http://

TABLE OF CONTENTS PAGE NO

DEFINITIONS AND ABBREVIATIONS []

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA []

FORWARD LOOKING STATEMENTS []

RISK FACTORS []

SUMMARY OF THE INDUSTRY & BUSINESS OF THE ISSUER COMPANY []

THE ISSUE []

BASIC TERMS OF THE ISSUE []

SUMMARY STATEMENT OF ASSETS & LIABILITIES & PROFITS & LOSSES []

GENERAL INFORMATION []

CAPITAL STRUCTURE []

OBJECTS OF THE ISSUE []

BASIS FOR ISSUE PRICE []

STATEMENT OF TAX BENEFITS []

INDUSTRY OVERVIEW []

BUSINESS OVERVIEW []

REGULATIONS AND POLICIES []

HISTORY AND OTHER CORPORATE MATTERS []

SUBSIDIARIES & OTHER INFORMATION []

THE MANAGEMENT []

ORGANISATION CHART []

KEY MANAGEMENT PERSONNEL []

THE PROMOTER []

DIVIDEND POLICY []

FINANCIAL STATEMENTS []

MANAGEMENT DISCUSSION AND ANALYSIS []

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS []

GOVERNMENT APPROVALS []

OTHER REGULATORY AND STATUTORY DISCLOSURES []

ISSUE RELATED INFORMATION []

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF THE COMPANY []

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION & DECLARATION []

i

DEFINITIONS AND ABBREVIATIONS

TERM DESCRIPTION The Company and The Issuer

Unless the context otherwise requires, refers to Exide Industries Limited, a public limited company incorporated under the Companies Act, 1956

Subsidiaries, the Companys subsidiaries

Unless the context otherwise requires, refers to Chloride International Limited, Caldyne Automatics Limited, Chloride Batteries S E Asia Pte Limited, Espex Batteries Limited and Associated Battery Manufacturers (Ceylon) Limited.

Promoter Chloride Eastern Limited, U.K. General / Conventional Terms

TERM DESCRIPTION AGM Annual General Meeting Articles / Articles of Association / AoA

The Articles of Association of the Company

Auditors The Statutory Auditors of the Company, being S R Batliboi & Co., Chartered Accountants

Board of Directors / Board

The Board of Directors of the Company or a Committee thereof.

BSE Bombay Stock Exchange Limited CAGR Compounded Annual Growth Rate CDSL Central Depository Services (India) Limited Companies Act or the Act

The Companies Act, 1956, and any amendments thereto

CSE The Calcutta Stock Exchange Association Limited Director(s) Director(s) of the Company, unless otherwise specified DP Depository Participant Designated Stock Exchange

Bombay Stock Exchange Limited

EPS Earning Per Share Equity Share(s) of Share(s)

Equity shares of face value of Re 1/- each of the Company unless otherwise specified in the context thereof.

Equity Shareholder(s)

Means a holder of Equity Shares as on the Record Date.

FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999 and the amendments from time to time

and the regulations framed thereunder for the time being in force FII(s) Foreign Institutional Investors registered with SEBI under applicable laws Financial Year / Fiscal / FY

Financial Year ending March 31

GoI Government of India

Indian GAAP Generally Accepted Accounting Principles in India IT Act The Income Tax Act, 1961 and any amendments thereto IVL ING Vysya Life Insurance Company Limited Lead Manager SBI Capital Markets Limited Letter of Offer / Offer Document

The Letter of Offer dated [ ]

Memorandum or MoA or Memorandum of Association

Memorandum of Association of the Company

NAV Net Asset Value NRI/ Non Resident A person resident outside India, as defined under FEMA and who is a citizen of

ii

Indian India or a person of Indian origin, each such term as defined under the FEMA (Deposit) Regulations 2000, as amended.

Non-Resident A person who is not resident in India except NRIs and FIIs. NSE National Stock Exchange of India Limited NSDL National Securities Depository Limited OCB Overseas Corporate Bodies RBI Reserve Bank of India RoNW Return on Net Worth Renouncees The persons who have acquired Rights Entitlements from Equity Shareholders RoC Registrar of Companies Rights Entitlement The number of securities that a shareholder is entitled to in proportion to his/her

existing shareholding in the Company. Rights Issue The issue of Equity Shares on rights basis based on terms of this Letter of Offer Re / Rs/ Rupees / INR

Indian Rupees, the legal currency of the Republic of India

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

The SEBI (Disclosure and Investor Protection) Guidelines, 2000 as amended, including instructions and clarifications issued by SEBI from time to time.

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

Exide Industries Limited or the Company or the Issuer

Exide Industries Limited, a company incorporated on 31st January, 1947 under the Indian Companies Act, 1913.

Issue related Terms and Abbreviations TERM DESCRIPTION Applicant Any Equity Shareholder and/or Renouncee who makes an application pursuant to

the terms of the Letter of Offer and the CAF Bankers to the Issue State Bank of India & HDFC Bank Limited Allottee The successful applicant to whom the Equity Shares are being / or have been issued CAF Composite Application Form Draft Letter of Offer Draft Letter of Offer as filed with SEBI for its comments Issue / Rights Issue Issue of 5,00,00,000 fully Paid Equity Shares with a face value of Re 1/- each at a

premium of Rs 29/- per Equity Share for an amount aggregating to Rs 15,000 lakhs on Rights basis to the existing shareholders of the Company in the ratio of one fully paid Equity Share for every fifteen Equity Shares held by the existing shareholders on the record date, i.e., on [] 2007.

Issue Closing Date [] Issue Opening Date [] Issue Price Rs 30/- per equity share of face value of Re 1/-. Record Date [] Registrar to the Issue

C B Management Services (P) Ltd

Company/ Industry related terms and abbreviations TERM DESCRIPTION Ah Ampere hour CII Confederation of Indian Industries

iii

CMWSSB Chennai Metropolitan Water Supply & Sewage Board HRD Human Resource Development MPCB Maharashtra Pollution Control Board OEM Original Equipment Manufacturer PPM Parts per million SMF Sealed Maintenance Free TQM Total Quality Mangement VRLA Valve Regulated Lead Acid

iv

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA

Unless stated otherwise, the financial data in this Draft Letter of Offer is derived from the audited financial statements of the Company for the Financial years ended March 31, 2007, 2006, 2005, 2004 and 2003 and three months ended June 30, 2007 prepared in accordance with the Indian GAAP and the Companies Act. The financial data for the foreign subsidiaries in this Draft Letter of Offer is derived from the audited financial statements of the respective subsidiaries for the Financial years ended March 31, 2007, 2006, 2005, 2004 and 2003 and three months ended June 30, 2007 prepared in accordance with the GAAP of the respective country of incorporation of subsidiaries. The annual financial statements of the Company have been restated in accordance with the applicable SEBI Guidelines as stated in the report of the Companys statutory auditors, M/s S R Batliboi & Co., included in the Draft Letter of Offer. The Companys fiscal year commences on 1 April and ends on 31 March of the year. Unless stated otherwise, reference herein to a fiscal year (eg, fiscal 2007) is to the fiscal year ended 31 March of a particular year. The fiscal year of the Companys subsidiaries commences on 1 April and ends on 31 March of the year. Unless stated otherwise, reference to a fiscal year (eg, fiscal 2007) is to the fiscal year ended 31 March of a particular year. The degree to which the Indian GAAP financial statements (consolidated or unconsolidated) included in this Draft Letter of Offer will provide meaningful information is entirely dependant on the readers level of familiarity with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI Guidelines. Any reliance by persons not familiar with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI Guidelines on the financial disclosures presented in this Draft Letter of Offer should accordingly be limited. In the Draft Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. All references to Re Rs or INR refer to Rupees, the lawful currency of India. Unless stated otherwise, throughout the Draft Letter of Offer, all figures have been expressed in Lakhs, except in the section titled Capital Structure on page [] of the Draft Letter of Offer where certain figures have been expressed in absolute numbers. Market data used in the Draft Letter of Offer has been obtained from business publications and internal Company reports. Business publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although, the Company believes market data used in the Draft Letter of Offer is reliable, it has not been independently verified. Similarly, internal Company reports, while believed to be reliable, have not been verified by an independent source.

v

FORWARD LOOKING STATEMENTS The Company has included statements in the Draft Letter of Offer which contain words or phrases such as will, aim, is likely to result, believe, expect, will continue, anticipate, estimate, intend, plan, contemplate, seek to, future, objective, goal, project, should, will pursue and similar expressions or variations of such expressions, that are forward-looking statements. All forward looking statements are subject to risks, uncertainties and assumptions about the Company that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from the Companys expectations include but are not limited to: General economic and business conditions in the markets in which the Company operate and in the

local, regional, national and international economies; Changes in laws and regulations relating to the sectors/areas in which the Company operate; Increased competition in the sectors/areas in which the Company operate; The Companys ability to successfully implement its growth strategy and expansion plans, and to

successfully launch and implement various projects and business plans for which funds are being raised through this Issue;

