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DRAFT LETTER OF OFFER

Dated: March 26, 2010

For Equity Shareholders of the Company only

(Incorporated in India on April 07, 2000 as Rohit Ferro-Tech Private Limited under the Companies Act, 1956 with Registration No. 21-91629 with Registrar of Companies, West Bengal. The Company subsequently became a public Company under the name of Rohit Ferro-Tech Limited with effect from 24th June 2004)

ROHIT FERRO-TECH LIMITED

Registered Office: 35, Chittaranjan Avenue, 4th Floor, Kolkata - 700 012 Tel.: +91 33 22110225/0226/9805/9806, Fax: +91 33 22114134 /0522 E-mail: [email protected] Website: www.rohitferrotech.com Contact Person: Mr. Pramod Kumar Jain, CFO & Company Secretary

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF THE COMPANY ONLY PROMOTERS OF THE COMPANY MR. SURESH KUMAR PATNI, MRS. SARITA PATNI, MR. ROHIT PATNI, MR. ANKIT PATNI, SUANVI TRADING & INVESTMENT COMPANY PRIVATE LIMITED, INVESCO FINANCE PRIVATE LIMITED, PODDAR MECH TECH SERVICES PRIVATE LIMITED & VASUPUJYA ENTERPRISES PRIVATE LIMITED. DRAFT LETTER OF OFFER ISSUE OF [l] EQUITY SHARES OF RS. 10 EACH ("EQUITY SHARES") FOR CASH AT A PREMIUM OF RS. [l] PER EQUITY SHARE AGGREGATING TO AN AMOUNT NOT EXCEEDING RS. 10,000 LACS BY ROHIT FERRO-TECH LIMITED (THE "COMPANY" OR THE "ISSUER") TO THE EXISTING EQUITY SHAREHOLDERS OF THE COMPANY ON RIGHTS BASIS IN THE RATIO OF [l] EQUITY SHARES FOR EVERY [l] EQUITY SHARES HELD ON THE RECORD DATE I.E. [l] ("ISSUE"). THE ISSUE PRICE FOR THE EQUITY SHARES IS [l] TIMES OF THE FACE VALUE OF THE EQUITY SHARES. GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, Investors must rely on their own examination of the Company and the Issue including the risks involved. The securities being offered in this Issue have not been recommended or approved by the Securities and Exchange Board of India ("SEBI") nor does SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to "Risk Factors" on page 10 before making an investment in this Issue. ISSUER'S ABSOLUTE RESPONSIBILITY The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all information with regard to the Company and the Issue, which is material in the context of this Issue, that the information contained in this Draft Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The existing Equity Shares of the Company are listed on the Bombay Stock Exchange Limited ("BSE") and The National Stock Exchange of India Limited ("NSE"). The Equity Shares offered through this Draft Letter of Offer are proposed to be listed on the BSE and the NSE. The Company has received "in-principle" approvals from BSE and NSE for listing the Equity Shares to be allotted pursuant to the Issue vide letters dated [l] and [l] respectively. For the purposes of the Issue, the Designated Stock Exchange shall be BSE. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

MICROSEC CAPITAL LIMITED Azimganj House, 2nd Floor 7 Camac Street, Kolkata- 700 017 Tel: 91-33-2282 9330 (5 Lines) Fax: 91-33-2282 9335 E-mail: [email protected] Investor Grievance Email: [email protected] Website: www.microsec.in Contact Person: Mr. Manav Goenka

MAHESHWARI DATAMATICS PVT LTD 6, Mangoe Lane 2nd Floor Kolkata - 700 001 Tel: 91-33-2243-5809 Fax: 91-33-22484787 E-mail: [email protected] Website: www.mdpl.in Contact Person: Mr. Rajagopalan

ISSUE PROGRAMME ISSUE OPENS ON [l] LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS [l] ISSUE CLOSES ON [l]

TABLE OF CONTENTS TITLE Definitions and Abbreviations I. Risk Factors 1. 2. II. Forward-Looking Statements and Market Data Risk Factors 9 10 PAGE NO. 3

Introduction 1. 2. 3. 4. 5. Summary General Information Capital Structure Objects of the Issue Statement of Special Tax Benefits 17 22 26 31 42 44

III. IV.

Management Financial Statements 1. 2. 3. 4. 5. Auditors Report for year ended March 31, 2009 Limited Review Report for nine month period ended December 31, 2009 Material Developments Stock Market Data For Equity Shares of the Company Accounting Ratios & Capitalization Statement

52 102 110 111 113

V.

Legal and other Information 1. 2. Outstanding Litigation And Material Developments Government and Other Approvals 115 123 128

VI. VII.

Other Regulatory and Statutory Disclosures Issue Information 1. Terms of the Issue

136

VIII.

Other Information 1. 2. Material Contracts and Documents for Inspection Declaration 159 161

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DEFINITIONS AND ABBREVIATIONS Definitions of certain capitalized terms used in this Draft Letter of Offer are set forth below: 1. Company Related Terms

"RFTL",

"the Company", or "the Issuer" Articles / Articles of Association Auditors Board Directors/Board Equity Shares Memorandum Memorandum Association Registered Office of Rohit Ferro-Tech Limited, a public limited company incorporated under the Companies Act, 1956, with its registered office at 35, Chittaranjan Avenue, 4th Floor, Kolkata - 700 012, West Bengal The articles of association of the Company The statutory auditors of the Company, being S. Jaykishan Chartered Accountants The board of directors of the Company or any duly constituted committees thereof Equity shares of the Company of face value of Rs. 10 each The memorandum of association of the Company The registered office of the Company located at 35, Chittaranjan Avenue, 4th Floor, Kolkata - 700 012, West Bengal

/ of

2. Issue Related Terms

Term Allotment Allottee Applicant Auditors BSE CAF Companies Act the Act Depositories Act Depository Description Issue or transfer, as the context requires, of Equity Shares pursuant to the Offer to the successful applicants as the context requires The successful applicant to whom the Equity Shares are being/have been issued or transferred Any prospective investor who makes an application for Equity Shares in terms of this Letter of Offer The statutory auditors of the Company, viz. S. Jaykishan, Chartered Accountants Bombay Stock Exchange Limited Composite Application Form The Companies Act, 1956, as amended from time to time The Depositories Act, 1996, as amended A depository registered with SEBI under the SEBI (Depositories and Participants) Regulations, 1996, as amended from time to time A depository participant as defined under the Depositories Act Bombay Stock Exchange Limited The Draft Letter of Offer dated March 27, 2010 as filed with SEBI Equity shares of the Company of Rs. 10/- each unless otherwise specified in the context thereof The Applicant whose name appears first in the Application Form Twelve months ending March 31st of a particular year Generally Accepted Accounting Principles in India [] [] [] per Equity Share Shall mean the holder(s) of Equity Shares of Rs. 10/- at the Issue Price by the Company pursuant to this Draft Letter of Offer. Being the Lead Manager appointed for the Issue. In this case being Microsec Capital Limited 3

/

Depository Participant/DP Designated Stock Exchange DLOF/ Draft letter of offer Equity Shares First Applicant Fiscal or FY or Financial Year Indian GAAP Issue Opening Date Issue Closing Date Issue Price Investors Lead Manager/LM

MCL/Microsec Non Resident NSE OCB / Overseas Corporate Body

Promoters

Record Date Rights Issue/ Present Issue Registrar of Companies or RoC Registrar or Registrar to the Issue Stock Exchanges

Microsec Capital Limited, a public limited company incorporated under the provisions of the Companies Act and with its registered office at Shivam Chambers, 1st Floor, 53, Syed Amir Ali Avenue, Kolkata-700 019 A person who is not a NRI, FII or a person resident in India National Stock Exchange of India Limited A company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs, including overseas trusts in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 Shall mean jointly Mr. Suresh Kumar Patni, Mrs. Sarita Patni, Mr. Rohit Patni, Mr. Ankit Patni, Suanvi Trading & Investment Company Private Limited, Invesco Finance Private Limited, Poddar Mech Tech Services Private Limited & Vasupujya Enterprises Private Limited [] The issue of [] Equity Shares of Rs.10/- each at the Issue Price by the Company pursuant to this Draft Letter of Offer Registrar of Companies at Kolkata, West Bengal Maheshwari Datamatics Private Limited, a company incorporated under the Companies Act, having its registered office at 6, Mangoe Lane, 2nd Floor, Kolkata ­ 700 001 BSE and NSE

3. Conventional/General Terms

Term AGM CAGR Capex EGM EPS GIR HUF NAV PAN PAT P/E PLR RONW SSI WTO Description Annual General Meeting Compounded Annual Growth Rate Capital Expenditure Extra Ordinary General Meeting Earnings Per Share General Index Register Hindu Undivided Family Net Asset Value Permanent Account Number Profit After Tax Price Earnings Ratio Prime Lending Rate Return on Net Worth Small Scale Industries World Trade Organization

4. Company/Industry Related Terms Term ATC B/G CENVAT IDC Kgs. KV KVA KW L/C MT Mtr Description Applied Technology Council Bank Guarantee Central Value Added Tax Interest during construction Kilogram Kilo-Volt Kilo Volt Ampere Kilo-watt Letter of Credit Metric Tonnes Meter

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5. Abbreviations

Term AS BOB CDSL CIN DIN DEPB EEFC FCNR Account FEMA FIIs Description Accounting Standards as issued by the Institute of Chartered Accountants of India Bank of Baroda Central Depository Services (India) Limited Corporate Identity Number Director Identification Number Duty Entitlement Pass Book Export Earner's Foreign Currency account Foreign Currency Non Resident Account Foreign Exchange Management Act, 1999, as amended from time to time, and the Regulations framed there under Foreign Institutional Investor (as defined under SEBI (Foreign Institutional Investors) Regulations, 1995), registered with SEBI under applicable laws in India Foreign Investment Promotion Board The Government of India High Net-worth Individual SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 The Income Tax Act, 1961, as amended Not Applicable Non Banking Financial Company Non-Resident External Account. Non-Resident Indian, as defined under Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000, as amended Non Resident Ordinary Account National Securities Depository Limited Punjab National Bank Per Annum Research and Development The Reserve Bank of India Indian National Rupee Securities Contracts (Regulation) Act, 1956 as amended Securities Contracts (Regulation) Rules, 1957, as amended State Bank of India Securities and Exchange Board of India. Securities and Exchange Board of India Act, 1992 as amended

FIPB GoI HNI ICDR I.T. Act N.A. NBFC NRE Account NRI

NRO Account NSDL PNB P.A. R&D RBI Rs. SCRA SCRR SBI SEBI SEBI Act SEBI Regulations

The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by SEBI, as amended from time to time SEBI Takeover Securities and Exchange Board of India (Substantial Acquisition of Shares Regulations and Takeover) Regulations, 1997, as amended TFL Technical Feasibility Report WBIDC West Bengal Industrial Development Corporation

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OVERSEAS SHAREHOLDERS The distribution of this Draft Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession this Draft Letter of Offer may come are required to inform themselves about and observe such restrictions. The Company is making this Issue of Equity Shares on a rights basis to the Equity Shareholders of the Company and will dispatch the Abridged Letter of Offer and Composite Application Form ("CAF") to the shareholders who have an Indian address. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that this Draft Letter of Offer has been filed with SEBI for observations. Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and this Draft Letter of Offer may not be distributed, in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of this Draft Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer and, in those circumstances, this Draft Letter of Offer must be treated as sent for information only and should not be copied or redistributed. Accordingly, persons receiving a copy of this Draft Letter of Offer should not, in connection with the issue of the Equity Shares or the Rights Entitlements, distribute or send this Draft Letter of Offer in or into the United States or any other jurisdiction where to do so would or might contravene local securities laws or regulations. If this Draft Letter of Offer is received by any person in any such territory, or by their agent or nominee, they must not seek to subscribe to the Equity Shares or the Rights Entitlements referred to in this Draft Letter of Offer. Neither the delivery of this Draft Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in the Company's affairs from the date hereof or that the information contained herein is correct as at any time subsequent to this date. European Economic Area Restrictions In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member State"), an offer of the Equity Shares to the public may not be made in that Relevant Member State prior to the publication of a prospectus in relation to the Equity Shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that an offer of Equity Shares to the public in that Relevant Member State at any time may be made: a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than Euro 4,30,00,000 and (3) an annual net turnover of more than Euro 5,00,00,000, as shown in its last annual or consolidated accounts; or c) in any other circumstances which do not require the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

Provided that no such offer of Equity Shares shall result in the requirement for the publication by the Company pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an "offer to the public" in relation to any Equity Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Equity Shares to be offered so as to enable an investor to decide to purchase or subscribe the Equity Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. 6

This European Economic Area selling restriction is in addition to any other selling restriction set out below. United Kingdom Restrictions This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom, or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The Equity Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Equity Shares will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. NO OFFER IN THE UNITED STATES The rights and the securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or any U.S. state securities laws and may not be offered, sold, resold or otherwise transferred within the United States of America or the territories or possessions thereof (the ``United States'' or ``U.S.'') or to, or for the account or benefit of, "U.S. persons" (as defined in Regulation S under the Securities Act (``Regulation S'')), except in a transaction exempt from the registration requirements of the Securities Act. The rights referred to in this Draft Letter of Offer are being offered in India, but not in the United States. The offering to which this Draft Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any Equity Shares or rights for sale in the United States or as a solicitation therein of an offer to buy any of the said Equity Shares or rights. Accordingly, the Letter of Offer and the enclosed CAF should not be forwarded to or transmitted in or into the United States at any time. Neither the Company nor any person acting on behalf of the Company will accept subscriptions or renunciation from any person, or the agent of any person, who appears to be, or who the Company or any person acting on behalf of the Company has reason to believe is, either a "U.S. person" (as defined in Regulation S) or otherwise in the United States when the buy order is made. Envelopes containing a CAF should not be postmarked in the United States or otherwise dispatched from the United States or any other jurisdiction where it would be illegal to make an offer under the Draft Letter of Offer, and all persons subscribing for the Equity Shares and wishing to hold such Equity Shares in registered form must provide an address for registration of the Equity Shares in India. The Company is making this issue of Equity Shares on a rights basis to Equity Shareholders of the Company and the Letter of Offer and CAF will be dispatched to Equity Shareholders who have an Indian address. Any person who acquires rights and the Equity Shares will be deemed to have declared, represented, warranted and agreed, (i) that it is not and that at the time of subscribing for the Equity Shares or the Rights Entitlements, it will not be, in the United States when the buy order is made, (ii) it is not a "U.S. person" (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United States, and (iii) is authorised to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations. The Company reserves the right to treat as invalid any CAF which: (i) does not include the certification set out in the CAF to the effect that the subscriber is not a "U.S. person" (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United States and is authorized to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations; (ii) appears to the Company or its agents to have been executed in or dispatched from the United States; (iii) where a registered Indian address is not provided; or (iv) where the Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements; and the Company shall not be bound to allot or issue any Equity Shares or Rights Entitlement in respect of any such CAF.

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PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA Unless stated otherwise, the financial information and data in this Draft Letter of Offer is derived from the Company's financial statements which are included in this Draft Letter of Offer and set out in the section "Financial Information" on page 52. The Company's fiscal year commences on April 1 and ends on March 31 of the following calendar year. In this Draft Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to roundingoff, and unless otherwise specified, all financial numbers in parenthesis represent negative figures. The Company is an Indian listed company and prepares its financial statements in accordance with Indian GAAP and in accordance with the Companies Act. Neither the information set forth in the financial statements nor the format in which it is presented should be viewed as comparable to information prepared in accordance with US GAAP, IFRS or any accounting principles other than principles specified in the Indian Accounting Standards. Indian GAAP differs significantly in certain respects from IFRS and US GAAP. The Company urges you to consult your own advisors regarding such differences and their impact on the financial data. The degree to which the financial statements included in this Draft Letter of Offer will provide meaningful financial information is entirely dependent on the reader's familiarity with these accounting practices. Any reliance by persons not familiar with these accounting practices on the financial disclosures presented in this Draft Letter of Offer should accordingly be limited. All references to "India" contained in this Draft Letter of Offer are to the Republic of India, all references to the "US" or the "U.S." or the "USA", or the "United States" are to the United States of America, its territories and possessions, and all references to "UK" or the "U.K." are to the United Kingdom of Great Britain and Northern Ireland, together with its territories and possessions. Industry and Market Data Unless stated otherwise, industry, demographic and market data used throughout this Draft Letter of Offer has been obtained from industry publications, data on websites maintained by private and public entities, data appearing in reports by market research firms and other publicly available information and also as per Company estimates. These resources generally state that the information contained therein has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Neither we nor the Lead Managers have independently verified this data and neither we nor the Lead Managers make any representation regarding the accuracy of such data. Accordingly, Investors should not place undue reliance on this information.

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FORWARD LOOKING STATEMENTS All statements contained in this Draft Letter of Offer that are not statements of historical fact constitute "forward looking statements." All statements regarding the company expected financial condition and results of operations, business, plans and prospects are forward-looking statements. These forward-looking statements include statements as to the business strategy, the revenue and profitability, planned projects and other matters discussed in this Draft Letter of Offer regarding matters that are not historical facts. These forward-looking statements and any other projections contained in this Draft Letter of Offer (whether made by us or any third party) are predictions and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. Investors can generally identify forward-looking statements by terminology such as "aim", "anticipate", "believe", "expect", "estimate", "intend", "objective", "plan", "project", "shall", "will", "will continue", "will pursue" or other words or phrases of similar import. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with the Company expectations with respect to, but not limited to, regulatory changes pertaining to the industries in India in which we have our businesses and our ability to respond to them, ability to successfully implement strategy, the growth and expansion, technological changes, the exposure to market risks, general economic and political conditions in India, which have an impact on the company business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in competition in industry. Important factors that could cause actual results to differ materially from expectations include, but are not limited to, the following: · · · · · · · · · difficulty in managing future growth and profitability as a result of the diversified business; increase in the cost of raw materials and interruption in their availability; changes in Government policies that may affect the demand for and the supply and price of the products; non availability of fuel at competitive prices; political and social instability in countries where the company operates; fluctuation of Rupee against foreign currencies; increase in the interest rates with respect to borrowings; financial instability in Indian financial markets; and adverse political, social and economic developments in India.

For a further discussion of factors that could cause the Company's actual results to differ, see sections "Risk Factors" on pages 10. 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 Managers nor any of their respective affiliates or advisors have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI/Stock Exchanges requirements, the Company and Lead Managers 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.

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RISK FACTORS An investment in Equity Shares involves a high degree of risk. Investors should carefully consider all the information in this Draft Letter of Offer, including the risks and uncertainties described below, before making an investment in Equity Shares. If any of the following risks actually occur, the business, results of operations and financial condition could suffer, the price of our Equity Shares could decline, and you may lose all or part of your investment. The risks and uncertainties described below are not the only risks that we currently face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also have an adverse effect on our business, results of operations and financial condition. Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this offer unless they can afford to take the risk of losing all or a part of their investment. Investors are advised to read the risk factors described below carefully before making an investment decision in this offering. In making an investment decision, prospective investors must rely on their own examination of the Company and the terms of the Issue, including the merits and risks involved. This Draft Letter of Offer also contains forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including considerations described below and in the section entitled "Forward Looking Statements" on page no.9. Unless otherwise stated, the financial information used in this section is derived from the Company consolidated audited financial statements under Indian GAAP, as restated. A. INTERNAL RISK FACTORS 1. Outstanding Litigations/disputes/cases against the Company The Company is involved in certain legal proceedings, incidental to its business and operations, which if determined against the Company, could have an adverse impact on the results of its operations and financial condition. The summary of the litigations is as follows: Cases filed against the Issuer Company: Sr. No 1. 2. 3. Particulars No. of cases/disputes/ claims 9 3 2 14 Approx. amount involved where quantifiable (Rs. in lacs) 189.84 65.60 85.17 340.61

Central Excise Central Sales Tax & VAT Income Tax Total Cases filed by the Issuer Company: Nil

For further details, please refer to section Outstanding Litigations and Material Developments on page no. 115 of this Draft Letter of Offer.

2. Outstanding contingent liabilities could adversely affect the financial condition and profitability. As of March 31, 2009, the company had contingent liabilities in the following amounts, as disclosed in the audited consolidated financial statements: Rs. in Lacs Sl. No. Particulars 2008-2009 1. Bank Guarantees 8.46 2. Bills Discounted with Banks 6,807.92 3. Letters of Credit opened in favour of suppliers 337.95 4. VAT tax Demand (Under Appeal) 8.62 5. Entry Tax (Under Appeal) 5.94 6. Central Sales Tax (Under Appeal) 8.88 Total 7,177.77 10

If any of these contingent liabilities materialize, the Company's profitability may be adversely affected. 3. The Company's growth depends upon the growth prospects of other industries, especially power and infrastructure related sectors. A slowdown in any of these industries would seriously impact the growth prospects and will have a material adverse impact on our results While development of core industries like power and infrastructure is a stated policy objective of the Government of India, it cannot be said with certainty that these industries would grow at a faster pace, or grow at all. Any slowdown or lack of growth in the power or infrastructure sectors, whether in the private or public sector, would have a material adverse impact on the demand and pricing of company's products, which would have a material adverse impact on the Company's results of operations and financial condition. 4. Delay in Right Issue will impact the implementation of the Project A part of the cost of the project is to be funded from the Rights Issue. Any delay in the issue process or any under-subscription of Equity Shares offered as part of this issue will impact the implementation of the project. The management will make alternate funding arrangements through a suitable mix of secured/unsecured loans and internal accruals to fund the interim requirement in case there is any delay in the Rights Issue. 5. The Company is subject to the risk of price volatility and availability as regards both its finished products and the raw materials required for their production The financial condition and results of operations are significantly influenced by the market prices of the raw materials which are subject to domestic and international supply and demand, import/export tariffs and duties, domestic duties and various other factors which are beyond the company control. The market and prices for the Company's finished products may be influenced by the aggregate demand for such products which may fluctuate with changes in economic conditions, the price and availability of equivalent products from competitors and the price and availability of substitute products among other factors. However, no assurance can be given that future unfavorable movements in the price of the various raw materials or a reduction in demand for the finished products will not have a material adverse effect upon our financial condition and results of operations. 6. The Company operates under several statutory and regulatory permits, licenses and approvals. The failure to obtain and/or renew any approvals or licenses in future may have an adverse impact on the business operations. The Company requires certain statutory and regulatory permits and approvals for its business. There can be no assurance that the relevant authorities will issue such permits or renewals in the time frame anticipated by the Company or at all. Failure by the Company to renew, maintain or obtain the required permits or approvals or renewals may result in the interruption of operations and may have a material adverse effect on the Company's business, financial condition and results of operations. Additionally, the Company is required to adhere to certain terms and conditions provided for under the statutory and regulatory permits and approvals and any failure in adhering to such terms may result in the revocation of such approvals. 7. The Company has not yet placed orders for plant and machinery including misc fixed assets aggregating Rs. 6,464.12 Lacs. Any delay in placing the orders/ or supply of plant and machinery may result in time and cost overruns, and may affect profitability of the Company. The Company has estimated the requirement of plant and machinery including misc fixed assets based on quotations or internal estimates based on prevailing market prices of equipments. However, as on date of filing this Draft Letter of Offer with SEBI, the Company 11

has not placed confirmed orders amounting to Rs. 6,464.12 Lacs. The Company cannot assure that they would be able to acquire the plant and machinery required for the same, or acquire them at the prices as quoted/estimated in this Draft Letter of Offer. Any delay in acquisition of the plant and/or machinery required to be acquired herein could lead to time and cost overruns, and may have a material adverse effect on the business, results of operations and financial condition. 8. The Company has certain restrictive covenants arising out of the loan agreements entered into with the banks/financial institutions, which may have an adverse impact on future borrowing capacity. There are restrictive covenants in the agreements with the Banks/ Institutions from whom the Company has borrowed, which among other things require the Company to obtain prior permission from them for change in Management, declaring dividend and undertaking of new project etc. which may limit Company's discretion in these matters. 9. Common Pursuits amongst Group Companies Impex Ferro Tech Limited, promoted by Mr. Suresh Kumar Patni, is engaged in production of ferro alloys. Moreover, there is no non-compete agreement between the group companies. Such common pursuits may affect business strategies and thus the financial performance of Issuer Company. 10. The Company's Promoter Group has significant control over the management and affairs, as a result of which, the remaining shareholders may not be able to affect the outcome of shareholder voting. As on December 31, 2009, the Promoter Group owned an aggregate of 52.90% of Equity Shares of the Company. As a result, the Promoter Group, acting together, will influence the matters requiring shareholder approval, including the election of all or majority of Directors and approval of significant corporate transactions, such as mergers, consolidations or the sale of substantially all of assets. The Promoter Group will therefore has the ability to exercise controlling influence over the company's business and management affairs and may cause to take actions that may conflict with the interests of some of shareholders. 11. The Company's success depends largely upon the services of Promoters and senior management. The inability to attract and retain senior management may adversely affect the operations of the Company. The Company depends heavily on its promoters and senior management for setting strategic direction and managing business, which are crucial to Company's success. The continued success also depends upon the ability to attract and retain a large group of experienced professionals and staff. The loss of the services of senior management or company inability to recruit, train or retain a sufficient number of experienced personnel could have a material adverse effect on operations and profitability. The ability to retain experienced staff members as well as senior management will in part depend on the Company having in place appropriate staff remuneration and incentive schemes. 12. Labour problems could adversely affect the results of operations and financial condition of the Company The Company's operations are labour intensive. The employees at the plants, other than management staff, are members of labour unions. Whilst the Company had no labour problems in the past, the Company cannot assure prospective investors that it would not have such problems and disputes in the future. Occurrence of such disruptions for a prolonged period of time may adversely impact the results of operations and financial condition.

12

13. The Company's business may be adversely affected by environmental and safety regulations to which it is subject. The Company is required to comply with central, state and local laws and regulations governing the protection of the environment and occupational health and safety. The Company is also required to obtain and comply with environmental permits for some of its operations. There can be no assurance that the Company will at all times be in complete compliance with such laws, regulations and permits. If the Company violates or fails comply with any of the requirements under any such laws, regulations and permits, it could be fined or face other regulatory actions. In addition, such requirements may become more stringent over time and compliance with such requirements may become cumbersome. 14. The Company ability to pay dividends will depend upon future earnings, financial condition, cash flows, working capital requirements, capital expenditure, lender's approvals and other factors. The amount of the future dividend payments, if any, will depend upon the future earnings, financial condition, cash flows, working capital requirements, capital expenditures, lender's approvals and other factors. There can be no assurance that the Company shall have distributable funds or that it will declare dividends. 15. The company has entered into related party transactions with the promoters and/or Directors and the Group Companies The company has entered into transactions with related/ group companies, promoters, directors including loans taken/advanced and purchase and sale of goods. Whilst the company believes that all such transactions have been conducted on an "arm's length basis", there can be no assurance that the company could not have achieved more favorable terms had such transactions not been entered into with related parties. Furthermore, it is likely that the company may enter into related party transactions in the future. For details regarding the related party transactions, refer to "Financial Statements ­ Related Party Transactions" on page 100 of this Draft Letter of Offer. Disclosure as per Accounting Standard 18 has been complied. 16. The operations of the Company rely on timely supply of raw materials and inputs to the plant and transportation of finished products to customers, which are subject to risks and uncertainties. The Company depends upon various forms of transport, such as seaborne freight, rail and road to receive raw materials and the same is as important to deliver the finished products to the customers. These transportation facilities may not adequately support the operations due to traffic congestion and unavailability of respective fleet. Further, disruptions of transportation services because of weather related problems, strikes, lock-outs, inadequacies in the road infrastructure and port facilities, or other events could impair the ability of the Company to source raw materials and components and its ability to supply products to customers. There can be no assurance that such disruptions will not occur in future. In addition, significant increases in transportation cost may adversely impact the financial results of the Company. 17. The Company is exposed to interest rate risk as well as liquidity risk. The Company is exposed to interest rate fluctuations in respect of the borrowings from Banks and Institutions. In the event of increase in interest rates, the financial performance of the Company may be adversely affected. 18. Uninsured losses or losses in excess of the insurance coverage could result in a loss of Investment Although the Company attempts to limit and mitigate the liability for damages arising from fire and other perils, burglary, etc. through contractual provisions and/or comprehensive insurance coverage for the manufacturing facilities but still there are possible losses, which have not insured or the insurance cover in relation to which may not be adequate. On the occurrence of such loss the company may face loss of investments in the absence of insurance and even in 13

cases in which any such loss may be insured or on the event when the company may not be able to recover the entire claim from insurance companies. Further, there are many events that could significantly impact the operations, or expose the company to third-party liabilities, for which it may not be adequately insured. 19. The Company has unsecured loans that are payable on demand, which may adversely affect its operations and financial performance. The Company has unsecured loans which are repayable on demand and it cannot assure you that the Company would be able to replace these facilities on similar terms, or terms favorable to the Company, which may adversely impact on the company's operations and financial performance. B. EXTERNAL RISK FACTORS 1. Global economic, political and social conditions may harm the Company's ability to do business, increase costs and negatively affect stock price. Global economic and political factors that are beyond the control of the Company, influence forecasts and directly affect performance. These factors include interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation, deflation, foreign exchange fluctuations, consumer credit availability, consumer debt levels, unemployment trends, terrorist threats and activities, worldwide military and domestic disturbances and conflicts, and other matters that influence consumer confidence, spending and tourism. Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude. 2. A slowdown in economic growth in India could materially and adversely affect results of operations and financial condition of the Company. The Company's performance and the quality and growth of its business are dependent on the health of the overall Indian economy. There have been periods of slowdown in the economic growth of India during the 1990s as well in FY 2008-09. Although the services and industrial sectors of the economy are growing, the Indian economy remains largely driven by the performance of the agriculture sector, which depends on rainfall during the monsoon season and is therefore difficult to predict with certainty. The monsoons during the current financial year in certain areas of the country were deficient, which may adversely impact agricultural production. In the past, economic slowdowns have harmed industries. Any future slowdown in the Indian economy could thus harm the results of operations and financial condition of the Company. 3. Any downgrading of India's debt rating by international rating agencies could have a negative impact on the Company's business. Any adverse revisions to India's credit ratings for domestic and international debt by international rating agencies may adversely impact the Company's ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing is available. This could have a material adverse effect on the company's business and future financial performance, the company's ability to obtain financing for capital expenditures and the trading price of the Equity Shares. 4. Conditions in the securities markets may affect the price or liquidity of the Equity Shares. The Stock Exchanges have in the past experienced substantial fluctuations in the prices of listed securities. The Stock Exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Stock Exchanges have from time to time restricted securities from trading, limited price movements and restricted margin requirements. Further, disputes have occurred on occasion between listed companies and the Stock Exchanges, and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. If similar problems occur 14

in the future, the market price and liquidity of the Equity Shares of the Company could be adversely affected. 5. After the Issue, the price of the Company's Equity Shares may become highly volatile, or an active trading market for the Company Equity Shares may not develop. The price of the Company Equity Shares on the Indian Stock Exchanges may fluctuate after the Issue as a result of several factors, including: volatility in the Indian and global securities market; the company operations and performance; performance of competitors; the perception in the market with respect to investments in the sectors in which the Company operate in India; adverse media reports about the company or the sectors in which we operate; changes in the estimates of performance or recommendations by financial analysts; significant developments in India's economic liberalization and deregulation policies; and significant developments in India's fiscal regulations. There can be no assurance that an active trading market for the Equity Shares will be sustained after this Issue, or that the price at which the Equity Shares are being currently traded, or will trade on listing of the Equity Shares pursuant to the Issue, will correspond to the price at which the Equity Shares will trade in the market subsequent to the Issue. 6. Additional issuances of equity may dilute your share holding in the Company. Any future issuance of Equity Shares or securities linked to the company's Equity Shares may dilute shareholding in the Company. Further, sale of a large number of Company's Equity Shares by major shareholders could adversely affect the market price of company's Equity Shares. Similarly, the perception that any such primary or secondary sale may occur could adversely affect the market price of company's Equity Shares. 7. The Company's plants can be affected by natural disasters and technical failures. Any such failures could adversely affect the operations of the Company. The operations of the Company plants can be affected by natural disasters and technical failures including malfunctioning or breakdown of equipment, which could adversely affect the business, financial condition and the operations of the Company. PROMINENT NOTES: 1. Issue of [] Equity Shares with a face value of Rs. 10/- each at a premium of Rs. []/each for an amount not exceeding Rs. 10,000 Lacs on a rights basis to the existing equity shareholders of the Company in the ratio of [] Equity Share for every [] Equity Shares held by the equity shareholders on the Record Date i.e. [], 2010. For more details, please refer to the chapter titled "Terms of the Issue" beginning on page number 136 of the Draft Letter of Offer The net worth of the Company was Rs. 22,343.75 Lacs as of March 31, 2009, as per the audited consolidated financial statements. The book value per Equity Share, on a consolidated basis, was Rs. 56.59 and on a stand alone basis was Rs. 56.27, as at March 31, 2009, as per the latest audited financial statement, included in this Draft Letter of Offer. For further information, see the section "Financial Statements" beginning on page 52. There has been no change in the name of the Company in the last three years The Company has not issued any shares for consideration other than cash. There are no financing arrangements whereby the Promoter Group, the directors and their relatives who have financed the purchase made by any other person of company's securities during a period of six months immediately preceding the date of filing of this Draft Letter of Offer with SEBI. 15

2. 3.

4. 5. 6.

7.

For details of transactions by the Company with the Group Companies or Subsidiary during the last one year preceding the date of filing of this Draft Letter of offer, the nature of transactions and the cumulative value of transactions, please see the section "Financial Statements - Related Party Transactions" on page 100. Please refer to the section "Basis of Allotment" on page 144 for details on basis of allotment. Shareholders may contact the Compliance Officer or the Lead Manager for any complaints pertaining to this Issue including any clarification or related information. The Lead Manager is obliged to provide the same to you. The contact details of the Compliance Officer are detailed below: Mr. Pramod Kumar Jain 35, Chittaranjan Avenue, 4th Floor, Kolkata ­ 700012 Tel.: +91 33 22119805/06, Fax: +91 33 22110522, 22114134; E-mail: [email protected] Website: www.rohitferrotech.com

8. 9.

10. Any clarification or information relating to the Issue shall be made available by the Lead Manager and the Company to the investors at large and no selective or additional information would be available for a section of investors in any manner whatsoever. 11. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the relevant SCSB, along with complete details of the application in the Issue such as name, address of the applicant, Rights Entitlement, number of Equity Shares applied for, ASBA Account number and the Designated Branch of the SCSB where the application was submitted by the ASBA Investor. 12. The Company satisfies the following conditions as prescribed under Regulation 57(2) (b) of Part E of Schedule VIII of the ICDR Regulations. a. The Company has been filing periodic reports, statements and information in compliance with the listing agreement for the last three years immediately preceding the date of filing this Draft letter of offer with the designated stock exchange. The reports, statements and information referred to sub-clause (a) above are available on the website of Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India (NSE), the recognized stock exchanges with nationwide trading terminals. The Company has investor grievance ­ handling mechanism which includes meeting of the Shareholder's or Investor's Grievance Committee at frequent intervals, appropriate delegation of power by the board of directors of the Company as regards share transfer and have clearly laid down systems and procedures for timely and satisfactory redressal of investor grievances.

b.

c.

13. There are no relationships with statutory auditors to the Company other than auditing and certification of financial statements. 14. 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.

16

SUMMARY OF THE ISSUE

The following is a summary of the Issue. This summary should be read in conjunction with, and is qualified in its entirety by, more detailed information in the section "Terms of the Present Issue" on page 136.

This issue of Equity Shares is being made by the Company as set forth below: Equity Shares offered by the Company Rights Entitlement Record Date Issue Price Equity Shares Outstanding prior to the Issue Equity Shares Outstanding after the Issue Use of Issue proceeds [·] Equity Shares of Rs. 10 each [] Equity Shares for every [] Equity Shares held on the Record Date [] Rs. [] per Equity Share

39,482,945 Equity Shares

[] Equity Shares See section titled "Objects of the Issue" on page 31. See section titled "Terms of the Issue" on page 136.

Terms of the Issue

Security Codes : ISIN: BSE : NSE: INE248H01012 532731 ROHITFERRO

17

SUMMARY FINANCIAL INFORMATION The summary financial information presented below should be read in conjunction with the section titled "Financial Information" on page no. 52 AUDITED STANDALONE BALANCE SHEET AS AT MARCH 31, 2009 Schedul e I. SOURCES OF FUNDS 1. Shareholders' Funds a) Share Capital b) Deposit against share warrants [Refer Note no. B- 6 in Schedule 22] c) Reserves and Surplus 2. Loan Funds a) Secured Loans b) Unsecured Loans 3. Deferred Tax Liability [Refer Note no. B-18 in Schedule 22] Total APPLICATION OF FUNDS 1. Fixed Assets a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work-in-progress [Refer Note no. B-12 in Schedule 22] 2. Investments 3. Current Assets, Loans & Advances a) Inventories b) Sundry Debtors c) Cash & Bank Balances d) Loans & Advances Less : Current Liabilities & Provisions a) Current Liabilities b) Provisions Net Current Assets 4. Miscellaneous Expenditure (to the extent not written off or adjusted) Total Significant Accounting Policies & Notes on Accounts 5 24,981.97 2,227.20 22,754.78 1,114.27 1,877.83 30,187.94 7,331.88 3,163.13 10,547.88 51,230.83 21,268.69 413.99 21,682.68 29,548.15 79.35 55,374.36 22 20,855.89 1,236.38 19,619.51 1,713.40 8.49 12,679.10 6,177.75 3,954.25 9,919.80 32,730.89 10,523.15 1,713.80 12,236.95 20,493.94 119.02 41,954.36 As at 31st March 2009 (Rs. in Lacs) As at 31st March 2008

1

3,948.29 128.14 18,348.61 24,922.54 6,708.92 1,317.85 55,374.36

3,446.29 344.00 16,201.70 17,257.03 3,861.16 844.18 41,954.36

2 3 4

II .

