPMENTS

There are no material developments after the date of the last audited balance sheet as on March 31, 2004 , which may materiallyaffect the performance, or prospects of the Company.

As per the opinion of the Directors, no circumstances have arised since the date of last financial statement disclosed in theProspectus that materially and adversely affect or are likely to affect the trading or profitability of the Company, the value of itsassets, or its ability to pay liabilities within the next twelve months.

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XVII. RISK FACTORS

Investors should consider carefully the following risk factors, together with the other information contained in this Prospectus,before they decide to invest in the Company’s equity shares. If any of the following risks actually occur, the Company’sbusiness, financial condition and results of operations could suffer, the trading price of the Company’s equity shares coulddecline and investors may lose all or part of their investment.

A. INTERNAL TO THE COMPANY

01. The Company is promoted by first generation entrepreneurs and the investors will be subjected to all consequentialrisk associated with such ventures.


The Company has been promoted by Mr.Rajendra Sah who has experience in the relevant industry for the last fortyyears. Over the years he has also brought in relevant professionals to address the key areas of operation likeProduction, Marketing and Finance.

02. The objects of the Issue for which funds are being raised are as per the Company’s own estimates and have not beenappraised by any Bank/Financial Institution and no monitoring agency has been appointed to monitor the use of funds.

03. The proposed expansion project is mainly funded by the Public Issue. Any delay in raising the funds from IPO asdepicted under the caption, “Means of Finance” on page No. 22, may have adverse impact on the performance of theCompany.

04. The Company has not placed orders for any of the Plant and Machinery for which an amount of Rs.2341.75 lacs hasbeen included in the Objects of the Issue.

05. Part of Plant and Machinery are to be imported for which orders are yet to be placed and the estimated cost is arrivedat by translating foreign currency at the exchange rate prevalent on the date of the quotation. Any weakening of rupeeagainst the respective currency mentioned may increase the cost of the equipment.

06. Contingent Liabilities as on March 31, 2004

Estimated amount of contracts remaining to be executed on Capital Account and not provided for is Rs.5,23,000/-.

07. There has been a delay in the schedule of implementation of the project that the company proposes to undertake.

08. The Company has identified to buy Plot 13 to 16, Behind Dewan & Shah Indl. Estate, Village Valliv, Vasai (East),Thane, Maharashtra, which belongs to Industrial Agencies, a partnership firm in which Mr. Ashok Sah (brother ofMr.Rajendra Sah, Executive Chairman of the Company) is one of the Partners.

09. Losses of other Ventures of the Promoters

The following partnership ventures of the Promoters have incurred losses during the year 2002/2003.

(Rs.)

Name of the Venture Year ended Loss Incurred

Sah Marketing Co. 31 March 2002 26,377.61

Industrial Trading Co. 31 March 2002 136,546.57

Industrial Trading Co. 31 March 2003 18,67,301.00

Sah Udyog 31 March 2002 39,404.85


Since all of these are partnership concerns of the Promoters, it does not affect the operations and profitability of theCompany in any manner.

B. EXTERNAL TO THE COMPANY

01. Raw material prices are subject to fluctuations.

02. A substantial portion of the Company’s raw materials is imported. Hence, the Company carries a potential foreignexchange risk on its imports.

03. Competition from new entrants as well as existing players may affect the profitability of the Company.

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04. Any changes in regulatory environment may have an impact on the business of the Company.

Management Perception:

Changes in regulatory environment relating to Manufacturing and marketing of its products in India and abroad willsignificantly impact the business of the Company. The Company keeps itself abreast of the various developmentsrelating to the regulatory environment and gears itself in order to comply with such regulatory changes.

Notes:

l The net worth of the Company as per the Financial Accounts of the Company as on March 31, 2004 is Rs.1564.85 lacs andthe size of the Issue is Rs 3178.00 lacs

l The average cost of acquisition of Equity Shares of the Promoters is Rs.0.83 per share. The book value per share as on March31, 2004 is Rs.14.33 per share of Rs. 5/- each.

l The promoters/ directors/ key management personnel of the Company have no interest other than reimbursement of expensesincurred or normal remuneration or benefits.

l None of the other ventures of promoters have business interests/other interests in the Issuer Company.

l No loans and advances have been made to any person(s)/companies in which directors are interested.

l The investors are advised to refer to the Para on “Basis for Issue Price” before making any investment in this Issue.

l Investors may note that in case of over – subscription, allotment shall be on proportionate basis and will be finalized inconsultation with the National Stock Exchange of India Limited (Designated Stock Exchange). If the Issue is oversubscribed, theExecutive Director / Managing Director of the Designated Stock Exchange along with Post-issue Lead Merchant Banker andRegistrar to the Issue shall be responsible to ensure that the basis of allotment is finalized in a fair and proper manner.

l The Promoter Group/ directors of the Company/ directors of the Promoter have not purchased and or sold/ financed any sharesof the Company during the past six months.

l The investors may contact the Lead Manager or the Compliance Officer for any complaint/clarification/information pertaining tothe Issue, who will be obliged to attend to the same.

l RELATED PARTY TRANSACTION

[A] Relationship:

(a) Key Management Personnel :

Shri Rajendra Sah

Smt. Shobha Sah

Shri Vivek Sah

Shri Aditya Sah

(b) Relatives of Key management personnel with whom transactions have taken place:

Smt. Asha V. Sah


Shri Ashok P. Sah

Smt. Sudha Poddar

Miss. Malhar V. Sah

Master Ranay V. Sah


Smt. Shantadevi Sah

Smt. Lata Banka



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Rajendra Sah HUF

Vivek Sah HUF

Aditya Sah HUF


Sah Udyog

Sah Exports


Sah Agrotechs


Rs. In Lacs



2004 2003 2002 2001 2004 2003 2002 2001 2004 2003 2002 2001


Car Hire Charges 6.64 8.01 2.63 - - - - - - - - -

Rent Paid - - - 0.24 - - - - - 1.50 0.60 -

Sales Promotion - - - - - - - - - 15.92 1.70 2.47

Garden Expenses - - - - - - - - - 4.96 - -

Interest - 3.98 2.74 25.63 14.63 19.57 15.08 11.92 - - - -

Rent Received - - - - - - - - - - 0.77 -

Payables - 3.56 2.71 - - 4.04 - - - 0.16 - -

Receivables - - - 0.44 - - - 0.18 - 0.66 0.03 0.43

Loans Received 97.60 143.60 139.82 396.21 114.00 114.00 110.50 166.42 - 15.00 - -


XVIII. REDRESSAL OF INVESTOR GRIEVANCES

The Registrar to the Issue will handle investors grievances pertaining to this issue. A fortnightly status report of the complaintsreceived and redressed by them would be forwarded to the Company. The Company would also be coordinating with the Registrarsto the Issue in attending to the grievances of the investors.

The Company assures that the following schedules shall be adhered to by the Board of Directors in respect of the complaints, if any,to be received.

S.No. Nature of the Complaint Time Taken

1 Non-receipt of the refund warrants or share certificates Within 7 days of receipt of complaint, subject toproduction of satisfactory evidence

2 Change of address notification Within 7 days of receipt of information

3 Any other complaint in relation to public issue Within 7 days of receipt of complaint with all relevantdetails.

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The Company has appointed Mr.D Malla Reddy, Company Secretary as Compliance Officer who would directly deal with SEBIoffice with respect to implementation of various laws, rules, regulations and other directives issued by SEBI and matters related toinvestor complaints. The investors may contact the compliance officer in case of any pre-issue/post-issue related problems. TheCompliance Officer will be available at the following address:

M/s Sah Petroleums Limited406/407, Embassy Centre,

Nariman Point, Mumbai 400 021.Phone Nos. 022 – 56301911/22873097

Fax No. 022 - 22875751

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PART - II

A. GENERAL INFORMATION

Consents

Consents in writing of the Directors, Auditors, Lead Managers to the Issue, Bankers to the Company, Banker to the issue, CompanySecretary and Compliance Officer, Legal Advisors, Advisors to the Company, Registrars to the Issue to act in their respectivecapacities have been obtained and filed along with Copy of Prospectus with the Registrar of Companies, Maharashtra at Mumbai asrequired under Section 60 of the Act, and none of them have withdrawn the said consents upto the time of delivery of a copy ofthis prospectus for Registration with the said Registrar of Companies, Maharashtra at Mumbai.

M/s N D Daga & Company, Chartered Accountants, Auditors of the Company have also given their consent to the inclusion of theirreport as appearing hereinafter in the form and context in which appears in this Prospectus and also of the tax-benefits accruing tothe company and to the members of the company and such consent and report have not been withdrawn upto the time of deliveryof this Prospectus for Registration with the Registrar of Companies, Maharashtra at Mumbai.

Expert Opinion

Except for the various tax benefits available to the Company and its members expressed by the auditors of the Company givenelsewhere in the Prospectus, the Company has not obtained any other expert opinion.

Changes in the Board of Directors during the last three years:

There are no changes in the Board of Directors during the last three years.

Changes in Auditors during the last three years and reasons thereof:

There is no change in the Auditors during the last three Years.

Authority for the Issue


Procedure for Allotment

1. The Board reserves, at its sole, absolute and uncontrolled discretion and without assigning any reason therefore, the right toaccept or reject any application in whole or in part. If any application is rejected in full, the whole of the application moneyreceived will be refunded to the applicant. If an application is accepted in part, the excess application money received, if any,will be refunded to the applicant in terms of section 73 of the Act (within 10 weeks from the date of closure of the subscriptionlist).

2. Letters of allotment /or letters of regret along with refund cheques or pay orders of value over Rs.1500/-, if any will bedispatched by registered post at the applicants’ risk, within ten weeks from the closure of subscription list and if such moneyis not repaid within 8 days from the day the Company becomes liable to pay it, the Company and every Director of theCompany who is an Officer in default, shall, on and from the expiry of the 8th day be jointly and severally liable to repay thatmoney with interest @ 15% per annum as prescribed under Section 73 of the Act.