The Companys ability to meet its capital expenditure requirements; Fluctuations in operating costs; The Companys ability to attract and retain qualified personnel; Changes in technology; Changes in political and social conditions in India or in countries that the Company may enter, the

monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

The performance of the financial markets in India and globally; and Any adverse outcome in the legal proceedings in which the Company is involved. For a further discussion of factors that could cause the Companys actual results to differ, see the sections title Risk Factors Business Overview and Management Discussion and Analysis beginning on pages [], [] and [] of the Draft Letter of Offer respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither the Company nor the Lead Manager nor any of the respective affiliates have any obligation to pdate or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirement, the Company and the Lead Manager will ensure that investors in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchanges.

vi

RISK FACTORS An investment in Equity Shares involves a high degree of risk. Shareholders should carefully consider all the information in the Draft Letter of Offer, including the risk factors described below, before making an investment in the Companys Equity Shares. If any of the following risks actually occur, the Companys business, results of operations and financial condition could suffer, the price of its Equity Shares could decline, and you may lose all or part of your investment. The financial and other implications of material impact of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However there are a few risk factors where the impact is not quantifiable and hence the same has not been disclosed in such risk factors. Unless otherwise stated in the relevant risk factors set forth below, the Company is not in a position to specify or quantify the financial or other implication of any risks mentioned herein. Materiality The Risk Factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality: 1. Some events may not be material individually but may be found material collectively; 2. Some events may have material impact qualitatively instead of quantitatively; 3. Some events may not be material at present but may have material impact in future. INTERNAL RISK FACTORS Risks in Relation to the Companys Business and Results of Operations: 1. The Company and its Director(s) are parties to certain legal proceedings.

There are outstanding litigations filed by and against the Company and its Director(s). The Company is defendant in legal proceedings incidental to its business and operations and hence do not represent legal proceedings against any of the Directors in their individual capacity. These legal proceedings are pending at different levels of adjudication before various courts and tribunals. In such legal proceedings, if any significant claims are determined against the Company and it is required to pay any portion of the disputed amounts, it could have an effect on the Companys business and profitability.

A summary of the legal proceedings in which the Company is involved as on 03.10.2007 is as follows:

vii

Sr Type of Cases Description Number of Cases Amount (Rs lakhs)

(This is an approximation only since there are several matters in which amounts are not quantifiable)

By Against 1. Criminal Cases Criminal Complaints filed

against the Company (In all these cases, the Company has filed Quashing Applications/Special Leave Petitions/Writ Applications/Article 227 Applications, as the case may be)

- 7 Not Quantifiable

Criminal Complaints filed by the Company

68 - Not Quantifiable

2. Sales Tax Disputed Claims (Appealed by the Company)

66 683.63

3. Central Excise Disputed Claims (Appealed by the Company)

31 828.47

4. Income-tax Disputed Claims (Appealed by the Company)

5 42.97

5. Civil Cases Civil Cases filed against the Company by erstwhile dealers

5 1261.07 (This amount may vary depending on the final

adjudication / Judgment of the relevant forums/

Courts) 6. Civil Cases Civil Cases filed against the

Company before the Monopolies and Restrictive Trade Practices Commission

2 640.29 (This amount may vary depending on the final

adjudication / Judgment of the relevant forums/

Courts) 7. Civil Cases Other Civil Cases filed

against the Company 6 32.36

(This amount may vary depending on the final

adjudication / Judgment of the relevant forums/

Courts) 8. Civil Cases Civil Cases filed by the

Company 54 - 1224.95

(This amount may vary depending on the final adjudication / Judgment of the

viii

relevant forums/ Courts)

9. Consumer Forum Consumer Forum Cases filed against the Company

- 95 26.09

Consumer Forum Cases filed by the Company

1 - 1.26

10. Labour Cases Labour/Employee Cases filed against the Company

- 13 Not Quantifiable

Labour/Employee Cases filed by the Company

1 - 6.85

11 Employees Provident Fund

Case filed against Standard Batteries Limited and the Company

1 Not Quantifiable

12 Environment Public Interest Litigation 1 Not Quantifiable

A summary of the ongoing legal proceedings against Mr. T.V. Ramanathan, by virtue of his being the Managing Director of the Company is as follows:

For further details on the outstanding litigations of the Company and its Director(s) please refer to section titled Outstanding Litigations and Material Developments beginning on page [] on this Letter of Offer. Except as disclosed in the section titled Outstanding Litigations and Material Developments beginning on page [] of this Draft Letter of Offer, there are no other litigations pending as on the date of filing of this Draft Letter of Offer.

2. The Company has contingent liabilities as shown in the balance sheet, as restated, as at March

31, 2007, 2006, 2005, 2004, 2003 and for the three months period as on 30 June 2007.

The financial statements for March 31, 2007, 2006, 2005, 2004 and 2003 and for the three months ended 30 June 2007 state that there are no contingent liabilities not provided for except otherwise as below:

(Rs in lakhs) Particulars 30.06.07 31.03.07 31.03.06 31.03.05 31.03.04 31.03.03

Bills discounted with scheduled banks

298 3189 696 731 644 297

Outstanding bank guarantees / indemnity bonds

660 581 642 132 372 436

Sales tax, Excise claims etc (net of sales tax declaration forms since collected)

167 274 311 416 1117 233

Claims against the company not acknowledged as debts

25 25 25 35 137 365

Number of Cases

Nature of Case Short Description of Case Amount Involved

2 Criminal These are criminal matters which have been filed against the Company in which the Managing Director is one of the co-accused. The criminal matters consist of 1 case filed by the Maharashtra Pollution Control Board and the other filed by one Em Kay Enterprises relating to claim for refund of their security deposit with Standard Batteries Limited.

Not Quantifiable

ix

Guarantees given on behalf of a subsidiary company / employees

-- -- -- 707 1325 509

TOTAL 1150 4069 1674 2021 3595 1840

In the event any of the abovementioned obligations materialize, the Company will face additional financial burden to the extent, thereby affecting the Companys profitability.

3. Potential risk of the dislocation of some of the plants of the Company which are situated in the

municipal limits of the cities

One of the plants of the Company in Mumbai is situated within the municipal limits of the city and therefore could be relocated outside the city limits on account of an order if passed by the municipal authorities for the environmental protection issues. Such relocation would not only require cost to be incurred but would also hamper the production and the revenue.

4. Risk relating to competition

Company has entered into a technology transfer agreement with Shin Kobe Electric Machinery Company Limited, Japan, the manufacturing arm of Hitachi, for the manufacture of the lead acid storage batteries used for automotive applications and VRLA batteries used for industrial applications. The Company has also entered into a technology transfer agreement with The Furukawa Battery Company Limited, Japan for the manufacture of automotive batteries for four wheelers and a separate agreement for batteries for two wheelers. The Competitors have also entered into collaborations with other global players which give them access to equally effective technologies and hence they may be able to wrest some part of the Companys existing market share.

5. Risk relating to technology

Research is being undertaken globally to develop alternative technologies for manufacturing hybrid batteries for their use in automotive and industrial applications. Successful fruition of such research poses a risk to the Companys existing technology used for the manufacture of lead acid storage batteries.

6. Risk on account of failure of new products launched or proposed to be launched

The Company has an in-house Research and Development centre for the advancement of technology and development of new products for various applications such as automotive, motor cycle and industrial (railway, motive power, UPS, telecom, defence, etc.). In addition, R & D Centre is engaged in Projects on process technology aimed at improving product quality and consistency. During the year 2006-07, the Company has incurred an amount of Rs. 712 lakhs on its R & D activities. The amount incurred on R & D activities would not result in any benefit to the Company, in case, the new products launched after the extensive R & D do not become commercially successful or the R & D Centre fails to roll out new products to cater to the demand of the market or fails to improve the existing products.

7. Risk arising out of the unorganized market for automotive and industrial batteries

The total domestic market for the automotive and industrial batteries is estimated by the Company to be Rs 70 billion as on 31 March 2007. Out of the total, the share of unorganized market is estimated to be 40%. The Company runs the risk of losing business due to substantial difference in the price of the product being sold by the unorganized sector and the price of the similar products of the Company.

x

8. Potential threat to the image of the Company due to unauthorized use of the Companys trademark/ brand and counterfeit products

There are products in the market not manufactured by the Company which are being sold under the brand of EXIDE. Though the Company owns the trade mark of EXIDE, but the unauthorized use of the Companys trade mark/ brand could cause damage to its reputation. Also, the Company runs the risk of losing reputation on account of counterfeit products.

9. Some of the lands on which the Companys plants / office are located are not owned by it.

The lands on which the Companys plants at (i) Haldia, West Bengal (ii) part of Shamnagar, West Bengal (iii) Taloja, Maharashtra (iv) Chinchwad, Maharashtra and (v) Ahmednagar, Maharashtra and the project office at Salt Lake, Kolkata are located, are held on lease., The office at Entally, Kolkata is also held on lease. Since the Company does not have freehold interest in the said leased properties, termination of any of the above leases may affect the operations of the Company which may ultimately affect its profitability. .

Moreover, for the Companys plant at Bawal, Haryana, a Letter of Intent from the Haryana State Industrial Development Corporation and Conveyance Deed for the same are still pending execution.