6 7 8 9 10

11 12

13

Note: Schedule 1 to 13 & 22 referred above form an integral part of the Balance Sheet.

18

AUDITED STANDALONE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2009 Year Ended 31.03.2009 90,712.62 (3,237.46) 87,475.16 479.16 2,342.11 90,296.43 (Rs. in Lacs) Year Ended 31.03.2008 64,579.92 (2,316.12) 62,263.80 279.59 2,629.34 65,172.73

Schedule I. INCOME Sales Less: Excise Duty Other Income Increase / (Decrease) in Stock II . EXPENDITURE Raw Materials Consumed Purchase of Traded Goods Manufacturing Expenses Payments to & Provisions for Employees Administrative, Selling & Other Expenses Interest & Finance Charges Depreciation PROFIT BEFORE TAX Provision for Taxation: - Current - Deferred - Fringe Benefit Tax - Deferred MAT Credit Entitlement PROFIT AFTER TAX Less: Income Tax for Earlier Years Surplus from last year Balance available for Appropriation APPROPRIATIONS Dividend for earlier year Proposed Dividend Corporate Tax on Dividend Transfer to General Reserve Balance carried to Balance Sheet Earnings per Share [Refer Note No. B-17 in Schedule 22] (Face Value - Rs. 10/- each) Before extraordinary item - Basic - Diluted After extraordinary item - Basic - Diluted Significant Accounting Policies & Notes on 22 Accounts 17 18 19 20 21 14

15 16

49,261.25 8,281.22 15,762.38 652.39 9,358.55 4,599.75 990.75 88,906.27 1,390.16 157.50 473.67 12.73 (157.50) 903.76 (94.39) 11,822.85 12,632.23 75.30 197.41 46.35 12,313.16 12,632.23

30,250.70 5,197.92 12,925.66 396.02 3,683.11 2,470.35 708.55 55,632.29 9,540.43 1,097.00 388.57 12.00 8,042.87 (21.37) 4,856.15 12,877.65 516.94 87.85 450.00 11,822.85 12,877.65

2.41 2.13 2.16 1.91

23.34 21.57 23.28 21.52

Note: Schedule 14 to 22 referred above form an integral part of the Profit & Loss Account

19

AUDITED CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2009 Schedule I. SOURCES OF FUNDS 1. Shareholders' Funds a) Share Capital b) Deposit against share warrants (Refer note no.-6 in Schedule 22) c) Reserves and Surplus 2. Loan Funds a) Secured Loans b) Unsecured Loans 3. Deferred Tax Liability (Refer Note no. 18 in Schedule 22) Total APPLICATION OF FUNDS 1. Fixed Assets a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work-in-progress (Refer Note no. 12 in Schedule 22) 2. Investments 3. Current Assets, Loans & Advances a) Inventories b) Sundry Debtors c) Cash & Bank Balances d) Loans & Advances Less : Current Liabilities & Provisions a) Current Liabilities b) Provisions 5

(Rs. in lacs) As at March 31, 2009

1

3,948.29 128.14

2 3 4

18,514.69 27,470.04 6,708.92 1,317.85 58,087.94

II.

24,981.97 2,227.20 22,754.78 1,114.27

6 7 8 9 10

3,567.53 30,187.94 7,331.88 3,691.15 11,029.01 52,239.98 21,293.86 413.99 21,707.85 30,532.13

11 12

Net Current Assets 4. Miscellaneous Expenditure (to the extent not written off or adjusted) Total Significant Accounting Policies & Notes on Accounts 22 13

119.24 58,087.94

Note: Schedule 1, to 13 & 22 referred above form an integral part of the Consolidated Balance Sheet

20

AUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED MARCH 31, 2009 (Rs. in Lacs) 31.03.2009 Schedule I. INCOME Sales Less: Excise Duty Other Income Increase / (Decrease) in Stock II. EXPENDITURE Raw Materials Consumed Purchase of Traded Goods Manufacturing Expenses Payments to & Provisions for Employees Administrative, Selling & Other Expenses Interest & Finance Charges Depreciation PROFIT BEFORE TAX Provision for Taxation: - Current - Deferred - Fringe Benefit Tax Deferred MAT Credit Entitlement PROFIT AFTER TAX Less: Income Tax for Earlier Years Surplus from last year Balance available for Appropriation APPROPRIATIONS Dividend for earlier year Proposed Dividend Corporate Tax on Dividend Balance carried to Balance Sheet Earnings per Share (Face Value - Rs. 10/- each) (Refer Note no. 17 in Schedule 22) Before extraordinary item - Basic - Diluted After extraordinary item - Basic - Diluted Significant Accounting Policies & Notes on Accounts 14 90,712.62 (3,237.46) 87,475.16 480.20 2,342.11 90,297.47 49,261.25 8,281.22 15,762.38 652.39 9,401.04 4,697.76 990.75 89046.77 1,250.70 157.50 473.67 12.73 (157.50) 764.30 (94.39) 11,822.85 12,492.77 75.30 197.41 46.35 12,173.70 12,492.77

15 16

17 18 19 20 21

2.04 1.80 1.79 1.58 22

Note: Schedule 14 to 22 referred above form an integral part of the Consolidated Profit & Loss Account

21

GENERAL INFORMATION ROHIT FERRO TECH LIMITED Dear Shareholder(s), Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on January 7, 2010 and approvals of the members of the company sought by means of Postal Ballot (Vide notice dated January 31, 2010) and results declared on March 12, 2010, it has been decided to make the following offer to the Equity Shareholders of the Company, with a right to renounce: ISSUE OF [] EQUITY SHARES OF RS. 10 EACH FOR CASH AT A PREMIUM OF RS. [] PER EQUITY SHARE TO AN AMOUNT NOT EXCEEDING RS. 10,000 LACS TO THE EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF [] EQUITY SHARES FOR EVERY []EQUITY SHARES HELD ON THE RECORD DATE I.E. [] (THE "ISSUE"). THE ISSUE PRICE OF EACH EQUITY SHARE IS [] TIMES THE FACE VALUE OF THE EQUITY SHARE. Registered Office: 35, Chittaranjan Avenue, 4th Floor Kolkata ­ 700 012 Tel.: +91 33 22119805/9806 Fax: +91 33 22114134 E-mail: [email protected] Website: www.rohitferrotech.com Registration Number: 21-91629 of 2000 CIN No. - L27104WB2000PLC091629 The company is registered at the Registrar of Companies, West Bengal located at Nizam Palace, IInd MSO Building, 2nd Floor, 234/4, A. J. C. Bose Road, Kolkata ­ 700020, India. The offer is proposed to be listed at: Bombay Stock Exchange Limited (Designated Stock Exchange) and The National Stock Exchange of India Limited where the existing Equity Shares of the Company are presently listed. BOARD OF DIRECTORS OF THE COMPANY The Board of Directors of the Company comprises of 8 members as under: Name Designation Status Mr. Suresh Kumar Patni Chairman Non- Executive Chairman Mr. Rohit Patni Mr. Ankit Patni Mr. Binit Jain Mr. Kailash Chand Jain Mr. Jatindra Nath Rudra Mr. Jayant Kumar Chatterjee Mr. Asoke Kumar Basu Managing Director Jt. Managing Director Executive Director Director Director Director Director Executive Director Executive Director Executive Director Independent & Non Executive Independent & Non Executive Independent & Non Executive Independent & Non Executive

For details of the Board of directors of the Company, see section titled "Management" on page 44. CFO & COMPANY SECRETARY Mr. Pramod Kumar Jain 35, Chittaranjan Avenue, 4th Floor, Kolkata ­ 700012 Tel.: +91 33 22119805/06, Fax: +91 33 22110522, 22114134; E-mail: [email protected] Website: www.rohitferrotech.com

22

Note: Investors are advised to contact the Registrar to the Issue/Compliance Officer in case of any Pre-issue / Post-issue related problems such as non-receipt of letters of allotment/ share certificates/ credit of allotted Equity Shares in the respective beneficiary accounts, refund orders, etc. LEGAL ADVISOR TO THE ISSUE Mr. Sidhartha Sharma Advocate, High Court Kolkata "Hastings Chambers" 7C, Kiran Sankar Roy Road, 2nd Floor, Room No. 3, Kolkata- 700 001 Tel: 91-33-2231 4759 Fax: 91-33-2231 4511 E-Mail: [email protected] BANKERS TO THE COMPANY State Bank of India Commercial Branch Gillander House 8, N.S. Road, `D' Block, Kolkata -700 001 Tel: 91-33-2242-0448/0449 Fax: 91-33-2242-0452 E-Mail: [email protected] State Bank of Travancore Lake Market Branch 91, Rash Behari Avenue Kolkata- 700 026 Tel: 91-33-2464 3138 Fax: 91-33-2466-8956 E-Mail: [email protected] State Bank of Hyderabad 113, Park Street, Poddar Point Park Street Branch Kolkata-700 016 Tel: 91-33-2229-8694 Fax: 91-33-2229-1090 E-Mail: [email protected] United Bank of India Old Court House Street Branch 11, Hemanta Basu Sarani, Kolkata- 700 001 Tel: 91-33-2248-7471 Fax: 91-33-2248-6570/71 E-Mail: [email protected] AUDITORS S. Jaykishan Chartered Accountants 12, Ho-Chi Minh Sarani, Suite No 2D, 2E and 2F, 2nd Floor Kolkata ­ 700 071 Tel.: 91-33 4003-5801 Email: [email protected]

23

LEAD MANAGER TO THE ISSUE Microsec Capital Limited Azimgunj House, 2nd Floor 7, Camac Street, Kolkata ­ 700 017 Tel.: 91-33 22829330 Fax: 91-33 22829335 E-mail: [email protected]osec.in Website: www.microsec.in SEBI Registration No.: INM000010791 Contact Person: Mr. Manav Goenka REGISTRAR TO THE ISSUE Maheshwari Datamatics Pvt. Ltd. 6, Mangoe Lane, 2nd Floor, Kolkata ­ 700 001 Tel.: 91-33 2243 5029/5809 Fax: 91-33 2248 4787 E-Mail: [email protected] SEBI Registration No.: INR000000353 Contact Person: Mr. Rajagopalan Investors may contact the Registrar to the Issue/Compliance Officer in case of any pre-Issue/post Issue related problems. BANKERS TO THE ISSUE HDFC Bank Limited HDFC Bank House 3A Gurusaday Road Kolkata-700 019 Tel: 91-33-2283 6924 Fax: 91-33-2283 6922 E-Mail: [email protected] SELF CERTIFIED SYNDICATE BANKS The list of banks which have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in. For details on designated branches of SCSB collecting the CAF, please refer the above mentioned SEBI link. CREDIT RATINGS Since the present issue is a rights issue, no credit rating is required. TRUSTEES Since the present issue is of Equity Shares, appointment of Trustees is not required. APPRAISING AGENCY The Company has obtained appraised report for the project from State Bank of India and United Bank of India on individual basis. MONITORING AGENCY There is no outside independent Monitoring agency. The audit committee shall be responsible for monitoring the use of funds. THE PRINCIPAL TERMS OF THE LOANS AND ASSETS CHARGED AS SECURITY For the details about the principal terms of the loans and assets charged as security please refer to "Financial Statements" - "Secured Loans" appearing on page no. 87 of this Draft Letter of Offer. 24

INTER-SE ALLOCATION OF RESPONSIBILITIES The statement of allocation of responsibilities for this issue is as follows: Sl. No. 1 2 Activities Capital Structuring with the relative components and formalities such as the composition of debt and equity, type of instruments etc. Liaison with the Stock Exchanges and SEBI including obtaining in principle listing approval and completion of prescribed formalities with the Stock Exchanges and SEBI Due Diligence of Company's operations / management / legal / business plans Drafting and Design of the offer document. The designated Lead Manager shall ensure compliance with stipulated requirements and completion of prescribed formalities (including finalisation of Letter of Offer) with Stock Exchanges and SEBI Drafting and approval of all publicity material including statutory advertisement, corporate advertisement, brochure, corporate film etc. Marketing of the Issue which will cover, inter alia, formulating marketing strategies, preparation of publicity budgets, arrangements for selection of ad media, centres of holding conferences, collection centres, distribution of publicity and issue material including application form, Letter of Offer, Abridged Letter of Offer; and brochure and deciding the quantum of issue material Selection of various agencies connected with the Issue, namely Registrars to the Issue, Banker to the Issue, Printers and Advertisement agencies Follow up with Bankers to the Issue to get estimates of Collection, and advising the Issuer about closure of the Issue, based on correct figures The post issue activities will involve essential follow up steps which must include finalization of basis of allotment/weeding out of multiple applications, listing of instruments and dispatch of certificates and refunds, with the various agencies connected with the activities such as Registrars to the Issue, Bankers to the Issue. Whilst, many of the post issue activities will be handled by other intermediaries, the Lead Manager shall be responsible for ensuring that these agencies fulfill their functions and enable them to discharge this responsibility through suitable agreements with the Issuer Company. Responsibilities Microsec Microsec Coordinator Microsec Microsec

3 4

Microsec Microsec

Microsec Microsec

5 6

Microsec Microsec

Microsec Microsec

7 8 9

Microsec Microsec Microsec

Microsec Microsec Microsec

STANDBY UNDERWRITING AGREEMENT The present Rights Issue is not underwritten. However, the Promoters have confirmed vide their Letter of Intent dated March 15, 2010 that they intend to subscribe to the full extent of their entitlement in the Issue. The Promoters intend to apply for additional Equity Shares in the Issue such that at least 90% of the Issue size is subscribed. As a result of this subscription and consequent allotment, the Promoters may acquire Equity Shares over and above their entitlement in the Issue, which may result in their shareholding in the Company being above their current shareholding.

25

CAPITAL STRUCTURE The capital structure of the company and related information is set forth below. Rs. in Lacs Aggregate Nominal Aggregate Value Value at Issue Price

Authorized Share Capital 80,000,000 Equity Shares of Rs. 10/- each Issued, Subscribed and Paid Up Capital 39,482,945 Equity Shares of Rs. 10/- each fully paid up Present issue being offered to the Equity Shareholders through the Letter of Offer [] Equity Shares of Rs. 10/- each at a price of Rs. [] per share [] [] 3,948.29 3,948.29 8,000.00 8,000.00

Paid Up capital after the Issue [] Equity Shares of Rs. 10/- each fully paid up [] []

Share Premium Account Existing Share premium account Share premium account after the issue 5,345.45 [] 5,345.45 []

Changes in the Authorized Capital of the company since incorporation are given below:

On Incorporation May 13, 2002 June 17, 2002 August 26, 2002 February 4, 2003 September 18, 2003 March 3, 2004 September 4, 2004 December 27, 2004 March 31, 2005 October 9, 2007 March 12, 2010

Initial Authorised capital of Rs. 10 Lacs Increase in the authorised share capital of the company from Rs. 10 Lacs to Rs. 100 Lacs. Increase in the authorised share capital of the company from Rs. 100 Lacs to Rs. 300 Lacs. Increase in the authorised share capital of the company from Rs. 300 Lacs to Rs. 500 Lacs. Increase in the authorised share capital of the company from Rs. 500 Lacs to Rs. 800 Lacs. Increase in the authorised share capital of the company from Rs. 800 Lacs to Rs. 950 Lacs. Increase in the authorised share capital of the company from Rs. 950 Lacs to Rs. 1350 Lacs. Increase in the authorised share capital of the company from Rs. 1350 Lacs to Rs. 1600 Lacs. Increase in the authorised share capital of the company from Rs. 1600 Lacs to Rs. 2000 Lacs. Increase in the authorised share capital of the company from Rs. 2000 Lacs to Rs. 4000 Lacs. Increase in the authorised share capital of the company from Rs. 4000 Lacs to Rs. 4500 Lacs. Increase in the authorised share capital of the company from Rs. 4500 Lacs to Rs. 8000 Lacs.

26

Notes to the Capital Structure 1. a) Build up of Equity Share Capital The following is the history of the Equity Share Capital of the Company:

Date of Allotment / fully paid up April 7, 2000 August 20, 2002 February 17, 2003 April 24, 2003 May 19, 2003 March 28, 2004 September 6, 2004 March 29, 2005 May 5, 2005 May 16, 2005 April 5, 2006 August 11, 2008 September 13, 2008 No. of equity shares Cumulative No. of shares Face Value (Rs) Issue Price (Rs) Cumulative securities Premium Account

Conside ration

200 27,44,000 32,70,000 9,20,000 7,85,000 53,37,000 19,55,000 12,50,000 765,000 489,000 16,947,745 2,475,000 2,545,000

200 2,744,200 6,014,200 6,934,200 7,719,200 13,056,200 15,011,200 16,261,200 17,026,200 17,515,200 34,462,945 36,937,945 39,482,945

10 10 10 10 10 10 10 10 10 10 10 10 10

10 10 10 10 10 10 10 20 20 30 30 43 43

Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash Cash

Reasons for allotment Subscribers to the Memorandu m Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Further Allotment Initial Public Issue Conversion of Warrants Conversion of Warrants

­ ­ ­ ­ ­ ­ ­ 12,500,000 20,150,000 29,930,000 368,884,900 450,559,900 534,544,900

Notes :

The Promoters have confirmed that they intend to subscribe to the full extent of their Rights Entitlement in the Issue. Subject to compliance with the Takeover Code, the Promoters and Promoter Group reserve their right to subscribe for Equity Shares in this Issue by subscribing for renunciation, if any, made by any other Promoters or Promoter Group or any other shareholders. The Promoters have provided an undertaking dated March 15, 2010 to the Company to apply for additional Equity Shares in the Issue, to the extent of the unsubscribed portion of the Issue. As a result of this subscription and consequent allotment, the Promoters and Promoter Group may acquire Equity Shares over and above their Rights Entitlement in the Issue, which may result in an increase of the shareholding being above the current shareholding with the Rights Entitlement. This subscription and acquisition of additional Equity Shares by the Promoters and Promoter Group through this Issue to the extent of under subscription, if any, will not result in change of control of the management of the Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirements indicated in the section "Objects of the Issue" on page 31, there is no other intention/purpose for this Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoters and Promoter Group, in this Issue, the Promoters' shareholding in the Company exceeds their current shareholding. The Promoters and Promoter Group shall subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to the Promoters and Promoter Group of any unsubscribed portion, over and above their Rights Entitlement shall be done in compliance with the 27

Listing Agreement and other applicable laws prevailing at that time relating to continuous listing requirements. The Promoters has brought in Rs. 4,240 Lacs as advance against share application money. The funds brought in by the Promoters shall be adjusted against the share application money due from them towards their entitlement in the rights issue and also towards subscription in the unsubscribed portion, if any, in the present Issue.

28

2.

Pre-issue shareholding pattern of the Company as on December No. of Category of Shareholder Shareholde Total No. of rs Shares

31, 2009 is as follows: Total No. of Shares held in Dematerialized Form

Total Shareholding as a % of total No. of Shares As a % of (A+B) As a % of (A+B+C)

Shares pledged or otherwise encumbered Number As a % of of Total No. shares of Shares

(A) Shareholding of Promoter and Promoter Group (1) Indian Individuals / Hindu Undivided Family Bodies Corporate Sub Total (2) Foreign Total shareholding of Promoter and Promoter Group (A) Public Shareholding (1) Institutions Foreign Institutional Investors Sub Total (2) Non-Institutions Bodies Corporate Individuals Individual shareholders holding nominal share capital up to Rs. 1 lakh Individual shareholders holding nominal share capital in excess of Rs. 1 lakh Any Others (Specify) Non Resident Indians Trusts Sub Total Total Public shareholding (B) Total (A)+(B) (C) Shares held by Custodians and against which Depository Receipts have been issued Total (A)+(B)+(C)

4 4 8

2,599,007 18,287,500 20,886,507

2,599,007 5,400,000 7,999,007

6.58 46.32 52.90

6.58 46.32 52.90

-

-

8

20,886,507

7,999,007

52.90

52.90

-

-

2 2 829

1,025,893 1,025,893 6,446,521

1,025,893 1,025,893 5,027,021

2.60 2.60 16.33

2.60 2.60 16.33

-

-

15736 101

7,460,557 3,354,139

7,435,967 3,354,139

18.90 8.50

18.90 8.50

176 1 16,843 16,845 16,853 16,853

308,328 1,000 17,570,545 18,596,438 39,482,945 39,482,945 29

308,328 1,000 16,126,455 17,152,348 25,151,355 25,151,355

0.78 0.00 44.50 47.10 100.00 -

0.78 0.00 44.50 47.10 100.00 100.00

-

-

3.

Shareholders holding more than 1% of the share capital of the Company Name of the shareholders Suanvi Trading & Investment Company Pvt. Ltd Invesco Finance Pvt. Ltd Poddar Mech Tech Services Pvt. Ltd Vasupujya Enterprises Pvt. Ltd Panchmukhi Agrochem Pvt. Ltd Mr. Suresh Kumar Patni Goldman Sachs Investments (Mauritius) I Ltd Nidhi Harshvardhan Bhuwalka Mrs. Sarita Patni Mr. Rohit Patni Total No. of Shares 6,545,000 5,037,500 3,455,000 3,250,000 1,537,500 1,020,100 1,006,193 899,528 680,100 515,000 23,945,921 Shares as % of Total No. of Shares 16.58% 12.76% 8.75% 8.23% 3.89% 2.58% 2.55% 2.28% 1.72% 1.30%

Sl. No. 1 2 3 4 5 6 7 8 9 10

4.

Equity share issued for consideration other than cash

The company has not issued any equity share for consideration other than cash 5. Details of the shares acquired by promoters and promoter group in the last one year immediately prior to the date of filing of the letter of offer

There has been no shares acquired by promoters and promoter group in the last one year immediately prior to the date of filing of this Draft letter of offer 6. 7. 8. The present Issue being a rights issue, as per regulation 34(c) of the SEBI Regulations, the requirement of promoters' contribution and lock-in are not applicable. The Company has not instituted any employee stock option scheme as on the date of this Draft Letter of Offer. The Promoters and Directors of the Company and Lead Manager of the Issue have not entered into any buy-back, standby or similar arrangements for any of the securities being issued through this Draft Letter of Offer. At any given time, there shall be only one denomination of the Equity Shares of the Company and the Company shall comply with such disclosure and accounting norms specified by SEBI from time to time.

9.

10. No further issue of capital by way of issue of Bonus Shares, Preferential Allotment, Rights Issue or Public Issue or in any other manner which will affect the equity capital of the Company, shall be made during the period commencing from the filing of Draft Letter of Offer with the SEBI and the date on which the Equity Shares issued under this Draft Letter of Offer are listed or application money are refunded on account of the failure of the Issue. 11. The Issue will remain open for 15 days. However, the Board will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date.

30

OBJECTS OF THE ISSUE The Company intends to utilize the proceeds of the Issue towards the following purposes: 1. 2. 3. To part finance its proposed Ferro Alloy plant at Haldia, West Bengal; General corporate purposes; and Issue related expenses.

The Ferro Alloy plant consists of the following modules: 6 X 9 MVA rating submerged Arc Furnaces with transformers and other accessories Sintering plant for manganese ore fines Raw material handling facility 132 KV substation and electrical system The Objects Clause of the Memorandum and Articles of Association of the Company enable it to undertake the activities for which the funds are to be raised in the present Rights Issue. Further, it is confirmed that the activities, which the Company has been carrying out until now are in accordance with the object clause of Memorandum and Articles of Association of the Company. The fund requirement and deployment is based on the estimates prepared by the Company in consultation with technical advisor and has been appraised by bankers. The fund requirement below is based on current business plan of the Company. In view of the highly competitive and dynamic nature of the industry in which the Company operates, they may have to revise business plan from time to time and consequently fund requirement may also change. This may include rescheduling of current expenditure for a particular purpose vis-à-vis current plans at the discretion of Management. In case of any variations in the actual utilization of funds earmarked for the above activities, increased fund deployment for a particular activity may be met with, in the first instance, by surplus funds, if any available in respect of the other activity for which funds are being raised in this Issue, otherwise by the internal accruals and debt or any other resource as per the applicable regulatory framework. FUND REQUIREMENTS The details of requirements of funds for the objects of the Issue are as under: Particulars Ferro Alloy Plant at Haldia, West Bengal General Corporate Purpose * Rights Issue Expenses * Total Requirement of Funds

* Will be incorporated upon finalization of Issue Price

Rs. in Lacs Amount 26,696.89 [] [] []

Means of Finance Particulars Term Loans from Banks Proceeds of the right issue Internal Accruals Total The details of the term loans sanctioned

Rs. in Lacs Amount 17,500.00 [] [] []

The entire term loan requirement has been tied up by the Company. The details of the various term loans sanctioned by the Banks as on date of filling this Draft Letter of Offer are as follows: Name of Bank United Bank of India State Bank of India TOTAL Amount Sanctioned (Rs. in Lacs) 10,000.00 7,500.00 17,500.00 31 Date of Sanction February 10, 2009 June 17, 2009

Undertaking By the Issuer Company The Company hereby confirms that firm arrangements of finance through verifiable means towards 100% of the stated means of Finance, excluding the amount to be raised through the Rights Issue have been made. APPRAISAL The project has been individually appraised by United Bank of India & State Bank of India vide their appraisal reports dated January 9, 2009 & May 26, 2009 respectively. The total estimated cost as per the appraisal report of United Bank of India is Rs. 26,696.89 Lacs. A. PROJECT COST FOR SETTING UP THE FERRO ALLOY PLANT Sl No 1. 2. 3. 4. 5. 6. 7. 8. Particulars Land and Site Development Building & Civil Works Plant & Machinery Miscellaneous fixed Assets Technical Consultancy Fees Preliminary & Pre-operative expenses Contingencies Margin for working capital Total Cost Amount (Rs. in Lacs) 769.43 2,596.06 4,644.02 13,639.63 165.00 2,193.53 727.09 1,962.14 26,696.89

1. Land & Site Development The Company has acquired 40 acres of land from Haldia Development Authority on a long term lease of 90 years at a lease premium of Rs. 565 Lacs. The land is located near port of Haldia and it is about 90Km from Kolkata which is adequate for setting up the Ferro Alloy plant. The land required for the project is about 20 acres and the excess land would be retained for the rawmaterial storage facilities and the future expansion plans that the company might undertake. The total cost of land and site development works out at Rs.769.43 Lacs out of which Rs. 565 Lacs is lease premium and the remaining cost would be incurred towards land leveling, digging bore wells, construction of internal roads, construction of boundaries, plantations and development of green area. The land is free from any encumbrance and the Company has a clear occupation for the same. 2. Building & Civil Works The buildings and other civil work comprise of main furnace bays, main working platform, charging platform, electrode handling area, top floor winch mechanism, casting and tapping bay, finished goods stripping & storage shed, raw material storage charging shed & platform, sintering plant shed structures, etc. Apart from these, there are also some RCC brick constructions, which include shop office, HT & LT Rooms, Substations, Pump Room, Compressor Room, Battery Room, Water treatment facility, ablution block etc. The total estimated cost of the Building & Structures is Rs. 2,596.06 Lacs. Details for Building & Civil Works are as follows: SL. No. (i) Particulars Construction Type Covered Area (Sq. ft) 120,709 Rate Per Sq. ft 600 Estimated Cost (Rs. in Lacs) 724.26

Main furnace bay

(ii)

Furnace foundations

Steel trusses on steel Beams, RCC Flooring with heavy foundation & GI Roofing Floors RCC

900

8,500

76.50

32

(iii)

(iv) (v) (vi) (vii) a.

Crane bay area with gantry height at 33' for cranes Crushing , screening & storage bay Finished goods storage bay Coke shed Civil for sintering plant: Equipment shed

Steel trusses on steel beams with heavy foundation & GI roofing Steel trusses on steel beams with heavy foundation & GI roofing Steel trusses on steel beams with heavy foundation & GI roofing Steel trusses on steel beams with heavy foundation & GI roofing

35,503

600

213.02

26,627 10,651 26,896

550 525 550

146.45 55.92 147.93

Steel trusses on steel beams, RCC flooring with heavy foundation & GI roofing RCC RCC roof & brick wall RCC cum RCC cum RCC roof & brick wall RCC roof & brick wall RCC roof & brick wall RCC roof & brick wall RCC roof & brick wall RCC roof & brick wall RCC roof & brick wall RCC roof & brick wall RCC roof & brick wall RCC roof & brick wall civil work

150,000

700

1,050.00

b. (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) (xvi) (xvii)

RCC yard for RM storage Pump room for water circulation Cold sumps Underground reservoir Pump house for u/ground reservoir Compressor room Administrative building Central store Security goomty

10,000 1,076 613 938 2,294 377 3,228 1,614 430 430 97 301 2,582 10,760

250 425 3,250 3,250 425 425 675 425 425 425 425 425 425 425

25.00 4.57 19.91 30.47 9.75 1.60 21.79 6.86 1.83 1.83 0.41 1.28 10.98 45.73 2,596.06

Canteen Weigh bridge goomty (xviii) Ablution block (xix) Electrical rooms (xx) Labour quarters Total cost of buildings and 3. Plant & Machinery

The plant and machinery proposed to be installed comprises of six numbers of 9 MVA submerged electric arc furnaces including electrode clamping and slipping device, electrode contact clamps, terminal connecting castings, copper flexible cables, tapping gun assembly. The cost also includes furnace transformer, electricals viz switch yard for utility, 132 KV customer switchyard. The total cost of the plant and machinery has been estimated at Rs. 4,644.02 lacs including excise and tax, freight and insurance and the cost of erection and commissioning.

33

Details of the Plants & Machinery required for the projects are as follows: Sl. No. 1 2 Particulars Furnace shell made of 20 mm thick alloy steel Electrode Contact Clamp duly machined along with pressure rings, cooling arrangements etc. (each set of 20 clamps) & Machined Items Slipping Device (each Set of 3 pcs.) Mantle Set (each set of 4 pcs) Cooling Shield & and other SS Components P.R. Rings First set of Refractories & Tamping Paste Stuffing Box (electrode & Mantle) Chutes Insulation Electrode paste Electrode Casing Flexibles at Transformer ­ MT ((36 nos. for each furnace) Bus Bar at transformer MT (18 nos. for each furnace) Copper tube from transformer to Bus Tube terminal Terminal to Bus Bar Flexibles at Furnace & Wedge for flexibles Cable Lugs(each furnace of having 144 lugs) Furnace Water Circulation System Hydralic System Tapping Bus-bar arrangement Furnace Transformer 10 MVA Furnace charging system 10 mm thick MS Plates Pump House & Water treatment system Other Machined Items Springs & hardware Fabrication, erection & commissioning of Furnace ELECTRICALS Switch Yard For Utility 132 KV Customer Switchyard Other Electrical Equipments Total Plant & Machinery Cost No. of Machines 6 6 Total Amount (Rs. in Lacs) 200.13 142.38

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

6 6 6 6

6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6

21.53 73.46 101.6 60.96 492.75 51.11 17.58 46.01 60.02 23.44 45.85 39.49 255.45 33.72 120.55 81.97 61.32

83.19

18.67 963.28 35.15 174.42 55.01 97.58 171 71.66 245.29 799.45 4,644.02

Major orders placed & material received for fabrication of above equipments are as follows: Rs. in Lacs Amount 23.58 53.85 156.77 105.99

SL No. 1. 2. 3. 4.

Particulars 132 KV, 1250A & 40 KA, 3 Phase Isolator Boiler Plate Cable Carbon Tambing Paste

Name of Supplier Siemens LTD Progressive Steel Corporation Crystal Cable Industries Ltd. Hindalco Industries 34

Qty 10 Sets 121 MT 17800 MTR 300 MT

5. 6.

Copper Bus Tube Copper Bus Tube & Air Cool flexible cable 7. Copper Plate 8. Erection & Fabrication Of Structural Steel 9. Fabrications, Erection, Machining For Submerge Arc Furnace 10. FRP Cooling Tower 11. G I Earthing Strip 12. M.S.Black ERW Pipe 13. M.S Pipes 14. M.S.Black ERW, M.S ERW Pipes 15. M.S.Plate 16. M.S.Plate , Angle 17. M.S.Plates, Angles, JOIST

LTD Cubex Tubing Limited Ganapati Udyog Ganapati Udyog B.N. Construction Sri Balaji Constructions Southern Cooling Tower Pvt.Ltd DMP Projects Private Limited India Pipe Fitting Co India Pipe Fitting Co Arcade Tracom Pvt Ltd Kothari Trading Centre Kothari Trading Centre & Tata Ryerson Ltd Kamaldeep Ispat Pvt Ltd, Mangalam Fiscal Services Pvt Ltd, Mankasia Steel Pvt Ltd, Modern Ispat Pvt Ltd, Royal Steel Industries Transformers & Rectifiers India Ltd. National Refractories Grindwell Norton Limited Fluid Power Engg Siemens Ltd Siemens Ltd Siemens Ltd

15420 Kgs 34000 Kgs 18.2 MT 6000 MT 6 Nos 2 Nos. 10.5 MT 2676 MTR 10280 MTR 17600 Mtr 28 MT 729 MT 3153.88 MT

61.97 143.26 63.51 147.00 138.00 5.97 4.04 25.04 27.45 79.53 9.08 260.61 950.40

18. Power furnace & Distribution Transformer 19. Refractories Item 20. Slilicon Carbide 21. Slipping Cylinder, Hoisting Cylinder, Clamping Cylinders& Charging Chute Cylinders 22. Supply & Supervision of Erection & Commissioning of 11 KV Indoor VCB 23. Supply & Supervision of Erection & Commissioning of 145 KV SF6 Circuit Breaker 24. Supply & Supervision of Erection & Commissioning of 145 KV SF6 Circuit Breaker 25. Supply of 132 KV- 2000A/ 1250A & 40 KA, 3 Phase Isolator 26. Unloading Structural , Erection , Commissioning , Electricals Works, Verification of Material & Load Testing of EOT Crane 27. Vacuum Transformer 28. Welding Electrodes Total

14 No. 26240 NO. & 119.2 MT 4240 Nos. 6 Sets 16 Sets 4 Sets 3 Sets

1,595.00 38.02 23.25 67.64 69.62 27.70 18.83

Siemens Ltd Nutech Engineering

8 Sets 6 No.

16.89 15.60

Fowler Westrup India Pvt. Ltd NVJ Projects & Marketing

1 NOS. 1100 kgs & 100 Cases

7.40 12.01 4,148.00

35

4. Miscellaneous Fixed Assets The miscellaneous fixed assets for the Ferro alloys plant include raw material handling systems, sinter plant, cooling towers, water pumps, water cooling system, firefighting equipment, pollution control equipments, EOT cranes, Electricals etc. The cost of 900 TPD sinter plant estimated at Rs. 13,003.85 Lacs includes machinery foundation and ground hopper. The total cost of Misc. fixed assets including electrical is estimated at Rs. 13639.63 Lacs. Details of the miscellaneous fixed assets are as follows: Sl. No. 1 Particulars Quantity Unit No. of Machines Amount (Rs. in Lacs) 162.54 80.70 91.40 17.54 -

POLLUTION CONTROL EQUIPMENT Pollution Control Unit Structural Steel MS for Smoke Hood & Chimney 1 35 31 1 Set MT MT Lot 6 6 6 6

2

Electric Motors RAW MATERIAL HANDLING SYSTEM Consisting of belt conveyors, vibrating screen, day bins, electronic weighing skips, and telphar etc. Structural steel for Day Bins, Hoppers, etc. Shuttle Conveyors Micro Processor based Weighing System EMV Feeders Telphar Trolleys Gear Box Belt Conveyor & Idlers Mono Rail Hoist SINTER PLANT 300 TPD Sintering Plant Machinery Foundation 300 TPD Sintering Plant Machinery Foundation Ground Hopper

120 20 1 12 2 10 1 1 1 1 3 1 3 3 1 50 1 1 1

Tons Tons Set No. No. No. Lot No. No. No. No. No. No. No. No. Tons Lot Lot

3 3 3 3 3 3 3 3 2 1 1 6 3 3 6 6 1 1 2

138.34 20.03 5.86 41.96 5.67 30.62 30.92 10.21 7,864.17 170.00 4,347.51 85.00 60.00 173.88 86.94 33.44 42.08 98.28 10.00 10.50 22.05 13,639.63

3

4 5 6 7 8 9

E.O.T CRANE 16.5/7.5 T JCB Dumpers Stoking Car CI Pans Fire Fighting Equipments

10 Office furniture 11 Weigh Bridge - 60 MT Capacity Total Cost of Misc. Fixed Assets

The Company on a turn key basis has placed order with Ghalsasi Engineering Systems Private Limited for the Sinter Plant. The scope of services would include designing, detailed engineering, procurement, installation, erection, testing and commissioning of the Sinter Plant. The company shall indent the suppliers for equipment and materials directly as per the bill of quantities to be prepared based on detailed engineering and fabrication design and drawings. The total value of materials procured directly by the Company under the contract shall be adjusted against the contract price for the turkey arrangement.