3. Refunds will be made by cheque or pay orders drawn on the Company’s Bankers and Bank Charges, if any, for encashing suchcheques or pay orders will be borne by the applicant. Such Cheques or pay orders will however be payable at par at all centerswhere applications are accepted. In case of Joint Applications, refund pay Orders, if any will be made out to the first nameapplicant and all communications will be addressed to the applicant whose name appears first at his/her address as stated in theapplication form. All Cheques, pay orders of value over Rs.1500/-, letters of allotment and share certificates (as the case maybe) will be dispatched to the applicant at his/her registered address and at the risk of the applicant by registered post. RefundOrders of value not over Rs.1500/- will be dispatched under Certificate of Posting.

4. The subscription received against the Public Issue will be kept in separate bank accounts and the Company will not have accessto such funds unless they have received an approval from the National Stock Exchange for allotment, no utilisation shall be madetill listing approval is available from each of the exchanges where listing has been proposed.

5. The Company undertakes to make available to the Registrars to the Issue, adequate funds for the purpose of despatch of refundorders/allotment letters/ by registered post.

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Interest on Excess Application Money

Payment of interest at the rate upto 15% p.a. on the excess application money will be made to the applicants for the delay periodbeyond 78 days from the date of closure of the subscription list as per the guidelines issued by the Ministry of Finance vide theirNo.F-8/6/SE/79 dated 21st July, 1983, and as amended by letter No.F/14/2/SE/85 dated 27th September, 1985 addressed to the StockExchanges.

Basis of Allotment

In the event of the public Issue being oversubscribed, the allotment will be on a proportionate basis subject to market lots asexplained below:

a. A minimum 50% of the net Issue to the Indian public will be made available for allotment in favour of those retail individualapplicants who have applied for Equity Shares of or for a value not more than Rs.50,000/-. This percentage may be increasedin consultation with the Designated Stock Exchanges depending on the extent of response to the Issue from investors in thiscategory. In case allotments are made to a lesser extent than 50% because of lower subscription in the above category, thebalance Equity Shares would be added to the higher category and allotment made on a proportionate basis as per relevant SEBIGuidelines.

The Executive Director / Managing Director of the National Stock Exchange along with the post issue Lead Manager and theRegistrars to the issue shall be responsible to ensure that the basis of allotment is finalised in a fair and proper manner inaccordance with the guidelines.

b. The balance of Net Issue to Indian Public shall be made available to investors including corporate bodies/institutions andindividual applicants who have applied for Equity Shares for a value more than Rs.50,000/-.

c. The Unsubscribed portion of the net issue to any of the categories specified in (a) or (b) shall be made available for allotmentto applicants in the other category, if so required.

d. Applicants will be categorized according to the number of equity shares applied for.

e. The total number of equity shares to be allotted to each category as a whole shall be arrived at on a proportionate basis i.e. thetotal number of shares applied for in that category (number of applications in the category multiplied by the number of equityshares applied for) multiplied by the inverse of the over subscription ratio.

f. Number of equity shares to be allotted to the successful allottees will be arrived at on a proportionate basis i.e. total numberof equity shares applied for by each applicant in that category multiplied by the inverse of the over subscription ratio.

g. In all the applications where the proportionate allotment works out to less than 150 equity shares per applicant, the allotmentshall be made as follows:

i. Each successful applicant shall be allotted a minimum of 150 equity shares, and

ii. The successful applicants out of the total applicants of that category shall be determined by drawal of lots in such amanner that the total number of equity shares allotted in that category is equal to the number of equity shares worked outas per (b) above.

h. If the proportionate allotment to an applicant works out to a number that is more than 150 but is not a multiple of 150 (whichis the marketable lot for the purpose of allotment) the number in excess of the multiple of 150 would be rounded off to thehigher multiple of 150 if that number is 75 or higher. If that number is lower than 75, it would be rounded off to the lowermultiple of 150. All applicants in such categories would be allotted equity shares arrived at after such rounding off.

If the equity shares allocated on a proportionate basis to any category is more than the equity shares allotted to the applicants inthe category, the balance available equity shares for allotment shall be first adjusted against any other category where the allottedequity shares are not sufficient for proportionate allotment to the successful applicants in that category. The balance equity sharesif any, remaining after such adjustment will be added to the category comprising of applicants applying for minimum number ofequity shares.

In the event of over subscription, in the process of rounding off to ensure allotment in marketable lots, the Company may make suchadjustments in the basis of allotment, as may be necessary, in consultation with SEBI/Stock Exchanges. As the basis of allotment ison proportionate basis, in the process of rounding off to the nearest multiple of 150, the issue size may increase by a maximum of10% of the net offer to Indian Public.

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Allotment / Refund Orders

Allotment Letter(s) and/or Letter of Regret as the case may be together with refund cheques / pay order shall be dispatched byregistered post (refund cheques / pay order of value upto Rs. 1500/- by ordinary post under postal certificate) at the sole/first namedapplicant address within 10 weeks from the date of closing of the subscription list. If such money is not repaid within 8th day fromthe day the company becomes liable to pay. The Company and every Director of the Company who is an officer in default shall onand from the expiry of the 8th day be jointly and severally liable to repay that money with interest @ 15% per annum. In case ofjoint applications, Refund Orders, if any, will be made out in the First applicant’s name and all communication will be addressed tothe person whose name appears on the Application form.

The Company, as far as possible, will allot the equity shares within 30 days from closure of the subscription list and pay interestat the rate of 15% p.a. if the allotment is not made and the refund orders are not dispatched to the investors within 30 days fromclosure of the issue period for delay beyond 30 days.

The Company will also make available adequate funds to the Registrars to the Issue for the purpose of dispatch of Allotment letters/Share Certificates/Refund Orders as stated above.

Where the permission have been sought for dealing and listing of equity shares in the stock exchange(s) referred to above, if suchpermission has not been granted by the stock exchange(s) within 70 days from the date of closure of the subscription list or wheresuch permission is refused before the expiry of 78 days from the date of subscription list, then the Company shall forthwith repaywithout interest all money received from applicants in pursuance of the Prospectus, and if any such money is not repaid within eightdays after the company becomes liable to repay it (i.e. from the date of refusal or within 70 days from the date of closure ofsubscription list, whichever is earlier), the company and every director of the company who is an officer in default shall, on andfrom the expiry of eight days, be jointly and severally liable to repay that money with interest for the delayed period @ 15% perannum, if however, an appeal against the decision of any recognized stock exchange(s) refusing permission for the equity shares tobe dealt on that stock exchange has been preferred under section 22 of the Securities Contract (Regulation) act, any allotment madeunder this Prospectus shall not be void until the appeal is dismissed.

Refunds will be made by cheques or pay orders drawn on the bank(s) appointed by the company as refund banker. Such instrumentswill be payable at par at the places where applications are accepted. Bank charges, if any, for encashing such cheques or pay orderswill be payable by the applicant.

Application of Section 269 SS of the Income Tax Act,1961

In respect of the provisions of section 269SS of the Income Tax act,1961,the subscription against the equity shares should beeffected only by an account payee cheques or an account payee draft, if the amount payable is Rs 20000/- or more. In case thepayment is made in contravention of this provision, the application money will be refunded and no interest will be paid.

ISSUE MANAGEMENT TEAM

Lead Managers to the Issue

Karvy Investor Services Limited Fortune Financial Services (India) Limited“Karvy House”, KK Chambers, 2nd Floor,46, Avenue 4, Street No.1, Sir P T Marg,Banjara Hills, Fort,Hyderabad – 500 034. Mumbai – 400 001Tel. No. +91 40 23374714 Tel: +91 22 22077931Fax No. +91 40 23374714 Fax +91 22 22072948Email: [email protected] Email: [email protected] Regn. No.INM000008365 SEBI Regn. No. INM000000529

Registrar to the Issue Advisors to the Company

Karvy Computershare Private Limited Consort Capital Services (P) Limited“Karvy House”, 1409, Maker Chamber V,46, Avenue 4, Street No.1 Nariman Point,Banjara Hills, Hyderabad 500 034 Mumbai – 400 021.Tel: +91 40 23320251/23320751 Tel: +91 22 2285 2933/2204 7427Fax: +91 40 23431551 Fax: +91 22 2285 2932E-mail: [email protected] Email: [email protected] Regn. No. INR/000000221

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AUDITOR OF THE COMPANY

N.D. Daga & Co.Chartered Accountants5/2, Tardeo, AC Market Building,Tardeo Road,Mumbai – 400 034.Tel: 022 – 23522347/451

COMPANY SECRETARY & COMPLIANCE OFFICER

Mr. D. Malla Reddy406/407, Embassy Centre,Nariman Point,Mumbai – 400 021.Phone Nos. 022 – 56301911/22873097Fax No. 022 – 22875751Email: [email protected] may note that in case of any pre Issue/ post Issue related problems such as non-receipt of letters of allotment / sharecertificates / refund orders, etc. they should contact the Compliance Officer.

LEGAL ADVISORS TO THE ISSUE

Shiralkar & CoAdvocates and Solicitors16, Bansilal Mansion,1st Floor, Homi Modi Street,Fort, Mumbai – 400 001.Tel: 022 – 22644335/22644336

BANKERS TO THE COMPANY

Name of Bankers Address

Dena Bank Sachivalaya Corner Branch, “The Beacon”,M.K.Road, OPP. Mantralaya,Mumbai 400 021.

BANKERS TO THE ISSUE

Name of Bankers Address

HDFC Bank Limited Maneckji Wadia Building, Ground Floor, Nanik Motwani Marg, Fort, Mumbai – 400 001.

Brokers to the Issue

All the brokers of the Recognised Stock Exchanges registered with SEBI may act as Brokers to the Issue.

90

B. FINANCIAL INFORMATION

AUDITOR’S REPORT

The Directors,

M/s Sah Petroleums Limited

406/407, Embassy Centre,

Nariman Point,

Mumbai 400 021.

Dear Sirs,

We have examined the books of accounts of M/s Sah Petroleums Limited for the five financial years ended 31st March 2004 being thelast date to which the accounts of the company have been made up and audited by us for presentation to the members.