10. Risk on account of heavy reliance on imports for the procurement of raw material.

Lead is the most important raw material in the manufacture of storage batteries. Since the availability of Lead in India is limited, the Company procures almost 80% of Lead through imports. Restrictions, if any, on the production/ supply/ usage of Lead through change in policy/ law may directly affect the production of the Company.

11. Risk on account of potential fluctuations in future operating results on account of increase in

raw material costs, transportation costs etc.

The factors for potential fluctuations in future operating results are :

(i) Lead and Lead alloys are the major raw materials used in the manufacturing of storage batteries. A major portion of the requirements of Lead and Lead alloys consumed by the Company is imported. The cost of such materials to the Company depends upon the prices ruling in the international commodity markets at the time of imports, over which the Company do not have any control. Any increase in the price of the Lead and Lead alloys would directly affect the profitability of the Company.

(ii) The Company employs a large number of workforce at its manufacturing plants located at different locations (for details please refer page [] of the Draft Letter of Offer). The factory workers in a number of cases are affiliated to particular Trade Union(s). Any concerted industrial action could always disrupt the production volume and consequently the sales growth of the Company.

(iii) The Company engages a large number of heavy and light commercial trucks for movement

of both raw materials to its manufacturing plants and finished products to its distribution centers and thereafter to its end customers. Any serious strikes, stoppage of work, etc by the fleet owners could disrupt the production and sales volume of the Company.

xi

12. Dependence on distributors and customers

In overall terms, 50% of the Companys sales volume is directly to the end customers. The Company is dependent upon its distribution network to deliver its products to the end customers for the balance 50% of the sales volume. There could be occasions in the future that some of the intermediaries in the Companys distribution network may switch over to competitors. Such switching over of the Companys distributors would affect the distribution and the sales growth.

13. Investment in ING Vysya Life Insurance Company Limited

The Company has acquired 50% stake in ING Vysya Life Insurance Company Limited (IVL), with a belief that long term potential of value maximization from this investment will inure to the benefit of all the shareholders of the Company. ING of Netherlands, one of the other stakeholders in this venture happens to be one of the largest units in life insurance business globally. The ability of the Company to benefit from its fifty percent stake in IVL would depend upon the performance of the insurance company to secure a market share which is reasonable in relation to other private entities in the industry. Further, the investment of the Company in IVL is under a lock-in till October 2010. As a result, the Company run the risk that the valuation of its investment may end on lower side if IVL fails to perform upto the expectations. Due to the said lock-in, the funds are blocked till October 2010.

14. Ability to renew, maintain or obtain statutory and regulatory permits and licenses as

required to operate the Companys business, since any delay or inability to obtain the same may have an adverse impact on the its business

Being in the manufacturing business, the Company requires several statutory and regulatory permits, licenses and approvals to operate the business. Many of these approvals are granted for fixed periods of time and need renewal from time to time. The Company is required to renew such permits, licenses and approvals. There can be no assurance that the relevant authorities will issue any of such permits or approvals in time or at all. Further, these permits, licenses and approvals are subject to several conditions, and the Company cannot assure that it shall be able to continuously meet such conditions or be able to prove compliance with such conditions to statutory authorities, and this may lead to cancellation, revocation or suspension of relevant permits/ licenses/ approvals. Failure by the Company to renew, maintain or obtain the required permits, licenses or approvals, or cancellation, suspension or revocation of any of the permits, licenses or approvals which may result in the interruption of the Companys operations and may have a material adverse effect on the business.

15. The Company has applied for renewal of certain licenses and approvals for its business operations which have expired. .

Licence / Approvals which have expired and have been applied for renewal:

1. GUINDY UNIT

Consent granted under Section 21 of The Air (Prevention & Control of Pollution) Act,

1961 for the Companys Unit situated at 21/22, Alandur Road (Old Ham Division) R.S. No.120/2, Guindy, authorizing to operate industrial plant in the Air Pollution Control area issued by Tamil Nadu Pollution Control Board bearing Renewal Consent Order No 4470 Boards Proceeding No. TN PCB D/HUM/T-14/F-133/CHN/2006 which was valid till 31.03.07 had been applied for renewal.

Consent granted under Sec 25 of The Water (Prevention & Control of Pollution) Act,

1974 for the Companys Unit situated at 21/22, Alandur Road (Old Ham Division) R.S.

xii

No.120/2, Guindy authorizing discharge of sewage and trade effluents issued by Tamil Nadu Pollution Control Board bearing Renewal Consent Order No 6899 Boards Proceeding No. TN PCB D/HUM/T-14/F-133/CHN/2006 was issued on 04.04.2006 was valid till 31.03.2007 and had been applied for renewal.

Fire Services Licence for the Companys Unit situated at 21/22, Alandur Road (Old Ham

Division) Guindy, issued by Divisional Officer, Fire & Rescue Services Dept, Chennai, bearing Licence No. 2657/A1/2006 was valid till 9.3. 2007 and had been applied for renewal.

2. TALOJA UNIT

No Objection from Service Department for the Companys Unit at T-17, MIDC, Panvel,

Taloja, Dist : Raigad has expired and had been applied for renewal.

3. BANGALORE BRANCH OFFICE

Trade license under Bruhat Bangalore Mahanagar Palike has expired and had been applied for renewal.

Certificate of Registration under the State Tax on Profession, Trade, Callings &

Employment Act has expired and had been applied for renewal.

4. COCHIN BRANCH OFFICE

Trade Licence / Certificate of Enlistment under Kerala Municipal Act, 1994 for its establishment at 44/3331, Kaloor North, NH-47 has expired and had been applied for renewal.

5. JALANDHAR BRANCH OFFICE

Registration under Punjab Shops & Establishment Act, 1958 for its establishment at

Exide House G.T. Road , Jalandhar has expired and has been applied for renewal.

6. CHANDIGARH BRANCH OFFICE

Registration under Punjab Shops & Establishment Act, 1958 for its establishment at 177H & I, Industrial Area I, Chandigarh has expired and has been applied for renewal.

7. KOLKATA REGIONAL OFFICE

Renewal application made under Factories Act, 1948.

8. CHENNAI BRANCH OFFICE

Application filed for renewal of Profession Tax no. issued to Exide Industries Limited for

2007-2008 Trade License / certificate of establishment to Exide Industries Ltd. for its premises at

751, Annasalai has expired and had been applied for renewal.

16. The Company is dependant on the management team for success whose loss could adversely impact the profitability

The success of the company largely depends on the continued services and performance of the management and other key employees. The need for capable senior management in the industry is

xiii

intense, and the Company may not be able to retain its senior management or attract and retain new senior management in the future. The loss of service of the senior management could seriously impair the ability to continue to manage and expand the business efficiently. Further, the loss of any of the senior management or other key personnel may adversely affect the operations, finances and profitability of the company. Any failure or inability of the Company to efficiently manage its human resources would adversely affect its ability to implement new projects and expand the business.

17. Shortfall in performance vis--vis promise made in previous Issue.

The last three issues made by the company in the years 1978, 1995 and 1998 were the Rights Issues. There was no promise made by the Company in the Rights Issue of 1978. While the Objects of the Issue for all these three Rights Issues were achieved by the Company, there was a deviation in the actual vis--vis the projected profitability in case of the Rights issue of 1995 .For details please refer to the section titled Promise versus Performance on page no. []

18. Employee health, safety and regulatory measures are very important in the industry, any negligence can affect the operations

The Company is subject to safety and health laws and regulations such as the Environment (Protection) Act, 1986, the Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution) Act, 1981, Hazardous Wastes (Management & Handling) Rules, 1989, the Batteries (Management & Handling), Rules, 2001, the Indian Explosives Act, Fire Service Laws and the Indian Boilers Act, 1923. These laws and regulations impose controls on the Companys safety standards, and other aspects of its operations. The Company has incurred and expect to continue to incur, operating costs to comply with such laws and regulations. In addition, the Company has made and expect to continue to make capital expenditures on an on-going basis to comply with the safety and health laws and regulations. ,The Company may be liable to the Government of India or the State Governments or Union Territories with respect to its failures to comply with applicable laws and regulations.

Further, the adoption of new safety and health laws and regulations, new interpretations of existing laws, increased governmental enforcement of laws or other developments in the future may require that the Company make additional capital expenditures or incur additional operating expenses in order to maintain its current operations or take other actions that could have a material adverse effect on its financial condition, results of operations and cash flow. Safety, health an environmental laws and regulations in India, in particular, have been increasing in stringency and it is possible that they will become significantly more stringent in the future. The costs of complying with these requirements could be significant.

19. Any failure in the SAP based ERP systems could adversely impact the business of the

company

Any disruption of the functioning of its existing ERP systems, which are based on SAP, could disrupt its ability to track, record and analyse the work in progress, cause loss of data and disruption in operations including, among others an ability to assess the progress of the projects, process financial information or manage creditors/debtors or engage in normal business activities. This may have an adverse effect on its operations.