36

Major orders placed & material received for fabrication of above equipments are as follows: Rs. in Lacs Amount 10.51 9.79 9.78 19.29 242.12 7.22 4.06 50.00 13.87 264.00 247.98 30.17 250.00 7.09 10.78 336.31 1.25 73 nos. 50 nos. 192 nos. 5 nos. 10055.69 MT 499.52 34.82 3.44 33.52 3,577.97

Sl no 1 2 3 4 5 6 7 8 9 10 11 12 13 15 16 17 18 19 20 21 22 23

Particulars 250 KVA dg set 280 KW ac drive system ABB make panel Air compressor Cable Capacitor Control relay panel Control relay panel Conveyor belt Crane Drive system, gear box, conveyor belt system Electrical items EOT crane ESI battery bank Gear box & motor parts Gear box, coupling guard, housing block, base plate Geotechnical investigation Joint pin, gear box Lighting arrestor Lighting fitting Lightning-MCC M.S.Plates, angles, joist

Name of Supplier Western Consolidated Pvt Ltd Electrical & Electronics Electrical & Electronics Atlas Copco Compressor Sales Crystal Cable Industries Ltd. Universal Cables Ltd Centom Constructions Centom Constructions Hindustan Industrial Corpn WMI Cranes Ltd Shyam Machine Tools & Engineering Private Limited Electrical Micanite Corporation A.D.Electro Steel Co Pvt Ltd Electro Service India New Allenbary Works Anjana Steel Industries Pvt Ltd Geotechnical Engineers Consorium A.D.Electro Steel Co Pvt Ltd Crompton Greaves Limited Nishant Marketing & Mfg Co Automatic Controls Corporation Chirag Vyapaar Pvt Ltd, Jindal Steel & Power Limited, Progressive Steel Corporation, Shree Mahalaxmi Vinimay Private Limited, Steel & Metal Trading Co, Tata Ryerson Ltd, Tata Steel Processing & Distribution Limited, Universal Mineral Manufacturing Private Limited Voltas Limited Electro Therapy Pathak Machine Tools Private Limited Unique Fabrications Corpn Siemens Ltd

Qty 1 pcs 2 sets 2 sets 2 nos 18500mtr 1 sets 1 no. 8 set 1000 mtr 6 no. 21 nos. 13808 nos 2 nos. 2 sets 27 nos. 44 nos.

24 25 26 28 29

Manufacturing & supply of diesel operated truck Monorail hoist Overcrank, rail drilling Ss plate Supply & supervision of erection & commissioning of 11 KV indoor VCB

2 sets 3 nos. 14 no. 17940 kgs 1 sets

14.80 8.91 24.42 19.09 101.31

37

30 31 32 33 34 35

Suspension rods Transformer Vibrating feeder Weigh bridge Weigh machine Welding cable, cutting nozzle, trolley wheel

Unique Fabrications Corpn Crompton Greaves Limited International Combustion India Ltd. Avery India Limited Multi Weigh System Shree Jagannath Engineering Works

168 nos. 20 no. 36 nos. 2 set 2 sets 6000 mtr , 104 no. & 2 sets

2.96 33.89 30.96 21.08 26.52 120.86

6,068.30

Orders placed but material yet to be received Sl No. 1. 2. 3. 4. 5. 6. 7. Particulars M.S.Plate Premur Make Mixer Sinter Banking Pan Beam , Angle C I Ladle EOT Crane Softner & Multi Grade Filtration Plant Total Name of Supplier Universal Mineral Manufacturingprivate Limited Premur Impex Ltd Bharat Engg Works Chirag Vyapaar Pvt Ltd Vikas Iron & Steel Co WMI Cranes Ltd Unichem Water Engineering Co Qty 1300 MT 1 nos. 46530 kgs 2400 MT 20 Nos. 2 No. 3 nos. (Rs. in Lacs) 596.96 17.68 21.29 822.64 48.05 87.72 8.89 1,603.23 Order Date November 15, 2009 February 03, 2010 February 11, 2010 October 17, 2009 February 26, 2010 January 08, 2010 February 01, 2010 Expected Date of Delivery March 31,2010 April 20, 2010 April 10, 2010 March 31, 2010 March 31, 2010 June 30, 2010 July 31, 2010

5. Technical Consultancy Fees The Company has made arrangement with reputed technical consultants, M/s. Ghalsasi Engineering Systems Pvt. Limited & M/s. Engineering & Metallurgical, who will provide technical assistance in setting up the project, stabilisation of various production parameters, maintaining the production schedule and training of the personnel about production and finally trial runs at the plant. The technical services include know-how and basic engineering, design, engineering and drawing, procurement assistance and inspections, project monitoring, etc. The total cost for availing the technical services is estimated at Rs 165 Lacs. 6. Preliminary & Pre-operative expenses The major component for preliminary and pre-operative expenses is interest during construction (IDC). It also includes startup and miscellaneous expenses, salary & wages during construction period, travel expenses, legal expenses, insurance during construction, bank charges & security deposits. The IDC has been calculated at the interest rate of 11.75% p.a. The total preliminary & Pre-operative expenses are estimated to be around 2,193.53 Lacs. 7. Contingencies The technical consultants, who have substantial experience in implementation of Project, have estimated the Project cost. The cost estimate is based on the budgetary quotations for the majority of the capital equipments and no major change in the cost is expected. Considering these 38

factors, provision for contingency has been estimated conservatively at 3.5% on all main project cost aggregating Rs. 727.09 Lacs. 8. Margin for working capital The working capital margin requirements of the Project is estimated at Rs. 1,962.14 Lacs, based on the calculations for the first full year of operations for the Project on the basis of 90 days stock of raw material, 30 day stock of consumables, 7 days work in progress, 7 days of finished goods stock and 21 days of debtor holding. Margin money for the first year of operation has been estimated at Rs. 1,962.14 Lacs. The requirement of enhanced margin money in the subsequent years would be met out of the internal accruals. Computation of Working Capital Requirement for the first year of operation i.e. for FY 2010-11: Particulars Raw material (*) Suppliers credit (*) Peak holding Consumable stores Stock in process Finished goods Debtors : On domestic sales Fuel Margin For L/C And B/G Total 9. Infrastructure facilities for raw materials and utilities Raw Material Availability Manganese ores/ fines: The chief raw material for the ferro alloy plant at Haldia is manganese ores and fines. The Company would procure these from its existing vendors like Orissa Mining Corporation (OMC), Manganese Ore India Ltd, Nagpur manganese & Minerals Ltd etc. The Company is also importing its raw material from international suppliers like BHP Billitor and Samancore of Australia and Ore & Metal and Nobel agency from South Africa. The current supply arrangements would be adequate to meet the raw material requirement for the its proposed project. Others: Other raw materials like Coke breeze are available from private parties dealing in DSP coke and also from Ranigunj. Dolomite is available from Orissa and quartz is available from Durgapur- Asansol belt. Power Availability Ferro Alloys plants are power intensive units and the total power required for the proposed project is 55.5 MVA which is proposed to be obtained from the grid/ West Bengal State Electricity Distribution Corporation Ltd (WBSEDCL). Electricity is proposed to be sourced from the 132KV transformer proposed to be set up at the project site. B. GENERAL CORPORATE PURPOSES The Company intend to use approximately Rs.[] Lacs from the Net Proceeds towards general corporate purposes (including but not limited to setting up/modernization/renovation of offices, meeting marketing expenses, meeting product development and/or registration expenses, repayment of loans and towards organic and/or inorganic growth opportunities). The Board of 39 No. days 90 30 Margin % 25 Gross working capital (Rs. in Lacs) 4,585.92 1,528.64 3,057.28 14.94 350.21 376.30 1760.34 5.91 Margin money (Rs. in Lacs)

30 7 7 21 45

25 25 25 30 30

764.32 3.73 87.55 94.08 528.10 1.77

5,564.98

482.58 1,962.14

Directors will have the flexibility in sanctioning the utilization of these proceeds for general corporate purposes, which may be towards any of the purposes mentioned above, or any other purpose(s) in the Company's interest as they deem fit. C. ISSUE EXPENSES The total issue expenses are estimated to be around Rs. [] Lacs. The break-up of the expenses is as under: Sl. Particulars Amount (Rs. No. in Lacs) 1 Fees of Lead Manager, Registrar, Legal Advisor, Auditors [] 2 Printing & Stationery, Distribution, Postage, etc. [] 3 Advertisement & Marketing Expenses [] 4 Other Expenses (incl. Filing Fees, Listing Fees, Depository Charges, [] etc.) 5 Contingencies [] Total [] IMPLEMENTATION SCHEDULE The installation of production facilities involves various activities such as Design of Civil & Structural and Construction of Factory and Non-factory Buildings, Utilities & Services, Procurement of equipments, Award of Works Contract, Supervision of construction, erection and commissioning. All these activities which are interlinked and require close monitoring to avoid time overrun as well as cost overrun. The project implementation schedule has been drawn-up to maintain a strict time schedule, which is monitored with the help of Bar Chart and networking. Activity 1st and 2nd Furnaces 3rd and 4th Furnaces 5th and 6th Furnaces Start End Start End Start End Civil & Structural October, March, January, August, April, January, Works 2009 2010 2010 2010 2010 2011 Installation & March, October, January, January, April, April, Commissioning 2010 2010 2010 2011 2010 2011 September, September December December March, March, Trial runs 2010 , 2010 , 2010 , 2010 2011 2011 October, Not January, Not April, Not Commencement of 2010 Applicable 2011 Applicable 2011 Applicable commercial production To maintain the timely schedule of implementation the Promoter Group has brought in Rs. 4,240 Lacs as advance against share application money. Deployment of Funds in the Project The Company has already deployed a sum of Rs. 14,919.60 Lacs up to February 28, 2010 towards the objects of the present issue. The same has been certified by S. Jaykishan, Chartered Accountants, statutory auditors of the Company, vide their certificate dated March 4, 2010. The details of the funds already deployed are as under: Rs. in Lacs Sl. No. PARTICULARS Amount 1. Land and Site Development 760.26 2. Building 2,068.44 3. Plant & Machinery 5,270.62 4. Cenvat Credit On Capital Goods, Vat, Service Tax 428.40 5. Advance Against Project 5,554.30 6. Pre-operative expenses 733.65 7. Less: Sundry Creditors For Capital Goods/Expenses 426.12 8. Add: Cash & Bank Balances 530.05 TOTAL 14,919.60

40

Sources of Funds already deployed Sl. No. 1. 2. 3. Particulars

Rs. in Lacs Amount

Disbursement of Term Loan from Banks 9,200.00 Unsecured Loans* 4,624.81 Internal Accruals 1,094.78 Total 14,919.60 * Out of the unsecured loans of Rs. 4624.81 Lacs, the promoters have consented to convert an amount of Rs. 4,240 Lacs into share application money towards their entitlement in the rights issue. Year wise Break-up of the expenditure incurred proposed to be incurred on the said Project Rs. in Lacs Particulars Proposed Incurred till March 01, Fiscal expenditure to February 28, 2010 to March 2011 be Incurred 2010 31, 2010 Ferro Alloy Plant at Haldia, 14,919.60 [] [] West Bengal 26,696.89 General Corporate Purpose * [] [] [] Total 14,919.60 [] [] []

* Will be incorporated upon finalization of Issue Price

Interim use of Funds

Pending utilization of the proceeds of the Issue for the purposes described above, the funds would be temporarily invested in high quality interest bearing liquid instruments including fixed deposits with scheduled commercial banks. Such investments would be in accordance with the investment policies approved by the Board or a duly authorized committee from time to time. A part of the proceeds of the Issue, pending utilization for the purposes described above, may also be used by the Company to temporarily reduce its working capital borrowings from Banks.

Monitoring utilisation of funds The Board will monitor the utilisation of the Net Proceeds and disclose the details of the utilisation of the Issue proceeds, including interim use, under a separate head in the financial statements, specifying the purpose for which such proceeds have been utilised or otherwise disclosed as per the disclosure requirements of the listing agreements with the Stock Exchanges and in particular Clause 49 of the Listing Agreement. Under the Listing Agreement, the Company has agreed to furnish to the Stock Exchanges on a quarterly basis, a statement indicating material deviations, if any, in the use of proceeds of the Rights Issue from the objects stated in the Draft Letter of Offer. Interest of Promoters, Directors or Key Management Personnel in the Objects of the Issue No part of the proceeds from the Issue will be paid by the Company as consideration to the promoters, promoter group companies, directors, group companies or the key managerial personnel except in the normal course of the business.

41

STATEMENT OF SPECIAL TAX BENEFITS To The Board of Directors Rohit Ferro-Tech Limited 35, C R Avenue Kolkata ­ 700 012 Sirs, We hereby report that the enclosed annexure states the special tax benefits available to M/s. Rohit Ferro-Tech Limited (`the Company') and its shareholders under the provisions of the Income Tax Act, 1961 and other direct tax laws presently in force in India. These benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which is based on business imperatives, the Company faces in the future, which it may or may not choose to fulfill. The benefits discussed in the enclosed annexure are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his own consultant with respect to specific tax implications arising out of their participation in the issue, particularly in view of the fact that there could be different interpretations of legislation. We do not express any opinion or provide any assurance as to whether: · · the Company or its shareholders will continue to obtain these benefits in future ; or the conditions prescribed for availing the benefits have been / would be met with.

The contents of this annexure are based on the information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company. While all reasonable care has been taken in preparation of this statement, we accept no responsibility for any errors or omissions therein or for any loss sustained by any person who relies on it. This certificate is provided solely for the purpose of assisting the addressee Company in discharging its responsibilities under the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2009. For S Jaykishan Chartered Acountants

(Vivek Newatia) Partner M No. 062636 Dated: The 4th day of March, 2010 Place: Kolkata

42

ANNEXURE TO THE STATEMENT OF SPECIAL TAX BENEFITS Special Tax Benefits Available A. To the Company 1) The company being a manufacturing concern, is eligible for additional depreciation under section 32(1)(iia) of the Income-tax Act in respect of any new machinery or plant (other than ships and aircraft) which are acquired and installed after 31st March, 2005, @ 20% of the actual cost of such machinery or plant. The Company's Bishnupur unit is located in Bankura district, a Category "A" industrially backward district. The said unit is entitled under Section 80-IB(5) of the Income-tax Act, 1961 to a deduction of 100% of the profits and gains derived from the said unit for the first five years effective from financial year 2003-04 and 30% thereafter for the next five years.

2)

B. To the Shareholders of the Company No special tax benefit is available to the shareholders of the issuer Company. Notes: 1. All the above benefits are as per the current tax laws and will be available only to the sole/first named holder in case the shares are held by joint holders. Some or all of the tax consequences may be modified or amended by future amendments to the tax laws. In respect of non-residents, the tax rates and the consequent taxation will be further subject to any benefits available under the relevant DTAA, if any, between India and the country in which the non-resident has fiscal domicile. In view of the individual nature of tax consequences, each investor is advised to consult his/her own tax advisor with respect to specific tax consequences of his/her participation in the issue. The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposal of shares.

2.

3.

4.

43

MANAGEMENT As per Article 111 of the Articles of Association, the Company shall have a minimum of three (3) and a maximum of twelve (12) Directors. The details of the board of directors of the company are given below: Name, Designation, Category, Father's Name, Address, DIN & Sl. Occupation, Term of Date of Other Directorship No. Appointment Appointment (Public & Private Ltd.) Age 50 April 7, 2000 1. Mr. Suresh Kumar Patni 1. Impex Metal & Ferro Alloys years Non-Executive Limited Chairman 2. VSN Agro Products Limited S/o Mr. Dharam Chand 3. Impex Industries Limited Patni 4. Invesco Finance Pvt. Limited 15, Burdwan Road, 5. Impex Ferro Tech Limited Kolkata -700027 6. Shubham Complex Private DIN No. : 00032674 Limited Occupation : Business 7. Suanvi Trading & Investment Term : Liable to retire by Co. Private Limited rotation 8. Ankit Metal & Power Limited 9. Poddar Mech Tech Services Private Limited 10. Sarita Steel-Tech Private Limited 11. Marble Arch Properties Private Limited 12. Vasupujya Enterprises Private Limited 13. SKP Power Ventures Limited 14. VNG Mercantiles Pvt. Limited 26 August 27, 1. Ankit Metal & Power Limited 2. Mr. Rohit Patni years 2007 2. Divine Trading Co. Private Managing Director Limited S/o Mr. Suresh Kumar Patni 3. Greetamax Estates Private 15, Burdwan Road, Limited Kolkata-700027 4. Nutech Multimax Private DIN No. : 00034876 Limited Occupation : Business 5. Pioneer Multimax Private Term : For a period of 5 Limited years w.e.f August 27, 6. Impex Metal & Ferro Alloys 2007 Limited 7. SBM Steels Private Limited 8. SKP Power Ventures Limited 9. Vasupujya Enterprises Private Limited 10. SKP Overseas Pte. Limited 11. Impex Metal (Singapore) Pte. Limited 12. VNG Mercantiles Pvt. Limited 25 October 30, 1. Ankit Metal & Power Limited 3. Mr. Ankit Patni years 2006 2. Divine Trading Co. Private Joint Managing Director Limited S/o Mr. Suresh Kumar Patni 3. Greetamax Estates Private 15, Burdwan Road, Limited Kolkata-700027 4. Nutech Multimax Private DIN No. : 00034907 Limited Occupation : Business 5. Pioneer Multimax Private Term : For a period of 5 Limited years w.e.f August 27, 6. Vasupujya Enterprises Private 2007 Limited 44

4.

5.

6.

Mr. Binit Jain Executive Director S/o Mr. Vijay Kumar Jain Jayanti Enclave, 28, Apkar Garden, Asansol-713304 DIN No. : 00489046 Occupation : Service Term : For a period of 15 months w.e.f June 1, 2009 to August 31, 2010 Mr. Kailash Chand Jain Independent & NonExecutive Director S/o Late Ishwar Lal Jain 7B,Rajhans, 6, Hastings Park Road, Kolkata -700027 DIN No. : 00059590 Occupation : Service Term : Liable to retire by rotation Mr. Jatindra Nath Rudra Independent & NonExecutive Director S/o Late Sachindra Nath Rudra 3/1B, East Road, Kolkata-700032 DIN No. : 00059628 Occupation : Service Term : Liable to retire by rotation Mr. Jayant Kumar Chatterjee Independent & NonExecutive Director S/o Late H. N. Chatterjee Tollygreen, 250B,NSC Bose Road, Kolkata-700 040 DIN No. : 00059807 Occupation : Service Term : Liable to retire by rotation Mr. Asoke Kumar Basu Independent & NonExecutive Director S/o Mr. Binod Bihari Basu 24, Mandevilla Garden, Parijat, Flat No.A-1/6, Gariahat, Kolkata-700019 DIN No. : 02320377 Occupation : Consultant Term : Liable to retire by rotation

30 years

October 15, 2004

Impex Metal & Ferro Alloys Limited 8. Impex Metal (Singapore) Pte. Limited 9. SKP Overseas Pte. Limited 10. SBM Steels Private Limited 1. Jyoti Vyapaar Private Limited 2. Hira Concast Limited 3. Hira Smelters Private Limited 4. Hira Commercial Private Limited

7.

60 years

March 29, 2005

1. 2.

Ankit Metal & Power Limited Vikash Metal & Power Limited

73 years

March 29, 2005

1.

Ankit Metal & Power Limited

7.

67 years

May 16, 2005

NIL

8.

59 years

August 11, 2008

NIL

45

Brief profile of the Directors 1. Mr. Suresh Kumar Patni Mr. Suresh Kumar Patni, aged about 50 years, is the Non-Executive Chairman of the Company. He is a commerce graduate and has a wide experience of over two decades in Ferro Alloy Industry. He began his career as a commission agent by selling minerals and mineral products. Over his long association with the suppliers and buyers he was able to spot a need for setting up his own manufacturing facilities. He has also co-promoted Impex Ferro Tech Limited, Impex Metal & Ferro Alloys Limited and Ankit Metal & Power Limited. With a vast experience & presence in the ferro alloys sector, he diversified into steel sector and promoted Ankit Metal & Power Limited to set up an Integrated Steel Plant comprising of Sponge Iron, Captive Power Plant, Ingots, Billets and finally Rolled products. He contributes with his experience and provides guidance to the senior management of the Company. 2. Mr. Rohit Patni Mr. Rohit Patni, aged about 26 years, is the Managing Director of the Company. He has done his Engineering (BE) from PESIT, Bangalore and is a Gold Medalist and MBA from Cardiff University, Cardiff, UK and academically posses a good engineering background and had experience in implementation of projects in this Company and also in Ankit Metal & Power Limited and looks after the day to day affairs of the Company. 3. Mr. Ankit Patni Mr. Ankit Patni, aged about 25 years, is the Joint Managing Director of the Company. He is a Commerce Graduate along with CFA. He had started his carrier by associating with Ankit Metal & Power Limited and has gained a good amount of experience in the matters of finance, raw material procurements and marketing. 4. Mr. Binit Jain Mr. Binit Jain, aged about 30 years, is the Executive Director of the Company. He is a Commerce graduate and looks after the overall operations of the Company's Bishnupur plant. He is associated with the Bishnupur Plant of the Company since its inception and was instrumental in the overall commissioning of the plant. After having rich experience in setting up the plant at Bishnupur, he was also actively involved in the setting up of the Ferro Alloy Plant at Jajpur, Orissa. 5. Mr. Kailash Chand Jain Mr. Kailash Chand Jain, aged about 60 years, is an Independent and Non-Executive Director of the Company. He is a Commerce Graduate, FCA, FCS, FICWAI along with LLB. He has a long corporate experience of 36 years in various positions ranging from administrative officer to company secretary, chief executive, director and chairman. He has supervised the activities like accounts, secretarial, taxation, finance, legal, administration, HR, purchase, stores, production, general management, marketing etc. in industrial and commercial business houses engaged in diversified activities. 6. Mr. Jatindra Nath Rudra Mr. Jatindra Nath Rudra, aged about 73 years, is an Independent & Non-Executive Director of the Company. He is a Bachelor of Civil Engineering from Jadavpur University and has done his Master of Engineering from Calcutta University. He is also a life member of Institute of Surveyors. He was the CEO of WBIIDC, Govt. of West Bengal. He was deputed by Govt. of India for 6 years as Town Engineer, Kabwe, Republic of Zamabia, Africa. 7. Mr. Jayant Kumar Chatterjee Mr. Jayant Kumar Chatterjee, aged about 67 years, is an Independent and Non-Executive Director of the Company. He is a metallurgist and an expert in the field of ferro alloys, coal and coke. He has a wide experience of over 40 years in the steel & mining industry. He was associated with Tata Steel as a senior metallurgist in charge of blast furnace, sinter plant and coke-oven plant. 46

Subsequently he moved to Commercial division and was Chief of marketing in Ferro Alloys division of Tata Steel. 8. Mr. Asoke Kumar Basu Mr. Asoke Kumar Basu, aged about 59 years, is an Independent and Non-Executive Director of the Company. He is a Bachelor in Engineering (Mechanical) and has 35 years of experience in ferro alloys industry. He has worked with SAIL for 5 years under Alloy Steel Plant in Durgapur for the expansion project. He also has an experience of 12 years in the field of design, operation and maintenance including commissioning of Cement Industries both in India and abroad. Presently he provides the Consultation and Engineering services as a professional in the field of detailed engineering in the Steel and Cement sector. Nature of family relationships between the directors of the Company: Mr. Suresh Kumar Patni, the Chairman of the Company is the father of Mr. Rohit Patni and Mr. Ankit Patni. Hence they are relatives as per Schedule IA of the Companies Act, 1956. Except as indicated above none of the directors are related to each other. There is no arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which any of the directors were selected as director or member of senior management. Number of equity shares held by the Board of Directors: Name of Directors Mr. Suresh Kumar Patni Mr. Rohit Patni Mr. Ankit Patni Mr. Binit Jain Mr. Kailash Chand Jain Mr. Jatindra Nath Rudra Mr. Jayant Kumar Chatterjee Mr. Asoke Kumar Basu Number of shares held 1,020,100 515,000 383,807 NIL NIL NIL NIL NIL % age of Holding 2.58 1.30 0.97 NIL NIL NIL NIL NIL No. of Equity Shares Post Issue [] [] [] [] [] [] [] [] Post Issue Percentage Shareholding [] [] [] [] [] [] [] []

Interest of Promoters/ Directors All the Directors of the Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board and its committees and reimbursement of expenses. All the directors may also be deemed to be interested to the extent of equity shares, if any, already held by them and /or by their friends /relatives in the Company that may be subscribed for or allotted to them in the present offer and also to the extent of any dividend payable to them and other distributions in respect of the said equity shares. All the directors may also be deemed to be interested to the extent of normal transactions, if any, with the Company. The Directors may also be regarded as interested in the equity shares, if any, held or that may be allotted to the companies, firms and trust in which they are interested as directors, members, partners and or trustees. Terms of Employment of the Executive Directors Mr. Rohit Patni ­ Managing Director of the Company Mr. Rohit Patni was appointed as the Managing Director of the Company with effect from August 27, 2007 for a period of five years as approved by the Remuneration Committee at its meeting 47

held on August 27, 2007 and by the shareholders of the Company at the AGM of the Company held on September 28, 2007. The Company has entered into an agreement dated September 28, 2007 with Mr. Rohit Patni, pursuant whereto, Mr. Rohit Patni shall be paid a salary of Rs. 3,00,000/- (Rs. Three Lacs only) per month with an authority to the Board of Directors to alter and vary the terms and conditions of the said appointment with respect to further increases in salary from time to time in such a manner as may be agreed to between the Directors and Mr. Rohit Patni. Major terms & conditions of agreement are as follows: 1. 2. The Managing Director shall not be paid any sitting fees for attending the meetings of the Board of Directors or Committee thereof from the date of his appointment. During his tenure as Managing Director, Mr. Rohit Patni shall be directly in charge of the overall operations of the Company and will oversee and co-ordinate all other functional areas of the Business. He shall be entitled to all business traveling and related expenses incurred in connection with the Company's interest in line with travel Policy of the Company. Subject to the provisions of the Companies Act, 1956 each party has the right of terminating the appointment upon giving two months notice in writing. If at any time Mr. Rohit Patni ceases to be the Director of the Company for any cause whatsoever, he shall cease to be the Managing Director of the Company.

3. 4. 5.

Mr. Ankit Patni ­ Joint Managing Director of the Company Mr. Ankit Patni was appointed as the Joint Managing Director of the Company with effect from August 27, 2007 for a period of five years as approved by the Remuneration Committee at its meeting held on August 27, 2007 and by the shareholders of the Company at the AGM of the Company held on September 28, 2007. The Company has entered into an agreement dated September 28, 2007 with Mr. Ankit Patni, pursuant whereto, Mr. Ankit Patni shall be paid a salary of Rs. 2,00,000/- (Rs. Two Lacs only) per month with an authority to the Board of Directors to alter and vary the terms and conditions of the said appointment with respect to further increases in salary from time to time in such a manner as may be agreed to between the Directors and Mr. Ankit Patni. Major terms & conditions of agreement are as follows: 1. 2. The Jt. Managing Director shall not be paid any sitting fees for attending the meetings of the Board of Directors or Committee thereof from the date of his appointment. During his tenure as Jt. Managing Director, Mr. Ankit Patni shall be directly in charge of the overall operations of the Company and will oversee and co-ordinate all other functional areas of the Business. He shall be entitled to all business traveling and related expenses incurred in connection with the Company's interest in line with travel Policy of the company. Subject to the provisions of the Companies Act, 1956 each party has the right of terminating the appointment upon giving two months notice in writing. If at any time Mr. Ankit Patni ceases to be the Director of the Company for any cause whatsoever, he shall cease to be the Jt. Managing Director of the Company.

3. 4. 5.

Mr. Binit Jain ­ Executive Director of the Company Mr. Binit Jain was appointed as the Executive Director of the Company with effect from June 1, 2009 for a period of fifteen months as approved by the Remuneration Committee at its meeting 48

held on July 29, 2009 and by the shareholders of the Company at the AGM of the Company held on September 22, 2009. The Company has entered into an agreement dated July 29, 2009 with Mr. Binit Jain, pursuant whereto, Mr. Binit Jain shall be paid a salary of Rs. 50,000/- (Rs. Fifty Thousand only) per month subject to further increment but in no case shall exceed the limit of 5 (Five) percent of net profit within the meaning of and specified under section 198, 269, 309 & 310 of the Act, during his continuance of this agreement in consideration of the performance of his duties. Major terms & conditions of agreement are as follows: 1. 2. The Executive Director shall not be paid any sitting fees for attending the meetings of the Board of Directors or Committee thereof from the date of his appointment. The Executive Director shall not as long as he functions as the Executive Director become Interested or otherwise concerned directly or through his wife or children in any selling or other agency of the company without the prior approval of the Central Government. The Executive Director shall perform all the duties as may be delegated by the Board of Directors, Committee of Directors, Managing Director(s) from time to time subject to the provisions of the Companies Act, Articles of Association of the Company or under any other acts. The Company shall be entitled to terminate the agreement in the event of the Executive Director being guilty of misconduct or such intention to or negligence in the discharge of his duties or in the conduct of the Company's business as the Executive Director or any breach of this agreement which in opinion of the Board renders his retirement from the office of the Executive Director. If before the expiration of this agreement the tenure of the office of the Executive Director shall be determined by reason of reconstruction or amalgamation whether by the winding up of the Company or otherwise, the Executive Director shall have no claim against the Company for damage. Subject to the provisions of the Companies Act, 1956 each party has the right of terminating the appointment upon giving two months notice in writing.

3.

4.

5.

6.

Corporate Governance The Company has complied with the conditions of Corporate Governance as stipulated in clause 49 of the listing agreement and circular no. SEBI/CFD/DIL/CG/2004/12/10 dated October 29, 2004 issued by Securities and Exchange Board of India (SEBI.) as amended from time to time. Committees of the Board At present, there are three committees constituted by the Board ­ the Audit Committee, the Remuneration Committee and the Investor Grievance cum Share Transfer Committee. The Board at the time of constitution of each committee fixes the terms of reference for each committee and also delegates powers from time to time. The Board of Directors is committed in its responsibility for all constituents including investors, regulatory authorities and employees. The Company believes that the essence of corporate governance is transparency, accountability, investor protection, better compliance with statutory laws and regulations, value creation for shareholders / stakeholders. Audit Committee As per the requirement of Part II of Clause 49 of the Listing Agreement with the BSE and the NSE and Section 292A of the Companies Act, the Company has formed an Audit Committee. The primary role of the audit committee is overseeing the financial reporting process and disclosure of financial information, reviewing the financial statements before submission to the Board, reviewing adequacy of internal control systems and reviewing findings of internal investigations besides recommending appointment/removal of statutory auditors, internal auditors and fixing their 49

remuneration. The committee holds discussions with the statutory auditors and internal auditors periodically. The following non-executive directors of the Company constitute the Audit Committee: Sr. No. 1. 2. 3. Name of the Director Mr. Kailash Chand Jain Mr. Jatindra Nath Rudra Mr. Jayant Kumar Chatterjee Category Independent Director Independent Director Independent Director Designation Chairman Member Member

Mr. Pramod Kumar Jain, the Company Secretary, shall assist the committee in the proceedings. The terms of reference of the Audit Committee are broadly as follows: a) Oversight (supervision, direction and control) of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible; b) To review compliance with internal control systems; c) To review the findings of the Internal Auditor relating to various functions of the Company; d) To hold periodic discussions with the Statutory Auditors and Internal Auditors of the Company concerning the accounts of the Company, internal control systems, scope of audit and observations of the Auditors/Internal Auditors; e) To review the quarterly, half-yearly and annual financial results of the Company before submission to the Board; f) To make recommendations to the Board on any matter relating to the financial management of the Company, including the Statutory & Internal Audit Reports; g) Recommending the appointment of Statutory Auditors and the Branch Auditors and also fixation of their remuneration. The audit committee shall have full access to information contained in the records of the Company and external professional advice, if necessary. The scope of Audit Committee shall be: · · · · To To To To investigate any activity within its terms or reference seek information from any employee obtain outside legal or other professional advice secure attendance of outsiders with relevant expertise, if it considers necessary.

The Audit Committee also has powers as provided in Clause 49A of the Listing Agreement. Chairman of the Audit Committee shall attend the annual general meetings of the Company to provide any clarifications on matters relating to audit as may be required by the members of the Company. Remuneration Committee The following non-executive directors of the Company constitute the Remuneration Committee: Sr. No. 1. 2. 3. Name of the Director Mr. Jatindra Nath Rudra Mr. Kailash Chand Jain Mr. Jayant Kumar Chatterjee Category Independent Director Independent Director Independent Director Designation Chairman Member Member

The terms of reference of the reconstituted Remuneration Committee are as follows: · To determine and recommend to the Board of Directors the remuneration package of the Managing Director(s) and Whole-time Director(s) including periodicals revisions therein. 50

·

To approve, in the event of loss or inadequate profit in any year, the minimum remuneration payable to the Managing Director(s) and Whole-time Director(s) within the limits and subject to the parameters prescribed in the schedule XIII to the Companies Act, 1956.

Investor Grievance cum Share Transfer Committee The following non-executive directors of the Company constitute the Investor Grievance cum Share Transfer Committee: Sr. No. 1. 2. 3. Name of the Director Mr. Jayant Kumar Chatterjee Mr. Jatindra Nath Rudra Mr. Suresh Kumar Patni Category Independent Director Independent Director Non-Executive Director Designation Chairman Member Member

Investor Grievance cum Share Transfer Committee shall have the power to make decisions relating to redressal of Shareholders' grievances, which includes the duty: · To review and ensure compliance of statutory provisions of the Companies Act, the guidelines of SEBI and the Stock Exchanges and other statutory requirement relating to transfer and transmission of share/debenture of the Company. To review and ensure that the Registrar/Company's Transfer House implements all statutory provisions as above. Approve transfer/transmission of shares/debenture and demat/remat of shares/debentures. Approve issue of duplicate shares certificates, consolidate/sub-division of shares certificates on completion of the procedures as may be stipulated. Ensure all shareholders queries, grievance and complaints likes transfer of shares, nonreceipts of balance sheet, non-receipt of declared dividends etc. are attended and redressed in an expeditious manner. Any other matters referred by the Board relating to equity shareholders of the company.

· · · ·

·

Mr. Pramod Kumar Jain, Company Secretary, has been designated as secretary to the committees and as compliance officer to the Company. The Company Secretary has been delegated the authority to approve the requests for transfers/transmission, splits and remat/demat of shares of the Company. The Committee reviews the transfer/demat/remat/transmission/split as approved by the Company Secretary and take note thereof in their subsequent meeting(s).

51

FINANCIAL STATEMENTS AUDITORS REPORT FOR YEAR ENDED MARCH 31, 2009

To The Board of Directors Rohit Ferro-Tech Limited

1. We have audited the attached Balance Sheet of ROHIT FERRO-TECH LIMITED as at 31st March, 2009 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we considered appropriate, and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable to the Company. 4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that : a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit; b) In our opinion, proper books of account, as required by law have been kept by the Company so far as appears from our examination of those books; c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; e) On the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; f) In our opinion and to the best of our information and according to the explanations given to us, the said statements of accounts, read with the Accounting Policies & Notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2009, 52

ii. in the case of the Profit & Loss Account, of the profit of the Company for the year ended on that date, and iii. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

For S. JAYKISHAN Chartered Accountants,

(B.K. NEWATIA) Partner M. No. 050251 Dated: The 29th day of June, 2009 Place: Kolkata

53

Annexure to the Auditors' Report (Referred to in Paragraph 3 of our Report of even date) (i) a) The Company has maintained proper records to show full particulars, including quantitative details and situation of its fixed assets. b) We are informed that fixed assets of significant value have been physically verified by the management at reasonable intervals, in a phased programme and no material discrepancies were noticed in respect of the assets verified. c) The Company has not made any disposal of Fixed Assets during the year. (ii) a) As explained to us, inventories have been physically verified by the the year at reasonable intervals. management during

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c) In our opinion, the Company has maintained proper records of inventories and the discrepancies noticed on physical verification as compared to book records were not material. (iii) a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. b) Since the company has not granted any Loans as aforesaid, sub-clauses (b), (c) & (d) of this clause are not applicable. c) The Company has taken Unsecured Loan of Rs 67,700,000/- (Rs.9,500,000/- repaid during the year) from a company covered in the register maintained under section 301 of the Companies Act,1956. The maximum amount involved during the year was Rs.62,700,000/- and the year end balance was Rs.62,680,628/-. d) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of loan taken from a company as aforesaid are prima facie not prejudicial to the interest of the Company. e) In respect of the above loan, there are no stipulations as to repayment thereof. (iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system. (v) a) To the best of our knowledge and belief and according to the information and explanations given to us, we are of the opinion that the particulars of the contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956, have been so entered. b) In our opinion, the transactions made in pursuance of such contracts or arrangements and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. 54

(vi) The Company has not accepted any deposit during the year from the public within the meaning of the provisions of Sections 58A and 58AA of the Companies Act, 1956, and the rules framed there under. (vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (viii) The maintenance of cost records under section 209(1)(d) of the Companies Act,1956, has not been prescribed by the Central Government in respect of the products of the Company. (ix) a) According to the records of the Company examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Income-tax, Sales-tax, Wealth-tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues. According to the information and explanations given to us, there is no undisputed outstanding statutory dues as at 31st March, 2009 for a period exceeding six months from the date they became payable except Purchase Tax Payable Rs.47,400/-. b) On the basis of our examination of records and according to explanations given to us, there are no dues as on 31st March,2009 of Sales tax, Income tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute except for the following: Nature of Dues Orissa VAT Orissa VAT Entry Tax Central Sales Tax Amount (Rs.) 551,477/310,082/594,010/887,736/Forum where dispute is pending Joint Commissioner of Commercial Taxes (Jajpur, Orissa)

(x) The Company has neither accumulated losses at the end of the financial year nor has it incurred cash losses in the financial year under report or in the immediately preceding financial year. (xi) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. (xii) As explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) Clause (xiii) of the Order is not applicable, as the Company is not a chit fund company or nidhi/mutual benefit fund/society. (xiv) In respect of shares, securities, debentures and mutual fund units dealt or traded by the Company and held as investments, proper records have been maintained of the transactions and contracts and timely entries have been made therein. All the investments have been held by the company in its own name. (xv) According to the information and explanations given to us, the Company has given a Corporate Guarantee to secure financial assistance to SKP Overseas Pte Ltd, a wholly owned subsidary, which is not considered prejudicial to the interest of the Company. (xvi) On the basis of review of utilisation of funds pertaining to term loans on a overall basis and related information as made available to us, we are of the opinion that the Company has applied the term loans for the purpose for which they were obtained during the year. (xvii) In our opinion, and according to the information and explanations given to us, the funds raised on short-term basis have not been used for long-term investment. (xviii) The Company has made no fresh allotment of shares during the year to parties and companies covered in the Register maintained u/s 301 of the Companies Act, 1956. 55

(xix) No debentures have been issued by the Company and hence the question of creating security or charge in respect thereof does not arise. (xx) The company has not raised any money by way of public issue during the year. (xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year. For S. JAYKISHAN Chartered Accountants,

Dated: The 29th day of June, 2009 Place: Kolkata

(B.K. NEWATIA) Partner M. No. 050251

56

BALANCE SHEET AS AT 31ST MARCH 2009 Schedule I. SOURCES OF FUNDS 1. Shareholders' Funds a) Share Capital b) Deposit against share warrants [Refer Note no.B-6 in Schedule 22] c) Reserves and Surplus 2. Loan Funds a) Secured Loans b) Unsecured Loans 3. Deferred Tax Liability [Refer Note no. B-18 in Schedule 22] Total APPLICATION OF FUNDS 1. Fixed Assets a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work-in-progress [Refer Note no. B-12 in Schedule 22] 2. Investments 3. Current Assets, Loans & Advances a) Inventories b) Sundry Debtors c) Cash & Bank Balances d) Loans & Advances Less : Current Liabilities & Provisions a) Current Liabilities b) Provisions Net Current Assets 4. Miscellaneous Expenditure (to the extent not written off or adjusted) As at 31st March 2009

(Rs. in Lacs) As at 31st March 2008

1

3,948.29 128.14 18,348.61 24,922.54 6,708.92 1,317.85 55,374.36

3,446.29 344.00 16,201.70 17,257.03 3,861.16 844.18 41,954.36

2 3 4

II.