In accordance with the requirements of clause 24 of Part II of Schedule II to the Companies Act,1956, we report that the profits ofthe company for the above years are as set out below. These profits (expressed in lacs of rupees) have been arrived at after chargingall expenses of manufacture, working and management including depreciation and after making such adjustments (and regroupings) asin our opinion are appropriate and are subject to notes given below.

91

PROFIT AND LOSS ACCOUNT

Rs. In Lacs

Year Ended Year Ended Year Ended Year Ended Year EndedMarch 31, March 31, March 31, March 31, March 31,

2004 2003 2002 2001 2000INCOME

Gross Turnover

Manufactured 7,190.18 5,222.08 3,890.72 3,227.03 2,866.66

Traded 50.19 266.74 285.54 388.93 416.58

7,240.37 5,488.82 4,176.26 3,615.96 3,283.24

Less: Excise Duty 989.76 725.73 540.83 448.34 397.44

Net Turnover 6,250.61 4,763.09 3,635.43 3,167.62 2,885.80

Other Income 122.52 37.57 2.18 3.69 0.81

Increase/(Decrease) in Finished Goods 51.45 39.17 (13.43) (12.30) 39.20

6,424.58 4,839.83 3,624.18 3,159.01 2,925.81

EXPENDITURE

Materials 4,417.63 3,643.56 2,543.34 2,239.52 1,833.27

Staff Cost 122.66 125.61 123.27 165.26 172.64

Other Manufacturing Expenses 377.91 255.06 220.05 248.74 301.67

Administration Expenses 260.43 240.82 172.23 151.93 195.74

Selling & Distribution Expenses 243.71 234.39 315.11 131.03 186.33

5,422.34 4,499.44 3,374.00 2,936.48 2,689.65

PROFIT BEFORE INTEREST DEPRECIATIONAND TAX 1,002.24 340.39 250.18 222.53 236.16

Interest 33.85 44.19 66.83 147.61 184.29

Depreciation 27.81 27.30 29.06 29.58 29.48

PROFIT BEFORE TAX AND EXTRAORDINARYITEMS 940.58 268.90 154.29 45.34 22.39

Taxation 136.00 23.80 12.00 3.50 3.00

PROFIT BEFORE EXTRAORDINARY ITEMS 804.58 245.10 142.29 41.84 19.39

Extra Ordinary Items (net of tax) - - - - -

PROFIT AFTER EXTRAORDINARY ITEMS 804.58 245.10 142.29 41.84 19.39

92

Notes

1. Taxation has been computed after taking into consideration benefits admissible under the provisions of the Income Tax Act,1961.

2. Details of Materials

Rs. In lacs

Particulars 31.03.2004 31.03.2003 31.03.2002 31.03.2001 31.03.2000

Opening Stock 576.82 280.66 240.61 394.80 137.85

Add: Purchase 5321.20 3710.05 2340.05 1777.58 1759.67

Less Insurance Claim 75.61 9.07 - 36.14 -

Less Closing Stock 1424.91 576.82 280.66 240.61 394.80

Purchase of Finished goods 20.13 238.75 243.34 343.88 330.55

Total 4417.63 3643.56 2543.34 2239.52 1833.27

3. Selling and distribution expenses includes Bad Debts as under

Rs. In lacs

Particulars 31.03.2004 31.03.2003 31.03.2002 31.03.2001 31.03.2000

Bad Debts - 1.18 160.22 17.13 43.13

93

ASSETS AND LIABILITIES

Rs. in Lacs

As At As At As At As At As AtMarch 31, March 31, March 31, March 31, March 31,

2004 2003 2002 2001 2000

1 Fixed Assets

a. Gross Block 1,064.65 1,026.23 982.08 1,001.28 981.87

b. Less: Depreciation 300.67 282.74 264.84 241.69 204.44

c. Net Block 763.98 743.49 717.24 759.59 777.43

d. Capital Work-In-Progress 29.29 20.06 1.67 - 16.40

793.27 763.55 718.91 759.59 793.83

Less: Revaluation Reserve 397.64 407.49 417.34 427.19 437.04

395.63 356.06 301.57 332.40 356.79

2 Investments (Unquoted) - 0.50 0.50 0.74 0.77

3 Current Assets, Loans and Advances

a. Inventories 1,698.75 782.23 426.03 419.56 599.36

b. Sundry Debtors 1,607.74 1,285.02 1,100.13 1,079.66 1,120.87

c. Cash and Bank Balances 651.48 160.31 114.42 149.89 54.53

d. Loans and Advances 195.19 99.24 94.86 99.28 99.82

4,153.16 2,326.80 1,735.44 1,748.39 1,874.58

Less: Current Liabilities and Provisions

a. Current Liabilities

Sundry Creditors 214.89 296.88 34.52 48.83 159.14

Other Liabilities 413.43 355.60 144.60 142.16 144.85

b. Provisions 101.37 0.02 0.02 0.02 -

c. Deferred Tax Liabilities 1.87 3.15 - - -

731.56 655.65 179.14 191.01 303.99

Net Current Assets 3,421.60 1,671.15 1,556.30 1,557.38 1,570.59

Less: Borrowings

a. Secured Loans 1,853.52 863.68 924.45 804.87 916.06

b. Unsecured Loans 398.86 398.75 413.72 709.48 677.90

2,252.38 1,262.43 1,338.17 1,514.35 1,593.96

Net Assets 1,564.85 765.28 520.20 376.17 334.19

REPRESENTED BY

a. Share Capital 546.00 168.00 168.00 168.00 168.00

(1,09,20,000 (P.Y. 16,80,000) Eq. Shares ofRs. 5/- (Previous Years Rs.10/- ) each)

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b. Reserves and Surplus (excluding

Revaluation Reserve)

i] Capital Reserve 3.00 3.00 3.00 3.00 3.00

ii] Investment Allowance Reserve - - 0.37 0.37 0.37

iii] General Reserve 92.42 470.42 270.05 170.05 130.05

iv] Profit & Loss Account 928.01 123.86 78.78 34.75 32.77

1,023.43 597.28 352.20 208.17 166.19

Less: Miscellaneous Expenditure 4.58 - - - -

(to the extent not written off)

Net Worth 1564.85 765.28 520.20 376.17 334.19

ACCOUNTING RATIOS

31.03.2004 31.03.2003 31.03.2002 31.03.2001 31.03.2000

Earning per Share of Rs.5/- (Rs.) 7.37 2.25 1.30 0.38 0.18

Return on Net Worth (%) 51.42 32.03 27.35 11.12 5.80

Net Asset value per share of Rs.5/- (Rs) 14.33 7.01 4.75 3.44 3.06

Earning Per Share for all the years is on the basis of 1,09,20,000 Equity Shares.

CHANGE IN SHARE CAPITAL

Authorised Share Capital Nominal Value Rs. No. Of Shares Amount (Rs. In lacs)

As on 31.03.2003 10/- 20,00,000 200.00

As on 31.03.2004 5/- 120,00,000 600.00

As on 02.04.2004 5/- 220,00,000 1100.00

Issued Subscribed & Paid up Share Capital Nominal Value Rs. No. Of Shares Amount (Rs. In lacs)

As on 31.03.2003 10/- 16,80,000 168.00

Shares split on 05.03.2004 5/- 33,60,000 168.00

Bonus shares in the ratio of 2.25:1 on 15.03.2004 5/- 75,60,000 378.00

As on 31.03.2004 5/- 109,20,000 546.00

* Notes

1. Inventories are as valued and certified by the Management.

2. SUNDRY DEBTORS

Rs. In Lacs

Particulars 31.03.2004 31.03.2003 31.03.2002 31.03.2001 31.03.2000

(i) Outstanding for more

than six months 53.92 33.42 35.10 195.55 248.99

(ii) Outstanding for less

than six months 1553.82 1251.59 1065.02 884.11 871.88

Total 1607.74 1285.01 1100.12 1079.66 1120.87

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3. UNSECURED LOANS

Rs. In Lacs

Particulars 31.03.2004 31.03.2003 31.03.2002 31.03.2001 31.03.2000

(i) From Directors 97.60 143.60 139.82 396.21 354.05

(ii) From Shareholders 301.26 255.15 273.90 313.27 323.85

Total 398.86 398.75 413.72 709.48 677.90

Rate of Interest to Directors Nil 1% 1% 6% 15%

Rate of Interest to Others Nil to 12% 1% to 12.50% 1% to 14% 6% to 15% 15%

There is no fixed term of repayment of loans. However as per the terms of Bank Credit Facility, Unsecured Loans to the extentof Rs. 413.75 lacs are to be maintained.

4. RELATED PARTY TRANSACTION

[A] Relationship :

(a) Key Management Personal :

Shri Rajendra Sah

Smt. Shobha Sah

Shri Vivek Sah

Shri Aditya Sah

(b) Relatives of Key management personnel with whom transactions have taken place :

Smt. Asha V. Sah


Shri Ashok P. Sah

Smt. Sudha Poddar

Miss. Malhar V. Sah

Master Ranay V. Sah


Smt. Shantadevi Sah

Smt. Lata Banka





Rajendra Sah HUF

Vivek Sah HUF

Aditya Sah HUF


Sah Udyog

Sah Exports


Sah Agrotechs


96

Rs. In Lacs



2004 2003 2002 2001 2004 2003 2002 2001 2004 2003 2002 2001


Car Hire Charges 6.64 8.01 2.63 - - - - - - - - -

Rent Paid - - - 0.24 - - - - - 1.50 0.60 -

Sales Promotion - - - - - - - - - 15.92 1.70 2.47

Garden Expenses - - - - - - - - - 4.96 - -

Interest - 3.98 2.74 25.63 14.63 19.57 15.08 11.92 - - - -

Rent Received - - - - - - - - - - 0.77 -

Payables - 3.56 2.71 - - 4.04 - - - 0.16 - -

Receivables - - - 0.44 - - - 0.18 - 0.66 0.03 0.43

Loans Received 97.60 143.60 139.82 396.21 114.00 114.00 110.50 166.42 -15.00 - -


97

NOTES TO ACCOUNTS

Forming part of Profit and Loss Account for the period ended 31st March 2004 and Balance Sheet as at that date:

1] Significant Accounting Policies:

a] Fixed Assets

Fixed Assets are stated at their original cost except certain Fixed Assets which are adjusted for revaluation.

b] Depreciation

Depreciation on Fixed Assets has been provided on “Straight Line Method” at the rates and in the manner specified inSchedule XIV of the Companies Act, 1956. Depreciation on account of enhancement in the value of certain Fixed Assets onaccount of revaluation is adjusted against Revaluation Reserve.

c] Inventories

Inventories are valued at cost or market value whichever is lower. The company has been following this generally acceptedaccounting policy in accordance with the accounting standard (AS2) on valuation of Inventories.

d] Investment

Current Investment are valued at cost or market value whichever is less.

e] Income & Expenditure Recognition

Income & Expenditure are recognized and accounted for on accrual basis. In case of uncertainties in either aspect, revenuerecognition is postponed to the time of realizing such claims.

f] Sales

Sales are recognized when goods are invoiced on despatch to customers and are recorded inclusive of Excise duty but arenet of trade discount and Sales Tax.

g] Foreign Currency Transactions

1. Transaction in foreign currency are recorded at the exchange rate existing at the time of the transaction

2. Foreign Currency Liabilities/Assets covered by forward contracts are stated at the forward contract rates.

3. Foreign currency Assets/Liabilities not covered by forward contract are restated at rates ruling at the period end.

h] Retirement and other Benefits

The company has the following retirement schemes.