20. Investment in overseas subsidiaries

The Company has invested in its overseas subsidiaries, viz., Chloride Batteries S E Asia Pte Limited, Singapore, Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka and Espex Batteries Limited, UK with a view to produce/ market its products globally. Any negative change in the import and tariff policies of the government in the respective countries may affect the intake of Companys products by the overseas subsidiaries. In addition, invariably the overseas markets

xiv

are driven by technology advanced products and good cosmetics including product packaging. The success of the Companys investment in the overseas subsidiaries depends upon the ability of the company to maintain its excellence in technology and creating customer value perception in the overseas markets.

21. Increased competition may result in lower prices of or a decreased market share for the

Companys products. The Companys failure to effectively compete may reduce its profitability

The Company experience competition across markets for its products from domestic and international players. The Company compete with other battery manufacturers on the basis of availability of technology, product, and product range, product traits, quality and other factors as well as based on price, reputation, customer service and customer convenience. The Companys failure to compete effectively may decrease or prevent the Company from increasing its market share and reduce its profitability.

22. Any loss of or breakdown of machineries at any of the manufacturing facilities may have an

adverse affect on business, financial condition and results of operations

The Companys manufacturing facilities are subject to operating risks, such as the breakdown or failure of equipment, power supply or processes, performance below expected levels of output or efficiency, obsolescence, labour disputes, industrial accidents and the need to comply with the directives of relevant government authorities. The occurrence of any of these risks could significantly affect its operating results. Our business and operations may be adversely affected by any disruption of operations at manufacturing facilities.

23. Any disruption in supply of power at any of the manufacturing facilities may have an

adverse affect on the production

The power requirements of the Company are presently met by purchase of electricity from the State Electricity Boards of respective states and from Calcutta Electric Supply Corporation, Kolkata and other private power supply bodies, wherever applicable., Any disruption in supply of power at the Companys plants may have an adverse effect on its production.

Risks arising out of the Objects of the Issue 24. Requirement of the funds for the working capital has not been appraised by any Bank or

financial institution.

The use of proceeds of the Issue will be in accordance with the chapter titled Objects of the Issue beginning on page [] of the Draft Letter of Offer. These estimates related to the Objects of the Issue, are based on its internal estimates. No bank or financial institution has appraised the objects of the Issue for which proceeds are proposed to be raised through the Issue, and their utilization will be based on the management's internal estimates. Any downward deviation in the estimated working capital requirements may result in inability to utilise funds efficiently. The deployment of the proceeds of the issue will be internally monitored.

Risks Arising Out Of Shareholding / Equity Shares 25. Renunciation by any shareholder in favour of a non-resident or FII will require prior

approval of the RBI and/or FIPB subject to certain terms and conditions

Renunciation of rights entitlement in the Company by any shareholder in favour of a non-resident or a FII will require prior approval of RBI and/or FIPB subject to certain terms and conditions. There can be no certainty as to the conditions subject to which the approval will be granted or if

xv

the approval will be granted at all. For more details on the restrictions applicable to non residents or FIIs please refer to the section titled Basic Terms of the Issue beginning on page [] of the Draft Letter of Offer.

26. Future sale of Equity Shares by some of the current shareholders could affect the price of

the Companys Equity Shares in the secondary market

Any future issuance of Equity Shares by the Company could dilute earnings per share and adversely affect trading price of the Companys Equity Shares and could impact the Companys ability to raise capital through an offering of the securities. Also the sale of the Companys Equity Shares by any major shareholders could adversely affect trading price of the Companys Equity Shares and could impact the Companys ability to raise capital through an offering of the securities. In addition, any perceptions by investors that such an issuance or sale might occur, could also affect the trading price of the Companys Equity Shares.

External Risk Factors 1. There are a number of factors outside the control, which may prejudicially affect the Company

and may make the price of its Equity Shares volatile,

There are several factors outside the control that may cause fluctuations to the Companys revenues and operating results and the market price of its equity and/or prejudicially affect the business, financial condition and results of operations. These include:

Various sectors of the economy like agriculture, automobiles (both passenger and commercial

vehicles), telecom, power, railways, UPS, distribution warehouses of retailing, mining are customers for Companys products. The GDP growth of the Indian Economy is directly proportional to the growth of these sectors. Hence, the Companys overall sales volume growth could in the future be affected if there is a significant de-growth in the GDP of the Indian Economy.

Natural disasters, accidents, terrorists attacks at the Companys manufacturing plants, civil

unrest and other acts of violence could disrupt its operations and result in loss of revenues and/or increased costs.

Any significant changes in the safety, health and environmental laws and regulations may

adversely affect the Companys operations and revenue streams.

The trading price of the Companys Equity Shares may fluctuate after the Issue due to a variety of factors, including but not limited to :

a) results of the companys operations and the performance of its business, b) perceptions about the Companys future performance or the performance of companies

operating in the same sector(s) as the Company do; c) Change in the estimates of the Companys performance or recommendations by financial

analysts; d) performance of the Companys competitors and market perception of investments in the

Indian securities market in general; e) Adverse media reports on the Company or on the Indian plastic-pipe industry f) general economic, political and social factors, in the country and across the globe g) volatility in the Indian and global securities markets, h) trends in general business and industry, i) significant developments in Indias fiscal regime.

xvi

2. A slowdown in economic growth in India could cause the business to suffer.

The Indian economy has shown sustained growth over the last few years with gross domestic products (GDP) showing sustained growth. However, any slowdown in the Indian economy could lead to a slowdown in the industries the Company operate in and adversely affect the financial performance.

Notes to Risk Factors :

This is an Issue of 5,00,00,000 fully paid Equity Shares with a face value of Re.1/- each at a premium of Rs. 29 per Equity Share for an amount aggregating to Rs.15,000 lakhs on Rights basis to the existing shareholders of the Company in the ratio of 1 fully paid Equity Share for every 15 Equity Shares held by the existing shareholders on the Record Date, i.e. On [], 2007 1. The net worth of the Company as per its restated financials as at March 31, 2007 is Rs 62635

lakhs and for June 2007 is Rs 69916 lakhs

2. The average cost of acquisition of Equity Shares by the Promoters is as follows:

Promoter Average cost of acquisition (per Equity Share)

Chloride Eastern Limited, U.K.

Acquired and holding 366,520,000 shares over a period of 40 years at an average cost of 10,200,601 equivalent to Rs.82.34 crores (1=Rs.80.72 as on 24.09.2007) Therefore the average cost per share as at the exchange rate on 24.09.2007 is Rs.2.25

Source: RBI website- www.rbi.org.in 3. Net Asset Value of the Equity Shares of the Company, as per its restated financials as at March

31, 2007 is Rs. 8.35 per Equity Share and for June 2007 is Rs 9.32 per Equity Share. 4. All information shall be made available by the Manager to the Issue and the Company to the

existing shareholders of the Company and no selective or additional information would be available only to a section of the investors in any manner whatsoever.

5. Investors are advised to refer the paragraph on Basis of Issue Price on page [] of the Draft

Letter of Offer before making an investment in the Issue. 6. Please refer to the section on "Basis of Allotment" on page [] of this Draft Letter of Offer for

details of the basis of allotment. 7. Other than as stated in the section titled The Management, The Promoter and Financial

Statements beginning on page nos. [], [] and [] of the Draft Letter of Offer, the Promoters/ Directors/ Key Management Personnel have no interest other than reimbursement of expenses incurred or normal remuneration or benefits.

8. There have been no transactions in the shares of the Company on the Stock Exchanges by the

Promoter /Directors of the Company during the past 6 months. 9. Other than as stated in the Draft Letter of Offer, the other ventures of promoters have no business

Interests /other interests in the issuer company. 10. For details regarding loans and advances made to any person(s)/ companies in which directors are

interested refer to section titled The Managementand The Promoters beginning on page nos. [] and [] of the Draft Letter of Offer.

http://www.rbi.org.in/

xvii

11. The Manager to the Issue and the Company shall make any clarification or any information relating to the Issue available to the investors at large and no selective or additional information would be available in any manner whatsoever.

12. The lead manager and the Company shall update this Draft Letter of Offer and keep the

shareholders/public informed of any material changes till the listing and trading commencement and the company shall continue to make all material disclosures as per the terms of the listing agreement.