5

24,981.97 2,227.20 22,754.78 1,114.27 1,877.83 30,187.94 7,331.88 3,163.13 10,547.88 51,230.83 21,268.69 413.99 21,682.68 29,548.15 79.35 -

20,855.89 1,236.38 19,619.51 1,713.40 8.49 12,679.10 6,177.75 3,954.25 9,919.80 32,730.89 10,523.15 1,713.80 12,236.95 20,493.94 119.02 -

6 7 8 9 10

11 12

13

Total 55,374.36 41,954.36 Significant Accounting Policies & Notes on 22 Accounts Schedule 1 to 13 & 22 referred above form an integral part of the Balance Sheet. In terms of our report of even date attached. For S. JAYKISHAN Chartered Accountants

For & on behalf of the Board

S. K. Patni Chairman (B.K.Newatia) Partner M No. 050251 Dated : The 29th day of June, 2009 Place : Kolkata 57

Rohit Patni Managing Director

Pramod Kumar Jain CFO & Company Secretary

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2009 (Rs. in Lacs) Year Ended Year Ended Schedule 31.03.2009 31.03.2008 I. INCOME Sales 14 90,712.62 64,579.92 Less: Excise Duty (3,237.46) (2,316.12) 87,475.16 62,263.80 Other Income 15 479.16 279.59 Increase / (Decrease) in Stock 16 2,342.11 2,629.34 90,296.43 65,172.73 II. EXPENDITURE Raw Materials Consumed 17 49,261.25 30,250.70 Purchase of Traded Goods 8,281.22 5,197.92 Manufacturing Expenses 18 15,762.38 12,925.66 Payments to & Provisions for Employees 19 652.39 396.02 Administrative, Selling & Other Expenses 20 9,358.55 3,683.11 Interest & Finance Charges 21 4,599.75 2,470.35 Depreciation 990.75 708.55 88,906.27 55,632.29 PROFIT BEFORE TAX 1,390.16 9,540.43 Provision for Taxation: - Current 157.50 1,097.00 - Deferred 473.67 388.57 - Fringe Benefit Tax 12.73 12.00 - Deferred MAT Credit Entitlement (157.50) PROFIT AFTER TAX 903.76 8,042.87 Less: Income Tax for Earlier Years (94.39) (21.37) Surplus from last year 11,822.85 4,856.15 Balance available for Appropriation 12,632.23 12,877.65 APPROPRIATIONS Dividend for earlier year 75.30 Proposed Dividend 197.41 516.94 Corporate Tax on Dividend 46.35 87.85 Transfer to General Reserve 450.00 Balance carried to Balance Sheet 12,313.16 11,822.85 12,632.23 12,877.65 Earnings per Share [Refer Note No. B-17 in Schedule 22] (Face Value - Rs. 10/- each) Before extraordinary item - Basic 2.41 23.34 - Diluted 2.13 21.57 After extraordinary item - Basic 2.16 23.28 - Diluted 1.91 21.52 Significant Accounting Policies & Notes on 22 Accounts Schedule 14 to 22 referred above form an integral part of the Profit & Loss Account In terms of our report of even date attached. For S. JAYKISHAN Chartered Accountants For & on behalf of the Board S. K. Patni Rohit Patni (B.K.Newatia) Chairman Managing Director Partner M No. 050251 Pramod Kumar Jain Dated : The 29th day of June, 2009 CFO & Place : Kolkata Company Secretary 58

A

B

C

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2009 (Rs. in Lacs) Year ended 31.03.2009 Year ended 31.03.2008 Cash Flows from Operating Activities Net Profit before Tax & Extraordinary Items 1,390.16 9,540.43 Adjustments for: Depreciation 990.75 708.55 Investment Income (1.48) Interest Income (425.08) (216.02) Interest Expenses 4,599.75 2,509.86 Liabilities no longer required written back (2.86) Sundry Balances written off 2.20 3.75 Share Issue Expenses written off 39.67 39.67 Preliminary Expenses written off 5,202.96 1.33 3,047.14 Operating Profit before Working Capital Changes 6,593.12 12,587.58 Adjustments for: Trade & Other Receivables (992.98) (8,824.05) Inventories (17,508.84) (4,542.18) Trade Payables & Other Liabilities 10,528.92 (7,972.90) 6,176.80 (7,189.43) Cash Generated from Operations (1,379.78) 5,398.15 Direct Taxes Paid (1,367.54) (252.09) Net Cash from/ (used in) Operating Activities (2,747.32) 5,146.06 Cash Flows from Investing Activities Purchase of Fixed Assets & Capital W.I.P. (3,399.16) (5,664.73) Advances for Capitalalised Goods (466.22) 327.26 Purchase of Investment (1,877.83) Sale of Investment 9.97 Interest Received 506.10 103.60 Advance to Subsidiary (70.23) Decrease/ (Increase) in Fixed Deposits 897.84 (2,668.59) Net Cash from/ (used in) Investing Activities (4,399.53) (7,902.46) Cash Flows from Financing Activities Deposit against share warrants 344.00 Proceeds of Shares issued on conversion of warrants 1,942.74 Proceeds from Long Term Loan 1,502.62 848.00 Repayments of Long Term Loans (1,882.00) (1,481.00) Increase in Short Term Borrowings 8,044.89 2,303.58 Increase in Inter Corporate Deposits & Other Loans 2,847.76 3,830.91 Interest Paid (4,526.42) (2,523.84) Dividend paid (592.24) (344.63) 59

Corporate Dividend Tax Paid Net Cash from / (used in) Financing Activities Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) Cash and Cash Equivalents at the beginning of period Cash and Cash Equivalents at the end of period Notes:

(87.85) 7,249.50 102.64 309.41 412.05

(58.57) 2,918.46 162.06 147.35 309.41

i) The Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard-3 on "Cash Flow Statement" notified by the Companies (Accounting Standards) Rules, 2006 ii) Cash and cash equivalents include Cash- in-Hand and Bank balances on current account. (Refer Schedule 9). iii) Figures in brackets indicate Cash outflow. In terms of our report of even date attached. For S. JAYKISHAN Chartered Accountants For & on behalf of the Board

S. K. Patni Chairman (B.K.Newatia) Partner M No. 050251 Dated : The 29th day of June, 2009 Place : Kolkata

Rohit Patni Managing Director

Pramod Kumar Jain CFO & Company Secretary

60

SCHEDULES ANNEXED TO & FORMING PART OF THE BALANCE SHEET AS AT 31ST MARCH, 2009 SCHEDULE 1 Particulars SHARE CAPITAL Authorised 45,000,000 Equity Shares of Rs.10 /- each (PreviousYear - 45,000,000 Equity Shares of Rs.10/- each) Issued , Subscribed & Paid-up 39,482,945 Equity Shares of Rs.10/-each fully paid up in Cash (Previous Year: 34,462,945 Equity Shares of Rs. 10/- each) (During the year, the Company has allotted 50,20,000 equity shares of Rs. 10/- each to Preferential Convertible Warrant holders at a premium of Rs. 33/- per share) As at 31st March 2009 4,500.00 (Rs. in lacs) As at 31st March 2008 4,500.00

3,948.29

3,446.29

3,948.29 SCHEDULE 2 Particulars RESERVES & SURPLUS Securities Premium As per last account Add: Received during the year on allotment of shares to Preferential Convertible Warrant holders Capital Reserve Capital Investment Subsidy- As per last account General Reserve As per last account Surplus as per Profit & Loss A/c annexed As at 31st March 2009

3,446.29

(Rs. in lacs) As at 31st March 2008

3,688.85 1,656.60 5,345.45 240.00 450.00 12,313.16 18,348.61

3,688.85 3,688.85 240.00 450.00 11,822.85 16,201.70

SCHEDULE 3 Particulars SECURED LOANS A) Term Loans State Bank of India State Bank of Travancore State Bank of Hyderabad United Bank of India United Bank of India (for Haldia Project) B) Working Capital Loans Cash Credit State Bank of India State Bank of Hyderabad State Bank of Travancore 61 As at 31st March 2009 (Rs. in lacs) As at 31st March 2008

1,439.00 600.00 599.75 2,296.70 1,502.62

2,197.61 809.76 809.30 3,000.78 -

2,527.41 892.39 995.02

587.61 893.68 863.94

United Bank of India Export Packing Credit State Bank of India Stand by Line of Credit State Bank of India State Bank of Hyderabad State Bank of Travancore Buyers' Credit State Bank of India United Bank of India C) Rupee Loan IDBI Ltd. Notes :

2,995.49

2,145.34

2,500.01

2,519.78

500.09 250.00 300.00

506.72 251.44 -

3,748.00 1,776.07

671.07

2,000.00 24,922.54

2,000.00 17,257.03

A. Securities for Loans 1) Term Loans (other than for Haldia Project) are secured by way of 1st charge on pari passu basis by equitable mortgage of factory land & building and hypothecation of plant and machineries, both existing & future, of Bishnupur & Jajpur Units with collateral security by equitable mortgage on pari passu basis of i) office premises at Kolkata & ii) property of Shubham Complex (P) Ltd. and 2nd pari passu charge on current assets of the Company and Personal Guarantee of the Promoter Directors & Corporate Guarantee of the group Companies. 2) Term Loan for Haldia Project is secured by way of 1st charge on entire fixed assets of the said Project and 2nd charge on pari passu basis on the current assets of the Company and Personal Guarantee of the Promoter Directors & Corporate Guarantee of the group Companies. 3) Working Capital Loans are secured by way of 1st charge on pari passu basis by hypothecation of Inventories, Book Debts and Other Current Assets with 2nd charge on Company's Fixed Assets at Bishnupur & Jajpur Units and collateral security by equitable mortgage on pari passu basis of i) office premises at Kolkata & ii) property of Shubham Complex (P) Ltd., and Personal Guarantee of the Promoter Directors & Corporate Guarantee of the group Companies. 4) Loan from IDBI Ltd. is secured by 1st charge on Escrow account for Power Subsidy receivable. B. Term Loans repayable within one year- Rs. 3218.44 Lacs (Previous year- Rs. 1817.30 Lacs) SCHEDULE 4 (Rs. in lacs) As at 31st As at 31st Particulars March 2009 March 2008 UNSECURED LOANS Standard Chartered Bank 659.62 1,489.87 (Personally guaranteed by the promoter directors & one of the group companies) State Bank of Bikanar & Jaipur 1,500.00 (Personally guaranteed by the Managing Director) Citi Bank 700.00 (Personally guaranteed by the promoter directors & one of the group companies) Indusind Bank 1,000.00 WBIDC Ltd. (Bridge Loan against Power Subsidy receivable) 678.99 1,299.68 Other Bodies Corporate 2,170.32 1,071.61 6,708.92 62 3,861.16

SCHEDULE 5 FIXED ASSETS (Rs. in lacs)

G R O S S PARTICULARS As At 01.04.2008 Addition s during the year B L O C K As at 31.03.2009 DEPRECIATION As at 01.04.2008 For the year* As on 31.03.2009 NET BLOCK As at 31.03.2009 As at 31.03.2008

Deductio ns during the year

1

Land and Land Development a) Leasehold b) Freehold Factory Shed & Buildings Office Building Guest House Plant & Machineries Electrical Installations Tools & Equipments Air Conditioners Office Equipments Computers Motor Cars Furniture & Fixtures Fire Extinguishers

1,721.47 38.20 4,452.86 90.09 17.26 8,538.27 5,633.87 77.64 23.77 16.93 34.79 114.71 95.74 0.30 20,855.89 12,113.59 1,713.40 5,651.78

1,124.20 655.46 1,699.13 548.23 0.85 3.53 4.16 18.92 31.95 38.23 1.43 4,126.08 8,742.30 1,517.30 3,424.34

2,116.44 7,362.72

2,845.67 38.20 5,108.32 90.09 17.26 10,237.39 6,182.10 78.49 27.30 21.09 53.71 146.66 133.97 1.73 24,981.97 20,855.89 1,114.27 1,713.40

219.12 3.12 0.84 594.49 369.55 7.80 2.19 1.56 9.01 18.26 10.37 0.07 1,236.38 527.84 -

156.20 1.47 0.28 485.96 312.61 3.73 1.24 0.94 7.18 13.26 7.90 0.05 990.81 708.55 -

375.32 4.59 1.13 1,080.45 682.17 11.53 3.43 2.50 16.19 31.52 18.26 0.12 2,227.20 1,236.38 -

2,845.67 38.20 4,733.00 85.50 16.13 9,156.95 5,499.94 66.97 23.87 18.59 37.52 115.14 115.70 1.61 22,754.78 19,619.51 1,114.27 1,713.40

1,721.47 38.20 4,233.74 86.97 16.41 7,943.78 5,264.32 69.84 21.59 15.37 25.77 96.45 85.37 0.24 19,619.51 1,713.40 -

2 3 4 5 6 7 8 9 10 11 12 13 TOTAL

Figures as on 31.03.08 Capital Work-inProgress Previous year

* Includes Rs.6,573/- debited to Capital Work- In- Progress Notes:The original cost of vehicles & equipments includes Rs. 56.43 lacs (P.Y. Rs. 69.52 lacs) acquired from loans taken from banks & financial institutions, of which Rs.19.06 lacs (P.Y. Rs.37.44 lacs) were outstanding as at 31.03.2009. 63

SCHEDULE 6 Particulars INVESTMENTS (Long Term) Trade (Unquoted) Investment in Subsidiaries SKP Overseas Pte Ltd. 6000000 Shares of S$ 1 (Rs. 31.28) each fully paid up Investment in Equity Shares SKP Power Ventures Ltd. 10000 shares of Rs. 10/- each fully paid up Rohit Persia Mines & Industries PJSC 49 Shares of 10000 Rials (Rs.64.87) each fully paid up Non-Trade (Unquoted) Investment in Mutual Funds - Bajaj Allianz Equity Plus Fund (P Y 590.184 units) - Bajaj Allianz Cash Plus Fund (P Y 70317.307 units) As at 31st March 2009

(Rs. in lacs) As at 31st March 2008

1,876.79

-

1.00 0.03

-

1,877.83

0.07 8.42 8.49

SCHEDULE 7 Particulars INVENTORIES (as taken, valued & certified by the management) Raw Materials Finished Goods (including in transit Rs. 130,057,505) Work in Progress Packing Materials Stores & Spares As at 31st March 2009

(Rs. in lacs) As at 31st March 2008

23,267.35 3,835.86 2,578.37 52.13 454.22 30,187.94

8,460.79 2,646.35 1,425.78 31.15 115.03 12,679.10

SCHEDULE 8 Particulars SUNDRY DEBTORS (Unsecured, Considered Good) Due for more than 6 months Other Debts As at 31st March 2009 (Rs. in lacs) As at 31st March 2008

1,454.84 5,877.04 7,331.88

160.35 6,017.40 6,177.75

SCHEDULE 9 Particulars CASH & BANK BALANCES Cash in Hand (As Certified by the Management) Balances With Scheduled Banks In Current Accounts In Public Issue Account H.D.F.C Bank Ltd. 64 As at 31st March 2009 24.65 (Rs. in lacs) As at 31st March 2008 58.42

387.41 0.15

250.99 0.15

In Dividend Accounts H.D.F.C Bank Ltd. In Fixed Deposit Accounts (pledged with Banks as margin for Bank Guarantees and Letter of Credit facility) State Bank of India State Bank of Hyderabad State Bank of Travancore United Bank of India Centurion Bank of Punjab Ltd Induslnd Bank Yes Bank

4.68

0.60

900.00 484.06 153.04 773.64 12.91 107.24 315.35 3,163.13

2,739.53 55.72 375.00 326.00 147.85 3,954.25

SCHEDULE 10 Particulars LOANS & ADVANCES (Unsecured, Considered good) Advances recoverable in cash or in kind or for value to be received For Capital Goods To Subsidiary To Suppliers & Others Accrued Interest on deposits Prepaid Expenses Security & Other Deposits Balance with Excise Department Cenvat / Vat Credit Receivable Export Incentives Receivable Power Subsidy Receivable Income Tax Payments (including TDS) Income Tax Refundable MAT Credit Entitlement [Refer Note B-19 in Schedule 22] As at 31st March 2009

(Rs. in lacs) As at 31st March 2008

650.67 70.23 1,638.73 48.99 290.29 1,927.84 1,065.79 1,365.47 422.46 2,263.20 209.76 2.04 592.41 10,547.88

184.45 2,792.04 115.67 57.76 1,949.41 239.88 550.78 384.24 3,163.04 45.60 2.04 434.90 9,919.80

SCHEDULE 11 Particulars CURRENT LIABILITIES Acceptances Sundry Creditors Dues to Micro, Small & Medium Enterprises -Dues to Others For Supplies For Capital Goods For Expenses For Pending Disbursements Advances from Parties Income received in advance Interest accrued but not due Unclaimed Dividends* 65 As at 31st March 2009 1,412.32 16,760.58 93.45 2,692.24 185.10 24.74 22.10 73.33 4.68

(Rs. in lacs) As at 31st March 2008 3,575.93 3,251.56 221.17 2,480.44 327.12 658.43 7.76 0.60

Share Application Money Refundable

0.15

0.15

21,268.69 10,523.15 *There is no amount due and outstanding to be credited to Investor Education & Protection Fund. SCHEDULE 12 Particulars PROVISIONS For Taxation For Fringe Benefit Tax For Proposed Dividend For Corporate Tax on Dividend As at 31st March 2009 157.50 12.73 197.41 46.35 413.99 SCHEDULE 13 Particulars MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Preliminary Expenses Opening Balance Less: Amortised during the year Share Issue Expenses Opening Balance Less: Amortised during the year Total SCHEDULE 14 Particulars SALES Sale of Manufactured Goods Export Sales Domestic Sales Sale of Raw Materials Sale of Traded Goods Export Incentives Year ended 31st March 2009 As at 31st March 2009 (Rs. in lacs) As at 31st March 2008 1,097.00 12.00 516.94 87.85 1,713.80

(Rs. in lacs) As at 31st March 2008

119.02 39.67 79.35 79.35

1.33 1.33 158.69 39.67 119.02 119.02

(Rs. in lacs) Year ended 31st March 2008

54,374.36 26,144.52 1,046.33 8,546.85 600.55 90,712.62

41,350.10 16,501.75 5,775.61 952.47 64,579.92

SCHEDULE 15 Particulars OTHER INCOME Interest on Credit sales ( TDS Rs.1,927,013/-, P.Y.2,432,824/-) Interest on Fixed Deposits with Banks ( TDS Rs. 5,778,823/-, P.Y.-Rs.1,232,183/-) Interest on Other deposits ( TDS Rs. 954,446/-, P.Y.Nil) 66 Year ended 31st March 2009 63.61 258.70 78.85

(Rs. in lacs) Year ended 31st March 2008 69.59 146.43 -

Interest Received on advances ( TDS Rs. 492,707/-, P.Y.-Nil) Foreign Exchange Fluctuation Gain Premium on Forward Contract Liabilities no longer required written back Profit on redemption of investment with Mutual Funds (Current Investments - Other than trade)

23.92 49.75 2.86 1.48 479.16

63.57 279.59

SCHEDULE 16 Particulars INCREASE / (DECREASE) IN STOCK Closing Stock of Finished Goods (including in transit) Closing Work-in-Progress Less : Opening Stock of Finished Goods & Work-in-Progress Year ended 31st March 2009 3,835.86 2,578.37 6,414.23 4,072.13 2,342.11 SCHEDULE 17 Particulars RAW MATERIALS CONSUMED (Including cost of raw materials sold) Opening Stock Add: Purchases (including freight) Less : Closing Stock Year ended 31st March 2009

(Rs. in lacs) Year ended 31st March 2008 2,646.35 1,425.78 4,072.13 1,442.79 2,629.34

(Rs. in lacs) Year ended 31st March 2008

8,460.79 64,067.81 72,528.60 23,267.35 49,261.25

6,601.20 32,110.29 38,711.49 8,460.79 30,250.70

SCHEDULE 18 Particulars MANUFACTURING EXPENSES Labour Charges Power & Fuel Water Supply Charges Stores & Spares Packing Materials Material Handling Charges Excise Duty on variation in stocks [Refer Note no.B-9 in Schedule 22] Machinery Hire Charges Repairs & Maintenance To Factory Shed & Buildings To Plant & Machinery Year ended 31st March 2009 919.80 12,767.25 35.27 1,491.00 192.19 480.63 (192.31) 17.05 2.11 49.37 15,762.38

(Rs. in lacs) Year ended 31st March 2008 495.79 9,969.05 21.26 1,717.33 64.73 254.20 183.93 36.91 48.98 133.48 12,925.66

67

SCHEDULE 19 Particulars PAYMENTS TO & PROVISIONS FOR EMPLOYEES Factory Wages Salaries Contribution to Provident Fund Gratuity Directors' Remuneration Welfare Expenses SCHEDULE 20 Year ended 31st March 2009 364.31 157.07 26.93 6.75 63.00 34.32 652.39

(Rs. in lacs) Year ended 31st March 2008 201.25 92.05 16.50 5.99 58.81 21.43 396.02 (Rs. in lacs) Year ended 31st March 2008 15.13 17.04 2.73 56.04 19.42 6.62 22.44 86.05 42.80 14.74 146.06 15.89 35.88 1.00 0.30 0.28 0.88 88.15 419.73 39.52 13.74 45.58 9.47 63.81 1,532.19 888.46 17.85 23.23 5.40 7.92 3.75 1.33 39.67 3,683.11

Year ended 31st March 2009 ADMINISTRATIVE, SELLING & OTHER EXPENSES Rent Rates & Taxes Electricity Charges Insurance Printing & Stationery Postage, Telegram & Courier Telephone Charges Travelling & Conveyance Car Running & Maintenance Other Repairs & Maintenance Security Service Charges Membership & Subscription Legal & Professional Charges Auditors' Remuneration - For Audit - For Tax Audit - For Income Tax Matters - In any other matter Directors' Sitting Fees Miscellaneous Expenses Bank Charges Bill Discounting Charges Processing Fees to WBIDC Ltd Testing & Inspection Charges Donations Advertisement, Publicity & Sales Promotion Freight & Forwarding on Export Transportation, Loading & Labor Charges Commission on Sales- other than sole selling agent Discounts & Rebates Foreign Exchange Fluctuation Loss Sales Tax / Entry Tax on assessment Prior Period Expenses [Refer Note no. B-10 in Schedule 22] Sundry Balances Written Off Preliminary Expenses Written Off Share Issue Expenses Written Off 151.93 36.16 2.41 138.79 23.90 8.09 27.93 155.48 45.50 35.47 187.84 24.34 109.94 1.50 0.30 0.11 0.56 1.88 108.94 893.06 13.62 26.73 75.44 3.40 63.88 2,392.31 566.11 32.74 4,167.29 10.45 10.58 2.20 39.67 9,358.55 68

SCHEDULE 21 Year ended 31st March 2009 INTEREST & FINANCE CHARGES Interest to Banks/ Financial Institutions On Fixed Loans Others Motor Car Finance Charges Equipment Finance Charges Interest to Others

(Rs. in lacs) Year ended 31st March 2008

1,302.05 2,845.36 3.12 449.21 4,599.75

914.67 1,430.17 2.46 0.09 122.96 2,470.35

SCHEDULE - 22 SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS A. SIGNIFICANT ACCOUNTING POLICIES 1. Basis of preparation of financial statements. a) The financial statements are prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP) under the historical cost convention on accrual basis and on principles of going concern. The accounting policies are consistently applied by the Company. b) The financial statements are prepared to comply in all material respects with the accounting standards notified by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956. c) The preparation of the financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known / materialised. 2. Revenue Recognition a) Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. b) Sales are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are inclusive of excise duty but net of trade discounts and VAT. However, excise duty relating to sales is reduced from gross turnover for disclosing net turnover. Domestic sales are recognised at the time of dispatch of materials to the buyer. Export sales are recognised on the issue of bill of lading. c) Export incentives arising out of Export Sales are accounted for on accrual basis. d) Purchases are net of CENVAT/ VAT credit, Trade Discounts and claims. e) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. 3. Fixed Assets a) Fixed Assets are stated at cost, less accummulated depreciation and impairment losses, if any. Cost comprises the purchase price (net of CENVAT / duty credits availed or available thereon) and any attributable cost of bringing the asset to its working condition for the intended use. 69

b) Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, or at the rates prescribed under schedule XIV of the Companies Act, 1956, whichever is higher. No write off is made in respect of leasehold land as these are long term leases. c) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the higher of the asset's net selling price and value in use, which is determined by the present value of the estimated future cash flows. d) Cost of the fixed assets not ready for their intended use at the Balance Sheet date together with all related expenses are shown as Capital Work-in-progress. 4. Investments Investments classified as long-term investments are stated at cost. Provision is made to recognise any diminution other than temporary in the value of such investments. Current investments are carried at lower of cost and fair value. 5. Inventories Inventories are valued at lower of cost and net realisable value. Cost of inventories comprises material cost on FIFO basis, labour and manufacturing overheads incurred in bringing the inventories to their present location and condition. Cost of finished goods includes excise duty. 6. Foreign Currency Transactions i. Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. ii. Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. iii. Exchange Differences

Exchange differences arising on the settlement of monetary items are recognised as income or as expense in the year in which they arise. iv. Forward Exchange Contracts

The company enters into Forward Exchange Contracts which are not intended for trading or speculation purposes. The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or expense for the year. 7. Derivative Instruments The Company has entered into forward contracts to hedge a firm commitment or a highly probable forecast transaction to which Accounting Standard (AS) 11 is not applicable. The Company has applied announcement of The Institute of Chartered Accountants of India on 'Accounting for Derivatives' inter alia requiring provision for losses on all derivative contracts 70

outstanding at the Balance Sheet date by marking them to market keeping in view the principle of prudence. 8. Government Grants Government grants are recognized when there is a reasonable assurance that the Company will comply with the conditions attached thereto and the grants will be received. Government grant in the form of promoters' contribution is credited to capital reserve. Capital grant relating to specific assets is reduced from the gross value of the respective fixed assets. Government grants related to revenue are recognized by credit over the period to match them on a systematic basis to the costs, which it intended to compensate. 9. Employee Benefits a) Defined Contribution Plan Contributions as per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 towards provident fund and family pension fund are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There is no other obligation other than the contribution payable to the respective funds. b) Defined Benefit Plan Liability with regard to long-term employee benefits is provided for on the basis of an actuarial valuation at the Balance Sheet date. Actuarial gain / loss is recognised immediately in the statement of profit and loss. The Company has an Employees Gratuity Fund managed by the Life Insurance Corporation of India. c) Short-term Compensated Absences are provided for based on estimates. 10. Borrowing Costs a) Borrowing costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period untill the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. b) Other Borrowing costs are recognised as expense in the period in which they are incurred. 11. Expenditure on new projects & substantial expansion Preliminary project expenditure, capital expenditure, indirect expenditure incidental and related to construction/ implementation, interest on term loans to finance fixed assets and expenditure on start-up of the project are capitalized upto the date of commissionig of project to the cost of the respective assets. 12. Taxes on Income Tax expense comprises of current tax, deferred tax and fringe benefit tax. a) Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rates and tax laws. In case of tax payable as per provisions of MAT under section 115JB of he Income Tax Act, 1961, MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company wil pay normal income tax during the specified period. b) Deferred Tax arising on account of "timing differences" and which are capable of reversal in one or more subsequent periods is recognised, using the tax rates and tax laws that are enacted or substantively enacted. Deferred tax asset is recognised only to the extent there is reasonable certainty with respect to reversal of the same in future years as a matter of prudence. 71

13. Earnings per Share (EPS) a) Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. 14. Provisions & Contingent Liabilities Provision involving substantial degree of estimation in measurements is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are shown by way of notes to the Accounts in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered not probable. A Contingent Asset is not recognized in the Accounts. 15. Share Issue Expenses Share Issue Expenses are amortised over a period of 5 years U/s 35D of the Income Tax Act, 1961. 16. Prior Period Items Prior Period and Extraordinary items and Changes in Accounting Policies having material impact on the financial affairs of the Company are disclosed. B. 1. NOTES ON ACCOUNTS Contingent Liabilities not provided for in the books of Accounts in respect of:

a) Bank Guarantees - Rs.846,000 (Previous year Rs.1,721,042) b) Bills discounted with Banks, outstanding as on 31st March, 2009- Rs.680,792,008 (P.Y. Rs.873,526,956). c) Letters of Credit opened in favour of suppliers, outstanding as on 31st March, 2009 Rs.33,794,920. (P.Y. - Rs.453,246,166) d) Corporate Guarantee given to Indian Overseas Bank, Hongkong to secure the financial assistance to SKP Overseas Pte Ltd, a wholly owned subsidary, amounting to USD 15 million. e) Tax Demands disputed in appeal: · · · Orissa Vat for the year 2005-06 - Rs. 551,477 and for 2006-07 - Rs. 310,082. Entry Tax for 2006-07 Rs. 594,010. Central Sales Tax for 2006-07 Rs. 887,736.

f) Excise duty liability arising out of search operation by the Directorate General of Central Excise Intelligence. However, the Company has paid under protest a sum of Rs. 1.50 crore pending issuance of any show cause notice. 2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) - Rs.125,907,600 (Previous Year Rs. 28,300,000/-)

72

3. In the opinion of the Board of Directors, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the accounts. Adequate provisions have been made for all known losses and liabilities. 4. Certain balances of Sundry Creditors, Sundry Debtors, Unsecured Loans and Advances are subject to Confirmation. 5. There are no Micro, Small and Medium Enterprises to whom the Company owes dues, which are oustanding for more than 45 days as at 31st March, 2009. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. 6. In the year 2007-08, the Company had issued 8,000,000 Preferential Convertible Warrants (Exercise Price of Rs.43 each) on preferential basis to promoters & other strategic investors. Each warrant carried a right to convert the same into one Equity Share of Rs.10 each at a premium of Rs.33 each (as per the formula prescribed under the SEBI (DIP) guidelines) over a period of 18 months from the date of allotment. Of the above, 5,020,000 warrants have been converted into the Equity Shares during the year. The total proceeds from the said issue have been utilised for capital expenditure and investment in Subsidiary. Rs.12,814,000, being 10% of the exercise price of 2,980,000 warrants outstanding as on 31st March, 2009 has been shown as "Deposit against Share Warrants" in the Balance Sheet. 7. Sundry Debtors include Rs.275,901,296 (P.Y. Rs.321,752,489) covered by letters of credit in favour of the Company. 8a) Details of payments and provisions on account of remuneration to managerial personnel are as under: (Amount in Rs.) 2008-09 2007-08 i) Salaries to Managing Directors S.K.Patni 2,000,000 Rohit Patni - Managing Director 3,600,000 2,148,387 Ankit Patni - Joint Managing Director 2,400,000 1,432,258 6,000,000 5,580,645 ii) Salaries to Executive Director Binit Jain 300,000 300,000 300,000 300,000 iii) Perquisites iv) Sitting Fees to Other Directors 187,500 87,500 187,500 87,500 6,487,500 5,968,145

Liability for gratuity and leave encashment is provided on acturial basis for the company as a whole. The amount pertaining to the directors is not ascertainable and therefore, not included above. 8b) The computation of net profit for the purpose of Director's Remuneration u/s 349 of Companies Act, 1956 has not been enumerated since no commission has been paid to any of 73

the directors. Fixed managerial remuneration has been paid to the whole-time directors as per Schedule XIII of the Companies Act, 1956. 9. Amount of excise duty on variation in stocks shown in Schedule 19 represents differential excise duty on opening and closing stock of finished goods. 10. Prior period expenses for the year comprise of the followings:(Amount in Rs.) 2007-08 21,420 326,837 21,078 3,750 364,788 54,213 792,086

2008-09 Labour Charges Water Supply Charges Material Handling Charges Machinery Hire Charges Excise Duty Entry Tax Factory Wages Salaries Contribution to Provident Fund Discount Received Rent Electricity Charges Telephone Expenses Service Charges Bank Charges Miscellaneous Expenses Interest on car Loan Total 36,497 177,180 74,618 (771,641) 1,038,295 60,000 (461,445) 810,000 84,511 2,500 7,500 1,058,015

11. The Company has commenced commercial production from 5th Furnace at its Bishnupur unit on 27th August, 2008. Accordingly, pre-operative expenses relating to the said project have been capitalised by transfer to Factory Shed & Building, Plant & Machinery and Electrical installations in proportion to their respective costs. 12. Capital Work-in-Progress includes Pre-operative Expenses relating to projects under implementation, pending allocation to Fixed Assets: (Amount in Rs.) 2007-08 53,275,524 456,350 153,648 -

2008-09 Pre-Operative Expenses Opening Balance Add: Expenditure incurred during the year Salary Welfare Expenses Rent Rates & Taxes Repairs & Maintenance Insurance Electricity Charges Printing & Stationary Telephone Charges Travelling & Conveyance Motor Car Expenses Legal, Professional & Consultancy Charges Bank Charges Miscellaneous Expenses 74 7,390,534 372,500 7,226 174,005 1,800,697 92,200 6,806 31,356 23,981 7,414 8,809 550,000 13,556 109,444

Advertisement & Sales Promotion Transportation, Loading & Labour Charges Interest (Includes Rs.4,425,015 (P.Y.- Rs.65,147,428) on Term Loan) Depreciation Total Less: Amount allocated to Fixed Assets Closing Balance

28,300 95,878 11,033,088 6,573 21,752,367 11,553,563 10,198,804

65,147,428 119,032,950 111,642,416 7,390,534

13. Research and Development expenses aggregating to Rs.657,829/- in the nature of revenue expenditure have been included under the appropriate account heads. 14. Disclosure pursuant to Accounting Standard- 15 (Revised) " Employee Benefits" : a) Defined Contribution Plan: Amount of Rs. 2,693,276 (P.Y.-Rs. 16,49,632) is recognised as expense and included in "Payments to and Provisions For Employees" in Schedule-19 of the Profit & Loss Account. b) Defined Benefit Plan: i. Reconciliation of Opening and Closing balances of the Present Value of the Defined Benefit Obligation : (Amount in Rs.) 2007-08 2008-09 a. Present Value of Defined Benefit Obligation at the 1,310,434 710,093 beginning of the year b. Interest Cost 74,105 56,807 c. Current Service Cost 382,818 382,818 d. Actuarial Losses/ (Gains) (24,469) 160,716 e. Benefits Paid f. Present Value of Defined Benefit Obligation at the 1,742,888 1,310,434 close of the year ii. Changes in the Fair Value of Plan Assets and reconciliation thereof: (Amount in Rs.) 2007-08 2008-09 1,310,434 118,986 11,629 675,100 2,116,149 130,615 1,299 1,309,135 1,310,434 1,299

a. Fair Value of Plan Assets at the Beginning of the year b. Add : Expected Return on Plan Assets c. Add / (Less) : Actuarial Gains / (Losses) d. Add : Contributions e. Less: Benefits Paid f. Fair Value of Plan Assets at the close of the year Actual Return on Plan Assets

iii. Amount Recognised in the Balance Sheet including a reconciliation of the present value of the defined obligation in (i) and the fair value of the plan assets in (ii) to assets and liabilities recognised in the Balance Sheet: (Amount in Rs.)

a. Present Value of Defined Benefit Obligation b. Less: Fair Value of Plan Assets c. Present Value of unfunded obligation d. Net Liability / (Assets) recognised in the Balance Sheet **

2008-09 1,742,888 2,116,149 -

2007-08 1,310,434 1,310,434 -

** The excess of assets over liabilities have not been recognized as they are lying in an irrevocable trust fund. 75

iv. Amount recognised in the Profit and Loss Account are as follows : 2008-09 a. Current Service Cost b. Interest Cost c. Expected return on Plan Assets d. Actuarial Losses / ( Gains) e. Past Service Costs f. Effect of curtailment / settlement g. Net asset not recognised as above h. Recognised in the Profit and Loss Account v. 382,818 74,105 (118,986) (36,098) 373,261 675,100