1. Provident Fund for all employees.

2. The contribution to the above fund is charged to Profit and Loss Account.

3. Gratuity as Actuarially determined and funded by payments to the trust established for the purpose is charged toProfit and Loss Account.

i] Research and Development

Capital expenditure on Research and Development (R & D) is included in fixed assets under appropriate heads and revenueexpenditure on R & D is charged as expenditure in the year in which it is incurred.

j] Provision for Current and Deffered Tax

Provision for Current tax is made after taking into account benefits admissible under the provisions of Income Tax Act,1961. Deffered tax resulting from “timing difference” between book profit and taxable profit using the tax rates and lawsthat have been enacted or substantively enacted as on Balance Sheet date.

2] Sah Petroleums Limited was incorporated as Private Limited Company. By virtue of section 43A(1A) of the Companies Act,1956 the Company became a deemed public Company in 1989. However the provision of the said section have been madeinapplicable after the commencement of Companies (Amendment) Act, 2000. Consequently, Company had become a “PrivateCompany”. The Company is converted to a Public Limited Company on 10th March, 2004.

3] i] Sundry Creditors includes Rs. 14,79,734/- (Previous Year Rs.24,59,155/-) due to Small Scale Industrial undertakings and Rs. NILtowards interest accrued thereon (To the extent such parties have been identified on the basis of information available with theCompany). This has been relied upon by the Auditors.

98

ii] Names of Small Scale industrial undertakings to whom company owes any sum which is outstanding for more than 30 days asat 31at March, 2004 are as under:

Rupees

1. Endeavour Chemicals Pvt. Ltd. 80,904

2. Makwell Plastisizers Pvt. Ltd. 1,03,929

3. Pax Enterprises Pvt. Ltd. 24,075

4. R.K. Metal & Plastic Pvt. Ltd. 5,48,587

5. Eastern Petroleums Pvt. Ltd. 7,22,239

Total Rs. 14,79,734

4] Estimated amount of Outstanding contracts/Capital commitment Rs.5,23,000/- (Previous year Rs. NIL)

5] Previous years’ figures have been regrouped / recast wherever necessary.

6] ADDITIONAL INFORMATION AS FAR AS APPLICABLE PURSUANT TO PART II OF SCHEDULE VI OF THECOMAPANIES ACT 1956.

a. Particulars of Capacity:

The Company’s unit being a registered Small Scale Industry is exempted from licensing of capacity.

Installed capacity for the manufacturing of Industrial Oils and Lubricants – 40,000 KL per annum (approx).

Since the companies installed capacity is dependent on Product-mix, which in turn is dependent on the basis of actualdemand for various products from time to time, it is not feasible for the company to give the exact installed capacity. Thecompany has, however indicated the installed capacity on the basis of the normal year’s product-mix as certified by theManaging Director and the same being a technical matter is accepted by the Auditors.

b. Particulars in respect of opening and closing stocks, production, purchases and sales of goods produced and traded:

2003-2004 2002-2003

Qty. Value (Rs.) Qty. Value (Rs.)

Opening Stock

Oils & Lubricants 543,760 15,220,860 503,781 12,737,169

Traded Goods 57,539 1,933,598 13,644 500,650

Purchases

Traded Goods 13,490 2,012,567 180,110 23,874,782

Sales

Oils & Lubricants 27,347,055 719,017,604 19,778,555 449,635,166

Traded Goods 72,091 5,019,403 735,076 26,674,257

Closing Stock

Oils & Lubricants 659,081 22,399,610 543,760 15,220,860

Traded Goods 2,697 295,218 57,539 1,933,598

Excess / Shortage

Oils & Lubricants 11,181 46,478

Traded Goods 3,759 -1,139

Actual Production

Oils & Lubricants 27,451,194 19,772,056

99

c. Raw Materials Consumed :

Oils & Lubricants 27,805,421 440,054,964 20,258,063 340,481,457

d. Imported / Indigenous Materials Consumed:

2003-2004 2002-2003

Imported Indigenous Imported Indigenous

Raw Materials 237,603,597 202,451,367 104,653,960 235,827,497

53.99% 46.01% 30.74% 69.26%

Stores & Spares Nil 26,226,278 NIL 22,396,331

- 100% - 100%

e. Value of Direct Imports (C.I.F. Value) :

Raw Materials Rs. 293,776,136 (Previous Year Rs. 141,536,027)

f. Expenditure in Foreign Currency

Travelling Rs. 267,629 (Previous year Rs.79,249)

g. Earning in Foreign Exchange :

On Export of goods (FOB Basis) Rs. 3,308,306 (Previous year NIL)

7] Defferred Tax Liability at the year end comprise timing difference on account of difference between Book and Tax DepreciationRs. 187,200 (Previous year Rs. 315,200)

DIVIDEND

We further report that the dividends (subject to deduction of tax at source) declared by M/s Sah Petroleums Limited in respect offive financial years ended 31.03.2004 are as under:

Particulars 31.03.2004 31.03.2003 31.03.2002 31.03.2001 31.03.2000

No. of Equity Shares of Rs.5/-(Previous Years 10/-) each 1,09,20,000 16,80,000 16,80,000 16,80,000 16,80,000

Rate of Dividend- Final 0.01% 0.01% 0.01% 0.01% -

Amount of Dividend in lacs 0.05 0.02 0.02 0.02 -

Yours faithfullyFor N.D.Daga & Co.

Chartered Accountants

N.D.Daga

Proprietor

(Membership No. F9921)

Mumbai. Date: 9th August 2004

Lead Manager confirms that all notes to the accounts and significant accounting policies have been incorporated.

100

l PRINCIPAL TERMS OF LOANS & ASSETS CHARGED AS SECURITY

1. Company has obtained following credit facilities from Dena Bank

A] Cash Credit Hypothecation (Stock/Book Debts) Rs. 300.00 lacs

B] Letter of Credit – I/F (DA/DP max 180 days) Rs. 1100.00 lacs

C] Bank Guarantee (P/F) (Sub limit of NFB Limit) Rs. 40.00 lacs

These are secured by:

(i) Hypothecation of

(a) Present & future stock of Raw Materials, Stock in Process, Finished goods, Stores & Spares, Packing Material of theCompany.

(b) Present and future Book Debts, Outstanding and Receivables of the Company.

(c) All Movable Properties including Plant & Machinery, Furniture & Fixtures etc. lying at the office premises at Mumbaiand at factory premises at Vasai.

(ii) Equitable Mortgage of Immovable Property of the Company situated at Plot No. 5 to 10, Village Valiv, Taluka Vasai, Dist.Thane.

(iii) Collateral Security over office premises at Mumbai.

(iv) Guaranteed by Directors.

2. From Others

Secured by Equitable Mortgage of Immovable Property situated at Plot No. 11 & 12, Village Valiv, Taluka Vasai, Dist. Thane.

TAXATION STATEMENT Rs. In Lacs

Particulars 31.03.2004 31.03.2003 31.03.2002 31.03.2001 31.03.2000

Tax at Actual Rate on Profits 288.64 90.07 50.79 16.54 7.46

Adjustments:

Permanent Differences

New Industrial Undertaking (u/s 80 IB) (192.80) (80.64) (44.06) (9.68) -

Others 41.84 9.94 6.44 1.02 1.70

Timing Differences

Difference between Tax depreciation from Book depreciation (1.68) (1.63) (0.17) (4.04) (6.02)

Tax saving thereon 152.64 72.33 37.79 12.70 4.32

Tax Provision for the Year 136.00 17.74 13.00 3.84 3.14

CAPITALISATION STATEMENT Rs. In Lacs

Particulars Pre-issue Post Issue

(At an offer price of Rs.35/-)

Short Term Debt 1838.64 1838.64

Long Term Debt 413.75 413.75

Shareholders fund

Share Capital 546.00 1000.00

Reserve 1023.43 3747.43

Total Shareholders Fund 1569.43 4747.43

Long Term Debt/ Equity 0.26:1 0.09:1

101

TOP TEN SUNDRY DEBTORS (As on 31.03.2004)

Rs. In Lacs

J.K.Industries Limited 172.56

Goodyear India Limited 111.83

Eicher Tractors Limited 67.56

Metzeller Automotive Profiles India Pvt. Ltd. 58.96

Jabalpur Vehicle Factory 37.11

Maharashtra State Road Transport Corpn. 33.79

Metro Tyres Limited 32.87

Tata Motors Limited 32.60

Bajaj Auto Ltd. 31.80

Pelican Rubber Pvt. Ltd. 30.64

ANALYSIS OF LOANS & ADVANCES (As on 31.03.2004)

Rs. In Lacs

Prepaid Expenses 7.85

Excise Duty 65.53

Claims Receivable 29.32

Advance against Expenses 27.16

Advances to Suppliers 35.02

Deposits 23.73

Sales Tax 1.96

Interest Receivable 3.11

Advance to Employees 1.51

Total 195.19

MAJOR PARTIES UNDER LOANS AND ADVANCES (As on 31.03.2004)

Rs. In Lacs

Name of the Party Particulars Amount

Gulf Oil Corporation Limited Advance to Suppliers 14.00

Chennai Petroleum Corporation Ltd. Advance to Suppliers 10.11

Karvy Investor Services Ltd. Advance against Expenses 7.88

Samarpan Converters Pvt. Ltd. Deposits 5.00

Reliance Industries Ltd. Advance to Suppliers 4.81

Mistic Inc Advance against Expenses 4.05

Bharat Petroleum Corporation Ltd. Advance to Suppliers 3.58

Consort Capital Services Pvt. Ltd. Advance against Expenses 3.15

All India Clearing & Forwarding Pvt. Ltd. Advance against Expenses 2.30

Kaydees Appliances Deposits 1.85

Sundry Debtors / Loans and Advances do not include any amount due from Directors/Promoters or Persons related to the Directors/Promoters of the Company.