13. The Related Party Transactions for the previous three years is as follows:

31.03.07 31.03.06 31.03.05 I Sales and services to and other recoveries from

related parties

Subsidiaries 6348 4882 4247 Associate Companies 4 5 -- Companies / firms / in which Directors / Key

Management Personnel are interested -- 3 --

II Purchase /other services from related parties Subsidiaries 983 523 135 Associate Companies -- -- -- III Royalty / Technical Assistance Fees Paid /

Payable

Companies / firms / in which Directors / Key Management Personnel are interested

7 7 7

IV Dividend Paid/Payable Holding Company -- -- 1466 V Dividend Received Subsidiaries 103 64 29 Associate Companies 56 10 -- VI Purchase of Fixed Assets Subsidiary -- -- -- VII Sale of Fixed Assets Subsidiaries 216 -- -- VIII Loans Received Subsidiaries -- 13 325 IX Expenses incurred by the Company on behalf of

the Group / Subsidiaries

Subsidiaries -- -- -- Companies / firms / in which Directors / Key

Management Personnel are interested -- -- --

X Interest Costs Subsidiaries -- 18 7 XI Payment of Rent & Maintenance Charges Subsidiaries 16 4 4 Companies / firms / in which Directors / Key

Management Personnel are interested -- -- 22

XII Royalty/Technical Assistance Fees Received / Receivable

Subsidiaries 44 38 42 Associates -- -- -- XIII Information & Technology Costs Companies / firms / in which Directors / Key

Management Personnel are interested -- -- 5

xviii

XIV Interest Income Subsidiaries 1 -- 1 XV Remuneration Key Management Personnel 442 505 315 XVI Publicity Expenses Companies / firms / in which Directors / Key

Management Personnel are interested -- -- --

XVII Loans / Advances Granted Subsidiaries -- -- -- XVIII Rendering of Services Subsidiaries 2 2 2 XIX Outstanding Balance Payable XIX (i) Purchase of Goods Subsidiaries -- -- 103 Associate Companies -- -- -- Companies / firms / in which Directors / Key

Management Personnel are interested -- -- --

XIX(ii) Loan Accepted Subsidiaries -- 200 325 Companies / firms / in which Directors / Key

Management Personnel are interested

XIX (iii) Remuneration Key Management Personnel 184 208 88 XIX (iv)

Technical Assistance Expenses

Companies / firms / in which Directors / Key Management Personnel are interested

4 3 3

XIX (v) Information & Technology Companies / firms / in which Directors / Key

Management Personnel are interested -- -- --

XIX (vi) Rent & Maintenance Charges Subsidiaries -- -- -- Companies / firms / in which Directors / Key

Management Personnel are interested -- -- --

XX (i) Outstanding Balance Receivable Sales & Services

Subsidiaries 1060 1046 654 Associate Companies -- 5 -- XX (ii) Dividend Received Subsidiaries 14 38 9 Associates -- -- -- XX (iii) Technical Assistance Income Subsidiaries 11 10 10 XX (iv) Loan Given Subsidiaries 9 8 8 XX (v) Interest Income Subsidiaries 1 1 --

For further details refer to section titled Financial Statements beginning on page [] of the Draft Letter of Offer

1

Summary of the Industry and Business of the Issuer Company (The information presented in this section has been extracted from the Companys Annual Reports, Business Magazines and the discussions held with Company officials, which have not been independently verified by the Company, the Lead Manager or any of their respective affiliates or advisors.) Industry Overview The domestic lead storage battery industry is estimated at around Rs. 70 billion and comprises two main segments: Automotive and Industrial batteries. Storage batteries are basically used as a secondary source of power in vehicles and industrial applications. Automotive batteries account for 60% of the total market while industrial batteries contribute the rest. The unorganized sector in overall terms has a market share of 40% out of Rs 70 billion market. The Automobile industry can be subdivided into the OEM and Retail or Replacement markets. The Industrial batteries market can be broken up into the infrastructure market (railways, telecom and power), submarine batteries and fast-moving industrial batteries (UPS and inverters). Business Overview The Company manufactures the widest range of storage batteries in the world from 2.5 Ah to 15000 Ah capacity, covering the broadest spectrum of applications. The Company has eight factories located across the country 3 in Maharashtra, 2 in West Bengal, 2 in Tamil Nadu and 1 in Haryana. The Company powers most of the industrial and automotive segments in the country and its products are used in the applications in infrastructure and defence sectors. The Companys predecessor began its operations in 1916 as an import house called Chloride Electrical Storage Company before its incorporation as a Limited Company in 1947 registered under The Companies Act, 1913. The Company has since grown to become one of the largest manufacturer and exporter of batteries in the sub-continent today. The Company was rechristened as Exide Industries Limited in 1995. The Company has grown steadily, modernized its manufacturing processes and took initiatives on the service front. Constant innovations have helped the Company to produce the range of industrial batteries with various technology configurations. Companys Segment-wise break-up of Revenue The Company broadly serves two Segments viz. Automotive Batteries and Industrial Batteries (including Submarine sub-segment). The contribution of each segment as on 31.08.2007 towards the business of the Company appears as under:

SEGMENTS & BREAK-UP % Share Automotive Batteries OEM, Retail, Exports and Defence 60% Industrial Batteries

Railways, Telecom, Power, Submarine and Fast Moving Industrial Batteries

38%

Submarine 2% 40% Automotive Batteries In the domestic market, the Company sell its products under EXIDE, SF, SONIC and Standard Furukawa Brands. In the international market the products are sold mainly under DYNEX, INDEX & SONIC brands.

2

The Company supply batteries to almost all the car and two-wheeler manufacturers in the country. The Company has a distribution network comprising over 4000 dealer outlets. These outlets are supported by 4 regional offices and 28 branch offices. The Company also export batteries to the Middle East, Japan and CIS countries. Replacement Market In the replacement segment, a large part is dominated by the smaller unorganized players especially in the commercial vehicles and tractor market. The Company has 73% share of the replacement retail market. The Companys Operation Kissan has helped to move a large part of the unorganized tractor replacement market into the organized space. Industrial Batteries In domestic market, the Company sell its products mainly under EXIDE, INDEX, SF, CEIL & POWER SAFE brands and in the international markets mainly under CEIL, CHLORIDE and INDEX brands. Industrial batteries are of three types, Conventional lead acid batteries, VRLA (Valve regulated lead acid batteries) batteries and Nickel-Cadmium batteries. Both organized and unorganized players compete in the OEM and retail industrial battery markets. Industrial batteries cater mostly to the infrastructure sector such as railways, telecom, power plants, solar cells and other industrial segments such as uninterrupted power supply, inverters and traction batteries. Exides Inva tubular batteries for Inverter applications and Tele tubular for Telecom Sector introduced in the year 2000 has created volume growth. The Company also manufacture industrial batteries for niche segments such as miners cap lamp batteries and submarine batteries. Segment-wise contribution to the sales revenue (as on 31.08.2007)

Segment % of Companys Sales Revenue

Infrastructure - Railways, Power, Telecom

15%

Fast-Moving Industrial Batteries - UPS, Inverters, Traction Batteries

19%

Export - Cap Lamps etc.

4%

Total Industrial Batteries 38%

Infrastructure Segment In the infrastructure sector, batteries are sold in the railways, power and telecom segments. The Company faces competition from both organized and unorganized players. The infrastructure segment contributes 13-15% to the total revenue. Fast-Moving Industrial Batteries Segment Fast-moving industrial batteries include UPS, Inverters, Traction batteries and the like. The key growth drivers for fast moving industrial batteries are: increasing computerization and power shortages. Exports The Company exports traction batteries to Europe through the subsidiary company ESPEX Batteries Limited, while exports to Australia, Japan, Korea, etc. is done through its 100% subsidiary in Singapore.

3

Submarine Batteries The Company also manufactures high-end submarine batteries (Type 1, 2 & 3). The Company manufactures two to three submarine batteries a year to meet the countrys defence requirements. With the governments permission, in recent years the Company has exported to Algeria. Technology/Technical Support The Company has a Technical collaboration with Shin-Kobe Electric Machinery Company Limited, Japan (part of Hitachi Group) for automotive batteries and also for valve regulated lead acid storage batteries. The Company also has a technical collaboration with The Furukawa Battery Company Limited, Japan for automotive batteries. In addition, the Company has a stand alone Research and Development Centre recognised by the Department of Science and Technology, Government of India, which is carrying out research on various facets of lead acid technology including development of new products in various applications, primarily to make the product range internationally competitive. In addition, R&D is also engaged in projects embracing process technology, aimed at improving the product quality, consistency, production efficiency and material utilisation. Product Quality and After Sales Service are the key factors for retaining the existing market share and customer base. In addition, new products underpinned by innovation and continuous technology upgradation are equally important for not only market share retention but also to secure profitable growth in niche market segments. To ensure the concerted focus in the above mentioned key success factors, the Research and Development Division of the Company have been recently reorganized to have three distinct and separate departments as under :- 1. Process Control and Quality Assurance 2. Performance Improvement of existing products and Product Development with New Designs and

New Products 3. Innovation and Technology Upgradation. Above departments are having distinct roles and the functional accountability with clearly identified resource allocation. Companys Market Share in Different Segments as on 31.08.2007

Market Shares % of the total segment Telecom 30% Railways 30% Auto (OEM) Passenger Vehicles 80% Auto (OEM) Overall 72% Auto (Replacement) overall including unorganized 35% Branded (Replacement) 80% Two-wheelers 55% Power Projects 70% UPS/Inverters 40% Traction 80% Cap Lamps 90%

Source: Company estimates

4

Utility-wise Break-up of Industrial Batteries Utility Sector Customer/ Client Motive Power Electric Vehicles Mining

Locomotives, Miners Caps Lamps

Indian Railways, Macneill & Magor, Godrej, Voltas, Josts, Maini, BHEL, Escorts, Indian Navy

Standby Power, Telecom, UPS, Inverter Fujitsu, Alcatel, Siemens, Tata Lucent, BSNL, MTNL, Birla A&T, Crompton Greaves, Tata Telecom, Reliance Telecom.