(Amount in Rs.) 2007-08 382,818 56,807 (1,299) 160,716 599,042

Broad Categories of Plan Assets as a percentage of Total Assets as at 31.03.2009 (Amount in Rs.) 2007-08 2008-09 Qualifying Insurance Policy YES YES

vi. Actuarial Assumptions as at the Balance Sheet date:

a. Mortality table b. Discount Rate c. Salary Escalation Rate

2007-08 2008-09 LIC 1994-96 Ultimate 8% 8% 4% 3%

vii. The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors. 15. A) Business segments: Based on the synergies, risks and returns associated with business operations and in terms of Accounting Standard - 17, the Company is predominantly engaged in a single reportable segment of 'Ferro Alloys' during the year. Trading of iron and steel & minerals has not been considered as a separate reportable segment since segment revenue / result from the same is less than 10% of the total revenue / result. B) Geographical segments: The Company's secondary geographical segments have been identified based on the location of customers and are disclosed based on revenues within India and revenues outside India. Secondary segment assets and liabilities are based on the location of such asset / liability. 2008-09 Rs. (In Lakhs) Revenue (Gross Sales) Within India Outside India Carrying Amount of Segment Assets Within India Outside India Capital Expenditure Within India Outside India 3,526.94 3,526.94 4,803.93 4,803.93 71,671.42 4,502.07 76,173.49 50,971.44 3,100.86 54,072.30 36,338.26 54,374.36 90,712.62 2007-08 Rs. (In Lakhs) 23,229.82 41,350.10 64,579.92

76

16. Related Party Disclosures i. Name of the related parties where control exists irrespective of whether transactions have occurred or not: a) b) c) Enterprise on which the Company has control Entities / Individuals owning directly or indirectly an interest in the voting power that gives them control Joint Ventures SKP Overseas PTE Ltd. Wholly Owned Subsidiary None Rohit Persia Mines & Industries PJSC

ii. Names of the other related parties with whom transactions have taken place during the year a) Key Managerial Personnel Suresh Kumar Patni Rohit Patni Ankit Patni Binit Jain Sarita Patni Arin Minerals Pvt. Ltd. (Formerly Manju Cement Co. Pvt. Ltd.) Impex Metal & Ferro Alloys Ltd. Impex Ferro Tech Ltd Ankit Metal & Power Ltd. Vasupujya Enterprises (P) Ltd. Marble Arch Properties Pvt. Ltd. (w.e.f 27.03.2009) SKP Power Ventures Ltd.

b) c)

Relatives of Key Managerial Person Enterprises owned or significantly influenced by the Key Managerial Personnel or their relatives

iii. Sl. No. 1 2

Details of Transactions with Related Parties Nature of Transactions Advance to Subsidiary SKP Overseas PTE Ltd. Advance to Joint Venture Company Rohit Persia Mines & Industries PJSC Deposit against Share Warrants Ankit Patni Rohit Patni Sarita Patni Suresh Kumar Patni Investment in Subsidiary SKP Overseas PTE Ltd. Investment in Equity Shares Rohit Persia Mines & Industries PJSC SKP Power Ventures Ltd. Loans Taken Vasupujya Enterprises (P) Ltd. 77 31st March, 2009 (Amount in Rs.) 31st March, 2008

7,023,254

-

7,098,056

-

3

187,679,325 3,178 100,000 67,700,000

2,580,000 2,580,000 2,580,000 2,580,000 13,500,000

4 5

6

7 8 9

10

11

12

13

Loans Repaid Vasupujya Enterprises (P) Ltd. Interest Paid Vasupujya Enterprises (P) Ltd. Purchase of Goods Ankit Metal & Power Ltd. Arin Minerals Pvt. Ltd. Impex Metal & Ferro Alloys Ltd. Rohit Persia Mines & Industries PJSC Sales of Goods Impex Ferro Tech Ltd Ankit Metal & Power Ltd. Impex Metal & Ferro Alloys Ltd. DEPB Licence Purchased Ankit Metal & Power Ltd. Impex Metal & Ferro Alloys Ltd. Directors' Remuneration Suresh Kumar Patni Rohit Patni Ankit Patni Binit Jain Sitting Fees Ankit Patni Suresh Patni Sarita Patni Outstanding Balances

9,500,000 1,235,048 79,042,987 2,503,126 555,584,644 2,204,967

10,000,000 35,062,501 45,442,104 -

41,282,506 241,052,285 1,971,503 1,430,908 3,600,000 2,400,000 300,000 45,500 17,500

76,063,098 2,846,410 241,074,412 2,000,000 2,148,387 1,432,258 300,000 7,500 25,000 2,500

iv. Sl. No. 1 2

Nature of Transactions Sundry Creditors Impex Metal & Ferro Alloys Ltd. Sundry Debtors Impex Ferro Tech Ltd Ankit Metal & Power Ltd. Loan taken Vasupujya Enterprises (P) Ltd. Advances Given Rohit Persia Mines & Industries PJSC Marble Arch Properties Pvt. Ltd. Advance to Subsidiary * SKP Overseas PTE Ltd. Investment in Subsidiary SKP Overseas PTE Ltd. Investment in Equity Shares Rohit Persia Mines & Industries PJSC SKP Power Ventures Ltd. Deposit against Share Warrants Ankit Patni 78

31st March, 2009

(Amount in Rs.) 31st March, 2008

8,578,514 62,680,628 6,765,393 15,000,000 7,023,254 187,679,325 3,178 100,000

7,815,807 58,585,284 3,500,000 -

3 4

5 6 7

8

2,580,000

2,580,000

Rohit Patni 2,580,000 Sarita Patni 2,580,000 Suresh Kumar Patni 2,580,000 * Maximum amount outstanding at any time during the year - Rs. 7,023,254

2,580,000 2,580,000 2,580,000

17. Sl. No. (a)

Earnings Per Share (EPS) PARTICULARS Number of Shares considered as weighted average shares for calculation of Basic Earnings Per Share Dilutive effect of issue of shares on exercise of warrants Number of shares considered as weighted average shares and potential shares outstanding for calculation of diluted EPS (i) Profit after tax, before extraordinary item (Rs.) (ii) Profit after tax, after extraordinary item (Rs.) Nominal Value of Equity Share (Rs.) Earning Per Share (Basic) in Rs. : (i) Before extraordinary item (ii) After extraordinary item Earning Per Share (Diluted) in Rs. : (i) Before extraordinary item (ii) After extraordinary item 31st March, 2009 37,437,397 5,025,548 42,462,945 90,376,263 80,937,683 10.00 2.41 2.16 2.13 1.91 31st March, 2008 34,462,945 2,819,672 37,282,617 804,286,573 802,149,665 10.00 23.34 23.28 21.57 21.52

(b)

(c) (d)

(e)

18. Components of Deferred Tax Liability as per AS-22, "Accounting for Taxes on Income" is as under : Nature of Timing Differences Deferred Tax Liability Depreciation Deferred Tax Asset Unabsorbed Depreciation Net Deferred Tax Liability As on 31.03.09 146,668,579 14,883,831 131,784,748 As on 31.03.08 84,417,765 84,417,765

Deferred tax asset on account of unabsorbed depreciation has been recognised as there exists virtual certainty of realisation on reversal of deferred tax liability in future years on account of depreciation. 19. The Company has made current tax provision for Minimum Alternate Tax (MAT) u/s 115JB of the Income Tax Act, 1961. As per the provisions of Section 115JAA, MAT Credit receivable has been recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India. The said asset is created by way of a credit to the profit & loss account and shown as MAT Credit Entitlement. The Company will review the same at each balance sheet date and write down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period. 20. Forward contracts/ hedging instruments outstanding as at the Balance Sheet date are as follows:

79

Nature (Nos.) of Contract Forward Contract (1)

Foreign Currency USD

Buy/ Sell Sell

Amount in Foreign Currency 2,000,000

Purpose Hedging Purpose

Particulars of unhedged foreign currency exposure as at 31.03.09 are as follows:

Amount Receivable Amount Payable

Currency USD EURO USD

2008-09 3,019,799 100,893 19,279,500

2007-08 7,771,580 9,861,654

21. The Company has not made any remittance in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittance in foreign currencies on account of dividends have been made on behalf of non ­resident shareholders. 22. The Company has entered into a Joint Venture namely "Rohit Persia Mines and Industries PJSC" with 49% interest to acquire mines in Iran. The said Joint Venture is yet to acquire the same. The Company has invested a sum of Rs. 6,768,571 (including advances for supplies) as on 31st March 2009. 23. There are no transactions (other than transactions with subsidiaries as given in para 16(iv)(5) above) which are required to be disclosed under Clause 32 of the Listing Agreement. 24. Additional information pursuant to the provisions of paragraphs 3 & 4 of Part II of Schedule VI to the Companies Act, 1956. A) Capacity, Production, Sales & Stock of Finished Goods

Licensed Capacity: N.A. Installed Capacity: Ferro Alloys 172,875 M.T. Per Annum (P.Y- 151,525 M.T.) (Installed Capacity has been certified by the management and not verified by the auditors being a technical matter) FERRO ALLOYS For the Year Ended 31.03.2009 Qty. (M.T.) 3631.490 115376.030 110066.300 8941.220 Value (Rs.) 264,634,706 8,051,887,832 383,586,333 For the Year Ended 31.03.2008 Qty. (M.T.) 1071.100 97476.560 94916.170 3631.490 Value (Rs.) 46,464,019 5,785,184,302 264,634,706

Opening Stock Production Sales Closing Stock B)

Raw Materials Consumed 193274.905 74782.510 77770.640 2,352,171,132 1,251,267,239 1,012,065,143 310,621,033 270667.910 17045.570 65848.605 1,972,257,084 309,306,542 560,119,234 183,387,061

Chrome Ore Manganese Ore Coke Others (being less than 10% of total consumption

80

individually) 4,926,124,546 Break- up Imported Indigenous Total C) 1,657,035,514 3,269,089,032 4,926,124,546 33.64% 66.36% 100.00% 615,368,915 2,409,701,007 3,025,069,921 3,025,069,921 20.34% 79.66% 100.00%

Stores, Spares & consumables

Break- up Imported Indigenous Total

1,461,662 147,638,077 149,099,739

0.98% 99.02% 100.00%

171,732,802 171,732,802

100.00% 100.00%

D) Sale of Raw Materials Manganese Ore 2846.550 Coke 4142.760 Others

43,381,560 55,119,048 6,132,594 104,633,202

-

-

E) Purchases & Sales of Items traded i) Purchases Iron & Steel 20752.065 693,372,071 Minerals 13715.832 134,749,829 828,121,900 ii) Sales Iron & Steel Minerals 20752.065 13715.832 715,917,917 138,767,578 854,685,495

11253.870 28552.775

288,682,976 231,108,883 519,791,859

11253.870 28552.775

297,131,870 280,428,895 577,560,765

F)

Value of Imports / Expenditure in Foreign Currency

Particulars CIF Value of Imports a) Raw Materials b) Stores & Spares c) Capital Goods

31st March, 2008 2,190,399,728 1,327,121 15,996,016 2,207,722,865

31st March, 2009 645,853,815 5,179,373 651,033,188

(Amount in Rs.)

Expenditure in Foreign Currency Travelling & Conveyance a) Membership & Subscription b) Legal & Professional Fees c) Commission on Sales d) Miscellaneous Expenses e)

4,083,161 2,181,637 82,915 2,377,811 8,725,524

3,215,490 829,461 40,070 113,386 4,198,407

G)

Earnings in Foreign Currency 5,285,894,184 3,937,544,723

FOB Value of Exports

81

25. Previous year's figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary. Accordingly, amounts and other disclosures for the preceeding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year. In terms of our report of even date attached. For S. JAYKISHAN Chartered Accountants For & on behalf of the Board

Suresh Kumar Patni Chairman (B.K.Newatia) Partner M No. 050251 Dated : The 29th day of June, 2009 Place : Kolkata

Rohit Patni Managing Director

Pramod Kumar Jain CFO & Company Secretary

82

Information as required under Part IV of Schedule VI to the Companies Act, 1956. a) Balance Sheet and Company's general profile Registration Details : Registration No. 91629 Balance Sheet date : 31.03.2009 b) Capital raised during the year: Public Issue: NIL Rights issue: NIL State Code: 21 Figures in thousand Bonus Issue: Private Placement: NIL 50200

c) Position of Mobilisation & Deployment of funds Total Liabilities: 5537436 Total Assets: SOURCES OF FUNDS Paid Up Capital Deposit Against Share Warrants Reserves & Surplus Secured Loans Unsecured Loans Deferred Tax liability APPLICATION OF FUNDS Net Fixed Assets Capital work-in-progress Investments Net Current Assets Misc. expenditure to the extent not written off d) Performance of the Company Total Income Total Expenditure Profit before Tax Profit after Tax Earnings per Share Dividend Rate %

5537436

394,829 12,814 1,834,861 2,492,254 670,892 131,785 2,275,478 111,427 187,783 2,954,815 7,935

8,795,432 8,656,416 139,016 90,376 2.41 5%

e) Generic Names of the Principal Products / services of the Company Item Code No. (ITC Code) Product Description In terms of our report of even date attached. For S. JAYKISHAN For & on behalf of the Board Chartered Accountants S. K. Patni Chairman (B.K.Newatia) Partner M No. 050251 Dated : The 29th day of June, 2009 Place : Kolkata. 7202 2100 Ferro Alloys

Rohit Patni Managing Director

Pramod Kumar Jain CFO & Company Secretary 83

AUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2009 To The Board of Directors of Rohit Ferro-Tech Limited 1. We have audited the attached Consolidated Balance Sheet of ROHIT FERRO-TECH LIMITED ("the Company") and its Subsidiary ("the Group") as at 31st March 2009 and also the Consolidated Profit & Loss Account for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. The financial statements of the subsidiary, SKP Overseas Pte. Ltd., (incorporated in Singapore), with total assets of Rs. 4685.77 Lacs as at 31st March, 2009, total revenue of Rs. 1.04 Lacs and total expenditure of Rs. 140.5 Lacs for the year ended on that date have not been audited by us. These financial statements have been audited by other auditor, whose report has been furnished to us, and in our opinion, in so far as it relates to the amounts included in respect of this subsidiary is based solely on the report of other auditor. However the financial statements of a Joint Venture, namely Rohit Persia Mines and Industries PJSC, are not considered for consolidation for the reasons cited in Note No. 1 of Schedule 22 of the Consolidated Financial Statement. We report that the Consolidated Financial Statements have been prepared by the Group in accordance with the requirements of Accounting Standard (AS -21), "Consolidated Financial Statements" notified by the Companies (Accounting Standards) Rules, 2006 and on the basis of the separate audited financial statements of the Company and its subsidiary. Based on our audit and on consideration of the report of other auditor on separate financial statements of the subsidiary, and on the basis of information and explanations given to us, we are of the opinion that the attached Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India. (i) in case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Group as at 31st March, 2009, (ii) in case of the Consolidated Profit & Loss Account, of the consolidated results of operations of the Group for the year ended on that date. For S. JAYKISHAN Chartered Accountants

2.

3.

4.

5.

Dated: The 29th day of June, 2009 Place: Kolkata

B.K. NEWATIA Partner M. No. 050251

84

CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH' 2009 Schedule I. SOURCES OF FUNDS 1. Shareholders' Funds a) Share Capital b) Deposit against share warrants (Refer Note no. 6 in Schedule 22) c) Reserves and Surplus 2. Loan Funds a) Secured Loans b) Unsecured Loans 3. Deferred Tax Liability (Refer Note no. 18 in Schedule 22) Total APPLICATION OF FUNDS 1. Fixed Assets a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work-in-progress (Refer Note no. 12 in Schedule 22) 2. Investments 3. Current Assets, Loans & Advances a) Inventories b) Sundry Debtors c) Cash & Bank Balances d) Loans & Advances Less : Current Liabilities & Provisions a) Current Liabilities b) Provisions 5

(Rs. in lacs) As at 31st March' 2009

1

3,948.29 128.14

2 3 4

18,514.69 27,470.04 6,708.92 1,317.85 58,087.94

II.

24,981.97 2,227.20 22,754.78 1,114.27

6 7 8 9 10

11 12

Net Current Assets 4. Miscellaneous Expenditure (to the extent not written off or adjusted) Total 13

3,567.53 30,187.94 7,331.88 3,691.15 11,029.01 52,239.98 21,293.86 413.99 21,707.85 30,532.13 119.24 58,087.94

Significant Accounting Policies & Notes on Accounts 22 Schedule 1 to 13 & 22 referred above form an integral part of the Balance Sheet. In terms of our report of even date attached. For S. JAYKISHAN Chartered Accountants (B.K.Newatia) Partner M No. 050251 Dated : The 29th day of June, 2009 Place : Kolkata. 85 For & on behalf of the Board Suresh Kumar Patni Chairman

Rohit Patni Managing Director

Pramod Kumar Jain CFO & Company Secretary

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 31ST MARCH' 2009 (Rs. in lacs) 31.03.2009 Schedule I. INCOME Sales Less: Excise Duty Other Income Increase / (Decrease) in Stock II. EXPENDITURE Raw Materials Consumed Purchase of Traded Goods Manufacturing Expenses Payments to & Provisions for Employees Administrative, Selling & Other Expenses Interest & Finance Charges Depreciation PROFIT BEFORE TAX Provision for Taxation: - Current - Deferred - Fringe Benefit Tax Deferred MAT Credit Entitlement PROFIT AFTER TAX Less: Income Tax for Earlier Years Surplus from last year Balance available for Appropriation APPROPRIATIONS Dividend for earlier year Proposed Dividend Corporate Tax on Dividend Balance carried to Balance Sheet 14 90,712.62 (3,237.46) 87,475.16 480.20 2,342.11 90,297.47 49,261.25 8,281.22 15,762.38 652.39 9,401.04 4,697.76 990.75 89046.77 1,250.70 157.50 473.67 12.73 (157.50) 764.30 (94.39) 11,822.85 12,492.77 75.30 197.41 46.35 12,173.70 12,492.77

15 16

17 18 19 20 21

Earnings per Share (Face Value - Rs. 10/- each) (Refer Note no. 17 in Schedule 22) Before extraordinary item - Basic - Diluted After extraordinary item - Basic - Diluted Significant Accounting Policies & Notes on Accounts 22 Schedule 1 to 13 & 22 referred above form an integral part of the Balance Sheet. In terms of our report of even date attached. For S. JAYKISHAN For & on behalf of the Board Chartered Accountants (B.K.Newatia) Partner M No. 050251 Dated : The 29th day of June, 2009 Place : Kolkata. Suresh Kumar Patni Chairman Rohit Patni Managing Director

2.04 1.80 1.79 1.58

Pramod Kumar Jain CFO & Company Secretary 86

SCHEDULES ANNEXED TO & FORMING PART OF THE CONSOLIDATED BALANCE SHEET AS AT 31ST MARCH, 2009 SCHEDULE 1 Particulars SHARE CAPITAL Authorised 45,000,000 Equity Shares of Rs.10 /- each Issued , Subscribed & Paid-up 39,482,945 Equity Shares of Rs.10/-each fully paid up in Cash (During the year, the Company has allotted 50,20,000 equity shares of Rs. 10/- each to Preferential Convertible Warrant holders at a premium of Rs. 33/- per share) (Rs. in lacs) As at 31st March 2009

4,500.00 3,948.29

3,948.29 SCHEDULE 2 (Rs. in lacs) Particulars RESERVES & SURPLUS Securities Premium As per last account Add: Received during the year on allotment of shares to Preferential Convertible Warrant holders Capital Reserve Capital Investment Subsidy- As per last account General Reserve As per last account Foreign Currency Translation Reserve Surplus as per Profit & Loss A/c annexed As at 31st March 2009

3,688.85 1,656.60 5,345.45 240.00 450.00 305.54 12,173.70 18,514.69

SCHEDULE 3 Particulars SECURED LOANS A) Term Loans State Bank of India State Bank of Travancore State Bank of Hyderabad United Bank of India United Bank of India (for Haldia Project) Indian Overseas Bank - Hongkong Branch (in foreign currency) B) Working Capital Loans Cash Credit : State Bank of India State Bank of Hyderabad State Bank of Travancore United Bank of India Export Packing Credit : State Bank of India 87 (Rs. in lacs) As at 31st March 2009

1,439.00 600.00 599.75 2,296.70 1,502.62 2,547.50

2,527.41 892.39 995.02 2,995.49 2,500.01

Stand by Line of Credit : State Bank of India State Bank of Hyderabad State Bank of Travancore Buyers' Credit : State Bank of India United Bank of India C) Rupee Loan : IDBI Ltd.

500.09 250.00 300.00 3,748.00 1,776.07 2,000.00 27,470.04

Notes : A. Securities for Loans : 1) Term Loans (other than for Haldia Project) are secured by way of 1st charge on pari passu basis by equitable mortgage of factory land & building and hypothecation of plant and machineries, both existing & future, of Bishnupur & Jajpur Units with collateral security by equitable mortgage on pari-passu basis of i)office premises at Kolkata & ii) property of Shubham Complex (P) Ltd. and 2nd paripassu charge on current assets of the Company and Personal Guarantee of the Promoter Directors & Corporate Guarantee of Group Companies. 2) Term Loan for Haldia Project is secured by way of 1st charge on entire fixed assets of the said Project and 2nd charge on pari passu basis on the current assets of the Company and Personal Guarantee of the Promoter Directors & Corporate Guarantee of the group Companies. 3) Working Capital Loans are secured by way of 1st charge on pari passu basis by hypothecation of Inventories, Book Debts and Other Current Assets with 2nd charge on Company's Fixed Assets at Bishnupur & Jajpur Units and collateral security by equitable mortgage on pari passu basis of i)office premises at Kolkata & ii) property of Shubham Complex(P) Ltd.,and Personal Gurantee of the promoter Directors & Corporate Guarantee of the group Companies. 4) Loan from IDBI Ltd. is secured by 1st charge on Escrow account for Power Subsidy receivable. 5) Loan from Indian Overseas Bank is secured by pledge of investments in exchangeable bonds of PT Pacific Samudra Perkasa and personally guaranted by certain promoters and directors of the Parent Company. The Parent Company has further extended a corporate guarantee amounting to USD 15 million against the said loan. B. Term Loans repayable within one year- Rs. 3727.94 Lacs (Previous year- Rs. 1817.30 Lacs) SCHEDULE 4 Particulars UNSECURED LOANS Standard Chartered Bank (Personally guaranteed by the promoter directors & one of the group companies) State Bank of Bikanar & Jaipur (Personally guaranteed by the Managing Director) Citi Bank (Personally guaranteed by the promoter directors & one of the group companies) Indusind Bank WBIDC Ltd. (Bridge Loan against Power Subsidy receivable) Other Bodies Corporate

(Rs. in lacs) As at 31st March 2009 659.62

1,500.00 700.00

1,000.00 678.99 2,170.32 6,708.92

88

SCHEDULE 5 FIXED ASSETS (Rs. in lacs) G R O S S B L O C K DEPRECIATION AS AT 01.04.200 8 FOR THE YEAR* NET BLOCK

PARTICULARS

AS AT 01.04.2008

ADDITIO NS DURING THE YEAR

DEDUCTION S DURING THE YEAR

AS AT 31.03.2009

AS AT 31.03.2009

AS AT 31.03.2008

1

Land and Land Development a) Leasehold b) Freehold Factory Shed & Buildings. Office Building Guest House Plant & Machineries Electrical Installations 1,721.47 38.20 4,452.86 90.09 17.26 8,538.27 5,633.87 77.64 23.77 16.93 34.79 114.71 95.74 0.30 20,855.89 1,713.40 1,124.20 655.46 1,699.13 548.23 0.85 3.53 4.16 18.92 31.95 38.23 1.43 4,126.08 1,517.30 2,116.44 2,845.67 38.20 5,108.32 90.09 17.26 10,237.39 6,182.10 78.49 27.30 21.09 53.71 146.66 133.97 1.73 24,981.97 1,114.27 219.12 3.12 0.84 594.49 369.55 7.80 2.19 1.56 9.01 18.26 10.37 0.07 1,236.38 156.20 1.47 0.28 485.96 312.61 3.73 1.24 0.94 7.18 13.26 7.90 0.05 990.81 375.32 4.59 1.13 1,080.45 682.17 11.53 3.43 2.50 16.19 31.52 18.26 0.12 2,227.20 2,845.67 38.20 4,233.74 85.50 16.13 9,156.95 5,499.94 66.97 23.87 18.59 37.52 115.14 115.70 1.61 22,754.78 1,114.27

2 3 4 5 6

7 Tools & Equipments 8 Air Conditioners 9 Office Equipments 10 Computers 11 Motor Cars 12 Furniture & Fixtures 13 Fire Extinguishers TOTAL Capital Work-in- Progress

Notes: The original cost of vehicles & equipments includes Rs. 56.43 lacs acquired from loans taken from banks & financial institutions, of which Rs.19.06 lacs were outstanding as at 31.03.2009.

89

SCHEDULE 6

(Rs. in lacs) As at 31st March 2009

INVESTMENTS (Long Term) Trade (Unquoted) Investment in Equity Shares SKP Power Ventures Ltd. (10000 shares of Rs. 10/- each fully paid up) Rohit Persia Mines & Industries PJSC (90 Shares of 10000 Rials (Rs.64.87) each fully paid up) Investment in Exchangeable Bonds PT Pacific Samudra Perkasa (3 bonds of $1,000,000/- each & 1 bond of $4,000,000/- each)

1.00 0.03 3,566.50

3,567.53 SCHEDULE 7 (Rs. in lacs) As at 31st March 2009

INVENTORIES (as taken, valued & certified by the management) Raw Materials Finished Goods(including in transit Rs.130,057,505) Work in Progress Packing Materials Stores & Spares

23,267.35 3,835.86 2,578.37 52.13 454.22 30,187.94

SCHEDULE 8

(Rs. in lacs) As at 31st March 2009

SUNDRY DEBTORS (Unsecured, Considered Good) Due for more than 6 months Other Debts

1,454.84 5,877.04 7,331.88

SCHEDULE 9

(Rs. in lacs) As at 31st March 2009 24.65

CASH & BANK BALANCES Cash in Hand ( As Certified by the Management) Balances With Foreign Banks Current Accounts Fixed Deposit Accounts Balances With Scheduled Banks Current Accounts Public Issue Account Dividend Account Fixed Deposit Account (pledged with Banks as margin for Bank Guarantees and Letter of Credit facility) 90

17.35 510.67 387.41 0.15 4.68 2,746.25 3,691.15

SCHEDULE 10 (Rs. in lacs) As at 31st March 2009 LOANS & ADVANCES (Unsecured, Considered good) Advances recoverable in cash or in kind or for value to be received : For Capital Goods To Suppliers & Others Accrued Interest on deposits Prepaid Expenses Security & Other Deposits Balance with Excise Department Cenvat/Vat Credit Receivable Export Incentives Receivable Power Subsidy Receivable Income Tax Payments (including TDS) Income Tax Refundable MAT Credit Entitlement (Refer Note no. 19 in Schedule 22) 650.67 2,188.99 48.99 290.29 1,928.95 1,065.79 1,365.47 422.46 2,263.20 209.76 2.04 592.41 11,029.01 SCHEDULE 11 (Rs. in lacs) As at 31st March 2009 CURRENT LIABILITIES Acceptances Sundry Creditors : Dues to Micro, Small & Medium Enterprises Dues to Others : For Supplies For Capital Goods For Expenses For Pending Disbursements Advances from Parties Income received in advance Income accured but not due Unpaid Dividends* Share Application Money Refundable 1,412.32 16,760.58 93.45 2,692.96 185.10 49.20 22.10 73.33 4.68 0.15 21,293.86 *There is no amount due and outstanding to be credited to Investor Education & Protection Fund. SCHEDULE 12 (Rs. in lacs) As at 31st March 2009 157.50 12.73 197.41 46.35 413.99

PROVISIONS For Taxation For Fringe Benefit Tax For Proposed Dividend For Corporate Tax on Dividend

91

SCHEDULE 13

(Rs. in lacs) As at 31st March 2009

MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Preliminary Expenses Opening Balance Addition during the year Less: Amortised during the year Share Issue Expenses Opening Balance Addition during the year Less: Amortised during the year

39.89 39.89 39.89 119.02 119.02 39.67 79.35 119.24

SCHEDULE 14

(Rs. in lacs) Year Ended 31st March 2009

SALES Sale of Manufactured Goods : Export Sales Domestic Sales Sale of Raw Materials Sale of Traded Goods Export Incentives

54,374.36 26,144.52 1,046.33 8,546.85 600.55 90,712.62

SCHEDULE 15

(Rs. in lacs) Year Ended 31st March 2009 63.61 259.74 78.85 23.92 49.75 2.86 1.48 480.20

OTHER INCOME Interest on Credit Sales ( TDS-Rs.1,927,013/-) Interest on Fixed Deposits with Banks( TDS -Rs. 5,778,823/- ) Interest on Other Deposits ( TDS-Rs.954,446/-) Interest Received on advances Premium on Forward Contract Liability no longer required written back Profit on redemption of investment with Mutual Funds (Current Investments - Other than trade)

92

SCHEDULE 16

(Rs. in lacs) Year Ended 31st March 2009 3,835.86 2,578.37 6,414.23 4,072.13 2,342.11

INCREASE / (DECREASE) IN STOCK Closing Stock of Finished Goods(including in transit) Closing Work-in-Progress Less : Opening Stock of Finished Goods & Work-in-progress

SCHEDULE 17

(Rs. in lacs) Year Ended 31st March 2009

RAW MATERIALS CONSUMED (Including cost of raw materials sold) Opening Stock Add: Purchases (including freight) Less : Closing Stock

8,460.79 64,067.81 72,528.60 23,267.35 49,261.25

SCHEDULE 18

(Rs. in lacs) Year Ended 31st March 2009 919.80 12,767.25 35.27 1,491.00 192.19 480.63 (192.31) 17.05 2.11 49.37 15,762.38

MANUFACTURING EXPENSES Labour Charges Power & Fuel Water Supply Charges Stores & Spares Packing Materials Material Handling Charges Excise Duty on variation in stocks (Refer Note no. 9 in Schedule 22) Machinery Hire Charges Repairs & Maintenance : To Factory Shed & Buildings To Plant & Machinery

SCHEDULE 19

(Rs. in lacs) Year Ended 31st March 2009 364.31 157.07 26.93 6.75 63.00 34.32 652.39 93

PAYMENTS TO & PROVISIONS FOR EMPLOYEES Factory Wages Salaries Contribution to Provident Fund Gratuity Directors' Remuneration Welfare Expenses

SCHEDULE 20

(Rs. in lacs) Year Ended 31st March 2009 151.93 36.16 2.41 138.79 23.94 8.09 27.93 155.48 45.50 35.47 187.84 24.34 126.28 2.05 0.30 0.11 0.56 2.66 109.43 893.59 26.73 75.44 3.40 63.88 2,392.31 566.11 32.74 4,191.06 10.45 10.58 2.20 39.67 9,401.04

ADMINISTRATIVE, SELLING & OTHER EXPENSES Rent Rates & Taxes Electricity Charges Insurance Printing & Stationery Postage, Telegram & Courier Telephone Charges Travelling & Conveyance Car Running & Maintenance Other Repairs & Maintenance Security Service Charges Membership & Subscription Legal & Professional Charges Auditors Remuneration : - For Audit - For Tax Audit - For Income Tax Matters In any other matter Directors' Sitting Fees Miscellaneous Expenses Bank Charges Processing Fees to WBIDC Ltd Testing & Inspection Charges Donations Advertisement, Publicity & Sales Promotion Freight & Forwarding on Export Transportation, Loading & Labour Charges Commission on Sales- other than sole selling agent Discounts & Rebates Foreign Exchange Fluctuation Loss Sales Tax / Entry Tax on Assessment Prior Period Expenses (Refer Note no. 10 in Schedule 22) Sundry Balances Written Off Share Issue Expenses Written Off

SCHEDULE 21

(Rs. in lacs) Year Ended 31st March 2009

INTEREST & FINANCE CHARGES Interest to Banks/ Financial Institutions : On Fixed Loans Others Motor Car Finance Charges Interest to Others

1,400.06 2,845.36 3.12 449.21 4,697.76 94

SCHEDULE

22

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 1. Principles of consolidation The consolidated financial statements relate to Rohit Ferro Tech Limited (`the Company') and its subsidiary company. The consolidated financial statements have been prepared on the following basis: a) The financial statements of the Company and its subsidiary company are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions in accordance with the Accounting Standards (AS-21)-"Consolidated Financial Statements." b) In case of foreign subsidiaries, being non-integral foreign operations, revenue items are consolidated at the average rate prevailing during the year. All assets and liabilities are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognised in the Foreign Exchange Translation Reserve. c) The difference between the costs of investment in the subsidiaries, over the net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital Reserve as the case may be. d) The difference between the proceeds from disposal of investment in a subsidiary and the carrying amount of its assets less liabilities as of the date of disposal is recognized in the consolidated statement of Profit & Loss Account as exceptional item being the profit or loss on disposal of investment in subsidiary. e) As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented in the same manner as the Company's separate financial statements. 2. Investments Investments other than in subsidiaries and associates have been accounted as per Accounting Standard (AS) 13 "Accounting for Investments". 3. Other Accounting Policies These are set out under "Significant Accounting Policies" as given in the Standalone Financial Statements of Rohit Ferro Tech Limited. B. NOTES ON ACCOUNTS 1. The Consolidated Financial Statement includes the financial statements of the parent company and its wholly-owned subsidiary, SKP Overseas Pvt. Ltd. incorporated in Singapore. Subsidiaries are consolidated from the date on which effective control is acquired and are excluded from the date of transfer/disposal. The Company has entered into a Joint Venture namely "Rohit Persia Mines and Industries PJSC" with 49% interest to acquire mines in Iran. The said Joint Venture has not yet commenced its operation and hence not considered for consolidation. The Parent Company has invested a sum of Rs.6,768,571/-(including advances for suppliers) as on 31st March, 2009. 2. Contingent Liabilities not provided for in the books of Accounts in respect of: a) Bank Guarantees - Rs.846,000/with Banks, 95 outstanding as on 31st March, 2009-

b) Bills Discounted Rs.680,792,008/-

c) Letters of Credit opened in favour of suppliers, outstanding as on 31st March, 2009 Rs.33,794,920/d) Tax Demands disputed in appeal: Orissa Vat for the year 2005-06-Rs.551,477/- and for 2006-07 Rs. 310,082/Entry Tax for FY 2006-07 Rs. 594,010/-. Central Sales Tax for 2006-07 Rs. 887,736/e) Excise Duty Liability arising out of search operation by the Directorate General of Central Excise Intelligence. However, the Company has paid under protest a sum of Rs.1.50 crore pending issuance of any show cause notice. 3. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) - Rs.125,907,600/-, 4. In the opinion of the Board of Directors, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the accounts. Adequate provisions have been made for all nown losses and liabilities. 5. Certain balances of Sundry Creditors, Sundry Debtors, Unsecured Loans and Advances are subject to Confirmation. 6. In the year 2007-08, the Company had issued 8,000,000 preferential Convertible Warrants (Excise Price of Rs. 43/-each) on preferential basis to promoters & other strategic investors. Each warrant carried a right to convert the same into on Equity Share of Rs. 10/each at a premium of Rs.33/- each (as per the formula prescribed under the SEBI{(DIP) guidelines}over a period of 18 months from the date of allotment. Of the above, 5,020,000 warrants have been converted into the Equity Shares during the Year. The total proceed from the said issue have been utilised for capital expenditure and investment in subsidiary. Rs. 12,814,000 being 10% of the exercise price of 2,980,000 warrants outstanding as on 31st March, 2009 has been shown as "Deposit against Shares Warrants" in the Balance Sheet. 7. Sundry Debtors include Rs.275,901,296/- covered by letters of credit in favour of the Company. 8. Details of payments and provisions on account of remuneration to managerial personnel are as under: Particulars i) Salaries to Managing Directors S.K.Patni Rohit Patni-Managing Director Ankit Patni-Joint Managing Director Salaries to Executive Director Binit Jain Perquisites Sitting Fees to Other Directors 2008-09

3,600,000 2,400,000 6,000,000 300,000 300,000 266,464 266,464 6,566,464 96

ii)

iii) iv)

Liability for gratuity and leave encashment is provided on acturial basis for the company as a whole. The amount pertaining to the directors is not ascertainable and therefore, not included above. 9. Amount of excise duty on variation in stocks shown in Schedule 19 represents differential excise duty on opening and closing stock of finished goods. 10. Prior period expenses for the year comprise of the followings:Particulars Labour Charges Water Supply Charges Material Handling Charges Machinery Hire Charges Excise Duty Entry Tax Factory Wages Salaries Contribution to Provident Fund Discount Received Rent Electricity Charges Telephone Expenses Service Charges Bank Charges Miscellaneous Expenses Interest on Car Loan (Amount in Rs.) 2008-09 36,497 177,180 74,618 (771,641) 1,038,295 60,000 (461,445) 810,000 84,511 2,500 7,500 1,058,015 11. The Company has commenced commercial production at its Bishnupur unit from 5th Furnace on 27th August, 2008. Accordingly, pre-operative expenses relating to the said project have been capitalized by transfer to Factory Shed & Building, Plant & Machinery and Electrical Installations in proportion to their respective costs. 12. Capital Work-in-Progress includes Pre-operative Expenses relating to projects under implementation, pending allocation to Fixed Assets : Particulars Pre-Operative Expenses Opening Balance Add: Expenditure incurred during the period Salary Welfare Expenses Rent Rates & Taxes Repair & Maintenance Insurance Electricity Charges Printing & Stationary Telephone Charges Travelling & Conveyance Motor Car Expenses 97 372,500 7,226 174,005 1,800,697 92,200 6,806 31,356 23,981 7,414 8,809 2008-09 7,390,534

Legal, Professional & Consultancy Charges Bank Charges Miscellaneous Expenses Advertisement & Sales Promotion Transportation, Loading & Labour Charges Interest (Includes Rs.4,425,015/- (Previous YearRs.65,147,428/-) on Term Loan) Depreciation TOTAL Less : Amount allocated to Fixed Assets Closing Balance

550,000 13,556 109,444 28,300 95,878 11,033,088 6,573 21,752,367 11,553,563 10,198,804

13. Research and Development expenses aggregating to Rs. 657,829/- in the nature of revenue expenditure have been included under the appropriate account heads. 14. Disclosure pursuant to Accounting Standard- 15 ( Revised) " Employee Benefits" : a. Defined Contribution Plan: Amount of Rs. 2,693,276/- (Previous Year-Rs. 16,49,632/-) is recognised as expense and included in "Payments to and Provision For Employees" in Schedule-19 of the Profit & Loss Account. b. Defined Benefit Plan:

i.Reconciliation of Opening and Closing balances of the Present Value of the Defined Benefit Obligation: Particulars a. Present Value of Defined Benefit Obligation at the beginning of the year b. Interest Cost c. Current Service Cost d. Actuarial Losses/ (Gains) e. Benefits Paid f. Present Value of Defined Benefit Obligation at the close of the year ii.Changes in the Fair Value of Plan Assets and reconciliation thereof: Particulars a. Fair Value of Plan Assets at the Beginning of the year b. Add : Expected Return on Plan Assets c. Add / (Less) : Actuarial Gains / (Losses) d. Add : Contributions e. Less: Benefits Paid f. Fair Value of Plan Assets at the close of the year Actual Return on Plan Assets 2008-09 1,310,434 118,986 11,629 675,100 2,116,149 130,615 2008-09 1,310,434 74,105 382,818 (24,469) 1,742,888

iii.Amount Recognized in the Balance Sheet including a reconciliation of the present value of the defined obligation in (i) and the fair value of the plan assets in (ii) to assets and liabilities recognized in the Balance Sheet : Particulars a. Present Value of Defined Benefit Obligation b. Less: Fair Value of Plan Assets 98 2008-09 1,742,888 2,116,149

c. Present Value of unfunded obligation d. Net Liability / (Assets) recognised in the Balance Sheet ** ** The excess of assets over liabilities have not been recognized as they are lying in an irrevocable trust fund. iv.Amount recognised in the Profit and Loss Account are as follows: Particulars a. Current Service Cost b. Interest Cost c. Expected return on Plan Assets d. Actuarial Losses / ( Gains) e. Past Service Costs f. Effect of curtailment / settlement g. Net asset not recognised as above h. Recognised in the Profit and Loss Account

-

2008-09 382,818 74,105 (118,986) (36,098) 373,261 675,100

v.Broad Categories of Plan Assets as a percentage of Total Assets as at 31.03.2009 Particulars Qualifying Insurance Policy vi.Actuarial Assumptions as at the Balance Sheet date: Particulars a. Mortality table b. Discount Rate c. Salary Escalation Rate 2008-09 LIC 1994-96 Ultimate 8% 4% 2008-09 YES

vii.The estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors. 15. (A) Business segments: Based on the synergies, risks and returns associated with business operations and in terms of Accounting Standard - 17, the Company is predominantly engaged in a single reportable segment of 'Ferro Alloys' during the year. Trading of iron and steel & materials has not been considered as a separate reportable segment since segment revenue/result from the same is less than 10% of the total revenue/result. (B) Geographical segments: The Company's secondary geographical segments have been identified based on the location of customers and are disclosed based on revenues within India and revenues outside India. Secondary segment assets and liabilities are based on the location of such asset/liability. Particulars Revenue (Gross Sales) Within India Outside India Carrying Amount of Segment Assets Within India Outside India 71,671.42 7,200.92 78,872.34 99 36,338.26 54,374.36 90,712.62 Rs. (In Lakhs) 2008-09

Capital Expenditure Within India Outside India 3,526.94 3,526.94 16. Related Party Disclosures control exists irrespective of whether

i.Name of the related parties where transactions have occurred or not:

a.