102

C. STATUTORY AND OTHER INFORMATION

Minimum Subscription

If the Company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the issue, or ifthe subscription level falls below 90% after the closure of the issue on account of cheques having been returned unpaid or withdrawalof applications, the company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days afterthe Company becomes liable to pay the amount, the Company shall pay interest as per Section 73 of the Companies Act, 1956.

Expenses of the Issue

The expenses of the Issue payable by the Company inclusive of fees payable to the Lead Manager, other Advisors to the Issue, feesof Legal Advisors, Stamp Duty, Printing, Publication, Advertising and Distribution expenses, Bank charges, Fees payable to theRegistrars to the Issue, Listing Fees, Brokerage and other Miscellaneous Expenses which are estimated to be approximately 7.87% ofthe Issue size, and will be met out of the proceeds of the Issue.

Fees Payable to the Lead Manager to the Issue

The total fees payable to the Lead Manager will be as per the Memorandum of Understanding signed with the Lead Manager, a copyof which is available for inspection at the Registered Office of the Company.

The Lead Managers will be reimbursed for all relevant out-of-pocket expenses including such as cost of travel, stationery, postage,communication expenses.

Fees Payable to the Registrar to the Issue

The fees payable to the Registrar to the Issue will be as per the Memorandum of Understanding signed with the Company, a copyof which is available for inspection at the Registered Office of the Company.

The Registrar will be reimbursed for all relevant out-of-pocket expenses including such as cost of travel, stationery, postage, stampduty, communication expenses. Adequate funds will be provided to the Registrar to the Issue to enable them to send refund ordersor allotment advice by registered post.

Brokerage

Brokerage will be paid by the Company upto 1.5 % on the issue price of Equity Shares offered to the Public on the basis ofallotment made against applications bearing the stamp of the members of any recognised Stock Exchanges in India in the broker’scolumn. Brokerage at the same rate will also be payable to the Bankers to the Issue in respect of allotments made againstapplications procured by them provided the relevant forms of applications bear their respective stamps in the Broker’s column.

In case of tampering or over-stamping of Brokers/Agent’s codes on the application form, the company’s decision to pay brokeragein this respect will be final and no further correspondence will be entertained in this matter.

Commission and brokerage on previous issues

Except as stated elsewhere in the Prospectus, no sum has been paid or is payable as commission or brokerage for subscribing to orprocuring or agreeing to procure subscription for any of the Equity Shares of the Company since its inception.

Previous Issue of Capital during last five years:

The company has not made any public issue of equity/ debentures what so ever prior to this issue. The details of issue of capitalhave been outlined in the paragraph on the build up of the share capital under the capital structure.

Issues otherwise than for Cash

The company has not issued any shares for consideration other than by cash other than by capitailisation of free reserves. Detailsof shares issued by capitalisation of reserves are as under:

Date of allotment Ratio Shares issued

10.05.90 1:1 Bonus by capitalization of reserves 71,000

29.01.93 2:1 Bonus by capitalization of reserves 2,84,000

06.03.96 1:1 Bonus by capitalization of reserves 8,40,000

15.03.04 2.25:1 Bonus by capitalization of reserves 75,60,000

103

Outstanding Redeemable Preference shares and Debentures

The Company since its incorporation has not issued any redeemable preference shares and Debentures.

Options to Subscribe

Except as otherwise stated in this Prospectus, the Company has not entered into, nor does it at present propose to enter into anycontract or arrangements whereby any option or preferential right of any kind has been, or is proposed to be, given to any personto subscribe for any shares of the Company.

Purchase of Property:

Except as stated in the ‘Objects of the Issue” in this Prospectus and save in respect of the property purchased or acquired or to bepurchased or acquired in connection with the business or activities contemplated by the objects of the issue, there is no propertywhich the Company has purchased or acquired or proposes to purchase or acquire which is to be paid for wholly or partly out ofthe proceeds of the present issue or the purchase or acquisition of which has not been completed on the date of this Prospectus,other than property in respect of which

l Contracts for the purchase or acquisitions were entered into in the ordinary course of business and the contracts were notentered into in contemplation of the issue nor is the issue contemplated in consequence of the contracts or

l The amount of purchase money is not material.

Except as elsewhere stated in the Prospectus, the company has not purchased any property in which any of its promoters and/ordirectors have direct or indirect interest in any payment made thereof.

Classes of Shares

The Authorized Share Capital of the Company is Rs 11,00,00,000 comprising of Equity Shares of Rs. 5/- each

Interest of Promoters and Directors

All the Directors may be deemed to be interested to the extent of the sitting fees and other remuneration for the services renderedand the reimbursement of expenses, if any, payable to them under the articles. The Directors may also be deemed to be interestedto the extent of:

a) The shares, if any, held by them or by the relatives or by firms or companies of which any of them is a partner and a Director/Member respectively. The shares, if any, out of the present issue that may be subscribed for and allotted to them or theirrelatives or any Company in which they are Directors/Members of to firms in which they are partners.

b) Remuneration of Executive Chairman, Managing Director, Joint Managing Director and Executive Director

Pursuant to the resolution passed at the meeting of the shareholders in Extra-ordinary general meeting on April 2, 2004. The detailedterms and conditions of the appointment are as under:

Name Rajendra Sah Shobha Sah Vivek Sah Aditya Sah

Designation

Period

Salary

Perquisites

Executive Chairman

5 years w.e.f. 01.04.2004

Rs.75,000/- p.m.

Furnished accommodation orhousing allowance. Utilitieslike power, gas and water, staff,leave travel assistance,education assistance, medicalreimbursement, club fees,personal accident insurance andsuch other perquisites as may bedecided by the Board ofDirectors of the Company. Thetotal value of perquisites shallnot exceed Rs.50,000/- permonth.

Executive Director

5 years w.e.f. 01.04.2004

Rs.50,000/- p.m.


Managing Director

5 years w.e.f. 01.04.2004

Rs.50,000/- p.m.


Jt. Managing Director

5 years w.e.f. 01.04.2004

Rs.50,000/- p.m.


104

D. MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

SHARE CAPITAL

3. a “The Authorised Capital of the Company is Rs 11,00,00,000/- (Rupees Eleven Crores only) divided into 2,20,00,000 (TwoCrore Twenty Lacs Only) Equity shares of Rs 5/- (Rupees five only)”.

b. The Company shall have power to issue preference shares including redeemable preference shares in accordance with theprovisions of Section 80 or any statutory modificants thereof including convertible debentures.

c. Where at any time subsequent to the first allotment of shares, it is proposed to increase the subscribed capital by the issueof new shares, subject to any direction the contrary which may be given by the Company in general meeting and subjectonly to these directions such new shares shall be issued in accordance with the provisions of Section 81 of the Act Or anystatutory modifications thereof.

d. The Company shall have power issue shares at a discount, but in doing so, the Company shall comply with the provisionsof Section 79 or any statutory modifications thereof.

e. The Company shall have power to issue shares at a discount, but in doing so, the Company shall comply with theprovisions of Section 71 or any statutory modifications thereof.

f. Subject to the provisions of Section 86 of the Act, the Company shall have the power to issue equity shares with votingrights or with differential rights as to dividend, voting or otherwise in accordance with such rules and subject to suchconditions as may be prescribed from time to time. In accordance with the provisions of the said section of the Companyshall have the power to issue preference share in accordance with such rules/conditions/guidelines as may be prescribed

Revaluation of Assets:

The Fixed Assets of the company were revalued during the accounting year ended 31st March 1995 Land, Factory Building & Plant& Machinery at Vasai were valued by approved valuers on the basis of current replacement value and office premises at Bombaywere valued on the basis of market rate furnished by the society.

Sr. Head Book WDV Valuers Fig Appreciation

On Amount Rs. Rs.Rs.

i Land at Vasai 01.04.94 2,44,728 30,28,000 27,83,272

ii Factory Building at Vasai 01.04.94 24,14,300 84,80,000 60,65,700

iii Plant & Machinery at Vasai Factory 01.04.94 59,45,062 98,22,700 38,77,638

iv Office premises at Mumbai 01.08.94 3,63,837 3,70,50,000 3,66,86,163

Commission

In addition to the above, he is alsoeligible to Provident Fund,Gratuity, Superannuation, LeaveTravel Allowance, leaveencashment as per the rules of theCompany.

If the Company earns profits inexcess of the limits specified underSchedule XIII or if the profits areadequate in any financial year, asper the provisions of Section 198,309 and any other applicableprovisions of the Companies Act,1956, the remuneration andcommission, if any, shall be paidas per the profits earned by theCompany in that part icularfinancial year.

In addition to the above, she isalso eligible to Provident Fund,Gratuity, Superannuation, LeaveTravel Allowance, leaveencashment as per the rules of theCompany.






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from time to time. The Company shall also have the right to issue shares in any denomination in due compliance of therelevant provisions of the Act and applicable rules and regulations for the time being in force.