Railways Train Lighting, Air Conditioning, Electric Multiple Units, Diesel Loco Starters, Signalling and Telecom.

Railways

5

THE ISSUE

Equity Shares proposed to be issued by the Company

5,00,00,000

Rights Entitlement One Equity Share for every Fifteen Equity Shares held on the Record Date

Record Date [], 2007 Issue Price per Equity Share Rs 30 per Equity Share. Equity Shares outstanding prior to the Issue 75,00,00,000 Equity Shares of Re 1/- each Equity Shares outstanding after the Rights Issue of Equity Shares

80,00,00,000 Equity Shares of Re 1/- each

Terms of the Issue For more information see Issue Related Information on page [] of this Draft Letter of Offer.

Terms of Payment Due Date Amount On Rights Issue application Entire Issue Price i.e., an amount of Rs 30/- per

equity share including the share premium is to be paid at the time of application

Objects of the Issue For further details on the Objects of the Issue, please refer to page no. [] of the Draft Letter of Offer.

6

BASIC TERMS OF THE ISSUE The Equity Shares proposed to issued on rights basis are subject to the terms and conditions contained in this Draft Letter of Offer, the enclosed Composite Application Form (CAF), the Memorandum and Articles of Association of the Company, the provisions of the Companies Act, approvals from RBI, guidelines issued by SEBI, approvals from the stock exchanges where equity shares of the Company are listed, FEMA guidelines, notifications and regulations for issue of capital and for listing of securities and/ or other statutory authorities and bodies from time to time, the terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate, the provisions of the Depositories Act, to the extent applicable, and any other legislative enactments and rules as may be applicable and introduced from time to time. Basis for the Issue The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders of the Company whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in dematerialized form and on the Register of Members of the Company in respect of the Equity Shares held in physical form at the close of business hours on the Record Date, i.e., [] fixed in consultation with the Designated Stock Exchange. The Equity Shares are being offered for subscription in the ratio of one Equity Share for every fifteen Equity Shares held by the Equity Shareholders on the Record Date. Rights Entitlement As your name appears as beneficial owner in respect of the shares held in electronic form or appears in the Register of Members as an equity shareholder of the Company as on [] (Record Date), you are entitled to the number of shares as disclosed in Block I of Part A of the enclosed CAF. Rights Entitlement Ratio 1. The eligible shareholders shall be entitled to one Equity Share for every fifteen Equity Shares held on

the Record Date. 2. Rights entitlement on shares held in the pool account of the clearing members on the Record Date shall

be considered, and such claimants are requested to :

(a) Approach the concerned depository through the clearing member of the Stock Exchange with requisite details; and

(b) Depository in turn should furnish details of the transaction to the Registrar.

Only upon receipt of the aforesaid details, rights entitlement of the claimants shall be determined. Principal Terms of the Issue Face Value Each Equity Share shall have a face value of Re 1. Issue Price Each Equity Share is being offered at a price of Rs 30/- for cash.

7

Terms of Payment Full amount of Rs 30/- per share is payable on application. Payment should be made in cash / or by cheque/ demand draft / drawn on any bank which is situated at and is a member or a sub member of the Bankers to the Issue, clearing house located at the center where the application is accepted. A separate cheque / draft must accompany each application form. Outstation cheques / drafts will not be accepted and application(s) accompanied by such cheques / drafts will be rejected. Applicants residing at places other than the cities where the collection centers have been opened should send their completed CAF by registered post / speed post to the Registrars to the Issue, C B Management Services (P) Limited along with bank drafts payable at Kolkata, net of demand draft and postal charges in favour of Exide Industries Limited Rights Issue crossed A/c Payee only so that the same is received on or before closure of the Issue (i.e. [] ) Fractional Entitlements Fractional entitlement will be ignored. Equity shareholders whose fractional entitlement is being ignored would be given preferential allotment of one additional equity share each, if they apply for an additional equity share. JointHolders Where two or more persons are registered as the holders of any equity shares, they shall be deemed to hold the same as joint-holders with benefits of survivorship subject to provisions contained in the Articles of Association of the Company.

8

Summary of Financial Statements: Summary Statement of Restated Assets and Liabilities of the Company Annexure - I

(Rs in lakhs) 30.06.07 31.03.07 31.03.06 31.03.05 31.03.04 31.03.03 A Fixed Assets Gross Block 96535 94713 88400 85899 80787 75265 Less : Depreciation 50013 48465 43495 37953 33160 27754 Net Block 46522 46248 44905 47946 47627 47511 Less : Revaluation

Reserve 4048 4248 4978 5597 6164 6724

Net Block after adjustment for Revaluation Reserves

42474 42000 39927 42349 41463 40787

Capital Work-in-progress

2894 3101 621 379 151 396

Sub Total 45368 45101 40548 42728 41614 41183 B Investments 41551 37801 27853 11162 1987 1902 C Current Assets, Loans

and Advances

Inventories 42418 39661 24172 22758 21233 18040 Sundry Debtors 23564 14794 15125 16087 12916 13532 Cash & Bank Balances 166 142 1737 3619 126 265 Loans and Advances 2524 2579 2856 3027 2110 2988 Sub Total 68672 57176 43890 45491 36385 34825 D Total Assets (A+B+C) 155591 140078 112291 99381 79986 77910 Liabilities and

Provisions

E Loan Funds Secured Loans 26589 27787 15627 11672 8444 25484 Unsecured Loans 6004 4683 13358 17347 11453 2682 Sub Total 32593 32470 28985 29019 19897 28166 F Deferred Tax

Liabilities Net 4350 4370 4260 4940 4690 4820

G Current Liabilities & Provisions

Current Liabilities 37641 32324 21847 16980 17594 12663 Provisions 11091 8279 7012 6082 6221 5481 Sub Total 48732 40603 28859 23062 23815 18144 H Total Liabilities and

Provisions 85675 77443 62104 57021 48402 51130

I Net Worth (D-H) 69916 62635 50187 42360 31584 26780 Represented by Shareholders Funds Share Capital 7500 7500 7500 7500 7122 3561 Reserves & Surplus 66464 59383 47665 40457 30626 29943 Less : Revaluation

Reserve 4048 4248 4978 5597 6164 6724

Reserves & Surplus (Net of Revaluation Reserve)

62416 55135 42687 34860 24462 23219

Net Worth 69916 62635 50187 42360 31584 26780

9

Notes : (1) The above figures should be read along with the Statement of Notes to the Restated Financial

Information and Statement of Significant Accounting Policies as appearing in Annexures IV & V. (2) Necessary adjustments have been made to the Audited Financial Statements in accordance with

the requirements of Paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

Summary Statement of Restated Profits & Losses of the Company Annexure II Rs in lakhs 30.06.07 31.03.07 31.03.06 31.03.05 31.03.04 31.03.03 Income Sales Of products

manufactured by the Company

84258 235715 176024 147319 119533 107333

Of products traded by the Company

618 2542 103 75 - -

Sub Total 84876 238257 176127 147394 119533 107333 Less : Excise Duty,

Sales Tax & VAT and Octroi

18459 51236 38178 29867 24156 21233

Net Sales 66417 187021 137949 117527 95377 86100 Other Income 55 949 670 205 246 145 Total Income 66472 187970 138619 117732 95623 86245 Expenditure Materials Consumed 40917 113688 82095 70429 49106 44191 Staff Costs 3950 12396 9784 8738 8682 8591 Other Expenses 8380 30067 23505 20477 19376 17477 Interest & Finance

Costs 533 2771 2244 1146 847 2917

Depreciation 1492 5555 5603 5522 5209 4699 Total Expenditure 55272 164477 123231 106312 83220 77875 Profit before Tax &

Exceptional Items 11200 23493 15388 11420 12403 8370

Exceptional Items -- -- -- 170 -- -- Profit before tax 11200 23493 15388 11250 12403 8370 Less : Provision for

Taxation 3919 8007 4995 3930 4180 3060

Profit after Tax 7281 15486 10393 7320 8223 5310 Notes : (1) The above figures should be read along with the Statement of Notes to the Restated Financial

Information and Statement of Significant Accounting Policies as appearing in Annexures IV & V. (2) Necessary adjustments have been made to the Audited Financial Statements in accordance with

the requirements of Paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

For the financial statement of the subsidiary companies please refer page no.[] of the Draft Letter of Offer

10

GENERAL INFORMATION

Dear Shareholder(s), Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on 28th August 2007, it has been decided to make the following offer to the Equity Shareholders of the Company with a right to renounce. ISSUE OF 5,00,00,000 FULLY PAID EQUITY SHARES WITH A FACE VALUE OF Re 1/- EACH AT A PREMIUM OF Rs 29/- PER EQUITY SHARE FOR AN AMOUNT AGGREGATING Rs. 15000 LAKHS ON RIGHTS BASIS TO THE EXISTING SHAREHOLDERS OF THE COMPANY IN THE RATIO OF ONE FULLY PAID EQUITY SHARE FOR EVERY FIFTEEN EQUITY SHARES HELD BY THE EXISTING SHAREHOLDERS ON THE RECORD DATE, I.E., ON []. THE ISSUE PRICE IS 30 TIMES THE FACE VALUE OF THE EQUITY SHARES OF THE COMPANY. IMPORTANT This offer is applicable only to those Equity Shareholders whose names appear as beneficial owners as

per the list to be furnished by the Depositories in respect of the Equity Shares held in the electronic form and in the Register of Members of the Company in respect of the shares held in physical form as on [] i.e., Record Date.