Entities/Individuals owning directly or indirectly interest in the voting power that gives them control b. Joint Ventures

an

NONE Rohit Persia Industries PJSC Mines &

ii.Name of the other related parties with whom transactions have taken place during the year a. Key Managerial Personnel Suresh Kumar Patni Rohit Patni Ankit Patni Binit Jain Sarita Patni Arin Minerals Pvt. Ltd. (Formerly known as Manju Cement Co. Pvt. Ltd.) Impex Metal & Ferro Alloys Ltd. Impex Ferro-Tech Ltd. Ankit Metal & Power Ltd. Vasupujya Enterprises (P) Ltd. Marble Arch Properties Pvt. Ltd. (Related in Current Year) SKP Power Ventures Ltd.

b.

Relatives of Key Managerial Person

c. Enterprises owned or significantly influenced by the Key Managerial Personnel or their relatives

iii.Details of Transactions with Related Parties (Amount in Rs.) Sl. No. 1 2 Nature of Transactions Advance to Joint Venture Company Rohit Persia Mines & Industries PJSC Investment in Equity Shares Rohit Persia Mines & Industries PJSC SKP Power Ventures Ltd. 3 4 5 6 Loans Taken Vasupujya Enterprises (P) Ltd. Loans Repaid Vasupujya Enterprises (P) Ltd. Interest Paid Vasupujya Enterprises (P) Ltd. Purchase of Goods Ankit Metal & Power Ltd. Arin Minerals Pvt. Ltd. Impex Metal & Ferro Alloys Ltd. Rohit Persia Mines & Industries PJSC Sales of Goods 100 2008-09 7,098,056 3,178 100,000 67,700,000 9,500,000 1,235,048 79,042,987 2,503,126 555,584,644 2,204,967

7

8

9

10

Ankit Metal & Power Ltd. Impex Metal & Ferro Alloys Ltd. DEPB Licence Purchased Ankit Metal & Power Ltd. Impex Metal & Ferro Alloys Ltd. Directors' Remuneration Rohit Patni Ankit Patni Binit Jain Sitting Fees Suresh Patni Sarita Patni

41,282,506 241,052,285 1,971,503 1,430,908 3,600,000 2,400,000 300,000 45,500 17,500

iv.Outstanding Balances (Amount in Rs.) Sl. No. 1 2 3 Nature of Transactions Sundry Debtors Ankit Metal & Power Ltd. Loan Taken Vasupujya Enterprises (P) Ltd. Advances Given Rohit Persia Mines & Industries PJSC Marble Arch Properties Pvt. Ltd. Investment in Equity Shares Rohit Persia Mines & Industries PJSC SKP Power Ventures Ltd. Deposit against Share Warrants Ankit Patni Rohit Patni Sarita Patni Suresh Kumar Patni 2008-09 8,578,514 62,680,628 6,765,393 15,000,000 3,178 100,000 2,580,000 2,580,000 2,580,000 2,580,000

4

5

17. Earnings per Share (EPS) (Amount in Rs.) 2008-09 37,437,397 5,025,548 42,462,945 76,430,045 66,991,465 10.00 2.04 1.79 1.80 1.58

PARTICULARS (a) Number of Shares considered as weighted average shares for calculation of Basic Earnings Per Share Dilutive effect of issue of shares on exercise of warrants Number of shares considered as weighted average shares and potential shares outstanding for calculation of diluted EPS (b) (i) Profit after tax, before extraordinary item (Rs.) (ii) Profit after tax, after extraordinary item (Rs.) (c) Nominal Value of Equity Share (Rs.) (d) Earning Per Share (Basic) in Rs. : (i) Before extraordinary item (ii) After extraordinary item (e) Earning Per Share (Diluted) in Rs. : (i) Before extraordinary item (ii) After extraordinary item 101

LIMITED REVIEW REPORT ­ STANDALONE FINANCIAL STATEMENTS To The Board of Directors Rohit Ferro-Tech Limited 1. We have reviewed the accompanying unaudited Financial Statements (incorporating Profit & Loss Account and Assets and Liabilities) of Rohit Ferro-Tech Limited (the Company) for the period ended 31st December,2009 for the purposes of its inclusion in the offer document prepared by the Company in connection with its proposed Rights Issue. These financial Statements are the responsibility of the Company's Management. Our responsibility is to issue a report on these financial statements based on our review. We conducted our review in accordance with the Standard on Review Engagement (SRE) 2400, "Engagements to Review Financial Statements" issued by The Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion. Based on our review conducted as above nothing has come to our attention that causes us to believe that the accompanying unaudited financial statements prepared in accordance with applicable accounting standards and other recognised accounting practices and policies has not disclosed the information required to be disclosed in terms of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by SEBI on August, 26, 2009 including the manner in which it is to be disclosed, or that it contains any material misstatement. This report is intended solely for inclusion in the Offer Document in connection with the proposed Rights Issue of the equity shares of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent. For S. JAYKISHAN Chartered Accountants

2.

3.

4.

Place: Kolkata Dated: The 4th day of March, 2010

V. NEWATIA Partner Membership No.:062636

102

LIMITED REVIEWED STANDALONE BALANCE SHEET AS AT 31ST DECEMBER, 2009 As on 31st Dec' 2009 (Rs. in Lacs) I. SOURCES OF FUNDS 1. Shareholders' Funds a) Share Capital b) Reserves and Surplus 2. Loan Funds a) Secured Loans b) Unsecured Loans 3. Deferred Tax Liability Total II. APPLICATION OF FUNDS 1. Fixed Assets a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work-in-progress 2. Investments 3. Current Assets, Loans & Advances a) Inventories b) Sundry Debtors c) Cash & Bank Balances d) Loans & Advances Less : Current Liabilities & Provisions a)Current Liabilities b)Provisions Net Current Assets 4. Miscellaneous Expenditure Total In terms of our report of even date attached. For S. JAYKISHAN Chartered Accountants For and on behalf of the Board

3,948.29 20,469.75 25,306.80 6,581.07 1,746.05 58,051.96

25,169.87 3,038.48 22,131.39 6,757.22 2,339.69 26,402.80 89,00.75 4,241.13 14,096.58 26,394.78 4,72.41 26,867.19 26,774.07 49.59 58,051.96

S. K. Patni Chairman (V Newatia) Partner M No. 062636 Dated : The 4th day of March, 2010 Place : Kolkata.

Rohit Patni Managing Director

Pramod Kumar Jain CFO & Company Secretary

103

LIMITED REVIEWED FINANCIAL RESULT FOR THE PERIOD ENDED 31ST DECEMBER, 2009 (Rs. in Lacs) STANDALONE 31.12.2009 60,469.15 924.05 61,393.20 2,069.82 27,969.01 6,565.20 545.13 12,047.18 811.28 5,746.73 55,754.36 5,638.84 481.11 6,119.96 3,340.25 2,779.71 2,779.71 786.71 1,993.00 1,993.00 3,948.29

PARTICULARS 1 a) Net Sales b) Other Operating Income Total Operating Income (a+b) Total Expenditure: a) (Increase) / Decrease in stock in trade b) Consumption of Raw Materials c) Purchase of traded goods d) Employee Cost e) Power f) Depreciation g) Other expenditure Sub-Total Profit from Operations before Other Income, Interest and Exceptional Items (1-2) Other Income Profit before Interest & Exceptional Items (3+4) Interest & Financial Charges Profit before Exceptional Items (5-6) Exceptional Items Profit from Ordinary activities before Tax (7-8) Tax Expenses Net Profit from Ordinary Activities after Tax (9-10) Extraordinary Items (Net of Tax) Net Profit for the Period (11-12) Paid-up equity share capital (Face Value Rs.10/- each) Reserves excluding revaluation reserve as per Balance Sheet of previous year EPS for the period (Not Annualised) Basic: Before Extraordinary Items After Extraordinary Items Diluted: Before Extraordinary Items After Extraordinary Items

2

3 4 5 6 7 8 9 10 11 12 13 14 15 16

5.05 5.05 5.05 5.05

Public shareholding: -Number of Shares 18,596,438 -Percentage of Shareholding 47.10 18 Promoter and Promoter Group Shareholding a) Pledged / Encumbered NIL b) Non-Encumbered - Number of Shares 20,886,507 - Percentage of Shares (as a % of total shareholding of promoter & promoter group) 100.00 - Percentage of Shares (as a % of total share capital of the Company) 52.90 NOTES: 1. The Provision for Taxation includes Provision for Current Tax and Deferred Tax and is net of MAT credit entitlement. 2. The Company operates in one reportable segment only viz. Ferro Alloys.

17

104

In terms of our report of even date attached. For S. JAYKISHAN Chartered Accountants For and on behalf of the Board

S. K. Patni Chairman (V Newatia) Partner M No. 062636 Dated : The 4th day of March, 2010 Place : Kolkata.

Rohit Patni Managing Director

Pramod Kumar Jain CFO & Company Secretary

105

LIMITED REVIEW REPORT ­ CONSOLIDATED FINANCIAL STATEMENTS To The Board of Directors Rohit Ferro-Tech Limited 1. We have reviewed the accompanying unaudited Consolidated Financial Statements (incorporating Profit & Loss Account and Assets and Liabilities) of Rohit Ferro-Tech Limited (the Company) and its Subsidiary Company for the period ended 31st December, 2009 for the purposes of its inclusion in the offer document prepared by the Company in connection with its proposed Rights Issue. These Financial Statements are the responsibility of the Company's Management. Our responsibility is to issue a report on these financial statements based on our review. The Consolidated Financial Statements include the unaudited financial statements of a Subsidiary namely SKP Overseas Pte. Ltd. having total assets (net) of Rs. 4067.53 Lacs as at 31st December, 2009 and total expenses of Rs.120.17 Lacs for the period then ended as considered in the Consolidated Financial Statements. The Financial Statements of the said subsidiary have not been reviewed but have been certified by the management. The Financial Statements of a Joint Venture, namely Rohit Persia Mines and Industries PJSC, are not considered for consolidation for the reasons cited in Note No.2 of the Consolidated Financial Statements. We conducted our review in accordance with the Standard on Review Engagement (SRE) 2400, "Engagements to Review Financial Statements" issued by The Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the financial statements are free of material misstatement. A review is limited primarily to inquiries of company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. We have not performed an audit and accordingly, we do not express an audit opinion. Based on our review conducted as above and subject to our observation in Para 2. above, nothing has come to our attention that causes us to believe that the accompanying unaudited Consolidated Financial Statements prepared in accordance with applicable accounting standards and other recognised accounting practices and policies has not disclosed the information required to be disclosed in terms of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by SEBI on August 26, 2009 including the manner in which it is to be disclosed, or that it contains any material misstatement. This report is intended solely for inclusion in the offer document in connection with the proposed Rights Issue of the equity shares of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent For S. JAYKISHAN Chartered Accountants

2.

3.

4.

5.

Place: Kolkata Dated: The 4th day of March, 2010

V. NEWATIA Partner Membership No.:062636

106

LIMITED REVIEWED CONSOLIDATED BALANCE SHEET AS AT 31ST DECEMBER, 2009 As on 31st Dec' 2009 (Rs. In Lacs) I. SOURCES OF FUNDS 1. Shareholders' Funds a) Share Capital b) Reserves and Surplus 2. Loan Funds a) Secured Loans b) Unsecured Loans 3. Deferred Tax Liability Total II. APPLICATION OF FUNDS 1. Fixed Assets a) Gross Block b) Less: Depreciation c) Net Block d) Capital Work-in-progress 2. Investments 3. Current Assets, Loans & Advances a) Inventories b) Sundry Debtors c) Cash & Bank Balances d) Loans & Advances Less : Current Liabilities & Provisions a)Current Liabilities b)Provisions Net Current Assets 4. Miscellaneous Expenditure Total In terms of our report of even date attached. For S. JAYKISHAN Chartered Accountants For and on behalf of the Board

3,948.29 20,349.02 29,495.06 6,581.07 1,746.05 62,119.49

25,169.87 3,038.48 22,131.39 6,757.22 5,120.01 26,402.81 8,900.75 4,716.62 14,778.41 54,798.59 26,417.68 472.41 26,890.09 27,908.50 202.37 62,119.49

S. K. Patni Chairman (V Newatia) Partner M No. 062636 Dated : The 4th day of March, 2010 Place : Kolkata.

Rohit Patni Managing Director

Pramod Kumar Jain CFO & Company Secretary

107

LIMITED REVIEWED CONSOLIDATED FINANCIAL RESULT FOR THE PERIOD ENDED 31ST DECEMBER, 2009 (Rs. In Lacs) CONSOLIDATED PARTICULARS 31.12.2009 60,469.15 1 a) Net Sales 924.05 b) Other Operating Income 61,393.20 Total Operating Income (a+b) Total Expenditure: 2,069.82 a) (Increase) / Decrease in stock in trade 27,969.01 b) Consumption of Raw Materials 6,565.20 c) Purchase of traded goods 545.13 d) Employee Cost 12,047.18 e) Power 811.28 f) Depreciation 5,749.85 g) Other expenditure 55,757.48 Sub-Total 3 Profit from Operations before Other Income, Interest and Exceptional 5,635.72 Items (1-2) 481.11 4 Other Income 6,116.83 5 Profit before Interest & Exceptional Items (3+4) 3,457.29 6 Interest & Financial Charges 2,659.54 7 Profit before Exceptional Items (5-6) 8 Exceptional Items 2,659.54 9 Profit from Ordinary activities before Tax (7-8) 786.71 10 Tax Expenses 1,872.83 11 Net Profit from Ordinary Activities after Tax (9-10) 12 Extraordinary Items (Net of Tax) 1,872.83 13 Net Profit for the Period (11-12) 3,948.29 14 Paid-up equity share capital (Face Value Rs.10/- each) 15 Reserves excluding revaluation reserve as per Balance Sheet of previous year 16 EPS for the period (Not Annualised) 4.74 Basic: Before Extraordinary Items 4.74 After Extraordinary Items 4.74 Diluted: Before Extraordinary Items 4.74 After Extraordinary Items 17 Public shareholding: 18,596,438 -Number of Shares 47.10 -Percentage of Shareholding 18 Promoter and Promoter Group Shareholding NIL a) Pledged / Encumbered b) Non-Encumbered 20,886,507 - Number of Shares - Percentage of Shares (as a % of total shareholding of promoter & 100.00 promoter group) 52.90 - Percentage of Shares (as a % of total share capital of the Company) NOTES: 1. The consolidated financial results have been prepared in line with the requirement of Accounting Standard 21 - 'Consolidated Financial Statements' 2. The Company had entered into a Joint Venture namely 'Rohit Persia Mines and Industries PJSC' with 49% interest to acquire mines in Iran. The said Joint Venture has not yet commenced its 108 2

operation and hence not considered for Consolidation. The Parent Company has invested a sum of Rs.66.88 lacs including (Advances for supplies) as on 31st December, 2009. 3. The Provision for Taxation includes Provision for Current Tax and Deferred Tax and is net of MAT credit entitlement. 4. The Company operates in one reportable segment only viz. Ferro Alloys.

In terms of our report of even date attached. For S. JAYKISHAN Chartered Accountants For and on behalf of the Board

S. K. Patni Chairman (V Newatia) Partner M No. 062636 Dated : The 4th day of March, 2010 Place : Kolkata.

Rohit Patni Managing Director

Pramod Kumar Jain CFO & Company Secretary

109

MATERIAL DEVELOPMENTS

Recent Developments In accordance with circular no.F.2/5/SE/76 dated February 5, 1977 issued by the Ministry of Finance, Government of India, as amended by Ministry of Finance, Government of India through its circular dated March 8, 1977 and in accordance with sub-item (B) of item X of Part E of the SEBI Regulations, the information required to be disclosed for the period between the last date of the financial statements provided to the shareholders and the date preceding one month from the date of Draft Letter of Offer is provided below: 1. Working results of the Company on a stand-alone basis for the period from April 1, 2009 to December 31, 2009: Sl. No 1. 2. 3. 4. 5. 6. Particulars Sales / Turnover Other Income Gross Profit (Excluding depreciation and taxes) Provision for Depreciation Provision for Taxation Profit / (Loss) for the period Amount (Rs. in Lacs) 61,393.20 481.11 3,590.99 811.28 786.71 1,993.00

2. Material changes and commitments, if any, affecting the financial position of the Company There are no material changes and commitments, which are likely to affect the financial position of the Company since March 31, 2009 (i.e. last date up to which audited information is incorporated in the Draft Letter of Offer).

110

STOCK MARKET DATA FOR EQUITY SHARES OF THE COMPANY The tables set forth below are for the periods that indicate the high and low prices of the Company Equity Shares and also the volume of trading activity. On March 26, 2010, the closing price of Equity Shares of the Company on NSE and BSE was Rs. 38.50 and Rs. 38.65, respectively (Equity Shares of face value of Rs.10 each). 1. The week end prices of the Equity Shares of the Company for last four weeks on the BSE and NSE are provided in the table below: Week ended on March 26, 2010 March 19, 2010 March 12, 2010 March 05, 2010 * Source: www.bseindia.com; ** Source: www.nseindia.com BSE* 38.65 39.35 39.00 40.25 Closing Price (In Rs.) NSE** 38.50 39.35 39.00 40.40

2. The highest and lowest prices of the Equity Shares of the Company on the BSE and NSE for last four weeks are provided in the table below: Name of the stock Highest exchange (In Rs.) BSE 42.50 NSE 42.40 Source: www.bseindia.com; Source: www.nseindia.com Date March 08, 2010 March 08, 2010 Lowest (In Rs.) 37.95 34.50 Date March 03, 2010 March 02, 2010

3. The highest and lowest prices of the Equity Shares of the Company on the BSE for last three year are provided in the table below: Year Highest (In Rs.) 2007-2008 127.20 2008-2009 194.95 2009-2010 49.05 Source: www.bseindia.com; Date January 01, 2008 May 30, 2008 October 01, 2009 Lowest (In Rs.) 24.45 13.45 12.35 Date March 28, 2007 March 05, 2009 March 09, 2009

4. The highest and lowest prices of the Equity Shares of the Company on the NSE for last three year are provided in the table below: Highest (In Rs.) 2007-2008 119.00 2008-2009 194.95 2009-2010 48.80 Source: www.nseindia.com Year Date January 02, 2008 May 30, 2008 October 01, 2009 Lowest (In Rs.) 24.65 13.55 12.30 Date March 28, 2007 March 05, 2009 March 09, 2009

5. The highest and lowest prices of the Equity Shares of the Company on the BSE for the six months preceding the date of filing of the Draft Letter of Offer are provided in the table below: Year October, 2009 November, 2009 December, 2009 January, 2010 February, 2010 March, 2010 Highest (In Rs.) 49.05 42.65 43.30 48.60 42.90 42.50 Date October 01, 2009 November 23, 2009 December 31, 2009 January 21, 2010 February 02, 2010 March 08,2010 111 Lowest (In Rs.) 35.00 33.50 36.50 37.15 36.10 37.95 Date October 29, 2009 November 04, 2009 December 21, 2009 January 29,2010 February 24, 2010 March 03, 2010

Source: www.bseindia.com; 6. The highest and lowest prices of the Equity Shares of the Company on the NSE for the six months preceding the date of filing of the Draft Letter of Offer are provided in the table below: Year Highest (In Rs.) October, 2009 48.80 November, 2009 42.40 December, 2009 43.45 January, 2010 48.80 February, 2010 43.00 March, 2010 42.40 Source: www.nseindia.com Date October 01, 2009 November 23, 2009 December 31, 2009 January 21, 2010 February 02, 2010 March 08, 2010 Lowest (In Rs.) 34.95 33.70 36.25 37.15 36.10 34.50 Date October 29, 2009 November 04, 2009 December 21, 2009 January 29,2010 February 24, 2010 March 02, 2010

112

ACCOUNTING RATIOS AND CAPITALISATION STATEMENT

Accounting Ratios The following table presents certain accounting and other ratios derived from the Company's audited consolidated financial statements as at and for the year ended March 31, 2009 included in "Financial Statements" on page 52 of this Draft Letter of Offer. Particulars Weighted average number of equity shares for basic Earnings Per Share Weighted average number of equity shares for diluted Earnings Per Share Basic Earnings Per Share (Rs.) Diluted Earnings Per Share (Rs.) Return on Net Worth (%) Net Asset Value Per Share (Rs.) The Ratios have been computed as below: Earnings Per Share (Basic) (Rs.) Earnings Per Share (Diluted) (Rs.) Return On Net worth (%) Net Asset Value per Share (Rs.) Net profit attributable to Equity Shareholders (excluding extraordinary items, if any)/ Weighted Average number of Equity Shares outstanding during the year Net profit attributable to Equity Shareholders (excluding extraordinary items, if any)/ Weighted Average number of Diluted Equity Shares outstanding during the year Net profit attributable to Equity Shareholders (excluding extraordinary items, if any)/ Net Worth at the end of the year (excluding revaluation reserves) Net Worth at the end of the year (excluding revaluation reserves)/ Net shares outstanding at the end of financial year. (Rs. in Lacs) Pre-issue as at March 31, 2009 10,436.86 23,742.10 34,178.97 Adjusted for the Issue* [] [] [] For the Financial Year Ended March 31, 2009 37,437,397 42,462,945 1.79 1.58 3.42% 56.59

Consolidated Capitalization Statement (audited)

PARTICULARS Debts Short Term Debt Long Term Debt Total - (A) Shareholders' Funds Share Capital Reserves & Surplus (Excluding Revaluation Reserve) Less: Miscellaneous Expenditure Total Shareholders' Funds (B) Total Capitalization (A+B) Total Debt/ Equity Ratio

3,948.29 18,514.69 119.23 22,343.75 56,522.72 1.52 1.06

[] [] [] [] [] []

Long term Debt/Equity ratio * To be included at the time of filing of the Letter of Offer. 113

The Ratios have been computed as below: Total Debt / Equity Ratio: (Short Term Debt + Long Term Debt)/ Net Worth Long Term Debt/ Equity Ratio: Long Term Debt/ Net Worth

114

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS Except as described below, there are no outstanding litigations, suits or criminal or civil prosecutions, proceedings or tax liabilities against the Company, its Directors and Promoters and the Promoter group companies that would have a material adverse effect on the business of the Company and there are no defaults, non payment or overdue of statutory dues, institutional / bank dues and dues payable to holders of debentures, bonds and fixed deposits that would have a material adverse effect on the Company's business other than unclaimed liabilities against the Company or its Directors or its subsidiary or Promoters or Promoter group as on the date of this Draft Letter of Offer. Litigations against Rohit Ferro-Tech Limited 1. Central Excise Sl. No. Department Case No. Date Instituted Background 1 Office of the Asst. Commissioner of Central Excise, Durgapur. V-72(4)52/Rohit/SCN/Dgp-IV/07/4715 15-11-2007 A show cause cum demand Notice was issued on the Company by the Central Excise Department, Durgapur-IV Division as to why input credit and Education Cess should not be reversed and why interest and penalty should not be imposed. The matter is under appeal. Rs. 4,40,750.00 and interest & penalty under the provision of Central Excise Act, 1944. 2 Central Excise, Durgapur V-72(4)13/ROHIT/SCN/DGP-4/08/734 05-02-08 A show cause cum demand notice was issued on the company by Central Excise Department Durgapur-IV division as to why credit of input service tax taken by the company should not be reversed and interest and penalty should not be imposed. The matter is under appeal Rs. 147501.00 and interest & penalty under the relevant provision of Act, 3 Central Excise, Durgapur V-72(4)68/ROHIT/SCN/DGP-4/07/5589 18-12-07 A show cause cum demand notice was issued on the company by Central Excise Department Durgapur-IV division as to why the company should not pay the differential Education Cess along with penalty under the provisions of the Act. The matter is under appeal Rs. 6266.00 and penalty under the relevant provision of Central Excise Act, 1944 4 Central Excise, Durgapur V-(28)03/ST/ROHIT/DGP-4/08/6206 20-11-08 A show cause cum demand notice was issued on the company by Central Excise Department Durgapur-IV division as to why the company should not pay interest for delay payment of service tax and education cess along with penalty under the relevant provision of the Act. 115

Present Status Amount/Involved

Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved

Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved

Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved

The matter is under appeal Not Ascertainable ( Penalty u/s 77 & 78 and interest under section 75 of the Act) 5 Office of the commissioner of Central Excise, Bolpur 41/COMMR/BOL/07 11-12-07 A show cause cum demand notice was issued on the company by the commissioner of Central Excise Bolpur as to why the credit of input service tax and Education Cess should not be disallowed and be recovered from the company with interest and penalty under the relevant provision of the Act. The matter is under appeal Rs. 10751049.00 and interest and Penalty under the relevant provision of the Act. 6 Office of the commissioner of Central Excise, Bolpur V-(15)48/ADJ/CE/BOL/09/787 06-04-09 A show cause cum demand notice was issued on the company by Joint Commissioner of Central Excise Bolpur as to why Central Excise duty, Education Cess and S&HEC should not be recovered from the company along with interest and penalty as per the relevant provision of the Act. The matter is under appeal Rs. 4242925.00 and Interest and Penalty as per the relevant provision of the Act. 7 Office of the commissioner of Central Excise, Bolpur V(15)304/Adj/CE/Bol/09/167 21-01-10 A show cause cum demand notice was issued on the company by Joint Commissioner of Central Excise Bolpur as to why credit of input Service Tax, Education Cess and H.E.Cess should not be disallowed and recovered from them along with the interest and penalty as per the relevant provision of the Act. The matter is under process. Rs. 778898.00 and Interest and Penalty as per the relevant provision of the Act. 8 Office of the commissioner of Central Excise, Bolpur V(15)31/Adj/CE/BOL/09/3314 31-12-09 A show cause cum demand notice was issued on the company by Joint Commissioner of Central Excise Bolpur as to why credit of input service tax, Education Cess and S& HEC should not be disallowed and recovered with interest and penalty as per the relevant provision of Act. The matter is under process. Rs- 2616990.00 and Interest and Penalty as per the relevant provision of the Act.

Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved

Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved

Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved

Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved

116

Sl. No. Department Case No. Date Instituted Background

Present Status

Amount/Involved 2. Income Tax Sl. No. Department Case No. Date Instituted Background

9 Directorate General of Central Excise Intelligence, East Zonal Unit DGCE/KOL/SA/82/08-09 10-09-08 The Central Excise Department on 10-09-08 conducted a search operation on the registered office and factory premises of the Company. Consequent upon the search operation the Department vide order dated 21.01.2009 imposed certain restrictions under the Central Excise Act and CENVET Credit Rules. The Company has deposited a sum of Rs. 1.50 Cr under Protest against the contingent liability and filed a writ petition before the Kolkata High Court The Kolkata High court vide their interim order dated 09.02.2009 restrained the department to implement the restriction imposed in Para 5(ii) of the order dated 21.01.2009 till the writ petition is heard. The case is under progress. Not Ascertainable

Present Status Amount/Involved

1 CIT(A)-1/Kolkata Case No. yet not given by the authority 31-12-08 The Additional Commissioner of Income Tax Range (1) has issued a demand cum assessment order under section 143(3) of the Income Tax Act, 1961, demanding a sum of Rs. 931200 against the assessment of AY 2006-07. The Company has made an appeal before the CIT(A)-I against the order. The case is under progress Rs. 931200.00

Sl. No. Department Case No. Date Instituted Background

2 CIT(A)-1/Kolkata Case No. yet not given by the authority 10-02-10 The DCIT, Circle-I, Kolkata has issued a demand cum assessment order under section 143(3) of the Income Tax Act, 1961, demanding a sum of Rs. 7585480/- against the assessment of AY 2007-08. The Company has made an appeal before the CIT(A)-I against the order. The proceedings is under process Rs. 7585480.00 ( Including Interest)

Present Status Amount/Involved

3. Central Sales Tax & VAT Sl. No. Department Case No. Date Instituted Background Present Status Amount/Involved 1 Joint Commissioner of Commercial Taxes, Bow Bazar Charge 34(A)/VAT/08-09 & 38(A)/C.S.T./08-09 2-2-2010 Tax Demand Claimed against disallowance of Input tax Credit taken in the year 2005-06. The Company is in the process of filing of an appeal before the Sr. Joint Commissioner of Commercial Taxes, Dharmtala Circle Rs. 19,12,431.00

117

Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved

2 Joint Commissioner of Commercial Taxes, Bow Bazar Charge 5899 9-12-2009 Tax Demand claimed against the disallowance of Input tax Credit taken on purchase of Coal, Coke as raw materials in the year 2008-09. The Company has filed an appeal before the Hon'ble Taxation Tribunal Extraordinary Jurisdiction, Salt Lake for the proper adjudication in the matter. The case is under progress. Rs. 46,47,500.00

Sl. No. Department Case No. Date Instituted Background Present Status Amount/Involved

3 The Deputy Commissioner of Bureau of Investigation 1654(M)-B.1 24-08-2009 Tax Demand Claimed against disallowance of Input Tax Credit in the year 2008-09. The Company has deposited a sum of Rs. 10,00,000/- under protest. The Company has submitted a Statement of Input Tax Credit . The case is pending for further action in the matter. Not Ascertainable

Litigation against the Promoters NIL Litigation against the Directors NIL Litigation against Subsidiary NIL Litigation against Group Companies/Associate Concerns: i. Impex Ferro Tech Limited 1. EXCISE Sl. No. Department Case No. Date Instituted Background 1 Asstt. Commissioner Of Central Excise Asansol -II Division SCN No. V(4) 21/ADJ/KAL/06/0225 12-01-07 Demand for the credit taken for the service tax paid on the freight paid, pertaining to outward transportation beyond the place of removal and the said credit taken as input service as referred in rule 2(1) of the CENVET Credit Rules, 2004 did not qualify as input service, hence credit taken has to be paid by the assessee. The company has appealed against the order and case has been referred to the Larger Bench The company has made an application to the Commissioner (Appeals)-Kolkata for vacation of the judicial proceedings and immunity from payment of the duty, interest and penalty. The case is still under progress Rs. 308947.00 118

Present Status

Amount/Involved

Sl. No. Department Case No. Date Instituted Background

Present Status

Amount/Involved Sl. No. Department Case No. Date Instituted Background Present Status

2 Additional Commissioner of Central Excise, Bolpur SCN No. II(8) 43/AE/CE/BOL/07/2161 05-05-08 Pertaining to shortage of finished stock (physical) in comparison to daily stock account for finished goods, demand and penalty of equal amount was imposed on the company and its director Mr. V.K.Jain under Section 11AC of the Act read with rule 25 of the CER, 2002 and rule 26 of the Central Excise Rules, 2002 respectively. The company has made an Appeal to the Commissioner (Appeal) Kolkata for admissibility of Cenvat Credit, waiver of Penalty and interest and stay against pre-deposit of the duty, penalty and interest. The case is still under progress Rs. 1,555,308.00 ( Including Penalty ) 3 Joint Commissioner of Central Excise, Bolpur SCN No. V(15)139/Adj/CE/BOl/07/208 24-01-08 Inadmissibility of Cenvat Credit taken as input service under rule 2(1) of CCR, 2004 The company has made an Appeal to the Commissioner (Bolpur) for admissibility of Cenvat Credit, waiver of Penalty and interest and stay against pre-deposit of the duty, penalty and interest. The case is under progress Rs. 825944.00 4 Directorate General of Central Excise, Intelligence, Kolkata N.A. 10-09-2008 A Search operation was conducted by the Directorate General of Central Excise Intelligence. Consequent to the search the Company has deposited a sum of Rs. 30 Lacs as pre deposit against the contingent liability , The department has not yet issued any show cause notice. Not Ascertainable 5 Joint Commissioner of Central Excise, Bolpur V(15)11/Adj/CE/Bol/09/261 09-02-10 A show cause cum demand notice was issued on the company by Joint Commissioner of Central Excise Bolpur on the subject of valuation provisions of the goods sold from the depots and through the consignment agents during the financial year 2005-06. The proceeding is under process. RS. 910094.00 ( Duty and Cess)

Amount/Involved Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved Sl. No. Department Case No. Date Instituted Background

Present Status Amount/Involved

2. Central Sales Tax and VAT Sl. No. Department Case No. Date Instituted Background Present Status 1 Joint Commissioner of Commercial Taxes 03/B/09-10&02/B/09-10 03-06-09 Demand Claimed against non submission of Declaration form and disallowance of Input Tax Credit claimed in the year 2006-07 The Company has filed an appeal before the Sr. Joint Commissioner 119

Amount/Involved

of Commercial Taxes. The case is under progress Rs. 118002661.00 ( Including Interest)

Sl. No. Department Case No. Date Instituted Background

2 Joint Commissioner of Commercial Taxes 2(A)/05-06 & 6(A)/56/08-09 24-11-09 Demand Claimed against non submission of Declaration form and disallowance of Input Tax Credit claimed in the year 2005-06 The Company is in the process of filing of an appeal before the Sr. Joint Commissioner of Commercial Taxes within the stipulated period of time. Rs. 64332388.00 ( Including Interest)

Present Status Amount/Involved

Further, a notice u/s 65(1) read with section 7 of WBST, Act 1994 from government of West Bengal, Bureau of investigation was served upon Impex Ferro Tech Limited to produce the book of account for the year 2002-2003 and 2003-2004. The management of the Company, as directed , time to time on the date of hearing, produced/and/or producing the necessary documents and information before the authority for efficacious conclusion of the hearing. In the course of enquiry the company has voluntarily paid Rs.823640.00 to the department. ii. Ankit Metal & Power Limited 1. Excise Sl. No. Department Case No. Date Instituted Background 1 Directorate General of Central Excise Intelligence, East Zonal Unit DGCE/KOL/SA/81/08-09 10-09-08 The Central Excise Department on 10-09-08 conducted a search operation on the registered office and factory premises of the Company. Consequent upon the search operation the Department vide order dated 21.01.2009 imposed certain restrictions under the Central Excise Act and CENVET Credit Rules. The Company has deposited a sum of Rs. 1.20 Cr under Protest and filed a writ petition no 2209 (W) of 2009 before the Kolkata High Court The Kolkata High Court vide their interim order dated 09.02.2009 restrained the department to implement the restriction imposed in Para 3(ii) of the order till the writ petition is heard. The case is under progress. Not Ascertainable

Present Status

Amount/Involved

2. Central Sales Tax & VAT Sl. No. Department Case No. Date Instituted Background Present Status Amount/Involved Sl. No. Department Case No. 1 Joint Commissioner of Commercial Taxes, Bow Bazar Charge. 06(A)/1/VAT/08-09 & 09(A)/56/08-09 28-11-2008 Demand Claimed against non-submission of Declaration Forms and disallowance of Input tax Credit claimed in the year 2005-06. The Company has filed an Appeal before the Sr. Joint Commissioner of Commercial Taxes. The case is under progress. Rs. 2,26,05,531.00 2 Joint Commissioner of Commercial Taxes, Bow Bazar Charge. 035/A/08-09 & 039/A/08-09 120

Date Instituted Background Present Status Amount/Involved Sl. No. Department Case No. Date Instituted Background

30-06-2009 Demand Claimed against non-submission of Declaration Forms and disallowance of Input tax Credit claimed in the year 2006-07. The Company has made a payment of Rs.2,51909/- against the impugned order and filed an Appeal before the Sr. Joint Commissioner of Commercial Taxes. The case is in progress. Rs. 9,15,39,474.00 3 Joint Commissioner of Commercial Taxes, Purulia Range West Bengal 13/PR/PRR/07-08 11-1-2008 The ACST has imposed a penalty of Rs. 7875000/- for nonendorsement of Way Bills for the year 2006-07. The Company has deposited a sum of Rs. 15,00,000/- under protest and filed an appeal before the Sr. Joint Commissioner of Commercial Taxes. The Sr. Joint Commissioner has passed a order modifying the penalty to Rs 9293565/- against which the Company has filed an appeal before the Additional Commissioner of Commercial Taxes The matter is under progress and pending for final disposal. Rs. 92,93,565.00 4 Joint Commissioner of Commercial Taxes, Durgapur Range. 122/DPR/DP 6-5-2008 The ACST has imposed a penalty of RS 8795000/- for NonEndorsement of Way Bills for the year 2007-08 The Company has filed an Appeal before the Sr. Joint Commissioner of Commercial Taxes, Durgapur Range West Bengal. The case is under progress Rs. 87,95,000.00

Present Status Amount/Involved Sl. No. Department Case No. Date Instituted Background Present Status Amount/Involved iii.