4. Subject to the provisions to the provisions of these Articles and of the Act, the shares shall be under the control of the Boardof Directors, who may allot of otherwise dispose thinks fit and with full power to give any person the option to call for or beallotted shares of any class of the Company (subject to section 42, 69, 70, 71, 72, 73, 75, 76(2) 78 and 79 of the Act or anystatutory modifications thereof) either at a premium or at par or at discount and such option being exercisable for such time andfor such consideration as the Board think fit. Provide that option or right to call of share shall not be given to any person orpersons except with the sanction of the Company in General meeting. Subject to the provisions of the Act and these Article,the Directors may allot and issue shares in the capital of the Company as payment for any property or assets of any kindwhatsoever (including goodwill of any business sold or transferred, goods or machinery or about the formation or promotion ofthe Company or the conduct of its business and any shares which may be so allotted may be issued as fully paid up orotherwise than in case, and if so issued shall be deemed to be fully paid up or partly paid up shares as aforesaid. The Directorsshall cause returns to be filed of any such allotment as provided by Section 75 of the Act.

5. a. The Directors shall in making the allotments duly observe the provisions of the Act.

b. The amount payable on application on each share shall not be less than 5 percent of the nominal amount of the share.

c. Nothing herein contained shall prevent the Directors from issuing fully paid up shares either on payment of the entirenominal value thereof in cash or in satisfaction of any outstanding debt or obligation of the Company.

5 A. Employee stock option Scheme:

The Company shall have the right to issue the Securities through the employee stock option scheme in accordance with therules, Regulations, Guidelines, etc., prescribed/issued by various authorities concerned from time to time.

5 B. Dematerialization of Securities:

a. For the purpose of this Article:

“SEBI” means the Securities and Exchange Board of India established under Section 3 of the Securities andExchange Board of India Act, 1992.

“Depositories Act” means the Depositories Act, 1996 including any statutory modifications or reenactment thereof forthe time being in force.

“Depository” means a Company formed and registered under the Companies Act, 1956 and which has been granted acertificate of registration under subsection (1A) of Section 12 of the Securities Board of India Act, 1992.

“Bye-laws” means made by a Depository under Section 26 of the Depositories Act.

“Beneficial Owner” means a person whose name is recorded as such with a Depository.

“Member” means the duly registered holder from time to time of the shares of the Company and includes everyperson whose name is entered as a Beneficial Owner in the records of the Depository.

“Participant” means a person registered as such under Section 12(1A) of the Securities and Exchange Board of IndiaAct, 1992.

“Record” includes the records maintained in the form of books or stores in computer or in such other form as may bedetermined by regulations made by SEBI in relation to the Depositories Act.

“Regulations” means the regulations made by SEBI.

“Security” means such security as may be specified by SEBI.

Words imparting the singular number only include the plural number and vice versa.

Words imparting persons include corporations.

Words and expressions used and not defined in the Act but defined in the Depositories Act, shall have the samemeanings respectively assigned to them in that Act.

b. Either the Company or the investor may exercise an option to issue, deal in, hold the securities (including shares) witha depository in electronics form and the certificates in respect thereof shall be dematerialised, in which event the rightsand obligations of the parties concerned and matters connected therewith or incidental thereof, shall be governed by theprovisions of the Depositories Act, as amended from time to time or any statutory modifications thereto re-enactmentthereof.

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c. Not withstanding anything contained in these Articles, the Company shall be entitled to dematerialize its existingsecurities, dematerialize its securities held in the depositories and / or offer it fresh securities in a rematerialised frompursuant to the Depositories Act, and the rules framed there under, if any.

d. Every person subscribing to or holding securities of the Company shall have the option to receive security certificatesor to hold the securities with a Depository.

If a person opts to hold his security with Depository, the Company shall intimate such Depository the details ofallotment of the security, and on receipt of the information, the Depository shall enter in its records the name of theallottees as the Beneficial Owner of the Security.

e. All Securities held by a Depository shall be dematerialized and be in fungible form. Nothing contained in Sections 153,153A, 153B, 187B, 187C and 372 of the Act, shall apply to a Depository in respect of the Securities held by it onbehalf of the Beneficial Owner.

f. i. Not withstanding anything to the contrary contained in the Act, or these Articles, a Depository shall be deemedto be registered owner for the purpose of effecting transfer of ownership of security on behalf of the BeneficialOwner.

ii. Save as otherwise provided in (a) above, the Depository as the registered owner of the Securities shall not haveany voting rights or any other rights in respect of the security held by it.

iii. Every person holding securities of the Company and whose name is entered as the Beneficial Owner in therecords of the Depository shall be deemed to be a member of he Company. The Beneficial Owner of Securitiesshall be entitled to all the rights and benefits and subject to all the liabilities in respect of his securities, which areheld by a Depository.

g. Expect as ordered by a Court of Competent jurisdiction or as required by law, the Company shall be entitled to treatthe person whose name appears as the Beneficial Owner of shares in records of the Depository as the absolute ownerthereof and accordingly shall not be bound to recognize any benami trust or equitable, contingent, future or partialinterest in any share, or (expect only as is by these Articles otherwise expressly provided) any right in respect or ashare other than absolute right thereto in accordance with these Articles, on the part of any other person whether ornot it has express or implied notice thereof, by the Board shall be entitled at their sole discretion to register any sharein the joint name of any two or more persons, or the survivors of them.

h. Every Depository shall furnish to the Company information about the transfer of securities in the name of beneficialOwner at such intervals and in such manner as may be specified by the by the bye-laws and the Company in thatbehalf.

i. Upon receipt of certificate of Securities on surrender by a person who has entered into an agreement with theDepository through a participant, the Company shall cancel such certificate and substitute in its records the name ofDepository as the registered owner in respect of the said securities and shall also inform the Depository accordingly.

j. If a Beneficial Owner seeks to opt out of a Depository in respect of any security, the Beneficial shall inform theCompany.

The Depository shall on receipt of information as above make appropriate entries in its records and shall inform theCompany.

The Company shall within thirty (30) days of the receipt of intimation from the Depository and on fulfillment of suchconditions and payment of such fees as may be specified by the regulations, issue the certificate of securities to theBeneficial Owner or the transferee as the case may be.

k. Notwithstanding anything contained in the act, or these Articles to the contrary, where securities are held in aDepository, the records of the beneficial ownership may be served by such Depository on the Company by means ofelectronic mode or by delivery of floppies or disc.

l. Except as specifically provided in these Articles, the provisions relating to joint holders of shares, calls, lien of shares,forfeiture of shares any transmission of shares shall be applicable to shares held in Depository so far as they applyto shares in physical form subject to the provisions of the Depository Act.

m. Notwithstanding anything in the Act, or these Articles where securities are dealt with by a Depository, the Companyshall intimate the details thereof of the Depository immediately on allotment of such securities.

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n. The shares in the capital shall be numbered progressively accordingly to their several denominations provided, however,that the provisions relating the progressive numbering shall not apply to the shares of the Company which aredematerialized or may be dematerialized in future or issued in future in dematerialized form. Except in the mannerhereinbefore mentioned, no share shall be subdivided. Every forfeited or surrendered share held in material form shallcontinue to bear the number by which the same was originally distinguished.

o. The Company shall cause to keep a Register and index of members and Register and Index of Debenture holders inaccordance with Section 151 and 152 of the Act respectively and the Depository Act, with details of shares anddebentures held in material and dematerialized forms in any media as may be permitted by law including in any formof electronic media. The Register and index of Beneficial Owners maintained by – Depository under Section 11 of theDepositories Act, shall be deemed to be Register and Index of Members and Register and Index of Debenture Holders,as the case may be for the purpose of the Act. The Company shall have the power to keep in any state or countryoutside India a branch Register or members resident in that state or country.

p. The Company shall keep a Register of Transfers and shall have recorded therein fairly and distinctly particulars ofevery transfer or transmission of any share held in material form.

ALTERATION OF SHARE CAPITAL

6. 1. The Company shall have power to alter the conditions of the Memorandum as follows, that is to say, it may:

a. Increase its share capital by such amount as it things expedient by issuing new shares.

b. Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares.

c. Sub-divide its shares or any of them into shares of smaller amount than is fixed by memorandum so however, in thesubdivision the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be thesame as it was in the case of the share from which the reduced shares is derived.

2. The power conferred by this regulation shall be exercised by the Company in general meeting.

7. The Company shall have power to reduce any share premium account in accordance with the provisions of Section 78 read withSection 100 or share-capital may be reduced through shares buy-back as per Government/statutory rules with permission ofgeneral meetings or any statutory modifications thereof.

VARIATION OF SHAREHOLDERS’ RIGHTS

9. a. If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwiseprovided by the terms of the share of that class) may subject to the provisions of Section 106 and 107 and whether or notthe Company is being wound up be varied with the consent in writing of the holders of three fourths of the issue sharesof that or with the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class.

b. Subject to the provisions of Section 170(2) and (b) or any statutory modifications thereof, to every such separate Generalmeeting the provision of these Resolutions relating to General Meetings shall mutates mutandis apply but so that thenecessary quorum shall be two persons at least holding a representing by proxy one-third of the issued shares of the classin question.

c. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not unlessotherwise provided by the terms of issue of the shares of that class be deemed to be varied by the creation or issue offuture shares ranking pari pasu therewith.

CERTIFICATES

8. a. Every members shall be entitled to a certificate under the common seal of the Company signed by two directors and theSecretary or any other person named for the purpose by the Board specifying the number of shares, held by him and theamount paid thereon.

b. Every member in the first instance shall be entitled to one or more certificates as issued by the Company for all the sharesregistered in his name, and every certificate of shares shall specify the number or number of shares in respect of which itis issued, and the amount paid up thereon or credited thereto.

c. If any certificate be worn out, defaced, destroyed or lost, a new or new ones may be issued in lieu thereof, on productionto the Directors of evidences satisfactory to them of its being worn out, defaced, destroyed, or lost, or in default of suchevidence on such indemnity being given as the Directors may think sufficient.

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d. A fee of Re 1/- shall be charged in respect of every new certificate besides the out of pocket expenses incurred by theCompany, in investigating evidence or indemnity required by the Directors of the Company.