Your attention is drawn to the section titled Risk Factors beginning on Page[]of the Draft Letter of

Offer. Please ensure that you have received the CAF with the Draft Letter of Offer. In case the original CAF is not received, lost or misplaced by the shareholder, the Registrar will issue a

duplicate CAF on the request of the shareholder who should furnish the registered folio number / DP ID / Client ID number and his/her full name and address to the Registrar. Please note that those applicants who are making the application in the duplicate CAF should not utilize the original CAF for any purpose including renunciation, even if it is received / found subsequently. In case the original and the duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored.

Please read the Draft Letter of Offer and the instructions contained herein and in the CAF carefully,

before filling in the CAF. The instructions contained in the CAF are an integral part of the Draft Letter of Offer and must be carefully followed. Applications are liable to be rejected if they are not in conformity with the terms of the Draft Letter of Offer or the CAF.

All enquiries in connection with the Draft Letter of Offer or CAF should be addressed to the Registrars

to the Issue, C B Management Services (P) Ltd., quoting the Registered Folio Number /Depository Participant (DP) Number and Client ID Number and the CAF Numbers as mentioned in the CAF.

The offer will be kept open for a minimum period of thirty days. The Issue Program is as follows :

Issue Opens on : [] Last date for request for split application forms : [] Issue closes on : []

11

The funds received against the Issue will be kept in a separate bank account(s) and the Company will not have any access to such funds unless the Company satisfies the Designated Stock Exchange with suitable documentary evidence that the minimum subscription of 90% of the Issue has been received by the Company. If the Company does not receive the minimum subscription of 90% of the Issue, the entire subscription shall be refunded to the applicants within 42 days from the date of closure of the Issue. Chloride Eastern Limited, U.K., , the Promoter has undertaken to subscribe to such under-subscribed portion, after considering the allotment, to ensure that the Issue is 100% subscribed. This acquisition of additional Equity Shares, if allotted to Chloride Eastern Limited, the Promoter, shall be in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of Regulations 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of the Company.

All the legal requirements as applicable till the filing of the Draft Letter of Offer with the Designated

Stock Exchange have been complied with.

Name and Registered Office: Exide Industries Limited Exide House 59E Chowringhee Road Kolkata 700 020 Tel : (033) 2283 2636 Fax : (033) 2283 2637 Email : barundas@cal.exide.co.in Website : www.exideindustries.com Details of Registration The Company was incorporated on 31st day of January, 1947 bearing Registration No. 14919 of 1947-48. Company Identification Number (CIN) is U31402WB1970PLC014919. The Company is registered with the Office of the Registrar of Companies, West Bengal, Nizam Place, 2nd M.S.O. Building, 2nd Floor, 234/4, A.J.C. Bose Road, Kolkata 700 020. Board of Directors The Board of Directors of the Company comprises: Article 98 of AoA of the Company adopted at General Meeting held on 30th January, 1979 limits a maximum of 16 directors.

Name of the Director Designation Directors Identification Number

Mr R G Kapadia Non Executive Chairman 00003272 Mr R B Raheja Vice Chairman & Non Executive Director 00037480 Mr T V Ramanathan Managing Director & Chief Executive Officer 00012249 Mr G Chatterjee Director - Industrial 00012306 Mr P K Kataky Director - Automotive 00012343 Dr S K Mittal Director R & D 00012322 Mr A K Mukherjee Director Finance & Chief Financial Officer 00131626 Mr W Wong Non Executive Director 00510908 Mr H M Kothari Non Executive and Independent Director 00009873 Mr Bhaskar Mitter Non Executive and Independent Director 00103707

mailto:barundas@cal.exide.co.inhttp://www.exideindustries.com/

12

Mr S N Mookherjee Non Executive and Independent Director 01355486 Mr Vijay Aggarwal Non Executive and Independent Director 00515412 Mr A H Parpia Non Executive and Independent Director 00003289 Mr S B Raheja Non Executive Director 00552176 Mr D S Parekh (Alternate Director to Mr S B Raheja)

Non Executive and Independent Director 00009078

Brief details of the Companys Chairman, Vice Chairman, Managing Director and Executive Directors: Mr R G Kapadia - Chairman & Independent Non-Executive Director, aged 51 years, is a practicing Chartered Accountant and Senior Partner of G M Kapadia & Company, an Audit firm of many years standing, located at Mumbai. Mr Kapadia is also a Director of Asianet Satellite Communications Limited, Bhoruka Power Corporation Limited, Goldiam International Limited, H & R Johnson India Limited, Neelkamal Limited, Prism Cement Limited and ING Vysya Life Insurance Company Limited, among other companies in India. He is also a Director of Chloride Eastern Limited, UK, Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka, Chloride Eastern Industries Pte. Ltd., Singapore and Chloride Batteries South East Asia Pte. Limited, Singapore. He was also appointed a Director of Fidelity Trustee Company Pvt. Ltd. He served as the President of the prestigious Indian Merchants Chamber for 2005-06 and is considered an expert on Taxation matters. Mr R B Raheja, Vice-Chairman and Non-Executive Director, aged 53 years. Has a wide range of experience in Industry and Business. A Director of EIH Limited, the prominent hotel chain, he is also on the Board of EIH Associated Hotels, which run the Trident Hilton Chain as well as Juhu Beach Resorts Limited. He is also on the Board of Asianet Satellite Communications Limited, H & R Johnson (I) Limited, the largest Tile company in India, Futura Polyesters Limited, Supreme Petrochem Limited, Prism Cement Limited, Sonata Software Limited, Innovasynth Technologies (I) Limited and ING Vysya Life Insurance Company Limited. Besides these, he is a Director in a number of Private Limited companies, besides having interests in a lot of other businesses. Mr T V Ramanathan, Managing Director & Chief Executive Officer, aged 62 years is a Chartered Accountant and a qualified Company Secretary. He has had decades of experience in companies within India and abroad. Before joining his present assignment in 1995, he was with the UB Group and has a wealth of experience in dealing with Financial and Accounting matters. He is a Director of Chloride International Limited and on the Board of ESPEX Batteries Limited, UK and Chloride Batteries South East Asia Pte. Ltd. Singapore. Mr G Chatterjee, Director-Industrial, aged 57 years, has a wide range of experience in Production and Marketing. An Engineer and an MBA from IIM, he has spent over two decades in the company where he is acknowledged to have spearheaded the growth of Exide in the battery range for Industrial Applications. He has also led the move for Exide to enter into joint ventures for marketing of industrial batteries in UK and Australia. He is a Director on the Board of Caldyne Automatics Limited, Haldia Integrated Development Agency Limited, ESPEX Batteries Limited, UK, Chloride Batteries South East Asia Pte. Limited, Singapore. Mr P K Kataky, Director-Automotive, aged 59 years, has a wide range of experience in Marketing. He has been associated with the battery industry for two decades and as an Engineer has brought to bear his innovative solutions for expanding the reach of the company in automotive batteries after market.

13

He is also a Director of Chloride International Limited and Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka. Dr S K Mittal, Director - Research & Development, aged 59 years, has a wide range of experience in Research & Development, with him having spent more than three decades in this profession. He has been with Exide since its early days when the Research & Development wing was at a nascent stage and is credited with having a number of international Patents, which have been registered by Exide in the recent years. Mr A K Mukherjee, Director-Finance & Chief Financial Officer, aged 46 years, has a wide range of experience in financial and accounting matters, being a Chartered & Cost Accountant. He joined Exide from his previous stint with Phillips India Limited. He is also a Director on the Board of Caldyne Automatics Limited . Company Secretary and Compliance Officer Mr Barun Das Exide House 59E Chowringhee Road Kolkata 700 020 Tel : (033) 2283 2636 Fax : (033) 2283 2637 Email : barundas@cal.exide.co.in Legal Advisors to the Issue Khaitan & Co. Advocates, Notaries, Patent & Trademark Attorneys Emerald House, 1B, Old Post Office Street Kolkata 700 001 Tel: (033) 2248 7000 Fax: (033) 2230 7857 E-mail: sucharita@khaitanco.com Bankers to the Company