Impex Metal & Ferro Alloys Limited 1. Central Sales Tax & VAT

Sl. No. Department Case No. Date Instituted Background Present Status Amount/Involved

1 Joint Commissioner of Commercial Taxes, Bow Bazar Charge. 3(A)/05-06 & 37(A)/56/08-09 23-11-2009 Demand Claimed against non-submission of Declaration Forms and disallowance of Input tax Credit claimed in the year 2005-06. The Company is in the process of filing of an appeal before the appropriate authority Rs.767702.00

Sl. No. Department Case No. Date Instituted Background Present Status

2 Joint Commissioner of Commercial Taxes, Bow Bazar Charge. 03/B/09-10 & 03/B/09-10 30-06-2009 Demand Claimed against non-submission of Declaration Forms and disallowance of Input tax Credit claimed in the year 2006-07. The Company has made a payment of Rs 24482/- against this order and filed an appeal before the Sr. Joint Commissioner of Commercial Taxes. The case is under progress. 121

Amount/Involved

Rs. 53,82,164.00

Further, a notice u/s 65(1) read with section 7 of WBST, Act 1994 from government of West Bengal, Bureau of investigation was served upon Impex Metal and Ferro Alloys Limited on 24th June 2004 to produce the book of account for the year 2002-2003 and 2003-2004. The management of the Company, as directed , time to time on the date of hearing, produced/and/or producing the necessary documents and information before the authority for efficacious conclusion of the hearing. In the course of enquiry the company has voluntarily paid Rs.30 Lacs to the department. Cases filed by the Company NIL

122

GOVERNMENT AND OTHER APPROVALS In view of the approvals listed below, the Company can undertake this Issue and the current business activities. No further major approvals from any governmental or regulatory authority or any other entity are required to undertake the Issue or continue the business activities. Unless otherwise stated, these approvals are all valid as of the date of this Draft Letter of Offer. APPROVAL MATERIAL TO THE CURRENT BUSINESS ACTIVITIES A. INCOME TAX REGISTRATIONS Sl. No. 1 2 Description Permanent Account Number TDS Account Number Reference AACCR1593A CALR03389B

B. EXCISE REGISTRATIONS Sl. NO. 1 2 Location Plant ­ Bishnupur Plant Jajpur Plant ­ Haldia Reference/ Registration No. AACCR1593AXM001 AACCR1593AXM002 Authority Assistant Commissioner of Central Excise, Durgapur Division Assistant Commissioner of Central Excise, Balasore Division Deputy Commissioner/ Assistant Commissioner of Central Excise Date of Issue February 2, 2005 November 30, 2004 November 25, 2009

3

AACCR1593AXM003

C. SALES TAX REGISTRATIONS 1. Central Sales Tax Sl. NO. 1 2 3 4 5 6 State West Bengal Orissa Uttar Pradesh Gujarat Haryana Punjab Reference/ Registration No. 19531799236 21651402067 GB-5357761 24560102496 06791533430 90780711 Authority Office of Commissioner, Commercial Taxes, Government of WB Astt. Commissioner of Sales Tax, Jajpur Circle Assistant Commissioner, Ghaziabad Sales Tax Authority Part- I Assessing Authority Assessing Authority Date of Issue July 15, 2002 April 1, 2005 August 6, 2003 September 27, 2005 July 11, 2003 October 22, 2003

2. VAT Registrations Sl. NO. 1. 2. 3. State Approval Granted West Bengal Orissa Uttar Pradesh VAT Registration Certificate VAT Registration Certificate VAT Registration Certificate Reference/ Registration No. 19531799042 21651402067 09289002300 123 Date of Issue August 25, 2006 April 1, 2005 August 6, 2003

Authority Astt. Commissioner, Commercial Taxes, Govt. of WB Astt. Commissioner of Sales Tax, Jajpur Circle Assistant Commissioner, Ghaziabad

4. 5. 6.

Gujarat Haryana Punjab

VAT Registration Certificate VAT Registration Certificate VAT Registration Certificate

24060102496 06791533430 03151154125

Sales Tax Authority Part- I Assessing Authority Excise & Taxation Officer

September 27, 2005 July 11, 2003 April 1, 2005

D. SERVICE TAX REGISTRATIONS Sl. NO. 1 2 Location Plant ­ Bishnupur Plant ­ Jajpur Reference/ Registration No. AACCR1593AST002 AACCR1593AST001 Authority Assistant Commissioner of Central Excise, Durgapur Division Assistant Commissioner of Central Excise & Customs, Balasore Division Date of Issue June1, 2006 June 2, 2006

E. LABOUR/EMPLOYEE RELATED APPROVALS 1. Provident Fund Registration Sl. NO. 1 2 Location West Bengal Orissa 2. Sl. NO. 1 Reference/ Registration No. W.B./D.G.P./41851 OR/12981 Authority Employees' PF Organization, Bishnupur Employees' PF Organization, Unit No ­IX, Regional Office, Orissa Date of Issue December 18, 2003 June1, 2006

Employees State Insurance Registration Reference/ Registration No. OR/REV/44-6298513416 Authority Regional Office, E.S.I. Corporation, Bhubaneshwar Date of Issue May 22, 2008

Location Plant ­ Jajpur 3. Professional Tax

Sl. NO. 1 2

Location West Bengal Orissa

Reference/ Registration No. ECC ­ 0103187 JAGPR-77

Authority Professional Tax Office, Calcutta Central Range Professional Tax Officer, Jajpur Circle

Date of Issue May 7, 2002 March29, 2007

4. Sl. NO. 1 2 3

Registration under Contract Labours Act Reference/ Registration No. 01/BSP/CL/R/03 JRD-(R)-26/05 Authority Office of Registering Officer under the Contract Labour Act, Bishnupur division Office of the Registering Officer, Government of Orissa Office of Registering Officer under the Contract Labour Act, Basudebpur, Khanjanchak, Mednipur Date of Issue July 26, 2003 March 29, 2005 November 19, 2008

Location Plant ­ Bishnupur Plant ­ Jajpur Plant ­ Haldia

07/CON/R/2008 124

F. TRADE LICENSCES Sl. NO. 1 2 3 Location 35, C.R.Avenue, Kolkata -700 012 33, C.R.Avenue, Kolkata -700 012 Plant ­ Haldia Reference/ Registration No. 304710000353 004061014070 1860 Authority Kolkata Municipal Corporation, License Department Kolkata Municipal Corporation, License Department Haldia Municipality Date of Issue October 22, 2009 October 22, 2009 October 23, 2009 Validity March 31, 2010 March 31, 2010 March 31, 2010

G. FACTORY AND OTHER LICENSES Sl. NO. 1 Location Plant Jajpur Plant Haldia Approval Granted Factory License Warehouse License Reference/ Registration No. Registration No. ­ JJ109 07/2009 Date of Issue November 25, 2006 October 30, 2009

2

Authority Joint Directorate of Factories and Boilers Office of Commissioner of Customs, Custom House :Kolkata GOI

Validity December 31, 2010 July 22, 2010

H. ENVIRONMENT RELATED APPROVALS SL. NO. 1 2 3 Location Plant Bishnupur Plant Jajpur Plant Haldia Plant Haldia Approval Granted Consent to Operate Consent to Operate Consent to Establish Environment Clearance Registration Clearance Registration Reference/ Registration No. 158156/SEE(KO)G/03 2976/IND-I-CON5455 258-2N01/2009(E) F No. J11011/405/2008IA II (I) Authority West Bengal Pollution Control Board State Pollution Control Board, Orissa West Bengal Pollution Control Board Ministry of Environment and Forest, Government of India Date of Issue November 1, 2009 April 8, 2009 May 6, 2009 March 17, 2009 Validity October 31, 2011 March 3, 2010 March31, 2014 Until revoked

4

I. Sl. NO. 1 2 3

SECRETARIAT OF INDUSTRIAL ASSISTANCE REGISTRATION Location Plant - Bishnupur Plant - Jajpur Plant - Haldia Reference/ Registration No. 1823/SIA/IMO/2008 1106/SIA/IMO/2004 1824/SIA/IMO/2008 Authority Pubic Relation & Complaints Section of Ministry of Commerce & Industry Pubic Relation & Complaints Section of Ministry of Commerce & Industry Pubic Relation & Complaints Section of Ministry of Commerce & Industry Date of Issue June 17, 2008 March 31, 2004 June17, 2008

125

J. Sl. NO. 1 2

LOCAL BODY REGISTRATION Location Plant ­ Bishnupur Plant - Haldia Registration No. 7965 Reference/ Registration No. Authority Bankura Gram Panchayat Haldia Municipality Date of Issue June 17, 2002 October 23, 2009 Validity Until revoked March 31, 2010

K. STATE ELECTRICITY BOARD REGISTRATION Sl. NO. 1 2 3 Location Plant Bishnupur Plant - Jajpur Plant - Haldia Reference/ Registration No. C/BC/BAN/17/183A 00AA024364 C/BC/MID/G/670A Authority West Bengal State Electricity Distribution Company Limited Orissa State Electricity Distribution Company Limited West Bengal State Electricity Distribution Company Limited Date of Issue January 22, 2010 January 1, 2010 March 4, 2009 Validity January 21, 2015 December 31, 2015 March 3, 2014

L. OTHER CORPORATE APPROVALS Sl. NO. 1 Approval Granted ISO 9001 : 2000 Certificate of ImporterExporter Code Membership Certificate (Engineering Export Promotion Council) Star Export House Certificate Permission for setting 100% EOU Green Card Reference/ Registration No. IRQS/0910005 Authority Indian Register Quality Systems, Department of Indian Register of Shipping Ministry of Commerce, GOI Date of Issue December 31, 2008 July 1, 2003 Validity December 30, 2011 Valid till cancellation

2

203006313

3

EEPC:K:REG:172:20062007

4

B-001230

5 6

Card No. ­ 526 2(1)/R-37/2009/1929

Engineering Export Promotion Council, Ministry of Commerce Office of the Joint Director General of Foreign Trade, Ministry of Commerce, GOI Falta Special Economic Zone, Ministry of Commerce & Industry Ministry of Commerce & Industry, Government of India

March 15, 2007 April 1, 2007 July 23, 2009 July 23, 2009

March 31, 2009 March31, 2012 October 22, 2010 July 22, 2012 WHICH

APPROVALS MATERIAL TO THE CURRENT BUSINESS ACTIVITIES FOR APPLICATIONS HAVE BEEN MADE BUT APPROVLS ARE YET TO BE OBTAINED: Sl. No. 1 Description Renewal of Factory License - Bishnupur Issuing Authority Inspector of Factories, Durgapur 126

Date of Application January 27, 2010

2 3 4

Factory License Service Tax Code Employees State Insurance Code

Chief Inspector, Directorate of Factories The Superintendent, Excise deptt., Haldia division Regional Director, Employees State Insurance Corporation, Kolkata

February 22, 2010 February 25, 2010 February 14, 2010

APPROVALS OF CURRENT BUSINESS ACTIVITIES FOR WHICH APPLICATION IS YET TO BE SUBMITTED: Sl. No. 1 2 Description Professional Tax Registration Provident Fund Registration Location Plant ­ Haldia Plant - Haldia Issuing Authority Professional Tax Office Provident Fund Organization

127

OTHER REGULATORY AND STATUTORY DISCLOSURES Important Information Under no circumstances should any request be sent to the Lead Manager to the Offer. The Company undertakes to provide adequate Funds to the Registrars to the Offer for posting of the Refund Orders/ Letters of Allotment/ Share Certificates by registered post wherever applicable. Authority for the Issue This Issue is being made pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on January 7, 2010 and approvals of the members of the company sought by means of Postal Ballot (Vide notice dated January 31, 2010) and results declared on March 12, 2010, with a right to renounce. Prohibition by SEBI Neither the Company, nor its Promoters, directors, any of the Company's Associates or Group Companies, and Companies with which the directors of Issuer are associated, as directors or promoters, have not been prohibited from accessing the capital market under any order or directions passed by SEBI. Further, the Directors of the Company are not associated with the capital markets and not been prohibited from accessing the capital markets under any order or direction passed by SEBI. Further the Promoter, their relatives (as per Act), the Company, group companies, associate companies are not declared as willful defaulters by RBI / Government authorities Eligibility for the Issue The Company is an existing company registered under the Companies Act whose Equity Shares are listed on the BSE and the NSE. The Company is eligible to make this Issue in terms of Chapter IV of the SEBI Regulations. The Company is in compliance as prescribed under Part E of Schedule VIII of the ICDR Regulations. It satisfies the following conditions: a. The Company has been filing periodic reports, statements and information in compliance with the listing agreement for the last three years immediately preceding the date of filing this Draft letter of offer with the designated stock exchange. The reports, statements and information referred to sub-clause (a) above are available on the website of BSE & NSE the recognized stock exchanges with nationwide trading terminals. The Company has investor grievance ­ handling mechanism which includes meeting of the Shareholder's or Investor's Grievance Committee at frequent intervals, appropriate delegation of power by the board of directors of the Company as regards share transfer and have clearly laid down systems and procedures for timely and satisfactory redressal of investor grievances.

b.

c.

DISCLAIMERS SEBI DISCLAIMER CLAUSE AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THIS DRAFT LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED/CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT LETTER OF OFFER. THE LEAD MANAGER, MICROSEC CAPITAL LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE 128

DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 FOR DISCLOSURE AND INVESTOR PROTECTION IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT LETTER OF OFFER, THE LEAD MANAGER ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD MANAGER HAVE FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED MARCH 26, 2010, WHICH WILL READ AS FOLLOWS: 1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATIONS LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE; 2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT: a) THE DRAFT LETTER OF OFFER FORWARDED TO THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE. ALL THE LEGAL REQUIREMENTS TO THE SAID ISSUE AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ISSUED BY THE BOARD, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

b)

c)

3. WE CONFIRM THAT BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID. 4. WE HAVE SATISFIED OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS. - NOT APPLICABLE 5. WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS' CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED TO FORM PART OF PROMOTERS' CONTRIBUTION SUBJECT TO LOCKIN SHALL NOT BE DISPOSED/ SOLD/ TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT LETTER OF OFFER WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT LETTER OF OFFER. ­ NOT APPLICABLE AS THE PRESENT ISSUE IS A RIGHTS ISSUE

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6. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUES OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER ­ NOT APPLICABLE AS THE PRESENT ISSUE IS A RIGHTS ISSUE 7. WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C ) AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS' CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS' CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS' CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE ISSUER ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. - NOT APPLICABLE AS THE PRESENT ISSUE IS RIGHTS ISSUE 8. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE "MAIN OBJECTS" LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION. 9. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONIES RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SUB SECTION (3) OF SECTION 73 OF THE COMPANIES ACT, 1956 AND THAT SUCH MONIES SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FORM ALL THE STOCK EXCHANGES MENTIONED IN THE DRAFT LETTER OF OFFER. WE FURHTER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. ­ NOTED FOR COMPLIANCE 10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE. 11. WE CERTIFY THAT ALL APPLICABLE DISCLOSURES MANDATED IN SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN THE ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION. 12. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER: a. AN UNDERTAKING FROM THE COMPANY THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE COMPANY; AND b. AN UNDERTAKING FROM THE COMPANY THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE SEBI FROM TIME TO TIME. 13. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO THE ADVERTISMENT IN TERMS OF SECURITIES AND EXCHANGE BOARD OF INDIA 130

(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE MAKING THE ISSUE. 14. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OF THE ISSUER, SITUATION AT WHICH THE PROPOSED BUISNESS STANDS, THE RISK FACTORS, PROMOTERS' EXPERIENCE, ETC. 15. WE ENCLOSE A CHECKLIST CONFIRMING REGULATIONWISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT LETTER OF OFFER WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY. THE FILING OF THE OFFER DOCUMENT DOES NOT, HOWEVER, ABSOLVE THE ISSUER FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY 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 ANY IRRREGULARITIES OR LAPSES IN OFFER DOCUMENT". DISCLAIMER CLAUSE OF THE ISSUER AND LEAD MANAGER THE COMPANY AND THE LEAD MANAGER, VIZ. MICROSEC CAPITAL LIMITED ACCEPT NO RESPONSIBILITY FOR STATEMENTS MADE OTHERWISE THAN IN THIS DRAFT LETTER OF OFFER OR IN ANY ADVERTISEMENT OR OTHER MATERIAL ISSUED BY THE COMPANY OR AT THE INSTANCE OF THE COMPANY AND THAT ANYONE PLACING RELIANCE ON ANY OTHER SOURCE OF INFORMATION WOULD BE DOING SO AT HIS OWN RISK. INVESTORS WHO INVEST IN THE ISSUE WILL BE DEEMED TO HAVE REPRESENTED TO THE ISSUER COMPANY AND LEAD MANAGER AND THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS, AFFILIATES AND REPRESENTATIVES THAT THEY ARE ELIGIBLE UNDER ALL APPLICABLE LAWS, RULES, REGULATIONS, GUIDELINES AND APPROVALS TO ACQUIRE EQUITY SHARES OF OUR COMPANY, AND ARE RELYING ON INDEPENDENT ADVICE / EVALUATION AS TO THEIR ABILITY AND QUANTUM OF INVESTMENT IN THIS ISSUE. THE LEAD MANAGER AND THE COMPANY SHALL MAKE ALL INFORMATION AVAILABLE TO THE EQUITY SHAREHOLDERS AND NO SELECTIVE OR ADDITIONAL INFORMATION WOULD BE AVAILABLE FOR A SECTION OF THE EQUITY SHAREHOLDERS IN ANY MANNER WHATSOEVER INCLUDING AT PRESENTATIONS, IN RESEARCH OR SALES REPORTS ETC. AFTER FILING OF THIS DRAFT LETTER OF OFFER WITH SEBI. Disclaimer with respect to jurisdiction This Draft Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and regulations thereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Kolkata, India only. Selling Restrictions The distribution of this Draft Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession this Draft Letter of Offer may come are required to inform themselves about and observe such restrictions. The Company is making this Issue of Equity Shares on a rights basis to the Shareholders of the Company and will dispatch the Draft Letter of Offer and CAFs to Shareholders who have provided an Indian address. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer has been filed with SEBI. 131

Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, and this Draft Letter of Offer may not be distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of this Draft Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer and, those circumstances, this Draft Letter of Offer must be treated as sent for information only and should not be copied or redistributed. Accordingly, persons receiving a copy of this Draft Letter of Offer should not, in connection with the issue of the Equity Shares or the rights entitlements, distribute or send the same in or into the United States or any other jurisdiction where to do so would or might contravene local securities laws or regulations. If this Draft Letter of Offer is received by any person in any such territory, or by their agent or nominee, they must not seek to subscribe to the Equity Shares or the rights entitlements referred to in this Draft Letter of Offer. Neither the delivery of this Draft Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in the Company's affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date. United States Restrictions NEITHER THE RIGHTS ENTITLEMENTS NOR THE SECURITIES THAT MAY BE PURCHASED PURSUANT HERETO HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY U.S. STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, RESOLD OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OF AMERICA OR THE TERRITORIES OR POSSESSIONS THEREOF (THE "UNITED STATES" OR THE "U.S.") OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, "US PERSONS" (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT ("REGULATION S")), EXCEPT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE RIGHTS REFERRED TO IN THIS DRAFT LETTER OF OFFER ARE BEING OFFERED IN INDIA, BUT NOT IN THE UNITED STATES. THE OFFERING TO WHICH THIS DRAFT LETTER OF OFFER RELATES IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE CONSTRUED AS, AN OFFERING OF ANY SHARES OR RIGHTS FOR SALE IN THE UNITED STATES OR AS A SOLICITATION THEREIN OF AN OFFER TO BUY ANY OF THE SAID SHARES OR RIGHTS. ACCORDINGLY, THIS DRAFT LETTER OF OFFER SHOULD NOT BE FORWARDED TO OR TRANSMITTED IN OR INTO THE UNITED STATES AT ANY TIME. NEITHER THE COMPANY NOR ANY PERSON ACTING ON BEHALF OF THE COMPANY WILL ACCEPT SUBSCRIPTIONS OR RENUNCIATIONS FROM ANY PERSON, OR THE AGENT OF ANY PERSON, WHO APPEARS TO BE, OR WHO THE COMPANY OR ANY PERSON ACTING ON BEHALF OF THE COMPANY HAS REASON TO BELIEVE IS, EITHER A "U.S. PERSON" (AS DEFINED IN REGULATION S) OR OTHERWISE IN THE UNITED STATES. ANY PERSON SUBSCRIBING TO THE EQUITY SHARES OFFERED HEREBY WILL BE DEEMED TO REPRESENT THAT SUCH PERSON IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) OR OTHERWISE IN THE UNITED STATES AND HAS NOT VIOLATED ANY U.S. SECURITIES LAWS IN CONNECTION WITH THE EXERCISE. European Economic Area Restrictions In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive at any relevant time (each, a "Relevant Member State") the Company has not made and will not make an offer of the Equity Shares to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Equity Shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect from and including the Relevant Implementation Date, make an offer of Equity Shares to the public in that Relevant Member State at any time: a) to legal entities which are authorised or regulated to operate in the financial markets, or if not so authorised or regulated, whose corporate purpose is solely to invest in securities; or b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than 4,30,00,000 and (3) an annual net turnover of more than 5,00,00,000, as shown in its last annual or consolidated accounts; or 132

c)

to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the lead manager; or

d) in any other circumstances which do not require the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purpose of this provision, the expression an "offer of Equity Shares to the public" in relation to any Equity Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Equity Shares to be offered so as to enable an Investor to decide to purchase or subscribe for the Equity Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. This European Economic Area selling restriction is in addition to any other selling restriction set out below. United Kingdom Restrictions This Draft Letter of Offer is only being distributed to and is only directed at (i) persons who are outside the United Kingdom, or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The Equity Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Equity Shares will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Designated Stock Exchange The Designated Stock Exchange for the purposes of this Issue will be the BSE. Disclaimer Clause of the BSE As required, a copy of this Draft Letter of Offer has been submitted to BSE. The Disclaimer Clause as intimated by BSE to us, post scrutiny of this Draft Letter of Offer, shall be included in the Letter of Offer prior to filing with the Stock Exchanges. Disclaimer Clause of the NSE As required, a copy of this Draft Letter of Offer has been submitted to NSE. The Disclaimer Clause as intimated by NSE to us, post scrutiny of this Draft Letter of Offer, shall be included in the Letter of Offer prior to filing with the Stock Exchanges. Impersonation Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Act, which is reproduced below: "Any person who a) Makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or b) Otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years."

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Filing The Draft Letter of Offer was filed with SEBI, Plot No. C 4-A, 'G' Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051, India for its observations. After SEBI gives its observations, the Letter of Offer will be filed with the Designated Stock Exchange as per the provisions of the Companies Act. Issue Related Expenses The expenses of the Issue payable by the Company include brokerage, fees and reimbursement to the Lead Manager, Auditors, Legal Advisor, registrar to the issue, printing and distribution expenses, publicity, listing fees, stamp duty and other expenses and will be met out of the Issue Proceeds.

Activity

Lead Merchant Banker Registrars to the Issue Legal Advisors Bankers to the Issue SCSB Commission Others Total estimated Issue expenses * Amounts will be finalized at the time of filing the Letter of Offer and determination of Issue price and other details. Investor Grievances and Redressal System

Expense* (Rs. in Lacs) [] [] [] [] [] [] []

Expense* (% of total expenses) [] [] [] [] [] [] []

Expense* (% of Issue Size) [] [] [] [] [] [] []

The Company has adequate arrangements for redressal of Investor complaints. Well-arranged correspondence system developed for letters of routine nature. The share transfer and dematerialization for the Company is being handled by in-house registrar and share transfer agent. Letters are filed category wise after having attended to. Redressal norm for response time for all correspondence including shareholders complaints is within 15 days. Status of Complaints a) b) c) d) Total number of complaints received during Fiscal 2009: 5 No. of shareholders complaints as on February 10, 2010: 7 Status of the pending complaints as on February 10, 2010: Nil Time normally taken by it for disposal of various types of Investor grievances: 15 days

Investor Grievances arising out of this Issue The Company's Investor grievances arising out of the Issue will be handled by Maheshwari Datamatics Pvt. Ltd who is the Registrar to the Issue. The Registrar will have a separate team of personnel handling only post-Issue correspondence. The agreement between the Company and the Registrar will provide for retention of records with the Registrar for a period of one year from the last date of dispatch of Allotment Advice/ share certificate / refund orders to enable the investors to approach the Registrar for redressal of their grievances. All grievances relating to the Issue may be addressed to the Registrar to the Issue giving full details such as folio number, name and address, contact telephone/cell numbers, email id of the first Investor, number and type of shares applied for, CAF serial number, amount paid on application and the name of the bank and the branch where the application was deposited, along 134

with a photocopy of the acknowledgement slip. In case of renunciation, the same details of the Renouncee should be furnished. The average time taken by the Registrar for attending to routine grievances will be seven days from the date of receipt. In case of non-routine grievances where verification at other agencies is involved, it would be the endeavour of the Registrar to attend to them as expeditiously as possible. The Company undertakes to resolve the Investor grievances in a time bound manner. The contact details of the Registrar to the Issue are: MAHESHWARI DATAMATICS PVT. LTD 6, Mangoe Lane, 2nd Floor, Kolkata ­ 700 001 Tel: 91-33-2243-5029/5809, 2248-2248 Fax: 91-33-2248-4787 E-mail: [email protected] Contact Person: Mr. Rajagopalan Investors may contact the Compliance Officer / Assistant Company Secretary in case of any Pre-Issue/ Post-Issue related problems such as non-receipt of allotment advice/share certificates/ demat credit/refund orders etc. His address is as follows: Mr. Pramod Kumar Jain Rohit Ferro-Tech Limited 35, Chittaranjan Avenue, 4th Floor, Kolkata-700 012, India Tel.: (033) 22119805/9806/9729 Fax: (033) 22256143/22119834 Email: [email protected] Website: www.rohitferrotech.com

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TERMS OF THE ISSUE The Equity Shares proposed to be issued on rights basis, are subject to the terms and conditions contained in the Draft Letter of Offer, the enclosed CAF, the Memorandum of Association and Articles of Association of the Company, the provisions of the Companies Act, the terms and conditions as may be incorporated in the Foreign Exchange Management Act, 1999, as amended ("FEMA"), guidelines and regulations issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by GoI and/or other statutory authorities and bodies from time to time, terms and conditions as stipulated in the allotment advice or security certificate 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 whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the shares held in the electronic form and on the Register of Members of the Company in respect of shares held in the physical form at the close of business hours on the Record Date i.e. [·] fixed in consultation with the Designated Stock Exchange. Rights Entitlement As your name appears as beneficial owner in respect of Equity Shares held in the electronic form or appears in the register of members as an Equity Shareholder of the Company as on the Record Date, i.e., [], you are entitled to the number of Equity Shares as set out in Part A of the enclosed CAFs. PRINCIPAL TERMS OF THE EQUITY SHARES Face value Each Equity Share shall have the face value of Rs. 10 Issue Price Each Equity Share shall be offered at an Issue Price of Rs. [] for cash at a premium of Rs. [] per Equity Share. The Issue Price has been arrived in consultation between the Company and the Lead Manager. Rights Entitlement Ratio The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the Company in the ratio of [·] Equity Shares for every [·] Equity Shares held as on the Record Date. Terms of payment The entire Issue Price of Rs. [·] per Share is payable on application only. Fractional entitlements If the shareholding of any of the equity shareholders is not in the multiples of [·] then the fractional entitlement of such shareholders shall be rounded off to the next higher integer, subject to the minimum entitlement of 1 equity share. The equity shares needed for rounding off will be adjusted from the promoters' entitlement. Ranking of the Equity Shares The Equity Shares shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari passu in all respects including dividends with the existing Equity Shares of the Company.

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Listing and trading of Equity Shares proposed to be issued The Company's existing Equity Shares are currently traded on the Stock Exchanges under the ISIN INE248H01012. The fully paid up Equity Shares proposed to be issued on a rights basis shall be listed and admitted for trading on the Stock Exchanges under the existing ISIN for fully paid Equity Shares of the Company. The listing and trading of the Equity Shares shall be based on the current regulatory framework applicable thereto. Accordingly, any change in the regulatory regime would accordingly affect the schedule. The Equity Shares allotted pursuant to this Issue will be listed as soon as practicable but in no case later than seven working days from the finalisation of the basis of allotment. The Company has made an application for "in-principle" approval for listing of the Equity Shares respectively to the BSE and the NSE through letters dated [], 2010 and [], 2010 and has received such approval from the BSE pursuant to the letter no. [], dated [], 2010 and from the NSE pursuant to letter no. [], dated, [], 2010. Rights of the Equity Shareholder Subject to applicable laws, the equity shareholders shall have the following rights: · · · · · · · Right to receive dividend, if declared; Right to attend general meetings and exercise voting powers, unless prohibited by law; Right to vote on a poll in person or by proxy; Right to receive offers for rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation; Right to free transferability of Equity shares; and Such other rights as may be available to a shareholder of a listed public company under the Companies Act and Memorandum and Articles of Association.

General Terms of the Issue Market lot The Equity Shares of the Company are tradable only in dematerialized form. The market lot for Equity Shares in dematerialized mode is one. In case of holding in physical form, the Company would issue to the allottees one certificate for the Equity Shares allotted to one folio ("Consolidated Certificate"). Joint-holders Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint-tenants with benefits of survivorship subject to provisions contained in the Articles of Association of the Company. Nomination facility In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose. A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity Shares. A Person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner 137

prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form available on request at the registered office of the Company or such other person at such addresses as may be notified by the Company. The applicant can make the nomination by filling in the relevant portion of the CAF. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already registered the nomination with the Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio. In case the allotment of Equity Shares is in dematerialized form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the applicant would prevail. If the applicants want to change their nomination, they are requested to inform their respective DP. Notices All notices to the Equity Shareholder(s) required to be given by the Company shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper in Kolkata with wide circulation and/or, will be sent by ordinary post/ to the registered holders of the Equity Share from time to time. Additional Subscription by the Promoter The Promoters have confirmed that they intend to subscribe to the full extent of their Rights Entitlement in the Issue. Subject to compliance with the Takeover Code, the Promoters and Promoter Group reserve their right to subscribe for Equity Shares in this Issue by subscribing for renunciation, if any, made by any other Promoters or Promoter Group or any other shareholders. The Promoters have provided an undertaking dated March 15, 2010 to the Company to apply for additional Equity Shares in the Issue, to the extent of the unsubscribed portion of the Issue. As a result of this subscription and consequent allotment, the Promoters and Promoter Group may acquire Equity Shares over and above their Rights Entitlement in the Issue, which may result in an increase of the shareholding being above the current shareholding with the Rights Entitlement. This subscription and acquisition of additional Equity Shares by the Promoters and Promoter Group through this Issue to the extent of under subscription, if any, will not result in change of control of the management of the Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirements indicated in the section "Objects of the Issue" on page 31, there is no other intention/purpose for this Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoters and Promoter Group, in this Issue, the Promoters' shareholding in the Company exceeds their current shareholding. The Promoters and Promoter Group shall subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to the Promoters and Promoter Group of any unsubscribed portion, over and above their Rights Entitlement shall be done in compliance with the Listing Agreement and other applicable laws prevailing at that time relating to continuous listing requirements. For details, please see the section "Basis of Allotment" on page 144. Procedure for Application The CAF would be printed in black ink for all shareholders. An additional separate advise for nonresident shareholders will be provided. In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request the Registrars to the Issue, Maheshwari Datamatics Pvt. Ltd, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. Non-resident shareholders can obtain a copy of the CAF from the Registrars to the Issue, Maheshwari Datamatics Pvt. Ltd. from their office located at 6, Mangoe Lane, 2nd Floor, Kolkata ­ 700 001, India by furnishing the registered folio number, DP ID number, Client ID number and their full name and address. Acceptance of the Issue You may accept the Issue and apply for the Equity Shares offered, either in full or in part by filling Part A of the enclosed CAF and submit the same along with the Application Money payable to the 138

Bankers to the Issue or any of the branches as mentioned on the reverse of the CAF before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board thereof in this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the cheque /demand draft, net of bank and postal charges, payable at Kolkata to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. The applications received through registered post shall be dealt with by the Registrars to the Issue in the normal course. Offer to Non-Resident Equity Shareholders/Applicants As per Regulation 6 of notification No. FEMA 20/200-RB dated May 3, 2000 the RBI has given general permission to Indian companies to issue rights shares to non-resident shareholders including additional shares. Applications received from NRIs and non-residents for allotment of Equity Shares shall be inter alia, subject to the conditions imposed from time to time by the RBI under the Foreign Exchange Management Act, 1999 (FEMA) in the matter of refund of application moneys, allotment of Equity Shares, issue of letter of allotment / notification No. FEMA 20/200-RB dated May 3, 2000. The Board of Directors may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBI while approving the allotment of Equity Shares, payment of dividend etc. to the non-resident shareholders. The rights shares purchased by non-residents shall be subject to the same conditions including restrictions in regard to the repatriability as are applicable to the original shares against which rights shares are issued. By virtue of Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies ("OCBs") have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, OCBs shall not be eligible to subscribe to the Equity Shares. The RBI has however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated nonresident entities. Thus, OCBs desiring to participate in this Issue must obtain prior approval from the RBI. On providing such approval to the Company at its registered office, the OCB shall receive the Draft Letter of Offer and the CAF. Draft Letter of offer and CAF shall only be dispatched to non-resident Equity Shareholders with registered address in India. Option available to the Equity Shareholders The Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder is entitled to. If the Equity Shareholder applies for an investment in Equity Shares, then he can: · · · · · Apply for his entitlement in part; Apply for his entitlement in part and renounce the other part; Apply for his entitlement in full; Apply for his entitlement in full and apply for additional Equity Shares. Renounce his Rights Entitlement in full.

Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional Equity Shares. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above your Rights Entitlement, provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, subject to sectoral caps and in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under "Basis of Allotment" on page 144.