“Provided that the Company shall not charge any fees for sub-division of consolidation of shares and debenture certificateor for sub-division of letter of allotment or for splitting, consolidation, or renewal of pucca transfer receipts intodenominations, corresponding to market units of trading or for issue of new certificates in replacement of those which areold or worn out where cages on the reverse for the recording of transfer have been fully utilized”.

e. In respect of any share or shares held jointly by several persons, the delivery of certificates for share to the first namedperson of several joint share holders shall be sufficient delivery to all such holders. The Company shall work in 3 monthsafter the allotments of its shares or debentures and within 1 month after application for the Registration of Transfer of anyshares or debentures, complete and have ready for delivery Certificate of all shares and debentures allotted or transferredunless the condition of issue of shares or debentures otherwise provide and the company shall otherwise comply with therequirements of Section 113 and other applicable provisions if any of the Act.

CALLS ON SHARES

12 a i The board may, from time to time, make call upon the members in respect of any money unpaid on their shares(whether on account of the nominal value of the shares or by way of premium) and not by the conditions of allotmentthere of made payable at fixed times.

Provided that no calls shall exceed on fourth of the shares or be payable at less than one month from the date for thepayment of the last preceding call.

ii. Each member shall, subject to receiving at least fourteen days notice specifying the time or times and place ofpayment, pay to the Company at the time or times and place so specified the amount called on his shares.

iii A call may be revoked or postponed at the discretion of the Board.

iv. Provided that any amount be paid in advance of calls on any share such amount may carry interest at 6% per annumbut shall not in respect thereof confer a right to divide or participate in profits.

b A call shall be deemed to have been made at the time when the resolution of the Board authorizing the call was passed andmay be acquired to be paid by installments.

c. The joint-holders of a share shall be jointly and severally liable to pay all calls in respect thereof.

d. i. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person fromwhom the sum is due shall pay interest thereon the day appointed for payment thereof to the time of actual paymentat 12% per annum or at such lower rate, if any, as the Board may determine.

ii. The Board shall be at the notice, find a purchasing members for all or any of the shares comprised therein, and givenotice accordingly or if through no fault of the retiring member, the purchase of any share in respect of sale notice hasbeen given shall not be completed within 30 days from the service of such notice the retiring member shall at any timewithin three months thereafter be at liberty, subject to Article 3 here of to sell and transfer the shares comprised inthis sale notice.

e. i. Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether onaccount of the nominal value of the share of by way of premium shall for the purpose of these Resolutions, be deemedto be a call duly made and payable on the date on which by the terms of issue such sum becomes payable.

ii. In case of non payment of such sum, all the relevant provisions of these regulations as to payment of interest andexpenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made andnotified.

LIEN ON SHARES

13. The Company shall have a first and paramount lien upon all the shares (other than fully paid up shares) registered in the nameof each member (whether solely or jointly with others) and upon the precedes of the sale thereof for all money’s (whetherpresently or not) called or payable at a fixed time in respect of such shares and no equitable interest in any share shall becreated except upon the footing and condition that Article 10 hereof shall have full effect. Any such lien shall extended to alldividends and bonuses from time to time declared in respect of such shares, unless otherwise agreed registration of transfer ofshares shall operate as a waiver of the Company’s lien, if any, on such shares. The Directors may at any time declare any sharewholly or in past except from the provisions of the said clause.

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FORFEITURE OF SHARES

14 a. If any member fails to pay any call or installment of a call on the day appointed for payment thereof, the Board may atany time thereafter during such time as any part of the call or installment remain unpaid, serve a notice on him requiringpayment of so much of the call or installment as is unpaid, together with any interest which may have accrued and allexpenses that may have been incurred by the Company by reason of such non-payment.

b. The notice of aforesaid shall:

i. Name a further day (not earlier than the expiry of fourteen days from the date of notice) on or before which thepayment required by the notice is to be maid, and

ii. State that in the event of non-payment on or before the day so named, the shares in respect of which the call wasmade will be liable to be forfeited.

c. If the requirements of any such notice as aforesaid are not complied with, any shares in respect of which the notice hasbeen given may at any time, thereafter, before the payment required by the notice has been made, be forfeited by aresolution of the Board to that effect.

d. i. A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Board thinks fit.

ii. At any time before a sale or disposal as aforesaid, the Board, may annual the forfeiture on such terms it thinks fit.

e. A person whose shares have been forfeited shall cease to be a member.

f. A duly verified declaration in writing that the declarant is a Director, the Manager or the Secretary of the Company, andthat the share in Company has been duly forfeited on a date stated in the declaration shall be conclusive evidence of factstherein stated as against all persons claiming to be entitled to the share.

i. The Company may receive the consideration if any given for the share on any sale of disposal thereof and may executea transfer of the share in favour of the person to whom the share is sold of disposed off.

ii. The transferee shall thereupon be registered as the holder of the shares.

iii. The transferee shall not be bound to see the application of the purchase money, if any, nor shall his title by the sharesof affected by any irregularity or invalidity in the proceeding in reference to the forfeiture, sale or disposal of theshare.

g. The provisions of these Regulations as to forfeiture shall apply in the case of non-payment of any sum which by the termsof issue of a share become payable at a fixed time, whether on account of the nominal value of the share or by way ofpremium, as if the same had been payable by virtue of a call duly made and notified.

h. The forfeiture of share shall involve the extinction of all interest in and also of all claims and demands against the Companyin respect of the shares and all other right of incidental to the share, except only such of those rights as by these Articlesare expressly saved.

TRANSFER AND TRANSMISSION OF SHARES

15 In registering transfer and transmission of shares, the Company shall comply with the provision of Section 108, 110, 111, 112and 250 of the Act or any statutory modifications thereof.

16 a. The instrument of transfer of any share in the Company shall be executed by or on

behalf of both the transferor and transferee. The transferor shall be deemed to remain a holder of the shares until the nameof the transferee is entered in the Register of members in respect thereof.

b. The instrument shall be writing and all the provisions of Section 108 of the Companies Act, 1956, and of any statutorymodification thereof for the time being shall be duly complied with in respect of all the transfer of shares and registrationthereof.

c. The Board may, subject to the right of appeal conferred by Section III of the Act, decline to register.

i. The transfer of Share, not fully paid share, to a person of whom they do not approve.

Or

ii. Any transfer of shares on which the Company has a lien. Provided that the Company will not decline to register ofacknowledge any transfer of shares on the ground that transfer being either alone or jointly with any other person orpersons indebted to the Company to any account whatsoever except a lien on shares.

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d. The board may also decline to recognize any instrument of transfer unless:

i. The instrument of transfer of transfer is accomplished by the certificate of the shares to which it relates, and suchother evidence as Board may reasonably require to show the right of the transferor to make the transfer and

ii. The instrument of transfer is in respect of only on class of shares.

e. The registration of transfers may be suspended at such times and for such periods as the Board may from time to timedetermine. Provided that such registration shall not be suspended for more than forty-five days in any year and provisionsof Section 154 of the Act shall be complied with.

f. The Company shall not charge any fees for the Registration of any probate letters of Administration Certificate of death,marriage, power of Attorney and such other similar documents.

17 a i. On the death of a member, the survivors or survivor where the member was joint holder and his legal representativewhere he was shareholder shall be the only person recognized by the Company as having any title to his interest inthe share.

ii. Nothing in Clause (i) shall release of the estate of the deceased jointly holder from any liability in respect of any sharewhich had been jointly held by him or other persons.

b. 1. Any person becoming entitled to share in consequence of the death or insolvency of a member may upon suchevidence being produced as may from time to time property be required by the Board and subject as here-in –afterprovided, elect, either:

i. To be registered himself as holder of the share, or

ii. To make such transfer of the share as the deceased or insolvent member could have made.

2. The Board shall, in either case, have the same right to decline or suspended registration as it would have had, if thedeceased or insolvent member has transferred the shares before his death or insolvency.

c. 1. If the person so becoming entitled, shall elect, to be registered as holder of the share himself, he shall deliver or sentto the Company a notice in writing signed by him stating that he so elects.

2. If the person aforesaid shall elect to transfer the share he shall testify his election by executing a transfer of the share.

3. All limitations, restrictions and provisions of these regulations relating to the right to transfer and the registration oftransfer of shares shall be applicable to any such notice of transfer as aforesaid as if the death of insolvency of thenumber had not occurred and the notice of transfer were a transfer signed by that member.

d. A person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the samedividends and the other advantages to which would be entitled if he were the registered holder of the share except that theshall not, before being registered as a member in respect of it to exercise any right conferred by membership in relation tomeetings of the Company, Provided that, the Board may at any time given notice requiring any such person to elect eitherto be registered himself of to transfer the share, and if the notice is not complied within 90 days, the Board may, transferwithhold payments of all dividends, bonuses or other money’s payable in respect of the share until the requirements of thenotice have been complied with.

BORROWING POWERS

18 a. The Company shall have power to borrow from any person or persons and secure the payment of any sum of money forthe purpose of the Company and the Directors may from time to time at their discretion exercise this power and maythemselves lend to the Company on security or otherwise provided the Directors shall not contravene the provisions ofSections 293 (i)(d) shall be invalid or ineffectual except in the case of express ‘notice’ to the lender or the recipient of thesecurity at the time when the debt was incurred or security given that the limit hereby imposed had been or was herebyexceeded.

b. The Directors may raise or secure the repayment of any sum or sums manner upon such terms and conditions in all respectas they may think fit and in particular, by certain of mortgage or change on the undertaken the whole or any part of theproperty, present or future, or uncalled capital of the Company or by the issue of bonds perpetual or redeemable,debentures or debenture stock of the Company charged upon all or any part of the property of the Company both, presentand future, including its capital for the time being.

c. Subject to the provisions of Section 58A of the Act and Company’s (Acceptance of Deposit) rules, 1975, the Directors

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may receive deposits for such term and bearing at such rates as the Directors may decide from time to time. The Depositsmay be received from person or persons including the Directors and the shareholders of the Company.

d. The Directors shall cause a proper register to be kept in accordance with the provisions of section 143 of chargesspecifically affecting the property of the Company and shall duly comply with the requirements of the Act with regard tothe registration of mortgages and charges. The register of charges kept in pursuance of Section 143 shall be open duringbusiness hours subject to reasonable restrictions as the Company in general meeting may impose so that, not less than twohours in each day are allowed for such inspection to any creditor or member of the Company without fee and other personon payment of fee of Rs 1/- for each inspection at the Registered office of the Company.