State Bank of India Commercial Branch 24 Park Street, Kolkata 700 016 Tel No: [033] 2229 4335 Fax no.: [033] 2229 3555 E-mail: b.bandyopadhyay@sbi.co.in Standard Chartered Bank 19 N S Road Kolkata 700 001 Tel No. [033] 2222 0126 Fax no.: [033] 2223 1196 E-mail: saurish.ghosh@in.standardchartered .com Citibank N.A 41 Chowringhee Road Kolkata 700 071 Tel No. [033] 4400 3570 Fax no.: [033] 2288 2002 E-mail: biplab.banerjee@citigroup.com

mailto:barundas@cal.exide.co.in

14

The Hongkong and Shanghai Banking Corporation Limited 31 B B D Bag Kolkata 700 001 Tel No. [033] 2254 2070 Fax no.: [033] 2213 1394 E-mail: sudiptoghosh@hsbc.co.in BNP Paribas 4A B B D Bag East Kolkata 700 001 Tel No. [033] 2248 2166 Fax no.: [033] 2243 6290 E-mail: naveen.mehra@asia.bnpparibas.com HDFC Bank Ltd Uniworth House 3A Gurusaday Dutta Road Kolkata 700 019 Tel No. [033] 2281 6843 Fax no.: [033] 22814333 E-mail: patrayani.dinkar@hdfcbank.com Deutsche Bank AG 9 Shakespeare Sarani Kolkata 700 071 Tel No. [033] 6600 9527 Fax no.: [033] 2282 3158 E-mail: aband.dugar@db.com ICICI Bank Limited 2B Gorky Terrace Kolkata 700 071 Tel No. [033] 2283 2209 Fax no.:[033] 2283 2308 E-mail: prakash.bagla@icicibank.com ABN AMRO Bank N.V. Azimganj House 7 Camac Street Kolkata 700 017 Tel No. [033] 3982 8020 Fax no.: [033] 2282 3158 E-mail: jitesh.saboo@in.abnamro.com Lead Manager to the Issue SBI Capital Markets Limited 202 Maker Tower E, Cuffe Parade Mumbai 400 005 Tel : +91 22 2218 9166 Fax :+91 22 2218 8332 Email : exide.rights@sbicaps.com Website :www.sbicaps.com Contact person: Mr Gitesh Vargantwar

mailto:exide.rights@sbicaps.com

15

Registrar to the Issue and Registrar and Transfer Agents for the Company M/s C B Management Services (P) Ltd P-22 Bondel Road Kolkata 700 019 Tel : (033) 2280 2486 Fax: (033) 2247 0263 Email : cbmsl1@cal2.vsnl.net.in Contact person: Mr. Shankar Ghosh and Mr. P Basu Bankers to the Issue State Bank of India Commercial Branch 24 Park Street, Kolkata 700 016 Tel No : [033] 2229 4335 Fax No. : [033] 2217 - 2904 Email : b.bandyopadhyay@sbi.co.in Contact person: Mr B. Bandyopadhyay HDFC Bank Limited HDFC Bank House 3A, Gurusaday Road Kolkata 700 019 Tel : (033) 2281 6843 Fax : (033) 2281-4333 Email :patrayani.dinkar@hdfcbank.com Contact person: Mr P Dinkar Auditors of the Company M/s S R Batliboi & Co., Chartered Accountants 22 Camac Street Block C, 3rd Floor Kolkata 700 017 Tel: [033] 2281 1224 Fax:[033] 2281 7750 E-mail: ram.agrawal@in.ey.com Note : Investors are advised to contact the Registrars to the Issue / Compliance Officer in case of any pre-issue / post issue related problems such as non-receipt of Abridged Letter of Offer/ Letter of Offer / Letter of Allotment / Share Certificate(s) / Refund Orders / Demat Credit. Inter-se Allocation of Responsibilities Not Applicable Credit Rating This being a Rights Issue of Equity Shares, no credit rating is required. Trustees This being a Rights Issue of Equity Shares, appointment of Trustees is not required.

mailto:cbmsl1@cal2.vsnl.net.in

16

Monitoring Agency Not Applicable Appraising Entity Not Applicable Underwriting / Standby arrangements The present Issue is not underwritten and the Company has not made any standby arrangements for the Issue. Minimum Subscription Clause a. If the Company does not receive the minimum subscription of 90% of the issued amount the entire

subscription shall be refunded to the applicants within 42 days from the date of closure of the issue. b. If there is a delay in the refund of subscription by more than 8 days after the Company becomes liable

to repay the subscription amount (i.e., 42 days after closure of the issue), the Company shall pay interest for the delayed period at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

c. All monies received out of this Rights Issue through this Draft Letter of Offer shall be transferred to a

separate bank account. In case, the Rights Issue is undersubscribed, after considering the number of equity shares applied as per entitlement/ renouncement and additional equity shares, the undersubscribed portion can be applied for only after the close of the Issue. Chloride Eastern Limited, U.K., the Promoter has undertaken to subscribe to such under-subscribed portion, after considering the allotment, to ensure that the Issue is 100% subscribed. This acquisition of additional Equity Shares, if allotted to Chloride Eastern Limited, the Promoter, shall be in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of Regulations 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of the Company. .

17

CAPITAL STRUCTURE

The Share Capital of the Company as on the date of filing of the Draft Letter of Offer with SEBI and Stock Exchanges is as setforth: Aggregate

nominal value (Rs Lakhs)

Aggregate value at Issue

Price (Rs Lakhs)

Authorised Share Capital 1,00,00,00,000 Equity Shares of Re 1/- each

10000 Issued, Subscribed & Paid-up Share Capital 75,00,00,000 Equity Shares of Re 1/ - each

7500 Present Issue being offered to the existing Shareholders through the Letter of Offer 5,00,00,000 Equity Shares of face value of Re 1/- each being offered @ Rs 30/- each for cash

500

15000

Paid- up Capital after the Issue 80,00,00,000 Equity Shares of Re 1/- each fully paid-up

8000 Securities Premium Account Existing Securities Premium Account On Allotment of Proposed Rights Issue Total After the Proposed Rights Issue

6958

14500

21458 The Capital structure statement is prepared on the assumption that the proposed rights issue of 5 crore Equity Shares @ Rs 30/- will be subscribed fully. Notes to Capital Structure: Details of increase / reclassification in the Companys Authorised Share Capital, since inception

Sl no. Details of increase / reclassification in Authorised Share Capital

Date when increased

1. Increase of authorized capital from Rs 1,00,00,000 to Rs 2,00,00,000 consisting of 20,00,000 Equity Shares of Rs 10/- each

4th January, 1960

2. Increase of authorized capital from Rs 2,00,00,000 to Rs 3,50,00,000 consisting of 35,00,000 Equity Shares of Rs 10/- each.

23rd December, 1968

3. Increase of authorized capital from Rs 3,50,00,000 to Rs 6,00,00,000 consisting of 60,00,000 Equity Shares of Rs 10/- each.

19th December, 1973

18

4. Increase of authorized capital from Rs 6,00,00,000 to Rs 10,00,00,000 consisting of 1,00,00,000 Equity Shares of Rs 10/- each.

18th January, 1977

5. Increase of authorized capital from Rs 10,00,00,000 to Rs 15,00,00,000 consisting of 1,50,00,000 Equity Shares of Rs 10/- each.

4th July, 1983

6. Increase of authorized capital from Rs 15,00,00,000 to Rs 25,00,00,000 consisting of 2,50,00,000 Equity Shares of Rs 10/- each.

19th August, 1986

7. Increase of authorized capital from Rs 25,00,00,000 to Rs 75,00,00,000 consisting of 7,50,00,000 Equity Shares of Rs 10/- each.

17th July, 1995

8. The Authorised capital of the Company of Rs 75,00,00,000 was divided into 5,00,00,000 Equity Shares of Rs 10/- each and 2,50,00,000 Preference Shares of Rs 10/- each.

3rd September, 1998

9. The Authorised capital of the Company of Rs 75,00,00,000 was restructured to 7,50,00,000 Equity Shares of Rs 10/- each.

11th July, 2003

10. Increase of authorized capital from Rs 75,00,00,000 to Rs 1,00,00,00,000 consisting of 10,00,00,000 Equity Shares of Rs 10/- each.

29th July, 2005

11. The face value of the Equity Share of the Company of Rs 10/- each was sub-divided into shares of Re 1/- each. Authorized capital therefore, consists of 100,00,00,000 Equity Shares of Re.1/- each.

21st July, 2006

i. Build up of Equity Share Capital

Sl No.

Date of Allotment

No. of Shares issued

Face Value of Shares (Rs)

Issue Price (Rs)

Cumulative subscribed and paid up capital

(Rs)

Cumulative Share Premium

account

(Rs)

Nature of Allotment

Cumulative Equity Shares (Nos.)

1 Subcribers to MOA and other issue prior to 1960

500000 10/- 10/- 50,00,000 - Various allottees

500000

2. 19.05.1960 680000 10/- 15/- 118,00,000 34,00,000 Public Issue with a premium of Rs 5 per share

1180000

3. 06.12.1965 236000 10/- -- 141,60,000 10,40,000 Bonus Issue in the ratio of 1:5 from the share premium account

1416000

4. 06.02.1967 354000 10/- -- 177,00,000 Nil Bonus Issue in the ratio of 1:4 from the

1770000

19

share premium account and the reserve & surplus

5. 23.12.1968 3,54,000 10/- -- 212,40,000 Nil Bonus Issue in the