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If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional Equity Shares in Part A of the CAF. The Renouncee applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares. Where the number of additional Equity Shares applied for exceeds the number available for allotment, the allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange. Renunciation This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favour of any other person or persons. Your attention is drawn to the fact that our Company shall not allot and/or register Equity Shares in favour of more than three persons (including joint holders), partnership firm(s) or their nominee(s), minors, HUF(s), any trust or society (unless the same is registered under the Societies Registration Act, 1860 or the Indian Trust Act, 1882 or any other applicable law relating to societies or trusts and is authorized under its constitution or bye laws to hold Equity Shares, as the case may be). Any renunciation from resident Indian Shareholder(s) to Non/resident Indian(s) or from Non/resident Indian Shareholder(s) to Resident Indian(s) is subject to the renouncer(s)/Renouncee(s) obtaining the approval of the FIPB and/or necessary permission of the RBI under the FEMA and such permissions should be attached to the CAF. Applications not accompanied by the aforesaid approvals are liable to be rejected. By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies ("OCBs") have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs) Regulations, 2003. Accordingly, the existing Equity Shareholders of our Company who do not wish to subscribe to the Equity Shares being offered but wish to renounce the same in favour of Renouncee shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s). `Part A' of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its collecting branches specified on the reverse of the CAF with the form of renunciation (`Part B' of the CAF) duly filled in shall be conclusive evidence for the Company of the Renouncees applying for Equity Shares in `Part C' of the CAF to receive allotment of such Equity Shares. The Renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares. `Part A' of the CAF must not be used by the Renouncee(s) as this will render the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour of any other person. Procedure for renunciation a) To renounce the whole offer in favour of one renounce If you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In case of joint holding, all joint holders must sign Part B of the CAF. The person in whose favor renunciation has been made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign this part of the CAF. b) To renounce in part/or renounce the whole to more than one person(s) If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more renouncees, the CAF must be first split into requisite number of forms. Please indicate your requirement of split forms in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests for split forms. On receipt of the required number of split forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed. 140

In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with the specimen registered with the Company, the application is liable to be rejected. Renouncee(s) The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the Application Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date along with the application money. Change and/ or introduction of additional holders If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is/are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed. However, this right of renunciation is subject to the express condition that the Board of Directors of the Company shall be entitled in its absolute discretion to reject the request for allotment from the Renouncee(s) without assigning any reason thereof. Instructions for Options The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF: Option Option Available A Accept whole or part of your entitlement without renouncing the balance. B Accept your entitlement in full and apply for additional Equity Shares. C Renounce your entitlement in full to one person (Joint renouncees not exceeding three are considered as one renouncee). 1. Accept a part of your entitlement and renounce the balance to one or more renouncee(s). Action Required Fill in and sign Part A (All joint holders must sign) Fill in and sign Part A including Block III relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign). Fill in and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncees must fill in and sign Part C of the CAF (All joint renouncees must sign). Fill in and sign Part D (all joint holders must sign) requesting for Split Application Forms. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once. On receipt of the Split Form take action as indicated below: i. For the Equity Shares you wish to accept, if any, fill in and sign Part A of one split CAF (only for option 1). For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand over the split CAFs to the renouncees. Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them.

D

OR 2. Renounce your entitlement to all the Equity Shares offered to you to more than one renouncee.

ii.

iii.

141

E

Introduce a joint holder or change the sequence of joint holders.

This will be treated as a renunciation. Fill in and sign Part B and the renouncees must fill in and sign Part C.

Please note that: Part A of the CAF must not be used by any person(s) other than those in whose favour this Issue has been made. If used, this will render the application invalid. Request for SAF should be made for a minimum of one Equity Share or, in either case, in multiples thereof and one SAF for the balance Equity Shares, if any. Request by the applicant for the Split Application Form should reach the Registrars on or before [·] Only the person to whom this Draft Letter of Offer has been addressed to and not the renouncee(s) shall be entitled to renounce and to apply for Split Application Forms. Forms once split cannot be split again. Split form(s) will be sent to the applicant(s) by post at the applicant's risk. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM. Mode of payment for Resident Equity Shareholders/ Applicants All cheques / drafts accompanying the CAF should be drawn in favour of "[]" and marked `A/c Payee only'. Applicants residing at places other than places where the bank collection centres have been opened by the Company for collecting applications, are requested to send their applications together with Demand Draft of amount net of bank and postal charges, for the full application amount favouring "[]" and marked `A/c Payee only' payable at Kolkata directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. The Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any. Mode of payment for Non-Resident Equity Shareholders/ Applicants As regards the application by non-resident equity shareholders, the following further conditions shall apply: Payment by non-residents must be made by demand draft / cheque payable at Kolkata or funds remitted from abroad in any of the following ways: Application with repatriation benefits Payment by NRIs/ FIIs/ foreign investors must be made by demand draft/cheque payable at Kolkata or funds remitted from abroad in any of the following ways: By Indian Rupee drafts purchased from abroad and payable at Kolkata or funds remitted from abroad (submitted along with Foreign Inward Remittance Certificate); or By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Kolkata; or By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable in Kolkata; or FIIs registered with SEBI must remit funds from special non-resident rupee deposit account. All cheques/drafts submitted by non-residents applying on repatriable basis should be drawn in favour of "[]" payable at Kolkata and crossed `A/c Payee only' for the amount payable. A separate cheque or bank draft must accompany each application form. Applicants may note that where payment is made by drafts purchased from NRE/FCNR accounts as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/FCNR account should be enclosed with the CAF. In the absence of the above the application shall be considered incomplete and is liable to be rejected. 142

In the case of NR who remits their application money from funds held in FCNR/NRE Accounts, refunds and other disbursements, if any shall be credited to such account details of which should be furnished in the appropriate columns in the CAF. In the case of NRIs who remit their application money through Indian Rupee Drafts from abroad, refunds and other disbursements, if any will be made in US Dollars at the rate of exchange prevailing at such time subject to the permission of RBI. The Company will not be liable for any loss on account of exchange rate fluctuation for converting the Rupee amount into US Dollars or for collection charges charged by the applicant's Bankers. Application without repatriation benefits As far as non-residents holding shares on non-repatriation basis is concerned, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Kolkata or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Kolkata. In such cases, the allotment of Equity Shares will be on non-repatriation basis. All cheques/drafts submitted by non-residents applying on non-repatriation basis should be drawn in favour of `[]' payable at Kolkata and must be crossed `A/c Payee only' for the amount payable. The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF. If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with the CAF. In the absence of the above, the application shall be considered incomplete and is liable to be rejected. New demat account shall be opened for holders who have had a change in status from resident Indian to NRI. Note: In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act, 1961. In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Shares cannot be remitted outside India. The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF. In case of an application received from non-residents, allotment, refunds and other distribution, if any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals. Availability of Duplicate CAF In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID No. and his/ her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. Thus in case the original and duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with a demand draft net of bank and postal charges, drawn in favor of "[]" in case of resident 143

shareholders and nonresident shareholders applying on non-repatriable basis and in favour of "[]" payable at Kolkata, in case of non-resident shareholders applying on repatriable basis and send the same by registered post directly to the Registrar to the Issue so as to reach them on or before the closure of the Issue. In such case the demand draft should be payable at Kolkata. The envelope should be subscribed "[]" in case of resident shareholders and non-resident shareholders applying on non-repatriable basis and in favour of "[]" in case of non-resident shareholders applying on repatriable basis. The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars: Name of Issuer, being Rohit Ferro Tech Limited Name and address of the Equity Shareholder including joint holders Registered Folio No./ DP ID No. and Client ID No. Number of shares held as on Record Date. Certificate numbers and distinctive Nos., if held in physical form. Number of Rights Equity Shares entitled. Number of Rights Equity Shares applied for. Number of additional Equity Shares applied for, if any. Total number of Equity Shares applied for. Total amount paid on application Particulars of cheque/draft Savings/Current Account Number and name and address of the bank where the Equity Shareholder will be depositing the refund order. PAN number, Income Tax Circle/Ward/District, photocopy of the Pan card/Form 60/ Form 61 declaration and for each applicant in case of joint names. Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company. Please note that those who are making the application otherwise than on original CAF shall not be entitled to renounce their rights and should not utilize the original CAF for any purpose including renunciation even if it is received subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications. The Company shall refund such application amount to the applicant without any interest thereon. Last date of Application The last date for submission of the duly filled in CAF is []. The Issue will be kept open for a minimum of 15 (fifteen) days and the Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue Opening Date. If the CAF together with the amount payable is not received by the Banker to the Issue/Registrar to the Issue or if the CAF is not received by the SCSB on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/Committee of Directors, the offer contained in this Draft Letter of Offer shall be deemed to have been declined and the Board/Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under "Basis of Allotment" below. Basis of Allotment Subject to the provisions contained in the Letter of Offer, the Articles of Association of the Company and the approval of the Designated Stock Exchange, the Board will proceed to allot the Equity Shares in the following order of priority: a) Full allotment to those Equity Shareholders who have applied for their Rights Entitlement either in full or in part and also to the Renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or in part. b) Allotment pertaining to fractional entitlements in case of any shareholding other than in multiples of []. 144

c)

Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as part of the Issue and have also applied for additional Equity Shares. The allotment of such additional Equity Shares will be made as far as possible on an equitable basis having due regard to the number of Equity Shares held by them on the Record Date, provided there is an undersubscribed portion after making full allotment in (a) and (b) above. The allotment of such Equity Shares will be at the sole discretion of the Board / Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and will not be a preferential allotment.

d) Allotment to Renouncees who having applied for all the Equity Shares renounced in their favour, have applied for additional Equity Shares provided there is surplus available after making full allotment under (a), (b) and (c ) above. The allotment of such Equity Shares will be at the sole discretion of the Board/Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and not preferential allotment. After taking into account allotment to be made under (a) above, if there is any unsubscribed portion, the same shall be deemed to be `unsubscribed' for the purpose of regulation 3(1)(b) of the Takeover Code which would be available for allocation under (b), (c) and (d) above. The Promoters have confirmed that they intend to subscribe to the full extent of their Rights Entitlement in the Issue. Subject to compliance with the Takeover Code, the Promoter and Promoter Group reserve their right to subscribe for Equity Shares in this Issue by subscribing for renunciation, if any, made by any other Promoters or Promoter Group or any other shareholders. The Promoters have provided an undertaking dated 15, 2010 to the Company to apply for additional Equity Shares in the Issue, to the extent of the unsubscribed portion of the Issue. As a result of this subscription and consequent allotment, the Promoters and Promoter Group may acquire Equity Shares over and above their Rights Entitlement in the Issue, which may result in an increase of the shareholding being above the current shareholding with the Rights Entitlement. This subscription and acquisition of additional Equity Shares by the Promoters and Promoter Group through this Issue, if any, will not result in change of control of the management of the Company and shall be exempt in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirements indicated in the section "Objects of the Issue" on page 31, there is no other intention/purpose for this Issue, including any intention to delist the Company, even if, as a result of allotments to the Promoters and Promoter Group, in this Issue, the Promoters' shareholding in the Company exceeds their current shareholding. The Promoters and Promoter Group shall subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to the Promoters and Promoter Group of any unsubscribed portion, over and above their Rights Entitlement shall be done in compliance with the Listing Agreement and other applicable laws prevailing at that time relating to continuous listing requirements. PROCEDURE FOR APPLICATION THROUGH THE APPLICATIONS SUPPORTED BY BLOCKED AMOUNT ("ASBA") PROCESS This section is for the information of the ASBA Investors proposing to subscribe to the Issue through the ASBA Process. The Company and the Lead Managers are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of this Draft Letter of Offer. Equity Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and to ensure that the CAF is correctly filled up. The list of banks who have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in/pmd/scsb.pdf. For details on designated branches of SCSB collecting the CAF, please refer the above mentioned SEBI link. Shareholders who are eligible to apply under the ASBA Process The option of applying for Equity Shares in the Issue through the ASBA Process is only available to Equity Shareholders of the Company on the Record Date and who: · are holding Equity Shares in dematerialised form and has applied towards his/her rights entitlements or additional Securities in the Issue in dematerialised form; 145

· · · CAF

Has not renounced his entitlements in full or in part; are not a Renouncee; are applying through blocking of funds in a bank account with one of the SCSBs.

The Registrar will despatch the CAF to all Equity Shareholders as per their Rights Entitlement on the Record Date for the Issue. Those Equity Shareholders who wish to apply through the ASBA payment mechanism will have to select for this mechanism in Part A of the CAF and provide necessary details. Equity Shareholders desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option in Part A of the CAF only. Application in electronic mode will only be available with such SCSB who provides such facility. The Equity Shareholder shall submit the CAF to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB. Acceptance of the Issue You may accept the Issue and apply for the Equity Shares offered, either in full or in part, by filling Part A of the CAFs sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of the Company in this regard. Mode of payment The Equity Shareholder applying under the ASBA Process agrees to block the entire amount payable on application (including for additional Equity Shares, if any) with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB. After verifying that sufficient funds are available in the bank account provided in the CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF until it receives instructions from the Registrars. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount as per Registrar's instruction allocable to the Equity Shareholders applying under the ASBA Process from bank account with the SCSB mentioned by the Equity Shareholder in the CAF. This amount will be transferred in terms of the SEBI Guidelines, into the separate bank account maintained by the Company as per the provisions of section 73(3) of the Companies Act, 1956. The balance amount remaining after the finalisation of the basis of allotment shall be either unblocked by the SCSBs or refunded to the investors by the Registrar on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Manager to the respective SCSB. The Equity Shareholders applying under the ASBA Process would be required to block the entire amount payable on their application at the time of the submission of the CAF. The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of which have been provided by the Equity Shareholder in the CAF does not have sufficient funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, the Company would have a right to reject the application only on technical grounds. Options available to the Equity Shareholders applying under the ASBA Process The summary of options available to the Equity Shareholders is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the respective CAFs received from Registrar:

146

Option Available Accept whole or part of your entitlement without renouncing the balance. Accept your entitlement in full and apply for additional Shares

Action Required Fill in and sign Part A of the CAF (All joint holders must sign) Fill in and sign Part A of the CAF including Block III relating to the acceptance of entitlement and Block IV relating to additional Shares (All joint holders must sign)

The Equity Shareholder applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required necessary details. However, in cases where this option is not selected, but the CAF is tendered to the SCSB with the relevant details required under the ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as if the Equity Shareholder has selected to apply through the ASBA process option. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above the number of Equity Shares that you are entitled too, provided that (i) you have applied for all the Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under "Terms of the Issue - Basis of Allotment" on page 144. If you desire to apply for additional Equity Shares please indicate your requirement in the place provided for additional Equity Shares in Part A of the CAF. Renunciation under the ASBA Process Renouncees cannot participate in the ASBA Process. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF and who is applying under the ASBA Process may make an application to subscribe to the Issue on plain paper, along with Demand Draft, net of bank and postal charges payable at Kolkata which should be drawn in favour of the "Rohit Ferro ­ Rights Issue" and the Equity Shareholders should send the same by registered post directly to SCSB. The envelope should be super scribed "Rohit Ferro ­ Rights Issue" and should be postmarked in India. The application on plain paper, duly signed by the Investors including joint holders, in the same order as per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars: · Name of Issuer, being Rohit Ferro Tech Limited; · Name and address of the Equity Shareholder including joint holders; · Registered Folio Number/ DP and Client ID no.; · Number of Equity Shares held as on Record Date; · Number of Equity Shares entitled to; · Number of Equity Shares applied for; · Number of additional Equity Shares applied for, if any; · Total number of Equity Shares applied for; · Total amount paid at the rate of Rs. [] per Equity Share; · Particulars of cheque/draft; and · Except for applications on behalf of the Central or State Government and the officials appointed by the courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue.

147

Option to receive Securities in Dematerialized Form SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE BEING HELD ON RECORD DATE. General instructions for Equity Shareholders applying under the ASBA Process a) Please read the instructions printed on the respective CAF carefully. b) Application should be made on the printed CAF only and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/or which are not completed in conformity with the terms of this Draft Letter of Offer are liable to be rejected. The CAF must be filled in English. c) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose bank account details are provided in the CAF and not to the Bankers to the Issue/Collecting Banks (assuming that such Collecting Bank is not a SCSB), to the Company or Registrar or Lead Manager to the Issue.

d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAFs without PAN will be considered incomplete and are liable to be rejected. e) All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cash payment is not acceptable. In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with the Company/or Depositories.

g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with the Company. In case of joint applicants, reference, if any, will be made in the first applicant's name and all communication will be addressed to the first applicant. h) All communication in connection with application for the Securities, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first/sole applicant Shareholder, folio numbers and CAF number. i) Do's: a) Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in. b) Ensure that you submit your application in physical mode only. Electronic mode is only available with certain SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to you. c) Ensure that the details about your Depository Participant and beneficiary account are correct and the beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only. 148 Only the person or persons to whom Securities have been offered and not renouncee(s) shall be eligible to participate under the ASBA process.

d) Ensure that the CAFs are submitted at the SCSBs whose details of bank account have been provided in the CAF. e) Ensure that there are sufficient funds (equal to {number of Equity Shares, as the case may be applied for} X {Issue Price of Equity Shares, as the case may be}) available in the bank account maintained with the SCSB mentioned in the CAF before submitting the CAF to the respective Designated Branch of the SCSB. f) Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on application mentioned in the CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same.

g) Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form. h) Each applicant should mention their Permanent Account Number ("PAN") allotted under the I. T. Act. i) Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the CAF. Ensure that the Demographic Details are updated, true and correct, in all respects.

j)

Don'ts: a) Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB. b) Do not pay the amount payable on application in cash, by money order or by postal order. c) Do not send your physical CAFs to the Lead Manager to Issue / Registrar / Collecting Banks (assuming that such Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of the SCSB only.

d) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground. e) Do not instruct your respective banks to release the funds blocked under the ASBA Process. Grounds for Technical Rejection under the ASBA Process In addition to the grounds listed under "Grounds for Technical Rejection" on page 156 of this Draft Letter of Offer, applications under the ABSA Process are liable to be rejected on the following grounds: a) Application for entitlements or additional Equity Shares in physical form. b) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with the Registrar. c) Sending CAF to a Lead Manager / Registrar / Collecting Bank (assuming that such Collecting Bank is not a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company.

d) Renouncee applying under the ASBA Process. e) Insufficient funds are available with the SCSB for blocking the amount. 149

f)

Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen pursuant to regulatory orders.

g) Account holder not signing the CAF or declaration mentioned therein. Depository account and bank details for Equity Shareholders applying under the ASBA Process IT IS MANDATORY FOR ALL THE EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT'S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. EQUITY SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF. Equity Shareholders applying under the ASBA Process should note that on the basis of name of these Equity Shareholders, Depository Participant's name and identification number and beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the Depository demographic details of these Equity Shareholders such as address, bank account details for printing on refund orders and occupation ("Demographic Details"). Hence, Equity Shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF. These Demographic Details would be used for all correspondence with such Equity Shareholders including mailing of the letters intimating unblock of bank account of the respective Equity Shareholder. The Demographic Details given by Equity Shareholders in the CAF would not be used for any other purposes by the Registrar. Hence, Equity Shareholders are advised to update their Demographic Details as provided to their Depository Participants. By signing the CAFs, the Equity Shareholders applying under the ASBA Process would be deemed to have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records. Letters intimating allotment and unblocking or refund (if any) would be mailed at the address of the Equity Shareholder applying under the ASBA Process as per the Demographic Details received from the Depositories. Refunds, if any, will be made directly to the bank account in the SCSB and which details are provided in the CAF and not the bank account linked to the DP ID. Equity Shareholders applying under the ASBA Process may note that delivery of letters intimating unblocking of bank account may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the Equity Shareholder in the CAF would be used only to ensure dispatch of letters intimating unblocking of bank account. Note that any such delay shall be at the sole risk of the Equity Shareholders applying under the ASBA Process and none of the Company, the SCSBs or the Lead Managers shall be liable to compensate the Equity Shareholder applying under the ASBA Process for any losses caused due to any such delay or liable to pay any interest for such delay. In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Equity Shareholders (including the order of names of joint holders), the DP ID and the beneficiary account number, then such applications are liable to be rejected. DISPOSAL OF APPLICATIONS AND APPLICATION MONEYS AND INTEREST IN CASE OF DELAY IN INSTRUCTIONS TO SCSB BY THE REGISTRAR TO THE ISSUE In accordance with the Companies Act, the requirements of the Stock Exchanges and SEBI Guidelines, the Company undertakes that: 150

· · ·

Allotment and transfer shall be made only in dematerialised form within 15 days from the Issue Closing Date; Instructions for unblocking of the ASBA shareholder's Bank Account shall be made within 15 days from the Issue Closing Date; and If the instructions to SCSB to unblock funds in the ASBA accounts are not given within 8 days after the Company becomes liable to repay all moneys received from the applicants in pursuance of this Draft Letter of Offer, i.e. within 7 days from the Issue Closing Date, then the Company and every Director of the Company who is an officer in default shall, on and from such expiry of 8 days, be liable to repay the money, with interest at the rate of 15% p.a. on application money, as prescribed under Section 73 of the Companies Act.

In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Shareholders (including the order of names of joint holders), the DP ID and the beneficiary account number, then such applications are liable to be rejected. Disposal of Investor Grievances All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, Amount blocked on application, bank account number and the Designated Branch or the collection centre of the SCSB where the Application Form was submitted by the ASBA shareholder. Underwriting The present Issue is not underwritten. Allotment / Refund The Company will issue and dispatch allotment advice/ share certificates/demat credit and/or letters of regret along with refund order or credit the allotted Equity Shares to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day the Company becomes liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is earlier) the Company and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed under Section 73 of the Companies Act. Investors residing at centers where clearing houses are managed by the Reserve Bank of India ("RBI") will get refunds through Electronic Clearing Service ("ECS") except where Investors are otherwise disclosed as applicable/eligible to get refunds through direct credit and real time gross settlement ("RTGS"). In case of those Investors who have opted to receive their Rights Entitlement in dematerialized form using electronic credit under the depository system, advice regarding their credit of the Equity Shares shall be given separately. Investors to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within 15 days of the Issue Closing Date. In case of those Investors who have opted to receive their Rights Entitlement in physical form and the Company issues letter of allotment, the corresponding share certificates will be kept ready within three months from the date of allotment thereof or such extended time as may be approved by the Company Law Board under Section 113 of the Companies Act or other applicable provisions, if any. Investors are requested to preserve such letters of allotment, which would be exchanged later for the share certificates.For more information, please see the section "Terms of the Issue" on page 136.

151

The letter of allotment / refund order exceeding Rs. 1,500 would be sent by registered post/speed post to the sole/first Investors registered address. Refund orders up to the value of Rs. 1,500 would be sent under certificate of posting. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked `Account Payee only' and would be drawn in favour of the sole/first Investor. Adequate funds would be made available to the Registrar to the Issue for this purpose. As regards allotment/ refund to non-residents, the following further conditions shall apply: In case of non-residents, who remit their application monies from funds held in NRE/ FCNR accounts, refunds and/ or payment of interest/ dividend and other disbursement, if any, shall be credited to such accounts, details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of non-residents, who remit their application monies through Indian Rupee draft purchased from abroad, refund and/ or payment of dividend/ interest and any other disbursement, shall be credited to such accounts (details of which should be furnished in the CAF) and will be made net of bank charges/ commission in US Dollars, at the rate of exchange prevailing at such time. The Company will not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupee amount into US Dollars. The share certificate(s) will be sent by registered post at the Indian address of the non-resident applicant. Mode of Making Refunds The payment of refund, if any, would be done through various modes in the following order of preference: 1. ECS ­ Payment of refund would be done through ECS for applicants having an account at any of the 68 centres where clearing houses for ECS are managed by the Reserve Bank of India, State Bank of India, Punjab National Bank, Union Bank of India, Andhra Bank, Corporation Bank, Bank of Baroda, State Bank of Travancore, Central Bank of India, Canara Bank, Oriental Bank of Commerce, United Bank of India, State Bank of Hyderabad and State Bank of Bikaner and Jaipur. This mode of payment of refunds would be subject to availability of complete bank account details including the nine digit Magnetic Ink Character Recognition (MICR) code as appearing on a cheque leaf, from the depository. The payment of refund through ECS is mandatory for applicants having a bank account at any of the 68 centers, except where applicant is otherwise disclosed as eligible to get refunds through direct credit or RTGS. NEFT (National Electronic Fund Transfer) ­ Payment of refund shall be undertaken through NEFT wherever the applicants' bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the applicants have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the applicants through this method. Direct Credit ­ Applicants having their bank account with the Refund Banker, i.e. Punjab National Bank shall be eligible to receive refunds, if any, through direct credit. The refund amount, if any, would be credited directly to the eligible applicant's bank account with the Refund Banker. RTGS ­ Applicants having a bank account at any of the 68 centers detailed above, and whose application amount exceeds Rs. 1 million, shall be eligible to exercise the option to receive refunds, if any, through RTGS. All applicants eligible to exercise this option shall mandatorily provide the IFSC code in the CAF, the refund shall be made through the ECS or direct credit, if eligibility disclosed. For all other Investors, including those who have not updated their bank particulars with the MICR code, the refund orders will be dispatched under certificate of posting for value up to Rs. 1,500 and through speed post / registered post for refund orders of Rs. 1,500 152

2.

3.

4.

5.

and above. Such refunds will be made by cheques, pay orders or demand drafts drawn in favour of the sole / first Investor and payable at par. 6. Credit of refunds to Investors in any other electronic manner permissible under the banking laws, which are in force, and is permitted by the SEBI from time to time.

Printing Of Bank Particulars on Refund Orders As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant's bank account are mandatory for printing on the refund orders. Bank account particulars will be printed on the refund orders/refund warrants which can then be deposited only in the account specified. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Letters of Allotment / Share Certificates / Demat Credit Allotment advice / share certificates / demat credit will be dispatched to the registered address of the first named Investor or respective beneficiary accounts will be credited within 15 (fifteen) days, from the Issue Closing Date. In case the Company issues allotment advice, the relative shared certificates will be dispatched within one month from the date of the allotment. Allottees are requested to preserve such allotment advice (if any) to be exchanged later for share certificates. Option to receive Equity Shares in Dematerialized Form Applicants to the Equity Shares of the Company issued through this Issue shall be allotted the securities in dematerialized (electronic) form at the option of the applicant. The Company has signed the following tripartite agreements to enable the Investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates: i. ii. Agreement dated 22/11/2005 with NSDL and Maheshwari Datamatics Pvt. Ltd. Agreement dated 17/12/2005 with CDSL and Maheshwari Datamatics Pvt. Ltd.

In this Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. The CAF shall contain space for indicating number of shares applied for in demat and physical form or both. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No separate applications for securities in physical and/or dematerialized form should be made. If such applications are made, the application for physical securities will be treated as multiple applications and is liable to be rejected. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares. The Equity Shares of the Company will be listed on the BSE and NSE. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM. Procedure for availing the facility for allotment of Equity Shares in this Issue in the electronic form is as under: Open a beneficiary account with any depository participant (care should be taken that the beneficiary account should carry the name of the holder in the same manner as is exhibited in the records of the Company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with the Company). In case of Investors having various folios in the Company with different joint holders, the Investors will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such Beneficiary Account (s) need not adhere to this step. 153

For Equity Shareholders already holding Equity Shares of the Company in dematerialized form as on the Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Equity Shares pursuant to this Issue by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of Equity Shares arising out of this Issue may be made in dematerialized form even if the original Equity Shares of the Company are not dematerialized. Nonetheless, it should be ensured that the Depository Account is in the name(s) of the Equity Shareholders and the names are in the same order as in the records of the Company. Responsibility for correctness of information (including applicant's age and other details) filled in the CAF vis-à-vis such information with the applicant's depository participant, would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be the same as registered with the applicant's depository participant. If incomplete / incorrect beneficiary account details are given in the CAF the applicant will get Equity Shares in physical form. The Equity Shares pursuant to this Issue allotted to investors opting for dematerialized form, would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant's depository participant will provide to him the confirmation of the credit of such Equity Shares to the applicant's depository account. Renouncees will also have to provide the necessary details about their beneficiary account for allotment of securities in this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected. Option to subscribe Other than the present Issue, and except as disclosed in - Terms of the Issue on page 136, the Company has not given any person any option to subscribe to the Equity Shares of the Company. The Investors shall have an option either to receive the security certificates or to hold the securities in dematerialised form with a depository. Utilization of Proceeds Subscription received against this Issue will be kept in a separate bank account(s) and the Company would not have access to such funds unless the basis of allotment approved by the Designated Stock Exchange. General instructions for applicants a) Please read the instructions printed on the enclosed CAF carefully. b) Application should be made on the printed CAF, provided by the Company except as mentioned under the head Application on Plain Paper and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of this Draft Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the applicants, details of occupation, address, and father's / husband's name must be filled in block letters. c) The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting Bank or to the Registrar to the Issue and not to the Company or Lead Manager to the Issue. Applicants residing at places other than cities where the branches of the Bankers to the Issue have been authorized by the Company for collecting applications, will have to make payment by Demand Draft payable at Kolkata of amount net of bank and postal charges, and send their application forms to the Registrar to the Issue by REGISTERED POST. If any portion of the CAF is / are detached or separated, such application is liable to be rejected. 154

d) Applications for any value made by the Investor, or in the case of joint names, each of the joint Investors, should mention his / her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAF without PAN will be considered incomplete and are liable to be rejected. e) Bank Account Details: It is mandatory for applicants to provide information as to their savings/current account number and the name of the Bank with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Application not containing such details is liable to be rejected. For Eligible Equity Shareholders holding Equity Shares in dematerialised form, such bank details will be drawn from the demographic details of the Eligible Equity Shareholder in the records of the Depository. f) All payments should be made by cheque / DD only. Cash payment is not acceptable. In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon.

g) Signatures should be either in English or Hindi or in any other language specified in the Eight Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with the Company or depositories. h) In case of an application under power of attorney or by a body corporate or by a society, a certified true copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under this Issue and to sign the application and a copy of the Memorandum and Articles of Association and / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case the above-referred documents are already registered with the Company, the same need not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable to be rejected. In no case should these papers be attached to the application submitted to the Bankers to the Issue. i) In case of joint holders, all joint-holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with the Company. Further, in case of joint applicants who are renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the first applicant's name and all communication will be addressed to the first applicant. Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroad for allotment of Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a Non-Resident or NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

j)

k) All communication in connection with application for the Equity Shares, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to the Secretarial Department, Rohit Ferro Tech Limited, 35, Chittaranjan Avenue, 4th Floor, Kolkata ­ 700 012 in the case of Equity Shares held in physical form and to the respective depository participant, in case of Equity Shares held in dematerialized form. l) Split forms cannot be re-split.

m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled to obtain split forms. 155

n) Applicants must write their CAF number at the back of the cheque / demand draft. o) Only one mode of payment per application should be used. The payment must be either in cash or by cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the application is to be submitted. p) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated cheques and postal / money orders will not be accepted and applications accompanied by such cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash. (For payment against application in cash please refer point (f) above) q) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF. Grounds for Technical Rejections Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following: Amount paid does not tally with the amount payable for; Bank account details (for refund) are not given; Age of first applicant not given; PAN not mentioned for application of any value;; In case of Application under power of attorney or by limited companies, corporate, trust, etc., relevant documents are not submitted; If the signature of the existing shareholder does not match with the one given on the Application Form and for renouncees if the signature does not match with the records available with their depositories; If the Applicant desires to have shares in electronic form, but the Application Form does not have the Applicant's depository account details; Application Forms are not submitted by the Applicants within the time prescribed as per the Application Form and the Draft Letter of Offer; Applications not duly signed by the sole/joint Applicants; Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to invest in the Issue; Applications accompanied by Stockinvest; In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Applicants (including the order of names of joint holders), the Depositary Participant's identity (DP ID) and the beneficiary's identity; Applications by US persons; Applications by ineligible Non-residents (including on account of restriction or prohibition under applicable local laws) and where last available address in India has not been provided. Payment by Stockinvest In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the Stockinvest Scheme has been withdrawn with immediate effect. Hence, payment through Stockinvest would not be accepted in this Issue. Disposal of application and application money No acknowledgment will be issued for the application moneys received by the Company. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF. 156

The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, a nd in either case without assigning any reason thereto. In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the applicant within 15 days from the close of the Issue in accordance with section 73 of the Act. For further instruction, please read the Composite Application Form (CAF) carefully. Utilization of Issue Proceeds The Board of Directors declares that: 1. 2. The funds received against this Issue will be transferred to a separate bank account as per sub-section (3) of Section 73 of the Act. Details of all moneys utilized out of the Issue shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the purpose for which such money has been utilized. Details of all such unutilized moneys out of the Issue, if any, shall be disclosed under an appropriate head in the balance sheet of the Company indicating the form in which such unutilized moneys have been invested. The Company may utilize the funds collected in the Issue only after the basis of allotment is finalized.

3.

4.

Undertakings by the Company 1. 2. The complaints received in respect of the Issue shall be attended to by the Company expeditiously and satisfactorily. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock Exchanges where the securities are to be listed will be taken within seven working days of finalization of basis of allotment. The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post shall be made available to the Registrar to the Issue. That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 15 days of closure of the issue, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund. The certificates of the securities/ refund orders shall be dispatched within the specified time. Certificates of securities/refund orders of the Non-Resident/Non Resident Indians shall be dispatched within the specified time subject to receipt of approval from RBI/FIPB, if required; The Company accepts full responsibility for the accuracy of information given in this Draft Letter of Offer and confirms that to best of its knowledge and belief, there are no other facts the omission of which makes any statement made in this Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts. Except as disclosed, no further issue of securities affecting equity capital of the Company shall be made till the securities issued/offered through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc. Adequate arrangements shall be made to collect all ASBA applications and to consider then similar to non-ASBA applications while finalising the Basis of Allotment. 157

3. 4.

5. 6.

7.

8.

9.

10.

All information shall be made available by the Lead Manager and the Issuer to the investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever. At any given time, there shall be only one denomination of the Equity Shares of the Company and the Company shall comply with such disclosure and accounting norms specified by SEBI from time to time.

11.

Minimum Subscription If the Company does not receive the minimum subscription of 90% of the Issue, the Company shall forthwith refund the entire subscription amount received within 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day the Company becomes liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is earlier) the Company and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under sub-section (2) and (2A) of Section 73 of the Companies Act. Important Please read this Draft Letter of Offer carefully before taking any action. The instructions contained in the accompanying Composite Application Form (CAF) are an integral part of the conditions of this Draft Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected. All enquiries in connection with this Draft Letter of Offer or accompanying CAF and requests for Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and super scribed `[] on the envelope) to the Registrar to the Issue at the following address: Maheshwari Datamatics Pvt. Ltd. 6, Mangoe Lane, 2nd Floor, Kolkata ­ 700 001 Tel: 033- 2243 5029/5809 Fax: 033- 2248 4787 It is to be specifically noted that this Issue of Equity Shares is subject to the section entitled "Risk Factors" beginning on page 10 of this Draft Letter of Offer. The Issue will remain open for at least 15 days. However, the Board will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date.

158

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contracts (not being contracts entered in to in the ordinary course of business carried on by the Company or entered into more than two years before the date of this Draft Letter of Offer) which are or may be deemed material have been entered or are to be entered in to by the Company. These Contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of the Company situated at 35, Chittaranjan Avenue, 4th Floor, Kolkata ­ 700012 (W. B.), India from 10.00 a.m. to 1.00 p.m., on Business Days, from the date of this Draft Letter of Offer until the date of closure of the Issue. Material Contracts 1. 2. 3. 4. 5. Agreement dated March 26, 2010 with Microsec Capital Limited, appointing them as Lead Manager to the Issue. Agreement dated February 11, 2010 with Maheshwari Datamatics Pvt. Ltd., appointing them as Registrars to the Issue. Engagement letter dated December 30, 2009 for appointment of Microsec Capital Limited as Lead Manager Tripartite Agreement dated December 17, 2005 among the Company, CDSL and Maheshwari Datamatics Pvt. Ltd., Registrar to the Issue. Tripartite Agreement dated November 22, 2005 among the Company, NSDL and Maheshwari Datamatics Pvt. Ltd., Registrar to the Issue.

Documents for inspection 1. 2. 3. Memorandum and Articles of Association of the Company. Certificate of Incorporation dated June 24, 2004 of the Company Consents of the Directors, Auditors, Company Secretary, Lead Manager to the Issue, Bankers to the Issue, Legal Advisor to the Issue and Registrar to the Issue to include their names in the Draft Letter of Offer to act in their respective capacities. Due Diligence certificate from the Lead Manager dated March 26, 2010 Copy of the resolution of the Board of Directors dated January 7, 2010 approving this Issue. Consents of the Shareholders of the Company obtained Via Postal Ballot (based on Scrutinizer's Report dated March 12, 2010) results declared in newspapers on March 13, 2010. Sanction letters received from the banks Name of Bank/ Financial Institution State Bank of India United Bank of India 8. 9. Date of Sanction June 17, 2009 February 10, 2009

4. 5. 6.

7.

Annual Reports of the Issuer Company (both Standalone and Consolidated) for the latest Audited Financial Year ended 31st March 2009. Annual Reports of the Issuer Company for the latest Years ended March 31, 2005, 2006, 2007 and 2008.

10. Limited Review Report dated March 4, 2010 issued by S. Jaykishan, Auditors of the Company on the interim unconsolidated financial statements of the Company for the period from April 01, 2009 to December 31, 2009. 159

11. Limited Review Report dated March 4, 2010 issued by S. Jaykishan, Auditors of the Company on the interim consolidated financial statements of the Company for the period from April 01, 2009 to December 31, 2010. 12. Special Tax Benefit Certificate dated March 4, 2010 from M/s. S. Jaykishan, Auditors of the Company. 13. Copy of the Certificate dated March 4, 2010 from M/s. S. Jaykishan, Chartered accountants, the statutory auditors regarding the Sources and Deployment of Funds till February 28, 2010. 14. Copy of contract with Executive Directors. 15. Copy of the prospectus of the Initial Public Offering made in 2006 16. Copy of in-principle approval received from Bombay Stock Exchange Limited vide letter no. [·] dated [·]. 17. Copy of in-principle approval received from National Stock Exchange Limited vide letter no. [·] dated [·]. 18. Copy of SEBI Observation letter no. [·] dated [·] and compliance thereof. Any of the contracts or documents mentioned in this Draft Letter of Offer may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the shareholders subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

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