DIVIDENDS AND RESERVES

78. The company in General Meeting may declare dividends but no dividend shall exceed the amount recommended by the Board.

79. The board may from time to time pay the members such interim dividends as appear to it to be justified by the profits of theCompany.

80. a. The Company shall transfer to a Reserve of such percentage of its profits for the year, as prescribed by Transfer of(profits to Reserve) Rules 1975 before declaring of paying dividends out of profits of the current year.

b. The Board may also carry forward any profits which it may think prudent not divide.

c. Subject to the rights of the persons, if any entitled to share with special rights as to dividends all the dividends shall bedeclared and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividend is paid,but if and so long as holding is paid upon any of the shares in the company dividends, may be declared and paid accordingto the amounts of the shares.

d. No amount paid or credited as paid on the shares and shall not in respect thereof confer a right to dividend or toparticipate in the profit of the Company.

e. All dividend shall be appointed and paid proportionately to the amount paid or credited as paid on the shares during anyportion or portions of the period in respect of which the dividend is paid, but if any share is issued on the terms providingthat is shall rank for dividends as from a particular date such share rank for dividend accordingly.

81. The Board may deduct from any dividend payable to any member all sums of money if any, presently payable by him to theCompany on account of calls or otherwise in relation to the shares of the Company.

82. a. Any General Meeting declaring a dividend or bonus may direct payment of such dividends or bonus wholly or partly bythe distribution of specific assets and the Board shall given effect to the resolution of the meeting.

b. Where any difficulty in regard to such distribution the Board may settle the same as it things expedient and in suchparticular, may issue fractional certificates and fix the value for distribution of such specified assets or any part thereofmay determine that cash payments shall be made to any member upon the footing of the value so fixed in order to adjustthe rights of all parties and may vest any such specific asset trustees as many seem expedient to the Board.

c. Any dividend interest or other money payable in cash in respect of shares may be paid by Cheque or warrant sent throughthe post directed to the registered address of the holder or in the case of joint holders to the registered addresses of the oneof the joint holders how is first named on the register of members or to such person and to such address as the holder ofjoint holders may in writing direct.

d. Every such Cheque or warrant shall be made payable to the order of the person to whom it is sent.

e. Any one of the two or more joint holders of a share may be given effectual receipts for any dividends, bonuses or othermoneys payable in respect of such shares.

f. Notice of any dividend that may have been declared shall be given to the persons entitled to share therein the mannermentioned in the act.

83. Any Annual General Meeting declaring a dividend may make a call on the members of such amount as the meeting fixed but sothat the call on each member shall not exceed the dividend payable to him, and so that the call be made payable at the same timeas the dividend and the dividend, if so arranged between the company and the members be set off against the call under thisclause shall be deemed ordinary business of the ordinary General Meeting which declares a dividend.

84. All dividends on any share not having a registered owner entitled require payment and competent to give a valid receipt shallremain in suspense until some competent persons be registered as the holder of the share.

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85. The Board shall transfer the unpaid dividends within 7 days of the expiry of 42 days from the date of declaration of the dividendto a special account with a scheduled bank to be known as “Unpaid Dividend Account”. If the amount of the unpaid dividend is notso transferred, the Company shall pay interest at the rate of 12% per annum. Any money transferred to the unpaid DividendAccount of the Company which remains unpaid on unclaimed for 3 years from the date of such transfer must be preferred to theCentral Government and any claim after such transfer must be preferred to the Central Government. No unclaimed dividends shall beforfeited unless the claim there to becomes barred by law.

WINDING UP

90. Every account of the Directors, when audited and approved by an Annual General Meeting shall be conclusive.

91. If the company shall be wound up and the assets available for distribution among the members as such, shall be insufficient torepay the whole of the paid up capital such assets shall be borne by the members in proportion to the capital paid up or whichought to have been paid up at the commencement of the winding up on the shares held by them respectively. And if in awinding up the assets available for distribution among the members shall be more than sufficient to repay the whole of thecapital paid up at the commence of the winding up the excess of winding up paid up or which ought to have been paid up onthe shares held by them respectively. But this clause is to be without prejudice to the right of the holders of shares issued uponspecial terms and conditions.

92. If the company shall be wound up, whether voluntarily or otherwise, the liquidators may, with the sanction of a specialresolution, divide among the contributories, in specific or kind, any pay of the assets, of the company trustees upon such trustfor the benefits of the contributories or any of them as the liquidators with the like sanction, shall think fit, but that no membershall be compelled to accept any shares or other securities where there is any liability.

SECRECY

93. Every Director, Secretary, Manager, Auditor, Trustee, Member of Committee, Officer, Servant, Agent, Accountant or otherperson employed in the business of the company shall before entering upon the duties sign a declaration pledging himself notto reveal any of the matters which may have come to his knowledge in the discharge of his duties except when required to doso by the Directors or by any meeting of the share holders or by a court of Law by the person to whom such matters relateand except so far as may be necessary in order to comply with any other provisions of these Articles of Association.

94. Any Director or officer of the Company shall be entitled , if he thinks fit, to decline to answer any question concerning thebusiness of the Company which may be put to him on any occasion including any meeting of the Company on the ground thatthe answer to such question would disclose or tend to disclose the trade secrets of the company.

95. Any officer or employee of the company proved to the satisfaction of the Board of Directors to have been guilty of disclosingthe secrets of the Company shall be liable to instant dismissal without notice, and payment of damages.

INDEMNITY

96. a. Every Director of the Company, Secretary, and other officer of employee of the Company, shall be indemnified by theCompany against, and it shall be the duty of the Directors to pay out of the funds of the Company costs losses andexpenses (including travelling expenses) which any such Director, Officer or employee may incur or become liable to byreason or any contract entered into or act of deed done by as such Director Officer or servant or in any way in thedischarge of his duties.

b. Subject to as aforesaid every Director, Manager, Secretary or other officer of the Company shall be indemnified against anyliability incurred by him in defending any proceedings whether civil or criminal in which judgement is given in his favouror in which he is acquitted or in connection with any application under section 653 of this Act, which relief is given to himby the Court.

97. No Director, Auditor or other officer of the company shall be liable for the acts, receipts or defaults of any other Director orOfficer, for joining in any receipts or other act for conformity or for any loss or expenses happening to the Company thoroughthe insufficiency, a deficiency of title to any property acquired by order of the Directors for or on behalf of the Company shallbe invested or for any loss or damage arising from the bankruptcy, insolvency or torturous act of any person with whom anymoney’s, securities, or effects shall be deposited, or for any loss occasioned by any error or judgment commission default oroversight on his part, or for any other loss damage or misfortune whatever which shall happen in relation to the execution ofthe duties of his own dishonesty.

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E. MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts and agreements referred to in Para “A” below (not being contracts entered into in the ordinary courseof business carried on or intended to be carried on by the Company or contracts entered into more than two years before thedate of this Prospectus) which are / or may be deemed to be material have been entered into by or on behalf of the Company.Copies of these contracts together with copies of documents referred to in Para “B” below all of which have been attached tothe copy of this Prospectus and which have been delivered to the ROC for registration and may be inspected at the RegisteredOffice of the Company between 11.00 a.m. and 1.00 p.m. on any working day from the date of this Prospectus until the dateof closing of subscription list.

A) MATERIAL CONTRACTS

1. Memorandum of Understanding (MOU) dated April 23, 2004 between the Company and Karvy Investor ServicesLimited for this Public Issue.

2. Memorandum of Understanding (MOU) dated May 7, 2004 between the Company and Fortune Financial Services(India) Limited for this Public Issue.

3. Memorandum of Understanding (MoU) between the Company and the Registrar to the Issue, Karvy ComputersharePrivate Limited dated April 20, 2004.

4. Copies of quotations obtained for plant and machinery

5. Copy of tri-partite agreement entered into between CDSL, the Company and the Registrar of the issue M/s KarvyComputershare Private Limited.

6. Copy of tri-partite agreement entered into between NSDL, the Company and the Registrar of the issue M/s KarvyComputershare Private Limited.

B) DOCUMENTS FOR INSPECTION

1. Memorandum and Articles of Association of the Company as amended from time to time.

2. Certificate of Incorporation dated 6th July 1983 and Certificate of change of name dated 10th March 2004.

3. Copy of special resolution passed u/s 81 (1A) on 2nd April 2004 authorizing the Issue of Equity Shares

4. Copies of initial listing application made to the National Stock Exchange of India Ltd, and The Stock Exchange,Mumbai.

5. Letters from the National Stock Exchange of India Ltd., and The Stock Exchange, Mumbai dated June 25, 2004 andJune 22, 2004 respectively granting permission to use their names in the Prospectus.

6. Copies of Auditors Reports

l Report mentioned in prospectus-dated August 9, 2004.

l Report on tax benefits dated April 9, 2004.

7. Consent letters from directors, Lead Managers, Bankers to the issue, Bankers to the Company, Advisors to theCompany, Auditors, Legal Advisors, Registrar to the issue, Company Secretary & Compliance Officer to act in theirrespective capacities and for inclusion of their names in the Prospectus

8. Copy of members’ Resolution passed on 2nd April 2004 for appointment of Executive Chairman, Managing Director,Joint Managing Director and Executive Director alongwith copies of agreement entered into with them.

9. Power of Attorney(s) executed by the directors for signing and making correction in the prospectus on their behalf

10. Copies of Annual Reports for the last 5 accounting period i.e. FYs 1999-2000, 2000-2001, 2001-2002, 2002-2003 and2003-2004.

11. Due diligence certificate dated May 11, 2004 issued by Lead Manager to the Issue, Karvy Investor Services Limited.

12. Legal Clearance Certificate dated August 7, 2004 given by M/s. Shiralkar & Co., Legal Advisor.

13. SEBI observation letter No.CFD/DIL/17031/2004 dated August 3, 2004

14. Interse allocation of responsibilities between the Lead Managers.